We evaluate our ownership interests, contractual arrangements and other relationships to determine if we have a variable interest in an entity. These evaluations involve judgment and assumptions based on available historical and prospective information, among other qualitative factors. If we determine that an entity is a VIE and that we are the primary beneficiary, we consolidate the entity in our consolidated financial statements. We are considered the primary beneficiary of the VIE when we have both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of the primary beneficiary is reassessed on an ongoing basis.

On May 4, 2026, we acquired 49% of the issued and outstanding shares of the La Regina entities, which were determined to be VIEs. See Note 3 for additional information on the acquisition of La Regina. La Regina currently produces all of our Rao’s tomato-based pasta sauces pursuant to a long-term manufacturing and supply agreement. The remaining 51% of the outstanding equity interests of La Regina are subject to a call option granted to us and a put option granted to La Regina. The call option may be exercised from the first anniversary of the closing until the later of the tenth anniversary of the closing and the date of cessation of the material commercial agreements between the parties. Under the call option, we may, during specified exercise periods, acquire additional equity interests in increments of not less than 2% from La Regina equity holders at a price based on an implied total equity value of approximately $584 million, subject to the payment of a control premium of up to 20% and to a 20% reduction for specified material adverse changes. The put option may be exercised from three years after the first anniversary of the closing until the tenth anniversary of the closing. Under the put option, La Regina equity holders may require us to purchase all or a portion of their remaining equity interests during a defined exercise period, subject to certain conditions and similar pricing mechanics as the call option.

We determined that we are the primary beneficiary and therefore consolidate the La Regina entities based on the totality of our arrangements, including the fixed price put and call options and our greater exposure to the economic risks and benefits of the VIEs as well as our integrated business relationship with La Regina. The remaining 51% of the outstanding equity interests of La Regina are accounted for as noncontrolling interests. Refer to the section below on Redeemable Noncontrolling Interests.


(Millions)	2026
Cash and cash equivalents	$	92
Accounts receivable, net	26
Inventories	93
Other current assets	30
Plant assets, net of depreciation	149
Goodwill	331
Other assets	37
Total assets	$	758

Short-term borrowings	77
Accounts payable	77
Accrued liabilities	10

Long-term debt	28

Other liabilities	10
Total liabilities	$	202

Noncontrolling interests with redemption features that are outside of our control at fixed or determinable prices and dates are presented in temporary equity on the Consolidated Balance Sheets. The remaining 51% noncontrolling equity interests in La Regina are considered redeemable and classified as temporary equity due to the fixed price put option under the purchase agreements, which may require us to purchase all or a portion of the remaining equity interests from the La Regina equity holders during a defined exercise period. The put option is exercisable upon the passage of time at the option of the holders based on a fixed price other than fair value as described above.

The redeemable noncontrolling interests are measured at the greater of the redemption fair value or the carrying value, adjusted for net earnings (loss) and other comprehensive income (loss). The acquisition date fair value of the redeemable noncontrolling interests was approximately $300 million, which will be accreted using the effective interest method to the redemption value of $357 million over four years when the put option becomes exercisable. The fair value of the noncontrolling interests was determined by the fixed price of the put and call options embedded within the noncontrolling interest, discounted to present value. Adjustments related to the accretion of the redemption value will be recognized in retained earnings. The redemption value was determined based on 51% of the implied total equity value of approximately $584 million, plus a 20% premium.


(Millions)	2026
Balance at beginning of year	$	—
Acquisition(1)	300
Net earnings (loss) attributable to redeemable noncontrolling interests	2
Accretion of redeemable noncontrolling interests	5
Foreign currency translation adjustments	(3)
Balance at end of year	$	304

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