What changed in Kla's 10-K for the fiscal year ended June 30, 2026

[added] A supplier may discontinue production of a particular part for any number of reasons, including the supplier's financial condition or business operational decisions, which would require us to purchase, in a single transaction, a large number of such discontinued parts in order to ensure that a continuous supply of such parts remains available to our customers. Such "end-of-life" parts purchases could result in significant expenditures by us in a particular period, and, ultimately, any unused parts may result in a significant inventory write-off, either of which could have an adverse impact on our financial condition and results of operations for the applicable periods. Recently, a few large suppliers have discontinued manufacturing certain DRAM chips that are incorporated in a number of our products, and the resulting shortage has caused a dramatic increase in the prices to acquire these chips. Our efforts to procure these chips contributed to an increase in purchase commitments in fiscal 2026. We estimate that the additional costs to procure these DRAM chips will continue to have an adverse impact on our gross margin in fiscal 2027. If we are unable to acquire adequate supply of such chips or acquire them in a timely or cost-controlled manner, our results of operations could be harmed.

[added] In 2026, we entered into interest rate swaps which are designated as fair value hedges and allow us to convert a portion of our fixed-rate payments under the senior, unsecured long-term notes issued in June 2022 ("2022 Senior Notes") into floating-rate payments based on the Daily Secured Overnight Financing Rate swap rate plus a fixed number of basis points. As of June 30, 2026, we had an aggregate principal amount of $2.00 billion in fixed-rate debt that was swapped to floating-rate debt.

[added] Because the interest rate swaps convert a portion of our fixed-rate debt to floating-rate debt, an increase in interest rates would require us to pay additional interest on the swapped debt, which may have an adverse effect on our results of operations and cash flows. These hedges may be inadequate to achieve their intended purpose of managing the fair value of our fixed-rate debt exposure. Furthermore, if a financial counterparty to our hedges experiences financial difficulties or is otherwise unable to honor the terms of the interest rate hedges, we may experience material financial losses.

[added] Additionally, while we are pursuing recovery of duties previously paid through the administrative refund process established by U.S. Customs and Border Protection and have begun receiving refunds, changes in the refund process or related legal challenges could impact the timing of cash receipts and our results of operations.

[added] In April 2025, the Chinese government imposed export controls on seven of the seventeen elements classified as rare earth elements. In October 2025, the Chinese government imposed additional restrictions and licensing requirements on certain rare earth elements, some of which became effective immediately on the announcement date and other portions of the regulations became effective in November 2025. The Chinese government imposed export controls on an additional five rare earth elements and certain license requirements for items made outside of China that incorporate controlled rare earth elements. It is estimated that China controls about 70% of the worldwide mining of rare earth elements, 90% of the separation and processing of those elements and 93% of the magnets manufactured from those elements. Rare earth elements are critical to certain components contained in our products. If our suppliers are unable to provide the components necessary to make our products because of restrictions placed on their access to rare earth elements or products derived from rare earth elements, our business, financial condition and results of operations could be materially harmed. Our operating results and business may be adversely impacted if we are unable to obtain parts to meet our production requirements and product specifications, or if we are able to do so only on unfavorable terms.

[added] We also offer advanced technology solutions across a range of adjacent markets, including PCBs, advanced packaging, specialty semiconductors (such as LEDs, power devices and compound semiconductors), data storage and general materials research. In addition, our services business has grown consistently year over year and accounted for approximately 23% of our total revenues in fiscal 2026. Our services revenue, which is generated largely from recurring "subscription-like" contracts, provides maintenance and other services to maximize uptime, productivity and tool life for our customers, supported in part by continued demand from legacy semiconductor markets.

The shares of common stock repurchased under our stock repurchase program have reduced our basic and diluted weighted-average shares outstanding for the fiscal years ended June 30, 2026, 2025 and 2024. The total amount of stock repurchases during the fiscal years ended June 30, 2026, 2025 and 2024 was $2.29 billion, $2.15 billion and $1.74 billion, respectively. The stock repurchase program is intended, in part, to mitigate the potential dilutive impact related to our equity incentive plans and shares issued in connection with our ESPP as well as to return excess cash to our stockholders. As of June 30, 2026, an aggregate of $9.74 billion was available for repurchase under our stock repurchase program, which reflects an increase in the authorized repurchase amount of $7.00 billion in the third quarter of fiscal 2026, which is in addition to the [added] $3.94 billion authorization remaining as of December 31, 2025 under the then existing share repurchase program announced in the fourth quarter of fiscal 2025.

[added] Revenue in Korea increased 26.2% compared with the prior fiscal year, due to increased investments by memory customers, including investments supporting high-bandwidth memory and advanced DRAM technology roadmaps.

No corresponding language in the FY2026 10-K.

No corresponding language in the FY2026 10-K.

No corresponding language in the FY2026 10-K.

No corresponding language in the FY2026 10-K.

No corresponding language in the FY2026 10-K.

We have [added] faced delays and could face additional delays or denials in the export of our tools by regulatory agencies for national security or other regulatory concerns in the countries in which we do business, which could negatively affect our results of operations and timing of revenue recognition. We have controls and procedures designed to maintain compliance with U.S. and other applicable export control laws and regulations; however, we cannot guarantee that such controls and procedures will be successful in preventing violations or allegations of [added] violations of increasingly complex and often conflicting regulations worldwide. [added] Recently, some of our products destined for China have been held up by U.S. Customs and Border Protection due to questions about the nature of the customer or about the capabilities of our products. We cannot make any assurance that products that have been held up will be cleared for shipment in a timely manner or without a license. Shipment delays or cancellations could have an adverse effect on our financial condition and results of operations. The complexity and evolving nature of the rules and regulations, and the fact that Commerce or other relevant regulators might adopt interpretations of regulations that differ from those of the Company, increase our risk of non-compliance.

Our global operations are dependent upon certain information systems, including telecommunications, the internet, our corporate intranet, network communications, email and various computer hardware and software applications. System failures or malfunctions, such as difficulties with our customer and supplier relationship management systems, could disrupt our operations and our ability to timely and accurately process and report key components of our financial results. Our [added] ERP system is integral to our ability to accurately and efficiently maintain our books and records, record transactions, provide critical information to our management, and prepare our financial statements. [added] We are currently upgrading our ERP system, with implementation expected to be completed in the first quarter of fiscal year 2027. Implementation of an upgrade to an ERP system requires the investment of significant resources and could lead to data migration issues, administrative and technical problems, and delays. Moreover, once our ERP system is upgraded, it may not operate as we expect it to. Any disruptions or[added] difficulties that may occur in connection with our ERP system or other systems (whether in connection with the regular operation, periodic enhancements, modifications or upgrades of such systems or the integration of our acquired businesses into such systems, or due to cybersecurity events such as ransomware attacks, including attacks on the information systems of our business partners and other third parties) could adversely affect our ability to complete important business processes, such as the evaluation of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. Any of these events could have an adverse effect on our business, operating results and financial condition.

We maintain commitments to purchase inventory from our suppliers as well as goods, services, and other assets in the ordinary course of business. Our estimate of our significant purchase commitments primarily for material, services, supplies and asset purchases is [added] $5.97 billion as of June 30, [added] 2026, a majority of which will be due within the next 12 months. For additional details, refer to Note [added] 15 "Commitments and Contingencies" to our Consolidated Financial Statements.

[added] Revenue in China was comparable to the prior fiscal year, as continued investments in [added] legacy-node technologies by domestic semiconductor companies were largely offset by export control restrictions affecting certain advanced technology transactions.

As of June 30, [added] 2026 and 2025, we had no outstanding borrowings under the [added] Revolving Credit Facility or Prior Revolving Credit [added] Facility, respectively. We were in compliance with all covenants under the Credit Agreement as of June 30, [added] 2026 (the net leverage ratio was [added] 0.53 to 1.00 compared to a maximum [added] net leverage ratio of [added] 3.25 to 1.00 on a quarterly basis covering the trailing four consecutive fiscal quarters for each fiscal quarter). Considering our current liquidity position, short-term financial forecasts and ability to prepay the Revolving Credit Facility, if necessary, we expect to continue to be in compliance with our financial covenants at the end of our fiscal year ending June 30, [added] 2027. For additional information on the Revolving Credit Facility, see Note [added] 7 "Debt" in the Notes to our Consolidated Financial Statements.

[added] In 2026, we entered into interest rate swaps which are designated as fair value hedges and allow us to effectively convert a portion of our fixed-rate payments under the 2022 Senior Notes into floating-rate payments. Interest on the Senior Notes and interest on the swaps are both payable semi-annually. As of June 30, [added] 2026, we had an aggregate principal amount of senior, unsecured notes totaling $5.95 billion with due dates ranging from fiscal 2029 through fiscal 2063. For additional information on these senior notes, see Note [added] 7 "Debt" in the Notes to our Consolidated Financial Statements. As of June 30, [added] 2026, we were in compliance with all of our covenants under the relevant indentures associated with the Senior Notes.

On July 3, 2025, we [added] entered into a Revolving Credit Facility with a maturity date of July 3, 2030, that allows us to borrow up to $1.50 [added] billion, replacing the Prior Revolving Credit Facility (as defined below). Subject to the terms of the Credit Agreement, the Revolving Credit Facility may be increased by an amount up to $500.0 million in the aggregate. [added] As of June 30, 2025, we had in place a Credit Agreement dated June 8, 2022 ("Prior Credit Agreement") for an unsecured Revolving Credit Facility ("Prior Revolving Credit Facility") with a maturity date of June 8, 2027 that allowed us to borrow up to $1.50 billion. Subject to the terms of the Prior Credit Agreement, the Prior Revolving Credit Facility could have been increased by an amount up to $250.0 million in the aggregate.

We determine the fair value of purchased intangible assets using the income approach, primarily by applying the relief-from-royalty or multi-period excess-earnings methods. In connection with the [added] continued deterioration of the long-term forecast for our PCB businesses noted above, we recorded impairment losses related to purchased intangible assets of $8.7 million during the second quarter of fiscal [added] 2025.

We maintain guarantee arrangements available through various financial institutions for up to [added] $176.2 million, of which [added] $142.5 million had been issued as of June 30, [added] 2026, primarily to fund guarantees to customs authorities for value-added tax and other operating requirements of our consolidated subsidiaries worldwide.

The following [added] customer accounted for more than 10% of our total revenues, primarily in our Semiconductor Process Control segment, for the indicated periods:

As of June 30, [added] 2026, our cash, cash equivalents and marketable securities totaled [added] $4.90 billion, compared to the [added] $4.49 billion balance as of June 30, [added] 2025. Refer to below discussions of sources and uses of cash during the fiscal year.[added] As of June 30, 2026, $735.1 million of our $4.90 billion cash, cash equivalents, and marketable securities were held by our foreign subsidiaries and branch offices. We have recorded appropriate provisions for income or withholding taxes that may result from future repatriations of this balance.

We continue to focus on returning cash to our investors, making [added] $2.29 billion in share repurchases and paying [added] $1.06 billion in dividends in the year ended June 30, [added] 2026. Our Board of Directors has authorized a program that permits us to repurchase our common stock, including an increase in the authorized repurchase amount of $7.00 billion in the third quarter of fiscal 2026. As of June 30, 2026, we had $9.74 billion of repurchase authority remaining. We also announced an increase in the dividend [added] level in the [added] third quarter of fiscal [added] 2026 to $0.230 per share per quarter, which was our [added] 17th consecutive annual dividend increase. Refer to the "Liquidity and Capital Resources" section below for more information on our strong cash flow generation and strategy of returning excess cash to our stockholders.

[added] While we continue to invest in technological innovation, demand for our products may be affected by the timing of customer adoption decisions and changes in delivery schedules, which can result in variability in our operating results. In addition, geopolitical factors, including government regulations and tariffs, have impacted our results of operations and may continue to do so. We have also increased our purchase commitments, in part to secure the supply of key components, which may affect the timing and magnitude of our costs and working capital requirements. Despite these dynamics, we delivered higher revenue and net income in fiscal year [added] 2026 compared to fiscal year [added] 2025, driven by increased sales volume and disciplined cost management. Looking ahead to fiscal year 2027, we expect continued revenue growth as customer engagement and demand signals continue to strengthen.

Our business is affected by the concentration of our customer base and our customers' capital equipment procurement schedules as a result of their investment plans. Our product revenues in any particular period are impacted by the amount of new orders we receive during that period and, depending upon the duration of manufacturing and installation cycles, in the preceding periods. Revenue is also impacted by average customer pricing, customer revenue deferrals associated with volume purchase agreements, the effect of fluctuations in foreign currency exchange rates, increased trade restrictions as discussed in the "Executive Summary" section above and the availability of government incentives for semiconductor capital investments. Service revenues are generated from product maintenance and support services, as well as billable time and material service [added] calls made to our customers. The amount of our service revenues [added] is typically a function of the number of systems installed at our customers' sites and the utilization of those systems, but it is also impacted by other factors, such as our rate of service contract renewals, the types of systems being serviced and fluctuations in foreign currency exchange rates. A significant portion of our revenues continues to be generated in Asia, where a substantial portion of the world's semiconductor manufacturing capacity is located, and we expect that trend to continue.

Changes in gross margin from revenue volume of products and services reflect our ability to leverage existing infrastructure to generate higher revenues. Changes in gross margin from the mix of products and services sold reflect the impact of changes within the composition of product and service offerings. Changes in gross margin from manufacturing labor, [added] overhead and efficiencies reflect our ability to manage costs and drive productivity as we scale our manufacturing activity to respond to customer requirements and amortization of intangible assets. Changes in gross margin [added] from other service and manufacturing costs include the impact of tariffs, customer support costs, including the efficiencies with which we deliver services to our customers, and the effectiveness with which we manage our production plans and inventory risk. Other service and manufacturing costs included higher installation and warranty costs and increased costs due to tariffs, partially offset by lower inventory-related charges in fiscal year 2026 compared to fiscal year 2025.

Interest expense [added] represents interest associated with our debt instruments. Interest on our Senior Notes is payable semi-annually. Concurrent with the Senior Notes interest payments, floating interest payments on our interest rate swaps are paid semi-annually and the fixed-rate interest receivable on the swaps is received semi-annually. Interest expense during the fiscal year ended June 30, [added] 2026 decreased compared to the fiscal year ended June 30, [added] 2025 primarily due to reduced interest expense following our $750.0 million debt repayment in the second quarter of fiscal 2025.

[added] Revenue in North America increased 29.0% compared with the prior fiscal year, primarily due to increased leading-edge customer investments in [added] foundry/logic and memory technologies, supported by strong demand associated with AI and HPC applications.

Revenue from our Specialty Semiconductor Process [added] segment decreased slightly by 1% in fiscal 2026 compared to fiscal 2025, primarily due to lower customer investments and reduced product sales in China, mostly offset by higher service revenues resulting from growth in the installed base of tools.

[added] The semiconductor industry continues to experience market expansion and diversification. HPC and data centers, supported by increasing adoption of AI, are contributing to industry growth and these trends are expected to continue to [added] influence industry investment into fiscal year 2027. AI represents a key technology inflection point driving innovation and demand at the leading edge, and our portfolio of products is well positioned to support leading-edge demand and the ongoing AI infrastructure buildout. Our semiconductor customers generally operate in one or both major semiconductor device manufacturing markets: memory and foundry/logic. Long-term demand drivers include continued adoption of EUV in HVM for logic and DRAM (including high-bandwidth memory), which are increasing process control requirements and expanding our served market. Demand for advanced semiconductor technologies, particularly at leading-edge nodes such as 2-nanometer, is increasing process complexity and process control intensity, which in turn is driving incremental demand for our solutions. Increasing complexity and value of semiconductor packages, particularly for AI and HPC applications, is also driving significant growth in our advanced packaging business. Broader industry trends, including digitization, communication improvements, healthcare innovation, industrial applications, and increasing semiconductor content in automobiles and intelligent systems, are supporting continued investment in legacy and mature-node capacity, where long product lifecycles and expanding end-market demand require ongoing manufacturing investments.

We are a leading supplier of process control and yield management solutions and services for the semiconductor and related electronics industries. Our broad portfolio of inspection and metrology products, [added] along with related services, software and other offerings, [added] supports R&D and manufacturing of ICs, wafers and reticles. Our products, services and expertise [added] enable our customers to measure, detect, analyze and resolve critical [added] nanometer-scale product defects, helping them to [added] address manufacturing challenges and [added] achieve higher yields at lower cost.

Tax expense was [added] higher as a percentage of income before taxes during the fiscal year ended June 30, [added] 2026 compared to the fiscal year ended June 30, [added] 2025 primarily due to [added] a decrease in the proportion of earnings generated in jurisdictions with tax rates lower than the U.S. statutory rates and a decrease in the proportion of U.S. earnings eligible for the FDDEI deduction, partially offset by a decrease in our NCTI during the fiscal year ended June 30, [added] 2026 and a $230.4 million goodwill impairment charge during the fiscal year ended June 30, [added] 2025 which is non-deductible for income tax.

Changes in gross margin from revenue volume of products and services reflect our ability to leverage existing infrastructure to generate higher revenues. Changes in gross margin from the mix of products and services sold reflect the impact of changes within the composition of product and service offerings. Changes in gross margin from manufacturing labor, overhead and efficiencies reflect our ability to manage costs and drive productivity as we scale our manufacturing activity to respond to customer requirements and amortization of intangible assets. Changes in gross margin from other service and manufacturing costs include the impact of tariffs, customer support costs, including the efficiencies with which we deliver services to our customers, and the effectiveness with which we manage our production plans and inventory risk. Other service and manufacturing costs included higher installation and warranty costs and increased costs due to tariffs, partially offset by lower inventory-related charges in fiscal year 2026 compared to fiscal year 2025.

The change in Other expense (income), net during the fiscal year ended June 30, [added] 2026 compared to the fiscal year ended June 30, [added] 2025 was primarily [added] due to a net fair value gain of $28.0 million from an equity security, favorable foreign exchange fluctuation of $19.2 million, and release of a tax reserve of $11.6 million compared to the prior fiscal year, partially offset by lower interest income of $3.8 million.

SG&A expenses during the fiscal year ended June 30, [added] 2026 increased compared to the fiscal year ended June 30, [added] 2025, primarily due to increases in the following areas: [added] employee-related expenses of [added] $35.9 million as a result of increased headcount and higher compensation and benefits costs, facility-related expenses of [added] $23.9 million, and provision for credit losses of $22.7 million.

Revenue from our PCB and Component Inspection segment increased [added] 21% in fiscal [added] 2026 compared to fiscal [added] 2025, primarily driven by increased demand from customers investing in advanced packaging technologies, higher revenue from our PCB business, and increased service revenue attributable to growth in the [added] installed base of tools. The increase was partially offset by [added] the absence of revenue from our Display business following our exit from this business in the prior year.

Revenue from our Semiconductor Process Control segment increased [added] 12% in fiscal [added] 2026 compared to fiscal [added] 2025, primarily due to [added] increased revenue from foundry/logic and memory customers, driven by continued leading-edge investment supporting AI and HPC applications. Revenue growth also benefited from strong customer adoption of our advanced packaging products and higher service revenue [added] attributable to growth in the installed base of tools.

The [added] 12% increase in total revenues in the fiscal year ended June 30, [added] 2026 compared to the prior fiscal year [added] was primarily driven by higher product revenues [added] resulting from increased leading-edge customer investments in foundry/logic, memory and advanced packaging [added] technologies, supported by strong demand [added] associated with AI and HPC applications. Revenue growth also benefited from higher service revenues, which increased 16% due to growth in our installed base of tools.

Our business is affected by the concentration of our customer base and our customers' capital equipment procurement schedules as a result of their investment plans. Our product revenues in any particular period are impacted by the amount of new orders we receive during that period and, depending upon the duration of manufacturing and installation cycles, in the preceding periods. Revenue is also impacted by average customer pricing, customer revenue deferrals associated with volume purchase agreements, the effect of fluctuations in foreign currency exchange rates, increased trade restrictions as discussed in the "Executive Summary" section above and the availability of government incentives for semiconductor capital investments. Service revenues are generated from product maintenance and support services, as well as billable time and material service calls made to our customers. The amount of our service revenues is typically a function of the number of systems installed at our customers' sites and the utilization of those systems, but it is also impacted by other factors, such as our rate of service contract renewals, the types of systems being serviced and fluctuations in foreign currency exchange rates. A significant portion of our revenues continues to be generated in Asia, where a substantial portion of the world's semiconductor manufacturing capacity is located, and we expect that trend to continue.

Net cash used in financing activities during the fiscal year ended June 30, [added] 2026 was $3.39 billion compared to [added] $3.79 billion during the fiscal year ended June 30, [added] 2025. The decrease in cash used was primarily due to a debt repayment of $750.0 million [added] in the prior year, and an increase of cash provided by issuance of common stock of $17.1 million; partially offset by increases in cash [added] paid for dividends and dividend equivalents of $153.2 million, cash used for common stock repurchases of [added] $139.8 million and [added] tax withholding payments related to vested and released RSUs of $72.3 million.

Net cash used in investing activities during the fiscal year ended June 30, [added] 2026 was $1.19 billion compared to [added] $202.5 million during the fiscal year ended June 30, [added] 2025. The increase in cash used was primarily due to [added] increases in net [added] purchases of available-for-sale securities of [added] $959.9 million, and capital expenditures of $40.7 million, partially offset by a $10.5 million increase in proceeds from capital-related government [added] assistance.

We are continuously assessing the aggregate potential impact of government [added] regulations, tariffs and other geopolitical risks on our financial results and operations. See Part I Item 1A "Risk Factors" for more information regarding how such actions by the U.S. government or another country could significantly impact our ability to provide our products and services to existing and potential customers, especially in China, and adversely affect our business, financial condition and results of operations.

R&D expenses during the fiscal year ended June 30, [added] 2026 increased compared to the fiscal year ended June 30, [added] 2025, primarily due to [added] increases in employee-related expenses of [added] $124.8 million as a result of increased headcount and higher compensation and benefits costs, and engineering project material costs of [added] $36.0 million.

We typically finance our liquidity requirements through cash generated from our operations. Net cash provided by operating activities during the fiscal year ended June 30, [added] 2026 was $4.14 billion compared to [added] $4.08 billion during the fiscal year ended June 30, [added] 2025. The increase [added] in cash provided was primarily due to an increase in customer and other collections of approximately [added] $1.2 billion, mainly driven by higher [added] shipments, plus a decrease of income tax and other tax payments of approximately $136 million; partially offset by increases in accounts payable payments of approximately [added] $1.1 billion and employee-related payments of approximately [added] $213 million.

We also have commitments for our non-qualified executive deferred compensation plan of [added] 417.3 million, operating lease obligations of $301.5 million and an income tax payable obligation related to uncertain tax positions of [added] $275.3 million.

The total amounts of regular quarterly cash dividends and dividend equivalents paid during the fiscal years ended June 30, [added] 2026, 2025 and 2024 were $1.06 billion, $904.6 million and [added] $773.0 million, respectively. The increase in the amount of regular quarterly cash dividends and [added] dividend equivalents paid during the fiscal year ended June 30, [added] 2026 as compared to the fiscal year ended June 30, [added] 2025 reflected the [added] cumulative effect of two increases in the level of our regular quarterly cash dividend from [added] $0.170 to $0.190 per share [added] announced during the fourth quarter of fiscal 2025, and from [added] $0.190 to $0.230 per share announced during the [added] third quarter of fiscal [added] 2026. The amounts of accrued dividend equivalents payable for regular quarterly cash dividends on unvested RSUs with dividend equivalent rights were $13.3 million as of [added] both June 30, [added] 2026 and 2025. These amounts will be paid upon vesting of the underlying unvested RSUs as described in Note [added] 9 "Equity and Long-term Incentive Compensation [added] Plans" to our Consolidated Financial Statements.

The shares of common stock repurchased under our stock repurchase program have reduced our basic and diluted weighted-average shares outstanding for the fiscal years ended June 30, [added] 2026, 2025 and 2024. The total amount of stock repurchases during the fiscal years ended June 30, [added] 2026, 2025 and 2024 was $2.29 billion, $2.15 billion and [added] $1.74 billion, respectively. The stock repurchase program is intended, in part, to mitigate the potential dilutive impact related to our equity incentive plans and shares issued in connection with our ESPP as well as to return excess cash to our stockholders. As of June 30, [added] 2026, an aggregate of [added] $9.74 billion was available for repurchase under our stock repurchase program, which reflects an increase in the authorized repurchase amount of [added] $7.00 billion in the [added] third quarter of fiscal [added] 2026, which is in addition to the $3.94 billion authorization remaining as of December 31, 2025 under the then existing share repurchase program announced in the fourth quarter of fiscal 2025.

As of June 30, [added] 2026, our aggregate principal debt obligation was $5.95 billion, which represents Senior Notes due from fiscal year 2029 to fiscal year 2063. Interest payments of [added] $5.20 billion associated with all of our debt obligations are based on the principal amount multiplied by the applicable interest rate for each series of Senior Notes. For additional details, refer to Note [added] 7 "Debt" to our Consolidated Financial Statements.

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses incurred in connection with acquisitions, R&D credits as a percentage of aggregate pre-tax income, non-taxable or non-deductible increases or decreases in the assets held within our Executive Deferred Savings Plan, the tax effects of employee stock activity and the effectiveness of our tax planning strategies. We also continue to monitor the adoption of Pillar Two relating to the global minimum tax in each of our tax jurisdictions to evaluate its impact on our effective income tax rate. For some of the jurisdictions that have adopted Pillar Two in their tax legislation, it was effective for us beginning in our fiscal year ended June 30, [added] 2025.

On August [added] 6, 2026, we announced that our Board of Directors had declared a quarterly cash dividend of [added] $0.230 per share. Refer to Note [added] 19 "Subsequent Events" to our Consolidated Financial Statements for additional information regarding the declaration of our quarterly cash dividend announced subsequent to June 30, [added] 2026.