APi Group Corp

As 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 Brighton, Minnesota, and its wholly‑owned subsidiaries (the “Subsidiaries”).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains “forward-looking statements.” These forward-looking statements are based on beliefs and assumptions as of the date such statements are made and are subject to risks and uncertainties. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. 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 identifying terms.

These forward-looking statements are based on our current expectations and assumptions and on information currently available to management and include, among others, statements regarding, as of the date such statements are made:

•our beliefs and expectations regarding our business strategies and competitive strengths;

•our beliefs regarding procurement challenges and the nature of our contractual arrangements and renewal rates and their impact on our future financial results;

•our beliefs regarding our acquisition and divestiture platform and ability to execute acquisitions and divestitures and successfully integrate strategic acquisitions;

•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 our cash flows and organic growth opportunities and our belief that it helps mitigate the impact of economic downturns;

•our intent to continue to grow our business, both organically and through acquisitions, and our beliefs regarding the impact of our business strategies on our growth;

•our beliefs regarding our customer relationships and plans to grow existing business and expand service offerings;

•our beliefs regarding our ability to pass along price increases in supplies and materials to our customers;

•our expectations regarding the cost of compliance with laws and regulations;

•our expectations regarding labor matters;

•our beliefs regarding market risk, including our exposure to foreign currency fluctuations, and our ability to mitigate that risk;

•our expectations and beliefs regarding accounting and tax matters;

•our beliefs regarding the effectiveness of the design and operation of our internal control over financial reporting;

•our expectations regarding future capital expenditures;

•our expectations regarding our enterprise resource planning systems implementations;

•our expectations regarding future pension contributions; and

•our beliefs 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 availability of future sources of liquidity.

These 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 risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Annual Report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

The factors identified below are believed to be important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Other factors not discussed herein could also have a material adverse effect on us. You should not rely upon forward-looking statements as predictions 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 as of the date of this Annual 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 SUMMARY

Below is a summary of the principal factors that may affect our business, financial condition, 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 factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report and our other filings with the Securities and Exchange Commission (the “SEC”).

•We operate in both domestic and 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.

•As we increase our reliance on cloud-based applications and platforms to operate our businesses, any disruption or interference with these platforms could adversely affect our financial condition and results of operations.

•Improperly managed projects or project delays may result in additional costs or claims against us.

•We are a decentralized company and place significant decision-making authority with our subsidiaries’ leadership, supported by certain integrated policies and processes.

•As part of our business strategy, we rely on our ability to successfully execute acquisitions and divestitures and to integrate acquired businesses into our operations, and our inability to do so could adversely affect our business and results of operations.

•Higher interest rates increase the interest costs on our credit facilities and on our other floating rate indebtedness and 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 and our ability to secure financing, take advantage of acquisition opportunities, or achieve our growth objectives.

•Our level of indebtedness, and the associated compliance obligations contained in the financial covenants in our credit facilities and restrictions on our operations set forth in the Credit Agreement (as later defined), increases the potential negative impact of interest rate increases and creates risks to our cash flow and operating flexibility.

•A significant portion of our revenue is recognized over time based on estimates of contract revenue, costs, and profitability, and our reliance on such projections carries risk of a reduction or reversal of previously recorded revenue or profits.

•We are self-insured against many potential liabilities, which makes estimating our future expenses for claims difficult and which increases the financial risks associated with the realization of such potential liabilities.

•We carry a significant amount of goodwill, identifiable intangible assets, and fixed assets that are subject to impairment in the future under certain circumstances.

•Any shortfalls in our operation and maintenance of effective controls over financial reporting creates certain risks.

•We may not accurately estimate the costs associated with services provided under fixed price contracts.

•A portion of our contracts allocate the risks of price increases in supplies and materials to us.

•Our contracts portfolio contains many highly-regulated government contracts and guaranties of subsidiary contracts, which present elevated risks in the event of contract breach, as well as elevated risks in the event of changes in spending or budgetary priorities, or delays in contract awards.

•Our backlog is subject to reduction or cancellation, and revenues may be realized in different periods than initially reflected in backlog.

•We maintain a workforce based upon current and anticipated workloads. We could incur significant costs and reduced profitability 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. Additionally, shortages of skilled labor could impede our ability to provide timely, cost-effective services to our customers.

•A large portion of our workforce is covered by collective bargaining agreements, works council arrangements, and pension plans, which limits our discretion in the management of covered employees, carries a risk of strikes or other concerted activities that may impair our operations, subjects us to potential works council claims and litigation and imposes obligations to fund certain pension plans.

•We are vulnerable to the economic conditions affecting the industries we serve, including the construction, technology, energy exploration, and related industries, which present risks of a decline in demand for our services or in the financial condition of our customers and their ability and willingness to invest in infrastructure projects.

•A portion of our expected future growth is based on the ability and willingness of public and private entities to invest in infrastructure.

•Our business is subject to operational hazards due to the nature of services we provide and the conditions in which we operate, including some factors which may be outside of our control, including electricity, fires, explosions, mechanical failures, and weather-related incidents.

•In our business we face regular litigation across a broad range of claims, including health, safety, and environmental regulation proceedings, as well as costs related to damages we may be assessed relating to our contractual obligations, or as a result of product liability claims against our customers.

•Our success ultimately depends on our ability to successfully compete in the highly competitive industries and markets we serve, which may be jeopardized by the loss of key senior management personnel or a shortage of highly skilled personnel.

•Certain of the markets we serve are seasonal, and our projects can be negatively impacted by poor or extreme weather.

•We operate as a holding company, and as such, rely on our subsidiaries to provide cash for our operations and obligations, including distributions and dividends, if any.

•We have outstanding equity instruments that require us to issue additional shares of common stock in the future and we may issue additional preferred stock or make other changes to our ownership structure to generate additional capital. These activities may dilute your ownership interests and, among other reasons, reduce the value of our common stock.

•We may issue preferred stock in the future and the terms of the preferred stock may reduce the value of our common stock.

•As part of our incorporation and bylaws in Delaware, we are subject to certain provisions that limit stockholders' actions.

•Our stock price may be volatile and, as a result, stockholders could lose a significant portion or all of their investment.

•We maintain confidential data and information which exposes us to risks associated with cybersecurity incidents and compliance with data privacy and security laws, identity protection, and information security.

•We face risks associated with deterioration in our performance of services, increases in healthcare costs, significant employee misconduct, adverse regulatory changes and changes in accounting principles, all of which may negatively impact our operations and financial results.