Sensata Technologies Holding (ST) risk factors, FY2024 10-K

Business and Operational Risks

1. 01Adverse conditions in the industries upon which we are dependent, including the automotive industry, have had, and may in the future have, adverse effects on our business
2. 02We may incur material losses and costs as a result of product liability, warranty, and recall claims that may be brought against us
3. 03We are dependent on market acceptance of our new product introductions and product innovations for future revenue, and we may not realize all of the revenue or achieve anticipated gross margins from products subject to existing awards or for which we are currently engaged in development
4. 04Increasing costs for, or limitations on the supply of or access to, manufactured components and raw materials may adversely affect our business and results of operations
5. 05Restructuring our business or divesting some of our businesses or product lines in the future may have a material adverse effect on our results of operations, financial condition, and cash flows
6. 06Labor disruptions or increased labor costs have had, and may in the future have, adverse impacts on our business
7. 07We operate in markets that are highly competitive and competitive pressures could require us to lower our prices or result in reduced demand for our products
8. 08In the ordinary course of business, we rely on IT networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information, and to manage or support a variety of business processes and activities
9. 09Improper disclosure of confidential, personal, or proprietary data could result in regulatory scrutiny, legal liability, or harm to our reputation. Changes to data protection laws, new customer requirements, and changes to international data transfer rules could impose new burdens
10. 10Our future success depends in part on our ability to attract and retain key senior management and qualified technical, sales, and other personnel
11. 11We are subject to risks associated with climate change, including increased regulation of GHG emissions, changing consumer preferences and other risks related to our transition to Electrification, and the potential increased impacts of severe weather events on our operations and infrastructure
12. 12Our business is subject to numerous global risks, including regulatory, political, economic, governmental, and military concerns and instability
13. 13We are subject to various risks related to public health crises, which have had, and may in the future have, material and adverse impacts on our business, financial condition, liquidity, and results of operations
14. 14In connection with the implementation of our corporate strategies, we face risks associated with the acquisition of businesses, the integration of acquired businesses, and the growth and development of these businesses

Financial Risks

1. 15We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows
2. 16Our level of indebtedness could adversely affect our financial condition and our ability to operate our business, including our ability to service our debt and/or comply with the related covenants
3. 17Changes in government trade policies, including the imposition of tariffs, may have a material impact on our results of operations
4. 18We have recorded a significant amount of goodwill and other identifiable intangible assets, and we may be required to recognize goodwill or intangible asset impairments, which would reduce our earnings
5. 19Our global effective tax rate is subject to a variety of different factors that could create volatility in that tax rate, expose us to greater than anticipated tax liabilities, or cause us to adjust previously recognized tax assets and liabilities
6. 20We are a holding company and, therefore, may not be able to receive dividends or other payments in needed amounts from our subsidiaries

Legal and Regulatory Risks

1. 21Changes in existing environmental or safety laws, regulations, and programs could reduce demand for our products, which could cause our revenue to decline
2. 22Our operations expose us to the risk of material environmental liabilities, litigation, government enforcement actions, and reputational risk
3. 23Our ability to compete effectively depends, in part, on our ability to maintain the proprietary nature of our products and technology
4. 24We may be subject to claims that our products or processes infringe on the intellectual property rights of others, which may cause us to pay unexpected litigation costs or damages, modify our products or processes, or prevent us from selling our products
5. 25We are a defendant to a variety of litigation in the course of our business that could cause a material adverse effect on our results of operations, financial condition, and/or cash flows
6. 26We have identified material weaknesses in our internal control over financial reporting. These material weaknesses could in the future adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner
7. 27If actions to remediate these material weaknesses are not completed on a timely basis, or if other remediation efforts are not successful, we may, in the future, identify additional internal control deficiencies that could rise to the level of a material weakness, or uncover errors in financial reporting
8. 28As a public limited company incorporated under the laws of England and Wales, we may have less flexibility with respect to certain aspects of capital management
9. 29As a public limited company incorporated under the laws of England and Wales, the enforcement of civil liabilities against us may be more difficult