What changed in this filing

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Item 1. Financial Statements

2024-04-26 compared with 2023-10-27 · 243 added, 394 removed, 457 unchanged (58% of the section changed)

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net sales $ 1,653 $ 1,805

3 unchanged sentences

Restructuring costs, net 26 38

Impairment of goodwill, intangibles and other assets 263 148 274 148

Operating income (loss) 16 ( 36 )

1 unchanged sentence

Interest expense, net 70 68

Other (income) expense, net 70 24 91 ( 73 )

Income (loss) before income taxes ( 298 ) ( 41 ) ( 379 ) 487

Income tax provision (benefit) ( 80 ) ( 60 ) ( 77 ) 41

Net income (loss) $ ( 218 ) $ 19 $ ( 302 ) $ 446

Loss on extinguishment and modification of debt 1 —

Other expense, net 5 12

Loss before income taxes ( 60 ) ( 116 )

Income tax benefit ( 51 ) ( 14 )

Net loss $ ( 9 ) $ ( 102 )

Weighted average common shares outstanding:

1 unchanged sentence

Diluted 414.7 413.9

Earnings (loss) per share:

Loss per share:

Basic $ ( 0.02 ) $ ( 0.25 )

1 unchanged sentence

COMPREHENSIVE INCOME (LOSS):

Net income (loss) $ ( 218 ) $ 19 $ ( 302 ) $ 446

Net loss $ ( 9 ) $ ( 102 )

Other comprehensive income (loss), net of tax:

3 unchanged sentences

Total other comprehensive income (loss), net of tax ( 9 ) 7

Total comprehensive income (loss) $ ( 172 ) $ ( 59 ) $ ( 266 ) $ 313

Total comprehensive loss $ ( 18 ) $ ( 95 )

See Notes to Condensed Consolidated Financial Statements (Unaudited).

3 unchanged sentences

(Amounts in millions, except par values)

September 30,

2024 December 31,

12 unchanged sentences

Accounts payable $ 1,038 $ 1,003

Accrued compensation 150 123

Other accrued liabilities 1,489 1,565

8 unchanged sentences

Stockholders’ equity:

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at September 30, 2023 and December 31, 2022)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 439.5 shares and 438.6 shares issued at September 30, 2023 and December 31, 2022, respectively)

Treasury stock, at cost ( 25.3 shares and 25.0 shares at September 30, 2023 and December 31, 2022, respectively)

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at March 31, 2024 and December 31, 2023)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 440.9 shares and 439.6 shares issued at March 31, 2024 and December 31, 2023, respectively)

Treasury stock, at cost ( 25.8 shares and 25.3 shares at March 31, 2024 and December 31, 2023, respectively)

( 631 ) ( 627 )

9 unchanged sentences

(Amounts in millions)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income (loss) $ ( 302 ) $ 446

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net loss $ ( 9 ) $ ( 102 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 85 81

Impairment of goodwill, intangibles and other assets 274 148

Gain from sale of business — ( 136 )

Deferred income taxes 8 6

Stock based compensation expense 16 11

Pension settlement charge 66 —

Other, net ( 3 ) ( 9 )

Changes in operating accounts excluding the effects of divestiture:

Changes in operating accounts:

Accounts receivable 221 45

4 unchanged sentences

Cash flows from investing activities:

Proceeds from sale of divested business — 616

Capital expenditures ( 59 ) ( 83 )

Swap proceeds 8 14

Other investing activities, net 1 1

Net cash provided by (used in) investing activities ( 147 ) 420

Net cash used in investing activities ( 50 ) ( 68 )

Cash flows from financing activities:

Net payments of short-term debt ( 244 ) —

Net proceeds from issuance of long-term debt — 990

Payments on current portion of long-term debt ( 2 ) ( 2 )

Repurchase of shares of common stock — ( 325 )

Proceeds from (payments on) short-term debt, net ( 131 ) 232

Proceeds from short-term debt with original maturities greater than 90 days 431 —

Payments on short-term debt with original maturities greater than 90 days ( 200 ) —

Cash dividends ( 31 ) ( 97 )

Equity compensation activity and other, net ( 9 ) ( 7 )

Net cash provided by (used in) financing activities ( 405 ) 344

Net cash provided by financing activities 60 128

Exchange rate effect on cash, cash equivalents and restricted cash ( 3 ) ( 1 )

Increase in cash, cash equivalents and restricted cash 119 184

Increase (decrease) in cash, cash equivalents and restricted cash 39 ( 18 )

Cash, cash equivalents and restricted cash at beginning of period 361 303

9 unchanged sentences

Stock Treasury

Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance at June 30, 2023 $ 440 $ ( 627 ) $ 6,945 $ ( 2,422 ) $ ( 1,021 ) $ 3,315

Comprehensive income (loss) — — — ( 218 ) 46 ( 172 )

Dividends declared on common stock - $ 0.07 per share

— — ( 29 ) — — ( 29 )

Equity compensation, net of tax — — 12 — — 12

Balance at September 30, 2023 $ 440 $ ( 627 ) $ 6,928 $ ( 2,640 ) $ ( 975 ) $ 3,126

Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity

Balance at December 31, 2023 $ 440 $ ( 627 ) $ 6,915 $ ( 2,726 ) $ ( 890 ) $ 3,112

Comprehensive income (loss) — — — ( 302 ) 36 ( 266 )

Comprehensive loss — — — ( 9 ) ( 9 ) ( 18 )

Dividends declared on common stock - $ 0.07 per share

1 unchanged sentence

Equity compensation, net of tax 1 ( 4 ) 15 — — 12

Balance at September 30, 2023 $ 440 $ ( 627 ) $ 6,928 $ ( 2,640 ) $ ( 975 ) $ 3,126

Balance at March 31, 2024 $ 441 $ ( 631 ) $ 6,900 $ ( 2,735 ) $ ( 899 ) $ 3,076

Stock Treasury

Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Total Stockholders' Equity

Balance at June 30, 2022 $ 439 $ ( 623 ) $ 7,251 $ ( 2,108 ) $ ( 937 ) $ 4,022

Comprehensive income (loss) — — — 19 ( 78 ) ( 59 )

Dividends declared on common stock - $ 0.23 per share

— — ( 93 ) — — ( 93 )

Equity compensation, net of tax — — ( 15 ) — — ( 15 )

Balance at September 30, 2022 $ 439 $ ( 623 ) $ 7,143 $ ( 2,089 ) $ ( 1,015 ) $ 3,855

Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance at December 31, 2022 $ 439 $ ( 623 ) $ 7,052 $ ( 2,338 ) $ ( 1,011 ) $ 3,519

3 unchanged sentences

Equity compensation, net of tax — ( 4 ) 9 — — 5

Common stock purchased and retired ( 13 ) — ( 312 ) — — ( 325 )

Other — — ( 1 ) — — ( 1 )

Balance at September 30, 2022 $ 439 $ ( 623 ) $ 7,143 $ ( 2,089 ) $ ( 1,015 ) $ 3,855

Balance at March 31, 2023 $ 439 $ ( 627 ) $ 6,965 $ ( 2,440 ) $ ( 1,004 ) $ 3,333

See Notes to Condensed Consolidated Financial Statements (Unaudited).

11 unchanged sentences

GAAP for a complete financial statement.

The condensed consolidated financial statements for all comparable prior periods presented have been retrospectively adjusted to reflect the following:

• 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.

See Footnote 16 for further information;

• A prior-year change in method of accounting for certain inventory in the U.S.

from the last-in, first-out method to the first-in, first-out method resulted in a $ 5 million and $ 16 million reduction of cost of products sold and corresponding increase to operating income and income before income taxes, additional income tax provision of $ 1 million and $ 4 million and increase of $ 4 million and $ 12 million to net income in the Company's previously issued unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022, respectively;

• A revision associated with an incorrect change in functional currency designation in the prior year resulted in additional expense to record mark to market adjustments of $ 16 million and $ 35 million in other (income) expense, net in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022, respectively, and a reclassification between Accumulated Other Comprehensive Loss and Retained Deficit in the Condensed Consolidated Statement of Stockholder’s Equity of $ 35 million at September 30, 2022.

Refer to Footnote 19 of the Company's most recent Annual Report on Form 10-K, filed on February 15, 2023.

On March 31, 2022, the Company sold its Connected Home & Security (“CH&S”) business to Resideo Technologies, Inc.

See Footnotes 2 and 16 for further information.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates and Risks

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GAAP in preparing the Company’s condensed consolidated financial statements requires the pervasive use of estimates and assumptions.

The Company continues to be impacted by inflationary pressures, softening global demand, focus by major retailers on the rebalancing of inventory levels, rising interest rates and indirect macroeconomic impacts from the Russia-Ukraine conflict.

These collective macroeconomic trends, the duration or severity of which are highly uncertain, are rapidly changing the retail and consumer landscape and are expected to continue to negatively impact the Company’s operating results, cash flows and financial condition during the current year.

As consumers continue to face widespread increases in prices and interest rates, their discretionary spending and purchase patterns may continue to be unfavorably impacted.

The Company continues to be impacted by inflationary pressures, soft global demand, major retailers’ focus on tight control over inventory levels, elevated interest rates and indirect macroeconomic impacts from geopolitical conflicts.

These collective macroeconomic trends, the duration or severity of which are highly uncertain, are still changing the retail and consumer landscape and are expected to continue to negatively impact the Company’s operating results, cash flows and financial condition during the current year.

As consumers continue to face widespread increases in prices and elevated interest rates, their discretionary spending and purchase patterns may continue to be unfavorably impacted.

The high level of uncertainty of these factors has resulted in estimates and assumptions that have the potential for more variability and are more subjective.

1 unchanged sentence

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.

During the third quarter of 2023, the Company concluded that a triggering event had occurred for the goodwill associated with the Baby reporting unit in the Learning and Development segment, and for an indefinite-lived tradename in the Outdoor and Recreation segment, as a result of a downward revision of forecasted cash flows due to market conditions, as well as rising interest rates.

The Company performed a quantitative impairment test and determined that the Baby reporting unit goodwill and the indefinite-lived tradename in the Outdoor and Recreation segment were impaired.

During the third quarter of 2023, the Company recorded a non-cash impairment charge of $ 241 million for the Baby reporting unit goodwill and $ 22 million for the indefinite-lived tradename in the Outdoor and Recreation segment, as the carrying values exceeded their fair values.

See Footnote 7 for further information.

During the second quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Home Fragrance reporting unit in the Home and Commercial Solutions segment and for the goodwill associated with the Baby reporting unit in the Learning and Development segment, as a result of a downward revision of forecasted cash flows due to softening global demand, primarily caused by continued inflationary pressure that is impacting discretionary spending behavior of consumers, as well as rising interest rates.

The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Home and Commercial Solutions segment was impaired.

During the second quarter of 2023, the Company recorded a non-cash impairment charge of $ 8 million, as the carrying value of the tradename exceeded its fair value.

The Company concluded that the Baby reporting unit goodwill was not impaired during the second quarter of 2023.

See Footnote 7 for further information.

Seasonal Variations

2 unchanged sentences

Also, the Company typically tends to generate 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.

In addition, uncertainty still remains over the volatility and direction of future consumer and customer demand patterns, as well as inflationary and supply chain pressures.

Accordingly, the Company’s results of operations and cash flows for the three and nine months ended September 30, 2023 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2023.

Adoption of New Accounting Guidance

In addition, uncertainty still remains over the volatility and direction of future consumer and customer demand patterns, as well as inflationary pressures.

Accordingly, the Company’s results of operations and cash flows for the three months ended March 31, 2024 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2024.

Recent Accounting Pronouncements

Changes to U.S.

GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs.

The Company considers the applicability and impact of recently issued and proposed ASUs.

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

Improvements to Reportable Segment Disclosures.” The amendments in this update require that a public entity disclose on an annual and interim basis significant segment expenses that are regularly provided to the entity’s chief operating decision maker (the “CODM”), nature and amount of other financial information by reportable segment and any additional measures of a segment’s profit or loss used by the CODM in assessing segment performance and deciding allocation of resources.

The amendments in ASU 2023-07 are effective for fiscal

years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements.

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

Improvements to Income Tax Disclosures.” The standard requires all entities subject to income taxes to disclose disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The new requirement will be effective for annual periods beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company does not expect the adoption of ASU 2023-09 to have a material impact on the consolidated financial statements.

Adoption of New Accounting Guidance

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

” In January 2021, the FASB clarified the scope of this guidance with the issuance of ASU 2021-01, Reference Rate Reform:

ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In January 2021, the FASB clarified the scope of this guidance with the issuance of ASU 2021-01, Reference Rate Reform:

ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met.

This ASU was further updated with the issuance of ASU 2022-06, Reference Rate Reform:

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In October 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

” This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows.

Disclosure of Supplier Finance Program Obligations.” This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to better consider the effect of the programs on an entity’s working capital, liquidity and cash flows.

This ASU is effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023.

See disclosures hereafter for further information.

The Company adopted ASU 2022-04 and it did not have a material impact on its consolidated financial statements.

See disclosure hereafter for further information.

Sales of Accounts Receivables

Factored receivables at September 30, 2023 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 345 million, a decrease of approximately $ 75 million from December 31, 2022.

Factored receivables at March 31, 2024 associated with the Company’s existing factoring agreement for certain customer receivables (the “Customer Receivables Purchase Agreement”) were approximately $ 300 million, an increase of approximately $ 60 million from December 31, 2023.

Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction.

The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow in the Condensed Consolidated Statement of Cash Flows.

The Company records the discount as other (income) expense, net in the Condensed Consolidated Statement of Operations.

As further described in Footnote 18, in October 2023, the Company entered into a new accounts receivable facility pursuant to which receivables of certain subsidiaries are sold or pledged.

The Company records the discount as other expense, net in the Condensed Consolidated Statement of Operations.

In addition, the Company, through a wholly-owned special purpose entity (“SPE”) has a three-year agreement with a financial institution to sell up to $ 225 million, between February and April of each year and up to $ 275 million at all other times, of certain other customer receivables without recourse on a revolving basis (the “New Receivables Facility”).

Under the New Receivables Facility, certain of the Company’s subsidiaries continuously sell their accounts receivables, originating in the U.S.

to the SPE and the SPE sells the receivables to the financial institution.

The SPE is a variable interest entity for which the Company is considered to be the primary beneficiary.

The SPE’s sole business consists of the purchase of receivables from certain subsidiaries of the Company and the subsequent transfer of such receivables to the financial institution.

Although the SPE is consolidated in the Company’s condensed consolidated financial statements, it is a separate legal entity with separate creditors.

The assets of the SPE are not available to pay creditors of the Company or its subsidiaries.

The fair value of these servicing arrangements as well as the fees earned were immaterial.

The Company accounts for receivables sold from the SPE to the financial institution as a sale of financial assets and derecognizes the trade receivables from the Company’s Condensed Consolidated Balance Sheet.

The balance of outstanding accounts receivables sold to the financial institution as of March 31, 2024 was $ 110 million, an increase of approximately $ 65 million from December 31, 2023.

Cash received under the New Receivables Facility is classified as an operating cash flow and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow in the Condensed Consolidated Statement of Cash Flows.

The Company records the discount as other expense, net in the Condensed Consolidated Statement of Operations.

Supplier Finance Program Obligations

The Company has worked with its suppliers of goods and services over the past several years to revisit terms and conditions, including the extension of payment terms.

Additionally, a global financial institution offers a voluntary supply chain finance program (the “SCF Program”) which enables suppliers, at their sole discretion, to sell their receivables from the Company to the financial institution on a non-recourse basis.

Additionally, a global financial institution offers a voluntary supply chain finance program (the “SCF Program”) which enables suppliers, at their sole discretion, to sell their receivables due from the Company to the financial institution on a non-recourse basis.

The Company and its suppliers agree on contractual terms for the goods and services procured, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF Program.

Payments terms average approximately 125 days.

Supplier payments terms average approximately 128 days.

The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms.

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The suppliers’ voluntary inclusion of invoices in the SCF Program does not change the Company’s existing contractual terms with its suppliers.

The Company does not provide any guarantees under the SCF Program, nor does it have any economic interest in a supplier’s decision to participate in the SCF Program.

Amounts due under the SCF Program are included in accounts payable in the Condensed Consolidated Balance Sheets and as operating cash flows in the Condensed Consolidated Statement of Cash Flows.

At September 30, 2023 and December 31, 2022, outstanding payment obligations under the SCF Program were approximately $ 100 million for both periods.

Footnote 2 — Divestiture Activity

On March 31, 2022, the Company sold its CH&S business to Resideo Technologies, Inc., for approximately $ 593 million, subject to customary working capital and other post-closing adjustments.

As a result, during the nine months ended September 30, 2022, the Company recorded a pretax gain of $ 136 million, which was included in other (income) expense, net in its Condensed Consolidated Statements of Operations.

The Company does not provide any guarantees or collateral directly under the SCF Program, nor does it have any economic interest in a supplier’s decision to participate in the SCF Program.

Pursuant to the Second Amendment (defined hereafter), a lender under the Credit Revolver (defined hereafter) that also participates in the SCF Program secured its related financing pursuant to the terms of the Credit Revolver.

See Footnote 8 for further information.

In April 2024, the Company exercised its right to terminate the SCF Program with the current financial institution.

The Company continued to reflect invoices participating in the SCF Program as current liabilities in the Condensed Consolidated Balance Sheet and cash flows from operating activities in the Condensed Consolidated Statement of Cash Flows as of and for the three months ended March 31, 2024, respectively.

The termination will not materially impact the Company’s operating results, financial condition or liquidity.

The following table sets forth the outstanding payment obligations due to the financial institution and activities related to the suppliers who participated in the SCF Program:

Balance at December 31, 2023

Invoices participating in the SCF Program 86

Invoices paid to the financial institution ( 88 )

Balance at March 31, 2024

Footnote 2 — Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the nine months ended September 30, 2023 (in millions):

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the three months ended March 31, 2024 (in millions):

Adjustment Pension and

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Balance at December 31, 2023 $ ( 668 ) $ ( 196 ) $ ( 26 ) $ ( 890 )

Other comprehensive loss before reclassifications ( 8 ) ( 1 ) ( 6 ) ( 15 )

Other comprehensive income (loss) before reclassifications ( 24 ) 9 4 ( 11 )

Amounts reclassified to earnings — ( 1 ) 3 2

Net current period other comprehensive income (loss) ( 24 ) 8 7 ( 9 )

Balance at September 30, 2023 $ ( 696 ) $ ( 257 ) $ ( 22 ) $ ( 975 )

Reclassifications from AOCL to the results of operations for the three and nine months ended September 30, 2023 and 2022 were pretax (income) expense of (in millions):

Balance at March 31, 2024 $ ( 692 ) $ ( 188 ) $ ( 19 ) $ ( 899 )

Reclassifications from AOCL to the results of operations for the three months ended March 31, 2024 and 2023 were pretax (income) expense of (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Cumulative translation adjustment (1)

$ — $ — $ — $ 6

Pension and postretirement benefit plans (1)

Derivative financial instruments (2)

5 ( 7 ) ( 3 ) ( 10 )

(1) See Footnote 10 for further information.

(2) See Footnote 9 for further information.

(3) See Footnote 10 for further information.

The income tax provision (benefit) allocated to the components of AOCL for the periods indicated are as follows (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Foreign currency translation adjustments $ 12 $ ( 6 )

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Derivative financial instruments 2 ( 3 )

Income tax provision related to AOCL $ 39 $ 30 $ 17 $ 54

Income tax provision (benefit) related to AOCL $ 17 $ ( 9 )

Footnote 3 — Restructuring

Restructuring costs, net incurred by reportable business segments for all restructuring activities for the periods indicated are as follows (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

To better align its resources with its strategy and operating model and to reduce the cost structure of its global operations, the Company commits to restructuring plans as necessary and as follows:

Organizational Realignment Plan

In January 2024, the Company announced an organizational realignment, which is expected to strengthen the Company’s front-end commercial capabilities, such as consumer understanding and brand communication, in support of the “where to play” and “how to win” strategy choices the Company unveiled in June of 2023 (the “Realignment Plan”).

In addition to improving accountability, the Realignment Plan is designed to unlock operational efficiencies and cost savings, reduce complexity and free up funds for reinvestment.

As part of the Realignment Plan, the Company is making several operating model changes, which entail:

standing up a cross-functional brand management organization, realigning business unit finance to fully support the new global brand management model, further simplifying and standardizing regional go-to-market organizations, and centralizing domestic retail sales teams, the digital technology team, business-aligned accounting personnel, the Manufacturing Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach.

The Company will also further optimize the Company’s real estate footprint and pursue other cost reduction initiatives.

These actions are expected to be substantially implemented by the end of 2024, subject to local law and consultation requirements.

Restructuring and restructuring-related charges associated with these actions are estimated to be in the range of $ 75 million to $ 90 million and are expected to be substantially incurred by the end of 2024.

This estimate of charges consists primarily of $ 60 million to $ 70 million related to cash severance payments and other termination benefits, $ 11 million to $ 16 million associated with office space reduction and consolidation and approximately $ 4 million of other charges.

The Company expects the majority of the aggregate charges will be cash expenditures.

The Company commenced organizational realignment activities during the first quarter of 2024.

During the three months ended March 31, 2024, the Company recorded restructuring charges of $ 22 million and nominal restructuring-related charges in connection with the Realignment Plan.

Network Optimization Project

In May 2023, the Company announced a restructuring and cost savings initiative that is intended to simplify and streamline its North American distribution network (the “Network Optimization Project”) in order to improve the Company’s cost structure and operating margins while maintaining focus on customer and consumer fulfillment.

The Company initiated implementation of the Network Optimization Project during the second quarter of 2023 and expects it to be substantially implemented by the end of fiscal year 2024.

The Network Optimization Project incorporates a variety of initiatives, including a reduction in the overall number of distribution centers, an optimization of distribution by location, and completion of select automation investments intended to further streamline the Company’s cost structure and to maximize operating performance.

The Company currently estimates that it will incur approximately $ 37 million to $ 49 million in restructuring and restructuring-related charges associated with execution of the Network Optimization Project and expects that the costs incurred will be substantially complete by the end of 2024.

This estimate of charges consists primarily of $ 8 million to $ 11 million related to cash severance payments and other termination benefits and approximately $ 29 million to $ 38 million associated with industrial site reductions.

The Company expects approximately $ 35 million to $ 44 million of the aggregate charges will be cash expenditures.

In connection with the Network Optimization Project, the Company recorded restructuring charges of $ 3 million during the three months ended March 31, 2024, and has incurred $ 10 million since inception.

In addition, the Company incurred $ 2 million of restructuring-related charges during the three months ended March 31, 2024, and has incurred $ 18 million since inception.

Project Phoenix

In January 2023, the Company announced a restructuring and savings initiative (“Project Phoenix”) that was intended to strengthen the Company by leveraging its scale to further reduce complexity, streamline its operating model and drive operational efficiencies.

Project Phoenix was substantially implemented by the end of 2023 and incorporated 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 included manufacturing, distribution, transportation and customer service, transition to a unified One Newell go-to-market model in key international geographies, and reduce overhead costs.

The Company estimates that it will incur approximately $ 100 million to $ 130 million in restructuring and restructuring-related charges in connection with Project Phoenix.

These charges consist primarily of $ 80 million to $ 105 million in charges related to severance payments and other termination benefits;

$ 15 million to $ 20 million in charges associated with office space reductions;

and approximately $ 5 million of other charges, including those associated with employee transition and legal costs.

The Company expects approximately $ 95 million to $ 120 million of the aggregate charges will be cash expenditures.

The Company commenced reducing headcount in the first quarter of 2023, and while the program was mostly complete by the end of 2023, charges will continue to be recognized as the Company completes remaining actions in accordance with local regulations and consultation requirements.

All cash payments are expected to be paid within one year of charges incurred.

During the three months ended March 31, 2024 and 2023, the Company recorded restructuring charges of $ 1 million and $ 36 million, respectively, in connection with Project Phoenix, and has incurred $ 79 million since inception.

Also, during the three months ended March 31, 2024 and 2023, the Company recorded restructuring-related charges of $ 3 million and $ 6 million, respectively, in connection with Project Phoenix, and has incurred $ 22 million since inception.

Restructuring costs, net and restructuring-related costs incurred from inception for the Realignment Plan, Network Optimization Project and Project Phoenix (collectively, the “Plans”) were as follows (in millions):

Severance and termination costs Contract termination and other costs Total restructuring

charges Restructuring-related

charges Total charges

Realignment Plan $ 22 $ — $ 22 $ — $ 22

Network Optimization Project 7 3 10 18 28

Project Phoenix 77 2 79 22 101

$ 106 $ 5 $ 111 $ 40 $ 151

Other Restructuring and Restructuring-Related Charges

The Company also incurs other restructuring and restructuring-related costs in connection with various discrete initiatives.

During the three months ended March 31, 2024 and 2023, the Company recorded nominal and $ 2 million of other restructuring charges, respectively.

Restructuring-related costs are recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.

During the three months ended March 31, 2024 and 2023, the Company recorded other restructuring-related charges of $ 8 million and $ 7 million, respectively.

Restructuring costs, net incurred by reportable business segments for all restructuring activities for the periods indicated and the total charges since inception for the Plans are as follows (in millions):

Three Months Ended

March 31, Total charges from inception of Plans

Home and Commercial Solutions $ 7 $ 16 $ 50

3 unchanged sentences

$ 26 $ 38 $ 111

Ac crued restructuring costs activity for the nine months ended September 30, 2023 was as follows (in millions):

Accrued restructuring costs activity for the three months ended March 31, 2024 was as follows (in millions):

Balance at December 31, 2023 Restructuring

Costs, Net Payments Balance at

March 31, 2024

Severance and termination costs $ 30 $ 24 $ ( 34 ) $ 20

Contract termination and other costs — 2 ( 2 ) —

$ 30 $ 26 $ ( 36 ) $ 20

Accrued restructuring costs activity for the three months ended March 31, 2023 was as follows (in millions):

Balance at December 31, 2022 Restructuring

Costs, Net Payments Foreign

and Other Balance at

September 30, 2023

March 31, 2023

Severance and termination costs $ 7 $ 36 $ ( 33 ) $ — $ 10

1 unchanged sentence

$ 7 $ 38 $ ( 34 ) $ ( 1 ) $ 10

Project Phoenix

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 in 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.

The Company currently estimates that it will incur approximately $ 100 million to $ 130 million in restructuring and restructuring-related charges in connection with Project Phoenix, substantially all of which are expected to be incurred by the end of 2023.

These charges consist primarily of $ 80 million to $ 105 million in charges related to severance payments and other termination benefits;

$ 15 million to $ 20 million in charges associated with office space reductions;

and approximately $ 5 million of other charges, including those associated with employee transition and legal costs.

The Company expects approximately $ 95 million to $ 120 million of the total aggregate charges will be cash expenditures.

All cash payments are expected to be paid within one year of charges incurred.

During the three and nine months ended September 30, 2023, the Company recorded restructuring charges of $ 10 million and $ 63 million, respectively, in connection with Project Phoenix.

Network Optimization Project

In May 2023, the Company announced a restructuring and savings initiative that is intended to simplify and streamline its North American distribution network (the “Network Optimization Project”) in order to improve the Company’s cost structure and operating margins while maintaining focus on customer and consumer fulfillment.

The Company initiated implementation of the Network Optimization Project during the second quarter of 2023 and expects it to be substantially implemented by the end of fiscal year 2024.

The Company expects approximately $ 35 million to $ 44 million of the total aggregate charges will be cash expenditures.

During the three and nine months ended September 30, 2023, the Company recorded restructuring charges of $ 3 million and $ 5 million, respectively, in connection with the project.

Other Restructuring and Restructuring-Related Charges

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, including certain costs associated with Project Ovid, the 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 and costs associated with the optimization of manufacturing sites.

During the three months ended September 30, 2023 and 2022, the Company recorded other restructuring charges of $ 3 million for both periods, and $ 8 million and $ 12 million for the nine months ended September 30, 2023 and 2022, respectively.

Footnote 4 — Inventories

Inventories are comprised of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Raw materials and supplies $ 224 $ 214

4 unchanged sentences

Property, plant and equipment, net, is comprised of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Land $ 73 $ 75

3 unchanged sentences

$ 1,194 $ 1,212

Depreciation expense was $ 53 million and $ 50 million for the three months ended September 30, 2023 and 2022, respectively, and $ 158 million and $ 146 million for the nine months ended September 30, 2023 and 2022, respectively.

Depreciation expense was $ 51 million and $ 54 million for the three months ended March 31, 2024 and 2023, respectively .

Footnote 6 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the nine months ended September 30, 2023 is as follows (in millions):

Goodwill activity for the three months ended March 31, 2024 is as follows (in millions):

March 31, 2024

Segments Net Book Value at December 31, 2023

Impairment Charges Foreign

Net Book Value at

September 30, 2023

Net Book Value

Home and Commercial Solutions $ 747 $ — $ 4,052 $ ( 3,305 ) $ 747

2 unchanged sentences

$ 3,071 $ ( 12 ) $ 8,239 $ ( 5,180 ) $ 3,059

During the third quarter of 2023, the Company concluded that a triggering event had occurred for the goodwill associated with the Baby reporting unit in the Learning and Development segment as a result of a downward revision of forecasted cash flows due to lower volume and profitability expectations, as well as rising interest rates.

The Company performed a quantitative impairment test and determined that the Baby reporting unit goodwill was impaired.

During the third quarter of 2023, the Company recorded a non-cash impairment charge of $ 241 million as the carrying value of the reporting unit exceeded its fair value.

During the third quarter of 2022, the Company concluded that a triggering event had occurred for the Home Fragrance reporting unit in the Home and Commercial Solutions segment, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory, and rising interest rates.

The decline in global demand is driven primarily by inflationary pressures which are impacting the discretionary spending behavior of consumers.

The Company performed a quantitative impairment test and determined that the Home Fragrance reporting unit goodwill was impaired.

During the third quarter of 2022, the Company recorded a non-cash impairment charge of $ 108 million, as the carrying value of the reporting unit exceeded its fair value.

Other intangible assets, net, are comprised of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Accumulated Amortization

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$ 3,483 $ ( 1,036 ) $ 2,447 $ 3,495 $ ( 1,007 ) $ 2,488

(1) In connection with the operating model changes associated with Project Phoenix, the Company determined that six tradenames with aggregate carrying values of $ 70 million no longer met indefinite-lived criteria and were reclassified during the first quarter as finite-lived tradenames, with useful lives ranging from five to ten years .

Amortization expense for intangible assets was $ 28 million and $ 25 million for the three months ended September 30, 2023 and 2022, respectively and $ 82 million and $ 76 million for the nine months ended September 30, 2023 and 2022, respectively.

During the third quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Outdoor and Recreation segment, as a result of a downward revision of forecasted cash flows due to market conditions, as well as rising interest rates.

The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Outdoor and Recreation segment was impaired.

During the third quarter of 2023, the Company recorded a non-cash impairment charge of $ 22 million for the indefinite-lived tradename in the Outdoor and Recreation segment, as the carrying value of the tradename exceeded its fair value.

During the second quarter of 2023, the Company concluded that a triggering event had occurred for indefinite-lived tradename in the Home Fragrance reporting unit in the Home and Commercial Solutions segment as a result of a downward revision of forecasted cash flows due to softening global demand, primarily caused by continued inflationary pressure that is impacting discretionary spending behavior of consumers, as well as rising interest rates.

The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Home and Commercial Solutions segment was impaired.

During the second quarter of 2023, the Company recorded a non-cash impairment charge of $ 8 million, as the carrying value of the tradename exceeded its fair value.

During the third quarter of 2022, the Company concluded that a triggering event had occurred for indefinite-lived tradenames in the Kitchen and Home Fragrance reporting units in the Home and Commercial Solutions segment, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory and rising interest rates.

The decline in global demand was driven primarily by inflationary pressures which impacted the discretionary spending behavior of consumers.

The Company also concluded that a triggering event had occurred for two indefinite-lived tradenames in the Baby reporting unit, in the Learning and Development segment, as a result of rising interest rates and inflationary pressures.

The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Kitchen reporting unit and two indefinite-lived tradenames in the Baby reporting unit were impaired.

During the third quarter of 2022, the Company recorded an aggregate non-cash impairment charge of $ 40 million, as the carrying values of these tradenames exceeded their fair values.

(1) In alignment with the Company’s strategy, the Company determined that certain tradenames with aggregate carrying values of $ 322 million no longer met the criteria to be classified as indefinite-lived tradenames effective January 1, 2024.

The estimated useful lives range from 10 to 15 years, which will increase the Company’s annual amortization expense by $ 25 million, approximately $ 6 million quarterly (approximately $ 0.01 net loss per share per quarter).

Amortization expense for intangible assets was $ 34 million and $ 27 million for the three months ended March 31, 2024 and 2023, respectively.

Footnote 7 — Other Accrued Liabilities

Other accrued liabilities are comprised of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Customer accruals $ 597 $ 659

Accrued compensation 122 190

Operating lease liabilities 122 122

Accrued self-insurance liabilities, contingencies and warranty 105 99

Accrued interest expense 106 74

Accrued income taxes 79 53

Accrued self-insurance liabilities, contingencies and warranty 91 92

Accrued marketing and freight expenses 62 71

Accrued income taxes 51 89

Other 338 268

2 unchanged sentences

Debt is comprised of the following at the dates indicated (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

4.00 % senior notes due 2024 (1)

7 unchanged sentences

Revolving credit facility (1)

Commercial paper — 359

Receivables facility — 35

Other debt 2 1

1 unchanged sentence

Long-term debt $ 4,558 $ 4,575

On August 21, 2023, Moody's Corporation (“Moody's”) downgraded the Company's debt rating to “Ba2”.

As a result of Moody's 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.

(1) Included in short-term debt and current portion of long-term debt

On February 9, 2024, Moody’s Corporation (“Moody’s”) downgraded the Company’s senior unsecured debt rating to “Ba3”.

As a result of Moody’s downgrade, certain of the Company’s outstanding senior notes currently aggregating to approximately $ 3.1 billion (the “Coupon-Step Notes”) were subject to an interest rate increase 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 2024).

On August 3, 2023, S&P Global Inc.

On February 14, 2024, S&P Global Inc.

(“S&P”) downgraded the Company’s debt rating to “BB-”.

In March 2023, S&P had also downgraded the Company’s debt rating to “BB+”.

As a result of the S&P downgrades, certain of the Company’s outstanding senior notes currently aggregating to approximately $ 3.1 billion are subject to an aggregated interest rate adjustment of 50 basis points.

As a result of the S&P downgrade, the Coupon-Step Notes were subject to an additional interest rate increase 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 2024).

Furthermore, as a result of the March S&P downgrade, the Company's ability to borrow from the commercial paper market on terms it deems acceptable or favorable was eliminated.

On February 14, 2023, Fitch Ratings downgraded the Company's debt rating to “BB”.

This downgrade did not impact the interest rates on any of the Company's senior notes.

Receivables Facility

The Company maintained an Accounts Receivable Securitization Facility (the “Securitization Facility”).

The aggregate commitment under the Securitization Facility was $ 375 million.

The Securitization Facility matured on October 2, 2023 and was terminated thereafter.

At September 30, 2023, the Company had no outstanding borrowing under the Securitization Facility.

See Footnote 18 for details related to the new accounts receivable facility.

The S&P and Moody’s downgrades will collectively increase the Company’s interest expense by approximately $ 16 million in the aggregate on an annualized basis (approximately $ 12 million in 2024).

Revolving Credit Facility

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.

The Company had a $ 1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) maturing in August 2027.

On March 27, 2023, the Company entered into an amendment (the “First 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 First Amendment, and (ii) lower the Interest Coverage Ratio, as defined in the First Amendment, for the fiscal quarters ending on June 30, 2023, September 30, 2023, December 31, 2023 and March 31, 2024.

On February 7, 2024, the Company, certain of its subsidiaries, as subsidiary borrowers, and certain of its subsidiaries, as subsidiary guarantors, entered into a second amendment to the Credit Revolver agreement (the “Second Amendment”).

The Second Amendment, among other things, (i) reduced the commitments of the lenders from $ 1.5 billion to $ 1.0 billion (ii) replaced the Company’s existing financial covenants with new financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Second Amendment), (iii) required the Company and certain of the Company’s domestic and foreign subsidiaries (collectively the “Guarantors”) to guarantee all obligations under the Credit Revolver including, without limitation, obligations in respect of extensions of credit to any of the borrowers, certain hedging obligations, certain cash management obligations, and certain supply chain financing obligations, and (iv) required the Company and the other Guarantors to grant a lien and security interest in certain of its assets consisting of eligible accounts receivable, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations.

See Footnote 1 for further information with respect to the Company’s SCF Program.

The Credit Revolver provides for the issuance of up to $ 150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver.

At September 30, 2023, the Company had $ 375 million of outstanding borrowings under the Credit Revolver and approximately $ 21 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $ 1.1 billion.

At March 31, 2024, the Company had $ 231 million of outstanding borrowings under the Credit Revolver and approximately $ 20 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $ 749 million.

The indentures governing the Company’s senior notes contain usual and customary nonfinancial covenants.

The Company’s borrowing arrangements other than the senior notes contain usual and customary nonfinancial covenants and certain financial covenants, including minimum interest coverage and maximum debt-to-total-capitalization ratios.

The Company’s borrowing arrangements other than the senior notes contain usual and customary nonfinancial covenants and certain financial covenants, including minimum collateral coverage and net leverage ratios.

Weighted average interest rates are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Total debt 5.6 % 4.8 %

1 unchanged sentence

The fair value of the Company’s senior notes are based upon prices of similar instruments in the marketplace and are as follows (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Fair Value Book Value Fair Value Book Value

Senior notes $ 4,591 $ 4,754 $ 4,633 $ 4,772

The carrying amounts of all other significant debt approximates fair value.

The carrying amounts of all other debt approximates fair value.

Footnote 9 — Derivatives

8 unchanged sentences

Fair Value Hedges

At September 30, 2023, the Company had approximately $ 1.1 billion notional amount of interest rate swaps that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

At March 31, 2024, the Company had approximately $ 1.1 billion notional amount of interest rate swaps that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

These floating rate swaps are designated as fair value hedges against $ 500 million of principal on the 6.375 % senior notes due 2027, $ 500 million of principal on the 6.625 % senior notes due 2029 and $ 100 million of principal on the 4.000 % senior notes due 2024 for the remaining life of the notes.

The benchmark interest rate for the $ 100 million floating swap and associated fair value hedge was amended for a change in benchmark interest rate from LIBOR to Secured Overnight Financing Rate (“SOFR”), effective June 1, 2023, accounted for in accordance with ASC 848 (see Footnote 1 for further information).

See Footnote 1 for further information.

The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.

1 unchanged sentence

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements.

The Company previously entered into three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of $ 1.3 billion.

The Company has three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, with an aggregate notional amount of $ 1.3 billion.

Each of these cross-currency swaps was designated as a net investment hedge of the Company’s foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S.

dollar interest.

During the third quarter of 2022, the Company entered into additional cross-currency swaps with notional amounts of $ 500 million each, with one maturing in September 2027 and one in September 2029.

The Company has two additional cross-currency swaps, maturing in September 2027 and September 2029, with an aggregate notional amount of $ 1.0 billion.

These swaps were also designated as net investment hedges of the Company’s foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a floating rate of Euro-based interest and receives a floating rate of U.S.

1 unchanged sentence

The Company has elected the spot method for assessing the effectiveness of these contracts.

During the three months ended September 30, 2023 and 2022, the Company recognized income of $ 9 million and $ 8 million, respectively, and income of $ 30 million and $ 19 million for the nine months ended September 30, 2023 and 2022, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

During the three months ended March 31, 2024 and 2023, the Company recognized income of $ 9 million and $ 11 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales with maturity dates through September 2024.

The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges.

The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item.

At September 30, 2023, the Company had approximately $ 293 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the Company’s Condensed Consolidated Statement of Operations as the underlying hedged item.

At March 31, 2024, the Company had approximately $ 331 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions.

At September 30, 2023, the Company had approximately $ 1.2 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through July 2024.

Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company's Condensed Consolidated Statement of Operations.

At March 31, 2024, the Company had approximately $ 1.5 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through January 2025.

Fair market value gains or losses are included in the results of operations and are classified in other expense, net in the Company’s Condensed Consolidated Statement of Operations.

The following table presents the fair value of derivative financial instruments at the dates indicated (in millions):

1 unchanged sentence

Assets (Liabilities)

Balance Sheet Location September 30, 2023 December 31, 2022

Balance Sheet Location March 31, 2024 December 31, 2023

Derivatives designated as effective hedges:

14 unchanged sentences

The following table presents gain and (loss) activity (on a pretax basis) related to derivative financial instruments designated or previously designated, as effective hedges (in millions):

September 30, 2023 Three Months

September 30, 2022

Gain/(Loss) Gain/(Loss)

Location of gain /(loss) recognized in income Recognized

(effective portion)

Interest rate swaps Interest expense, net $ — $ ( 2 ) $ — $ ( 2 )

Foreign currency contracts Net sales and cost of products sold 6 ( 3 ) 20 9

Cross-currency swaps Other (income) expense, net 86 — 108 —

Total $ 92 $ ( 5 ) $ 128 $ 7

September 30, 2023 Nine Months

September 30, 2022

March 31, 2024 Three Months

March 31, 2023

Gain/(Loss) Gain/(Loss)

7 unchanged sentences

Cross-currency swaps

Other (income) expense, net 16 — 190 —

Other expense, net 48 — ( 21 ) —

Total $ 53 $ ( 4 ) $ ( 26 ) $ 9

At September 30, 2023, net deferred losses of approximately $ 7 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three months ended September 30, 2023 and 2022, the Company recognized in other (income) expense, net, income of $ 15 million and expense of $ 6 million, respectively, and expense of $ 3 million and $ 7 million during the nine months ended September 30, 2023 and 2022, respectively, related to derivatives that are not designated as hedging instruments.

At March 31, 2024, net deferred losses of approximately $ 6 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three months ended March 31, 2024 and 2023, the Company recognized in other expense, net, expense of $ 1 million and $ 10 million, respectively, related to derivatives that are not designated as hedging instruments.

Gains and losses on these derivatives are mostly offset by foreign currency movement in the underlying exposure.

The Company is not a party to any derivatives that require collateral to be posted prior to settlement.

The Company is not a party to any derivative agreements that require collateral to be posted prior to settlement.

See Footnote 8 for further information describing the guarantee of certain hedging obligations granted pursuant to the Second Amendment of the Credit Revolver.

Footnote 10 — Employee Benefit and Retirement Plans

1 unchanged sentence

Pension Benefits

International U.S.

International

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

Three Months Ended March 31,

2024 2023 2024 2023

3 unchanged sentences

Amortization — 1 — 1

Settlements — — 61 — — — 66 —

Total (income) expense $ ( 3 ) $ ( 2 ) $ 2 $ 3

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Interest cost $ 1 $ — $ 1 $ —

Amortization $ ( 1 ) $ ( 2 )

Total income $ ( 1 ) $ ( 2 )

Defined Benefit Plan

In February 2022, the Company entered into an agreement with an insurance company for a bulk annuity purchase or “buy-in” for one of its U.K.

defined benefit pension plans (“U.K.

Plan”), resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations (“PBO”) to covered participants.

In April 2023, the Company completed a “buy-out” of approximately 7 % of the U.K.

The “buy-out” was completed by the execution of a Deed Poll Agreement and a Deed of Assignment with an insurance company.

In September 2023, the Company completed the “buy-out” of the remaining PBO of the aforementioned plan through the execution of a Deed Poll Agreement and a Deed of Assignment with an insurance company.

In connection with these transactions, during the three and nine months ended September 30, 2023, the Company recorded a pretax settlement loss of $ 61 million and $ 66 million, respectively, in other (income) expense, net, in the Company's Condensed Consolidated Statement of Operations, related to the recognition of previously unrecognized actuarial losses reclassified from AOCL to losses.

Retiree Annuity Buyout

In October 2023, the Company entered into an agreement with an insurance company to purchase a group annuity contract to settle approximately $ 160 million to $ 175 million of projected benefit obligations for approximately 55 % of the retirees in one of its U.S.

defined benefit pension plans.

The transaction for the transfer of the pension liability to the insurance company will be funded with the plan’s existing assets.

The Company will record a pretax loss in connection with this transaction to reclassify approximately $ 60 million to $ 70 million into earnings from AOCL.

In January 2024, the Company received a court ruling with respect to determining the benefits pensioners should have received upon converting their defined benefit to a defined contribution.

As the legal proceeding is concluded, the Company reduced its underlying pension obligation by approximately $ 11 million, with a corresponding offset to AOCL.

Footnote 11 — Income Taxes

The Company’s effective income tax rates for the three months ended September 30, 2023 and 2022 was a benefit of 26.8 % and 146.3 %, respectively, resulting from increased discrete tax benefits combined with increased pretax losses, and benefit of 20.3 % and provision of 8.4 % for the nine months ended September 30, 2023 and 2022, respectively, resulting from more discrete tax benefits combined with year to date pretax losses.

The Company’s effective income tax rates for the three months ended March 31, 2024 and 2023 were a benefit of 85.0 % and 12.1 %, respectively, due to an increased forecasted annual tax rate driven primarily by lower forecasted pretax book income.

The differences between the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three and nine months ended September 30, 2023 and 2022 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned, as well as certain taxable income inclusion items in the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three months ended March 31, 2024 and 2023 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned, as well as certain taxable income inclusion items in the U.S.

based on foreign earnings.

The three and nine months ended September 30, 2023 were impacted by certain discrete items.

Income tax expense for the three months ended September 30, 2023 included discrete tax benefits of $ 71 million due to the release of a deferred tax liability related to a U.S.

legal entity reorganization, $ 10 million due to the filing of tax returns in various jurisdictions, $ 16 million associated with impairment charges and $ 18 million due to the settlement of the U.K.

pension plan.

The nine months ended September 30, 2023 also included certain discrete items totaling $ 10 million of additional income tax expense.

The three and nine months ended September 30, 2022 were also impacted by certain discrete items.

Income tax expense for the three months ended September 30, 2022 included a discrete benefit of $ 58 million associated with a change in the Company's indefinite reinvestment assertion regarding certain earnings within its Irish operations, $ 6 million associated with tradename impairments, $ 4 million associated with the reduction of a valuation allowance related to operations in the state of Georgia and $ 2 million associated with the approval of certain state tax credits.

The nine months ended September 30, 2022 also included a discrete benefit of $ 11 million associated with the reduction in valuation allowance related to the integration of certain Brazilian operations and $ 4 million associated with the approval of certain state tax credits, offset by $ 16 million of tax expense related to the divestiture of the CH&S business.

For the period ended March 31, 2024 these items increased the tax rate more than the prior period due to the lower forecasted pretax book income.

In periods where forecasted pretax income is low, the proportional impact of these items on the effective tax rate may be significant.

The three months ended March 31, 2024 were impacted by certain discrete items totaling $ 4 million of additional income tax expense.

The three months ended March 31, 2023 were also impacted by certain discrete items totaling $ 4 million of additional income tax expense.

The Company files numerous consolidated and separate income tax returns in the U.S.

federal jurisdiction and various state and foreign jurisdictions.

The Company’s U.S.

1 unchanged sentence

income tax returns for various years, are under examination.

The statute of limitations for the Company’s U.S.

federal income tax returns has expired for years prior to 2011 and for 2016.

With few exceptions, the Company is no longer subject to other income tax examinations for years before 2016.

Footnote 12 — Weighted Average Shares Outstanding

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Basic weighted average shares outstanding 414.7 413.9

1 unchanged sentence

Diluted weighted average shares outstanding 414.7 413.9

(1) The three and nine months ended September 30, 2023 excludes 2.1 million and 1.5 million, respectively, of potentially dilutive share-based awards as their effect would be anti-dilutive.

At September 30, 2023 and 2022, there were 0.8 million and 0.1 million, respectively, potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

Footnote 14 — Stockholders' Equity and Share-Based Compensation

During the three and nine months ended September 30, 2023, the Company granted 4.4 million and 6.0 million, respectively, performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of $ 39 million and $ 61 million, respectively, including awards granted under the Special Incentive Plan (the “SIP”) on July 5, 2023.

These performance-based RSUs entitle the recipients to shares of the Company’s common stock primarily over a two to three-year vesting period, subject to continued employment.

(1) The three months ended March 31, 2024 and 2023 excludes 2.8 million and 1.3 million, respectively, of potentially dilutive share-based awards as their effect would be anti-dilutive.

At March 31, 2024, there were 0.7 million potentially dilutive stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

Footnote 13 — Share-Based Compensation

During the three months ended March 31, 2024, in connection with its annual grant, the Company granted 1.7 million performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of $ 13 million, which entitles the recipients to shares of the Company’s common stock primarily over a three -year vesting period, subject to continued employment.

The actual number of shares that will ultimately be paid upon vesting is dependent on the level of achievement of the specified performance conditions.

During the three and nine months ended September 30, 2023, the Company also granted 1.4 million and 4.3 million, respectively, time-based RSUs with an aggregate grant date fair value of $ 12 million and $ 53 million, respectively, including awards granted under the SIP on July 5, 2023 .

During the three months ended March 31, 2024, primarily in connection with its annual grant, the Company also granted 5.1 million time-based RSUs with an aggregate grant date fair value of $ 39 million.

These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest in annual installments over a one to three-year period, subject to continued employment.

During the nine months ended September 30, 2023, the Company also granted 0.5 million time-based stock options with an aggregate grant date fair value of $ 2 million.

These stock options entitle the recipients to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of the underlying shares as of the grant dates and vest on the specified anniversaries of the grant dates, subject to continued employment.

The weighted average assumptions used to determine the fair value of stock options granted for the nine months ended September 30, 2023, were as follows:

Risk-free interest rates 3.6 %

Expected volatility 42.1 %

Expected dividend yield 4.4 %

Expected life (in years) 6.9

Exercise price $ 12.86

Share Repurchase Program

On February 6, 2022, the Company's Board of Directors authorized a $ 375 million Share Repurchase Program (“SRP”), effective through its expiration date of December 31, 2022.

Under the SRP, the Company was permitted to purchase its common shares in the open market, in negotiated transactions or in other manners, as permitted by federal securities laws and other legal requirements.

On February 25, 2022, the Company repurchased $ 275 million of its shares of common stock beneficially owned by Carl C.

Icahn and certain of his affiliates, at a purchase price of $ 25.86 per share, the closing price of the Company's common shares on February 18, 2022.

During the three months ended June 30, 2022, the Company repurchased approximately $ 50 million of its shares of common stock at an average price of $ 22.01 per share.

The Company did no t repurchase any of its shares of common stock during the three months ended September 30, 2022.

Footnote 14 — Fair Value Disclosures

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The following table presents the Company’s non-pension financial assets and liabilities, which are measured at fair value on a recurring basis (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Fair value Asset (Liability) Fair value Asset (Liability)

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The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, derivative instruments, notes payable and short and long-term debt.

The carrying values for current financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate fair value due to the short maturity of such instruments.

maturity of such instruments.

The fair values of the Company’s debt and derivative instruments are disclosed in Footnote 8 and Footnote 9 , respectively.

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These assets and certain liabilities are measured at fair value on a nonrecurring basis as part of the Company’s annual impairment testing and as circumstances require.

At September 30, 2023, the goodwill of the Baby reporting unit in the Learning and Development segment and an indefinite-lived tradename in the Outdoor and Recreation segment were recorded at fair values based upon the Company’s impairment testing.

The most significant unobservable inputs (Level 3) used to estimate the fair values of the Company's reporting unit goodwill and intangible assets are discount rates.

The discount rates used in the measurements were 8.5 % for the Baby reporting unit and 11.5 % for the Outdoor and Recreation indefinite-lived tradename.

At September 30, 2023, goodwill for the Baby reporting unit in the Learning and Development segment and an indefinite-lived tradename within the Outdoor and Recreation segment were fair valued at $ 415 million and $ 35 million, respectively, on a non-recurring basis in connection with triggering events that occurred during the third quarter of 2023.

See Footnotes 1 and 7 for further information.

In connection with the Company’s annual impairment testing at December 1, 2023, two tradenames in the Home and Commercial Solutions segment were measured at fair values of $ 491 million and $ 53 million.

Effective January 1, 2024, the tradename with the fair value of $ 53 million, no longer met the criteria to be classified as an indefinite-lived tradename and was reclassified to a definite-lived tradename with a useful life of 10 years.

Footnote 15 — Segment Information

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 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 CH&S business to Resideo Technologies, Inc.

The results of operations for the CH&S business 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 Company’s three reportable segments are:

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

Home and Commercial Solutions Ball (1) , Calphalon, Crockpot, FoodSaver, Mapa, Mr.

Coffee, Oster, Rubbermaid, Rubbermaid Commercial Products, Sistema, Spontex, Sunbeam, WoodWick and Yankee Candle

Commercial cleaning and maintenance solutions;

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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;

Learning and Development Dymo, Elmer’s, EXPO, Graco, NUK, Paper Mate, Parker and Sharpie Baby gear and infant care products;

writing instruments, including markers and highlighters, pens and pencils;

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activity-based products and labeling solutions

Outdoor and Recreation Campingaz, Coleman, Contigo, ExOfficio and Marmot Products for outdoor and outdoor-related activities

Outdoor and Recreation Campingaz, Coleman, Contigo and Marmot Active lifestyle products for outdoor and outdoor-related activities;

technical apparel and on-the-go beverageware

(1) and Ball® TM of Ball Corporation, used under license.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net sales (1)

Home and Commercial Solutions $ 893 $ 971

$ 1,123 $ 1,212 $ 3,152 $ 3,804

Learning and Development 559 564

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Home and Commercial Solutions $ 16 $ ( 37 )

$ 64 $ ( 75 ) $ 6 $ 88

Learning and Development 94 72

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$ 16 $ ( 36 )

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Segment assets

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$ 12,100 $ 12,163

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Impairment of goodwill and indefinite-lived intangibles assets

Home and Commercial Solutions $ — $ 123 $ 8 $ 123

Learning and Development 241 25 241 25

Outdoor and Recreation 22 — 22 —

$ 263 $ 148 $ 271 $ 148

(1) All intercompany transactions have been eliminated.

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Corporate depreciation and amortization is allocated to the segments on a percentage of net sales basis and included in segment operating income (loss).

(3) Home and Commercial Solutions net sales and operating income for the first quarter of 2022 include the CH&S business prior to its sale.

The following table disaggregates revenue by major product grouping source for the periods indicated (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Commercial $ 324 $ 348

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Home Fragrance 131 164

Connected Home and Security — — — 109

Home and Commercial Solutions 893 971

Baby 246 297 714 901

Writing 339 347

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The following table disaggregates revenue by geography for the periods indicated (in millions):

Three Months Ended September 30,

America International TOTAL North

America International TOTAL

Home and Commercial Solutions $ 764 $ 359 $ 1,123 $ 835 $ 377 $ 1,212

Learning and Development 501 193 694 559 192 751

Outdoor and Recreation 131 100 231 159 130 289

$ 1,396 $ 652 $ 2,048 $ 1,553 $ 699 $ 2,252

Nine Months Ended September 30,

Three Months Ended March 31,

America International TOTAL North

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In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony and information in connection with various aspects of its activities.

The Company previously disclosed that it had received a subpoena and related informal document requests from the SEC primarily relating to its sales practices and certain accounting matters.

The Company cooperated with the SEC in connection with its investigation and requests for documents, testimony and information.

Since January 2023, the Company had been discussing with the SEC the possibility of reaching a settlement to resolve the investigation, which related to the time period between third quarter of fiscal year 2016 and second quarter of fiscal year 2017.

On September 29, 2023, the Company entered into a settlement with

the SEC, which concluded the investigation of the Company.

The Company previously disclosed that it had received a subpoena and related informal document requests from the SEC primarily relating to its sales practices and certain accounting matters, which related to the time period between third quarter of fiscal year 2016 and second quarter of fiscal year 2017.

On September 29, 2023, the Company entered into a settlement with the SEC, which concluded the investigation of the Company.

Under the terms of the settlement, the Company neither admitted nor denied the SEC’s findings and agreed to pay a civil penalty of approximately $ 13 million, which did not have a material effect on the Company’s Condensed Consolidated Financial Statements.

On June 30, 2021, the Company received a subpoena from the SEC requesting the production of documents related to its disclosure of the potential impact of the U.S.

Treasury regulations most recently described in Footnote 12 - Income Ta xes in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 15, 2023.

Securities Litigation

The Company and certain of its current and former officers and directors were named as defendants in a securities class action lawsuit filed in the Superior Court of New Jersey, Hudson County, on behalf of all persons who acquired Company common stock pursuant to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden Corporation (the “Registration Statement”).

The action was filed on September 6, 2018 and was captioned Oklahoma Firefighters Pension and Retirement System v.

Newell Brands Inc., et al ., Civil Action No.

HUD-L-003492-18 (“Oklahoma Firefighters”).

In October 2022, the Company entered into a settlement agreement to resolve the claims asserted in this lawsuit.

Under the settlement, the Company agreed to create a settlement fund of approximately $ 103 million for the benefit of the class, subject to certain exclusions, which was predominantly funded by insurance proceeds.

Both the settlement and the insurance receivable were recorded during the third quarter of 2022.

The amount not funded by available insurance proceeds, which is not material to the Company, was expensed during the third quarter of 2022.

In the fourth quarter of 2022, the Court granted the plaintiff's motion for preliminary approval of the settlement, and the Company and its insurers paid the required amount into the settlement fund.

On February 10, 2023, the Court granted the plaintiff's motion for final approval of settlement.

The deadline to appeal the order granting final approval of the settlement has expired and the settlement is final.

Certain of the Company’s current and former officers and directors have been named in shareholder derivative lawsuits.

On October 29, 2018, a shareholder filed a putative derivative complaint, Streicher v.

Polk, et al ., in the United States District Court for the District of Delaware (the “Streicher Derivative Action”), purportedly on behalf of the Company against certain of the Company's current and former officers and directors.

On October 30, 2018, another shareholder filed a putative derivative complaint, Martindale v.

Polk, et al ., in the United States District Court for the District of Delaware (the “Martindale Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against the same defendants.

The complaints allege, among other things, violations of the federal securities laws, breaches of fiduciary duties, unjust enrichment, and waste of corporate assets.

The factual allegations underlying these claims are similar to the factual allegations made in the In re Newell Brands, Inc.

Securities Litigation that was previously pending in the United States District Court for the District of New Jersey.

That matter was dismissed by the District Court on January 10, 2020, and the dismissal was affirmed by the United States District Court of Appeals for the Third Circuit on December 1, 2020.

The Streicher Derivative Action and the Martindale Derivative Action have been consolidated and the case is now known as In re Newell Brands Inc.

Derivative Litigation (the “Newell Brands Derivative Action”), which is pending in the United States District Court for the District of Delaware.

On December 30, 2020, two shareholders filed a putative derivative complaint, Weber, et al.

Polk, et al ., in the United States District Court for the District of Delaware (the “Weber Derivative Action”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.

The complaint in the Weber Derivative Action alleges, among other things, breaches of fiduciary duty and waste of corporate assets.

The factual allegations underlying these claims are similar to the factual allegations made in the Newell Brands Derivative Action.

These derivative complaints seek damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.

The United States District Court for the District of Delaware stayed the Newell Brands Derivative Action and the Weber Derivative Action.

On January 31, 2023, Plaintiff Streicher voluntarily dismissed herself from the Newell Brands Derivative Action without prejudice.

On September 5, 2023, the Newell Brands Derivative Action and the Weber Derivative Action were dismissed with prejudice.

On May 26, 2023, Plaintiff Streicher filed a new putative derivative complaint, Streicher v.

Polk, et al ., in the Superior Court of New Jersey, Law Division:

Hudson County (the “New Jersey Derivative Action” and, collectively with the Newell Brands Derivative Action and the Weber Derivative Action, the “Derivative Actions”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.

The complaint in the New Jersey Derivative Action alleges breaches of fiduciary duty.

The factual allegations underlying these claims were similar to the factual allegations made in the Newell Brands Derivative Action and the Weber Derivative Action.

On June 7, 2023, Plaintiff Streicher filed a Stipulation of Settlement (the “Stipulation”) and Motion for Preliminary Approval of Settlement in the New Jersey Derivative Action.

The proposed settlement as set forth in the Stipulation provided for, among other things, a full release of the claims that the plaintiffs or any other Company stockholder asserted or could have asserted in the Derivative Actions against any of the defendants named

in those actions, in exchange for the Company’s agreement to implement and/or maintain certain corporate governance measures, as more fully described in the Stipulation and Notice of Proposed Derivative Settlement as filed by the Company with the SEC on a Current Report on Form 8-K dated June 29, 2023 (the “Settlement”).

On June 27, 2023, the Superior Court of Hudson County, New Jersey issued an order preliminarily approving the proposed Settlement as set forth in the Stipulation.

On August 25, 2023, the Superior Court of Hudson County, New Jersey approved the Settlement and dismissed the case with prejudice.

Further, on June 30, 2021, the Company received a subpoena from the SEC requesting the production of documents related to its disclosure of the potential impact of the U.S.

Treasury and the IRS’s temporary regulations under IRC Section 245A, as enacted by the 2017 U.S.

Tax Reform Legislation and IRC Section 954(c)(6) (the “Temporary Regulations”), as well as the August 21, 2020 finalized versions of the Temporary Regulations .

Environmental Matters

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and the extent to which the Company’s, and other parties’ status as PRPs is disputed.

The Company’s estimate of environmental remediation costs associated with these matters at September 30, 2023 was $ 36 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Company’s estimate of environmental remediation costs associated with these matters at March 31, 2024 was $ 38 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters.

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EPA has issued General Notice Letters to over 100 entities, including the Company and its subsidiary, Berol Corporation (together, the “Company Parties”), alleging that they are PRPs at the Diamond Alkali Superfund Site (the “Site”) pursuant to CERCLA.

The Site is the subject of investigation and remedial activities and related settlement negotiations with the U.S.

The Site is the subject of investigation and remedial activities and related settlement negotiations with the

The Site is divided into four “operable units,” and the Company Parties have received General Notice Letters in connection with operable Unit 2, which comprises the lower 8.3 miles of the Lower Passaic River and its tributaries (“Unit 2”), and operable Unit 4, which comprises a 17 -mile stretch of the Lower Passaic River and its tributaries (“Unit 4”).

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EPA simultaneously filed a complaint and lodged a Consent Decree to resolve the liability of the Company Parties and other settlement parties for past and future CERCLA response costs at Unit 2 and Unit 4.

The proposed Consent Decree is undergoing public notice and comment, and it remains subject to court entry.

On January 17, 2024, following review of public comments, the U.S.

EPA filed an amended complaint and lodged a modified Consent Decree.

EPA filed a motion to enter the modified Consent Decree on January 31, 2024.

As of the date of this filing, the Company does not expect that its allocation in the U.S.

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OCC has also stated that it may broaden its claims in the future after completion of the Natural Resource Damage Assessment described below.

In March 2023,

the Court granted an unopposed motion to stay the OCC Litigation.

At this time, the Company cannot predict the eventual outcome.

In March 2023, the Court granted an unopposed motion to stay the OCC Litigation.

On January 5, 2024, the Court granted a motion to extend the stay pending the Court’s adjudication of the then anticipated, and currently pending, motion to enter the amended Consent Decree embodying the U.S.

EPA Settlement.

At this time, the Company cannot predict the eventual outcome of the OCC Litigation.

In 2007, the National Oceanic and Atmospheric Administration (“NOAA”), acting as the lead administrative trustee on behalf of itself and the U.S.

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The Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group.

In the year ended December 31, 2021, the Company recorded an immaterial reserve to continuing operations in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter.

year ended December 31, 2021, the Company recorded an immaterial reserve to continuing operations in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter.

Further, in connection with the Company’s sale of The United States Playing Card Company (“USPC”), Cartamundi, Inc.

and Cartamundi España, S.L.

(the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was filed against USPC.

and Cartamundi España, S.L., (the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was filed against USPC in 2021.

During the fourth quarter of 2022, the Company recorded an immaterial reserve based on the outcome of a judicial ruling relating to indirect taxes in an international entity.

During the three months ended March 31, 2023, the Company paid the estimated liability to the relevant taxing authorities.

Although the Company cannot predict the ultimate outcome of this contingency with certainty, it believes that any additional amounts it may be required to pay will not have a material effect on the Company’s future Condensed Consolidated Financial Statements.

Although management of the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 17 .

At September 30, 2023, the Company had approximately $ 40 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

Footnote 18 — Subsequent Event

As disclosed in the Company's Current Report on Form 8-K filed with the SEC on October 5, 2023, the Company entered into a new three-year revolving accounts receivable facility (the “New Receivables Facility”).

The New Receivables Facility provides for liquidity in an amount of up to $ 225 million between February and April of each year and up to $ 275 million at all other times.

As part of the New Receivables Facility, the Company and certain of its subsidiaries entered into a Receivables Sale Agreement and a Receivables Purchase Agreement.

Under the Receivables Sale Agreement, certain subsidiaries (the “Originators”) sell and commit to continue to sell all of existing and future accounts receivable (subject to certain excluded accounts receivable) to Jarden Receivables LLC, a special purpose entity (the “SPE”).

Pursuant to a Receivables Purchase Agreement, by and among the SPE, Royal Bank of Canada, as administrative agent (the “Administrative Agent”), the Company and certain other persons from time to time party thereto as purchasers (the “Purchasers”) and group agents, the SPE will sell certain accounts receivable (the “Sold Receivables”) to the Administrative Agent (for the ratable benefit of the Purchasers), guarantee the payment of the Sold Receivables and pledge its remaining accounts receivable to the Administrative Agent in order to secure such guarantee.

The New Receivables Facility bears a fluctuating rate equal to (i) the weighted average cost of commercial paper issued by any conduit purchaser to fund or maintain its investment, plus related dealer commissions and note issuance costs or (ii) if funded by a committed purchaser, the SOFR calculated based on term SOFR for a one-month interest period, plus 10 basis points.

The New Receivables Facility expires in October 2026.

During the first quarter of 2023, the Company paid the estimated liability to the relevant taxing authorities.

Although the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 16 .

At March 31, 2024, the Company had approximately $ 39 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

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