What the changes say
- Six prior risks were removed, including macroeconomic cycles, electric-vehicle transition, trade policy, restructuring, Spin-Off benefits, and standalone-company history.
- Technology infrastructure risk now specifically covers operational technology, industrial controls, ERP providers, manufacturing partners, and unsupported systems.
- Program-launch risk now includes machine and engine programs, while intellectual-property risk adds customer ownership and exclusivity claims.
- Environmental risk expands to natural-resource use and customer operations; competition now emphasizes product technology system solutions.
What changed since the prior 10-K
Dropped
- DroppedRisks Related to Our Industry and Strategy
Adverse changes in general business and economic conditions, including recessions, adverse market conditions or downturns impacting the vehicle and industrial equipment industries, have in the past and may in the future adversely affect our business, financial condition, and results of operations
Covered recessions, inflation, interest rates, credit, and cyclical vehicle and industrial-equipment demand.
- DroppedRisks Related to Our Industry and Strategy
If we do not deliver new products, services and technologies in response to changing consumer preferences and increased regulation of greenhouse gas emissions, or if the market for electric vehicles grows faster than expected, our business, financial condition, and results of operations could be adversely impacted
Covered failure to respond to emissions regulation, changing preferences, and faster-than-expected electric-vehicle adoption.
- DroppedRisks Related to Our Business and Operations
Changes in U.S. and foreign administrative policy, including changes to existing trade agreements and any resulting changes in international trade relations, may adversely affect our business, financial condition and results of operations
- DroppedRisks Related to Our Business and Operations
We could incur restructuring charges as we execute restructuring and other actions in an effort to improve future profitability and competitiveness and to optimize our product portfolio, and we may not achieve the anticipated savings and benefits from these actions
- DroppedRisks Related to the Spin-Off
We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Off
- DroppedRisks Related to the Spin-Off
We have only operated as an independent, publicly traded company since July 3, 2023, and our historical combined financial information is not necessarily representative of the results we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results
Reworded
- 79% rewrittenRisks Related to Our Business and Operations
If we are unable to protect our intellectual property or if a third party makes assertions against us or our customers relating to intellectual property rights, our business, financial condition and results of operations could be adversely affected
The risk now emphasizes customer claims for ownership or exclusivity over intellectual property developed for them, while dropping counterfeit-goods and weak-enforcement language.
- 78% rewrittenRisks Related to Our Business and Operations
Our profitability and results of operations may be adversely affected by program launch difficulties
The scope expands from vehicle programs to machine, engine, and vehicle programs, and includes customer production readiness.
- 72% rewrittenRisks Related to the Spin-Off
We or the Former Parent may fail to perform under, or additional disputes may arise between the parties relating to, various transaction agreements that have been executed in connection with the separation
The wording now expressly covers amendments and restatements to the transaction agreements governing PHINIA’s relationship with the Former Parent.
- 70% rewrittenRisks Related to Our Business and Operations
A failure of or disruption in our technology infrastructure, including a disruption related to cybersecurity, could adversely impact our business, financial condition, and results of operations
The risk now specifically covers operational technology, industrial control systems, ERP providers, manufacturing partners, and end-of-life or unsupported systems and hardware.
Was: A failure of or disruption in our information technology infrastructure, including a disruption related to cybersecurity, could adversely impact our business, financial condition and results of operations
- 59% rewrittenRisks Related to Our Industry and Strategy
We face strong competition
The description adds product solutions and scope of product technology system solutions, and broadens the competitive industries from automotive to global transportation and industrial equipment.
- 57% rewrittenRisks Related to Regulatory, Legal and Similar Matters
We are subject to extensive environmental, health and safety, human rights and other laws and regulations related to corporate sustainability that are subject to change, and may in the future be supplemented by additional such laws and regulations and may involve significant risks
The risk adds natural-resource laws and risks involving customers’ operations, while describing the plants as automotive and industrial-equipment facilities.
Was: We are subject to extensive environmental, health and safety, human rights and other laws and regulations that are subject to change and may involve significant risks
- 42% rewrittenRisks Related to Regulatory, Legal and Similar Matters
Changes in tax laws or tax rates taken by taxing authorities and tax audits or similar processes could adversely affect our business, financial condition and results of operations
No substantive risk change is apparent; the tax-law, audit, restructuring, tax-credit, and assessment concerns remain the same.
- 40% rewrittenRisks Related to Regulatory, Legal and Similar Matters
We have liabilities related to product warranties, litigation and other claims
The warranty-cost wording now expressly includes repair or replacement expenses; the disclosed recall and warranty exposure otherwise remains unchanged.
- 40% rewrittenRisks Related to Our Business and Operations
Our business in China is subject to aggressive competition and is sensitive to economic, geopolitical, social and market conditions
Was: Our business in China is subject to aggressive competition and is sensitive to economic, political, social and market conditions
- 40% rewrittenRisks Related to Our Industry and Strategy
The failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions, partnerships or other strategic investments could adversely affect our growth and our business, financial condition, and results of operations
Was: The failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions or partnerships could adversely affect our growth and our business, financial condition, and results of operations
- 35% rewrittenRisks Related to Our Business and Operations
We continue to face volatile costs of commodities used in the production of our products and elevated levels of inflation
- 33% rewrittenRisks Related to Our Business and Operations
We are under substantial pressure from our customers to reduce the prices of our products
Was: We are under substantial pressure from OEMs to reduce the prices of our products
- 31% rewrittenRisks Related to Our Business and Operations
We are subject to risks related to our international operations
- 27% rewrittenRisks Related to Our Customers and Suppliers
Disruptions in our supply chain have in the past, and could in the future, adversely affect our business, financial condition and results of operations
- 23% rewrittenRisks Related to Regulatory, Legal and Similar Matters
The impacts of climate change, regulations related to climate change, various stakeholders’ emphasis on reducing the impacts of climate change, and other related matters may adversely impact our business, financial condition and results of operations
Was: The impacts of climate change, regulations related to climate change and various stakeholders’ emphasis on climate change and other related matters may adversely impact our business, financial condition and results of operations
All 24 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Industry and Strategy
- 01We face strong competition59% rewritten
- 02The failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions, partnerships or other strategic investments could adversely affect our growth and our business, financial condition, and results of operations40% rewritten
Risks Related to Our Business and Operations
- 03A failure of or disruption in our technology infrastructure, including a disruption related to cybersecurity, could adversely impact our business, financial condition, and results of operations70% rewritten
- 04We are under substantial pressure from our customers to reduce the prices of our products33% rewritten
- 05We continue to face volatile costs of commodities used in the production of our products and elevated levels of inflation35% rewritten
- 06Our profitability and results of operations may be adversely affected by program launch difficulties78% rewritten
- 07Our inability to identify, attract, retain, and develop a qualified global workforce could adversely impact our business, financial condition and results of operations and impair our ability to meet our strategic objectives and the needs of our customers
- 08If we are unable to protect our intellectual property or if a third party makes assertions against us or our customers relating to intellectual property rights, our business, financial condition and results of operations could be adversely affected79% rewritten
- 09We are subject to risks related to our international operations31% rewritten
- 10Our business in China is subject to aggressive competition and is sensitive to economic, geopolitical, social and market conditions40% rewritten
Risks Related to Our Customers and Suppliers
- 11Disruptions in our supply chain have in the past, and could in the future, adversely affect our business, financial condition and results of operations27% rewritten
- 12We face credit, operational and sales concentration risks related to our customers
- 13Work stoppages, production shutdowns and similar events or conditions could significantly disrupt and adversely impact our business, financial condition and results of operations
Risks Related to Regulatory, Legal and Similar Matters
- 14We have liabilities related to product warranties, litigation and other claims40% rewritten
- 15We are subject to extensive environmental, health and safety, human rights and other laws and regulations related to corporate sustainability that are subject to change, and may in the future be supplemented by additional such laws and regulations and may involve significant risks57% rewritten
- 16Changes in tax laws or tax rates taken by taxing authorities and tax audits or similar processes could adversely affect our business, financial condition and results of operations42% rewritten
- 17We are, and in the future may be, subject to governmental investigations and related proceedings regarding vehicle emissions standards
- 18The impacts of climate change, regulations related to climate change, various stakeholders’ emphasis on reducing the impacts of climate change, and other related matters may adversely impact our business, financial condition and results of operations23% rewritten
- 19Compliance with and changes in other laws and regulations impacting our operations could be costly and could affect our business, financial condition and results of operations
Risks Related to Credit and Our Financials
- 20Goodwill, indefinite-lived intangible assets and long-lived assets, which are subject to periodic impairment evaluations, represent a significant portion of our total assets. An impairment charge on these assets could have an adverse impact on our business, financial condition and results of operations
- 21Changes in interest rates and asset returns could increase our pension funding obligations, which could reduce our profitability and cash flow and adversely impact our business, financial condition and results of operations
- 22We are subject to a number of restrictive covenants and requirements under our indebtedness, which could limit our financial and operating flexibility and subject us to other risks
Risks Related to the Spin-Off
- 23If the Spin-Off were determined not to qualify as tax-free for U.S. federal income tax purposes, we could have an indemnification obligation to the Former Parent, which could adversely affect our business, financial condition and results of operations
- 24We or the Former Parent may fail to perform under, or additional disputes may arise between the parties relating to, various transaction agreements that have been executed in connection with the separation72% rewritten
Other Phinia 10-Ks
- FY2024 10-K risk factors30 risks
PHINIA’s biggest strategic risk is adapting fuel-system and electrical products to tighter emissions rules and faster electric-vehicle adoption.
Filed Feb 13, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.