NEWELL BRANDS INC. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Newell Brands Inc.’s (“Newell Brands,” the “Company,” “we,” “us” or “our”) consolidated financial condition and results of operations. The discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto. Forward-Looking Statements Forward-looking statements in this Report are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “setting up,” “beginning to,” “will,” “should,” “would,” “could,” “resume,” “are confident that,” “remain optimistic that,” “seek to,” or similar statements. The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to: • the Company’s ability to optimize costs and cash flow and mitigate the impact of retailer inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjustments and actions to improve working capital; • the Company’s dependence on the strength of retail and consumer demand and commercial and industrial sectors of the economy in various countries around the world; • the Company’s ability to improve productivity, reduce complexity and streamline operations; • the Company's ability to manage any actual or perceived ongoing effects of the COVID-19 pandemic, including as a result of any additional variants of the virus or the efficacy and distribution of vaccines; • competition with other manufacturers and distributors of consumer products; • major retailers’ strong bargaining power and consolidation of the Company’s customers; • supply chain and operational disruptions in the markets in which we operate, whether as a result of the actual or perceived effects of the COVID-19 pandemic or broader geopolitical and macroeconomic conditions, including the military conflict between Russia and Ukraine; • changes in the prices and availability of labor, transportation, raw materials and sourced products, including significant inflation, and the Company's ability to offset cost increases through pricing and productivity in a timely manner; • the cost and outcomes of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties, including but not limited to those described in Footnote 17 of the Notes to Unaudited Condensed Consolidated Financial Statements , the potential outcomes of which could exceed policy limits, to the extent insured; • the Company’s ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend; • the Company's ability to consistently maintain effective internal control over financial reporting; • the risks inherent to the Company’s foreign operations, including currency fluctuations, exchange controls and pricing restrictions; • future events that could adversely affect the value of the Company’s assets and/or stock price and require additional impairment charges; • unexpected costs or expenses associated with dispositions; • the Company's ability to effectively execute its turnaround plan, including Project Ovid and Project Phoenix; • risks related to the Company’s substantial indebtedness, potential increases in interest rates or changes in the Company’s credit ratings; • a failure or breach of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s service providers; • the impact of United States and foreign regulations on the Company’s operations, including the impact of tariffs and environmental remediation costs and legislation and regulatory actions related to data privacy and climate change; • the potential inability to attract, retain and motivate key employees; • changes in tax laws and the resolution of tax contingencies resulting in additional tax liabilities; • product liability, product recalls or related regulatory actions; • the Company’s ability to protect its intellectual property rights; • significant increases in the funding obligations related to the Company’s pension plans; and • other factors listed from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings. 23 Table of Contents The information contained in this Report is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this Report as a result of new information or future events or developments. In addition, there can be no assurance that the Company has correctly identified and assessed all of the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct. Overview Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz. Newell Brands’ beloved brands enhance and brighten consumers lives at home and outside by creating moments of joy, building confidence and providing peace of mind. The Company sells its products in nearly 200 countries around the world and has operations on the ground in over 40 of these countries, excluding third-party distributors. Business Strategy The Company continues to execute on its turnaround strategy of building a global, next generation consumer products company that can unleash the full potential of its brands in a fast-moving omni-channel environment. The strategy, developed in 2019, is designed to: • Drive sustainable top line growth by focusing on innovation, sharpening brand positioning, strengthening the international businesses, enhancing digital marketing and omni-channel capabilities, and building customer relationships; • Improve operating margins by driving productivity and overhead savings, while reinvesting in the business; • Accelerate the cash conversion cycle by focusing on cash efficiency and improving key working capital metrics; • Strengthen the portfolio by investing in attractive categories that are aligned with its capabilities and strategy and optimizing product mix; and • Strengthen organizational capabilities and employee engagement by building a winning team and focusing the best people on the right things. The Company is implementing this strategy while addressing key challenges such as shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail and consumer landscape; continued macroeconomic and geopolitical volatility; a softening macro backdrop; significant inflationary and supply chain pressures, and an evolving regulatory landscape. Continued execution of these strategic imperatives, in combination with new initiatives aimed to build operational excellence, will better position the Company for long-term sustainable growth. One such initiative is Project Ovid, a multi-year, customer centric supply chain initiative to transform the Company's go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies. This initiative, which commenced its first phase go-live during the third quarter of 2022 and its second phase go-live during the first quarter of 2023, is expected to leverage technology to further simplify the organization by harmonizing and automating processes. Project Ovid is designed to optimize the Company’s distribution network by creating a single integrated supply chain from 23 business-unit-centric supply chains. The initiative is intended to reduce administrative complexity, improve inventory and invoicing workflow for our customers and enhance product availability for consumers through omni-channel enablement. This new operating model is also expected to drive efficiencies by consolidating the number of overall distribution sites and better utilizing the Company's transportation and distribution network. In January 2023, the Company announced a restructuring and savings initiative (“Project Phoenix”) that is intended to strengthen the Company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies. Project Phoenix is expected to be substantially implemented by the end of 2023 and incorporates a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize the Company’s supply chain functions, which include manufacturing, distribution, transportation and customer service, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs. The Company commenced reducing headcount during the first quarter of 2023, with most of these actions expected to be completed by the end of 2023, subject to local law and consultation requirements. 24 Table of Contents Organizational Structure Effective January 1, 2023, as a result of the implementation of a new operating model intended to drive further simplification and unlock additional efficiencies and synergies within the Company, the chief operating decision maker (“CODM”) now reviews the businesses as three operating segments: Home and Commercial Solutions, Learning and Development and Outdoor and Recreation. The Home and Commercial Solutions operating segment represents the combination of the previously reported Commercial Solutions, Home Appliances and Home Solutions operating segments. Prior period comparable results have been reclassified to conform to the operating segment change. On March 31, 2022, the Company sold its Connected Home & Security (“CH&S”) business to Resideo Technologies, Inc. The results of operations for CH&S continued to be reported in the Condensed Consolidated Statements of Operations as part of the Home and Commercial Solutions segment through March 31, 2022. The Company's three primary reportable segments are the following: Segment Key Brands Description of Primary Products Home and Commercial Solutions Ball (1) , Calphalon, Chesapeake Bay Candle, Crockpot, FoodSaver, Mapa, Mr. Coffee, Oster, Quickie, Rubbermaid, Rubbermaid Commercial Products, Sistema, Spontex, Sunbeam, WoodWick and Yankee Candle Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling solutions; household products, including kitchen appliances; food and home storage products; fresh preserving products; vacuum sealing products; gourmet cookware, bakeware and cutlery and home fragrance products Learning and Development Aprica, Baby Jogger, Dymo, Elmer’s, EXPO, Graco, Mr. Sketch, NUK, Paper Mate, Parker, Prismacolor, Sharpie, Tigex, Waterman and X-Acto Baby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based products and labeling solutions Outdoor and Recreation Campingaz, Coleman, Contigo, ExOfficio and Marmot Products for outdoor and outdoor-related activities (1) and Ball® TM of Ball Corporation, used under license. This structure reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. See Footnote 16 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. Recent Developments Current Macroeconomic Conditions The Company, which has been impacted in recent years by inflationary and supply chain pressures, labor shortages, and logistical challenges across its businesses, and more recently by indirect macroeconomic impacts from the Russia-Ukraine conflict, continues to experience additional headwinds due to softening global demand and an increased focus by retailers to rebalance inventory levels. These collective macroeconomic trends, the duration or severity of which are highly uncertain, are rapidly changing the retail and consumer landscape are expected to negatively impact the Company’s operating results, cash flows and financial condition during the current year. To help mitigate the negative impact of these conditions to the operating performance of its businesses, the Company has secured selective pricing increases, accelerated productivity initiatives, optimized advertising and promotion expenses, deployed overhead cost containment efforts, adjusted demand forecasts and supply plans, and taken actions designed to improve working capital. The Company will continue to evaluate other opportunities to improve its financial performance both in the short and long term, including the consolidation of its distribution sites. Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future expense or impairment charges. See Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on use of estimates and risks. 25 Table of Contents Russia-Ukraine Conflict The global economy has been negatively impacted by the military conflict between Russia and Ukraine. While the Company does not expect the conflict to have a material impact on its results of operations, it has experienced shortages in raw materials and increased costs for transportation, energy, and commodities due in part to the negative impact of the Russia-Ukraine military conflict on the global economy. Further escalation of geopolitical tensions related to the conflict, including increased trade barriers and restrictions on global trade, could result in, among other things, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain. Additionally, if the military conflict escalates beyond its current scope, the Company could be negatively impacted by economic recessions in certain neighboring European countries or globally. See Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on use of estimates and risks. Project Phoenix In January 2023, the Company announced Project Phoenix, a restructuring and savings initiative described above that aims to strengthen the Company by leveraging its scale to further reduce complexity by streamlining its operating model and driving operational efficiencies. During the three months ended March 31, 2023, the Company recorded restructuring charges of $36 million in connection with the program. See Footnote 4 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. Debt Rating Downgrade On March 20, 2023, S&P Global Inc. (“S&P”) downgraded the Company’s debt rating to “BB+”. As a result of the S&P downgrade, certain of the Company’s outstanding senior notes currently aggregating to approximately $3.1 billion are subject to an interest rate adjustment of 25 basis points. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million on an annualized basis (approximately $6 million in 2023). In addition, the Company is still subject to the interest rate adjustment of 25 basis points in connection with the Moody’s Corporation (“Moody’s”) downgrade of the Company's debt rating in 2020. Furthermore, as a result of the S&P downgrade, the Company's ability to borrow from the commercial paper market on terms it deems acceptable or favorable was eliminated. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. On February 14, 2023, Fitch Ratings downgraded the Company's debt rating to “BB”. This downgrade does not impact the interest rates on any of the Company's senior notes. Amendment to Credit Revolver The Company has a $1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) that matures in August 2027. On March 27, 2023, the Company entered into an amendment to its Credit Revolver (the “Amendment”) to (i) include non-cash expenses resulting from grants of stock awards among the items that may be added to Consolidated Net Income when calculating Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined in the Amendment, and (ii) lower the Interest Coverage Ratio, as defined in the Amendment, for the fiscal quarters ending on June 30, 2023, September 30, 2023, December 31, 2023 and March 31, 2024. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. 26 Table of Contents Three Months Ended March 31, 2023 vs. Three Months Ended March 31, 2022 Consolidated Operating Results Three Months Ended March 31, (in millions) 2023 2022 $ Change % Change Net sales $ 1,805 $ 2,388 $ (583) (24.4)% Gross profit 482 740 (258) (34.9)% Gross margin 26.7 % 31.0 % Operating income (loss) (36) 217 (253) NM Operating margin (2.0) % 9.1 % Interest expense, net 68 59 9 15.3% Other (income) expense, net 12 (118) 130 NM Income (loss) before income taxes (116) 276 (392) NM Income tax provision (benefit) (14) 48 (62) NM Income tax rate 12.1 % 17.4 % Net income (loss) $ (102) $ 228 $ (330) NM Diluted earnings (loss) per share attributable to common shareholders $ (0.25) $ 0.54 NM - NOT MEANINGFUL Net sales decreased 24%, as pricing actions by the Company were more than offset by softening global demand, as retailers significantly pulled back on orders, the impact of the sale of the CH&S business at the end of the first quarter of 2022, which negatively impacted net sales by approximately 5%, and category exits, primarily in the Home and Commercial Solutions segment. The net sales performance also reflected the lapping of elevated levels of demand in certain categories during the prior year. In addition, prior year net sales benefited from a shift in customer orders normally placed in the second quarter of the year. Changes in foreign currency unfavorably impacted net sales by $49 million, or 2%. Gross profit decreased 35% compared to prior year. Gross margin declined to 26.7% as compared with 31.0% in the prior year period. The decrease in gross margin was driven by lower gross profit leverage and input cost inflation. The gross margin decline was partially offset by favorable net pricing and gross productivity. The gross profit decline also reflected the unfavorable impact of the sale of the CH&S business in the prior year. Changes in foreign currency exchange rates unfavorably impacted gross profit by $25 million, or 3%. In addition to the change in gross profit noted above, notable items impacting operating income (loss) for the three months ended March 31, 2023 and 2022 were as follows: Three Months Ended March 31, 2023 2022 $ Change Restructuring (See Footnote 4 ) and restructuring-related costs (a) $ 51 $ 11 $ 40 Transactions costs and other (b) 9 8 1 (a) Restructuring-related costs reported in cost of goods sold and SG&A for the three months ended March 31, 2023 was $5 million and $8 million, respectively, and primarily relate to facility closures. For the three months ended March 31, 2022, restructuring-related costs reported in cost of sales and SG&A were $5 million and $1 million, respectively, and primarily relate to facility closures. Restructuring costs were $38 million and $5 million for the three months ended March 31, 2023 and 2022, respectively. (b) Transaction and other costs for the three months ended March 31, 2023 primarily related to expenses associated with certain legal proceedings. Transaction and other costs for the three months ended March 31, 2022 primarily related to completed divestitures and expenses associated with certain legal proceedings. 27 Table of Contents Operating loss was $36 million as compared to operating income of $217 million in the prior year period. The decline reflects lower gross profit, higher restructuring charges, in connection with Project Phoenix, partially offset by lower compensation and overhead expense, advertising and promotion costs and an employee retention credit in connection with the CARES Act. Interest expense, net increased primarily due to higher interest rates and debt levels, partially offset by higher interest income. The weighted average interest rates for the three months ended March 31, 2023 and 2022 were approximately 4.8% and 4.5%, respectively. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. Other (income) expense, net for three months ended March 31, 2023 and 2022 includes the following items: Three Months Ended March 31, 2023 2022 Foreign exchange losses, net $ 2 $ 12 Gain on disposition of business (See Footnote 2 ) — (130) Other losses, net 10 — $ 12 $ (118) The income tax benefit for the three months ended March 31, 2023 was $14 million as compared to a provision of $48 million for the three months ended March 31, 2022. The effective tax rate for the three months ended March 31, 2023 was a benefit of 12.1%, resulting from lower discrete tax expense combined with pretax losses during the period, as compared to provision of 17.4% for the three months ended March 31, 2022. See Footnote 12 of the Notes to Consolidated Financial Statements in the Company’s 2022 Annual Report on Form 10-K for information regarding the inherent uncertainty associated with the Company's position on certain U.S. Treasury Regulations. Business Segment Operating Results Home and Commercial Solutions Three Months Ended March 31, (in millions) 2023 2022 $ Change % Change Net sales $ 971 $ 1,350 $ (379) (28.1)% Operating income (loss) (37) 89 (126) NM Operating margin (3.8) % 6.6 % Home and Commercial Solutions net sales for the three months ended March 31, 2023 decreased 28%, which reflected softening demand across most channels, the sale of the CH&S business at the end of the first quarter of 2022, which unfavorably impacted net sales by approximately 8% and certain category exits in the Kitchen business. The net sales decline was partially offset by pricing actions and improved order fulfillment resulting from the easing of supply chain constraints. Changes in foreign currency unfavorably impacted net sales by $23 million, or 2%. Operating loss for the three months ended March 31, 2023 was $37 million as compared to operating income of $89 million in the prior year. The decrease in operating results is primarily due to lower gross profit leverage, product mix and input cost inflation, higher restructuring charges, in connection with Project Phoenix, as well as the unfavorable impact from the sale of the CH&S business in the prior year, partially offset by gross productivity and lower compensation expense and advertising and promotion costs. 28 Table of Contents Learning and Development Three Months Ended March 31, (in millions) 2023 2022 $ Change % Change Net sales $ 564 $ 650 $ (86) (13.2)% Operating income 72 138 (66) (47.8)% Operating margin 12.8 % 21.2 % Learning and Development net sales for the three months ended March 31, 2023 decreased 13%, reflecting declines in both the Writing and Baby businesses. The Writing business performance reflected pricing actions and improvement in replenishment orders in certain areas, which were more than offset by logistical constraints and supply chain shortages, as well as softening demand in certain categories in the U.S. Pricing actions in the Baby business were more than offset by softening demand in certain categories in the U.S., an increased focus by retailers to rebalance inventory levels, a shift in the timing of orders by a retailer into the second quarter of 2023 and lower sales to a customer that recently declared bankruptcy. Changes in foreign currency unfavorably impacted net sales by $14 million, or 2%. Operating income for the three months ended March 31, 2023 decreased to $72 million as compared to $138 million in the prior-year period. The decrease in operating income is primarily due to lower gross profit leverage and input cost inflation, as well as higher restructuring charges primarily associated with Project Phoenix, partially offset by gross productivity. Outdoor and Recreation Three Months Ended March 31, (in millions) 2023 2022 $ Change % Change Net sales $ 270 $ 388 $ (118) (30.4)% Operating income (loss) (1) 46 (47) NM Operating margin (0.4) % 11.9 % Outdoor and Recreation net sales for the three months ended March 31, 2023 decreased 30% primarily reflecting softening global demand and the lapping of customer inventory replenishment in the prior year, partially offset by pricing actions. Changes in foreign currency unfavorably impacted net sales by $12 million or 3%. Operating loss for the three months ended March 31, 2023 was $1 million as compared to operating income of $46 million in the prior-year period. The decline was primarily due to lower gross profit leverage, product mix and higher restructuring charges in connection with Project Phoenix, partially offset by gross productivity and lower compensation expense. Liquidity and Capital Resources Liquidity The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects an increased focus by retailers to rebalance inventory levels, the supply chain disruptions, inflationary pressures and uncertainty over the volatility and direction of future demand patterns on the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary. As noted in the Business Strategy and Recent Developments , the Company has taken actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility, including amending certain terms of its Credit Revolver. The Company believes these actions and its cash generating capability, together with its borrowing capacity and available cash and cash equivalents, provide adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and execute its ongoing business initiatives. The Company regularly assesses its cash requirements and the available sources to fund these needs. For further information, refer to Risk Factors in Part I - Item 1A and Recent 29 Table of Contents Developments in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation s of the Company's most recent Annual Report on Form 10-K, filed on February 15, 2023. At March 31, 2023, the Company had cash and cash equivalents of approximately $271 million, of which approximately $237 million was held by the Company’s non-U.S. subsidiaries. Cash, cash equivalents and restricted cash increased (decreased) as follows for the three months ended March 31, 2023 and 2022 (in millions): 2023 2022 Increase (Decrease) Cash used in operating activities $ (77) $ (272) $ 195 Cash provided by (used in) investing activities (68) 559 (627) Cash provided by (used in) financing activities 128 (393) 521 Exchange rate effect on cash, cash equivalents and restricted cash (1) 8 (9) Decrease in cash, cash equivalents and restricted cash $ (18) $ (98) $ 80 The Company has historically generated the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers. See below for further information on the Company's recent operating cash flow performance. Cash Flows from Operating Activities The change in net cash used in operating activities reflects the lapping of unfavorable working capital associated with inventory build in the prior year and lower incentive compensation payments in the current year, partially offset by lower operating income and higher restructuring payments. Cash Flows from Investing Activities The change in cash provided by investing activities was primarily due to proceeds from the sale of the CH&S business in the prior year and higher capital expenditures in the current year associated with Project Ovid. Cash Flows from Financing Activities The change in net cash provided by financing activities was primarily due to the period-over-period change in short-term debt, and repurchase of shares of the Company's common stock in the prior year. See Footnotes 1, 9 and 14 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information. Capital Resources The Company has a $1.5 billion Credit Revolver that matures in August 2027. The Credit Revolver requires compliance with certain financial covenants. A failure to maintain our financial covenants and to subsequently remedy a default would impair our ability to borrow under the Credit Revolver and potentially subject the Company to cross-default and acceleration provisions in its debt documents. The Company was in compliance with all of its debt covenants at March 31, 2023. At March 31, 2023, the Company had $760 million of outstanding borrowings under the Credit Revolver and approximately $22 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $720 million. The Company maintains an Accounts Receivable Securitization Facility (the “Securitization Facility”). The aggregate commitment under the Securitization Facility is $375 million. The Securitization Facility matures in October 2023 and bears interest at a margin over a variable interest rate. The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances. At March 31, 2023, the Company had $90 million outstanding under the Securitization Facility. 30 Table of Contents Risk Management From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on the Company's derivative instruments. Significant Accounting Policies and Critical Estimates For further information on significant accounting policies and critical estimates, refer to the Company's most recent Annual Report on Form 10-K, filed on February 15, 2023. Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no material changes from the information previously reported under Part II, Item 7A. in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.