APi Group (APG) risk factors, FY2024 10-K

RISKS RELATED TO OUR BUSINESS

1. 01We operate in international markets, which subjects us to economic, political and other risks
2. 02We are implementing new enterprise resource planning systems. Our failure to implement such systems successfully, on time and on budget could have a material adverse effect on us
3. 03Improperly managed projects or project delays may result in additional costs or claims against us, which could have a material adverse effect on our financial condition, operating results, and cash flows
4. 04We are a decentralized company and place significant decision-making authority with our subsidiaries’ management, supported by certain integrated policies and processes

RISKS RELATED TO ACQUISITIONS

1. 05Our business strategy includes acquiring companies and making investments that complement our existing businesses or expand into adjacent industries. These acquisitions and investments could be unsuccessful or consume significant resources, which could adversely affect our operating results

FINANCIAL RISKS

1. 06Higher interest rates increase the interest costs on our credit facilities and on our other floating rate indebtedness and could impact adversely our ability to refinance existing indebtedness or to sell assets
2. 07Interest payments for certain of our indebtedness, including borrowings under the credit facilities are based on floating rates. As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes
3. 08Adverse developments in the credit markets could adversely affect the funding of significant projects and therefore reduce demand for our services
4. 09We may need additional capital in the future for working capital, capital expenditures or acquisitions, and we may not be able to access capital on favorable terms, or at all, which would impair our ability to operate our business or achieve our growth objectives
5. 10Our use of revenue recognition over time could result in a reduction or reversal of previously recorded revenue or profits
6. 11Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill and identifiable intangible assets for impairment each year, or more frequently if circumstances suggest an impairment may have occurred
7. 12In connection with our preparation of our consolidated financial statements for the years ended December 31, 2023 and 2022, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting
8. 13As of December 31, 2024, on a consolidated basis, we had $2,157 million in principal amount of debt outstanding under our credit facilities, $614 million of senior notes, and other indebtedness totaling approximately $5 million
9. 14The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities, and our future debt level may limit our future financial and operating flexibility
10. 15We are self-insured against many potential liabilities

RISKS RELATED TO OUR CONTRACTS

1. 16We may not accurately estimate the costs associated with services provided under fixed price contracts, which could impair our financial performance
2. 17A portion of our contracts allocate the risk of price increases in supplies to us
3. 18Changes in spending or budgetary priorities or delays in contract awards may materially adversely affect our business, financial condition and results of operations
4. 19Our backlog is subject to reduction or cancellation, and revenues may be realized in different periods than initially reflected in our backlog

RISKS RELATED TO OUR WORKFORCE

1. 20Our pension commitments and obligations to make cash contributions to meet our obligations in certain pension plans subject us to risks
2. 21Our unionized workforce and related obligations could adversely affect our operations

RISKS RELATED TO OUR CUSTOMER BASE

1. 22A portion of our expected future growth is based on the ability and willingness of public and private entities to invest in infrastructure

RISKS RELATED TO OUR OCCUPATIONAL HAZARDS

1. 23Our business is subject to operational hazards due to the nature of services we provide and the conditions in which we operate, including electricity, fires, explosions, mechanical failures and weather-related incidents
2. 24Our projects expose our employees to electrical lines and equipment, pipelines carrying potentially explosive or toxic materials, heavy equipment, transportation accidents, adverse weather conditions and the risk of damage to equipment and property from hazardous conditions such as working at heights
3. 25Our businesses at times perform services under challenging conditions involving factors outside of our control
4. 26We are and may become subject to periodic regulatory proceedings, including Fair Labor Standards Act (“FLSA”) and state wage and hour class action lawsuits, which may adversely affect our business and financial performance
5. 27We are and may become subject to periodic litigation which may adversely affect our business and financial performance
6. 28We are exposed to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, and other claims and legal proceedings

RISKS RELATED TO THE INDUSTRIES IN WHICH WE OPERATE

1. 29We have significant operations in highly competitive markets, and our failure to effectively compete could reduce our market share and harm our financial performance
2. 30Our businesses are impacted by levels of construction activity and an economic downturn in that industry could materially and adversely affect our business
3. 31required later in the project’s lifecycle. Consequently, some of our businesses experience the results of economic trends later in an economic cycle
4. 32A failure in the systems we construct and install, or in the systems we repair or service, whether due to employee acts or omissions or faulty workmanship or design, may subject us to significant liability
5. 33Our failure to comply with environmental laws could result in significant liabilities and increased environmental regulations could result in increased costs
6. 34surface fracture, resulting in the release of subsurface materials. These subsurface materials may contain contaminants in excess of amounts permitted by law, potentially exposing us to remediation costs and fines
7. 35Certain of our businesses are party to personal injury litigation and could be named as defendants in similar cases in the future related to our use or disposal of hazardous materials, which could adversely affect our financial condition, results of operations and cash flows
8. 36The industries we serve can be seasonal, cyclical and affected by weather conditions at project sites and other variations, the combined effects of which can potentially delay cash flows and adversely impact our results of operations

RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE AND OWNERSHIP OF OUR STOCK

1. 37We operate as a holding company and our principal source of operating cash is income received from our subsidiaries
2. 38In addition, we have various outstanding equity awards to employees and directors under the APi Group Corporation 2019 Equity Incentive Plan. As of December 31, 2024, we had 11,998,287 shares of common stock available under this Plan
3. 39We may issue preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock
4. 40Delaware law and our organizational documents contain certain provisions, including anti-takeover provisions, which limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable
5. 41Our stockholders may be required to bring certain actions or proceedings relating to us in the Delaware Court of Chancery and certain actions asserting claims arising under the Securities Act in the federal district courts of the United States
6. 42Our stock price may be volatile and, as a result, you could lose a significant portion or all of your investment
7. 43In the event of a cybersecurity incident, we could experience operational interruptions, incur substantial additional costs, become subject to legal or regulatory proceedings or suffer damage to our reputation
8. 44Data privacy, identity protection and information security compliance may require significant resources and presents certain risks
9. 45The loss of key senior management personnel or the failure to hire and retain highly skilled personnel could negatively affect our business
10. 46Increases in healthcare costs could adversely affect our financial results
11. 47We are subject to many laws and regulations in the jurisdictions in which we operate, and changes to such laws and regulations may result in additional costs and impact our operations
12. 48Changes in accounting principles may cause unexpected fluctuations in our reported financial information