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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-14 · 179 added, 351 removed, 279 unchanged (66% of the section changed)

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This section should be read along with the relevant portions of this Annual Report on Form 10-K for a complete discussion of the events and items summarized below.

The “ Results of Operations ” section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “ Management's Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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 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 sells its products in over 150 countries around the world and has operations on the ground in more than 45 of these countries, excluding third-party distributors.

The Company has three operating segments:

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Business Strategy

Following a comprehensive assessment of key capabilities, starting in the second quarter of 2023, the leadership team began implementing an integrated set of new “where to play” and “how to win” strategies 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;

a highly competitive operating environment;

a rapidly changing retail and consumer landscape;

continued macroeconomic and geopolitical volatility;

a soft macro backdrop;

significant inflationary pressures on consumers and an evolving regulatory landscape.

The Company is actively advancing the strategic priorities identified through its comprehensive capability assessment completed in 2023.

These priorities are based on 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 flows with a new operating model, critical talent upgrades and a culture redesign.

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 which entails a multi-year, customer centric supply chain initiative which has transformed the Company’s go-to-market capabilities in the U.S., improving customer service levels and driving operational efficiencies.

Project Ovid optimized the Company’s distribution network in 2022 and 2023 by creating a single integrated supply chain from 23 business-unit-centric supply chains.

The initiative reduced administrative complexity, improved inventory and invoicing workflow for our customers and enhanced product availability for consumers through omni-channel enablement.

This new operating model continues to drive efficiencies by better utilizing the Company’s transportation and distribution network and consolidating the number of overall distribution sites.

In May 2023, the Company announced a restructuring and cost savings initiative that was 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 Network Optimization Project incorporated a variety of initiatives, including a reduction in the overall number of distribution centers, an optimization of distribution by location, and completion of select automation investments intended to further streamline the Company’s cost structure and to maximize operating performance.

These actions were substantially implemented by the end of 2024.

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.

Project Phoenix incorporated a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize the Company’s supply chain functions, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs.

These actions were substantially implemented by the end of 2023.

In January 2024, the Company announced an 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 unveiled in June of 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:

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 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 likely result in future restructuring and restructuring-related charges.

One such initiative is the organizational Realignment

Plan, announced in 2024, 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.

Actions under the Realignment Plan were implemented by the end of fiscal year 2025.

Further building on the Company’s turnaround strategy, the Company announced the Productivity Plan in December 2025.

The Productivity Plan is designed to further simplify processes, streamline overhead and redirect resources to the highest-value activities.

See Business in Item 1 for additional information on these initiatives.

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, fluctuating interest rates and indirect 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 negatively impacted the Company’s operating results, cash flows and financial condition during 2024 and are to some degree expected to persist into 2025.

To help mitigate the negative impact of these conditions to the operating performance of its businesses, the Company has 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.

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, Critical Accounting Estimates and Footnote 1 of the Notes to Consolidated Financial Statements for further information.

Tariffs Exposure

In early 2025, the current U.S.

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

The Company is working to determine its tariff cost exposure, and potential mitigation plans, as well as the associated timing to implement such, if any.

However, the impact to the Company’s results of operations and cash flows cannot be determined at this time.

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 year ended December 31, 2024, the Company recorded restructuring and restructuring-related charges of $37 million and $15 million, respectively.

See Risk Factors in Item 1A .

and Footnote 4 of the Notes to 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 transaction was finalized during the fourth quarter of fiscal year 2024.

In connection with this transaction, the Company recognized a loss of $8 million, which was included in the $15 million restructuring-related charges mentioned above.

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.

See Footnotes 4 and 13 of the Notes to 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, have increased 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 manufacturers, 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 incurred incremental cash tariff cost of approximately $174 million in 2025 due to the currently announced and imposed tariffs as well as retaliatory tariffs on U.S.

exports, prior to any offsetting impact from mitigating actions.

There will be a timing difference between the operating cash outflow and the recognition of cost of products sold arising from the tariffs.

As a result, the Company recognized approximately $114 million of incremental costs of products sold in the Consolidated Statement of Operations in 2025.

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.

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.

Global Productivity Plan

In December 2025, the Company announced the Productivity Plan, as further described in the preceding section.

The Company expects to record $75 million to $90 million of restructuring and restructuring-related charges in connection with the Productivity Plan, primarily for severance and related costs, with most of the charges to be recognized by the end of 2026.

The Company commenced separation of professional and clerical employees during December 2025 and recorded $40 million of restructuring charges for severance and other termination benefits and restructuring-related charges.

See Risk Factors in Item 1A, and Footnote 3 of the Notes to Consolidated Financial Statements for further information.

Indefinite-Lived Intangible Asset Impairment

During the fourth quarter of 2024, as a result of the Company’s annual impairment testing, the Company recorded a non-cash impairment charge of $85 million related to one tradename in the H&CS segment, as the carrying value of the tradename exceeded its fair value.

The decline in the fair value of the tradename in the H&CS segment was the result of a downward revision of forecasted revenue mainly due to a distribution loss, which the Company was informed of during the fourth quarter of 2024.

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 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, and recorded an aggregate non-cash impairment charge of $260 million for the indefinite-lived tradenames, as the carrying values exceeded their fair values.

During the fourth quarter of 2025, as a result of the Company’s annual impairment testing, the Company recorded an aggregate non-cash impairment charge of $340 million related to two tradenames in the H&CS segment and one in the L&D segment, as the carrying values of the tradenames exceeded their fair values.

The decline in the fair values resulted primarily from a downward revision of the forecasted cash flows and an increase in the reporting unit’s discount rate, primarily due to the increased risk premium applied to enable reconciliation to the Company’s total enterprise value given the decline in the Company’s stock price since the last annual impairment test.

See Critical Accounting Estimates and Footnotes 1 and 6 of the Notes to Consolidated Financial Statements for further information.

Debt Redemption and Issuance

In December 2024, the Company repaid the outstanding aggregate principal amount of its 4.000% senior notes, plus accrued and unpaid interest upon maturity for total consideration of $205 million.

In November 2024, the Company completed a registered public offering and sale of $750 million of aggregate principal amount of 6.375% senior notes due 2030 (the “2030 Notes”) and $500 million of aggregate principal amount of 6.625% senior notes due 2032 (the “2032 Notes”) (collectively the “Notes”) and received proceeds of approximately $1.24 billion, net of fees and expenses paid.

The Company used the proceeds of the offering to fully redeem its outstanding 4.875% senior notes due 2025 and to redeem in part its outstanding 4.200% senior notes due 2026.

In November 2024, the Company fully redeemed its 4.875% notes due 2025 at a redemption price equal to 100% of the outstanding aggregate principal amount of the notes, plus accrued unpaid interest to the date of the redemption.

The total consideration was approximately $511 million.

The Company also partially redeemed $750 million of the outstanding aggregate amount of the 4.200% senior notes due 2026 at a redemption price of 101.006%.

The total consideration, including accrued unpaid interest to the date of its redemption was approximately $764 million.

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

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

Debt Redemption

In November 2025, the Company repaid the outstanding principal amount of its 3.900% senior notes due 2025 (the “2025 Notes”), plus accrued and unpaid interest upon maturity for total consideration of $48 million.

Debt Rating Downgrades

During the fourth quarter of 2025, Moody’s further downgraded the Company’s senior unsecured debt rating to “B2”, without any further impact to the interest rates on any of the Company’s senior notes, as the Company has reached the maximum provision on the affected bonds.

See Footnote 8 of the Notes to Consolidated Financial Statements for further information on debt redemption and debt rating downgrades.

Results of Operations

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Gross margin 33.8 % 33.6 %

Operating income (loss) 67 (85) 152 NM

Operating income 39 67 (28) (41.8)%

Operating margin 0.5 % 0.9 %

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Diluted loss per share $ (0.68) $ (0.52)

NM — NOT MEANINGFUL

Net sales decreased 7% compared to prior year.

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

Product line exits negatively impacted net sales by approximately 1%, primarily in the H&CS segment.

These factors were partially mitigated by pricing, mainly in international markets to offset inflation and currency movement.

Changes in foreign currency unfavorably impacted net sales by $234 million, or approximately 3%.

Gross profit increased 8% compared to prior year.

Net sales decreased 5% compared to the prior year.

Net sales were unfavorably impacted by soft demand across all segments, primarily by our H&CS and O&R segments, net distribution losses and product line exits.

These unfavorable factors were partially mitigated by launches of product innovations.

Changes in foreign currency unfavorably impacted net sales by $2 million, or less than 1%.

Gross profit decreased by approximately $116 million, or approximately 5% compared to the prior year, primarily driven by our H&CS segment.

Gross margin improved to 33.8% as compared with 33.6% in 2024.

The improvement in gross margin was driven by pricing, productivity and lower restructuring-related charges of $50 million, partially offset by higher absorption cost associated with lower sales volume and inflation.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $121 million, or 5%.

Notable items, other than the aforementioned, impacting operating income (loss) for 2024 and 2023 are as follows:

The improvement in gross margin was driven by gross productivity and pricing and lower restructuring-related charges of approximately $32 million, partially offset by volume impact of lower sales, additional tariffs of approximately $114 million and inflation.

Notable items, other than the aforementioned, impacting operating income for 2025 and 2024 are as follows:

Years Ended December 31,

(in millions) 2025 2024 $ Change

Impairment of goodwill and intangible assets ( See Footnotes 1 and 7)

Impairment of goodwill and intangible assets (a)

$ 340 $ 345 $ (5)

Restructuring ( See Footnote 4) and restructuring-related (a) (b)

Restructuring and restructuring-related (b)

Transaction costs and other (c)

(a) Restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) and in impairment of goodwill, intangibles and other assets for 2024 were $36 million, $13 million and $8 million, respectively, and primarily relate to facility closures.

Restructuring-related costs reported in cost of products sold and SG&A for 2023 were $86 million and $13 million, respectively, and primarily relate to facility closures.

(a) See Footnotes 1 and 6 of the Notes to Consolidated Financial Statements for further information.

(b) Restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) for 2025 were $4 million and $24 million, respectively, and primarily relate to facility closures associated with the Realignment Plan and various discrete initiatives as well as previously disclosed but substantially completed restructuring activities.

Restructuring-related costs reported in cost of products sold, SG&A and in impairment of goodwill, intangibles and other assets for 2024 were $36 million, $13 million and $8 million, respectively, and primarily relate to facility closures associated with previously disclosed but substantially completed restructuring activities, as well as other discrete initiatives.

Restructuring costs for 2025 and 2024 were $62 million and $45 million, respectively.

(b) Restructuring-related cost during the twelve months ended December 31, 2024 related to Project Phoenix, Network Optimization Project, Realignment Plan and other discrete programs were $8 million, $18 million, $15 million and $16 million, respectively.

(c) Transaction costs and other for 2024 primarily relate to accelerated amortization and write-off of other assets associated with integration projects.

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

(c) Transaction costs and other for 2025 includes expenses for certain legal proceedings and completed divestitures, costs of a product recall, fire-related losses and hyperinflationary currency movements.

Transaction costs and other reported in cost of products sold and SG&A for 2025 were $29 million and $10 million, respectively.

Transaction costs and other for 2023 primarily relate to completed divestitures, expenses associated with certain legal proceedings, impairment of other assets and inventory write-down due to regulatory restrictions banning the salability of certain of the Company’s products in certain jurisdictions.

Transaction costs and other reported in cost of products sold, SG&A and impairment of other assets for 2023 were $20 million, $23 million and $3 million, respectively.

Operating income was $67 million as compared to operating loss of $85 million in the prior year period.

The improvement reflects the impact of higher gross profit of $195 million as discussed above, savings from restructuring actions primarily from Project Phoenix and the Realignment Plan, lower restructuring charges of $50 million and lower transaction costs and other of $22 million.

These improvements were partially offset by higher incentive compensation expense of approximately $89 million, higher advertising and promotion costs of $46 million and $23 million of additional amortization of certain tradenames.

Transaction costs and other for 2024 primarily relate to release of a bad debt reserve due to a recovery of a receivable from an international customer, hyperinflationary currency movements and accelerated amortization and write-offs of other assets associated with integration projects.

Transaction costs and other reported in cost of products sold and SG&A for 2024 were $11 million and $1 million, respectively.

Operating income was $39 million as compared to $67 million in the prior year period.

The decline reflects the aforementioned impact of lower gross profit of $116 million, higher restructuring charges of $17 million (See Footnote 3 of the Notes to the Consolidated Financial Statements for further information), and increase in advertising and promotion costs of $12 million, partially offset by lower incentive compensation expense of approximately $95 million, due to weaker performance relative to targets in 2025, and savings from restructuring actions related to the Realignment Plan and Productivity Plan.

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

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(in millions) 2025 2024

Pension settlement and non-service costs, net (See Footnote 11 )

Foreign exchange losses, net (See Footnote 10 )

(Gain) loss on disposition of businesses and investments (a)

Foreign exchange losses, net (b)

Discount on factored receivables and other, net 8 8

(a) During 2025, the Company sold its equity interest in a joint venture and realized a pretax gain of $12 million.

(b) See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

The income tax benefit for 2025 was $16 million as compared to $44 million in 2024.

The effective tax rate for 2024 was 16.9%, due to the impact of certain discrete items as compared to 28.5% for 2023.

The effective tax rate for 2025 was 5.3% as compared to 16.9% for 2024.

The decrease in the tax benefit rate was primarily driven by decrease in discrete benefits and lower pretax book income for 2025.

See Footnote 11 of the Notes to Consolidated Financial Statements for further information on income taxes.

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Net sales $ 3,772 $ 4,071 $ (299) (7.3)%

Operating income (loss) (2) 37 (39) NM

Operating margin 0.0 % 0.8 %

H&CS net sales for 2024 decreased 8% compared to prior year, which reflected soft demand across all businesses and distribution losses.

Product line exits also negatively impacted net sales by approximately 1%.

Pricing actions partially offset these negative factors.

Changes in foreign currency unfavorably impacted net sales by $151 million, or 3%.

Operating loss for 2024 was $2 million as compared to operating income of $37 million in the prior year.

The decline in operating results is primarily due to higher non-cash impairment charges, related to indefinite-lived tradenames of $275 million, compared to a charge of $76 million during 2023, higher advertising and promotion costs of $18 million, additional amortization of certain tradenames of $17 million and inflation.

These factors were partially offset by improvement of $134 million in gross profit, mainly due to productivity, lower restructuring charges of $41 million and release of a bad debt reserve due to a recovery of a receivable from an international customer of $9 million.

See Footnote 7 of the Notes to the Consolidated Financial Statements for further information on non-cash impairment charge and additional amortization of tradenames.

Learning and Development

Years Ended December 31,

(in millions) 2024 2023 $ Change % Change

Net sales $ 2,717 $ 2,706 $ 11 0.4%

Operating income 473 213 260 NM

Operating margin 17.4 % 7.9 %

L&D net sales for 2024 increased modestly by less than 1%, compared to prior year, as growth in the Baby business, primarily as a result of improved orders from major retailers and innovation, was partially offset by a decline in the Writing business due to soft demand in certain markets, partially offset by contribution from product innovation.

Changes in foreign currency unfavorably impacted net sales by $44 million, or 2%.

Operating income for 2024 increased to $473 million as compared to $213 million in 2023.

The increase in operating income is primarily due to improved gross profit of approximately $87 million, due to gross productivity, savings from restructuring actions as well as lower non-cash impairment charges.

The Company recorded non-cash impairment charges related to indefinite-lived tradenames and goodwill of $70 million and $241 million during 2024 and 2023, respectively.

See Footnote 7 of the Notes to the Consolidated Financial Statements for further information on the non-cash impairment charges.

Outdoor and Recreation

Years Ended December 31,

(in millions) 2024 2023 $ Change % Change

Net sales $ 794 $ 999 $ (205) (20.5)%

Operating loss (86) (83) (3) (3.6)%

Operating margin (10.8) % (8.3) %

O&R net sales for 2024 decreased 21% compared to prior year, reflecting soft global demand and distribution losses.

Changes in foreign currency unfavorably impacted net sales by $39 million, or 4%.

Operating loss for 2024 was $86 million as compared to $83 million in 2023.

The decline was primarily due to lower gross profit of $26 million, caused by unfavorable fixed cost leverage associated with lower sales volume and inflation, partially offset by gross productivity, favorable pricing and savings from restructuring actions and absence of a non-cash impairment charge of $22 million recorded in the prior year.

There were no non-cash impairment charges recorded during 2024.

See Footnote 7 of the Notes to the Consolidated Financial Statements for further information.

Consolidated Operating Results 2023 vs.

Years Ended December 31,

(in millions, except per share data) 2023 2022 $ Change % Change

Net sales $ 8,133 $ 9,459 $ (1,326) (14.0)%

Gross profit 2,353 2,834 (481) (17.0)%

Gross margin 28.9 % 30.0 %

Operating income (loss) (85) 312 (397) NM

Operating loss (138) (2) (136) NM

Operating margin (3.7) % — %

Interest expense, net 283 235 48 20.4%

Other (income) expense, net 175 (81) 256 NM

Income (loss) before income taxes (543) 157 (700) NM

Income tax benefit (155) (40) (115) NM

Income tax rate 28.5 % (25.5) %

Net income (loss) $ (388) $ 197 $ (585) NM

Diluted earnings (loss) per share $ (0.94) $ 0.47

NM — NOT MEANINGFUL

Net sales for 2023 decreased 14% as compared to 2022.

Net sales were unfavorably impacted by soft global demand, distribution losses and category exits, primarily in the H&CS segment, partially offset by pricing actions by the Company.

The sale of the Connected Home and Security (“CH&S”) business at the end of the first quarter of 2022 negatively impacted net sales by approximately 1%.

H&CS net sales for 2025 decreased approximately 7% compared to prior year, which reflected soft demand across all businesses, net distribution losses and product line exits, primarily in our Kitchen and Commercial businesses.

These declines were partially offset by launches of product innovations mainly in the Kitchen and Home Fragrance businesses.

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

In 2023, gross profit decreased 17% and gross margin declined to 28.9% as compared with 30.0% in 2022.

The decline in gross margin reflected higher absorption costs associated with a lower sales volume, higher sales promotional activities to reduce elevated inventory levels, inflation, higher restructuring-related charges of approximately $64 million and inventory write-down of $11 million due to regulatory restrictions banning the salability of certain of the Company’s products in certain jurisdictions, partially offset by favorable pricing and gross productivity.

The gross profit decline also reflected the unfavorable impact of the sale of CH&S business in 2022 by approximately $36 million.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $38 million, or 1%.

Notable items, other than the aforementioned, impacting operating income (loss) for 2023 and 2022 are as follows:

Years Ended December 31,

(in millions) 2023 2022 $ Change

Impairment of goodwill and intangible assets (See Footnotes 1 and 7 )

$ 339 $ 474 $ (135)

Restructuring and restructuring-related (See Footnote 4 ) (a)

Transaction costs and other (b)

(a) Restructuring-related costs reported in cost of products sold and SG&A for 2023 were $86 million and $13 million, respectively, and primarily relate to facility closures.

Restructuring-related costs reported in cost of products sold and SG&A for 2022 were $22 million and $2 million, respectively, and primarily relate to facility closures.

Restructuring costs for 2023 and 2022 were $95 million and $15 million, respectively.

(b) Transaction costs and other for 2023 primarily relate to completed divestitures, expenses associated with certain legal proceedings, impairment of other assets and an inventory write-down due to regulatory restrictions banning the salability of certain of the Company’s products in certain jurisdictions.

Transaction costs and other reported in cost of products sold, SG&A and impairment of other assets for 2023 were $20 million, $23 million and $3 million, respectively.

Transaction costs and other for 2022 primarily relate to completed divestitures, expenses associated with certain legal proceedings, an indirect tax reserve for an international entity and an incremental bad debt reserve for an international customer.

Transaction costs and other reported in cost of products sold and SG&A for 2022 were $4 million and $68 million, respectively.

Operating loss in 2023 was $85 million as compared to operating income of $312 million in 2022.

The decline reflects the impact of lower gross profit of $481 million, higher incentive compensation expense of approximately $105 million and higher restructuring and restructuring-related charges, approximately $91 million, primarily in connection with Project Phoenix, the Network Optimization Project and other on-going facility closures.

These factors were partially offset by lower non-cash impairment charges

of approximately $132 million, lower transaction costs and other of approximately $45 million, lower advertising and promotion costs of approximately $16 million, savings from restructuring actions and approximately $15 million of employee retention credit in connection with the CARES Act.

Interest expense, net increased primarily due to higher interest rates, partially offset by higher interest income.

The weighted average interest rates for 2023 and 2022 were approximately 5.2% and 4.3%, respectively.

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

Other (income) expense, net for 2023 and 2022 include the following items:

Years Ended December 31,

(in millions) 2023 2022

Pension settlement costs (See Footnote 11 )

Gain on disposition of businesses (See Footnote 2 )

Foreign exchange losses, net (See Footnote 10 )

Discount on factored receivables and other, net 27 8

The income tax benefit for 2023 was $155 million as compared to a benefit of $40 million in 2022.

The effective tax rate for 2023 was 28.5%, resulting from the combination of pretax book losses and discrete tax benefits of $112 million due to the effects of certain legal entity reorganizations in the U.S.

and Luxembourg and $10 million due to the filing of tax returns in various jurisdictions.

The year ended December 31, 2022 included discrete benefits of $58 million associated with a change in the Company’s indefinite reinvestment assertion regarding certain earnings within its Irish operations, $28 million associated with the reduction in valuation allowance related to the integration of certain Brazilian and Luxembourg operations and $6 million associated with the approval of certain state tax credits, offset by $14 million of income tax expense related to the divestiture of CH&S.

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

Business Segment Operating Results 2023 vs.

Home and Commercial Solutions

Years Ended December 31,

(in millions) 2023 2022 $ Change % Change

Net sales $ 4,428 $ 5,194 $ (766) (14.7)%

Operating income (loss) 37 (212) 249 NM

Operating margin 0.8 % (4.1) %

NM — NOT MEANINGFUL

H&CS net sales for 2023 decreased 15% which reflected softening global demand across all businesses, the sale of the CH&S business at the end of the first quarter of 2022, which unfavorably impacted net sales by approximately 2%, as well as certain category exits and distribution losses, primarily in the Kitchen business, partially offset by pricing actions.

Changes in foreign currency unfavorably impacted net sales by $14 million, or approximately less than 1%.

Operating income for 2023 was $37 million as compared to operating loss of $212 million in 2022.

The improvement in operating results was primarily due to gross productivity, pricing actions, lower non-cash impairment charges (see Footnote 7 of the Notes to Consolidated Financial Statements for further information), approximately $368 million, absence of an indirect tax reserve for an international entity, approximately $24 million, lower advertising and promotional costs, approximately $16 million and bad debt expense arising from an international customer bankruptcy, approximately $8 million, as well as savings from restructuring actions, partially offset by lower gross profit, approximately $157 million, reflecting higher absorption costs associated with lower sales volume, as well as higher restructuring and restructuring-related charges, approximately $54 million, primarily in connection with Project Phoenix.

The sale of CH&S at the end of the first quarter of 2022 also unfavorably impacted the operating results by approximately $12 million.

Operating loss was $138 million as compared to $2 million in the prior year.

The decline in operating results is primarily due to lower gross profit of $116 million, resulting from unfavorable fixed cost leverage associated with lower sales volume, additional tariffs and inflation, partially offset by gross productivity.

The decline in operating results was also

unfavorably impacted by $15 million of higher non-cash impairment charges related to indefinite-lived tradenames (see Footnote 6 of the Notes to Consolidated Financial Statements for further information) and $15 million of higher advertising and promotion costs.

These unfavorable factors were partially offset by savings from restructuring actions related to the Realignment Plan.

Learning and Development

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Operating margin 17.2 % 17.4 %

L&D net sales for 2023 decreased 8%, primarily due to a decline in the Baby business.

The Writing business declined slightly due to soft demand in certain categories, partially offset by pricing actions and innovations.

Pricing actions in the Baby business were more than offset by soft demand in certain categories, as well as lower sales to a customer that declared bankruptcy, which impacted net sales by approximately 5%.

Changes in foreign currency unfavorably impacted net sales by $10 million, or approximately less than 1%.

Operating income for 2023 decreased to $213 million, compared to $593 million in 2022.

The decrease in operating income was primarily due to lower gross profit, approximately $117 million, reflecting higher absorption costs associated with lower sales volume and inflation, higher restructuring and restructuring-related charges of $14 million, primarily in connection with Project Phoenix, and increased advertising and promotion costs of approximately $8 million.

Operating income also decreased due to higher charges for non-cash goodwill impairment of approximately $211 million and additional amortization of acquired intangibles assets, of approximately $7 million (see Footnote 7 of the Notes to Consolidated Financial Statements for further information).

Gross productivity, favorable pricing and savings from restructuring actions partially offset the aforementioned factors.

L&D net sales for 2025 decreased 1%, compared to prior year as soft demand primarily in the Writing business was partially offset by contributions from launches of product innovations in both the Baby and Writing businesses.

Changes in foreign currency favorably impacted net sales by $4 million, or less than 1%.

Operating income for 2025 decreased to $464 million as compared to $473 million in 2024.

The decrease in operating income is primarily due to lower gross profit of $31 million, as gross productivity was more than offset by inflation and impact of tariffs.

The decline in gross profit was partially offset by lower non-cash impairment charge of $20 million, related to an indefinite-lived tradename (see Footnote 6 of the Notes to Consolidated Financial Statements for further information) and savings from restructuring actions primarily related to the Realignment Plan.

Outdoor and Recreation

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Net sales $ 741 $ 794 $ (53) (6.7)%

Operating income (loss) (83) 86 (169) NM

Operating loss (25) (86) 61 70.9%

Operating margin (3.4) % (10.8) %

NM — NOT MEANINGFUL

O&R segment net sales for 2023 decreased 24% reflecting soft global demand and distribution losses, partially offset by pricing actions.

Changes in foreign currency unfavorably impacted net sales by $14 million, or 1%.

Operating loss for 2023 was $83 million as compared to operating income of $86 million in 2022.

The decline was primarily due to lower gross profit of approximately $171 million, caused by unfavorable fixed cost leverage associated with lower sales volume, inflation, higher sales promotional activities to reduce elevated inventory levels and inventory write-down due to regulatory restrictions banning the salability of certain of the Company’s products in certain jurisdictions.

Additionally, during 2023, there was a $22 million non-cash impairment charge related to an indefinite-lived tradename (see Footnote 7 of the Notes to Consolidated Financial Statements for further information), and higher restructuring charges primarily in connection with Project Phoenix of approximately $6 million.

These factors were partially offset by gross productivity, favorable pricing, savings from restructuring actions and lower advertising costs of approximately $7 million.

O&R net sales for 2025 decreased approximately 7% compared to prior year primarily due to net distribution losses, soft demand and business exits.

These declines were partially offset by contribution from launches of product innovation and pricing.

Changes in foreign currency favorably impacted net sales by $2 million, or less than 1%.

Operating loss for 2025 was $25 million as compared to $86 million in 2024.

The improvement was due to higher gross profit of $31 million driven primarily by gross productivity, pricing actions and mix.

Savings from restructuring actions also contributed to the improvement of operating results.

Liquidity and Capital Resources

The Company believes the extent of the impact of the rapidly changing retail and consumer landscape, which reflects an increased focus by retailers to rebalance 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 as well as refinancing certain of its senior notes.

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.

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subsidiaries.

Deferred taxes are recorded for earnings of the Company’s foreign operations that are determined to be not indefinitely reinvested.

Deferred taxes are recorded for earnings of

the Company’s foreign operations that are determined to be not indefinitely reinvested.

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

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Increase (Decrease)

2024 2023 2022 2024 2023

Cash provided by (used in) operating activities $ 496 $ 930 $ (272) $ (434) $ 1,202

Cash provided by (used in) investing activities (151) (199) 343 48 (542)

Cash provided by operating activities $ 264 $ 496 $ (232)

Cash used in investing activities (164) (151) (13)

Cash used in financing activities (101) (451) 350

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Cash Flows from Operating Activities

The change in net cash provided by 2024 operating activities reflects lower year-over year working capital reductions, primarily relating to inventory in 2024 compared to 2023, and higher incentive compensation payments in the current year, partially offset by improved operating results.

The change in net cash provided by operating activities for 2023 primarily reflects a reduction of working capital and lower incentive compensation payments in 2023, partially offset by impact of operating loss and higher restructuring payments.

See Capital Resources for further information.

The change in net cash provided by operating activities for 2025, was primarily driven by lower cash generated from accounts receivable, due to lower net sales and timing of collections, cash impact of additional tariffs and higher cash incentive compensation payments in 2025.

These were partially offset by improvement in inventory levels and timing of vendor payments as well as lower restructuring payments during the year.

Cash Flows from Investing Activities

The change in cash used in investing activities for 2024 was primarily due to lower capital expenditures, as significant projects, primarily related to Project Ovid, were mostly executed during 2023, as well as higher proceeds from settlement of swaps.

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

The change in net cash used in investing activities for 2023 was primarily due to proceeds from the sale of the CH&S business in 2022.

See Footnote 2 of the Notes to Consolidated Financial Statements for further information.

The change in net cash used in investing activities for 2025 primarily reflects lower capital expenditures of $12 million, as the Company continues to streamline its initiatives and higher proceeds from sale of divested businesses and investments, offset by lower proceeds from settlement of swaps.

See Footnote 9 of the Notes to Consolidated Financial Statements for further information on swaps.

Cash Flows from Financing Activities

The change in net cash used in financing activities in 2024 was primarily due to lower quarterly dividend payment in the current year and the period-over-period change in debt.

The change in net cash used in financing activities for 2023 was primarily due to the period-over-period change in debt, a reduction of the quarterly dividend payment in 2023 that commenced with the second quarter payment, and repurchase of shares of the Company’s common stock in the prior year.

See Footnotes 1,9 and 14 of the Notes to Consolidated Financial Statements for further information.

The change in cash used in financing activities was primarily due to higher utilization of the Credit Revolver during the current year.

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

Capital Resources

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Credit Revolver

As of December 31, 2024, the Company is a party to a $1.0 billion Credit Revolver maturing in August 2027.

The Credit Revolver requires compliance with certain financial covenants.

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

The Second Amendment among other things, reduced the commitments of the lenders from $1.5 billion to $1.0 billion, replaced the Company’s existing financial covenants with new financial covenants, required the Company and the Guarantors to guarantee all obligations under the Credit Revolver, and required the Company and the other Guarantors to grant a lien and security interest in certain of its assets.

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’s $1.00 billion Credit Revolver matures 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.

In accordance with the terms of the Credit Revolver, the Total Net Leverage Ratio covenant, is scheduled to decrease as of the last day of the fiscal quarter ending September 30, 2026 and to continue at such level for each fiscal quarter

ending thereafter during the remaining term of the Credit Revolver.

The Company’s ability to continue to comply with the Total Net Leverage Ratio covenant is dependent upon the Company’s future operating and financial performance, which may be affected by economic conditions and other factors beyond our control.

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, absent a waiver of such default by the lenders under the Credit Revolver or an amendment or replacement of the Credit Revolver with alternative financing, potentially subject the Company to cross-default and acceleration provisions in its debt documents, which would have a significant adverse effect on the Company’s business, financial condition and operating results.

While the Company would pursue refinancing the Credit Revolver with a new or amended borrowing facility should such action be necessary, there can be no assurance regarding the availability of such a new or amended facility on terms favorable to the Company or at all.

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 December 31, 2025, there was $852 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 December 31, 2024, the Company had $40 million of outstanding borrowings under the Credit Revolver and approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $925 million.

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

Customer Receivables Purchase Agreement

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

Factored receivables under the Customer Receivables Purchase Agreement at December 31, 2024 were approximately $270 million, an increase of approximately $30 million from December 31, 2023.

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

Under the Receivables Facility, certain of the Company’s subsidiaries continuously sell their accounts receivables, originated in the U.S., to the SPE and the SPE sells the receivables to the financial institution.

At December 31, 2025, the Company had approximately $37 million of outstanding standby letters of credit issued against the Credit Revolver and $130 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $685 million.

Customer Receivable Purchase Agreements

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.

Outstanding receivables sold under the Customer Receivables Purchase Agreement totaled approximately $270 million at both December 31, 2025 and 2024.

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”).

Under the Receivables Facility, certain of the Company’s subsidiaries continuously sell their accounts receivables, originated in the U.S., to the SPE which then sells the receivables to the financial institution.

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

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

The balance of outstanding accounts receivables sold to the financial institution as of December 31, 2024 was approximately $145 million, an increase of approximately $100 million from December 31, 2023.

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

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

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

In November 2024, the Company completed a registered public offering and sale of the Notes and received proceeds of approximately $1.24 billion, net of fees and expenses paid.

The Company used the net proceeds of the offering to fully redeem its outstanding 4.875% senior notes due 2025 and to redeem in part its outstanding 4.200% senior notes due 2026.

The total consideration was approximately $511 million.

The Company also partially redeemed $750 million of the outstanding aggregate amount of the 4.200% senior notes due 2026 at a redemption price of 101.006%.

The total consideration, including accrued unpaid interest to the date of its

redemption was approximately $764 million.

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

In December 2024, the Company repaid the outstanding aggregate principal amount of its 4.000% senior notes, plus accrued and unpaid interest upon maturity for total consideration of $205 million.

In February 2024, Moody’s Corporation (“Moody’s”) and S&P Global Inc.

(“S&P”) downgraded the Company’s senior unsecured debt rating to “Ba3” and “BB-”, respectively.

As a result, the Company’s outstanding senior notes aggregating to approximately $3.1 billion at that time (the “Coupon-Step Notes”) were subject to an interest rate increase of 25 basis points for each downgrade, or 50 basis points in the aggregate.

The change to the interest rate due to the Moody’s and S&P downgrades collectively increased the Company’s interest expense by approximately $16 million on an annualized basis at the time of the downgrades (approximately $12 million in 2024).

The partial redemption of the 4.200% senior notes due 2026 during the fourth quarter of 2024 decreased the aggregate amount of the Coupon-Step Notes to $2.3 billion, resulting in a reduction of the Company’s annualized interest expense impact of the February 2024 Moody’s and S&P downgrades by approximately $4 million, reducing the aggregate annualized impact of the downgrades to approximately $12 million beginning in 2025.

Outstanding receivables sold under the Receivables Facility at December 31, 2025 and 2024 were approximately $125 million and $145 million, 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 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 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 Consolidated Balance Sheets.

In May 2025, 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 $1.23 billion, net of fees and expenses paid.

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

In November 2025, the Company repaid the outstanding principal amount of the 2025 Notes, plus accrued and unpaid interest upon maturity for total consideration of $48 million.

During the second quarter of 2025 Moody’s and S&P downgraded the Company’s senior unsecured debt rating.

As a result, certain of the Company’s outstanding senior notes were subject to interest rate adjustments, taking effect in the fourth quarter of 2025.

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

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The Company does not enter into derivative transactions for trading purposes.

Interest Rate Contracts

The Company manages its fixed and floating rate debt mix using interest rate swaps.

The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest.

Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates.

Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs.

The settlement of interest rate swaps is included in interest expense.

Fair Value Hedges

At December 31, 2024, the Company had approximately $1.0 billion notional amount of interest rate swaps that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

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

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

The swap designated as a fair value hedge associated with the $100 million of principal on the 4.000% senior notes due 2024, matured on December 2024, concurrent with the maturity of the notes.

Cross-Currency Contracts

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

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

During the fourth quarter of 2024, the Company closed two of these cross-currency swaps, ahead of maturities of January 2025 and February 2025, with an aggregate notional amount of $900 million and received total consideration of approximately $27 million.

Also, during the fourth quarter of 2024, the Company entered into three new cross-currency swaps, two maturing in November 2026 and one in November 2028, with an aggregate notional amount of $770 million.

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

dollar interest.

During the third quarter of 2022, the Company entered into two cross-currency swaps with an aggregate notional amount of $1.0 billion, maturing in September 2027 and September 2029.

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

dollar interest.

At December 31, 2024, the Company has cross-currency swaps outstanding with an aggregate notional amount of approximately $2.1 billion.

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

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 accumulated other comprehensive income (loss) until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item.

At December 31, 2024, the Company had approximately $337 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 December 31, 2024, the Company had approximately $1.0 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through June 2025.

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

The following table presents the fair value of derivative financial instruments at December 31, 2024 (in millions):

Derivatives designated as effective hedges:

Cash flow hedges:

Foreign currency contracts $ 8

Fair value hedges:

Interest rate swaps (30)

Net investment hedges:

Cross-currency swaps 27

Derivatives not designated as effective hedges:

Foreign currency contracts 17

See Footnote 9 of the Notes to Consolidated Financial Statements for further information on the Company’s derivative instruments.

Contractual Obligations, Commitments and Off-Balance Sheet Arrangements

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$ 4,718 $ 130 $ 1,752 $ 1,250 $ 1,586

Interest on debt (2)

Interest on debt (b)

2,242 333 581 333 995

Lease obligations (3)

Lease obligations (c)

652 137 212 140 163

Purchase obligations (4)

Purchase obligations (d)

802 589 155 58 —

$ 8,414 $ 1,189 $ 2,700 $ 1,781 $ 2,744

(1) Amounts represent contractual obligations based on the earliest date that the obligation may become due, excluding interest, based on borrowings outstanding as of December 31, 2024.

(a) Amounts represent contractual obligations based on the earliest date that the obligation may become due, excluding interest, based on borrowings outstanding as of December 31, 2025.

For further information relating to these obligations, see Footnote 8 of the Notes to Consolidated Financial Statements .

(2) Amounts represent estimated interest payable on borrowings outstanding as of December 31, 2024, excluding the impact of fixed to floating rate interest rate swaps.

(b) Amounts represent estimated interest payable on borrowings outstanding as of December 31, 2025, excluding the impact of fixed to floating rate interest rate swaps.

Interest on floating-rate debt was estimated using the rate in effect as of December 31, 2025.

For further information, see Footnote 9 of the Notes to Consolidated Financial Statements .

(3) Amounts represent lease liabilities on operating leases as of December 31, 2024.

For further information, see Footnotes 8 and 9 of the Notes to Consolidated Financial Statements .

See Footnote 12 of the Notes to Consolidated Financial Statements .

(4) Primarily consists of purchase commitments with suppliers entered into as of December 31, 2024, for the purchase of materials, packaging and other components and services.

(d) Primarily consists of purchase commitments with suppliers entered into as of December 31, 2025, for the purchase of materials, packaging and other components and services.

These purchase commitment amounts represent only those items which are based on agreements that are legally enforceable and that specify all significant terms including minimum quantity, price and term and do not represent total anticipated purchases.

(5) Total does not include contractual obligations reported as of December 31, 2024 balance sheet as current liabilities, except for the current portion of long-term debt, short-term debt and accrued interest.

(e) Total does not include contractual obligations reported as of December 31, 2025 balance sheet as current liabilities, except for the current portion of long-term debt, short-term debt, accrued interest and current portion of lease liabilities.

The Company also has liabilities for uncertain tax positions and unrecognized tax benefits.

The Company is under audit from time-to-time by the IRS and other taxing authorities, and it is possible that the amount of the liability for uncertain tax positions and unrecognized tax benefits could change in the coming year.

The Company is under audit from time-to-time by the Internal Revenue Service (“IRS”) and other taxing authorities, and it is possible that the amount of the liability for uncertain tax positions and unrecognized tax benefits could change in the coming year.

While it is possible that one or more of these examinations may be resolved in the next year, the Company is not able to reasonably estimate the timing or the amount by which the liability will be settled over time;

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Revenue Recognition

The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied or at a point in time, which generally occurs either on shipment or on delivery based on contractual terms, which is also when control is transferred.

The Company’s primary performance obligation is the sale and distribution of its consumer and commercial products to its customers.

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Certain customers may receive cash and/or non-cash incentives such as cash discounts, returns, credits or reimbursements related to defective products, customer discounts (such as volume or trade discounts), cooperative advertising and other customer-related programs, which are accounted for as variable consideration.

In some cases, the Company applies judgment, including contractual rates and historical payment trends, when estimating variable consideration.

In some cases, the Company applies judgment when estimating variable consideration by evaluating contractual rates and historical payment trends.

In addition, the Company participates in various programs and arrangements with customers designed to increase the sale of products by these customers.

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Under customer programs and arrangements that require sales incentives to be paid in advance, the Company amortizes the amount paid over the period of benefit or contractual sales volume.

When incentives are paid in arrears, the Company accrues the estimated

amount to be paid based on the program’s contractual terms, expected customer performance and/or estimated sales volume.

When incentives are paid in arrears, the Company accrues the estimated amount to be paid based on the program’s contractual terms, expected customer performance and/or estimated sales volume.

These estimates are determined using historical customer experience and other factors, which sometimes require significant judgment.

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During the fourth quarter of 2025, the Company elected to perform a qualitative assessment for the Writing reporting unit and a quantitative assessment for the Commercial and Baby reporting units.

Based on the Company’s qualitative assessment, the Company concluded there were no events or circumstances that rise to a level that would more likely than not reduce the fair value of the reporting unit below the carrying value;

therefore, a quantitative goodwill impairment analysis was not required for the Writing reporting unit.

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assignment of assets and liabilities to reporting units;

and estimation of future cash flows, business growth rates, terminal values, discount rates and total enterprise value.

and estimation of future cash flows (including net sales, gross profit and operating expenses), terminal values, discount rates and total enterprise value.

The income approach used is the discounted cash flow methodology and is based on five-year cash flow projections reflecting the Company’s latest projections which included, among other things, the impact of current and projected financial performance of the reporting unit at the time the Company performed its impairment testing.

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

See Footnotes 1 and 7 of the Notes to Consolidated Financial Statements for further information.

During the fourth quarter of 2025, in conjunction with its annual impairment testing, there were no goodwill impairment charges recorded as a result of the quantitative goodwill assessments.

However, the Commercial reporting unit in the H&CS segment, had a fair value within 10% of its associated carrying value.

The decline in fair value of the Commercial reporting unit resulted primarily from a downward revision of forecasted cash flows and an increase in the reporting unit’s discount rate, primarily due to an increased risk premium applied to enable reconciliation to the Company's total enterprise value, given the decline in the Company’s stock price since the last annual impairment test.

A hypothetical 10% reduction in forecasted earnings before interest, taxes, depreciation and amortization used in the discounted cash flows to estimate the fair value to the Commercial reporting unit would have resulted in an impairment charge of approximately $131 million against its goodwill carrying value of $747 million.

See Footnote 6 of the Notes to Consolidated Financial Statements for further information on the Company's goodwill.

Indefinite-lived intangibles

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macroeconomic conditions, industry and market conditions, and the current and forecasted financial performance.

Company performs a quantitative test when qualitative factors alone are not sufficient to conclude whether it is more likely than not that an indefinite-lived intangible asset is not impaired.

The Company performs a quantitative test when

qualitative factors alone are not sufficient to conclude whether it is more likely than not that an indefinite-lived intangible asset is not impaired.

If the Company performs a quantitative test, an impairment loss will only be recognized for the amount by which the carrying value of the indefinite-lived intangible asset exceeds its fair value, not to exceed the total carrying value of the asset.

During the fourth quarter of 2024, the Company elected to perform qualitative assessments for two indefinite-lived intangible assets in the Learning and Development segment and quantitative assessments for two indefinite-lived intangible assets in the H&CS segment as well as two for the L&D segment.

Based on the Company’s qualitative assessments, the Company concluded there were no events or circumstances that rise to a level that would more likely than not reduce the fair value of those indefinite-lived intangible assets below the carrying value;

therefore, a quantitative impairment analysis was not required for the two indefinite-lived intangible assets in the L&D segment.

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

During the fourth quarter of 2025, the Company elected to perform qualitative assessments for two indefinite-lived intangible assets in the L&D segment and quantitative assessments for two indefinite-lived intangible assets in the H&CS segment as well as two for the L&D segment.

therefore, a quantitative impairment analysis was not required for these two indefinite-lived intangible assets.

The quantitative testing of indefinite-lived intangibles under established guidelines for impairment requires significant use of judgment and assumptions (such as estimation of future cash flows, royalty rates, terminal values and discount rates).

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

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

During the fourth quarter of 2024, in conjunction with its annual impairment testing, the Company recorded non-cash impairment charge of $85 million associated with one tradename in the H&CS segment, as the carrying value exceeded the fair value.

The decline in the fair value of the tradename in the H&CS segment was the result of downward revision of forecasted revenue mainly due to a distribution loss, which the Company was informed of during the fourth quarter of 2024.

A hypothetical 10% reduction in the forecasted revenue and residual (excess) cash flows used in the excess earnings method applied in determining the fair value of the tradename would have resulted in an incremental impairment charge on the H&CS segment of $22 million.

During the third quarter of 2024, the Company concluded that triggering events had occurred for indefinite-lived tradenames in the H&CS and L&D segments, as a result of downward revisions of forecasted cash flows primarily due to lower volume and profitability expectations.

The Company performed quantitative impairment tests and determined that the indefinite-lived tradenames in the H&CS and L&D segments were impaired.

During the third quarter of 2024, the Company recorded non-cash impairment charges of $190 million and $70 million for the indefinite-lived tradenames in the H&CS and in the L&D segments, respectively, as the carrying values exceeded their fair values.

During the fourth quarter of 2024, in conjunction with its annual impairment testing, one tradename in the L&D segment had a fair value within 10% of its associated carrying value of $135 million.

A hypothetical 10% reduction in the forecasted revenue used in the relief from royalty method in determining the fair value of the tradename would have resulted in an impairment charge of $10 million in the L&D segment.

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.

During the fourth quarter of 2025, in conjunction with its annual impairment testing, the Company recorded non-cash impairment charges of $163 million and $127 million associated with two tradenames in the H&CS segment and $50 million associated with one tradename in the L&D segment, as the carrying values exceeded the fair values.

The decline in the fair value of the tradenames in the H&CS and L&D segments resulting in the aforementioned non-cash impairment charges was the result of a downward revision of forecasted cashflows and an increase in the tradenames’ discount rates, primarily due to increased risk premiums applied to enable reconciliation to the Company's total enterprise value, given the decline in the Company’s stock price since the last annual impairment test.

A hypothetical 10% reduction in the forecasted revenue and residual (excess) cash flows used in the excess earnings method applied in determining the fair value of each tradename would have resulted in an incremental non-cash impairment charge in the H&CS segment of $19 million and $9 million, for each tradename.

A hypothetical 10% reduction in the forecasted revenue used in the relief from royalty method in determining the fair value of the tradename would have resulted in an incremental non-cash impairment charge in the L&D segment of $1 million.

There was no resulting non-cash impairment charge with respect to the other tradename in the L&D segment for which a quantitative assessment was performed.

However, this tradename had a fair value within 10% of its associated carrying value of $135 million.

A hypothetical 10% reduction in the forecasted revenue used in the relief from royalty method in determining the fair value of the tradename would have resulted in a non-cash impairment charge of $9 million in the L&D segment.

The Company has experienced headwinds due to soft global demand, announced and/or imposed tariffs on foreign imports into the U.S., and an increased focus by retailers to rebalance inventory levels in light of continued inflationary pressures on consumers.

The Company expects that current market contraction is reflective of a reset of demand levels.

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Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending continue to 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 7 of the Notes to Consolidated Financial Statements for further information associated with non-cash indefinite-lived intangibles impairment charges resulting from its annual test and triggering events during 2024.

See Footnote 6 of the Notes to Consolidated Financial Statements for further information associated with non-cash indefinite-lived intangibles impairment charges resulting from its annual test during 2025.

Other Long-Lived Assets

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For example, if items are favorably resolved or management determines a deferred tax asset is realizable that was previously reserved, the Company will recognize period tax benefits.

Conversely, to the extent tax matters are unfavorably resolved or management determines a valuation allowance is necessary for a tax asset that was not previously reserved, the Company will recognize incremental period tax expense.

Conversely, to the extent tax matters are unfavorably resolved or management determines a valuation

allowance is necessary for a tax asset that was not previously reserved, the Company will recognize incremental period tax expense.

These matters are expected to contribute to the tax rate differing from the statutory rate and continued volatility in the Company’s effective tax rate.

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The investment portfolios contain a diversified blend of equity and fixed-income investments.

Furthermore, equity investments are diversified across geography and market capitalization through investments in U.S.

The equity investments are diversified across geography and market capitalization through investments in U.S.

large-capitalization stocks, U.S.

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For 2025, 2024 and 2023, the actual return on plan assets for the Company’s U.S.

pension plan assets was approximately $14 million, $57 million and loss of $220 million, respectively, versus an expected return on plan assets of approximately $47 million, $52 million and $47 million, respectively.

pension plan assets was approximately $66 million, $14 million and $57 million, respectively, versus an expected return on plan assets of approximately $48 million, $47 million and $52 million, respectively.

The actual amount of future contributions will depend, in part, on long-term actual return on assets and future discount rates.

Pension contributions for all the Company’s pension plans, postretirement benefit obligations, including supplemental executive retirement plans (“SERPs”) for 2025 are estimated to be approximately $20 million, as compared to the 2024 contributions of approximately $23 million.

The weighted average expected return on plan assets assumption for 2024 was approximately 5.4% for all of the Company’s pension plans.

The weighted average discount rate at the 2024 measurement date used to measure the pension plans’ (including SERPs’) benefit obligations and postretirement benefit obligations was approximately 5.1% and 4.9%, respectively.

A 25 basis points decrease in the discount rate at the 2024 measurement date would increase the pension plans’, including postretirement and SERPs projected benefit obligations, by approximately $20 million.

The healthcare cost trend rates used in valuing the Company’s postretirement benefit obligation are established based upon actual healthcare cost trends and consultation with actuaries and benefit providers.

At December 31, 2024, the current weighted average healthcare cost trend rate assumption was approximately 6.3%.

The current healthcare cost trend rate is assumed to gradually decrease through 2038 to an ultimate healthcare cost trend rate of 4.8%.

Pension contributions for all the Company’s pension plans and postretirement benefit obligations for 2026 are estimated to be approximately $8 million, as compared to the 2025 contributions of approximately $3 million.

The weighted average expected return on plan assets assumption for 2025 was approximately 5.7% for the Company’s domestic and international pension plans.

The weighted average discount rate at the 2025 measurement date used to measure the pension plans’ benefit obligations and postretirement benefit obligations was approximately 5.0% and 4.8%, respectively.

A 25 basis points decrease in the discount rate at the 2025 measurement date would increase projected benefit obligations for the pension plans and postretirement plans by approximately $17 million.

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

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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;

• the Company’s ability to improve productivity, reduce complexity and streamline operations;

• 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;

• risks related to the Company’s substantial indebtedness and current leverage profile, ability to refinance upcoming revolver and bond maturities on favorable terms, and 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 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, the Realignment Plan and other restructuring and cost saving initiatives;

• the Company's ability to effectively execute its turnaround plan, including the Productivity 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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• 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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• significant increases in the funding obligations related to the Company’s pension plans;

• other factors listed from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings.

• other factors listed from time to time in our SEC filings, including but not limited to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other filings.

The information contained in this Annual Report on Form 10-K is as of the date indicated.

The Company assumes no obligation to update any forward-looking statements contained in this Annual Report on Form 10-K as a result of new information or future events or developments.

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.

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.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis