What changed in this filing

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Item 1. Financial Statements

2024-04-18 compared with 2023-10-19 · 105 added, 119 removed, 269 unchanged (45% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) September 30, 2023 December 31, 2022

(in thousands, except share and per share data) March 31, 2024 December 31, 2023

Current assets:

43 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share data) 2024 2023

6 unchanged sentences

Provision for doubtful accounts 6,211 5,639

Restructuring and other costs 83,042 —

Total operating expenses 1,754,790 1,604,098

Non-operating expense (income):

Non-operating (income) expense:

Interest expense, net 17,690 16,864

Other ( 23,006 ) ( 11,967 )

Total non-operating expense (income) 105 10,604 4,808 31,421

Total non-operating (income) expense ( 5,316 ) 4,897

Income before income taxes 325,181 404,406

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2024 2023

Net income $ 248,894 $ 303,957

Other comprehensive income (loss), net of income taxes:

Other comprehensive (loss) income, net of income taxes:

Foreign currency translation adjustments ( 79,920 ) 23,827

Cash flow hedge adjustments, net of income taxes in 2023 — $ 0 and $ 951 ;

2022 — $ 1,384 and $ 4,151 , respectively

— 3,741 2,572 11,223

Pension and postretirement benefit adjustments, net of income taxes in 2023 — $ 703 and $ 2,108 ;

2022 — $ 2,576 and $ 7,736 , respectively

1,909 6,982 5,735 20,957

Other comprehensive income (loss), net of income taxes ( 75,405 ) ( 121,088 ) ( 54,720 ) ( 216,577 )

Pension and postretirement benefit adjustments, net of income taxes in 2024 — $ 1,063 ;

Other comprehensive (loss) income, net of income taxes ( 77,032 ) 25,741

Comprehensive income $ 171,862 $ 329,698

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended September 30, 2023

(in thousands, except share and per share data) Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Parent Equity Non-controlling Interests in Subsidiaries Total Equity

July 1, 2023 140,467,550 $ 140,468 $ 153,748 $ ( 1,011,857 ) $ 4,788,852 $ 4,071,211 $ 14,583 $ 4,085,794

Net income — — — — 351,198 351,198 — 351,198

Other comprehensive loss, net of tax — — — ( 75,405 ) — ( 75,405 ) — ( 75,405 )

Cash dividend declared, $ 0.9500 per share

— — — — ( 133,254 ) ( 133,254 ) — ( 133,254 )

Shares issued from employee incentive plans 5,991 6 ( 541 ) — — ( 535 ) — ( 535 )

Share-based compensation — — 10,395 — — 10,395 — 10,395

Purchase of stock ( 238,755 ) ( 239 ) — — ( 37,258 ) ( 37,497 ) — ( 37,497 )

Noncontrolling interest activities — — — — — — 579 579

September 30, 2023 140,234,786 $ 140,235 $ 163,602 $ ( 1,087,262 ) $ 4,969,538 $ 4,186,113 $ 15,162 $ 4,201,275

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

8 unchanged sentences

Noncontrolling interest activities — — — — — — ( 1,139 ) ( 1,139 )

September 30, 2023 140,234,786 $ 140,235 $ 163,602 $ ( 1,087,262 ) $ 4,969,538 $ 4,186,113 $ 15,162 $ 4,201,275

Three Months Ended September 30, 2022

July 1, 2022 141,280,841 $ 141,281 $ 123,388 $ ( 953,228 ) $ 4,329,115 $ 3,640,556 $ 13,007 $ 3,653,563

Net income — — — — 312,358 312,358 — 312,358

Other comprehensive loss, net of tax — — — ( 121,088 ) — ( 121,088 ) — ( 121,088 )

Cash dividend declared, $ 0.8950 per share

— — — — ( 126,434 ) ( 126,434 ) — ( 126,434 )

Shares issued from employee incentive plans 14,619 15 ( 1,039 ) — — ( 1,024 ) — ( 1,024 )

Share-based compensation — — 9,891 — — 9,891 — 9,891

Purchase of stock ( 333,451 ) ( 334 ) — — ( 49,474 ) ( 49,808 ) — ( 49,808 )

Noncontrolling interest activities — — — — — — 734 734

September 30, 2022 140,962,009 $ 140,962 $ 132,240 $ ( 1,074,316 ) $ 4,465,565 $ 3,664,451 $ 13,741 $ 3,678,192

Nine Months Ended September 30, 2022

March 31, 2024 139,335,342 $ 139,335 $ 179,349 $ ( 1,053,904 ) $ 5,137,597 $ 4,402,377 $ 14,799 $ 4,417,176

Three Months Ended March 31, 2023

1 unchanged sentence

Net income — — — — 303,957 303,957 — 303,957

Other comprehensive loss, net of tax — — — ( 216,577 ) — ( 216,577 ) — ( 216,577 )

Other comprehensive income, net of tax — — — 25,741 — 25,741 — 25,741

Cash dividend declared, $ 0.9500 per share

4 unchanged sentences

Noncontrolling interest activities — — — — — — ( 652 ) ( 652 )

September 30, 2022 140,962,009 $ 140,962 $ 132,240 $ ( 1,074,316 ) $ 4,465,565 $ 3,664,451 $ 13,741 $ 3,678,192

March 31, 2023 140,545,475 $ 140,545 $ 147,690 $ ( 1,006,801 ) $ 4,644,770 $ 3,926,204 $ 13,432 $ 3,939,636

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2024 2023

5 unchanged sentences

Excess tax benefits from share-based compensation ( 3,461 ) ( 584 )

Gain on sale of real estate — ( 102,803 )

Changes in operating assets and liabilities ( 219,721 ) 132,942

Other operating activities, including changes in operating assets and liabilities ( 26,301 ) ( 201,727 )

Net cash provided by operating activities 318,306 197,507

2 unchanged sentences

Proceeds from sale of property, plant and equipment 68,462 1,971

Proceeds from divestitures of businesses 3,381 —

Proceeds from sale of investments — 80,482

8 unchanged sentences

Other financing activities ( 2,231 ) ( 4,118 )

Net cash provided by (used in) financing activities ( 599,019 ) 386,034

Net cash used in financing activities ( 175,223 ) ( 157,813 )

Effect of exchange rate changes on cash and cash equivalents ( 17,058 ) 3,262

Net increase (decrease) in cash and cash equivalents 1,174 ( 85,503 )

Net decrease in cash and cash equivalents ( 52,419 ) ( 2,280 )

Cash and cash equivalents at beginning of period 1,102,007 653,463

14 unchanged sentences

These adjustments are of a normal recurring nature.

We have reclassified certain prior period amounts to conform to the current period presentation.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results for the year ended December 31, 2023.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of results for the year ended December 31, 2024.

We have evaluated subsequent events through the date the unaudited Condensed Consolidated Financial Statements covered by this quarterly report were issued.

3 unchanged sentences

We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to not be applicable or are expected to have an immaterial impact on our Condensed Consolidated Financial Statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs .

This standard requires disclosure of the key terms of outstanding supply chain finance programs and a rollforward of the related amounts due to vendors participating in these programs.

The new standard does not affect the recognition, measurement or financial statement presentation of any amounts due.

The guidance was effective in the first quarter of 2023, except for the rollforward, which becomes effective in the first quarter of 2024.

For additional information, please refer to the supply chain finance programs section herein.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This standard requires disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of other segment items by reportable segment, and all annual disclosures currently required by Topic 280 to be included in interim periods.

The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted.

We are currently evaluating the impact of adopting this standard on our financial statements and disclosures.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The standard requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items, income before tax expense disaggregated between domestic and foreign, income tax expense disaggregated by federal, state and foreign, as well as further information on income taxes paid.

The guidance is effective for our Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted.

The guidance should be applied on a prospective basis, with retrospective application permitted.

We are currently evaluating the impact of adopting this standard on our financial statements and disclosures.

Prepaid Expenses and Other Current Assets

The following table provides a detail of prepaid expenses and other current assets reported within the Condensed Consolidated Balance Sheets as of:

(in thousands) September 30, 2023 December 31, 2022

(in thousands) March 31, 2024 December 31, 2023

Prepaid expenses $ 161,952 $ 110,863

9 unchanged sentences

The following table summarizes the classification and carrying amounts of the derivative instruments and the foreign currency denominated debt, a non-derivative financial instrument, that are designated and qualify as part of hedging relationships (in thousands):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Instrument Balance Sheet Location Notional Balance Notional Balance

3 unchanged sentences

Foreign currency debt Long-term debt € 700,000 $ 755,580 € 700,000 $ 772,660

The tables below present gains and losses related to designated net investment hedges:

Gain Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components

(in thousands) 2023 2022 2023 2022

Three Months Ended September 30,

Net investment hedges:

Forward contracts $ 19,217 $ 81,454 $ 3,158 $ 7,965

Foreign currency debt 20,300 43,890 — —

Total $ 39,517 $ 125,344 $ 3,158 $ 7,965

Gain Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components

The tables below presents gains and losses related to designated net investment hedges:

Gain (Loss) Recognized in AOCL before Reclassifications Gain Recognized in Interest Expense for Excluded Components

(in thousands) 2024 2023 2024 2023

Nine Months Ended September 30,

Three Months Ended March 31,

Net investment hedges:

3 unchanged sentences

Fair Value of Financial Instruments

As of September 30, 2023 the fair value of our senior unsecured notes was approximately $ 2.9 billion, which are designated as Level 2 in the fair value hierarchy.

As of March 31, 2024, the fair value of our senior unsecured notes was approximately $ 3.7 billion, which are designated as Level 2 in the fair value hierarchy.

Our valuation technique is based primarily on prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities.

1 unchanged sentence

While such borrowings of the independents and affiliates are outstanding, we are required to maintain compliance with certain covenants.

At September 30, 2023, we were in compliance with all such covenants.

As of September 30, 2023, the total borrowings of the independents and affiliates subject to guarantee by us were approximately $ 991 million.

As of March 31, 2024, we were in compliance with all such covenants.

As of March 31, 2024, the total borrowings of the independents and affiliates subject to guarantee by us were approximately $ 934 million.

These loans generally mature over periods from one to six years .

We regularly monitor the performance of these loans and the ongoing operating results, financial condition and ratings from credit rating agencies of the independents and affiliates that participate in the guarantee programs.

In the event that we are required to make payments in connection with these guarantees, we would obtain and liquidate certain collateral pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees.

In the event that we are required to make payments in connection with these guarantees, we would obtain and liquidate certain collateral

pledged by the independents or affiliates (e.g., accounts receivable and inventory) to recover all or a substantial portion of the amounts paid under the guarantees.

We recognize a liability equal to current expected credit losses over the lives of the loans in the guaranteed loan portfolio, based on a consideration of historical experience, current conditions, the nature and expected value of any collateral, and reasonable and supportable forecasts.

To date, we have not had significant losses in connection with guarantees of independents’ and affiliates’ borrowings and the current expected credit loss reserve is not material.

As of September 30, 2023, there are no material guaranteed loans for which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral.

As of September 30, 2023, we have recognized certain assets and liabilities amounting to $ 63 million each for the guarantees related to the independents’ and affiliates’ borrowings.

As of March 31, 2024, there are no material guaranteed loans for which the borrower is experiencing financial difficulty and recovery is expected to be provided substantially through the operation or sale of the collateral.

As of March 31, 2024, we have recognized certain assets and liabilities amounting to $ 55 million each for the guarantees related to the independents’ and affiliates’ borrowings.

These assets and liabilities are included in other assets and other long-term liabilities in the Condensed Consolidated Balance Sheets.

11 unchanged sentences

Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable in our Condensed Consolidated Balance Sheets.

All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in cash flows from operating activities in our consolidated statement of cash flows.

As of September 30, 2023 and December 31, 2022, the outstanding payment obligations to the financial institutions are $ 2.9 billion and $ 3.1 billion, respectively.

The amount settled through the SCF program was $ 3.1 billion and $ 2.7 billion for the nine months ended September 30, 2023 and 2022 respectively.

All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in cash flows from operating activities in our Condensed Consolidated Statement of Cash Flows.

As of March 31, 2024 and December 31, 2023, the outstanding payment obligations to the financial institutions are $ 3.0 billion and $ 3.0 billion, respectively.

The amount settled through the SCF program was $ 1.0 billion and $ 1.0 billion for the three months ended March 31, 2024 and March 31, 2023, respectively.

(in thousands) March 31, 2024

Obligations outstanding at the beginning of the year $ 3,026,824

Invoices confirmed during the year 995,254

Confirmed invoices paid during the year ( 987,476 )

Confirmed obligations outstanding at the end of the year $ 3,034,602

Earnings Per Share

4 unchanged sentences

The following table summarizes basic and diluted shares outstanding:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share data) 2024 2023

7 unchanged sentences

The following table presents a summary of our reportable segment financial information:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2024 2023

9 unchanged sentences

Corporate expense ( 83,762 ) ( 66,015 )

Other unallocated (loss) income, net (1) — ( 3,462 ) — 47,355

Other unallocated costs (1) ( 83,042 ) —

Income before income taxes $ 325,181 $ 404,406

(1) The following table presents a summary of the other unallocated income, net:

Three Months Ended September 30, Nine Months Ended September 30,

(1) The following table presents a summary of the other unallocated costs:

Three Months Ended March 31,

(in thousands) 2024 2023

Other unallocated income, net:

Gain on sale of real estate (2) $ — $ — $ — $ 102,803

Gain on insurance proceeds (3) — — — 1,507

Transaction and other costs (4) — ( 3,462 ) — ( 56,955 )

Total other unallocated (loss) income, net $ — $ ( 3,462 ) $ — $ 47,355

(2) Amount reflects a gain on the sale of real estate that had been leased to S.P.

(3) Amount reflects insurance recoveries in excess of losses incurred on inventory, property, plant and equipment and other fire-related costs.

(4) Amount primarily reflects costs associated with the January 3, 2022 acquisition of Kaman Distribution Group.

Beginning in 2023, certain functions, including cybersecurity and the management of our product liability litigation, were transferred to corporate to be streamlined and centrally managed.

These costs totaled $ 15 million and $ 44 million for the three and nine months ended September 30, 2022, of which $ 9 million and $ 27 million were allocated to Automotive and $ 6 million and $ 17 million were allocated to Industrial based on several factors, including sales volumes and headcount.

Beginning in 2023, these costs, which totaled $ 30 million and $ 49 million for the three and nine months ended September 30, 2023, are no longer allocated to our segments when measuring their operating performance.

We have not restated the 2022 comparative segment financial information.

Net sales are disaggregated by geographical region for each of our reportable segments, as we deem this presentation best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors.

Other unallocated costs:

Restructuring and other costs (2) $ ( 83,042 ) $ —

Total other unallocated costs $ ( 83,042 ) $ —

(2) Please refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements for more information.

by economic factors.

The following table presents disaggregated geographical net sales from contracts with customers by reportable segment:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2024 2023

11 unchanged sentences

subsidiaries to a separate bankruptcy-remote special purpose entity (“SPE”).

The A/R Sales Agreement has a three-year term, which we intend to renew.

The A/R Sales Agreement has a three-year term expiring in January 2025, which we intend to renew.

We continue to be involved with the receivables transferred by the SPE to the unaffiliated financial institutions by providing collection services.

As cash is collected on sold receivables, the SPE continuously transfers ownership and control of new qualifying receivables to the unaffiliated financial institutions so that the total principal amount outstanding of receivables sold is approximately $ 1.0 billion at any point in time (which is the maximum amount allowed under the agreement as amended on January 3, 2022).

The total principal amount outstanding of receivables sold is approximately $ 1.0 billion as of both September 30, 2023 and December 31, 2022.

The amount of receivables pledged as collateral as of September 30, 2023 and December 31, 2022 is approximately $ 1.3 billion and $ 1.1 billion, respectively.

The following table summarizes the activity and amounts outstanding under the A/R Sales Agreement for the:

Three Months Ended September 30, Nine Months Ended September 30,

The total principal amount outstanding of receivables sold is approximately $ 1.0 billion as of both March 31, 2024 and December 31, 2023.

The amount of receivables pledged as collateral as of March 31, 2024 and December 31, 2023 is approximately $ 1.4 billion and $ 1.2 billion, respectively.

The following table summarizes the activity and amounts outstanding under the A/R Sales Agreement as of:

Three Months Ended March 31,

(in thousands) 2024 2023

Receivables sold to the financial institution and derecognized $ 2,206,769 $ 2,281,934 $ 6,511,568 $ 6,760,652

Receivables sold to the financial institutions and derecognized $ 2,170,043 $ 2,165,407

Cash collected on sold receivables $ 2,170,044 $ 2,165,411

1 unchanged sentence

The SPE incurs fees due to the unaffiliated financial institutions related to the accounts receivable sales transactions.

Those fees, which totaled $ 15 million and $ 8 million for the three months ended and $ 44 million and $ 14 million for the nine months ended September 30, 2023 and 2022, respectively, are recorded within other non-operating expense (income) in the Condensed Consolidated Statements of Income.

Those fees, which totaled $ 15 million and $ 14 million for the three months ended March 31, 2024 and 2023, respectively, are recorded within other non-operating expense (income) in the Condensed Consolidated Statements of Income.

The SPE has a recourse obligation to repurchase from the unaffiliated financial institutions any previously sold receivables that are not collected due to the occurrence of certain events, including credit quality deterioration and customer sales returns.

The reserve recognized for this recourse obligation as of September 30, 2023 and December 31, 2022 is not material.

The reserve recognized for this recourse obligation as of March 31, 2024 and December 31, 2023 is not material.

The servicing liability related to our collection services also is not material, given the high quality of the customers underlying the receivables and the anticipated short collection period.

Employee Benefit Plans

Net periodic benefit income from our pension plans included the following components for our pension benefits:

Three Months Ended September 30, Nine Months Ended September 30,

Net periodic benefit income from our pension plans included the following components for the three months ended March 31:

Pension Benefits

(in thousands) 2024 2023

5 unchanged sentences

Net periodic benefit income $ ( 13,464 ) $ ( 11,115 )

Service cost is recorded in selling, administrative and other expenses in the Condensed Consolidated Statements of Income while all other components are recorded within other non-operating expense (income).

Pension benefits also include amounts related to supplemental retirement plans.

We acquired several businesses for approximately $ 232 million and $ 1.6 billion, net of cash acquired, during the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023, we recognized approximately $ 290 million and $ 38 million of revenue, net of store closures, related to our current year Automotive and Industrial acquisitions, respectively.

We recorded approximately $ 172 million of goodwill and other intangible assets associated with these acquisitions.

We acquired several businesses for approximately $ 132 million and $ 40 million, net of cash acquired, during the three months ended March 31, 2024 and March 31, 2023, respectively.

During the three months ended March 31, 2024, we recognized approximately $ 99 million and $ 10 million of revenue, net of store closures, related to our current year Automotive and Industrial acquisitions, respectively.

We recorded approximately $ 92 million of goodwill and other intangible assets associated with these acquisitions, primarily related to our European Automotive acquisitions.

Other intangible assets acquired of $ 41 million consisted of customer relationships with a weighted average amortization lives of 20 years.

1 unchanged sentence

The results of operations for acquired businesses are included in our Condensed Consolidated Statements of Income beginning on their respective acquisition dates.

KDG Acquisition

On January 3, 2022, we, through our wholly-owned subsidiary, Motion Industries, Inc., acquired all of the equity interests in KDG for a purchase price of approximately $ 1.3 billion in cash, net of cash acquired of approximately $ 30 million.

KDG, which is headquartered in Bloomfield, Connecticut, is a power transmission, automation and fluid power industrial distributor and solutions provider with operations throughout the United States, providing electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components to maintenance, repair, and operation and original equipment manufacturer customers.

Accumulated Other Comprehensive Loss

The following tables present the changes in AOCL by component for the nine months ended September 30:

The following tables present the changes in AOCL by component for the three months ended March 31:

Changes in Accumulated Other

5 unchanged sentences

Other comprehensive income (loss), net of income taxes 2,888 — ( 79,920 ) ( 77,032 )

Ending balance, September 30, 2023 $ ( 500,875 ) $ — $ ( 586,387 ) $ ( 1,087,262 )

Ending balance, March 31, 2024 $ ( 515,053 ) $ — $ ( 538,851 ) $ ( 1,053,904 )

Changes in Accumulated Other

2 unchanged sentences

Beginning balance, January 1, 2023 $ ( 506,610 ) $ ( 2,572 ) $ ( 523,360 ) $ ( 1,032,542 )

Other comprehensive loss before reclassifications — — ( 248,757 ) ( 248,757 )

Other comprehensive income before reclassifications — — 23,827 23,827

Amounts reclassified from accumulated other comprehensive loss 1,914 — — 1,914

Other comprehensive income (loss), net of income taxes 20,957 11,223 ( 248,757 ) ( 216,577 )

Ending balance, September 30, 2022 $ ( 442,270 ) $ ( 3,819 ) $ ( 628,227 ) $ ( 1,074,316 )

Other comprehensive income, net of income taxes 1,914 — 23,827 25,741

Ending balance, March 31, 2023 $ ( 504,696 ) $ ( 2,572 ) $ ( 499,533 ) $ ( 1,006,801 )

The AOCL components related to the pension benefits are included in the computation of net periodic benefit income in the Employee Benefit Plans Footnote.

4 unchanged sentences

Many of these involve claims of personal injury allegedly resulting from the use of automotive parts we distributed.

The amount accrued for pending and future claims was $ 225 million as of September 30, 2023, which represented our best estimate of the liability within our calculated range of $ 199 million to $ 283 million, discounted using a discount rate of 4.59 %.

The amount accrued for pending and future claims was $ 220 million as of December 31, 2022, which represented our best estimate of the liability within our calculated range of $ 190 million to $ 270 million, discounted using a discount rate of 3.83 %.

Our undiscounted product liability was $ 297 million and $ 285 million as of September 30, 2023 and December 31, 2022, respectively.

The amount accrued for pending and future claims was $ 235 million as of March 31, 2024, which represents our best estimate of the liability within our calculated range of $ 187 million to $ 265 million, discounted using a discount rate of 4.20 %.

The amount accrued for pending and future claims was $ 244 million as of December 31, 2023, which represents our best estimate of the liability within our calculated range of $ 196 million to $ 277 million, discounted using a discount rate of 3.88 %.

Our undiscounted product liability was $ 297 million and $ 308 million as of March 31, 2024 and December 31, 2023, respectively.

There have been no significant developments to the information presented in our 2023 Annual Report on Form 10-K with respect to litigation or commitments and contingencies.

2 unchanged sentences

Applying this threshold, there are no environmental matters to disclose for this period.

Restructuring and other costs

In February 2024, we approved and initiated a global restructuring designed to better align our assets and further improve the efficiency of the business.

This initiative includes an announced voluntary retirement offer in the U.S., along with a rationalization and optimization of certain distribution centers, stores and other facilities.

In the first quarter 2024, we incurred $ 83 million in restructuring and other costs.

We expect to incur total costs up to $ 200 million related to the global restructuring efforts in 2024 and to substantially complete the initiative by the end of 2025.

We may incur additional charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of these initiatives.

The global restructuring was approved and funded by our corporate office and therefore these costs are not allocated to our segments.

The table below summarizes the activity related to the restructuring costs discussed above.

(in thousands) Severance and other employee costs Other restructuring costs (1)

Liability as of January 1, 2024 $ — $ — $ —

Restructuring and other costs 61,624 21,418 83,042

Cash payments ( 7,036 ) ( 13,018 ) ( 20,054 )

Non-cash charges 1,339 ( 8,255 ) ( 6,916 )

Translation ( 25 ) — ( 25 )

Liability as of March 31, 2024 $ 55,902 $ 145 $ 56,047

(1) Amount reflects moving expenses, accelerated rent, professional fees, facility closure costs and asset impairment costs that are attributable to our restructuring.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements