COHERENT CORP.

Previous wording

We generate almost all of our revenues, earnings and cash flows from developing, manufacturing and marketing a broad portfolio of products and services for our end markets. We also generate revenue, earnings and cash flows from externally-funded research and development contracts relating to the development and manufacture of new technologies, materials and products.

Current wording

Coherent Corp. (“Coherent”, the “Company,” “we,” “us” or “our”) is a vertically integrated manufacturing company that develops, manufactures and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in communications, industrial, instrumentation and electronics applications. We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets. Coherent has broad technical expertise and a deep technology stack in areas of importance to our products, including materials growth and fabrication of specialty materials, semiconductor lasers, passive optics including isolators, transceivers, transport equipment, high power lasers for semiconductor capital equipment, display manufacturing, precision manufacturing, and scientific research. Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide.

Previous wording

On May 23, 2023, the Board of Directors approved the Company’s May 2023 Restructuring Plan (“2023 Plan”) which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. These restructuring actions were intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model.

Current wording

On May 23, 2023, the Board of Directors approved the 2023 Plan which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. These restructuring actions were intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model.

Previous wording

In the three and nine months ended March 31, 2025, these activities resulted in charges of $11 million and $43 million, respectively. The current quarter costs are primarily for employee termination costs and site move costs and the current year-to-date costs are primarily for impairment losses associated with the sale of our Newton Aycliffe business, employee termination costs, site move costs and accelerated depreciation. In fiscal 2024, these activities resulted in charges of $27 million, primarily for accelerated depreciation, the write-off of property and equipment, and site move costs. In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. We expect these restructuring actions to be substantially completed by the end of fiscal 2025. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material. See Note 17. Restructuring Plan to the Company’s Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

In the three months ended September 30, 2025, these activities resulted in charges of $7 million. The current quarter costs are primarily for site move and employee termination costs. In fiscal 2025, these activities resulted in charges of charges of $53 million, primarily for impairment losses associated with the sale of our Newton Aycliffe business, impairment of right-of-use (“ROU”) assets, employee termination costs, site move costs and accelerated depreciation, with $24 million of those charges in the three months ended September 30, 2024. In fiscal 2024, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. See Note 17. Restructuring Plans for further information.

Previous wording

Commencing in the quarter ended March 31, 2025, and as part of the ongoing strategic review of the Company’s business, the Company’s management approved a plan (“2025 Plan” and together with the 2023 Plan, the Restructuring Plans) to take a number of restructuring actions, including site consolidations, facilities moves and closures, workforce reductions, contract terminations, and certain other associated cost reductions.

Current wording

Commencing in the quarter ended March 31, 2025, and as part of the ongoing strategic review of the Company’s business, the Company’s management approved the 2025 Plan (and together with the 2023 Plan, the Restructuring Plans) to take a number of restructuring actions, including site consolidations, facilities moves and closures, workforce reductions, contract terminations, and certain other associated cost reductions.

Previous wording

In the three months ended March 31, 2025, these activities resulted in $63 million of charges primarily for the write-off of property and equipment and employee termination costs. We expect the restructuring actions to be substantially completed by the end of fiscal 2026. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.

Current wording

In the three months ended September 30, 2025, these activities resulted in $13 million of charges primarily related to employee termination and site closure costs. In fiscal 2025, these activities resulted in $107 million of charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. We expect the restructuring actions to be substantially completed by the end of fiscal 2026. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material. See Note 17. Restructuring Plans for further information.

Previous wording

In early 2025, the United States implemented significant new tariffs on foreign imports impacting multiple countries, commodities and industries, and these new tariffs and export restrictions also prompted retaliatory tariffs and export restrictions from certain countries. As of April 2025, certain tariffs and retaliatory tariffs have been delayed, but a number of the new tariffs remain in effect, including significant tariffs and trade sanctions between the United States and China. China has also restricted the export of certain rare earth minerals which are used in our products.

Current wording

In early 2025, the United States implemented significant new tariffs and export restrictions affecting a broad range of countries, commodities and industries. These actions have prompted retaliatory measures from certain foreign governments, including the imposition of tariffs and export controls. As of September 2025, while some of these measures have been delayed, a number of the new tariffs remain in effect, including substantial trade sanctions between the United States and China. China has imposed restrictions on the export of certain rare earth minerals which are critical to our products.

Previous wording

Currently, we do not expect these tariffs, trade sanctions, and/or restrictions on the export of certain rare earth minerals which are used in our products to have a material impact on our business, financial condition, operational results and/or cash flows in the fourth quarter of fiscal 2025.

Current wording

These tariffs, trade sanctions, and/or restrictions on the export of certain rare earth minerals used in our products did not have a material impact on our business, financial condition, operational results and/or cash flows in the first quarter of fiscal 2026.

Previous wording

However, we are in a dynamic environment, and as a global company with a substantial and diversified manufacturing footprint. Our diverse manufacturing footprint provides us with some insulation against these tariffs, trade sanctions, and other geopolitical challenges and our flexible and resilient supply chain enables a high degree of optionality. As the tariff, trade sanctions, and export restrictions become more clear, we expect these attributes will enable us to find opportunities to moderate the impact of the same.

Current wording

As a global company with a substantial and diversified manufacturing footprint our diverse manufacturing footprint provides us with some insulation against these tariffs, trade sanctions, and other geopolitical challenges. Our geographically diverse supply chain combined with the internal production of many of our most critical technology in-feeds provides adaptability and optionality that benefits our customers. As the tariff, trade sanctions, and export restrictions become clearer, we expect to identify opportunities to mitigate their impact. However, we operate in a dynamic geopolitical environment, and we are not immune to any sustained disruption in global trade conditions. Such disruptions could create future headwinds for the Company and may result in revenue reduction, cost increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, results of operations and cash flows.

Previous wording

The following tables set forth select items from our Condensed Consolidated Statements of Earnings (Loss) for the three and nine months ended March 31, 2025 and 2024 ($ in millions)(1):

Current wording

The following tables set forth select items from our Condensed Consolidated Statements of Earnings (Loss) for the three months ended September 30, 2025 and 2024 ($ in millions)(1):

Previous wording

Gross margin. Gross margin for the three months ended March 31, 2025 was $528 million, or 35% of total revenues, compared to $366 million, or 30% of total revenues, for the same period last fiscal year, an increase of 492 basis points. The increase as a percent of revenue for the three months ended March 31, 2025 was primarily due to higher revenue volume as well as improvements in pricing optimization and cost reductions and improvements in manufacturing yields, partially offset by unfavorable product mix. Gross margin for the nine months ended March 31, 2025 was $1,497 million, or 35% of total revenues, compared to $1,024 million, or 30% of total revenues, for the same period last fiscal year, an increase of 484 basis points. The increase as a percent of revenue for the nine months ended March 31, 2025 was primarily due to higher revenue volume, cost reductions and improvements in manufacturing yields partially offset by unfavorable product mix.

Current wording

Gross margin. Gross margin for the three months ended September 30, 2025 was $579 million, or 37% of total revenues, compared to $460 million, or 34% of total revenues, for the same period last fiscal year, an increase of 252 basis points. The increase as a percent of revenue for the three months ended September 30, 2025 was primarily due to higher revenue volume, product cost reductions and yield improvements in the Datacenter & Communications segment. In addition, gross margin was favorably impacted by pricing optimization in both the Datacenter & Communications and Industrial segments.

Previous wording

Research and development. Research and development (“R&D”) expenses for the three months ended March 31, 2025 were $151 million, or 10% of revenues, compared to $127 million, or 11% of revenues, for the same period last fiscal year. R&D expenses for the nine months ended March 31, 2025 were $426 million, or 10% of revenues, compared to $352 million, or 10% of revenues, for the same period last fiscal year. For both the three and nine months ended March 31, 2025, the increases in R&D expenses were primarily related to continued investment in our product portfolios, particularly in datacom.

Current wording

Research and development. Research and development (“R&D”) expenses for the three months ended September 30, 2025 were $155 million, or 10% of revenues, compared to $132 million, or 10% of revenues, for the same period last fiscal year. The increase of $23 million in R&D expenses was primarily related to continued investment in our product portfolios, particularly in our Datacenter & Communications segment. We continue to prioritize R&D investments in projects with the highest expected return-on-investment, supporting our long-term growth strategy.

Previous wording

Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the three months ended March 31, 2025 were $231 million, or 15% of revenues, compared to $205 million, or 17% of revenues, for the same period last fiscal year. SG&A expenses for the nine months ended March 31, 2025 were $681 million, or 16% of revenues, compared to $626 million, or 18% of revenues, for the same period last fiscal year. The decreases in SG&A as a percentage of revenue for the three and nine months ended March 31, 2025 were primarily the result of higher sales volumes and lower integration consulting costs partially offset by the impact of higher variable and share-based compensation.

Current wording

Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 2025 were $252 million, or 16% of revenues, compared to $229 million, or 17% of revenues, for the same period last fiscal year. The decrease in SG&A as a percentage of revenue for the three months ended September 30, 2025 was primarily the result of higher sales volumes and efficiencies achieved from cost reduction initiatives partially offset by higher integration and divestiture-related consulting costs, as well as higher share-based compensation expense.

Previous wording

Restructuring charges. Restructuring charges related to our Restructuring Plans for the three and nine months ended March 31, 2025 were $74 million and $106 million, respectively, and consist of asset write-offs, employee termination costs, move costs and accelerated depreciation due to the consolidation and closure of certain manufacturing sites as well as impairment losses associated with the sale of our Newton Aycliffe business. Restructuring charges related to our 2023 Restructuring Plan for the three and nine months ended March 31, 2024 were $12 million and $13 million, respectively, and consisted of severance, accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites. See Note 17. Restructuring Plans included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

Restructuring charges. Restructuring charges for the three months ended September 30, 2025 were $19 million and consisted primarily of employee termination costs and move costs due to the consolidation and closure of certain manufacturing sites. Restructuring charges for the three months ended September 30, 2024 were $24 million and consisted of impairment losses associated with the sale of our Newton Aycliffe business, accelerated depreciation, and move costs due to the consolidation of certain manufacturing sites. See Note 17. Restructuring Plans included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Previous wording

Interest and other, net. Interest and other, net for the three months ended March 31, 2025 was expense of $62 million, compared to expense of $54 million for the same period last fiscal year, an increase of $8 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, and interest and dividend income on cash balances. For the three months ended March 31, 2025, the increase of $8 million in comparison to the same period last fiscal year was driven by $14 million higher foreign exchange net losses and $6 million lower interest and dividend income due to decreases in interest rates earned on investments, as well as the decrease in restricted cash balances partially offset by $15 million lower interest expense. The $14 million higher foreign exchange losses were primarily due to higher volatility of exchange rates, particularly the Euro, Swedish Krona and British Pound, during the three months ended March 31, 2025 in addition to the cessation of our balance sheet hedging program at the end of September 2024. The $15 million lower interest expense was primarily due to lower interest expense on our New Term B Loans resulting from lower balances and lower interest rates, partially offset by lower interest expense benefit from our interest rate cap and swap. Interest and other, net for the nine months ended March 31, 2025 was expense of $126 million, compared to expense of $190 million for the same period last fiscal year, a decrease of $64 million. For the nine months ended March 31, 2025, the decrease of $64 million in comparison to the same period last fiscal year was driven by $32 million lower interest expense, $17 million higher foreign exchange net gains, and $13 million lower interest and dividend income due to decreases in interest rates earned on investments as well as the decrease in restricted cash balances. The $17 million higher foreign exchange net gains were primarily due to higher volatility of exchange rates, particularly the Euro, Korean Won, and Chinese Renminbi, during the nine months ended March 31, 2025 in addition to the cessation of our balance sheet hedging program at the end of September 2024. The $32 million lower interest expense was primarily due to lower interest expense on our New Term B Loans resulting from lower balances and lower interest rates partially offset by lower interest expense benefit from our interest rate cap and swap.

Current wording

Interest and other, net. Interest and other, net expense for the three months ended September 30, 2025 was $42 million, compared to $56 million for the same period in the prior fiscal year, a decrease of $14 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, losses on debt extinguishment, equity gains and losses from unconsolidated investments, and interest and dividend income on cash balances. For the three months ended September 30, 2025, the decrease of $14 million in comparison to the same period last fiscal year was driven by $11 million lower foreign exchange net losses, $8 million lower interest expense and a $7 million gain on sale from an equity investment partially offset by $5 million lower interest income and $5 million higher debt extinguishment and debt transaction fees. The $11 million lower foreign exchange net losses were primarily due to lower volatility of exchange rates during the three months ended September 30, 2025. The $8 million lower interest expense was primarily due to lower interest expense on our Term Loans resulting from lower balances and lower interest rates partially offset by lower interest expense benefit from our interest rate cap and swap. The $5 million lower interest and dividend income was primarily due to decreases in interest rates earned on investments as well as the decrease in average cash and restricted cash balances.

Previous wording

Income taxes. The Company’s year-to-date effective income tax rate at March 31, 2025 was 19% compared to an effective tax rate of 29% for the same period in 2024. The variations between the Company’s effective tax rate and the U.S. statutory rate of 21% were due to tax rate differentials between U.S. and foreign jurisdictions. The current year-to-date rate was impacted by the recording of a $19 million windfall on stock awards due to the increase in stock price.

Current wording

Income taxes. The Company’s year-to-date effective income tax rate at September 30, 2025 was a 4% benefit compared to a benefit of 29% for the same period in the prior fiscal year. The variance from the U.S. statutory rate of 21% was primarily due to discrete benefits related to German tax law changes, an uncertain tax position release and differences in tax rates between U.S. and foreign jurisdictions.

Previous wording

Net loss attributable to noncontrolling interests. Net loss attributable to noncontrolling interests for the three and nine months ended March 31, 2025 was $14 million and $17 million, respectively, and represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC. Net loss attributable to noncontrolling interests for the three and nine months ended March 31, 2024 was $3 million and $4 million, respectively. See Note 11. Noncontrolling Interests included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

Net loss attributable to noncontrolling interests. Net loss attributable to noncontrolling interests for the three months ended September 30, 2025 was $1 million, consistent with the same period in the prior fiscal year. This amount represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC. See Note 11. Noncontrolling Interests included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Previous wording

Revenues and segment profit for the Company’s reportable segments are discussed below. During the first quarter of fiscal 2025 as a result of a new CEO joining the Company in the fourth quarter of fiscal 2024, our Chief Operating Decision Maker (“CODM”) implemented changes in the measure he uses to allocate resources and assess performance. Our CODM now evaluates each segment’s performance and allocates resources based on segment revenue and segment profit, instead of operating income, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, and certain other charges. Additionally, effective the first quarter of fiscal 2025, we no longer allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 13. Segment Reporting, to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the Company’s reportable segments and for the reconciliation of the Company’s segment profit to earnings (loss) before income taxes, which is incorporated herein by reference. We report our financial results in the following three designated segments: (i) Networking, (ii) Materials, and (iii) Lasers.

Current wording

Revenues and segment profit for the Company’s reportable segments are discussed below. Our CODM evaluates each segment’s operations for decision-making and performance assessment based on segment revenue and segment profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, impairment charges on assets held-for-sale, gain on sale of businesses and certain other charges. Additionally, we do not allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 13. Segment Reporting, to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on the Company’s reportable segments and for the reconciliation of the Company’s segment profit to earnings (loss) before income taxes, which is incorporated herein by reference. Effective July 1, 2025, we report our financial results in the following two designated segments: (i) Datacenter & Communications and (ii) Industrial.

Previous wording

Comparative prior period segment information has been recast to conform to the new segment profitability measure. The change in our operating segment measure had no impact on our previously reported consolidated results of operations, financial condition, or cash flows.

Current wording

Comparative prior period segment information has been recast to conform to the new segments.

Previous wording

Segment profit for the three months ended March 31, 2025 increased 79% to $175 million, compared to segment profit of $98 million for the same period last fiscal year. The increase in segment profit for the three months ended March 31, 2025 was primarily driven by higher revenues, partially offset by higher R&D investments in our product portfolio. Segment profit for the nine months ended March 31, 2025 increased 83% to $465 million, compared to segment profit of $254 million for the same period last fiscal year. The increase in segment profit for the nine months ended March 31, 2025 was primarily driven by higher revenues, partially offset by higher R&D investments in our product portfolio.

Current wording

Segment profit for the three months ended September 30, 2025 increased 23% to $269 million, compared to segment profit of $219 million for the same period last fiscal year. The increase in segment profit for the three months ended September 30, 2025 was primarily driven by higher revenues, partially offset by increased R&D investments in our product portfolio.

Previous wording

Historically, our primary sources of cash have been from operations, long-term borrowings, and advance funding from customers. Other sources of cash include proceeds from the issuance of equity, proceeds received from the exercises of stock options, and sale of equity investments and businesses. Our historic uses of cash have been for business acquisitions, capital expenditures, investment in research and development, payments of principal and interest on outstanding debt obligations, payments of debt and equity issuance costs to obtain financing and payments in satisfaction of employees’ minimum tax obligations. Supplemental information pertaining to our sources and uses of cash for the periods indicated is presented as follows:

Current wording

Historically, our primary sources of cash have been provided from operations, long-term borrowings, and advance funding from customers. Other sources of cash include proceeds from the issuance of equity, proceeds received from the exercises of stock options, and sale of equity investments and businesses. Our historic uses of cash have been for business acquisitions, capital expenditures, investment in research and development, payments of principal and interest on outstanding debt obligations, payments of debt and equity issuance costs to obtain financing and payments in satisfaction of employees’ minimum tax obligations. Supplemental information pertaining to our sources and uses of cash for the periods indicated is presented as follows:

Previous wording

Net cash provided by operating activities was $503 million for the nine months ended March 31, 2025 compared to $383 million for the same period last fiscal year. The increase in cash flows provided by operating activities during the nine months ended March 31, 2025 compared to the same period last fiscal year was primarily due to higher earnings partially offset by increases in accounts receivables and inventories as a result of higher revenues.

Current wording

Net cash provided by operating activities was $46 million for the three months ended September 30, 2025 compared to $153 million for the same period in the prior fiscal year. The decrease in cash flows provided by operating activities during the three months ended September 30, 2025 compared to the same period in the prior fiscal year was primarily due to increases in inventories and accounts receivable as a result of higher revenues partially offset by higher accounts payable and higher net earnings.

Previous wording

Net cash used in investing activities was $284 million for the nine months ended March 31, 2025, compared to $249 million for the same period last fiscal year. Higher cash used to fund capital expenditures of $63 million year-over-year was partially offset by $27 million cash received from the sale of a business.

Current wording

Net cash provided by investing activities was $297 million for the three months ended September 30, 2025, compared to net cash used of $66 million for the same period in the prior fiscal year. The increase was primarily due to $391 million cash received from the sale of a business, net of fees.

Previous wording

On July 1, 2022, Coherent entered into a Credit Agreement by and among the Company, the lenders, and other parties thereto, and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent, which provides for senior secured financing of $4.0 billion, consisting of a term loan A credit facility (the “Term A Facility”) with an aggregate principal amount of $850 million, a term loan B credit facility (the “Term B Facility” and, together with the Term A Facility, the “Term Facilities”), with an aggregate principal amount of $2,800 million, and a revolving credit facility (the “Revolving Credit Facility” and, together with the Term Facilities, the “Senior Credit Facilities”), in an aggregate available amount of $350 million, including a letter of credit sub-facility of up to $50 million. On March 31, 2023, Coherent entered into Amendment No. 1 to the Credit Agreement, which replaced the adjusted LIBOR-based rate of interest therein with an adjusted Secured Overnight Financing Rate (“SOFR”) based rate of interest. As amended, the Term A Facility and the Revolving Credit Facility each bear interest at an adjusted SOFR rate subject to a 0.10% floor plus a range of 1.75% to 2.50%, based on the Company’s total net leverage ratio. The Term A Facility and the Revolving Credit Facility borrowings bear interest at adjusted SOFR plus 1.85% as of March 31, 2025. On April 2, 2024, Coherent entered into Amendment No. 2 to the Credit Agreement, under which the principal amount of term B loans outstanding under the Credit Agreement (the “Existing Term B Loans”) were replaced with an equal amount of new term loans (the “New Term B Loans”) having substantially similar terms as the Existing Term B Loans, except with respect to the interest rate applicable to the New Term B Loans and certain other provisions. On January 2, 2025, Coherent entered into Amendment No. 3 to the Credit Agreement, under which the principal amount of the New Term B Loans were replaced with an equal amount of new term loans (the “New Term B-2 Loans”) having substantially similar terms as the New Term B Loans, except with respect to the interest rate applicable to the New Term B-2 Loans and certain other provisions. As further amended, the New Term B-2 Loans bear interest at a SOFR rate (subject to a 0.50% floor) plus 2.00% as of March 31, 2025. The maturity of the New Term B-2 Loans and revolving credit facility remains unchanged. In relation to the Term Facilities, the Company incurred expense of $44 million and $150 million, respectively, for the three and nine months ended March 31, 2025, which is included in Interest expense in the Condensed Consolidated Statements of Earnings (Loss). On July 1, 2023, our interest rate cap became effective, which together with our interest rate swap (through September 30, 2024), reduced interest expense by $6 million and $27 million, respectively, during the three and nine months ended March 31, 2025.

Current wording

On September 26, 2025, the Company entered into Amendment No. 4 (“Amendment No. 4”) and Amendment No. 5 (“Amendment No. 5”) to the Credit Agreement. Under Amendment No. 4, (i) the existing revolving credit commitments were refinanced and replaced with new senior secured revolving credit commitments, (ii) $350 million of senior secured incremental revolving credit commitments were added, increasing the total revolving credit facility to $700 million (the “2025 Revolving Loans”), including a letter of credit sub-facility of up to $100 million, and (iii) a $1,250 million new tranche of senior secured incremental term A loans was added (the “2025 Incremental Term A Loans”), the proceeds of which were used, in part, to repay all outstanding principal, interest and fees under the initial term A loans. As amended, the 2025 Revolving Loans and the 2025 Incremental Term A Loans each bear interest at an adjusted SOFR rate subject to a 0.00% floor plus a range of 1.25% to 2.25% based on the Company’s total net leverage ratio. The interest rate applicable to the 2025 Revolving Loans and the 2025 Incremental Term A Loans is initially a SOFR-based rate plus 1.50% as of September 30, 2025. The 2025 Revolving Loans and the 2025 Incremental Term A Loans mature on the earlier of September 26, 2030 or a “Springing Maturity Date,” which is a date that is 91 days prior to the stated maturity of either (i) the Company’s unsecured senior notes or (ii) the term B loans then outstanding if, on such 91st day, the applicable senior notes or term B loans remain outstanding and liquidity is less than (x) $250 million plus (y) the aggregate outstanding principal amount of such notes or term B loans, as applicable. Under Amendment No. 5, the outstanding New Term B-2 Loans were replaced with an equal amount of new term loans (the “New Term B-3 Loans”) having substantially similar terms as the New Term B-2 Loans, except with respect to the interest rate applicable to the New Term B-3 Loans and certain other provisions. As further amended, the New Term B-3 Loans bear interest at a SOFR-based rate (subject to a 0.50% floor) plus 1.75% as of September 30, 2025. The New Term B-3 Loans will mature on July 1, 2029.

Previous wording

During the nine months ended March 31, 2025, the Company made payments of $383 million for the Term Facilities, including voluntary payments of $350 million.

Current wording

During the three months ended September 30, 2025, the Company made payments of $400 million for the Term Facilities, all of which were voluntary payments.

Previous wording

As of March 31, 2025, the Company had no borrowings outstanding under the Revolving Credit Facility.

Current wording

As of September 30, 2025, the Company had $10 million in borrowings outstanding under the Revolving Credit Facility.

Previous wording

On December 4, 2023, the Company consummated two investment agreements under which Silicon Carbide LLC, a Company subsidiary, received$1.0 billion cash in exchange for 25% of the equity of that entity. Such funds have and will continue to be used primarily to fund future capital expansion in our silicon carbide business and will enableus to increase our available free cash flow to provide greater financial and operational flexibility to execute our capital allocation priorities. See Note 11. Noncontrolling Interests included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

On December 4, 2023, the Company completed two investment agreements under which Silicon Carbide LLC, a Company subsidiary, received$1.0 billion cash in exchange for 25% of the equity of that entity. Such funds have and will continue to be used primarily to fund future capital expansion in our silicon carbide business and will enableus to increase our available free cash flow to provide greater financial and operational flexibility to execute our capital allocation priorities. See Note 11. Noncontrolling Interests included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Previous wording

Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of March 31, 2025, the Company held approxim ately $838 million of cash, cash equivalents and restricted cash outside of the United States. Generally, cash balances held outside the United States could be repatriated to the United States.

Current wording

Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of September 30, 2025, the Company held approxim ately $802 million of cash, cash equivalents and restricted cash outside of the United States. Generally, cash balances held outside the United States could be repatriated to the United States.

Previous wording

At March 31, 2025, we had $736 million of restricted cash, which includes $733 million at our Silicon Carbide LLC that is restricted for use by only that subsidiary.

Current wording

At September 30, 2025, we had $700 million of restricted cash, which includes $697 million at our Silicon Carbide LLC that is restricted for use by only that subsidiary.