Based on industry sources and government information, the Company estimateswe estimate that in fiscal 20172020 the size of the North American lighting and building managementtechnology solutions market served by the Companywe serve (also referred to herein as “addressable market”) was approximately $19 billion and similar to the prior year asover $20 billion. We estimate that the addressable market was estimated to be flat to up low-singledeclined in the upper single digits as compared with fiscal 2016.2019. The decline in the market is primarily due to the impact on demand associated with the COVID-19 pandemic. The addressable market includes non-portable luminaires as defined by the National Electrical Manufacturers Association; poles for outdoor lighting; emergency lighting fixtures;fixtures and lighting equipment; daylighting; lighting controls; heating, ventilation, and air conditioning (“HVAC”) controls; and building management controllers,technology controls, software, and systems. This market estimate is based on a combination of external industry data and internal estimates and excludes portable and vehicular lighting fixtures and certain related lighting components, such as non-integrated lighting ballasts and most lamps. A source of demand for the lighting and building management industry is attributed to the renovation and retrofit of less efficient lighting and building management systems. While the precise size of the North American market is not known, the Company estimates the potential size of the installed base of lighting and building management solutions to be well in excess of $500 billion.

The Company operatesWe operate in a highly competitive industry that is affected by volatility from a number of general business and economic factors, such as, but not limited to, gross domestic product growth, employment levels, credit availability, interest rates, building costs, construction-related labor availability, building occupancy rates, imports and trade, energy

Our market is influenced by: the development of new lighting technologies, including solid-state lighting, electronic drivers, embedded lighting controls, form factors, and more effective optical designs and lamps; federal, state, and local requirements for updated energy codes; incentives by federal, state, and local municipal authorities, as well as utility companies, for using more energy-efficient lighting and building managementtechnology solutions; and design strategies and technologies addressing sustainability and facilitating smarter buildings and cities. The Company isintelligent buildings. We are a leading provider of integrated lighting and building managementtechnology solutions based on these technologies and utilizesutilize internally developed, licensed, or acquired intellectual property. Solid-state lighting and digital building managementtechnology systems provide the opportunitycan be converged allowing for lighting and building management systems to be integrated in a manner resulting in thean optimal platform for enabling the IoT that collect and exchange datalocal operating system to increase efficiency as well as provide a host of other economic benefits resulting from data analytics and other features. Thereduce costs while also delivering productivity benefits. We expect that the industry’s addressable market is likely to meaningfully expand due to the benefits and value creation provided by our intelligent networked lighting, building management systems,platform services and the IoT.location-aware and asset tracking applications. New entrants including both well-established as well as new software and technology companies, therefore continue to develop capabilities and solutions that are both complementary as well as competitive to those of traditional industry participants.    

The Company offersWe offer a broad portfolio of indoor and outdoor lighting and building managementtechnology solutions for commercial, institutional, industrial, infrastructure, and residential applications. TheOur lighting and building technology solutions are designed to enhance the occupant experience, improve the quality of the visual environment, and provide seamless operational energy efficiency and cost reductions.

Our portfolio of lighting solutions includes lighting products utilizing fluorescent, light emitting diode (“LED”), organic LED (“OLED”),fluorescent, incandescent, high intensity discharge, halogen, and metal halide and incandescent light sources to illuminate an extensive number of applications as well as standalone and embedded lighting control solutions from simple to sophisticated, wired and wireless. Lighting and controls products and solutions include the following: recessed, surface, and suspended lighting; downlighting; decorative lighting; emergency and exit lighting; track lighting; daylighting; special-use lighting; street and roadway lighting; parking garage lighting; tunnel lighting; underwater lighting; area pedestrian, flood, and decorative site lighting; landscape lighting; occupancy sensors; photocontrols; relay panels; architectural dimming panels; and integrated lighting controls systems. Building management

Our building technology solutions include products and solutions for controlling HVAC, lighting, shades, and access control that deliver end to end optimization of those building systems. The Company's lighting andWe also offer Atrius™, our intelligent building management solutions are designed to enhanceplatform that enhances the occupant experience, improve the quality of the visual environment,improves building system management, and provide seamlessautomates labor intensive tasks while delivering operational energy efficiency and cost reductions, as well as increased digital functionality duereductions. Though a connected and converged building system architecture, our local operating system and building sensory network powers a host of applications, allowing clients to a uniqueupgrade over time and seamlessly deploy new capability to collect vast amountsthrough application installations instead of data that can better enable the IoT for building owners. The solutions portfolio of the Companycostly hardware upgrades.

We also includes modular wiring, LED drivers, sensors, glass, and inverters sold primarilysell products to original equipment manufacturers (“OEMs”).

Customers of the CompanyOur customers include electrical distributors, system integrators, retail home improvement centers, electric utilities, national accounts, system integrators, utility distributors, national accounts, value-added resellers, digital retailers, government entities and municipalities, lighting showrooms, developers, OEMs, and energy service companies. In addition, there are a variety of other professionals who can represent a significant influence in the product and solutions specification process for any given project. These generally include building owners, federal, state, and local governments, contractors, engineers, architects, and lighting designers.

The Company operates 19We operate 18 manufacturing facilities, including eightsix facilities in the United States, six facilities in Mexico, threetwo facilities in Europe, and twofour in Canada. The Company utilizesWe utilize a blend of internal and outsourced manufacturing processes and capabilities to fulfill a variety of customer needs in the most cost-effective manner. Certain critical processes, such as reflector forming and anodizing, high-end glass production, surface mount circuit board production, and assembly are performed (not exclusively) at company-operated facilities, offering the ability to differentiate products through superior capabilities. Other components, such as lamps, LEDs, certain LED light engines,drivers, lamps, sockets, and ballasts are purchased primarily from third-party vendors. The Company’sOur investment in itsour production facilities is focused primarily on improving capabilities, product quality, and manufacturing efficiency as well as environmental, health, and safety compliance. The CompanyWe also utilizesutilize contract manufacturing from U.S., Asian, and European sources for certain products. Of totalThe following table shows the percentage of finished goods manufactured and purchased in fiscal 2017, the Company’s U.S. operations produced approximately 22%, its Mexican operations produced approximately 56%, and its European operations produced approximately 2%, and finished product manufactured2020 by others accounted for approximately 20%.significant geographic region.

We operate six facilities in Mexico. These facilitiesMexico, which are authorized to operate as Maquiladoras by the Ministry of Economy of Mexico. Maquiladora status allows the Companyus to import certain items from the United States into Mexico duty-free, provided that such items, after processing, are exported from Mexico within a stipulated time frame. Maquiladora status, which is renewed periodically, is subject to various restrictions and requirements, including compliance with the terms of the Maquiladora program and other local regulations, which have become stricter in recent years.

Research and development (“R&D”) is defined as the critical investigation aimed at discovery of new knowledge and the conversion of that knowledge into the design of a new product or significant improvement to an existing product. The Company investsWe invest in the development of new products and solutions as well as the enhancement of existing

The Company experiencesWe experience competition based on numerous factors, including features and benefits, price, brand name recognition, product quality, product and system design, energy efficiency, customer relationships, and service capabilities, and price.capabilities. The market for lighting and building managementtechnology solutions and services is competitive and continues to evolve.evolve through acquisition and consolidation activities. Certain global and more diversified electrical manufacturers may provide a broader

product offering utilizing electrical, lighting, and building managementtechnology products as well as pricing benefits from the bundling of various offerings. In addition, there have been a growing number ofare new competitors, fromincluding Asian importers, small startup companies, toand global electronics, technology, and software companies, offering competing solutions, sometimes deploying different technologies.

TheOur operations of the Company are subject to numerous comprehensive laws and regulations relating to the generation, storage, handling, transportation, and disposal of hazardous substances, as well as solid and hazardous wastes, and to the remediation of contaminated sites. In addition, permits and environmental controls are required for certain of the Company’sour operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities. On an ongoing basis, the Company allocateswe allocate resources, including investments in capital and operating costs relating to environmental compliance. Environmental laws and regulations have generally become stricter in recent years, and federal, state, and local governments domestically and internationally are considering new laws and regulations, including those governing raw material composition, carbon dioxide and other air emissions, end-of-life product dispositions, and energy efficiency. The Company isWe are not aware of any pending legislation or proposed regulation related to environmental issues that would have a material adverse effect on the Company.us. The cost of responding to future changes, however, may be substantial.

Products produced by the Company requireOur production requires certain raw materials, including certain grades of steel and aluminum, electrical and electronic components, plastics, and other petroleum-based materials and components. In fiscal 2017, the Company2020, we purchased approximately 109,00070,000 tons of steel and aluminum. The Company estimatesWe estimate that approximately 7% of purchased raw materials are petroleum-based. Additionally, the Company estimateswe estimate that approximately five million gallons of diesel fuel were consumed in fiscal 20172020 through the Company’sour distribution activities. The Company purchasesWe purchase most raw materials and other components on the open market and reliesrely on third parties for providingto provide certain finished goods. While these items are generally available from multiple sources, the cost of products sold may be affected by changes in the market price of raw materials and tariffs on certain materials, particularly imports from Asia, as well as disruptions in availability of raw materials, components, and sourced finished goods.

The Company doesWe do not currently engage in or expect to engage in significant commodity hedging transactions for raw materials, though the Company haswe have and will continue to commit to purchase certain materials for a period of up to 12 months. The Company monitorsWe monitor and investigatesinvestigate alternative suppliers and materials based on numerous attributes including quality, service, and price. The CompanyWe currently sourcessource raw materials and components from a number of suppliers, but the Company’sour ongoing efforts to improve the cost effectiveness of itsour products and services may result in a reduction in the number of itsour suppliers.

The Company producesWe produce and stocksstock quantities of inventory at key distribution centers and warehouses throughout North America and to a much lesser degree, certain European markets. The backlog of orders at any given time is affected by various factors, including seasonality, cancellations, sales promotions, production cycle times, and the timing of receipt and shipment of orders, which are usually shipped within a few weeks of order receipt. Accordingly, a comparison of backlog orders from period to period is not necessarily meaningful and may not be indicative of future shipments.

The Company ownsWe own or hashave licenses to use various domestic and foreign patents, trademarks, and other intellectual property related to itsour products, processes, and businesses. These intellectual property rights are important factors for itsour businesses. The Company reliesWe rely on copyright, patent, trade secret, and trademark laws as well as agreements, restrictive covenants, and internal processes and controls to protect these proprietary rights. Despite these protections, unauthorized parties may attempt to infringe on theour intellectual property of the Company.property. As of August 31, 2017, the Company2020, we had approximately 1,2751,700 active United States and foreign patents. While patents and patent applications in the aggregate are important to theour competitive position, of the Company, no single patent or patent application is individually material to the Company.us.

The Company’sOur business exhibits some seasonality, with net sales being affected by weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers. Because of these seasonal factors the Company haswe historically have experienced and generally expects to experience, itsour highest sales in the last two quarters of each fiscal year.year; however, our seasonality has been meaningfully impacted by the enactment of tariffs and the COVID-19 pandemic.

Our lighting and building managementtechnology solutions are sold to customers in both the new construction as well as renovation and retrofit markets for residential and non-residential applications. The construction market is cyclical in nature and subject to changes in general economic conditions.conditions and fiscal policies. Sales volume has a major impact on the profitability of the Company.our profitability. Economic downturns and the potential decline in key construction markets may have a material adverse effect on theour net sales and operating incomeincome. Additionally, tariffs have caused pull forwards of the Company.customer orders to avoid price increases.

As of August 31, 2017, the Company2020, we employed approximately 12,50011,500 associates, of which approximately 4,0003,800 were employed in the United States, approximately 8,0006,900 in Mexico, and approximately 500800 in other international locations, including Europe, Canada, and the Asia/Pacific region. Union recognition and collective bargaining arrangements are in place or in process, covering approximately 9,5007,700 persons (including approximately 2,0001,600 in the United States). Union recognition and collective bargaining arrangements covering approximately 7,0006,800 persons will expire within the next fiscal year, primarily due to annual negotiations with unionsof union contracts in Mexico. The remaining expiring arrangements will expire after the next fiscal year and relate to approximately 500900 persons employed within the United States. The Company believesWe believe that it haswe have a good relationship with both itsour unionized and non-unionized employees.

Additionally, the Company haswe have adopted a written Code of Ethics and Business Conduct that applies to all of the Company’sour directors, officers, and employees, including itsour principal executive officer and senior financial officers. The Code of Ethics and Business Conduct and the Company’sour Corporate Governance Guidelines are available free of charge through the “Corporate Governance” link on the Company’sour website. Any amendments to, or waivers of, the Code of Ethics and Business Conduct for the Company'sour principal executive officer and senior financial officers will be disclosed on the Company'sour website promptly following the date of such

amendment or waiver. Additionally, the Statement of Responsibilities of Committees of the Board of Directors (the “Board”) and the Statement of Rules and Procedures of Committees of the Board, which contain the charters for the Company’sour Audit Committee, Compensation Committee, and Governance Committee, and the rules and procedures relating thereto, are available free of charge through the “Corporate Governance” link on the Company’sour website. Each of the Code of Ethics and Business Conduct, the Corporate Governance Guidelines, the Statement of Responsibilities of Committees of the Board, and the Statement of Rules and Procedures of Committees of the Board is available in print to any stockholder of the Companyour stockholders that requestsrequest such document by contacting the Company’sour Investor Relations department.

The Company competesWe compete based on suchnumerous factors, asincluding features and benefits, brand name recognition, product quality, product and reputation, quality,system design, energy efficiency, customer relationships, service product features, innovation,capabilities, and price. Asian imports have also increased competition within the lighting market. In addition, the Company operateswe operate in a highly competitive environment that is influenced by a number of general business and economic factors, such as economic vitality, employment levels, credit availability, interest rates, trends in vacancy rates and rent values, energy costs, and commodity costs. Sales of lighting and building managementtechnology solutions depend significantly on the level of activity in new construction and renovation/retrofits. Declines in general economic activity, appropriations, and regulations, including tax and trade policy and other political uncertainties, may negatively impact new construction and renovation projects, which in turn may impact demand for the Company’sour product and service offerings.

The Company utilizesWe utilize a variety of raw materials and components in itsour production process including steel, aluminum, lamps, certain rare earth materials, LEDs, LED drivers, ballasts, wire, electronic components, power supplies, petroleum-based by-products, natural gas, and copper. The CompanyWe also sourcessource certain finished goods externally. Future increases in the costs of these items, including import tariffs, could adversely affect profitability, as there can be no assurance that future price increases will be successfully passed through to customers. The CompanyWe generally sourcessource these goods from a number of suppliers. However, there are a limited number of suppliers for certain components and certain purchased finished goods, which on a limited basis results in sole-source supplier situations. Disruptions in the supply of those items could negatively impact the Company’sour performance. Suppliers for certain of those items are our competitors of the Company that may, for various strategic reasons, choose to cease selling to the Company.us. In addition, the Company'sour ongoing efforts to improve the cost effectiveness of itsour products and services may result in a reduction in the number of itsour suppliers, and in turn, increased risk associated with reliance on a single or limited number of suppliers. Furthermore, volatility in certain commodities, such as oil, impacts all suppliers and, therefore, may cause the Companyus to experience significant price increases from time to time regardless of the number and availability of suppliers. Profitability and volume could be negatively impacted by limitations inherent within the supply chain of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price. Additionally, the Company iswe are dependent on certain service providers for key operational functions. While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant.

Aggressive pricing actions by competitors, including Asian importers and those within the technology and services sectors, may affect the Company’sour ability to achieve desired revenue growth and profitability levels under itsour current pricing strategies. The CompanyWe may also decide to lower prices to match the competition.competition or for other reasons or to exit unprofitable business. Additionally, the Companywe may not be able to increase prices to cover rising costs of components and raw materials.costs. Even if the Companywe were able to increase prices to cover costs, competitive pricing pressures may not allow the Companyus to pass on any more than the cost increases. Alternatively, if component and raw material costs were to decline, the marketplace may not allow the Companyus to hold prices at their current levels.

Continual introductions of new products and solutions, services, and technologies, enhancement of existing products and services, and effective servicing of customers are key to the Company’sour competitive strategy. The success of new product and solution introductions depends on a number of factors, including, but not limited to, timely and

The Company hasWe have strengthened itsour business through strategic acquisitions, alliances, and investments and may continue to do so as opportunities arise in the future. Such investments have been and may be in start-up or development stage entities. The CompanyWe will benefit from such activity only to the extent that itwe can effectively leverage and integrate the assets or capabilities of the acquired businesses and alliances, including, but not limited to, personnel, technology, and operating processes. Moreover, unanticipated events, negative revisions to valuation assumptions and estimates, diversion of resources and management's attention from other business concerns, and difficulties in attaining synergies, among other factors, could adversely affect the Company’sour ability to recover initial and subsequent investments, particularly those related to acquired goodwill and intangible assets or non-controlling interests. In addition, such investment transactions may limit the Company'sour ability to invest in other activities, which could be more profitable or advantageous.

Various uncertainties and risks are associated with the implementation of a number of aspects of the Company’sour global business strategies, including but not limited to, the development, marketing and selling of new products and solutions, new product development, the development, marketing, and selling of lighting, building management,technology, and software-based solutions, and effective integration of acquisitions, and the development of production capacity related to components such as LED drivers.acquisitions. Those uncertainties and risks include, but are not limited to: diversion of management’s attention; difficulty in retaining or attracting employees; negative impact on relationships with distributors and customers; obsolescence of current products and slow new product development; inability to effectively participate in the emerging opportunities of the Internet of Things (“IoT”) utilizing the Company'sour digital lighting and building managementtechnology systems; additional streamlining efforts; inability to produce certain components with quality, performance, and cost attributes equal to or better than provided by other component manufacturers; and unforeseen difficulties in the implementation of the management operating structure. Problems with strategy execution could offset anticipated benefits, disrupt service to customers, and impact product quality as well as adversely affect the Company.our business. With the addition of new products and solutions, the Companywe may encounter new and different competitors that may have more experience with respect to such products and solutions.

The Company expectsWe expect to benefit from its ongoingour programs to streamline operations, including the consolidation of certain manufacturing facilities and the reduction of overhead costs. Such benefits will only be realized to the extent that the Companywe can effectively leverage assets, personnel, and operating processes in the transition of production between manufacturing facilities. Uncertainty is inherent within the facility consolidation process and unforeseen circumstances could offset the anticipated benefits, disrupt service to customers, and impact product quality.

The World Health Organization has declared the Company's OperationsCOVID-19 outbreak a pandemic, and the virus continues to spread in areas where we operate and sell our products and services. The COVID-19 pandemic and similar issues in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments. Several public health organizations have recommended, and some governments have implemented, certain measures to slow and limit the transmission of the virus, including shelter in place, social distancing ordinances, and business shutdowns. There is considerable uncertainty regarding the extent to which the COVID-19 outbreak will continue to spread and the extent and duration of governmental and other measures implemented to try to slow the spread of the virus

The Company competesWe compete in an industry and markets where technology and innovation play major roles in the competitive landscape. The Company isWe are highly engaged in the investigation, development, and implementation of new technologies and services. Securing employee talent, key partnerships, and alliances, as well as employee talent, including having access to technologies, services, and solutions developed by others, andas well as obtaining appropriate patents and the right to utilize patents of other parties all play a significant role in protecting the Company’sour freedom to operate and development activities.operate. Additionally, the continual development of new technologies by existing and new source suppliers — including

In addition, there have been a growing number ofare new competitors, fromincluding Asian importers, small startup companies, toand global electronics, technology, and software companies, whichoffering competing solutions, sometimes deploying different technologies. These competitors may vertically integrate and begin offering total solution packages that directly compete with the Company'sour offerings. Certain global and more diversified electrical manufacturers as well as certain global technology and building solution providers may be able to obtain a competitive advantage over the Companyus by offering broader and more integrated solutions utilizing electrical, lighting, controls, building automation systems, and data analytics, and small startup companies may offer more localized product sales and support services within individual regions.

Relationships with customers are directly impacted by the Company’sour ability to deliver quality products and services. Although no individual customer exceeded 10% of sales during the current fiscal year, the loss of or a substantial decrease in the volume of purchases by certain larger customers could harm the Companyour business in a meaningful manner. The Company hasWe have relationships with channel partners such as electrical distributors, home improvement retailers, independent sales agencies, system integrators, and value-added resellers. While the Company maintainswe maintain positive, and in many cases long-term, relationships with these channel partners, the sudden or unplanned loss of a number of these channel partners or a

substantial decrease in the volume of purchases from a major channel partner or a group of channel partners could adversely affect the Company.our business.

The breakdown of equipment or other events, including, but not limited to, labor disputes, strikes, workplace violence, pandemics, cyber-attacks, civil disruptions, or catastrophic events such as war or natural disasters, leading to production interruptions in the Company’sour or one or more of itsour suppliers’ facilities could adversely affect the Company.us. Approximately 56% of the Company’sour finished products are manufactured in Mexico, a country that periodically experiences heightened civil unrest or may experience trade disputes with the U.S., both of which could cause a disruption of the supply of products to or from these facilities. Further, because many of the Company’sour customers are to varying degrees dependent on planned deliveries from the Company’sour facilities, those customers that have to reschedule their own production or delay opening a facility due to the Company’sour missed deliveries as a result of these disruptions could pursue financial claims against the Company. The Companyus. We may incur costs to correct any of these problems in addition to facing claims from customers. Further, the Company’sour reputation among actual and potential customers may be harmed and result in a loss of business. While the Company haswe have developed business continuity plans, including alternative capacity, to support responses to such events or disruptions and maintains insurance policies covering, among other things, physical damage and business interruptions, these policies may not cover all losses. The CompanyWe could incur uninsured losses and liabilities arising from such events, including damage to itsour reputation, loss of customers, and substantial losses in operational capacity.

The Company isWe are highly dependent on various software and automated systems to record and process operational and financial transactions. The CompanyWe could experience a failure of one or more of these software and automated systems or could fail to complete all necessary data reconciliation or other conversion controls when implementing a new software system. The CompanyWe could also experience a compromise of itsour security due to many reasons, including technical system flaws, clerical, data input or record-keeping errors, or tampering or manipulation of itsour systems by employees or unauthorized third parties.parties, including viruses, malware, or phishing. Information security risks also exist with respect to the use of portable electronic devices, such as laptops and smartphones, which are particularly vulnerable to loss and theft. The CompanyWe may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond itsour control (for example, natural disasters, acts of terrorism, cyber attacks, epidemics, computer viruses, and electrical/telecommunications outages). All of these risks are also applicable where the Company relieswe rely on outside vendors to provide services, which may operate in a cloud environment. The Company isWe are dependent on the third-party vendors to operate secure and reliable systems which may include data transfers over the internet.

The CompanyWe also maintains informationprovide and maintain technology built on our local operating system to supportenable lighting controls systems in certain of its customer offerings, which are integral to the functionality of those integratedand building technology systems. In addition to the risks noted above, there are other risks associated with these customer offerings. CustomersFor example, a customer may be installing softwaredepend on their networksintegral information from, or functionality of, our technology to support that customer’s other systems, such that a failure of our technology could impact those systems, including by loss or destruction of data. Likewise, a customer’s failure to properly configure, update, or upgrade its own network and

The Company and certainCertain of itsour third-party vendors and we may receive and store personal information in connection with human resources operations, customer offerings, and other aspects of the business. A material network breach in the security of these systems could include the theft of intellectual property, trade secrets, the unauthorized release, gathering, monitoring, misuse, loss, change, or employeedestruction of our or our clients' confidential, proprietary and customer information.other information (including personal identifying information of individuals), or otherwise disrupt our or our clients' or other third parties' business operations. To the extent that any disruption or security breach results in a loss or damage to the Company'sour data, or an inappropriate disclosure of confidential or customer or employee information, it could cause significant damage to the Company'sour reputation, affect relationships with the Company'sour customers, employees, and employees,other counterparties, lead to claims against us, which may result in the Company,payment of fines, penalties, and costs, and ultimately harm the Company'sour business. In addition, the Companywe may be required to incur significant costs, or regulatory fines, penalties, or intervention, to protect against damage caused by these disruptions or security breaches in the future.

The Company isWe are also subject to an increasing number of data privacy and security laws and regulations that prohibitimpose requirements on us and our technology prior to certain transfersuse or transfer, storing, use, processing, disclosure, and protection of data including but not limitedand prior to transfers within and outside the Company fromsale or use of certain jurisdictions to others.technologies. Failure to comply with such laws and regulations could result in the imposition of fines, penalties and other costs. The legal and regulatory data privacy framework is evolving and uncertain. For example, the European Court of Justice’s decision in October 2015 to invalidate the Safe Harbor data privacy

program between the United States and the European Union, the European Union’s implementation of the General Data Protection Regulation in 2018, the European Union’s pending ePrivacy Regulation, and California’s implementation of its Consumer Privacy Act of 2018 and Connected Device Privacy Act of 2018 (f.k.a. SB-327) all could disrupt the Company'sour ability to use or transfer data from Europe to the United Statesor sell products and solutions because such activities may not be in compliance with applicable law.law in certain jurisdictions.

Operating systemSystem failures, ineffective system implementation or disruptions, failure to comply with data privacy and security laws or regulations, or the compromise of security with respect to internal or external operating systems or portable electronic devices could damage our systems or infrastructure, subject the Companyus to liability claims, or regulatory fines, penalties, or intervention, harm the Company’sour reputation, interrupt the Company’sour operations, disrupt customer operations, and adversely affect the Company’sour internal control over financial reporting, business, financial condition, results of operations, or cash flows.

The CompanyWe employed approximately 12,50011,500 people as of August 31, 2017,2020, approximately 8,5007,700 of whom are employed in international locations. As such, the Company haswe have significant exposure to changes in domestic and foreign laws governing relationships with employees, including wage and hour laws and regulations, fair labor standards, minimum wage requirements, overtime pay, unemployment tax rates, workers' compensation rates, citizenship requirements, and payroll taxes, which likely would have a direct impact on the Company'sour operating costs. Union recognition and collective bargaining agreements are in place or in process covering approximately 76%67% of the Company'sour workforce. Collective bargaining agreements representing approximately 59% of our workforce will expire within one year, primarily due to annual negotiations with unions in Mexico. Collective bargaining agreements representing approximately 56% of the Company's workforce will expire within one year. While the Company believeswe believe that it haswe have good relationships with both itsour unionized and non-unionized employees, the Companywe may become vulnerable to a strike, work stoppage, or other labor action by these employees.

The Company reliesWe rely upon the knowledge and experience of employees involved in functions throughout the organization that require technical expertise and knowledge of the industry. An inability to attract and retain such employees could adversely impact the Company’sour ability to execute key operational functions.

Risks inherent in the sale of solutions and services include assuming greater responsibility for successfully delivering projects that meet a particular customer specification, includingincluding: defining and controlling contract scope and timing, efficiently executing projects, and managing the performance and quality of the Company’s subcontractors and suppliers. As the Company expands itswe expand our service offerings, reliance on the technical infrastructure to provide services to customers will increase. If the Company failswe fail to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in implementation of services. If the Company iswe are unable to manage and mitigate these risks, the Companywe could incur liabilities and other losses.

The Company utilizesWe utilize strategic partners and third partythird-party relationships in order to operate and grow itsour business. For instance, the Company utilizeswe utilize third parties to contract manufacture certain products, subcontract installation and commissioning, as well as perform certain selling, distribution, and administrative functions. The CompanyWe cannot control the actions or performance, including product quality, of these third parties and therefore, cannot be certain that the Companywe or itsour end-users will be satisfied. Any future actions of or any failure to act by any third party on which the Company’sour business relies could cause the Companyus to incur losses or interruptions in itsour operations.

The Company hasWe have substantial activities outside of the United States, including sourcing of products, materials, components, and purchasedcontract manufactured finished goods. The Company’sgoods, as well as manufacturing and distribution activities. Our operations, as well as those of key vendors, are therefore subject to regulatory, economic, political, military, and other events in countries where these operations are located, particularly Mexico.located. In addition to the risks that are common to both the Company’sour domestic and international operations, the Company faceswe face risks specifically related to itsour foreign operations and sourcing activities, including but not limited to: foreign currency fluctuations; unstable political, social, regulatory, economic, financial, and market conditions; laws that prohibit shipments to certain countries or restricted parties and that prohibit improper payments to government officials such as the Foreign Corrupt Practices Act and the U.K. Bribery Act; potential for privatization and other confiscatory actions; trade restrictions and disruption; criminal activities; unforeseen increases in tariffs and taxes; corruption; and other changes in regulation in international jurisdictions that could result in substantial additional legal or compliance obligations for us.

We source certain components and approximately 14% of our finished goods from Asia, a significant portion of which are subject to import tariffs. These tariffs could increase in future periods resulting in higher costs and/or lower demand. We are seeking to mitigate the Company. The Company operatesimpact of Chinese tariffs on our profitability, including a variety of activities such as engaging alternative suppliers that produce products and components whose origin is in countries other than China, insourcing the production of certain products, and raising selling prices. We could be adversely affected to the extent we are unable to mitigate the impacts of the tariffs.

We operate six manufacturing facilities in Mexico, which are authorized to operate as Maquiladoras by the Ministry of Economy of Mexico. Maquiladora status allows the Companyus to import certain items from the United States into Mexico duty-free, provided that such items, after processing, are exported from Mexico within a stipulated time frame. Maquiladora status, which is renewed periodically, is subject to various restrictions and requirements, including compliance with the terms of the Maquiladora program and other local regulations, which have become stricter in recent years.

The Company isWe are also subject to certain other laws and regulations affecting itsour international operations, including laws and regulations such as the North AmericanUnited States, Mexico, Canada Free Trade Agreement (“USMCA”) which, among other things, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. RepealA majority of our sales are subject to USMCA. In addition, the US government has initiated or alterationis considering imposing tariffs on certain foreign goods, including steel and aluminum. Related to this action, certain foreign governments, including China, have instituted or are considering imposing tariffs on certain U.S. goods. We source certain components and approximately 14% of these lawsour finished goods from Asia, a significant portion of which are subject to Chinese tariffs. It remains unclear what the U.S. Administration or foreign governments will or will not do with respect to tariffs, the recently enacted USMCA, or other international trade agreements and regulations couldpolicies. A trade war or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, costs, customers, suppliers, and/or the Company'sUS economy or certain sectors thereof and, thus, to adversely impact our business.

The evolution of the Company’sour products, complexity of itsour supply chain, and reliance on third-party vendors such as customs brokers and freight vendors, which may not have effective processes and controls to enable the Companyus to fully and accurately comply with such requirements, could subject the Companyus to liabilities for past, present, or future periods. Such liabilities could adversely impact the Company’s business, financial condition, results of operations, and cash flows.our business.

In June 2016, the United Kingdom (U.K.(“U.K.”) held a referendum in which voters approved an exit from the European Union (“E.U.”) commonly referred to as “Brexit.” AsThe U.K. subsequently withdrew from the European Union on January 31, 2020, subject to a result of the referendum,transition period that is set to end on December 31, 2020. Although it the British government has begun negotiatingis unknown what the terms of the U.K.’s future's relationship with the E.U. Although it is unknown what those terms will be, it is possible that there will be greater restrictions on imports and exports between the U.K. and E.U. countries and increased regulatory complexities. These changes could cause disruptions to and create uncertainty surrounding the Company'sour business and the business of existing and future customers and suppliers as well as have an impact on the Company'sour employees based in Europe, which could adversely impact itsour business. The actual effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently.

The Company continuesWe continue to monitor conditions affecting itsour international locations, including potential changes in income from a strengthening or weakening in foreign exchange rates in relation to the U.S. dollar. Some of these risks, including but not limited to foreign exchange risk,rates, violations of laws, and higher costs associated with changes in regulation, could adversely impact the Company’sour business.

The laws and regulations impacting the Companyus impose increasingly complex, stringent and costly compliance activities, including but not limited to environmental, health, and safety protection standards and permitting, labeling and other requirements regarding, among other things, electronic and wireless communications, air emissions, wastewater discharges, the use, handling, and disposal of hazardous or toxic materials, the remediation of environmental contamination, and working conditions for the Company’sand compensation of our employees. Some environmental laws, such as Superfund, the Clean Water Act, and comparable laws in U.S. states and other jurisdictions world-wide, impose joint and several liability for the cost of environmental remediation, natural resource damages, third partythird-party claims, and other expenses, without regard to the fault or the legality of the original conduct, on those persons who contributed to the release of a hazardous substance into the environment. The CompanyWe may also be affected by future industry standards, laws or regulations, including those

imposed in response to energy, climate change, product functionality, geopolitical, corporate social responsibility, or similar concerns. These standards, laws, or regulations may impact our costs of operation, the sourcing of raw materials, and the manufacture and distribution of the Company’sour products and place restrictions and other requirements or impediments on the products and solutions the Companywe can sell in certain geographical locations.locations or on the willingness of certain investors to own our shares.

The Company isWe are subject to and in the future may be subject to various claims, including legal claims arising in the normal course of business. Such claims may include without limitation employment claims, product recall, personal injury, network security, data privacy, or property damage claims resulting from the use of the Company'sour products, services, or solutions, as well as exposure to hazardous materials, contract disputes, or intellectual property disputes. The Company isWe are insured up to specified limits for certain types of losses with a self-insurance retention per occurrence, including product or professional liability, and cyber liability, including network security and data privacy claims, and isare fully self-insured for certain other types of losses, including environmental, product recall, warranties, commercial disputes, and patent infringement. The Company establishes reservesWe establish accruals for legal claims when the costs associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the level of insurance coverage held by the Companywe hold and/or the amounts reservedaccrued for such claims. In the event of unexpected future developments, it is possible that the ultimate resolutions of such matters could be unfavorable. The Company’sOur insurance coverage is negotiated on an annual basis, and insurance policies in the future may have coverage exclusions that could cause claim-related costs to rise.

The CompanyWe may need to recall products if they are improperly designed, manufactured, packaged, or labeled, and the Company doeswe do not maintain insurance for such recall events. Many of the Company'sour products and solutions have become more complex in recent years and include more sophisticated and sensitive electronic components. The Company hasA problem or issue relating to any individual component could have the effect of creating a compounded problem for an integrated solution, which could result in significant costs and losses. We have increasingly manufactured certain of those components and products in itsour own facilities. The Company hasWe have previously initiated product recalls as a result of potentially faulty components, assembly, installation, design, and packaging of itsour products. Widespread product recalls could result in significant losses due to the costs of a recall, the destruction of product inventory, penalties, and lost sales due to the unavailability of a product for a period of time. In addition, products we developed by the Company that incorporate new technologies, such as LED technology, generally provide for more extensive warranty protection which may result in higher costs if warranty claims on these products are higher than historical amounts. The CompanyWe may also be liable if the use of any of itsour products causescause harm, whether from fire, shock, harmful materials or components, alleged adverse health impacts from exposure to light emitted by our products, or any other personal injury or property damage, and we could suffer losses from a significant product liability judgment against the Companyus in excess of itsour insurance limits. The CompanyWe may not be able to obtain indemnity or reimbursement from itsour suppliers or other third parties for the warranty costs or liabilities associated with itsour products. A significant product recall, warranty claim, or product liability case could also result in adverse publicity, damage to the Company’sour reputation, and a loss of consumer confidence in itsour products.

The Company ownsWe own certain patents, trademarks, copyrights, trade secrets, and other intellectual property. In addition, the Company continueswe continue to file patent applications, when appropriate. The CompanyWe cannot be certain that others have not and will not infringe on itsour intellectual property rights; however, the Company seekswe seek to establish and protect those rights, which could result in significant legal expenses and adversely affect the Company'sour financial condition and results of operations.

Over the last several years, the Companywe and others in the industry have received an increased number of allegations of patent infringement from competitors and otherfrom non-practicing entity patent holders, often coupled with offers to license such patents for use by the Company.our use. Such offers typically relate to various technologies including electronics, power systems, controls, and software, as well as the use of visible light to communicate data, the use of certain wireless networking methods, and the design of specific products. The Company believesWe believe that it doeswe do not need or will be able to invalidate or access such patents through licensing, cross-licensing, or other mutually beneficial arrangements, although to the extent the Company iswe are required but unable to enter into such arrangements on acceptable economic terms, it could adversely impact the Company.us.

The market price of the Company’sour common shares could fluctuate significantly for many reasons, including reasons unrelated to the Company’sour specific performance, such as reports by industry analysts, investor perceptions, or negative announcements by customers, competitors, or suppliers regarding their own performance, as well as general global economic, industry, and political conditions. SInceSince management does not provide guidance, the Company'sour performance could be different than analyst expectations causing a decline in the Company'sour stock price. To the extent that other large companies within the Company’sour industry experience declines in share price, the Company’sour share price may decline as well. In addition, when the market price of a company’s shares drops significantly, shareholders could institute securities class action lawsuits against the Company. Such a lawsuitus or otherwise engage in activism, which could cause the Companyus to incur substantial costs and could divert the time and attention of the Company’sour management and other resources.

Significant changes in actual investment returns on defined benefit plan assets, discount rates, and other factors could adversely affect the Company'sour results of operations and the amount of contributions the Company iswe are required to make to the defined benefit plans in future periods. As the Company'sour defined benefit plan assets and liabilities are marked-to-market on an annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year. In accordance with United States generally accepted accounting principles, the income or expense for the plans is calculated using actuarial valuations. These valuations reflect assumptions about financial markets and interest rates, which may change based on economic conditions. Funding requirements for the defined benefit plans are dependent upon, among other things, interest rates, underlying asset returns, and the impact of legislative or regulatory changes related to defined benefit funding obligations. Unfavorable changes in these factors could adversely affect the Company.our results.

TheOur general corporate offices of the Company are located in Atlanta, Georgia. Because of the diverse nature of operations and the large number of individual locations, it is neither practical nor meaningful to describe each of theour operating facilities owned or leased by the Company.leased. The following listing summarizes the significant facility categories as of August 31, 2017:2020: