NEWELL BRANDS INC. 10-Q

Item 1. Financial Statements NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Amounts in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net sales $ 1,947 $ 2,048 $ 5,633 $ 6,057 Cost of products sold 1,268 1,427 3,751 4,325 Gross profit 679 621 1,882 1,732 Selling, general and administrative expenses 536 501 1,518 1,457 Restructuring costs, net 4 16 40 76 Impairment of goodwill, intangibles and other assets 260 263 266 274 Operating income (loss) ( 121 ) ( 159 ) 58 ( 75 ) Non-operating expenses: Interest expense, net 75 69 223 213 Loss on extinguishment and modification of debt — — 1 — Other expense, net 9 70 15 91 Loss before income taxes ( 205 ) ( 298 ) ( 181 ) ( 379 ) Income tax benefit ( 7 ) ( 80 ) ( 19 ) ( 77 ) Net loss $ ( 198 ) $ ( 218 ) $ ( 162 ) $ ( 302 ) Weighted average common shares outstanding: Basic 416.0 414.2 415.3 414.1 Diluted 416.0 414.2 415.3 414.1 Loss per share: Basic $ ( 0.48 ) $ ( 0.53 ) $ ( 0.39 ) $ ( 0.73 ) Diluted $ ( 0.48 ) $ ( 0.53 ) $ ( 0.39 ) $ ( 0.73 ) COMPREHENSIVE INCOME (LOSS): Net loss $ ( 198 ) $ ( 218 ) $ ( 162 ) $ ( 302 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments ( 2 ) ( 16 ) ( 61 ) ( 8 ) Pension and postretirement costs ( 3 ) 53 5 52 Derivative financial instruments ( 1 ) 9 13 ( 8 ) Total other comprehensive income (loss), net of tax ( 6 ) 46 ( 43 ) 36 Total comprehensive loss $ ( 204 ) $ ( 172 ) $ ( 205 ) $ ( 266 ) See Notes to Condensed Consolidated Financial Statements (Unaudited). 2 Table of Contents NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in millions, except par values) September 30, 2024 December 31, 2023 Assets: Cash and cash equivalents $ 494 $ 332 Accounts receivable, net 931 1,195 Inventories 1,652 1,531 Prepaid expenses and other current assets 285 296 Total current assets 3,362 3,354 Property, plant and equipment, net 1,153 1,212 Operating lease assets 488 515 Goodwill 3,074 3,071 Other intangible assets, net 2,155 2,488 Deferred income taxes 791 806 Other assets 750 717 Total assets $ 11,773 $ 12,163 Liabilities: Accounts payable $ 1,047 $ 1,003 Other accrued liabilities 1,486 1,565 Short-term debt and current portion of long-term debt 869 329 Total current liabilities 3,402 2,897 Long-term debt 4,092 4,575 Deferred income taxes 223 241 Operating lease liabilities 422 446 Other noncurrent liabilities 774 892 Total liabilities 8,913 9,051 Commitments and contingencies ( Footnote 16 ) Stockholders’ equity: Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at September 30, 2024 and December 31, 2023) — — Common stock ( 800.0 authorized shares, $ 1.00 par value, 442.2 shares and 439.6 shares issued at September 30, 2024 and December 31, 2023, respectively) 442 440 Treasury stock, at cost ( 26.2 shares and 25.3 shares at September 30, 2024 and December 31, 2023, respectively) ( 633 ) ( 627 ) Additional paid-in capital 6,872 6,915 Retained deficit ( 2,888 ) ( 2,726 ) Accumulated other comprehensive loss ( 933 ) ( 890 ) Total stockholders’ equity 2,860 3,112 Total liabilities and stockholders’ equity $ 11,773 $ 12,163 See Notes to Condensed Consolidated Financial Statements (Unaudited). 3 Table of Contents NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in millions) Nine Months Ended September 30, 2024 2023 Cash flows from operating activities: Net loss $ ( 162 ) $ ( 302 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 245 240 Impairment of goodwill, intangibles and other assets 266 274 Deferred income taxes ( 9 ) ( 108 ) Stock based compensation expense 49 32 Pension settlement charge — 66 Other, net ( 7 ) ( 39 ) Changes in operating accounts: Accounts receivable 238 26 Inventories ( 138 ) 411 Accounts payable 41 31 Accrued liabilities and other, net ( 177 ) 48 Net cash provided by operating activities 346 679 Cash flows from investing activities: Capital expenditures ( 163 ) ( 209 ) Proceeds from sale of divested businesses and investment 14 — Swap proceeds 25 34 Other investing activities, net 17 28 Net cash used in investing activities ( 107 ) ( 147 ) Cash flows from financing activities: Payments on short-term debt, net 39 ( 244 ) 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 ( 431 ) — Payments on current portion of long-term debt — ( 2 ) Cash dividends ( 89 ) ( 155 ) Equity compensation activity and other, net ( 14 ) ( 4 ) Net cash used in financing activities ( 64 ) ( 405 ) Exchange rate effect on cash, cash equivalents and restricted cash ( 15 ) ( 8 ) Increase in cash, cash equivalents and restricted cash 160 119 Cash, cash equivalents and restricted cash at beginning of period 361 303 Cash, cash equivalents and restricted cash at end of period $ 521 $ 422 Supplemental disclosures: Restricted cash at beginning of period $ 29 $ 16 Restricted cash at end of period 27 26 See Notes to Condensed Consolidated Financial Statements (Unaudited). 4 Table of Contents NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) (Amounts in millions, except per share amounts) Common Stock Treasury Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity Balance at June 30, 2024 $ 441 $ ( 631 ) $ 6,887 $ ( 2,690 ) $ ( 927 ) $ 3,080 Comprehensive loss — — — ( 198 ) ( 6 ) ( 204 ) Dividends declared on common stock - $ 0.07 per share — — ( 31 ) — — ( 31 ) Equity compensation, net of tax 1 ( 2 ) 16 — — 15 Balance at September 30, 2024 $ 442 $ ( 633 ) $ 6,872 $ ( 2,888 ) $ ( 933 ) $ 2,860 Balance at December 31, 2023 $ 440 $ ( 627 ) $ 6,915 $ ( 2,726 ) $ ( 890 ) $ 3,112 Comprehensive loss — — — ( 162 ) ( 43 ) ( 205 ) Dividends declared on common stock - $ 0.21 per share — — ( 90 ) — — ( 90 ) Equity compensation, net of tax 2 ( 6 ) 47 — — 43 Balance at September 30, 2024 $ 442 $ ( 633 ) $ 6,872 $ ( 2,888 ) $ ( 933 ) $ 2,860 Common 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 Balance at December 31, 2022 $ 439 $ ( 623 ) $ 7,052 $ ( 2,338 ) $ ( 1,011 ) $ 3,519 Comprehensive income (loss) — — — ( 302 ) 36 ( 266 ) Dividends declared on common stock - $ 0.37 per share — — ( 155 ) — — ( 155 ) Equity compensation, net of tax 1 ( 4 ) 31 — — 28 Balance at September 30, 2023 $ 440 $ ( 627 ) $ 6,928 $ ( 2,640 ) $ ( 975 ) $ 3,126 See Notes to Condensed Consolidated Financial Statements (Unaudited). 5 Table of Contents NEWELL BRANDS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Footnote 1 — Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of Newell Brands Inc. (collectively with its subsidiaries, the “Company”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (including normal recurring accruals) considered necessary for a fair statement of the financial position and the results of operations of the Company. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, and the footnotes thereto, included in the Company’s most recent Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet at December 31, 2023 has been derived from the audited financial statements as of that date, but it does not include all the information and footnotes required by U.S. GAAP for a complete financial statement. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates and Risks Management’s application of U.S. 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, soft global demand, major retailers’ focus on tight control over their 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. In addition, some of the other inherent estimates and assumptions used in the Company’s forecasted results of operations and cash flows that form the basis of the determination of the fair value of the reporting units for goodwill and indefinite-lived intangible asset impairment testing are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates and labor inflation. 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 2024, the Company concluded that triggering events had occurred for indefinite-lived tradenames in the Home and Commercial Solutions (“H&CS”) and Learning and Development (“L&D”) segments, as a result of downward revisions of forecasted cash flows primarily due to lower volume and profitability expectations. The Company performed quantitative impairment tests and determined that indefinite-lived tradenames in the H&CS and L&D segments were partially impaired. During the third quarter of 2024, the Company recorded an aggregate non-cash impairment charge of $ 260 million for the indefinite-lived tradenames, as the carrying values exceeded their fair values. See Footnote 6 for further information. Seasonal Variations Sales of the Company’s products tend to be seasonal, with sales, operating income and operating cash flow in the first quarter generally lower than any other quarter during the year, driven principally by reduced volume and the mix of products sold in the first quarter. The seasonality of the Company’s sales volume combined with the accounting for fixed costs, such as depreciation, amortization, rent, personnel costs and interest expense, impacts the Company’s results on a quarterly basis. 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 pressures. Accordingly, the Company’s results of operations and cash flows for the three and nine months ended September 30, 2024 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2024. 6 Table of Contents 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 (“ASC”). 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: Scope . 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: Deferral of the Sunset Date of Topic 848 , which extends the sunset date of the guidance. The Company adopted ASU 2020-04 and it did not have a material impact on its consolidated financial statements. 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. 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. The Company adopted ASU 2022-04 which 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, 2024 associated with the Company’s existing factoring agreement for certain customer receivables (the “Customer Receivables Purchase Agreement”) were approximately $ 290 million, an increase of approximately $ 50 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 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 “Receivables Facility”). Under the 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 7 Table of Contents 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 September 30, 2024 was $ 140 million, an increase of approximately $ 95 million from December 31, 2023. Cash received under the 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 In June 2024, the Company entered into an arrangement with a third-party vendor which provides a service for the Company’s suppliers, at their sole discretion, to sell their receivables due from the Company with various financial institutions, who at their sole discretion, contract with the third-party vendor to participate in the supplier finance program (the “New SCF Program”). 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 New SCF Program. 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. Suppliers that participate in the New SCF Program, at their sole discretion, determine which invoices, if any, they want to sell to the third-party vendor. The suppliers’ voluntary inclusion of invoices in the New SCF Program does not change the Company’s existing contractual terms with its suppliers. The Company does not provide any guarantees or collateral under the New SCF Program, nor does it have any economic interest in a supplier’s decision to participate in the New SCF Program. Amounts due to suppliers participating in the New SCF Program are included in accounts payable in the Condensed Consolidated Balance Sheets and amounts paid to suppliers participating in the New SCF Program are classified as operating cash flows in the Condensed Consolidated Statement of Cash Flows. Supplier payment terms for those participating in the program averaged approximately 119 days. Prior to the New SCF Program, a global financial institution offered a voluntary supply chain finance program (the “Former SCF Program”) which similarly enabled suppliers, at their sole discretion, to sell their receivables due from the Company to the financial institution on a non-recourse basis. Pursuant to the Second Amendment (defined hereafter), a lender under the Credit Revolver (defined hereafter) that also participated in the Former 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 Former SCF Program with the financial institution. The Former SCF Program was terminated in August 2024. The termination did not materially impact the Company’s operating results, financial condition or liquidity. There were no outstanding payment obligations relating to the Former SCF Program as of September 30, 2024. The following table sets forth the outstanding payment obligations due to the third-party vendor and activities related to the suppliers who participated in the New and Former SCF Program: Balance at December 31, 2023 $ 96 Invoices participating in the Supplier Finance Programs 125 Invoices paid to the financial institution and third-party vendor ( 207 ) Balance at September 30, 2024 $ 14 8 Table of Contents 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, 2024 (in millions): Cumulative Translation Adjustment Pension and Postretirement Costs Derivative Financial Instruments AOCL Balance at December 31, 2023 $ ( 668 ) $ ( 196 ) $ ( 26 ) $ ( 890 ) Other comprehensive income (loss) before reclassifications ( 62 ) 6 5 ( 51 ) Amounts reclassified to earnings 1 ( 1 ) 8 8 Net current period other comprehensive income (loss) ( 61 ) 5 13 ( 43 ) Balance at September 30, 2024 $ ( 729 ) $ ( 191 ) $ ( 13 ) $ ( 933 ) Reclassifications from AOCL to the results of operations for the three and nine months ended September 30, 2024 and 2023 were pretax (income) expense of (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Cumulative translation adjustment (1) $ 1 $ — $ 1 $ — Pension and postretirement benefit plans (2) ( 1 ) 64 ( 2 ) 69 Derivative financial instruments (3) 1 5 10 ( 3 ) (1) See Footnote 14 for further information. (2) See Footnote 10 for further information. (3) See Footnote 9 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, 2024 2023 2024 2023 Foreign currency translation adjustments $ ( 21 ) $ 21 $ ( 5 ) $ 3 Pension and postretirement benefit costs 1 15 3 16 Derivative financial instruments ( 1 ) 3 4 ( 2 ) Income tax provision (benefit) related to AOCL $ ( 21 ) $ 39 $ 2 $ 17 Footnote 3 — Restructuring 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 9 Table of Contents 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 and nine months ended September 30, 2024, the Company recorded restructuring charges of $ 1 million and $ 32 million, respectively. During the three and nine months ended September 30, 2024, the Company also recorded restructuring-related charges of $ 2 million and $ 10 million, respectively, in connection with the Realignment Plan. The Company has incurred aggregate charges of $ 42 million since inception in connection with the Realignment Plan. In June 2024, as part of optimizing the Company’s real estate footprint, the Company entered into a lease agreement for a new location of its Corporate headquarters in Atlanta, Georgia, which will allow it to consolidate five different facilities and bring together employees in the area into a single location. See Footnote 5 for further information. Also in June 2024, the Company entered into an agreement with an unrelated third party to sell and leaseback its current headquarters facility, which is expected to close during the fourth quarter of fiscal year 2024. The Company intends to occupy the current facility while waiting to build-out the new facility, which is anticipated to be completed during the first half of fiscal year 2025. Management concluded the sale of the current headquarters facility satisfied the criteria to be classified as held for sale at June 30, 2024. As such, the Company wrote down the carrying value of the assets held for sale to their fair value less cost to sell. During the second quarter of 2024, the Company recorded a net charge of $ 6 million inclusive of a fair market value adjustment related to the below market rental payments associated with the sale leaseback transaction, which was recorded within impairment of goodwill, intangibles and other assets in the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2024. The underlying assets held for sale were classified within prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet as of September 30, 2024. 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 charges 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 and restructuring-related charges for the periods indicated as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, Incurred since inception 2024 2023 2024 2023 Restructuring charges $ — $ 3 $ 3 $ 5 $ 10 Restructuring-related charges 5 4 13 12 29 Total $ 5 $ 7 $ 16 $ 17 $ 39 10 Table of Contents 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. 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. In connection with Project Phoenix, the Company recorded restructuring and restructuring-related charges for the periods indicated as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, Incurred since inception 2024 2023 2024 2023 Restructuring costs $ 1 $ 10 $ 2 $ 63 $ 80 Restructuring-related costs 2 5 7 15 26 Total $ 3 $ 15 $ 9 $ 78 $ 106 Restructuring charges, net and restructuring-related charges 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 costs Restructuring-related costs Total costs Realignment Plan $ 31 $ 1 $ 32 $ 10 $ 42 Network Optimization Project 6 4 10 29 39 Project Phoenix 78 2 80 26 106 $ 115 $ 7 $ 122 $ 65 $ 187 Other Restructuring and Restructuring-Related Charges The Company also incurs other restructuring and restructuring-related charges in connection with various discrete initiatives. The Company recorded $ 2 million and $ 3 million of other restructuring costs for the three and nine months ended September 30, 2024, respectively and $ 3 million and $ 8 million of other restructuring costs for the three and nine months ended September 30, 2023, respectively. Restructuring-related charges are recorded in cost of products sold, selling, general and administrative expenses (“SG&A”) and impairment of other assets in the Condensed Consolidated Statements of Operations based on the nature of the underlying charges incurred. During the three months ended September 30, 2024 and 2023, the Company recorded other restructuring-related charges of $ 9 million and $ 16 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded other restructuring-related charges of $ 17 million and $ 28 million, respectively. 11 Table of Contents Restructuring charges, 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 September 30, Nine Months Ended September 30, Total incurred since inception of Plans 2024 2023 2024 2023 Home and Commercial Solutions $ ( 1 ) $ 10 $ 9 $ 37 $ 51 Learning and Development 4 3 12 14 25 Outdoor and Recreation — — 3 8 14 Corporate 1 3 16 17 32 $ 4 $ 16 $ 40 $ 76 $ 122 Accrued restructuring costs for the nine months ended September 30, 2024 were as follows (in millions): Balance at December 31, 2023 Restructuring Costs, Net Payments Balance at September 30, 2024 Severance and termination costs $ 30 $ 36 $ ( 49 ) $ 17 Contract termination and other costs — 4 ( 4 ) — $ 30 $ 40 $ ( 53 ) $ 17 Accrued restructuring costs for the nine months ended September 30, 2023 were as follows (in millions): Balance at December 31, 2022 Restructuring Costs, Net Payments Foreign Currency and Other Balance at September 30, 2023 Severance and termination costs $ 7 $ 71 $ ( 57 ) $ — $ 21 Contract termination and other costs — 5 ( 4 ) ( 1 ) — $ 7 $ 76 $ ( 61 ) $ ( 1 ) $ 21 Footnote 4 — Inventories Inventories are comprised of the following (in millions): September 30, 2024 December 31, 2023 Raw materials and supplies $ 202 $ 214 Work-in-process 158 173 Finished products 1,292 1,144 $ 1,652 $ 1,531 12 Table of Contents Footnote 5 — Property, Plant and Equipment, Net Property, plant and equipment, net, is comprised of the following (in millions): September 30, 2024 December 31, 2023 Land $ 70 $ 75 Buildings and improvements 653 678 Machinery and equipment 2,520 2,517 3,243 3,270 Less: Accumulated depreciation ( 2,090 ) ( 2,058 ) $ 1,153 $ 1,212 Depreciation expense was $ 47 million and $ 53 million for the three months ended September 30, 2024 and 2023, respectively, and $ 142 million and $ 158 million for the nine months ended September 30, 2024 and 2023, respectively. In June 2024, the Company entered into an agreement for a right of use operating lease for its Corporate headquarters in Atlanta, Georgia, with an initial lease term of 14.5 years. During the third quarter of 2024, the Company took possession of certain floors of the leased facility and recorded a right of use asset and corresponding lease liability of approximately $ 17 million in the Condensed Consolidated Balance Sheet at September 30, 2024. The gross minimum contractual aggregate lease payments are approximately $ 106 million. See Footnote 3 for additional information. Footnote 6 — Goodwill and Other Intangible Assets, Net Goodwill activity for the nine months ended September 30, 2024 is as follows (in millions): September 30, 2024 Segments Net Book Value at December 31, 2023 Foreign Exchange Gross Carrying Amount Accumulated Impairment Charges Net Book Value Home and Commercial Solutions $ 747 $ — $ 4,052 $ ( 3,305 ) $ 747 Learning and Development 2,324 3 3,414 ( 1,087 ) 2,327 Outdoor and Recreation — — 788 ( 788 ) — $ 3,071 $ 3 $ 8,254 $ ( 5,180 ) $ 3,074 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 L&D 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 and recorded a non-cash impairment charge of $ 241 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, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Tradenames — indefinite life (1) $ 957 $ — $ 957 $ 1,535 $ — $ 1,535 Tradenames — other (1) 551 ( 139 ) 412 232 ( 105 ) 127 Capitalized software 654 ( 538 ) 116 628 ( 512 ) 116 Patents and intellectual property 22 ( 21 ) 1 22 ( 20 ) 2 Customer relationships and distributor channels 1,075 ( 406 ) 669 1,078 ( 370 ) 708 $ 3,259 $ ( 1,104 ) $ 2,155 $ 3,495 $ ( 1,007 ) $ 2,488 13 Table of Contents (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 $ 28 million for the three months ended September 30, 2024 and 2023, respectively, and $ 103 million and $ 82 million for the nine months ended September 30, 2024 and 2023, respectively. During the third quarter of 2024, the Company concluded that triggering events had occurred for indefinite-lived tradenames in the H&CS and L&D segments, as a result of downward revisions of forecasted cash flows primarily due to lower volume and profitability expectations. The Company performed quantitative impairment tests and determined that the indefinite-lived tradenames in the H&CS and L&D segments were impaired. During the third quarter of 2024, the Company recorded non-cash impairment charges of $ 190 million and $ 70 million for the indefinite-lived tradenames in the H&CS and L&D segments, respectively, as the carrying values exceeded their fair values. In addition, the Company concluded that a triggering event had occurred for long-lived assets related to its Outdoor and Recreation (“O&R”) segment, as a result of a downward revision of forecasted cash flows primarily due to lower volume and profitability expectations. As a result, the Company estimated the future cash flows for the asset group and compared the sum of the undiscounted cash flows to the carrying value of the asset group. The Company concluded that the sum of the undiscounted cash flows was in excess of the asset group’s carrying value. As such, there was no impairment charge associated with the long-lived assets of the O&R segment. During the third quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the O&R 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 O&R 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 O&R 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 an indefinite-lived tradename in the Home Fragrance reporting unit in the H&CS 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 H&CS 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. Footnote 7 — Other Accrued Liabilities Other accrued liabilities are comprised of the following (in millions): September 30, 2024 December 31, 2023 Customer accruals $ 608 $ 659 Accrued compensation 206 190 Operating lease liabilities 116 122 Accrued interest expense 112 74 Accrued self-insurance liabilities, contingencies and warranty 87 92 Accrued income taxes 58 89 Accrued marketing and freight expenses 59 71 Other 240 268 $ 1,486 $ 1,565 14 Table of Contents Footnote 8 — Debt Debt is comprised of the following at the dates indicated (in millions): September 30, 2024 December 31, 2023 4.00 % senior notes due 2024 (1) (2) $ 200 $ 198 4.875 % senior notes due 2025 (1) 499 498 3.90 % senior notes due 2025 47 47 4.20 % senior notes due 2026 1,981 1,980 6.375 % senior notes due 2027 494 488 6.625 % senior notes due 2029 493 486 5.375 % senior notes due 2036 417 417 5.50 % senior notes due 2046 658 658 Revolving credit facility (1) 170 131 Other debt 2 1 Total debt 4,961 4,904 Short-term debt and current portion of long-term debt ( 869 ) ( 329 ) Long-term debt $ 4,092 $ 4,575 (1) Included in short-term debt and current portion of long-term debt at September 30, 2024. (2) Included in short-term debt and current portion of long-term debt at December 31, 2023. Senior Notes 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 February 14, 2024, S&P Global Inc. (“S&P”) downgraded the Company’s debt rating to “BB-”. 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). 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 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 15 Table of Contents certain limitations. See Footnote 1 for further information with respect to the Company’s SCF Programs. 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, 2024, the Company had $ 170 million of outstanding borrowings under the Credit Revolver and approximately $ 29 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $ 801 million. Other 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 collateral coverage and net leverage ratios. Weighted average interest rates are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Total debt 5.8 % 5.1 % 5.8 % 5.1 % Short-term debt 7.9 % 7.7 % 7.8 % 6.8 % 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, 2024 December 31, 2023 Fair Value Book Value Fair Value Book Value Senior notes $ 4,753 $ 4,789 $ 4,633 $ 4,772 The carrying amounts of all other debt approximates fair value. Footnote 9 — Derivatives From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes. Interest Rate Contracts The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. The settlement of interest rate swaps is included in interest expense. Fair Value Hedges At September 30, 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. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt. 16 Table of Contents Cross-Currency Contracts The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements. 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. 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. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended September 30, 2024 and 2023, the Company recognized income of $ 9 million for both periods and income of $ 26 million and $ 30 million for the nine months ended September 30, 2024 and 2023, 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 June 2025. 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 Company’s Condensed Consolidated Statement of Operations as the underlying hedged item. At September 30, 2024, the Company had approximately $ 190 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, 2024, the Company had approximately $ 955 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through June 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. 17 Table of Contents The following table presents the fair value of derivative financial instruments at the dates indicated (in millions): Fair Value of Derivatives Assets (Liabilities) Balance Sheet Location September 30, 2024 December 31, 2023 Derivatives designated as effective hedges: Cash Flow Hedges Foreign currency contracts Prepaid expenses and other current assets $ 1 $ 1 Foreign currency contracts Other accrued liabilities ( 4 ) ( 13 ) Fair Value Hedges Interest rate swaps Other assets 1 — Interest rate swaps Other accrued liabilities ( 7 ) ( 15 ) Interest rate swaps Other noncurrent liabilities — ( 4 ) Net Investment Hedges Cross-currency swaps Prepaid expenses and other current assets 13 22 Cross-currency swaps Other assets 13 15 Cross-currency swaps Other accrued liabilities ( 15 ) — Cross-currency swaps Other noncurrent liabilities ( 114 ) ( 119 ) Derivatives not designated as effective hedges: Foreign currency contracts Prepaid expenses and other current assets 7 7 Foreign currency contracts Other accrued liabilities ( 11 ) ( 14 ) Total $ ( 116 ) $ ( 120 ) 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): Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Gain/(Loss) Gain/(Loss) Location of gain /(loss) recognized in income Recognized in OCI (effective portion) Reclassified from AOCL to Income Recognized in OCI (effective portion) Reclassified from AOCL to Income Interest rate swaps Interest expense, net $ — $ ( 1 ) $ — $ ( 2 ) Foreign currency contracts Net sales and cost of products sold ( 3 ) — 6 ( 3 ) Cross-currency swaps Other expense, net ( 88 ) — 86 — Total $ ( 91 ) $ ( 1 ) $ 92 $ ( 5 ) Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Gain/(Loss) Gain/(Loss) Location of gain (loss) recognized in income Recognized in OCI (effective portion) Reclassified from AOCL to Income Recognized in OCI (effective portion) Reclassified from AOCL to Income Interest rate swaps Interest expense, net $ — $ ( 4 ) $ — $ ( 4 ) Foreign currency contracts Net sales and cost of products sold 7 ( 6 ) ( 8 ) 7 Cross-currency swaps Other expense, net ( 22 ) — 16 — Total $ ( 15 ) $ ( 10 ) $ 8 $ 3 18 Table of Contents At September 30, 2024, net deferred losses of approximately $ 1 million within AOCL are expected to be reclassified to earnings over the next twelve months. During the three months ended September 30, 2024 and 2023, the Company recognized in other expense, net, expense of $ 10 million and income of $ 15 million, respectively and expense of $ 1 million and $ 3 million during the nine months ended September 30, 2024 and 2023, 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 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 The components of pension and postretirement benefit (income) expense for the periods indicated, are as follows (in millions): Pension Benefits U.S. International U.S. International Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 2024 2023 2024 2023 Service cost $ — $ — $ 1 $ — $ — $ — $ 3 $ 2 Interest cost 8 11 2 5 25 34 6 13 Expected return on plan assets ( 12 ) ( 13 ) ( 2 ) ( 3 ) ( 35 ) ( 41 ) ( 5 ) ( 9 ) Amortization — 1 1 4 — 3 1 5 Settlements — — — 61 — — 1 66 Total (income) expense $ ( 4 ) $ ( 1 ) $ 2 $ 67 $ ( 10 ) $ ( 4 ) $ 6 $ 77 Postretirement Benefits Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Interest cost $ 1 $ 1 $ 1 $ 1 Amortization ( 2 ) ( 2 ) ( 4 ) ( 5 ) Total income $ ( 1 ) $ ( 1 ) $ ( 3 ) $ ( 4 ) Other In January 2024, the Company received a court ruling with respect to determining the benefits certain pensioners related to an international subsidiary were entitled to receive 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. 19 Table of Contents Footnote 11 — Income Taxes The Company’s effective income tax rates for the three months ended September 30, 2024 and 2023 were benefit of 3.4 % and 26.8 %, respectively, and benefit of 10.5 % and 20.3 % for the nine months ended September 30, 2024 and 2023, respectively. 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, 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. For the three and nine months ended September 30, 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 and nine months ended September 30, 2024 were impacted by certain discrete items. Income tax benefit for the three months ended September 30, 2024 included discrete benefits of $ 44 million associated with non-cash impairment charges, offset by $ 3 million of additional income tax expense. The nine months ended September 30, 2024 also included certain discrete items including a benefit of $ 64 million associated with a reduction in liabilities for unrecognized tax benefits, as a result of the tax authorities’ examination of its U.S. tax returns for the years 2011 to 2015, as further described hereafter, and its Brazil tax returns for the years 2015 to 2017, offset by $ 7 million of additional tax related to withholding taxes associated with certain previously taxed earnings that are no longer indefinitely reinvested, $ 8 million of interest expense associated with uncertain tax liabilities and $ 3 million of additional income tax expense. The three and nine months ended September 30, 2023 were also 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. On May 14, 2024, the Company received a Statutory Notice of Deficiency (“Notice”) from the Internal Revenue Service (“IRS”) for the tax years 2011 to 2015. T he Company agreed to certain adjustments raised by the IRS through the Notice. Accordingly, the Company has concluded that various income tax positions taken by the Company have been effectively settled, with the exception of the matter the Company intends to dispute as further described hereafter. The Company will pay the IRS approximately $ 22 million for additional income taxes and interest. As a result, the Company has reduced its liability for unrecognized tax benefits for this amount, recorded in other noncurrent liabilities in the Condensed Consolidated Balance Sheets, with a corresponding increase to its current income tax liability. On July 19, 2024, the Company filed a petition in the U.S. Tax Court disputing the proposed assessment of $ 80 million in additional taxes plus $ 34 million in penalties plus the additional interest calculated upon final settlement related to the transfer pricing of services performed by certain of the Company’s foreign affiliates for the tax years 2011 to 2015. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result. If the IRS prevails in the assessment of additional tax, interest and penalties in excess of the Company’s current reserves, such outcome could have a material adverse effect on the Company’s financial position and results. 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. federal income tax returns for 2017 to 2020, as well as certain state and non-U.S. 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. 20 Table of Contents Footnote 12 — Weighted Average Shares Outstanding The computations of the weighted average shares outstanding for the periods indicated are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Basic weighted average shares outstanding 416.0 414.2 415.3 414.1 Dilutive securities (1) — — — — Diluted weighted average shares outstanding 416.0 414.2 415.3 414.1 (1) The three and nine months ended September 30, 2024 excludes 2.5 million and 2.8 million, respectively, of potentially dilutive share-based awards and 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, 2024 and 2023, there were 0.7 million and 0.8 million, respectively, 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 nine months ended September 30, 2024, primarily in connection with its annual grant, the Company granted 1.7 million performance-based restricted stock units (“RSUs”), with an aggregate grant date fair value of $ 13 million. These performance-based RSUs entitle the recipients to shares of the Company’s common stock and vest primarily at the end of a three -year 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 nine months ended September 30, 2024, primarily in connection with its annual grant, the Company also granted 5.8 million time-based RSUs with an aggregate grant date fair value of $ 45 million. These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest in annual installments primarily over a three-year period, subject to continued employment. Footnote 14 — Fair Value Disclosures Recurring Fair Value Measurement s 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, 2024 December 31, 2023 Fair value Asset (Liability) Fair value Asset (Liability) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivatives: Assets $ — $ 35 $ — $ 35 $ — $ 45 $ — $ 45 Liabilities — ( 151 ) — ( 151 ) — ( 165 ) — ( 165 ) Investment securities, including mutual funds 3 — — 3 14 — — 14 For publicly traded investment securities, including mutual funds, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1. The Company determines the fair value of its derivative instruments using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. Accordingly, the Company’s derivative instruments are classified as Level 2. 21 Table of Contents Financial Instruments 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. The fair values of the Company’s debt and derivative instruments are disclosed in Footnote 8 and Footnote 9 , respectively. In 2019, the Company acquired an equity investment in a publicly traded Asian writing business, which is traded on an active exchange and therefore has a readily determinable fair value. During the third quarter of 2024, the Company sold all its equity interest in the open market for proceeds of approximately $ 11 million and recorded a loss of approximately $ 2 million within other expense, net in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2024. Nonrecurring Fair Value Measurements The Company’s nonfinancial assets, which are measured at fair value on a nonrecurring basis, include property, plant and equipment, goodwill, intangible assets and certain other assets. The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows. Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business growth rates, terminal values and discount rates. The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use of judgment and assumptions, such as the estimation of cash flow projections, terminal values, royalty rates, contributory cross charges, where applicable, and discount rates. Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy. 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. During the third quarter of 2024, indefinite-lived tradenames in the H&CS and L&D segments were recorded at fair value based upon the Company’s impairment testing. The most significant unobservable inputs (Level 3) used to estimate the fair values of the Company’s intangible assets are discount rates. The discount rates used in the measurements of the indefinite-lived tradenames were 11.0 % and 7.5 % for the H&CS and L&D indefinite-lived tradenames, respectively. The Company fair valued the indefinite-lived tradenames within the H&CS and L&D segments at $ 301 million and $ 65 million, respectively, on a non-recurring basis in connection with triggering events that occurred during the third quarter of 2024. See Footnotes 1 and 6, for further information. 22 Table of Contents Footnote 15 — Segment Information The Company’s three reportable segments are: Segment Key Brands Description of Primary Products 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; closet and garage organization; hygiene systems and material handling solutions; household products, including kitchen appliances; food and home storage products; fresh preserving products; vacuum sealing products; gourmet cookware, bakeware and cutlery and home fragrance products Learning and Development 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; art products; activity-based products and labeling solutions 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. This structure reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. Selected information by segment is presented in the following tables (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net sales (1) Home and Commercial Solutions $ 1,047 $ 1,123 $ 2,902 $ 3,152 Learning and Development 717 694 2,089 2,071 Outdoor and Recreation 183 231 642 834 $ 1,947 $ 2,048 $ 5,633 $ 6,057 Operating income (loss) (2) Home and Commercial Solutions $ ( 94 ) $ 64 $ ( 30 ) $ 6 Learning and Development 75 ( 127 ) 374 133 Outdoor and Recreation ( 23 ) ( 42 ) ( 52 ) ( 38 ) Corporate ( 79 ) ( 54 ) ( 234 ) ( 176 ) $ ( 121 ) $ ( 159 ) $ 58 $ ( 75 ) September 30, 2024 December 31, 2023 Segment assets Home and Commercial Solutions $ 4,460 $ 4,713 Learning and Development 3,921 4,111 Outdoor and Recreation 580 687 Corporate 2,812 2,652 $ 11,773 $ 12,163 (1) All intercompany transactions have been eliminated. (2) Operating income (loss) by segment is net sales less cost of products sold, SG&A, restructuring and impairment of goodwill, intangibles and other assets. Certain Corporate expenses of an operational nature are allocated to business segments primarily on a net sales basis. Corporate depreciation and amortization is allocated to the segments on a percentage of net sales basis and included in segment operating income (loss). 23 Table of Contents 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, 2024 2023 2024 2023 Commercial $ 355 $ 368 $ 1,028 $ 1,094 Kitchen 527 578 1,461 1,586 Home Fragrance 165 177 413 472 Home and Commercial Solutions 1,047 1,123 2,902 3,152 Baby 280 246 751 714 Writing 437 448 1,338 1,357 Learning and Development 717 694 2,089 2,071 Outdoor and Recreation 183 231 642 834 $ 1,947 $ 2,048 $ 5,633 $ 6,057 The following table disaggregates revenue by geography for the periods indicated (in millions): Three Months Ended September 30, 2024 2023 North America International TOTAL North America International TOTAL Home and Commercial Solutions $ 691 $ 356 $ 1,047 $ 764 $ 359 $ 1,123 Learning and Development 531 186 717 501 193 694 Outdoor and Recreation 97 86 183 131 100 231 $ 1,319 $ 628 $ 1,947 $ 1,396 $ 652 $ 2,048 Nine Months Ended September 30, 2024 2023 North America International TOTAL North America International TOTAL Home and Commercial Solutions $ 1,892 $ 1,010 $ 2,902 $ 2,105 $ 1,047 $ 3,152 Learning and Development 1,552 537 2,089 1,505 566 2,071 Outdoor and Recreation 340 302 642 465 369 834 $ 3,784 $ 1,849 $ 5,633 $ 4,075 $ 1,982 $ 6,057 Footnote 16 — Litigation and Contingencies The Company is subject to various claims and lawsuits in the ordinary course of business, including from time to time, contractual disputes, employment and environmental matters, product and general liability claims, claims that the Company has infringed on the intellectual property rights of others, and consumer and employment class actions. Some of the legal proceedings include claims for punitive as well as compensatory damages. In the ordinary course of business, the Company is also subject to legislative requests, regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. 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, 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 24 Table of Contents Company’s Condensed Consolidated Financial Statements. 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 The Company is involved in various matters concerning federal and state environmental laws and regulations, including matters in which the Company has been identified by the U.S. Environmental Protection Agency (“U.S. EPA”) and certain state environmental agencies as a potentially responsible party (“PRP”) at contaminated sites under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and equivalent state laws. In assessing its environmental response costs, the Company has considered several factors, including the extent of the Company’s volumetric contribution at each site relative to that of other PRPs; the kind of waste; the terms of existing cost sharing and other applicable agreements; the financial ability of other PRPs to share in the payment of requisite costs; the Company’s prior experience with similar sites; environmental studies and cost estimates available to the Company; the effects of inflation on cost estimates; 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, 2024 was $ 37 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. Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates. Lower Passaic River Matter The U.S. 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. EPA. 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”). Unit 2 is geographically subsumed within Unit 4. In October 2021, the U.S. EPA issued a Record of Decision for an interim remedy for the upper 9 miles of Unit 4, selecting a combination of dredging and capping as the remedial alternative, which the U.S. EPA estimates will cost $ 441 million in the aggregate. The U.S. EPA also performed a Source Control Early Action Focused Feasibility Study for Unit 2, which culminated in a Record of Decision in 2016. The U.S. EPA estimates that the selected remedy for Unit 2 set forth in its Record of Decision will cost $ 1.4 billion in the aggregate. In September 2017, the U.S. EPA announced an allocation process involving roughly 80 Unit 2 General Notice Letter recipients, with the intent of offering cash-out settlements to a number of parties (the “U.S. EPA Settlement”). The allocation process has concluded, and the Company Parties were placed in the lowest tier of relative responsibility among allocation parties. On December 16, 2022, the U.S. 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. On January 17, 2024, following review of public comments, the U.S. EPA filed an amended complaint and lodged a modified Consent Decree. U.S. 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. EPA Settlement relating to Unit 2 and Unit 4, if the settlement is finalized, will be material to the Company. In June 2018, Occidental Chemical Corporation (“OCC”) sued over 100 parties, including the Company Parties, in the U.S. District Court in New Jersey pursuant to CERCLA, requesting cost recovery, contribution, and a declaratory judgement. The defendants, in turn, filed claims against 42 third-party defendants, and filed counterclaims against OCC (collectively, the “OCC Litigation”). The primary focus of the OCC Litigation has been certain past and future costs for investigation, design and remediation of Units 2 and 4. However, OCC has stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the Site, after the U.S. EPA has selected the Newark Bay remedy. 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. On January 5, 2024, the Court granted a motion to extend the 25 Table of Contents 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. Department of the Interior, issued a Notice of Intent to Perform a Natural Resource Damage Assessment to the Company Parties, along with numerous other entities, identifying the recipients as PRPs. The federal trustees (who now include the United States Department of Commerce, represented by NOAA, and the Department of the Interior, represented by the United States Fish and Wildlife Service) are presently undertaking the Natural Resource Damage Assessment with respect to the Site. Based on currently known facts and circumstances, the Company does not believe that the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of operations. However, in the event of one or more adverse determinations related to this matter, including the OCC Litigation and Natural Resource Damage Assessment noted above (for which the Company cannot currently estimate the range of possible losses), it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material. Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates. Other Matters In the normal course of business and as part of its acquisition and divestiture strategy, the Company may provide certain representations and indemnifications related to legal, environmental, product liability, tax or other types of issues. Based on the nature of these representations and indemnifications, it is not possible to predict the maximum potential payments under all of these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements did not have a material effect on the Company’s business, financial condition or results of operations. In connection with the 2018 sale of The Waddington Group, Novolex Holdings, Inc. (the “Buyer”) filed suit against the Company in October 2019 in the Superior Court of Delaware. 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. 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 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 first quarter of 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 Condensed Consolidated Financial Statements. 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 September 30, 2024, the Company had approximately $ 48 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses. 26 Table of Contents