Risk factors

New risks highlight competition for drilling locations, capital, equipment and personnel, and the need to replace produced reserves to sustain production.

Newly identifies AI deployment as a business risk, including flawed or biased algorithms, employee training gaps, competitor advances and added costs.

2025 capital spending was $544 million, down from about $1 billion in 2024; 2026 spending is projected at $350 million to $400 million.

Tariffs cost $11 million in 2025; the Company estimates $20 million–$30 million in 2026 if current tariffs remain in place.

Associate risk now expressly includes fraud, unauthorized or illegal acts, policy or regulatory noncompliance, and substantial liability.

Commercial real estate fell to 45.7% of loans from 55.4%, but the company now highlights outsized impact from deterioration in a few large credits.

AI use is newly identified as a source of compliance, privacy, cybersecurity and intellectual-property risks.

The Portland Mega Plant opened in late 2025; Shoals is still ramping up and relocating operations, with cost, quality and supply risks.

Clinical-evidence risk now covers four implant uses, including fractures and pelvic fixation during multilevel spine fusion.

79 expands technology disruption risk to name artificial intelligence and potential legal, regulatory and compliance exposure.

Tariffs are newly identified alongside inflation as potential drivers of loss costs, trade disruption, and market volatility.

New AI use brings evolving regulatory, privacy, bias, accuracy, intellectual-property and cybersecurity exposure.