What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-23 · 285 added, 269 removed, 1166 unchanged (32% of the section changed)

22 unchanged sentences

Business Segments 70

Business Acquisition 71

Variable Interest Entities and Related Party Transactions

10 unchanged sentences

Selling, general and administrative expenses 856.2 906.4 817.8

Gain on sale of trademarks ( 90.0 ) — —

Impairment of goodwill and intangible assets 428.7 — 222.2

Environmental and other related costs, net of recoveries 33.7 56.4 11.1

Gain on sale of businesses, trademarks and long-lived assets ( 90.4 ) ( 90.0 ) —

Impairment of long-lived assets 185.3 428.7 —

Environmental and other related costs (income), net of recoveries ( 10.4 ) 33.7 56.4

Operating profit (loss) ( 68.2 ) ( 208.4 ) 155.7

7 unchanged sentences

Net earnings (loss) ( 39.2 ) ( 189.1 ) 67.0

net loss attributable to noncontrolling interests ( 0.8 ) ( 1.6 ) ( 1.7 )

net earnings (loss) attributable to noncontrolling interests 0.4 ( 0.8 ) ( 1.6 )

Net earnings (loss) attributable to Wolverine World Wide, Inc.

20 unchanged sentences

Amortization of prior actuarial losses, net of taxes of $( 0.2 ), $ 2.4 and $ 3.0

( 0.5 ) 8.9 10.8

Curtailment gain, net of taxes of $ 0.3 in 2023

Other comprehensive income (loss) ( 8.8 ) ( 34.5 ) 31.7

3 unchanged sentences

Comprehensive income (loss) ( 48.0 ) ( 223.6 ) 98.7

comprehensive loss attributable to noncontrolling interests ( 1.3 ) ( 1.6 ) ( 1.9 )

comprehensive income (loss) attributable to noncontrolling interests 0.9 ( 1.3 ) ( 1.6 )

Comprehensive income (loss) attributable to Wolverine World Wide, Inc.

5 unchanged sentences

(In millions, except share data) December 30,

2022 January 1,

2023 December 31,

Current assets:

60 unchanged sentences

Pension and SERP expense

Debt extinguishment, interest rate swap termination, and other costs — 5.8 5.5

Impairment of goodwill and intangible assets 428.7 — 222.2

Environmental and other related costs, net of cash payments and recoveries received ( 23.0 ) 33.7 31.5

Gain on sale of trademarks ( 90.0 ) — —

Debt extinguishment — — 5.8

Impairment of long-lived assets 185.3 428.7 —

Environmental and other related costs ( 55.1 ) ( 23.0 ) 33.7

Gain on sale of businesses, trademarks and long-lived assets ( 90.4 ) ( 90.0 ) —

( 2.0 ) ( 2.7 ) ( 1.9 )

16 unchanged sentences

Investment in joint ventures

( 2.8 ) — ( 3.5 )

Proceeds from sale of trademarks 90.0 — —

Proceeds from company-owned life insurance policies — — 26.8

Proceeds from sale of businesses, trademarks and long-lived assets 188.9 90.0 —

( 2.7 ) 3.9 ( 2.3 )

5 unchanged sentences

Borrowings of long-term debt

— 750.0 471.0

Payments on long-term debt

2 unchanged sentences

( 0.9 ) — ( 10.4 )

Termination of interest rate swap — — ( 7.3 )

Cash dividends paid

28 unchanged sentences

See accompanying notes to consolidated financial statements.

Cash and cash equivalents at the end of the year in the Consolidated Statements of Cash Flows includes $ 4.0 million of Wolverine Leathers business related cash and cash equivalents that are classified as held for sale as of December 31, 2022 that are not included in cash and cash equivalents in the Consolidated Balance Sheets.

Cash and cash equivalents at the end of the year in the Consolidated Statements of Cash Flows includes $ 5.6 million and $ 4.0 million of cash and cash equivalents that are classified as held for sale as of December 30, 2023 and December 31, 2022, respectively, that are not included in cash and cash equivalents in the Consolidated Balance Sheets.

WOLVERINE WORLD WIDE, INC.

6 unchanged sentences

Loss Treasury Stock Non-controlling Interest Total

Balance at December 28, 2019 $ 108.3 $ 233.4 $ 1,263.3 $ ( 102.1 ) $ ( 736.2 ) $ 11.7 $ 778.4

Net loss ( 136.9 ) ( 1.7 ) ( 138.6 )

Other comprehensive loss ( 28.5 ) ( 0.2 ) ( 28.7 )

Balance at January 2, 2021 $ 110.4 $ 252.6 $ 1,093.3 $ ( 130.6 ) $ ( 764.3 ) $ 11.6 $ 573.0

Net earnings (loss) 68.6 ( 1.6 ) 67.0

Other comprehensive income 31.7 — 31.7

Shares forfeited, net of shares issued under stock incentive plans ( 431,180 shares)

1 unchanged sentence

Shares issued for stock options exercised, net ( 774,145 shares)

0.8 16.4 17.2

Stock-based compensation expense

8 unchanged sentences

Balance at January 1, 2022 $ 111.6 $ 298.9 $ 1,128.2 $ ( 98.9 ) $ ( 810.2 ) $ 14.8 $ 644.4

Net earnings (loss) 68.6 ( 1.6 ) 67.0

Other comprehensive income 31.7 — 31.7

Net loss ( 188.3 ) ( 0.8 ) ( 189.1 )

Other comprehensive loss ( 34.0 ) ( 0.5 ) ( 34.5 )

Shares issues, net of shares forfeited under stock incentive plans ( 495,502 shares)

1 unchanged sentence

Shares issued for stock options exercised, net ( 74,482 shares)

0.8 16.4 17.2

Stock-based compensation expense

4 unchanged sentences

( 81.3 ) ( 81.3 )

Purchases of shares under stock-based compensation plans ( 172,023 shares)

( 6.4 ) ( 6.4 )

Capital contribution from noncontrolling interests 7.0 7.0

Balance at January 1, 2022 $ 111.6 $ 298.9 $ 1,128.2 $ ( 98.9 ) $ ( 810.2 ) $ 14.8 $ 644.4

Other ( 2.1 ) ( 2.1 )

Balance at December 31, 2022 $ 112.2 $ 325.4 $ 907.2 $ ( 132.9 ) $ ( 891.3 ) $ 18.4 $ 339.0

See accompanying notes to consolidated financial statements.

7 unchanged sentences

Loss Treasury Stock Non-controlling Interest Total

Balance at January 1, 2022 $ 111.6 $ 298.9 $ 1,128.2 $ ( 98.9 ) $ ( 810.2 ) $ 14.8 $ 644.4

Net loss ( 188.3 ) ( 0.8 ) ( 189.1 )

Other comprehensive loss ( 34.0 ) ( 0.5 ) ( 34.5 )

Balance at December 31, 2022 $ 112.2 $ 325.4 $ 907.2 $ ( 132.9 ) $ ( 891.3 ) $ 18.4 $ 339.0

Net earnings (loss) ( 39.6 ) 0.4 ( 39.2 )

Other comprehensive income (loss) ( 9.3 ) 0.5 ( 8.8 )

Shares issued, net of shares forfeited under stock incentive plans ( 745,662 shares)

5 unchanged sentences

Issuance of treasury shares ( 9,924 shares)

Purchase of common stock for treasury ( 3,815,164 shares)

( 0.1 ) 0.3 0.2

Capital contribution from noncontrolling interests 30.1 2.1 32.2

Other ( 2.1 ) ( 2.1 )

Balance at December 30, 2023 $ 113.0 $ 364.0 $ 834.8 $ ( 142.2 ) $ ( 891.0 ) $ 21.4 $ 300.0

13 unchanged sentences

The Company’s portfolio of owned and licensed brands includes:

Bates ® , Cat ® , Chaco ® , Harley-Davidson ® , Hush Puppies ® , HYTEST ® , Keds ® , Merrell ® , Saucony ® , Sperry ® , Stride Rite ® , Sweaty Betty ® and Wolverine ® .

Bates ® , Cat ® , Chaco ® , Harley-Davidson ® , Hush Puppies ® , HYTEST ® , Merrell ® , Saucony ® , Sperry ® , Stride Rite ® , Sweaty Betty ® and Wolverine ® .

The Company’s products are marketed worldwide through owned operations, through licensing and distribution arrangements with third parties, and through joint ventures.

The Company also operates retail stores and eCommerce sites to market both its own brands and branded footwear and apparel from other manufacturers, and has a leathers division that markets Wolverine Performance Leathers™ .

On June 30, 2022, the Company sold the Champion trademarks for footwear in the United States and Canada to HanesBrand Inc.

for $ 90.0 million in cash.

The Company recorded a gain of $ 90.0 million associated with the transaction.

On August 2, 2021, the Company completed the acquisition of Lady of Leisure InvestCo Limited (the “Acquired Company”) for $ 417.4 million, net of acquired cash of $ 7.4 million.

The Acquired Company owns the Sweaty Betty ® brand and activewear business, a premium women’s activewear brand.

The Company also operates retail stores and eCommerce sites to market both its own brands and branded footwear and apparel from other manufacturers.

Effective February 4, 2023, the Company completed the sale of the Keds ® business.

See Note 20 for further discussion.

In the third quarter of fiscal 2023, the Company entered into a multi-year licensing agreement of the Hush Puppies ® brand in the United States and Canada.

As part of this agreement, the Company agreed to sell inventory and provide certain transition services to the licensee.

In addition, the Company completed the sale of Hush Puppies ® trademarks, patents, copyrights, and domains in China, Hong Kong, and Macau in the third quarter of fiscal 2023.

The Company will continue to own the Hush Puppies ® brand throughout the rest of the world.

See Note 20 for further discussion.

Effective August 23, 2023, the Company completed the sale of the U.S.

performance leathers business and effective December 28, 2023, the Company completed the sale of the Asia-based performance leathers business.

See Note 20 for further discussion.

Principles of Consolidation and Basis of Presentation

2 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

During the fourth quarter of 2022, the Company announced changes to its reportable segments as a result of changes in how its Chief Operating Decision Maker, the Company's Chief Executive Officer, allocates resources to and assess performance of the Company's operating segments.

All prior period disclosures have been retrospectively adjusted to reflect the new reportable segments.

The Company’s fiscal year is the 52- or 53-week period that ends on the Saturday nearest to December 31.

Fiscal years 2022 and 2021 each had 52 weeks, and fiscal year 2020 had 53 weeks.

Fiscal years 2023, 2022 and 2021 each had 52 weeks.

Use of Estimates

12 unchanged sentences

Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Shipping and handling costs that are charged to and reimbursed by a customer are recognized as revenue, while the related expenses incurred by the Company are recorded as cost of goods sold.

Shipping and handling costs that are charged to and reimbursed by a customer are recognized as revenue, while the related

expenses incurred by the Company are recorded as cost of goods sold.

The Company has elected the practical expedient to treat shipping and handling activities that occur after control of the goods transfers to the customer as fulfillment activities.

10 unchanged sentences

Advertising expenses were $ 169.3 million, $ 220.7 million and $ 195.4 million for fiscal years 2023, 2022 and 2021, respectively.

Prepaid advertising totaled $ 2.7 million and $ 3.6 million as of December 31, 2022 and January 1, 2022, respectively.

Prepaid advertising totaled $ 2.6 million and $ 2.7 million as of December 30, 2023 and December 31, 2022, respectively.

Earnings Per Share

21 unchanged sentences

Property, plant and equipment are stated on the basis of cost and include expenditures for buildings, leasehold improvements, furniture and fixtures, material handling systems, equipment and computer hardware and software.

Normal repairs and maintenance are expensed as incurred.

Normal repairs and

maintenance are expensed as incurred.

Depreciation of property, plant and equipment is computed using the straight-line method.

33 unchanged sentences

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to impairment tests at least annually.

The Company reviews the carrying

amounts of goodwill and indefinite-lived intangible assets by reporting unit at least annually, or when indicators of impairment are present, to determine if such assets may be impaired.

The Company includes assumptions such as a discount rate and expected future operating performance, which includes forecasted revenue growth, earnings before interest, taxes, depreciation and amortization ("EBITDA") margin and cost of capital, which are derived from internal projections and operating plans, as part of a discounted cash flow analysis to estimate fair value.

The Company reviews the carrying amounts of goodwill and indefinite-lived intangible assets by reporting unit at least annually, or when indicators of impairment are present, to determine if such assets may be impaired.

part of a discounted cash flow analysis to estimate fair value.

If the carrying value of these assets is not recoverable, based on the discounted cash flow analysis, management compares the fair value of the assets to the carrying value.

8 unchanged sentences

If such assets are considered to be impaired, the impairment amount to be recognized is the amount by which the carrying value of the assets exceeds their fair value.

The Company recorded $ 37.3 million in non-cash impairment charges on certain Corporate U.S.

office long-lived property, plant and equipment and right-of-use assets, primarily resulting from divestitures and consolidation of U.S.

offices, to adjust the carrying amount of the assets to estimated fair value.

Fair value was estimated based on the discounted cash flows of estimated rental income from subleases net of estimated expenses.

The Company incurred $ 1.9 million in non-cash impairment charges on certain Sperry ® retail store assets where the estimated future cash flows did not support the net book value of the assets.

The following table provides details related to asset impairment charges recorded during 2023:

(In millions) December 30,

Lease right-of-use assets impairment $ 28.6

Property, plant and equipment impairment 10.6

Indefinite-lived trade name impairment (1)

Held for sale impairment of carrying value (2)

Impairment of Sperry ® assets not sold (2)

Total impairment of long-lived assets $ 185.3

(1) See Note 4 for information related to the Indefinite-lived trade name impairment recorded in fiscal 2023.

(2) See Note 20 for information related to the held for sale carrying value impairment and impairment of Sperry ® assets not sold recorded in fiscal 2023.

Fair Value of Financial Instruments

7 unchanged sentences

The costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies.

Liabilities for estimated costs of environmental remediation are based primarily upon third-party environmental studies, other internal analysis and the extent of the contamination and the nature of required remedial actions at each site.

Liabilities for estimated costs of environmental remediation are based primarily upon third-party environmental studies, other internal analysis and the extent of the contamination and the nature of

required remedial actions at each site.

The Company records adjustments to the estimated costs if there are changes in the scope of the required remediation activity, extent of contamination, governmental regulations or remediation technologies.

42 unchanged sentences

For intangible assets acquired in a business combination, the Company typically uses the income method.

Significant estimates used in valuing certain intangible

assets include, but are not limited to, the amount and timing of future cash flows, growth rates and discount rates, among other items.

Significant estimates used in valuing certain intangible assets include, but are not limited to, the amount and timing of future cash flows, growth rates and discount rates, among other items.

If the actual results differ from the estimates and judgments used, the amounts recorded in the Consolidated Financial Statements may be exposed to potential impairment of the intangible assets and goodwill as discussed in the "Goodwill and Indefinite-Lived Intangibles" accounting policy.

For further discussion, refer to Note 19.

NEW ACCOUNTING STANDARDS

The FASB has issued the following Accounting Standards Update (“ASU”) that the Company has not yet adopted.

The FASB has issued the following Accounting Standards Update (“ASU”) that the Company has adopted.

The following is a summary of the new standard.

Standard Description Effect on the Financial Statements or Other Significant Matters

Standard Description Effect on the Financial Statements

ASU 2020-04, Reference Rate Reform (Topic 848);

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (as amended by ASU 2021-01 and ASU 2022-06) Provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued.

This guidance is applicable for the Company’s borrowing instruments under the amended senior credit facility, which use LIBOR as a reference rate, and is available for adoption effective immediately.

but was previously only available through December 31, 2022.

In December 2022, in ASU 2022-06, the FASB deferred the expiration date and extended the relief in Topic 848 beyond the cessation date of USD LIBOR.

The new accounting rules must be adopted by December 31, 2024.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (as amended by ASU 2021-01 and ASU 2022-06).

Provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued.

The Company adopted ASU 2020-04 during the second quarter of 2023 on a prospective basis.

The Company amended its amended senior credit facility to use SOFR as an alternative to LIBOR.

The adoption of the ASU did not have a material effect on the consolidated financial statements.

The FASB has issued the following Accounting Standards Updates (“ASU”) that the Company has not yet adopted.

The following is a summary of the new standard and anticipated impact of adopting these new standards.

Standard Description Effect on the Financial Statements

ASU 2023-07, Improvements to Reportable Segment Disclosures Requires entities disclose on an annual and interim basis significant segment expense, including an amount and composition description for other segment items, and how reported measures of profit or loss are used by the chief operating decision maker in assessing segment performance and deciding how to allocate resources.

The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of the new standard on its Consolidated Financial Statements.

ASU 2023-09, Improvements to Income Tax Disclosures The ASU requires annual disclosures of prescribed standard categories for the components of the effective tax rate reconciliation, disclosure of income taxes paid disaggregated by jurisdiction, and other income-tax related disclosures.

The ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years after December 15, 2024.

The Company is evaluating the impact of the new standard on its Consolidated Financial Statements.

EARNINGS PER SHARE

9 unchanged sentences

Adjustment for unvested restricted common stock

— ( 0.1 ) ( 0.8 )

Shares used to calculate basic earnings per share

7 unchanged sentences

For fiscal years 2023, 2022 and 2021, 2,022,676 , 1,434,081 and 605,774 outstanding stock options, respectively, have not been included in the denominator for the computation of diluted earnings per share because they were anti-dilutive.

The Company has 2,000,000 authorized shares of $ 1 par value preferred stock, none of which was issued or outstanding as of December 31, 2022 or January 1, 2022.

The Company has 2,000,000 authorized shares of $ 1 par value preferred stock, none of which was issued or outstanding as of December 30, 2023 or December 31, 2022.

The Company has designated 150,000 shares of preferred stock as Series A junior participating preferred stock and 500,000 shares of preferred stock as Series B junior participating preferred stock for possible future issuance.

The Company repurchased $ 81.3 million, $ 39.6 million and $ 21.0 million of Company common stock in fiscal years 2022, 2021 and 2020, respectively, under stock repurchase plans.

The Company did not repurchase Company common stock in fiscal year 2023, The Company repurchased $ 81.3 million and $ 39.6 million of Company common stock in fiscal years 2022 and 2021, respectively, under stock repurchase plans.

In addition to the stock repurchase program activity, the Company acquired $ 5.8 million, $ 7.7 million and $ 14.1 million of Company common stock in fiscal years 2023, 2022 and 2021, respectively, in connection with employee transactions related to stock incentive plans.

On February 11, 2019, the Company's Board of Directors approved a common stock repurchase program that authorizes the repurchase of an additional $ 400.0 million of common stock over a four year period incremental to amounts remaining under the previous repurchase program.

The annual amount of stock repurchases is restricted under the terms of the Company's Credit Agreement.

The annual amount of stock repurchases is restricted under the terms of the Company's Senior Credit Facilities and senior notes indenture.

The common stock repurchase program expired on September 11, 2023.

GOODWILL AND OTHER INTANGIBLE ASSETS

2 unchanged sentences

Goodwill balance at beginning of the year $ 485.0 $ 556.6

Acquisition of a business (see Note 19) — 118.9

Sale of a business (see Note 20) ( 20.4 ) —

Impairment — ( 48.4 )

Reclassified to assets held for sale (1)

Foreign currency translation effects 5.5 ( 23.2 )

Goodwill balance at end of the year $ 427.1 $ 485.0

In the fourth quarter of fiscal 2022, after completion of its annual impairment testing, the Company recognized a $ 48.4 million goodwill impairment charge to the Sweaty Betty ® reporting unit.

The impairment was due to an increase in the discount rates used in the valuation.

The Company did not recognize any goodwill impairment charges during fiscal years 2021 and 2020.

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $ 274.0 million and $ 718.1 million as of December 31, 2022 and January 1, 2022, respectively.

(1) Represents goodwill associated with the Sperry ® business classified as held for sale as of fiscal 2023, refer to Note 20.

The Company performs its annual testing for goodwill and indefinite-lived intangible asset impairment at the beginning of the fourth quarter of the fiscal year for all reporting units.

In the fourth quarter of 2022, after completion of the annual impairment testing, the Company recorded a $ 48.4 million impairment charge for Sweaty Betty ® goodwill.

The Company did not recognize

any impairment charges for goodwill during 2023 and 2021.

For the Sweaty Betty ® reporting unit included in the fiscal 2023 annual impairment test, the estimated fair value of the reporting unit exceeded the carrying value of by 5 %.

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $ 174.1 million and $ 274.0 million as of December 30, 2023 and December 31, 2022, respectively.

In the third quarter of 2023, due to the continued lower current year performance of the Sperry ® brand, the Company determined that a triggering event had occurred requiring impairment testing of the Sperry ® trade name.

Based on the results of the impairment testing, the Company recognized impairment charges of $ 38.3 million to the Sperry ® trade name.

The impairment charge was due to reductions in future cash flow assumptions mainly due to decreases in anticipated future performance and an increase in the discount rate used in the valuation.

In the fourth quarter of fiscal 2022, after the completion of the annual impairment testing, the Company recognized impairment charges of $ 191.0 million and $ 189.3 million to the Sperry ® and Sweaty Betty ® trade names, respectively.

The impairment charge for the Sperry ® trade name was due to reductions in future cash flow assumptions mainly due to decreases in anticipated future performance and an increase in the discount rate used in the valuation.

The impairment charge for the Sweaty Betty ® trade name resulted from reductions in future cash flow assumptions due to an increase in the discount rate used in the valuation.

In the fourth quarter of fiscal 2020, after the completion of the annual impairment testing, the Company recognized a $ 222.2 million impairment charge for the Sperry ® trade name.

The Sperry ® and Sweaty Betty ® trade names were valued using the income approach, specifically the multi-period excess earnings method.

The Sweaty Betty ® reporting unit fair value was estimated using both income-based and market-based valuation methods.

T he key assumptions used in the valuations were revenue growth, EBITDA margin, and the discount rate.

The key assumptions used in the valuation being revenue growth, EBITDA margin, and the discount rate.

Although the Company believes the estimates and assumptions used in the valuation were appropriate, it is possible assumptions could change in future periods.

The risk of future impairment to the Sperry ® and Sweaty Betty ® trade names and Sweaty Betty ® goodwill depend on key assumptions used in the determination of the trade name's and Sweaty Betty ® reporting unit's fair value, such as revenue growth, EBITDA margin, discount rate, and assumed tax rate, or macroeconomic conditions that could adversely affect the value of the Company's Sperry ® and Sweaty Betty ® trade names and Sweaty Betty ® reporting unit.

A future impairment charge of the Sperry ® trade name or Sweaty Betty ® trade name and Sweaty Betty ® reporting unit goodwill could have an adverse material effect on the Company's consolidated financial results.

The carrying value of the Company’s Sperry ® and Sweaty Betty ® trade names indefinite-lived intangible assets was $ 105.3 million and $ 94.1 million, respectively, as of December 31, 2022.

The risk of future impairment to the Sweaty Betty ® trade name and Sweaty Betty ® goodwill depend on key assumptions used in the determination of the trade name's and reporting unit's fair value, such as revenue growth, earnings before interest, taxes, depreciation and amortization margin, discount rate, and assumed tax rate, or if macroeconomic conditions deteriorate and adversely affect the values of the Company's Sweaty Betty ® trade name and the Sweaty Betty ® reporting unit.

A future impairment charge of the Sweaty Betty ® trade name and the Sweaty Betty ® reporting unit goodwill could have an adverse material effect on the Company's consolidated financial results The carrying value of the Company’s Sweaty Betty ® trade name indefinite-lived intangible asset and the Sweaty Betty ® reporting unit goodwill were $ 99.5 million and $ 53.0 million, respectively, as of December 30, 2023.

Amortizable intangible assets are amortized using the straight-line method over their estimated useful lives.

7 unchanged sentences

Total $ 80.9 $ 46.0 $ 34.9

January 1, 2022

December 31, 2022

(In millions) Gross carrying

18 unchanged sentences

Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows at the time of collection.

Total receivables sold under the RPA were $ 218.2 million and total cash collections under the RPA were $ 75.5 million in fiscal year 2022.

Total receivables sold under the RPA were $ 613.9 million and $ 218.2 million in fiscal years 2023 and 2022, and total cash collections under the RPA were $ 662.7 million and $ 75.5 million in fiscal years 2023 and 2022.

The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded.

As of the fiscal year ended December 31, 2022, the amount sold to the Purchasers was $ 142.7 million, which was derecognized from the Consolidated Balance Sheets.

As collateral against sold receivables, Rockford ARS maintains a certain level of unsold receivables, which was $ 70.0 million as of the fiscal year ended December 31, 2022.

As of the fiscal years ended December 30, 2023 and December 31, 2022, the amount sold to the Purchasers was $ 93.9 million and $ 142.7 million respectively, which was derecognized from the Consolidated Balance Sheets.

As collateral against sold receivables, Rockford ARS maintains a certain level of unsold receivables, which was $ 62.3 million and $ 70.0 million as of the fiscal years ended December 30, 2023 and December 31, 2022 respectively.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition and Performance Obligations

The Company provides disaggregated revenue for the wholesale and direct-to-consumer sales channels, which are reconciled to the Company’s reportable segments.

The wholesale channel includes royalty revenues, which operates in a similar manner as

other wholesale revenues due to similar oversight and management, customer base, the performance obligation (footwear and apparel goods) and point in time completion of the performance obligation.

The Company reports disaggregated revenue for the wholesale and direct-to-consumer sales channels, which are reconciled to the Company’s reportable segments.

The wholesale channel includes royalty revenues, which operates in a similar manner as other wholesale revenues due to similar oversight and management, customer base, the performance obligation (footwear and apparel goods) and point in time completion of the performance obligation.

(in millions) 2023 2022 2021

6 unchanged sentences

Total 480.6 590.5 548.8

Lifestyle Group:

Wholesale 232.8 374.4 369.2

1 unchanged sentence

Total 323.2 524.1 546.5

Wholesale 70.4 63.6 45.3

Direct-to-consumer 6.2 5.9 4.1

Total 76.6 69.5 49.4

Total revenue $ 2,242.9 $ 2,684.8 $ 2,414.9

11 unchanged sentences

(In millions) December 30,

2022 January 1,

2023 December 31,

Product returns reserve $ 13.1 $ 15.3

11 unchanged sentences

The estimated cost of inventory for product returns is recorded in prepaid expenses and other current assets on the consolidated balance sheets.

The estimated cost of inventory for product returns was $ 6.7 million and $ 6.1 million at December 31, 2022 and January 1, 2022, respectively.

The estimated cost of inventory for product returns was $ 6.1 million and $ 6.7 million at December 30, 2023 and December 31, 2022, respectively.

Customer Markdowns

11 unchanged sentences

Customer advances are recognized in other accrued liabilities on the consolidated balance sheets.

The Company used the LIFO method to value inventories of $ 109.8 million and $ 42.0 million at December 31, 2022 and January 1, 2022, respectively.

The Company used the LIFO method to value inventories of $ 88.8 million and $ 109.8 million at December 30, 2023 and December 31, 2022, respectively.

During fiscal years 2023 and 2022, changes in the LIFO reserve increased cost of goods sold by $ 1.3 million and $ 3.0 million, respectively.

If the FIFO method had been used, inventories would have been $ 11.0 million and $ 8.0 million higher than reported at December 31, 2022 and January 1, 2022, respectively.

If the FIFO method had been used, inventories would have been $ 12.3 million and $ 11.0 million higher than reported at December 30, 2023 and December 31, 2022, respectively.

Total debt consists of the following obligations:

(In millions) December 30,

2022 January 1,

2023 December 31,

Term Facility, due October 21, 2026 $ 71.7 $ 190.0

3 unchanged sentences

Total debt $ 920.8 $ 1,158.0

On October 21, 2021, the Company entered into a 2021 Replacement Facility Amendment and Reaffirmation Agreement (the “Amendment”) of its credit facility (as amended and restated, the "Credit Agreement").

The Amendment amended and restated the prior credit agreement to, among other things:

(i) provide for a term loan A facility (the “Term Facility”) in an aggregate principal amount of $ 200.0 million, which replaced the existing term loan A;

(ii) provide for an increased revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”) with total commitments of $ 1.0 billion, an increase of $ 200.0 million from the existing Revolving Facility;

and (iii) set the LIBOR floor to 0.000 %, a

decrease of 0.750% from the existing Senior Credit Facilities.

The maturity date of the loans under the Senior Credit Facilities was extended to October 21, 2026.

The Amendment provides for a debt capacity of up to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt) not to exceed $ 2.0 billion unless certain specified conditions set forth in the Credit Agreement are met.

The Company’s Credit Agreement provides for a term loan A facility (the “Term Facility”) and for a revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”).

The maturity date of the loans under the Senior Credit Facilities is October 21, 2026.

The Credit Agreement provides for a debt capacity of up to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt) not to exceed $ 2.0 billion unless certain specified conditions set forth in the Credit Agreement are met.

The Term Facility requires quarterly principal payments with a balloon payment due on October 21, 2026.

The scheduled principal payments due under the Term Facility over the next 12 months total $ 10.0 million as of December 30, 2023 and are recorded as current maturities of long-term debt on the consolidated balance sheets.

In addition, the Company made payments towards the Term Facility in accordance with disposition proceeds language contained in the Credit Agreement.

The Revolving Facility allows the Company to borrow up to an aggregate amount of $ 1.0 billion.

The Revolving Facility also includes a $ 100.0 million swingline subfacility and a $ 50.0 million letter of credit subfacility.

The Company had outstanding letters of credit under the Revolving Facility of $ 5.7 million and $ 5.8 million as of December 31, 2022 and January 1, 2022, respectively.

The Company had outstanding letters of credit under the Revolving Facility of $ 6.6 million and $ 5.7 million as of December 30, 2023 and December 31, 2022, respectively.

These outstanding letters of credit reduce the borrowing capacity under the Revolving Facility.

13 unchanged sentences

As of December 30, 2023, the Company was in compliance with all covenants and performance ratios under the Senior Credit Facilities.

On August 26, 2021, the Company issued $ 550.0 million aggregate principal debt amount of 4.000 % senior notes due on August 15, 2029.

Related interest payments are due semi-annually beginning February 15, 2022.

On June 30, 2023, the Company entered into the Fourth Amendment (the “Fourth Amendment”) to its Credit Agreement, dated as of July 31, 2012.

The Fourth Amendment provided the Company with near-term financial flexibility by adjusting the maximum Consolidated Leverage Ratio allowed under the Credit Agreement through the end of fiscal 2023.

Financial covenant thresholds will revert to pre-existing levels in the first quarter of fiscal 2024.

On December 21, 2023, the Company entered into the Fifth amendment (the "Fifth Amendment") to its Credit Agreement, dated as of July 31, 2012.

The Fifth Amendment provides the Company with additional allowable disposition capacity in fiscal 2023 and fiscal 2024 to support the Company's transformation.

The Company's $ 550.0 million 4.000 % senior notes issued on August 26, 2021 are due on August 15, 2029.

Related interest payments are due semi-annually.

The senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries.

The proceeds from the senior notes were used to extinguish the Company’s $ 250.0 million senior notes due on September 1, 2026 and $ 300.0 million senior notes due on May 15, 2025.

The Company incurred $ 34.0 million of debt extinguishment and other costs in connection with the extinguishment of the senior notes, of which $ 28.4 million is related to redemption premiums and $ 5.6 million is related to the write-off of capitalized financing fees.

The Company has a foreign revolving credit facility with aggregate available borrowing s of $ 2.0 million that are un committed and, therefore, each borrowing against the facility is subject to approval by the lender.

There were no borrowings against this facility as of December 31, 2022 and January 1, 2022.

There were no borrowings against this facility as of December 30, 2023 and December 31, 2022.

The Company included in interest expense the amortization of deferred financing costs of $ 2.2 million, $ 2.0 million, and $ 2.3 million in fiscal years 2023, 2022 and 2021, respectively.

6 unchanged sentences

(In millions) December 30,

2022 January 1, 2022

2023 December 31, 2022

Land $ 0.6 $ 3.9

29 unchanged sentences

dollar inventory purchases made by non-U.S.

wholesale operations in the normal course of

These foreign currency forward exchange hedge contracts extended out to a maximum of 524 days and 538 days as of December 31, 2022 and January 1, 2022, respectively.

wholesale operations in the normal course of business.

These foreign currency forward exchange hedge contracts extended out to a maximum of 531 days and 524 days as of December 30, 2023 and December 31, 2022, respectively.

If, in the future, the foreign exchange contracts are determined not to be highly effective or are terminated before their contractual termination dates, the Company would remove the hedge designation from those contracts and reclassify into earnings the unrealized gains or losses that would otherwise be included in accumulated other comprehensive income (loss) within stockholders’ equity.

During fiscal 2020, the Company reclassified $ 0.6 million to other income for foreign currency derivatives that were no longer deemed highly effective.

The Company also utilizes foreign currency forward exchange contracts that are not designated as hedging instruments to manage foreign currency transaction exposure.

7 unchanged sentences

The Company also assessed at the inception of the hedge, and continues to assess on an ongoing basis, whether the derivative used in the hedging transaction is highly effective in offsetting changes in the cash flows of the hedged item.

The Company had a cross currency swap to minimize the impact of exchange rate fluctuations which matured on September 1, 2021 .

Changes in fair value related to movements in the foreign currency exchange spot rate were recorded in accumulated other comprehensive income (loss), offsetting the currency translation adjustment related to the underlying net investment that was also recorded in accumulated other comprehensive income (loss).

All other changes in fair value were recorded in interest expense.

The notional amounts of the Company’s derivative instruments are as follows:

(Dollars in millions) December 30,

2022 January 1,

2023 December 31,

Foreign exchange hedge contracts $ 269.0 $ 334.2

2 unchanged sentences

(In millions) December 30,

2022 January 1,

2023 December 31,

Financial assets:

3 unchanged sentences

Foreign exchange hedge contracts $ ( 5.1 ) $ ( 1.3 )

Interest rate swap — ( 0.1 )

Foreign exchange hedge contract financial assets are recorded to prepaid expenses and other current assets and financial liabilities are recorded to other accrued liabilities on the consolidated balance sheets.

4 unchanged sentences

Each stock option or stock appreciation right granted counts as 1.0 stock incentive unit.

Stock options

granted under the Stock Plan have an exercise price equal to the fair market value of the underlying stock on the grant date, expire no later than ten years from the grant date and generally vest over three years .

Stock options granted under the Stock Plan have an exercise price equal to the fair market value of the underlying stock on the grant date, expire no later than ten years from the grant date and generally vest over three years .

All other awards granted, including Restricted Awards and Performance Awards, count as 2.6 stock incentive units for each share, restricted share or restricted stock unit granted.

Restricted Awards issued under the Stock Plan are subject to certain restrictions, including a prohibition against any sale, transfer or other disposition by the officer or employee during the vesting period (except for certain transfers for estate planning purposes for certain officers), and a requirement to forfeit all or a certain portion of the award upon certain terminations of employment.

These restrictions typically lapse over a three - to four- year period from the date of the award.

These restrictions typically lapse over a three-year period from the date of the award.

The Company has elected to recognize expense for these stock-based incentive plans ratably over the vesting term on a straight-line basis.

11 unchanged sentences

Awards Weighted-

Unvested at December 28, 2019 1,618,916 $ 27.36 1,127,102 $ 31.94

Unvested at January 2, 2021 1,644,017 $ 26.39 1,005,322 $ 35.25

Granted 654,898 34.64 630,996 38.02

5 unchanged sentences

Forfeited ( 219,530 ) 30.05 ( 83,724 ) 27.31

Unvested at January 1, 2022 1,208,000 $ 33.62 764,415 $ 35.69

Unvested at December 31, 2022 1,516,478 $ 28.95 774,654 $ 34.14

Granted 1,678,585 13.66 686,294 14.82

4 unchanged sentences

The total fair value of Restricted Awards vested during the year ended December 30, 2023 was $ 11.1 million.

As of January 1, 2022, there was $ 19.8 million of unrecognized compensation expense related to unvested Restricted Awards, which was expected to be recognized over a weighted-average period of 1.6 years.

The total fair value of Restricted Awards vested during the year ended January 1, 2022 was $ 34.8 million.

As of December 31, 2022, there was $ 19.4 million of unrecognized compensation expense related to unvested Restricted Awards, which was expected to be recognized over a weighted-average period of 1.6 years.

The total fair value of Restricted Awards vested during the year ended December 31, 2022 was $ 10.9 million.

2 unchanged sentences

The total fair value of Performance Awards vested during the year ended December 30, 2023 was $ 5.7 million.

As of January 1, 2022, there was $ 16.1 million of unrecognized compensation expense related to unvested Performance Awards, which was expected to be recognized over a weighted-average period of 1.4 years.

The total fair value of Performance Aw ards vested during the year ended January 1, 2022 was $ 6.2 million.

As of December 31, 2022, there was $ 10.8 million of unrecognized compensation expense related to unvested Performance Awards, which was expected to be recognized over a weighted-average period of 1.6 years.

The total fair value of Performance Aw ards vested during the year ended December 31, 2022 was $ 9.3 million.

7 unchanged sentences

(In millions)

Outstanding at December 28, 2019 4,033,107 $ 21.41 4.4 $ 49.8

Outstanding at January 2, 2021 3,259,405 $ 22.22 3.9 $ 29.7

Granted 23,610 34.22

5 unchanged sentences

Canceled ( 101,091 ) 22.57

Outstanding at January 1, 2022 2,488,812 $ 22.29 3.2 $ 16.7

Granted 20,171 25.19

Outstanding at December 31, 2022 2,333,410 $ 22.43 2.4 $ —

Exercised ( 6,042 ) 16.51

4 unchanged sentences

The total pretax intrinsic value of stock options exercised during fiscal years 2023, 2022 and 2021 was $ 0.0 million, $ 0.4 million and $ 11.4 million, respectively.

As of December 31, 2022, there was $ 0.1 million of unrecognized compensation expense related to stock option grants expected to be recognized over a weighted-average period of 0.9 years.

As of January 1, 2022 and January 2, 2021, there was $ 0.2 million and $ 0.1 million, respectively, of unrecognized compensation expense related to stock option awards expected to be recognized over a weighted-average period of 1.3 years and 0.9 years, respectively.

There was no unrecognized compensation expense related to stock option grants as of December 30, 2023.

As of December 31, 2022 and January 1, 2022, there was $ 0.1 million and $ 0.2 million, respectively, of unrecognized compensation expense related to stock option awards expected to be recognized over a weighted-average period of 0.9 years and 1.3 years, respectively.

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the Company’s closing stock price as of each fiscal year end, which would have been received by the option holders had all option holders exercised options, where the market price o f the Company's stock was above the strike price ("in-the-money"), as of that date.

There were no in-the-money options exercisable as of December 31, 2022, based on the Company’s closing stock price of $ 10.93 per share .

As of January 1, 2022, 2,247,575 outstanding options were exercisable and in-the-money, with a weighted-average exercise price of $ 21.70 per share.

There were no in-the-money options exercisable as of December 30, 2023 and December 31, 2022.

The Company’s closing stock price was $ 8.89 per share as of December 30, 2023 and $ 10.93 per share as of December 31, 2022.

RETIREMENT PLANS

5 unchanged sentences

The Company also has individual deferred compensation agreements with certain former employees that entitle those employees to receive payments from the Company following retirement, generally for the duration of their lives.

The Company maintains life insurance policies with a cash surrender value of $ 46.6 million at December 31, 2022 and $ 45.6 million at January 1, 2022 recognized as other assets on the consolidated balance sheets that are intended to partially fund deferred compensation benefits under the SERP and deferred compensation agreements.

The Company maintains life insurance policies with a cash surrender value of $ 48.3 million at December 30, 2023 and $ 46.6 million at December 31, 2022 recognized as other assets on the consolidated balance sheets that are intended to partially fund deferred compensation benefits under the SERP and deferred compensation agreements.

The Company has two defined contribution 401(k) plans covering substantially all domestic employees that provide for discretionary Company contributions based on the amount of participant deferrals.

4 unchanged sentences

The Company also has a benefit plan at a foreign location that provides for retirement benefits based on years of service.

The obligation recorded under this plan was $ 0.8 million at December 31, 2022 and $ 1.0 million at January 1, 2022 and was recognized as a deferred compensation liability on the consolidated balance sheets.

The obligation recorded under this plan was $ 0.6 million at December 30, 2023 and $ 0.8 million at December 31, 2022 and was recognized as a deferred compensation liability on the consolidated balance sheets.

The following summarizes the status of and changes in the Company’s assets and related obligations for its pension plans (which include the Company’s defined benefit pension plans and the SERP) for the fiscal years 2023 and 2022:

5 unchanged sentences

Interest cost on projected benefit obligations

Actuarial gains ( 107.8 ) ( 26.6 )

Actuarial loss (gain) 15.7 ( 107.8 )

Benefits paid to plan participants

17 unchanged sentences

Accrued pension liabilities ( 78.4 ) ( 72.9 )

Net amount recognized

$ ( 76.8 ) $ ( 111.3 )

Funded status of pension plans and SERP (supplemental):

Funded status of qualified defined benefit plans and SERP $ ( 82.5 ) $ ( 76.8 )

$ ( 76.8 ) $ ( 111.3 )

Nonqualified trust assets (cash surrender value of life insurance) recorded in other assets and intended to satisfy the projected benefit obligation of unfunded SERP obligations 38.8 38.0

Net funded status of pension plans and SERP (supplemental)

$ ( 38.0 ) $ ( 73.3 )

Unrecognized net actuarial loss recognized in accumulated other comprehensive income was $ 1.8 million and $ 41.8 million, and amounts net of tax were $ 1.7 million and $ 33.2 million, as of December 31, 2022 and January 1, 2022, respectively.

The accumulated benefit obligations for all defined benefit pension plans and the SERP were $ 315.9 million at December 31, 2022 and $ 416.1 million at January 1, 2022 .

The decrease in benefit obligation for fiscal 2022 was the result of actuarial gains caused by changes to the discount rate .

The actuarial gain included in accumulated other comprehensive loss and expected to be recognized in net periodic pension income during fiscal 2023 is $ 0.7 million.

Unrecognized net actuarial loss recognized in accumulated other comprehensive income was $ 10.7 million and $ 1.8 million, and amounts net of tax were $ 8.7 million and $ 1.7 million, as of December 30, 2023 and December 31, 2022, respectively.

The accumulated benefit obligations for all defined benefit pension plans and the SERP were $ 334.7 million at December 30, 2023 and $ 315.9 million at December 31, 2022 .

The increase in benefit obligation for fiscal 2023 was the result of actuarial losses caused by changes to the discount rate .

The actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension income during fiscal 2024 is $ 1.7 million.

The following is a summary of net pension and SERP expense recognized by the Company:

3 unchanged sentences

Expected return on pension assets ( 18.5 ) ( 20.5 ) ( 19.5 )

Net amortization loss 11.3 13.8 6.6

Net amortization loss (gain) ( 0.7 ) 11.3 13.8

Curtailment ( 1.0 ) — —

Net pension expense $ 0.7 $ 9.3 $ 14.0

SERP expense 3.9 3.8 5.7

Qualified defined benefit pension plans expense $ 5.5 $ 8.3 $ 3.3

Qualified defined benefit pension plans expense (income) $ ( 3.2 ) $ 5.5 $ 8.3

The non-service cost components of net pension expense is recorded in the Other expense (income), net line item on the consolidated statements of operations and comprehensive income.

18 unchanged sentences

The amortization period is either a five-year period, unless the minimum amortization method based on average remaining service periods produces a higher amortization;

or, over the average remaining service period of participants expected to receive benefits.

or, over the average remaining life expectancy of participants expected to receive benefits.

The Company utilizes a bond matching calculation to determine the discount rate.

9 unchanged sentences

The Company’s asset allocations by asset category and fair value measurement are as follows:

December 31, 2022 January 1, 2022

December 30, 2023 December 31, 2022

(In millions) Total % of Total Total % of Total

3 unchanged sentences

32.7 % 90.0 1

Real Estate — 1

Cash 52.4 19.9 % 46.6 18.5 %

32 unchanged sentences

Hong Kong ( 7.3 ) ( 14.2 ) ( 7.2 )

Italy ( 2.5 ) 0.3 1.1

United Kingdom 2.3 ( 1.1 ) ( 0.5 )

Other 3.9 2.9 2.5

8 unchanged sentences

Income tax audit adjustments — — 2.5

Permanent adjustment related to goodwill divested 4.3 — —

Deferred adjustment for income tax audit — — ( 1.2 )

Capital loss from sale of subsidiary ( 95.7 ) — —

Other Permanent adjustments and non-deductible expenses ( 1.2 ) ( 1.4 ) ( 0.3 )

3 unchanged sentences

(In millions) December 30,

2022 January 1,

2023 December 31,

Deferred income tax assets:

4 unchanged sentences

Net operating loss and foreign tax credit carryforwards 56.6 19.9

Capital loss carryforwards 60.4 —

Book over tax depreciation and amortization 0.4 0.5

1 unchanged sentence

Environmental reserve 14.8 28.3

Intangible Assets 1.3 —

Other 8.3 6.5

7 unchanged sentences

Total deferred income tax liabilities ( 56.1 ) ( 93.8 )

Net deferred income tax liabilities $ ( 10.8 ) $ ( 117.1 )

The valuation allowance for deferred income tax assets as of December 31, 2022 and January 1, 2022 was $ 26.7 million and $ 24.6 million, respectively.

Net deferred income tax asset (liabilities) $ 89.5 $ ( 10.8 )

The valuation allowance for deferred income tax assets as of December 30, 2023 and December 31, 2022 was $ 55.6 million and $ 26.7 million, respectively.

The net increase in the total valuation allowance during fiscal 2023 was $ 28.9 million.

2 unchanged sentences

legal entities, foreign net operating loss carryforwards and tax credit carryforwards in foreign jurisdictions.

The ultimate realization of the deferred tax assets depends on the generation of future taxable income in foreign jurisdictions as well as state and local tax jurisdictions.

The valuation allowance for fiscal 2023 is also related to U.S.

federal capital loss carryforwards.

The ultimate realization of the deferred tax assets depends on the generation of future taxable income in foreign jurisdictions as well as state and local tax jurisdictions, and capital gains in the U.S.

tax jurisdiction.

During 2023, the Company sold one of its foreign subsidiaries which generated a tax capital loss of $ 417.8 million on the divestiture of that entity's stock.

That tax capital loss was used to offset taxable gains related to the divestiture of various brand and non-core assets between 2022 and 2024 in the amount of $ 312.5 million.

The remaining capital loss of $ 105.3 million has no immediate use and therefore has a full valuation allowance resulting in an increase to the valuation allowance of $ 24.1 million as of December 30, 2023.

The current year change in the valuation allowance results in a decrease against the state deferred tax assets of $ 0.8 million, an increase related to state net operating loss carryforward of $ 2.3 million, and a net increase relating to the foreign net operating losses and foreign tax credits and other deferred tax assets of $ 3.3 million.

1 unchanged sentence

The Company had U.S.

federal net operating loss carryforwards, state net operating loss carryforwards and Internal Revenue Code section 163(j) interest expense carryforwards of $ 15.7 million, $ 224.7 million and $ 43.6 million respectively, which have expirations ranging from 2023 to an unlimited term during which they are available to offset future state taxable income.

federal capital loss carryforwards, federal net operating loss carryforwards and Internal Revenue Code section 163(j) interest expense carryforwards of $ 263.8 million, $ 27.1 million, and $ 65.8 million respectively, which have expirations ranging from 2029 to an unlimited term during which they are available to offset future U.S.

federal taxable income.

The Company had state net operating loss carryforwards and Internal Revenue Code section 163(j) interest expense carryforwards of $ 234.4 million and $ 74.7 million respectively, which have expirations ranging from 2024 to an unlimited term during which they are available to offset future state taxable income.

The Company also had tax credit carryforwards in foreign jurisdictions of $ 2.6 million, which are available for an unlimited carryforward period to offset future foreign taxes.

7 unchanged sentences

Unrecognized tax benefits at end of the year $ 2.6 $ 9.0

The portion of the unrecognized tax benefits that, if recognized currently, would reduce the annual effective tax rate was $ 9.0 million and $ 10.1 million as of December 31, 2022 and January 1, 2022, respectively.

The portion of the unrecognized tax benefits that, if recognized currently, would reduce the annual effective tax rate was $ 2.6 million and $ 9.0 million as of December 30, 2023 and December 31, 2022, respectively.

During 2023, the Company released $ 5.1 million of unrecognized tax benefits related to net operating losses that were deemed to be fully limited based on the completion of a separate return loss year analysis.

The release had no impact on the effective tax rate since the Company released both the deferred tax asset and contra deferred tax asset related to the net operating losses.

The Company recognizes interest and penalties related to unrecognized tax benefits through interest expense and income tax expense, respectively.

Interest accrued related to unrecognized tax benefits was $ 0.5 million and $ 0.6 million as of December 31, 2022 and January 1, 2022, respectively.

Interest accrued related to unrecognized tax benefits was $ 0.5 million and $ 0.5 million as of December 30, 2023 and December 31, 2022.

The Company is subject to periodic audits by domestic and foreign tax authorities.

6 unchanged sentences

The Company intends to repatriate cash held in foreign jurisdictions and as such has recorded a deferred tax liability related to additional state taxes and foreign withholding taxes on the future dividends received in the U.S.

from the foreign subsidiaries of $ 1.1 million and $ 1.4 million for fiscal years 2022 and 2021, respectively.

from the foreign subsidiaries of $ 1.1 million and $ 1.1 million for fiscal years 2023 and 2022.

The Company intends to permanently reinvest all non-cash undistributed earnings outside of the U.S.

9 unchanged sentences

translation Derivatives Pension Total

Balance at Balance at January 2, 2021 $ ( 36.8 ) $ ( 20.3 ) $ ( 73.5 ) $ ( 130.6 )

Balance at January 1, 2022 $ ( 56.8 ) $ ( 8.9 ) $ ( 33.2 ) $ ( 98.9 )

Other comprehensive income (loss) before reclassifications (1)

6 unchanged sentences

( 76.3 ) 10.8 31.5 ( 34.0 )

Balance at January 1, 2022 $ ( 56.8 ) $ ( 8.9 ) $ ( 33.2 ) $ ( 98.9 )

Balance at December 31, 2022 $ ( 133.1 ) $ 1.9 $ ( 1.7 ) $ ( 132.9 )

Other comprehensive income (loss) before reclassifications (1)

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income (loss) 4.2 ( 18.8 ) (2)

Income tax (expense) benefit — 4.7 ( 2.4 ) 2.3

Income tax benefit — 4.6 0.2 4.8

Net reclassifications

6 unchanged sentences

Amounts related to foreign currency derivatives that are no longer deemed to be highly effective are included in other income.

Amounts related to interest rate swaps and the cross currency swap are included in interest expense.

Amounts related to interest rate swaps are included in interest expense.

(3) Amounts reclassified are included in the computation of net pension expense.

4 unchanged sentences

Quoted Prices With Other Observable Inputs (Level 2)

(In millions) December 31, 2022 January 1, 2022

(In millions) December 30, 2023 December 31, 2022

Financial assets:

3 unchanged sentences

The fair value of foreign currency forward exchange contracts represents the estimated receipts or payments necessary to terminate the contracts.

The fair value of the cross-currency swap is determined using the current forward rates and changes in the spot rate.

Nonrecurring Fair Value Measurements

Indefinite-lived intangible assets and goodwill are tested annually, or if a triggering event occurs that indicates an impairment loss may have been incurred, using fair value measurements with unobservable inputs (Level 3).

In the fourth quarter of fiscal 2022, after completion of its annual impairment testing, the Company recognized a $ 48.4 million goodwill impairment charge to the Sweaty Betty ® reporting unit.

The Company also recorded impairment charges of $ 189.3 million and $ 191.0 million to

the Sweaty Betty ® and Sperry ® indefinite-lived trade names, respectively, in fiscal 2022.

Refer to Note 4, “Goodwill and Other Intangibles” for additional discussion on the Sweaty Betty ® goodwill impairment and the Sperry ® and Sweaty Betty ® trade name impairments.

In the third quarter of 2023, based on the results of the impairment testing, the Company recognized impairment charges of $ 38.3 million to the Sperry ® trade name.

In the fourth quarter of 2022, after completion of the annual impairment testing, the Company recorded a $ 48.4 million impairment charge for Sweaty Betty ® goodwill.

The Company also recorded impairment charges of $ 191.0 million and

$ 189.3 million to the Sperry ® and Sweaty Betty ® trade names, respectively , in fiscal 2022.

Refer to Note 4, “Goodwill and Other Intangibles” for additional discussion on the Sperry ® goodwill impairment and the Sperry ® and Sweaty Betty ® trade name impairment.

Fair Value Disclosures

2 unchanged sentences

The carrying value and the fair value of the Company’s debt are as follows:

(In millions) December 31, 2022 January 1, 2022

(In millions) December 30, 2023 December 31, 2022

Carrying value $ 920.8 $ 1,158.0

42 unchanged sentences

The last remaining individual action included in the Litigation Matters was dismissed without prejudice on June 24, 2022.

In addition, in September 2022, the parties to the putative class action filed a motion for preliminary approval of a proposed class action settlement seeking to resolve the putative class action plaintiffs’ claims (the “Motion for Preliminary Approval”).

On September 19, 2022, the court granted the Motion for Preliminary Approval and scheduled a final approval hearing regarding the settlement for March 29, 2023.

Only one of the Litigation Matters, the lawsuit filed by the current owner of a former landfill and gravel mining operations, remains pending in Michigan state court, and it is in the discovery and motions stages of litigation.

For certain of the Litigation Matters described above and as a result of developments during 2022, the Company has increased its accrual by $ 40.5 million since January 1, 2022 and made related payments of $ 50.1 million.

On March 29, 2023, the court presiding over the putative class action granted final approval of the proposed settlement and dismissed the lawsuit with prejudice.

The last remaining Litigation Matter, the lawsuit filed by the current owner of a former landfill and gravel mining operations, was pending in Michigan state court but has been administratively stayed by the Court.

There were no developments during fiscal year 2023 that required the Company to change the amount accrued for the Litigation Matters described above.

The Company made related payments of $ 37.8 million in connection with the Litigation Matters described above during fiscal year 2023.

As of December 30, 2023, the Company had recorded liabilities of $ 2.7 million for certain of the Litigation Matters described above which are recorded as other accrued liabilities in the consolidated balance sheets.

In December 2018, the Company filed a lawsuit against certain of its historic liability insurers, seeking to compel them to provide a defense against the Litigation Matters on the Company's behalf and coverage for remediation efforts undertaken by, and indemnity provided by, the Company.

The Company recognized certain recoveries from legacy insurance policies in 2022 and 2021, and continues pursing additional recoveries through the lawsuit.

The Company recognized certain recoveries from legacy insurance policies in 2023 and 2022, and continues pursuing additional recoveries through the lawsuit.

Other Litigation

2 unchanged sentences

While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the meritorious legal defenses available to the Company and reserves for liabilities that the Company has recorded, along with applicable insurance, it is management’s opinion that the outcome of these

items are not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

items, individually and in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Environmental Liabilities

31 unchanged sentences

BUSINESS SEGMENTS

The Company’s portfolio of brands are organized into the following three reportable segments.

All prior period disclosures have been retrospectively adjusted to reflect the new reportable segments.

The Company’s portfolio of brands are organized into the following reportable segments.

• Active Group, consisting of Merrell ® footwear and apparel, Saucony ® footwear and apparel, Sweaty Betty ® activewear, and Chaco ® footwear;

• Work Group, consisting of Wolverine ® footwear and apparel, Cat ® footwear, Bates ® uniform footwear, Harley-Davidson ® footwear and HYTEST ® safety footwear;

• Lifestyle Group , consisting of Sperry ® footwear, Keds ® footwear, and Hush Puppies ® footwear and apparel.

The Company's operating segments are the Work Group, Lifestyle Group, Active Group, and Sweaty Betty ® .

The Company's operating segments are the Active Group, Work Group, and Sweaty Betty ® .

Sweaty Betty ® and the Active Group were evaluated and combined into one reportable segment because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance

1 unchanged sentence

The Company also reports “Other” and “Corporate” categories.

The Other category consists of the Company’s leather marketing operations, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores and the Stride Rite® licensed business.

The Corporate category consists of the gain on the sale of the Champion trademarks in fiscal 2022 and unallocated corporate expenses, such as corporate employee costs, costs related to the COVID-19 pandemic, impairment of intangible assets and goodwill, reorganization activities, and environmental and other related costs.

Other consists of Sperry ® footwear, Keds ® footwear, Hush Puppies ® footwear and apparel, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues, multi-branded direct-to-consumer retail stores and the Stride Rite ® licensed business.

Prior to the fourth quarter of 2023, Sperry ® , Keds ® , and Hush Puppies ® financial results were reported in the Lifestyle Group.

The Lifestyle Group is no longer a reportable segment based upon how the Chief Operating Decision Maker, the Company's Chief Executive Officer, allocates resources to and assesses performance of the Company's operating segments.

The Corporate category consists of gains on the sale of businesses and trademarks, unallocated corporate expenses, such as corporate employee costs, corporate facility costs, reorganization activities, impairment of long-lived assets and environmental and other related costs.

The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories.

8 unchanged sentences

Work Group 480.6 590.5 548.8

Lifestyle Group 447.5 477.0 407.0

Other 323.2 524.1 546.5

3 unchanged sentences

Work Group 58.1 102.5 103.8

Lifestyle Group 48.1 67.5 34.2

Other 32.8 59.9 75.6

9 unchanged sentences

Work Group 0.4 0.3 0.3

Lifestyle Group 2.0 2.3 3.0

Other 2.9 3.4 3.9

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Work Group 0.1 0.4 0.4

Lifestyle Group 2.0 0.1 1.7

Other 0.1 5.2 1.8

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(In millions) December 30,

2022 January 1,

2023 December 31,

Total assets:

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Work Group 288.4 375.7

Lifestyle Group 514.8 663.4

Other 250.8 573.4

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Work Group 60.3 59.6

Lifestyle Group 97.4 101.3

Other 49.1 111.0

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(In millions) December 30,

2022 January 1,

2023 December 31,

2022 January 1,

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While changes in suppliers could cause delays in manufacturing and a possible loss of sales, management believes that other suppliers could provide similar products on comparable terms.

BUSINESS ACQUISITIONS

Sweaty Betty ®

On July 31, 2021, the Company entered into a definitive agreement to acquire 100 % of the outstanding shares of Lady of Leisure InvestCo Limited.

The acquisition was completed on August 2, 2021 for $ 417.4 million, net of acquired cash of $ 7.4 million.

The Acquired Company owns the Sweaty Betty ® brand and activewear business.

The acquisition was funded with cash on hand and borrowings under the Company’s Revolving Facility.

Sweaty Betty ® is a premium women’s activewear brand that distributes a wide array of innovative on-trend tops, bottoms, swimwear, outerwear and accessories around the world, mainly through direct-to-consumer channels.

The Sweaty Betty ® acquisition is part of the Company’s strategic shift over the last several years from a traditional footwear wholesaler to a consumer-obsessed, digital-focused growth company.

The acquisition also aligns with the Company’s strategic growth plan to focus on expanding the Company’s digital and international footprint, and building the brand portfolio beyond footwear.

Sweaty Betty ® contributed net revenue of $ 211.5 million and net loss of $ 5.5 million to the Company for the year ended December 31, 2022.

The Sweaty Betty ® operating results are included in the Active category for segment reporting purposes.

The Company recognized acquisition-related transaction costs of $ 7.5 million, all of which were recognized in fiscal year 2021 in the selling, general and administrative expenses line item in the Consolidated Statement of Operations.

These costs represent investment banking fees, legal and professional fees, transaction fees, and consulting fees associated with the acquisition.

The Company accounted for the acquisition following FASB ASC Topic 805, Business Combinations , and the related assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The aggregate purchase price was allocated to the major categories of assets acquired and liabilities assumed based upon their respective fair values at the acquisition date using primarily Level 2 and Level 3 inputs.

The Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates.

The Sweaty Betty ® trademark, which is estimated to have an indefinite life, has been valued at $ 346.4 million using the multi-period excess earnings method.

The multi-period excess earnings method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, EBITDA margin, tax rates and a discount rate.

The purchase price allocation was finalized during the quarter ended July 2, 2022.

The following table summarizes the purchase price allocation to the assets acquired and liabilities assumed at the acquisition date:

(In millions) Fair Value

Accounts receivable $ 3.6

Inventories 48.4

Prepaid expenses and other current assets 5.3

Property, plant and equipment 10.0

Lease right-of-use assets 7.0

Goodwill 118.9

Intangibles 355.0

Other assets 0.6

Total assets acquired 548.8

Accounts payable 13.1

Accrued salaries and wages 6.0

Other accrued liabilities 14.3

Lease liabilities 7.0

Deferred income taxes 91.0

Total liabilities assumed 131.4

Net assets acquired $ 417.4

Goodwill is the result of expected synergies and the Company’s ability to grow the Sweaty Betty ® brand, as well as the acquired assembled workforce.

All of the goodwill is presented within the Active Group for segment reporting purposes and within the Sweaty Betty ® reporting unit and will not be deductible for income tax purposes.

Intangible assets acquired in the acquisition were valued on the acquisition date as follows:

(In millions) Intangible Asset Useful life

Trade name and trademark $ 346.4 Indefinite

Customer relationship 7.2 18 years

Backlog 1.0 5 months

Customer list 0.4 3 years

Total intangible assets acquired $ 355.0

The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition of the Sweaty Betty ® brand and activewear business occurred at the beginning of fiscal 2020.

The pro forma information is not necessarily indicative of the results that would have actually been obtained if the acquisition had occurred at such date or that may be attained in the future.

These pro forma amounts have been calculated after including the historical Sweaty Betty ® operating results in the Company’s consolidated results and reflecting the following adjustments:

fair value adjustments for intangible assets and inventory acquired, timing adjustment to recognize acquisition related costs incurred in 2021 and in 2020, and adjustments reflecting historical interest expense.

The adjustments have been applied with related tax effects.

(In millions) 2021 2020

Net revenue $ 2,552.4 $ 1,954.7

Net earnings attributable to Wolverine World Wide, Inc.

83.9 ( 144.9 )

VARIABLE INTEREST ENTITIES AND RELATED PARTY TRANSACTIONS

On December 17, 2023, the Company entered into a purchase agreement to sell a 40 % ownership interest in Gemini Asia Saucony, LLC, which was established for the purpose of holding, licensing and managing the intellectual property rights associated with the Saucony ® brand in China, Hong Kong and Macau, to XMS Sports Co.

Limited for cash of $ 39.0 million.

Assets and Liabilities of Consolidated VIEs

The Company has joint ventures that source and market the Company’s footwear and apparel products in China.

Based upon the criteria set forth in FASB ASC 810, Consolidation , the Company has determined two of the consolidated joint ventures are variable interest entities (VIEs) and the Company is the primary beneficiary.

Based upon the criteria set forth in FASB ASC 810, Consolidation , the Company has determined two of the consolidated joint ventures are variable interest entities (VIEs) of which the Company is the primary beneficiary and, as a result, the Company consolidates these VIEs.

The primary beneficiary determination is based on the relationship between the Company and the VIE, including contractual agreements between the Company and the VIE.

The Company has determined that two of the VIEs that are consolidated meet the criteria to be classified as held for sale as of year end 2023, refer to Note 20, "Divestitures and Assets and Liabilities Held for Sale" for additional discussion.

Specifically, the Company has the power to direct the activities that are considered most significant to the entities’ performance and the Company has the obligation to absorb losses and the right to receive benefits that are significant to the entities.

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Assets held by the VIEs are only available to settle obligations of the respective entities.

Holders of liabilities of the VIEs do not have recourse to the Company.

The following is a summary of the entities’ assets and liabilities included in the Company’s consolidated balance sheets.

Holders of liabilities of these VIEs do not have recourse to the Company.

The following is a summary of these VIE’s assets and liabilities included in the Company’s consolidated balance sheets.

(In millions) 2023 2022

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Noncurrent assets — 0.8

Assets held for sale 51.6 —

Total assets 51.6 44.7

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Noncurrent liabilities — 1.6

Liabilities held for sale 15.4 —

Total liabilities $ 15.4 $ 11.2

Nonconsolidated VIEs

The Company also has two joint ventures that are VIEs and are not consolidated as the Company does not have the power to direct the most significant activities that impact the VIEs' economic performance.

The Company also has two joint ventures that are VIEs that are not consolidated as the Company does not have the power to direct the most significant activities that impact the VIEs' economic performance.

The two VIEs distribute footwear and apparel products in the Asia Pacific region.

The following is a summary of carrying amounts of assets included in the Company’s consolidated balance sheets for fiscal years 2022 and 2021 related to VIEs for which the Company is not the primary beneficiary.

The Company’s maximum exposure to loss is the same as the carrying amounts.

The following is a summary of the carrying amounts of assets included in the Company’s consolidated balance sheets.

(In millions) 2022 2021

Equity method investments (1)

(1) Equity method investments are included in “Other Assets” on the Consolidated Balance Sheets.

The Company’s consolidated balance sheets in 2022 included $ 8.1 million in Other Assets related to VIEs for which the Company is not the primary beneficiary.

The Company has determined that the VIEs that are not consolidated meet the criteria to be classified as held for sale as of year-end fiscal 2023, refer to Note 20, "Divestitures and Assets and Liabilities Held for Sale" for additional discussion.

Related Party Transactions

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Related party transactions consist of the sale of goods, made at arm’s length, and other arrangements.

For the fiscal years ended December 31, 2022 and January 1, 2022 the Company recognized net sales to equity affiliates totaling $ 35.5 million and $ 19.5 million, respectively.

For the fiscal years ended December 30, 2023 and December 31, 2022 the Company recognized net sales to equity affiliates totaling $ 66.5 million and $ 35.5 million, respectively.

The following table summarizes related party transactions included in the consolidated balance sheets.

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Long term assets due from related parties — 1.6

DIVESTITURES AND ASSETS AND LIABILITIES HELD FOR SALE

Divestiture of Keds ® Business

On February 7, 2023 the Company entered into an Asset Purchase Agreement with Designer Brands, Inc.

(the "Buyer") pursuant to which the Buyer agreed to purchase the global Keds ® business.

The sale was effective as of February 4, 2023, in accordance with the terms and conditions of the Asset Purchase Agreement.

The following table summarizes the net gain recognized in connection with the divestiture:

(In millions)

Net proceeds $ 83.4

Net assets disposed ( 65.9 )

Direct costs to sell ( 1.6 )

AOCI reclassification adjustment, foreign currency translation 4.2

Gain on sale of business $ 20.1

The Company determined that the divestiture of the Keds ® business did not represent a strategic shift that had or will have a major effect on the Consolidated Results of Operations, and therefore results were not classified as discontinued operations.

The proceeds from the sales were used to reduce outstanding borrowings under the Revolving Facility.

Divestiture of U.S.

Wolverine Leathers Business

On August 23, 2023, the Company completed the sale of its U.S.

performance leathers business to its long-time customer, New Balance.

The Company received $ 4.0 million in cash for the sale and recognized a gain on sale of $ 1.9 million.

The assets sold, which were included in the Other segment category, consist of $ 2.1 million in inventory.

Divestiture of Hush Puppies ® intellectual property in China, Hong Kong, and Macau

On September 1, 2023, the Company entered into an asset purchase agreement to sell the Hush Puppies ® trademarks, patents, copyrights and domains in China, Hong Kong and Macau to its current sublicensee, Beijing Jiaman Dress Co., Ltd.

for cash of $ 58.8 million and recognized a gain on sale of $ 55.8 million.

The gain on sale is net of transaction related fees of $ 3.0 million.

The transaction closed on September 14, 2023.

The Company continues to own the Hush Puppies ® brand throughout the rest of the world.

Sale-Leaseback of Louisville Distribution Facility

On December 28, 2023, the Company completed a sale and leaseback transaction with an independent third party for the land, building and related fixed assets of its distribution center located in Louisville, Kentucky for a sale price of $ 23.5 million.

The distribution center was leased back to the Company via a two year lease agreement which includes a one year renewal option.

The transaction qualifies for sales recognition under the sale leaseback accounting requirements and the Company recorded a gain of $ 12.6 million.

Divestiture of Asia-based Leathers Business

On December 14, 2023, the Company completed the sale of its Asia-based performance leathers business to Interhides Public Company Limited, a current materials vendor of the Company.

The Company received $ 8.2 million in cash for the sale.

The assets sold, which were included in the Other segment category, consist of $ 8.2 million in inventory.

Assets and Liabilities Held for Sale

During the fourth quarter of 2022, the Company announced that it had initiated a formal process to divest the Keds ® business and Wolverine Leathers business, both of which are low-profit contributors.

The Company has determined that both the Keds ®

business and the Wolverine Leathers business meet the criteria to be classified as held for sale, and therefore have reclassified the related assets and liabilities as held for sale on the Consolidated Balance Sheets.

The following is a summary of the major categories of assets and liabilities that have been classified as held for sale on the Consolidated Balance Sheets at December 31, 2022:

On January 10, 2024, the Company completed the sale of the global Sperry ® business and as of fiscal 2023 year-end, determined that the Sperry ® business met the criteria to be classified as held for sale.

The Company received gross proceeds of $ 97.4 million in cash, subject to customary purchase price adjustments .

The Company determined that the divestiture of the Sperry ® business does not represent a strategic shift that had or will have a major effect on the consolidated condensed results of operations, and therefore results of this business were not classified as discontinued operations.

Upon classification as held for sale, the Company compared the Sperry ® business' carrying value with its fair value, less costs to sell.

Based upon the selling price, the Company estimated implied losses in excess of the carrying value of the Sperry ® business' long-lived assets.

As a result, the Company recorded non-cash impairment charges totaling $ 95.0 million during fiscal 2023 to reduce the net carrying value of the Sperry ® business' long-lived assets to zero.

Also during fiscal 2023, the Company recorded an impairment charge of $ 11.0 million related to assets that will not convey as part of the Sperry ® sale transactions and are not expected to be used within the Company’s other businesses.

These charges are reported within the impairment of long-lived assets line on the consolidated statements of operations.

This write-down includes a $ 1.0 million loss related to currency translation adjustments in accumulated other comprehensive loss.

On December 17, 2023, the Company entered into an agreement to sell the Company’s equity interest in the Merrell and Saucony China joint venture entities to Xtep International Holdings Limited ("Xtep"), its joint venture partner.

On January 1, 2024, the Company completed the sale of and received cash of $ 22.0 million.

The Company has determined that the Merrell and Saucony China joint venture entities meet the criteria to be classified as held for sale as of year-end 2023, and therefore have reclassified the related assets and liabilities as held for sale on the Consolidated Balance Sheets.

The Company determined that the planned divestiture does not represent a strategic shift that had or will have a major effect on the consolidated condensed results of operations, and therefore results of this business were not classified as discontinued operations.

The Keds ® business and the performance leathers business met the criteria to be classified as held for sale as of year end 2022, and therefore reclassified the related assets and liabilities as held for sale on the Consolidated Balance Sheets as of year end 2022.

As noted above, the Company completed the sale of both the Keds ® business and performance leathers business in fiscal 2023.

The following is a summary of the major categories of assets and liabilities that have been classified as held for sale on the consolidated condensed balance sheets:

(In millions) 2023 2022

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Inventories 83.3 43.1

Other current assets 2.9 —

Property, plant and equipment, net 3.8 —

Lease right-of-use assets

Goodwill 43.0 —

Indefinite-lived intangibles 67.0 11.4

Amortizable intangibles, net 21.0 —

Other assets 7.8 5.9

Impairment of carrying value ( 96.8 ) —

Total assets held for sale 160.6 67.9

Accounts payable 4.8 8.1

Lease liabilities 9.0 —

Accrued liabilities 9.0 0.7

Other liabilities 1.4 —

Total liabilities held for sale $ 24.2 $ 8.8

The Company determined that the divestiture of the Keds ® business and Wolverine Leathers business do not represent a strategic shift that had or will have a major effect on the Consolidated Results of Operations, and therefore results were not classified as discontinued operations.

SUBSEQUENT EVENT

On February 7, 2023 the Company entered into an Asset Purchase Agreement with Designer Brands, Inc.

(the "Buyer") pursuant to which the Buyer agreed to purchase the global Keds ® business, other than the Excluded Assets (as defined in the Asset Purchase Agreement), and to assume certain liabilities.

The purchase price was approximately $ 83.6 million and the sale was effective February 4, 2023, in accordance with the terms and conditions of the Asset Purchase Agreement.

On January 10, 2024, the Company entered into a Purchase Agreement with ABG Intermediate Holdings 2 LLC, an affiliate of Authentic Brands Group LLC.

(the "ABG Buyer"), pursuant to which the ABG Buyer agreed to purchase all of the outstanding equity of certain subsidiaries of the Company that own or hold for use intellectual property used by the Company exclusively in the footwear, apparel, and accessories business conducted by the Company under the Sperry ® brand.

In addition, on January 10, 2024 the Company entered into an Inventory Purchase Agreement with Aldo U.S.

Inc., an affiliate of the Aldo Group (the "Aldo Buyer"), pursuant to which the Aldo Buyer agreed to purchase certain inventory and other assets of the Sperry ® business, and to assume certain contracts of the Sperry ® business, including Sperry ® retail store leases.

The aggregate purchase price under these two purchase agreements was approximately $ 97.4 million in cash, subject to customary purchase price adjustments .

On December 17, 2023, the Company and Xtep entered into a Purchase Agreement pursuant to which Xtep agreed to purchase the Company’s equity interest in the Merrell and Saucony joint venture entities (Saucony Brand Operations Ltd., Saucony Distribution Operations Ltd., Merrell Brand Operations Ltd.

and Merrell Distribution Operations Ltd.), transitioning the business from a joint venture model to a license and distribution rights model under which Xtep will exclusively carry out the development, marketing and distribution of footwear, apparel and accessories for the Saucony and Merrell brands in China.

The purchase price was approximately $ 22.0 million in cash, and the sale was effective January 1, 2024, in accordance with the terms and conditions of the Purchase Agreement.

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Wolverine World Wide, Inc.

and subsidiaries (the Company) as of December 31, 2022 and January 1, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and January 1, 2022, and the results of its operations and its cash flows for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, in conformity with U.S.

and subsidiaries (the Company) as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, in conformity with U.S.

generally accepted accounting principles.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

3 unchanged sentences

Description of the Matter At December 30, 2023, the Company’s goodwill and indefinite-lived intangible assets were $427.1 million and $174.1 million, respectively.

During 2022, the Company recognized a goodwill impairment charge of $48.4 million associated with its Sweaty Betty reporting unit and impairment charges of $191.0 million and $189.3 million, associated with its Sperry and Sweaty Betty indefinite-lived intangible assets, respectively.

During 2023, the Company recognized impairment charges of $38.3 million associated with its Sperry indefinite-lived intangible asset.

As discussed in Notes 1 and 4 of the consolidated financial statements, goodwill and indefinite-lived intangibles are tested for impairment at least annually.

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and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 30, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and January 1, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021, and the related notes and financial statement schedule and our report dated February 23, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the fiscal years ended December 30, 2023, December 31, 2022, and January 1, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 22, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data