Note L – Cloud Computing Arrangements

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The Company capitalizes implementation costs associated with its cloud computing arrangements when incurred, consistent with the treatment of costs capitalized for internal use software. These costs begin amortization once the related software is placed in service and will be amortized over the remaining non-cancellable term of the hosting agreement, plus any renewal periods that are reasonably certain to be exercised, and are recorded within Operating, selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income, the same line item as the related hosting fees. No amortization expenses have been recorded in the twelve and thirty-six weeks ended May 10, 2025, or the comparable prior year periods. Capitalized cloud-based enterprise resource planning (ERP) software implementation costs were $17.1 million at May 10, 2025, which were recorded within Other long-term assets on the Company's Condensed Consolidated Balance Sheets. No cloud-based software implementation costs were recorded at August 31, 2024. Cloud computing arrangement implementation costs are classified within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.