Ferguson Enterprises

New or substantially reworded (7)

• Furthermore, any of these conditions could affect key suppliers, which could impair their ability to deliver products and result in delays for our customers or added costs. Read more

  Accordingly, any prolonged uncertainty about current or future micro- or macro-economic conditions and potential volatility in our relevant end markets has in the past and may in the future negatively impact our business, financial condition and results of operations.

• We operate a variety of pension plans, including defined benefit plans in Canada and the U.K. Read more

  The amount we are required to contribute to these plans is determined by the laws and regulations governing each plan and is generally related to the funded status of the plans. A deterioration in the value of the plans’ investments or a decrease in the discount rate used to calculate plan liabilities generally would negatively impact the funding status of the plans, which may result in an increase in our obligation to make contributions to the plans.

• The U.K. defined benefit pension plan (the “U.K. Plan”), our largest defined benefit plan, is closed to future service costs. Read more

  The trustee of the U.K. Plan has purchased a bulk annuity insurance policy that provides an income stream equivalent to the obligations to pensioners covered by the arrangement. As a result, the Company is no longer expected to make ongoing deficit reduction contributions to the U.K. Plan, but will make ongoing contributions to cover the plan’s expenses and other payments that may be required.

• In spite of the efforts taken to match our plan liabilities with a portfolio of assets designed to hedge the underlying interest, inflation and longevity risk, certain actions by pensions regulators or the trustees of our pension plans, any material revisions to existing pension legislation or any failure by the insurer to fulfill its obligations could result in us being required to incur significant additional costs immediately or in short time frames. Such costs could reduce the cash available for working capital and other corporate uses, and may have an adverse impact on the Company’s financial condition.

• Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs, sanctions or taxes on imports from countries where we import products or raw materials (either directly or through our suppliers), could have a material adverse impact on our competitive position, business, financial condition and results of operations. Recently, the U.S. has announced tariffs and reciprocal tariffs on a wide range of products manufactured or produced worldwide. Several countries have similarly announced reciprocal or other tariffs impacting products manufactured or produced in the U.S. The U.S. has and may in the future pause, reimpose or increase tariffs, and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other retaliatory countermeasures in response to the imposition of tariffs by the U.S. If these…

• Conversely, if tariffs, duties or quotas are lifted or if the level of imported products otherwise increases, we could be adversely affected to the extent that we would then have higher-cost products in our inventory or experience lower prices and margins due to increased supplies of these products that could drive down prices and margins. If prices of these products were to decrease significantly, we might not be able to profitably sell these products, and the value of our inventory would decline. In addition, significant price decreases could result in a significantly longer holding period for some of our inventory.

• Trade restrictions could be adopted with little to no advanced notice, and we may not be able to effectively mitigate the adverse impacts from such measures.

No longer in the text (4)

• We operate a variety of pension plans, including funded and underfunded defined benefit schemes in Canada and the U.K. Read more

  Our pension trustees and plan sponsors aim to match the liabilities with a portfolio of assets, comprising equity and debt securities alongside diversified growth assets and further investments designed to hedge the underlying interest and inflation risk in the associated liabilities. The market value of these assets can rise and fall over time, which impacts the funding position of the plan. The U.K. defined benefit pension plan (the “U.K. Plan”), our largest defined benefit plan, is closed to future service costs and has a buy-in insurance policy which covers a large proportion of the existing participants.

• As required by U.K. pensions regulation, the U.K. Plan completed its triennial actuarial valuation exercise in fiscal 2023, which is measured on a technical provisions basis, based on the U.K. Read more

  Plan’s financial position as of April 30, 2022. The triennial valuation resulted in a need for deficit reduction contributions of £133 million spread over the period to January 31, 2026, of which we have paid £50 million as of July 31, 2024. New funding requirements will apply to the next triennial valuation of the U.K. Plan (as of April 30, 2025), requiring the plan to target a funding level where dependency on the employer is low. Any additional funding requirements, which could be affected by factors such as a deterioration in economic conditions or changes in actuarial assumptions, could have an adverse effect on our financial condition.

• Furthermore, the U.K. pensions regulator could take action (for example civil, criminal, monetary and non-monetary penalties) in situations where the “employer covenant” of a defined benefit plan—the willingness and ability of the sponsor to fund the plan—has been detrimentally affected in a material way or where corporate activity, such as certain corporate activities taken in connection with the Merger, poses a materially detrimental risk to accrued plan benefits. The consequences of successful civil and criminal actions include fines, and (in the case of civil actions) requirements to provide further funding for the plan, for both the sponsor and its connected group companies. In addition, actions by the trustees of our pension plans or any material revisions to the existing pension legislation could result in us being required to incur significant additional costs immediately or in…

• Trade tensions between the U.S. and China have escalated over the past several years which resulted in elevated tariffs. Read more

  The current U.S. presidential administration has not taken action to roll these back. Following the Office of United States Trade Representative’s (the “USTR”) quadrennial review of the tariffs imposed on China-origin goods pursuant to Section 301 of the Trade Act of 1974 (the “U.S. Trade Act”), in May 2024, the USTR recommended that tariffs on products from China would continue at current rates or have their rates raised. Rates on certain steel and aluminum products under Section 301 will increase from 0-7.5% to 25% in 2024.