NWL 10-K & 10-Q changes, risk factors and insider trading

Although the Company has long-established relationships with many customers, the Company generally does not have any long-term supply or binding contracts or guarantees of minimum purchases with its largest customers. Purchase commitments by these customers are generally made using individual purchase orders. As a result, these customers may cancel their orders, change purchase quantities from forecast volumes, delay purchases for a number of reasons beyond the Company’s control or change other terms of the business relationship. Significant or numerous cancellations, reductions, delays in purchases or changes in business practices by customers could have a material adverse effect on the Company’s business, results of operations and financial condition. In addition, because many of the Company’s costs are fixed, a reduction in customer demand due to decreased sales to end consumers could have an adverse effect on the Company’s profitability. The retail landscape in many of the Company’s markets continues to be impacted by the rapid growth of e-commerce retailers, changing consumer preferences (including shopping online and through mobile commerce and social applications) and the emergence of alternative retail channels, such as subscription services and direct-to-consumer businesses. The rapid growth in e-commerce and emergence of alternative retail channels may adversely affect the Company’s relationships with its key retailers, whereby the number of products it sells will no longer be a reliable indicator of the amount of future business the Company can expect.

The Company’s plans to execute its turnaround plan and restructuring initiatives, improve productivity,productivity and reduce complexity and costs may not be successful, which would materially adversely affect its financial results.

The Company is executing a turnaround plan to build a global, next generation consumer products company that can unleash the full potential of its brands in a fast-moving omni-channel environment. The Company is implementing various global initiatives in connection with the turnaround plan to reduce costs and improve cash flows, as further described in Item 1- Business1-Business Strategy.

The Company’s use of artificial intelligence (“AI”) tools in its operations and systems poses inherent risk and could adversely affect the Company’s operations and financial conditions. The Company’s success may increasingly become dependent on its ability to effectively leverage AI to support its operational efficiencies, such as in supply chain and support functions, and its product development and marketing capabilities. The Company may be outpaced by its competitors in their more successful or earlier adoption of AI solutions, which could negatively affect the Company’s commercial competitiveness. Use of AI exposes the Company to risks that such AI solutions may be deficient, produce inaccurate or misleading output, become inoperable or subject the Company to cybersecurity and data privacy breaches, all of which could lead to operational disruptions, flawed decision-making, increased costs, and an inhibited ability to improve product development and marketing through the use of AI, and could impact the Company’s operational effectiveness and financial condition. Additionally, the use of certain AI solutions could put the Company’s own information and intellectual property rights at risk,risk or expose the Company to risk of infringing third parties’ intellectual property or other rights. The global legal, regulatory, and ethical landscape surrounding AI is rapidly evolving and remains uncertain, which creates continued compliance risk and may incur additional operational costs associated with the Company’s use of AI, may limit the Company’s ability to fully develop or use AI solutions as intended, and may further cause legal repercussions and brand or reputational harm to the Company.

The Company cannot guarantee that its security efforts will prevent attacks and resulting breaches or breakdowns of the Company’s, or its third-party service providers’ databases or systems notwithstanding whether the Company takes reasonable steps to prevent such attacks. The Company’s operations, especially its retail operations,operations and employee benefits administration, involve the storage and transmission of employees’, customers’ and consumers’ personal and sensitive information, such as credit card and bank account numbers. The Company’s payment services may be subject to credit card and other payment fraud schemes, including unauthorized use of credit cards, debit cards or bank account information, identity theft or merchant fraud. If the IT systems, networks or service providers relied upon fail to function properly, or if the Company suffers a loss or disclosure of customers’ and consumers’ data, business or stakeholder information, due to any number of causes, ranging from catastrophic events to power outages to security breaches, or the inability to effectively address these failures on a timely basis, the Company may suffer interruptions in its ability to manage operations, a risk of government enforcement action, litigation and possible liability, and reputational, competitive and/or business harm, which may adversely impact the Company’s results of operations and/or financial condition. In addition, if the Company’s service providers, suppliers or customers experience a breach or unauthorized disclosure or system failure, their businesses could be disrupted or otherwise negatively affected, which may result in a disruption in the Company’s supply chain or reduced customer orders or other business operations, which could adversely affect the Company.

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

The Company is subject to laws of various jurisdictions where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor, investor, employee or other stakeholder information and personal data, including but, not limited to, the General Data Protection Regulation of the European Union, the California Consumer Privacy Act, and various other privacy laws and regulations. The Company may be subject to additional regulations, such as the European Union AI Act, that specifically affect the use of personal information in the context of AI systems. The changes introduced by these laws and regulations increase the complexity of regulations enacted to protect business and personal data, subject the Company to additional costs and have required, and may in the future require, costly changes to the Company’s security systems, policies, procedures and practices. These laws and regulations may grant, among other things, individual rights to access and delete personal information,information and the right to opt out of the sale of personal information.information, causing the Company to incur costs and operational inefficiencies. These laws and regulations can also impose significant forfeitures and penalties for noncompliance and afford private rights of action to individuals under certain circumstances. Any failure to manage data privacy in compliance with applicable laws and regulations could result in significant regulatory investigations, fines, and sanctions, consumer and class action litigation, commercial litigation, prolonged negative publicity, data breaches, declining customer confidence, loss of key customers, employee liability, and other unfavorable consequences.

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

Specifically, evolvingEvolving trade policies could continue to make sourcing products from foreign countries more difficult and costly, as the Company sources a significant amount of its products from outside of the U.S. For example, in earlyIn 2025, the current U.S. presidential administration announced significantand/or imposed a series of new tariffs on foreign imports into the U.S., specificallyincluding without limitation significant tariffs on products manufactured in China. Tariffs on imports into the U.S., most significantly from Mexico and Canada, all of which were subsequently postponed prior to becoming effective, and China, and has proposed additional newretaliatory tariffs thaton mayexports be implemented in the future. Given the Company’s reliance upon non-domestic suppliers, any significant changes tofrom the U.S. tradeto policiesother (countries, have increased costs for the Company and thosecould impact the level of othertrade countriesbetween the U.S. and its various trading partners around the globe in response)general. orThe changesCompany withoutcontinues sufficientto notice may causedeploy a materialmitigation adversestrategy effect on its abilitydesigned to source products from other countries or significantly increaseoffset the costsimpact of obtainingthis suchtariff products,exposure whichthrough coulda resultnumber of actions, including pricing, productivity and in asome materialcases adverserelocation effectof onmanufacturing. ourHowever, financialthe results.rate The extent andor duration of increasedthese tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.markets, Anyand there can be no assurance as to the extent to which the Company will be able to offset the impact through mitigation actions. Given the Company’s reliance upon non-domestic suppliers, new or additional tariffs on goods imported to the U.S. from China, Mexico, Canada,Mexico or other countries, or products imported into the European Union or other non-U.S. markets, couldor alsoother significant changes to the U.S. trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on the Company’s ability to source products from other countries or significantly increase the costcosts of someobtaining ofsuch products, which could result in a material adverse effect on our productsfinancial and reduce our margins.results.

Finally, there has been an increased focus from certain investors, customers, consumers, employees, and other stakeholdersstakeholders, as well as legislative bodies and regulatory agencies, concerning corporate citizenship and sustainability matters. From time to time, the Company announces certain initiatives regarding its focus areas, some of which may be required in accordance with applicable laws, and which may include environmental matters, human capital, sustainability, packaging, responsible sourcing and social investments. In 2024, the Company published its Corporate Citizenship Report which included updates on many of these focus areas and goals for certain areas. The Company could fail, or be perceived to fail, in its achievement of such initiatives and goals or it could fail in accurately reporting its progress on such initiatives and goals. In addition, the Company could be criticized for the scope of such initiatives or perceived as not acting responsibly in connection with these matters. The Company’s reputation and business could be negatively impacted by such developments or litigation may be filed against the Company resulting in significant expenses or investments to repair such impacts. Damage to the Company’s reputation or a loss of consumer confidence in the Company’s brands could adversely affect the Company’s business, results of operations, cash flows and financial condition as well as require resources to repair the harm.

At December 31, 2024,2025, the Company had $4.6$4.67 billion in outstanding debt, reflecting aan decreaseincrease of approximately $300$100 million versus December 31, 2023.2024. The Company’s substantial indebtedness has, and could continue to have, important consequences for the Company, including:

•limiting its ability to borrow additional funds; and

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

For example, the Company’s credit ratings were downgraded in both 20242025 and 20232024 by each of Moody’s Corporation (“Moody’s”) and S&P Global Inc. (“S&P”) which resulted in a coupon step-up of certain of the Company’s outstanding senior notes. In addition, credit ratings can also affect the terms of debt agreements to include more restrictive covenants which may further restrict our business operations or limit our ability to raise additional capital due to our covenant restrictions then in effect. For example, in November 2024, the Company issued $750 million of aggregate principal amount of 6.375% senior notes due 2030 and $500 million of aggregate principal amount of 6.625% senior notes due 2032, and suchin May 2025, the Company completed the offering and sale of $1.25 billion of 8.500% senior notes containdue 2028 (collectively the “Notes”). These Notes include covenants that are more restrictive thanlimit the seniorability notes thatof the Company hasand historicallyits issued.subsidiaries to incur or guarantee additional debt, create or permit certain liens, redeem or repurchase certain debt, consummate certain asset sales, make certain loans and investments, consolidate, merge or sell all or substantially all of the Company and its subsidiaries assets, enter into certain transactions with affiliates and pay distributions on, or redeem or repurchase the Company’s capital stock, subject in each case to certain qualifications and exceptions, including the termination of certain of these covenants upon the Notes receiving investment grade credit ratings. There is no guarantee that debt or equity financings will be available in the future to fund future acquisitions, developments, or general operating expenses, or that such financing will be available on terms consistent with our historical agreements or expectations. See Liquidity and Capital Resources in Item 7 and Footnote 98 of the Notes to the Consolidated Financial Statements for further discussion.

The Company is required by the SEC to establish and maintain effective internal control over financial reporting that provides reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements in accordance with U.S. GAAP.generally accepted accounting principles (“GAAP”). Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

During the years ended December 31, 2024,2025, 20232024 and 2022,2023, the Company recorded non-cash impairment charges related to goodwill and indefinite-lived intangibles of $345$340 million, $339$345 million and $474$339 million, respectively. Future events or factors may occur that could adversely affect the fair value of the Company’s assets and require impairment charges, including, but not limited to, divestitures of certain businesses or product lines, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on the Company’s sales and customer base, a material adverse change in the Company’s relationship with significant customers or business partners, or a further sustained decline in the Company’s stock price. In the event any such impairment indicators become known or are present, the Company may be required to perform impairment tests based on changes in the economic environment and other factors, and these tests could result in non-cash impairment charges in the future. As there is minimal difference between the estimated fair values and the carrying values of some of the Company’s intangible assets as a result of recent non-cash impairment charges, future non-cash impairment charges may occur. See Critical Accounting Estimates in Item 7 and Footnotes 1 and 76 of the Notes to Consolidated Financial Statements for further discussion.

Changes in laws, regulations and related interpretations may alter the environment in which the Company does business. This includes changes in environmental, data privacy, competitivecompetition and product-related laws, as well as changes in accounting standards, taxation and other regulations. Accordingly, the Company’s ability to manage regulatory, tax and legal matters (including environmental, human resource, product liability, patent and other intellectual property matters), and to resolve pending legal and environmental matters without significant liability could require the Company to record significant reserves in excess of amounts accrued to date or pay significant fines during a reporting period, which could materially impact the Company’s results. In addition, new regulations may be enacted in the U.S. or abroad that may introduce compliance uncertainty and may require the Company to incur additional personnel-related, environmental or other costs on an ongoing basis, significantly restrict the Company’s ability to sell certain products, or incur fines or penalties for noncompliance, any of which could adversely affect the Company’s results of operations.

As a U.S.-based multinationalmulti-national company, the Company is also subject to tax regulations in the U.S. and multiple foreign jurisdictions, some of which are interdependent. For example, certain income that is earned and taxed in countries outside the U.S. may not be taxed in the U.S. until those earnings are actually repatriated or deemed repatriated. If these or other tax regulations should change, the Company’s financial results could be impacted. Furthermore, the Organization for Economic Co-operation and Development (the “OECD”) introduced a framework implementing a global minimum corporate tax of 15%, referred to as Pillar Two. Much of Pillar Two was enacted in countries outside the U.S. effective as of January 1, 2024, with certain remaining aspects effective beginning January 1, 2025 or later. In January 2025, the U.S. issued an executive order announcing opposition to aspects of these rules. While it is unlikely that the U.S. will enact legislation to adopt Pillar Two, many countries in which we operate have adopted the legislation, and other countries are in the process of introducing legislation to implement Pillar Two. The Company’s current income tax impact of Pillar Two is immaterial, however we will continue to monitor both U.S. and international legislative developments to assess for any potential impacts.

Although the Company maintains product liability insurance in amounts that it believes are reasonable, that insurance is, in most cases, subject to significant self-insured retentions for which the Company is responsible, and the Company cannot assure you that it will be able to maintain such insurance on acceptable terms, if at all, in the future or that product liability claims will not exceed the amount of insurance coverage. The Company does not maintain insurance against many types of claims involving alleged product defects other than personal injury or property damage. Additionally, the Company does not maintain product recall insurance and may not have insurance coverage for claims asserted in consumer class action lawsuits that seek monetary compensation unrelated to personal injury and/or property damage, such as claims related to the marketing or warranty of the product. The Company spends substantial resources ensuring compliance with governmental and other applicable standards. However, compliance with these standards does not necessarily prevent individual or class action lawsuits, which can entail significant cost and risk. As a result, these types of claims could have a material adverse effect on the Company’s business, results of operations and financial condition.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with “Financial Statements and Supplementary Data” included in Part II, Item 8 of this Annual Report on Form 10-K and the Company’s audited Consolidated Financial Statements and Notes thereto included elsewhere in this Annual Report on Form 10-K. The “Business Strategy” and “Recent Developments” sections below are brief presentations of our business and certain significant items addressed in this section or elsewhere in this Annual Report on Form 10-K. This section should be read along with the relevant portions of this Annual Report on Form 10-K for a complete discussion of the events and items summarized below. The “Results of Operations” section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz. Newell Brands is focused on delighting consumers by lighting up everyday moments. The Company sells its products in over 150 countries around the world and has operations on the ground in overmore 40than 45 of these countries, excluding third-party distributors. The Company has three operating segments: Home and Commercial Solutions (“H&CS”), Learning and Development (“L&D”) and Outdoor and Recreation (“O&R”).

In JanuaryDecember 2024,2025, the Company announced the RealignmentProductivity Plan, which is expected to strengthen the Company’s front-end commercial capabilities, as further described in the preceding section. The Company initiatedexpects theto Realignmentrecord Plan$75 duringmillion theto first$90 quartermillion of 2024. For the year ended December 31, 2024, the Company recorded restructuring and restructuring-related charges in connection with the Productivity Plan, primarily for severance and related costs, with most of $37the charges to be recognized by the end of 2026. The Company commenced separation of professional and clerical employees during December 2025 and recorded $40 million of restructuring charges for severance and $15other million,termination respectively.benefits and restructuring-related charges. See Risk Factors in Item 1A.1A, and Footnote 43 of the Notes to Consolidated Financial Statements for further information.

Debt Redemption and Issuance

In DecemberNovember 2024,2025, the Company repaid the outstanding aggregate principal amount of its 4.000%3.900% senior notes,notes due 2025 (the “2025 Notes”), plus accrued and unpaid interest upon maturity for total consideration of $205$48 million.

Net sales decreased 7%5% compared to the prior year. Net sales were unfavorably impacted by soft global demand across all segments, primarily by our H&CS and O&R segments, net distribution losses.losses Productand product line exits negatively impacted net sales by approximately 1%, primarily in the H&CS segment.exits. These unfavorable factors were partially mitigated by pricing,launches mainlyof inproduct international markets to offset inflation and currency movement.innovations. Changes in foreign currency unfavorably impacted net sales by $234$2 million, or approximatelyless 3%.than 1%.

Gross profit increaseddecreased 8%by approximately $116 million, or approximately 5% compared to the prior year.year, primarily driven by our H&CS segment. Gross margin improved to 33.6%33.8% as compared with 28.9%33.6% in 2023.2024. The improvement in gross margin was driven by pricing,gross productivity and pricing and lower restructuring-related charges of $50approximately $32 million, partially offset by highervolume absorptionimpact cost associated withof lower salessales, volumeadditional tariffs of approximately $114 million and inflation. Changes in foreign currency exchange rates unfavorably impacted gross profit by $121 million, or 5%.

Notable items, other than the aforementioned, impacting operating income (loss) for 20242025 and 20232024 are as follows:

(ab)Restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) for 2025 were $4 million and $24 million, respectively, and primarily relate to facility closures associated with the Realignment Plan and various discrete initiatives as well as previously disclosed but substantially completed restructuring activities. Restructuring-related costs reported in cost of products sold, SG&A and in impairment of goodwill, intangibles and other assets for 2024 were $36 million, $13 million and $8 million, respectively, and primarily relate to facility closures.closures Restructuring-relatedassociated costswith reportedpreviously indisclosed costbut ofsubstantially productscompleted soldrestructuring andactivities, SG&Aas forwell 2023as wereother $86discrete million and $13 million, respectively, and primarily relate to facility closures.initiatives. Restructuring costs for 20242025 and 20232024 were $45$62 million and $95$45 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements for further information.

Operating income was $67$39 million as compared to operating loss of $85$67 million in the prior year period. The improvementdecline reflects the aforementioned impact of higherlower gross profit of $195$116 millionmillion, as discussed above, savings from restructuring actions primarily from Project Phoenix and the Realignment Plan, lowerhigher restructuring charges of $50$17 million (See Footnote 3 of the Notes to the Consolidated Financial Statements for further information), and lowerincrease transactionin advertising and promotion costs and other of $22$12 million. These improvements weremillion, partially offset by higherlower incentive compensation expense of approximately $89$95 million, higherdue advertisingto weaker performance relative to targets in 2025, and promotionsavings costsfrom ofrestructuring $46actions millionrelated to the Realignment Plan and $23Productivity million of additional amortization of certain tradenames.Plan.

The income tax benefit for 20242025 was $44$16 million as compared to $155$44 million in 2023.2024. The effective tax rate for 20242025 was 16.9%, due to the impact of certain discrete items5.3% as compared to 28.5%16.9% for 2023.2024. The decrease in the tax benefit rate was primarily driven by decrease in discrete benefits and lower pretax book income for 2025. See Footnote 1211 of the Notes to Consolidated Financial Statements for further information on income taxes.

H&CS net sales for 20242025 decreased 8%approximately 7% compared to prior year, which reflected soft demand across all businessesbusinesses, net distribution losses and distribution losses. Productproduct line exitsexits, alsoprimarily negativelyin impactedour netKitchen salesand byCommercial approximatelybusinesses. 1%.These Pricingdeclines actionswere partially offset theseby negativelaunches factors.of product innovations mainly in the Kitchen and Home Fragrance businesses. Changes in foreign currency unfavorably impacted net sales by $151$8 million, or 3%.less than 1%.

L&D net sales for 20242025 increased modestly by less thandecreased 1%, compared to prior year,year as growthsoft demand primarily in the BabyWriting business, primarily as a result of improved orders from major retailers and innovation,business was partially offset by acontributions declinefrom launches of product innovations in both the Baby and Writing business due to soft demand in certain markets, partially offset by contribution from product innovation.businesses. Changes in foreign currency unfavorablyfavorably impacted net sales by $44$4 million, or 2%.less than 1%.

Operating income for 20242025 increaseddecreased to $473$464 million as compared to $213$473 million in 2023.2024. The increasedecrease in operating income is primarily due to improvedlower gross profit of approximately $87$31 million, due toas gross productivity,productivity savingswas frommore restructuringthan actionsoffset asby wellinflation asand impact of tariffs. The decline in gross profit was partially offset by lower non-cash impairment charges.charge Theof Company$20 recorded non-cash impairment chargesmillion, related to an indefinite-lived tradenamestradename and goodwill of $70 million and $241 million during 2024 and 2023, respectively. See(see Footnote 76 of the Notes to the Consolidated Financial Statements for further information) onand savings from restructuring actions primarily related to the non-cashRealignment impairment charges.Plan.

•risks related to the Company’s substantial indebtedness and current leverage profile, ability to refinance upcoming revolver and bond maturities on favorable terms,terms or at all, and potential increases in interest rates or changes in the Company’s credit ratings including the failure to maintain financial covenants which if breached could subject us to cross-default and acceleration provisions in our debt documents;

•the impact on the Company’s operations and financial condition resulting from the current global macroeconomic environment, including the impact of tariffs imposed by the U.S. and retaliatory tariffs imposed by foreign countries, and the Company’s ability to effectively execute its mitigation plans;

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

The Company continues to execute the strategic priorities identified through its 2023 comprehensive capability assessment. These priorities, grounded in defined “where to play” and “how to win” choices, are intended to drive sustainable improvement in revenue performance, margins and cash flow through a redesigned operating model, targeted talent investments and a culturerenewed redesign.culture.

Execution of the Company’s strategy continues amid a dynamic operating environment, including shifting consumer preferences, heightened competitive intensity, changes in retailer inventory and promotional behavior, increased adoption of digital and artificial intelligence‑enabled tools, macroeconomic and geopolitical volatility, cumulative inflationary pressures on consumers, rising oil and other raw material prices, tariffs imposed by the U.S. in 2025 and early 2026 as well as other countries’ related retaliatory actions, and an evolving regulatory landscape. The Company continues to deploy mitigation actions, including pricing optimization, productivity initiatives and strategic manufacturing relocations, where appropriate.

The Company’s operating focus remains on disciplined execution of its key priorities, including driving top‑line improvement over time through product and commercial innovation and brand investment; protecting margins through productivity, procurement savings, overhead management and disciplined reinvestment; further deleveraging the balance sheet; improving cash flow and balance sheet strength through working capital management and capital allocation; and enhancing commercial and operational execution through complexity reduction, technology standardization, Enterprise Resource Planning System (ERP) consolidation, stock- keepingstock-keeping unit (SKU) rationalization and supply chain optimization.

Update on Tariffs and Geopolitical Conflicts

Global economic conditions continue to be adversely affected by ongoing geopolitical conflicts, including the Russia‑Ukraine and the Middle East conflicts. The Company has experienced increased costs for raw materials, transportation, energy, and commodity costs, driven in part by elevated fuel prices and global macroeconomic effects.pressures. The continuation or escalation of geopolitical tensions, including the expansion ofexpanded trade restrictions, sanctions, or other barriers to global trade, could adversely affect the Company by disrupting its supply chain (including changes in prices and availability of transportation, raw materials and sourced products), reducing consumer demand, increasing volatility in foreign exchange rates and financial markets, and contributing to localized or global economic downturns. See “Results of Operations” and Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Three Months Ended MarchJune 31,30, 2026 vs. Three Months Ended MarchJune 31,30, 2025

Notable items, other than those noted above, impacting operating income for the three months ended MarchJune 31,30, 2026 and 2025 were as follows (in millions):

(b)Restructuring-related costs reported in selling,cost generalof and administrative expense (“SG&A”)sales for the three months ended MarchJune 31,30, 2026 was $1 million andmillion, primarily related to facility closures associated with previously announced but substantially completed restructuring activities. For the three months ended MarchJune 31,30, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expense (“SG&A”) were $3$1 million and $11$5 million, respectively, and primarily related to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.

(c)Transaction and other costs for the three months ended MarchJune 31,30, 2026 primarily related to expenses for certain legal proceedings and completed divestitures. Transaction and other costs for the three months ended MarchJune 31,30, 2025 primarily related to hyperinflationary currency movements.

Operating income was $34$283 million, compared to $21$171 million in the prior year period. The improvement primarily reflects the aforementioned factors relatedthat contributed to the $127 million increase in gross profit of $10 million andprofit, savings from restructuring actions related to the Productivity Plan, and lower consulting and other professional service costs. These favorable impacts were partially offset by $5a $17 million increase in incentive compensation primarily due to improved performance relative to targets under the Company’s Management Bonus Plan and a $9 million increase in advertising and promotion spending.spending to support new market entry initiatives and new product launches.

Interest expense, net increased by $12$5 million due to higher interest rates.rates and lower interest income. The weighted average interest rates for the three months ended MarchJune 31,30, 2026 and 2025 were approximately 6.9%6.8% and 6.0%,6.3%, respectively. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Other expense, net for three months ended MarchJune 31,30, 2026 and 2025 includes the following items (in millions):

The income tax benefitprovision for the three months ended MarchJune 31,30, 2026 was $28$89 million asmillion, compared to $18$25 million for the three months ended MarchJune 31,30, 2025. The Company’s effective income tax rates for the three months ended MarchJune 31,30, 2026 and 2025 were a benefit of 45.9%45.6% and 32.7%35.2%, respectively. The changeincome intax provision for the three months ended June 30, 2026 was impacted by certain discrete items, including a $24 million discrete tax expense, primarily attributable to the tax rateeffect reflectsof athe yearIEEPA overTariff yearrefund decreaserecognized during the quarter for amounts previously expensed in forecasted pretax book income for 2026 combined with an increase in income tax benefits.2025. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

H&CS net sales for the three months ended MarchJune 31,30, 2026 decreasedincreased approximately 4%,1%, reflecting softcontributions demandfrom acrosslaunches allof businesses,product asinnovations, wellmodest asrecovery unfavorablein the Kitchen business and favorable order timing, as certain customers accelerated purchases in the first quarter of 2025 ahead of anticipated tariff impacts and price increases, and retailers shifted orders intofrom thefirst quarter to second quarter of 2026, primarily in connection with key reset events. These factors were partiallylargely offset by productsoft innovationinternational launches and favorable net pricing including a $17 million contribution from a refinement of estimates related to customer programs as discussed above.demand. Changes in foreign currency also favorably impacted net sales by $26$18 million, or approximately 3%.2%.

L&D net sales for the three months ended MarchJune 31,30, 2026 increased approximately 4%.5%. Net sales increased in both the Baby and the Writing businesses. The increase in the Baby business was primarily driven by contributions from launches of product innovation and improved replenishment orders from major retailers, pricing actions and contributions from product innovation.retailers. The increase in the Writing business was due to distributioncontributions gainsfrom launches of product innovations and favorable net pricingdistribution including a $7 million contribution from a refinement of estimates related to customer programs as discussed above.gains. Changes in foreign currency favorably impacted net sales by $11$3 million, or approximately 2%.less than 1%.

Operating income for the three months ended MarchJune 31,30, 2026 increased to $108$308 million as compared to $98$202 million in the prior-year period.period, reflecting the recording of a refund of approximately $63 million and $14 million associated with IEEPA Tariffs expensed in 2025 and the first quarter of 2026, respectively. The increaseimprovement in operating incomeresults was primarilyalso due to higher grossnet profitsales of $11 million, asand gross productivityproductivity. andThese netfavorable pricing actions including the $7 million contribution related to customer programs discussed above, whichfactors were partially offset by inflationinflationary and increased advertising and promotion spending.pressures.

O&R net sales for the three months ended MarchJune 31,30, 2026 decreasedincreased approximately 4%3%, mainly reflecting soft demand, partially offset by favorable pricing and contributions from launches of product innovations.innovations Changesand net distribution gains. The impact of changes in foreign currency favorably impactedto net sales bywas $5 million, or approximately 3%.immaterial.

Operating lossincome for the three months ended MarchJune 31,30, 2026 was $7$4 million as compared to $5$8 million in the prior-year period. The changedecrease primarily reflects a $4 million increase in operating performance was due to increased advertising and promotion spending,spending to support new market entry initiatives and new product launches. Operating income benefited from the recording of a refund of approximately $7 million associated with IEEPA Tariffs expensed in 2025, which was partially offset by $4inflationary million improvement in gross profit due to favorable pricing and gross productivity.pressures.