Our business, financial condition and results of operations are subject to various risks. Investors should review and consider the risk factors previously disclosed in the 2025 Annual Report on Form 10-K for the year ended January 3, 2026, and in the Quarterly Report on Form 10-Q for the quarter ended April 4, 2026, along with the additional risk factors included below. We may disclose changes to these risk factors or additional risk factors in our future filings with the SEC as the business environment and conditions change. Additional risks and uncertainties not presently known to us or that we currently believe are not material also may adversely impact our business, financial condition, results of operations and cash flows. The global economic impacts of the conflict in the Middle East could adversely affect our business, financial condition or operating results. The ongoing conflict in the Middle East has resulted in significant volatility in the global energy and commodity markets, increased energy and shipping costs, disruptions to international shipping lanes (including the Strait of Hormuz) and heightened risks of supply-chain interruptions, cyber-attacks and terrorism. Certain of our direct or indirect suppliers also have been negatively impacted by these events, resulting in increased costs to us for certain materials and components. The continuation or escalation of hostilities in the Middle East region could adversely affect global economic conditions, lead to other delivery schedule, order activity and/or supply chain disruptions, result in continued elevated transportation and energy costs and other inflationary pressures or otherwise negatively impact our operations. Sustained elevated energy costs, including the cost of jet fuel, could adversely impact demand and/or utilization of our aircraft and rotorcraft products. Furthermore, the potential for retaliatory acts of cyberwarfare against U.S. defense companies in response to the hostilities could result in increased cyber-attacks against us. The impact of any one or more of these or other factors could adversely affect our business, financial condition or operating results. Risks related to the intended separation of the Company's Industrial Segment We have recently announced our intention to separate our Industrial segment from the Company and its core aerospace and defense businesses (the Separation) pursuant to a sale of the Industrial businesses, a tax-free separation of the Industrial businesses into a standalone, publicly traded company or another transaction. The Company has begun to explore several paths to effect the Separation, but at this time there is uncertainty as to the terms, structure and timing of any transaction, whether the closing conditions for a transaction will be satisfied or waived, and whether the Separation will be completed on the Company’s targeted timeline or at all. Additional factors such as conditions in the equity and debt markets and other external conditions or developments, many of which are outside of the Company’s control, could delay the completion of the Separation relative to its targeted timeline, prevent it from occurring at all or, if it does occur, adversely impact the future operating and financial performance, market position and business strategy for the Company and/or the Industrial segment following the Separation. These or other unanticipated developments could also cause the Separation to occur on terms or conditions that are less favorable than anticipated. Furthermore, there is no guarantee that the Separation, if completed, will be successful in meeting its objectives or achieving its intended benefits. We have customer concentration with the U.S. Government; reduction in U.S. Government defense spending or a material reduction or delay in funding of the MV-75 program could adversely affect our results of operations and financial condition. During 2025, we derived approximately 27% of our revenues from sales to a variety of U.S. Government entities. Our revenues from the U.S. Government largely result from contracts awarded to us under various U.S. Government defense-related programs. The MV-75 program at Bell represents a significant and growing portion of our U.S. Government revenues and backlog. Bell has significantly increased and expects to continue to increase its investments in the resources, facilities and personnel applied to the 31 Table of Contents MV-75 program. However, as described in Note 12. Commitments and Contingencies - MV-75 Program - Funding, subsequent to the end of our second quarter, in mid-July 2026, Bell exhausted substantially all currently available fiscal 2026 MV-75 program funds. While the U.S. Government is pursuing an ATR request for $350 million in additional fiscal 2026 funding for the MV-75 program, approval of the request is not guaranteed. The U.S. Government has advised that is not obligated to reimburse Bell for any costs incurred beyond the current obligated funding allotted for the contract and that any performance beyond the allotted funds is at Bell’s own risk. If additional funding is not approved and obligated, we could incur significant unreimbursed costs and recognize a significant unfavorable cumulative catch-up program adjustment as well as experience an adverse cash flow impact. In addition, while the current Future Years Defense Program indicates a funding level for the MV-75 program of $2.3 billion for the Government’s fiscal 2027 year which begins October 1, 2026, considerable uncertainty exists regarding how future budget and program decisions will develop. We cannot predict the impact on existing, follow-on or future programs from changes in the threat environment, defense spending levels, government priorities, political leadership, procurement practices, inflation and other macroeconomic trends, military strategy, or broader societal changes. Significant changes in national and international priorities for defense spending could affect the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition. In particular, a material reduction or delay in funding of the MV-75 program could have a material adverse effect on Bell’s and our cash flows, results of operations and financial condition. Global macroeconomic conditions could negatively impact our business. Global macroeconomic conditions have negatively impacted our business in the past and could in the future negatively impact our business. Negative macroeconomic factors may have an adverse effect on our business, results of operations and financial condition, as well as on our distributors, customers, subcontractors and suppliers, and on activity in many of the industries and markets we serve. We cannot predict changes in worldwide or regional economic or political conditions and government policies as such factors are highly volatile and beyond our control. If current macroeconomic pressures, including from inflation and labor and supply chain challenges, continue or if global macroeconomic conditions deteriorate and remain at depressed levels for extended periods, our business, results of operations and financial condition could be materially adversely affected. In addition, changes in laws or policies governing the terms of foreign trade, including increased trade restrictions, tariffs or taxes on imports from countries where we manufacture or sell our products or from where we import products or raw materials (either directly or through our suppliers) could adversely impact our competitive position, business operations or financial results. In particular, recent changes to global tariff policies have created significant uncertainty with respect to trade policies, treaties and tariffs. Our aircraft products, subassemblies, parts and components manufactured in Canada and Mexico are largely qualified under the rules of the United States-Mexico-Canada Agreement (USMCA) for preferential treatment on tariffs imposed by the U.S. on imports from Canada and Mexico into the United States. The USMCA’s mandatory six-year joint review was held on July 1, 2026, and the United States declined to renew the agreement for an additional 16-year term. Canada and Mexico each expressed support for a 16-year extension. As a result of the United States’ decision not to renew, the agreement now enters a period of annual joint reviews that will continue each year until the parties agree on an extension or the agreement expires on July 1, 2036. USMCA remains in force during this annual review period and our existing tariff preferences, rules of origin qualifications, and investment protections currently remain operative. However, the agreement is now subject to recurring renegotiation risk at each annual review, and any party may withdraw from the agreement upon six months’ written notice. The termination of the agreement, renegotiation of the agreement with terms less favorable to us or the imposition of other U.S. tariff measures imposed under separate legal authorities which override USMCA preferences for covered goods could result in the loss or reduction of preferential tariff treatment which could increase our costs and create compliance and supply-chain disruption risks. These developments could adversely impact us, our distributors, customers, subcontractors or suppliers, which could have a material adverse effect on our financial position, results of operations or cash flows. See Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion of the impact of these tariffs.