In connection with various contracts and agreements, the Company has agreed to indemnify counterparties against certain third party claims relating to the infringement of intellectual property rights and other items. Generally, such indemnification obligations do not apply in situations in which the counterparties are grossly negligent, engage in willful misconduct, or act in bad faith. Based on the Company’s historical experience and the estimated probability of future loss, the Company has determined that the fair value of such indemnifications is not material to its consolidated financial position or results of operations.

From time to time, the Company is involved in litigation and other proceedings, including matters related to commercial and intellectual property disputes, as well as trade, regulatory and other claims related to its business. Other than as described below, the Company believes that all current proceedings are routine in nature and incidental to the conduct of its business. However, the matters described below, if decided adversely to or settled by the Company, could result, individually or in the aggregate, in a liability material to the Company's consolidated financial position, results of operations or cash flows.

In accordance with ASC Topic 450 “Contingencies” (“Topic 450”), the Company establishes accruals for contingencies when (i) the Company believes it is probable that a loss will be incurred and (ii) the amount of the loss can be reasonably estimated. If the reasonable estimate is a range, the Company will accrue the best estimate in that range; where no best estimate can be determined, the Company will accrue the minimum. Legal proceedings and other contingencies for which no accrual has been established are disclosed to the extent required by Topic 450.

From time to time, the Company’s view regarding probability of loss with respect to outstanding legal proceedings will change, proceedings for which the Company is able to estimate a loss or range of loss will change, and the estimates themselves will change. In addition, while many matters presented in financial disclosures involve significant judgment and may be subject to significant uncertainties, estimates with respect to legal proceedings are subject to particular uncertainties. Other than as described below, the Company believes that all current proceedings are routine in nature and incidental to the conduct of its business.

In connection with previously disclosed and now concluded matters, including a consolidated securities class action (the "Consolidated Securities Action"), shareholder derivative lawsuits and government investigations, the Company provided notice of claims under multiple director and officer liability insurance policy periods. While the Company’s director and officer insurance carriers from each policy period have funded a portion of the payment in connection with the previously disclosed settlement of the Consolidated Securities Action, the Company remains in litigation with certain of its insurance carriers regarding coverage with respect to one of these policy periods. On January 20, 2026, the U.S. Court of Appeals for the Fourth Circuit issued a decision requiring the Company to repay $90 million of insurance proceeds previously funded by the insurance carriers for the settlement amount and defense costs from the Consolidated Securities Action. The Company filed a petition for rehearing, which was denied. The Company repaid the $90 million during Fiscal 2026. The case was remanded to the U.S. District Court for the District of Maryland for further proceedings, including a ruling on the insurance carriers' request for prejudgment interest totaling $8.5 million. On July 7, 2026, the District Court denied the carriers' request. The carriers have 30 days to appeal. As of June 30, 2026, the Company has accrued $8.5 million in respect of these legal proceeding contingencies within accrued expenses on the Condensed Consolidated Balance Sheets.

On February 20, 2026, the U.S. Supreme Court issued a ruling, which invalidated certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The U.S. Supreme Court ruling did not address refunds, creating uncertainty regarding the potential recovery of tariffs previously paid under IEEPA. In April 2026, the IEEPA refund process was launched and the Company started evaluating and, where appropriate, pursuing potential reimbursement of certain IEEPA tariffs previously paid.

During the three months ended June 30, 2026, the Company started receiving tariff refunds. As a result, the Company recognized a net benefit of approximately $70 million in cost of goods sold related to the recovery of tariff costs previously recognized during Fiscal 2026. Additional tariff recoveries recognized during the quarter primarily offset tariff costs associated with inventory sold during the current period and therefore did not result in an incremental net benefit to cost of goods sold. The Company also reduced the carrying value of inventory on hand by approximately $8 million to reflect estimated tariff refunds attributable to unsold inventory.

During the three months ended June 30, 2026, the Company received total cash refunds of approximately $101 million. As of June 30, 2026, approximately $13 million of expected future tariff refunds was included within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. Subsequent to the quarter end, the remaining cash refunds were received.