What changed in this filing

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Item 1A. Risk Factors

2025-02-14 compared with 2024-02-21 · 98 added, 118 removed, 290 unchanged (43% of the section changed)

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Additional risks that are currently unknown to the Company or that the Company currently considers immaterial may also impair its business or adversely affect its financial condition or results of operations.

Industry and Economic Risks

Strategic and Operational Risks

The Company is subject to intense competition in a marketplace dominated by large omni-channel and e-commerce retailers.

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The dominant share of the market represented by these large retailers, together with changes in consumer shopping patterns, and the integration of brick and mortar and e-commerce operations at major retailers, has contributed to the formation of dominant multi-category omni-channel and e-commerce retailers that have strong negotiating power with suppliers.

These retailers have and may continue to foster high levels of competition among suppliers, reduce inventory levels, demand innovative new products and products tailored to each of their unique specifications, require suppliers to maintain or reduce product prices in response to competitive, economic or other

factors, and require product delivery with shorter lead times.

Retailers have imported and may continue to import products directly from foreign sources and source and sell products under their own private label brands, typically at lower prices, that compete with the Company’s products.

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The intense competition in the traditional retail and e-commerce sectors may result in a number of customers experiencing financial difficulty or failing in the future.

For example, the Company’s results in 2023, particularly in the Learning and Development segment, were negatively impacted by the bankruptcy of a large customer.

To address these challenges, the Company must be able to respond to competitive factors and the potential loss of customers in the future, and the failure to respond effectively could result in a loss of sales, reduced profitability and a limited ability to recover cost increases through price increases.

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Further, if the consolidation trend continues, it could result in additional increase in the customers’ negotiating power with suppliers, as well as pricing and other competitive pressures that could reduce the Company’s sales and profitability.

Strategic and Operational Risks

The Company’s sales are dependent on purchases by several large customers and any significant decline in these purchases or pressure from these customers to reduce prices could have a negative effect on the Company’s future financial performance.

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If the Company does not continue to develop and maintain leading brands or realize the anticipated benefits of advertising and promotion spend over the long term, its operating results may suffer.

The Company’s ability to compete successfully also depends increasingly on its ability to develop and maintain leading brands so that the Company’s retail and other customers will need its products to meet consumer demand.

Leading brands allow the Company to realize economies of scale in its operations.

The Company’s ability to compete successfully also depends increasingly on its ability to develop and maintain leading brands that consumers choose and prefer.

Leading brands allow the Company to compete at desirable price levels and to realize economies of scale in its operations.

The development and maintenance of such brands require significant investment in brand-building and marketing initiatives.

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If these investments fail to adequately or effectively allow the Company to further expand its e-commerce business, maintain or grow its overall market position or otherwise benefit the Company, the Company’s market position, net sales and financial performance could be adversely affected.

In addition, a greater concentration of e-commerce sales could result in a reduction in the amount of sales by the Company’s other customers, which could, if not offset by a greater increase in e-commerce sales, materially adversely affect the business of the Company.

In addition, a greater concentration of e-commerce sales could result in a reduction in sales by the Company’s other customers, which could, if not offset by a greater increase in e-commerce sales, materially adversely affect the business of the Company.

Furthermore, the cost of certain e-commerce, omni-channel and technology investments may adversely impact the Company’s financial performance in the short and long-term.

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The Company is executing a turnaround plan to build a global, next generation consumer products company that can unleash the full potential of its brands in a fast-moving omni-channel environment.

The Company is implementing various global initiatives in connection with the turnaround plan to reduce costs and improve cash flows.

Project Ovid is a multi-year, customer centric supply chain initiative to transform the Company's go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies.

This initiative is expected to reduce the complexity of the organization, improve the Company’s cash conversion cycle and increase investment in the Company’s most significant growth platforms.

It is further designed to reduce costs associated with direct materials, indirect expenses, and distribution and logistics, among other things.

Other major productivity, streamlining and divestment programs may also be required in the future to continue the turnaround plan.

In January 2023, the Company announced Project Phoenix, an initiative that was intended to strengthen the Company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies.

It incorporated a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize its supply

chain functions, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs.

The Company expects to realize significant savings when the initiatives are fully implemented, however it resulted in material charges and led to the elimination of approximately 13% of office positions during 2023.

Additionally, in May 2023, the Company announced 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 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.

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” choices the company unveiled in June of 2023.

The Company expects to realize savings when fully implemented, however it will result in material charges and is expected to result in the elimination of approximately 7% of office roles.

The Company is implementing various global initiatives in connection with the turnaround plan to reduce costs and improve cash flows, as further described in Item 1- Business Strategy.

These initiatives may not be substantially completed in the expected timeframe, may be more costly to implement than expected, or may not fully achieve the anticipated cost savings.

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In some instances, the Company maintains single-source or limited-source sourcing relationships, either because multiple sources are not available or the relationship is advantageous due to performance, quality, support, delivery, capacity or price considerations.

For example, the Baby business unit within the Company's Learning and Development segment has a single source of supply for products that comprise a majority of its sales and which owns intellectual property rights in respect to many of those products.

For example, the Baby business unit within the Company’s L&D segment has a single source of supply for products that comprise a majority of its sales and which owns intellectual property rights in respect to many of those products.

Any inability of the Company’s vendors and suppliers to timely deliver quality parts and products or any unanticipated change in supply, quality or pricing of products could be disruptive and costly to the Company.

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The Company’s dependence on these few suppliers could also adversely affect its ability to react quickly and effectively to changes in the market for its products.

The Company may use artificial intelligence in its business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and could adversely affect the Company’s business.

The Company’s use of artificial intelligence (“AI”) tools in its operations and systems poses inherent risk and could adversely affect the Company’s operations and financial conditions.

The Company’s success may increasingly become dependent on its ability to effectively leverage AI to support its operational efficiencies, such as in supply chain and support functions, and its product development and marketing capabilities.

The Company may be outpaced by its competitors in their more successful or earlier adoption of AI solutions, which could negatively affect the Company’s commercial competitiveness.

Use of AI exposes the Company to risks that such AI solutions may be deficient, produce inaccurate or misleading output, become inoperable or subject the Company to cybersecurity and data privacy breaches, all of which could lead to operational disruptions, flawed decision-making, increased costs, and an inhibited ability to improve product development and marketing through the use of AI, and could

impact the Company’s operational effectiveness and financial condition.

Additionally, the use of certain AI solutions could put the Company’s own information and intellectual property rights at risk, or expose the Company to risk of infringing third parties’ intellectual property or other rights.

The global legal, regulatory, and ethical landscape surrounding AI is rapidly evolving and remains uncertain, which creates continued compliance risk and may incur additional operational costs associated with the Company’s use of AI, may limit the Company’s ability to fully develop or use AI solutions as intended, and may further cause legal repercussions and brand or reputational harm to the Company.

A cyber-attack or failure of one or more key information technology systems, networks, processes, associated sites or service providers could have a material adverse impact on the Company’s business or reputation.

The Company relies extensively on information technology (“IT”) systems, networks and services, including Internet sites, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are

managed, hosted, provided and/or used by third parties or their vendors, to assist in conducting business.

The various uses of these IT systems, networks and services include, but are not limited to:

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• marketing and selling products to consumers;

• collecting and storing customer, consumer, employee, investor and other stakeholder information and personal data, including data that may be subject to data privacy laws, including but not limited to the General Data Protection Regulation of the European Union (“GDPR”), the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), the Colorado Privacy Act (“CPA”), Virginia Consumer Data Protection Act (“VCDPA”), the Utah Consumer Protection Act (“UCPA”) or the General Law for Protection of Personal Data (“LGPD”) of Brazil;

• processing transactions;

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• handling other processes necessary to manage the Company’s business.

Increased IT security threats and cyber-crime, including advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing and social engineering schemes designed to provide access to the Company’s networks or data, pose a potential risk to the security of the Company’s IT systems, networks and services, as well as the confidentiality, availability and integrity of the Company’s data.

Increased IT security threats and cyber-crime, including advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing, use of AI and social engineering schemes designed to gain unauthorized access to the Company’s networks or data, pose a potential risk to the security of the Company’s IT systems, networks and services, as well as the confidentiality, availability and integrity of the Company’s data.

Cyber threats are becoming more sophisticated, are constantly evolving and are being made by groups and individuals with a wide range of expertise and motives, increasing the difficulty of detecting and successfully defending against them.

The Company deploys technical and organizational measures to protect and prevent unauthorized access to or loss of data, however, as techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, the Company may be unable to anticipate these techniques or implement preventive measures.

The Company deploys technical and organizational measures to protect and prevent unauthorized access to or loss of data;

however, as techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, the Company may be unable to anticipate these techniques or implement preventive measures.

Furthermore, the Company’s relationships with, and access provided to, third parties and their vendors may create difficulties in anticipating and implementing adequate preventive measures or fully mitigating harms after an attack or breach occurs.

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If the IT systems, networks or service providers relied upon fail to function properly, or if the Company suffers a loss or disclosure of customers’ and consumers’ data, business or stakeholder information, due to any number of causes, ranging from catastrophic events to power outages to security breaches, or the inability to effectively address these failures on a timely basis, the Company may suffer interruptions in its ability to manage operations, a risk of government enforcement action, litigation and possible liability, and reputational, competitive and/or business harm, which may adversely impact the Company’s results of operations and/or financial condition.

In addition, if the Company’s service providers, suppliers or customers experience a breach or unauthorized disclosure or system failure, their businesses could be disrupted or otherwise negatively affected, which may result in a disruption in the Company’s supply chain or reduced customer orders or other business operations, which would adversely affect the Company.

The Company is subject to laws of various jurisdictions where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor or employee information or related data, including the GDPR which went into effect in May 2018, the CCPA, which went into effect on January 1, 2020, the LGPD which went into effect in August 2020, the CPRA and VCDPA both of which became operative in January 2023, the CPA which went into effect in July 2023, the UCPA having gone into effect on December 31, 2023, and various other U.S.

state level privacy regulations.

The changes introduced by the GDPR, CCPA, LGPD, CPRA, CPA and other U.S.

state laws increase the complexity of regulations enacted to protect business and personal data, subject the Company to additional costs and have required, and may in the future require, costly changes to the Company’s security systems, policies, procedures and practices.

The Company may face particular data protection and privacy risks in connection with the European Union’s Global Data Protection Regulation, the California Consumer Privacy Act and other privacy laws and regulations.

The Company is subject to laws of various jurisdictions where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor, investor, employee or other stakeholder information and personal data, including but, not limited to, the General Data Protection Regulation of the European Union, the California Consumer Privacy Act, and various other privacy laws and regulations.

The Company may be subject to additional regulations, such as the

European Union AI Act, that specifically affect the use of personal information in the context of AI systems.

The changes introduced by these laws and regulations increase the complexity of regulations enacted to protect business and personal data, subject the Company to additional costs and have required, and may in the future require, costly changes to the Company’s security systems, policies, procedures and practices.

These laws and regulations may grant, among other things, individual rights to access and delete personal information, and the right to opt out of the sale of personal information.

These laws and regulations can also impose significant forfeitures and penalties for noncompliance and afford private rights of action to individuals under certain circumstances.

Any failure to manage data privacy in compliance with applicable laws and regulations could result in significant regulatory investigations, fines, and sanctions, consumer and class action litigation, commercial litigation, prolonged negative publicity, data breaches, declining customer confidence, loss of key customers, employee liability, and other unfavorable consequences.

The Company’s operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as the impact of tariffs.

The Company’s success is dependent, in part, on its continued ability to reduce its exposure to or mitigate the impact of increases in the cost of raw materials, finished goods, energy, transportation and other necessary supplies and services through a variety of programs, including periodic purchases, future delivery purchases, long-term contracts, sales price adjustments and certain derivative instruments, while maintaining and improving margins and market share.

Significant inflation in the costs of labor, finished goods, raw materials, energy and transportation has negatively impacted, and will likely continue to negatively impact, the Company’s results of operations.

Significant inflation in the costs of labor, finished goods, raw materials, energy and transportation has negatively impacted, and may continue to negatively impact, the Company’s results of operations.

There is no assurance that we will be able to fully offset any such cost increases through cost reduction programs or price increases of our products, especially given the competitive environment.

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Pricing and availability of finished goods, raw materials, energy, transportation and other necessary supplies and services for use in the Company’s businesses can be volatile due to numerous factors beyond its control, including general, domestic and international economic conditions, natural disasters, labor costs, production levels, competition, consumer demand, import duties and tariffs, currency exchange rates, international treaties, and changes in laws, regulations, and related interpretations.

Specifically, evolving trade policies could continue to make sourcing products from foreign countries difficult and costly, as the Company sources a significant amount of its products from outside of the United States.

Given the Company's reliance upon non-domestic suppliers, any significant changes to the United States trade policies (and those of other countries in response) may cause a material adverse effect on its ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.

Any additional tariffs on Chinese-origin goods, or on other certain products imported into the United States or European Union, such as carbon import taxes could increase the cost of some of our products and reduce our margins.

For example, in early 2025, the current U.S.

presidential administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico and Canada, all of which were subsequently postponed prior to becoming effective, and China, and has proposed additional new tariffs that may be implemented in the future.

Given the Company’s reliance upon non-domestic suppliers, any significant changes to the U.S.

trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on its ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.

The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S.

and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.

Any new or additional tariffs on goods imported to the U.S.

from China, Mexico, Canada, or other countries, or products imported into the European Union or other non-U.S.

markets, could also increase the cost of some of our products and reduce our margins.

Unfavorable shifts in industry-wide demand for the Company’s products could result in inventory valuation risk.

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If inventories on hand are in excess of demand or slow moving, appropriate write-downs may be recorded.

In addition, the Company writes off inventories that are considered obsolete based upon changes in customer demand, product design changes including those required by new product regulation, that result in existing inventory obsolescence, or new product introductions, which eliminate demand for existing products.

introductions, which eliminate demand for existing products.

Remaining inventory balances are adjusted to approximate net realizable market value.

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The loss of the services of one or more executive officers or other key employees could have a material adverse effect on the Company’s business, prospects, financial condition and results of operations.

The Company’s success also depends, in part, on its continuing ability to attract, retain and develop highly qualified talent.

In 2023, the Company hired a new Chief Financial Officer, Chief Human Resources Officer, President of Brand Management and Innovation and Segment CEO for Outdoor and Recreation.

Global competition for such talent is intense and has increased in the recent past amidst emerging labor trends, including but not

limited to increased remote work options.

There can be no assurance that the Company can retain its key employees or attract, engage, retain or otherwise develop internally other highly qualified talent in the future.

The Company’s success also depends, in part, on its continuing ability to attract, retain and develop highly qualified talent deeper in the organization.

Global competition for talent is intense and has increased in recent years amidst emerging labor trends, including but not limited to expanded remote work options.

There can be no assurance that the Company can attract, engage or retain its key employees or highly qualified talent in the future.

Damage to the Company’s reputation or loss of consumer confidence could have an adverse effect on the Company’s business .

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If third parties fail to comply with our policies and procedures or similar compliance requirements set forth by our customers, the Company could potentially suffer significant losses of business and revenue from certain customers.

Further, third parties sell counterfeit versions of some of our products, which are often inferior or may pose safety risks.

Further, third parties sell counterfeit or materially altered versions of some of our products, which are often inferior or may pose safety risks.

As a result, consumers of our brands could confuse our products with these counterfeit products, which could cause them to refrain from purchasing our brands in the future and in turn could impair our brand equity.

Finally, there has been an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters.

From time to time, the Company announces certain initiatives regarding its focus areas, which may include environmental matters, diversity, inclusion and belonging, sustainability, packaging, responsible sourcing and social investments.

From time to time, the Company announces certain initiatives regarding its focus areas, which may include environmental matters, human capital, sustainability, packaging, responsible sourcing and social investments.

In 2024, the Company published its Corporate Citizenship Report which included updates on many of these focus areas and goals for certain areas.

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In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause our operational results to suffer.

Further, the United Kingdom exited the European Union in 2020 (“Brexit”) and entered into a trade and cooperation agreement with the European Union in 2021.

The trade agreement offers United Kingdom and European Union businesses preferential access to each other’s markets, ensuring imported goods will be free of tariffs and quotas.

However, economic relations between the United Kingdom and the European Union are now on more restricted terms than before and there remains uncertainty around the post-Brexit regulatory environment.

Brexit may also lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which E.U.

laws to replace or replicate, and those laws and regulations may be cumbersome, difficult or costly in terms of compliance.

Any of these effects of Brexit, among others, could adversely affect our business, financial condition, operating results and cash flows.

Additionally, if a potential devaluation of the local currencies of our international customers relative to the U.S.

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• requiring the Company to comply with financial and non-financial covenants in its debt documents that may place restrictions on business activities and, if breached, subject the Company to cross-default and acceleration provisions.

In addition, if the Company is unable to timely reduce its level of indebtedness, the Company will be subject to increased demands on its cash resources, which could increase its total debt-to-capitalization ratios, decrease its interest coverage ratios, lower its credit ratings, result in a breach of covenants or otherwise adversely affect the business and financial results of the Company going forward.

An increase in interest rates could have a material adverse effect on the Company’s business.

In addition, if the Company is unable to timely reduce its level of indebtedness, the Company will be subject to increased demands on its cash resources, which could decrease its collateral coverage ratios, increase its leverage ratios, lower its credit ratings, result in a breach of covenants or otherwise adversely affect the business and financial results of the Company going forward.

While the majority of the Company’s debt is fixed, fluctuations in interest rates can increase borrowing costs on the portion that is variable, and interest rate increases on this portion of the Company’s debt could have a material adverse effect on the Company’s business.

Increases in interest rates would raise the cost of servicing our debt and could reduce our profitability and cash flows.

In response to the last global economic recession, extraordinary monetary policy actions of the U.S.

Federal Reserve and other central banking institutions, including the utilization of quantitative easing, were taken to create and maintain a low interest rate environment.

During 2023, the U.S.

Federal Reserve raised the targeted federal funds rate four times for a total of 100 basis points resulting in a target range of 5.25% to 5.50%.

The policy statements, decisions and actions of the U.S.

Federal Reserve are uncertain and subject to change depending on economic conditions.

Any change in the fiscal policies or stated target interest rates of the U.S.

Federal Reserve or other central banking institutions, or market expectations of such change, are difficult to predict and may result in significantly higher long-term interest rates.

Such a transition may be abrupt and may, among other things, reduce the availability and/or increase the costs of issuing new Senior Notes, obtaining new debt and refinancing existing indebtedness.

Such a transition may be abrupt and may, among other things, reduce the availability and/or increase the costs of issuing new notes, obtaining new debt and refinancing existing indebtedness.

Reductions in the Company’s credit ratings could materially and adversely affect its business, availability of future borrowings, financial condition and results of operations.

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The credit ratings assigned to the Company also impact the interest rates paid on short- and long-term financing.

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

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”) are subject to an interest rate adjustment of 25 basis points.

The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million on an annualized basis (approximately $2 million in 2023).

On February 9, 2024, Moody’s downgraded the Company’s senior unsecured debt rating to “Ba3”, subjecting the Coupon-Step Notes to an additional interest rate adjustment of 25 basis points.

The change to the interest rate due to the downgrade will further 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.

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

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

As a result of the S&P downgrades, the Company’s Coupon-Step Notes are subject to an aggregated interest rate adjustment of 50 basis points.

The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $15 million on an annualized basis (approximately $8 million in 2023).

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, 2024, S&P downgraded the Company’s debt ratings to “BB-”, subjecting the Company’s Coupon-Step Notes to an additional interest rate adjustment of 25 basis points, which will increase interest expense by approximately $8 million on an annualized basis (approximately $6 million in 2024).

On February 14, 2023, Fitch Ratings downgraded the Company’s Long-Term Issuer Default Rating to “BB”, then to “B+” on November 1, 2023.

These downgrades did not impact the interest rates on any of the Company’s senior notes.

See Liquidity and Capital Resources in Item 7 .

The ratings from credit agencies are not recommendations to buy, sell or hold the Company’s securities, and each rating should be evaluated independently of any other rating.

Failure to remediate the material weaknesses in our internal control over financial reporting or our inability to maintain effective internal control over financial reporting, could result in material misstatements in our financial statements, and our failure to meet our reporting and financial obligations, which in turn could have a negative impact on our financial condition.

For example, the Company’s credit ratings were downgraded in both 2024 and 2023 by each of Moody’s Corporation and S&P Global Inc.

which resulted in a coupon step-up of certain of the Company’s outstanding senior notes.

In addition, credit ratings can also affect the terms of debt agreements to include more restrictive covenants which may further restrict our business operations or limit our ability to raise additional capital due to our covenant restrictions then in effect.

For example, in November 2024, the Company issued $750 million of aggregate principal amount of 6.375% senior notes due 2030 and $500 million of aggregate principal amount of 6.625% senior notes due 2032, and such notes contain covenants that are more restrictive than the senior notes that the Company has historically issued.

There is no guarantee that debt or equity financings will be available in the future to fund future acquisitions, developments, or general operating expenses, or that such financing will be available on terms consistent with our historical agreements or expectations.

See Liquidity and Capital Resources in Item 7 and Footnote 9 of the Notes to the Consolidated Financial Statements for further discussion.

Failure to maintain effective internal control over financial reporting could result in material misstatements in our financial statements, and our failure to meet our reporting and financial obligations, which in turn could have a negative impact on our financial condition.

The Company is required by the SEC to establish and maintain effective internal control over financial reporting that provides reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements in accordance with U.S.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent

limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

The Company did not maintain effective controls over the reviews of significant assumptions used in the impairment assessment of goodwill, indefinite-lived tradenames and long-lived assets.

Specifically, the control activities related to the reviews of the significant assumptions utilized in the impairment assessments were not executed, as designed, at the appropriate level of precision to prevent or detect a material misstatement.

These control deficiencies resulted in management adjustments to the impairment loss and the other intangible assets, net accounts, prior to the issuance of the Company’s financial statements.

These control deficiencies could result in a material misstatement of the goodwill, indefinite-lived tradenames, long-lived assets and the related accounts and disclosures in the annual or interim consolidated financial statements.

Accordingly, our management has determined that these control deficiencies constitute material weaknesses.

The Company’s management, with the oversight of the Audit Committee of the Board, is updating our internal processes and controls to strengthen their effectiveness and has developed a remediation plan, which includes the following actions:

• Identifying additional resources to assist in the preparation and reviews of significant assumptions used in the impairment assessments;

• Improving the development of sufficient supporting documentation related to reviews over significant assumptions associated with the Company’s impairment assessments.

The material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective.

The Company will monitor the effectiveness of its remediation plan and will refine its remediation plan, as needed.

We can give no assurance that the measures we take will remediate the material weaknesses or that additional material weaknesses will not arise in the future.

Any failure to remediate the material weaknesses, or the identification of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected, negatively impact the public perception of the Company and our securities and cause us to fail to meet our reporting and financial obligations or incur significant additional costs to remediate the material weakness, each of which could harm our ability to raise capital on favorable terms in the future or otherwise have a negative impact on our financial condition.

The Company has experienced, and in the future may experience again, material weaknesses along with potential problems implementing and maintaining adequate internal controls.

Failure to maintain effective internal controls, including any failure to implement required new or improved controls, could result in our inability to conclude that the Company has effective internal control over financial reporting.

If the Company cannot meet its financial reporting obligations in a timely and reliable manner, or prevent fraud, the public perception of the Company and its securities may be harmed, and it may be unable to raise capital on favorable terms in the future or otherwise, which could have a negative impact on the Company’s financial condition.

Continued declines in the future expected cash flows for the Company’s businesses or changes to underlying assumptions used to calculate fair value could result in additional impairment charges which could have a material adverse effect on the Company’s financial results of operations.

The Company is required under U.S.

GAAP to review its long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable, and are also required to conduct impairment tests on goodwill and other indefinite-lived intangible assets annually or more frequently, if circumstances indicate that the carrying value may not be recoverable or that an other-than-temporary impairment exists.

GAAP to review its long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable, and is also required to conduct impairment tests on goodwill and other indefinite-lived intangible assets annually or more frequently, if circumstances indicate that the carrying value may not be recoverable or that an other-than-temporary impairment exists.

During the years ended December 31, 2024, 2023 and 2022, the Company recorded non-cash impairment charges related to goodwill and indefinite-lived intangibles of $345 million, $339 million and $474 million, respectively.

Future events or factors may occur that would adversely affect the fair value of the Company’s assets and require impairment charges, including, but not limited to, divestitures of certain businesses or product lines, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on the Company’s sales and customer base, a material adverse change in the Company’s relationship with significant customers or business partners, or a sustained decline in the Company’s stock price.

Future events or factors may occur that could adversely affect the fair value of the Company’s assets and require impairment charges, including, but not limited to, divestitures of certain businesses or product lines, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on the Company’s sales and customer base, a material adverse change in the Company’s relationship with significant customers or business partners, or a sustained decline in the Company’s stock price.

In the event any such impairment indicators become known or are present, the Company may be required to perform impairment tests based on changes in the economic environment and other factors, and these tests could result in impairment charges in the future.

As there is minimal difference between the estimated fair values and the carrying values of some of the Company’s intangible assets as a result of recent impairment charges, future impairment charges may occur.

See Critical Accounting Estimates in Item 7 and Footnotes 1 and 7 of Notes to Consolidated Financial Statements .

See Critical Accounting Estimates in Item 7 and Footnotes 1 and 7 of the Notes to Consolidated Financial Statements for further discussion.

The Company is exposed to both foreign currency translation and transaction risks that may materially adversely affect the Company’s operating results, financial condition and liquidity.

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The Company continues to recognize foreign exchange losses related to the currency devaluation in Argentina and its designation as a hyperinflationary economy.

Exchange differences (gains and losses) arising on the settlement of monetary items or on translation of monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in the Consolidated Statement of Operations in the period in which they arise.

Although the Company may employ, at times, a variety of techniques to mitigate the impact of foreign currency transaction risk, including the hedging of forecasted cash inflows and outflows, it cannot guarantee that such risk management strategies will be effective, and its financial condition or results of operations could be adversely impacted.

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The Company could be responsible for any settlement or judgment over the amount of available insurance coverage or for the entire settlement or judgment, if not insured.

In the ordinary course of business, the Company is also subject to formal and informal regulatory and governmental examinations, subpoenas, requests for documents, testimony or information, inquiries, investigations, threatened legal actions and proceedings.

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 for the time period beginning from January 1, 2016.

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 paid a civil penalty of approximately $13 million, which did not have a material effect on the Company’s Consolidated Financial Statements.

Responding to governmental investigations, voluntary document requests, subpoenas or actions by regulatory bodies may be time-consuming, expensive and disruptive to the Company’s operations and could divert the attention of management and key personnel from the Company’s business operations.

The Company is also subject to formal and informal regulatory and governmental examinations, subpoenas, requests for documents, testimony or information, inquiries, investigations, threatened legal actions and proceedings.

For example, in 2023, the Company entered into a settlement with the SEC, which concluded an investigation primarily relating to the Company’s sales practices and certain accounting matters between the third quarter of fiscal year 2016 and second quarter of fiscal year 2017.

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.

Responding to governmental investigations, voluntary document requests, subpoenas or actions by regulatory bodies is time-consuming, expensive and disruptive to the Company’s operations and could divert the attention of management and key personnel from the Company’s business operations.

The Company’s businesses and operations are subject to regulation in the U.S.

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If these or other tax regulations should change, the Company’s financial results could be impacted.

Furthermore, the Organization for Economic Co-operation and Development (the “OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two.

Many aspects of Pillar Two are effective as of January 1, 2024, with certain remaining aspects to be effective beginning January 1, 2025 or later.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two.

While we do not currently expect Pillar Two to have a material impact on our effective tax rate, our analysis is ongoing as the OECD continues to release guidance and countries implement legislation.

Furthermore, the Organization for Economic Co-operation and Development (the “OECD”) introduced a framework implementing a global minimum corporate tax of 15%, referred to as Pillar Two.

Much of Pillar Two was enacted in countries outside the U.S.

effective as of January 1, 2024, with certain remaining aspects effective beginning January 1, 2025 or later.

In January 2025, the U.S.

issued an executive order announcing opposition to aspects of these rules.

While it is unlikely that the U.S.

will enact legislation to adopt Pillar Two, many countries in which we operate have adopted the legislation, and other countries are in the process of introducing legislation to implement Pillar Two.

The Company’s

current income tax impact of Pillar Two is immaterial, however we will continue to monitor both U.S.

and international legislative developments to assess for any potential impacts.

On June 18, 2019, the U.S.

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The Company analyzed the Regulations and concluded the relevant Regulations were not validly issued.

Therefore, the Company has not accounted for the effects of the Regulations in its Consolidated Financial Statements for the period ending December 31, 2023.

The Company believes it has strong arguments in favor of its position and believes it has met the more likely than not recognition threshold that its position will be sustained.

However, due to the inherent uncertainty involved in challenging the validity of regulations as well as a potential litigation process, there can be no assurances that the relevant Regulations will be invalidated or that a court of law will rule in favor of the Company.

Therefore, the Company has not accounted for the effects of the Regulations in its Consolidated Financial Statements for the periods presented.

If the Company’s position on the Regulations is not sustained, the Company would be required to recognize an income tax expense of approximately $180 million to $220 million related to an income tax benefit from fiscal year 2018 that was recorded based on regulations in existence at the time.

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The Company is regularly under audit by various worldwide tax authorities.

Although the Company believes its tax estimates are reasonable, the final outcome of tax audits and related litigation could be materially different than that reflected in its historical income tax provisions and

There can be no assurance that the resolution of any audits or litigation will not have an adverse effect on future operating results.

See Footnote 12 of the Notes to the Consolidated Financial Statements for further information.

The Company may incur significant costs in order to comply with environmental remediation obligations.

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Under certain circumstances, the Consumer Products Safety Commission or a comparable foreign agency could require the Company to repurchase or recall one or more of its products.

Additionally, other laws and agencies, such as the National Highway Traffic Safety Administration, regulate certain consumer products sold by the Company in the United States and abroad, and more restrictive laws and regulations may be adopted in the future.

Additionally, other laws and agencies, such as the National Highway Traffic Safety Administration, regulate certain consumer products sold by the Company in the U.S.

and abroad, and more restrictive laws and regulations may be adopted in the future.

From time to time, the Company has announced voluntary recalls of its products where it has identified potential product safety concerns.

When the Company is required to remove, or voluntarily removes, its products from the market, the Company might have large quantities of finished products that it is unable to sell.

The Company also faces exposure to product liability claims if one of its products is alleged to have resulted in property damage, bodily injury or other adverse effects.

Company also faces exposure to product liability claims if one of its products is alleged to have resulted in property damage, bodily injury or other adverse effects.

In addition to the risk of substantial monetary judgments or fines or penalties that may result from any governmental investigations, product liability claims or regulatory actions could result in negative publicity that could harm the Company’s reputation in the marketplace, adversely impact the value of its end-user brands, or result in an increase in the cost of producing the Company’s products.

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The Company currently either self-insures or administers a high retention insurance program for most product liability risks.

Historically, product liability awards have rarely exceeded the Company’s individual per occurrence self-insured retention.

The Company cannot give assurance, however, that its future product liability experience will be consistent with its past experience or that claims and awards subject to self-insured retention will not be material.

The Company cannot give assurance that its future product liability experience will be consistent with its past experience or that claims and awards subject to self-insured retention will not be material.

See Footnote 18 of the Notes to Consolidated Financial Statements for a further discussion of these and other regulatory and litigation-related matters.

If the Company fails to adequately protect its intellectual property rights, competitors may manufacture and market the same or similar products, which could adversely affect the Company’s market share and results of operations.

The Company’s success with its proprietary products depends, in part, on its ability to protect its current and future technologies and products and to defend its intellectual property rights, including its patent, trade secret and trademark rights.

If the Company fails to adequately protect its intellectual property rights, competitors may manufacture and market the same or similar products, or the incidence of counterfeit products may increase.

The Company holds numerous design and utility patents covering a wide variety of products.

The Company cannot be sure that it will receive patents for any of its innovations or that any existing or future patents that it receives or licenses will provide competitive advantages for its products.

The Company cannot be sure that it will receive patents for any of its innovations or that any existing or future patents that it receives or licenses from others will provide competitive advantages for its products.

The Company also cannot be sure that competitors will not challenge and potentially invalidate any existing or future patents that the Company receives or licenses.

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Climate change and increased focus by governmental and non-governmental organizations and customers on sustainability issues, including those related to climate change, may adversely affect our business and financial results.

Increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce changes in the climate that could have significant physical effects, such as increased frequency and severity of storms, droughts, floods, wildfires and other climatic events.

Increased frequency of extreme weather could cause increased incidence of disruption to the production and distribution of our products at these locations.

Increasing natural disasters in connection with climate change could also be a direct threat to our third-party vendors, service providers or other stakeholders, including disruptions of supply chains or information technology or other necessary services for our Company.

Rising temperatures and increased frequency of extreme weather resulting from climate change could cause increased incidence of disruption to the production and distribution of our products at these locations and could subject the Company to increased operating costs and capital expenses in response thereto.

The consequences of climate change could also be a direct threat to our third-party vendors, service providers or other stakeholders, including increased costs of supplies and disruptions of supply chains or IT or other necessary services for our Company.

Federal, state, and local governments, as well as some of our customers, are beginning to respond to climate change issues.

This increased focus on sustainability is resulting in new legislations, regulations and customer requirements that could negatively affect us, as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.

This increased focus on sustainability is resulting in new legislation, regulations and customer requirements that could negatively affect us, as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.

Legislation or regulations that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s supply chain, could adversely affect our operations and financial results.

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These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition, and results of operations.

Likewise, a failure to comply with any current or future sustainability-related reporting requirements, as established by regulators in the U.S., Europe and beyond, may result in loss of business, regulatory penalties, litigation, and/or reputational damage.

Expectations relating to environmental, social and governance considerations expose the Company to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business.

Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance and sustainability considerations relating to businesses, including climate change and greenhouse gas emissions, data privacy, AI and human capital.

The Company makes statements about its environmental, social and governance targets, goals and initiatives that require investments and are impacted by factors that may be outside the Company’s control.

In addition, some stakeholders may disagree with the Company’s goals and initiatives and the focus of stakeholders may change and evolve over time.

The Company may also amend, abandon or replace its targets, goals and initiatives due to a change in strategy, reduced relevance of such targets, goals and initiatives or changing market conditions, and the Company may take certain actions that stakeholders or regulators view as contrary to such targets, goals and initiatives.

Stakeholders also may have very different views on where the Company’s focus on environmental, social and governance and sustainability issues should be placed, including differing views of regulators in various jurisdictions in which we operate.

Any failure, or perceived failure, by the Company to achieve its targets or goals, further its initiatives, adhere to its public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and materially adversely affect the Company’s business, reputation, results of operations, financial condition and stock price.

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-K

Item 1A. Risk Factors