J M SMUCKER Co

Previous wording

This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three months ended July 31, 2025 and 2024. All comparisons presented are to the corresponding period of the prior year, unless otherwise noted.

Current wording

This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three and six months ended October 31, 2025 and 2024. All comparisons presented are to the corresponding period of the prior year, unless otherwise noted.

Previous wording

On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM. The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 on this transaction, primarily during the third quarter of 2025.

Current wording

On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM. The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 on this transaction, primarily during the third quarter of 2025.

Previous wording

On December 2, 2024, we sold the Voortman business to Second Nature. The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, respectively, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 on this transaction, primarily during the second quarter of 2025.

Current wording

On December 2, 2024, we sold the Voortman business to Second Nature. The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 on this transaction, primarily during the second quarter of 2025.

Previous wording

During the first three months of 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, which we anticipate will persist through the remainder of 2026. Further, the higher costs have required price increases across our business, and we anticipate the price elasticity of demand could remain elevated during 2026 as consumers continue to experience broader inflationary pressures and are selective in their spending. In response to the inflationary pressures, we continue to focus on the delivery of our company-wide transformation initiative to deliberately translate our continuous improvement mindset into sustainable productivity initiatives in order to grow our profit margins and reinvest in the Company to enable future growth and cost savings.

Current wording

During the first half of 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, which we anticipate will persist through the remainder of 2026. Further, the higher costs have required price increases across our business, and we anticipate the price elasticity of demand could remain elevated during 2026 as consumers continue to experience broader inflationary pressures and are selective in their spending. In response to the inflationary pressures, we continue to focus on the delivery of our company-wide transformation initiative to deliberately translate our continuous improvement mindset into sustainable productivity initiatives in order to grow our profit margins and reinvest in the Company to enable future growth and cost savings.

Previous wording

In addition, it is possible significant disruptions in our supply chain could occur if certain geopolitical events continue to impact markets around the world, including the impact of potential shipping delays due to supply and demand imbalances, as well as labor shortages and tariffs. We also continue to work closely with our customers and external business partners, taking additional actions to ensure safety and business continuity and to maximize product availability. We have maintained production at all our facilities and availability of appointments at distribution centers. Furthermore, we have implemented measures to manage order volumes to ensure a consistent supply across our retail partners during periods of high demand. However, to the extent that high demand levels or supply chain disruptions delay order fulfillment, we may experience volume loss and elevated penalties. Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we continue to monitor the environment for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions.

Current wording

In addition, it is possible significant disruptions in our supply chain could occur if certain geopolitical events continue to impact markets around the world, including the impact of potential shipping delays due to supply and demand imbalances, as well as labor shortages and tariffs. We also continue to work closely with our customers and external business partners, taking additional actions to ensure safety and business continuity and to maximize product availability. We have maintained production at all our facilities and availability of appointments at distribution centers.

Previous wording

Overall, broad-based supply chain disruptions and the impact of inflation remain uncertain. We will continue to evaluate the nature and extent to which supply chain disruptions and inflation will impact our business, supply chain, including labor availability and attrition, results of operations, financial condition, and liquidity.

Current wording

Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we continue to monitor these environments, among others, for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions. Overall, broad-based supply chain disruptions and the impact of inflation remain uncertain. We will continue to evaluate the nature and extent to which supply chain disruptions and inflation will impact our business, supply chain, including labor availability and attrition, results of operations, financial condition, and liquidity.

Previous wording

Net sales in the first three months of 2026 decreased $11.8, or 1 percent, which includes $52.8 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $41.2, or 2 percent. Net price realization contributed 6 percentage points to net sales, primarily driven by higher net pricing for coffee, partially offset by lower net pricing for peanut butter. Volume/mix decreased net sales by 4 percentage points, primarily driven by decreases for coffee, dog snacks, sweet baked goods, and fruit spreads and lower contract manufacturing sales related to the divested pet food brands, partially offset by an increase for Uncrustables sandwiches.

Current wording

Net sales in the first six months of 2026 increased $47.1, or 1 percent, which includes $103.3 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $152.2, or 4 percent. Net price realization contributed 8 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix decreased net sales by 5 percentage points, primarily driven by decreases for coffee, dog snacks, peanut butter, and lapping contract manufacturing sales related to the divested pet food brands in the prior year.

Previous wording

Our non-GAAP financial measures are adjusted to exclude amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments (“adjusted gross profit”) decreased $89.3, or 11 percent, as compared to the prior year, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit. Adjusted operating income decreased $77.6, or 17 percent, as compared to the prior year, further reflecting the exclusion of amortization expense and other special project costs.

Current wording

Our non-GAAP financial measures are adjusted to exclude amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments (“adjusted gross profit”) decreased $89.8, or 10 percent, as compared to the prior year second quarter, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit. Adjusted operating income decreased $96.3, or 20 percent, as compared to the prior year second quarter, further reflecting the exclusion of the $260.8 pre-tax loss for the assets held for sale in the prior year, amortization expense, and other special project costs.

Previous wording

Gross profit decreased $322.5, or 40 percent, in the first three months of 2026, primarily driven by higher commodity costs, inclusive of the net unfavorable impact of derivative gains and losses, as well as unfavorable volume/mix and the noncomparable impact of divestitures, partially offset by higher net price realization.

Current wording

Gross profit decreased $338.7, or 20 percent, in the first six months of 2026, primarily driven by higher commodity costs, a net unfavorable impact of derivative gains and losses, unfavorable volume/mix, tariffs, and the noncomparable impact of divestitures, partially offset by higher net price realization.

Previous wording

Net interest expense was comparable to the prior year. For additional information, refer to Note 7: Debt and Financing Arrangements.

Current wording

Net interest expense was comparable to the prior year for the three and six months ended October 31, 2025. For additional information, refer to Note 7: Debt and Financing Arrangements.

Previous wording

Income taxes decreased $73.6, or 121 percent, during the three months ended July 31, 2025, primarily due to the loss before income taxes resulting in an income tax benefit in the current year. During both the current and prior years, the effective income tax rates varied from the U.S. statutory income tax rate of 21.0 percent, primarily due to state income taxes. We anticipate a full-year effective income tax rate for 2026 to be approximately 24.0 percent. For additional information, refer to Note 12: Income Taxes.

Current wording

The effective income tax rates for the three months ended October 31, 2025 and 2024, were 24.2 and 136.7 percent, respectively, and for the six months ended October 31, 2025 and 2024, were 24.6 and 48.7 percent, respectively. During the current year, the effective income tax rates varied from the U.S. statutory income tax rate of 21.0 percent, primarily due to state income taxes. During the prior year, the effective income tax rates varied from the U.S. statutory income tax rate of 21.0 percent, primarily due to unfavorable impacts of the classification of the Voortman business as held for sale. We anticipate a full-year effective income tax rate for 2026 to be approximately 24.2 percent. For additional information, refer to Note 12: Income Taxes.

Previous wording

Divestiture Costs: Total divestiture costs incurred to date related to the Sahale Snacks and Canada condiment businesses that were divested in 2024 were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges. We did not incur any divestiture costs during the three months ended July 31, 2025, and incurred divestiture costs of $0.3 during the three months ended July 31, 2024, primarily consisting of employee-related costs. We do not anticipate any additional costs to be incurred related to these divestiture activities.

Current wording

Divestiture Costs: Total divestiture costs incurred to date related to the Sahale Snacks and Canada condiment businesses that were divested in 2024 were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges. We did not incur any divestiture costs during the three and six months ended October 31, 2025, and incurred divestiture costs of $0.1 and $0.4 during the three and six months ended October 31, 2024, respectively, primarily consisting of employee-related costs. We do not anticipate any additional costs to be incurred related to these divestiture activities.

Previous wording

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of these divestitures. We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026. We have recognized total cumulative costs of $6.8, of which $0.3 and $0.1 were recognized during the three months ended July 31, 2025 and 2024, respectively, primarily consisting of other transition and termination costs.

Current wording

As a result of our recent divestitures, we identified opportunities to address certain distribution inefficiencies. We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026. We have recognized total cumulative costs of $8.4, of which $1.6 and $1.9 were recognized during the three and six months ended October 31, 2025, respectively, and $0.8 and $0.9 during the three and six months ended October 31, 2024, respectively, primarily consisting of other transition and termination costs.

Previous wording

Integration Costs: On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, a manufacturer and marketer of sweet baked goods brands. Total integration costs related to the acquisition are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges. We have recognized total cumulative integration costs of $185.3, of which $0.4 and $12.0 were recognized during the three months ended July 31, 2025 and 2024, respectively. We anticipate the remaining integration costs will be incurred by the end of 2026 and are expected to be split between employee-related and other transition and termination costs.

Current wording

Integration Costs: On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, a manufacturer and marketer of sweet baked goods brands. Total integration costs related to the acquisition are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges. We have recognized total cumulative integration costs of $186.0, of which $0.7 and $1.1 were recognized during the three and six months ended October 31, 2025, respectively, and $15.1 and $27.1 were recognized during the three and six months ended October 31, 2024, respectively. We anticipate the remaining integration costs will be incurred by the end of 2026 and are expected to be split between employee-related and other transition and termination costs.

Previous wording

Restructuring Costs: On May 27, 2025, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidate operations into other existing facilities by early calendar year 2026 to further optimize operations for our Sweet Baked Snacks segment. We anticipate incurring approximately $75.0 of costs related to these efforts, consisting of $60.0 in noncash charges for accelerated depreciation and $15.0 in employee-related and other transition and termination costs. We have recognized total cumulative costs of $20.7, which included $4.2 and $16.5 of employee-related and other transition and termination costs, respectively, during the three months ended July 31, 2025.

Current wording

Restructuring Costs: During the first quarter of 2026, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidate operations into other existing facilities by early calendar year 2026 to further optimize operations for our Sweet Baked Snacks segment. We anticipate incurring approximately $75.0 of costs related to these efforts, consisting of $60.0 in noncash charges for accelerated depreciation and $15.0 in employee-related and other transition and termination costs. We have recognized total cumulative costs of $47.9, which included $27.2 and $47.9 of employee-related and other transition and termination costs, during the three and six months ended October 31, 2025, respectively.

Previous wording

The U.S. Retail Coffee segment net sales increased $93.8 in the first three months of 2026. Net price realization increased net sales by 18 percentage points, primarily driven by higher net pricing across the portfolio. Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreases for the Dunkin’ and Folgers brands, partially offset by an increase for the Café Bustelo brand. Segment profit decreased $38.4, primarily reflecting higher commodity costs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.

Current wording

The U.S. Retail Coffee segment net sales increased $238.7 in the first six months of 2026. Net price realization increased net sales by 23 percentage points, reflecting higher net pricing across the portfolio. Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for the Folgers and Dunkin’brands, partially offset by an increase for the Café Bustelo brand. Segment profit decreased $86.8, primarily reflecting higher commodity costs, unfavorable volume/mix, tariffs, and higher marketing spend, partially offset by higher net price realization.

Previous wording

The U.S. Retail Frozen Handheld and Spreads segment net sales decreased $12.1 in the first three months of 2026. Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreases for peanut butter and fruit spreads, partially offset by an increase for Uncrustables sandwiches. Net price realization decreased net sales by 1 percentage point, reflecting higher trade spend for peanut butter, partially offset by higher net pricing for Uncrustables sandwiches. Segment profit decreased $4.7, primarily driven by higher marketing spend and unfavorable volume/mix, partially offset by lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility.

Current wording

The U.S. Retail Frozen Handheld and Spreads segment net sales decreased $36.2 in the first six months of 2026. Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for peanut butter and fruit spreads. Net price realization contributed 1 percentage point to net sales, reflecting higher net pricing for Uncrustables sandwiches, partially offset by higher trade spend for peanut butter. Segment profit decreased $18.7, primarily driven by unfavorable volume/mix, higher marketing spend, and increased costs, partially offset by lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility and higher net price realization.

Previous wording

The U.S. Retail Pet Foods segment net sales decreased $31.7 in the first three months of 2026. Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for dog snacks and lower contract manufacturing sales related to the divested pet food brands. Net price realization was neutral to net sales. Segment profit decreased $14.0, primarily reflecting unfavorable volume/mix and higher costs, partially offset by lower marketing spend.

Current wording

The U.S. Retail Pet Foods segment net sales decreased $63.9 in the first six months of 2026. Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for dog snacks and lapping contract manufacturing sales related to the divested pet food brands in the prior year. Net price realization was neutral to net sales. Segment profit decreased $11.0, primarily reflecting unfavorable volume/mix, partially offset by higher net price realization and lower marketing spend.

Previous wording

The Sweet Baked Snacks segment net sales decreased $80.5 in the first three months of 2026, inclusive of the impact of $52.8 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands. Excluding the noncomparable impact of the divestitures, net sales decreased $27.7, or 10 percent. Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for snack cakes. Net price realization decreased net sales by 2 percentage points, primarily reflecting lower net pricing for snack cakes. Segment profit decreased $40.2 during the three months ended July 31, 2025, primarily reflecting the impact of noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, and higher costs.

Current wording

The Sweet Baked Snacks segment net sales decreased $139.9 in the first six months of 2026, inclusive of the impact of $103.3 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands. Excluding the noncomparable impact of the divestitures, net sales decreased $36.6, or 7 percent. Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for snack cakes and private label products, partially offset by an increase for donuts. Net price realization decreased net sales by 1 percentage point, primarily reflecting lower net pricing for snack cakes. Segment profit decreased $89.0, primarily reflecting higher costs, the impact of noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, lower net price realization, and higher marketing spend.

Previous wording

International and Away From Home net sales increased $18.7 in the first three months of 2026, including $0.2 of unfavorable foreign currency exchange. Excluding the noncomparable impact of foreign currency exchange, net sales increased $18.9, or 7 percent. Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee and portion control products. Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreases for coffee and fruit spreads, partially offset by an increase for Uncrustables sandwiches. Segment profit increased $16.9, primarily driven by higher net price realization and lower SD&A expenses, partially offset by higher costs.

Current wording

International and Away From Home net sales increased $48.4 in the first six months of 2026, including $1.8 of unfavorable foreign currency exchange. Excluding the noncomparable impact of foreign currency exchange, net sales increased $50.2, or 8 percent. Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix was neutral to net sales as decreases for coffee, fruit spreads, and dog snacks were mostly offset by an increase for Uncrustables sandwiches. Segment profit increased $25.3, primarily driven by higher net price realization, lower SD&A expenses, and favorable volume/mix, partially offset by higher costs and tariffs.

Previous wording

Our principal source of funds is cash generated from operations, supplemented by borrowings against our commercial paper program and revolving credit facility. Total cash and cash equivalents decreased to $39.3 at July 31, 2025, compared to $69.9 at April 30, 2025.

Current wording

Our principal source of funds is cash generated from operations, supplemented by borrowings against our commercial paper program and revolving credit facility. Total cash and cash equivalents decreased to $62.8 at October 31, 2025, compared to $69.9 at April 30, 2025.

Previous wording

The $183.5 increase in cash used for operating activities in the first three months of 2026 was primarily driven by lower net income (loss) and the related impacts to income and other taxes, partially offset by lower working capital requirements in 2026. The cash required to fund working capital decreased compared to the prior year, primarily driven by the timing of settling our derivative instruments, partially offset by an increase in cash used for inventories, reflecting higher inventory levels and input cost inflation in the current year.

Current wording

The $241.2 decrease in cash provided by operating activities in the first six months of 2026 was primarily driven by lower net income adjusted for noncash items in the current year and higher working capital requirements in 2026. The cash required to fund working capital increased compared to the prior year, primarily driven by an increase in cash used for inventories, reflecting higher inventory levels and input cost inflation in the current year, and an increase in cash used for accounts payable due to timing of spend and payments, partially offset by increases in cash related to the timing of settling our derivative instruments and the change in trade receivables due to timing of sales and payments.

Previous wording

Cash used for investing activities in the first three months of 2026 consisted primarily of an increase of $126.7 in our derivative cash margin account balances and $84.3 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities. Cash used for investing activities in the first three months of 2025 consisted primarily of $123.7 in capital expenditures, reflecting our investments in the new Uncrustables sandwiches manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities. The use of cash for 2025 also included an increase of $48.6 in our derivative cash margin account balances.

Current wording

Cash used for investing activities in the first six months of 2026 consisted primarily of $150.6 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities, and an increase of $52.8 in our derivative cash margin account balances. Cash used for investing activities in the first six months of 2025 consisted primarily of $210.7 in capital expenditures, reflecting our investments in the new Uncrustables sandwiches manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities. The use of cash for 2025 also included an increase of $14.9 in our derivative cash margin account balances.

Previous wording

Cash provided by financing activities in the first three months of 2026 consisted primarily of a net increase in short-term borrowings of $300.6, partially offset by dividend payments of $114.4. Cash used for financing activities in the first three months of 2025 consisted primarily of dividend payments of $112.1, partially offset by a net increase in short-term borrowings of $96.2.

Current wording

Cash used for financing activities in the first six months of 2026 consisted primarily of dividend payments of $231.2, partially offset by a net increase in short-term borrowings of $87.4. Cash used for financing activities in the first six months of 2025 consisted primarily of dividend payments of $226.5 and a net decrease in short-term borrowings of $121.6.

Previous wording

As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion, and our rights and obligations to our suppliers are not impacted. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. As of July 31, 2025, and April 30, 2025, $324.5 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers. During the first three months of 2026 and 2025, we paid $340.9 and $422.6, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

Current wording

As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. As of October 31, 2025, and April 30, 2025, $248.0 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers. During the first six months of 2026 and 2025, we paid $679.6 and $818.8, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

Previous wording

We have available a $2.0 billion unsecured revolving credit facility with a group of ten banks that matures in March 2030. Additionally, we participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of July 31, 2025, we had $952.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.65 percent.

Current wording

We have available a $2.0 billion unsecured revolving credit facility with a group of ten banks that matures in March 2030. Additionally, we participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of October 31, 2025, we had $748.5 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.29 percent.

Previous wording

Dividend payments were $114.4 and $112.1 in the first three months of 2026 and 2025, respectively, and dividends declared per share were $1.10 and $1.08 in the first three months of 2026 and 2025, respectively. The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.

Current wording

Dividend payments were $231.2 and $226.5 in the first six months of 2026 and 2025, respectively, and dividends declared per share were $2.20 and $2.16 in the first six months of 2026 and 2025, respectively. The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.

Previous wording

During the three months ended July 31, 2025, we did not repurchase any common shares under a repurchase plan authorized by the Board. The shares repurchased during the three months ended July 31, 2025 and 2024, consisted of shares repurchased from stock plan recipients in lieu of cash payments. As of July 31, 2025, approximately 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations. There is no guarantee as to the exact number of shares that may be repurchased or when such purchases may occur.

Current wording

During the six months ended October 31, 2025, we did not repurchase any common shares under a repurchase plan authorized by the Board. The shares repurchased during the six months ended October 31, 2025 and 2024, consisted of shares repurchased from stock plan recipients in lieu of cash payments. As of October 31, 2025, approximately 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations. There is no guarantee as to the exact number of shares that may be repurchased or when such purchases may occur.

Previous wording

As of July 31, 2025, total cash and cash equivalents of $34.8 was held by our foreign subsidiaries, primarily in Canada. We have not repatriated foreign cash to the U.S. during the first three months of 2026.

Current wording

As of October 31, 2025, total cash and cash equivalents of $58.1 was held by our foreign subsidiaries, primarily in Canada. We have not repatriated foreign cash to the U.S. during the first six months of 2026.

Previous wording

Non-GAAP financial measures exclude certain items affecting comparability that can significantly affect the year-over-year assessment of operating results, which include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income (loss) before income taxes and reflects the exclusion of the previously discussed items, as well as any adjustments for one-time tax related activities, when they occur. While this adjusted effective income tax rate does not generally differ materially from our GAAP effective income tax rate, certain exclusions from non-GAAP results can significantly impact our adjusted effective income tax rate.

Current wording

Non-GAAP financial measures exclude certain items affecting comparability that can significantly affect the year-over-year assessment of operating results, which include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income before income taxes and reflects the exclusion of the previously discussed items, as well as any adjustments for one-time tax-related activities, when they occur. While this adjusted effective income tax rate does not generally differ materially from our GAAP effective income tax rate, certain exclusions from non-GAAP results can significantly impact our adjusted effective income tax rate.