Civeo (CVEO) risk factors, FY2025 10-K

Other

1. 01Risks in this section are grouped by category. Many risks affect more than one category and the risks are not in order of significance or probability of occurrence because they have been grouped by categories23% rewritten

Risks Related to Our Customers

1. 02Certain of our customers’ spending may be directly, and our business may be indirectly, affected by (i) volatile or low met coal, oil, iron ore or natural gas prices; (ii) elevated or increasing production costs, including due to tariffs; or (iii) unsuccessful exploration results44% rewritten
2. 03Our customers and their operations are exposed to a number of unique operating risks and challenges which could also adversely affect us
3. 04We depend on several significant customers
4. 05Failure to retain our current customers, renew our existing customer contracts and obtain new customer contracts, or the termination of existing contracts, could adversely affect our business
5. 06Due to the significant geographic concentration of our business, adverse events in areas where we operate could negatively impact our business, and our geographic concentration could limit the number of customers seeking our services
6. 07We may be adversely affected if customers reduce their accommodations outsourcing

Risks Related to Our Operations

1. 08We operate in a highly competitive industry, and if we fail to compete effectively, our business will suffer
2. 09Our operations may suffer due to over-capacity of certain types of accommodations assets in certain regions
3. 10Increased operating costs and limited cost recovery through pricing or contract terms may constrain our ability to make a profit
4. 11While our multi-year contracts often provide for annual escalation in our room rates for food, labor and utility inflation, we may be unable to fully recover costs, or the recovery may be delayed, and such increases would negatively impact our profitability on contracts that do not contain such inflation protections30% rewritten
5. 12Employee and customer labor problems could adversely affect us
6. 13Failure to develop or maintain positive relationships with the Indigenous people in the areas where we operate could adversely affect our business
7. 14Development or required use of permanent infrastructure in the areas where we locate our assets could negatively impact our business38% rewritten
8. 15the west coast of British Columbia, then demand for our hospitality services could decrease as customer employees move to the region and choose to utilize permanent housing and food serviceNew
9. 16A failure to maintain food safety or comply with government regulations related to food and beverages or serving alcoholic beverages may subject us to liability
10. 17Changes in U.S. or foreign trade policies, including tariffs and other protectionist trade measures, may adversely impact our future net income, cash flows and financial conditionNew
11. 18The majority of our major Canadian lodges are located on land subject to leases. If we are unable to renew a lease or obtain permits necessary to operate on such leased land, we could be materially and adversely affected35% rewritten
12. 19We are susceptible to seasonal earnings volatility due to seasonal weather patterns in our regions of operations
13. 20We may be subject to risks associated with the transportation, installation and demobilization of mobile accommodations
14. 21Our business could be negatively impacted by security threats, including cybersecurity threats and other disruptions
15. 22Our business could be disrupted by any failure of our information systems51% rewritten
16. 23Loss of key members of our management could adversely affect our business
17. 24The effects of public health crises, pandemics and epidemics may materially affect how we and our customers are operating our and their businesses

Financial/Accounting Risks

1. 25Currency exchange rate fluctuations could adversely affect our U.S. dollar reported results of operations and financial position
2. 26Our indebtedness could restrict our strategy and operations and make us more vulnerable to adverse economic conditions
3. 27We may not have adequate insurance for potential liabilities and insurance may not cover certain liabilities
4. 28We recorded impairments of our long-lived assets of zero, $11.6 million and $1.4 million in 2025, 2024 and 2023, respectively. As of December 31, 2025, goodwill of $7.5 million at our Australian reporting unit represented 2% of total assets
5. 29Our inability to control the inherent risks of identifying, acquiring and integrating businesses that we may acquire, including any related increases in debt or issuances of equity securities, could adversely affect our operations39% rewritten

Legal and Regulatory Risks

1. 30We do business in Australia and Canada, whose political and regulatory environments and compliance regimes differ from those in the U.S26% rewritten
2. 31We are subject to extensive and costly environmental laws and regulations that may require us to take actions that will adversely affect our results of operations
3. 32We may be exposed to certain regulatory and financial risks related to climate change and other ESG-related matters

Risks Related to Our Common Shares

1. 33The market price and trading volume of our common shares may be volatile
2. 34These factors may materially reduce the market price of our common shares, regardless of our operating performance. In addition, our average daily trading volume on the New York Stock Exchange has historically been low, which may result in greater price volatility
3. 35The repurchases of our common shares or payment of dividends are each within the discretion of our Board of Directors, and there is no guarantee that we will repurchase common shares or pay any dividends in the future or at levels anticipated by our shareholders44% rewritten
4. 36We are governed by the corporate laws in British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws in Delaware, U.S
5. 37Provisions contained in our articles and applicable Canadian and British Columbia laws could discourage a take-over attempt, which may reduce or eliminate the likelihood of a change of control transaction and, therefore, the ability of our shareholders to sell their shares for a premium
6. 38The enforcement of civil liabilities against Civeo may be more difficult

Risks Related to Our Structure

1. 39We are subject to various Australian, Canadian and other taxes
2. 40We remain subject to changes in tax law (in various jurisdictions) and other factors that could impact our effective tax rate