Company: HEI-A
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000046619-25-000082
Chunk: 45

Company: HEICO CORP
Filing Date: 2025-12-22
Form: 10-K
Item: Item 1A
Chunk 45
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 partnerships;

•Changes in the mix of earnings in jurisdictions with differing statutory tax rates;

•Adjustments to estimated taxes upon finalization of various tax returns;

•Resolution of issues arising from tax audits with various tax authorities;

•The reversal of any previously recognized tax-exempt unrealized gains in the cash surrender values of life insurance policies related to the HEICO Corporation Leadership Compensation Plan, a nonqualified deferred compensation plan; and

•The Organization for Economic Co-operation and Development’s (“OECD”) global minimum tax framework (“Pillar Two”), which establishes a 15% minimum effective tax rate for large multinational enterprises, became effective for our operations in fiscal 2025.  The adoption of Pillar Two did not have a significant impact on our fiscal 2025 consolidated financial statements.  We will continue to monitor the potential impact of future legislation and guidance and as more jurisdictions in which we conduct business implement Pillar Two legislation. 

Any significant increase in our future effective tax rates could have a material adverse effect on net income for future periods.

We may incur product liability claims that are not fully insured and such insurance may not be available at commercially reasonable rates.

    Our jet engine and aircraft component replacement parts and repair and overhaul services expose our business to potential liabilities for personal injury or death as a result of the failure of an aircraft component that we have designed, manufactured or serviced.  While we maintain liability insurance to protect us from future product liability claims, an uninsured or partially insured claim, or a claim for which third-party indemnification is not available, could have a material adverse effect on our business, financial condition and results of operations.  Additionally, our customers typically require us to maintain substantial insurance coverage at commercially reasonable rates and our inability to obtain insurance coverage at commercially reasonable rates could have a material adverse effect on our business.

We may incur environmental liabilities and these liabilities may not be covered by insurance.

    Our operations and facilities are subject to a number of federal, state and local environmental laws and regulations, which govern, among other things, the discharge of hazardous materials into the air and water as well as the handling, storage and disposal of hazardous materials.  We monitor evolving environmental and climate-related regulations for potential impact on our business or results of operations.  Pursuant to various environmental laws, a current or previous owner or operator of real property may be liable for the costs of 

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removal or remediation of hazardous materials.  Environmental laws typically impose liability whether or not the owner or operator knew of, or was responsible for