Element Solutions Inc

Previous wording

Element Solutions, incorporated in Delaware in January 2014, is a leading global specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy. Our product innovation and product extensions are expected to continue to drive sales growth in both new and existing markets while expanding margins through a consistent focus on increasing customer value propositions.

Current wording

Element Solutions, incorporated in Delaware in January 2014, is a leading global specialty chemicals technology company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in multiple high-value industries, including consumer electronics, power electronics, semiconductor fabrication, high-performance computing, communications and data storage infrastructure, automotive systems, industrial surface finishing and offshore energy. Our product innovation and product extensions are expected to continue to drive sales growth in both new and existing markets while expanding margins through a consistent focus on increasing customer value propositions.

Previous wording

Our operations are organized into two segments: Electronics and Industrial & Specialty. In 2024, we achieved net sales of $2.46 billion, to which our Electronics and Industrial & Specialty segments contributed approximately 64% and 36%, respectively.

Current wording

Our operations are organized into two segments: Electronics and Specialties. In 2025, we achieved net sales of $2.55 billion, to which our Electronics and Specialties segments contributed approximately 70% and 30%, respectively.

Previous wording

Electronics – The Electronics segment researches, formulates and sells specialty chemicals and material process technologies for all types of electronics hardware, from complex printed circuit board designs to advanced semiconductor packaging. In mobile communications, computers, automobiles and aerospace equipment, its products are an integral part of the electronics manufacturing process and the functionality of end-products. The segment's "wet chemistries" for metallization, surface treatments and solderable finishes form the physical circuitry pathways and its "assembly materials," such as SMT, pastes, fluxes and adhesives, join those pathways together. The segment provides specialty chemical solutions through the following businesses: Assembly Solutions, Circuitry Solutions and Semiconductor Solutions.

Current wording

Electronics – The Electronics segment researches, formulates and sells specialty chemicals and material process technologies for all types of electronics hardware from complex printed circuit board designs to advanced semiconductor packaging. In high-performance datacenters, mobile communications, computers, automobiles and aerospace equipment, its products are an integral part of the electronics manufacturing process and the functionality of end-products. The segment's "wet chemistries" for metallization, surface treatments and solderable finishes form the physical circuitry pathways and its "assembly materials," such as SMT, pastes, fluxes and adhesives, join those pathways together. The segment provides solutions through the following businesses: Assembly Solutions, Circuitry Solutions and Semiconductor Solutions.

Previous wording

Industrial & Specialty – The Industrial & Specialty segment researches, formulates and sells specialty chemicals and material process technologies that enhance surfaces or improve industrial processes in diverse industrial sectors from automotive trim to transcontinental infrastructure and from high-speed printing to high-design faucets. Its products include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids in offshore energy production. These fully consumable products are used in the aerospace, automotive, construction, consumer electronics, consumer packaged goods and oil and gas production end-markets. The segment provides specialty chemical solutions through the following businesses: Industrial Solutions, Graphics Solutions and Energy Solutions.

Current wording

Specialties – The Specialties segment researches, formulates and sells specialty chemicals and material process technologies that enhance surfaces or improve industrial processes in diverse industrial sectors from automotive trim to transcontinental infrastructure to high-design faucets. Its products include chemical systems that protect and decorate metal and plastic surfaces and chemistries used in water-based hydraulic control fluids for offshore energy production. The segment's products are used in the aerospace, automotive, construction, consumer electronics and oil and gas production end-markets. The segment provides solutions through the following businesses: Industrial Solutions and Energy Solutions. On February 28, 2025, we completed the sale of our flexographic printing plate business, MacDermid Graphics Solutions.

Previous wording

•Cash Dividends - During the year ended December 31, 2024, approximately $78.2 million was returned to our stockholders in the form of cash dividends.

Current wording

•Cash Dividends - During the year ended December 31, 2025, approximately $77.8 million was returned to our stockholders in the form of cash dividends.

Previous wording

We may pursue targeted and opportunistic acquisitions in our existing or adjacent end-markets that seek to strengthen our current businesses, expand and diversify our product offerings, and enhance our growth and strategic position. We expect to achieve commercial and distribution efficiencies by expanding into related categories that can be marketed through our existing distribution channels or provide us with new distribution channels for our existing products. To the extent we pursue future acquisitions, we expect that acquisition candidates would demonstrate a combination of attractive margins, strong cash flow characteristics, niche leading positions and consumable products that generate recurring revenue. We believe the diversity of the niche end-markets we serve will enable us to continue our growth and maintain strong cash flow generation throughout economic cycles and mitigate the impact of a downturn in any single market. We will only pursue a candidate when it is deemed to be fiscally prudent and meets our acquisition criteria. We anticipate that any future acquisitions would be financed through a combination of cash on hand, availability under our Credit Agreement and/or new debt or equity offerings.

Current wording

We regularly pursue targeted and opportunistic acquisitions in our existing or adjacent end-markets that seek to strengthen our current businesses, expand and diversify our product offerings, and enhance our growth and strategic position. We expect to achieve commercial and distribution efficiencies by expanding into related categories that can be marketed through our existing distribution channels or provide us with new distribution channels for our existing products. To the extent we pursue future acquisitions, we expect that acquisition candidates would demonstrate a combination of attractive margins, strong cash flow characteristics, niche leading positions and consumable products that generate recurring revenue. We believe the diversity of the niche end-markets we serve will enable us to continue our growth and maintain strong cash flow generation throughout economic cycles and mitigate the impact of a downturn in any single market. We will only pursue an acquisition candidate when it is deemed to be fiscally prudent and meets our acquisition criteria. We anticipate that any future acquisitions would be financed through a combination of cash on hand, availability under our Credit Agreement and/or new debt or equity offerings.

Previous wording

In 2024, approximately 77% of our net sales originated outside of the U.S. and were denominated in numerous currencies, including the euro and Chinese yuan. Therefore, fluctuations in foreign exchange rates in any given reporting period may positively or negatively impact our financial performance. Foreign exchange translation negatively impacted our 2024 net sales performance by approximately 2%.

Current wording

In 2025, approximately 79% of our net sales originated outside of the U.S. and were denominated in numerous currencies, including the Chinese yuan and euro. Therefore, fluctuations in foreign exchange rates in any given reporting period may positively or negatively impact our financial performance. Foreign exchange translation had an immaterial impact on our 2025 net sales performance.

Previous wording

The preparation of financial statements in conformity with GAAP requires us to make estimates that may significantly impact our reported financial results and accompanying disclosures. We base our estimates, assumptions and judgments on historical experience, current conditions as well as other factors that we consider reasonable. Estimates relate to matters that are inherently uncertain and actual results may differ from these estimates and such differences could be material to our financial statements.

Current wording

The preparation of financial statements in conformity with GAAP requires us to make estimates that may significantly impact our reported financial results and accompanying disclosures. We base our estimates, assumptions and judgments on historical experience, current conditions and other factors that we consider reasonable. Estimates relate to matters that are inherently uncertain and actual results may differ from these estimates and such differences could be material to our financial statements.

Previous wording

In 2024, the estimated fair value of our reporting units was considered to be substantially in excess of their respective carrying value.

Current wording

In 2025, the estimated fair value of each of our reporting units was considered to be substantially in excess of their respective carrying value.

Previous wording

To supplement our financial results presented in accordance with GAAP in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, we present certain non-GAAP financial measures, such as operating results on a constant currency and organic basis and Adjusted EBITDA. Management internally reviews these non-GAAP measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to our business. We believe these non-GAAP financial measures, which are each further described below, provide investors with an additional perspective on trends and underlying operating results on a period-to-period comparable basis. We also believe that investors find this information helpful in understanding the ongoing performance of our operations separate from items that may have a disproportionate positive or negative impact on our financial results in any particular period or are considered to be associated with our capital structure.

Current wording

To supplement our financial results presented in accordance with GAAP in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, we present certain non-GAAP financial measures, such as operating results on a constant currency and organic basis, Adjusted EBITDA and Adjusted EBITDA margin. Management internally reviews these non-GAAP measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to our business. We believe these non-GAAP financial measures, which are each further described below, provide investors with an additional perspective on trends and underlying operating results on a period-to-period comparable basis. We also believe that investors find this information helpful in understanding the ongoing performance of our operations separate from items that may have a disproportionate positive or negative impact on our financial results in any particular period or are considered to be associated with our capital structure.

Previous wording

We define Adjusted EBITDA as EBITDA, excluding the impact of additional items included in GAAP earnings which we believe are not representative or indicative of our ongoing business or are considered to be associated with our capital structure. Management believes Adjusted EBITDA provides investors with a more complete understanding of the long-term profitability trends of our business and facilitates comparisons of our profitability to prior and future periods.

Current wording

We define Adjusted EBITDA as EBITDA, excluding the impact of additional items included in GAAP earnings which we believe are not representative or indicative of our ongoing business or are considered to be associated with our capital structure. Management believes Adjusted EBITDA and Adjusted EBITDA margin provide investors with a more complete understanding of the long-term profitability trends of our business and facilitates comparisons of our profitability to prior and future periods.

Previous wording

Net sales for 2024 increased 5% on a reported basis, 7% on a constant currency basis and 4% on an organic basis. Electronics' consolidated results were positively impacted by $59.7 million of pass-through metals pricing and $8.1 million of acquisitions and Industrial & Specialty's consolidated results were positively impacted by $0.5 million of acquisitions.

Current wording

Net sales for 2025 increased 4% on a reported basis, 3% on a constant currency basis and 6% on an organic basis. Electronics' consolidated results were positively impacted by $64.4 million of pass-through metals pricing and Specialties' consolidated results were negatively impacted by $139 million of divestitures.

Previous wording

•Assembly Solutions: net sales increased 8% on a reported basis and 1% on an organic basis. Pass-through metals pricing had a positive impact of 8% on reported net sales. Foreign exchange had a negative impact of 2% on reported net sales. The increase in organic net sales was primarily due to demand improvement in consumer, mobile and computer end markets, offset by weakness in broader industrial and automotive end markets.

Current wording

•Assembly Solutions: net sales increased 16% on a reported basis and 8% on an organic basis. Pass-through metals pricing had a positive impact of 8% on reported net sales. Foreign exchange had an immaterial impact on reported net sales. The increase in organic net sales was primarily due to higher paste and flux volumes from increased consumer electronics demand in Asia and the Americas.

Previous wording

•Industrial Solutions: net sales decreased 5% on a reported basis and 2% on an organic basis. Acquisitions had an immaterial impact on reported net sales. Foreign exchange had a negative impact of 2% on reported net sales. The decrease in organic net sales was primarily due to continued lower demand in the automotive end market, lower commodity surcharges in 2024 when compared to 2023 as well as demand softness in construction and industrial end markets. Both periods included an equipment sale for a new production line under a multi-year chemistry sales agreement with an automotive customer.

Current wording

•Industrial Solutions: net sales decreased 2% on a reported basis and remained relatively flat on an organic basis. Divestitures had a negative impact of 3% on reported net sales. Foreign exchange had an immaterial impact on reported net sales. An equipment sale in the third quarter of 2024 for a new production line under a multi-year chemistry sales agreement resulted in a negative impact of approximately 1% to organic net sales. In addition, organic net sales were impacted by volume declines in Europe from lower activity in automotive, construction and general industrial markets, offset by increased net sales of engineering applications primarily in the United Kingdom and increased demand in the automotive end market in Asia.

Previous wording

•Energy Solutions: net sales increased 8% on a reported basis and 8% on an organic basis. Foreign exchange had an immaterial impact on reported net sales. The increase in organic net sales was primarily due to price improvement and a continued increase in drilling and energy production activity from higher utilization rates.

Current wording

•Energy Solutions: net sales increased 8% on a reported basis and 7% on an organic basis. Foreign exchange had a positive impact of 1% on reported net sales. The increase in organic net sales was primarily due to an increase in production volumes from competitive wins and ongoing pricing actions.

Previous wording

Operating expenses for 2024 decreased 7% on a reported basis and 6% on a constant currency basis. Excluding the goodwill impairment charge discussed above, operating expenses for 2024 increased 4% on a reported basis and 5% on a constant currency basis. The constant currency increase was primarily driven by $19.8 million of higher incentive compensation costs, primarily due to higher accruals associated with increased expectations for strong full year financial results, $12.2 million of costs related to the MGS Transaction, higher personnel costs and $3.9 million of research and development costs associated with contingent consideration for the Kuprion Acquisition in the first quarter of 2024. This was partially offset by a 2023 expense of $15.7 million for research and development costs associated with the purchase accounting related to the Kuprion Acquisition. See Note 4, Acquisitions, to the Consolidated Financial Statements for further information regarding the Kuprion Acquisition research and development costs.

Current wording

Operating expenses for 2025 increased 5% on a reported basis and 5% on a constant currency basis. The constant currency increase was primarily driven by a 2025 executive share grant for $37.1 million in the fourth quarter of 2025, higher incentive compensation costs, due to higher accruals associated with increased expectations for strong full year financial results, $6.1 million of higher research and development costs associated with our Kuprion ActiveCopper applications and $4.0 million of non-recurring costs associated with the MGS Transaction in 2025; partially offset by $22.7 million of lower operating expenses due to the sale of MacDermid Graphics Solutions and $3.9 million of research and development costs associated with contingent consideration for the Kuprion Acquisition incurred in the first quarter of 2024. See Note 4, Acquisitions, to the Consolidated Financial Statements for further information regarding the Kuprion Acquisition research and development costs.

Previous wording

For the year ended December 31, 2024, the fluctuations in foreign exchange gains were primarily driven by the remeasurement of intercompany loans.

Current wording

For the year ended December 31, 2025, the fluctuations in foreign exchange (losses) and gains were primarily driven by the remeasurement of intercompany loans and working capital balances.

Previous wording

Other expense, net for 2023 included $7.0 million of charges due to highly inflationary accounting for our operations in Turkey, $2.3 million of debt refinancing costs related to the prepayment of our then existing term loans B-1 and term loans A and $0.1 million of net losses associated with metals derivative contracts ($1.3 million of realized losses and $1.2 million of unrealized gains).

Current wording

Other expense, net for 2025 included $47.2 million of net losses associated with metals derivative contracts ($30.5 million of realized and $16.7 million of unrealized losses), $3.6 million of charges due to highly inflationary accounting for our operations in Turkey and $1.8 million of debt extinguishment costs related to the partial prepayment of our term loans B-3 in the first quarter of 2025.

Previous wording

The income tax expense for 2024 totaled $44.8 million, as compared to $13.0 million in 2023. Our tax expense for 2024 was lower than the U.S. statutory tax rate primarily driven by a continued U.S. benefit related to claiming foreign tax credits consistent with our election in the fourth quarter of 2023, release of valuation allowances and deductions for FDII, with offsets from withholding taxes, tax attribute expirations and the impact of changes to the geographical mix of earnings.

Current wording

The income tax expense of $44.8 million for the year ended December 31, 2024, is below the statutory U.S. rate primarily driven by a continued U.S. benefit related to claiming foreign tax credits consistent with our election in the fourth quarter of 2023 and the release of valuation allowances and deductions for FDII, with offsets from withholding taxes, tax attribute expirations and the impact of changes to the geographical mix of earnings.

Previous wording

The rate for 2024 includes a benefit associated with the release of valuation allowances of $40.8 million previously recorded against certain U.K. tax attribute carryforwards, primarily consisting of net operating loss carryforwards and interest carryforwards. The valuation allowances were released as the Company expects improved profitability in its U.K. business and a shift to a three-year cumulative income position. The Company determined there was sufficient positive, objectively verifiable evidence to conclude that it is more likely than not that, as of December 31, 2024, select U.K. net deferred tax assets will be realized. These expectations are based on actual results, management's assessment of projected future taxable income, and expected utilization of net operating losses and tax carryforwards.

Current wording

The rate for 2024 also includes a benefit associated with the release of valuation allowances of $40.8 million previously recorded against certain U.K. tax attribute carryforwards, primarily consisting of net operating loss carryforwards and interest carryforwards. The valuation allowances were released as the Company expects improved profitability in its U.K. business and a shift to a three-year cumulative income position. The Company determined there was sufficient positive, objectively verifiable evidence to conclude that it is more likely than not that, as of December 31, 2024, select U.K. net deferred tax assets will be realized. These expectations are based on actual results, management's assessment of projected future taxable income, and expected utilization of net operating losses and tax carryforwards

Previous wording

During the third quarter of 2024, an internal restructuring of the Graphics business was completed which resulted in the recognition of a capital gain of $208 million. This gain was offset by capital losses generated in 2024 totaling $10.1 million and capital loss carryforwards of $198 million. The capital gain provided income of the appropriate character to support the release of a valuation allowance on the amount of the capital loss carryforward utilized. The remaining unused capital loss carryforward with a full valuation allowance expired at the close of 2024. The capital gain also resulted in a higher interest expense deduction and consequentially a lower deduction for FDII and lower utilization of certain foreign tax credits before expiration. In addition, the gain on the internal restructuring resulted in a step-up in tax basis and the Company recorded a deferred tax asset of $22.5 million on the excess of stock tax basis over book basis due to subsequent held for sale classification. As of the balance sheet date there is no objectively verifiable evidence supporting income of appropriate character to realize this tax benefit, therefore a valuation allowance has been recorded against this deferred tax asset. Due to the status of the MGS Transaction it is reasonably possible the status of this deferred tax assets and related valuation allowance are subject to change due to one or more future confirming events.

Current wording

During the third quarter of 2024, an internal restructuring of the Graphics business was completed which resulted in the recognition of a capital gain of $208 million. The gain was offset by capital losses generated in 2024 totaling $10.1 million and capital loss carryforwards of $198 million. The capital gain provided income of the appropriate character to support the release of a valuation allowance on the amount of the capital loss carryforward utilized. The remaining unused capital loss carryforward with a full valuation allowance expired at the close of 2024. The capital gain also resulted in a higher interest expense deduction and, consequentially, a lower deduction for FDII and lower utilization of certain foreign tax credits carryforwards before expiration. The gain resulted in a step-up in tax basis and the Company recorded a deferred tax asset of $22.5 million on the excess of stock tax basis over book basis due to the subsequent held for sale classification offset with a full valuation allowance. As noted above, this deferred tax asset and the corresponding valuation allowance were realized and released in connection with the MGS Transaction.

Previous wording

During 2024, the Company finalized the 2023 consolidated U.S. federal income tax return along with prior years amended federal corporate income tax returns related to crediting foreign taxes including the return-to-provision true-up of foreign tax credits, valuation allowances and prior year one-time benefit.

Current wording

Also, during 2024, the Company finalized the 2023 consolidated U.S. federal income tax return along with prior years amended federal corporate income tax returns related to crediting foreign taxes including the return-to-provision true-up of foreign tax credits, valuation allowances and prior year one-time benefit.

Previous wording

Electronics' Adjusted EBITDA for 2024 increased 14% on a reported basis and 16% on a constant currency basis. The constant currency increase was primarily driven by higher gross profits related to favorable product mix and growth in the Circuitry and Semiconductor Solutions businesses.

Current wording

Electronics' Adjusted EBITDA for 2025 increased 6% on a reported basis and 5% on a constant currency basis. The constant currency increase was primarily driven by the broad-based increase in sales across the segment.

Previous wording

Our primary sources of liquidity during 2024 were the proceeds from the syndication of our new term loans B-3 of approximately $1.04 billion as well as available cash generated from operations. Our primary uses of cash and cash equivalents were to prepay approximately $1.14 billion of debt outstanding, pay cash dividends and fund operations including working capital and capital expenditures. Our first significant debt principal payment of approximately $800 million is related to the maturity of our 3.875% USD Notes due 2028. In the fourth quarter of 2024, we paid a cash dividend of 8 cents per share. We currently expect to continue to pay a cash dividend on a quarterly basis; however, the actual declaration of any cash dividends, as well as their amounts and timing, will be subject to the final determination of our Board of Directors based on factors including our future earnings and cash flow generation.

Current wording

Our primary sources of liquidity during 2025 were the proceeds from the MGS Transaction and available cash generated from operations. Our primary uses of cash and cash equivalents were to prepay $200 million of our outstanding term loans B-3, fund operations, including working capital and capital expenditures, pay cash dividends and repurchase shares of our common stock under our stock repurchase program. Our first significant debt principal payment of approximately $800 million is related to the maturity of our 3.875% USD Notes due 2028. In the fourth quarter of 2025, we paid a cash dividend of 8 cents per share. We currently expect to continue to pay a cash dividend on a quarterly basis; however, the actual declaration of any cash dividends, as well as their amounts and timing, will be subject to the final determination of our Board of Directors based on factors including our future earnings and cash flow generation.

Previous wording

For the full year 2025, we expect our capital expenditures to be approximately $65.0 million. We believe that our cash and cash equivalents and cash generated from operations, supplemented by our availability under our lines of credit, including our revolving credit facility under the Credit Agreement, will be sufficient to meet our working capital needs, interest payments, capital expenditures, potential dividend payments and other business requirements for at least the next twelve months. However, working capital cycles and/or future repurchases of our common stock and/or acquisitions may require additional funding, which may include future debt and/or equity offerings. Our long-term liquidity may be influenced by our ability to borrow additional funds, manage interest rates, renegotiate existing debt and/or raise new equity or debt under terms that are favorable to us.

Current wording

For the full year 2026, we expect our capital expenditures to be approximately $75.0 million. We believe that our cash and cash equivalents and cash generated from operations, supplemented by our availability under our lines of credit, including our revolving credit facility under the Credit Agreement, will be sufficient to meet our working capital needs, interest payments, capital expenditures, potential dividend payments and other business requirements for at least the next twelve months. However, working capital cycles and/or future repurchases of our common stock and/or acquisitions may require additional funding, which may include future debt and/or equity offerings. Our long-term liquidity may be influenced by our ability to borrow additional funds, manage interest rates, renegotiate existing debt and/or raise new equity or debt under terms that are favorable to us.

Previous wording

During 2024, approximately 77% of our net sales were generated from non-U.S. operations, and we expect a large portion of our net sales to continue to be generated outside of the U.S. As a result, our foreign subsidiaries will likely continue to generate a substantial portion of our cash. We expect to manage our worldwide cash requirements with available funds generated by the many subsidiaries through which we conduct business and cost-efficient access to those funds. We may transfer cash from certain international subsidiaries to the U.S. and/or other international subsidiaries when we believe it is cost effective to do so. Of our $359 million of cash and cash equivalents at December 31, 2024, $224 million was held by our foreign subsidiaries.

Current wording

During 2025, approximately 79% of our net sales were generated from non-U.S. operations, and we expect a large portion of our net sales to continue to be generated outside of the U.S. As a result, our foreign subsidiaries will likely continue to generate a substantial portion of our cash. We expect to manage our worldwide cash requirements with available funds generated by the many subsidiaries through which we conduct business and cost-efficient access to those funds. We may transfer cash from certain international subsidiaries to the U.S. and/or other international subsidiaries when we believe it is cost effective to do so. Of our $627 million of cash and cash equivalents at December 31, 2025, $202 million was held by our foreign subsidiaries.

Previous wording

In the second quarter of 2023, we borrowed $150 million of incremental term loans A under our senior credit facility to finance the reacquired ViaForm Distribution Rights. In December 2023, we received proceeds of approximately $1.15 billion from the syndication of our term loans B-2 which were used to prepay our then outstanding $1.11 billion term loans B-1 and $150 million term loans A reducing gross debt by $105 million. During 2023, we also paid $77.4 million of cash dividends on shares of our common stock and $7.7 million for shares of our common stock withheld by the Company to satisfy the tax withholding requirements related to the vesting of RSUs included in "Other, net."

Current wording

In 2025, we prepaid $200 million of our outstanding term loans B-3, paid $77.8 million of cash dividends on shares of our common stock and paid $25.0 million in the aggregate for the repurchase of shares of our common stock under our stock repurchase program. In addition, we paid $19.4 million for shares of our common stock withheld by the Company to satisfy the tax withholding requirements related to the vesting of RSUs, partially offset by proceeds of $4.2 million received for stock options exercised, included in "Other, net."

Previous wording

The expected long-term rate of return on assets assumption is developed with reference to historical returns, forward-looking return expectations, the Domestic and Foreign Pension Plans' investment allocations, and peer comparisons. We used a long-term rate of return on plan assets of 7.0% and 3.1% for our Domestic and Foreign Pension Plans, respectively, to determine our net periodic pension expense for 2024. The discount rate used to value the pension obligation was developed with reference to a number of factors, including the current interest rate environment, benchmark fixed-income yields and expected future pension benefit payments. Discount rates of 5.6% and 3.1% were established for the Domestic Pension Plan and Foreign Pension Plans, respectively, at December 31, 2024, compared to rates of 5.0% and 3.1% established for those respective plans at December 31, 2023. We evaluate the Pension Plans' actuarial assumptions on an annual basis, including the expected long-term rate of return on assets and discount rates. A one percent increase in the discount rate would increase the pension plan expense by approximately $0.7 million and decrease the pension benefit obligation by approximately $14.0 million, whereas a one percent decrease in the discount rate would decrease the pension plan expense by approximately $0.9 million and increase the pension benefit obligation by approximately $16.7 million.

Current wording

The expected long-term rate of return on assets assumption is developed with reference to historical returns, forward-looking return expectations, the Domestic Pension Plans and Foreign Pension Plans' investment allocations, and peer comparisons. We used a long-term rate of return on plan assets of 6.7% and 3.9% for our Domestic Pension Plans and Foreign Pension Plans, respectively, to determine our net periodic pension expense for 2025. The discount rate used to value the pension obligation was developed with reference to a number of factors, including the current interest rate environment, benchmark fixed-income yields and expected future pension benefit payments. Discount rates of 5.3% and 3.5% were established for the Domestic Pension Plan and Foreign Pension Plans, respectively, at December 31, 2025, compared to rates of 5.6% and 3.1% established for those respective plans at December 31, 2024. We evaluate the Pension Plans' actuarial assumptions on an annual basis, including the expected long-term rate of return on assets and discount rates. A one percent increase in the discount rate would increase the pension plan expense by approximately $0.7 million and decrease the pension benefit obligation by approximately $13.9 million, whereas a one percent decrease in the discount rate would decrease the pension plan expense by approximately $0.9 million and increase the pension benefit obligation by approximately $15.9 million.

Previous wording

Our Domestic Pension Plans' investment policies incorporate an asset allocation strategy that emphasizes long-term growth of capital and acceptable asset volatility as long as such volatility remains consistent with the volatility of the indexes of relevant markets. Our investment policies attempt to achieve a mix of approximately 95% of plan investments for liability-matching, 3% for long-term growth, and 2% for near-term benefit payments. The weighted average asset allocation of the Domestic Pension Plan was 95% fixed income holdings, 3% equity securities and derivatives and 2% cash at December 31, 2024.

Current wording

Our Domestic Pension Plans' investment policies incorporate an asset allocation strategy that emphasizes long-term growth of capital and acceptable asset volatility as long as such volatility remains consistent with the volatility of the indexes of relevant markets. Our investment policies attempt to achieve a mix of approximately 94% of plan investments for liability-matching, 3% for long-term growth, and 3% for near-term benefit payments. The weighted average asset allocation of the Domestic Pension Plan was 94% fixed income holdings, 3% equity securities and derivatives and 3% cash at December 31, 2025.

Previous wording

The Domestic Pension Plans were overfunded by $2.3 million at December 31, 2024 compared to underfunded by $8.2 million at December 31, 2023. The increase in the funding position was primarily driven by $11.0 million of actuarial gains due to changes in plan assumptions and experience and a $7.1 million return on plan assets partially offset by $8.4 million of interest costs.

Current wording

The Domestic Pension Plans were overfunded by $5.0 million at December 31, 2025 compared to $2.3 million at December 31, 2024. The increase in the funding position in 2025 was primarily driven by $1.3 million of actuarial loss due to changes in plan assumptions and experience and a $12.0 million return on plan assets partially offset by $8.7 million of interest costs.

Previous wording

The Foreign Pension Plans were underfunded by $12.9 million at December 31, 2024 compared to $14.8 million at December 31, 2023.

Current wording

The Foreign Pension Plans were underfunded by $13.4 million at December 31, 2025 compared to $12.9 million at December 31, 2024.

Previous wording

At December 31, 2024, we had $1.82 billion of indebtedness, net of unamortized discounts and debt issuance costs of $14.8 million, which primarily included:

Current wording

At December 31, 2025, we had $1.63 billion of indebtedness, net of unamortized discounts and debt issuance costs of $10.3 million, which primarily included:

Previous wording

•$1.04 billion of term debt arrangements outstanding under our term loans; and

Current wording

•$836 million of term debt arrangements outstanding under our term loans; and