���������ƽ��

Executive Overview

In 2024, we drove our strategy (as described on page 2) by investing in core strengths that deepened connection with existing guests, while introducing innovations that further differentiated ���������ƽ��, unlocked new channels of growth, and gave consumers more reasons to become loyal ���������ƽ�� guests. During 2024, we

• Continued to emphasize newness and differentiation across our assortment, including a steady flow of exclusive products and designer collaborations, such as:
  • 2,000 new wellness products introduced in January of 2025—600 of which were exclusive to ���������ƽ��;
  • our exclusive official "Taylor Swift | The Eras Tour Book";
  • our large assortment of exclusive Wicked products including Wicked Quenchers from Stanley; 
  • partnerships with celebrities such as Dwayne “The Rock” Johnson, Tom Holland, Jennifer Aniston, Ashley Tisdale and more;
  • the Diane von Furstenberg for ���������ƽ�� collection; 
  • The Cuddle Collab limited-edition collection for pets and pet lovers; and 
  • a limited-time pickleball collection with tennis and lifestyle brand Prince;
• Launched or expanded several owned brands, including dealworthy^TM — our new low-price line of essentials — and Auden^TM, Cat & Jack^TM, Gigglescape^TM, and up&up^TM, with 11 of our owned brands exceeding $1 billion in annual sales;
• Expanded the selection of products available on our ���������ƽ�� Plus digital marketplace;
• Launched our reimagined ���������ƽ�� Circle loyalty program to deliver an easier and more personalized shopping and saving experience, including a free-to-join option and a paid membership for same-day delivery, as well as the integration of ���������ƽ�� Circle Card (formerly RedCard);
• Continued to enhance our Roundel digital media products and services, including through a new self-service buying tool, Roundel Media Studio, and experiential events integrated with marketing activities;
• Invested in new artificial intelligence (AI) technology, including modernized AI-powered inventory management systems and Store Companion, an AI-powered chatbot designed to make team members' jobs easier and enhance the shopping experience;
• Opened 23 new stores, many of which are full-size stores, reflecting our large-format focus and stores as hubs strategy; and
• Fulfilled over 65 percent of our digital sales through our same-day fulfillment options (Order Pickup, Drive Up, and Same Day Delivery), which grew 7.7 percent compared to 2023, including double-digit percentage growth in both Same Day Delivery and Drive Up.

back to Executive Overview

Financial Summary

Fiscal 2024 included the following notable items:

• GAAP and Adjusted diluted earnings per share were $8.86.
• Net Sales were $106.6 billion, a decrease of $0.8 billion, or 0.8 percent, from the prior year, driven by one less week in the current year. 
• Comparable sales increased 0.1 percent, driven by a 1.4 percent increase in traffic and partially offset by a 1.3 percent decrease in average transaction amount.
• Operating income of $5.6 billion was 2.5 percent lower than the 53-week prior-year period. 

Earnings Per Share

Note:  Amounts may not foot due to rounding. Adjusted diluted earnings per share (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of our operations. A reconciliation of non-GAAP financial measures to GAAP measures is provided on page 30.

(a) 2023 consisted of 53 weeks compared with 52 weeks in 2024 and 2022.

We report after-tax return on invested capital (ROIC) because we believe ROIC provides a meaningful measure of our capital-allocation effectiveness over time. For the trailing twelve months ended February 1, 2025, after-tax ROIC was 15.4 percent, compared to 16.1 percent for the trailing twelve months ended February 3, 2024. The calculation of ROIC is provided on page 31.

back to Financial Summary

Analysis of Results of Operations

Summary of Operating Income
(dollars in millions)

(a) In 2024, we changed the presentation of revenue in our Consolidated Statements of Operations, consolidating the previous three-line format (Sales, Other Revenue, and Total Revenue) to a single line labeled "Net Sales", which reflects all revenues (formerly Total Revenue). Note 2 to the Financial Statements provides additional information. We believe this presentation better reflects our strategy, which includes growing capabilities and business offerings that leverage ���������ƽ��'s assets and competitive strengths.

(b) Refer to Note 3 to the Financial Statements for additional information about a reclassification of prior year amounts to conform with current year presentation. 

(c) 2023 consisted of 53 weeks compared with 52 weeks in 2024 and 2022.

Rate Analysis

(a) Reflects the impact of a reclassification of prior year amounts to conform with current year presentation. Refer to Note 3 to the Financial Statements for additional information. 

Note: Gross margin is calculated as Net Sales less Cost of Sales. All rates are calculated by dividing the applicable amount by Net Sales. Previously our gross margin rate was calculated based only on Merchandise Sales. The calculation change aligns with our 2024 transition to a single-line revenue presentation on our Consolidated Statements of Operations, with prior period amounts updated to conform to the current year presentation. We also updated prior period gross margin rates to conform to the current year calculations, which resulted in an approximate 1 percentage point increase in our gross margin rate for both 2023 and 2022. 

A discussion regarding Analysis of Results of Operations and Analysis of Financial Condition for 2023, as compared to 2022, is included in Part II, Item 7, MD&A to our Annual Report on Form 10-K for the year ended February 3, 2024.

Net Sales

Net Sales includes Merchandise Sales and revenues from other sources, most notably advertising revenue and credit card profit-sharing income. Note 2 to the Financial Statements provides more information.

Merchandise Sales are net of expected returns, and our estimate of gift card breakage. Note 2 to the Financial Statements defines gift card "breakage." We use comparable sales to evaluate the performance of our stores and digital channels by measuring the change in sales for a period over the comparable, prior-year period of equivalent length. Comparable sales include all Merchandise Sales, except sales from stores open less than 13 months or that have been closed. Comparable sales measures vary across the retail industry. As a result, our comparable sales calculation is not necessarily comparable to similarly titled measures reported by other companies. Digitally originated sales include all Merchandise Sales initiated through mobile applications and our websites. Our stores fulfill the majority of digitally originated sales, including shipment from stores to guests, store Order Pickup or Drive Up, and Same Day Delivery. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties.

Merchandise Sales growth – from both comparable sales and new stores – represents an important driver of our long-term profitability. We expect that comparable sales growth will drive a significant portion of our total sales growth. We believe that our ability to successfully differentiate our guests’ shopping experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will over the long-term drive both increasing shopping frequency (number of transactions, or "traffic") and the amount spent each visit (average transaction amount).

The extra week in 2023 contributed $1.7 billion to Net Sales.

Comparable Sales

Comparable Sales by Channel

Merchandise Sales by Channel

Merchandise Sales by Fulfillment Channel

Note: Merchandise Sales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shipping merchandise from stores to guests, Order Pickup, Drive Up, and Same Day Delivery.

Part I, Item 1, Business of this Form 10-K and Note 2 to the Financial Statements provides additional product category sales information. The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix, and transfer of sales to new stores makes further analysis of sales metrics infeasible.

TD Bank Group offers credit to qualified guests through ���������ƽ��-branded credit cards: the ���������ƽ�� Credit Card and the ���������ƽ�� MasterCard Credit Card (���������ƽ�� Credit Cards). Additionally, we offer a branded proprietary ���������ƽ�� Debit Card and ���������ƽ�� Circle Card Reloadable Account. Collectively, we refer to these products as ���������ƽ�� Circle Cards. Guests receive a 5 percent discount on virtually all purchases when they use a ���������ƽ�� Circle Card at ���������ƽ��. We monitor the percentage of purchases that are paid for using ���������ƽ�� Circle Cards (���������ƽ�� Circle Card Penetration) because our internal analysis has indicated that a meaningful portion of incremental purchases on our ���������ƽ�� Circle Cards are also incremental sales for ���������ƽ��. For the years ended February 1, 2025, February 3, 2024, and January 28, 2023, total ���������ƽ�� Circle Card Penetration was 17.8 percent, 18.6 percent, and 19.8 percent, respectively. See the Customer Loyalty Programs section within Item 1. Business on page 5 for information about the rebranding of RedCards.

Gross Margin Rate

Our gross margin rate was 28.2 percent in 2024 and 27.5 percent in 2023. The increase reflected the net impact of 

• merchandising activities, including cost improvements which more than offset higher promotional and clearance markdown rates, as well as growth in advertising and marketplace revenues;
• lower book to physical inventory adjustments in 2024; and
• higher supply chain & digital fulfillment costs due to new supply chain facilities coming online and an increase in digital volume.

Selling, General and Administrative (SG&A) Expense Rate

Our SG&A expense rate was 20.6 percent in 2024, compared with 20.0 percent in 2023, reflecting the net impact of cost increases across our business, including higher team member pay and benefits and higher general liability expenses, partially offset by the benefit of lower store remodel-related expenses.

Store Data

Number of Stores and Retail Square Feet

(a) In thousands; reflects total square feet less office, distribution center, and vacant space.

back to Analysis of Results of Operations

Other Performance Factors

Net Interest Expense

Net interest expense was $411 million for 2024, compared with $502 million for 2023. The decrease in net interest expense was primarily due to an increase in interest income.

Provision for Income Taxes

Our 2024 effective income tax rate was 22.2 percent compared with 21.9 percent in 2023. The increase primarily reflects lower discrete tax benefits compared to the prior year. 

Numerous countries, including certain jurisdictions in which we operate, have enacted legislation to implement the model rules of the Organization for Economic Cooperation and Development Pillar Two framework (Pillar Two), which is designed to ensure large multinational enterprises are subject to a 15 percent global minimum tax on income earned in each jurisdiction in which they operate. We do not expect the enacted rules, which will be applicable to us in 2025, to materially impact our 2025 financial results. 

Under the Pillar Two framework, any existing deferred tax assets not disclosed in our financial statements will not be available for future use. Accordingly, we are disclosing the existence of gross tax loss carryforwards of $1.1 billion in Canada and $0.2 billion in Luxembourg. The losses are deemed to have a remote possibility of realization; therefore, a deferred tax asset and valuation allowance are not established.

back to Other Performance Factors

Reconciliation of Non-GAAP Financial Measures to GAAP Measures

To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share (Adjusted EPS). This metric excludes certain items presented below. We believe this information is useful in providing period-to-period comparisons of the results of our operations. This measure is not in accordance with, or an alternative to, generally accepted accounting principles in the U.S. (GAAP). The most comparable GAAP measure is diluted earnings per share. Adjusted EPS should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate Adjusted EPS differently than we do, limiting the usefulness of the measure for comparisons with other companies.

Reconciliation of Non-GAAP Adjusted EPS
(millions, except per share data)

Note: Amounts may not foot due to rounding.

(a) 2023 consisted of 53 weeks compared with 52 weeks in 2024 and 2022.
(b) Other items unrelated to current period operations, none of which were individually significant.

Earnings before interest expense and income taxes (EBIT) and earnings before interest expense, income taxes, depreciation, and amortization (EBITDA) are non-GAAP financial measures. We believe these measures provide meaningful information about our operational efficiency compared with our competitors by excluding the impact of differences in tax jurisdictions and structures, debt levels, and for EBITDA, capital investment. These measures are not in accordance with, or an alternative to, GAAP. The most comparable GAAP measure is net earnings. EBIT and EBITDA should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate EBIT and EBITDA differently, limiting the usefulness of the measures for comparisons with other companies.

EBIT and EBITDA
(dollars in millions)

(a) 2023 consisted of 53 weeks compared with 52 weeks in 2024 and 2022.
(b) Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales.

We have also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of the add-back of operating lease interest to operating income. We believe this metric is useful in assessing the effectiveness of our capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies.

After-Tax Return on Invested Capital
(dollars in millions)

Numerator

Denominator

(a) Consisted of 53 weeks.

(b) Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within Operating Income. Operating lease interest is added back to Operating Income in the ROIC calculation to control for differences in capital structure between us and our competitors.

(c) Calculated using the effective tax rates, which were 22.2 percent and 21.9 percent for the trailing twelve months ended February 1, 2025, and February 3, 2024, respectively. Includes tax effect of $1.3 billion related to EBIT for each of the trailing twelve month periods ended February 1, 2025, and February 3, 2024, and $35 million and $26 million, respectively, related to operating lease interest.

(d) Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities.

(e) Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.

back to Reconciliation of Non-GAAP Financial Measures to GAAP Measures

Analysis of Financial Condition

Liquidity and Capital Resources

Capital Allocation

We follow a disciplined and balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to profitably grow our business, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return any excess cash to shareholders by repurchasing shares within the limits of our credit rating goals.

Our year-end cash and cash equivalents balance increased to $4.8 billion from $3.8 billion in 2023. Our cash and cash equivalents balance includes short-term investments of $3.9 billion and $2.9 billion as of February 1, 2025, and February 3, 2024, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly rated direct short-term instruments that mature in 60 days or less. We also place dollar limits on our investments in individual funds or instruments.

Operating Cash Flows

Cash flows provided by operating activities were $7.4 billion in 2024 compared with $8.6 billion in 2023. The operating cash flow decrease is primarily due to higher income tax payments and the combined impact of inventory and accounts payable activity.

Inventory

Year-end inventory was $12.7 billion in 2024, compared with $11.9 billion in 2023. The increase in inventory levels reflects 

• earlier inventory receipts compared to the prior year, including to support merchandising strategies; and
• inventory investments in select merchandise categories to support sales growth and an improved in-stock position.

Capital Expenditures

Note: Amounts may not foot due to rounding.

Capital expenditures in 2024 reflect investments in our strategic initiatives, including investments in both stores and in our supply chain, enhancing our capabilities and guest experience across stores and digital channels. The decrease in capital expenditures in 2024 compared with 2023 primarily reflects a slowdown in store remodel activities.

We expect capital expenditures in 2025 of approximately $4 billion to $5 billion, with the majority focused on store assets, including both new stores and remodels, as well as continued investment in supply chain and technology projects. We expect to open about 20 new stores during 2025 and to resume a faster pace of remodel activities compared with 2024. 

Dividends

We paid dividends totaling $2.0 billion ($4.44 per share) in 2024 and $2.0 billion ($4.36 per share) in 2023, a per share increase of 1.8 percent. We declared dividends totaling $2.1 billion ($4.46 per share) in 2024 and $2.1 billion ($4.38 per share) in 2023, a per share increase of 1.8 percent. We have paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future.

Share Repurchases

During 2024, we deployed $1.0 billion to repurchase shares. We did not repurchase any shares during 2023. See Part II, Item 5, Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this Annual Report on Form 10-K and Note 20 to the Financial Statements for more information.

Financing

Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced spectrum of debt maturities, and to manage our net exposure to floating interest rate volatility. Within these parameters, we seek to minimize our borrowing costs. Our ability to access the long-term debt and commercial paper markets has provided us with ample sources of liquidity. Our continued access to these markets depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings. As of February 1, 2025, our credit ratings were as follows:

Credit Ratings

If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically, and there is no guarantee our current credit ratings will remain the same as described above.

We have the ability to obtain short-term financing from time to time under our commercial paper program and credit facilities. In October 2024, we obtained a new committed $1.0 billion 364-day unsecured revolving credit facility that will expire in October 2025 and terminated our prior 364-day credit facility. This credit facility and our $3.0 billion unsecured revolving credit facility that will expire in October 2028 provide a liquidity backstop to our commercial paper program. No balances were outstanding under either credit facility at any time during 2024 or 2023. We did not have any balances outstanding under our commercial paper program as of February 1, 2025 or February 3, 2024.

Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit facilities also contain a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, as of February 1, 2025, no notes or debentures contained provisions requiring acceleration of payment upon a credit rating downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control and (ii) our long-term credit ratings are either reduced and the resulting rating is non-investment grade, or our long-term credit ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade.

Note 15 to the Financial Statements provides additional information.

Future Cash Requirements

We enter into contractual obligations in the ordinary course of business that may require future cash payments. Such obligations include, but are not limited to, purchase commitments, debt service, leasing arrangements, and liabilities related to deferred compensation and pensions. The Notes to the Consolidated Financial Statements provide additional information.

We believe our sources of liquidity, namely operating cash flows, credit facility capacity, and access to capital markets, will continue to be adequate to meet our contractual obligations, working capital and capital expenditure requirements, finance anticipated expansion and strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the foreseeable future.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. In the Notes to the Consolidated Financial Statements, we describe the significant accounting policies used in preparing the consolidated financial statements. Our management has discussed the development, selection, and disclosure of our critical accounting estimates with the Audit & Risk Committee of our Board of Directors. The following items require significant estimation or judgment:

Inventory and cost of sales:  The vast majority of our inventory is accounted for under the retail inventory accounting method using the last-in, first-out method (LIFO). Our inventory is valued at the lower of LIFO cost or market. We reduce inventory for estimated losses related to shrink and markdowns. Our shrink estimate is based on historical losses and is adjusted to reflect results of actual physical inventory counts. We generally perform counts at each location annually, with counts taking place throughout the year. A 10 percent increase or decrease in our 2024 year-end inventory shrink reserve would impact our cost of sales by approximately $150 million. Historically, our actual physical inventory count results have shown our estimates to be reasonably accurate. Market adjustments for markdowns are recorded when the salability of the merchandise has diminished. Salability can be impacted by consumer preferences and seasonality, among other factors. We believe the risk of inventory obsolescence is largely mitigated because our inventory typically turns in less than three months. Inventory was $12.7 billion and $11.9 billion as of February 1, 2025, and February 3, 2024, respectively, and is further described in Note 8 to the Financial Statements.

Vendor income:  We receive various forms of consideration from our vendors (vendor income), principally earned as a result of volume rebates, promotions, advertising allowances, and markdown allowances. Vendor income is recorded as a reduction of cost of sales except in arrangements where the payment is a reimbursement of specific, incremental, and identifiable costs and recorded as an offset to those costs. Vendor income earned can vary based on a number of factors, including purchase volumes, sales volumes, and our pricing and promotion strategies.

We establish a receivable for vendor income that is earned but not yet received. Based on historical trending and data, this receivable is computed by forecasting vendor income collections and estimating the amount earned. The majority of the year-end vendor income receivables are collected within the following fiscal quarter, and we do not believe there is a reasonable likelihood that the assumptions used in our estimate will change significantly. Historically, adjustments to our vendor income receivable have not been material. Vendor income receivable was $543 million and $513 million as of February 1, 2025, and February 3, 2024, respectively. Vendor income is described further in Note 4 to the Financial Statements.

Long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The evaluation is performed primarily at the store level. An impairment loss is recognized when estimated undiscounted future cash flows from the operation and/or eventual disposition of the asset or asset group are less than its carrying amount, and is measured as the excess of its carrying amount over fair value. We estimate fair value by obtaining market appraisals, obtaining valuations from third-party brokers, or using other valuation techniques. We recorded impairments of $68 million, $102 million, and $66 million in 2024, 2023, and 2022, respectively, which are described further in  Note 10 to the Financial Statements.

Insurance/self-insurance: We retain a substantial portion of the risk related to certain general liability, workers' compensation, property loss, and team member medical and dental claims. However, we maintain stop-loss coverage to limit the exposure related to certain risks. Liabilities associated with these losses include estimates of both claims filed and losses incurred but not yet reported. We use actuarial methods which consider a number of factors to estimate our ultimate cost of losses. General liability and workers' compensation liabilities are recorded based on our estimate of their net present value; other liabilities referred to above are not discounted. Our workers' compensation and general liability accrual was $772 million and $650 million as of February 1, 2025, and February 3, 2024, respectively. We believe that the amounts accrued are appropriate; however, our liabilities could be significantly affected if future occurrences or loss developments differ from our assumptions. For example, a 10 percent increase or decrease in average claim costs would have impacted our self-insurance expense by $77 million in 2024. Historically, adjustments to our estimates have not been material. Refer to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for further disclosure of the market risks associated with these exposures. We maintain insurance coverage to limit our exposure to certain events, including network security matters.

Income taxes: We pay income taxes based on the tax statutes, regulations, and case law of the various jurisdictions in which we operate. Significant judgment is required in determining the timing and amounts of deductible and taxable items, and in evaluating the ultimate resolution of tax matters in dispute with tax authorities. The benefits of uncertain tax positions are recorded in our financial statements only after determining it is more likely than not the uncertain tax positions would withstand challenge by taxing authorities. We periodically reassess these probabilities and record any changes in the financial statements as appropriate. Gross uncertain tax positions, including interest and penalties, were $454 million and $366 million as of February 1, 2025, and February 3, 2024, respectively. Although we believe our tax positions are reasonable, the resolution of these matters could be materially different from our assumptions, which would affect our consolidated results of operations and/or operating cash flows. Income taxes are described further in Note 18 to the Financial Statements.

Pension accounting:  We maintain a funded qualified defined benefit pension plan, as well as nonqualified and international pension plans that are generally unfunded, for certain current and former team members. The costs for these plans are determined based on actuarial calculations using the assumptions described in the following paragraphs. Eligibility and the level of benefits vary depending on each team member's full-time or part-time status, date of hire, age, length of service, and/or compensation. The benefit obligation and related expense for these plans are determined based on actuarial calculations using assumptions about the expected long-term rate of return, the discount rate, compensation growth rates, mortality, and retirement age. These assumptions, with adjustments made for any significant plan or participant changes, are used to determine the period-end benefit obligation and establish expense for the next year.

Our 2024 expected long-term rate of return on plan assets of 7.00 percent was determined by the portfolio composition, historical long-term investment performance, and current market conditions. A 1 percentage point decrease in our expected long-term rate of return would increase annual expense by $40 million. 

The discount rate used to determine benefit obligations is adjusted annually based on the interest rate for long-term high-quality corporate bonds, using yields for maturities that are in line with the duration of our pension liabilities. Our benefit obligation and related expense will fluctuate with changes in interest rates. A 1 percentage point decrease in the weighted average discount rate would increase annual expense by $33 million.

Based on our experience, we use a graduated compensation growth schedule that assumes higher compensation growth for younger, shorter-service pension-eligible team members than it does for older, longer-service pension-eligible team members. 

Pension benefits are further described in Note 23 to the Financial Statements.

Legal and other contingencies: We believe the accruals recorded in our consolidated financial statements properly reflect loss exposures that are both probable and reasonably estimable. We do not believe any of the currently identified claims or litigation will materially affect our results of operations, cash flows, or financial condition. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on the results of operations, cash flows, or financial condition for the period in which the ruling occurs, or future periods. Refer to Note 14 to the Financial Statements for further information on contingencies.

back to Analysis of Financial Condition

New Accounting Pronouncements

We do not expect that any recently issued accounting pronouncements will have a material effect on our financial statements.

back to New Accounting Pronouncements

Forward-Looking Statements

This report contains forward-looking statements, which are based on our current assumptions and expectations. These statements are typically accompanied by the words "aim," "anticipate," "believe," "could," "expect," "may," "might," "seek," "will," "would," or similar words. The principal forward-looking statements in this report include statements regarding: our future financial and operational performance, our strategy for growth, the adequacy of and costs associated with our sources of liquidity, the funding of debt maturities, the execution of our share repurchase program, our expected capital expenditures and new lease commitments, the expected compliance with debt covenants, the expected impact of new accounting pronouncements, our intentions regarding future dividends, the expected contributions and payments related to our pension plan, the expected return on plan assets, the expected timing and recognition of compensation expenses, the adequacy of our reserves for general liability, workers' compensation, and property loss, the expected outcome of, and adequacy of our reserves for, claims, litigation, and the resolution of tax matters, our expectations regarding our contractual obligations, liabilities, and vendor income, the expected ability to recognize deferred tax assets and liabilities and the timing of such recognition, our expectations regarding arrangements with our partners, and changes in our assumptions and expectations.

All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors included in Part I, Item 1A, Risk Factors to this Form 10-K, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

back to Forward-Looking Statements