What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2024-10-25 · 133 added, 301 removed, 107 unchanged (80% of the section changed)

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Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws.

This report contains forward-looking statements within the meaning of the federal securities law.

These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “setting up,” “beginning to,” “will,” “should,” “would,” “could,” “resume,” “are confident that,” “remain optimistic that,” “seek to,” or similar statements.

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Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to:

• the Company’s ability to optimize costs and cash flow and mitigate the impact of soft global demand and retailer inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjustments and actions to improve working capital;

• the Company’s ability to optimize costs and cash flow and mitigate the impact of soft global demand and retailers’ inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjustments and actions to improve working capital;

• the Company’s dependence on the strength of retail and consumer demand and commercial and industrial sectors of the economy in various countries around the world;

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• risks related to the Company’s substantial indebtedness, potential increases in interest rates or changes in the Company’s credit ratings including the failure to maintain financial covenants which if breached could subject us to cross-default and acceleration provisions in our debt documents;

• the impact on the Company’s operations and financial condition resulting from the current global macroeconomic environment, including the impact of tariffs imposed by the U.S.

and retaliatory tariffs imposed by foreign countries, and the Company’s ability to effectively execute its mitigation plans;

• competition with other manufacturers and distributors of consumer products;

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• changes in the prices and availability of labor, transportation, raw materials and sourced products, including significant inflation, and the Company’s ability to offset cost increases through pricing and productivity in a timely manner;

• the Company’s ability to effectively execute its turnaround plan, including Project Ovid, Project Phoenix, the Network Optimization Project and the Realignment Plan;

• the Company’s ability to effectively execute its turnaround plan, including the Realignment Plan and other restructuring and cost saving initiatives;

• the Company’s ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;

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• the cost and outcomes of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties, including but not limited to those described in Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements , the potential outcomes of which could exceed policy limits, to the extent insured;

• the Company’s ability to remediate the material weaknesses in internal control over financial reporting and to maintain effective internal control over financial reporting;

• the Company’s ability to maintain effective internal control over financial reporting;

• risk associated with the use of artificial intelligence in the Company’s operations and the Company’s ability to properly manage such use;

• a failure or breach of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s service providers;

• the impact of United States and foreign regulations on the Company’s operations, including the impact of tariffs and environmental remediation costs and legislation and regulatory actions related to product safety, data privacy and climate change;

• the impact of U.S.

and foreign regulations on the Company’s operations, including environmental remediation costs and legislation and regulatory actions related to product safety, data privacy and climate change;

• the potential inability to attract, retain and motivate key employees;

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• the Company’s ability to protect its intellectual property rights;

• the impact of climate change and the increased focus of governmental and non-governmental organizations and customers on sustainability issues, as well as external expectations related to environmental, social and governance considerations;

• significant increases in the funding obligations related to the Company’s pension plans;

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In addition, there can be no assurance that the Company has correctly identified and assessed all of the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct.

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz.

Newell Brands Inc.

is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz.

Newell Brands is focused on delighting consumers by lighting up everyday moments.

The Company sells its products in over 150 countries around the world and has operations on the ground in over 40 of these countries, excluding third-party distributors.

The Company has three operating segments:

Home and Commercial Solutions (“H&CS”), Learning and Development (“L&D”) and Outdoor and Recreation (“O&R”).

Business Strategy

Following a comprehensive assessment of key capabilities, effective the second quarter of 2023, the leadership team began implementing an integrated set of new “where to play” and “how to win” strategy choices designed to enable the Company to leverage the scale of the portfolio, while further building upon its operational foundation and strengthening its front-end capabilities.

As part of its strategy, the Company is focused on:

• Driving meaningful improvement in front-end capabilities, including consumer understanding, brand management, brand communications, innovation and go-to-market execution;

• Disproportionately investing in the Company’s largest and most profitable brands, fastest-growing channels and key geographies;

• Turning the Company’s scale into a competitive advantage, enabling cost savings that provide fuel for reinvestment;

• Transitioning to a high-performance organization as the Company transforms its culture.

The Company is implementing this strategy while continuing to address key challenges such as shifting consumer preferences and behaviors;

In 2023, the Company initiated a multi-year turnaround plan based on a comprehensive capability assessment and a clear set of “where to play” and “how to win” strategic choices with the goal of improving the Company’s top line, expanding margins and improving cash flow.

During 2024, the Company fully deployed its strategy, transitioned to a new operating model, rebuilt its front-end capabilities and continued with its simplification agenda.

This strategy is beginning to yield tangible results as evidenced by improving trends in net sales and gross margin expansion.

The Company is implementing this strategy while continuing to address key global challenges such as shifting consumer preferences and behaviors;

a highly competitive operating environment;

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a soft macro backdrop;

significant inflationary pressures on consumers and an evolving regulatory landscape.

significant cumulative inflationary pressures on consumers;

recently announced tariffs by the current U.S.

presidential administration and other countries’ retaliatory actions in response to such tariffs;

and an evolving regulatory landscape.

In order to successfully navigate these challenges and deliver strong performance, the Company intends to continue creating and leveraging scale to unlock the full potential of the Company’s portfolio of leading brands through maintaining a disciplined approach and executing with excellence on the Company’s key priorities for 2025 including:

• Returning to profitable top line growth through product and commercial innovation, distribution expansion and international market penetration;

• Expanding gross and operating margin, building on the significant gains achieved in 2024;

• Further deleveraging the balance sheet and improving cash flow efficiency;

• Driving operational excellence through complexity reduction, technology standardization and continued stock-keeping unit (“SKU”) optimization;

• Strengthening our high-performance culture, emphasizing accountability, innovation and inclusion.

The Company is deeply committed to sustaining its turnaround momentum and driving long-term profitable growth.

Execution of these strategic imperatives, in combination with other initiatives aimed to build operational excellence, will better position the Company for long-term sustainable growth.

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

Project Ovid was designed to optimize the Company’s distribution network by creating a single integrated supply chain from 23 business-unit-centric supply chains.

The Company continues to implement the remaining phases of this initiative.

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 Company currently estimates that it will incur approximately $37 million to $49 million in restructuring and restructuring-related charges associated with the execution of the Network Optimization Project.

The Company also expects to incur $30 million to $40 million in capital expenditures related to the Network Optimization Project.

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.

The Company commenced reducing headcount during the first quarter of 2023, and while the program was mostly completed 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.

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

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

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

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

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

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

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

The Company estimates that it will incur approximately $75 million to $90 million in restructuring and restructuring-related charges in connection with the Realignment Plan.

One such initiative is the organizational realignment (“Realignment Plan”), which was designed 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” strategies the Company initiated in 2023.

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

As part of the Realignment Plan, the Company has made several operating model changes, which entailed:

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 has also further optimized the Company’s real estate footprint and pursued other cost reduction initiatives.

These actions were primarily implemented by the end of 2024.

Remaining actions, subject to applicable local law and consultation requirements, are expected to be implemented by the end of fiscal year 2025.

In addition, the Company continues to review its operating footprint and non-core brands, which will result in future restructuring and restructuring-related charges.

Organizational Structure

The Company implemented an operating model intended to drive further simplification and unlock additional efficiencies and synergies within the Company, the chief operating decision maker (“CODM”) reviews the businesses as three operating segments:

Home and Commercial Solutions, Learning and Development and Outdoor and Recreation.

The Company’s three reportable segments are the following:

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.

See Footnote 15 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Recent Developments

Current Macroeconomic Conditions

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

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

To help mitigate the negative impact of these conditions to the operating performance of its businesses, the Company has secured selective pricing increases, accelerated productivity initiatives, optimized advertising and promotion expenses, deployed overhead cost containment efforts, adjusted demand forecasts and supply plans, and taken actions designed to improve working capital.

The Company will continue to evaluate other opportunities to improve its financial performance both in the short and long term.

Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future expense or impairment charges.

See Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on use of estimates and risks.

Geopolitical Conflicts

The global economy has been negatively impacted by military conflicts, such as the Russia-Ukraine conflict and the conflicts in the Middle East.

While the Company does not expect these conflicts to have a material impact on its results of operations, it has experienced supply chain disruptions, shortages in raw materials and increased costs for transportation, energy and commodities due in part to the negative impact of these conflicts on the global economy.

Further escalation of geopolitical tensions, including increased trade barriers and restrictions on global trade, could result in, among other things, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain.

Additionally, if these military conflicts escalate beyond their current scope, the Company could be negatively impacted by localized or global economic recessions.

See Results of Operations and Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Organizational Realignment Plan

In January 2024, the Company announced the Realignment Plan, which is expected to strengthen the Company’s front-end commercial capabilities, as further described in the preceding section.

The Company initiated the Realignment Plan during the first quarter of 2024.

For the three and nine months ended September 30, 2024 the Company recorded restructuring charges of $1 million and $32 million, respectively.

The Company also recorded restructuring-related costs of $2 million and $10 million for the three and nine months ended September 30, 2024, respectively.

See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

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.

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 conducting the build-out of the new facility, which is anticipated to be completed during the first half of fiscal year 2025.

Reclassification of Indefinite-Lived Tradenames

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.

See Footnote 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Intangible Asset Impairment

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 revision 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 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 Footnotes 1 and 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements and Significant Accounting Policies and Critical Estimates for further information.

Amendment to Credit Revolver

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

On February 7, 2024, the Company entered into a second amendment to the Credit Revolver agreement.

The second amendment reduced the commitments of the lenders from $1.5 billion to $1.0 billion;

replaced existing financial covenants with new covenants, including a collateral coverage ratio and total net leverage ratio;

provided a guarantee by the Company and certain subsidiaries of all obligations under the Credit Revolver, including certain hedging obligations, cash management obligations, and supply chain financing obligations;

and granted the lenders under the Credit Revolver a security interest in certain eligible assets and all products and proceeds of the foregoing, subject to certain limitations.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Debt Rating Downgrades

During February 2024, Moody’s Corporation and S&P Global Inc.

downgraded the Company’s senior unsecured debt rating to “Ba3” and “BB-”, respectively, which resulted in an interest rate increase of 25 basis points from each rating downgrade.

The change to the interest rates as a result of both downgrades will increase the Company’s interest expense by $16 million on an annualized basis (approximately $12 million in 2024).

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Update on Tariffs

The current U.S.

presidential administration has announced and/or imposed a series of new tariffs on foreign imports into the U.S., including without limitation significant tariffs on products manufactured in China.

Tariffs on imports into the U.S., most significantly from China, and any retaliatory tariffs on exports from the U.S.

to other countries, will increase costs for the Company and could impact the level of trade between the U.S.

and its various trading partners around the globe in general.

We believe that the Company is well positioned to respond to the current tariff environment, primarily because the Company maintains a significant U.S.

manufacturing presence of 15 production facilities and manufactures, in the U.S.

and two of its facilities in Mexico, products representing over half of the Company’s U.S.

revenues that are not presently subject to the recently announced U.S.

This manufacturing presence is expected to provide a competitive advantage to the Company in certain categories where its competitors are exposed to import tariffs.

The Company also has a scaled, centralized procurement team that is proficient in sourcing raw materials and finished products from over 50 countries around the world.

The Company is actively working on the deployment of a mitigation strategy to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing.

At this time, it is difficult to predict the rate or duration of these tariffs, and there can be no assurance as to the extent to which the Company will be able to offset the impact through mitigation actions.

Additional tariffs or further increases to the U.S.

tariffs, retaliatory actions taken by other countries, or failure to effectively deploy the Company’s mitigation plans could have a significant negative impact on the Company.

Results of Operations

Three Months Ended September 30, 2024 vs.

Three Months Ended September 30, 2023

Consolidated Operating Results

Three Months Ended

September 30,

(in millions) 2024 2023 $ Change % Change

Net sales $ 1,947 $ 2,048 $ (101) (4.9)%

Gross profit 679 621 58 9.3%

Gross margin 34.9 % 30.3 %

Operating loss (121) (159) 38 23.9%

Operating margin (6.2) % (7.8) %

Interest expense, net 75 69 6 8.7%

Other expense, net 9 70 (61) (87.1)%

Loss before income taxes (205) (298) 93 31.2%

Income tax benefit (7) (80) 73 91.3%

Income tax rate 3.4 % 26.8 %

Net loss $ (198) $ (218) $ 20 9.2%

Diluted loss per share $ (0.48) $ (0.53)

Net sales for the three months ended September 30, 2024 decreased 5%.

Net sales were unfavorably impacted by soft global demand, net distribution losses and product line exits, primarily in the H&CS segment, offset by pricing, mainly in international markets to offset inflation and currency movement.

Changes in foreign currency unfavorably impacted net sales by $57 million, or 3%.

Gross profit increased 9% and gross margin improved to 34.9% as compared with 30.3% in the prior year period.

The increase in gross profit was driven by productivity and lower restructuring-related charges of $5 million, partially offset by lower net sales, as discussed above and inflation.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $21 million, or 3%.

Notable items, other than those noted above, impacting operating loss for the three months ended September 30, 2024 and 2023 are as follows:

Three Months Ended

September 30,

2024 2023 $ Change

Restructuring and restructuring-related costs (See Footnote 3 ) (a) (b)

$ 22 $ 41 $ (19)

Transaction costs and other (c)

Impairment of goodwill and intangible assets (See Footnote 6 )

Amortization of acquired intangibles (See Footnote 6 )

(a) Restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) for the three months ended September 30, 2024 were $13 million and $5 million, respectively, and primarily relate to facility closures.

For the three months ended September 30, 2023, restructuring-related costs reported in cost of products sold and SG&A were $18 million and $7 million, respectively, primarily related to facility closures.

Restructuring costs were $4 million and $16 million for the three months ended September 30, 2024 and 2023, respectively.

(b) Restructuring-related costs during the three months ended September 30, 2024 related to Project Phoenix, Network Optimization Project, Realignment Plan and other discrete programs were $2 million, $5 million, $2 million and $9 million, respectively.

(c) Transaction costs and other for the three months ended September 30, 2024 primarily related to accelerated amortization and write-off of other assets associated with integration projects.

For the three months ended September 30, 2023 transaction and other costs primarily related to expenses associated with certain legal proceedings.

Operating loss was $121 million as compared to $159 million in the prior year period.

The improvement reflects the impact of higher gross profit of $58 million discussed above, savings from restructuring actions primarily from Project Phoenix and the Realignment Plan, and lower restructuring and restructuring-related charges of $19 million.

These increases were partially offset by higher incentive compensation expense of $22 million, higher advertising and promotion costs of $3 million, and additional amortization of certain tradenames of $6 million.

Interest expense, net increased primarily due to higher interest rates and lower interest income.

The weighted average interest rates for the three months ended September 30, 2024 and 2023 were approximately 5.8% and 5.1%, respectively.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Other expense, net for three months ended September 30, 2024 and 2023 includes the following items:

Three Months Ended

September 30,

Foreign exchange losses, net $ 6 $ 5

Loss on disposition of investment 2 —

Pension settlement costs — 61

Discount on factored receivables and other, net 1 4

Income tax benefit for the three months ended September 30, 2024 was $7 million as compared to benefit of $80 million for the three months ended September 30, 2023.

The effective tax rate for the three months ended September 30, 2024 was 3.4%, due to decreased tax discrete benefits.

For the three months ended September 30, 2023 the effective tax rate was 26.8%.

See Footnote 11 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Business Segment Operating Results

Home and Commercial Solutions

Three Months Ended

September 30,

(in millions) 2024 2023 $ Change % Change

Net sales $ 1,047 $ 1,123 $ (76) (6.8)%

Operating income (loss) (94) 64 (158) NM

Operating margin (9.0) % 5.7 %

NM - NOT MEANINGFUL

H&CS net sales for the three months ended September 30, 2024 decreased 7%, which reflected soft global demand across all businesses, as well as product line exits and distribution losses, partially offset by pricing actions.

Changes in foreign currency unfavorably impacted net sales by $41 million, or 4%.

Operating loss for the three months ended September 30, 2024 was $94 million as compared to operating income of $64 million in the prior year period.

The decline in operating results is primarily due to a non-cash impairment charge related to an indefinite-lived tradename of $190 million recorded during the third quarter of 2024, higher advertising and promotion costs of $4 million, additional amortization of certain tradenames of $3 million, and inflation.

These declines were partially offset by increased gross profit primarily due to gross productivity and savings from restructuring actions.

There were no non-cash impairment charges during the third quarter of 2023.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Learning and Development

Three Months Ended

September 30,

(in millions) 2024 2023 $ Change % Change

Net sales $ 717 $ 694 $ 23 3.3%

Operating income (loss) 75 (127) 202 NM

Operating margin 10.5 % (18.3) %

NM - NOT MEANINGFUL

L&D net sales for the three months ended September 30, 2024 increased 3%, as an increase in the Baby business was partially offset by decrease in the Writing business.

Improved orders and favorable order timing from major retailers in the Baby business, as well as contribution from product innovation in both businesses, were partially offset by a shift in order timing to the second quarter of 2024 in the Writing business.

Changes in foreign currency unfavorably impacted net sales by $8 million, or 1%.

Operating income for the three months ended September 30, 2024 was $75 million as compared to operating loss of $127 million in the prior-year period.

The improvement in operating results is primarily due gross productivity, savings from restructuring actions, and lower non-cash impairment charges.

The Company recorded non-cash impairment charges of $70 million and $241 million in the third quarter of 2024 and 2023, respectively.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Outdoor and Recreation

Three Months Ended

September 30,

(in millions) 2024 2023 $ Change % Change

Net sales $ 183 $ 231 $ (48) (20.8)%

Operating loss (23) (42) 19 45.2%

Operating margin (12.6) % (18.2) %

Outdoor and Recreation net sales for the three months ended September 30, 2024 decreased 21%, reflecting soft global demand and distribution losses.

Changes in foreign currency unfavorably impacted net sales by $8 million, or 3%.

Operating loss for the three months ended September 30, 2024 was $23 million as compared to $42 million in the prior-year period.

The improvement was primarily due to the absence of a non-cash impairment charge of $22 million recorded in the third quarter of the prior year.

There were no non-cash impairment charges during the third quarter of 2024.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Nine Months Ended September 30, 2024 vs.

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 vs.

Three Months Ended March 31, 2024

Consolidated Operating Results

Nine Months Ended

September 30,

Three Months Ended March 31,

(in millions) 2025

3 unchanged sentences

Gross margin 32.1 % 30.5 %

Operating income (loss) 58 (75) 133 NM

Operating income 21 16 5 31.3%

Operating margin 1.3 % 1.0 %

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Income tax rate 32.7 % 85.0 %

Net loss $ (162) $ (302) $ 140 46.4%

Net loss $ (37) $ (9) $ (28) NM

Diluted loss per share $ (0.09) $ (0.02)

NM - NOT MEANINGFUL

Net sales for the nine months ended September 30, 2024 decreased 7%.

Net sales were unfavorably impacted by soft global demand, net distribution losses and product line exits, primarily in the H&CS segment, partially offset by pricing, mainly in international markets to offset inflation and currency movement.

Net sales for the three months ended March 31, 2025 decreased 5%.

Net sales were unfavorably impacted by soft global demand and net distribution losses.

Business exits, primarily in the H&CS segment, also unfavorably impacted net sales by approximately $8 million, or less than 1%.

These unfavorable factors were partially mitigated by launches of product innovations in the L&D segment and pricing actions, primarily in international markets to offset inflation and unfavorable foreign currency movement.

Changes in foreign currency unfavorably impacted net sales by $44 million, or 3%.

Gross profit increased compared to prior year.

Gross profit was essentially flat compared to the prior year.

Gross margin improved to 32.1% as compared with 30.5% in the prior year.

The increase in gross profit was driven by productivity and lower restructuring-related charges of $21 million, partially offset by lower sales as described above, and inflation.

The improvement in gross margin was driven by gross productivity, pricing and lower restructuring-related charges of approximately $5 million, partially offset by the volume impact of lower sales as described above and inflation.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $10 million, or 2%.

Notable items, other than those noted above, impacting operating income (loss) for the nine months ended September 30, 2024 and 2023 were as follows:

Nine Months Ended

September 30,

Notable items, other than those noted above, impacting operating income for the three months ended March 31, 2025 and 2024 were as follows:

Three Months Ended March 31,

2025 2024 $ Change

Restructuring and restructuring-related costs (See Footnote 3 ) (a) (b)

Restructuring and restructuring-related costs (See Footnote 3 ) (1)

$ 25 $ 39 $ (14)

Transaction costs and other (c)

Impairment of goodwill and intangible assets (See Footnote 6 )

Amortization of acquired intangibles (See Footnote 6 )

(a) For the nine months ended September 30, 2024 restructuring-related costs reported in cost of products sold, SG&A and in impairment of goodwill, intangibles and other assets was $28 million, $13 million and $6 million, respectively, primarily related to facility closures.

For the nine months ended September 30, 2023, restructuring-related costs reported in cost of products sold and SG&A was $49 million and $6 million, respectively, primarily related to facility closures.

Restructuring costs were $40 million and $76 million for the nine months ended September 30, 2024 and 2023, respectively.

(b) Restructuring-related costs during the nine months ended September 30, 2024 related to Project Phoenix, Network Optimization Project, Realignment Plan and other discrete programs were $7 million, $13 million, $10 million and $17 million, respectively.

(c) Transaction costs and other for the nine months ended September 30, 2024 primarily related to accelerated amortization and write-off of other assets associated with integration projects.

For the nine months ended September 30, 2023 transaction and other costs primarily related to expenses associated with certain legal proceedings.

Operating income was $58 million as compared to operating loss of $75 million in the prior year period.

The improvement reflects higher gross profit of $150 million as discussed above, savings from restructuring actions primarily from Project Phoenix and the Realignment Plan, lower restructuring and restructuring-related charges of $44 million, lower transaction costs and other of $20 million and lower non-cash impairment charges.

The Company recorded non-cash impairment charges of $260 million and $271 million in the third quarter of 2024 and 2023, respectively.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

These improvements were partially offset by higher incentive compensation expense of $69 million, higher advertising and promotion costs of $26 million, and additional amortization of certain tradenames of $18 million.

Interest expense, net increased due to higher interest rates and lower interest income.

The weighted average interest rates for the nine months ended September 30, 2024 and 2023 were approximately 5.8% and 5.1%, respectively.

Transaction costs and other (2)

(1) For the three months ended March 31, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) were $3 million and $11 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

For the three months ended March 31, 2024, restructuring-related costs reported in cost of products sold and SG&A were $8 million and $5 million, respectively, primarily related to facility closures associated with the Network Optimization Project and Project Phoenix, previously disclosed, and other discrete initiatives.

Restructuring costs were $11 million and $26 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to the Realignment Plan.

(2) Transaction costs and other for the three months ended March 31, 2025 primarily related to hyperinflationary currency movements.

For the three months ended March 31, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer.

Operating income was $21 million as compared to $16 million in the prior year period.

The improvement reflects benefits from gross productivity, savings from restructuring actions primarily related to the Realignment Plan and lower restructuring and restructuring-related charges of $14 million.

These improvements were partially offset by higher advertising and promotion costs of $6 million.

Interest expense, net increased by $2 million due to higher interest rates and lower interest income.

The weighted average interest rates for the three months ended March 31, 2025 and 2024 were approximately 6.0% and 5.6%, respectively.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Other expense, net for nine months ended September 30, 2024 and 2023 includes the following items:

Nine Months Ended

September 30,

Other expense, net for three months ended March 31, 2025 and 2024 includes the following items:

Three Months Ended March 31,

Foreign exchange losses, net $ 1 $ 3

Net gain on disposition of businesses and investment (1) —

Pension settlement costs — 66

Discount on factored receivables and other, net 3 2

The income tax benefit for the nine months ended September 30, 2024 was $19 million as compared to $77 million for the nine months ended September 30, 2023.

The effective tax rate for the nine months ended September 30, 2024 was a benefit of 10.5%, due to the impact of certain discrete items as compared to 20.3% for the nine months ended September 30, 2023.

The income tax benefit for the three months ended March 31, 2025 was $18 million as compared to $51 million for the three months ended March 31, 2024.

The Company’s effective income tax rates for the three months ended March 31, 2025 and 2024 were benefits of 32.7% and 85.0%, respectively, due to a decrease in the forecasted tax rate for 2025 that was primarily driven by improved forecasted pretax book income year over year.

See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

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Home and Commercial Solutions

Nine Months Ended

September 30,

Three Months Ended March 31,

(in millions) 2025 2024 $ Change % Change

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NM - NOT MEANINGFUL

H&CS net sales for the nine months ended September 30, 2024 decreased 8%, which reflected soft demand across all businesses, product line exits as well as net distribution losses partially offset by pricing actions.

H&CS net sales for the three months ended March 31, 2025 decreased 9%, which reflected soft demand across all businesses, as well as net distribution losses.

Business exits also unfavorably impacted net sales by approximately 1%.

Pricing actions partially offset these unfavorable factors.

Changes in foreign currency unfavorably impacted net sales by $28 million, or 3%.

Operating loss for the nine months ended September 30, 2024 was $30 million as compared to operating income of $6 million in the prior year.

The decrease in operating results is primarily due to higher non-cash impairment charge of $190 million, compared to a charge of $8 million during the prior year, higher advertising and promotion costs of $12 million, additional amortization of certain tradenames of $12 million, and inflation.

The decrease in operating income was partially offset by increased gross profit primarily due to gross productivity, savings from restructuring actions, lower restructuring and restructuring-related charges of $27 million, and release of a bad debt reserve due to a recovery of a receivable from an international customer of $9 million.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Operating loss for the three months ended March 31, 2025 was $2 million as compared to operating income of $16 million in the prior year.

The decrease in operating income is primarily due to lower gross profit of $15 million resulting from unfavorable fixed cost leverage associated with the lower sales volume, as described above, and inflation, partially offset by gross productivity and lower restructuring and restructuring-related charges of $10 million.

Learning and Development

Nine Months Ended

September 30,

Three Months Ended March 31,

(in millions) 2025 2024 $ Change % Change

Net sales $ 572 $ 559 $ 13 2.3%

Operating income 374 133 241 NM

Operating income 98 94 4 4.3%

Operating margin 17.1 % 16.8 %

NM - NOT MEANINGFUL

L&D net sales for the nine months ended September 30, 2024 increased 1%, as growth in the Baby business was offset by decline in the Writing business.

Improved orders and favorable order timing from major retailers in the Baby business, as well as contribution from product innovation in the Writing business were partially offset by changes in foreign currency which unfavorably impacted net sales by $35 million, or 2%.

Operating income for the nine months ended September 30, 2024 increased to $374 million as compared to $133 million in the prior-year period.

The increase in operating income is primarily due to gross productivity, savings from restructuring actions as well as lower non-cash impairment charges, partially offset by higher advertising and promotion costs of $13 million.

The Company recorded non-cash impairment charges of $70 million and $241 million in the third quarter of 2024 and 2023, respectively.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

L&D net sales for the three months ended March 31, 2025 increased 2%, as growth in the Baby business, primarily as a result of improved orders from major retailers and launches of product innovations, was partially offset by a decline in the Writing business due to soft demand in certain markets, partially offset by contribution from launches of product innovations.

Changes in foreign currency unfavorably impacted net sales by $11 million, or 2%.

Operating income for the three months ended March 31, 2025 increased to $98 million as compared to $94 million in the prior-year period.

The increase in operating income is primarily due to higher gross profit of $7 million primarily due to higher net sales and gross productivity, partially offset by inflation and higher advertising and promotion costs of $2 million.

Outdoor and Recreation

Nine Months Ended

September 30,

Three Months Ended March 31,

(in millions) 2025 2024 $ Change % Change

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Operating margin (2.7) % (9.0) %

Outdoor and Recreation net sales for the nine months ended September 30, 2024 decreased 23% primarily reflecting soft global demand and distribution losses.

O&R net sales for the three months ended March 31, 2025 decreased 9% as improvements in certain international markets of approximately 11%, were more than offset by declines in the U.S.

of approximately 19%, primarily due to distribution losses.

Changes in foreign currency unfavorably impacted net sales by $5 million, or 2%.

Operating loss for the nine months ended September 30, 2024 was $52 million as compared to $38 million in the prior-year period.

The decline was primarily due to lower gross profit resulting from lower sales, partially offset by savings from restructuring actions and the absence of a non-cash impairment charge of $22 million recorded in the third quarter of the prior year.

There were no non-cash impairment charges during the third quarter of 2024.

See Footnote 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Operating loss for the three months ended March 31, 2025 was $5 million as compared to $18 million in the prior-year period.

The improvement in operating performance was due to higher gross profit of $7 million driven primarily by gross productivity and favorable pricing, as well as lower restructuring-related charges of $2 million and lower amortization of certain tradenames of approximately $2 million.

Liquidity and Capital Resources

The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers focus on tight control over inventory levels, inflationary pressures and uncertainty over the volatility and direction of future demand patterns on the Company’s future sales, operating results, cash flows, liquidity and financial condition, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

As noted in Business Strategy and Recent Developments , the Company has taken actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility, including amending certain terms of its Credit Revolver.

The Company believes these actions and its cash generating capability, together with its borrowing capacity and available cash and cash equivalents, provide adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and execute its ongoing business initiatives for the foreseeable future.

The Company’s $1.2 billion, 4.200% senior notes will be maturing on April 1, 2026 (the “2026 Notes”).

Following the issuance of these financial statements the Company plans to take additional steps to increase its liquidity, including pursuing a refinancing of all or substantially all of the Company’s 2026 Notes prior to their maturity.

The Company believes it will be able to refinance the 2026 Notes prior to maturity in light of its most recent debt refinancing in November 2024, which was significantly oversubscribed.

However, there can be no assurance that such financing would be available on terms acceptable to the Company, or at all.

Absent such a refinancing;

however, the Company will require additional liquidity to continue its operations over the next twelve months from the issuance of these financial statements.

In the event such refinancing is not available to the Company in full or at all, the Company would need to undertake various actions including:

drawing down up to the full available capacity on the Company’s Credit Revolver;

deferring or eliminating discretionary capital expenditures as well as advertising and promotion expense;

reducing or eliminating future dividends;

and liquidation of certain assets.

The Company believes the aforementioned individual actions or a combination of such actions, its cash generating capability, and available cash and cash equivalents, would provide adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due, including the 2026 Notes, and execute its ongoing business initiatives over the next twelve months from the issuance of these financial statements.

However, there can be no assurances that the Company will be successful in generating the additional liquidity, through a debt refinancing on terms acceptable to the Company or otherwise, that would be necessary to meet its obligations over the next twelve months from the issuance of these financial statements.

If the Company is unable to make the payment on the 2026 Notes upon maturity, the Company would be in default of such senior notes, which would trigger cross-default provisions within other debt instruments and would have a significant adverse effect on the Company’s business, financial condition and operating results.

The Company regularly assesses its cash requirements and the available sources to fund these needs.

The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as recently imposed tariffs by the current U.S.

presidential administration, including those most recently announced reciprocal tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

For further information, refer to Risk Factors in Part I - Item 1A and Recent Developments in Part II - Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation s of the Company's most recent Annual Report on Form 10-K, filed on February 14, 2025.

At September 30, 2024, the Company had cash and cash equivalents of approximately $494 million, of which approximately $403 million was held by the Company’s non-U.S.

At March 31, 2025, the Company had cash and cash equivalents of approximately $233 million, of which approximately $185 million was held by the Company’s non-U.S.

subsidiaries.

During the second quarter, the Company recorded $7 million of additional tax related to withholding taxes associated with certain previously taxed foreign earnings that are no longer indefinitely reinvested, which the Company intends to repatriate such cash during the remainder of 2024.

Cash, cash equivalents and restricted cash increased (decreased) as follows for the nine months ended September 30, 2024 and 2023 (in millions):

Cash, cash equivalents and restricted cash increased (decreased) as follows for the three months ended March 31, 2025 and 2024 (in millions):

2025 2024 Increase (Decrease)

Cash provided by operating activities $ 346 $ 679 $ (333)

Cash provided by (used in) operating activities $ (213) $ 32 $ (245)

Cash used in investing activities (27) (50) 23

Cash used in financing activities (64) (405) 341

Cash provided by financing activities 270 60 210

Exchange rate effect on cash, cash equivalents and restricted cash 3 (3) 6

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Cash Flows from Operating Activities

The change in net cash provided by operating activities reflects an improvement in operating results as well as a decrease in accounts receivable and an increase in accounts payable in the current year, more than offset by an increase in inventory in the current period compared to a significant decrease in 2023, as well as higher incentive compensation payments in the current year.

The change in net cash used in operating activities reflects a decrease in factored accounts receivable in the current year and higher incentive compensation payments in the current year, partially offset by an increase in accounts payable in the current period and lower restructuring payments.

Cash Flows from Investing Activities

The change in cash used in investing activities was primarily due to lower capital expenditures, as significant projects, primarily related to Project Ovid, were mostly executed during the prior year.

The lower cash used in investing activities was primarily due to higher proceeds from sale of assets.

Cash Flows from Financing Activities

The change in net cash used in financing activities was primarily due to a lower quarterly dividend payment in the current year and the period-over-period net change in short-term debt.

The change in net cash provided by financing activities was due to the period-over-period net change in short-term debt.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Capital Resources

The Company has a $1.0 billion Credit Revolver that matures in August 2027.

The Credit Revolver requires compliance with certain financial covenants.

A failure to maintain the Company’s financial covenants and to subsequently remedy a default would impair its ability to borrow under the Credit Revolver and potentially subject the Company to cross-default and acceleration provisions in its debt documents.

The Company was in compliance with all of its debt covenants at September 30, 2024.

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.

The Company maintains a $1.0 billion senior secured revolving credit facility (the “Credit Revolver”) maturing in August 2027.

Under the Credit Revolver, the Company may borrow funds on a variety of interest terms.

The Credit Revolver agreement (i) requires the Company to satisfy financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) requires the Company and certain of its domestic and foreign subsidiaries (the “Guarantors”) to guaranty Company obligations under the Credit Revolver and (iii) requires the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations.

Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver.

At March 31, 2025 there was $870 million of availability based on the value of the pledged collateral prior to giving effect to outstanding borrowings and letters of credit under the Credit Revolver.

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 March 31, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $350 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $485 million.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

On April 14, 2025, Moody’s Corporation (“Moody’s”) downgraded the Company’s senior unsecured debt rating to “B1”.

As a result of Moody’s downgrade, certain of the Company’s outstanding senior notes aggregating to approximately $2.3 billion are subject to an interest rate adjustment of 25 basis points, with such adjustment to take effect in the fourth quarter of this year.

The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $6 million on an annualized basis (approximately $2 million in 2025).

The Company was in compliance with all of its debt covenants at March 31, 2025.

Risk Management

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For further information on significant accounting policies and critical estimates, refer to the Company's most recent Annual Report on Form 10-K, filed on February 14, 2025 and Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Goodwill and Indefinite-Lived Intangibles

Goodwill and indefinite-lived intangibles are tested and reviewed for impairment annually during the fourth quarter (on December 1), or more frequently if facts and circumstances warrant.

Indefinite-lived intangibles

The testing of indefinite-lived intangibles (primarily trademarks and tradenames) under established guidelines for impairment also requires significant use of judgment and assumptions (such as cash flow projections, royalty rates, terminal values and discount rates).

An indefinite-lived intangible asset is impaired by the amount its carrying value exceeds its estimated fair value.

For impairment testing purposes, the fair value of indefinite-lived intangibles is determined using either the relief from royalty method or the excess earnings method.

The relief from royalty method estimates the value of a tradename by discounting the hypothetical avoided royalty payments to their present value over the economic life of the asset.

The excess earnings method estimates the value of the intangible asset by quantifying the residual (or excess) cash flows generated by the asset and discounts those cash

flows to the present.

The excess earnings methodology requires the application of contributory asset charges.

Contributory asset charges typically include assumed payments for the use of working capital, tangible assets and other intangible assets.

Changes in forecasted operations and other assumptions could materially affect the estimated fair values.

Changes in business conditions could potentially require adjustments to these asset valuations.

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 in 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.

As a result, the Company recorded non-cash impairment charges of $190 million and $70 million to the H&CS and L&D segments, respectively, during the third quarter of 2024, as the carrying value of the individual assets exceeded their fair value.

A hypothetical 10% reduction in the forecasted revenue and earnings before interest, taxes and amortization used in the excess earnings method in determining the fair value of these indefinite-lived intangibles would have resulted in an incremental impairment charge to the H&CS and L&D segments of $30 million and $7 million, respectively.

In addition, the Company has experienced headwinds due to soft global demand and an increased focus by retailers to rebalance inventory levels in light of continued inflationary pressures on consumers across all of our segments.

As a result, the Company may identify future triggering events for its reporting units or indefinite-lived tradenames, including the aforementioned indefinite-lived tradenames in the H&CS and L&D segments.

If the demand continues to contract or the business fails to regain lost distribution, additional declines in the fair value of these tradenames may occur resulting in an impairment charge.

Additional impairment testing may be required based on further deterioration of global demand and/or the macroeconomic environment, continued disruptions to the Company’s business, further declines in operating results of the Company’s reporting units and/or tradenames, further sustained deterioration of the Company’s market capitalization, and other factors, which may necessitate changes to estimates or valuation assumptions used in the fair value of the reporting units for goodwill and indefinite-lived intangible tradenames.

Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending decline significantly in the future or if commercial and industrial economic activity experiences a sustained deterioration from current levels, the Company may be required to record further impairment charges in the future.

See Footnotes 1 and 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Quantitative and Qualitative Disclosures about Market Risk

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis