Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, provides management’s views on our financial condition and results of operations and should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related notes thereto.

NON-GAAP FINANCIAL MEASURES

We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. Reconciliations of our non-GAAP financial measures from the most directly comparable GAAP financial measures are provided in accordance with Regulations G and S-K.

Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture investments and other, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing.

We use the non-GAAP financial measures defined below in this MD&A.

• Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, the currency adjustments for transitional reporting of highly inflationary economies, and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for an extra week in our fiscal year and the calendar shift resulting from an extra week in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current period average exchange rates to exclude the effect of foreign currency fluctuations.

Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

• Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures.

We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period.

• Adjusted free cash flow refers to cash flow (used in) provided by operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from company-owned life insurance policies, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments, less net cash used for Argentine Blue Chip Swap securities. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases and acquisitions.

• Operational working capital as a percentage of annualized current quarter net sales refers to trade accounts receivable and inventories, net of accounts payable, and excludes cash and cash equivalents, short-term borrowings, deferred taxes, other current assets and other current liabilities divided by annualized current quarter net sales. We believe that operational working capital as a percentage of annualized current quarter net sales assists investors in assessing our working capital requirements because it excludes the impact of fluctuations attributable to our financing and other activities (which affect cash and cash equivalents, deferred taxes, other current assets and other current liabilities) that tend to be disparate in amount, frequency or timing, and may increase the volatility of working capital as a percentage of sales from period to period. The items excluded from this measure are not significantly influenced by our day-to-day activities managed at the operating level and do not necessarily reflect the underlying trends in our operations.

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OVERVIEW AND OUTLOOK

Fiscal Year

In January 2025, the Audit Committee of our Board of Directors approved a change to our previous 52- or 53-week fiscal year generally ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025 and fiscal years 2026 and beyond will begin on January 1 and end on December 31.

Net Sales

The factors impacting reported net sales change, as compared to the prior-year period, are shown in the table below.

									Three Months Ended March 29, 2025
Reported net sales change									—		%
Foreign currency translation									3
Sales change ex. currency(1)									2
Organic sales change(1)									2		%

(1)Totals may not sum due to rounding.

In the three months ended March 29, 2025, net sales increased on an organic basis compared to the same period in the prior year primarily due to higher volume/mix, partially offset by the impact of raw material deflation-related price reductions.

Net Income

Net income decreased from approximately $172 million in the first three months of 2024 to approximately $166 million in the first three months of 2025. The primary factors affecting this decrease were:

• The net impact of raw material deflation-related price reductions

• Losses on venture and other investments

• Unfavorable foreign currency translation

These items were partially offset by the following factors:

• Benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs

• Higher volume/mix

Cost Reduction Actions

2025 Actions

We recorded $4.8 million in restructuring charges, net of reversals, during the three months ended March 29, 2025. These charges consisted of severance and related costs for the reduction of approximately 130 positions, as well as asset impairment charges, at various locations across our company. Our 2025 actions are primarily intended to optimize the operational footprint in our Solutions Group reportable segment.

Restructuring charges were included in “Other expense (income), net” in the unaudited Condensed Consolidated Statements of Income. Refer to Note 4, “Cost Reduction Actions,” to the unaudited Condensed Consolidated Financial Statements for more information.

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Cash Flow

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net cash (used in) provided by operating activities			$	(16.3)					$	119.8
Purchases of property, plant and equipment			(36.0)						(48.8)
Purchases of software and other deferred charges			(7.6)						(6.9)
Purchases of Argentine Blue Chip Swap securities			—						(20.2)
Proceeds from sales of Argentine Blue Chip Swap securities			—						14.0
Proceeds from sales of property, plant and equipment			—						.1
Proceeds from insurance and sales (purchases) of investments, net			6.8						.1
Adjusted free cash flow			$	(53.1)					$	58.1

During the first three months of 2025, net cash (used in) provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments and trade rebates and changes in operational working capital, partially offset by lower tax payments, net of refunds. During the first three months of 2025, adjusted free cash flow decreased compared to the same period last year primarily due to a decrease in net cash provided by operating activities, partially offset by lower purchases of property, plant and equipment.

Outlook

In the first quarter of 2025, the U.S. announced additional tariffs on goods imported into the U.S. from numerous countries, many of which responded with reciprocal tariffs and other actions on goods imported from the U.S. The U.S. government has indicated that it is willing to negotiate with other countries regarding the tariffs; to enable these negotiations, it paused certain of these tariffs for a 90-day period. As it relates to the direct impact of these tariffs, a relatively small portion of our global materials purchases is impacted and the vast majority of our imports and exports between the U.S., Canada and Mexico are compliant with the United States-Mexico-Canada Agreement (“USMCA”). Based on current information, we estimate that the overall direct cost impact will likely result in a low single digit rate of inflation to our total raw material purchases. To mitigate the potential impact to our operations, we are implementing strategic sourcing adjustments and pricing surcharges. The indirect impact on demand for our products and solutions is more uncertain. While a majority of our products and solutions relates to less discretionary consumer staples, we also serve more discretionary and cyclical markets, such as industrials, durables and apparel.

Certain factors that we believe may contribute to or impact our 2025 results are described below.

• Elevated uncertainty related to trade policy and the macroeconomic environment.

• In the second quarter of 2025, we anticipate sales growth in the majority of our businesses to be offset by a decline in apparel, resulting in sales comparable to prior year.

• For the full year:

◦We expect an unfavorable impact to our net sales and operating income from foreign currency translation, based on recent rates.

◦We anticipate incremental savings from restructuring actions, net of transition costs.

◦We expect our effective tax rate to be in the mid-twenty percent range.

ANALYSIS OF RESULTS OF OPERATIONS FOR THE FIRST QUARTER

Income Before Taxes

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net sales			$	2,148.3					$	2,151.3
Cost of products sold			1,526.8						1,519.1
Gross profit			621.5						632.2
Marketing, general and administrative expense			347.0						365.2
Other expense (income), net			19.9						12.6
Interest expense			30.9						28.6
Other non-operating expense (income), net			(3.3)						(8.6)
Income before taxes			$	227.0					$	234.4

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Gross Profit

Gross profit for the first quarter of 2025 decreased from the same period last year due to the net impact of raw material deflation-related price reductions and unfavorable foreign currency translation, partially offset by benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and favorable volume/mix.

Marketing, General and Administrative Expense

Marketing, general and administrative expense decreased in the first quarter of 2025 compared to the same period last year primarily due to lower employee-related costs, favorable foreign currency translation and benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, partially offset by growth investments.

Other Expense (Income), Net

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Other expense (income), net, by type
Restructuring charges:
Severance and related costs, net of reversals			$	4.7					$	4.9
Asset impairment and lease cancellation charges			.2						1.1
Other items:
(Gain) loss on venture investments and other			14.3						2.2
Losses from Argentine peso remeasurement and Blue Chip Swap transactions			.7						11.3
Outcomes of legal matters and settlements, net			—						(6.9)
Other expense (income), net			$	19.9					$	12.6

Refer to Note 4, “Cost Reduction Actions,” to the unaudited Condensed Consolidated Financial Statements for more information regarding restructuring charges. Refer to Note 10, “Commitments and Contingencies,” to the unaudited Condensed Consolidated Financial Statements for more information regarding the outcomes of legal matters and settlements, net.

Interest Expense

Interest expense increased in the first quarter of 2025 compared to the same period last year primarily due to higher interest related to the €500 million of senior notes we issued in November 2024.

Net Income and Earnings per Share

			Three Months Ended
(In millions, except per share amounts and percentages)			March 29, 2025						March 30, 2024
Income before taxes			$	227.0					$	234.4
Provision for income taxes			60.7						62.0
Net income			$	166.3					$	172.4
Per share amounts:
Net income per common share			$	2.10					$	2.14
Net income per common share, assuming dilution			2.09						2.13
Effective tax rate			26.7		%				26.5		%

Provision for Income Taxes

Our effective tax rate for the three months ended March 29, 2025 was comparable to the same period last year. Refer to Note 6, “Taxes Based on Income,” to the unaudited Condensed Consolidated Financial Statements for more information.

RESULTS OF OPERATIONS BY REPORTABLE SEGMENT FOR THE FIRST QUARTER

During the fourth quarter of 2024, we modified our segment performance measure to exclude other expense (income), net. These changes align with how our chief operating decision maker evaluates segment performance and allocates resources. The prior period has been conformed to the current period presentation. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense; other non-operating expense (income), net; and other items.

Refer to Note 11, “Segment and Disaggregated Revenue Information,” to the unaudited Condensed Consolidated Financial Statements for more information.

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Materials Group

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net sales including intersegment sales			$	1,524.0					$	1,543.5
Less intersegment sales			(43.9)						(47.0)
Net sales			$	1,480.1					$	1,496.5
Segment adjusted operating income(1)			230.3						240.5

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $4.4 million and $14.4 million in the first quarter of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, (gain) loss on venture investments and other, losses from Argentine peso remeasurement and Blue Chip Swap transactions, and outcomes of legal matters and settlements, net.

The factors impacting reported net sales change, as compared to the prior-year period, are shown in the table below.

			Three Months Ended
			March 29, 2025
Reported net sales change			(1)		%
Reclassification of sales between segments			(1)
Foreign currency translation			3
Sales change ex. currency(1)			1
Organic sales change(1)			1		%

(1)Totals may not sum due to rounding.

In the first quarter of 2025, net sales increased on an organic basis compared to the same period in the prior year mainly due to favorable volume/mix, partially offset by the impact of raw material deflation-related price reductions. On an organic basis, net sales increased by a low single digit rate in North America, decreased by a low single digit rate in Europe, the Middle East and North Africa, increased by a low single digit rate in Asia Pacific and increased by a high single digit rate in Latin America.

Segment Adjusted Operating Income

Segment adjusted operating income decreased in the first quarter of 2025 compared to the same period last year primarily due to the net impact of pricing and raw material input costs and unfavorable foreign currency translation, partially offset by favorable volume/mix and productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs.

Solutions Group

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net sales including intersegment sales			$	681.4					$	665.7
Less intersegment sales			(13.2)						(10.9)
Net sales			$	668.2					$	654.8
Segment adjusted operating income(1)			68.2						60.9

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $10.1 million and $4.8 million in the first quarter of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, (gain) loss on venture investments and other, and outcomes of legal matters and settlements, net.

Net Sales

The factors impacting reported net sales change, as compared to the prior-year period, are shown in the table below.

			Three Months Ended
			March 29, 2025
Reported net sales change			2		%
Reclassification of sales between segments			2
Foreign currency translation			1
Sales change ex. currency(1)			5
Organic sales change(1)			5		%

(1)Totals may not sum due to rounding.

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In the first quarter of 2025, net sales increased on an organic basis compared to the same period in the prior year by a low single digit rate in high-value categories and a high single digit rate in the base business. Company-wide, on an organic basis, net sales of intelligent labels increased by a mid-single digit rate compared to the same period in the prior year.

Segment Adjusted Operating Income

Segment adjusted operating income increased in the first quarter of 2025 compared to the same period last year primarily due to benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, and higher volume, partially offset by growth investments.

FINANCIAL CONDITION

Liquidity

Operating Activities

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net income			$	166.3					$	172.4
Depreciation			48.8						49.0
Amortization			29.1						28.3
Provision for credit losses and sales returns			11.9						11.8
Stock-based compensation			7.9						7.5
Deferred taxes and other non-cash taxes			(14.8)						(3.0)
Other non-cash expense and loss (income and gain), net			20.5						18.1
Changes in assets and liabilities and other adjustments			(286.0)						(164.3)
Net cash (used in) provided by operating activities			$	(16.3)					$	119.8

During the first three months of 2025, net cash (used in) provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments and trade rebates and changes in operational working capital, partially offset by lower tax payments, net of refunds.

Investing Activities

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Purchases of property, plant and equipment			$	(36.0)					$	(48.8)
Purchases of software and other deferred charges			(7.6)						(6.9)
Purchases of Argentine Blue Chip Swap securities			—						(20.2)
Proceeds from sales of Argentine Blue Chip Swap securities			—						14.0
Proceeds from sales of property, plant and equipment			—						.1
Proceeds from insurance and sales (purchases) of investments, net			6.8						.1
Proceeds from settlement of net investment hedges			6.2						—
Payments for acquisitions, net of cash acquired, and venture investments			(2.6)						(.3)
Net cash used in investing activities			$	(33.2)					$	(62.0)

Purchases of Property, Plant and Equipment

During the first three months of 2025, in our Materials Group reportable segment, we primarily invested in equipment to support growth in the U.S. and certain countries in Europe, primarily Belgium; in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, including Vietnam and China, and in the U.S. During the first three months of 2024, in our Materials Group reportable segment, we primarily invested in buildings and equipment to support growth in the U.S. and in certain countries in Europe, primarily France; in our Solutions Group reportable segment, we primarily invested in buildings and equipment in certain countries in Asia Pacific, including Vietnam and China, in the U.S. and in certain countries in Latin America, primarily Mexico.

Purchases of Software and Other Deferred Charges

During the first three months of 2025 and 2024, we primarily invested in information technology upgrades in the U.S.

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Purchases and Proceeds from Sales of Argentine Blue Chip Swap Securities

During the first three months of 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $6 million. Refer to Note 12, “Supplemental Financial Information,” to the unaudited Condensed Consolidated Financial Statements for more information.

Proceeds from Insurance and Sales (Purchases) of Investments, Net

During the first three months of 2025, we received higher proceeds from sales from investments and insurance policies.

Proceeds from Settlement of Net Investment Hedges

During the first three months of 2025, we settled €420 million notional amount of net investment hedges.

Financing Activities

			Three Months Ended
(In millions)			March 29, 2025						March 30, 2024
Net increase (decrease) in borrowings with maturities of three months or less			$	796.5					$	15.9
Repayments of long-term debt and finance leases			(525.0)						(1.7)
Dividends paid			(69.4)						(65.3)
Share repurchases			(261.6)						(15.6)
Net (tax withholding) proceeds related to stock-based compensation			(11.9)						(18.3)
Payments for settlement of fair value hedges			(13.5)						—
Net cash used in financing activities			$	(84.9)					$	(85.0)

Borrowings and Repayment of Debt

During the first three months of 2025 and 2024, our commercial paper borrowings were used to fund the repayment of long-term debt, dividend payments, share repurchases, capital expenditures and other general corporate purposes.

In the first quarter of 2025, we repaid our €500 million of senior notes at maturity using the net proceeds from the €500 million of senior notes we issued in the fourth quarter of 2024, cash flows from operations and commercial paper borrowings.

Refer to Note 3, “Debt,” to the unaudited Condensed Consolidated Financial Statements for more information.

Dividends Paid

We paid dividends of $0.88 per share in the first three months of 2025 compared to $0.81 per share in the same period last year. In April 2025, subsequent to the end of the first quarter of 2025, we increased our quarterly dividend rate to $0.94 per share, representing an increase of approximately 7% from our previous quarterly dividend rate of $0.88 per share.

Share Repurchases

During the first three months of 2025 and 2024, we repurchased approximately 1.4 million and 0.1 million shares of our common stock, respectively.

In April 2025, subsequent to the end of the first quarter of 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased.

Net (Tax Withholding) Proceeds Related to Stock-based Compensation

Tax withholding for stock-based compensation was lower in the first three months of 2025 compared to 2024 primarily due to a lower number of shares vesting for certain performance-based awards based on our performance against the objectives established for the awards.

Payments for Settlement of Fair Value Hedges

During the first three months of 2025, we settled €420 million notional amount of fair value hedges.

Long-lived Assets

In the three months ended March 29, 2025, other intangibles resulting from business acquisitions, net, decreased by approximately $21 million to $734.7 million, primarily reflecting current year amortization expense.

Refer to Note 2, “Goodwill and Other Intangibles Resulting from Business Acquisitions,” to the unaudited Condensed Consolidated Financial Statements for more information.

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Shareholders’ Equity Accounts

As of March 29, 2025, the balance of our shareholders’ equity was $2.17 billion. Refer to Note 8, “Supplemental Equity and Comprehensive Income Information,” to the unaudited Condensed Consolidated Financial Statements for more information.

Impact of Foreign Currency Translation

			Three Months Ended
(In millions)			March 29, 2025
Change in net sales			$	(52)

International operations generated approximately 69% of our net sales during the three months ended March 29, 2025. Our future results are subject to changes in worldwide economic conditions, tariffs, social, geopolitical, and market conditions in the regions in which we operate and the impact of fluctuations in foreign currency exchange and interest rates.

The unfavorable impact of foreign currency translation on net sales in the first three months of 2025 compared to the same period last year was primarily related to euro-denominated sales and sales in Brazil.

Effect of Foreign Currency Transactions

The impact on net income from transactions denominated in foreign currencies is largely mitigated because the costs of our products are generally denominated in the same currencies in which they are sold. In addition, to reduce our income and cash flow exposure to transactions in foreign currencies, we enter into foreign exchange forward, option and swap contracts where available and appropriate. Refer to Note 5, “Financial Instruments,” to the unaudited Condensed Consolidated Financial Statements for more information.

Analysis of Selected Financial Ratios

We utilize the financial ratios discussed below to assess our financial condition and operating performance. We believe this information assists our investors in understanding the factors impacting our cash flow other than net income and capital expenditures.

Operational Working Capital Ratio

Operational working capital, as a percentage of annualized current-quarter net sales, is reconciled to working capital (deficit) below. Our objective is to minimize our investment in operational working capital, as a percentage of annualized current-quarter net sales, to maximize our cash flow and return on investment. As shown below, operational working capital, as a percentage of annualized current-quarter net sales, in the first quarter of 2025 increased compared to the first quarter of 2024.

(In millions, except percentages)			March 29, 2025						March 30, 2024
(A) Working capital (deficit)			$	77.6					$	(421.4)
Reconciling items:
Cash and cash equivalents			(195.9)						(185.7)
Other current assets			(299.0)						(250.6)
Short-term borrowings and current portion of long-term debt and finance leases			877.5						1,170.5
Accrued payroll and employee benefits and other current liabilities			802.7						836.2
(B) Operational working capital			$	1,262.9					$	1,149.0
(C) First-quarter net sales, annualized			$	8,593.2					$	8,605.2
Operational working capital, as a percentage of annualized current-quarter net sales: (B) ÷ (C)			14.7		%				13.4		%

Accounts Receivable Ratio

The average number of days sales outstanding was 64 days in the first quarter of 2025 compared to 63 days in the first quarter of 2024, calculated using the accounts receivable balance at quarter-end divided by the average daily sales in the respective quarter. The increase in average number of days sales outstanding was primarily due to the timing of collections and the impact of foreign currency translation.

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Inventory Ratio

Average inventory turnover was 6.0 in the first quarter of 2025 compared to 6.2 in the first quarter of 2024, calculated using the annualized first-quarter cost of products sold in 2025 and 2024, respectively, and divided by the inventory balance at quarter-end. The decrease in average inventory turnover was primarily due to the impact of foreign currency translation.

Accounts Payable Ratio

The average number of days payable outstanding was 76 days in the first quarter of 2025 compared to 78 days in the first quarter of 2024, calculated using the accounts payable balance at quarter-end divided by the respective annualized first-quarter cost of products sold. The decrease in average number of days payable outstanding primarily reflected the timing of vendor payments, partially offset by the impact of foreign currency translation.

Capital Resources

Capital resources used to fund our operational needs include cash flows from operations, cash and cash equivalents and debt financing, including access to commercial paper borrowings supported by our $1.20 billion revolving credit facility (the “Revolver”).

The Revolver is used as a back-up facility for our commercial paper borrowings and can be used for other corporate purposes. No balance was outstanding under the Revolver as of March 29, 2025 or December 28, 2024.

As of March 29, 2025, we had cash and cash equivalents of $195.9 million held in accounts at third-party financial institutions. Our cash balances are held in numerous locations around the world. As of March 29, 2025, the majority of our cash and cash equivalents was held by our foreign subsidiaries, primarily in Asia Pacific.

To meet our U.S. cash requirements, we have several cost-effective liquidity options available. These options include borrowing funds at reasonable rates, including borrowings from foreign subsidiaries, and repatriating foreign earnings and profits. However, if we were to repatriate foreign earnings and profits, a portion would be subject to cash payments of withholding taxes imposed by foreign tax authorities. Additional U.S. taxes may also result from the impact of foreign currency fluctuations related to these earnings and profits.

We are currently considering various sources, including cash flows from operations and commercial paper borrowings to repay our $25.0 million of medium-term notes and $5.0 million of medium-term notes maturing in the second and third quarters of 2025, respectively.

Capital from Debt

The carrying value of our total debt increased by approximately $307 million in the first three months of 2025 to $3.46 billion, primarily reflecting higher commercial paper borrowings and the revaluation of our euro-denominated debt, partially offset by the repayment of our €500 million of senior notes at their maturity in March 2025.

Credit ratings are a significant factor in our ability to raise short- and long-term financing. The credit ratings assigned to us also impact the interest rates we pay and our access to commercial paper, credit facilities and other borrowings. A downgrade of our short-term credit ratings could impact our ability to access commercial paper markets. If our access to commercial paper markets were to become limited, we believe that the Revolver and our other credit facilities would be available to meet our short-term funding requirements. When determining a credit rating, we believe that rating agencies primarily consider our competitive position, business outlook, consistency of cash flows, debt level and liquidity, geographic dispersion and management team. We remain committed to maintaining an investment grade rating.

Off-Balance Sheet Arrangements, Contractual Obligations, and Other Matters

Refer to Note 10, “Commitments and Contingencies,” to the unaudited Condensed Consolidated Financial Statements for this information. Except as indicated therein, we have no material off-balance sheet arrangements as described in Item 303(b) of Regulation S-K.