614 paragraphs in Risk Factors of the 10-K filed Feb 27, 2026
with nothing like them in the 10-K filed Feb 21, 2025. Quoted exactly.
Paragraphs that were only edited are under 10-K change.
Compared with the Risk Factors in the latest 10-K of the other 23 Materials companies:
a paragraph with at least half its words the same at another company is called similar, and the companies are listed under it.
A paragraph most of them have is marked boilerplate. No line means no other company has one like it.
This counts text; it does not say how serious a risk is.
Show the other 53
We rely heavily on the use of certain raw materials (principally virgin wood fiber, recycled fiber, caustic soda, starch
and adhesives), energy sources (principally biomass, natural gas, electricity and fuel oil) and third-party transport
companies. The market price of virgin wood fiber varies based on availability, demand, quality, and source. The
global supply and demand for recycled fiber may be affected by factors such as trade policies between countries,
individual governments’ legislation and regulations, and general macroeconomic conditions. In addition, the
increase in demand of products manufactured, in whole or in part, from recycled fiber, on a global basis, may cause
significant fluctuations in recycled fiber prices. Taking into account ongoing inflationary conditions in domestic and
global markets, we have experienced, and may continue to experience, a significant increase in various costs,
including recycled fiber, energy, freight, chemical, and other supply chain costs, which has adversely affected, and
Read in the 10-K ↗
In addition, because our business operates in highly competitive industry segments, we have not always been able
to, and may in the future be unable to, recoup past or future increases in the costs of any raw materials, energy
Similar paragraph at 1 of 23 other Materials companies:
SHWsources or transportation sources from customers, which significantly affect profitability. In addition, where we are
able to recoup our cost increases, there may be a delay between the onset of the cost increases and the
recoupment. Any inability to recover input cost increases could lead to a material adverse effect on our business,
Similar paragraph at 1 of 23 other Materials companies:
SWWe have significant exposure to energy costs, in particular gas, electricity and other fuel costs. Energy prices have
fluctuated dramatically in the past and may continue to increase and/or fluctuate in the future. Transportation costs
are also impacted by energy costs since a key component of transportation costs relates to the cost of oil. We have
employed and expect to continue to employ, strategies, including hedging a portion of our energy costs, and risk
mitigation tools to reduce the volatility of energy costs and ensure a degree of certainty over future energy costs.
However, there can be no certainty that those strategies and tools will continue to manage such impact in the future.
Volatile and increasing energy prices, including as a consequence of the conflict between Russia and Ukraine as
well as heightened geopolitical tensions in regions such as the Middle East, China, and recent events in Venezuela,
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We operate in a competitive international environment. Our products compete with other forest products and
Product innovations, manufacturing and operating efficiencies, additional manufacturing capacity, distribution and
commercial strategies pursued or achieved by competitors, and the entry of new competitors, could negatively
impact our financial results. In addition, our products compete with companies that produce substitutes for wood-
fiber products, such as plastics and various types of metal. Customer shifts away from wood-fiber products toward
such substitute products may adversely affect our business and financial results. Further, we depend on critical
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Pricing in the paper and packaging industries can be affected by, among other things, product commoditization,
changes in demand, entrance or withdrawal of new competitors or capacity, changes in product supply, and the
introduction of new products, technologies and equipment, including the use of artificial intelligence ("AI") and
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SWmachine learning solutions. We face significant pressure to reduce per unit costs to achieve commercially
acceptable returns. In circumstances where we are unable to adjust the relevant cost base sufficiently, pricing
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Trading in shares of common stock on the London Stock Exchange ("LSE") and the NYSE takes place in different
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SWcurrencies (pound sterling on the LSE and U.S. dollars on the NYSE) and at different times (resulting from different
Similar paragraph at 1 of 23 other Materials companies:
SWtime zones, different trading hours and different trading days for the LSE and the NYSE). The trading prices of
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in the price of shares of common stock on the NYSE could cause a decrease in the trading price of shares of
Similar paragraph at 1 of 23 other Materials companies:
SW
States, and vice versa, may not be realized or, if realized, may not be sustained, and the costs and additional
regulatory burdens associated with a dual listing may ultimately outweigh the associated benefits.
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General economic conditions may adversely affect industrial non-durable goods production, consumer confidence
and spending, and employment levels, all which impact demand for our products, or otherwise adversely affect our
business. We may also be adversely affected by catastrophic or other unforeseen events, natural disasters,
geopolitical events, military conflicts, terrorism, port and canal blockages and similar disruptions, political, financial
or social instability, or civil or social unrest. Future health epidemics or pandemics could also adversely impact
portions of our business to varying degrees, including as the result of change in demand for certain products, supply
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operations, cash flow, liquidity, or financial condition. Moreover, negative economic conditions or other adverse
developments with respect to our business have resulted in and may in the future result in impairment charges,
including impairments related to divested or acquired businesses whose carrying values may not be recoverable,
any of which could be material. Volatility or uncertainty in the financial, capital and credit markets, and negative
developments associated with interest rates, asset values, currency exchange rates and the availability of credit,
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adversely affect our liquidity, access to capital markets and ability to pay a dividend.
Macroeconomic conditions in the U.S., Europe and globally remain challenging and volatile. Recent periods have
been characterized not only by persistent inflationary pressures, elevated interest rates, challenging labor market
conditions, tariff policies and heightened trade policy uncertainty but also by slowing global economic growth,
weakening global trade and investment flows, supply chain realignments, currency volatility, shifting fiscal and
monetary policies across major economies and adverse effects and uncertainty associated with current geopolitical
conditions. Our operations have been adversely affected and could continue to be adversely affected in the future,
Similar paragraph at 1 of 23 other Materials companies:
NEMby these challenging macroeconomic and geopolitical conditions, including as the result of lower demand for certain
products, and higher raw material and labor costs. Further, because the markets for packaging products in many
industrialized countries are generally mature, there is a significant degree of correlation between economic growth
and demand for packaging products. Therefore, any deterioration in macroeconomic conditions in the U.S., Europe
and/or globally resulting in a slowdown in economic growth may correlate with a corresponding decline in demand
for packaging products in those markets. Moreover, any significant deterioration in current negative macroeconomic
conditions, or any recovery therefrom that is significantly slower than anticipated, could have a material adverse
effect on our business, results of operations or financial condition. In addition, there can be no assurance that
dividends will continue to be declared or paid at historical levels, and any reduction or suspension of dividends
could negatively impact our stock price. Further, if negative macroeconomic conditions result in significant
disruptions to capital and financial markets, the cost of borrowing, our ability to access capital on favorable terms,
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As a global producer of renewable fiber-based packaging products, we operate in many different countries. As a
Similar paragraph at 1 of 23 other Materials companies:
SWresult, we are vulnerable to risks related to our international operations. These risks, which can vary substantially by
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IFFcountry, may include economic or political instability, geopolitical events, corruption, anti-American sentiment,
expropriation measures, social and ethnic unrest, natural disasters, military conflicts and terrorism, the regulatory
environment (including the risks of operating in developing or emerging markets in which there are significant
Similar paragraph at 1 of 23 other Materials companies:
IFFuncertainties regarding the interpretation and enforceability of legal requirements and the enforceability of
contractual rights and intellectual property rights), adverse currency fluctuations, foreign exchange control regimes
(including restrictions on currency conversion), downturns or changes in economic conditions (including in relation
to commodity inflation), adverse tax consequences or rulings, import restrictions, controls or other trade protection
measures, economic sanctions, health guidelines and safety protocols, nationalization, changes in social, political or
labor conditions, and adverse developments regarding sustainability, environmental regulations and trade policies
and agreements, any of which risks could negatively affect our financial results. For example, a portion of our sales
could be adversely affected by changes in economic conditions and demographics, including as a result of tariffs.
Similar paragraph at 1 of 23 other Materials companies:
AMCRTrade protection measures in favor of local producers of competing products, including governmental subsidies,
tariffs, tax benefits and other measures may give local producers a competitive advantage and adversely impact our
operating results and our business prospects in these countries. Likewise, disruption in existing trade agreements or
increased trade friction between countries (such as in relation to the trade tensions between the U.S. and China),
Similar paragraph at 1 of 23 other Materials companies:
SW
services across borders. Additionally, the U.S. government in 2025 increased certain rates and broadened the
scope of certain tariffs imposed on goods imported into the U.S., such as from China, which may strain international
trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from
the United States. Specifically, the U.S. federal government implemented tariffs on certain foreign goods and may
implement additional tariffs on foreign goods. If lasting, such tariffs and any further legislation or actions taken by the
U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or
retaliatory measures taken by governments in Europe, Asia, and other countries, could adversely impact our ability
to sell products and services in our international markets. Tariffs have increased the cost of certain capital items,
including materials and equipment used in our capital investments. These increased costs could adversely impact
Similar paragraph at 1 of 23 other Materials companies:
NUEthe profit margin that we earn on our products, which could make our products less competitive and reduce
consumer demand. Countries may also adopt other protectionist measures that could limit our ability to offer our
products and services. Conversely, these tariffs and retaliatory tariffs may be subject to further changes or
negotiations which could lower or remove them in the near or longer term with a return to more normalized trade
conditions in some instances. Due to this uncertainty, the ultimate impact of any tariffs and trade tension is unclear
and will depend on various factors, including if there are negotiated bilateral agreements to remove or lower tariffs,
and the timing, amount, scope and nature of the tariffs that remain implemented.
Recent legal and policy developments have further increased uncertainty. On February 20, 2026, the U.S. Supreme
Court struck down several of the sweeping tariffs imposed through a series of executive orders, holding that the
tariffs exceeded the authority granted under the International Emergency Economic Powers Act. The Court's ruling
eliminated key tariffs on imports from numerous major trading partners and created uncertainty regarding the status
of various trade agreements and tariff related obligations. The Court did not determine whether importers are owed
refunds for tariffs previously paid, although estimates suggest that potential refunds could be substantial, and
federal agencies must now determine how to administer the ruling. In response to the Supreme Court’s decision,
the government announced new Executive Orders on February 20, 2026, aimed at restructuring U.S. tariff policy
and exploring alternative statutory authorities to impose or maintain tariffs. The scope, timing, and implementation of
these Executive Orders remains uncertain, and may result in new or modified tariff regimes, additional regulatory
requirements, or further trade friction with U.S. trading partners. We may become entitled to refunds of certain tariffs
previously paid; however, whether any refund will be available, and the amount and timing of any such refund,
remain uncertain and subject to ongoing administrative processes and additional federal guidance. We are
continuing to evaluate the impact of both the Supreme Court’s ruling and the new Executive Orders on our supply
chain, input costs, pricing, capital investments, and overall operating results, and the ultimate impact, if any, on our
Read in the 10-K ↗
disruptions arising therefrom, including as the result of the military conflict between Russia and Ukraine, the conflict
in the Middle East, and increasing tensions between China and Taiwan. These risks may be further heightened in
the event of the expansion in the scope or escalation of any such conflicts. In addition, changes to economic
sanctions programs, could put us at risk of violating sanctions because of an existing presence in a newly
sanctioned jurisdiction or relationship with a newly sanctioned entity if we fail or are unable to end such presence or
In addition, our international operations are subject to laws related to operations in foreign jurisdictions, including
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NEMlaws prohibiting bribery of government officials and other corrupt practices. Anti-bribery laws such as the U.K.
Bribery Act 2010, the Foreign Corrupt Practices Act of 1977, and similar worldwide anti-corruption laws generally
prohibit companies and their intermediaries from making improper payments to public officials for the purpose of
obtaining or retaining business. Further, the U.S. Department of the Treasury’s Office of Foreign Assets Control and
other non-U.S. government entities maintain economic sanctions targeting various countries, persons and entities.
We are also subject to the laws and regulations of governmental and regulatory agencies. Failure to comply with
Similar paragraph at 2 of 23 other Materials companies:
NEM,
SWdomestic or foreign laws could result in various adverse consequences for us including the imposition of civil or
criminal sanctions, reputational damage and the prosecution of executives overseeing international operations.
We are exposed to the translation of the results of overseas subsidiaries into their respective reporting currencies,
as well as the impact of currency fluctuations on their commercial transactions denominated in foreign currencies.
Adverse movements in foreign exchange rates relating to foreign currency denominated commodities, assets and
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As a publicly listed company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-
Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the listing requirements of the NYSE. By virtue of our secondary
listing on the LSE, we are also subject to the listing requirements of the LSE, the Market Abuse Regulation and
Similar paragraph at 1 of 23 other Materials companies:
PPGDisclosure Guidance and Transparency Rules. The Exchange Act requires that we file annual and other reports with
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other things, that we establish and maintain effective internal controls and procedures for financial reporting. Any
failure to maintain effective controls or any difficulties encountered implementing required new or improved controls
could cause us to fail to meet our reporting obligations, which could have a material adverse effect on our business
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AVY,
MLM,
NEM,
SWOur operations are subject to regulation under a wide variety of domestic and international laws, regulations and
Similar paragraph at 2 of 23 other Materials companies:
NEM,
SWother government requirements, including, among others, those relating to the environment, health and safety, labor
Similar paragraph at 1 of 23 other Materials companies:
SWand employment, data privacy, tax, trade, competition and corruption and health care. There can be no assurance
that laws, regulations and government requirements will not be changed, applied or interpreted in ways that will
require us to modify our respective operations and objectives or affect our respective returns on investments by
restricting existing activities and products or increasing costs. In addition, any failure or alleged failure to comply
with applicable laws, regulations or other government requirements could have an adverse effect on our reputation
Similar paragraph at 1 of 23 other Materials companies:
FCXand financial results or may result in, among other things, litigation, revocation of required licenses, internal
investigations, governmental investigations or proceedings, administrative enforcement actions, fines and civil and
We are subject to increasingly stringent federal, state, local and international laws governing the protection of the
Similar paragraph at 1 of 23 other Materials companies:
PPGenvironment that continue to evolve as new guidance is provided by regulatory and governing bodies and as
pending or future litigation is resolved. The changing laws, regulations and standards relating to corporate
governance, sustainability matters and public disclosures in various jurisdictions create uncertainty for public
companies, increase legal and compliance costs and make activities more time consuming. We have incurred, and,
following completion of our planned separation of the EMEA packaging business, expect to continue to incur and
invest resources, significant capital, operating and other expenditures complying with applicable and forthcoming
environmental laws and regulations, including with respect to GHG emissions and other climate-related matters.
These investments may lead to higher operating expenses as the cost of compliance increases. Our environmental
expenditures include, among other areas, those related to air and water quality, waste disposal and the cleanup of
soil and groundwater, including situations where we have been identified as a potentially responsible party.
Following the separation of our EMEA packaging business, we will evaluate our exposure to international climate
There can be no assurance that future remediation requirements and compliance with existing and new laws and
requirements will not require significant expenditures, or that existing reserves for specific matters will be adequate
Similar paragraph at 1 of 23 other Materials companies:
SWto cover future costs. We could also incur substantial fines or sanctions, enforcement actions (including orders
Similar paragraph at 1 of 23 other Materials companies:
SWlimiting operations or requiring corrective measures), natural resource damages claims, cleanup and closure costs,
third-party claims for property damage and personal injury and reputational harm as a result of violations of, or
liabilities under, environmental laws, regulations, codes and common law. The amount and timing of environmental
expenditures is difficult to predict, and, in some cases, liability may be imposed without regard to contribution or to
whether we knew of, or caused, the release of hazardous substances. Additionally, if our compliance efforts with
new applicable laws, regulations, and standards do not align with the expectations of regulatory or governing bodies
due to ambiguities in their application and implementation, or if they differ from interpretations arising from related
litigation, we may face legal actions. This could negatively impact our business, financial condition, operational
Our global operations are subject to complex and evolving domestic and international data privacy laws and
Similar paragraph at 2 of 23 other Materials companies:
FCX,
NEMregulations, such as the European Union’s General Data Protection Regulation, the UK's General Data Protection
Similar paragraph at 1 of 23 other Materials companies:
ALBRegulation, any supplemental applicable European Union member state or UK national data protection laws,
China’s Personal Information Protection Law and comprehensive privacy laws in many U.S. states. These laws
impose a range of compliance obligations regarding the handling of personal data. There are significant penalties
for non-compliance, including monetary fines, disruption of operations and reputational harm. Moreover, other states
and governmental authorities around the world have introduced or passed, or are considering, similar legislation
which may impose varying standards and requirements on data collection, use and processing activities.
This increasingly restrictive and evolving global regulatory environment related to data privacy and data protection
may continue to require changes to our business practices, and give rise to significantly expanded compliance
burdens, costs and enforcement risks. Moreover, many of these laws and regulations are subject to uncertain
application, interpretation or enforcement standards that could result in claims, changes to business practices, data
processing and security systems, penalties, increased operating costs or other impacts on our business.
Additionally, regulatory bodies and others tasked with enforcing privacy and data protection laws have been actively
engaging in enforcement investigations and actions. These laws often provide for civil penalties for violations, as
well as private rights of action for data breaches that may increase data breach litigation. We use internal and
external resources to monitor compliance with relevant legislation and continually evaluate and, where necessary,
modify data processing practices and policies to comply with evolving privacy laws. Nevertheless, relevant
regulatory authorities could determine that our data handling practices fail to address all the requirements of certain
new laws, which could subject us to penalties and/or litigation. In addition, there is no assurance that our security
controls over personal data, the training of employees and vendors on data privacy and data security, and policies,
procedures and practices will prevent the improper handling of, disclosure of or access to personal data. Any such
unauthorized access, use or disclosure in violation of applicable privacy and data protection laws could cause
reputational harm and loss of consumer confidence and subject us to government enforcement actions (including
fines), or result in private litigation, which could result in loss of revenue, increased costs, liability for monetary
damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results.
We are also exposed to the risk of changes in tax law and tax rates in a number of jurisdictions. The costs
associated with these laws and regulations are substantial and possible future laws and regulations or changes to
existing laws and regulations (including the imposition of higher taxes) could require us to incur additional expenses
or capital expenditures or result in restrictions on or suspensions of operations. For example, the Organization for
Economic Cooperation and Development (the “OECD”) has issued a framework pursuant to which EU and non-EU
countries (including countries in which we operate) have enacted a 15% global minimum tax applied on a country-
by-country basis (the “Pillar Two rule”). In many of the countries implementing the Pillar Two rule, the first
component of the Pillar Two rule became effective in 2024 and the second component in 2025. In January 2026, the
OECD/G20 issued administrative guidance modifying application of the Pillar Two rule through a Side-by-Side
system introducing two new Pillar Two safe harbors for US-parented multinational corporations, effective beginning
in 2026. The application of these safe harbors by each country that has implemented Pillar Two now depends on the
respective countries’ enacting the Side-by-Side system. It is possible that the Pillar Two rule could adversely impact
our effective tax rate in future periods. Additionally, administrative guidance with respect to tax law can be
incomplete or vary from legislative intent, and therefore the application of the tax law is uncertain. While we believe
our reported positions comply with relevant tax laws and regulations, taxing authorities could interpret the
application of certain laws and regulations differently. We have been and continue to be subject to tax audits in
various taxing jurisdictions around the world. In some cases, we have appealed, and may continue to appeal,
assessments by taxing authorities, including in the court system. As such, tax controversy matters may result in
previously unrecorded tax expenses, accelerated cash tax payments, higher future tax expenses, or the
AI continues to evolve rapidly, and, as with many technological innovations, it presents risks and challenges that
could affect its adoption and our business. Uncertainty in the global and legal regulatory regime relating to AI may
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SWrequire significant resources to modify and maintain business practices to comply with international laws, the nature
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SWof which cannot be determined at this time. Multiple jurisdictions, including Europe, the U.S. federal government,
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SWand certain U.S. states, have already proposed or enacted laws, regulations, and other requirements governing AI.
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SWIn Europe, the EU AI Act, adopted in May 2024, entered its implementation phase in 2025 and imposes extensive
transparency, risk management and data governance obligations for AI systems, particularly those classified as high
risk, with significant fines for noncompliance. Additional implementing measures are expected. In the United States,
2025 marked a shift in federal AI policy with the government establishing a national AI policy framework aimed at
asserting federal preemption over divergent state AI laws. States continue to adopt AI statutes creating varied
compliance regimes addressing accountability, automated decision-making, transparency, worker protections and
privacy. Changes in regulatory regimes, or the adoption of new or more restrictive requirements, could make it more
difficult to use AI tools, require us to change our business practices, or limit AI usage which may lead to
Similar paragraph at 1 of 23 other Materials companies:
SW
from meeting customer demand, reduce sales and/or negatively impact our financial condition. Any of our
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•terrorism or threats of terrorism, security incidents or other threats to employee safety;
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Our ability to operate and grow our business depends on our ability to attract and retain employees with the skills
Similar paragraph at 2 of 23 other Materials companies:
APD,
SWnecessary to operate and maintain our facilities, produce our products and serve our customers. The market for
both hourly workers and salaried workers continues to be competitive, particularly for employees with specialized
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SWtechnical and trade experience. This, along with the current competitive labor market and ongoing cost-pressured
conditions, has led to higher labor costs. In addition, we rely on our key executive and management personnel to
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SWmanage our business efficiently and effectively. The unanticipated departure of key executive and management
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SWemployees, particularly in a challenging market for attracting and retaining employees, could adversely affect our
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SWbusiness. Moreover, changing demographics and labor work-force trends, including evolving expectations around
remote and hybrid work, work-life balance expectations and increased return-to-office requirements, may make it
difficult for us to attract, retain or replace retiring or departing employees. The failure to retain and/or recruit
additional or substitute senior managers and/or other key employees and a failure to identify and resource for future
capability requirements such that there is a gap in skills and knowledge across key business areas, or if higher labor
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and labor relations depend on the ability to drive innovation, manage change and engage the workforce, and failure
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prospects. Further, labor disputes or other problems could lead to a substantial interruption to our business and
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A significant number of our employees located outside of the U.S. are represented by unions, trade unions and
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SWnational works councils. We have collective bargaining agreements in place with U.S. and international trade
unions. In the U.S., we may not be able to successfully negotiate new collective bargaining agreements once our
current contracts with unions expire without work stoppages or labor difficulties, or we may be unable to renegotiate
such contracts on favorable terms. The mill master collective bargaining agreement and related mill joint pension
council master agreement with the United Steelworkers union (the "USW") will expire in August 2027 and
September 2027, respectively. The converting master collective bargaining agreements and related converting joint
pension council master agreement which will expire in April and September 2028, respectively. The USW represents
approximately 8,622 employees in our mills and converting facilities. In Europe, we have collective agreements in
place with trade unions, and also have agreements in place with the European Works Council, which brings
together employee representatives from the different European countries in which we operate and provides a forum
for information sharing and consultation. We have experienced limited work stoppages in the past and may
experience work stoppages in the future. Further, labor organizations may attempt to organize groups of additional
employees from time to time, and recent and potential changes in labor laws could make it easier for them to do so.
If there is a substantial change to the terms of any collective bargaining agreements or an agreement acceptable to
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SWus cannot be reached at all when the collective agreements are renewed, we could face increased labor costs or
disruptions as a result of labor union activity in the future. If we experience any extended interruption of operations
at any of the relevant facilities as a result of strikes or other work stoppages, or if unions, trade unions and national
works councils are able to organize additional groups of our employees, our operating costs could increase and our
Read in the 10-K ↗
place and planned for North America and EMEA. In 2025, we agreed to sell our Global Cellulose Fibers business,
which we completed in January 2026, and exited the converting bag business. In North America, we actioned
closure of three mills, two recycling facilities, and six box plants, as well as one sheet plant, one sheet feeder, one
molded fiber facility and one box-to-sheet-feeder conversion. In EMEA, we actioned closures of 17 packaging
plants, one mill and one recycling center. Together these actions reduced the workforce by approximately 1,400. On
January 29, 2026, we announced plans to separate our EMEA packaging business into an independent public
company. Through the 80/20 approach, we intend to deliver profitable market share growth by striving to be the
lowest-cost producer, and the most reliable and innovative sustainable packaging solutions provider to our
customers across North America and EMEA. As part of our 80/20 approach, we intend to guide investments and
align resources to win with customers, while reducing complexity and cost across the Company. To that end, we
have been implementing restructuring initiatives. To that end, we have incurred, and expect to incur, charges in
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SW
benefits from its restructuring initiatives, the Company’s financial results could be adversely impacted. In addition,
because we are unable to predict or control market conditions, including changes in the supply and demand for our
products, product prices or manufacturing costs, we may not be able to predict the appropriate time to undertake
restructurings. Further, cash and non-cash charges may be incurred in connection with restructuring activities,
which may be material. Moreover, judgment is required to estimate restructuring charges, and these estimates, and
the assumptions underlying them, may change as additional information becomes available or facts or
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Our strategy for long-term growth, productivity and profitability depends, in part, on our ability to accomplish prudent
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benefits expected from such transactions, including the planned separation of our EMEA packaging business.
Ongoing capital investment is also required to expand, maintain and upgrade existing facilities, to develop new
facilities and to ensure compliance with new regulatory requirements. As part of our 80/20 approach, our capital
spending has increased. Capital projects may experience unanticipated disruptions or delays and the desired
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SWbenefits from those projects may not be realized. These risks include a deterioration in macroeconomic conditions,
shortages or higher costs of capital equipment or materials, delays in obtaining permits or other required approvals,
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SWchanges in laws and regulations or operational challenges. Our ability to advance capital investments depends on
the availability of cash flow. If our cash flow decreases due to market conditions, increased operating costs,
tightening credit markets, or other factors, we may be required to defer, scale back or cancel planned capital
projects. Such delays or reductions could limit our ability to pursue our strategic priorities, maintain or improve
operational efficiency or respond effectively to competitive or regulatory pressures. We are subject to the risk that
the expected benefits from such transactions and capital investments may not be achieved. This failure could
require an impairment charge to be recorded for goodwill or other intangible assets, which could lead to decreased
assets and reduced net earnings. Among the benefits expected from the strategic separation of our EMEA
packaging business, as well as completed acquisitions and joint ventures are synergies, cost savings, growth
opportunities and access to new markets (or a combination thereof), and in the case of divestitures, the realization
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SWof proceeds from the sale of businesses and assets to purchasers who place a higher strategic value on such
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SW
the inability to realize business goals with such transactions as noted above, including our assumptions, the focus of
management’s attention on these transactions, the assimilation or separation of businesses, the demands on
financial, operational and information technology systems, our ability to integrate and separate personnel, labor
models, financials, customer relationships, supply chain and logistics, IT and other systems successfully, business
culture compatibility, the possibility of becoming responsible for substantial contingent or unanticipated legal
liabilities as the result of corporate transactions, and changes in our geographic footprint and in the complexity of
Moreover, effective internal controls are necessary to provide reliable and accurate financial reports, and the
planned separation of our North America and EMEA businesses may create complexity in our financial systems and
internal controls and make them more difficult to manage. Further regional integration of businesses into our internal
control system could cause us to fail to meet our financial reporting obligations. Moreover, any failure to integrate
the regional businesses, or delay in integrating the regional businesses, or IT systems of regional businesses could
create an increased risk of cybersecurity incidents. Following our regional integration, efforts may not produce the
expected margins or cash flows. Furthermore, we may finance these strategic transactions by incurring additional
debt or issuing equity, which could increase leverage or impact our ability to access capital in the future.
Similar paragraph at 2 of 23 other Materials companies:
SW,
VMC
Our business operations rely on securely managed information technology systems, some of which are provided or
managed by third parties, for data capture, processing, storage and reporting. We have invested in information
technology security initiatives and risk management, as well as incident response, business continuity and disaster
recovery plans, but it is not possible to eliminate all systematic or external risk. Further, the development and
maintenance of information technology security measures is costly and requires ongoing monitoring, testing and
updating as technologies and processes change, and efforts to overcome security measures become increasingly
sophisticated. Additionally, the global regulatory environment surrounding information security, data privacy and data
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other global companies, our systems are subject to recurring attempts by third parties to access information,
manipulate data or disrupt operations. In this regard, we have experienced cyber threats and events from time to
time, although none have materially affected us, including our results of operations or financial condition. Given the
current cyber threat environment, the volume and intensity of cybersecurity attacks and attempted intrusions are
expected to increase in the future. We work with a large and increasing number of third-party vendors, suppliers,
platforms, software, applications, and technologies, each of which may be subject to a cybersecurity incident or
information technology failure that impacts our business or operations. We may be required to spend significant
resources to verify the implementation of cybersecurity controls by our vendors and suppliers. In addition, despite
careful security and controls design, implementation, updating, monitoring and independent third-party verification,
our information technology systems, together with those of our third-party providers or joint venture partners, have
been and could again be compromised or disrupted due to factors such as employee error or malfeasance, cyber-
attacks, including ransomware, malware, phishing attacks, advanced persistent threats, social engineering,
credential stuffing or distributed denial-of-service attacks or data or security breaches by malicious actors such as
common hackers, criminal groups or nation-state organizations or social activist (“hacktivist”) organizations,
disruptions resulting from geopolitical events, natural disasters, failures or impairments of telecommunications
networks or other catastrophic events. Such attacks are increasing in complexity, and the rapid evolution and
increased adoption of AI technologies may intensify cybersecurity risks by making cyber-attacks more difficult to
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SWdetect, contain, and mitigate. Furthermore, remote working and personal device use increases the risks of cyber
incidents and the improper dissemination of personal or confidential information. Moreover, the hardware, software
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SWor applications we use may have inherent vulnerabilities or defects of design, manufacture or operations or could be
inadvertently or intentionally implemented or used in a manner that could compromise information security. In
addition, cybersecurity-related threats may remain undetected for an extended period of time.
Any cybersecurity attack, data or security breach, other security incident, compromise, damage, disruption, outage
or shutdown to our or the information technology systems or networks, or those of any businesses with which we
Similar paragraph at 2 of 23 other Materials companies:
APD,
PPG
could also result in operational or supply chain disruptions, data loss, corruption or manipulation, or information
misappropriation including, but not limited to, interruption to systems availability, denial of access to and misuse of
applications required by customers to conduct business, the acquisition, use or disclosure of data or inability to
access data, the release of confidential information about our operations, and subject us to litigation and
government enforcement actions. Further, in such event, access to applications required to plan operations, source
materials, manufacture and ship finished goods and account for orders could be denied or misused. Theft of
intellectual property or trade secrets, and loss or inappropriate disclosure of confidential company, employee,
customer or vendor information, could also stem from such incidents. Moreover, any significant cybersecurity event
could require us to devote significant management time and resources in response to such event, interfere with the
Similar paragraph at 1 of 23 other Materials companies:
SWpursuit of other important business strategies and initiatives, and cause us to incur additional expenditures, which
could be material, including to investigate and remediate such event, recover lost data, prevent future compromises
and adapt systems and practices in response to such events. There is no assurance that any remedial actions will
Similar paragraph at 1 of 23 other Materials companies:
SWmeaningfully limit the success of future attempts to breach our information systems, particularly because malicious
actors are increasingly sophisticated and utilize tools and techniques specifically designed to circumvent security
measures, avoid detection and obfuscate forensic evidence, which means we may be unable to identify, investigate
or remediate effectively or in a timely manner. Further, we are subject to an increasing number of cybersecurity
reporting obligations in different jurisdictions that vary in their scope and application, which may add complexities in
providing complete and reliable information about cybersecurity incidents to customers, counterparties, and
regulators, as well as the public. Corporate actions may impact our cybersecurity risk profile. As part of the strategic
separation of our EMEA packaging business, we intend to assess and address these cybersecurity risks to ensure
robust protection of our operations and data assets. Additionally, while insurance coverage designed to address
certain aspects of cyber risks may be in place, such insurance coverage may be insufficient to cover all losses or all
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IFF
A customer’s use of our products may decrease for a variety of reasons, including the customer’s level of
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SWsatisfaction with our products and services, the expansion of business to offer new products, the effectiveness of
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SWour support services, the pricing of our products, the pricing, range and quality of competing products, the effects of
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SWglobal economic conditions, regulatory limitations, trust, perception and interest in the paper and packaging industry
Similar paragraph at 1 of 23 other Materials companies:
SWand in their products. Furthermore, customers can and do switch purchases between competing packaging
Any failure by us to retain existing customers, attract new customers, and increase revenue from both new and
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SW
and/or future prospects. These efforts may require substantial financial expenditures, commitments of resources,
developments of processes, and other investments and innovations without a guarantee that existing customers will
Similar paragraph at 1 of 23 other Materials companies:
SW
We maintain business insurance that we consider to be adequate and appropriate for our business and activities.
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We rely on intellectual property laws to protect our rights to certain aspects of our systems, products and processes
including product designs, proprietary technologies, research and concepts. For example, our packaging business
owns hundreds of patents covering our designs and products. Trademarks and licenses and their effective
management play an important role in protecting intellectual property rights. The actions taken by us to protect our
respective proprietary rights may be inadequate to prevent imitation or unauthorized use. The laws of various
countries offer different levels of protection for intellectual property rights and there can be no assurance that our
intellectual property rights will not be challenged, invalidated, misappropriated or circumvented by third parties. Any
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including areas such as product design, materials sourcing, manufacturing, logistics, and customer delivery. Our
failure to adopt or scale these capabilities in a timely manner could impair our ability to meet evolving customer
expectations or may result in us falling behind our competitors with regards to innovation, speed to market,
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business, financial condition, results of operations and/or future growth prospects.
The proposed separation of our EMEA packaging business may not be completed, on the terms or the
timeline announced, if at all, and we may fail to realize some or all of the potential benefits of the proposed
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SWOn January 29, 2026, we announced our intention to create two independent, publicly traded companies:
International Paper will be comprised of its current business in North America including both legacy IP and DS
Smith assets, and the EMEA packaging business will be comprised of both legacy DS Smith and IP assets in
EMEA. The separation is expected to be structured as a spin-off of the combined EMEA Packaging business to
shareholders and is expected to be completed within 12-15 months, subject to the satisfaction of certain customary
conditions, including final approval by the IP Board of Directors as well as the filing and effectiveness of a
registration statement with the U.S. Securities and Exchange Commission and the publication of a prospectus
Executing the proposed separation will require significant amounts of time and effort, which could divert
management attention, disrupt the activities of our employees and have negative implications for our relationships
with our customers and other third parties. We also expect to incur additional costs and expenses in connection with
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SWThe proposed separation is complex, and completion of the proposed separation and the timing of its completion
will be subject to a number of factors and conditions, including the readiness of the new company to operate as an
independent public company, the successful integration of both legacy DS Smith and International Paper
businesses in EMEA into one packaging business and finalization of the capital structure of the new company. The
complexity and magnitude of the restructuring and regional integration efforts associated with the separation are
significant and will continue to result in substantial costs. The restructuring and regional integration processes could
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challenges involved in successfully restructuring and regionally integrating legacy DS Smith and International Paper
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business financial condition, results of operations, and cash flows. Further, unanticipated developments could delay,
Similar paragraph at 2 of 23 other Materials companies:
CF,
SWprevent or otherwise adversely affect the proposed separation, including disruptions in general or financial market
conditions, material adverse changes in business or industry conditions, unanticipated costs and potential problems
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PKGor delays in obtaining various regulatory and tax approvals or clearances. There can be no assurances regarding
the ultimate timing or structure of the proposed separation or that we will be able to complete the proposed
separation on the terms or on the timeline that was announced, if at all. In the event that the separation is not
completed, we will have incurred and may continue to incur, certain significant non-recurring costs related to the
If the separation is completed, we may not be able to achieve the full strategic and financial benefits that are
expected to result from the separation. An inability to realize some or all of the anticipated benefits of the separation,
as well as any delays encountered in the process, could have an adverse effect on our business, financial condition,
Similar paragraph at 2 of 23 other Materials companies:
IFF,
SWresults of operations and cash flows. There can be no assurance that the combined value of the common stock and
Similar paragraph at 1 of 23 other Materials companies:
SWordinary shares of the two companies will be equal or exceed the value that our common stock might have been
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Maintaining an investment-grade credit rating is an important element of our financial strategy. A downgrade of
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of assets, suspension or reduction of dividends and reductions in capital expenditures and working capital.
Certain of our debt agreements provide for an interest rate increase in case of a credit rating downgrade. This
applies to agreements governing approximately $4.0 billion of our debt as of December 31, 2025. As a result, a
downgrade in credit rating may lead to an increase in interest expenses. There can be no assurance that our credit
ratings will remain in effect for any given period of time or that such ratings will not be lowered, suspended or
withdrawn entirely by the rating agencies if, in each rating agency’s judgment, circumstances so warrant. Any such
downgrade, suspension or withdrawal of credit ratings could adversely affect our cost of borrowing, limit access to
Similar paragraph at 1 of 23 other Materials companies:
SWthe capital markets or result in more restrictive covenants in agreements governing the terms of any future
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indebtedness in an environment where rates, despite moderating in 2025, remain elevated and subject to
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In addition, we are subject to agreements governing our indebtedness that require us to meet and maintain certain
financial ratios and covenants. A significant or prolonged downturn in general business and economic conditions, or
other significant adverse developments with respect to our results of operations or financial condition, may affect
Similar paragraph at 3 of 23 other Materials companies:
APD,
NEM,
STLDour ability to comply with these covenants or meet those financial ratios and tests and could require us to take
action to reduce our debt or to act in a manner contrary to our current business objectives. Moreover, the
restrictions associated with these financial ratios and covenants may prevent us from taking actions that we believe
would be in the best interest of our business and may make it difficult for us to execute our business strategy
successfully or effectively compete with companies that are not similarly restricted. Additionally, despite these
restrictions, we may be able to incur substantial additional indebtedness in the future, which might subject us to
additional restrictive covenants that could affect our financial and operational flexibility and otherwise increase the
We are subject to interest rate risk associated with short-term cash investments, variable rate debts, supply chain
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in the Temple Inland timber monetization special purpose entities. We have variable rate debt in the aggregate
amount of approximately $2.1 billion as of December 31, 2025. Interest rates rose significantly during 2022-2024
but declined in 2025 following adjustments made by the Federal Reserve in response to economic conditions.
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We are subject to the risk that a bank with currently issued irrevocable letters of credit supporting installment notes
in connection with Temple Inland’s 2007 sales of forestlands, may be downgraded below the required rating. Prior to
2013, certain banks had fallen below the required ratings threshold and were successfully replaced, or waivers were
obtained regarding their replacement. As a result of continuing uncertainty in the banking environment, the three
letter-of-credit banks currently in place remain subject to risk of downgrade and the number of qualified replacement
banks remains limited. The downgrade of one or more of these banks may subject us to additional costs of securing
a replacement letter-of-credit bank or could result in an acceleration of deferred income taxes of $487 million if
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contingencies, both known and unknown, which may relate to past, present and future facts, events, circumstances
and occurrences. Should an unfavorable outcome occur in connection with the legal, regulatory or governmental
proceedings or our other loss contingencies or we become subject to any such loss contingencies in the future,
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For example, we (through both International Paper and our DS Smith legacy subsidiaries operating in Italy) are
among several of companies operating in the paper packaging industry subject to a decision by the Italian
Competition Authority concerning anti-competitive behavior in Italy. We are further subject to a number of actual and
threatened claims for compensation arising out of or relating to the decision by the Italian Competition Authority. In
addition, International Paper has been named as a defendant in a purported class action complaint that alleges civil
violation of Sections 1 and 3 of the Sherman Act. The complaint alleges that the defendants, beginning on
November 1, 2020 through the present, conspired to fix, raise, maintain, and/or stabilize prices of containerboard
products and seeks to recover treble damages, injunctive relief, attorneys’ fees and actual damages.
The Company is defending and intends to continue to defend robustly against such claims. It is too early to predict
or reasonably estimate the overall outcome or ultimate potential liability (if any) that might be incurred in connection
therewith, and there can be no guarantee that the aggregate of possible damages could not have a material impact
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In connection with the spin-off of Sylvamo Corporation (“Sylvamo”), we previously entered into agreements with
Sylvamo and its subsidiaries, including among others a tax matters agreement. Under the tax matters agreement,
we could have significant payment obligations in connection with certain Brazilian tax matters. Under this
agreement, we have agreed to pay 60% of the first $300 million of any liability resulting from the resolution of these
Brazilian tax matters (with Sylvamo paying the remaining 40% of the first $300 million of any such liability) and
100% of any liability resulting from the Brazilian tax matters over $300 million. These Brazilian tax matters relate to
assessments for the tax years 2007-2015 of approximately $106 million in tax (adjusted for variation in currency
exchange rates) and approximately $288 million in interest, penalties, and fees (adjusted for variation in currency
exchange rates). Accordingly, the assessments total approximately $394 million (adjusted for variation in currency
exchange rates), although interest, penalties and fees continue to accrue. Under the tax matters agreement, our
potential liability for such assessments would currently be approximately $274 million (adjusted for variation in
currency exchange rates). If we were found liable to pay such amounts, this could have an adverse effect on our
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DS Smith previously identified material weaknesses in its internal controls over financial reporting,
including its Information Technology General Control environment, that, if not properly remediated, could
increase the costs, expenses and management time required to meet the standards required by Section 404
of the Sarbanes-Oxley Act, and therefore adversely affect the business of the Company and its share price.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,
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BALLsuch that there is a reasonable possibility that a material misstatement of our annual or interim consolidated
Prior to January 31, 2025, DS Smith was not required to comply with Section 404 of the Sarbanes-Oxley Act or to
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SWformally assess the effectiveness of its internal controls over financial reporting for that purpose. As described under
Item 8 “Report of Management on Financial Statements” and Item 9A. "Controls and Procedures," in connection
with the preparation of the acquisition proxy statement, the independent auditors identified material weaknesses in
DS Smith's internal control environment including Information Technology General Controls ("ITGCs") in fiscal years
ended April 30, 2022, April 30, 2023, and April 30, 2024, which would have constituted material weaknesses under
Section 404 of the Sarbanes-Oxley Act. DS Smith’s ITGCs were not consistently operating effectively due to
inappropriate user and administrative access, ineffective change-management, inadequate third-party management,
In accordance with SEC guidance, our management’s assessment of the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2025, excluded DS Smith. During 2025, International Paper
worked to incorporate the internal controls and procedures for DS Smith into the Company’s internal control
environment and will continue to incorporate the internal controls and procedures for the legacy DS Smith assets in
North America post separation. Management is focused on remediating the DS Smith ITGC deficiencies, and has
initiated a redesign of ITGCs across DS Smith systems, including enhancing governance over user access and
system changes, by delivering training across DS Smith to further educate and upskill control and process owners.
These remediation measures may be time consuming and costly and there is no assurance that these initiatives will
ultimately have the intended effects. The deficiencies in DS Smith’s internal control over financial reporting will not
be considered remediated until the controls operate for a sufficient period and management has concluded, through
testing that these controls operate effectively. If we do not successfully remediate the deficiencies, or if other
deficiencies are identified or arise in the future, we may incur additional costs and expenses and will be required to
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SWdedicate management's time to meeting the standards required by Section 404 of the Sarbanes-Oxley Act. In such
case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic
reports, in addition to applicable stock exchange listing requirements and requirements under certain of our
agreements, which could adversely affect investor confidence in us, our business, and the trading price of our
Similar paragraph at 2 of 23 other Materials companies:
MLM,
SWcommon stock. In addition, these DS Smith ITGC deficiencies may also have the effect of heightening other risks
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Climate change impacts, including rising temperatures, extreme temperature events (such as prolonged heat or
freezing conditions) and the increasing severity and/or frequency of adverse weather conditions, may result in
operational impacts on our facilities, as well as supply chain disruptions and increased raw material and other costs.
These adverse weather conditions and other physical impacts which may be exacerbated as the result of climate
change include floods, hurricanes, tornadoes, earthquakes, hailstorms, wildfires, snow, ice storms and drought.
Climate change may also contribute to the decreased productivity of forests, a key source in the production of paper
products, and adverse impacts on the distribution and abundance of species, and the spread of disease and insect
epidemics, any of which developments could adversely affect forestland management and the availability of energy
and water resources. The effects of climate change and global, regional and local weather conditions, including the
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In recent years, there has been a heightened focus, including from investors, customers, the general public,
domestic and foreign governmental (including but not limited to the United Kingdom and the European Union) and
nongovernmental authorities, regarding sustainability matters, including with respect to climate change, greenhouse
Similar paragraph at 1 of 23 other Materials companies:
SWgas (“GHG”) emissions, packaging and waste, sustainable supply chain practices, biodiversity, deforestation, land,
Similar paragraph at 1 of 23 other Materials companies:
SWenergy and water use, and human capital matters. This heightened focus on sustainability matters, including climate
change, has resulted in more prescriptive reporting requirements with respect to sustainability metrics and other
new requirements, an increased expectation that such metrics will be voluntarily disclosed by companies such as
Similar paragraph at 1 of 23 other Materials companies:
SWours, and increased pressure with respect to making commitments, setting targets, or establishing goals, and taking
action to meet them, which has caused and is expected to continue to cause the Company to incur increased
compliance costs. As the result of this increased focus and commitment to sustainability matters, we (either
voluntarily and/or as required by applicable law and regulation) have provided disclosure and established targets
and goals with respect to various sustainability matters, including climate change. For example, we have publicly
committed to reducing our Scope 1, 2 and 3 GHG emissions by 35% from 2019 to 2030. Meeting these and other
sustainability targets and goals have increased our capital and operational costs. Further, we may continue to
establish, increase and/or revise such disclosure, targets and goals in the future. For example, as we prepare to
separate our EMEA operations, we intend to assess International Paper’s 2030 goals and adapt our existing targets
and timelines. Efforts to achieve our initiatives and goals, including collecting, measuring, and reporting
sustainability information, involve operational, reputational, financial, legal, and other challenges and may result in
additional costs or delays related to achieving our 2030 goals. Such efforts may have a negative impact on us,
There also continues to be a lack of consistency in implementation expectations of legal and regulatory initiatives
regarding climate change across jurisdictions and various governmental entities. Additional expenses are expected
to be incurred because of domestic and international regulators requiring additional disclosures regarding GHG
emissions. Further, there can be no assurance regarding the extent to which our climate and other sustainability
targets can be achieved, and the achievement of these targets is subject to various risks and uncertainties, some of
which are outside our control. Moreover, there is no assurance that investments made in furtherance of achieving
such targets and goals will meet investor expectations or any binding or non-binding legal standards regarding
sustainability performance. If we are unable to meet climate and other sustainability targets and goals, on projected
timelines or at all, or if such goals and targets are perceived negatively, including the perception that they are not
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SWsufficiently robust or, conversely, are too costly or not otherwise in our best interests, investor, customer and other
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SWstakeholder relationships could be damaged, which could adversely impact our reputation, business and results of
Similar paragraph at 2 of 23 other Materials companies:
LYB,
SWoperations. Moreover, not all our competitors establish climate or other sustainability targets and goals at
comparable levels, which could result in competitors having lower supply chain or operating costs as well as
We may be unable to manage energy demand needs within our sustainability targets and certain of our respective
acquisitions may bring new sustainability challenges. Such inability to manage sustainability demands and
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prospects. Other climate-related business risks that we face, include risks related to the transition to a lower-carbon
economy, such as increased prices for fossil fuels; the introduction of a carbon tax; increased regulation of
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SW
Additionally, sustainability reporting is becoming more broadly expected by regulators, investors, shareholders, and
other third parties. If we do not adapt to or comply with such investor, customer, or other stakeholder expectations,
or if we are perceived to have not responded appropriately or quickly enough to growing sustainability related
concerns for sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may
suffer reputational damage or be precluded from doing business with certain customers. Our business, financial
condition, and/or the market price of our common stock could be materially and adversely affected. Further, our
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SWsustainability and goals may not be favored by certain stakeholders, whose priorities and expectations may not align
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SWor may be opposed to one another, which could result in public scrutiny or reputational damage, and could impact
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SW
We have defined benefit pension plans covering substantially all U.S. salaried employees hired prior to July 1, 2004,
and substantially all hourly union and non-union employees regardless of hire date. We froze participation for U.S.
salaried employees under these plans, including credited service and compensation on or after January 1, 2019;
however, the pension freeze does not affect benefits accrued through December 31, 2018.
We continue to provide retiree health care benefits to certain former U.S. employees, as well as financial assistance
toward the cost of individual retiree medical coverage for certain former U.S. salaried employees. Prior to the
acquisition, DS Smith and its predecessor entities maintained a number of separate defined benefit pension
arrangements for different employee groups. These plans were closed or frozen at different times and, in some
cases, were subsequently terminated or transitioned to multiemployer plans. For certain union represented groups,
we continue to make required contributions or other payments tied to historical withdrawal liabilities or plan funding
obligations. We also assumed a small legacy retiree life insurance benefit for a limited group of former employees,
which will continue only for the remaining covered participants through 2027. DS Smith did not provide retiree health
care benefits to its U.S. employees, and no new retiree health care obligations were created as part of the
Pension costs are dependent upon numerous factors resulting from actual plan experience and assumptions of
future experience. Pension plan assets are primarily made up of equity and fixed income investments. Fluctuations
in actual market returns on plan assets, changes in general interest rates and in the number of retirees may impact
pension costs in future periods. Likewise, changes in assumptions regarding current discount rates and expected
rates of return on plan assets could increase pension costs. However, the impact of market fluctuations has been
reduced as a result of investments in our pension plan asset portfolio which hedge the impact of changes in interest
rates on the plan’s funded status. Drivers for fluctuating health costs include unit cost changes, health care
utilization by participants, and potential changes in legal requirements and government oversight. If any of these
factors cause pension costs or health care benefits to increase in future periods, this could have an adverse effect
Our U.S. and UK funded pension plans are currently fully funded on a projected benefit obligation basis;
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We record an asset or a liability associated with our pension plans equal to the surplus of the fair value of plan
assets above the benefit obligation or the excess of the benefit obligation over the fair value of plan assets. As of
December 31, 2025, we had an overfunded U.S. qualified pension with a surplus of $366 million and an overfunded
UK qualified pension with a surplus of $112 million. When aggregated with U.S. nonqualified pension obligations,
the benefit surplus recorded under the provisions of Accounting Standards Codification 715, “Compensation –
Retirement Benefits,” as of December 31, 2025 was $148 million. The amount and timing of future contributions,
which could be material, will depend upon a number of factors, including the actual earnings, changes in values of
plan assets and changes in interest rates. If benefit obligations under the qualified pensions exceed the value of
plan assets by more than permitted under applicable statutory minimum funding requirements, then we may be
required to make additional contributions. Such contributions may have an adverse effect on our operational results
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