Arcosa, Inc.

Previous wording

At December 31, 2024, Arcosa's backlog was approximately $1.2 billion within our Engineered Structures and $280.1 million within our Transportation Products segments. Arcosa's ability to meet customer delivery schedules for backlog is dependent on a number of factors including, but not limited to, sufficient manufacturing plant capacity, adequate supply channel access to raw materials and other inventory required for production, an adequately trained and capable workforce, engineering expertise, and appropriate planning and scheduling of manufacturing resources. We may also encounter capacity limitations due to changes in demand despite our forecasting efforts. Some of the contracts we enter into with our customers, such as for barges, traffic structures and wind towers, require long manufacturing lead times and contain penalty clauses or liquidated damages provisions related to late delivery. Failure to deliver in accordance with contract terms and customer expectations could subject us to financial penalties, damage existing customer relationships, increase our costs, reduce our sales and have a material adverse effect on Arcosa's business.

Current wording

At December 31, 2025, Arcosa's backlog was approximately $1.1 billion within our Engineered Structures and $296.9 million within our Transportation Products segments. Arcosa's ability to meet customer delivery schedules for backlog is dependent on a number of factors including, but not limited to, sufficient manufacturing plant capacity, adequate supply channel access to raw materials and other inventory required for production, an adequately trained and capable workforce, engineering expertise, and appropriate planning and scheduling of manufacturing resources. We may also encounter capacity limitations due to changes in demand despite our forecasting efforts. Some of the contracts we enter into with our customers, such as for barges, traffic structures and wind towers, require long manufacturing lead times and contain penalty clauses or liquidated damages provisions related to late delivery. Failure to deliver in accordance with contract terms and customer expectations could subject us to financial penalties, damage existing customer relationships, increase our costs, reduce our sales and have a material adverse effect on Arcosa's business.

Previous wording

Arcosa depends on professional labor across its businesses and skilled labor in the manufacture, maintenance, and repair of Arcosa’s products. Some of Arcosa’s facilities are located in areas where demand for skilled laborers, such as welders, complex machine operators, and equipment maintenance workers, may exceed supply. Arcosa competes for such personnel with other companies, including public and private company competitors who may periodically offer more favorable terms of employment. If Arcosa is unable to hire and retain these skilled laborers, Arcosa may be limited in its ability to maintain or increase production rates and costs to replace or retain skilled laborers may increase.

Current wording

Arcosa depends on professional labor across its businesses and skilled labor in the manufacture, maintenance, and repair of Arcosa’s products. Some of Arcosa’s facilities are located in areas where demand for skilled laborers, such as welders, complex machine operators, and equipment maintenance workers, may exceed supply. Arcosa competes for such personnel with other companies who may periodically offer more favorable terms of employment. If Arcosa is unable to hire and retain these skilled laborers, Arcosa may be limited in its ability to maintain or increase production rates and costs to replace or retain skilled laborers may increase.

Previous wording

A significant portion of Arcosa’s business depends on the adequate supply of raw materials and numerous specialty and other parts and components at competitive prices. The principal material used in Arcosa’s manufacturing segments is steel. The current U.S. presidential administration has proposed to significantly increase tariffs on foreign imports of steel and aluminum. The inflationary pressures on principal raw material prices, like steel, may result in increased costs or a delay in orders from Arcosa's customers. Market steel prices have in the past and may in the future exhibit periods of volatility and an increase in steel prices could continue to negatively impact demand for Arcosa's products. Steel prices may experience further volatility as a result of scrap surcharges assessed by steel mills, tariffs, and other market factors. Furthermore, consolidation of steel producers may lead to decreased competition in the industry and result in increased steel prices. Arcosa may use contract-specific purchasing practices, supplier commitments, contractual price escalation provisions, flexing between steel type, and other arrangements with Arcosa’s customers to mitigate the effect of this volatility on Arcosa’s operating profits. To the extent that Arcosa does not have such arrangements in place, a change in steel prices could materially lower Arcosa’s profitability.

Current wording

A significant portion of Arcosa’s business depends on the adequate supply of raw materials and numerous specialty and other parts and components at competitive prices. The principal material used in Arcosa’s manufacturing segments is steel. The current U.S. administration has maintained and, in some cases, significantly expanded tariffs on foreign imports of steel and aluminum. While Arcosa has historically mitigated tariff impacts through tariff exclusions or alternative sourcing, these strategies are subject to change, including the expiration of exclusions or the imposition of new tariffs, quotas, or trade restrictions on previously exempt supply sources. Any adverse change in trade policy, such as the imposition of new tariffs, quotas, or other trade remedies, could increase costs and adversely affect our margins and profitability. In addition, the inflationary pressures on principal raw material prices, like steel, may result in increased costs or a delay in orders from Arcosa's customers. Market steel prices have in the past and may in the future exhibit periods of volatility and an increase in steel prices could continue to negatively impact demand for Arcosa's products. Steel prices may experience further volatility as a result of scrap surcharges assessed by steel mills, tariffs, and other market factors. Furthermore, consolidation of steel producers may lead to decreased competition in the industry and result in increased steel prices. Arcosa may use contract-specific purchasing practices, supplier commitments, contractual price escalation provisions, flexing between steel type, and other arrangements with Arcosa’s customers to mitigate the effect of this volatility on Arcosa’s operating profits. To the extent that Arcosa does not have such arrangements in place, a change in steel prices could materially lower Arcosa’s profitability.

Previous wording

A part of the operations in Arcosa’s Construction Products segment includes the mining of natural aggregates and specialty materials reserves. The success and viability of these operations depend on the accuracy of Arcosa’s reserve estimates, the costs of production and the ability to economically distribute the natural aggregates and specialty materials. Estimates for natural aggregate and specialty materials reserves and for the costs of production of such reserves depend upon a variety of factors and assumptions, many of which involve uncertainties beyond Arcosa’s control, such as geological and mining conditions that may not be identifiable. In addition, Arcosa's success in recovering natural aggregates and specialty materials depends on the ability to secure new reserve locations and permits to mine such reserves in areas that make distribution of materials economically viable. Engaging and maintaining good relations within the communities where we operate is important to securing and retaining permits. Inaccuracies in reserve estimates and production costs, and the inability to secure locations and permits for future operations could negatively affect our results of operations. The success and viability of Arcosa's recycled aggregates operation depends on Arcosa's success in procuring supply stock for processing recycled materials into recycled aggregates. The inability to secure and maintain locations and permits for recycled aggregates operations could negatively affect our results of operations.

Current wording

A part of the operations in Arcosa’s Construction Products segment includes the mining of natural aggregates and specialty materials reserves. The success and viability of these operations depend on the accuracy of Arcosa’s reserve estimates, the costs of production and the ability to economically distribute the natural aggregates and specialty materials. Estimates for natural aggregate and specialty materials reserves and for the costs of production of such reserves depend upon a variety of factors and assumptions, many of which involve uncertainties beyond Arcosa’s control, such as geological and mining conditions that may not be identifiable. In addition, Arcosa's success in recovering natural aggregates and specialty materials depends on the ability to maintain permits for existing mines and secure and permit new reserve locations in areas that make distribution of materials economically viable. Engaging and maintaining good relations within the communities where we operate is important to securing and retaining permits. Inaccuracies in reserve estimates and production costs, and the inability to secure locations and permits for future operations could negatively affect our results of operations. The success and viability of Arcosa's recycled aggregates operation depends on Arcosa's success in procuring supply stock for processing recycled materials into recycled aggregates. The inability to secure and maintain locations and permits for natural and recycled aggregates operations could negatively affect our results of operations.

Previous wording

Arcosa uses electricity and various gases, including natural gas, at Arcosa’s manufacturing facilities and uses diesel fuel in vehicles to transport Arcosa’s products to customers and to operate its plant equipment. An outbreak or escalation of hostilities between the U.S. and any foreign power or between other foreign powers, such as the war in Ukraine or the conflicts in the Middle East, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general. Additionally, extreme weather conditions such as extreme temperatures, hurricanes, tornadoes, or floods could result in varying states of disaster and lead to disruptions to the delivery and supply of petroleum and/or natural gas, including rationing thereof, or an increase in natural gas prices, electricity prices, or other general energy costs. Future limitations on the availability (including limitations imposed by increased regulation or restrictions on rail, road, and pipeline transportation of energy supplies) or consumption of electricity, petroleum products or natural gas and/or an increase in energy costs, particularly natural gas and diesel fuel, could have an adverse effect upon our ability to conduct Arcosa’s business cost effectively.

Current wording

Arcosa uses electricity and various gases, including natural gas, at Arcosa’s manufacturing facilities and uses diesel fuel in vehicles to transport Arcosa’s products to customers and to operate its plant equipment. An outbreak or escalation of hostilities between the U.S. and any foreign power or between other foreign powers, such as the war in Ukraine, conflicts in Venezuela and the Middle East or tensions with China, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general. Additionally, extreme weather conditions such as extreme temperatures, hurricanes, tornadoes, or floods could result in varying states of disaster and lead to disruptions to the delivery and supply of petroleum and/or natural gas, including rationing thereof, or an increase in natural gas prices, electricity prices, or other general energy costs. Future limitations on the availability (including limitations imposed by increased regulation or restrictions on rail, road, and pipeline transportation of energy supplies) or consumption of electricity, petroleum products or natural gas and/or an increase in energy costs, particularly natural gas and diesel fuel, could have an adverse effect upon our ability to conduct Arcosa’s business cost effectively.

Previous wording

Some of the markets Arcosa serves have a limited number of customers. For example, Arcosa's wind tower customer base is highly concentrated due to a limited number of companies constructing wind towers. The volumes purchased by customers in each of Arcosa’s business segments vary from year to year, and not all customers make purchases every year. Furthermore, the timing of the completion, delivery, and customer acceptance of orders, including backlog orders, may cause Arcosa's revenues and income from operations to vary substantially each quarter. As a result, the order levels for Arcosa’s products have varied significantly from period to period in the past and may continue to vary significantly in the future. GE Vernova accounted for approximately 10.8% of our consolidated revenues in 2024 up from 8.1% of consolidated revenues in 2023. As a result of these fluctuations, Arcosa believes that comparisons of its sales and operating results between periods may not be meaningful and should not be relied upon as indicators of future performance.

Current wording

Some of the markets Arcosa serves have a limited number of customers. For example, Arcosa's wind tower customer base is highly concentrated due to a limited number of companies constructing wind towers. The volumes purchased by customers in each of Arcosa’s business segments vary from year to year, and not all customers make purchases every year. Furthermore, the timing of the completion, delivery, and customer acceptance of orders, including backlog orders, may cause Arcosa's revenues and income from operations to vary substantially each quarter. As a result, the order levels for Arcosa’s products have varied significantly from period to period in the past and may continue to vary significantly in the future. GE Vernova accounted for approximately 12.2% of our consolidated revenues in 2025 up from 10.8% of consolidated revenues in 2024. As a result of these fluctuations, Arcosa believes that comparisons of its sales and operating results between periods may not be meaningful and should not be relied upon as indicators of future performance.

Previous wording

Arcosa has a significant amount of indebtedness. As of December 31, 2024, our total debt (excluding debt issuance costs) was approximately $1.7 billion, and we had unused commitments of $699.3 million under our revolving credit facility that is part of our Credit Agreement (after giving effect to $0.7 million of outstanding letters of credit). Our increased amount of indebtedness year-over-year primarily resulted from the closing of the Stavola acquisition, and this increase in the amount of our indebtedness resulted in higher interest expense year over year. In addition, Arcosa is subject to a variety of performance bonds, payment guarantees and other contingent obligations in the operation of its business.

Current wording

As of December 31, 2025, our total debt (excluding debt issuance costs) was approximately $1.5 billion, and we had unused commitments of $700.0 million under our revolving credit facility that is part of our Credit Agreement. In addition, Arcosa is subject to a variety of performance bonds, payment guarantees and other contingent obligations in the operation of its business.

Previous wording

Despite our increase in leverage to finance the Stavola acquisition, subject to the limits contained in the Financing Documents, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, it could have important consequences, including the following:

Current wording

Subject to the limits contained in the Financing Documents, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, it could have important consequences, including the following:

Previous wording

Pandemics, epidemics, or other public health emergencies, as well as the governmental reaction thereto, may adversely affect Arcosa’s business.

Current wording

Pandemics, epidemics, or other public health emergencies, as well as the governmental shutdowns related thereto or otherwise, may adversely affect Arcosa’s business.

Previous wording

Arcosa’s business may be adversely affected if a pandemic, epidemic, or other public health emergency occurs. The outbreak of COVID-19, including its variants, disrupted local, state, national, and global economies. Any future similar public health emergency could negatively impact our business, including the health and productivity of our employees, the availability and pricing of supplies and raw materials, our ability to fulfill customer orders, and the availability of our transportation and distribution networks. If any of Arcosa’s facilities become subject to closure from a public health emergency, the business as a whole could be materially affected.

Current wording

Arcosa’s business may be adversely affected if a pandemic, epidemic, or other public health emergency occurs. The outbreak of a pandemic, epidemic, or any future public health emergency could negatively impact our business, including the health and productivity of our employees, the availability and pricing of supplies and raw materials, our ability to fulfill customer orders, and the availability of our transportation and distribution networks. If any of Arcosa’s facilities become subject to closure from a public health emergency, the business as a whole could be materially affected.

Previous wording

A public health emergency could also disrupt Arcosa's cross-border business transactions and activities. During the COVID-19 pandemic, governments in the U.S. and elsewhere in the world implemented strict measures to help control the spread of the virus, including quarantines, travel restrictions and business curtailments. Such actions may impair or prevent Arcosa from continuing its operations. The extent to which a pandemic, epidemic, or other public health emergency could impact our business will depend on numerous evolving factors that we may not be able to accurately predict.

Current wording

A public health emergency could also disrupt Arcosa's cross-border business transactions and activities. During a pandemic, governments in the U.S. and elsewhere in the world may impose strict measures to help control the spread of a virus, including quarantines, travel restrictions and business curtailments. Such actions may impair or prevent Arcosa from continuing its operations. The extent to which a pandemic, epidemic, or other public health emergency, as well as government shutdowns related thereto or otherwise, could impact our business will depend on numerous evolving factors that we may not be able to accurately predict.

Previous wording

Cyclical or other fluctuations, including as a result of government or macroeconomic policy, could result in decreased demand for our products, which could in turn result in lower sales volumes, lower prices, a slowdown in production at our facilities and/or a decline in or loss of profits. In addition, an economic downturn may negatively affect the collectability of accounts receivable. Any of the foregoing market or industry conditions or events could result in reductions in Arcosa’s revenues, or increased operating costs.

Current wording

Cyclical or other fluctuations, including as a result of government or macroeconomic policy, could result in decreased demand for our products, which could, in turn, result in lower sales volumes, lower prices, a slowdown in production at our facilities and/or a decline in or loss of profits. Arcosa may transition away from certain businesses based on such cyclical downturns and economic conditions. In addition, an economic downturn may negatively affect the collectability of accounts receivable. Any of the foregoing market or industry conditions or events could result in reductions in Arcosa’s revenues, or increased operating costs.

Previous wording

Increased inflation and volatile input costs may be beyond our control, including rising prices for raw materials such as steel, liquid asphalt, fuel, parts and components, freight, packaging, supplies, labor, and energy, increases our costs to manufacture and distribute our products. We may be unable to pass these rising costs on to our customers. While Arcosa cannot predict the extent to which inflation may increase, increases and volatility in the price of steel and liquid asphalt have and could impact a customer's decision to place or delay orders for new barges, wind towers, or asphalt paving. Other inflationary pressures may generally result in a reduction in construction activity, which could have a material adverse effect on our business. Under varying circumstances, Arcosa may take actions to minimize these inflationary risks, but such efforts may not be effective in mitigating the impact on Arcosa's margins. Arcosa's revenues or operating costs may be negatively affected if we are unable to mitigate the impact of these cost increases through contractual means or otherwise offset the effect of these cost increases.

Current wording

Increased inflation and volatile input costs may be beyond our control, including rising prices for raw materials such as steel, liquid asphalt, fuel, parts and components, freight, packaging, supplies, labor, and energy, which increase our costs to manufacture and distribute our products. We may be unable to pass these rising costs on to our customers. While Arcosa cannot predict the extent to which inflation may increase, increases and volatility in the price of steel and liquid asphalt have impacted and could impact in the future a customer's decision to place or delay orders for new barges, wind towers, or asphalt paving. Other inflationary pressures may generally result in a reduction in construction activity, which could have a material adverse effect on our business. Under varying circumstances, Arcosa may take actions to minimize these inflationary risks, but such efforts may not be effective in mitigating the impact on Arcosa's margins. Arcosa's revenues or operating costs may be negatively affected if we are unable to mitigate the impact of these cost increases through contractual means or otherwise offset the effect of these cost increases.

Previous wording

Arcosa’s operations outside of the U.S. are subject to risks associated with cross-border business transactions and activities. Political, legal, trade, environmental regulations, or economic change or instability, criminal activities, or social unrest could limit or curtail Arcosa’s respective foreign business activities and operations, including the ability to hire and retain employees. Violence in Mexico associated with drug trafficking is continuing. Arcosa has not, to date, been materially affected by any of these risks, but Arcosa cannot predict the likelihood of future effects from such risks or any resulting adverse impact on Arcosa’s business.

Current wording

Arcosa’s operations outside of the U.S. are subject to risks associated with cross-border business transactions and activities. Political, legal, trade or environmental regulatory developments, economic change or instability, criminal activities, or social unrest could limit or curtail Arcosa’s respective foreign business activities and operations, including the ability to hire and retain employees. Violence in Mexico associated with drug trafficking is continuing. Arcosa has not, to date, been materially affected by any of these risks, but Arcosa cannot predict the likelihood of future effects from such risks or any resulting adverse impact on Arcosa’s business.

Previous wording

Arcosa ships raw materials to Mexico and manufactures products in Mexico that are sold in the U.S. or elsewhere, which are subject to customs and other regulations. Any shutdown or delays at the U.S./Mexico border could affect our ability to transport or import our products manufactured in Mexico in a timely manner or at all. Some foreign countries where Arcosa operates have regulatory authorities that regulate products sold or used in those countries. If Arcosa fails to comply with the applicable regulations related to the foreign countries where Arcosa operates, Arcosa may be unable to market and sell its products in those countries or could be subject to administrative fines or penalties.

Current wording

Arcosa ships raw materials to Mexico and manufactures products in Mexico that are sold in the U.S. or elsewhere, which are subject to customs and other regulations. Any shutdown or delays at the U.S./Mexico border could affect our ability to transport or import our products manufactured in Mexico in a timely manner or at all. Some foreign countries where Arcosa operates have regulatory authorities that regulate products sold or used in those countries.

Previous wording

Furthermore, any material change in the tariffs, quotas, regulations or duties on imports imposed by the U.S. government and agencies or on exports by the government of Mexico or its agencies, could affect Arcosa’s ability to export products that Arcosa manufactures in Mexico. Failure to comply with such import and export regulations could result in significant fines and penalties.

Current wording

Furthermore, any material changes in the tariffs, quotas, trade remedies, regulations or duties on imports imposed by the U.S. government and agencies, or on exports by the government of Mexico or its agencies, could materially adversely affect Arcosa’s ability to export products that Arcosa manufactures in Mexico. In particular, the tariffs put in place by the current U.S. administration have resulted in, and may continue to result in, increased raw material costs that we may not be able to fully pass on to customers. Additionally, the U.S. Department of Commerce has initiated an investigation into imports of wind tower components; while the final scope and magnitude of any potential duties are pending, it is possible an adverse determination could result in significant new tariffs on such imported products. Changes in U.S. trade policy have also resulted in reciprocal and retaliatory tariffs from U.S. trading partners, which could decrease demand for some of our products and reduce revenue. Failure to comply with such import and export regulations could result in significant fines and penalties.

Previous wording

Arcosa faces competition from manufacturers both in the U.S. and around the world, some of which may engage in competition and trade practices involving the importation of competing products into the U.S. in violation of U.S. or other foreign laws, regulations, or practices. Arcosa’s competitors may import competing products that are subsidized by foreign governments and sold in the U.S. at less than fair value. The results of trade negotiations, trade agreements, and tariffs could also negatively affect Arcosa’s supplies, cost of goods sold, and customers. Arcosa produces certain products at its manufacturing facilities in Mexico. Arcosa's business benefits from free trade agreements, such as the United States-Mexico-Canada Agreement ("USMCA"). Potential USMCA developments, including tariffs, changes or amendments to the agreement, governmental orders, policies, and laws and regulations could adversely affect Arcosa's existing production operations in Mexico and have a material adverse effect on Arcosa's business. Additionally, effective February 4, 2025, the U.S government implemented an additional tariff on goods being imported from China and announced additional tariffs for goods imported into the U.S. from Mexico and Canada beginning in March 2025. Changes in U.S. trade policy have resulted and could again result in reactions from U.S. trading partners, including adopting responsive trade policies making it more difficult or costly for us to export or import our products from Mexico. While we cannot predict what additional changes to trade policy will be made by the current or a future presidential administration or Congress, including whether existing tariff policies will be maintained or modified, what products may be subject to such policies, or whether the entry into new or bilateral or multilateral trade agreements will occur, such changes could increase pricing pressure on Arcosa’s products, reduce Arcosa’s revenues and operating profits, limit Arcosa’s ability to grow, and otherwise adversely affect Arcosa’s financial results.

Current wording

Arcosa faces competition from manufacturers both in the U.S. and around the world, some of which may engage in competition and trade practices involving the importation of competing products into the U.S. in violation of U.S. or other foreign laws, regulations, or practices. Arcosa’s competitors may import competing products that are subsidized by foreign governments and sold in the U.S. at less than fair value. The results of trade negotiations, trade agreements, and tariffs have negatively affected and could continue to negatively affect Arcosa’s supplies, cost of goods sold, and customers. Arcosa produces certain products at its manufacturing facilities in Mexico and relies on cross-border supply chains. Arcosa's business benefits from free trade agreements, such as the United States-Mexico-Canada Agreement ("USMCA"). In July 2026, there will be a first review of the USMCA that could ultimately result in material changes to the agreement's terms. Such potential USMCA developments, including tariffs, changes or amendments to the agreement, governmental orders, policies, and laws and regulations could adversely affect Arcosa's existing production operations in Mexico and have a material adverse effect on Arcosa's business. Additionally, since 2025, the U.S. government has implemented additional tariffs on goods being imported into the U.S. from China, Mexico and Canada. Also, since 2025, changes in U.S. trade policy have resulted in reciprocal tariffs on exports from the U.S. and could again result in reactions from U.S. trading partners, including adopting responsive trade policies, like reciprocal tariffs, making it more difficult or costly for us to export or import our products from or into Mexico and Canada. In February 2026, the U.S. Supreme Court ruled that some of the tariffs imposed under the current U.S. presidential administration are invalid. Following the ruling, a presidential proclamation was issued imposing additional tariffs under U.S. trade laws different from those ruled on by the U.S. Supreme Court, such tariffs can remain in effect for up to 150 days, which may be extended by the U.S. Congress. The current U.S. presidential administration may continue to impose additional tariffs under other U.S. trade laws.

Previous wording

Arcosa and its customers depend on government spending and funding from federal, state and local government agencies, and any disruption in government funding could harm Arcosa's business.

Current wording

Arcosa and its customers depend on government spending, funding and routine operations from federal, state and local government agencies, and any disruption in government funding or other functions could harm Arcosa's business.

Previous wording

Furthermore, certain of Arcosa’s businesses depend on government spending for infrastructure and other similar building activities. As a result, demand for some of Arcosa’s products is influenced by local, state, U.S. federal, and international government fiscal policies, tax incentives and other subsidies, and other general macroeconomic and political factors. Projects in which Arcosa participates may be funded directly by governments or privately-funded, but are otherwise tied to or impacted by government policies, U.S. presidential executive orders and memorandums, and spending measures.

Current wording

Furthermore, certain of Arcosa’s businesses depend on government spending for infrastructure and other similar building activities, including Stavola's business activities in New Jersey. As a result, demand for some of Arcosa’s products is influenced by local, state, U.S. federal, and international government fiscal policies, tax incentives and other subsidies, and other general macroeconomic and political factors. Projects in which Arcosa participates may be funded directly by governments or privately-funded, but are otherwise tied to or impacted by government policies, U.S. presidential executive orders and memorandums, and spending measures. In 2021, the IIJA was signed into law, which provides approximately $350 billion for federal highway programs from 2022 through 2026 by extending many of the programs in the 2015 Fixing America's Surface Transportation Act at higher funding levels, as well as supplemental funding for roads, bridges, and other major projects. We expect Congress to either complete a new multi-year surface transportation reauthorization by the end of 2026 or an extension of the current IIJA funding until such time as they are able to pass a new highway reauthorization.

Previous wording

Government spending is often approved only on a short-term basis and some of the projects in which Arcosa’s products are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of a change in priorities under the current U.S. presidential administration, poor economic conditions, lower than expected revenues, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the profitability of Arcosa’s business.

Current wording

Government spending is often approved only on a short-term basis and some of the projects in which Arcosa’s products are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of a change in priorities under the current U.S. administration, poor economic conditions, lower than expected revenues, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the profitability of Arcosa’s business.

Previous wording

In addition, the impact of a government shutdown could have a material adverse effect on Arcosa's revenues, profits, and cash flows. Arcosa relies on government personnel to conduct certain routine business processes for the inspection and delivery of certain products that, if disrupted, could have an impact on Arcosa's revenues and business. The negative impact on the economy from a public health emergency could also impact our customers in similar ways, causing customers to postpone projects, cancel or delay orders, or file bankruptcy.

Current wording

Furthermore, Arcosa relies on government personnel to conduct certain routine business processes for the inspection and delivery of certain products that, if disrupted, could have an impact on Arcosa's revenues and business. For example, our barge business depends on services provided by the U.S. Coast Guard and a government shutdown may limit the Coast Guard's ability to conduct such services, which could impair our ability to deliver vessels on schedule, increase logistical and compliance costs, and disrupt customer operations.

Previous wording

Arcosa is currently, and may from time to time be, involved in various claims or legal proceedings arising out of Arcosa’s operations. The defense of these lawsuits, claims, investigations, and proceedings may divert management's attention from Arcosa's core business and be expensive to defend. Any claims or legal proceedings brought against Arcosa, with or without merit, could harm Arcosa's reputation in the industry and reduce product sales. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken Arcosa’s liquidity and financial condition. Although Arcosa maintains reserves for its probable and reasonably estimable liability, Arcosa’s reserves may be inadequate to cover its portion of claims or final judgments after taking into consideration rights in indemnity and recourse under insurance policies or to third parties as a result of which there could be a material adverse effect on Arcosa’s business. See Note 15. "Commitments and Contingencies” for additional information on the Company’s current litigation.

Current wording

Arcosa is currently, and may from time to time be, involved in various claims or legal proceedings arising out of Arcosa’s operations. The defense of these lawsuits, claims, investigations, and proceedings may divert management's attention from Arcosa's core business and be expensive to defend. Any claims or legal proceedings brought against Arcosa, with or without merit, could harm Arcosa's reputation in the industry and reduce product sales. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken Arcosa’s liquidity and financial condition. Although Arcosa maintains reserves for its probable and reasonably estimable liability, Arcosa’s reserves may be inadequate to cover its portion of claims or final judgments after taking into consideration rights in indemnity and recourse under insurance policies or to third parties as a result of which there could be a material adverse effect on Arcosa’s business. See Note 14. "Commitments and Contingencies” to the Consolidated Financial Statements for additional information on the Company’s current litigation.

Previous wording

In addition, if Arcosa is not able to successfully integrate its transactions, including the Ameron and Stavola acquisitions, to any material degree, such failure of a successful integration could result in unexpected claims or otherwise have a material adverse effect on Arcosa’s business. Integration risks include the following: (i) the diversion of management’s time and resources to integration matters from other Arcosa matters; (ii) difficulties in achieving business opportunities and growth prospects of the acquired business; (iii) difficulties in managing the expanded operations; (iv) challenges in retaining key personnel; and (v) the disruption of ongoing business, customer, and employee relationships. The failure to successfully integrate such mergers or acquisitions could prevent Arcosa from achieving the anticipated operating and cost synergies or long-term strategic benefits from such transactions.

Current wording

In addition, if Arcosa is not able to successfully integrate its transactions, including the Stavola acquisition, to any material degree, such failure of a successful integration could result in unexpected claims or otherwise have a material adverse effect on Arcosa’s business. Integration risks include the following: (i) the diversion of management’s time and resources to integration matters from other Arcosa matters; (ii) difficulties in achieving business opportunities and growth prospects of the acquired business; (iii) difficulties in managing the expanded operations; (iv) challenges in retaining key personnel; and (v) the disruption of ongoing business, customer, and employee relationships. The failure to successfully integrate such mergers or acquisitions could prevent Arcosa from achieving the anticipated operating and cost synergies or long-term strategic benefits from such transactions.

Previous wording

Although we believe that we are in material compliance with all applicable regulations and operating permits material to our business operations, if we determine that our products or processes are not in compliance with applicable requirements, rules, regulations, specifications, standards or product testing criteria, it might result in additional operating expenses, administrative fines or penalties, criminal sanctions, product recalls, reputational harm, or loss of business that could have a material adverse effect on Arcosa’s business.

Current wording

Although we believe that we are in material compliance with all applicable regulations and operating permits material to our business operations, if it is determined that our products or processes are not in compliance with applicable requirements, rules, regulations, specifications, standards or product testing criteria, it might result in additional operating expenses or otherwise adversely affect our ability to operate, administrative fines or penalties, criminal sanctions, product recalls, reputational harm, or loss of business that could have a material adverse effect on Arcosa’s business.

Previous wording

In addition, amendments to existing statutes and regulations, adoption of new statutes and regulations, modification of existing operating permits, or entering into new lines of business which are covered by regulatory agencies that Arcosa has not previously been subject to could require us to alter our methods of operation and/or discontinue the sale of certain of our products, resulting in substantial costs. For example, the U.S. barge industry relies, in part, on the Jones Act because it prohibits foreign vessels from transporting goods between U.S. ports. Changes to or a repeal of such legislation could have a material adverse impact on Arcosa’s barge business and revenues.

Current wording

In addition, amendments to existing statutes and regulations, adoption of new statutes and regulations, modification of existing operating permits, or entering into new lines of business which are under the jurisdiction of governmental agencies that Arcosa has not previously been subject to could require us to alter our methods of operation and/or discontinue the sale of certain of our products, resulting in substantial costs. For example, the U.S. barge industry relies, in part, on the Jones Act because it prohibits foreign vessels from transporting goods between U.S. ports. Changes to or a repeal of such legislation could have a material adverse impact on Arcosa’s barge business and revenues.

Previous wording

Arcosa is subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to: (i) the release or discharge of regulated materials into the environment at Arcosa’s facilities or with respect to Arcosa’s products while in operation; (ii) the management, use, processing, handling, storage, transport and transport arrangement, and disposal of hazardous and non-hazardous waste, substances, and materials; and (iii) other activities relating to the protection of human health and the environment. Such laws and regulations expose Arcosa to liability for its own acts and potentially the acts of others. These laws and regulations also may impose current liability on Arcosa under circumstances where, at the time of the action taken, such action complied with then applicable laws and regulations. In addition, environmental laws and regulations may require significant expenditures to achieve compliance, and non-compliance could result in a shutdown or work stoppage and civil and criminal fines or penalties.

Current wording

Arcosa is subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to: (i) the release or discharge of regulated materials into the environment at or from Arcosa’s facilities or with respect to Arcosa’s products while in operation; (ii) the management, use, processing, handling, storage, transport and transport arrangement, and disposal of hazardous and non-hazardous waste, substances, and materials; and (iii) other activities relating to the protection of human health and the environment. Such laws and regulations expose Arcosa to liability for its own acts and potentially the acts of others. These laws and regulations also may impose current liability on Arcosa under circumstances where, at the time of the action taken, such action complied with then applicable laws and regulations. In addition, environmental laws and regulations may require significant expenditures to achieve compliance, and non-compliance could result in a shutdown or work stoppage and administrative, civil and/or criminal fines or penalties.

Previous wording

Environmental pre-construction, construction, and operating permits are, or may be, required for Arcosa’s operations under these laws and regulations. These permits are subject to modification, renewal, and/or revocation. Although Arcosa regularly monitors and reviews its operations, procedures, and policies for compliance with

Current wording

Environmental pre-construction, construction, and operating permits are, or may be, required for Arcosa’s operations under these laws and regulations. These permits are subject to modification, renewal, and/or revocation. Although Arcosa regularly monitors and reviews its operations, procedures, and policies for compliance with Arcosa’s environmental permits and related laws and regulations, the risk of environmental liability is inherent in the operation of Arcosa’s businesses.

Previous wording

We use controlled hazardous materials in our business and generate wastes that are regulated as hazardous wastes under U.S. federal, state, and local environmental laws and under equivalent provisions of law in other jurisdictions in which our manufacturing facilities are located. Our use and management of these substances and materials is subject to stringent, and periodically changing, regulation that can impose costly compliance obligations on us and have the potential to adversely affect our manufacturing activities. We are also subject to potential liability for claims alleging property damage and personal and bodily injury or death arising from the use of or exposure to our products, especially in connection with products we manufacture that our customers use to transport or store hazardous, flammable, toxic, or explosive materials.

Current wording

We use and otherwise handle controlled hazardous materials in our business and generate wastes that are regulated as hazardous wastes under U.S. federal, state, and local environmental laws and under equivalent provisions of law in other jurisdictions in which our manufacturing facilities are located. Our use and management of these substances and materials are subject to stringent, and periodically changing, regulation that can impose costly compliance obligations on us and have the potential to adversely affect our manufacturing activities. We are also subject to potential liability for claims alleging property damage and personal and bodily injury or death arising from the use of or exposure to our products, especially in connection with products we manufacture that our customers use to transport or store hazardous, flammable, toxic, or explosive materials.

Previous wording

The risk of accidental contamination or injury from these materials cannot be completely eliminated. If an accident involving these substances occurs, we could be held liable for any damages that result, as well as incur clean-up costs and liabilities, which can be substantial. Additionally, an accident could damage our facilities, resulting in operational delays and increased costs.

Current wording

The risk of accidental contamination or injury from these materials cannot be completely eliminated. If an accident involving these substances occurs, we could be held liable for any damages that result, as well as incur clean-up costs and liabilities, which can be substantial. Additionally, an accident involving these materials could damage our facilities, resulting in operational delays and increased costs.

Previous wording

There can be no assurance that we will not encounter environmental conditions at any of our manufacturing plants or other facilities that may require us to incur significant clean-up or correction costs. Upon encountering an environmental condition or receiving a notice of an environmental condition, we may be required to correct the condition. The presence of an environmental condition requiring corrective action or remediation relating to any of our manufacturing plants or other facilities may require significant expenditures to address.

Current wording

There can be no assurance that we will not encounter environmental conditions at any of our manufacturing plants or other facilities that may require us to incur significant clean-up or correction costs. Upon encountering an environmental condition or receiving a notice of an environmental condition, we may be required to investigate and/or correct or remediate the condition. The presence of an environmental condition requiring corrective action or remediation relating to any of our manufacturing plants or other facilities may require significant expenditures to address.

Previous wording

Legislation and new rules to regulate emission of greenhouse gases (“GHGs”) may require Arcosa to meet new standards that may require substantial reductions in carbon emissions. There is also a potential for climate change legislation and regulation that could adversely impact the cost of certain manufacturing inputs, including the increasing cost of energy and electricity. While Arcosa cannot assess the direct impact of these or other potential regulations, new climate change protocols could affect demand for its products and/or affect the price of materials, input factors, energy costs, and manufactured components.

Current wording

There is a potential that climate change legislation and regulation could adversely impact the cost of certain manufacturing inputs, including the increasing cost of energy and electricity. While Arcosa cannot assess the direct impact of these or other potential regulations, new climate change protocols could affect demand for its products and/or affect the price of materials, input factors, energy costs, and manufactured components.

Previous wording

We also communicate certain initiatives and goals regarding GHG and related matters in our public disclosures. These initiatives and goals may be difficult and expensive to implement or may not advance at a pace sufficient to meet our goals, and we could be criticized for the scope, accuracy, adequacy or completeness of the disclosure. Further, statements about our GHG-related initiatives and goals, and progress towards these goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. If our GHG-related data, processes and reporting are inaccurate or incomplete, or if we fail to achieve progress with respect to these goals or initiatives on a timely basis or at all, our operations and financial performance could be adversely affected.

Current wording

We may communicate certain initiatives and goals regarding GHGs and related matters in our public disclosures. These initiatives and goals may be difficult and expensive to implement or may not advance at a pace sufficient to meet our goals, and we could be criticized for the scope, accuracy, adequacy or completeness of the disclosure. Further, statements about our GHG-related initiatives and goals, and progress towards these goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. If our GHG-related data, processes and reporting are inaccurate or incomplete, or if we fail to achieve progress with respect to these goals or initiatives on a timely basis or at all, our operations and financial performance could be adversely affected.

Previous wording

California has enacted climate disclosure laws requiring certain U.S. companies doing business in California to report certain GHG emissions and make other climate-related financial risk disclosures. In addition, the SEC has proposed climate disclosure requirements. Both the California and the SEC disclosure rules have been legally challenged and are pending final resolution. To the extent these climate disclosures survive and/or substantially similar ones are adopted in the future, we will be required to incur significant time and money to comply with the disclosure requirements and may be required to modify certain of our operations. These compliance costs could adversely impact our future business.

Current wording

California has enacted climate disclosure laws requiring certain U.S. companies doing business in California to report certain GHG emissions and make other climate-related financial risk disclosures. In the past, U.S. federal agencies, like the SEC, have proposed similar climate disclosure requirements. The California rules have been legally challenged and are pending final resolution. To the extent these climate disclosures survive and/or substantially similar ones are adopted in the future, we will be required to incur significant time and money to comply with the disclosure requirements and may be required to modify certain of our operations. These compliance costs could adversely impact our future business.

Previous wording

For example, the IRA provides for certain manufacturing, production, and investment tax credit incentives, including AMP tax credits for companies that domestically manufacture and sell clean energy equipment, like Arcosa Wind Towers. If any currently available tax benefits, tax credits, subsidies, or programs, including the AMP tax credits, are allowed to expire or are otherwise modified or repealed, the demand for Arcosa’s products could decrease and/or the amount of AMP tax credits or other tax benefits for which Arcosa or its contractual counterparties may be eligible may be reduced, thereby creating the potential for a material adverse effect on Arcosa’s business and future financial results.

Current wording

For example, tax legislation enacted in August 2022 provided for certain manufacturing, production, and investment tax credit incentives, including AMP tax credits for companies that domestically manufacture and sell clean energy equipment, like Arcosa Wind Towers. However, tax legislation enacted in July 2025 includes several provisions that roll-back, phase out, repeal, and/or add stricter eligibility requirements for these tax incentives, including provisions that terminate (i) AMP tax credits for wind tower components sold after 2027 and (ii) production tax credits and investment tax credits for wind farm projects that are not placed in service before the end of 2027 (unless such projects begin construction on or before July 4, 2026). Although the pending expiration of these incentives may pull demand forward in the near term, such expiration could in the longer term reduce the demand for Arcosa’s products and/or decrease the amount of AMP tax credits or other tax benefits for which Arcosa or its contractual counterparties may be eligible, thereby creating the potential for a material adverse effect on Arcosa’s business and future financial results.

Previous wording

While we employ several measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event or that any third parties with which we do business will be successful in preventing a cyber event. We have invested and continue to invest in risk management, information security, and data protection measures, including technical, administrative, and organizational safeguards, in order to protect our systems and data. The cost and operational consequences of implementing, maintaining, and enhancing further data or system safeguards could increase significantly to keep pace with increasingly frequent, complex, and sophisticated global cyber threats. Any material breaches of cybersecurity, including the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data, or media reports of perceived security vulnerabilities to our systems, products, and services or those of our third parties could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions, or other statutory penalties, litigation, liability for failure to safeguard our customers' information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us. Any of the foregoing may have a material adverse effect on our business, operating results, and financial condition.

Current wording

While we employ several measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event or that any third parties with which we do business will be successful in preventing a cyber event. We have invested and continue to invest in risk management, information security, and data protection measures, including technical, administrative, and organizational safeguards, in order to protect our systems and data. The cost and operational consequences of implementing, maintaining, and enhancing further data or system safeguards could increase significantly to keep pace with increasingly frequent, complex, and sophisticated global cyber threats, including those enabled or amplified by AI. Any material breaches of cybersecurity, including the accidental loss, inadvertent disclosure or unauthorized access or dissemination of proprietary information or sensitive or confidential data, or media reports of perceived security vulnerabilities to our systems, products, and services or those of our third parties could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions, or other statutory penalties, litigation, liability for failure to safeguard our customers' information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us. Any of the foregoing may have a material adverse effect on our business, operating results, and financial condition.

Previous wording

The laws and regulations governing cybersecurity, data privacy and protection, and the unauthorized disclosure of confidential or protected information pose increasingly complex compliance challenges and potentially elevate costs, and any actual or perceived failure to adequately address privacy and cybersecurity concerns or comply with applicable laws and regulations could result in significant penalties, legal liability, judgments and negative publicity; require us to change our business practices; increase the costs and complexity of compliance; and adversely affect our business. If we are not able to adjust to changing laws, regulations and standards relating to privacy or cybersecurity, our business may be materially harmed. As noted above, we are also subject to the possibility of cyber events, which themselves may result in a violation of these privacy and data security laws.

Current wording

The laws and regulations governing cybersecurity, data privacy and protection, and the unauthorized access or disclosure of confidential or protected information pose increasingly complex compliance challenges and potentially elevate costs, and any actual or perceived failure to adequately address privacy and cybersecurity concerns or comply with applicable laws and regulations could result in significant penalties, legal liability, judgments and negative publicity; require us to change our business practices; increase the costs and complexity of compliance; and adversely affect our business. If we are not able to adjust to changing laws, regulations and standards relating to privacy or cybersecurity, our business may be materially harmed. As noted above, we are also subject to the possibility of cyber events, which themselves may result in a violation of these privacy and data security laws.