−Removed: Factors that could affect future results include the following:
−Removed: IMPLEMENTATION OF BUSINESS STRATEGY IN INFORMATION TECHNOLOGY MARKET
−Removed: Future results may be adversely impacted if we are unable to grow revenue and expand margin in our Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions businesses.
−Removed: Our strategy places an emphasis on growing revenue, including specifically from higher-value and higher-margin offerings in our Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions businesses.
−Removed: Our ability to grow revenue and profitability in these businesses will depend our ability to win contracts with clients for higher growth and higher-margin user experience-based solutions, which in turn depends on our ability to offer differentiated solutions that meet client needs.
−Removed: It will also depend on an efficient utilization of delivery personnel.
−Removed: Revenue and profit margins in these businesses are a function of both the portfolio of solutions sold and the rates we are able to charge for solutions.
−Removed: The rates we are able to charge for our solutions are affected by a number of factors, including clients’ perception of our ability to add value through our solutions, introduction of new offerings by us or our partner eco-system, market pricing pressure, and general economic conditions such as inflation or an economic downturn, or the perception of the risk of these occurrences.
−Removed: Chargeability is also affected by a number of factors, including our ability to transition resources from completed projects to new engagements and across geographies, and our ability to forecast demand for services and thereby maintain appropriate resource levels.
−Removed: Our results of operations and financial condition may be adversely impacted if sales of higher-margin offerings do not offset declines in revenue and profitability of lower-margin offerings, including lower-margin contracts that we voluntarily exit.
−Removed: Future results may be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services.
−Removed: We continue to invest in our ClearPath Forward operating system software in order to retain and extend our existing client base included in our Enterprise Computing Solutions business.
−Removed: If clients do not believe in the value proposition provided by ClearPath Forward or choose not to renew their contracts, there may not be a meaningful return on these investments, and revenue could decline meaningfully.
−Removed: Furthermore, if ClearPath Forward is sold in the form of Software as a Service (SaaS) at an accelerated pace, this would have a negative impact on our short- and medium-term cash position and could adversely impact our operations, financial condition and liquidity.
−Removed: Additionally, we also continue to invest in other software and solutions and related services.
−Removed: If we are unsuccessful in selling these other solutions and related services, there may not be a meaningful return on these investments.
−Removed: Further, the revenues generated by other solutions and related services may be insufficient to offset any revenue declines caused if we are unable to retain our installed base.
−Removed: If we are unable to attract and retain experienced personnel in key positions, our future results could be adversely impacted.
−Removed: Our ability to retain, train and develop our existing associate base in the skills and solutions required to service our clients is critical to our future success.
−Removed: We also need to attract new talent to augment the skills required to deliver our solutions to our clients.
−Removed: Our failure to retain, train and develop existing personnel or attract new talent with the requisite skill set, retain key personnel or implement an appropriate succession plan for such personnel could adversely impact our ability to successfully carry out our business strategy.
+Added: We are subject to a wide range of factors that could materially affect future performance.
+Added: Because of these factors, past performance may not be a reliable indicator of future results.
+Added: You should carefully consider, together with the other information contained in this Annual Report on Form 10-K, the risks and uncertainties described below.
+Added: These risks may have a material adverse effect on our reputation, business, results of operations, financial condition, or cash flows.
+Added: In addition to these risks, there may be additional risks and uncertainties that adversely affect our business, performance or financial condition in the future that are not presently known, are not currently believed to be significant or are not identified below because they are common to most or all companies.
+Added: BUSINESS AND OPERATING RISKS
+Added: Cyber incidents, security breaches and other disruptions in our IT systems have occurred and will continue to occur that could result in the incurrence of significant costs as well as harm to our business.
+Added: Our business includes managing, processing, storing and transmitting information, including proprietary, confidential, client, employee and personal information, intellectual property and proprietary business information.
+Added: This information is housed within our own information systems (made of a combination of on-premise and third-party cloud providers), the cloud and those that we design, develop, host or manage for clients.
+Added: These systems are critical to our and our clients’ business activities and unauthorized access to, disruption of, or attacks on these systems pose serious risks, including inadvertent loss or disclosure of company, information and employee and client data.
+Added: In addition, negligent or improper conduct of our employees or third parties working on our behalf with access to these systems and the sensitive information housed therein have and may in the future adversely affect our business and reputation.
+Added: We have experienced, and will continue to experience, cybersecurity attacks and other security breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond.
+Added: These include cyberattacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries.
+Added: The occurrence of cybersecurity attacks and other security breaches continue to increase globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as denial of service attacks, wireless network attacks, viruses and worms, malicious software, ransomware, malware, misconfigurations, supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, business email compromises and cyber-extortion, among other cybersecurity threats.
+Added: As a known provider of IT solutions, we are and will remain an attractive target for such attacks.
+Added: Furthermore, our industry subjects us to elevated risk and, accordingly, security vulnerabilities can occur and will continue to occur across a broad range of hardware, software or other infrastructure, increasing for us the potential of occurrence and the cost of response and remediation.
+Added: These attacks have been successful against us and those of our third-party service providers and have resulted in, and in the future could result in, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure of confidential or other information, including intellectual property, personal information, and data of the company, third parties, employees, clients or others.
+Added: For example, in 2022, the company disclosed a cyber attack involving our software lab environment, which caused no service disruptions for our operations or, to our knowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software.
+Added: The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, which increases the risk and severity when they occur.
+Added: Additionally, limitations in the ability of our IT teams to remain up-to-date with the tools necessary to thwart these threat actors could lead to attacks not being detected until after the attack has occurred.
+Added: In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cyber incidents and security breaches, which could affect our ability to report or address these incidents effectively or in a timely manner.
+Added: An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes.
+Added: The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and classic hacking techniques.
+Added: Similarly, the threat of malicious cyber activity from nation states and other sophisticated actors continues to increase, particularly with the rise of global conflicts like in the Ukraine.
+Added: Any disruption, termination or substandard provision of services, including by us or third-party cloud providers, could materially and adversely affect our business by disrupting normal IT operations, customer service, accounting and technology functions, affecting our ability to comply with our financing arrangements and otherwise impacting our ability to manage our business.
+Added: Disruption, termination or substandard provision of services could be the result of localized conditions (such as power outages, telecommunications failures, fire or explosion), failure of our systems to function as designed, or as the result of events or circumstances of broader geographic impact (such as storms, earthquakes, floods, epidemics, strikes, acts of war, civil unrest
+Added: or terrorist acts).
+Added: We have incurred such disruptions, which have resulted and could result in further substantial repair or replacement costs and/or data loss or other impediments that affect our ability to run our business.
+Added: To date these disruptions have not had a material impact on our operations;
+Added: however, there is no assurance that such impacts will not be material in the future, and such disruptions have in the past and may in the future have the impacts discussed below.
+Added: Cyber incidents, security breaches and other disruptions in our IT systems have exposed, and in the future could expose, us to liability, litigation and regulatory or other government action, which could result in the loss of existing or potential clients, damage to our brand and reputation, damage to our competitive position and financial loss.
+Added: In addition, the cost and operational consequences of responding to cyber incidents and security breaches and implementing remediation measures is and could continue to be significant.
+Added: These financial consequences include the costs associated with obtaining and maintaining cyber insurance.
+Added: While we work to continuously evaluate our security perimeter to strengthen and enhance our security posture, our efforts may not meet the ever-evolving level of sophistication, volume, persistence and novelty of the threats, or our efforts may not be complete or sufficient to adequately maintain the confidentiality, security, or availability of the data we collect, store and use to operate our business.
+Added: For information on our cybersecurity risk management, strategy and governance, see Item 1C.
+Added: - Cybersecurity.
+Added: A significant portion of our revenue is derived from our installed base.
+Added: Future results may be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services to existing and new clients.
+Added: A significant portion of our revenue is derived from our installed base, many of which are subject to long-term contracts.
+Added: We continue to invest in our solutions to retain and extend our existing client base as well as attract new clients.
+Added: If legacy clients do not believe in the value provided by our solutions and exit their contracts, or if they choose not to renew their contracts, or not to renew these contracts on terms at least as favorable as the current contracts, our revenue could decline meaningfully and there could be a material adverse effect on our business, results of operations or financial condition.
+Added: We could also lose clients because of their merger, acquisition or business failure.
+Added: We may not be able to replace the revenue and earnings from any such lost client.
+Added: We are expecting revenue, margin and market share expansion due to our differentiated solutions and the decision by some of our competitors to exit or de-emphasize their focus on our targets markets.
+Added: If some or all of these competitors focus on our target markets, it could adversely affect our ability to gain market share or otherwise adversely affect future results.
+Added: Furthermore, if ClearPath Forward is sold in the form of Software as a Service (SaaS) at an accelerated pace, this would have a negative timing impact on our short- and medium-term cash position and could adversely impact our operations, financial condition and liquidity.
+Added: Additionally, we invest in and sell new solutions and related services.
+Added: If we invest insufficiently or are unsuccessful in selling these other solutions and related services, there may not be a meaningful return on these investments.
+Added: Further, the revenues generated by newer solutions and related services may be insufficient to offset any revenue declines caused if we are unable to retain the revenues generated by our installed base.
+Added: Future results may be materially adversely impacted if we are unable to grow revenue, expand profit margin and generate sufficient cash flows in our businesses.
+Added: Our strategy places an emphasis on growing revenue, including specifically from higher-value and higher-margin offerings and our ability to profitably grow revenue and generate cash flows in our businesses depends on our ability to win contracts with clients for higher growth and higher-margin solutions.
+Added: This in turn depends on our ability to offer solutions that meet client needs.
+Added: It also depends on an efficient utilization of delivery personnel and the ability to meet our clients’ technological needs.
+Added: Revenue and profit margin in these businesses are a function of both the portfolio of solutions sold and the rates we charge.
+Added: The rates we charge for our solutions are affected by several factors, including clients’ perception of our ability to add value, introduction of new offerings by us or our alliance partners, market pricing pressure, and general economic conditions such as inflation or an economic downturn, or the perception of the risk of these occurrences.
+Added: Chargeability is also affected by several factors, including our ability to transition resources from completed projects to new engagements and across geographies, and our ability to forecast demand for services and thereby maintain appropriate resource levels.
+Added: Our results of operations and financial condition may be materially adversely impacted if sales of higher-margin offerings do not offset declines in revenue and profitability of lower-margin offerings, including contracts that we voluntarily exit.
+Added: Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases.
+Added: Approximately 56% of our total revenue for 2023 was derived from international operations.
+Added: Given our global operations, macroeconomic conditions, like foreign currency exchange rate fluctuations, currency restrictions and devaluations, increases in inflation rates and weaker intellectual property protections in some jurisdictions, as well as geopolitical conditions affect us, our
+Added: clients’ businesses and the markets they serve.
+Added: Volatile, negative and uncertain economic and political conditions have in the past, and could in the future, undermine business confidence in markets where we operate or plan to operate, which could cause our clients to reduce, defer or eliminate spending on new initiatives and technologies or existing contracts, both of which could negatively affect our business.
+Added: Growth in some markets we serve has slowed and could continue to slow, stagnate or contract.
+Added: The same could occur in other markets where we do business or plant to do business.
+Added: Because we operate globally and have significant businesses in many markets, an economic slowdown in any of key markets such as in the United States or Europe could adversely affect our results of operations.
+Added: Ongoing economic and political volatility and uncertainty and changing demand patterns affect our business in several ways, including making it more difficult to accurately forecast client demand and effectively build our revenue and resource plans.
+Added: Economic and political volatility and uncertainty is particularly challenging because it may take time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations.
+Added: Additionally, our business has been, and can in the future be, adversely impacted by acts of war, terrorism, natural disasters and the widespread outbreak of infectious diseases, like the COVID-19 pandemic, as such events have unpredictable consequences on the world economy and our operations.
+Added: Changing demand patterns from economic and political volatility and uncertainty, including because of increasing geopolitical tensions, inflation, economic downturns and changes in global trade policies and their impact on us, our clients and the industries we serve, have in the past had a negative impact and could in the future have a significant negative impact on our results of operations.
+Added: Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations and cash flows.
+Added: Our success depends, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology and offerings to serve the changing needs of our clients.
+Added: Our services and solutions are continually evolving because of as machine learning and AI, including generative AI, augmented and virtual reality, automation, Internet of Things, hybrid computing architectures like quantum, high performance and edge computing, infrastructure and network engineering and intelligent connected solutions.
+Added: As we expand our services and solutions, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to these new areas, which may negatively affect our results of operations, cash flows, reputation and demand for our services and solutions.
+Added: Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud, data and AI solutions, could affect the nature of how we generate revenue.
+Added: Some of these technological developments have reduced and replaced some of our historical services and solutions and will continue to do so in the future.
+Added: This has caused, and may in the future cause, clients to delay spending under existing contracts and delay entering into new contracts while they evaluate new technologies.
+Added: Furthermore, if we are unable to introduce new pricing or commercial models that reflect the value of technological innovation or if the pace and level of spending on new technological developments are not sufficient to make up any shortfall.
+Added: Developments in the industries we serve, which may be rapid, could also shift demand to new services and solutions.
+Added: If, we are unable to offer new services and solutions that match client demand because of changes in the industries we serve, we may be less competitive and need to make significant investment to adapt.
+Added: For example, if we fail to continue to develop leading machine learning and AI services and solutions, including generative AI, we may lose future opportunities.
+Added: Our growth strategy focuses on responding to technological developments by driving innovation that will enable us to expand our business into new growth areas.
+Added: We are applying machine learning and AI to our services, how we deliver work to our clients, and to our own internal operations.
+Added: AI technologies are complex and rapidly evolving, and we face significant competition, including from our clients, who may develop their own internal AI-related capabilities, which can lead to reduced demand for our services and solutions.
+Added: If we do not invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected.
+Added: Our work with government and public sector clients exposes us to additional risks inherent in the government contracting and public sector environment.
+Added: A significant amount of our business comes from government and public sector clients.
+Added: Our clients include national, provincial, state and local government entities, located in a variety of countries.
+Added: This work carries various inherent risks, including, but not limited to, the right to audit our contract costs and conduct inquiries and investigations of our business practices and compliance with government and public sector contract requirements, such as security clearance, and the inherent limitations of internal controls may not prevent or detect all improper or illegal activities.
+Added: Negative findings in such audits, investigations or inquiries could affect our future sales and profitability due to a wide range of consequences, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with new and existing government
+Added: and public sector clients.
+Added: In the ordinary course of business, we have had findings in connection with audits, investigations and inquiries related to government work and public sector clients.
+Added: We have experienced some adverse consequences, as a result, and may in the future experience further adverse consequences because of our work with government and public sector clients, which could materially affect our future results of operations.
+Added: Government and public sector clients typically fund projects through appropriated monies.
+Added: While these projects are often planned and executed as multi-year projects, government and public sector clients usually reserve the right to change the scope of, or terminate these projects for lack of approved funding at their convenience.
+Added: Changes in government or political developments, including changes in administrations or regimes, government closures or shutdowns, budget deficits, shortfalls or uncertainties, government spending reductions or other debt constraints could result in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.
+Added: Furthermore, if insufficient funding is appropriated to the government or public sector client to cover termination costs, we may not be able to fully recover our investments.
+Added: Political and economic factors such as pending elections, the outcome of recent elections, changes in leadership among key executive or legislative decision makers, revisions to governmental tax or other policies and reduced tax revenues could affect the number and terms of new government and public sector contracts signed or the speed at which new contracts are signed, decrease future levels of spending and authorizations for programs that we bid, shift spending priorities to programs in areas for which we do not provide services and/or lead to changes in enforcement or how compliance with relevant rules or laws is assessed.
+Added: The occurrences or conditions described above have had an adverse impact on our results of operations and could have a material adverse effect on our business or our results of operations in the future.
+Added: If we are unable to maintain our credit rating or access the financing markets, it may adversely impact our business and liquidity.
+Added: As of December 31, 2023, we had $485 million aggregate principal amount of our 6.875% Senior Secured Notes due November 1, 2027 (the 2027 Notes).
+Added: Our business may not generate cash flows from operations sufficient to pay off these notes and we expect that we will need to refinance these notes prior to maturity or explore additional sources of debt and/or equity to repay theses notes.
+Added: The agencies rating our indebtedness regularly evaluate us and determine our credit ratings based on several factors.
+Added: These factors include our financial strength and ability to generate earnings and cash flows, as well as factors not entirely within our control, such as rising interest rates, conditions affecting the information technology industry and the economy and changes in rating methodologies.
+Added: A downgrade of our credit ratings could adversely affect our access to liquidity and capital;
+Added: particularly as we plan to refinance the 2027 Notes prior to maturity, an adverse change in our credit rating could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business.
+Added: Rising interest rates and other market conditions may also impact our ability to utilize surety bonds, letters of credit, foreign exchange derivatives or other financial instruments we use to conduct our business.
+Added: These impacts could affect our growth, profitability, and financial condition, including liquidity.
+Added: If we are unable to access the financing markets, we would be required to use cash on hand to fund operations and our required pension contributions and repay outstanding debt as it comes due.
+Added: There is no assurance that we will generate sufficient cash to fund our operations, pension contributions and refinance such debt, including because of impaired access to financing markets, which could have a material adverse effect on our business.
+Added: If we are unable to align employees and their skills with global client demand around the world and retain and develop employees and management with strong leadership skills, our business may be adversely impacted.
+Added: Our success is dependent, in large part, on our ability to attract and retain employees with market-leading skills and capabilities like AI and machine learning in line with global client demand.
+Added: We must reskill, retain and inspire appropriate numbers of talented employees with diverse skills in order to serve our clients, respond quickly to rapid and ongoing changes in demand, technology, industry and the macroeconomic environment, and continuously innovate to grow our business.
+Added: If we are unable to do so, we may not be able to innovate and deliver new services and solutions to fulfill client demand.
+Added: In addition, the unionization of certain of our associate populations results in higher costs and unique operational challenges.
+Added: At certain times and in certain geographical regions, we can find it difficult to attract and retain enough employees with the skills or backgrounds to meet current and/or future demand.
+Added: In these cases, we may need to redeploy existing employees or increase our reliance on subcontractors to fill certain labor needs.
+Added: If we are not successful in these initiatives, our results of operations could be adversely affected.
+Added: If our utilization rate of our employees is too high or too low, it could have an adverse effect on associate engagement and attrition, the quality of the work performed and our ability to staff projects.
+Added: We are dependent on retaining members of the Unisys management team and other employees with critical capabilities.
+Added: If we are unable to do so, our ability to innovate, generate new business opportunities and effectively lead large and complex transformations and client relationships could be jeopardized.
+Added: Our equity-based incentive compensation plans and other variable
+Added: cash compensation programs, as well as promotions, are designed to reward high-performing employees for their contributions and provide incentives for them to remain with us.
+Added: If the anticipated value of such incentives or the pace of promotions does not materialize because of company performance or volatility or lack of positive performance in our stock price, or if our total compensation package is not viewed as being competitive, our ability to attract and retain key employees could be adversely affected.
+Added: We have been, and expect in the future to be, required to contribute additional cash to meet our significant underfunded defined benefit pension plan obligations, and these contributions could have a material impact on our operations, financial condition and liquidity.
+Added: We have significant underfunded obligations under our U.S.
+Added: defined benefit pension plans.
+Added: In 2023, we made cash contributions of $42.4 million, primarily for our international defined benefit pension plans.
+Added: Based on current legislation, global regulations, recent interest rates and expected returns, we estimate cash contributions of approximately $21 million in 2024, primarily for our international defined benefit pension plans.
+Added: We estimate that cash contributions to our U.S.
+Added: defined benefit pension plans will begin to increase in 2025, increasing the total estimated contributions for our U.S.
+Added: defined benefit pension plans to approximately $110 million in 2025 and approximately $770 million in the aggregate from 2026 through 2033.
+Added: Estimates for future cash contributions are likely to change based on several factors including volatility in the capital markets, discount rate changes, asset return changes, or changes in economic or demographic trends.
+Added: There have been significant increases in forecasted contributions to our U.S.
+Added: plans and non-U.S.
+Added: defined benefit pension plans in the past and such forecasts can be significantly impacted in the future.
+Added: If we are unable to generate sufficient cash flows from operations to pay the required future cash contributions, we may not be able to obtain additional funding to satisfy these obligations.
+Added: In such a case, we may be forced to reduce or delay business activities, acquisitions, investments and/or capital expenditures;
+Added: restructure or refinance our indebtedness;
+Added: or seek additional equity capital, waiver or bankruptcy protection, and we may not be able to effect any of these remedies when necessary, or on satisfactory terms.
We face aggressive competition, which could lead to reduced demand for our solutions and related services and could have an adverse effect on our business.
−Removed: The market in which we operate includes a large number of companies vying for customers and market share both domestically and internationally.
+Added: Our future performance is largely dependent on our ability to compete successfully and expand in the markets we currently serve.
+Added: The market in which we operate includes many companies vying for clients and market share both domestically and internationally.
Our competitors include systems integrators, consulting and other professional services firms, outsourcing providers, infrastructure services providers, computer hardware manufacturers and software providers.
−Removed: If we are unable to differentiate our offerings from those of our competitors and renew existing contracts and win new contracts, our revenues may decline.
−Removed: Some of our competitors may develop competing services and products that offer better price for performance or that reach the market in advance of our offerings.
−Removed: Some competitors also have or may develop greater financial and other resources than us, providing them with the enhanced ability to compete for market share, in some instances through significant economic incentives to secure contracts.
−Removed: Some also may be better able to compete for skilled professionals.
−Removed: Any of these factors could lead to reduced demand for our solutions and related services and could have an adverse effect on our business.
−Removed: Future results will depend on our ability to mitigate the effects of aggressive competition on revenues, pricing and margins.
−Removed: Our future results may be adversely impacted if we are unable to effectively anticipate and respond to rapid technological innovation in our industry.
−Removed: We operate in an industry characterized by rapid technological innovation, evolving technology standards, short product life cycles and continually changing customer demand patterns.
−Removed: Future success will depend in part on our ability to anticipate and respond to these market trends and to design, develop, introduce, deliver or obtain new and innovative services and products on a timely and cost-effective basis using newer delivery models.
−Removed: Additionally, we may not be successful in anticipating or responding to changes in technology, industry standards or customer preferences, and the market may not demand or accept our services and product offerings.
−Removed: In addition, services and products developed by competitors may make our offerings less competitive.
−Removed: Our future results will depend on our ability to retain significant clients and attract new clients.
−Removed: We have a number of significant long-term contracts with clients, including governmental entities, and our future success will depend, in part, on retaining our relationships with these clients and attracting new clients.
−Removed: We could lose clients for reasons such as contract expiration, conversion to a competing service provider, disputes with clients or a decision to in-source services.
−Removed: We could also lose clients as a result of their merger, acquisition or business failure.
−Removed: We may not be able to replace the revenue and earnings from any such lost client.
−Removed: We are expecting revenue, margin and market share expansion due to our differentiated solutions and the decisions by some of our competitors to exit or de-emphasize their focus on our target markets.
−Removed: If such competitors change that position, it could impact our ability to gain market share.
−Removed: Our contracts may not be as profitable as expected or provide the expected level of revenues.
−Removed: In a number of our long-term services contracts, our revenue is based on the volume of services and products provided.
+Added: If we are unable to differentiate our offerings from those of our competitors and renew and expand on existing contracts and win new contracts, our revenues may significantly decline.
+Added: Some of our competitors may develop competing solutions and services that offer better price for performance or that reach the market before our offerings.
+Added: Some competitors have and may continue to have greater financial and other resources than we have, providing them with the enhanced ability to compete for market share, including by providing significant economic incentives and discounts to secure contracts.
+Added: Additionally, competitors may generally offer more aggressive pricing or contractual terms, which may affect our ability to win work.
+Added: Even if we have potential offerings that address marketplace or client needs better than others, competitors may be more successful at selling similar services they offer, including to our clients.
+Added: Furthermore, some competitors are more established in certain markets, which may make executing our growth strategy to expand in these markets more challenging.
+Added: Some may be better able to compete for skilled professionals, innovate and/or provide new services and solutions faster than us, or may be able to anticipate the need for services and solutions before we do.
+Added: Our competitors may also team together to create competing offerings.
+Added: If we are unable to compete successfully, we could lose market share and clients to competitors, which could materially adversely affect our results of operations.
+Added: We also may face greater competition due to consolidation of companies in the technology sector through strategic mergers, acquisitions or teaming arrangements.
+Added: Consolidation activity may result in new competitors with greater scale, a broader footprint or offerings that are more attractive than ours.
+Added: New services or technologies offered by competitors, our alliance partners or new entrants may make our offerings less differentiated or less competitive when compared to other alternatives, which may adversely affect our businesses and results of operations.
+Added: Future results depend in part on the pricing, performance and capabilities of third parties with whom we have commercial relationships.
+Added: We maintain business relationships and transact with our alliance partners, suppliers and other third parties that have complementary solutions, services or skills.
+Added: Future results will depend, in part, on the pricing, performance and capabilities of these third parties.
+Added: Inflation may lead to higher labor and other costs charged by these third parties, and supply chain disruptions
+Added: may cause the inability by them to deliver in a timely manner, which could adversely affect our results of operations.
+Added: Additionally, the financial condition of, and our relationship with, distributors and other indirect partners can impact our ability to serve current and potential clients and end users effectively and efficiently.
+Added: Our commercial contracts have not been, and in the future may not be, as profitable as expected or provide the expected level of revenue.
+Added: In many of our long-term solutions and services contracts, revenue is based on the volume of solutions and services provided.
As a result, revenue levels anticipated at contract inception are not guaranteed.
−Removed: Our contracts with governmental entities are subject to the availability of appropriated funds and appropriations may be delayed or may not be made at all.
−Removed: Further, appropriations are subject to many different factors, including budget priorities, economic cycles, change in political administrations and other circumstances beyond our control that may impact our revenues from government contracts.
−Removed: In addition, some of our contracts may permit termination at the customer’s discretion before the end of the contract term or may permit termination or impose other penalties if we do not meet the performance levels specified in the contracts.
−Removed: Some of our services contracts are fixed-price contracts under which we assume the risk for delivery of the contracted services and products at an agreed-upon fixed price.
−Removed: Should we experience problems in performing fixed-price contracts on a profitable basis, adjustments to the estimated cost to complete may be required and may or may not be obtained.
−Removed: Future results will depend on our ability to perform these services contracts profitably.
−Removed: We could face business and financial risk in implementing acquisitions or dispositions.
−Removed: As part of our business strategy, we may from time to time acquire complementary technologies, products and businesses, or dispose of existing technologies, products and businesses, including transactions of a material size.
−Removed: Any acquisitions may result in the incurrence of substantial additional indebtedness or contingent liabilities.
+Added: Some of our contracts may permit termination at the client’s discretion before the end of the contract term or may permit termination or impose other penalties if we do not meet the performance levels specified in the contracts, particularly for government and public sector clients.
+Added: In addition, from time to time, the company is involved in disputes and legal proceedings with our clients concerning solutions and services that the company has provided.
+Added: Some of our commercial contracts require customized solutions, features, configurations and functions, and, in such a customized environment, there have been and may continue to be claims for failure to perform.
+Added: In such cases, we have not, and in the future may not, achieve expected revenue and profit from certain commercial contracts.
+Added: If we are unable to protect or enforce our intellectual property rights, our services or solutions infringe upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others, our business could be adversely affected.
+Added: Our success depends, in part, upon our ability to obtain intellectual property protection for our proprietary platforms, methodologies, processes, software, hardware and other solutions.
+Added: Existing laws of the various countries in which we provide services or solutions may offer only limited intellectual property protection.
+Added: We rely upon a combination of confidentiality policies and procedures, nondisclosure and other contractual arrangements, and patent, trade secret, copyright and trademark laws to protect our intellectual property rights.
+Added: These laws are subject to change at any time and could further limit our ability to obtain or maintain intellectual property protection.
+Added: There is uncertainty concerning the scope of patent and other intellectual property protection for software and business methods, which are fields in which we rely on intellectual property laws to protect our rights.
+Added: Even where we obtain intellectual property protection, our intellectual property rights may not prevent or deter competitors, current or former employees, or other third parties from reverse engineering our solutions or proprietary methodologies and processes or independently developing services or solutions similar to, or duplicative of, ours.
+Added: Further, the steps we take in this regard might not be adequate to prevent or deter infringement or other misappropriation of our intellectual property by competitors, current or former employees or other third parties, and we might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights.
+Added: For example, we have brought and may continue to bring lawsuits to protect our intellectual property, proprietary and other confidential information.
+Added: Enforcing our rights requires considerable time, money and oversight, and we may not be successful in enforcing our rights.
+Added: In addition, we cannot be sure that our services and solutions, including, for example, our software and hardware solutions, or the solutions of others that we offer to our clients, do not infringe on the intellectual property rights of third parties (including competitors as well as non-practicing holders of intellectual property assets), and these third parties could claim that we or our clients are infringing upon their intellectual property rights.
+Added: Furthermore, although we have established policies and procedures to respect the intellectual property rights of third parties and that prohibit the unauthorized use of intellectual property, we may not be aware if our associates have misappropriated and/or misused intellectual property, and their actions could result in claims of intellectual property misappropriation and/or infringement from third parties.
+Added: These claims could harm our reputation, cause us to incur substantial costs or prevent us from offering some services or solutions in the future.
+Added: Any related proceedings could require us to expend significant resources over an extended period of time.
+Added: In most of our contracts, we agree to indemnify our clients for expenses and liabilities resulting from claimed infringements of the intellectual property rights of third parties used to provide our solutions or perform our services.
+Added: In some instances, the amount of these indemnities could be greater than the revenues we receive from the client.
+Added: Any claims or litigation in this area could be time-consuming and costly, damage our reputation and/or require us to incur additional costs to obtain the right to continue to offer a service or solution to our clients.
+Added: If we cannot secure this right at all or on reasonable terms, or we are unable to implement alternative technology in a cost-effective manner, our results of operations could be materially adversely affected.
+Added: The risk of infringement claims against us may increase as we expand our business.
+Added: Further, we rely on third-party software, hardware and other intellectual property in providing some of our services and solutions.
+Added: If we lose our ability to continue using any such software, hardware or intellectual property for any reason, including because it is found to infringe the rights of others, we will need to obtain substitutes or seek alternative means of obtaining the technology necessary to continue to provide such services and solutions.
+Added: Our inability to replace such software, hardware or intellectual property effectively or in a timely and cost-effective manner could materially adversely affect our results of operations.
+Added: We could face business and financial risk through the completion of acquisitions or dispositions.
+Added: As part of our business strategy, we have and may acquire complementary technologies, solutions, services and businesses, or dispose of existing technologies, solutions, services and businesses, including transactions of a material size.
+Added: We may not have the cash sufficient to make such opportunistic acquisitions.
+Added: Accordingly, any acquisitions may result in the incurrence of substantial additional indebtedness or contingent liabilities.
Acquisitions could also result in potentially dilutive issuances of equity securities and an increase in amortization expenses related to intangible assets.
−Removed: Additional potential risks associated with acquisitions include technical, cultural and operational integration challenges;
−Removed: difficulties in maintaining or enhancing the profitability of any acquired business;
−Removed: risks of entering markets in which we have no or limited prior experience;
−Removed: potential loss of employees or failure to maintain or renew any contracts of any acquired business;
−Removed: and expenses of any undiscovered or potential liabilities of the acquired product or business, including relating to employee benefits contribution obligations or environmental requirements.
Potential risks with respect to dispositions include difficulty finding buyers or alternative exit strategies on acceptable terms in a timely manner;
2 unchanged sentences
and post-closing indemnity claims.
−Removed: Further, with respect to both acquisitions and dispositions, management’s attention could be diverted from other business concerns.
−Removed: Adverse credit conditions could also affect our ability to consummate acquisitions or dispositions.
−Removed: The risks associated with acquisitions and dispositions could have a material adverse effect upon our business, financial condition and results of operations.
+Added: The risks associated with acquisitions, including integration, and dispositions could have a material adverse effect upon our business, financial condition and results of operations.
There can be no assurance that we will be successful in consummating future acquisitions or dispositions on favorable terms or at all.
−Removed: DEFINED BENEFIT PENSION PLANS
−Removed: We have significant underfunded pension obligations.
−Removed: We have significant underfunded obligations under our U.S.
−Removed: defined benefit pension plans.
−Removed: In 2022, we made cash contributions of $39.3 million, primarily for our international defined benefit pension plans.
−Removed: Based on current legislation, global regulations, recent interest rates and expected returns, in 2023 we expect to make cash contributions of approximately $40 million, primarily for our international defined benefit pension plans.
−Removed: Based upon our most current estimates as of December 31, 2022, we do not expect to make mandatory cash contributions to our U.S.
−Removed: qualified defined benefit pension plans until 2025.
−Removed: Estimates for future cash contributions are likely to change based on a number of factors including market conditions and changes in discount rates.
−Removed: We may need to obtain additional funding in order to make future contributions.
−Removed: In this event, there is no assurance that we would be able to obtain such funding or that we will have enough cash on hand to pay the required cash contributions.
−Removed: Deterioration in the value of our worldwide defined benefit pension plan assets, as well as discount rate changes, asset return changes, or changes in economic or demographic trends, could require us to make cash contributions to our defined benefit pension plans in the future in an amount larger than currently anticipated.
−Removed: Increased cash contribution requirements or an acceleration in the due date of such cash contributions would further reduce the cash available for working capital, capital expenditures and other corporate uses and may worsen the adverse impact on our operations, financial condition and liquidity.
−Removed: GENERAL BUSINESS RISKS
−Removed: Cybersecurity incidents have occurred and may continue to occur and could result in the incurrence of significant costs and harm to our business and reputation.
−Removed: Our business includes managing, processing, storing and transmitting proprietary and confidential data, including personal information, intellectual property and proprietary business information, within our own IT systems and those that we design, develop, host or manage for clients.
−Removed: These systems are critical to our business activities, and unauthorized access to or disruptions of, and cybersecurity attacks on, these systems pose increasing risks.
−Removed: Like other companies, we have experienced cybersecurity attacks and have had to expend increasing human and financial resources to respond.
−Removed: Cyberattacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and our services and systems, including the systems of our outsourced service providers, have been and may in the future continue to be the target of various forms of cybersecurity incidents such as DNS attacks, wireless network attacks, viruses and worms, malicious software, ransomware, cyber extortion, misconfigurations, supply chain attacks, application centric attacks, peer-to-peer attacks, phishing attempts, backdoor trojans and distributed denial of service attacks, among other cybersecurity threats.
−Removed: Attacks also may include social engineering and cyber extortion to induce customers, contractors, business partners, vendors, employees and other third parties to disclose information, transfer funds, or unwittingly provide access to systems or data.
−Removed: As a known provider of IT solutions, we pose an attractive target for such attacks.
−Removed: The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, and these new techniques may not be detected until after an incident has occurred.
−Removed: Despite established security controls, cybersecurity incidents involving our systems could result in disruption of our services, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure or misuse of confidential or other information, including intellectual property, personal information, and other confidential information (of the company, third parties, employees, clients or others).
−Removed: We could be exposed to liability, litigation, and regulatory or other government action, as well as the loss of existing or potential customers, damage to our brand and reputation, damage to our competitive position, and other financial loss, any of which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.
−Removed: In our industry, security vulnerabilities are increasingly discovered, publicized and exploited across a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response and remediation for us.
−Removed: Although we continuously take significant steps to mitigate cybersecurity risk across a range of functions, such measures can never eliminate the risk entirely or provide absolute security, and we have experienced and expect to continue to experience cyberattacks on our information systems.
−Removed: The failure of our internal control over financial reporting and disclosure controls and procedures to be effective and the potential for material weaknesses in our internal control over financial reporting could result in material misstatements in our financial statements.
−Removed: Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on, and our independent registered public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting.
−Removed: The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
−Removed: Annually, we perform activities that include reviewing, documenting and testing our internal control over financial reporting.
−Removed: In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
−Removed: If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
−Removed: This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price.
−Removed: Following an investigation by our Audit & Finance Committee into our internal control environment, during the fourth quarter of 2022, we reevaluated the effectiveness of our disclosure controls and procedures and internal control over financial reporting and identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting.
−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: In response to these material weaknesses, management implemented remedial actions to improve controls, which included enhancing our written policy regarding information escalation for cyber-incidents, enhancing our disclosure committee, and other measures described under “Status of Remediation Plan for Material Weaknesses” in the “Report of Management” subsection of “Financial Statements and Supplementary Data” (Part II, Item 8 of this Form 10K).
−Removed: Management anticipates that the new controls, as implemented and when tested for a sufficient period of time, will remediate the material weaknesses.
−Removed: However, due to the timing of the design and implementation of our remediation efforts during the fourth quarter of 2022, there has been insufficient time for us to demonstrate consistent execution against all newly implemented actions.
−Removed: As such, management is unable to determine whether the implemented remedial actions are operating effectively at December 31, 2022, and as a result, management has concluded that our internal control over financial reporting was not effective as of December 31, 2022.
−Removed: We expect to continue to enhance our internal controls and assess our operating effectiveness in 2023.
−Removed: We may nevertheless be unsuccessful in remediating the material weaknesses identified by management, or we may be unable to identify and remediate additional control deficiencies, including material weaknesses, in the future.
−Removed: If 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: We have received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters.
−Removed: Professional costs resulting from the investigation that resulted in the identification of the material weaknesses have been significant and are expected to continue to be significant, in particular if litigation costs relating to these regulatory, investigative and enforcement inquiries, subpoenas and demands grow.
−Removed: Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our business partners could occur as a result of the investigation and the material weaknesses.
+Added: LEGAL AND REGULATORY
+Added: Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these legal and regulatory requirements could harm our business and cause reputational risk.
+Added: We are subject to numerous, changing, and sometimes conflicting, legal and regulatory regimes on matters as diverse as anticorruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, including ESG regulation and reporting requirements, anti-competition, anti-money-laundering, data privacy and protection such as those in the United States and the European Union with the General Data Protection Regulation (GDPR), government compliance, wage-and-hour standards, employment and labor relations, product liability, health and safety, environmental, human rights and AI regulations.
+Added: The sanctions environment has resulted in new sanctions and trade restrictions, which may impair trade with sanctioned individuals and countries, and result in negative impacts to regional trade ecosystems among our clients, our alliance partners, and ourselves.
+Added: The global nature of our operations, including emerging markets where legal and regulatory systems may be less developed or understood by us, and the diverse nature of our operations across several regulated industries, further increases the difficulty of compliance.
+Added: Compliance with diverse legal or regulatory requirements is costly, time-consuming and requires significant resources.
+Added: Violations of one or more of these regulations in the conduct of our business or in connection with the performance of our obligations to our clients have occurred and resulted in fines and penalties, claims, money damages and other sanctions, and could result in additional significant fines and penalties, monetary damages, enforcement actions and/or criminal prosecutions or sanctions against us and/or our employees, prohibitions on doing business, restrictions on our ability to carry out our contractual obligations to our clients and damage to our reputation.
+Added: Due to the varying degrees of development of the legal and regulatory systems of the countries in which we operate, local laws may not be well developed or provide clear guidance or they may be insufficient to protect our rights.
+Added: In many parts of the world, including countries in which we operate and/or seek to expand, practices in the local business community might not conform to international business standards and could violate anticorruption laws or regulations, including the U.S.
+Added: Foreign Corrupt Practices Act and the U.K.
+Added: Bribery Act 2010, or economic and trade restrictions administered by the U.S.
+Added: Treasury Department’s Office of Foreign Assets Control.
+Added: Our employees, alliance partners and third parties, including companies we acquire and their employees, subcontractors, vendors and agents, and other third parties with which we work, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anticorruption laws or regulations.
+Added: Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, any of which could materially adversely affect our business, including our results of operations and our reputation.
+Added: Changes in laws and regulations could also mandate significant and costly changes to the way we implement our services and solutions or could impose additional taxes on our services and solutions.
+Added: For example, changes in laws and regulations to limit using off-shore resources in connection with our work or to penalize companies that use off-shore resources, which have been proposed from time to time in various jurisdictions, could adversely affect our results of operations.
+Added: Such changes may result in contracts being terminated or work being transferred onshore, resulting in greater costs to us, and could have a negative impact on our ability to obtain future work from government clients.
+Added: In addition, several jurisdictions where we operate have proposed legislation regulating AI and non-personal data that may impose significant requirements on how we design, build and deploy AI and handle non-personal data for ourselves and our clients.
+Added: For example, some jurisdictions have established extensive new standards for AI safety and security.
+Added: Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging.
+Added: These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to
+Added: change our solutions and services offerings or business practices, or prevent or limit our use of AI.
+Added: If we cannot use AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
+Added: Any of these factors could adversely affect our business, financial condition, and results of operations.
+Added: If we fail again to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business and operating results may be adversely affected.
+Added: If we fail again to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
+Added: If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which could cause investors to lose confidence in our reported financial information and result in significant expenses to remediate.
+Added: Following the identification during the fourth quarter of 2022 of material weaknesses in our disclosure controls and procedures and internal control over financial reporting, which has since been remediated, we have expended, and anticipate we will continue to expend, significant resources including accounting-related costs and costs associated with significant management oversight to maintain and improve the effectiveness of our disclosure controls and procedures and our internal control over financial reporting.
+Added: If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls, which 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.
+Added: If we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange (NYSE).
+Added: In addition, testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
+Added: We have received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters, including as disclosed in Note 18, “Litigation and contingencies” in Part II, Item 8 of this Form 10-K.
+Added: Professional costs resulting from litigation and contingencies have been significant and are expected to continue to be significant, in particular, if litigation costs grow.
+Added: Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our clients could occur as a result.
In addition, as a result of the investigation and remediation efforts, certain operational changes have occurred and may continue to occur in the future.
−Removed: Any or all of these impacts based on the findings of the investigation and related matters and the surrounding circumstances could exacerbate the other risks described herein and directly or indirectly have a material adverse effect on our operations and/or financial performance.
−Removed: If we are unable to access the financing markets, it may adversely impact our business and liquidity.
−Removed: Market conditions may impact our ability to access the financing markets on terms acceptable to us or at all.
−Removed: If we are unable to access the financing markets, we would be required to use cash on hand to fund operations and our required pension contributions and repay outstanding debt as it comes due.
−Removed: There is no assurance that we will generate sufficient cash to fund our operations and required pension contributions and refinance such debt.
−Removed: A failure by us to generate such cash would have a material adverse effect on our business if we were unable to access financing markets and may result in a default with respect to our pension obligation and under our debt agreements.
−Removed: Market conditions may also impact our ability to utilize surety bonds, letters of credit, foreign exchange derivatives or other financial instruments we use to conduct our business.
−Removed: A significant portion of our revenue is derived from international operations, and we are subject to the risks of doing business internationally.
−Removed: A significant amount of our total revenue is derived from international operations.
−Removed: The risks of doing business internationally include foreign currency exchange rate fluctuations, changing and increasingly more stringent global data privacy regulations, currency restrictions and devaluations, changes in political or economic conditions, increases in inflation rate, trade protection measures, import or export licensing requirements, multiple and possibly overlapping and conflicting tax laws, new tax legislation, weaker intellectual property protections in some jurisdictions and additional legal and regulatory compliance requirements applicable to businesses that operate internationally, including the U.S.
−Removed: Foreign Corrupt Practices Act, economic and trade sanctions regulations administered by the U.S.
−Removed: Treasury Department’s Office of Foreign Assets Control, regulations in the European Union such as the General Data Protection Regulation, the U.K.
−Removed: Bribery Act and other U.S.
−Removed: laws and regulations.
−Removed: Our business may be adversely affected by global economic conditions, acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases.
−Removed: If global economic conditions deteriorate, or clients anticipate that they could deteriorate, we could see reductions in demand and increased pressure on revenue and profit margins.
−Removed: We could also see a further consolidation of clients, which could also result in a decrease in demand.
−Removed: Our business could also be affected by acts of war, terrorism, natural disasters and the widespread outbreak of infectious diseases.
−Removed: Geopolitical conditions could escalate, and this could have unpredictable consequences on the world economy and on our business.
−Removed: If, as a result of such an event, our clients in a particular industry were to suffer material adverse impacts, we may experience a reduction in demand for our services and products from such clients, which may materially and adversely affect our business, results of operations and financial condition.
−Removed: A reduction in our credit rating could adversely affect our business and/or the holders of our securities.
−Removed: The credit rating agencies rating our indebtedness regularly evaluate us, and credit ratings are based on a number of factors, including our financial strength and ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the information technology industry and the economy and changes in rating methodologies.
−Removed: There can be no assurance that we will maintain our current credit ratings.
−Removed: A downgrade of our credit ratings could adversely affect our access to liquidity and capital, and could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to conduct our business.
−Removed: This could affect our growth, profitability, and financial condition, including liquidity.
−Removed: A significant disruption in our IT systems could adversely affect our business and reputation.
−Removed: We rely extensively on our IT systems to conduct our business and perform services for our clients.
−Removed: Our systems are subject to damage or interruption from power outages, telecommunications failures, computer viruses and malicious attacks, cybersecurity breaches and catastrophic events.
−Removed: If our systems are accessed without our authorization, damaged or fail to function properly, we could incur substantial repair or replacement costs, experience data loss and impediments to our ability to conduct our business, and damage the market’s perception of our services and products.
−Removed: In addition, a disruption could result in our failure to meet performance standards and obligations in our client contracts, which could subject us to liability, penalties and contract termination.
−Removed: This may adversely affect our reputation and financial results.
−Removed: Future results will depend in part on the performance and capabilities of third parties with whom we have commercial relationships.
−Removed: We maintain business relationships with key partners, suppliers, channel partners and other parties that have complementary products, services or skills.
−Removed: Future results will depend, in part, on the performance and capabilities of these third parties, on the ability of external suppliers to deliver components at reasonable prices and in a timely manner, and on the financial condition of, and our relationship with, distributors and other indirect channel partners, which can affect our capacity to effectively and efficiently serve current and potential customers and end users.
−Removed: Additionally, cost inflation and supply chain disruptions may lead to higher labor and other costs, as well as an inability to procure products needed to deliver our solutions, which could adversely affect our results of operations.
−Removed: Our reputation and relationship with our clients are critical to our business and any harm to our reputation could have a material adverse effect on our future revenue and profitability.
−Removed: The success of our business is dependent on strong, long-term client relationships and on our reputation for responsiveness and quality.
−Removed: As a result, if a client is not satisfied with our services or products, our reputation could be damaged and our business adversely affected.
−Removed: Allegations by private litigants or regulators of improper conduct, as well as negative publicity and press speculation about us, whatever the outcome and whether or not valid, may harm our reputation.
−Removed: In addition to harm to reputation, if we fail to meet our contractual obligations, we could be subject to legal liability, which could adversely affect our business, operating results and financial condition.
−Removed: Our services or products may infringe upon the intellectual property rights of others.
−Removed: We cannot be sure that our services and products do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us or against our clients.
−Removed: These claims could cost us money, prevent us from offering some services or products, or damage our reputation.
−Removed: Legal proceedings could affect our results of operations or cash flow or may adversely affect our business or reputation.
−Removed: Various lawsuits, claims, investigations and proceedings have been brought or asserted against us in the past relating to matters arising in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, environmental matters, securities matters, intellectual property and non-income tax matters.
−Removed: We believe that we have valid defenses with respect to legal matters pending against us.
−Removed: Litigation is inherently unpredictable, however, and it is possible that our results of operations or cash flows could be materially affected in any particular period as a result of future developments of the legal matters pending against us, including the resolution of any such matters.
−Removed: In addition, legal proceedings or environmental matters may arise in the future with respect to our existing and legacy operations that may adversely affect our business or reputation.
+Added: Any or all of these could directly or indirectly have a material adverse effect on our operations and/or financial performance.
+Added: Legal proceedings and environmental matters have and may continue to impact our results of operations and cash flows.
+Added: Various lawsuits, claims, investigations and proceedings have been brought or asserted against us relating to matters arising in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, intellectual property, environmental, securities, and non-income tax matters.
+Added: We are also subject to a variety of legal and environmental compliance risk, including with respect to predecessor company operations, which have led or may lead to environmental remedial actions at former or third-party sites.
+Added: Significant current matters are disclosed in Note 18, “Litigation and contingencies” in Part II, Item 8 of this Form 10-K.
+Added: Regardless of the outcome of any individual matter, litigation and environmental matters have impacted and could continue to impact our results of operations, cash flows and business.
+Added: In addition, legal proceedings or environmental matters may arise in the future with respect to our existing and legacy operations that may adversely affect our business.
+Added: Failure to meet ESG expectations and standards, achieve our ESG goals, or comply with ESG regulations or laws could adversely affect our business, results of operations, financial condition, stock price or reputation.
+Added: Our ESG goals, commitments, and targets reflect our current plans and aspirations, are based on available data and estimates, and are not guarantees that we will be able to achieve them.
+Added: Actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation.
+Added: Initiatives to address ESG issues may be costly and may not have the desired effect.
+Added: Evolving stakeholder expectations and our efforts and ability to manage these issues and accomplish our goals, commitments, and targets present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price.
+Added: Increasing focus on ESG matters has resulted in, and is expected to continue to result in, the adoption of legal and regulatory requirements designed to mitigate the effects of climate change on the environment, as well as legal and regulatory requirements requiring climate, human rights and supply chain-related disclosures.
+Added: If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations.
+Added: In addition, our selection of voluntary disclosure frameworks and standards, and the interpretation or application of
+Added: those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders.
+Added: Our ability to achieve our ESG commitments is subject to numerous risks, many of which are outside of our control.
+Added: Examples of such risks include:
+Added: (1) the availability and cost of low- or non-carbon-based energy sources and technologies;
+Added: (2) evolving regulatory requirements affecting ESG standards or disclosures;
+Added: (3) the availability of suppliers that can meet our sustainability, diversity and other standards;
+Added: and (4) our ability to recruit, develop, and retain diverse talent.
+Added: In addition, standards for tracking and reporting on ESG matters, including climate change and human rights related matters, have not been harmonized and continue to evolve.
+Added: Methodologies for reporting ESG data may be updated and previously reported ESG data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes in circumstances.
+Added: Our processes and controls for reporting ESG matters across our operations are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG and climate-related disclosures that may soon be required by the SEC, the new California climate legislation and European Union climate legislation, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
+Added: Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes may be limited.
+Added: As of December 31, 2023, we had $1.7 billion in U.S.
+Added: federal NOL carryforwards, for which we currently maintain a full valuation allowance.
+Added: A corporation’s ability to deduct its U.S.
+Added: federal NOL carryforwards and utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the U.S.
+Added: Internal Revenue Code (Section 382) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material shareholders exceed 50 percent during a rolling three-year period).
+Added: Similar rules may apply under state tax laws.
+Added: A future tax “ownership change” pursuant to Section 382 or future changes in tax laws that impose tax attribute utilization limitations may severely limit or effectively eliminate our ability to utilize our NOL carryforwards and other tax attributes.
Impairment of goodwill or intangible assets may negatively impact our results of operations.
3 unchanged sentences
An impairment of a significant portion of our goodwill or intangible assets could adversely affect our results of operations.
−Removed: A failure to meet standards or expectations with respect to our environmental, social and governance practices could adversely impact our business and reputation.
−Removed: Many governmental bodies and current and prospective investors, clients, partners, and employees are increasing their focus on corporate environmental, social and governance (ESG) practices.
−Removed: If we fail to meet the standards or expectations of any of these groups, we may suffer reputational damage, our business may be adversely impacted and we may find it more difficult to recruit or retain key personnel.
−Removed: Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes may be limited.
−Removed: A corporation’s ability to deduct its federal NOL carryforwards and utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the U.S.
−Removed: Internal Revenue Code (Section 382) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material shareholders exceed 50 percent during a rolling three-year period).
−Removed: Similar rules may apply under state tax laws.
−Removed: A future tax “ownership change” pursuant to Section 382 or future changes in tax laws that impose tax attribute utilization limitations may severely limit or effectively eliminate our ability to utilize our NOL carryforwards and other tax attributes.
Other factors discussed in this report, although not listed here, also could materially affect our future results.
−Removed: UNRESOLVED STAFF COMMENTS
−Removed: Not applicable.
−Removed: As of December 31, 2022, the company did not own or lease any physical properties that are material to its business.
−Removed: LEGAL PROCEEDINGS
−Removed: Information with respect to litigation is set forth in Note 19, “Litigation and contingencies,” of the Notes to Consolidated Financial Statements and is incorporated herein by reference.
−Removed: MINE SAFETY DISCLOSURES
−Removed: Not applicable.
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.