things, there are additional logistical requirements associated with international sales, which increase the amount of time between the completion of production and our ability to recognize related revenue. In addition, expansion into foreign markets requires the establishment of distribution networks and may require modification of products to meet local requirements or preferences. Establishment of distribution networks or modification to the design of our products to meet local requirements and preferences may take longer or be more costly than we anticipate and could have a material adverse effect on our ability to achieve international sales growth. In addition, our entry into certain markets that we wish to enter may require us to establish a joint venture or face competition from foreign state-backed competitors. Identifying an appropriate joint venture partner and creating a joint venture could be more time consuming, more costly and more difficult than we anticipate. Local government policy and influence can also impact international competition, such as in China where a state-controlled economy favors local market participants. Our use of artificial intelligence and autonomy technologies may expose us to additional risks and may not deliver the benefits we anticipate. We are developing, integrating and using artificial intelligence (AI) and autonomy in certain products, services and internal operations. These technologies are evolving and, in many cases, rely on third-party tools, data, software or infrastructure. Our ability to realize benefits from their use depends on factors such as data quality, system integration, workforce adoption, computing resources and the ongoing performance and availability of third-party technology providers. AI-enabled systems may not perform as intended under all operating conditions and may generate inaccurate, incomplete or biased outputs. As these technologies are introduced into products, services or operations, failures or perceived failures, whether due to design limitations, data constraints, integration challenges, cybersecurity incidents, operator misuse, inadequate training or other causes, could result in product performance issues, safety incidents, increased costs, reputational harm or reduced customer acceptance. In addition, the legal and regulatory framework governing AI and data use is rapidly evolving and remains uncertain. New or changing laws, regulations or standards could increase compliance costs, limit permissible uses, require changes to product design or governance practices or expose us to litigation or enforcement actions. If we are unable to effectively develop, integrate, govern or manage AI-enabled technologies, or if these technologies fail to deliver benefits we expect, our results of operations, financial condition or competitive position could be adversely affected. Financial Risks We are subject to changes in contract estimates. We account for substantially all long-term contracts in the Transport segment utilizing the cost-to-cost method of percentage-of-completion accounting. This accounting requires judgment relative to assessing risks, estimating revenues and costs and making assumptions regarding the timing of receipt of delivery orders from our government customers. Due to the size and nature of these contracts, the estimate of costs is complex and subject to many variables. We must make assumptions regarding expected increases in material costs, wages and employee benefits, engineering hours, productivity and availability of labor and allocated fixed costs. Changes to production costs, overhead rates, learning curves and/or supplier performance can also impact these estimates. For example, cumulative catch-up adjustments on contracts in the Transport segment negatively impacted operating income by approximately $35 million in 2025. Furthermore, under the revenue recognition accounting rules, we can only include units in our estimates of overall contract profitability after we have received a firm delivery order for those units. Because new orders have the potential to significantly change the overall profitability of cumulative orders received to date, the period in which we receive those orders will impact the estimated life ‑ to ‑ date contract profitability. Changes in underlying assumptions, circumstances or estimates could have a material adverse effect on our net sales, financial condition and/or profitability. We may experience losses in excess of our recorded reserves for doubtful accounts and guarantees of indebtedness of others. As of December 31, 2025, we had consolidated gross receivables of $1.5 billion. In addition, we were subject to obligations to guarantee customer indebtedness to third parties of $559 million, under which we estimate our maximum exposure to be $93 million. We evaluate the collectability of receivables and our guarantees of indebtedness of others based on a combination of factors and establish reserves based on our estimates of potential current and future losses. In circumstances where we believe it is probable that a specific customer will have difficulty meeting its financial obligations, a
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