What Westinghouse Air Brake Technologies Corporation (Wabtec) told the SEC could break it.

As a global company, Wabtec is subject to anti-corruption laws and to U.S. export controls (Commerce/BIS), OFAC economic sanctions, customs, and currency/transfer-pricing rules; despite compliance programs, prohibited acts by employees, agents, or partners could violate these laws.

“We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S. Department of Commerce's Bureau of Industry and Security, the U.S. Department of Treasury's Office of Foreign Assets Control, and various non-U.S. government entities, including applicable export control regulations, economic sanctions on countries and persons, customs requirements, currency exchange regulations, and transfer pricing regulations.”

Changes to tariffs and trade restrictions could raise Wabtec's input costs, reduce its products' competitiveness, delay customers' investments in freight/transit rail, and — via reduced global trade — lower overall rail investment.

“A protectionist trade environment in either the United States or those foreign countries in which we do 17 business, such as a change in the current tariff structures, export compliance or other trade policies, may adversely affect our business. In particular, such policies may impact or delay our customers' investments in our products, reduce the competitiveness of our products in certain markets, and inhibit our ability to cost-effectively purchase necessary inputs from certain suppliers.”

About half of Wabtec's net sales are outside the U.S., with substantial operations in emerging markets such as Brazil, India, and Kazakhstan that carry regulatory, economic, social, and political uncertainty, heightened by geopolitical volatility.

“We have substantial operations located in emerging markets, such as Brazil, India, and Kazakhstan. Operations in such emerging markets are inherently risky due to a number of regulatory, economic, social and political uncertainties, which may be exacerbated in environments of heightened geopolitical uncertainty and volatility.”

Wabtec's supply chain — including third-party manufacturing and transportation — is vulnerable to disruption, especially where a product is sourced from a single supplier or location; the COVID-19 era caused component, raw-material, and chip shortages across its China, India, U.S., and Europe channels.

“Failure to take adequate steps to mitigate the likelihood or potential impact of disruptions, or to effectively manage such events if they occur, particularly when a product is sourced from a single supplier or location, could adversely affect our business or financial results. For example, the COVID-19 pandemic caused supply chain disruptions, particularly with respect to channels in China, India, the U.S. and Europe, and labor availability constraints that resulted in component, raw material and chip shortages.”