Medtronic plc (MDT) FY2026 10-K and Q1 FY2027 10-Q Summary

Business

From the fiscal 2026 Annual Report on Form 10-K, accession 0001628280-26-044354.

Medtronic plc is a healthcare technology company headquartered in Galway, Ireland, founded in 1949 and selling in more than 150 countries. It develops, manufactures, distributes and sells device-based medical therapies and services, and describes itself as the leading global healthcare technology company. It has over 95,000 full-time employees, 43% of them based in the U.S. or Puerto Rico. No single customer accounts for more than 10 percent of total net sales. China is approximately six percent of total revenue.

Management frames its strategy around three areas: accelerating innovation-driven growth from recent launches and the pipeline; delivering better outcomes and experiences for patients and providers; and turning data, AI and automation into action.

Three reportable segments. Fiscal 2026 net sales were $36.4 billion.

Cardiovascular Portfolio, about $14.0 billion of fiscal 2026 net sales, the largest of the three. Beginning in the first quarter of fiscal 2027 the portfolio's divisions were reorganized from Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary & Peripheral Vascular into four: Electrophysiology Therapies (Cardiac Rhythm Management and Cardiac Ablation), Interventional Cardiology Therapies (Coronary and Renal Denervation, and Structural Heart), CardioVascular Surgery (Cardiac Surgery and Aortic), and Peripheral Vascular Health. Products span implantable pacemakers (Azure, Micra leadless transcatheter pacing), defibrillators (Aurora extravascular ICD, Cobalt and Crome), CRT devices, the SelectSecure 3830 and OmniaSecure leads, insertable cardiac monitors (Reveal LINQ, LINQ II), the TYRX antibacterial envelope, cardiac ablation (PulseSelect and Affera Sphere-360 pulsed field ablation catheters, Affera Sphere-9 focal catheter and mapping system, Arctic Front cryoablation), the CoreValve Evolut TAVR family and Avalus Ultra surgical valve, Endurant and Valiant stent grafts, Harmony transcatheter pulmonary valves, the Penditure left atrial appendage exclusion system, VitalFlow ECMO, Onyx Frontier and Resolute Onyx drug-eluting stents, the Symplicity Spyral renal denervation system, IN.PACT drug-coated balloons, the Abre venous stent, and the ClosureFast and VenaSeal endovenous systems. It also includes Care Management Services and Cath Lab Managed Services.

Neuroscience Portfolio, about $10.3 billion of fiscal 2026 net sales. Three divisions. Cranial & Spinal Technologies sells the AiBLE spine ecosystem, StealthStation navigation, Stealth Autoguide, O-arm imaging, Mazor robotic guidance, UNiD AI-driven surgical planning, Midas Rex drills, plus spinal implants (Catalyft, CD Horizon ModuLeX, T2 Stratosphere, Adaptix, Titan with nanoLOCK, Zevo, Infinity OCT, Prestige LP), the Infuse bone graft, and demineralized bone matrix products. Specialty Therapies covers Neurovascular (Pipeline Flex and Vantage flow diverters, Solitaire stent retrievers, Riptide aspiration, Onyx liquid embolic, React catheters), ENT (Straightshot M5, NIM Vital nerve monitoring, Propel and Sinuva sinus implants, StealthStation ENT, the Stealth AXiS system) and Pelvic Health (InterStim X, InterStim II, InterStim Micro, the Altaviva tibial neuromodulation system). Neuromodulation sells spinal cord stimulation (Inceptiv closed-loop, Intellis, Vanta), brain modulation (the Percept family with BrainSense), the SynchroMed III drug infusion system, and interventional products (Kyphon kyphoplasty, OsteoCool, Emprint, Accurian).

Medical Surgical Portfolio, about $8.8 billion of fiscal 2026 net sales. Surgical & Endoscopy sells advanced stapling and energy (Tri-Staple, Endo GIA, Signia, LigaSure, Sonicision 7), electrosurgical platforms (Valleylab FT10 and FX8), the Hugo robotic-assisted surgery system and Touch Surgery Enterprise, hernia products (AbsorbaTack, MaxTack, Symbotex, ProGrip), sutures (V-Loc, Polysorb, Monosof), and endoscopy (GI Genius, PillCam, Bravo, Endoflip 300, Emprint, ManoScan, Barrx, Nexpowder). Acute Care & Monitoring sells Nellcor pulse oximetry, the RespArray monitor, BIS brain monitoring, INVOS oximetry, WarmTouch warming, Microstream capnography, McGRATH MAC video laryngoscopes, and Shiley airway products.

All other / Diabetes, about $3.1 billion of fiscal 2026 net sales. In May 2025 Medtronic announced its intent to separate the Diabetes Business into an independent public company, MiniMed Group, Inc. MiniMed completed an initial public offering on March 9, 2026, after which Medtronic retained approximately 90% of it. Because Medtronic retains a controlling interest, MiniMed's results remain consolidated. From the fourth quarter of fiscal 2026 the Diabetes Operating Unit is no longer a reportable segment. Diabetes sells insulin pumps, continuous glucose monitoring systems and consumables.

How it sells. Direct sales representatives plus independent distributors and agents, with a portion of revenue from consignment inventory held at hospitals. Sales teams are organized around physician specialties; supply products are marketed to materials managers, group purchasing organizations and integrated delivery networks. Products require FDA 510(k) clearance or pre-market approval in the U.S. and CE Mark in the E.U.; the EU Medical Device Regulation implementation period runs to the end of 2027 for high-risk devices and the end of 2028 for medium- and low-risk devices.

Risk factors

From the fiscal 2026 Annual Report on Form 10-K, accession 0001628280-26-044354.

Competition and technology shifts. Medtronic competes against large diversified manufacturers and niche specialists, and also against alternative therapies including GLP-1 pharmaceuticals. Rapid technological change may shift standards of care, physician preferences and sites of service, including the growth of ambulatory surgical centers, faster than anticipated, and new modalities could reduce demand for device-based therapy in markets where Medtronic currently leads. The company has lost market share in the past in connection with product problems, physician advisories and safety alerts.

Execution across multiple platforms. Growth depends on developing, approving, scaling and commercializing several differentiated platforms concurrently across therapeutic and geographic markets. The company identifies delays, cost overruns, supply chain readiness and inconsistent execution as risks, and states that underperformance of one or more major launches could materially affect results. It also flags the risk of failing to integrate, scale or apply AI and digital technologies at a pace comparable to competitors.

Supply and manufacturing. Certain components, raw materials and services, including sterilization, come from sole suppliers, and several key products are manufactured or sterilized at a single facility with constrained capacity. FDA and other regulatory requirements make replacement sources slow to qualify. Evolving chemical regulation covering ethylene oxide and PFAS may add supply constraints; semiconductor and resin shortages have caused disruption before.

Acquisitions, divestitures and the Diabetes separation. The company has made several significant acquisitions and divestitures and notes that simultaneously executing multiple transactions increases operational complexity and heightens execution and timing risk. On the Diabetes separation specifically: it may be delayed or not completed as contemplated; it may generate transaction, advisory, separation and stand-up costs, dis-synergies and stranded costs; Medtronic may operate under transition agreements with MiniMed whose disputes could harm it; and depending on the structure and timing of future dispositions, Medtronic may retain significant exposure to MiniMed's business for an extended period. Future separation steps could produce tax liabilities.

Regulation and enforcement. Products and business activities are regulated by the FDA, DOJ, HHS Office of Inspector General and numerous non-U.S. authorities. Inspections have in the past produced Form 483 observations, warning letters and other enforcement, including against third parties on which Medtronic relies for manufacture, sterilization or supply, action against those third parties can disrupt Medtronic's ability to sell affected products even when Medtronic is not the direct subject. Workforce reductions and reorganization at the FDA and HHS may affect approval timelines and reimbursement programs.

Quality, recalls and product liability. Many products are implanted for long periods or used on critically ill patients. Component failures, manufacturing nonconformances or design issues can lead to recalls, safety alerts and product liability litigation including class actions, and because of the strength of the Medtronic brand a single adverse event can damage demand for a whole product family.

Reimbursement and cost containment. Customers depend on third-party payors. Coverage decisions, utilization management such as prior authorization, national and provincial tender pricing (particularly volume-based procurement in China), GPO and IDN purchasing concentration, and site-of-service incentives all bear on which products are bought and at what price. Some markets impose retrospective payment adjustments or clawbacks that could require refunds of amounts already received.

Intellectual property. The company is routinely both plaintiff and defendant in IP actions whose outcomes can take years. Patents expire, applications may not issue, and laws in some countries where Medtronic markets or manufactures protect IP less than U.S. law does.

Litigation. Product liability, commercial, IP, tax, securities, employment, environmental and competition matters are ongoing, and the company notes the increased availability of third-party litigation funding as a factor that may raise the frequency, scope and duration of claims.

Tax. Medtronic is taxed in the U.S., Ireland and elsewhere; treaty changes could increase taxation. The Pillar Two global minimum tax has been enacted in a number of countries including Ireland and was effective for Medtronic in fiscal 2025. The unresolved IRS dispute over allocation of income between Medtronic, Inc. and its Puerto Rico subsidiary for fiscal 2005 and 2006 was remanded by the Appellate Court back to the Tax Court in September 2025; an adverse outcome could be material.

Global operations and trade. Exposure includes currency movements, tariffs and border taxes, sanctions and export controls, and political instability. Trade and export control measures are increasingly aimed at software, digital health and AI-enabled tools, which could restrict Medtronic's ability to develop, deploy or service certain products in particular markets, including China. Russia and Belarus business is limited but supply of materials such as palladium and neon depends on Russian supply; Middle East conflict has disrupted maritime traffic and raised energy costs.

Cybersecurity. The company reports it is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on its business or operations. It does disclose that on April 24, 2026 it announced that an unauthorized third party accessed data in certain of its information technology systems; it contained the incident, engaged external experts, and based on its investigation to date has identified no impact to products, patient safety, customer connections, manufacturing and distribution, or financial reporting systems, and does not currently expect a material impact. Assessment remains ongoing and notification of affected individuals was expected to begin as early as the first quarter of fiscal 2027. The cybersecurity program is built on the NIST Cyber Security Framework 2.0 and led by a CISO reporting to the CIO, with Quality Committee and Audit Committee board oversight.

Insurance. Medtronic self-insures most of its insurable risks, managing part of the program through a wholly owned captive insurer, and retains third-party directors and officers coverage only.

Irish incorporation. Shareholders may find it harder to protect their interests than in a U.S.-incorporated company; U.S. judgments are not automatically enforceable in Ireland; direct (non-DTC) share transfers may attract 1% Irish stamp duty; and Irish law requires periodic shareholder authorization to issue shares and to disapply pre-emption rights, the current authorizations expire on April 16, 2027 unless renewed.

Other named risks include healthcare policy changes, anti-corruption compliance, environmental liabilities and remediation, climate and sustainability expectations, healthcare industry consolidation and the shift to ambulatory surgical centers, dependence on relationships with healthcare professionals, pricing pressure and inflation, debt obligations, and public health crises.

Management's discussion, fiscal 2026

From the fiscal 2026 Annual Report on Form 10-K, accession 0001628280-26-044354, covering the year ended April 24, 2026 against the year ended April 25, 2025.

Net sales were $36,364 million, up 8 percent from $33,537 million. U.S. sales were $18,103 million, up 5 percent; international sales were $18,261 million, up 12 percent. Diluted earnings per share were $3.73 against $3.61. Net cash provided by operating activities was $7,330 million against $7,044 million, and free cash flow (operating cash flow less property, plant and equipment additions) was $5,426 million against $5,185 million.

Management attributes the sales increase to growth across most businesses, to foreign currency, and to changes in the estimate of the Italian medical device payback accrual: the July 2024 Constitutional Court rulings and the June 2025 Legislative Decree (formalized into law in August 2025) covering certain prior years since 2015 produced a $39 million increase to net sales in fiscal 2026, against a $90 million decrease in fiscal 2025.

By segment. Cardiovascular was $14.0 billion, up 12 percent, Cardiac Rhythm & Heart Failure up 17 percent on pulsed field ablation growth (partly offset by cryoablation declines) plus Micra, Aurora EV-ICD and the 3830 lead; Structural Heart & Aortic up 7 percent on Penditure, Avalus Ultra and VitalFlow; Coronary & Peripheral Vascular up 5 percent on Symplicity Spyral, guide catheters and balloons and endovenous, partly offset by declines in coronary stents. Neuroscience was $10.3 billion, up 4 percent, Cranial & Spinal Technologies up 5 percent on AiBLE adoption; Specialty Therapies up 2 percent on ENT and Flow Diversion, offset by Pelvic Health and the Pipeline Vantage recall; Neuromodulation up 7 percent on Inceptiv, Percept RC and Interventional. Medical Surgical was $8.8 billion, up 5 percent, Surgical & Endoscopy up 4 percent, with growth in Surgical partly offset by Advanced Stapling declines from shifts to robotic surgery and lower bariatric procedure volumes; Acute Care & Monitoring up 7 percent. Diabetes was $3.1 billion, up 13 percent on international adoption of the MiniMed 780G system.

Costs. Cost of products sold was $12.7 billion against $11.6 billion, and rose as a percentage of sales, driven by $185 million of increased tariffs and duties on imported goods and $84 million of asset write-offs, partly offset by favorable currency and the Italian payback change. Research and development was $2.9 billion against $2.7 billion. Selling, general and administrative was $11.8 billion against $10.8 billion, up on selling expense in line with sales growth, new product launches, and increased spending to support the Diabetes separation. Accelerated amortization on certain Cardiovascular intangibles was $121 million in fiscal 2026 and $151 million in fiscal

1. Other operating expense swung on currency remeasurement and hedging, a $238 million net

loss against a $3 million net loss, plus a $157 million charge for a future minimum royalty obligation under a research and development funding arrangement. Net losses on minority investments were $131 million against $213 million.

Tax. The effective rate rose to 21.2 percent from 16.6 percent, on higher certain tax adjustments, an increase in Pillar Two global minimum tax, and jurisdictional mix. The non-GAAP nominal rate was 17.3 percent against 16.7 percent. Certain tax adjustments cost $260 million net in fiscal 2026, including $150 million on an intercompany sale of intellectual property, $70 million on the Diabetes separation and $66 million of deferred tax asset amortization, offset by a $51 million benefit on accrued interest for uncertain tax positions. Net operational tax benefits of $148 million were recognized.

Capital. Total debt was $28.0 billion at April 24, 2026 against $28.5 billion a year earlier. In July 2025 the company repaid €1.0 billion of Senior Notes at maturity for $1.2 billion. In September 2025 Medtronic, Inc. issued two tranches of Euro Senior Notes totaling €1.5 billion, maturing in fiscal 2031 and 2046, for roughly $1.7 billion net; proceeds repaid €500 million of Medtronic Luxco 2.625% notes for $587 million in September 2025 and €1.0 billion of Luxco 0.000% notes for $1.2 billion in October 2025. The company repurchased 10 million shares in fiscal 2026 at an average $93.25, against 38 million at $83.36 in fiscal 2025, leaving about $1.2 billion of the March 2024 $5.0 billion authorization. Liquidity at year end was $1.9 billion of cash and $7.3 billion of current investments, with no commercial paper outstanding and nothing drawn on the $3.5 billion credit facility expiring December 2030.

Goodwill. In the third-quarter annual impairment test, the Medical Surgical reporting unit's fair value exceeded its carrying value including goodwill by approximately 12%; $20.0 billion of goodwill was allocated to that unit at April 24, 2026. Other reporting units' fair values materially exceeded carrying values. MiniMed's stock price declined after its IPO; as of the 10-K's filing date its estimated fair value still exceeded carrying value, but the company flags risk of future impairment.

Outlook given in the 10-K. Based on rates as of June 3, 2026, management estimated a pre-tax net tariff impact of $250 million in fiscal 2027, excluding any government refunds.

Current quarter, first quarter of fiscal 2027

From the Form 10-Q for the quarter ended July 31, 2026, accession 0001628280-26-060473, and the earnings release furnished as Exhibit 99.1 to the Form 8-K dated September 1, 2026, accession 0001628280-26-059697.

The extra week. Fiscal 2027 is a 53-week year and the extra week fell in the first fiscal month of the first quarter, inside these results. The company estimates it benefited reported growth by approximately $570 million. The quarter is therefore 14 weeks against 13 weeks a year earlier, and no growth rate below is week-for-week comparable.

Net sales were $9,756 million against $8,578 million, up 14 percent as reported (the release states 13.7% as reported and 13.7% organic). U.S. sales were $4,906 million, up 16 percent; international sales were $4,850 million, up 11 percent. GAAP diluted earnings per share were $1.14 against $0.81; the release reports non-GAAP diluted EPS of $1.45, up 15.1%, and GAAP operating margin of 18.1% against non-GAAP operating margin of 23.7%. Net cash provided by operating activities was $1,793 million against $1,088 million.

Management attributes the sales increase to growth in most businesses, the extra week, and foreign currency, partially offset by the comparison against the prior-year Italian payback adjustment, the accrual decreased $39 million in the prior-year quarter as an increase to net sales, with no equivalent adjustment this quarter.

Beginning this quarter the Cardiovascular divisions were recast into Electrophysiology Therapies, Interventional Cardiology Therapies, CardioVascular Surgery and Peripheral Vascular Health, and a Surgical & Endoscopy product line moved into Neuromodulation. Prior-period sales have been recast.

By segment (three months, in millions). Cardiovascular $3,927 against $3,285, up 20 percent: Electrophysiology Therapies $2,218, up 30 percent, on pulsed field ablation in Cardiac Ablation Solutions and on Cardiac Pacing Therapies and Defibrillation Solutions within Cardiac Rhythm Management; Interventional Cardiology Therapies $894, up 7 percent, on TAVR, Symplicity Spyral, guide catheters and balloons; CardioVascular Surgery $477, up 9 percent, on Aortic, Avalus Ultra and VitalFlow ECMO; Peripheral Vascular Health $338, up 12 percent, on Peripheral Vascular and endoVenous. Neuroscience $2,678 against $2,427, up 10 percent: Cranial & Spinal Technologies $1,365, up 13 percent, on AiBLE adoption with growth in Core Spine and Neurosurgery; Specialty Therapies $774, up 10 percent, on Altaviva, ENT and Neurovascular, the latter driven primarily by the Scientia acquisition and Flow Diversion, partly offset by the Pipeline Vantage recall; Neuromodulation $539, up 5 percent, on Pain Stim and Percept RC. Medical Surgical $2,279 against $2,073, up 10 percent: Surgical & Endoscopy $1,740, up 9 percent, on LigaSure, V-Loc, ProGrip, the Hugo RAS system and Endoscopy; Acute Care & Monitoring $539, up 14 percent, on Nellcor, McGRATH MAC and Microstream. Diabetes was $843 against $721, up 17 percent, on the U.S. launch of MiniMed Flex with Simplera Sync and international adoption of the MiniMed 780G system.

Costs. Cost of products sold was $3.4 billion against $3.0 billion and was flat as a percentage of sales, on favorable pricing and cost-down initiatives offset by unfavorable mix; the company states the year-over-year impact of tariffs was not material once refunds are included. Research and development was $771 million against $726 million. Selling, general and administrative was $3.2 billion against $2.8 billion, up on selling expense in line with sales growth and on new product launches and commercialization. Amortization of intangibles fell because the prior-year quarter carried $45 million of accelerated amortization on Cardiovascular intangibles. Other operating expense reflected lower income from research and development funding arrangements, partly offset by a $48 million net loss on currency remeasurement and hedging against a $62 million net loss a year earlier. Other non-operating income improved on net gains on minority investments of $64 million against net losses of $113 million, partly offset by $17 million lower interest income.

Tax. The effective rate was 16.4% against 19.6%, the decrease driven by release of reserves for uncertain tax positions on prior-period intercompany transactions and by jurisdictional mix. The non-GAAP nominal rate was 17.2% against 17.8%.

Liquidity and capital. Operating cash flow rose $705 million year over year on higher collections from customers and lower cash taxes and litigation payments, partly offset by higher payments to suppliers. Cash used in investing rose $900 million, driven by a $1.2 billion increase in acquisitions partly offset by $109 million of net sales of investments. Net cash used in financing fell $1.0 billion: debt activity swung $1.3 billion, with $812 million of short-term borrowing inflows this year against $513 million of outflows a year ago, when the company also repaid €1.0 billion of Medtronic Luxco Senior Notes for $1.2 billion. Net share repurchases rose $219 million; the company bought 3 million shares at an average $81.56, leaving approximately $1.0 billion under the March 2024 authorization. Dividends were $0.72 per ordinary share, $921 million in total, against $0.71 and $910 million. Total debt was $28.2 billion at July 31, 2026 against $28.0 billion at April 24, 2026, the increase mostly short-term borrowings. Liquidity was $1.7 billion of cash and $7.1 billion of current investments; $450 million of commercial paper was outstanding against none at April 24, 2026, and nothing was drawn on the credit facility.

Goodwill. At July 31, 2026, $19.7 billion of goodwill was allocated to the Medical Surgical reporting unit, whose fair value exceeded carrying value by approximately 12% at the last annual test in the third quarter of fiscal 2026.

Acquisitions closed in the quarter. Scientia Vascular closed June 12, 2026, $527 million cash at closing plus $123 million of contingent consideration, $651 million of total consideration transferred and $681 million of total purchase price including $30 million of debt settlement; $511 million was recorded as goodwill and $278 million as other intangibles. SPR Therapeutics, Inc. closed July 16, 2026 for $654 million of cash consideration, with $422 million of goodwill and $241 million of other intangibles. Goodwill for both was assigned to the Neuroscience Portfolio and is not tax-deductible.

Diabetes separation. Medtronic still holds 252,813,348 MiniMed shares, about 90% of MiniMed, unchanged since the March 2026 IPO, and plans to complete the separation within fiscal 2027. The earnings release states that the separation is expected to be completed through a series of capital markets transactions which may include a spin-off, split-off, offering or combination, that a split-off is the company's current preferred structure, and that no final decision has been reached.

Litigation. No certain litigation charges were recognized in the quarter, against $27 million a year earlier; accrued certain litigation was approximately $0.2 billion at both July 31, 2026 and April 24, 2026. In the hernia mesh litigation, roughly 10,500 individual plaintiffs have filed as of August 5, 2026, and on August 4, 2026 the jury in the first MDL trial returned a verdict for plaintiffs awarding $88 million; the company believes the verdict is inconsistent with the law and evidence, expects to challenge and if necessary appeal, and has recorded no liability because a loss is not probable. In the Applied Medical antitrust case, a jury returned a $382 million verdict against the company on February 5, 2026, to be automatically trebled, with injunctive relief to be argued in October 2026 and attorneys' fees expected to be sought; the company plans to appeal and to post surety bonds once final judgment is entered, and has recorded no liability. Diabetes pump retainer ring litigation covers 27 suits on behalf of 105 individuals as of August 7, 2026; MiniMed will be responsible for any resulting financial liabilities. The Mallinckrodt bankruptcy trust's fraudulent transfer claims against Covidien affiliates are proceeding to discovery on the merits. On Italian payback, discussions continue between the Italian government and industry on years 2019 and beyond, and the accrued amount could differ materially. On tax, the Puerto Rico income allocation matter is back before the Tax Court with the parties seeking a stay to discuss resolution; an April 2026 preliminary IRS audit report on Medtronic Group Holding, Inc. for fiscal 2017 to 2019 left the Puerto Rico allocation, intercompany debt interest rates and foreign tax credit calculation unresolved, and the company will pursue IRS Appeals.

Guidance. The company raised fiscal 2027 organic revenue growth guidance by 50 basis points to 7.25% to 7.75%, from a prior 6.75% to 7.25%, and raised fiscal 2027 diluted non-GAAP EPS guidance to $5.94 to $6.00, from a prior $5.90 to $6.00. Guidance assumes a neutral to 1% accretive impact from foreign currency based on recent rates.

Tariffs. The 10-Q notes that on February 20, 2026 the U.S. Supreme Court ruled the administration's IEEPA tariff policies unconstitutional, that U.S. Customs and Border Protection has implemented refund procedures, and that the company has participated where appropriate.

Subsequent events

From Note 19 of the Form 10-Q for the quarter ended July 31, 2026, accession 0001628280-26-060473.

• In August 2026, after quarter end, the company entered into a cross-currency swap derivative

contract with a notional amount of $1.0 billion, designated as a net investment hedge of Chinese renminbi denominated exposures arising from investments in certain CNY functional-currency subsidiaries.

• On September 1, 2026, the company announced a strategic partnership with Cornerstone Robotics, a

surgical robotics company. The partnership includes an investment in Cornerstone and the rights to distribute Cornerstone's Sentire surgical system in select markets outside the U.S. where the system is approved. Medtronic paid approximately $700 million in cash for the investment in the second quarter of fiscal 2027; it will appear primarily as an increase in other assets.