TRACTOR SUPPLY CO DE

Note 11 –Commitments and Contingencies

Contractual Commitments

At December 28, 2024, the Company had various non-cancelable obligations of approximately $160.4 million, of which $58.6 million is related to the construction of new stores under the Company’s fee development program. Commitments related to new stores are generally due as construction progresses, with obligations extending through 2025.

The remaining $101.8 million in obligations is related to strategic investments related to information technology systems and inventory purchase obligations. The majority of these agreements are due within 3 years and are recorded as liabilities when the goods are received or the services are rendered.

In addition, the Company had $387.5 million legally binding minimum lease payments for leases signed, but not yet commenced.

Letters of Credit

At December 28, 2024, there were $74.1 million outstanding letters of credit.

Litigation

The Company is involved in various litigation matters arising in the ordinary course of business. The Company believes that, based upon information currently available, any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations or cash flows. However, litigation and other legal matters involve an element of uncertainty. Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company’s business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company’s Consolidated Financial Statements.

Note 12 –Segment Reporting

The Company hasone reportable segment which is the retail sale of products that support the rural lifestyle. The following table indicates the percentage of net sales represented by each major product category during fiscal 2024, 2023, and 2022:

Note: Net sales by major product categories for prior periods have been reclassified to conform to the current year presentation.

(a) Includes livestock and equine feed & equipment, poultry, fencing, and sprayers & chemicals.

(b) Includes food, treats and equipment for dogs, cats, and other small animals as well as dog wellness.

(c) Includes tractor & rider, lawn & garden, bird feeding, power equipment, and other recreational products.

(d) Includes truck accessories, trailers, generators, lubricants, batteries, and hardware and tools.

(e) Includes clothing, footwear, toys, snacks, and decorative merchandise.

The accounting policies of the retail segment are the same as those described in the Summary of Significant Accounting Policies included in Note 1 - Significant Accounting Policies.

The Company’s Chief Operating Decision Maker (“CODM”) is identified as the President and Chief Executive Officer. The CODM assesses performance for the retail segment based on Net income as reported on the Company’s Consolidated Statements of Income. The CODM considers net income on a monthly basis when assessing performance of the segment. Net income is also used in competitive analysis by benchmarking to the Company’s competitors and establishing management’s compensation.

The measure of segment assets is reported on the Company’s Consolidated Balance Sheets as total consolidated assets.

Within the reportable segment, there are significant expense categories regularly provided to the CODM and included in the measure of the segment’s net income as shown below:

(a) Personnel expenses include wages, salaries, and other forms of compensation related to personnel.

(b) Other segment expenses include occupancy expenses (including $611.8 million in rent expenses as disclosed in Note 5), advertising expenses, and other operating expenses within Selling, General, and Administrative expenses as described in Note 1.

Note 13 –Subsequent Events

On December 30, 2024, the Company completed its acquisition of Allivet, a privately-held online pet pharmacy, for $135.0 million. The deal was an all-cash transaction that the Company financed through its balance sheet. The acquisition of Allivet will complement and strengthen the Company’s portfolio offering for companion animals, equestrian and livestock customers and unlock new opportunities for growth.