What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-11-25 compared with 2024-11-26 · 68 added, 84 removed, 246 unchanged (38% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (all tabular amounts in thousands except per share amounts)

The following discussion includes results of operations and financial condition for the fiscal year ended November 2, 2024 (fiscal 2024) and the fiscal year ended October 28, 2023 (fiscal 2023) and year-over-year comparisons between fiscal 2024 and fiscal 2023.

The following discussion includes results of operations and financial condition for the fiscal year ended November 1, 2025 (fiscal 2025) and the fiscal year ended November 2, 2024 (fiscal 2024) and year-over-year comparisons between fiscal 2025 and fiscal 2024.

For discussion on results of operations and financial condition for fiscal 2024 and the fiscal year ended October 28, 2023 (fiscal 2023) and year-over-year comparisons between fiscal 2024 and fiscal 2023, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2024 filed with the Securities and Exchange Commission on November 26, 2024.

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Fiscal 2025 was a 52-week fiscal period, while fiscal 2024 was a 53-week fiscal period.

The additional week in fiscal 2024 is included in the first quarter ended February 3, 2024.

Therefore, fiscal 2024 includes an additional week of operations as compared to fiscal 2023.

The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024.

Therefore, fiscal 2025 includes one less week of operations as compared to fiscal 2024.

Results of Operations

Fiscal Year 2024 over 2023

$ Change % Change

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Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

Revenue (1) Y/Y% Revenue % of

Revenue (1) Y/Y%

Industrial $ 4,929,409 45 % 15 % $ 4,290,324 46 %

Automotive 3,277,865 30 % 16 % 2,837,522 30 %

Communications 1,080,496 11 % (33) % 1,606,426 13 %

Consumer 1,434,568 13 % 19 % 1,207,880 13 %

Communications 1,377,865 13 % 26 % 1,091,431 12 %

Total Revenue $ 11,019,707 100 % 17 % $ 9,427,157 100 %

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(1) The su m of the individual percentages may not equal the total due to rounding.

Revenue decreased 23% in fiscal 2024 as compared to fiscal 2023 primarily as a result of weaker macroeconomic trends.

This was pronounced in our Industrial end market as customers decreased their inventory balances and in the Communications end market primarily due to the timing of infrastructure deployment cycles.

The Automotive and Consumer end markets declined to a lesser extent as demand weakened driven by reduced consumer spending.

Revenue increased 17% in fiscal 2025 as compared to fiscal 2024 as a result of broad-based increase in demand for our products.

In addition to increased demand, the increase in the Industrial end market was primarily due to customer inventory balances normalizing and growth in the test equipment and aerospace and defense sub-markets.

In the Automotive end market, the increase was primarily driven by increases from connectivity solutions.

The increase in the Consumer end market was primarily related to portable consumer products and the increase in the Communications end market was primarily driven by growth in the wireline sub-market from data center infrastructure expansion in support of AI applications.

These increases were partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2025.

Revenue by Sales Channel

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Other customers include the U.S.

government, government prime contractors and certain commercial customers for which revenue is recorded over time.

government, government prime contractors and certain commercial

customers for which revenue is recorded over time.

Revenue (1) Revenue % of

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As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented but can fluctuate from time to time based on end market revenue trends.

As a percentage of total revenue, the decrease in the distributor channel is primarily due to the decrease in revenue in our Industrial end market.

As a percentage of total revenue, the decrease in the distributor channel is primarily due to the decrease in the percentage of revenue from our Industrial end market.

Revenue Trends by Geographic Region

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This may differ from the geographic location of the end customers particularly in cases where a third-party contract manufacturer purchases the Company’s products through distributors.

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change (1)

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(1) The sum of the individual percentages may not equal the total due to rounding.

In all periods presented, the predominant regions comprising “Rest of North and South America” are Canada and Mexico;

the predominant regions comprising “Europe” are Germany, Sweden, Israel and the Netherlands;

and the predominant regions comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.

Total revenue decreased in fiscal 2024 as compared to fiscal 2023 in all regions due to weaker macroeconomic conditions as discussed above under the heading Revenue Trends by End Market.

Fiscal Year 2024 over 2023

In all periods presented, the predominant regions comprising “Rest of North and South America” are Mexico and Canada;

the predominant regions comprising “Europe” are Germany, the Netherlands, France and Israel;

and the predominant regions comprising “Rest of Asia” are Taiwan, South Korea, Malaysia and Singapore.

Total revenue increased in fiscal 2025 as compared to fiscal 2024 in most regions due to broad-based demand increases as discussed above under the heading Revenue Trends by End Market.

2025 2024 $ Change % Change

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Gross margin % 61.5 % 57.1 %

Gross margin percentage in fiscal 2024 decreased by 690 basis points compared to fiscal 2023, primarily due to lower utilization of our factories due to decreased customer demand and unfavorable product mix.

Gross margin percentage in fiscal 2025 increased by 440 basis points compared to fiscal 2024, primarily due to higher utilization of our factories due to increased customer demand as well as a decrease in amortization expense related to acquired intangible assets.

Research and Development (R&D)

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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R&D expenses as a % of revenue 16 % 16 %

R&D expenses decreased in fiscal 2024 as compared to fiscal 2023 primarily as a result of lower R&D employee related variable compensation expenses, partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2023.

R&D expenses increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of higher R&D employee related variable compensation expenses and higher salary and benefit expenses, partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2025.

R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the success of new product development efforts, which we view as critical to our future growth.

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Selling, Marketing, General and Administrative (SMG&A)

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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SMG&A expenses as a % of revenue 11 % 11 %

SMG&A expenses decreased in fiscal 2024 as compared to fiscal 2023, primarily as a result of lower variable compensation expenses, SMG&A employee related salary and benefit expenses and discretionary spending.

The decrease was partially offset by an additional week of operations in fiscal 2024 as compared to fiscal 2023.

SMG&A expenses increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of higher SMG&A employee related variable compensation expenses and salary and benefit expenses, partially offset by an additional week of operations in fiscal 2024 as compared to fiscal 2025.

Amortization of Intangibles

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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Amortization expenses as a % of revenue 7 % 8 %

Amortization expenses decreased in fiscal 2024 as compared to fiscal 2023, primarily as a result of a portion of our acquired intangible assets becoming fully amortized during fiscal 2023.

Amortization expenses decreased in fiscal 2025 as compared to fiscal 2024, primarily as a result of a portion of our acquired intangible assets becoming fully amortized.

Special Charges, Net

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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Special charges, net as a % of revenue 1 % — %

Special charges, net decreased in fiscal 2024 as compared to fiscal 2023, primarily due to decreased charges related to our Q4 2023 Plan.

Special charges, net increased in fiscal 2025 as compared to fiscal 2024, primarily due to increased charges related to our Global Repositioning Actions.

See Note 5, Special Charges, Net , of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for more information.

Operating Income

Fiscal Year 2024 over 2023

2024 2023 $ Change % Change

Operating income $ 2,032,798 $ 3,823,112 $ (1,790,314) (47) %

Operating income as a % of revenue 21.6 % 31.1 %

The decrease in operating income in fiscal 2024 as compared to fiscal 2023 was primarily the result of a decrease in revenue which contributed to a decrease in gross margin of $2,495.9 million, partially offset by a $204.9 million decrease in SMG&A expenses, a $204.8 million decrease in amortization expenses, a $172.3 million decrease in R&D expenses and a $123.5 million decrease in special charges, net, as more fully described above.

Nonoperating Expense (Income)

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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$ 220,384 $ 255,458 $ (35,074) (14) %

The year-over-year increase in nonoperating expense in fiscal 2024 as compared to fiscal 2023 was primarily the result of higher interest expense related to our debt obligations and lower net gains from other investments, partially offset by higher interest income.

The year-over-year decrease in nonoperating expense in fiscal 2025 as compared to fiscal 2024 was primarily the result of higher interest income from higher cash, cash equivalents and short-term investments balances during fiscal 2025.

Provision for Income Taxes

Fiscal Year 2024 over 2023

2025 2024 $ Change % Change

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For fiscal 2025 and fiscal 2024 our pretax income was primarily generated in Ireland at a tax rate of 12.5%.

Our effective tax rate for fiscal 2023 was also impacted by a discrete income tax benefit recorded of $81.7 million resulting from the approval granted by the Joint Committee on Taxation of our federal corporate income tax relief claim which reduced the amount of transition tax owed under the Tax Cuts and Jobs Act of 2017.

See Note 12, Income Taxes , of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further discussion.

Fiscal Year 2024 over 2023

Our effective tax rate for fiscal 2025 was impacted by a net deferred tax expense of $153.8 million related to the remeasurement of our Global Intangible Low-Taxed Income related deferred tax assets and liabilities attributable to the passage of the One Big Beautiful Bill Act.

See Note 10, Income Taxes , of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

2025 2024 $ Change % Change

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Diluted EPS $ 4.56 $ 3.28 $ 1.28 39 %

The decrease in net income in fiscal 2024 as compared to fiscal 2023 was a result of a $1,790.3 million decrease in operating income and a $40.3 million increase in nonoperating expense, partially offset by a $151.4 million decrease in provision for income taxes.

The increase in net income in fiscal 2025 as compared to fiscal 2024 was a result of a $899.7 million increase in operating income and a $35.1 million decrease in nonoperating expense, partially offset by a $302.7 million increase in provision for income taxes.

Liquidity and Capital Resources

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Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities.

The decrease in cash provided by operating activities during fiscal 2024 as compared to fiscal 2023 was primarily a result of lower net income adjusted for noncash items partially offset by changes in working capital.

The increase in cash provided by operating activities during fiscal 2025 as compared to fiscal 2024 was primarily a result of higher net income adjusted for noncash items and changes in working capital.

Investing Activities

Investing cash flows generally consist of capital expenditures and cash used for acquisitions.

The decrease in cash used for investing activities during fiscal 2024 as compared to fiscal 2023 was primarily the result of a decrease in cash used for capital expenditures, partially offset by the net impact of purchases and maturities of short-term investments during fiscal 2024.

Investing cash flows generally consist of purchases of property, plant and equipment, available-for-sale investments and acquisitions of other businesses.

The change in cash used for investing activities during fiscal 2025 as compared to fiscal 2024 was primarily the result of the net impact of purchases and maturities of available-for-sale investments, partially offset by a decrease in cash used for capital expenditures.

Financing Activities

Financing cash flows generally consist of payments of dividends to shareholders, repurchases of common stock, issuance and repayment of debt and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans.

The decrease in cash used for financing activities during fiscal 2024 as compared to fiscal 2023 was primarily the result of lower common stock repurchases.

The increase in cash used for financing activities during fiscal 2025 as compared to fiscal 2024 was primarily the result of increased common stock repurchases and dividend payments to shareholders, partially offset by the net proceeds from our debt obligations.

Working Capital

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(1) We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of days sales outstanding and days cost of sales in inventory, respectively.

Cost of sales amounts used in the calculation of days cost of sales in inventory include accounting adjustments related to amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value as a result of the acquisition of Maxim.

The decrease in accounts receivable for fiscal 2024 compared to fiscal 2023 was primarily the result of variations in the timing of collections and billings and decreased revenue levels in the fourth quarter of fiscal 2024 as compared to the fourth quarter of fiscal 2023.

Inventory decreased in fiscal 2024 as compared to fiscal 2023, primarily as a result of our efforts to balance manufacturing production, demand and inventory levels.

The increase in accounts receivable for fiscal 2025 compared to fiscal 2024 was primarily the result of variations in the timing of collections and billings and increased revenue levels in the fourth quarter of fiscal 2025 as compared to the fourth quarter of fiscal 2024.

Inventory increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of our efforts to balance manufacturing production, demand and inventory levels.

Our inventory levels are impacted by our need to support forecasted sales demand and variations between those forecasts and actual demand.

Current liabilities decreased to $3.0 billion at November 2, 2024 from $3.2 billion recorded at the end of fiscal 2023, primarily due to decreases in accrued liabilities and current debt, partially offset by increases in income taxes payable.

Current liabilities increased to $3.2 billion at November 1, 2025 from $3.0 billion recorded at the end of fiscal 2024, primarily due to increases in accrued liabilities and income taxes payable, partially offset by a decrease in current debt.

Revolving Credit Facility

Our Third Amended and Restated Revolving Credit Agreement, dated as of June 23, 2021, with Bank of America N.A.

as administrative agent and the other banks identified therein as lenders, which was subsequently amended on December 20, 2022 and July 24, 2023 (as amended, the Revolving Credit Agreement) provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).

We may borrow under this revolving credit facility in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.

Our Fourth Amended and Restated Revolving Credit Agreement, dated as of April 11, 2025, with Bank of America N.A.

as administrative agent and the other banks identified therein as lenders (the Revolving Credit Agreement) provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $3.0 billion (subject to certain terms and conditions).

We may borrow under the Revolving Credit Agreement in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.

The terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain liens on assets and to incur certain subsidiary indebtedness.

In addition, the Revolving Credit Agreement contains a consolidated leverage ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) of not greater than 3.5 to 1.0.

In addition, the Revolving Credit Agreement contains an interest coverage covenant which requires the ratio of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated interest charges to be greater than 3.0 to 1.0.

As of November 1, 2025, we were in compliance with these covenants.

See Note 13, Revolving Credit Facility , of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further information on our revolving credit facility.

See Note 11, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our revolving credit facility.

As of November 1, 2025, we had approximately $8.1 billion of carrying value outstanding on our senior notes.

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As of November 1, 2025, we were compliant with these covenants.

See Note 14, Debt of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further information on our outstanding debt.

See Note 12, Debt of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our outstanding debt.

Commercial Paper Program

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Stock Repurchase Program

Our common stock repurchase program has been in place since August 2004.

Since inception, our Board of Directors has authorized us to repurchase $16.7 billion of our common stock under the program, which includes the $8.5 billion authorization approved by the Board of Directors on August 25, 2021.

Under the program, we may repurchase outstanding shares of our common stock from time to time in the open market and through privately negotiated transactions.

As of November 1, 2025, our Board of Directors had authorized us to repurchase $26.7 billion of our common stock under our common stock repurchase program and $9.7 billion remained available for repurchases under the current authorized program.

Repurchased shares are held as authorized but unissued shares of common stock.

Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when the full dollar amount of the authorization has been used to repurchase shares under the program.

As of November 2, 2024, $1.7 billion remained available for repurchase under the current authorized program.

The repurchased shares are held as authorized but unissued shares of common stock.

Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity and other factors we deem relevant.

Capital Expenditures

Net additions to property, plant and equipment were $730.5 million in fiscal 2024 as we invested to enhance our global resiliency and continue to diversify our global manufacturing footprint.

Net additions to property, plant and equipment were $533.6 million in fiscal 2025.

We expect capital expenditures for fiscal 2026 to be between approximately 4% and 6% of fiscal 2026 revenue.

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(5) We have supplier commitments for the purchase of materials and supplies in advance or with minimum purchase quantities.

As of November 2, 2024, our total liabilities associated with uncertain tax positions was $185.8 million, which are included in non-current income taxes payable in our Consolidated Balance Sheets contained in Item 8 of this Annual Report on Form 10-K.

As of November 1, 2025, our total liabilities associated with uncertain tax positions was $199.7 million, which are included in non-current income taxes payable in our Consolidated Balance Sheets contained in Part II, Item 8 of this Annual Report on Form 10-K.

Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the period in which we expect to settle the non-current liabilities associated with these uncertain tax positions.

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Unless otherwise discussed, management believes that the impact of recently issued standards will not have a material impact on our future financial condition and results of operations.

See Note 2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of adoption and impact on our financial condition and results of operations.

See Note 2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of adoption and impact on our financial condition and results of operations.

Critical Accounting Policies and Estimates

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Certain shipping terms require the goods to be through customs or be received by the customer before title passes.

In those instances, we defer the revenue recognized until title and control of the promised goods

have passed to the customer.

In those instances, we defer the revenue recognized until title and control of the promised goods have passed to the customer.

Shipping costs are charged to selling, marketing, general and administrative expense as incurred.

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Unsatisfied performance obligations primarily represent contracts for products with future delivery dates and with an original expected duration of one year or less.

We generally warrant that our products will meet their published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to the customer.

We generally warrant that our products will meet their

published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to the customer.

Specific accruals are recorded for known product warranty issues.

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To date, our actual results have not been materially different than our estimates.

Goodwill is subject to impairment tests annually or more frequently if events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method.

We test goodwill for impairment at the reporting unit level, which we determined is consistent with our identified operating segments, on an annual basis on the first day of the fourth quarter (on or about August 4 th ) or more frequently if we believe indicators of impairment exist or we reorganize our operating segments or reporting units.

We evaluate goodwill for impairment annually, as well as whenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method.

We have determined that the business operates as a single operating segment and has a single reporting unit for the purpose of goodwill impairment testing.

We test goodwill on an annual basis on the first day of the fourth quarter (August 3, 2025 in fiscal 2025) or more frequently if indicators of impairment exist or we reorganize our business.

We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its net book value.

When using the qualitative method, we consider several factors, including the following:

– the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in the markets in which these reporting units operate in order for there to be potential impairment;

– the carrying values of these reporting units as of the assessment date compared to their previously calculated fair values as of the date of the most recent quantitative impairment analysis;

– the amount by which the fair value of our reporting unit exceeded its carrying value as of the date of the most recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in the markets in which our reporting unit operates in order for there to be potential impairment;

– the carrying value of our reporting unit as of the assessment date compared to the previously calculated fair value as of the date of the most recent quantitative impairment analysis;

– the current forecasts as compared to the forecasts included in the most recent quantitative impairment analysis;

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– changes in the value of major U.S.

stock indices that could suggest declines in overall market stability that could impact the valuation of our reporting units;

– changes in our market capitalization and overall enterprise valuation to determine if there were any significant decreases that could be an indication that the valuation of our reporting units had significantly decreased;

– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit, which could materially lower our prior valuation conclusions under a discounted cash flow approach.

If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is less than its net book value, then we perform the quantitative goodwill impairment test.

The quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount.

If fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Additionally, we consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

We determine the fair value of our reporting units using a weighting of the income and market approaches.

stock indices that could suggest declines in overall market stability that could impact the valuation of our reporting unit;

– whether there had been any significant increases to the weighted-average cost of capital rates used, which could materially lower our prior valuation conclusions under a discounted cash flow approach.

If we elect not to use this option, or we determine that it is more likely than not that the fair value of our reporting unit is less than its net book value, then we perform the quantitative goodwill impairment test.

The quantitative goodwill impairment test requires us to compare the fair value of our reporting unit with its carrying amount.

If fair value is determined to be less

than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Additionally, we consider income tax effects from any tax deductible goodwill on the carrying amount of our reporting unit when measuring the goodwill impairment loss, if applicable.

We determine the fair value of our reporting unit using a weighting of the income and market approaches.

Under the income approach, we use a discounted cash flow methodology which requires management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others.

For the market approach, we use the guideline public company method.

Under this method we utilize information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to obtain their respective fair values.

In order to assess the reasonableness of the calculated reporting unit fair values, we reconcile the aggregate fair values of our reporting units determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.

During fiscal 2024 and fiscal 2023, we elected to use the qualitative method of assessing goodwill for all of our reporting units.

In all periods presented, we concluded the reporting units’ fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment existed.

Under this method we utilize information from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to obtain the respective fair value.

In order to assess the reasonableness of the calculated reporting unit fair value, we reconcile the fair value of our reporting unit determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.

During fiscal 2025, we used a combination of the quantitative and qualitative methods of assessing goodwill.

During fiscal 2024, we used the qualitative method of assessing goodwill.

In all periods presented, we concluded the reporting unit fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment existed.

Accounting for Income Taxes

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This evaluation is based on factors including, but not limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations.

A change in these factors could

result in the recognition of an increase or decrease to our income tax provision, which could materially impact our consolidated financial position and results of operations.

A change in these factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our consolidated financial position and results of operations.

In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain.

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Significant changes during the year in enacted tax law could affect these estimates.

See Note 12, Income Taxes , of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further discussion.

See Note 10, Income Taxes , of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis