What changed in this filing

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Item 1A. Risk Factors

2022-02-11 compared with 2021-02-12 · 94 added, 77 removed, 217 unchanged (44% of the section changed)

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In March 2020, the World Health Organization declared COVID-19 a global pandemic and governmental authorities around the world implemented shelter-in-place orders, quarantines, social distancing requirements, travel bans and other similar governmental restrictions to reduce the spread of COVID-19.

This negatively impacted the global economy, created significant volatility and disruption of financial markets and caused disruptions in our supply chains and logistics.

It also adversely affected our customers’ sentiment and spending, leading to a downturn in our markets.

Additionally, COVID-19 adversely affected our workforce, with temporary factory closures, slowdowns and restrictions on travel and transports, among other effects, thereby negatively impacting our operations.

We reduced our workforce to focus only on critical activities and a significant percentage of global team members continue to work remotely, which can introduce operational and cybersecurity risks.

We developed and implemented new health and safety protocols, business continuity plans and different scenario plans in an effort to try to mitigate the negative impact of COVID-19.

Our management continues to remain focused on mitigating the impact of COVID-19, which has required a large investment of time and resources, which may delay other value-add initiatives.

It is not possible to accurately predict with any degree of certainty the impact COVID-19 will have on our operations going forward as the situation continues to remain fluid.

Despite our efforts and numerous measures taken to manage the impacts of COVID-19, the full degree and extent to which it will ultimately affect our operational and financial performance will depend on uncertain future developments and factors beyond our control, including, but not limited to, the pace of the continued spread of the pandemic, the severity and ultimate duration of the pandemic, including any resurgences, mutations or variants, any governmental regulations or restrictions imposed in response to such, and the ultimate efficacy and distribution speed of approved vaccines and treatments.

We expect that any significant further or prolonged deterioration in the global economic conditions and disruptions to our global supply chain would adversely impact our operations, business results and financial condition.

Although certain restrictions related to the COVID-19 pandemic have eased, uncertainty continues to exist regarding such measures and potential future measures.

Efforts to combat the virus have been complicated by viral variants.

The COVID-19 pandemic has disrupted our operations and is expected to continue to negatively impact our operations in numerous ways.

It has also negatively impacted the global economy, created significant volatility and disruption of financial markets and caused disruptions in our supply chains and logistics.

The rapid increase in demand as the COVID-19 pandemic wanes has caused and is expected to continue to cause significant stress on global supply chains, resulting in parts and components shortages and/or inefficiencies in production.

Current material and component shortages have limited and could continue to limit our ability to meet customer demand.

Additionally, the COVID-19 pandemic adversely affected our workforce, with temporary factory closures, slowdowns, inefficiencies and restrictions on travel and transports, among other effects, thereby negatively impacting our operations.

A significant percentage of global team members continue to work remotely, which can introduce operational and cybersecurity risks.

Because working remotely has become more prevalent and accepted as a result of the COVID-19 pandemic, companies could determine that it will be acceptable for employees to work from their homes on a long-term basis, which could over time reduce demand for our products.

We developed and implemented new health and safety protocols, business continuity plans and different scenario plans in an effort to try to mitigate the negative impact of the COVID-19 pandemic.

Our management continues to remain focused on mitigating the impact of the COVID-19 pandemic, which has required a large investment of time and resources, which may delay other value-add initiatives.

It is not possible to accurately predict with any degree of certainty the impact of the COVID-19 pandemic on our operations going forward as the situation continues to remain fluid.

Despite our efforts and numerous measures taken to manage the impacts of the COVID-19 pandemic, the full degree and extent to which it will ultimately affect our operational and financial performance will depend on uncertain future developments and factors beyond our control, including, but not limited to, the pace of the continued spread of the pandemic, the severity and ultimate duration of the pandemic, including any resurgences, mutations or variants, any governmental regulations or restrictions imposed in response to such, and the ultimate efficacy and distribution speed of approved vaccines and treatments.

We expect that any further or prolonged disruptions to our global supply chain would adversely impact our operations, business results and financial condition.

Such factors could also continue to adversely affect our customers’ financial condition, resulting in further reduced spending for our products and services.

The longer the pandemic continues, the more likely that more of the foregoing risks may be realized.

The COVID-19 pandemic caused a global recession and there is no certainty about when a sustained economic recovery may occur and what such recovery will look like.

The impact of COVID-19 may also continue to exacerbate other risks discussed below in this section Item 1A.

The impact of the COVID-19 pandemic continues to evolve and its ultimate duration, severity and disruption to our business, customers and supply chain, and the related financial impact to us, cannot be accurately forecasted at this time.

The impact of the COVID-19 pandemic may also continue to exacerbate other risks discussed below in this section Item 1A.

Risk Factors, any of which could have a material effect on us.

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Our ability to match new product offerings to diverse global customers’ anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success.

This requires a thorough understanding of our existing and potential customers on a global basis, particularly in developing markets, including China, India, Brazil and the Middle East.

This requires a thorough understanding of our existing and potential customers on a global basis, particularly in developing markets, including China, India, Latin America, the Middle East and Africa.

Failure to compete effectively could result in lower revenues from our products and services, lower gross margins or cause us to lose market share.

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Any delay in receiving supplies could impair our ability to deliver products to our customers and, accordingly, could have a material adverse effect on our business, results of operations and financial condition.

Principal materials and components used in our various manufacturing processes include steel, castings, engines, tires, hydraulics, cylinders, drive trains, electric controls and motors, and a variety of other commodities and fabricated or manufactured items.

Increases in the cost of these materials and components may affect our financial performance.

If we are unable to recover a substantial portion of increased raw material or component costs through duty draw-back or from our customers and suppliers, our business or results of operation could be adversely affected.

We have experienced, and in the future are likely to experience, significant disruption of the supply of some of our parts, materials, components and final assemblies that we obtain from suppliers or subcontractors.

For example, the rapid increase in demand as the COVID-19 pandemic wanes has caused, and is expected to continue to cause, significant stress on global supply chains.

As economies around the world have reopened in 2021, sharp increases in demand have created significant disruptions to the global supply chain, which have affected our ability to receive goods on a timely basis and at anticipated costs.

Principal materials and components used in our various manufacturing processes include steel, castings, engines, tires, hydraulics, cylinders, drive trains, electric controls and motors, semiconductors, and a variety of other commodities and fabricated or manufactured items.

Increases in input costs and freight due to price inflation and global supply chain disruptions may adversely affect our financial performance.

Additionally, tariffs on certain Chinese origin goods may put pressure on input costs.

Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, railway and air freight capacity, and labor availability constraints, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, and increased transportation costs.

We actively monitor and mitigate supply chain risk, but there can be no assurance that our mitigation plans will be effective to prevent disruptions that may arise from shortages of materials that we use in the production of our products.

Uncertainties related to the magnitude and duration of global supply chain disruptions have adversely affected, and may continue to adversely affect, our business and outlook.

If we are unable to recover a substantial portion of increased costs from our customers and suppliers, or through duty draw-back, our business or results of operations could be adversely affected.

In addition, we purchase material and services from our suppliers on terms extended based on our overall credit rating.

Deterioration in our credit rating may impact suppliers’ willingness to extend terms and in turn accelerate cash requirements of our business.

Consolidation within our customer base and suppliers may negatively impact our pricing and product margins.

Over the last few years, some of our larger customers have been actively growing through acquisitions.

This consolidation has increased the concentration of our largest customers, resulting in increased pricing pressure from our customers.

Should our larger customers continue to grow through acquisitions, their buying influence may grow and negatively impact our negotiating leverage.

Some of our suppliers have undergone a similar process of consolidation.

The consolidation of our largest suppliers has resulted in limited sources of supply for certain parts and components and increased cost pressures from our suppliers.

Any future consolidation of our customer base or our suppliers could negatively impact our business, financial condition, results of operations and cash flows.

If this trend in customer and supplier consolidation continues, it could have an unfavorable impact on our pricing and product margins.

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

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• global and regional economic conditions;

• the United Kingdom’s (“U.K.”) departure from the European Union (“E.U.”);

• political instability;

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• transportation delays and interruptions;

• costs and difficulties in integrating, staffing and managing international operations, especially in developing markets such as China, India, Brazil and the Middle East;

• costs and difficulties in integrating, staffing and managing international operations, especially in developing markets such as China, India, Latin America, the Middle East and Africa;

• difficulty in obtaining distribution support;

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• current and changing tax laws.

In addition, many of the nations in which we operate have developing legal and economic systems adding greater uncertainty to our operations in those countries than would be expected in North America and Western Europe.

These factors may have an adverse effect on our international operations in the future.

We continue to focus on operational improvement in developing markets such as China, India, Brazil and the Middle East.

We continue to focus on operational improvement in developing markets such as China, India, Latin America, the Middle East and Africa.

These efforts will require us to hire, train and retain qualified personnel in countries where language, cultural or regulatory barriers may exist.

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Any decrease or delay in government funding of highway construction and maintenance, other infrastructure projects and overall government spending could cause our revenues and profits to decrease.

We may face limitations on our ability to integrate acquired businesses.

From time to time, we may engage in strategic transactions involving risks, including the possible failure to successfully integrate and realize the expected benefits of such transactions.

We have consummated acquisitions in the past and anticipate making additional acquisitions in the future.

Our ability to realize the anticipated benefits of any purchase, including the expected combination benefits, will depend, to a large extent, on our ability to integrate any acquired businesses.

The risks associated with integrating acquired businesses include:

• the business culture of the acquired business may not match well with our culture;

• technological and product synergies, economies of scale and cost reductions may not occur as expected;

• we may acquire or assume unexpected liabilities;

• faulty assumptions may be made regarding the acquisition and integration process;

• unforeseen difficulties may arise in integrating operations and systems;

• we may fail to retain, motivate and integrate key management and other employees of the acquired business;

• we may experience problems in retaining customers.

The successful integration of any newly acquired business also requires us to implement effective internal control processes in these acquired businesses.

We cannot ensure that any newly acquired companies will operate profitably, that the intended beneficial effect from these acquisitions will be realized and that we will not encounter difficulties in implementing effective internal control processes in these acquired businesses, particularly when the acquired business operates in foreign jurisdictions and/or was privately owned.

Any of the foregoing could adversely affect our business and results of operations.

If we fail to successfully integrate any acquired business, this could have an adverse effect on our business, financial condition and results of operations.

Financial and General Economy Risks

Our business is affected by the cyclical nature of markets we serve.

Demand for our products tends to be cyclical and is affected by the general strength of the economies in which we sell our products, prevailing interest rates, residential and non-residential construction spending, capital expenditure allocations of our customers and other factors.

As discussed under the risk factor titled, “Global public health pandemics, such as the COVID-19 pandemic, have adversely impacted and may continue to adversely impact our business, results of operations and financial condition and the ultimate impact will depend on future developments, which remain uncertain,” the COVID-19 pandemic negatively impacted the global economy and significantly increased economic and demand uncertainty.

These uncertain economic conditions have caused and may continue to cause our customers to forego or postpone new purchases.

While we are expecting to experience sales growth in 2022, we cannot provide any assurance the global economic weakness of the recent past will not recur.

As discussed under the risk factor titled, “We are dependent upon third-party suppliers, making us vulnerable to supply shortages and price increases,” the supply chain is currently constrained, and if we are not able to receive parts and components on a timely basis and at anticipated costs, we may not achieve the growth we expect in sales or profitability.

If our customers are not successful in generating sufficient revenue or are precluded from securing financing, they may not be able to pay, or may delay payment of, receivables that are owed to us.

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We are coming through a period during which global economic conditions and key commodity prices rapidly and significantly declined, and if economic conditions in the U.S.

and other key markets deteriorate further or do not show continued improvement, we may experience negative impacts to our net sales, financial condition, profitability and cash flows, which could result in the need for us to record impairments.

and other key markets do not show continued improvement, we may experience negative impacts to our net sales, financial condition, profitability and cash flows, which could result in the need for us to record impairments.

We have taken a number of steps, and will continually review our operations, to reduce our costs.

There can be no assurance, however, that these steps will mitigate the negative impact of a possible continued deterioration in economic conditions.

Our financial results could be adversely impacted by the U.K.’s departure from the E.U.

On January 31, 2020, the U.K.

withdrew from the E.U., which is commonly referred to as “Brexit”.

On December 24, 2020, the U.K.

announced they had reached an agreement which contains new rules for certain aspects on how the U.K.

will live, work and trade together.

The ultimate impact of the withdrawal of the U.K.

from the E.U.

remains uncertain, and may adversely impact the global economy, particularly business activity and economic and market conditions in the U.K.

and other important European economies.

Depending on the ultimate interpretations and application of the agreements negotiated by the U.K.

with the E.U.

and other countries, we could become subject to, among other things, export tariffs and regulatory restrictions that could increase transaction costs, reduce our ability to hire or retain employees in Northern Ireland, reduce access to supplies and materials, cause shipping delays because of the need for new customs inspections and procedures and reduce demand or access to customers in international markets, all of which would impair our ability to conduct our operations as they have been conducted historically.

While we have not experienced any direct material financial impact as a result of Brexit, we cannot predict its future implications and it is possible there will be financial, trade, regulatory or legal implications of Brexit that could adversely affect our business, financial condition or results of operations, particularly for our MP segment which has significant manufacturing facilities in Northern Ireland.

Changes affecting the availability of LIBOR may have consequences on us that cannot yet reasonably be predicted.

We currently have outstanding variable rate debt with interest rates based on LIBOR.

The U.K.’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop one week and two month U.S.

Dollar LIBOR rates after 2021 with remaining U.S.

Dollar LIBOR rates ceasing to be published on June 30, 2023.

In the U.S., the Alternative Reference Rates Committee has proposed the Secured Overnight Financing Rate (“SOFR”) as an alternative to LIBOR.

It is not presently known whether SOFR or any other alternative reference rates that have been proposed will attain market acceptance as replacements of LIBOR.

In addition, the overall financial markets may be disrupted as a result of the phase-out replacement of LIBOR.

Uncertainty as to the nature of such phase-out and selection of an alternative reference rate, together with disruption in the financial markets, may cause our interest expense to increase and our available cash flow and/or financial condition to be adversely affected.

There can be no assurance, however, that these steps will mitigate the negative impact of a possible deterioration in economic conditions.

We have a significant amount of debt outstanding and must comply with restrictive covenants in our debt agreements.

Our total debt at December 31, 2020 was approximately $1.2 billion.

Our credit agreement and other debt agreements contain financial and restrictive covenants that may limit our ability to, among other things, borrow additional funds or take advantage of business opportunities.

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In addition, our credit agreement indebtedness may use LIBOR as a benchmark for establishing our interest rate.

As discussed above, LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform which may cause LIBOR to perform differently than in the past or to be replaced entirely.

While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point which may impact our interest expense.

Our credit agreement provides for any changes away from LIBOR to a successor rate to be based on prevailing or equivalent standards, however, the replacement of LIBOR may result in fluctuating interest rates that may have a negative impact on our interest expense and our profitability.

Consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our credit agreement indebtedness.

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These economic conditions could have a material adverse effect on demand for our products and on our financial condition and operating results.

We are exposed to losses from providing financing and credit support to some of our customers.

We may assist customers in their rental, leasing and acquisition of our products by issuing guarantees to financial institutions or providing direct financing to our customers.

We assess the expectation of losses or non-performance based on consideration of historical customer reviews, current financial conditions, reasonable and supportable forecasts, equipment collateral value and other factors.

We are exposed to losses from providing credit support to some of our customers.

We may assist customers in their rental, leasing and acquisition of our products by facilitating financing transactions directly between (i) end-user customers, distributors and rental companies and (ii) third-party financial institutions, providing recourse in certain circumstances.

The expectation of losses or non-performance is assessed based on consideration of historical customer assessments, current financial conditions, reasonable and supportable forecasts, equipment collateral value and other factors.

Many of these factors, including the assessment of a customer’s ability to pay, are influenced by economic and market factors that cannot be predicted with certainty.

Our customers may fund the acquisition of our equipment through third-party finance companies.

In certain instances, we may provide a credit guarantee to the finance company by which we agree to make payments to the finance company should the customer default.

Our maximum liability is generally limited to our customer’s remaining payments due to the finance company at the time of default.

Our maximum liability is generally limited to our customer’s remaining payments due to the third-party financial institutions at the time of default.

In the event of a customer default, we are generally able to recover and dispose of the equipment at a minimum loss, if any, to us.

We also provide financing for some of our customers to acquire and use our equipment through loans, sales-type leases, and operating leases.

Until such financing obligations are satisfied through either customer payments or a third party sale, we retain the risks associated with such customer financing.

Our results could be adversely affected if such customers default on their contractual obligations to us, if residual values of such equipment on these transactions decline below original estimated values or we are unable to sell the financing receivable to a third party.

During periods of economic weakness, collateral underlying our guarantees of indebtedness of customers or receivables can decline sharply, thereby increasing our exposure to losses.

During periods of economic weakness, collateral underlying our guarantees of indebtedness of customers can decline sharply, thereby increasing our exposure to losses.

In the future, we may incur losses in excess of our recorded reserves if the financial condition of our customers were to deteriorate further or the full amount of any anticipated proceeds from the sale of the collateral supporting our customers’ financial obligations is not realized.

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We evaluate the collectability of our receivables based on consideration of a customer’s payment history, leverage, availability of third-party financing, political and foreign exchange risks, and other factors.

Recorded reserves represent our estimate of current expected credit losses on existing receivables and are determined based on historical customer reviews, current financial conditions and reasonable and supportable forecasts.

Recorded reserves represent our estimate of current expected credit losses on existing receivables and are determined based on historical customer assessments, current financial conditions, and reasonable and supportable forecasts.

An unexpected change in customer financial condition or future economic uncertainty could result in additional requirements for specific reserves, which could have a negative impact on our consolidated financial position.

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The reporting currency for our consolidated financial statements is the U.S.

Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound and Australian dollar.

Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound, Chinese Yuan, Australian Dollar and Mexican Peso.

Those assets, liabilities, expenses, revenues and earnings are translated into U.S.

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dollar may cause our actual results to differ materially from those anticipated in our guidance and have a material adverse effect on our business or results of operations.

We note that Brexit may negatively impact the value of the British Pound as compared to the U.S.

dollar and other currencies.

We assess foreign exchange risk based on transactional cash flows, identify naturally offsetting positions and purchase hedging instruments to partially offset anticipated exposures.

We assess foreign currency risk based on transactional cash flows, identify naturally offsetting positions and purchase hedging instruments to partially offset anticipated exposures.

Despite our efforts to partially hedge our anticipated exposures, currency fluctuations may impact our financial performance in the future.

Human Capital Risks

We rely on key management.

We rely on key management and skilled labor, and we may be unable to attract and retain qualified team members.

We rely on the management and leadership skills of our senior management team, particularly those of the Chief Executive Officer.

The loss of the services of key employees or senior officers, or the inability to identify, hire and retain other highly qualified personnel in the future, could adversely affect the quality and profitability of our business operations.

Our ability to expand or maintain our business depends on our ability to hire, train and retain team members with the skills necessary to understand and adapt to the continuously developing needs of our customers.

Efforts to attract talent to fill open roles in light of recent constrained labor availability may take more time than in the past and may cost us significantly more than in recent years.

Moreover, the constrained labor conditions may mean that retention of existing talent may require significant additional pay and incentives.

If we fail to attract, motivate, train and retain qualified personnel, or if we experience excessive turnover, we may experience declining sales, manufacturing delays or other inefficiencies, increased recruiting, training and relocation costs and other difficulties, and our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Competition for qualified personnel is intense and we may not be successful in attracting or retaining qualified personnel, which could negatively impact our business.

We may be adversely impacted by work stoppages and other labor matters .

As of December 31, 2020, we employed approximately 8,200 people worldwide in our continuing operations businesses.

As of December 31, 2021, we employed approximately 8,600 people worldwide.

While we have no reason to believe that we will be impacted by work stoppages or other labor matters, we cannot assure that future issues with our team members or labor unions will be resolved favorably or that we will not encounter future strikes, further unionization efforts or other types of conflicts with labor unions or our team members.

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Legal, Regulatory & Compliance Risks

Changes in import/export regulatory regimes, the imposition of tariffs and escalation of global trade conflicts could continue to negatively impact our business.

Changes in import/export regulatory regimes, imposition of tariffs, escalation of global trade conflicts and unfairly traded imports, particularly from China, could continue to negatively impact our business.

government has imposed tariffs on certain foreign goods from a variety of countries and regions that it perceives as engaging in unfair trade practices, and previously raised the possibility of imposing additional tariff increases or expanding the tariffs to capture other types of goods.

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imports have made the cost of some of our products more expensive for our Chinese customers.

We cannot predict the extent to which the new U.S.

administration or other countries will impose new or additional quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business.

We cannot predict the extent to which the U.S.

or other countries will impose new or additional quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business.

Tariffs and the possibility of an escalation or further developments of current trade conflicts, particularly between the U.S.

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While we have been able to mitigate a portion of the effects of tariffs through the U.S.

government’s duty draw back mechanism and from tariff exclusions, nearly all tariff exclusions have expired and there is no indication that expired tariff exclusions will be reinstated.

If we are unable to recover a substantial portion of increased raw material, component or machinery costs through duty draw-back or from our customers and suppliers this could have an adverse effect on our business or results of operations.

government’s duty draw-back mechanism and from tariff exclusions, all tariff exclusions have expired.

There is potential that some tariff exclusions may be reinstated, although this is uncertain.

If we are unable to recover a substantial portion of increased costs from our customers and suppliers or through duty draw-back, our business or results of operations could be adversely affected.

The Coalition of American Manufacturers of Mobile Access Equipment, an alliance of mobile access equipment producers in the U.S.

of which we are a member, is pursuing anti-dumping and countervailing cases against unfairly traded Chinese imports of mobile access equipment.

While the U.S.

Department of Commerce has issued in 2021 a countervailing and preliminary anti-dumping duty rate on mobile access equipment from China, these duties may not be enough to offset the subsidies provided by the Chinese government to Chinese mobile access equipment manufacturers.

If additional duties are not imposed on imports of Chinese mobile access equipment and/or the duties are not finalized through affirmative final determinations, we may continue to operate at a disadvantage to Chinese manufacturers.

This could result in reduced demand for our products in the U.S.

and have an adverse effect on our business or results of operations.

Compliance with environmental regulations could be costly and require us to make significant expenditures.

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While additional regulation of emissions in the future appears likely, it is too early to predict how new regulations would ultimately affect our business, operations or financial results, although government policies limiting greenhouse gas emissions of our products will likely require increased compliance expenditures on our part.

While plans are in place to continue to comply with the phase-in of European Stage V regulations, we are dependent on our engine suppliers to continue to timely deliver engines which meet applicable emissions regulations.

A failure to timely receive appropriate engines from our suppliers could result in our being placed in uncompetitive positions or without finished product when needed.

Compliance with environmental laws and regulations has required, and will continue to require, us to make expenditures;

however, we do not expect these expenditures to have a material adverse effect on our business or results of operations.

There is also increased focus, including by governmental and non-governmental organizations, investors and other stakeholders, on these and other sustainability matters.

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Foreign Corrupt Practices Act and similar worldwide anti-corruption laws.

We must comply with all applicable laws, including the Foreign Corrupt Practices Act (“FCPA”) and other laws that prohibit engaging in corruption for the purpose of obtaining or retaining business.

We must comply with all applicable laws, including the Foreign Corrupt Practices Act and other laws that prohibit engaging in corruption for the purpose of obtaining or retaining business.

These anti-corruption laws prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage regardless of whether those practices are legal or culturally expected in a particular jurisdiction.

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The timing and amount of benefits from our strategic initiatives may not be as expected and our financial results could be adversely impacted.

In 2020, we transitioned our “Focus, Simplify, Execute to Win” strategy to “Execute, Innovate, Grow”.

Each business in our Company is unique, but all businesses are managed to the “Execute, Innovate, Grow” operating framework .

This is part of our continuing strategy to deliver long-term growth and earnings to our shareholders.

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Although “Execute, Innovate, Grow” is expected to improve future operating margins and revenue growth, if we are unable to achieve expected benefits from these initiatives or are unable to complete them without material disruption to our businesses, the timing and amount of benefits may not be as expected and could adversely impact the Company’s competitive position, financial condition, profitability and/or cash flows.

General Risk Factors

Information Technology Risks

We may be adversely affected by disruption in, or breach in security of, our information technology systems.

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In addition, we could be impacted by cyber threats, disruptions or vulnerabilities of our customers and suppliers.

Like other global companies, we have experienced cyber threats and incidents, although none have had a material adverse effect on our business or financial condition.

Like other global companies, we have experienced cyber threats and incidents in our systems and those of our third-party providers, and we have experienced viruses and attacks targeting our information technology systems and networks, although none have had a material adverse effect on our business or financial condition.

Our information security efforts include programs designed to address security governance, identification and protection of critical assets, insider risk, third-party risk and cyber defense operations.

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

What changed 10-K

Item 1A. Risk Factors