Published
# Advanced Micro Devices, Inc. (AMD) — Narrative, FY2026 Q2 Fiscal year ends on the Saturday nearest December 31. The second quarter of fiscal 2026 ended June 27, 2026; fiscal 2025 ended December 27, 2025. Sources: Annual Report on Form 10-K for fiscal 2025, filed February 4, 2026 (accession 0000002488-26-000018); Quarterly Report on Form 10-Q for the quarter ended June 27, 2026, filed August 5, 2026 (accession 0000002488-26-000123); and Current Reports on Form 8-K noted inline. --- ## Business *From the FY2025 Form 10-K, accession 0000002488-26-000018.* AMD designs high-performance and AI computing silicon and the software stack around it. It is a fabless company: it owns no wafer fabs and no final assembly and test plants. Its portfolio spans AI accelerators, server CPUs, GPUs, data processing units (DPUs), AI network interface cards (AI NICs), FPGAs and adaptive SoCs for data centers; CPUs, APUs, chipsets and discrete GPUs for PCs; semi-custom SoCs for game consoles; and embedded processors and programmable logic. From time to time it also sells or licenses portions of its IP portfolio. Beginning in the first quarter of fiscal 2025 AMD combined its Client and Gaming segments into one reportable segment and retrospectively restated prior periods. The three reportable segments are: **Data Center.** Server-class CPUs, GPUs, AI accelerators, DPUs, AI NICs, FPGAs and adaptive SoCs. Products include the EPYC processor family (5th generation shipping through 2025, with 6th generation introduced in 2026); the Instinct GPU family (MI200, MI300, MI325 and MI350 series, with the MI355X announced for large-scale AI deployments); Radeon PRO V visual-cloud GPUs; Virtex, Kintex, Artix and Spartan FPGAs and Zynq and Versal adaptive SoCs; Alveo accelerator cards; Pensando DPUs and the Pensando "Pollara" 400 and "Vulcano" AI NICs; and the Solarflare low-latency networking portfolio with the Onload user-space libraries for capital markets. AMD also builds rack-scale platform designs — the Helios platform, previewed in 2025 — that combine its CPUs, GPUs and networking into full AI systems. **Client and Gaming.** Ryzen and Ryzen AI CPUs and APUs for desktops and notebooks, Ryzen Threadripper for workstations, Ryzen PRO for commercial PCs, and the supporting chipset suite. AMD states it was the first company to integrate a dedicated neural processing unit on the same SoC as an x86 CPU for AI PCs. Gaming covers Radeon RX discrete GPUs (the RX 9000 series on the RDNA 4 architecture), Radeon PRO and Radeon AI PRO professional cards, and semi-custom SoCs — AMD silicon powers the Sony PlayStation 5, the Microsoft Xbox Series S and X, and the Valve Steam Machine. AMD describes itself as the market share leader in semi-custom game console products. **Embedded.** Embedded CPUs and APUs (EPYC Embedded 9005/4005/2005 series, Ryzen Embedded 9000 series, and the Ryzen AI Embedded P100 and X100 series introduced in January 2026), UltraScale+ and UltraScale FPGAs, Zynq and Versal adaptive SoCs including the RFSoC line, and Kria system-on-modules with their starter kits. End markets include aerospace and defense, automotive, industrial, vision and healthcare, communications infrastructure, test and measurement, broadcast and data center. An **All Other** category — principally amortization of acquisition-related intangibles and stock-based compensation — is not a reportable segment but carries a large operating loss. **Software.** AMD develops compilers, drivers and development tools across its silicon, and the open ROCm platform for AI training and inference. Vivado, Vitis and Vitis AI serve the FPGA and adaptive SoC lines. **Customers and channels.** Data Center sells primarily to hyperscale cloud and private data centers, OEMs, ODMs, system integrators and distributors. Client and Gaming sells to PC OEMs, distributors, add-in-board (AIB) manufacturers and console makers. Embedded sells directly and through distributors, OEM partners, value-added resellers and integrated solution vendors. No customer accounted for at least 10% of consolidated net revenue in fiscal 2025 or fiscal 2024; one Client and Gaming customer was 18% of consolidated net revenue in fiscal 2023. **Manufacturing.** AMD relies on TSMC for all microprocessor and GPU wafers at 7 nm and below and primarily on GLOBALFOUNDRIES for nodes larger than 7 nm, under a wafer supply agreement that sets a minimum annual capacity allocation and pricing through 2026. TSMC, United Microelectronics and Samsung supply programmable logic ICs. Assembly, test, mark and packaging is done by two joint ventures with affiliates of Tongfu Microelectronics, plus Siliconware Precision Industries and King Yuan Electronics; nearly all assembly and final test occurs in China, Malaysia and Taiwan. **Scale and IP.** Approximately 31,000 employees worldwide as of December 27, 2025. Roughly 7,200 U.S. patents and 2,200 pending U.S. applications; approximately 18,900 patent matters worldwide (about 12,600 issued and 6,300 pending). International sales were 67% of net revenue in fiscal 2025. **Competition.** Intel and Nvidia in Data Center CPUs, GPUs, DPUs and AI NICs, with Altera in FPGAs and adaptive SoCs, plus smaller fabless accelerator and Arm-based CPU vendors and customers building their own silicon. Intel in client CPUs and APUs; Nvidia (the discrete GPU share leader) and Intel in graphics. In Embedded, Altera, Lattice Semiconductor and Microsemi in FPGAs; Broadcom, Marvell, Analog Devices, Texas Instruments, NXP, Qualcomm and Nvidia in ASSPs; Intel in embedded CPUs. **Environmental.** AMD is a named responsible party at three Superfund sites in Sunnyvale, California, subject to 1991 Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board. It has recorded an estimated environmental liability of approximately $5.9 million and records no offsetting insurance recoveries. --- ## Risk factors *Condensed from Item 1A of the FY2025 Form 10-K (accession 0000002488-26-000018) and the updated risk factors in the Q2 FY2026 Form 10-Q (accession 0000002488-26-000123).* **Competitive position.** Competition is expected to remain intense. Intel uses its microprocessor market position to price aggressively and target AMD's customers and channel partners with incentives; Nvidia leverages its data center GPU position, financial resources and proprietary software ecosystem. Competitor conduct — allocation strategies, pricing, bundling, licensing terms, lack of software interoperability, acquisitions — can limit customers' ability to choose AMD. In September 2025 Nvidia announced a partnership with and investment in Intel covering new data center and client platform products, which AMD flags as a source of increased competition and pricing pressure. Arm-based architectures could expand and reduce demand for x86. Customers developing their own AI silicon compete directly for the same sockets. **AI demand concentration and trajectory.** AMD depends on a small number of customers for a substantial portion of revenue and expects that to continue. The near- and long-term trajectory of generative AI demand is unknown. Customers may be unable to secure sufficient data center capacity or energy, may face construction delays, may lack capital for AI infrastructure, or may request alternative financing or deferred-payment arrangements from vendors. Public perception and evolving laws around data centers are named as additional constraints on customer buildouts. **Cyclicality and seasonality.** The semiconductor industry is highly cyclical with severe historical downturns, price erosion and inventory adjustment periods. Revenue is typically higher in the second half than the first half, and a large portion of quarterly sales occur in the last month of the quarter, making forecasting difficult. **Export controls, tariffs and geopolitics.** This is the most concretely quantified risk in the filings. In April 2025 the U.S. imposed a license requirement on exports of certain semiconductors to China (including Hong Kong and Macau) and D5 countries, affecting Instinct MI308 products; AMD recorded approximately $800 million of inventory and related charges in the second quarter of 2025, began shipping under subsequently granted licenses and reversed approximately $360 million in the fourth quarter of 2025, for approximately $440 million of net charges in 2025. In August 2025 U.S. officials expressed an expectation that the government would receive 15% of revenue from licensed MI308 sales to China; no regulation establishing that requirement has been published. In February 2026 the U.S. granted licenses to ship Instinct MI325 products to certain China-based customers, but AMD does not yet know whether China will allow the imports, and licensed MI325 units must first undergo a U.S. inspection process — subjecting them to a 25% tariff on importation into the United States for that inspection. The October 2023 BIS advanced-computing controls restrict certain Instinct ICs and Versal FPGAs. The January 2025 "AI Diffusion Rule" is slated for rescission and replacement with rules of unknown scope. A September 2025 BIS rule extending Entity List restrictions to entities at least 50% owned by listed parties had enforcement suspended for one year in October 2025 but can be reimposed. AMD's two THATIC joint ventures with Higon Information Technology have been on the Entity List since June 2019. In 2026 China's State Council promulgated Decrees No. 834 and No. 835, expanding authority to investigate and impose countermeasures on foreign companies that implement foreign export controls — raising the prospect of conflicting legal obligations. The Commerce Department's OICTS supply-chain program and the Treasury Outbound Investment Security Program add further restrictions. Tariffs on data center hardware could raise customer costs and cause AI infrastructure investments to be delayed or cancelled. **Supply chain.** AMD has no long-term commitment contracts with some third-party manufacturers and buys much capacity on purchase orders; those manufacturers also serve AMD's competitors and could reprioritize capacity, raise prices or demand prepayments. An industry-wide memory shortage is ongoing and memory prices have risen, which AMD flags both as a cost/gross-margin risk and, in the 10-Q, as a factor that may raise the price of customer data center buildouts. Certain packages, PCBs, interposers, substrates and capacitors come from limited or sole suppliers. AMD's long-term purchase commitments and prepayments have grown, and the filing states these risks have increased as those obligations have grown and could increase further. For rack-scale systems, third-party rack-level components must also be available and qualified; AMD notes that although it supplies certain products used in Helios-based systems, it does not manufacture or sell the completed Helios racks, which are expected to begin shipping in the second half of fiscal 2026. **Manufacturing yields and product transitions.** Yields depend on third-party process and packaging technology. Shorter launch cycles and a broader accelerated-computing portfolio mean concurrent shipment of new and prior-generation products, uneven customer adoption, and heightened supply/demand and inventory management risk, plus potential quality or production issues. **Semi-custom dependence.** Semi-custom revenue depends on securing design pipeline customers and on the market success of Sony's and Microsoft's consoles, over whose marketing AMD has no control. **Security, IT and cyber.** Products have been and may be subject to security vulnerabilities; mitigations may degrade performance or depend on vendors and end users to deploy. AMD and its vendors face increasingly sophisticated cyberattacks, including AI-assisted attacks, with exposure to loss of confidential data, regulatory enforcement under GDPR/CCPA-CPRA and remediation costs. **Financial commitments and counterparty exposure.** AMD enters long-term capacity purchase agreements, financial guarantees, leases and cloud compute capacity commitments to support customer and commercial-partner infrastructure, increasing credit and counterparty exposure to partners that may fail to secure financing, execute on schedule or remain solvent. Committing to cloud compute capacity it cannot use or offload would create excess capacity and cost. Note indentures and the revolving credit agreement restrict liens, sale-leaseback transactions and mergers, with cross- default provisions. **Acquisitions, divestitures and goodwill.** Integration risk, unanticipated liabilities, dilution from equity issued as consideration, and post-closing purchase price adjustments on divestitures. Prior acquisitions produced significant goodwill and intangibles subject to impairment testing. **Climate change** (added in the Q2 FY2026 10-Q). Extreme weather and natural disasters could disrupt AMD's operations and those of suppliers and customers. Data centers depend on clean water and reliable energy; if customers cannot secure sufficient power or water they may be unable to expand capacity and may reduce or stop purchases. Insurance coverage varies and may not respond. **Other named risks.** Reliance on third-party IP and on Microsoft and independent software vendors supporting AMD hardware; reliance on distributors and AIB partners with price protection and stock rotation rights; gray market diversion; unfavorable currency movements; realizability of deferred tax assets and multi-jurisdiction tax exposure (including OECD Pillar Two, with a January 2026 OECD "side-by-side" package that would exempt U.S.-based multinationals from parts of the global minimum tax but must be adopted country by country); litigation; environmental and conflict minerals regulation; AI-specific regulation such as the EU AI Act; attracting and retaining talent; and stock price volatility, including the effect of the repurchase program. --- ## Management's discussion — fiscal 2025 *From Item 7 of the FY2025 Form 10-K, accession 0000002488-26-000018.* Net revenue grew 34% to $34.6 billion from $25.8 billion in 2024. - **Data Center**: $16.6 billion, up 32% from $12.6 billion, driven by 5th generation EPYC processors and Instinct MI350 series GPUs. Operating income $3.6 billion versus $3.5 billion — higher revenue was largely offset by higher cost of sales, approximately $440 million of net inventory and related charges from the MI308 export control, and higher operating expenses. - **Client and Gaming**: $14.6 billion, up 51% from $9.6 billion. Client was $10.6 billion, up 51%, on a 31% increase in processor unit shipments and a 15% increase in average selling price. Gaming was $3.9 billion, up 51%, on higher semi-custom revenue and Radeon GPU demand. Segment operating income $2.9 billion versus $1.2 billion. - **Embedded**: $3.5 billion, down 3% from $3.6 billion as certain end-market demand remained mixed. Operating income $1.2 billion versus $1.4 billion. - **All Other**: operating loss of $4.0 billion, principally $2.3 billion of amortization of acquisition-related intangibles and $1.6 billion of stock-based compensation (2024: $4.2 billion loss, $2.4 billion and $1.4 billion respectively). Gross margin was 50%, up one point from 49%, on product mix partly offset by the MI308 charges. R&D was $8.1 billion, up $1.6 billion or 25%, on headcount added for the AI strategy. Marketing, general and administrative was $4.1 billion, up $1.4 billion or 52%, on go-to-market activity. Amortization of acquisition-related intangibles was $2.3 billion, down 6%. Interest expense was $131 million versus $92 million, reflecting the $1.5 billion of 4.212% and 4.319% Notes issued in March 2025. Other income, net was $577 million versus $181 million, mainly higher unrealized gains on long-term investments. AMD recorded an income tax **benefit** of $103 million in 2025 (an effective rate of (2.5)%) against a $381 million provision in 2024 (19%). The swing was driven by an $853 million benefit from releasing uncertain tax positions on reasonable cause relief for dual consolidated losses approved by the IRS in April 2025; 2024 had included a $373 million tax effect from an intercompany integration transaction. The One Big Beautiful Bill Act, enacted July 2025, mainly accelerated expensing of domestic R&D, which reduced income eligible for FDII, reduced deferred tax assets and reduced the current income tax liability. **Strategic actions in 2025.** AMD completed the acquisition of ZT Systems in March 2025 for $3.2 billion in cash plus 8.3 million shares of common stock. It retained select IP and the design employees (the ZT Design Business), and in October 2025 sold the ZT data center infrastructure manufacturing business to Sanmina Corporation for $2.4 billion in cash, subject to purchase price adjustments, plus 1.2 million Sanmina shares valued at $154 million; AMD received $1.4 billion net of cash divested and is eligible for up to $450 million of contingent consideration through 2028. Sanmina becomes AMD's preferred manufacturing partner for complex AI systems. Net income from discontinued operations was $66 million for 2025, net of $54 million of tax, including a $121 million change in the fair value of contingent consideration. In October 2025 AMD entered a product purchase agreement with OpenAI OpCo, LLC to deploy 6 gigawatts of AMD GPUs, the first gigawatt powered by Instinct MI450 series products, and concurrently issued OpenAI a warrant for up to 160 million shares at $0.01 per share, exercisable through October 5, 2030 subject to vesting and technical and commercial conditions. AMD also made smaller acquisitions in compiler and machine learning software, photonics and co-packaged optics, and high-speed inference. **Liquidity at year-end 2025.** Cash, cash equivalents and short-term investments of $10.6 billion versus $5.1 billion a year earlier. Aggregate principal debt of $3.3 billion ($874 million short-term, $2.3 billion long-term) versus $1.8 billion. A $3.0 billion unsecured revolver expiring April 29, 2027 was undrawn during 2025, and no commercial paper was outstanding under the then $3.0 billion program. Unconditional commitments were approximately $12.2 billion, of which $8.5 billion fell in fiscal 2026, plus $940 million of commenced leases and $1.3 billion of leases not yet commenced. Operating cash flow from continuing operations was $6.5 billion (2024: $3.0 billion), including a $2.2 billion inventory build to support the Data Center ramp; discontinued operations contributed $1.2 billion. Investing used $6.9 billion from continuing operations, including $5.5 billion of short-term investment purchases, $1.8 billion for acquisitions net of cash acquired and $1.0 billion of capital expenditures. Financing used $431 million, with $1.3 billion of buybacks (12.4 million shares) and $607 million of tax-withholding repurchases against $1.5 billion of net debt issuance. As of December 27, 2025, $9.4 billion remained available under the $14 billion repurchase authorization. A 2024 restructuring plan that cut approximately 4% of headcount was substantially complete in the first quarter of 2025; cumulative charges were $186 million ($113 million severance and benefits, $73 million asset impairment), with no additional charges in 2025. --- ## Current quarter — Q2 fiscal 2026 (quarter ended June 27, 2026) *From the Form 10-Q filed August 5, 2026, accession 0000002488-26-000123, and the second quarter 2026 results announced August 4, 2026 (Form 8-K, accession 0000002488-26-000121).* Net revenue was $11.5 billion, up 50% year over year, a record for the company. Gross margin was 54% against 40% a year earlier — a 14-point swing driven by the absence of the prior-year MI308 export-control charges and favorable product mix weighted toward Data Center. Operating income was $2.0 billion against a $134 million operating loss a year earlier. Net income was $2.3 billion versus $872 million, and diluted earnings per share were $1.38 versus $0.54. **Segments (three months):** - **Data Center** $6.7 billion, up 107%, on EPYC processors and Instinct MI350 series GPUs. Operating income $2.1 billion against a $155 million operating loss a year earlier. Six-month revenue was $12.5 billion, up 81%, with $3.7 billion of operating income against $777 million. Data Center was 58% of company revenue in the quarter. - **Client and Gaming** $3.8 billion, up 6%. Client was $3.1 billion, up 23%, on a 34% increase in client processor unit shipments partly offset by a 6% decline in average selling price from a mix shift toward Ryzen mobile and away from Ryzen desktop. Gaming was $779 million, down 31%, on lower semi-custom revenue. Segment operating income fell to $582 million from $767 million on higher operating expenses. - **Embedded** $977 million, up 19%, as demand strengthened across end markets. Operating income $386 million versus $275 million. - **All Other** operating loss of $1.1 billion, principally $544 million of amortization of acquisition-related intangibles and $503 million of stock-based compensation. **Costs and below-the-line.** R&D was $2.5 billion, up 33% on AI-driven headcount; MG&A was $1.4 billion, up 41% on go-to-market spending. Interest expense was $37 million. Other income, net was $598 million against $98 million, an increase of $500 million driven primarily by unrealized gains from the public market listing of non-marketable equity securities during the quarter — a non-operating item worth isolating when reading the earnings growth. The tax provision was $252 million, a 9.8% effective rate for the quarter and 11.8% for the six months, below the 21% statutory rate on foreign-derived deduction eligible income and R&D credits. The prior-year quarter carried a large discrete tax benefit, so year-over-year net income comparisons are distorted on both the charge and the tax lines. Discontinued operations were a $(8) million loss for the quarter. **Balance sheet and capital.** Cash, cash equivalents and short-term investments were $13.1 billion versus $10.6 billion at year-end 2025. Operating cash flow from continuing operations was $5.3 billion for the six months, against $2.4 billion a year earlier; working capital moved with a $966 million increase in receivables, a $1.0 billion increase in prepaid expenses and other assets from supply agreement prepayments, and a $2.2 billion increase in accounts payable. Investing used $5.2 billion for the six months, including $4.6 billion of short-term investment purchases, $1.2 billion of capital expenditures and $844 million of long-term investments, plus a $243 million payment for post-closing working capital adjustments on the ZT Manufacturing divestiture. Aggregate principal debt was unchanged at $3.25 billion. In May 2026 AMD replaced its $3.0 billion revolver with a five-year, $5.0 billion unsecured revolving credit facility and raised the commercial paper program ceiling from $3.0 billion to $5.5 billion; neither had any balance outstanding at quarter-end. AMD repurchased 1.1 million shares for $221 million in the six months, leaving $9.2 billion of the $14 billion authorization; it retired 66.9 million treasury shares during the quarter. Marketable equity securities carried at $1.2 billion (from $0.2 billion at year-end) and non-marketable equity and other securities at $1.7 billion (from $1.1 billion). International sales were 70% of net revenue for the quarter. **Commitments stepped up sharply.** Unconditional commitments were approximately $30.3 billion at June 27, 2026 — $17.4 billion of it in the remainder of fiscal 2026 — against $12.2 billion at year-end 2025. These are wafer, substrate and component purchases plus multi-year cloud compute capacity arrangements and software and technology licenses. Leases that had commenced were approximately $1.2 billion and data center and other real estate leases not yet commenced were $4.5 billion, with terms of 6 to 11 years, expected to commence beginning in the second half of fiscal 2026. AMD also had a maximum gross exposure of $4.1 billion from guarantees of a commercial partner's data center lease obligations with terms up to 15 years; these guarantees become payable on the partner's default, may be issued in exchange for warrants, and are carried as a credit derivative in other long-term liabilities. **Customer warrants.** AMD issued warrants to OpenAI (October 2025) and to Meta Platforms (February 2026), each for up to 160 million shares at $0.01 per share, vesting in tranches tied to Instinct GPU purchase milestones and specified stock price targets, with the OpenAI warrant also subject to stock-performance thresholds and each vested tranche subject to further technical and commercial conditions before exercise. They are exercisable through October 5, 2030 and February 23, 2031 respectively. The warrants are classified as liabilities until conditions for equity classification are met. As of June 27, 2026 no tranche had vested or become exercisable and the warrants had no effect on the quarter's financial statements — the dilution is therefore entirely prospective, contingent on the associated GPU volumes actually being purchased. Both customers intend to deploy up to 6 gigawatts of AMD data center GPUs. OpenAI's initial one gigawatt is AMD Instinct MI450 Series GPU products; Meta's initial one gigawatt equivalent is a custom AMD Instinct GPU based on the MI450 architecture, optimized for Meta's workloads. **ZT/Sanmina tail.** The ZT Systems purchase consideration was finalized at $4.4 billion ($3.2 billion cash, $860 million in AMD shares, $361 million contingent consideration settled in October 2025), with measurement period adjustments of $218 million to goodwill. The Sanmina earn-out receivable stood at $348 million within other non-current assets. Current-period acquisitions added $126 million of goodwill; AMD states other acquisitions in the periods presented were individually and collectively immaterial. **Product and partnership momentum in the quarter.** AMD launched the Helios rack-scale solution and the Instinct MI400 series (MI455X for large-scale training and inference, MI430X for HPC and sovereign AI), introduced 6th generation EPYC server CPUs, released ROCm.ai, launched the Instinct MI350P, and acquired MEXT for AI-powered predictive memory technology. It announced a partnership with Anthropic to deploy up to 2 gigawatts of MI450 series GPUs in Helios racks, expanded its Microsoft Azure collaboration for Helios racks and Pensando DPUs, and announced a Helios/Cerebras collaboration for low-latency inference. **Guidance.** For the third quarter of fiscal 2026 AMD expects revenue of approximately $13 billion plus or minus $300 million — roughly 41% year-over-year growth and roughly 13% sequential growth at the midpoint. Management stated it expects Data Center sales to accelerate in the second half of 2026. --- ## Subsequent events Events after the June 27, 2026 quarter end. **Disclosed in the Q2 FY2026 Form 10-Q (accession 0000002488-26-000123):** - **Investment commitments of up to $5.0 billion**, subject to certain contingencies, expected to be made through fiscal year 2028. The filing does not name the counterparties. - **Long-term data center leases with aggregate future payments of $9.5 billion**, over lease terms of up to 16 years, expected to commence in 2027 and 2028. These are in addition to the $4.5 billion of not-yet-commenced leases already on the books at quarter-end. **Disclosed by Current Report on Form 8-K after the 10-Q was filed:** - **$4.75 billion senior notes offering closed August 17, 2026** (8-K accession 0001193125-26-354029). Four tranches: $1.25 billion of 4.600% Senior Notes due August 17, 2029; $1.50 billion of 5.000% Senior Notes due August 17, 2031; $1.00 billion of 5.250% Senior Notes due August 17, 2033; and $1.00 billion of 5.500% Senior Notes due August 17, 2036. The notes are general unsecured senior obligations issued under the June 9, 2022 base indenture as supplemented by a Third Supplemental Indenture with U.S. Bank Trust Company, National Association as trustee, and were priced under an underwriting agreement dated August 13, 2026 at 99.889%, 99.921%, 99.919% and 99.757% of principal for the 2029, 2031, 2033 and 2036 notes respectively. AMD intends to use net proceeds for general corporate purposes, which may include the repayment of debt. The indenture limits liens securing debt, certain sale and leaseback transactions, and consolidation, merger or sale of substantially all assets; holders may require repurchase at 101% of principal plus accrued interest upon a change of control triggering event. This roughly doubles the $3.25 billion of principal debt outstanding at quarter-end and lands alongside the step-up in purchase, lease and investment commitments described above. - **Board composition changed effective August 19, 2026** (8-K accession 0000002488-26-000163), with a director retirement, a new independent director and a change of Audit and Finance Committee chair. The company states the retirement was not the result of any disagreement over its operations, policies or practices. No operating or financial disclosure accompanied the change.