What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-12-04 compared with 2024-06-05 · 160 added, 263 removed, 197 unchanged (68% of the section changed)

5 unchanged sentences

Executive Summary

Unless otherwise stated, the terms "we," "us," "our" and the "company" refer to Campbell Soup Company and its consolidated subsidiaries.

Unless otherwise stated, the terms "we," "us," "our" and the "company" refer to The Campbell's Company, formerly known as Campbell Soup Company, and its consolidated subsidiaries.

We are a manufacturer and marketer of high-quality, branded food and beverage products.

We operate in a highly competitive industry and experience competition in all of our categories.

On May 30, 2023, we completed the sale of our Emerald nuts business for $41 million.

The results of the business through the date of sale were reflected within the Snacks reportable segment.

On March 12, 2024, we completed the acquisition of Sovos Brands, Inc.

2 unchanged sentences

All references to the acquisition below refer to the Sovos Brands acquisition.

On August 26, 2024, we completed the sale of our Pop Secret popcorn business.

For additional information on the divestiture, see Note 4 to the Consolidated Financial Statements.

In November 2024, we entered into an agreement to sell our noosa yoghurt business for $200 million, subject to certain customary purchase price adjustments.

The closing of the transaction is subject to certain customary conditions, including regulatory approval.

For additional information on the divestiture, see Note 20 to the Consolidated Financial Statements.

Business Trends

Our industry continues to be impacted by commodity cost fluctuations, rising labor costs and other global macroeconomic challenges.

Through the third quarter, we experienced a moderate amount of input cost inflation, and we expect inflation to continue to moderate throughout the remainder of 2024.

We anticipate continued supply chain productivity and previously implemented pricing actions to mitigate some of the inflationary pressures and expect such benefits to largely offset the incremental costs in 2024.

Our industry continues to navigate a steady and ongoing recovery in light of supply chain disruptions, commodity cost volatility, changes in consumer purchasing and spending patterns, labor market issues, economic uncertainties and impacts of a change in administration as a result of the 2024 presidential election and other global macroeconomic challenges.

Through the first quarter, we continued to experience some moderation in input cost inflation, as we continue to see improvement across certain ingredients and packaging materials.

We anticipate continued supply chain productivity and benefits from cost savings initiatives to mitigate some of the inflationary pressures and expect such benefits to offset incremental costs in 2025.

We expect consumer trends to continue to evolve and our volumes to improve over time;

however, economic pressures on consumers, including the challenges of persistent inflation, may continue to negatively impact our volumes throughout 2025.

We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business, consolidated results of operations and financial condition.

We have lapped 2023 price increases and favorable net price realization will represent a reduced contribution to sales in 2024.

Consistent with trends seen throughout the industry, we have experienced a reduction in our volumes due to lower consumption;

however, we have seen modest sequential year over year volume/mix improvement in each of the last three quarters of 2024.

Company Name Change

On November 19, 2024, at the 2024 Annual Meeting of Shareholders of the company, our shareholders approved an amendment to the company’s Restated Certificate of Incorporation to change the company’s name from “Campbell Soup Company” to “The Campbell’s Company.” The company’s name change became effective on November 19, 2024.

Summary of Results

1 unchanged sentence

• Net sales increased 10% in the quarter to $2.772 billion primarily due to a 12-point benefit from the acquisition of Sovos Brands.

On a two-year compounded annual growth rate (CAGR), net sales increased 5%.

• Gross profit, as a percent of sales, was 30.9% in 2024 compared to 30.0% in the prior-year quarter.

The increase was primarily due to benefits from supply chain productivity improvements, mark-to-market adjustments on outstanding undesignated commodity hedges and lower costs associated with cost savings initiatives, partially offset by higher cost inflation and other supply chain costs and the impact of the acquisition.

• Earnings per share were $.44 in 2024, compared to $.53 a year ago.

• Gross profit, as a percent of sales, was 31.3% in 2025 and the prior-year quarter.

The performance reflected benefits from supply chain productivity improvements and mark-to-market adjustments on outstanding undesignated commodity hedges offset by the impact of cost inflation and other supply chain costs, unfavorable net price realization and the impact of the acquisition.

• Earnings per share were $.72 in 2025, compared to $.78 in the prior-year quarter.

The current quarter included expenses of $.16 per share and the prior-year quarter included expenses of $.13 per share from items impacting comparability as discussed below.

Net Earnings attributable to Campbell Soup Company

Net Earnings attributable to The Campbell's Company

The following items impacted the comparability of net earnings and net earnings per share:

• We implemented several cost savings initiatives in recent years.

In the third quarter of 2024, we recorded implementation costs and other related costs of $13 million in Administrative expenses, $3 million in Cost of products sold, $1 million in Marketing and selling expenses, $1 million in Research and development expenses and a reduction to Restructuring charges of $3 million related to these initiatives.

Year-to-date in 2024, we recorded Restructuring charges of $1 million and implementation costs and other related costs of $47 million in Administrative expenses, $9 million in Cost of products sold, $4 million in Marketing and selling expenses and $3 million in Research and development expenses related to these initiatives.

In the third quarter of 2023, we recorded Restructuring charges of $6 million and implementation costs and other related costs of $13 million in Administrative expenses, $12 million in Cost of products sold and $2 million in Research and development expenses (aggregate impact of $24 million after tax, or $.08 per share) related to these initiatives.

Year-to-date in 2023, we recorded Restructuring charges of $15 million and implementation costs and other related costs of $21 million in Administrative expenses, $12 million in Cost of products sold and $2 million in Research and development expenses (aggregate impact of $37 million after tax, or $.12 per share) related to these initiatives;

In the second quarter of 2024, we began implementation of a new optimization initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network.

In the third quarter of 2024, we recognized $5 million in Marketing and selling expenses related to this initiative;

In the third quarter of 2024, the total aggregate impact related to the cost savings and optimization initiatives was $20 million ($15 million after tax, or $0.05 per share).

Year-to-date in 2024, the total aggregate impact related to the cost savings and optimization initiatives was $69 million ($52 million after tax, or $0.17 per share).

In the first quarter of 2025, we recorded Restructuring charges of $6 million and implementation costs and other related costs of $11 million in Administrative expenses, $8 million in Cost of products sold, $1 million in Marketing and selling expenses and $1 million in Research and development expenses related to these initiatives.

In the first quarter of 2024, we recorded Restructuring charges of $2 million and implementation costs and other related costs of $5 million in Administrative expenses, $3 million in Cost of products sold, $2 million in Marketing and selling expenses and $1 million in Research and development expenses (aggregate impact of $10 million after tax, or $0.03 per share) related to these initiatives.

In the second quarter of 2024, we began implementation of an optimization initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network.

In the first quarter of 2025, we recognized $8 million in Marketing and selling expenses related to this initiative.

In the first quarter of 2025, the total aggregate impact related to the cost savings and optimization initiatives was $35 million ($27 million after tax, or $0.09 per share).

See Note 8 to the Consolidated Financial Statements and "Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives" for additional information;

• In the first quarter of 2025, we recognized gains in Cost of products sold of $4 million ($3 million after tax, or $.01 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges.

In the first quarter of 2024, we recognized losses in Cost of products sold of $15 million ($11 million after tax, or $.04 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges;

• In the first quarter of 2025 and 2024, we recorded accelerated amortization expense in Other expenses / (income) of $7 million ($5 million after tax, or $.02 per share) related to customer relationship intangible assets due to the loss of certain contract manufacturing customers, which began in the fourth quarter of 2023;

• In the first quarter of 2025, we recognized insurance recoveries in Administrative expenses of $1 million ($1 million after tax) related to a cybersecurity incident that was identified in the fourth quarter of 2023.

In the first quarter of 2024, we recorded costs of $2 million in Cost of products sold and $1 million in Administrative expenses (aggregate impact of $2 million after tax, or $.01 per share) related to the cybersecurity incident;

• In the first quarter of 2025, we recorded litigation expenses in Administrative expenses of $1 million ($1 million after tax) related to the Plum baby food and snacks business (Plum), which was divested on May 3, 2021, and certain other litigation matters.

In the first quarter of 2024, we recorded litigation expenses in Administrative expenses of $2 million ($2 million after tax, or $.01 per share) related to Plum;

• In the first quarter of 2025, we recognized an actuarial loss in Other expenses / (income) of $2 million ($1 million after tax) related to an interim remeasurement of our postretirement plan due to a plan amendment;

• In the first quarter of 2025, we recorded a loss in Other expenses / (income) of $25 million ($19 million after tax, or $.06 per share) on the sale of our Pop Secret popcorn business;

• In the first quarter of 2024, we announced our intent to acquire Sovos Brands and on March 12, 2024, the acquisition closed.

In the third quarter of 2024, we incurred $93 million of costs associated with the acquisition, of which $16 million was recorded in Restructuring charges, $39 million in Administrative expenses, $16 million in Other expenses / (income), $2 million in Marketing and selling expenses, $2 million in Research and development expenses and $18 million in Cost of products sold, of which $17 million was associated with the acquisition date fair value adjustment for inventory.

We also recorded costs of $2 million in Interest expense related to costs associated with the Delayed Draw Term Loan Credit Agreement (the 2024 DDTL Credit Agreement) used to fund the acquisition.

The aggregate impact was $95 million, $81 million after tax, or $.27 per share.

Year-to-date in 2024, we incurred $114 million of costs associated with the acquisition, of which $16 million was recorded in Restructuring charges, $39 million in Administrative expenses, $35 million in Other expenses / (income), $2 million in Marketing and selling expenses, $2 million in Research and development expenses, $18 million in Cost of products sold and $2 million in Interest expense.

The aggregate after-tax impact was $98 million, or $.33 per share;

• In the third quarter of 2024, we recognized gains in Cost of products sold of $13 million ($10 million after tax, or $.03 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges.

Year-to-date in 2024, we recognized gains in Cost of products sold of $5 million ($4 million after tax, or $.01 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges.

In the third quarter of 2023, we recognized losses in Cost of products sold of $9 million ($7 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges.

Year-to-date in 2023, we recognized losses in Cost of products sold of $9 million ($7 million after tax, or $.02 per share) associated with unrealized mark-to-market adjustments on outstanding undesignated commodity hedges;

• In the third quarter of 2024, we recorded accelerated amortization expense in Other expenses / (income) of $6 million ($5 million after tax, or $.02 per share) related to customer relationship intangible assets due to the loss of certain contract manufacturing customers, which began in the fourth quarter of 2023.

Year-to-date in 2024, we recorded accelerated amortization expense in Other expenses / (income) of $20 million ($15 million after tax, or $.05 per share) related to customer relationship intangible assets;

• Year-to-date in 2024, we recorded pre- and after-tax litigation expenses in Administrative expenses of $3 million ($.01 per share) related to the Plum baby food and snacks business (Plum), which was divested on May 3, 2021;

• Year-to-date in 2024, we recorded costs of $2 million in Cost of products sold and $1 million in Administrative expenses (aggregate impact of $2 million after tax, or $.01 per share) related to a cybersecurity incident that was identified in the fourth quarter of 2023;

• In the third quarter of 2023, we recognized actuarial losses in Other expenses / (income) of $17 million ($13 million after tax, or $.04 per share).

Year-to-date in 2023, we recognized actuarial losses in Other expenses / (income) of $26 million ($20 million after tax, or $.07 per share).

The actuarial losses related to interim remeasurements of certain U.S.

pension plans due to lump sum distributions that exceeded or were expected to exceed service and interest costs resulting in settlement accounting for the plans.

In the first quarter of 2024, we incurred costs associated with the acquisition in Other expenses / (income) of $9 million ($8 million after tax, or $.03 per share).

The items impacting comparability are summarized below:

Three Months Ended

April 28, 2024 April 30, 2023

October 27, 2024 October 29, 2023

(Millions, except per share amounts) Earnings

Net earnings attributable to Campbell Soup Company $ 133 $ .44 $ 160 $ .53

Net earnings attributable to The Campbell's Company $ 218 $ .72 $ 234 $ .78

Costs associated with cost savings and optimization initiatives $ (27) $ (.09) $ (10) $ (.03)

Costs associated with acquisition (81) (.27) — —

Commodity mark-to-market gains (losses) 3 .01 (11) (.04)

Accelerated amortization (5) (.02) (5) (.02)

Pension actuarial losses — — (13) (.04)

Cybersecurity incident recoveries (costs) 1 — (2) (.01)

Certain litigation expenses (1) — (2) (.01)

Postretirement actuarial losses (1) — — —

Charges associated with divestiture (19) (.06) — —

Costs associated with acquisition — — (8) (.03)

Impact of items on Net earnings (1)

2 unchanged sentences

(1) Sum of the individual amounts may not add due to rounding.

Nine Months Ended

April 28, 2024 April 30, 2023

(Millions, except per share amounts) Earnings

Net earnings attributable to Campbell Soup Company $ 570 $ 1.91 $ 689 $ 2.29

Costs associated with cost savings and optimization initiatives $ (52) $ (.17) $ (37) $ (.12)

Costs associated with acquisition (98) (.33) — —

Commodity mark-to-market gains (losses) 4 .01 (7) (.02)

Accelerated amortization (15) (.05) — —

Plum litigation expenses (3) (.01) — —

Cybersecurity incident costs (2) (.01) — —

Pension actuarial losses — — (20) (.07)

Impact of items on Net earnings $ (166) $ (.56) $ (64) $ (.21)

Net earnings attributable to Campbell Soup Company were $133 million ($.44 per share) in the current quarter, compared to $160 million ($.53 per share) in the year-ago quarter.

After adjusting for items impacting comparability, earnings increased primarily due to improved gross profit, partially offset by higher interest expense.

Net earnings attributable to Campbell Soup Company were $570 million ($1.91 per share) in the nine-month period this year, compared to $689 million ($2.29 per share) in the year-ago period.

After adjusting for items impacting comparability, earnings decreased reflecting higher marketing and selling expenses, higher interest expense, higher other expenses and higher research and development expenses, partially offset by improved gross profit.

Earnings per share benefited from a reduction in the weighted average diluted shares outstanding.

THIRD-QUARTER DISCUSSION AND ANALYSIS

Net earnings attributable to The Campbell's Company were $218 million ($.72 per share) in the current quarter, compared to $234 million ($.78 per share) in the year-ago quarter.

After adjusting for items impacting comparability, earnings decreased primarily due to higher interest expense, higher marketing and selling expenses and higher administrative expenses, partially offset by an increase in gross profit.

FIRST-QUARTER DISCUSSION AND ANALYSIS

An analysis of net sales by reportable segment follows:

Three Months Ended

(Millions) April 28, 2024 April 30, 2023 May 1, 2022 % Change 2024/2023 Two-Year CAGR %

(Millions) October 27, 2024 October 29, 2023 % Change

Meals & Beverages $ 1,706 $ 1,404 22

2 unchanged sentences

An analysis of percent change of net sales by reportable segment follows:

2024 versus 2023 Meals & Beverages Snacks

Meals & Beverages Snacks

Volume/mix 1% (1)% —%

4 unchanged sentences

(1) Includes revenue reductions from trade promotion and consumer coupon redemption programs.

(2) Sum of the individual amounts does not add due to rounding.

In Meals & Beverages, sales increased 22%, primarily due to a 22-point benefit from the acquisition of Sovos Brands.

Excluding the benefit from the acquisition of Sovos Brands, sales were comparable as gains in Prego pasta sauces, Canada and foodservice were offset by declines in U.S.

Favorable volume/mix was offset by lower net price realization.

Excluding the benefit from the acquisition of Sovos Brands, sales were comparable as gains in foodservice were offset by declines in U.S.

retail products.

retail products, declines in beverages and Campbell's pasta and Swanson canned poultry were partially offset by gains in Prego pasta sauces and U.S.

Sales of U.S.

soup increased 2% primarily due to an increase in broth, partially offset by decreases in ready-to-serve soups and condensed soups.

On a two-year CAGR basis, net sales increased 6%, including the impact of the acquisition.

soup decreased 4% primarily due to movements in retailer inventory levels influenced by the later timing of the Thanksgiving holiday this year.

In Snacks, sales decreased 4%.

Excluding the impact from the divestiture of the Emerald nuts business, sales decreased driven by declines in third-party partner brands, contract manufacturing, frozen products and fresh bakery, partially offset by sales of our power brands, which increased 2%.

Sales of power brands were driven by increases in cookies and crackers, primarily Goldfish crackers, and in salty snacks.

Sales were impacted by volume/mix declines and neutral net price realization.

On a two-year CAGR basis, net sales increased 5%.

Excluding the impact from the divestiture of the Pop Secret popcorn business, sales decreased due to declines in third-party partner brands and contract manufacturing, Pepperidge Farm cookies, Goldfish crackers and Late July snacks.

Sales were impacted by volume/mix declines and lower net price realization.

Gross profit, defined as Net sales less Cost of products sold, increased by $79 million in 2025 from 2024.

As a percent of sales, gross profit was 30.9% in 2024 and 30.0% in 2023.

The 90 basis-point increase in gross profit margin was due to the following factors:

As a percent of sales, gross profit was 31.3% in 2025 and 2024.

Gross profit margin performance was impacted by the following:

Margin Impact

Productivity improvements 150

Lower costs associated with cost savings initiatives 40

Volume/mix (1)

Cost inflation, supply chain costs and other factors (2)

Impact of acquisition (3)

Net price realization (80)

Impact of acquisition

Higher costs associated with cost savings initiatives (20)

Cost inflation, supply chain costs and other factors (2)

__________________________________________

(1) Includes the impact of operating leverage.

(2) Includes a 90 basis-point positive impact from the change in unrealized mark-to-market adjustments on outstanding undesignated commodity hedges and an estimated positive margin impact of 50 basis points from the benefit of cost savings initiatives, which were more than offset by cost inflation and other factors.

(3) Includes a negative margin impact of 70 basis points from a Sovos Brands acquisition date fair value adjustment for inventory.

(2) Includes an 80 basis-point positive impact from the change in unrealized mark-to-market adjustments on outstanding undesignated commodity hedges, an estimated positive margin impact of 40 basis points from the benefit of cost savings initiatives and a 10-basis point prior-year impact from a cybersecurity incident, which were more than offset by the impact of cost inflation and other factors.

Marketing and Selling Expenses

Marketing and selling expenses as a percent of sales were 8.7% in 2024 and 2023.

Marketing and selling expenses as a percent of sales were 9.0% in 2025 compared to 8.8% in 2024.

Marketing and selling expenses increased 13% in 2025 from 2024.

The increase was primarily due to the impact of the acquisition (approximately 7 points) and higher costs associated with costs savings and optimization initiatives (approximately 3 points), partially offset by lower advertising and consumer promotion expense (approximately 2 points) driven by Meals & Beverages and lower incentive compensation (approximately 2 points).

The increase was primarily due to the impact of the acquisition (approximately 12 points) and higher costs associated with costs savings and optimization initiatives (approximately 3 points), partially offset by lower other marketing expenses (approximately 2 points).

Administrative Expenses

Administrative expenses as a percent of sales were 8.8% in 2024 compared to 7.5% in 2023.

Administrative expenses as a percent of sales were 6.3% in 2025 and 2024.

Administrative expenses increased 11% in 2025 from 2024.

The increase was primarily due to costs associated with the acquisition (approximately 23 points), higher general administrative costs and inflation (approximately 7 points) and the impact of the acquisition (approximately 3 points), partially offset by increased benefits from cost savings initiatives (approximately 5 points) and lower incentive compensation (approximately 3 points).

The increase was primarily due to higher general administrative costs and inflation (approximately 7 points);

the impact of the acquisition (approximately 5 points) and higher costs associated with cost savings initiatives (approximately 4 points), partially offset by increased benefits from cost savings initiatives (approximately 4 points).

Other Expenses / (Income)

Other expenses were $30 million in 2024 compared to other expenses of $23 million in 2023 .

Other expenses were $43 million in 2025 compared to $24 million in 2024 .

Other expenses in 2025 included a loss of $25 million on the sale of the Pop Secret popcorn business, accelerated amortization expense of $7 million and a postretirement actuarial loss of $2 million.

Other expenses in 2024 included costs associated with the acquisition of $9 million and accelerated amortization expense of $7 million.

Other expenses in 2023 included pension actuarial losses of $17 million.

Excluding these amounts, the remaining change was primarily due to higher net periodic pension and postretirement benefit income in the prior year.

Operating Earnings

2 unchanged sentences

Three Months Ended

(Millions) April 28, 2024 April 30, 2023 % Change

(Millions) October 27, 2024 October 29, 2023 % Change

Meals & Beverages $ 337 $ 287 17

6 unchanged sentences

Operating earnings from Meals & Beverages increased 17%.

The increase was primarily due to the benefit of the acquisition of Sovos Brands, higher gross profit and lower marketing and selling expenses.

Gross profit margin increased due to supply chain productivity improvements, favorable volume/mix and benefits from cost savings initiatives, partially offset by higher cost inflation and other supply chain costs, unfavorable net price realization and the dilutive impact of the acquisition.

The increase was primarily due to the benefit of the acquisition of Sovos Brands and lower marketing and selling expenses.

Operating earnings from Snacks decreased 12%.

The decrease was primarily due to lower gross profit.

Gross profit margin decreased due to higher cost inflation and other supply chain costs as well as unfavorable volume/mix, partially offset by supply chain productivity improvements and the benefits from cost savings initiatives.

Gross profit decreased primarily due to the impact of cost inflation and other supply chain costs as well as unfavorable net price realization, partially offset by supply chain productivity improvements.

Corporate expense in 2025 included the following:

• $77 million of costs associated with the acquisition of Sovos Brands;

• costs of $29 million related to costs savings and optimization initiatives;

• $25 million loss on the sale of the Pop Secret popcorn business;

• $7 million of accelerated amortization expense;

• $2 million postretirement actuarial loss;

• $1 million of certain litigation expenses, including expenses related to Plum;

• $4 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges;

• $1 million of insurance recoveries related to a cybersecurity incident.

Corporate expense in 2024 included the following:

• costs of $27 million related to cost savings initiatives;

• $17 million of pension actuarial losses;

• $15 million of unrealized mark-to-market losses on outstanding undesignated commodity hedges;

Excluding these amounts, the remaining decrease was due to lower general and administrative expenses.

Interest Expense

Interest expense of $70 million in 2024 increased from $47 million in 2023 primarily due to higher levels of debt to fund the acquisition.

Taxes on Earnings

The effective tax rate was 26.9% in 2024 and 23.1% in 2023.

The increase in the effective tax rate was primarily due to nondeductible costs associated with the acquisition.

NINE-MONTH DISCUSSION AND ANALYSIS

An analysis of net sales by reportable segment follows:

Nine Months Ended

(Millions) April 28, 2024 April 30, 2023 May 1, 2022 % Change 2024/2023 Two-Year CAGR %

Meals & Beverages $ 4,058 $ 3,971 $ 3,672 2 5

Snacks 3,285 3,318 2,903 (1) 6

$ 7,343 $ 7,289 $ 6,575 1 6

An analysis of percent change of net sales by reportable segment follows:

2024 versus 2023 Meals & Beverages Snacks (2)

Volume/mix (3)% (2)% (2)%

Net price realization (1)

Divestiture — (1) (1)

Acquisition 4 — 2

__________________________________________

(1) Includes revenue reductions from trade promotion and consumer coupon redemption programs.

(2) Sum of the individual amounts does not add due to rounding.

In Meals & Beverages, sales increased 2% reflecting a 4-point benefit from the acquisition of Sovos Brands.

Volume/mix declines were partially offset by favorable net price realization.

Excluding the benefit from the acquisition, sales decreased primarily due to declines in U.S.

retail products, including U.S.

soup and beverages, partially offset by gains in foodservice and Canada.

Sales of U.S.

soup decreased 3% primarily due to decreases in ready-to-serve soups and condensed soups, partially offset by an increase in broth.

On a two-year CAGR basis, sales increased 5%, including the impact of the acquisition.

In Snacks, sales decreased 1%.

Excluding the impact from the divestiture of the Emerald nuts business, sales were comparable as sales of our power brands, which increased 4%, were offset by declines in sales of third-party partner brands, fresh bakery and contract manufacturing.

Sales of power brands were driven by increases in cookies and crackers, primarily Goldfish crackers and Lance sandwich crackers, and in salty snacks.

Sales benefited from favorable net price realization, partially offset by volume/mix declines.

On a two-year CAGR basis, sales increased 6%.

Gross profit, defined as Net sales less Cost of products sold, increased by $35 million in 2024 from 2023.

As a percent of sales, gross profit was 31.3% in 2024 and 31.0% in 2023.

The 30 basis-point increase in gross profit margin was due to the following factors:

Margin Impact

Productivity improvements 230

Net price realization 110

Lower costs associated with cost savings initiatives 20

Cost inflation, supply chain costs and other factors (1)

Impact of acquisition (2)

Volume/mix (3)

__________________________________________

(1) Includes an estimated positive margin impact of 30 basis points from the benefit of cost savings initiatives and a 20 basis-point positive impact from the change in unrealized mark-to-market adjustments on outstanding undesignated commodity hedges, which were more than offset by cost inflation and other factors, including a 10 basis-point negative impact from a cybersecurity incident.

(2) Reflects the Sovos Brands acquisition date fair value adjustment for inventory.

(3) Includes the impact of operating leverage.

Marketing and Selling Expenses

Marketing and selling expenses as a percent of sales were 8.8% in 2024 and 8.4% in 2023.

Marketing and selling expenses increased 5% in 2024 from 2023.

The increase was primarily due to the impact of the acquisition (approximately 2 points), higher selling expenses (approximately 2 points), higher costs related to cost savings and optimization initiatives (approximately 1 point) and higher other marketing expenses (approximately 1 point), partially offset by lower advertising and consumer promotion expense (approximately 1 point) driven by Meals & Beverages, and lower incentive compensation (approximately 1 point).

Administrative Expenses

Administrative expenses as a percent of sales were 7.6% in 2024 compared to 6.7% in 2023.

Administrative expenses increased 14% in 2024 from 2023.

The increase was primarily due to costs associated with the acquisition (approximately 8 points), higher costs related to cost savings initiatives (approximately 5 points), higher general administrative costs and inflation (approximately 5 points), and the impact of the acquisition (approximately 1 point), partially offset by increased benefits from cost savings initiatives (approximately 5 points).

Other Expenses / (Income)

Other expenses were $80 million in 2024 compared to other expenses of $41 million in 2023.

Other expenses in 2024 included costs associated with the acquisition of $35 million and accelerated amortization expense of $20 million.

Other expenses in 2023 included pension actuarial losses of $26 million.

Excluding these amounts, the remaining change was primarily due to higher net periodic pension and postretirement benefit income in the prior year.

Operating Earnings

Segment operating earnings increased 1% in 2024 from 2023.

An analysis of operating earnings by segment follows:

Nine Months Ended

(Millions) April 28, 2024 April 30, 2023 % Change

Meals & Beverages $ 763 $ 762 —

Snacks 489 482 1

1,252 1,244 1

Corporate income (expense) (312) (189)

Restructuring charges (1)

Earnings before interest and taxes $ 923 $ 1,040

__________________________________________

(1) See Note 7 to the Consolidated Financial Statements for additional information on restructuring charges.

Operating earnings from Meals & Beverages were comparable with prior year due to lower gross profit offset by the benefit of the acquisition of Sovos Brands and lower marketing and selling expenses.

Gross profit margin decreased due to

higher cost inflation and other supply chain costs and the dilutive impact of the acquisition, partially offset by supply chain productivity improvements, favorable net price realization, favorable volume/mix and the benefits of cost savings initiatives.

Operating earnings from Snacks increased 1%.

The increase was primarily due to higher gross profit, partially offset by higher marketing and selling expenses.

Gross profit margin increased due to supply chain productivity improvements, favorable net price realization, benefits from cost savings initiatives and favorable volume/mix more than offsetting higher cost inflation and other supply chain costs.

Corporate expense in 2024 included the following:

• costs of $11 million related to cost savings initiatives;

• $9 million of costs associated with the acquisition of Sovos Brands;

• costs of $68 million related to costs savings initiatives;

• $7 million of accelerated amortization expense;

• $3 million of costs related to a cybersecurity incident;

• $2 million of Plum litigation expenses.

• $3 million of costs associated with a cybersecurity incident;

• $5 million of unrealized mark-to-market gains on outstanding undesignated commodity hedges.

Corporate expense in 2023 included the following:

• costs of $35 million related to cost savings initiatives;

• $26 million of pension actuarial losses;

• $9 million.of unrealized mark-to-market losses on outstanding undesignated commodity hedges.

Excluding these amounts, the remaining increase was primarily due to higher net periodic pension and postretirement benefit income in the prior year, partially offset by lower general and administrative expenses.

Interest Expense

Interest expense of $165 million in 2024 increased from $139 million in 2023 primarily due to higher levels of debt to fund the acquisition .

Interest expense of $87 million in 2025 increased from $49 million in 2024 primarily due to higher levels of debt.

Taxes on Earnings

The effective tax rate was 23.2% in 2025 and 24.5% in 2024.

The increase in the effective tax rate was primarily due to nondeductible costs associated with the acquisition.

The decrease in the effective tax rate was primarily due to excess tax benefits associated with the vesting of stock-based compensation awards.

Restructuring Charges, Cost Savings Initiatives and Other Optimization Initiatives

7 unchanged sentences

We continued to implement this program and identified opportunities for additional cost synergies as we integrated Snyder's-Lance.

In 2022, we expanded these initiatives as we continue to pursue cost savings by further optimizing our supply chain and manufacturing network and through effective cost management.

In 2022, we expanded these initiatives as we continued to pursue cost savings by further optimizing our supply chain and manufacturing network and through effective cost management.

In the second quarter of 2023, we announced plans to consolidate our Snacks offices in Charlotte, North Carolina, and Norwalk, Connecticut, into our headquarters in Camden, New Jersey.

Cost estimates for these expanded initiatives, as well as timing for certain activities, are continuing to be developed.

A summary of the pre-tax charges recognized in the Consolidated Statements of Earnings related to these initiatives is as follows:

Three Months Ended Nine Months Ended

Three Months Ended

(Millions, except per share amounts)

April 28, 2024 April 30, 2023 April 28, 2024 April 30, 2023 Recognized as of April 28, 2024

October 29, 2023 Total Program

Restructuring charges $ 2 $ 297

7 unchanged sentences

A summary of the pre-tax costs associated with these initiatives is as follows:

(Millions) Recognized as of April 28, 2024

(Millions) Total Program

Severance pay and benefits

1 unchanged sentence

Implementation costs and other related costs

The total estimated pre-tax costs for actions that have been identified are approximately $905 million to $930 million and we expect to incur substantially all of the costs through 2025.

These estimates will be updated as the expanded initiatives are developed.

We expect the costs for actions that have been identified to date to consist of the following:

approximately $250 million to $255 million in severance pay and benefits;

Of the aggregate $895 million pre-tax costs incurred, approximately $720 million were cash expenditures.

Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges.

A summary of the pre-tax costs associated with segments is as follows:

(Millions) Total Program

Meals & Beverages $ 288

Corporate 224

As of July 28, 2024, we substantially completed the multi-year cost savings initiatives and Snyder's-Lance cost transformation program and integration, and we generated total pre-tax savings of approximately $950 million.

Certain phases that had not been fully implemented were incorporated into the 2025 cost savings initiatives described below.

Sovos Brands Integration Initiatives

On March 12, 2024, we completed the acquisition of Sovos Brands.

See Note 3 to the Consolidated Financial Statements for additional information.

We identified opportunities for cost synergies as we integrate Sovos Brands.

In 2024, we recorded Restructuring charges of $21 million for severance pay and benefits related to initiatives to achieve the synergies and generated pre-tax savings of $10 million.

The charges incurred in 2024 were associated with the Meals & Beverages segment.

In 2025, the initiatives to achieve synergies were incorporated into the cost savings initiatives described below.

2025 Cost Savings Initiatives

On September 10, 2024, we announced plans to implement cost savings initiatives beginning in 2025, including initiatives to further optimize our supply chain and manufacturing network, optimization of our information technology infrastructure and targeted cost management.

We also identified additional opportunities for cost synergies as we integrate Sovos Brands.

As mentioned above, we substantially completed our previous multi-year cost savings initiatives and Snyder's-Lance cost transformation program and integration.

Certain initiatives from that program have been incorporated into our 2025 cost savings initiatives.

Cost estimates for the 2025 initiatives, as well as timing for certain activities, are continuing to be developed.

A summary of the pre-tax charges recorded in the Consolidated Statement of Earnings related to these initiatives is as follows:

Three Months Ended

(Millions, except per share amounts) October 27, 2024

Restructuring charges $ 6

Administrative expenses 11

Cost of products sold 8

Marketing and selling expenses 1

Research and development expenses 1

Total pre-tax charges $ 27

Aggregate after-tax impact $ 21

Per share impact $ .07

A summary of the pre-tax costs associated with the initiatives is as follows:

(Millions) Recognized as of October 27, 2024

Severance pay and benefits

Asset impairment/accelerated depreciation 9

Implementation costs and other related costs

The total estimated pre-tax costs for actions that have been identified to date are approximately $190 million, and we expect to incur substantially all of the costs through 2028.

These estimates will be updated as the detailed plans are developed.

We expect the costs for the actions that have been identified to date to consist of the following:

approximately $20 million in severance pay and benefits;

approximately $50 million in asset impairment and accelerated depreciation;

and approximately $515 million to $535 million in implementation costs and other related costs.

and approximately $120 million in implementation costs and other related costs.

We expect these pre-tax costs to be associated with our segments as follows:

Meals & Beverages - approximately 72%;

Snacks - approximately 43%;

and Corporate - approximately 24%.

Of the aggregate $905 million to $930 million of pre-tax costs identified to date, we expect approximately $725 million to $750 million will be cash expenditures.

In addition, we expect to invest approximately $705 million in capital expenditures, of which we invested $508 million as of April 28, 2024.

We expect to invest in substantially all of the capital expenditures through 2025.

The capital expenditures primarily relate to optimization of production within our Meals & Beverages manufacturing network, a U.S.

warehouse optimization project, improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, optimization of information technology infrastructure and applications, enhancements to our headquarters in Camden, New Jersey, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, and optimization of the Snyder’s-Lance warehouse and distribution network.

We expect to fund the costs through cash flows from operations and short-term borrowings.

We expect the initiatives, once all phases are implemented, to generate annual ongoing savings of approximately $1 billion by the end of 2025.

As of April 28, 2024, we have generated total program-to-date pre-tax savings of $940 million.

Snacks - approximately 12% and Corporate - approximately 16%.

Of the aggregate $190 million of pre-tax costs identified to date, we expect approximately $135 million will be cash expenditures.

In addition, we expect to invest approximately $215 million in capital expenditures, of which we invested $18 million as of October 27, 2024.

The capital expenditures primarily relate to optimization of production within our manufacturing network, implementation of our existing SAP enterprise-resource planning system for Sovos Brands and optimization of information technology infrastructure and applications.

We expect the initiatives, once all phases are implemented, to generate annual ongoing savings of approximately $250 million by the end of 2028.

As of October 27, 2024, we have generated total program-to-date pre-tax savings of $30 million.

Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges.

A summary of the pre-tax costs associated with segments is as follows:

April 28, 2024

(Millions) Three Months Ended Nine Months Ended Costs Incurred to Date

Three Months Ended

(Millions) October 27, 2024

Meals & Beverages $ 21

Snacks — 30 375

Corporate 8 18 213

Total $ 15 $ 64 $ 855

Other Optimization Initiatives

In the second quarter of 2024, we began implementation of a new initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network.

In the second quarter of 2024, we began implementation of an initiative to improve the effectiveness of our Snacks direct-store-delivery route-to-market network.

Pursuant to this initiative we will purchase certain Pepperidge Farm and Snyder's-Lance routes where there are opportunities to unlock greater scale in select markets, combine them and sell the combined routes to independent contractor distributors.

We expect to execute this program in a staggered rollout and to incur expenses of up to approximately $115 million through 2029.

In the three-month period ended April 28, 2024, we incurred $5 million in Marketing and selling expenses related to this initiative.

Sovos Brands Integration Initiatives

On March 12, 2024, we completed the acquisition of Sovos Brands.

See Note 3 for additional information.

We have identified opportunities for cost synergies as we integrate Sovos Brands.

Cost estimates to achieve the synergies are continuing to be developed.

The total expected pre-tax costs and timing of when we expect to incur those costs, as well as the expected future cash expenditures, will be updated as detailed plans are developed.

We expect the pre-tax costs to be associated primarily with the Meals & Beverages segment.

In the three-month period ended April 28, 2024, we recorded Restructuring charges of $16 million of severance pay and benefits related to initiatives to achieve the synergies.

We expect the initiatives, once all phases are implemented, to generate annual ongoing savings of approximately $50 million by the end of 2026.

As of April 28, 2024, we have generated pre-tax savings of $3 million.

Segment operating results do not include restructuring charges, nor implementation and integration costs because we evaluate segment performance excluding such charges.

The costs incurred in the three-month period ended April 28, 2024 were associated with the Meals & Beverages segment.

In the three-month period ended October 27, 2024, we incurred $8 million in Marketing and selling expenses related to this initiative.

As of October 27, 2024, we have incurred $13 million in Marketing and selling expenses related to this initiative.

LIQUIDITY AND CAPITAL RESOURCES

6 unchanged sentences

We generated cash flows from operations of $225 million in 2025, compared to $174 million in 2024.

The decline in 2024 was primarily due to costs associated with the acquisition.

We had negative working capital of $1.318 billion as of April 28, 2024, and $161 million as of July 30, 2023.

The increase in 2025 was primarily due to changes in working capital and higher cash earnings.

We had negative working capital of $328 million as of October 27, 2024, and $1.386 billion as of July 28, 2024.

Current assets were less than current liabilities, which included debt maturing in one year, due to a focus on lowering core working capital requirements.

Total debt maturing within one year was $1.427 billion as of April 28, 2024, and $191 million as of July 30, 2023.

We have $1.15 billion aggregate principal amount of senior notes maturing in March 2025 that we expect to repay and/or refinance using available sources, which may include cash on hand, accessing the capital markets, commercial paper and/or revolving credit facility.

Total debt maturing within one year was $1.212 billion as of October 27, 2024, and $1.423 billion as of July 28, 2024.

As part of our focus to lower core working capital requirements, we have worked with our suppliers to optimize our terms and conditions, including the extension of payment terms.

6 unchanged sentences

The payment of these obligations is included in cash provided by operating activities in the Consolidated Statements of Cash Flows.

Amounts outstanding under these programs, which are included in Accounts payable on the Consolidated Balance Sheets, were approximately $260 million at April 28, 2024 and July 30, 2023.

On March 12, 2024, we completed the acquisition of Sovos Brands.

Cash consideration was $2.857 billion.

The acquisition was funded through the 2024 DDTL Credit Agreement of $2 billion and cash on hand.

Amounts outstanding under these programs, which are included in Accounts payable on the Consolidated Balance Sheets, were approximately $269 million at October 27, 2024 and $243 million at July 28, 2024.

Capital expenditures were $110 million in 2025 and $143 million in 2024.

Capital expenditures in 2025 included chip and cracker capacity expansion for our Snacks business, enhancements to our headquarters in Camden, New Jersey and network optimization for our Meals & Beverages business.

Capital expenditures are expected to total approximately $500 million in 2025.

Capital expenditures in the first nine months of 2024 included chip and cracker capacity expansion for our Snacks business, upgrades of assets across both segments of the business, enhancements to our headquarters in Camden, New Jersey and network optimization for our Meals & Beverages business.

In Snacks, we have a direct-store-delivery distribution model that uses independent contractor distributors.

From time to time, we purchase and sell routes.

From time to time, we purchase and sell routes, including certain routes under our optimization initiatives.

The purchase and sale proceeds of the routes are reflected in investing activities.

On August 26, 2024, we sold our Pop Secret popcorn business for $70 million.

Dividend payments were $116 million in 2025 and $114 million in 2024.

The regular quarterly dividend paid on our capital stock was $.37 per share in both the third quarter of 2024 and 2023.

On February 28, 2024, the Board of Directors declared a regular quarterly dividend of $.37 per share payable on April 29, 2024 to shareholders of record at the close of business on April 4, 2024.

On May 13, 2024, the Board of Directors declared a regular quarterly dividend of $.37 per share payable on July 29, 2024 to shareholders of record at the close of business on July 3, 2024.

In June 2021, the Board authorized an anti-dilutive share repurchase program of up to $250 million (June 2021 program) to offset the impact of dilution from shares issued under our stock compensation programs.

The June 2021 program has no expiration date, but it may be suspended or discontinued at any time.

Repurchases under the anti-dilutive program may be made in open-market or privately negotiated transactions.

The regular quarterly dividend paid on our capital stock was $.37 per share in both the first quarter of 2025 and 2024.

On September 18, 2024, the Board of Directors declared a regular quarterly dividend of $.37 per share payable on October 28, 2024 to shareholders of record at the close of business on October 3, 2024.

On December 3, 2024, the Board of Directors approved an increase in the regular quarterly dividend from $.37 per share to $.39 per share, or 5%.

They then declared a regular quarterly dividend of $.39 per share payable on January 27, 2025 to shareholders of record at the close of business on January 2, 2025.

In September 2021, the Board approved a strategic share repurchase program of up to $500 million (September 2021 program).

1 unchanged sentence

Repurchases under the September 2021 program may be made in open-market or privately negotiated transactions.

We repurchased 1.08 million shares at a cost of $46 million in 2024 pursuant to our June 2021 program.

As of April 28, 2024, approximately $58 million remained available under the June 2021 program and approximately $301 million remained available under the September 2021 program.

We repurchased 2.692 million shares at a cost of $141 million in 2023.

In September 2024, the Board authorized an anti-dilutive share repurchase program of up to $250 million (September 2024 program) to offset the impact of dilution from shares issued under our stock compensation programs.

The September 2024 program has no expiration date, but it may be suspended or discontinued at any time.

Repurchases under the September 2024 program may be made in open-market or privately negotiated transactions.

The September 2024 program replaced an anti-dilutive share repurchase program of up to $250 million that was approved by the Board in June 2021 and has been terminated.

During the three-month periods ended October 27, 2024 and October 29, 2023, we repurchased 1.098 million shares at a cost of $54 million and 679 thousand shares at a cost of $28 million, respectively, pursuant to our anti-dilutive share repurchase programs.

As of October 27, 2024, approximately $206 million remained available under the September 2024 program and approximately $301 million remained available under the September 2021 program.

See Note 15 to the Consolidated Financial Statements and “Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.

On October 10, 2023, we entered into the 2024 DDTL Credit Agreement totaling up to $2 billion scheduled to mature on October 8, 2024.

Loans under the 2024 DDTL Credit Agreement bear interest at the rates specified in the 2024 DDTL Credit Agreement, which vary based on the type of loan and certain other conditions.

The 2024 DDTL Credit Agreement contains customary representations and warranties, affirmative and negative covenants, including a financial covenant with respect to a minimum consolidated interest coverage ratio of consolidated adjusted EBITDA to consolidated interest expense (as each is defined in the 2024 DDTL Credit Agreement) of not less than 3.25:1.00, and events of default for credit facilities of this type.

The proceeds of the loans under the 2024 DDTL Credit Agreement could only be used in connection with the acquisition of Sovos Brands and the payment of fees and expenses incurred in connection therewith.

On March 12, 2024, we borrowed $2 billion under the 2024 DDTL Credit Agreement and used the proceeds in order to fund the acquisition of Sovos Brands, along with the fees and expenses incurred in connection therewith.

In August 2023, we filed a registration statement with the Securities and Exchange Commission that registered an indeterminate amount of debt securities.

Under the registration statement we may issue debt securities from time to time, depending on market conditions.

On March 19, 2024, pursuant to the registration statement, we issued senior unsecured notes of $2.5 billion, consisting of:

• $400 million aggregate principal amount of notes bearing interest at a fixed rate of 5.30% per annum, due March 20, 2026, with interest payable semi-annually on each of March 20 and September 20 commencing September 20, 2024;

• $500 million aggregate principal amount of notes bearing interest at a fixed rate of 5.20% per annum, due March 19, 2027, with interest payable semi-annually on each of March 19 and September 19 commencing September 19, 2024;

• $600 million aggregate principal amount of notes bearing interest at a fixed rate of 5.20% per annum, due March 21, 2029, with interest payable semi-annually on each of March 21 and September 21 commencing September 21, 2024;

• $1 billion aggregate principal amount of notes bearing interest at a fixed rate of 5.40% per annum, due March 21, 2034, with interest payable semi-annually on each of March 21 and September 21 commencing September 21, 2024.

On October 2, 2024, pursuant to the registration statement, we completed the issuance of senior unsecured notes of $1.15 billion, consisting of:

• $800 million aggregate principal amount of notes bearing interest at a fixed rate of 4.75% per annum, due March 23, 2035, with interest payable semi-annually on each of March 23 and September 23 commencing March 23, 2025;

• $350 million aggregate principal amount of notes bearing interest at a fixed rate of 5.25% per annum, due October 13, 2054, with interest payable semi-annually on each of April 13 and October 13 commencing April 13, 2025.

The notes contain customary covenants and events of default.

If a change of control triggering event occurs, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest, if any, to the purchase date.

We used the net proceeds from the sale of the notes to repay the $2 billion of outstanding borrowings under the 2024 DDTL Credit Agreement used to fund the Sovos Brands acquisition, including fees and expenses in connection therewith, and the remainder of the net proceeds to repay commercial paper.

On April 5, 2024, we repaid $100 million of the $500 million outstanding under our Delayed Draw Term Loan Credit Agreement (the 2022 DDTL Credit Agreement) due November 15, 2025.

As of April 28, 2024, we had $1.427 billion of short-term borrowings due within one year, of which $258 million was comprised of commercial paper borrowings.

As of April 28, 2024, we issued $28 million of standby letters of credit.

On April 16, 2024, we terminated our existing revolving credit facility dated September 27, 2021 (as amended on April 4, 2023).

I n October 2024, we used a portion of the net proceeds from the issuance of the notes to repay $200 million of the $400 million outstanding under our 2022 Delayed Draw Term Loan Credit Agreement due November 15, 2025 and a portion of our outstanding commercial paper.

We have $1.15 billion aggregate principal amount of senior notes maturing in March 2025, which we intend to repay by using a portion of the proceeds from the issuance of the notes along with cash on hand and issuing commercial paper.

As of October 27, 2024, we had $1.212 billion of short-term borrowings due within one year, of which $34 million was comprised of commercial paper borrowings.

As of October 27, 2024, we issued $27 million of standby letters of credit.

On April 16, 2024, we entered into a Five-Year Credit Agreement for an unsecured, senior revolving credit facility (the 2024 Revolving Credit Facility Agreement) in an aggregate principal amount equal to $1.85 billion with a maturity date of April 16, 2029 or such later date as extended pursuant to the terms set forth in the 2024 Revolving Credit Facility Agreement.

The 2024 Revolving Credit Facility Agreement remained unused at April 28, 2024, except for $1 million of standby letters of credit that we issued under it.

The 2024 Revolving Credit Facility Agreement remained unused at October 27, 2024, except for $1 million of standby letters of credit that we issued under it.

We may increase the 2024 Revolving Credit Facility Agreement commitments up to an additional $500 million, subject to the satisfaction of certain conditions.

27 unchanged sentences

• our ability to realize projected cost savings and benefits from cost savings initiatives and the integration of recent acquisitions;

• disruptions in or inefficiencies to our supply chain and/or operations, including reliance on key co-manufacturer and supplier relationships;

• disruptions in or inefficiencies to our supply chain and/or operations, including reliance on key contract manufacturer and supplier relationships;

• risks related to the effectiveness of our hedging activities and our ability to respond to volatility in commodity prices;

13 unchanged sentences

• goals and initiatives related to, and the impacts of, climate change, including from weather-related events;

• negative changes and volatility in financial and credit markets, deteriorating economic conditions and other external factors, including changes in laws and regulations;

• unforeseen business disruptions or other impacts due to political instability, civil disobedience, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics or other outbreaks of disease or other calamities.

• negative changes and volatility in financial and credit markets, deteriorating economic conditions and other external factors, including the impact of new or changes to existing governmental laws and regulations and their application;

• our indebtedness and ability to pay such indebtedness;

• unforeseen business disruptions or other impacts due to political instability, civil disobedience, terrorism, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics or other outbreaks of disease or other calamities.

This discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact our outlook.

We disclaim any obligation or intent to update forward-looking statements made by us in order to reflect new information, events or circumstances after the date they are made.

Quantitative and Qualitative Disclosure About Market Risk

For information regarding our exposure to certain market risk, see Item 7A, Quantitative and Qualitative Disclosure About Market Risk, in the 2024 Annual Report on Form 10-K.

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-Q

Item 2. Management’s Discussion and Analysis