What changed in this filing

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Item 1. Financial Statements

2025-08-01 compared with 2025-04-30 · 208 added, 125 removed, 458 unchanged (42% of the section changed)

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net sales $ 1,935 $ 2,033 $ 3,501 $ 3,686

3 unchanged sentences

Restructuring costs, net 6 10 17 36

Impairment of goodwill, intangibles and other assets — 6 — 6

Operating income 171 163 192 179

3 unchanged sentences

Other expense, net 5 1 9 6

Loss before income taxes ( 55 ) ( 60 )

Income tax benefit ( 18 ) ( 51 )

Net loss $ ( 37 ) $ ( 9 )

Income before income taxes 71 84 16 24

Income tax provision (benefit) 25 39 7 ( 12 )

Net income $ 46 $ 45 $ 9 $ 36

Weighted average common shares outstanding:

1 unchanged sentence

Diluted 420.9 418.2 421.8 417.9

Loss per share:

Earnings per share:

Basic $ 0.11 $ 0.11 $ 0.02 $ 0.09

1 unchanged sentence

COMPREHENSIVE INCOME (LOSS):

Net loss $ ( 37 ) $ ( 9 )

Net income $ 46 $ 45 $ 9 $ 36

Other comprehensive income (loss), net of tax:

3 unchanged sentences

Total other comprehensive loss, net of tax ( 30 ) ( 28 ) ( 33 ) ( 37 )

Total comprehensive loss $ ( 40 ) $ ( 18 )

Total comprehensive income (loss) $ 16 $ 17 $ ( 24 ) $ ( 1 )

See Notes to Condensed Consolidated Financial Statements (Unaudited).

27 unchanged sentences

Stockholders’ equity:

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at March 31, 2025 and December 31, 2024)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 444.7 shares and 442.3 shares issued at March 31, 2025 and December 31, 2024, respectively)

Treasury stock, at cost ( 27.0 shares and 26.2 shares at March 31, 2025 and December 31, 2024, respectively)

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at June 30, 2025 and December 31, 2024)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 445.0 shares and 442.3 shares issued at June 30, 2025 and December 31, 2024, respectively)

Treasury stock, at cost ( 27.1 shares and 26.2 shares at June 30, 2025 and December 31, 2024, respectively)

( 640 ) ( 634 )

9 unchanged sentences

(Amounts in millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net loss $ ( 37 ) $ ( 9 )

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

Net income $ 9 $ 36

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

Depreciation and amortization 154 164

1 unchanged sentence

Stock based compensation expense 33 33

Loss on extinguishment and modification of debt 13 1

Other, net ( 9 ) ( 3 )

14 unchanged sentences

Payments on short-term debt with original maturities greater than 90 days — ( 225 )

Payments on current portion of long-term debt ( 1,235 ) —

Net proceeds from issuance of long-term debt 1,235 —

Debt extinguishment and modification costs ( 9 ) ( 5 )

Cash dividends ( 60 ) ( 60 )

14 unchanged sentences

Stock Treasury

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

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

Balance at March 31, 2025 $ 445 $ ( 639 ) $ 6,847 $ ( 2,979 ) $ ( 984 ) $ 2,690

Comprehensive income (loss) — — — 46 ( 30 ) 16

Dividends declared on common stock - $ 0.07 per share

— — ( 30 ) — — ( 30 )

Equity compensation, net of tax — ( 1 ) 17 — — 16

Balance at June 30, 2025 $ 445 $ ( 640 ) $ 6,834 $ ( 2,933 ) $ ( 1,014 ) $ 2,692

Balance at December 31, 2024 $ 442 $ ( 634 ) $ 6,866 $ ( 2,942 ) $ ( 981 ) $ 2,751

Comprehensive loss — — — ( 37 ) ( 3 ) ( 40 )

Comprehensive income (loss) — — — 9 ( 33 ) ( 24 )

Dividends declared on common stock - $ 0.14 per share

1 unchanged sentence

Equity compensation, net of tax 3 ( 6 ) 30 — — 27

Balance at March 31, 2025 $ 445 $ ( 639 ) $ 6,847 $ ( 2,979 ) $ ( 984 ) $ 2,690

Balance at June 30, 2025 $ 445 $ ( 640 ) $ 6,834 $ ( 2,933 ) $ ( 1,014 ) $ 2,692

Stock Treasury

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

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

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

Comprehensive income (loss) — — — 45 ( 28 ) 17

Dividends declared on common stock - $ 0.07 per share

— — ( 29 ) — — ( 29 )

Equity compensation, net of tax — — 16 — — 16

Balance at June 30, 2024 $ 441 $ ( 631 ) $ 6,887 $ ( 2,690 ) $ ( 927 ) $ 3,080

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

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

Comprehensive income (loss) — — — 36 ( 37 ) ( 1 )

Dividends declared on common stock - $ 0.14 per share

1 unchanged sentence

Equity compensation, net of tax 1 ( 4 ) 31 — — 28

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

Balance at June 30, 2024 $ 441 $ ( 631 ) $ 6,887 $ ( 2,690 ) $ ( 927 ) $ 3,080

See Notes to Condensed Consolidated Financial Statements (Unaudited).

9 unchanged sentences

The Company has three operating segments:

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

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

Basis of Presentation

11 unchanged sentences

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

The Company continues to be impacted by inflationary pressures, soft global demand, major retailers’ focus on tight control over their inventory levels, 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 other countries’ retaliatory actions in response to such tariffs.

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.

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

The Company continues to deploy a mitigation strategy designed to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing.

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

7 unchanged sentences

Also, the Company typically tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers.

In addition, uncertainty still remains over the volatility and

direction of future consumer and customer demand patterns, as well as inflationary pressures inclusive of the impact of tariffs.

Accordingly, the Company’s results of operations and cash flows for the three months ended March 31, 2025 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2025.

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

Accordingly, the Company’s results of operations and cash flows for the three and six months ended June 30, 2025 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2025.

Recent Accounting Pronouncements

15 unchanged sentences

The Company maintains a factoring agreement with a financial institution to sell certain customer receivables (the “Customer Receivables Purchase Agreement”) up to $ 700 million of eligible accounts receivable.

During the three months ended March 31, 2025 and 2024, the Company factored receivables pursuant to the Customer Receivables Purchase Agreement and received proceeds of $ 587 million and $ 675 million, respectively, and collected from customers and remitted $ 540 million and $ 620 million, respectively to the financial institution.

Outstanding receivables sold under the Customer Receivables Purchase Agreement at March 31, 2025 and December 31, 2024 were approximately $ 310 million and $ 270 million, respectively.

During the six months ended June 30, 2025 and 2024, the Company factored receivables pursuant to the Customer Receivables Purchase Agreement.

The following table sets forth proceeds received and amount collected from customers and remitted to the financial institution (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Proceeds received $ 753 $ 772 $ 1,340 $ 1,447

Collected from customers and remitted to financial institution 620 710 1,160 1,330

Outstanding receivables sold under the Customer Receivables Purchase Agreement at June 30, 2025 and December 31, 2024 were approximately $ 440 million and $ 270 million, respectively.

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

5 unchanged sentences

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

During the three months ended March 31, 2025 and 2024, the Company factored receivables pursuant to the Receivables Facility and received proceeds of $ 248 million and $ 287 million, respectively, and collected from customers and remitted $ 280 million and $ 212 million, respectively to the financial institution.

Outstanding receivables sold under the Receivables Facility at March 31, 2025 and December 31, 2024 were approximately $ 120 million and $ 145 million, respectively.

During the six months ended June 30, 2025 and 2024, the Company factored receivables pursuant to the Receivables Facility.

The following table sets forth proceeds received and amount collected from customers and remitted to the financial institution (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Proceeds received $ 295 $ 324 $ 543 $ 611

Collected from customers and remitted to financial institution 269 300 549 512

Outstanding receivables sold under the Receivables Facility at June 30, 2025 and December 31, 2024 were approximately $ 145 million for each period.

Generally, for a receivable to be eligible under either program, the Company must have fulfilled its performance obligations and be contractually entitled to payment for such, based on a valid receivable that is not past due at the time of factoring the underlying receivable.

The Company accounts for receivables sold to the financial institutions under both factoring agreements as sale of financial assets and derecognizes the trade receivables from the Company’s Condensed Consolidated Balance Sheet.

The Company classifies the proceeds received from the sales of accounts receivable to the financial institutions as an operating cash flow and collections of accounts receivables not yet remitted to the financial institutions as financing cash flow in the Condensed Consolidated Statements of Cash Flows, such collections are classified as restricted cash (included in prepaid expenses and other current assets) on the Company’s Condensed Consolidated Balance Sheet.

Restricted cash related to both programs was $ 19 million and $ 21 million at March 31, 2025 and December 31, 2024, respectively.

The Company accounts for receivables sold to the financial institutions under both factoring agreements as a sale of financial assets and derecognizes the trade receivables from the Company’s Condensed Consolidated Balance Sheets.

The Company classifies the proceeds received from the sales of accounts receivable to the financial institutions as an operating cash flow and collections of accounts receivables not yet remitted to the financial institutions as financing cash flow in the Condensed Consolidated Statements of Cash Flows, and such collections are classified as restricted cash (included in prepaid expenses and other current assets) on the Company’s Condensed Consolidated Balance Sheets.

Restricted cash related to both programs was $ 23 million and $ 21 million at June 30, 2025 and December 31, 2024, respectively.

The Company records the discounts as other expense, net in the Condensed Consolidated Statements of Operations.

12 unchanged sentences

Invoices paid to the third-party vendor ( 39 )

Balance at March 31, 2025

Balance at June 30, 2025

Fair Value Measurements

2 unchanged sentences

For publicly traded investment securities, including mutual funds, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1 of the fair value hierarchy.

The fair value of such investments was not material at March 31, 2025 and December 31, 2024.

The fair value of such investments was not material at June 30, 2025 and December 31, 2024.

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

2 unchanged sentences

Footnote 2 — Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the three months ended March 31, 2025 (in millions):

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the six months ended June 30, 2025 (in millions):

Adjustment Pension and

5 unchanged sentences

Amounts reclassified to earnings (2)

— — ( 1 ) ( 1 )

Net current period other comprehensive income (loss) ( 18 ) 1 ( 16 ) ( 33 )

Balance at March 31, 2025 $ ( 768 ) $ ( 209 ) $ ( 7 ) $ ( 984 )

Balance at June 30, 2025 $ ( 785 ) $ ( 211 ) $ ( 18 ) $ ( 1,014 )

(1) Includes income tax provision (benefit) allocated to AOCL as follows $( 71 ) million, $( 3 ) million, $( 5 ) million and $( 79 ) million, respectively.

(2) Income tax provision (benefit) for both the three months ended March 31, 2025 and 2024 were not material.

(2) Income tax provision (benefit) for both the three and six months ended June 30, 2025 and 2024 were not material.

Pension and postretirement costs presented are primarily classified in other expense, net within the Condensed Consolidated Statements of Operations.

Refer to Footnote 9 for the statements of operations classifications of the Company’s various types of derivative financial instruments.

Reclassifications from AOCL to the results of operations on a before and after-tax basis for the for the three months ended March 31, 2025 and 2024 were not material for any of the periods presented.

Reclassifications from AOCL to the results of operations on a before and after-tax basis for the for the three and six months ended June 30, 2025 and 2024 were not material for any of the periods presented.

Footnote 3 — Restructuring

7 unchanged sentences

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.

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

Restructuring and restructuring-related charges associated with these actions are estimated to be in the range of $ 75 million to $ 90 million, mainly for severance payments and other termination benefits, office space reduction and consolidation and other expenses.

In connection with the Realignment Plan, the Company recorded restructuring and restructuring-related charges for the periods indicated as follows (in millions):

In connection with the Realignment Plan, the Company recorded restructuring and restructuring-related costs for the periods indicated as follows (in millions):

Three Months Ended

March 31, Incurred since inception

Restructuring charges $ 11 $ 22 $ 48

Restructuring-related charges 2 — 17

June 30, Six Months Ended

June 30, Incurred since inception

2025 2024 2025 2024

Restructuring costs $ 6 $ 9 $ 17 $ 31 $ 54

Restructuring-related costs 2 8 4 8 19

Total $ 8 $ 17 $ 21 $ 39 $ 73

Other Restructuring and Restructuring-Related Charges

The Company also incurs other restructuring and restructuring-related charges in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

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

The Company recorded restructuring charges, net and restructuring-related charges in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities for the periods indicated as follows:

Other Restructuring and Restructuring-Related Costs

The Company also incurs other restructuring and restructuring-related costs in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

Restructuring-related costs are recorded in cost of

products sold, selling, general and administrative expenses (“SG&A”) and impairment of other assets in the Condensed Consolidated Statements of Operations based on the nature of the underlying charges incurred.

The Company recorded restructuring costs, net and restructuring-related costs in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities for the periods indicated as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Restructuring costs $ — $ 1 $ — $ 5

1 unchanged sentence

Total $ 4 $ 9 $ 16 $ 26

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

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

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Home and Commercial Solutions $ 1 $ 3 $ 2 $ 10

2 unchanged sentences

Corporate 4 2 12 15

Accrued restructuring costs related to all restructuring activities for the three months ended March 31, 2025 were as follows (in millions):

$ 6 $ 10 $ 17 $ 36

Accrued restructuring costs related to all restructuring activities for the six months ended June 30, 2025 were as follows (in millions):

Balance at December 31, 2024 $ 12

1 unchanged sentence

Payments ( 19 )

Balance at March 31, 2025 $ 11

Balance at June 30, 2025 $ 10

Footnote 4 — Inventories

Inventories are comprised of the following (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Raw materials and supplies $ 189 $ 183

4 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Land $ 67 $ 65

3 unchanged sentences

$ 1,204 $ 1,157

Depreciation expense was $ 43 million and $ 51 million for the three months ended March 31, 2025 and 2024, respectively.

Depreciation expense was $ 47 million and $ 44 million for the three months ended June 30, 2025 and 2024, respectively and $ 90 million and $ 95 million for the six months ended June 30, 2025 and 2024, respectively.

Footnote 6 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the three months ended March 31, 2025 is as follows (in millions):

March 31, 2025

Goodwill activity for the six months ended June 30, 2025 is as follows (in millions):

June 30, 2025

Segments Net Book Value at December 31, 2024

5 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Accumulated Amortization

4 unchanged sentences

$ 3,135 $ ( 1,110 ) $ 2,025 $ 3,061 $ ( 1,053 ) $ 2,008

Amortization expense for intangible assets was $ 32 million and $ 34 million for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense for intangible assets was $ 32 million and $ 35 million for the three months ended June 30, 2025 and 2024, respectively and $ 64 million and $ 69 million for the six months ended June 30, 2025 and 2024, respectively.

Footnote 7 — Other Accrued Liabilities

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Customer accruals $ 638 $ 601

5 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

3.900 % senior notes due 2025 (1)

6 unchanged sentences

5.375 % senior notes due 2036

5.500 % senior notes due 2046

Revolving credit facility (1)

2 unchanged sentences

Long-term debt $ 4,535 $ 4,508

(1) Included in short-term debt and current portion of long-term debt at March 31, 2025 and December 31, 2024.

(1) Included in short-term debt and current portion of long-term debt at June 30, 2025 and December 31, 2024.

In May 2025, in an offering exempt from the registration requirements of the Securities Act of 1933 and all state securities laws, the Company completed the offering and sale of $ 1.25 billion of 8.500 % senior notes due 2028 (the “2028 Notes”) and received proceeds of approximately $ 1.23 billion, net of fees and expenses paid.

The 2028 Notes were issued pursuant to an indenture, dated as of May 22, 2025, between the Company and U.S.

Bank Trust Company, National Association (the “Indenture”).

The Indenture provides, among other things that the 2028 Notes are the senior unsecured obligations of the Company and includes covenants that limit the ability of the Company and its subsidiaries to incur or guarantee additional debt, create or permit certain liens, redeem or repurchase certain debt, consummate certain assets sales, make certain loans and investments, consolidate, merge or sell all or substantially all of the Company and its subsidiaries assets, enter into certain transactions with affiliates and pay distributions on, or redeem or repurchase the Company’s capital stock, subject in each case to certain qualifications and exceptions, including the termination of certain of these covenants upon the 2028 Notes receiving investment grade credit ratings.

The Company used the proceeds of the offering to fully redeem its outstanding 4.200 % senior notes due 2026 (the “2026 Notes”).

In June 2025, the Company fully redeemed its 2026 Notes at a redemption price equal to 100.757 % of the outstanding aggregate principal amount of the notes, plus accrued unpaid interest to the redemption date.

The total consideration was approximately $ 1.25 billion.

As a result of the redemption, the Company recorded a loss on debt extinguishment of $ 13 million.

Revolving Credit Facility

3 unchanged sentences

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.

At June 30, 2025, there was $ 989 million of availability under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

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.

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

At June 30, 2025, the Company had approximately $ 35 million of outstanding standby letters of credit issued against the Credit Revolver and $ 495 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $ 459 million.

During the second quarter of 2025, Moody’s Corporation (“Moody’s”) and S&P Global Inc.

(“S&P”) downgraded the Company’s senior unsecured debt rating to “B1” and “B+”, respectively.

As a result, certain of the Company’s outstanding senior notes aggregating to approximately $ 2.31 billion at that time (the “Coupon-Step Notes”) were subject to an interest rate adjustment of 25 basis points for each downgrade, or 50 basis points in the aggregate, with such adjustments to take effect in the fourth quarter of this year.

The redemption of the 2026 Notes in June 2025 decreased the aggregate amount of the Coupon-Step Notes to $ 1.08 billion.

The change to the interest rate due to the downgrades will increase the Company’s interest expense by approximately $ 5 million on an annualized basis (approximately $ 1 million in 2025).

The indentures governing the Company’s senior notes contain usual and customary nonfinancial covenants, with the 2028 Notes containing additional covenants, such as described above, and the 6.375 % notes due 2027 and the 6.625 % notes due 2032 likewise containing additional covenants consistent with the 2028 Notes, such as described in the Company’s most recent Annual Report on Form 10-K, filed on February 14, 2025.

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Total debt 6.3 % 6.0 % 6.2 % 5.8 %

1 unchanged sentence

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Fair Value Book Value Fair Value Book Value

11 unchanged sentences

The settlement of interest rate swaps is included in interest expense, net in the Condensed Consolidated Statements of Operations.

At March 31, 2025, the Company had approximately $ 1.0 billion notional amount of interest rate swaps due September 2027 and September 2029 that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

At June 30, 2025, the Company had approximately $ 1.00 billion notional amount of interest rate swaps due September 2027 and September 2029 that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

These floating rate swaps are designated as fair value hedges against the principal of the 6.375 % senior notes due 2027 and the 6.625 % senior notes due 2029 for the remaining life of the notes.

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

The Company recognized income of $ 9 million for both the three months ended March 31, 2025 and 2024 in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

During the three months ended June 30, 2025 and 2024, the Company recognized income of $ 8 million and $ 9 million, respectively and income of $ 17 million and $ 18 million, for the six months ended June 30, 2025 and 2024, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales with maturity dates through December 2025.

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

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

At March 31, 2025, the Company had approximately $ 331 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

At June 30, 2025, the Company had approximately $ 249 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

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

At March 31, 2025, the Company had approximately $ 753 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through January 2026.

At June 30, 2025, the Company had approximately $ 857 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through June 2026.

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

2 unchanged sentences

Accordingly, the Company’s derivative instruments are classified as Level 2 of the fair value hierarchy.

At March 31, 2025 and December 31, 2024, the fair value of the Company’s derivative financial instruments designated as effective hedges were not material by type of instrument.

At March 31, 2025, the fair value of the derivatives, designated as effective hedges, were recorded in prepaid expenses and other current assets, other assets, other accrued liabilities, and other noncurrent liabilities of $ 32 million, $ 20 million, $ 11 million, and $ 119 million, respectively, and $ 39 million, $ 38 million, $ 8 million, and $ 64 million, respectively, at December 31, 2024.

The fair value of the Company’s derivative financial instruments not designated as effective hedges were not material at March 31, 2025 and December 31, 2024.

At June 30, 2025 and December 31, 2024, the fair value of the Company’s derivative financial instruments designated as effective hedges were not material by type of instrument, with the exception of cross-currency swaps included in other noncurrent liabilities.

At June 30, 2025, the fair value of the derivatives, designated as effective hedges, were recorded in prepaid expenses and other current assets, other accrued liabilities, and other noncurrent liabilities of $ 23 million, $ 17 million and $ 287 million (including cross-currency swaps of $ 284 million),

respectively.

At December 31, 2024 the fair value of the derivatives, designated as effective hedges, were recorded in prepaid expenses and other current assets, other assets, other accrued liabilities, and other noncurrent liabilities of $ 39 million, $ 38 million, $ 8 million, and $ 64 million (including cross-currency swaps of $ 41 million), respectively.

The fair value of the Company’s derivative financial instruments not designated as effective hedges were not material at June 30, 2025 and December 31, 2024.

The gain or loss activity related to the Company’s interest rate swaps and foreign currency contract derivative financial instruments, designated or previously designated as effective hedges, recognized in other comprehensive income (effective portion) were not material to any of the periods presented, except for its cross-currency swaps.

The Company recognized loss of $ 88 million and gain of $ 48 million related to the Company’s cross-currency swaps, designated or previously designated as effective hedges, for the three months ended March 31, 2025 and 2024, respectively.

The Company recognized loss of $ 201 million and gain of $ 18 million related to the Company’s cross-currency swaps, designated or previously designated as effective hedges, for the three months ended June 30, 2025 and 2024, respectively and loss of $ 289 million and gain of $ 66 million for the six months ended June 30, 2025 and 2024, respectively.

The amount reclassified from AOCL to income has been presented in Footnote 2 .

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

At March 31, 2025, net deferred gains to be reclassified to earnings over the next twelve months are not expected to be material.

At June 30, 2025, net deferred losses to be reclassified to earnings over the next twelve months are not expected to be material.

Footnote 10 — Income Taxes

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.

The Company’s effective income tax rates for the three months ended June 30, 2025 and 2024 were provision of 35.2 % and 46.4 %, respectively, and a provision of 43.8 % and benefit of 50.0 % for the six months ended June 30, 2025 and 2024, respectively, due to a decrease in the forecasted tax rate for 2025 that was primarily driven by improved forecasted pretax book income and less discrete tax benefits year over year.

The differences between the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three months ended March 31, 2025 and 2024 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned, as well as certain taxable income inclusion items in the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three and six months ended June 30, 2025 and 2024 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned, as well as certain taxable income inclusion items in the U.S.

based on foreign earnings.

For the period ended March 31, 2025 these items increased the tax rates less than the prior period due to the higher forecasted pretax book income for 2025.

For the period ended June 30, 2025 these items increased the tax rates less than the prior period due to the higher forecasted pretax book income for 2025.

In periods where forecasted pretax income is relatively low, as in 2024, the proportional impact of these items on the effective rate may be significant.

During the three months ended March 31, 2025, the Company finalized its amended 2023 U.S.

The three and six months ended June 30, 2024 were impacted by certain discrete items.

Income tax expense for the three months ended June 30, 2024 included a discrete benefit of $ 64 million associated with a reduction in liabilities for unrecognized tax benefits, as the tax authorities’ examination of its U.S.

tax returns for the years 2011 to 2015 and its Brazil tax returns for the years 2015 to 2017 have been completed, offset by $ 7 million of additional tax related to withholding taxes associated with certain previously taxed earnings that are no longer indefinitely reinvested.

The six months ended June 30, 2024 also included certain discrete items totaling $ 4 million of additional income tax expense.

In June 2025, the Company filed its amended 2019 U.S.

federal income tax return to carry back capital losses generated in 2020.

This resulted in an increase in income tax expense of $ 3 million and an aggregate increase in noncurrent income taxes receivable of $ 10 million, and an increase in deferred tax liabilities of approximately $ 13 million.

In April 2025, the Company paid $ 31 million of tax for the one-time toll charge incurred in 2017 related to the Tax Credits and Jobs Act.

Due to the Internal Revenue Service (“IRS”) having not yet processed the amended 2017 return, which the Company filed during the year ended December 31, 2022, this resulted in an increase to the Company’s noncurrent income tax receivable.

In March 2025, the Company finalized its amended 2023 U.S.

federal income tax return and updated its estimate of the 2024 U.S.

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This resulted in an aggregate reduction in current income taxes payable and an increase in deferred tax liabilities of approximately $ 31 million.

On July 19, 2024, the Company filed a petition in the U.S.

Tax Court disputing a proposed assessment by the Internal Revenue Service (“IRS”) of $ 80 million in additional taxes and $ 34 million in penalties plus the additional interest calculated upon final settlement related to the transfer pricing of services performed by certain of the Company’s foreign affiliates for the tax years 2011 to 2015.

The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result.

If the IRS prevails in the assessment of additional tax, interest and penalties in excess of the Company’s current reserves, such outcome could have a material adverse effect on the Company’s financial position and results.

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

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

Other Matters

On July 4, 2025, the U.S.

enacted the One Big Beautiful Bill Act (the “OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including modifications to the international tax framework, and allows immediate expensing of domestic research and development costs and changes limitations related to the expensing of business interest expense.

Management is currently evaluating the effects the OBBBA will have on its consolidated financial statements.

On July 19, 2024, the Company filed a petition in the U.S.

Tax Court disputing a proposed assessment by the IRS of $ 80 million in additional taxes and $ 34 million in penalties plus the additional interest calculated upon final settlement related to the transfer pricing of services performed by certain of the Company’s foreign affiliates for the tax years 2011 to 2015.

The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result.

Footnote 11 — Weighted Average Shares Outstanding

The basic and diluted weighted average shares outstanding for the three months ended March 31, 2025 and 2024 were 416.8 million and 414.7 million, respectively.

The three months ended March 31, 2025 and 2024 excludes 5.9 million and 2.8 million, respectively, of potentially dilutive share-based awards as their effect would have been anti-dilutive.

At March 31, 2025, there were no potentially dilutive share awards with performance-based targets that were not met.

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

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Basic weighted average shares outstanding 417.8 415.2 417.3 415.0

Dilutive securities 3.1 3.0 4.5 2.9

Diluted weighted average shares outstanding 420.9 418.2 421.8 417.9

At June 30, 2025, there were no potentially dilutive share awards with performance-based targets that were not met.

At June 30, 2024, there were 0.7 million dilutive share awards with performance-based targets that were not met and as such, were excluded from the computation of diluted earnings per share.

Footnote 12 — Share-Based Compensation

During the three months ended March 31, 2025, in connection with its annual grant, the Company granted 2.0 million performance-based restricted stock units (“RSUs”), with an aggregate grant date fair value of $ 14 million.

During the six months ended June 30, 2025, primarily in connection with its annual grant, the Company granted 2.0 million performance-based restricted stock units (“RSUs”), with an aggregate grant date fair value of $ 14 million.

These performance-based RSUs entitle the recipients to shares of the Company’s common stock and vest primarily at the end of a three -year period, subject to continued employment.

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

During the three months ended March 31, 2025, primarily in connection with its annual grant, the Company also granted 5.8 million time-based RSUs with an aggregate grant date fair value of $ 41 million.

During the six months ended June 30, 2025, primarily in connection with its annual grant, the Company also granted 6.3 million time-based RSUs with an aggregate grant date fair value of $ 44 million.

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

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technical apparel and on-the-go beverageware

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

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

The President and Chief Executive Officer of the Company, who is the Chief Operating Decision Maker (the “CODM”) reviews the businesses as three operating segments:

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Segment SG&A includes an allocation of center-led corporate functions including the bonus for such corporate functions based on achieving 100 % of the respective target.

However, the allocation of center-led corporate functions does not include share-based compensation related to such functions.

Any variability in expense from such targets, favorable or unfavorable, is retained at corporate, which would be reflected as a corporate expense.

However, any variability in expense from such targets, favorable or unfavorable, is retained at corporate, and would be reflected as a corporate expense.

Segment SG&A also does not include any allocation of share-based compensation related to such center-led corporate functions or any adjustments, favorable or unfavorable, between the actual share-based compensation achieved versus the share-based compensation at target for operating segment employees, which items are also reflected in corporate expense.

The CODM considers budget-to-current forecast and prior actuals-to-current forecast variances for segment operating income on a periodic basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

The Company’s results by segment are as follows (in millions):

Three months ended March 31, 2025 Three months ended March 31, 2024

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Consolidated Home and Commercial Solutions Learning and Development Outdoor and Recreation Consolidated Home and Commercial Solutions Learning and Development Outdoor and Recreation

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Other expense, net 5 1

Loss before income taxes $ ( 55 ) $ ( 60 )

Income before income taxes $ 71 $ 84

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Consolidated Home and Commercial Solutions Learning and Development Outdoor and Recreation Consolidated Home and Commercial Solutions Learning and Development Outdoor and Recreation

Net sales (1)

$ 3,501 $ 1,704 $ 1,381 $ 416 $ 3,686 $ 1,855 $ 1,372 $ 459

Cost of products sold 2,313 1,228 776 309 2,483 1,345 767 371

Segment SG&A 858 452 304 102 848 436 298 114

Other segment costs (2)

5 2 1 2 21 10 8 3

Segment operating income (loss) $ 325 $ 22 $ 300 $ 3 $ 334 $ 64 $ 299 $ ( 29 )

Corporate expenses (3)

Operating income $ 192 $ 179

Interest expense, net 154 148

Loss on extinguishment and modification of debt 13 1

Other expense, net 9 6

Income before income taxes $ 16 $ 24

(1) All intercompany transactions have been eliminated.

(2) Other segment costs primarily include segment restructuring costs, net (see Footnotes 3 for further information).

(3) Corporate expenses primarily include costs of operating as a public company including retained costs of center-led corporate functions, and corporate restructuring and restructuring-related costs (see Footnote 3 for further information).

In addition, corporate expense includes adjustments, favorable or unfavorable, between the actual bonus achieved versus the bonus at target for center-led corporate functions, as well as adjustments, favorable or unfavorable, between the actual share-based compensation achieved versus the share-based compensation at target for operating segment employees.

(3) Corporate expenses primarily include costs of operating as a public company, including retained costs of center-led corporate functions, corporate restructuring and restructuring-related costs (see Footnote 3 for further information) and impairment of other assets.

In addition, corporate expense includes all share-based compensation and all adjustments, favorable or unfavorable, between the actual bonus achieved versus the bonus at target for center-led corporate functions, as well as all adjustments, favorable or unfavorable, between the actual share-based compensation achieved versus the share-based compensation at target for operating segment employees.

Depreciation and amortization by segment are as follows (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Home and Commercial Solutions $ 38 $ 37 $ 71 $ 79

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Corporate 16 16 35 32

Assets by segment are as follows at (in millions):

March 31, 2025 December 31, 2024

$ 79 $ 79 $ 154 $ 164

Capital expenditures by segment are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Home and Commercial Solutions $ 22 $ 18 $ 36 $ 36

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$ 59 $ 53 $ 118 $ 112

Capital expenditures by segment are as follows (in millions):

Three Months Ended March 31,

Assets by segment are as follows at (in millions):

June 30, 2025 December 31, 2024

Home and Commercial Solutions $ 4,285 $ 4,110

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Corporate 2,681 2,567

$ 11,507 $ 11,004

The following table disaggregates net sales (1) by major product grouping for the periods indicated (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Commercial $ 332 $ 349 $ 645 $ 673

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Home and Commercial Solutions 892 962 1,704 1,855

Baby 238 251 476 471

Writing 571 562 905 901

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The following table disaggregates net sales (1) by geography (2) for the periods indicated (in millions):

Three Months Ended March 31,

International (2)

Three Months Ended June 30,

America International TOTAL North

America International TOTAL

Home and Commercial Solutions $ 554 $ 338 $ 892 $ 625 $ 337 $ 962

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$ 1,283 $ 652 $ 1,935 $ 1,389 $ 644 $ 2,033

Six Months Ended June 30,

America International TOTAL North

America International TOTAL

Home and Commercial Solutions $ 1,064 $ 640 $ 1,704 $ 1,201 $ 654 $ 1,855

Learning and Development 1,040 341 1,381 1,021 351 1,372

Outdoor and Recreation 199 217 416 243 216 459

$ 2,303 $ 1,198 $ 3,501 $ 2,465 $ 1,221 $ 3,686

(1) All intercompany transactions have been eliminated.

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

The Company’s estimate of environmental remediation costs associated with these matters at March 31, 2025 was $ 38 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Company’s estimate of environmental remediation costs associated with these matters at June 30, 2025 was $ 36 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

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

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The Court’s order entering the Consent Decree has been appealed.

of the date of this filing, the Company does not expect that its share of payments toward the Consent Decree, if the Consent Decree is upheld following any appellate review, will be material to the Company.

As of the date of this filing, the Company does not expect that its share of payments toward the Consent Decree, if the Consent Decree is upheld following any appellate review, will be material to the Company.

In June 2018, Occidental Chemical Corporation (“OCC”) sued over 100 parties, including the Company Parties, in the U.S.

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Although the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 14 .

At March 31, 2025, the Company had approximately $ 48 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

At June 30, 2025, the Company had approximately $ 49 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

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

What changed 10-Q

Item 1. Financial Statements