What changed in this filing

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Item 1A. Risk Factors

2022-02-10 compared with 2021-02-11 · 115 added, 81 removed, 269 unchanged (42% of the section changed)

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The following factors could present difficulties to us:

• Managing our distribution channel partners;

• Managing our distribution channel partners and end-user customers;

• Managing our contract manufacturing and supply chain;

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An acquisition may present business issues which are new to us.

The process of integrating any acquired business, technology, service, or product into our operations may result in unforeseen operating difficulties and expenditures.

The process of integrating any acquired business, technology, service, product, or solution into our operations may result in unforeseen operating difficulties and expenditures.

Integration of an acquired company also may consume considerable management time and attention, which could otherwise be available for ongoing operations and the further development of our existing business.

These and other factors may result in benefits of an acquisition not being fully realized.

Acquisitions also may involve a number of risks, including:

• Difficulties and uncertainties in retaining the customers or other business relationships from the acquired entities;

Acquisitions also may involve a number of risks, including, but not limited to:

• Difficulties and uncertainties in retaining the customers, distributors, vendors, or other business relationships from the acquired entities;

• The loss of key employees of acquired entities;

• Disruptions in our business due to difficulties integrating and reorganizing operations, products, technologies and personnel;

• The ability of acquired entities to fulfill their customers’ obligations;

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Competitors may be able to respond more quickly to new or emerging technology and changes in customer requirements.

We face significant competition in developing and selling our products and solutions.

To remain competitive, we believe we must continue to effectively and economically provide:

• Technologically advanced systems that satisfy user demands;

• Superior customer service;

• High levels of quality and reliability;

• Dependable and efficient distribution networks.

We cannot assure we will be able to compete successfully against current or future competitors or technologies.

Increased competition in mobile computing products, data capture products, radio frequency identification devices (“RFID”), printers, supplies, or software-based solutions may result in price reductions, lower gross profit margins, and loss of market share, and could require increased spending on research and development, sales and marketing, and customer support.

The markets that we serve are rapidly evolving and highly competitive.

Some of our products, solutions and services are in direct competition with similar or alternative products, solutions and services provided by our competitors.

In addition, we often compete with local competitors that may have a substantial advantage in attracting customers in their countries due to more established branding in that country, greater knowledge with respect to the tastes and preferences of customers residing in that country or their focus on a single market.

Because of the potential for consolidation in any market, such competitors may become larger, and increased size could permit them to operate in wider geographic areas.

To remain competitive, we believe we must continue to effectively and economically:

• Identify and evolve with customer needs, emerging technologies, and industry trends;

• Monitor disruptive technologies and business models;

• Innovate, develop and timely commercialize new technologies, solutions, and services;

• Competitively price our products, solutions and services;

• Offer superior customer service;

• Provide products and solutions of high quality and reliability;

• Provide dependable and efficient distribution networks;

• Attract, retain and develop employees with technical expertise and an understanding of our industry and customer needs.

We cannot assure that we will be able to compete successfully against current or future competitors or technologies.

Current or future competitors are likely to continue to develop and introduce new and enhanced products, solutions and services that could cause a decline in market acceptance of our products, solutions or services, or result in the loss of major customers.

Increased competition in our industry may result in price reductions, lower gross profit margins, and loss of market share, and could require increased spending on research and development, sales and marketing, and customer support.

In addition, we may not be able to effectively anticipate and react to new entrants in the marketplace competing with our products, solutions or services.

Further, as we expand into markets beyond our core products, we may face well established competitors, placing us at a disadvantage in a new competitive landscape.

Some competitors may make strategic acquisitions or establish cooperative relationships with suppliers or companies that produce complementary products and solutions, which may create additional pressures on our competitive position in the marketplace.

An inability to compete successfully could have an adverse effect on our business and results of operations.

Operational Risks

The Company has substantial operations and sells a significant portion of our products, solutions and services outside of the U.S.

and purchases important components, including final products, from suppliers located outside the U.S.

and purchases important components, including final products, from suppliers located outside the U.S., many of whom with operations concentrated in China.

Shipments to non-U.S.

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To the extent a violation of a third party’s patent or other intellectual property right is established, we may be prevented from operating our business as planned and we may be required to pay costly judgments or settlements, enter into costly licensing arrangements or use a non-infringing method to accomplish our business objectives, any of which could have a negative impact on our operating margins.

See Item 3, Legal Proceedings for additional information regarding current patent litigation.

The inability to protect intellectual property could harm our reputation, and our competitive position may be materially damaged.

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We rely on information technology systems throughout the Company to keep financial records, process orders, manage inventory, coordinate shipments to distributors and customers, maintain confidential and proprietary information, and other technical activities, and operate other critical functions such as internet connectivity, network communications, and email.

The Company stores confidential and proprietary information

through cloud-based services that are hosted by third parties where we have less influence over security protocols.

In addition, our customers may use certain of our products and solutions to transmit and/or process personal data and other sensitive information.

Like many companies, we continually strive to meet industry information security standards relevant to our business.

We periodically perform vulnerability assessments, remediate vulnerabilities, review log/access, perform system maintenance, manage network perimeter protection, implement and manage disaster recovery testing, and provide periodic educational sessions to our employees to foster awareness of schemes to access sensitive information.

Despite our implementation of a variety of security measures, there is no assurance that such actions will be sufficient to prevent a cybersecurity incident.

Despite our implementation of a variety of security controls and measures, as well as those of our third-party vendors, there is no assurance that such actions will be sufficient to prevent a cybersecurity incident.

Further, as cybercrime and threats continue to rapidly evolve and become increasingly more difficult to detect and defend against, our current security controls and measures may not be effective in preventing cybersecurity incidents and we may not have the capabilities to detect certain vulnerabilities.

A cybersecurity incident could include an attempt to gain unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.

Phishing and other types of attempts to obtain unauthorized information or access are often sophisticated and difficult to detect or defeat.

A cybersecurity incident, including deliberate attacks and unintentional events, may lead to a material disruption of our core business systems, the loss or corruption of confidential business information, and/or the disclosure of personal data that in each case could result in an adverse business impact as well as possible damage to our brand.

Cybersecurity incidents can take a variety of forms including, unintentional events as well as deliberate attacks by individuals, groups and sophisticated organizations, such as state sponsored organizations or nation-state actors.

Further, certain of our third party vendors have limited access to our employee and customer data and may use this data in unauthorized ways.

Any such cybersecurity incident or misuse of our employees’ or customers’ data may lead to a material disruption of our core business systems, the loss or corruption of confidential business information, and/or the disclosure of personal data that in each case could result in an adverse business impact as well as possible damage to our brand.

This could also lead to a public disclosure or theft of private intellectual property and a possible loss of customer confidence.

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If our core business operations, or that of one of our third-party service providers, were to be breached, this could affect the confidentiality, integrity, and availability of our systems and data.

Any failure on the part of us or our third-party service providers to maintain the security of data we are required to protect, including

via the penetration of our network security and the misappropriation of confidential and proprietary information, could result in business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings, and private litigation with potentially large costs, and also result in deterioration in our suppliers’, distributors’, and customers’ confidence in us and other competitive disadvantages, and therefore could have a material adverse effect on our business, financial condition, and results of operations.

Any failure on the part of us or our third-party service providers to maintain the security of data we are required to protect, including via the penetration of our network security and the misappropriation of confidential and proprietary information, could result in:

business disruption;

damage to our reputation;

financial obligations to third parties;

fines, penalties, regulatory proceedings;

private litigation with potentially large costs;

deterioration in our suppliers’, distributors’, and customers’ confidence in us;

as well as other competitive disadvantages.

Such failures to maintain the security of data could have a material adverse effect on our business, financial condition, and results of operations.

While we continue to perform security due diligence, there is always the possibility of a significant breach.

Our products and solutions that are deployed in customer environments also have the possibility of being breached, which could result in damage to a customer’s confidentiality, integrity, and availability of the customer’s data and systems.

It is possible that such a breach could result in delays in, or loss of market acceptance of, our products, solutions or services;

Any threats or security breaches to our systems may negatively impact our customers.

Our products and solutions that are deployed in customer environments also have the possibility of being breached, which could result in disclosure of a customer’s confidential information, or disrupt the availability of the customer’s data and systems.

Further, our customers may fail to adopt adequate security controls and measures, or may fail to timely update their products and solutions to install or enable security patches, which may result in a security breach.

The market perception of the effectiveness of our products and our reputation could also be harmed as a result of any actual or perceived security breach that occurs in our network or in the network of a customer of our products, regardless of whether the breach is attributable to our products, the systems of other vendors or to actions of malicious parties.

It is possible that such a breach, or a perceived breach, could result in delays in, or loss of market acceptance of, our products, solutions or services;

diversion of our resources;

injury to our reputation;

theft or misuse of our intellectual property or other assets;

increased service and warranty expenses;

and payment of damages.

To date, we have had no material incidents related to the security on our products or solutions.

Although we maintain insurance related to cybersecurity risks, there can be no assurance that our insurance coverage will cover the particular cyber incident at issue or that such coverage will be sufficient.

To date, we have had no material incidents related to the security of our products or solutions.

Further, strategic customers may negotiate specific controls and we may incur additional costs to comply with such customer-specific controls.

Although we maintain insurance related to cybersecurity risks, there can be no assurance that our insurance will cover the particular cyber incident at issue or that such coverage will be sufficient.

We may incur liabilities as a result of product failures due to actual or apparent design or manufacturing defects.

We may be subject to product liability claims, which could include claims for property or economic damages or personal injury, in the event damages arise from our products as a result of actual or apparent design or manufacturing defects.

Such design or manufacturing defects may occur not only in our own designed products, but also in components provided by third-party suppliers.

We generally have insurance protection against property damage and personal injury liabilities and seek to limit such risk through product design, manufacturing quality control processes, product testing and contractual indemnification from suppliers.

However, due to the growing size of the Company’s installed product base and growing number of applications in which our products can be used, an actual or alleged design or manufacturing defect could result in product recalls, customer service costs or legal costs that could have material adverse effects on our financial results.

We have been subject to product liability claims, and may continue to be subject to such claims, including claims for property or economic damages or personal injury, where damages arose, and may continue to arise, from our products as a result of actual or apparent design or manufacturing defects.

In addition, such design or manufacturing defects may occur not only in our own designed products, but also in components provided by third-party suppliers.

We seek to limit such risk through insurance protection as well as product design, manufacturing quality control processes, product testing and contractual indemnification from suppliers.

Although there have been no material claims to-date at the Company, due to the growing size of the Company’s installed product base and growing number of applications in which our products can be used, an actual or alleged design or manufacturing defect could result in product recalls, injury to our reputation, and customer service costs or legal costs that could have material adverse effects on our financial results.

Defects or errors in the Company’s software products could harm our reputation, result in significant cost to us, and impair our ability to market such products.

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Although we have not suffered significant harm from any errors, defects, or bugs to date, we may discover significant errors, defects, or bugs in the future that we may not be able to correct or correct in a timely manner.

Any future errors, defects, or bugs found in our software products and related services may result in delays in, or loss of market acceptance of, our products, solutions or services;

Any future errors, defects, or bugs found in our software

products and related services may result in delays in, or loss of market acceptance of, our products, solutions or services;

diversion of resources;

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and payment of damages;

We depend on the ongoing services of our senior management and the ability to attract and retain key personnel.

The future success of the Company is substantially dependent on the continued services and contributions of senior management and other key personnel.

The ability to attract, retain, and motivate highly skilled employees is important to our long-term success.

Competition for skill sets in certain functions within our industry is intense and we may be unable to retain key employees or attract, assimilate, or retain other highly qualified employees in the future.

Any disruption in the services of senior management or our ability to attract and retain key personnel may have a material adverse effect on our business and results of operations.

which could have a material adverse effect on our financial results.

Our business success depends on our ability to attract, retain, develop and motivate key personnel.

Our business and results of operations could be adversely affected by increased competition for highly skilled employees, higher employee turnover, or increased compensation and benefit costs.

The future success of the Company is substantially dependent on the continued services and contributions of key personnel, including senior management and other highly skilled employees.

The experience, industry knowledge, and skill sets of our employees materially benefit our operations and performance, and the ability to attract, retain, develop, and motivate highly skilled employees is important to our long-term success.

Skilled employees in our industry are in high demand and competition for their experience and skill sets is intense.

The incentives and benefits we have available to attract, retain, and motivate employees may become less effective as employees seek new or different opportunities based on factors such as compensation, benefits, mobility, and flexibility that are different from what we offer.

Although we strive to be an employer of choice, we may not be able to continue to successfully attract, retain, develop, or motivate key personnel in the future.

Any disruption in the services of key personnel may have a material adverse effect on our business and results of operations.

A natural disaster, widespread public health issue, civil unrest, or man-made disaster may cause supply disruptions that could adversely affect our business and results of operations.

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The effects of the COVID-19 pandemic have and may continue to adversely affect our business, financial results, and results of operations.

The coronavirus (“COVID-19”) has spread rapidly worldwide, resulting in a broad number of governmental and commercial efforts to contain the spread of COVID-19 globally, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns.

The COVID-19 pandemic has been, and continues to be, complex and rapidly evolving, and has adversely impacted our business, primarily related to lower customer demand and higher fulfillment costs.

The duration and extent of the impact of the COVID-19 pandemic on our business, operations and financial results depends on factors that cannot be accurately predicted at this time, such as the severity and transmission rate of COVID-19, the extent and effectiveness of containment actions, the extent to which vaccines and/or other medical treatments are developed and made available to the

public, and the impact of these and other factors on our employees, customers, industry partners, suppliers and third party dealers, distributors, and resellers.

The federal, state, and local governments as well as foreign governments, to varying degrees, have imposed, and continue to impose, several protocols and regulations restricting the physical movement or other activities of individuals in an effort to limit the spread of COVID-19.

We have implemented a number of measures in an effort to protect the health and well-being of our employees, customers and suppliers, including having the majority of office workers work remotely, limiting employee travel, and withdrawing from industry events.

The transition to working remotely for most of our office employees may impact our business operations, customer relationships, pose additional data security risks as well as impact our ability to attract and retain talent.

The coronavirus (“COVID-19”) pandemic has been, and continues to be, complex and rapidly evolving, and has impacted our business, most recently, primarily related to supply chain disruption (including higher fulfillment costs and component shortages) and labor constraints.

The duration and extent of the impact of the COVID-19 pandemic on our business, operations and financial results depends on factors that cannot be accurately predicted at this time, such as the severity and transmission rate of COVID-19, the emergence of new variants of the virus, the extent and effectiveness of containment actions, the extent to which vaccines and/or other medical treatments are developed and made available to and accepted by the public, and the impact of these and other factors on our stakeholders.

federal, state, and local governments as well as non-U.S.

governments, to varying degrees, have imposed, and continue to impose, several protocols and regulations restricting activities of individuals in an effort to limit the spread of COVID-19.

Over the course of the pandemic we have implemented a number of measures in an effort to protect the health and well-being of our employees, customers and suppliers, including having the majority of office workers work remotely during the height of the pandemic and gradually returning to offices as restrictions are lifted, limiting employee travel, and implementing more strenuous health and safety measures for hosting and attending in-person industry events.

As governments ease their restrictions, we have been allowing, and will continue to allow, our employees to come back to work in our offices in a controlled approach, with modified business practices, including implementing social distancing protocols consistent with government regulations, vaccine verification, health screening, office capacity restrictions and tracking and tracing protocols where applicable, provision of personal protective equipment, increasing air exchange/ventilation and extensively and frequently disinfecting our workspaces.

However, there is no guarantee that such protocols will be successful in preventing the spread of COVID-19 amongst our employees, and even as employees return to our offices, we may be prevented from conducting business activities at full capacity for an indefinite period of time.

The extent and duration of ongoing workplace restrictions and limitations, particularly in sites with significant headcount, could adversely impact our operations and our ability to execute on strategic imperatives for our business.

As governments ease their restrictions and we allow our employees to come back to work in our offices in a controlled approach, we have modified our business practices, including implementing social distancing protocols, office capacity restrictions, health screening, provision of personal protective equipment, tracking and tracing protocols, and extensively and frequently disinfecting our workspaces.

However, there is no guarantee that such protocols will be successful in preventing the spread of COVID-19 amongst our employees.

In late 2020, certain vaccines were authorized by major regulatory bodies to help fight the infection of COVID-19, and certain other vaccines are in the late stages of development to provide such treatment.

At this time, the availability of authorized vaccines is highly limited, and the time required to make these vaccines available to all members of the public remains uncertain.

Further, we have experienced higher than normal employee absentee rates for employees who are unable to work from home, and even as employees return to our offices, we may be prevented from conducting business activities at full capacity for an indefinite period of time.

The potential negative effects to our operations, including reductions in production levels, research and development activities, and increased costs resulting from our efforts to mitigate the impact of COVID-19, may adversely affect our ability to deliver our products, solutions and services.

In addition, the continued spread of COVID-19 has led to disruption and volatility in the worldwide credit and financial markets, which could limit our ability to obtain external financing and result in a higher rate of losses on our accounts receivables due to credit defaults, adversely affecting our liquidity.

While the COVID-19 pandemic has not materially impacted our liquidity and capital resources to date, the duration and severity of any further economic or market impact of the pandemic remains uncertain and there can be no assurance that it will not have an adverse effect on our liquidity and capital resources, including our ability to access capital markets, in the future.

If COVID-19 becomes more prevalent in the locations where our customers, suppliers, or we conduct business, we may experience more pronounced disruptions in our operations.

Moreover, vaccine and testing mandates have been announced in jurisdictions in which our businesses operate.

As a company under U.S.

Occupational Safety and Health Administration (“OSHA”) jurisdiction, we must comply with OSHA COVID-19 mandates, such as the Emergency Temporary Standard (“ETS”) that was announced on November 5, 2021, but currently remains in flux and under review by the courts as to final implementation and compliance.

Our implementation of these mandates, and any future mandates, may result in employee attrition, including attrition of critically skilled labor, and may cause difficulty in attracting and retaining talent necessary for our business operations and securing future labor needs, which could have a material adverse effect on our business, financial condition, and results of operations.

The potential negative effects to our operations, including reductions in production levels,

research and development activities, and increased efforts to mitigate the impact of COVID-19, may adversely affect our ability to deliver our products, solutions and services.

Further, the conditions caused by COVID-19 have affected, and may continue to affect, the overall demand environment for our products, solutions and services.

The level of demand for certain product components has resulted in, and may continue to result in, lengthened lead times and higher input costs, including freight.

This has impacted, and may continue to impact, our ability to meet customer demand as well as profitability.

An inability to meet customer demand may also adversely affect our customers’ ability or willingness to purchase our products, solutions or services.

Additionally, our financial results may be adversely impacted by challenges in the macroeconomic environment, including market inflation, as a result of global supply chain shortages.

If COVID-19 or its variants become more prevalent in the locations where our customers, suppliers, or we conduct business, we may experience more pronounced disruptions in our operations.

If we are not able to respond to and manage the impact of such events effectively, our business and results of operations in future periods may be adversely affected.

Moreover, the impacts of the COVID-19 pandemic may exacerbate other pre-existing risks, such as global economic conditions, political, regulatory, social, financial, operational and cybersecurity as well as similar risks relating to our suppliers and customers, any of which could have a material adverse effect on our business.

Zebra could be adversely impacted by the United Kingdom’s withdrawal from the European Union.

Z ebra maintains its European regional headquarters and a label converting facility in the U.K.

and has significant operations and sales throughout Europe, including its regional distribution center located in Heerenveen, Netherlands.

Following the U.K.

formally withdrawing from the E.U.

on January 31, 2020, the U.K.

entered into a transition period that ended on December 31, 2020.

The E.U.-U.K.

Trade and Cooperation Agreement was entered into on December 24, 2020 and details the future relationship between the U.K.

and E.U., and has resolved much uncertainty.

Nevertheless, effective January 1, 2021, customs borders are in place between Great Britain and Northern Ireland and Great Britain and the E.U., which could adversely impact Zebra’s operations and financial performance due to the increase in importation requirements that may lead to disrupted or delayed shipments in the region.

Such disrupted or delayed shipments may also result in shortages of products and components or loss of customer confidence, which could affect Zebra’s financial performance.

We are exposed to risks under large, multi-year system and solutions and services contracts that may negatively impact our business.

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If our initial cost estimates are incorrect, we can lose money on these contracts.

Because many of these contracts involve new

technologies and applications and require the Company to engage subcontractors and can last multiple years, unforeseen events, such as technological difficulties, fluctuations in the price of raw materials, problems with our subcontractors or suppliers, and other cost overruns, can result in the contract pricing becoming less favorable or even unprofitable to us and have an adverse impact on our financial results.

Because many of these contracts involve new technologies and applications and require the Company to engage subcontractors and can last multiple years, unforeseen events, such as technological difficulties, fluctuations in the price of raw materials, problems with our subcontractors or suppliers, and other cost overruns, can result in the contract pricing becoming less favorable or even unprofitable to us and have an adverse impact on our financial results.

In addition, a significant increase in inflation rates could have an adverse impact on the profitability of longer-term contracts.

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The actions of our outsource partners could result in reputational damage to us and could negatively impact our financial results.

Additionally, transitioning activities between new or existing outsource partners or across different geographies as well as insourcing activities could result in additional cost, time and management attention in order to effectively manage the transition, which could negatively impact our financial results.

Further, we have from time-to-time, and in certain instances will continue to, transition our outsourced operations to new service providers and/or to different geographies.

Such transition activities between new or existing outsource partners or across different geographies, as well as insourcing activities, could

result in additional cost, time and management attention in order to effectively manage the transition, which could negatively impact our financial results.

Failure of our suppliers, subcontractors, distributors, resellers, and representatives to use acceptable legal or ethical business practices could negatively impact our business.

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Any of these events could have a negative impact on our sales and results of operations.

We rely on third-party dealers, distributors, and resellers to sell many of our products and solutions, and their failure to effectively bring our products and solutions to market may negatively affect our results of operation and financial results.

In addition to our own sales force, we offer our products and solutions through a variety of third-party dealers, distributors, and resellers who may also market other products and solutions that compete with ours.

Failure of one or more of our third-party dealers, distributors, or resellers to effectively promote our products and solutions could affect our ability to bring products and solutions to market and have a negative impact on our results of operations.

We rely on third-party dealers, distributors, and resellers to sell many of our products, services and solutions, and their failure to effectively bring our products, services and solutions to market may negatively affect our results of operation and financial results.

In addition to our own sales force, we offer our products, services and solutions through a variety of third-party dealers, distributors, and resellers who may also market other products, services and solutions that compete with ours.

Failure of one or more of our third-party dealers, distributors, or resellers to effectively promote our offerings could affect our ability to bring products, services and solutions to market and have a negative impact on our results of operations.

Any changes to our channel program may cause some of our third-party dealers, distributors, or resellers to exit the program due to modifications to the program structure, which may reduce our ability to bring products and solutions to market and could have a negative impact on our results of operations.

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This transition could be costly and time consuming.

From time to time we may diversify our product sourcing footprint, similar to the actions we took with our efforts to reduce our reliance on Chinese-based manufacturing, which may result in additional costs.

We have taken actions to diversify, and may take additional actions to diversify in the future, our product sourcing footprint.

Such actions have, and may again, result in additional costs.

Our future operating results depend on our ability to purchase a sufficient amount of materials, parts, and components, as well as services and software to meet the demands of customers.

We source some of our components from sole source suppliers.

Any disruption to our suppliers or significant increase in the price of supplies could have a negative impact on our results of operations.

Any disruption to our suppliers or significant increase in the price of supplies, inclusive of transportation costs, could have a negative impact on our results of operations.

Our ability to meet customers’ demands depends, in part, on our ability to obtain in a timely manner an adequate delivery of quality materials, parts, and components, as well as services and software from our suppliers.

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We have experienced shortages in the past that have negatively impacted our results of operations and may experience such shortages in the future.

Credit constraints at our suppliers could cause us to accelerate payment of accounts payable by us, impacting our cash flow.

At times we have and may continue to execute multi-year purchase commitments with suppliers that contain minimum spend thresholds, which we are obligated to fulfill even if customer demand declines.

In addition, volatility in customer demand, product availability, and costs to transport products, may result in increased operating input costs.

Also, credit constraints at our suppliers could cause us to accelerate payment of accounts payable by us, impacting our cash flow.

In addition, our current contracts with certain suppliers may be canceled or not extended by such suppliers and, therefore, not afford us with sufficient protection against a reduction or interruption in supplies.

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The Company currently imports a significant percentage of our products into the U.S., and an increase in customs duties with respect to these imports could negatively impact the Company’s financial performance.

During 2020, the Company successfully completed efforts to diversify its product sourcing footprint in order to reduce its reliance on Chinese-based manufacturing and mitigate the impacts of related customs duties.

Although the Company has taken actions to diversify its product sourcing footprint, these efforts may not be sufficient to mitigate negative impacts on the Company’s financial performance resulting from an increase in customs duties.

Taxing authority challenges may lead to tax payments exceeding current reserves.

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The taxation of our business is subject to the application of multiple, and sometimes conflicting, tax laws and regulations, as well as multinational tax conventions.

Many countries have recently adopted, or are considering the adoption of, revisions to their respective tax laws based on the on-going reports issued by the Organization for Economic Co-operation and

Development (“OECD”)/G20 Base Erosion and Profit Shifting (“BEPS”) Project, which could materially impact our tax liability due to our organizational structure and significant operations outside of the U.S.

Many countries have recently adopted, or are considering the adoption of, revisions to their respective tax laws based on the on-going reports issued by the Organization for Economic Co-operation and Development (“OECD”)/G20 Base Erosion and Profit Shifting (“BEPS”) Project, which could materially impact our tax liability due to our organizational structure and significant operations outside of the U.S.

Our effective tax rate is highly dependent upon the geographic distribution of our worldwide earnings or losses resulting from our structure and operating model, the tax regulations and tax holidays in each geographic region, and the availability of tax credits and carry-forwards.

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Higher volatility and fluctuations in foreign exchange rates for the U.S.

Dollar against currencies such as the Euro, British Pound Sterling, Czech Koruna, Brazilian Real, and Chinese Yuan could negatively impact product sales, margins, and cash flows.

Dollar against currencies such as the Euro, British Pound Sterling and Czech Koruna could negatively impact product sales, margins, and cash flows.

It is important that we are able to obtain many different types of insurance, and if we are not able to obtain insurance or exhaust our coverage, we may be forced to retain the risk.

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Further, certain types of coverages may be difficult or expensive to obtain.

We self-insure against certain business risks and expenses where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not deemed cost-effective or is not available.

We self-insure against certain

business risks and expenses where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not deemed cost-effective or is not available.

If the amount of our third-party insurance coverage is not available or adequate to cover all claims or liabilities, or to the extent we have elected to self-insure, we may be forced to bear substantial costs from an accident, incident, or claim.

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Our indebtedness could adversely affect our business.

As of December 31, 2020, we had $1.3 billion of outstanding debt, gross of unamortized discounts and debt issuance costs.

Our indebtedness could have important consequences, including the following:

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Our ability to restructure or refinance our indebtedness will depend on the condition of the capital and debt markets and our financial condition at such time.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants,

which could further restrict business operations.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict business operations.

The terms of anticipated or future debt instruments may limit or prevent us from taking any of these actions.

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To manage variable interest rate risk, we entered into forward interest rate swap agreements, which will effectively convert a portion of our indebtedness into a fixed rate loan.

Under generally accepted accounting principles, changes in the fair values of the swap contracts are reflected in our Consolidated Statements of Operations as a component of “Other, net” if not hedged.

Under generally accepted accounting principles, changes in the fair values of the swap contracts are reflected in our Consolidated Statements of Operations as a component of “Interest expense, net” if not hedged.

The associated impact on our quarterly operating results is directly related to changes in prevailing interest rates.

If interest rates increase, we would have a non-cash gain on the swaps, and vice versa in the event of a decrease in interest rates.

Consequently, these swaps introduce additional volatility to our operating results.

Consequently, these swaps may introduce additional volatility to our operating results.

Legal and Regulatory Risks

We could be adversely impacted by changes in accounting standards and subjective assumptions, estimates, and judgments by management related to complex accounting matters.

Generally accepted accounting principles and related accounting pronouncements, implementation guidelines, and interpretations with regard to a wide range of matters that are relevant to our businesses, including, but not limited to, revenue recognition, asset impairment, business acquisition purchase price allocations, impairment of goodwill and other intangible assets, inventories, tax matters, and litigation and other contingent liabilities are highly complex and involve many subjective assumptions, estimates, and judgments.

Generally accepted accounting principles and related accounting pronouncements, implementation guidelines, and interpretations with regard to a wide range of matters that are relevant to our businesses, including, but not limited to, revenue recognition, business acquisition purchase price allocations, impairment of goodwill and other intangible assets, inventories, tax matters, and litigation and other contingent liabilities are highly complex and involve many subjective assumptions, estimates, and judgments.

Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial performance or financial condition.

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As part of our operations, the Company collects, uses, stores, and transfers personal data of third parties, employees and limited customer data in and across various jurisdictions.

Laws and regulations relating to the handling of such personal data may result in increased costs, legal claims, or fines against the Company.

Laws and regulations relating to the handling of such personal

data may result in increased costs, legal claims, or fines against the Company.

Existing laws and emerging regulations may be inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations.

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In addition, it can be very costly to defend litigation or administrative proceedings and these costs could negatively impact our financial results.

Honeywell has filed patent litigation lawsuits against Zebra in multiple jurisdictions, including the International Trade Commission and Federal District Court in the Western District of Texas in the United States, as well as foreign courts in the United Kingdom, Germany and China.

The remedies sought in these lawsuits include damages and injunctive relief.

There can be no guarantee that the outcome of this litigation will not have a negative impact to our business or results of operations.

For additional information, see Item 3, Legal Proceedings .

We are subject to a wide range of product regulatory and safety, consumer, worker safety, and environmental laws.

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Compliance with such existing or future laws and regulations could subject us to future costs or liabilities, impact our production capabilities, constrict our ability to sell, expand or acquire facilities, restrict what products, solutions and services we can offer, and generally impact our financial performance.

these laws are environmental and relate to the use, disposal, remediation, emission and discharge of, and exposure to hazardous substances.

Some of these laws are environmental and relate to the use, disposal, remediation, emission and discharge of, and exposure to hazardous substances.

These laws often impose liability and can require parties to fund remedial studies or actions regardless of fault.

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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