APi Group Corporation (APG) 2024年10-K年度報告「NYSE」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-K_(Mark One)xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES

2、 EXCHANGE ACT OF1934 FOR THE TRANSITION PERIOD FROM TOCommission File Number 001-39275_APi Group Corporation(Exact name of Registrant as specified in its Charter)_Delaware98-1510303(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)c/o APi Group,Inc.1100 O

3、ld Highway 8 NWNew Brighton,MN55112(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(651)636-4320_Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,par

4、value$0.0001 per shareAPGNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes x No oIndicate by check mark if the Registrant is not required to fi

5、le reports pursuant to Section 13 or 15(d)of the Act.Yes o No xIndicate by check mark whether the Registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the Registrant was re

6、quired to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes x No oIndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of thischapter

7、)during the preceding 12 months(or for such shorter period that the Registrant was required to submit such files).Yes x No oIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or an emerging growth company.

8、See thedefinitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller reporting companyoEmerging growth companyoIf an emerging growth company

9、,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a)of the Exchange Act.oIndicate by check mark whether the registrant has filed a report on and attestati

10、on to its managements assessment of the effectiveness of its internal control over financial reporting underSection 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.xIf securities are registered pursuant to Section 12(b

11、)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements.oIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis o

12、f incentive-based compensation received by any of the registrantsexecutive officers during the relevant recovery period pursuant to 240.10D-1(b).oIndicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes o No xThe aggregate market value of the

13、 voting and non-voting common equity held by non-affiliates of the Registrant,based on the closing price of the shares of common stock on The NewYork Stock Exchange on June 30,2024,the last business day of the registrants most recently completed second quarter,was$8.5 billion.The number of shares of

14、 Registrants common stock outstanding as of February 19,2025 was 277,558,051.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants definitive proxy statement for the 2025 Annual Meeting of Stockholders,which is to be filed no later than 120 days after December 31,2024,are incorporatedby ref

15、erence into Part III of this Form 10-K.2025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm1/138i2025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm2/138Table of Contents PagePART I Ite

16、m 1.Business4Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments30Item 1C.Cybersecurity30Item 2.Properties31Item 3.Legal Proceedings32Item 4.Mine Safety Disclosures32PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of EquitySecurities33Item 6.R

17、eserved34Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations35Item 7A.Qualitative and Quantitative Disclosures About Market Risk53Item 8.Financial Statements and Supplementary Data55Item 9.Changes in and Disagreements with Accountants on Accounting and Financi

18、al Disclosure113Item 9A.Controls and Procedures113Item 9B.Other Information114Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections114PART III Item 10.Directors,Executive Officers and Corporate Governance115Item 11.Executive Compensation115Item 12.Security Ownership of Certain

19、Beneficial Owners and Management and Related Stockholder Matters115Item 13.Certain Relationships and Related Transactions,and Director Independence115Item 14.Principal Accounting Fees and Services115PART IV Item 15.Exhibits,Financial Statement Schedules116Item 16Form 10-K Summary120ii2025/5/19 10:13

20、apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm3/138Table of ContentsPART IAs used in this Annual Report on Form 10-K(Annual Report),the terms“we,”“us,”“our,”the“Company,”and“APG”refer to APi Group Corporation,a Delaware corporation headquartered in New

21、 Brighton,Minnesota,and its whollyownedsubsidiaries(the“Subsidiaries”).CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report contains“forward-looking statements.”These forward-looking statements are based on beliefs andassumptions as of the date such statements are made and are subj

22、ect to risks and uncertainties.These forward-looking statementsinvolve known and unknown risks,uncertainties,and other factors that may cause our actual results,performance,or achievementsto be materially different from any future results,performance,or achievements expressed or implied by the forwa

23、rd-lookingstatements.In some cases,you can identify forward-looking statements by terms including“expect,”“anticipate,”“project,”“will,”“should,”“believe,”“intend,”“plan,”“estimate,”“potential,”“target,”“would,”and similar expressions,although not all forward-looking statements contain these identif

24、ying terms.These forward-looking statements are based on our current expectations and assumptions and on information currentlyavailable to management and include,among others,statements regarding,as of the date such statements are made:our beliefs and expectations regarding our business strategies a

25、nd competitive strengths;our beliefs regarding procurement challenges and the nature of our contractual arrangements and renewal rates andtheir impact on our future financial results;our beliefs regarding our acquisition platform and ability to execute and successfully integrate strategicacquisition

26、s;our beliefs regarding the future demand for our services,the seasonal and cyclical volatility of our business,financial condition,results of operations,and cash flows;our beliefs regarding the recurring and repeat nature of our business,customers,and revenues,and its impact on ourcash flows and or

27、ganic growth opportunities and our belief that it helps mitigate the impact of economicdownturns;our intent to continue to grow our business,both organically and through acquisitions,and our beliefs regarding theimpact of our business strategies on our growth;our beliefs regarding our customer relat

28、ionships and plans to grow existing business and expand service offerings;our beliefs regarding our ability to pass along commodity price increases to our customers;our expectations regarding the cost of compliance with laws and regulations;our expectations regarding labor matters;our beliefs regard

29、ing market risk,including our exposure to foreign currency fluctuations,and our ability tomitigate that risk;our expectations and beliefs regarding accounting and tax matters;our beliefs regarding the effectiveness of the steps taken to remediate previously reported material weaknesses inour interna

30、l control over financial reporting;our expectations regarding future capital expenditures;our expectations regarding future expenses in connection with our multi-year restructuring program,includingthose related to workforce reductions;our expectations regarding future pension contributions;andour b

31、eliefs regarding the sufficiency of our current sources of liquidity to fund our future liquidity requirements,our expectations regarding the types of future liquidity requirements and our expectations regarding the availabilityof future sources of liquidity.12025/5/19 10:13apg-20241231https:/www.se

32、c.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm4/138Table of ContentsThese forward-looking statements are subject to a number of known and unknown risks,uncertainties and assumptions,including those described in“Risk Factors”and in“Risk Factor Summary”below.In light of these ri

33、sks,uncertainties,andassumptions,the forward-looking events and circumstances discussed in this Annual Report may not occur,and actual results coulddiffer materially and adversely from those anticipated or implied in the forward-looking statements.The factors identified below are believed to be impo

34、rtant factors,but not necessarily all of the important factors,that couldcause actual results to differ materially from those expressed in any forward-looking statement made by us.Other factors notdiscussed herein could also have a material adverse effect on us.You should not rely upon forward-looki

35、ng statements aspredictions of future events.Although we believe that the expectations reflected in the forward-looking statements are reasonable,we cannot guarantee future results,level of activity,performance or achievements.These forward-looking statements speak only asof the date of this Annual

36、Report.We assume no obligation to update or revise these forward-looking statements for any reason,even if new information becomes available in the future,except as required by applicable law.RISK FACTOR SUMMARYBelow is a summary of the principal factors that may affect our business,financial condit

37、ion,and results of operations.This summary does not address all of the risks that we face.Additional discussion of the risks summarized in this risk factorsummary,and other risks that we face,can be found below under the heading“Risk Factors”and should be carefully considered,together with other inf

38、ormation in this Annual Report and our other filings with the Securities and Exchange Commission(the“SEC”).We operate in international markets,which subjects us to economic,political,and other risks.We may not implement our new enterprise resource planning systems successfully,on time and on budget.

39、Improperly managed projects or project delays may result in additional costs on claims against us.We are a decentralized company and place significant decision-making authority with our subsidiariesmanagement,supported by certain integrated policies and processes.As part of our business strategy,we

40、rely on our ability to successfully acquire other businesses,and integrateacquired businesses into our operations,and our inability to do so could adversely affect our business and results ofoperations.Higher interest rates increase the interest costs on our credit facilities and on our other floati

41、ng rate indebtednessand could impact adversely our ability to refinance existing indebtedness or to sell assets.Adverse developments in the credit markets could adversely affect funding of significant projects in our industriesand our ability to secure financing,take advantage of acquisition opportu

42、nities,or achieve our growth objectives.A significant portion of our revenue is recognized over time based on estimates of contract revenue,costs,andprofitability,and our reliance on such projections carries risk of a reduction or reversal of previously recordedrevenue or profits.We have a significa

43、nt amount of goodwill and identifiable intangible assets that are subject to impairment in thefuture under certain circumstances.Any shortfalls in our operation and maintenance of effective controls over financial reporting creates certain risks.Our level of indebtedness,and the associated complianc

44、e obligations contained in the financial maintenancecovenants in our credit facilities and restrictions on our operations set forth in the Credit Agreement(as laterdefined),increases the potential negative impact of interest rate increases and creates risks to our cash flow andoperating flexibility.

45、We are self-insured against many potential liabilities,which makes estimating our future expenses for claimsdifficult and which increases the financial risks associated with the realization of such potential liabilities.We may not accurately estimate the costs associated with services provided under

46、 fixed price contracts.22025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm5/138Table of ContentsA portion of our contracts allocate the risks of price increases,or reductions in the supply,of the materials we use inour business to us.Our con

47、tracts portfolio contains many highly-regulated government contracts and guaranties of subsidiarycontracts,which present elevated risks in the event of contract breach,as well as elevated risks in the event ofchanges in spending or budgetary priorities,or delays in contract awards.Our contracts port

48、folio is primarily comprised of contracts with durations of less than six months,many of whichare subject to reduction or cancellation,which present risks that turn on our ability to maintain a stable pipeline ofprojects.We maintain a workforce based upon current and anticipated workloads.We could i

49、ncur significant costs andreduced profitability from underutilization of our workforce if we do not receive future contract awards,if contractawards are delayed,or if there is a significant reduction in the level of services we provide.Additionally,shortagesof skilled labor could impede our ability

50、to provide timely,cost-effective services to our customers.A large portion of our workforce is covered by collective bargaining agreements,works council arrangements andbenefit pension plans,which limits our discretion in the management of covered employees,carries a risk of strikesor other concerte

51、d activities that may impair our operations,subjects us to potential works council claims andlitigation and imposes obligations to fund certain pension plans.We are vulnerable to the economic conditions affecting the industries we serve,including the construction andtechnology industries,the energy

52、sector,and data centers,which present risks of a decline in demand for ourservices or in the financial condition of our customers and their ability and willingness to invest in infrastructureprojects.A portion of our expected future growth is based on the ability and willingness of public and privat

53、e entities toinvest in infrastructure.Our business is subject to operational hazards due to the nature of services we provide and the conditions in whichwe operate,including some factors which may be outside of our control,including electricity,fires,explosions,mechanical failures and weather-relate

54、d incidents.In our business we face regular litigation across a broad range of claims,including health,safety,andenvironmental regulation proceedings,as well as costs related to damages we may be assessed relating to ourcontractual obligations,or as a result of product liability claims against our c

55、ustomers.Certain of the markets we serve are seasonal,and our projects can be negatively impacted by poor or extremeweather.We operate as a holding company,and as such rely on our subsidiaries to provide cash for our operations andobligations,including distributions and dividends,if any.We have outs

56、tanding equity instruments that require us to issue additional shares of common stock in the future andwe may issue additional preferred stock or make other changes to our ownership structure to generate additionalcapital.These activities may dilute your ownership interests and,among other reasons,r

57、educe the value of ourcommon stock.As part of our incorporation and bylaws in Delaware,we are subject to certain provisions that limit stockholdersactions.We maintain confidential data and information which exposes us to risks associated with cybersecurity incidentsand compliance with data privacy a

58、nd security laws,identity protection and information security.We face risks associated with deterioration in our performance of services,increases in healthcare costs,significantemployee misconduct,and adverse regulatory changes,all of which may negatively impact our operations andfinancial results.

59、Our success ultimately depends on our ability to compete successfully in the industries and markets we serve whichmay be jeopardized by the loss of key senior management personnel or a shortage of highly skilled personnel.32025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000

60、162828025008189/apg-20241231.htm6/138Table of ContentsITEM 1.BUSINESSOur BusinessWe are a global,market-leading business services provider of fire and life safety,security,elevator and escalator,andspecialty services with a substantial recurring revenue base and over 500 locations worldwide.We provi

61、de statutorily mandated andother contracted services to a strong base of long-standing customers across industries.We have a winning leadership culturedriven by entrepreneurial business leaders that deliver innovative solutions to our customers.We believe that our core strategies of driving organic

62、growth and growth through accretive acquisitions,promotingsharing of best practices across all of our businesses,and leveraging our scale and services offerings place us in the position tocapitalize on opportunities and trends in the industries we serve,grow our businesses,and advance our position i

63、n each of ourmarkets.We believe that our revenue diversification across customers,end markets,geographies,and projects,combined with ourgo-to-market strategy of selling inspection work first,regional approach to operating our businesses,specialty operations in nichemarkets,strong commitment to leade

64、rship development,long-standing customers with a robust reputation in the industries weserve,and strong safety track record differentiates us from our competitors.We have a disciplined acquisition platform which has historically provided strategic acquisitions that are integrated intoour operations.

65、Since 2005,we have completed over 125 acquisitions.We target companies that align with our strategic prioritiesand demonstrate key value drivers such as culture,geography,end markets and client base,capabilities,and leadership.Ourpriorities are unified around maintaining business continuity while id

66、entifying and implementing operational efficiencies,costsynergies,and integration of organizational processes to drive margin expansion.We employ a regional operating model designed to improve speed and responsiveness to our customers across ourbusinesses,empower leadership of our businesses to driv

67、e business performance and execute key decisions,and foster cross-functional sharing of best practices.This structure promotes a business-owner mindset among our individual business leaders andcombines the personal attention of a small-to medium-sized company with the strength and support of an indu

68、stry leader.It alsoallows each of our businesses to remain highly focused on best positioning itself within the categories in which it competes andreinforces strong accountability for operational and financial performance.We operate our business under three primary operating segments,which aggregate

69、 to our two reportable segments:Safety Services A leading provider of safety services in North America,Europe,and Asia-Pacific,focusing onend-to-end integrated occupancy systems(fire protection solutions,Heating,Ventilation,and Air Conditioning(“HVAC”),entry systems,and elevators and escalators),inc

70、luding design,installation,inspection,and service ofthese integrated systems.The work performed within this segment spans across industries and facilities andincludes commercial,education,healthcare,high tech,industrial,and special-hazard settings.Specialty Services A leading provider of a variety o

71、f infrastructure services and specialized industrial plantservices,which include maintenance and repair of critical infrastructure such as underground electric,gas,water,sewer,and telecommunications infrastructure.Our services include engineering and design,fabrication,installation,maintenance servi

72、ce and repair,retrofitting and upgrading,pipeline infrastructure,access and roadconstruction,supporting facilities,and performing ongoing integrity management and maintenance to customerswithin the energy industry.Customers within this segment vary from private and public utilities,communications,he

73、althcare,education,transportation,manufacturing,industrial plants and governmental agencies throughout NorthAmerica.After reviewing the businesses in our portfolio,we have made the decision to realign our segments beginning in 2025 bymoving our HVAC business from Safety Services to Specialty Service

74、s.42025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm7/138Table of ContentsOur IndustryThe industries in which we operate are highly fragmented and comprised of national,regional,and local companies thatprovide services to customers across v

75、arious end markets and geographies.We believe the following industry trends are affecting,and will continue to affect,demand for our services.Evolving Regulation.The life safety and elevator industries are highly regulated at the federal,state,and local levels andcontinuous regulatory changes,includ

76、ing mandated building codes and inspections and maintenance requirements,continue togenerate increasing demand for our services,often on a recurring basis.For example,the Uniform Building Codes written by theNational Fire Protection Association and the International Code Council regulate fire suppre

77、ssion and sprinkler systems.Amongother things,these codes require testing,inspections,repair,maintenance and specific retrofits of building fire suppression andsprinkler systems,which generates recurring revenue related to those services.As these associations and government agenciescontinue to adopt

78、 new,more stringent regulations,the demand for our services increases.Deferred Infrastructure Investment.Following several years of deferred investment,the aging United States(U.S.)infrastructure system requires significant maintenance,repair and retrofit services which has spurred demand in our ind

79、ustry.Stateand local municipalities have deferred infrastructure spending for many years which has resulted in the need to rebuild or retrofit alarge portion of the U.S.infrastructure.The Infrastructure Investment and Jobs Act,signed into law on November 15,2021,includes$550 billion of newly authori

80、zed infrastructure spending through 2026.In addition,the growing strategic importance ofsemiconductor technology in industries like defense,automotive,and telecommunications has caused the U.S.to boost domesticsemiconductor production and reduce reliance on foreign supply chains.The CHIPS and Scienc

81、e Act,passed in 2022,allocatesfunds for semiconductor research,development,and manufacturing,including$39 billion for building new U.S.facilities andequipment.Our Competitive StrengthsWe believe that the following are our key competitive strengths:Leading Market Positions in Diverse Set of Niche Ind

82、ustries.We believe that we are one of the go-to-market leaders ineach of the niche industries we serve,including the industry leader in life safety and security services,among the top five specialtycontractors in North America,and a premier provider of services for elevator and escalator equipment.W

83、e believe that our revenuediversification across customers,end markets,geographies and projects,combined with our go-to-market strategy of sellinginspection work first,regional approach to operating our businesses,operations in niche industries with strong cross-sellingopportunities and recurring re

84、venue potential,strong commitment to leadership development,long-standing customer relationshipswith a robust reputation in the industries we serve,and strong safety track record differentiates us from our competitors.As a resultof our strong global brand recognition,we believe we have better access

85、 to new business opportunities,allowing us to maintain andadvance our market share positions.Repeat Revenue with Diverse Mix of Customers,End Markets,Geographies and Projects.We have repeat revenue froma diverse set of long-standing blue-chip customers who are spread across a variety of end markets

86、and geographies with lowconcentration.Many of our customers have high creditworthiness in a direct service relationship or contracting role,providingstable cash flows and a platform for organic growth.Service inspections are often required by legislation or insurance mandates,providing a strong recu

87、rring revenue stream.Our broad geographic footprint reaches over 500 locations throughout over 20countries and allows us to maintain relationships with local decision makers while also having the ability to execute multi-siteservices for national and international account customers.Differentiated Bu

88、siness Model Focused on Growing Service Revenue.Our go-to-market strategy in life safety is to sellinspection work first,because we estimate that every dollar sold can lead to subsequent service work.In most cases,our inspectionwork is covered by statutory or insurance requirements.Nearly all facili

89、ties that have existing life safety systems are required bylaw to have that system inspected on at least an annual basis.This strategy differentiates us from our peers and we believeultimately creates a stickier client relationship that we believe leads to recurring revenue,higher margins,and growth

90、 opportunities.Attractive Industry Fundamentals.We believe that the diversity of end markets we serve and the regulatory-drivendemand for certain of our services will enable us to better withstand various economic cycles.We believe that the industries inwhich we operate are subject to increasingly c

91、omplex and evolving regulatory environments and have experienced pent-up demandresulting from years of deferred maintenance and retrofit investment.We believe this presents attractive opportunities for us todrive growth in our businesses and enhance our market share positions.52025/5/19 10:13apg-202

92、41231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm8/1382025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm9/138Table of ContentsDisciplined Acquisition Platform with History of Strategic Acquisitions.We ha

93、ve a disciplined acquisition platformthrough which we systematically target,execute,and integrate strategic acquisitions.Since 2005,we have completed over 125acquisitions.Through our selective approach,we identify and assess companies that we believe align with our strategic prioritiesand demonstrat

94、e key value drivers such as culture,geography,end markets,client base,leadership,and service capabilities.Each ofour businesses maintains its identity,reputation,customer relationships and culture following acquisition while benefiting from theresources of the APG network,which we believe is an impo

95、rtant differentiator.Our acquired businesses benefit from direct accessto the APG network,which facilitates organizational sharing of knowledge and best practices,increases collaboration across ourbusinesses,and develops cross-brand solutions which foster enhanced experience,quality,and efficiency.D

96、ifferentiated Leadership Culture and Operating Model.We believe that one of our core pillars of success is our distinctleadership development culture predicated on Building Great Leaders,our cross-functional leadership development platformdesigned to enable independent company leadership,cultivate b

97、road management skills,enhance organizational flexibility,andempower the next cohort of leaders across our businesses.This culture of investing in leadership development at all levels of theorganization has created an empowered,entrepreneurial atmosphere which facilitates organizational sharing of k

98、nowledge and bestpractices and enables the development of cross-brand solutions and innovation.Another important initiative is our field-basedleadership programs.We believe our approach to field leadership is different from our peers field-based programs,which tend tofocus on technical competence as

99、 opposed to leadership.Moreover,we employ a decentralized operating model which improvesspeed and responsiveness to customers in industries with strict requirements.This also empowers the leaders of our businesses todrive business performance and execute key decisions,while highlighting the signific

100、ant focus we place on ensuring members ofour team receive continuous investment in their development.Resilient Business Model with Multiple Levers to Navigate Downturns.Our proactive approach to managing risk acrossour platform,recurring revenue services-focused business model,and highly variable co

101、st structure provide significant flexibility toeffectively navigate downturns.Our significant union labor force in the U.S.and subcontract labor force internationally allow us toflex our workforce capacity as market conditions dictate without incurring significant trailing costs or severance.Our ave

102、rageproject duration is relatively short,which helps mitigate inflationary exposure to cost of goods sold or changes in labor expensethat some peers may experience in an inflationary environment.Historically,we have managed inflationary pressure through costefficiency,cost saving actions,and price i

103、ncreases,when needed.We believe that our broad mix of customers across many sectorsand strong recurring revenue streams help us mitigate the impact of economic downturns on our business.In a downturn,we havemultiple levers to pull to preserve cash due to a high proportion of variable costs.Attractiv

104、e Financial Performance and Strong Margin and Cash Flow Profile.We believe that,due to our differentiatedoperating model,diversified services offerings,historically strong organic growth,and disciplined acquisition strategy,we have anattractive financial performance profile.In addition,we support ma

105、rgin growth by leveraging our scale to benefit from procurementsavings resulting from enhanced purchasing power and serving higher-margin,niche industries.We also have a stable cash flowprofile driven by our focus on recurring services-based revenue and our asset-light business model,which requires

106、minimalongoing capital expenditures(which are typically less than 1.5%of total net revenues).The mission-critical nature of our servicesand regulatory-driven inspection requirements provide predictable,recurring revenue stream opportunities.Maintenance andservices revenues are less cyclical and are

107、reasonably recurring due to the consistent renewal rates and deep customer relationships.Our Business StrategyWe intend to continue to grow our businesses,both organically and through acquisitions,and advance our position in eachof the markets we serve by pursuing the following integrated business s

108、trategies:Drive Organic Growth.We believe that we can continue to grow our businesses organically and capture additional marketshare across each of our segments by focusing on growing maintenance,inspection,monitoring,and service revenue andmaximizing cross-selling opportunities.Grow Maintenance,Ins

109、pection,Monitoring,and Service Revenue-We believe that we can drive substantial organic growthby focusing on growing our maintenance,inspection,monitoring,and service revenue,which is a component of our businessin each of our segments.We plan to capitalize on our broad base of installed projects,cro

110、ss-selling opportunities,andcustomer relationships to continue to grow maintenance,inspection,monitoring,and service revenue.62025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm10/138Table of ContentsMaximize Cross-Selling Opportunities-With

111、diverse businesses,a broad reach across a variety of different industries,geographies,and end markets,and a culture of collaboration,we believe that we have significant cross-selling opportunitiesto service more of the project life cycle and,once a project is completed,to continue to grow attractive

112、 recurring revenuestreams.Accelerate Growth through Acquisitions.We have a well-established acquisition platform with a track record ofexecuting accretive acquisitions through our selective approach to targeting and assessing potential acquisitions that we believealign with our values and strategic

113、priorities.We believe that the global markets and platforms in which we operate are fragmentedand lend themselves to continued opportunistic acquisitions.We have grown,and plan to continue to drive growth,throughaccretive acquisitions targeting businesses in our existing segments and those complemen

114、tary to our service offerings.Continue to Foster Leadership Development throughout All Levels and Geographies of the Organization.We plan tocontinue to invest in and support our leadership development culture through our Building Great Leaders platform,which webelieve will continue to empower the le

115、aders across our businesses,drive business performance and create future cross-sellingopportunities.Our programmatic training and development curriculum focuses on a range of topics,from enhancing technicalcapabilities to developing soft skills,and decision-making training to enable independent comp

116、any leadership.We believe that thisculture will continue to support our decentralized operating model,which combines the personal attention of a small-to medium-sized company with the strength and support of an industry leader.Leverage Our Scale and Services Portfolio.We believe that we can grow our

117、 businesses and increase our market positionby leveraging our scale and broad portfolio of services offerings to capitalize on demand for single-source national andinternational providers.For example,we plan to focus on expanding national and international accounts and further developing anentity-wi

118、de purchasing program to realize the benefits from volume discounts and vendor pricing.We plan to leverage ourindustry-leading positions and the leadership across our businesses to capture growth opportunities across each of our segments.Inaddition,our increasing international footprint enhances our

119、 services platform with complementary offerings and cross-sellingopportunities.CustomersWe have long-standing relationships with many customers in each of the industries we serve.We serve customers in boththe public and private sectors,including commercial,industrial,distribution and fulfillment cen

120、ters,manufacturing,education,healthcare,telecom,utilities,transmission and integrity,high tech,entertainment,government,and infrastructure.Our customersrange from Fortune 500 companies with diverse,worldwide operations to single-location companies.We have low customerconcentration with no single cus

121、tomer accounting for more than 5%of our total net revenues for 2024.Our focus on providing high quality service promotes deep,long-term relationships with our customers which oftenresults in continued opportunities for new business and a reliable source of recurring revenue for ongoing inspection,ma

122、intenance,and monitoring services.We often provide services under master service and other service agreements,which can be multi-yearagreements,subject to earlier termination.The remainder of our work is generated pursuant to contracts for specific projects or jobsthat require shorter-term services.

123、Customers are billed with varying frequency,the timing of which is generally dependent upon advance billing terms,milestone billings based on completion of certain phases of the work,or when services are provided.Under the typical paymentterms of master and other service agreements and contracts for

124、 specific projects,the customer makes progress payments based onquantifiable measures of performance as defined in the agreements.Some of our contracts include retainage provisions,underwhich a portion of the contract amount can be retained by the customer until final contract settlement.Government

125、Regulation and Environmental MattersOur business activities are subject to regional,national,state,and local laws and regulations in each country in which weconduct business.These laws and regulations involve matters including compliance with codes or regulations governing ourservices,licensing and

126、certification requirements,environmental and substance control,workplace safety,privacy,data use,datasecurity and protection of personal information,data storage and retention,biometrics,intellectual property,advertising,marketing,distribution,electronic contracts and other communications,competitio

127、n,taxation,economic or other trade prohibitions orsanctions,anti-corruption and political law compliance,securities law compliance,72025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm11/138Table of Contentsand financial services.In some cases

128、,laws and regulations outside of the U.S.impose different obligations or are more restrictivethan those in the U.S.These regulations are administered by various regional,national,state,and local health and safety and environmentalagencies and authorities.While we cooperate with governmental authorit

129、ies and take reasonable measures to meet regulatoryrequirements,certain of these risks are inherent in the operation of our business irrespective of regulatory compliance.Failure tocomply with these laws and regulations may involve civil and criminal liability.We are also subject to a wide range of

130、reporting,licensure,certification,and compliance requirements as prescribed by various multi-national,national,state,and localgovernmental bodies or agencies,for example,individual or corporate licensing requirements or certifications that qualify us toperform the services we offer.We believe we hav

131、e all required licenses to conduct our business activities and are in substantialcompliance with applicable regulatory requirements.Expenditures relating to such regulations are made in the normal course of ourbusiness and are neither material nor place us at any competitive disadvantage.We do not c

132、urrently expect that compliance withsuch laws and regulations will require us to make material expenditures.If we fail to comply with applicable regulations,we couldbe subject to substantial fines or revocation of our operating licenses.We are subject to various national,state,and local labor and em

133、ployment laws and regulations which govern minimumwage and hour requirements,overtime,working conditions,mandatory benefits,health and social insurance,statutory noticeperiods and other employment-related matters,duties and obligations.Additionally,a large portion of our business uses labor that isp

134、rovided under collective bargaining agreements or is subject to works council processes.As such,we are subject to national andlocal laws and regulations related to unionized labor and collective bargaining.We also are subject to various environmental laws and regulations that impose liability and cl

135、eanup responsibility forreleases of hazardous substances into the environment or potential liability for harm to persons or property.Under certain of theselaws and regulations,liabilities can be imposed for cleanup of properties,regardless of whether we directly caused thecontamination or violated a

136、ny law at the time of discharge or disposal.The presence of contamination from such substances orwastes could interfere with ongoing operations or adversely affect our business.In addition,we could be held liable for significantpenalties and damages under certain environmental laws and regulations.O

137、ur contracts with customers may also impose liabilitieson us regarding environmental issues that arise through the performance of our services.Additionally,under some legal theories ofrecovery applicable to claims for personal injury or property damage,liability could be imposed in connection with a

138、llegedlyhazardous substances on a market share basis,eliminating the need for claimants to prove a direct relationship between the injuryand our business operations.From time to time,we may incur costs and obligations related to environmental compliance and/orremediation matters or claims related to

139、 hazardous substances.Effect of Seasonality and Cyclical Nature of BusinessOur net revenues and results of operations can be subject to variability stemming from seasonal and other variations.Seasonal variations can be influenced by weather conditions impacting customer spending patterns,contract aw

140、ard seasons,andproject schedules,as well as the timing of holidays.Consequently,net revenues for our businesses are typically lower during thefirst and second quarters due to the prevalence of unfavorable weather conditions within our North American companies,which cancause project delays and affect

141、 productivity.Additionally,the industries we serve can be cyclical.Fluctuations in end-user demand,or in the supply of services withinthose industries,can affect demand for our services.As a result,our business may be adversely affected by industry declines or bydelays in new projects.Variations or

142、unanticipated changes in project schedules in connection with large projects can createfluctuations in net revenues.Competitive EnvironmentWe operate in industries which are highly competitive and highly fragmented.There are relatively few barriers to entry inmany of the industries in which we opera

143、te,and as a result,any organization that has adequate financial resources and access totechnical expertise could become a competitor.In each of our segments,we compete with a number of companies,ranging fromsmall,owner-operated businesses operating in narrow geographic regions to large companies wit

144、h national and international scalewho have significant financial,technical,and marketing resources.We compete based on a variety of factors,including price,service,technical expertise and experience,quality,safetyrecord,response time,and reputation for customer service.A portion of our revenue is de

145、rived from agreements with82025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm12/138Table of Contentscustomers that contain fixed price or per unit terms,and price is often an important factor in the contract award process for suchwork.Howeve

146、r,we believe our customers also consider a variety of other factors,including those described above,when selectinga service provider,and we believe that our technical capabilities,broad geographic reach,and skilled labor force enable us tocompete against our larger competitors.SupplyWe have multiple

147、 supply sources in various markets at competitive pricing for substantially all of our raw material andinstalled components.The raw materials and various purchased components we use such as piping,steel,sheet metal,firesuppression/detection,elevator/escalator components,and HVAC equipment have gener

148、ally been available in sufficient quantitiesin a timely manner.We rely on multiple third-party manufacturers as a source for pre-fabricated goods or system components.Historically,we have been able to mitigate commodity cost exposure by purchasing or price locking commodities early forparticular pro

149、jects,as well as selectively using time or market-based escalation provisions in proposals and contracts.While wehave experienced some impacts on our supply chain to date,they have only impacted longer term contracts within our business,which are not significant.We do not anticipate experiencing sig

150、nificant procurement challenges,as the purchases of requiredmaterials can be sourced from multiple sources;however,tariffs or other changes in international trade relations or other factorssuch as the impact of pandemics and regional conflicts,could result in limited availability of or increased cos

151、ts for some materials.Sales and MarketingOur success depends on developing and maintaining successful long-term relationships with key customers in each of theindustries we serve.We intend to continue our emphasis on developing and maintaining long-term relationships with our customersby providing r

152、eliable,high-quality service in a professional manner.We believe we can continue to leverage specific technical andmarketing strengths at the individual business level to expand the services offered in each businesss market.Our culture ofcollaboration across our businesses provides significant cross

153、-selling opportunities to leverage our current project base,existingrelationships and professional expertise to provide additional services to our existing customers.In North America,we provide asingle point of contact for customers with a regional or national portfolio of properties through our Nat

154、ional Service Group(“NSG”)team within our Safety Services segment,which enhances our understanding of customers on a national scale and allowsus to build more meaningful relationships with our customers.Through our NSG team,we are able to quickly and efficientlyallocate resources to meet customer ne

155、eds.Insurance and Legal ProceedingsThe primary insured risks in our operations are bodily injury,property damage and workers compensation injury.We areinsured for workers compensation,employers liability,auto liability,general liability,employee group health insurance,propertydamage or loss,business

156、 interruption,cyber incidents,pollution liability,professional liability,as well as for other business risksand retain the risk for claims resulting from uninsured deductibles or retentions per-incident or occurrence.Because we have verylarge deductibles or retentions,the vast majority of our claims

157、 are paid by us,so as a practical matter we self-insure the greatmajority of these risks.Losses under all of these insurance programs are accrued based upon our estimate of the likely ultimateliability for claims reported and an estimate of claims incurred but not reported(IBNR),with assistance from

158、 third-partyactuaries.In addition,in connection with the Chubb Acquisition,we agreed to accept the risk on certain pending claims againstChubb and certain IBNR claims.We estimated the exposure to loss presented by such claims with the assistance of third-partyactuaries and negotiated an adjustment t

159、o the purchase price in connection with these anticipated costs and have made associatedaccruals.These insurance liabilities and liabilities for the Chubb claims are difficult to assess and estimate due to unknown factors,including the severity of an injury,the extent of damage,the determination of

160、our liability,if any,in proportion to other parties andthe number of incidents not reported.The accruals are based upon known facts,historical trends,and industry averages using theassistance of an actuary to project the extent of these obligations and management believes such accruals are adequate.

161、Growing and Developing our PeopleOur number one value and priority is the safety,health and well-being of all of our approximately 29,000 team members,all of whom are critical to the execution of our strategies and achieving business success.92025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/ed

162、gar/data/1796209/000162828025008189/apg-20241231.htm13/138Table of ContentsTalent Development and EngagementWe believe our success in attracting and retaining qualified team members will be based on the quality of our training,leadership development and opportunities for growth and advancement.We of

163、fer multiple accelerated development programsfocusing on advancing the business and leadership skills of team members.Our field-based leadership has the opportunity toparticipate in a development program focused on building foundational leadership skills.In addition,we offer structured tools andoppo

164、rtunities for development,including individual development plans,executive coaching,strategic leadership advisory servicesand on-demand learning opportunities hosted on our learning management platform,on our intranet site,and through podcasts.We believe that a culture where every team member can gr

165、ow,thrive,and feel they belong is a differentiator and enablesus to attract and retain people who also build inclusive relationships with our customers.We are committed to equity and inclusionand are building and evolving our culture of inclusion through our day-to-day work through our leadership,le

166、arning anddevelopment.We monitor team member engagement through annual engagement assessments and provide recommendations for followup based on this assessment.Our continued success will depend,in part,on our ability to continue to attract,motivate,retain,andreward high-quality,skilled employees.Hea

167、lth&SafetyWe have a safety culture that is grounded in our commitment to zero incidents.We have established safety standardscovering the risks particular to our business,deployed through specific training and monitored by country-level inspectionprograms.The aim of these programs is to ensure that a

168、ll employees are aware of and comply with safety standards we haveestablished and all applicable laws,regulations and other requirements in the countries and jurisdictions in which we operate.Wehave implemented our safety program,STEPS(Striving Toward Excellence and Professionalism in Safety),global

169、ly,whichpromotes safety culture awareness throughout our operations.Outside of North America,we have established a security program,SAFE(Scan,Assess,Fix,Execute)which is linked to the need for preventive actions before starting work.In addition,we havemultiple programs geared towards increasing ever

170、yones awareness of our safety culture and to empower employees to stop work ifrisks are unmanageable.We are very focused on improving our fleet performance through defensive driver training,fleettechnology,and company fleet assessments.Additionally,we participate in an annual Safety Week which inclu

171、des activitiesdesigned to elevate safety awareness,and we hold an annual competition to acknowledge and reward businesses exhibitingexcellence in safety.Our team of over one hundred safety professionals support the operations in each business to ensure industrysafety standards are met and audits by

172、safety professionals or certified organizations are utilized to assess the maturity of our safetymanagement systems.Our rate of incidents recordable under the standards of the U.S.Occupational Safety and Health Administration(OSHA)per one hundred employees per year,also known as the OSHA recordable

173、rate,was 0.97 during 2024 and 0.96 during 2023.Ourrate of 0.97 is considerably less than the most recently published OSHA rate for our industry of 2.3.Competitive Pay,Benefits and Total Rewards PracticesOur total rewards philosophy is designed to align the compensation of our team members with Compa

174、ny financial resultsand performance,and to provide the appropriate market-competitive pay to attract,retain,and incentivize team members to achievesuperior performance.We offer a comprehensive,competitive portfolio of health,financial,and well-being benefits aligned withmarket practice and legal req

175、uirements in each country in which we operate.Our benefit programs support our team membersbringing their best self to work as they support their mental,physical,and financial needs and goals.Executive OfficersSet forth below is certain information relating to our current executive officers.NameAgeT

176、itleRussell A.Becker59Chief Executive Officer and PresidentGlenn David Jackola45Interim Chief Financial OfficerLouis B.Lambert49Senior Vice President,General Counsel and SecretaryKristina M.Morton50Senior Vice President and Chief People Officer102025/5/19 10:13apg-20241231https:/www.sec.gov/Archives

177、/edgar/data/1796209/000162828025008189/apg-20241231.htm14/138Table of ContentsRussell A.Becker has served as a director of the Company since October 2019.Mr.Becker joined APi Group,Inc.in 2002as its President and Chief Operating Officer and became its Chief Executive Officer in 2004.Prior to leading

178、 APi Group,Inc.,Mr.Becker served in a variety of roles at The Jamar Company,a subsidiary of APi Group,Inc.,including as a Manager of Constructionfrom 1995 to 1997 and as President from 1998 until he joined APi Group,Inc.in 2002.Mr.Becker served as a project manager forRyan Companies from 1993 to 199

179、5 and as a field engineer with Cherne Contracting from 1991 to 1993.Since January 2019,Mr.Becker has served on the board of directors for Marvin Companies,a private company.Mr.Becker also serves on the advisoryboard for the Construction Management Program at Michigan Technical University.Glenn David

180、 Jackola has served as Interim Chief Financial Officer since December 2024 and previously served as theChief Financial Officer and Vice President of Transformation at APi International since November 2022.Prior to his current role,he held the position of Vice President,Controller and Chief Accountin

181、g Officer at the Company from March 2022 to November2022,and as Vice President,Corporate Planning and Analysis since joining the Company in October 2021.Prior to joining theCompany,Mr.Jackola was the Vice President of Finance of James Hardie Building Products where he served as head of finance forth

182、e North American business.Prior to that,Mr.Jackola was Vice President of Finance Europe for Ecolab and also held other rolesof significant responsibility within Ecolab since joining in July 2008.Mr.Jackola received his bachelors degree in Economicsfrom Carleton College and his Master of Business Adm

183、inistration in Finance from the University of Chicago Booth School ofBusiness.Louis B.Lambert has served as Senior Vice President,General Counsel and Secretary of the Company since July 2022.Most recently,Mr.Lambert was Vice President and Assistant General Counsel for Polaris Inc.,a powersports manu

184、facturingcompany.Prior to joining APi,Mr.Lambert served as vice president,legal,and assistant secretary of Polaris Inc.,where he hadresponsibility for corporate governance,SEC compliance,M&A,executive compensation,and was general counsel for multipleglobal business units.Prior to that,Mr.Lambert hel

185、d increasingly senior legal roles at 3M Company and then General Mills,wherehe focused on global M&A,joint ventures,and various general counseling roles.Mr.Lambert began his career as an associate atFaegre&Benson(now Faegre Drinker)in its corporate finance group.Mr.Lambert earned his JD from Rutgers

186、 School of LawNewark and a bachelors degree from the University of Michigan in Ann Arbor.Kristina M.Morton has served as Senior Vice President and Chief People Officer of the Company since February 2022.Prior to joining the Company,Ms.Morton served as Vice President,Human Resources,Supply Chain and

187、Global Operations forGeneral Mills.During her 23-year tenure at General Mills,she also held roles in marketing,sales and supply chain,most recentlyleading 175 human resources professionals that supported 20,000 employees globally across 45 manufacturing facilities in the U.S.and Europe.Ms.Morton ear

188、ned her bachelors degree from the University of St.Thomas and her masters degree from theUniversity of Minnesota.Available InformationOur internet website address is .We make available free of charge,through our website,ourannual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on

189、 Form 8-K,all amendments to those reports filedor furnished pursuant to Section 13(a)or 15(d)of the Exchange Act and proxy statements for our annual meeting of stockholders,as soon as reasonably practicable after each such material is electronically filed with or furnished to the SEC.The SEC also ma

190、kesavailable at www.sec.gov reports,proxy and information statements and other information filed by issuers with the SEC,such asthe Company.ITEM 1A.RISK FACTORSRISKS RELATED TO OUR BUSINESSWe operate in international markets,which subjects us to economic,political and other risks.Approximately 38%of

191、 our revenue was derived from areas outside the United States for the year ended December 31,2024.Accordingly,our business is and will in the future be subject to risks associated with doing business internationally,including:laws and regulations that dictate how we conduct business;changes or insta

192、bility in a specific countrys or regions political or economic conditions,including inflation orcurrency devaluation;112025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm15/138Table of Contentspolitical,financial market or economic instabilit

193、y relating to epidemics or pandemics;laws and regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limitdistributions of capital;changes to existing or new domestic or international tax laws;trade protection measures,such as tariff increases,and import and

194、export licensing and control requirements,whichmay,among other things,increase commodity prices of materials used as components of supplies or materialsutilized in all of our operations,particularly in light of the stated trade policies of the new U.S.presidentialadministration;potentially negative

195、consequences from fluctuations in foreign currency exchange rates;difficulties repatriating income or capital,whether due to temporary blocking,taxes,tariffs or otherwise,whereincome from work outside the United States in non-U.S.dollars exceed our local currency needs;expropriation and governmental

196、 regulation restricting foreign ownership or requiring reversion or divestiture;laws and regulations governing our employee relations,including occupational health and safety matters andemployee compensation and benefits matters;uncertainties regarding legal or judicial systems,including inconsisten

197、cies between and within laws,regulationsand decrees,and judicial application thereof,and delays in the judicial process;difficulty in recruiting and retaining trained personnel in our international operations;andour ability to comply with,and the costs of compliance with,laws and regulations governi

198、ng international businessoperations,including restrictions on transactions with certain countries,governments,entities and individualssubject to U.S.economic sanctions or export restrictions,and anti-bribery laws such as the Foreign CorruptPractices Act and similar local anti-bribery laws.Our intern

199、ational operations subject us to laws,regulations,and interpretations which are complex,may restrict ourbusiness dealings,and are frequently changing.For example,we must comply with applicable trade sanctions and export controls,including those administered by the U.S.Department of Treasurys Office

200、of Foreign Assets Control and the U.S.CommerceDepartments Bureau of Industry and Security.In addition,applicable U.S.and non-U.S.anti-corruption laws,including but notlimited to the U.S.Foreign Corrupt Practices Act and the U.K.Bribery Act,generally prohibit us from,among other things,corruptly maki

201、ng payments for the purpose of obtaining or retaining business.We pursue opportunities in certain parts of the worldand in certain industries that may experience corruption,and in certain circumstances,compliance with these laws may conflictwith longstanding local customs and practices.Our policies

202、mandate compliance with all applicable anti-corruption and trade controls laws.We have policies andprocedures designed to ensure that our employees and intermediaries who work for us outside the United States comply with theselaws,and we otherwise require such employees and intermediaries to comply

203、with these laws.However,there can be no assurancethat such policies,procedures and other requirements will protect us from violating these regulations in every transaction in whichwe may engage,or protect us from liability under U.S.or international laws for actions taken by our employees or interme

204、diaries;moreover,detecting,investigating and resolving actual or alleged violations of such laws is expensive and could consumesignificant time and attention of our senior management,in-country management,and other personnel.Liability for such actionscould result in severe criminal or civil fines,pe

205、nalties,forfeitures,disgorgements or other sanctions.This in turn could have amaterial adverse effect on our financial condition,results of operations,and cash flows.We are implementing new enterprise resource planning systems.Our failure to implement such systems successfully,on timeand on budget c

206、ould have a material adverse effect on us.In 2024,we began implementing new enterprise resource planning(“ERP”)systems,which are designed in part to supportour future growth and more fully optimize our existing processes by harmonizing our systems and phasing out legacy systems atvarious businesses

207、we have acquired over the years,and will continue to implement the new systems in phases across our variousentities on a worldwide basis over the next few years.ERP implementations are complex,time-consuming,labor intensive,andinvolve substantial expenditures on system software and implementation ac

208、tivities.ERP implementations also requiretransformation of business and financial processes to realize the benefits of the ERP systems.Any such implementation involvesrisks inherent in the conversion to a new information technology system,including loss122025/5/19 10:13apg-20241231https:/www.sec.gov

209、/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm16/138Table of Contentsof information and potential disruption to our field operations.The implementations and maintenance of the new ERP systems haverequired,and will continue to require,the investment of significant financial and peop

210、le resources and the implementations may besubject to delays and cost overruns.In addition,we may not be able to successfully complete the implementations of the new ERPsystems without experiencing difficulties,or even if successfully implemented,we may not fully realize the anticipated benefits.Any

211、 disruptions,delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERPsystems could adversely affect our ability to provide the services and perform the business and reporting functions described above,and otherwise operate our business.Additionally,if we do n

212、ot effectively implement the ERP systems as planned or the systems donot operate as intended,the effectiveness of our internal control over financial reporting could be adversely affected or our abilityto assess it adequately could be delayed.Improperly managed projects or project delays may result

213、in additional costs or claims against us,which could have a materialadverse effect on our financial condition,operating results,and cash flows.The quality of our performance on any given project depends in large part upon the ability of the project manager(s)tomanage relationships and the project it

214、self and to timely assert contractual remedies and deploy appropriate resources,includingboth third-party contractors and our own personnel.Our results of operations,cash flows and liquidity could be adversely affectedif a project manager or our personnel miscalculate the resources or time needed to

215、 complete a project with capped or fixed fees,orthe resources or time needed to meet contractual milestones.Additionally,delays on a particular project,including delays indesigns,engineering information or materials provided to us by the customer or a third party,delays or difficulties in equipmenta

216、nd material delivery,schedule changes,delays from failure to timely obtain permits or rights-of-way or to meet other regulatoryrequirements,weather-related delays,governmental,industry,political and other factors,some of which are beyond our control,could result in cancellations or deferrals of proj

217、ect work,which could lead to a decline in revenue,or,for project deferrals,couldcause us to incur costs for standby pay,and could lead to personnel shortages on other projects scheduled to commence at a laterdate.We are a decentralized company and place significant decision-making authority with our

218、 subsidiaries management,supportedby certain integrated policies and processes.We believe our practice of conferring significant authority upon the management of our subsidiaries has been important toour successful growth and has allowed us to be responsive to opportunities and to our customers need

219、s.We seek to maintainbusiness continuity within our subsidiaries while identifying and implementing operational efficiencies,cost synergies,andintegration of organizational processes across these companies,including standardized global system implementations.Thisbalance presents certain risks,includ

220、ing the risk we would be slower to identify a misalignment between a subsidiarys and ouroverall business strategy or shared processes.If an operating subsidiary fails to follow our shared company policies and processes,including those relating to compliance with applicable laws,we could be subjected

221、 to risks of noncompliance with applicableregulations.RISKS RELATED TO ACQUISITIONSOur business strategy includes acquiring companies and making investments that complement our existing businesses orexpand into adjacent industries.These acquisitions and investments could be unsuccessful or consume s

222、ignificant resources,which could adversely affect our operating results.We expect to continue to evaluate the acquisition of strategic businesses,service lines,and technologies with the potentialto strengthen our industry position,enhance our existing offerings,or expand into adjacent industries.How

223、ever,we cannot assureyou that we will identify or successfully complete suitable acquisitions in the future or that completed acquisitions will besuccessful.Acquisitions that do not achieve the intended strategic or operational benefits could adversely affect our operatingresults and may result in a

224、n impairment charge.We may also face competition for acquisition opportunities,and other potential acquirers may offer more favorable termsor have greater financial resources available for potential acquisitions.This competition may further limit our acquisitionopportunities or raise the prices of a

225、cquisitions and make them less accretive,or possibly not accretive,to us.Furthermore,theincreased antitrust scrutiny of and compliance requirements for potential acquisitions,including by the Federal Trade Commissionand Department of Justice under the Hart-Scott Rodino Act,the Sherman Act,the Clayto

226、n Act,or other applicable laws,couldnegatively impact the cost and timing of or our ability to complete certain potential acquisitions.Failure to consummate futureacquisitions could negatively affect our business and growth strategies.132025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/da

227、ta/1796209/000162828025008189/apg-20241231.htm17/138Table of ContentsUnder certain circumstances,it may be difficult for us to complete transactions quickly and to integrate acquiredoperations efficiently into our current business operations,and we may not be able to do so successfully or within the

228、 anticipatedcosts or timeframe.Acquisitions and investments may involve significant cash expenditures,the incurrence of debt,expenses,andoperating losses that could have a material adverse effect on our business,financial condition,results of operations and cash flows.Acquisitions involve numerous o

229、ther risks,including:diversion of managements time and attention from daily operations;difficulties and unanticipated issues integrating acquired businesses,operations,systems,technology infrastructure,andpersonnel into our business;inability to obtain required regulatory approvals;inability to obta

230、in required financing on favorable terms or,if so obtained,risks associated with incurrence of additionalindebtedness;potential loss of key employees,key contractual relationships,or key customers of acquired companies or from ourexisting businesses;costs and expenses of acquisitions,including fees

231、paid to financial,legal and accounting advisors,facilities and systemsimplementation or consolidation costs,severance and other potential employment-related costs,including severancepayments that may be made to former employees of acquired businesses;an increase in the scope,geographic diversity and

232、 complexity of our current operations,and the need to coordinategeographically dispersed organizations;becoming subject to,and future changes in,additional laws and regulations as a result of an acquisition;complexities that may arise from any entry into new or adjacent markets or business lines as

233、a result of an acquisition;failure to recognize the expected synergies of any acquisition;failure of the acquired business to meet our expectations,which may cause our financial results to differ from our own orthe investment communitys expectations;potential need to negotiate with labor unions of t

234、he employees of acquired companies;assumption of the liabilities and exposure to unforeseen liabilities of acquired companies(including environmental,employee benefits,safety and health and third party property and casualty liabilities);other risks and liabilities arising from the prior operations o

235、f an acquired business,such as performance,operational,safety,cybersecurity,environmental,workforce or other compliance or tax issues,some of which we may not havediscovered or accurately estimated during our due diligence and may not be covered by indemnification obligations orinsurance.We cannot b

236、e sure that we will be able to successfully complete the integration process without substantial costs,delays,disruptions or other operational or financial problems.Failure to successfully integrate acquired businesses could adversely impactour business,financial condition,results of operations and

237、cash flows.Any acquisitions or investments may ultimately harm ourbusiness or financial condition,as such acquisitions may not be successful and may ultimately result in impairment charges.On June 3,2024,the Company expanded into a new market of elevators and escalators upon completing our acquisiti

238、on ofElevated Facility Services Group(Elevated).Elevated is a premier provider of contractually based services for all major brandsof elevator and escalator equipment.The success of the Elevated Acquisition depends,in part,on our ability to successfullyintegrate and operate the Elevated business in

239、conjunction with our existing life safety businesses and transition from the servicesand systems provided by the seller.The potential difficulties of integrating the operations of the Elevated business include,amongothers:continued unanticipated issues in integrating personnel,operations,systems and

240、 technology infrastructure;changes inapplicable laws and regulations or conditions imposed by regulators in a market we are not experienced in;deploying internalcontrols over financial reporting;operating risks inherent in the Elevated business and our existing businesses.We may notaccomplish the in

241、tegration of the Elevated business smoothly,successfully or within the anticipated costs or timeframe.In addition,the Elevated business may not meet our expectations,causing our financial results to differ from our own or the investmentcommunitys expectations.Any of these factors could have a negati

242、ve effect on our financial condition,results of operations,andcash flows.142025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm18/138Table of ContentsFINANCIAL RISKSHigher interest rates increase the interest costs on our credit facilities and

243、 on our other floating rate indebtedness and couldimpact adversely our ability to refinance existing indebtedness or to sell assets.Interest payments for certain of our indebtedness,including borrowings under the credit facilities are based on floatingrates.As a result,an increase in interest rates

244、will reduce our cash flow available for other corporate purposes.Higher interest rates could also limit our ability to refinance existing indebtedness and increase interest costs on anyindebtedness that is refinanced.We have and may continue to enter into agreements such as floating-to-fixed interes

245、t rate swaps,caps,floors and other hedging contracts in order to hedge against the cash flow effects of changes in interest rates for floating ratedebt.As of December 31,2024,the Company had$1,840 million notional amount outstanding in interest rate swap agreements thatexchange a variable rate of in

246、terest for a fixed rate over the term of the agreement.However,we may not maintain interest rateswaps with respect to all of our floating rate indebtedness,and any swaps we enter into may not fully mitigate our interest rate risk.In addition,these agreements expose us to the risk that other parties

247、to the agreements will not perform or that the agreements willbe unenforceable.Adverse developments in the credit markets could adversely affect the funding of significant projects and therefore reducedemand for our services.Adverse developments in the credit markets,including reduced liquidity or r

248、ising interest rates,could reduce theavailability of funding for large capital projects that require our services.Volatility in the credit and equity markets could reduce theavailability of debt or equity financing for significant projects,causing a reduction in capital spending,which could material

249、ly andadversely affect our financial condition,results of operations,and cash flows.We may need additional capital in the future for working capital,capital expenditures or acquisitions,and we may not be able toaccess capital on favorable terms,or at all,which would impair our ability to operate our

250、 business or achieve our growthobjectives.Our ability to generate cash is essential for the funding of our operations and the servicing of our debt.If existing cashbalances and cash generated from operations together with the borrowing capacity under our credit facilities are not sufficient tomake f

251、uture investments,make acquisitions or provide needed working capital,we may require financing from other sources.Ourability to obtain such additional financing in the future will depend on a number of factors including prevailing capital marketconditions,conditions in our industry,and our operating

252、 results.If additional funds were not available on acceptable terms,we maynot be able to make future investments,take advantage of acquisitions or pursue other opportunities.Our use of revenue recognition over time could result in a reduction or reversal of previously recorded revenue or profits.A s

253、ignificant portion of our revenue is recognized over time by measuring progress toward complete satisfaction ofperformance obligations in the proportion that our actual costs bear to our estimated contract costs at completion.The earnings orlosses recognized on individual contracts are based on esti

254、mates of contract revenue,costs and profitability.We review ourestimates of contract revenue,costs and profitability on an ongoing basis.Prior to contract completion,we may adjust our estimateson one or more occasions as a result of change orders to the original contract,collection disputes with the

255、 customer on amountsinvoiced,claims against the customer for increased costs incurred by us due to customer induced delays and other factors,or otherchanges in facts and circumstances that require modifications to estimated costs.Contract losses are recognized in the fiscal periodwhen the loss is de

256、termined.Contract profit estimates are also adjusted in the fiscal period in which it is determined that anadjustment is required.As a result of the requirements of over time revenue recognition,the possibility exists,for example,that wecould have estimated and reported a profit or loss on a contrac

257、t over several periods and later determined that all or a portion ofsuch previously estimated and reported profits or losses were overstated or understated.If this occurs,the full aggregate amount ofthe overstatement or understatement will be reported for the period in which such determination is ma

258、de,thereby eliminating all ora portion of any profits or losses from other contracts that would have otherwise been reported in such period or potentiallyresulting in a loss or gain being reported for such period.On a historical basis,we believe that we have made reasonably reliableestimates of the

259、progress towards completion on our long-term contracts.However,given the uncertainties associated with thesetypes of contracts,it is possible for actual costs to vary from estimates previously made,which may result in reductions or reversalsof previously recorded revenue and profits.152025/5/19 10:1

260、3apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm19/138Table of ContentsWe carry a significant amount of goodwill and identifiable intangible assets on our consolidated balance sheets.Earnings forfuture periods may be impacted by impairment charges for g

261、oodwill and intangible assets.Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses.We assess goodwilland identifiable intangible assets for impairment each year,or more frequently if circumstances suggest an impairment may haveoccurred.While we believ

262、e we have made reasonable estimates and assumptions to calculate the fair values of our reporting unitswhich were based on facts and circumstances known at such time,it is possible that existing or new events may result in forecastedcash flows,revenue and earnings that differ from those that formed

263、the basis of our estimates and assumptions,which could bematerially different from our estimates and assumptions.Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth.As of December 31,2024,we had goodwill of$2,894 mil

264、lion,which is maintained in various reporting units.Additionally,we have a significant amount of identifiable intangible assets and fixed assets that could also be subject toimpairment.If we determine that a significant impairment has occurred in the value of our unamortized intangible assets or fix

265、edassets,we could be required to write off a portion of our assets,which could adversely affect our financial condition or results ofoperations.In connection with our preparation of our consolidated financial statements for the years ended December 31,2023 and 2022,we and our independent registered

266、public accounting firm identified material weaknesses in our internal control over financialreporting.Our management is responsible for establishing and maintaining adequate internal control over financial reporting.Internal control over financial reporting is a process designed to provide reasonabl

267、e assurance regarding the reliability of financialreporting and the preparation of financial statements in accordance with accounting principles generally accepted in the UnitedStates of America(GAAP).As previously disclosed in our Annual Reports on Form 10-K for the years ended December 31,2023and

268、2022,management identified material weaknesses related to our internal control over financial reporting.Under standardsestablished by the United States Public Company Accounting Oversight Board,a material weakness is a deficiency,or combinationof deficiencies,in internal control over financial repor

269、ting,such that there is a reasonable possibility that a material misstatement ofannual or interim consolidated financial statements will not be prevented or detected and corrected on a timely basis.While we believe we have remediated all material weaknesses previously identified,we cannot assure tha

270、t we will nothave additional material weaknesses in the future.If we have additional material weaknesses in the future and fail to establish andmaintain effective control over financial reporting,our ability to accurately and timely report our financial results could beadversely affected.If we are u

271、nable to assert that our internal control over financial reporting is effective,or if our independent registeredpublic accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financialreporting,investors may lose confidence in the accuracy and

272、 completeness of our financial reports,the market price of our commonstock could be adversely affected,and we could become subject to litigation or investigations by the stock exchange on which oursecurities are listed,the SEC or other regulatory authorities,which could require additional financial

273、and management resources.Our indebtedness may adversely affect our cash flow and our ability to operate our business and fulfill our obligations underour indebtedness.As of December 31,2024,on a consolidated basis,we had$2,157 million in principal amount of debt outstanding underour credit facilitie

274、s,$614 million of senior notes,and other indebtedness totaling approximately$5 million.Our indebtedness could have significant effects on our operations.For example,it may:require us to dedicate a substantial portion of our cash flow from operations to payments on ourindebtedness,thereby reducing th

275、e availability of our cash flow to fund working capital,capitalexpenditures,dividends,innovation,and other general corporate purposes;cause credit rating agencies to view our debt level negatively;increase our vulnerability to general adverse economic and industry conditions;2025/5/19 10:13apg-20241

276、231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm20/138162025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm21/138Table of Contentslimit our flexibility in planning for,or reacting to,changes in our busines

277、s and the industries in which weoperate;limit our ability to make strategic acquisitions,introduce new technologies or pursue businessopportunities;andplace us at a competitive disadvantage compared to our competitors that have less indebtedness.In addition,the Credit Agreement governing the credit

278、facilities contains covenants that restrict our operations.Thesecovenants restrict,among other things,our ability to incur additional debt,grant liens,pay cash dividends,enter new lines ofbusiness,redeem our common stock,make certain investments and engage in certain merger,consolidation or asset sa

279、letransactions.These restrictions could limit our ability to plan for or react to market conditions,meet extraordinary capital needs orotherwise take actions that we believe are in our best interest.Further,a failure by us to comply with any of these covenants andrestrictions could result in an even

280、t of default that,if not waived or cured,could result in the acceleration of all or a substantialportion of the outstanding indebtedness thereunder.In addition,subject to the restrictions in the agreements that govern the CreditAgreement,if we incur substantial additional indebtedness(including secu

281、red indebtedness)in the future,these risks will beexacerbated.The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities,and ourfuture debt level may limit our future financial and operating flexibility.The Credit Agreement governing the cr

282、edit facilities prohibits distributions on,or purchases or redemptions of,securitiesif any default or event of default is continuing.In addition,it contains various covenants limiting our ability to,among other things,incur indebtedness if certain financial ratios are not maintained,grant liens,enga

283、ge in transactions with affiliates,enter into sale-leaseback transactions,and sell substantially all of our assets or enter into a merger or consolidation.The Credit Agreementgoverning the credit facilities also treats a change of control as an event of default and also requires us to maintain certa

284、in leverageratios.Our ability to access capital markets to raise capital on favorable terms will be affected by our debt level,our operatingand financial performance,the amount of our current maturities and debt maturing in the next several years,and by prevailingcredit market conditions.Moreover,if

285、 lenders or any future credit rating agency downgrade our credit rating,then we couldexperience increases in our borrowing costs,face difficulty accessing capital markets or incurring additional indebtedness,beunable to receive open credit from our suppliers and trade counterparties,be unable to ben

286、efit from swings in market prices andshifts in market structure during periods of volatility in the crude oil and natural gas markets or suffer a reduction in the marketprice of our common stock.If we are unable to access the capital markets on favorable terms at the time a debt obligation becomesdu

287、e in the future.The price and terms upon which we might receive such extensions or additional bank credit,if at all,could bemore onerous than those contained in existing debt agreements.Any such arrangements could,in turn,increase the risk that ourleverage may adversely affect our future financial a

288、nd operating flexibility and thereby impact our ability to pay cash distributionsat expected rates.We are self-insured against many potential liabilities.We are insured through a wholly-owned insurance captive and third party carriers.We maintain insurance policiescovering a broad range of risks,inc

289、luding automobile liability,general liability,property risk,employer liability,workerscompensation,employee group health,business interruption,professional liability and other typical business coverages,andcoverage for limited cyber incidents and pollution liability.If any of our insurance carriers

290、default on their obligations to provideinsurance coverage by reason of its insolvency or for other reasons,our exposure to claims would increase and our profits would beadversely affected.Certain of our coverages are subject to large deductibles or have high self-insured retention amounts,our polici

291、es do notcover all possible claims,and certain legacy risks at Chubb were assumed without insurance coverage.Accordingly,we areeffectively self-insured for a substantial number of actual and potential claims.Additionally,if our estimates of liability for currentor IBNR claims are substantially under

292、valued,we may incur unexpected losses higher than our reserves which we believe areadequate.Our estimates and accruals for unpaid claims and expenses are based on known facts,historical trends,industry averages,and reasonable estimates of future expenses,utilizing the assistance of third-party actua

293、ries.We believe our accruals are adequate.The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly.In connectionwith the Chubb claims,we estimated the exposure to loss presented by such claims,2025/5/19 10:13apg-20241231https:/www.sec.gov/

294、Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm22/138172025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm23/138Table of Contentsnegotiated an adjustment to the purchase price in connection with these anticipated costs and mad

295、e associated accruals.However,claims liabilities are difficult to assess and estimate due to many relevant factors,the effects of which are often unknown,includingthe severity of an injury or damage,the determination of liability in proportion to other parties,the timeliness of reported claims,the e

296、ffectiveness of our risk management and safety programs and the terms and conditions of our insurance policies.Additionally,unknown or changing trends,risks or circumstances,such as increases in claims,a weakening economy,increases in medical costs,changes in case law or legislation,or changes in th

297、e nature of the work we perform,could render our current estimates and accrualsinadequate.If our estimates materially diverge from our realized liabilities,adjustments to our balance sheet may be required andthese increased liabilities would be recorded in the period that the experience becomes know

298、n.RISKS RELATED TO OUR CONTRACTSWe may not accurately estimate the costs associated with services provided under fixed price contracts,which could impair ourfinancial performance.A portion of our agreements with customers contain fixed price terms.Under these contracts,we typically set the price ofo

299、ur services on a per unit or aggregate basis and assume the risk that costs associated with our performance may be greater thanwhat we estimated.We also enter into contracts for specific projects or jobs that require the installation or construction of an entireinfrastructure system or specified uni

300、ts within an infrastructure system,many of which are priced on a fixed price or per unit basis.Profitability for these contracts will be reduced if actual costs to complete a project exceed our original estimates.If estimated coststo complete the remaining work for a project exceed the expected reve

301、nue to be earned,the full amount of any expected loss isrecognized in the period the loss is determined.Our profitability on these contracts is therefore dependent upon our ability toaccurately estimate the costs associated with our services and our ability to execute in accordance with our plans.A

302、variety offactors could negatively affect these estimates,including changes in expected productivity levels,conditions at work sites differingmaterially from those anticipated at the time we propose on the contract,and higher than expected costs of labor and/or materials.These variations,along with

303、other risks inherent in performing fixed price contracts,could cause actual project results to differmaterially from our original estimates,which could result in lower margins than anticipated,or losses,which could reduce ourprofitability,cash flows and liquidity.A portion of our contracts allocate

304、the risk of price increases in supplies to us.For certain contracts,including where we have assumed responsibility for procuring materials for a project,we areexposed to market risk of increases in certain commodity prices of materials,such as copper and steel,which are used ascomponents of supplies

305、 or materials utilized in all of our operations.In addition,our customers capital budgets may be impactedby the prices of certain materials.These prices could be materially impacted by general market conditions and other factors,including U.S.trade relationships with other countries or the impositio

306、n of tariffs.We are also exposed to increases in energyprices,including as they relate to gasoline prices for our rolling-stock fleet of approximately 11,700 vehicles.Additionally,theprice of fuel required to run our vehicles and equipment is unpredictable and fluctuates based on events outside our

307、control.Anyincrease in fuel costs could materially reduce our profitability and liquidity to the extent we are not able to adjust our pricing forsuch expenses.While we believe we can increase our prices to adjust for some price increases in commodities,there can be noassurance that price increases o

308、f commodities would be recoverable.Additionally,some of our fixed price contracts do not allow usto adjust our prices and,as a result,increases in material or fuel costs could reduce our profitability with respect to such projects.Some of our subsidiaries are government contractors,and they are subj

309、ect to complex rules and regulations governinggovernment contractors,and their contracts with government entities are subject to audit.Violations of the applicable rules andregulations could result in a subsidiary being barred from future government contracts.Government contractors must comply with

310、many regulations and other requirements that relate to the award,administration and performance of these contracts,and government contracts are subject to audit.A violation of these laws andregulations could result in imposition of fines and penalties,the termination of a government contract or deba

311、rment from proposingon government contracts in the future.Further,despite our decentralized nature,a violation at one of our locations could impactother locations ability to propose on and perform government contracts.Additionally,because of our decentralized nature,we facerisks in maintaining compl

312、iance with all local,state and federal government contracting requirements.Prohibition againstproposing on future government contracts could have an adverse effect on our consolidated financial condition and results ofoperations.182025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/179

313、6209/000162828025008189/apg-20241231.htm24/138Table of ContentsChanges in spending or budgetary priorities or delays in contract awards may materially adversely affect our business,financialcondition and results of operations.We perform work through various subsidiaries to the U.S.federal government

314、 through government contracts.We alsoundertake projects for non-governmental customers who receive some level of federal funding for those projects.Levels of U.S.federal government spending are difficult to predict and subject to significant risk.Considerable uncertainty exists regarding howfuture b

315、udget and program decisions will unfold,including the spending priorities of the new U.S.presidential administration andCongress and what challenges budget and expenditure reductions and reforms on federal governmental processes will present forus,our customers and our industry generally.Pressures o

316、n and uncertainty surrounding the U.S.federal governments budget,andpotential changes in budgetary priorities and spending levels,could adversely affect the funding for the work we provide undergovernment contracts and the federally-funded projects we undertake for our customers,and could delay cont

317、racting or paymentdecisions by our customers or result in the federal government not renewing contracts with us.Current U.S.federal governmentspending levels for the work we provide to the federal government,for the funding of the projects of our customers or for otherprograms may not be sustained,a

318、nd future spending and program authorizations may not increase or may decrease or shift toprograms in areas where we do not provide services or are less likely to be awarded contracts.In the event the budgets or budgetarypriorities of the U.S.federal government entities with which we do business are

319、 delayed,decreased or underfunded,or if the sameoccurs with respect to the federally-funded projects we undertake for our customers,our consolidated revenues and results ofoperations could be materially and adversely affected.Our backlog is subject to reduction or cancellation,and revenues may be re

320、alized in different periods than initially reflected inour backlog.Our backlog includes the estimated unsatisfied performance obligations associated with the services to be performedunder customer contracts.These estimates are based on contract terms and evaluations regarding the timing of the servi

321、ces to beprovided.In many instances,our customers are not contractually committed to procure specific volumes of services under acontract.Revenue estimates reflected in our backlog can be subject to change due to a number of factors,including contractcancellations and contract changes made by our cu

322、stomers to the amount or nature of the work actually performed under a contract.As a result,our backlog as of any particular date is an uncertain indicator of the amount of or timing of future revenues andearnings.RISKS RELATED TO OUR WORKFORCEWe maintain a workforce based upon current and anticipat

323、ed workloads.We could incur significant costs and reducedprofitability from underutilization of our workforce if we do not receive future contract awards,if contract awards are delayed,or if there is a significant reduction in the level of services we provide.Shortages of skilled labor could impede

324、our ability toprovide timely,cost-effective services to our customers.Our estimates of future performance and results of operations depend,among other factors,on whether and when wereceive new contract awards,which affect the extent to which we are able to utilize our workforce.The rate at which we

325、utilize ourworkforce is affected by a variety of factors,including our ability to forecast the need for our services,our ability to maintain anappropriately sized workforce,our ability to transition employees from completed projects to new projects or between internalbusiness groups,our ability to m

326、anage attrition,and our need to devote resources to non-chargeable activities such as training orbusiness development.While our estimates are based upon our good faith judgment,professional knowledge and experience,theseestimates may not be accurate and may frequently change based on newly available

327、 information.In the case of large-scale projectswhere timing is often uncertain,it is particularly difficult to predict whether and when we will receive a contract award.Theuncertainty of contract award timing can present difficulties in matching our workforce size to our project needs.If an expecte

328、dcontract award is delayed or not received,we could incur significant costs and reduced profitability resulting from underutilizationof our workforce,redundancy of facilities,or from efforts to right-size our workforce and/or operations,which could reduce ourprofitability and cash flows.Conversely,w

329、e have in the past,and may from time to time in the future,face a shortage of skilledworkers.Any significant deterioration in employee relations,shortages of labor or increases in labors costs at any of our businessescould have a material adverse effect on our business,financial condition and result

330、s of operations.Competition in the market forlabor could drive up our costs,reduce our profitability,or impact our ability to deliver timely service to our customers.192025/5/19 10:13apg-20241231https:/www.sec.gov/Archives/edgar/data/1796209/000162828025008189/apg-20241231.htm25/138Table of Contents

331、Our pension commitments and obligations to make cash contributions to meet our obligations in certain pension plans subjectus to risks.Certain collective bargaining agreements in the U.S.require us to participate with other companies in multiemployerpension plans.To the extent those plans are underf

332、unded,U.S.regulations,including the Employee Retirement Income SecurityAct of 1974,as amended by the Multiemployer Pension Plan Amendments Act of 1980,may subject us to substantial liabilitiesunder those plans if we withdraw from them or if they are terminated or experience a mass withdrawal.In addi

333、tion,certain U.S.multiemployer pension plans to which we contribute or may contribute in the future are in“endangered,”“seriously endangered”or“critical”status.The Pension Protection Act of 2006 added special funding andoperational rules generally applicable to plan years beginning after 2007 for multiemployer plans that are classified as“endangered,”“seriously endangered”or“critical”status based