Risk Factors Update Summary

• A reduction in overall U.S. defense spending could adversely affect business. This reduction could impact sales, with 26% of total consolidated net sales in 2023 from the largest program, the F-35, representing 26% of total consolidated net sales in 2023.
• Events outside our control, such as market volatility, can impact investments. Goodwill now 21%.
• The F-35 program represented 27% of total consolidated net sales in 2022, decreasing to 26% in 2023. A reduction in funding or termination of significant programs by the U.S. Government could adversely affect financial performance.
• Changes in assumptions may affect financials; different assumptions could lead to varied results.
• Increased competition from startups and non-traditional defense contractors may impact the company's cost structure and competitiveness. This competition could lead to lower margins and affect future growth opportunities.
• Purchase price allocation now includes several factors, representing 21% of total assets.
• Geopolitical tensions, such as Russia's invasion of Ukraine, have elevated global security concerns. These tensions could indirectly disrupt the global supply chain, impacting access to resources and increasing pressures on certain materials.
• Cybersecurity threats and breaches in the supply chain pose significant risks. A breach in the multi-tiered supply chain could compromise data and adversely affect customer deliverables, emphasizing the need for robust cybersecurity measures.
• Investments in early-stage companies may limit the company's ability to exit investments or realize returns. These illiquid investments, in various forms, may lack visibility and influence over strategic decisions, potentially affecting investment returns.
• Changes in U.S. Government procurement policies, including fixed-price contracts and incentive-based fee arrangements, could impact profit rates and business competitiveness. These policy shifts may affect profitability and the ability to win new contracts.