2 unchanged sentences
We may amend, supplement or add to the risk factors described below from time to time in future reports filed with the SEC.
−Removed: Risks Related to the COVID-19 Pandemic
−Removed: The COVID-19 pandemic has had, and could continue to have, an adverse impact on our business.
−Removed: The COVID-19 pandemic had an adverse impact on our consolidated results of operations in the first half of 2020, with diminishing impacts during the second half of 2020 and during 2021.
−Removed: The COVID-19 pandemic could have an adverse impact on our business and consolidated financial results during 2022 and we are unable to determine the extent, duration, or nature at this time.
−Removed: The intensity, duration and governmental responses to the pandemic, as well as the pace of vaccination efforts and the emergence of new variants of the virus that cause COVID-19, are all highly uncertain and could contribute to the ultimate impact on our business.
−Removed: Specifically, the COVID-19 pandemic could impact:
−Removed: • Our suppliers’ ability to perform and the availability of materials and subcontractors’ services;
−Removed: • Our customers’ ability to access credit and to pay amounts due to us;
−Removed: • Our distributors’ ability to perform;
−Removed: • Our ability to:
−Removed: ◦ Access credit;
−Removed: ◦ Meet contractual deadlines with customers, which could result in delays in payments from customers and customers possibly seeking delay damages;
−Removed: ◦ Complete acquisitions due to potential adverse impacts on targeted businesses or product lines;
−Removed: ◦ Meet the financial covenants under our senior credit and other debt agreements.
−Removed: The impact of the COVID-19 pandemic has resulted, and could continue to result, in:
−Removed: • Disruptions in our supply chain or increased costs for certain components or commodities;
−Removed: • Labor shortages and difficulties filling the positions within our organization;
−Removed: • A prolonged reduction in the demand for certain of our products;
−Removed: • A prolonged shut-down of one or more of our facilities either due to exposure to the COVID-19 pandemic or to further restrictive government orders;
−Removed: • Asset impairment charges;
−Removed: • A loss of productivity, greater cybersecurity risk and other fraud risks, and difficulties in maintaining internal controls over financial reporting due to the impact of employees working remotely;
−Removed: • An adverse impact to the funded status of our defined benefit pension plans, which could result in (i) a material charge during the fourth quarter of 2022 and (ii) on a longer-term, additional funding requirements for the plans;
−Removed: • The diversion of management’s attention from core business operations;
−Removed: • Restructuring charges if we decide to reduce headcount as a result of a decline in customer demand.
−Removed: Any of the above risks could have a material adverse impact on our business and consolidated financial results.
−Removed: Risks Related to Contingent Liabilities
−Removed: Our South African subsidiary is subject to various claims, disputes, enforcement actions, litigation, arbitration and other legal proceedings related to two large power projects in South Africa that could ultimately be resolved against it.
−Removed: Since 2008, DBT had been executing on two large power projects in South Africa (Kusile and Medupi), on which it has now substantially completed its scope of work.
−Removed: Over such time, the business environment surrounding these projects was difficult, as DBT, along with many other contractors on the projects, experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various
−Removed: subcontractors (including DBT and its subcontractors), and various suppliers.
−Removed: DBT is currently involved in a number of claims relating to these challenges and may be subject to other claims, which could be significant.
−Removed: SPX has provided parent company guarantees to certain counterparties in connection with these projects.
−Removed: We cannot give assurance that these claims and the costs to assert DBT's claims and defend claims against DBT will not have a material adverse effect on our financial position, results of operations, or cash flows.
−Removed: See “MD&A - Critical Accounting Estimates - Contingent Liabilities” and Note 15 to our consolidated financial statements for further discussion.
−Removed: We are subject to potential liability relating to claims, complaints and proceedings, including those relating to asbestos, environmental, product liability and other matters.
−Removed: We are subject to various laws, ordinances, regulations and other requirements of government authorities in the United States and other nations.
−Removed: Additionally, changes in laws, ordinances, regulations, or other governmental policies may significantly increase our expenses and liabilities.
−Removed: Numerous claims, complaints, and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”).
−Removed: These claims relate to litigation matters ( e.g., class actions and contracts, intellectual property, and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management ma tters (e.g., general liability, automobile, and workers’ compensation claims).
−Removed: Periodically, claims, complaints and proceedings arising other than in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (e.g.
−Removed: patent infringement), including claims with respect to businesses that we have acquired for matters arising before the relevant date of the acquisition.
−Removed: From time to time, we face actions by governmental authorities, both in and outside the United States.
−Removed: Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate.
−Removed: Our insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against potential loss exposures.
−Removed: The liabilities we record for asbestos product liability matters are based on a number of assumptions, including historical claims and payment experience and actuarial estimates of the future period during which additional claims are reasonably foreseeable.
−Removed: While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties.
−Removed: As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, including as a result of our change in relevant assumptions, which could result in material charges to earnings.
−Removed: In addition, a significant increase in claims, costs, and/or issues with existing insurance coverage could have a material adverse impact on our financial position, results of operations and cash flows.
−Removed: We face environmental exposures including, for example, those relating to discharges from and materials handled as part of our operations, the remediation of soil and groundwater contaminated by petroleum products or hazardous substances or wastes, and the health and safety of our employees.
−Removed: We may be liable for the costs of investigation, removal, or remediation of hazardous substances or petroleum products on, under, or in our current or formerly owned or leased properties, or from third-party disposal facilities that we may have used, without regard to whether we knew of, or caused, the presence of the contaminants.
−Removed: The presence of, or failure to properly remediate, these substances may have adverse effects, including, for example, substantial investigative or remedial obligations and limitations on the ability to sell or rent affected property or to borrow funds using affected property as collateral.
−Removed: New or existing environmental matters or changes in environmental laws or policies could lead to material costs for environmental compliance or cleanup.
−Removed: In addition, environmentally related product regulations are growing globally in number and complexity and could contribute to increased costs with respect to disclosure requirements, product sales and distribution related costs, and post-sale recycling and disposal costs.
−Removed: There can be no assurance that these liabilities and costs will not have a material adverse effect on our financial position, results of operations, or cash flows.
−Removed: We devote significant time and expense to defend against the various claims, complaints, and proceedings brought against us.
−Removed: In addition, from time to time, we bring actions to enforce our rights against customers, suppliers, insurers, and other third parties.
−Removed: We cannot assure you that the expenses or distractions from operating our businesses arising from these defenses and actions will not increase materially.
−Removed: We cannot assure you that our accruals and right to indemnity and insurance will be sufficient, that recoveries from insurance or indemnification claims will be available or that any of our current or future claims or other matters will not have a material adverse effect on our financial position, results of operations, or cash flows.
−Removed: See “MD&A - Critical Accounting Estimates - Contingent Liabilities” and Note 15 to our consolidated financial statements for further discussion.
Risks Related to our Markets and Customers
2 unchanged sentences
In addition, certain of our businesses are subject to market-specific cycles.
−Removed: Furthermore, contract timing on projects, including those relating to communication technologies, fare collection systems, and process cooling systems and towers may cause significant fluctuations in revenues and profits from period to period.
+Added: Furthermore, contract timing on projects, including those relating to communication technologies, fare collection systems, obstruction lighting products, and process cooling systems and towers may cause significant fluctuations in revenues and profits from period to period.
The businesses of many of our customers are to varying degrees cyclical and have experienced, and may continue to experience, periodic downturns.
26 unchanged sentences
No assurances can be made that we will have sufficient resources to continue to make the investment required to maintain or increase our market share or that our investments will be successful.
−Removed: If we do not compete successfully, our business, financial condition, results of operations and cash flows could be materially adversely affected.
+Added: compete successfully, our business, financial condition, results of operations and cash flows could be materially adversely affected.
+Added: Our business with various governments is subject to government contracting risks.
+Added: Our business with government agencies, including sales to prime contractors that supply these agencies, is subject to government contracting risks.
+Added: and other government contracts are subject to termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract.
+Added: If terminated by the government as a result of our default, we could be liable for additional costs the government incurs in acquiring undelivered goods or services from another source and any other damages it suffers.
+Added: In addition, if we or one of our divisions were charged with wrongdoing with respect to a U.S.
+Added: government contract, the U.S.
+Added: government could suspend us from bidding on or receiving awards of new government contracts pending the completion of legal proceedings.
+Added: If convicted or found liable, the U.S.
+Added: government could subject us to fines, penalties, repayments and treble and other damages, and/or bar us from bidding on or receiving new awards of U.S.
+Added: government contracts and void any contracts found to be tainted by fraud.
+Added: government also reserves the right to debar a contractor from receiving new government contracts for fraudulent, criminal or other seriously improper conduct.
Risks Related to our Suppliers and Vendors
1 unchanged sentence
We are exposed to a variety of risks relating to the price and availability of raw materials and components.
−Removed: In recent years, we have faced volatility in the prices of many key raw materials (e.g., steel and oil) and key components (e.g.
−Removed: circuit boards), including price increases in response to trade laws and tariffs and shortages related to the COVID-19 pandemic.
+Added: In recent years, we have faced volatility in the prices of many key raw materials (e.g., steel and oil) and key components (e.g., circuit boards), including price increases in response to trade laws and tariffs and shortages related to the COVID-19 pandemic.
Increases in the prices of raw materials and components, including as a result of new or increased tariffs or the impact of new trade laws, or shortages or allocations of materials and components may have a material adverse effect on our financial position, results of operations or cash flows, as there may be delays in our ability, or we may not be able, to pass cost increases on to our customers, or our sales may be reduced.
5 unchanged sentences
Current economic conditions could also impact the ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all.
−Removed: Risks Related to Information, Technology and Cybersecurity
−Removed: If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted.
−Removed: We are increasingly dependent on cloud-based and other information technology (“IT”) networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information.
−Removed: We depend on such IT infrastructure for electronic communications among our locations around the world and between our personnel and suppliers and customers.
−Removed: In addition, we rely on these IT systems to record, process, summarize, transmit, and store electronic information, and to manage or support a variety of business processes and activities, including, among other things, our accounting and financial reporting processes;
−Removed: our manufacturing and supply chain processes;
−Removed: our sales and marketing efforts;
−Removed: and the data related to our research and development efforts.
−Removed: The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased overhead costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.
−Removed: Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
−Removed: IT security threats are increasing in frequency and sophistication and we have detected numerous attempts to compromise the security of our IT systems.
−Removed: Cyber-attacks may be random, coordinated, or targeted, including sophisticated computer crime threats.
−Removed: These threats pose a risk to the security of our systems and networks, and those of our business partners and third-party service providers, and to the confidentiality, availability, and integrity of our data.
−Removed: Despite our implementation of security measures, cybersecurity threats, such as malicious software, ransomware, phishing attacks, computer viruses, and attempts to gain unauthorized access, cannot be completely mitigated.
−Removed: Our business, reputation, operating results, and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown;
−Removed: our confidential, proprietary information is stolen or disclosed;
−Removed: the performance or security of our cloud-based product offerings is impacted;
−Removed: our intranet and internet sites are compromised;
−Removed: data is manipulated or destroyed;
−Removed: we incur costs or are required to pay fines in connection with stolen customer, employee, or other confidential information;
−Removed: we must dedicate significant resources to system repairs or increase cyber security protection;
−Removed: or we otherwise incur significant litigation or other costs.
−Removed: In addition, newer generations of certain of our products include IT systems, including systems that are cloud-based and/or interconnect through the internet.
−Removed: These systems are subject to the same cybersecurity threats described above and the failure of these systems, including by cyber-attack, could disrupt our customers’ business, leading to potential exposure for us.
−Removed: Our technology is important to our success, and failure to develop new products or make the appropriate investment in technology advancements may result in the loss of any sustainable competitive advantage in products, services and processes.
−Removed: We believe the development of our intellectual property rights is critical to the success of our business.
−Removed: In order to maintain our market positions and margins, we need to regularly develop and introduce high-quality, technologically advanced and cost-effective products on a timely basis, in many cases in multiple jurisdictions around the world.
−Removed: Information technology systems, platforms and products are critical to our operating environment, product offerings and competitive position.
−Removed: Certain digitalization initiatives important to our long-term success may require capital investment, have significant risks associated with their execution, and could take several years to implement.
−Removed: If we do not accurately predict, prepare and respond to new technology innovations, market developments and changing customer needs, our revenues, profitability and long-term competitiveness could be materially adversely affected.
−Removed: Failure to protect or unauthorized use of our intellectual property may harm our business.
−Removed: Despite our efforts to protect our proprietary rights, unauthorized parties or competitors may copy or otherwise obtain and use our products or technology.
−Removed: The steps we have taken may not prevent unauthorized use of our technology or knowledge, particularly in foreign countries where the laws may not protect our proprietary rights to the same extent as in the United States.
−Removed: Costs incurred to defend our rights may be material.
Risks Related to Our Manufacturing and Operations
Cost overruns, inflation, delays and other risks could significantly impact our results, particularly with respect to fixed-price contracts.
−Removed: A portion of our revenues and earnings is generated through fixed-price contracts, particularly within our HVAC reportable segment.
+Added: A portion of our revenues and earnings is generated through fixed-price contracts.
We recognize revenues for certain of these contracts over time whereby revenues and expenses, and thereby profit, in a given period are determined based on our estimates as to the project status and the costs remaining to complete a particular project.
9 unchanged sentences
The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers or our customers’ end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in market acceptance of our products and loss of sales, which would harm our business and adversely affect our revenues, profitability and cash flows.
+Added: Risks Related to Contingent Liabilities
+Added: Our South African subsidiary is subject to various claims, disputes, enforcement actions, litigation, arbitration and other legal proceedings related to two large power projects in South Africa that could ultimately be resolved against it.
+Added: Since 2008, DBT had been executing on two large power projects in South Africa (Kusile and Medupi), on which it has now substantially completed its scope of work.
+Added: Over such time, the business environment surrounding these projects was difficult, as DBT, along with many other contractors on the projects, experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various subcontractors (including DBT and its subcontractors), and various suppliers.
+Added: DBT is currently involved in a number of claims relating to these challenges and may be subject to other claims, which could be significant.
+Added: SPX has provided parent company guarantees to certain counterparties in connection with these projects.
+Added: We cannot give assurance that these claims and the costs to assert DBT's claims and defend claims against DBT will not have a material adverse effect on our financial position, results of operations, or cash flows.
+Added: See “MD&A - Critical Accounting Estimates - Contingent Liabilities” and Note 15 to our consolidated financial statements for further discussion.
+Added: We are subject to potential liability relating to claims, complaints and proceedings, including those relating environmental, product liability and other matters.
+Added: We are subject to various laws, ordinances, regulations and other requirements of government authorities in the United States and other nations.
+Added: Additionally, changes in laws, ordinances, regulations, or other governmental policies may significantly increase our expenses and liabilities.
+Added: Certain claims, complaints, and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”).
+Added: These claims relate to litigation matters , environmental matters, product liability matters, and other risk management ma tters (e.g., general liability, automobile, and workers’ compensation claims).
+Added: Periodically, claims, complaints and proceedings arising other than in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (e.g.
+Added: patent infringement), including claims with respect to businesses that we have acquired for matters arising before the relevant date of the acquisition.
+Added: From time to time, we face actions by governmental authorities, both in and outside the United States.
+Added: Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate.
+Added: Our insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against potential loss exposures.
+Added: We face environmental exposures including, for example, those relating to discharges from and materials handled as part of our operations, the remediation of soil and groundwater contaminated by petroleum products or hazardous substances or wastes, and the health and safety of our employees.
+Added: We may be liable for the costs of investigation, removal, or remediation of hazardous substances or petroleum products on, under, or in our current or formerly owned or leased properties, or from third-party disposal facilities that we may have used, without regard to whether we knew of, or caused, the presence of the contaminants.
+Added: The presence of, or failure to properly remediate, these substances may have adverse effects, including, for example, substantial investigative or remedial obligations and limitations on the ability to sell or rent affected property or to borrow funds using affected property as collateral.
+Added: New or existing environmental matters or changes in environmental laws or policies could lead to material costs for environmental compliance or cleanup.
+Added: In addition, environmentally related product regulations are growing globally in number and complexity and could contribute to increased costs with respect to disclosure requirements, product sales and distribution related costs, and post-sale recycling and disposal costs.
+Added: There can be no assurance that these liabilities and costs will not have a material adverse effect on our financial position, results of operations, or cash flows.
+Added: See “MD&A - Critical Accounting Estimates - Contingent Liabilities” and Note 15 to our consolidated financial statements for further discussion.
Risks Related to Macro-Economic, Domestic and World Events
38 unchanged sentences
• Suppliers’ and distributors’ ability to perform and the availability and costs of materials and subcontracted services.
−Removed: Downturns in global economies could negatively impact our performance or any expectations in reporting performance.
+Added: Downturns in global economies could negatively impact our results of operations and prospects.
+Added: In addition, economic instabilities resulting from geopolitical activities, including instabilities associated with the armed conflict in Ukraine, and the imposition of governmental sanctions in response thereto, and any conflict or threat of conflict that may affect Taiwan, could negatively impact our results of operations and prospects.
revenues and operations expose us to numerous risks that may negatively impact our business.
9 unchanged sentences
• Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, nationalization of private enterprises, or unexpected changes relating to currency could adversely impact our revenues and operations;
−Removed: • The United Kingdom’s exit from the European Union (commonly referred to as “Brexit”) has contributed to, and may continue to contribute to, economic, currency, market and regulatory uncertainty in the United Kingdom and European Union and could adversely affect economic, currency, market, regulatory, or political conditions both in those regions and worldwide;
• Customs, tariffs and trade restrictions may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner;
3 unchanged sentences
• Distance and language and cultural differences may make it more difficult to manage our business and employees and to effectively market our products and services;
−Removed: • Public health crises, including the outbreak of a pandemic or contagious disease.
−Removed: Any of the above factors or other factors affecting social and economic activity in the United Kingdom, China, and South Africa or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.
+Added: • Public health crises, including the outbreak of a pandemic or other contagious disease.
+Added: Any of the above factors or other factors affecting social and economic activity in the United Kingdom and China or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.
Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.
There is growing concern that increases in global average temperatures as a result of increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant adverse long-term climate changes, as well as more near-term changes in weather patterns that could adversely impact our operations.
−Removed: Moreover, growing concern over climate change may result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.
+Added: Moreover, growing concern over climate change may result in additional legal or regulatory requirements to disclose levels of carbon dioxide and other greenhouse gas emissions or that are designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.
Many of our manufacturing plants and the products we manufacture, particularly in the HVAC reportable segment, use significant amounts of electricity generated by burning fossil fuels, which releases carbon dioxide.
−Removed: Additionally, many of the products we manufacture in the HVAC reportable segment use natural gas or oil as a fuel source and may be subject to increasing regulatory restrictions aimed at “de-carbonization” or the elimination of such fuel sources.
+Added: Additionally, many of the products we manufacture in the HVAC reportable segment use natural gas or oil as a fuel source and may be subject to
+Added: increasing regulatory restrictions aimed at “de-carbonization” or the elimination of such fuel sources.
Increased energy or compliance costs and expenses as a result of increased legal or regulatory requirements may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products and we may be required to develop product improvements to satisfy developing energy-efficiency targets in order to remain competitive.
1 unchanged sentence
If we fail to achieve or improperly report on our progress on environmental and sustainability programs and initiatives or fail to develop product improvements to satisfy developing energy-efficiency targets, the results could have an adverse impact on our business, results of operations and financial condition.
+Added: Risks Related to Information, Technology and Cybersecurity
+Added: If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted.
+Added: We are increasingly dependent on cloud-based and other information technology (“IT”) networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information.
+Added: We depend on such IT infrastructure for electronic communications among our locations around the world and between our personnel and suppliers and customers.
+Added: In addition, we rely on these IT systems to record, process, summarize, transmit, and store electronic information, and to manage or support a variety of business processes and activities, including, among other things, our accounting and financial reporting processes;
+Added: our manufacturing and supply chain processes;
+Added: our sales and marketing efforts;
+Added: and the data related to our research and development efforts.
+Added: The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased overhead costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.
+Added: Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
+Added: IT security threats are increasing in frequency and sophistication and we have detected numerous attempts to compromise the security of our IT systems.
+Added: Cyber-attacks may be random, coordinated, or targeted, including sophisticated computer crime threats.
+Added: These threats pose a risk to the security of our systems and networks, and those of our business partners and third-party service providers, and to the confidentiality, availability, and integrity of our data.
+Added: Despite our implementation of security measures, cybersecurity threats, such as malicious software, ransomware, phishing attacks, computer viruses, and attempts to gain unauthorized access, cannot be completely mitigated.
+Added: Our business, reputation, operating results, and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown;
+Added: our confidential, proprietary information is stolen or disclosed;
+Added: the performance or security of our cloud-based product offerings is impacted;
+Added: our intranet and internet sites are compromised;
+Added: data is manipulated or destroyed;
+Added: we incur costs or are required to pay fines in connection with stolen customer, employee, or other confidential information;
+Added: we must dedicate significant resources to system repairs or increase cyber security protection;
+Added: or we otherwise incur significant litigation or other costs.
+Added: In addition, newer generations of certain of our products include IT systems, including systems that are cloud-based and/or interconnect through the internet.
+Added: These systems are subject to the same cybersecurity threats described above and the failure of these systems, including by cyber-attack, could disrupt our customers’ business, leading to potential exposure for us.
+Added: Our technology is important to our success, and failure to develop new products or make the appropriate investment in technology advancements may result in the loss of any sustainable competitive advantage in products, services and processes.
+Added: We believe the development of our intellectual property rights is critical to the success of our business.
+Added: In order to maintain our market positions and margins, we need to regularly develop and introduce high-quality, technologically advanced and cost-effective products on a timely basis, in many cases in multiple jurisdictions around the world.
+Added: Information technology systems, platforms and products are critical to our operating environment, product offerings and competitive position.
+Added: Certain digitalization initiatives important to our long-term success may require capital investment, have significant risks associated with their execution, and could take several years to implement.
+Added: If we do not accurately predict, prepare and respond to new technology innovations, market developments and changing customer needs, our revenues, profitability and long-term competitiveness could be materially adversely affected.
+Added: Failure to protect or unauthorized use of our intellectual property may harm our business.
+Added: Despite our efforts to protect our proprietary rights, unauthorized parties or competitors may copy or otherwise obtain and use our products or technology.
+Added: The steps we have taken may not prevent unauthorized use of our technology or knowledge, particularly in foreign countries where the laws may not protect our proprietary rights to the same extent as in the United States.
+Added: Costs incurred to defend our rights may be material.
Risks Related to Acquisitions and Dispositions
Acquisitions involve a number of risks and present financial, managerial and operational challenges.
−Removed: Our acquisitions involve a number of risks and present financial, managerial and operational challenges, including:
+Added: Our recent and future acquisitions involve a number of risks and may present financial, managerial and operational challenges, including:
• Adverse effects on our reported operating results due to charges to earnings, including potential impairment charges associated with goodwill and other intangibles;
27 unchanged sentences
Our dispositions involve a number of risks and present financial, managerial and operational challenges, including diversion of management attention from running our core businesses, increased expense associated with the dispositions, potential disputes with the customers or suppliers of the disposed businesses, potential disputes with the acquirers of the disposed businesses and a potential dilutive effect on our earnings per share.
−Removed: In addition, we have agreed to retain certain liabilities in connection with the disposition of certain bus inesses.
−Removed: These l iabilities may be significant and could negatively impact our business.
If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy.
In addition, we may not realize some or all of the anticipated benefits of our dispositions.
−Removed: See “Business,”
−Removed: “MD&A - Results of Discontinued Operations,” and Note 4 to our consolidated financial statements for the status of our divestitures.
+Added: See “Business,” “MD&A - Results of Discontinued Operations,” and Note 4 to our consolidated financial statements for the status of our divestitures.
+Added: We have divested a number of businesses, including the Spin-Off in 2015.
+Added: With respect to some of these former businesses, we have contractually agreed to indemnify the counterparties against, or otherwise retain, certain liabilities, including, certain lawsuits, tax liabilities, product liability claims, and environmental matters.
+Added: Even without ongoing contractual indemnification obligations, we could be exposed to liabilities arising out of the businesses for certain activities prior to the divestitures.
+Added: In addition, certain of the counterparties to those divestitures and/or the divested businesses have agreed to indemnify us or assume certain liabilities relating to those divestitures.
+Added: However, there can be no assurance that the indemnity or assumption of liability by the counterparties or divested businesses will be sufficient to protect us against the full amount of these liabilities, or that a counterparty or divested business will be able to fully satisfy its obligations.
+Added: Third parties also could seek to hold us responsible for any of the liabilities that a counterparty or divested business agreed to assume.
+Added: Even if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses ourselves.
+Added: Risks Related to the COVID-19 Pandemic
+Added: The COVID-19 pandemic has had, and could continue to have, an adverse impact on our business.
+Added: The COVID-19 pandemic had an adverse impact on our consolidated results of operations in the first half of 2020, with diminishing impacts during the second half of 2020 and during 2021 and 2022.
+Added: The COVID-19 pandemic could have an adverse impact on our business and consolidated financial results during 2023 and we are unable to determine the extent, duration, or nature at this time.
+Added: The intensity, duration and governmental responses to the pandemic, as well as the pace of vaccination efforts and the emergence of new variants of the virus that cause COVID-19, are all highly uncertain and could contribute to the ultimate impact on our business.
+Added: Specifically, the COVID-19 pandemic could impact:
+Added: • Our suppliers’ ability to perform and the availability of materials and subcontractors’ services;
+Added: • Our customers’ ability to access credit and to pay amounts due to us;
+Added: • Our distributors’ ability to perform;
+Added: • Our ability to:
+Added: ◦ Access credit;
+Added: ◦ Meet contractual deadlines with customers, which could result in delays in payments from customers and customers possibly seeking delay damages;
+Added: ◦ Complete acquisitions due to potential adverse impacts on targeted businesses or product lines;
+Added: ◦ Meet the financial covenants under our senior credit and other debt agreements.
+Added: The impact of the COVID-19 pandemic has resulted, and could continue to result, in:
+Added: • Disruptions in our supply chain or increased costs for certain components or commodities;
+Added: • Labor shortages and difficulties filling the positions within our organization;
+Added: • A prolonged reduction in the demand for certain of our products;
+Added: • A prolonged shut-down of one or more of our facilities either due to exposure to the COVID-19 pandemic or to further restrictive government orders;
+Added: • Asset impairment charges;
+Added: • A loss of productivity, greater cybersecurity risk and other fraud risks, and difficulties in maintaining internal controls over financial reporting due to the impact of employees working remotely;
+Added: • An adverse impact to the funded status of our defined benefit pension plans, which could result in additional funding requirements for the plans;
+Added: • The diversion of management’s attention from core business operations;
+Added: • Restructuring charges if we decide to reduce headcount as a result of a decline in customer demand.
+Added: Any of the above risks could have a material adverse impact on our business and consolidated financial results.
Risks Related to Human Capital Resources
8 unchanged sentences
Three of these collective bargaining agreements expire in 2023 and are scheduled for negotiation and renewal.
−Removed: We also have various collective labor arrangements covering certain non-U.S.
+Added: We also have various co llective labor arrangements covering certain non-U.S.
employee groups.
23 unchanged sentences
dollar will increase the effective price of our products sold in U.S.
−Removed: dollars into other countries, including countries utilizing the Euro, which may have a material adverse effect on sales or require us to lower our
−Removed: prices, and also decrease our reported revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.
+Added: dollars into other countries, including countries utilizing the Euro, which may have a material adverse effect on sales or require us to lower our prices, and also decrease our reported revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.
Likewise, the increased strength of the U.S.
23 unchanged sentences
In the event tax authorities were to challenge one or more of our tax positions, an unfavorable outcome could have a material adverse impact on our financial position, results of operations, and cash flows.
−Removed: If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangibles of the respective reporting unit, a material non-cash charge to earnings could result.
+Added: If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangible assets of the respective reporting unit, a material non-cash charge to earnings could result.
At December 31, 2022, we had goodwill and other intangible assets, net, of $856.9.
6 unchanged sentences
Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with cost reduction initiatives, capacity utilization, and assumptions for inflation and foreign currency changes.
−Removed: We monitor impairment indicators across all of our businesses.
−Removed: Significant changes in market conditions and estimates or judgments used to determine expected
−Removed: future cash flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known.
+Added: We monitor impairment indicators across all of
+Added: our businesses.
+Added: Significant changes in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known.
Cost reduction actions may affect our business.
10 unchanged sentences
Our incurrence of additional indebtedness may affect our business and may restrict our operating flexibility.
−Removed: At December 31, 2021, we h ad $246.0 in total indebtedness.
−Removed: On that same date, we had $437.8 of available borrowing capacity under our revolving credit facilities, after giving effect to $12.2 reserved for outstanding letters of credit.
−Removed: In addition, at December 31, 2021, we had $30.3 of available issuance capacity under our foreign credit instrument facilities after giving effect to $24.7 reserved for outstanding letters of credit.
−Removed: At December 31, 2021, our cash and equivalents balance was $396.0.
+Added: At December 31, 2022, we h a d $246.8 in total indebtedness.
+Added: On that same date, we h ad $489.0 o f available borrowing capacity under our revolving credit facilities, after givin g effect to $11.0 reserved for outstanding letters of credit.
+Added: In addition, at December 31, 2022, we had $10.2 of available issuance capacity under our foreign credit instrument facilities after giving effect to $14.8 res erved for outstanding letters of credit.
+Added: At December 31, 2022, our cash and equivalents balance wa s $157.1 .
See “ MD&A - Liquidity and Financial Condition - Borrowings ” and Note 13 to our consolidated financial statements for further discussion.
20 unchanged sentences
Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud.
−Removed: The identification of a material weakness could indicate a lack of controls adequate to generate accurate financial statements that, in turn, could cause a loss of investor confidence and decline in the market price of our common stock.
−Removed: We cannot assure you that we will be able to timely remediate any material weaknesses that may be identified in future periods or maintain all of the controls necessary for continued compliance.
−Removed: We have identified a material weakness in our internal control over financial reporting.
−Removed: If this material weakness is not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.
−Removed: Management identified a material weakness in our internal control over financial reporting related to the available insurance coverage for liabilities associated with alleged exposure to asbestos-containing materials.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: As discussed in Item 9A.
−Removed: “Controls and Procedures” of this filing, management has evaluated its assessment of the effectiveness of internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of December 31, 2021.
−Removed: We are committed to remediating the material weakness as promptly as possible, and management is in the process of implementing the remediation plan;
−Removed: however, there can be no assurance as to when the material weaknesses will be remediated or that additional material weaknesses will not arise in the future.
−Removed: If we are unable to maintain effective internal control over financial reporting, our ability to record, process and report financial information timely and accurately could be adversely affected.
Risks Related to Ownership of Our Common Stock
2 unchanged sentences
These provisions include, for example:
−Removed: a staggered board of directors;
+Added: a classified board of directors with directors serving staggered three-year terms;
a prohibition on stockholder action by written consent;
10 unchanged sentences
Sales of a substantial number of shares of common stock into the public market, or the perception that these sales could occur, could have a material adverse effect on our stock price.
−Removed: As of December 31, 2021, we had the ability to issue up to an additiona l 4.074 shares as restricted stock shares, restricted stock units, performance stock units, or stock options under our 2019 Stock Compensation Plan, and 0.027 under our 2006 Non-Employee Directors’ Stock Incentive Plan.
+Added: As of December 31, 2022, we had the ability to issue up to an additional 3.851 s hares as restricted stock units, performance stock units, or stock options under our 2019 Stock Compensation Plan.
We also may issue a significant number of additional shares, i n connection with acquisitions, through a registration statement, or otherwise.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.