NEWELL BRANDS INC.

Previous wording

The Company is implementing this strategy while continuing to address key global challenges such as shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail and consumer landscape; continued macroeconomic and geopolitical volatility; a soft macro backdrop; significant cumulative inflationary pressures on consumers; recently announced tariffs by the current U.S. presidential administration and other countries’ retaliatory actions in response to such tariffs; and an evolving regulatory landscape.

Current wording

The Company is implementing this strategy while continuing to address key global challenges such as shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail and consumer landscape; continued macroeconomic and geopolitical volatility; a soft macro backdrop; significant cumulative inflationary pressures on consumers; recently announced and imposed tariffs by the current U.S. presidential administration and other countries’ retaliatory actions in response to such tariffs; and an evolving regulatory landscape.

Previous wording

Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach. The Company has also further optimized the Company’s real estate footprint and pursued other cost reduction initiatives. These actions were primarily implemented by the end of 2024. Remaining actions, subject to applicable local law and consultation requirements, are expected to be implemented by the end of fiscal year 2025.

Current wording

Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach. The Company has also further optimized the Company’s real estate footprint and pursued other cost reduction initiatives. These actions were primarily implemented by the end of 2024. The remaining actions, subject to applicable local law and consultation requirements, are expected to be implemented by the end of fiscal year 2025.

Previous wording

The Company is actively working on the deployment of a mitigation strategy to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing. At this time, it is difficult to predict the rate or duration of these tariffs, and there can be no assurance as to the extent to which the Company will be able to offset the impact through mitigation actions. Additional tariffs or further increases to the U.S. tariffs, retaliatory actions taken by other countries, or failure to effectively deploy the Company’s mitigation plans could have a significant negative impact on the Company.

Current wording

Based on the currently announced and imposed tariffs as well as any retaliatory tariffs on U.S. exports, the Company anticipates an incremental cash tariff cost of approximately $155 million in 2025 prior to any offsetting impact from mitigating actions. There will be a timing difference between the operating cash outflow and the recognition of cost of products sold arising from the tariffs. As a result, the Company anticipates recognizing approximately $105 million of incremental costs of products sold (including $10 million in the second quarter) in the Statement of Operations in 2025. The Company continues to deploy a mitigation strategy designed to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing. At this time, it is difficult to predict the rate or duration of these tariffs, and there can be no assurance as to the extent to which the Company will be able to offset the impact through mitigation actions. Additional tariffs or further increases to the U.S. tariffs, retaliatory actions taken by other countries, or failure to effectively deploy the Company’s mitigation plans could have a significant negative impact on the Company.

Previous wording

On April 14, 2025, Moody’s Corporation (“Moody’s”) downgraded the Company’s senior unsecured debt rating to “B1”. As a result of Moody’s downgrade, certain of the Company’s outstanding senior notes aggregating to approximately $2.3 billion are subject to an interest rate adjustment of 25 basis points, with such adjustment to take effect in the fourth quarter of this year. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $6 million on an annualized basis (approximately $2 million in 2025).

Current wording

During the second quarter of 2025, Moody’s Corporation (“Moody’s”) and S&P Global Inc. (“S&P”) downgraded the Company’s senior unsecured debt rating to “B1” and “B+”, respectively. As a result, certain of the Company’s outstanding senior notes are subject to an interest rate adjustment of 25 basis points for each downgrade, or 50 basis points in the aggregate, with such adjustments to take effect in the fourth quarter of this year. The change to the interest rate due to the downgrades will increase the Company’s interest expense by approximately $5 million on an annualized basis (approximately $1 million in 2025).

Previous wording

Gross profit was essentially flat compared to the prior year. Gross margin improved to 32.1% as compared with 30.5% in the prior year. The improvement in gross margin was driven by gross productivity, pricing and lower restructuring-related charges of approximately $5 million, partially offset by the volume impact of lower sales as described above and inflation. Changes in foreign currency exchange rates unfavorably impacted gross profit by $10 million, or 2%.

Current wording

Gross profit decreased 2% compared to the prior year. Gross margin improved to 35.4% as compared with 34.4% in the prior year. The improvement in gross margin was driven by gross productivity, pricing actions and lower restructuring-related charges of approximately $6 million, partially offset by the volume impact of lower sales and inflation. Changes in foreign currency exchange rates favorably impacted gross profit by $2 million, or less than 1%.

Previous wording

(1)For the three months ended March 31, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) were $3 million and $11 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities. For the three months ended March 31, 2024, restructuring-related costs reported in cost of products sold and SG&A were $8 million and $5 million, respectively, primarily related to facility closures associated with the Network Optimization Project and Project Phoenix, previously disclosed, and other discrete initiatives. Restructuring costs were $11 million and $26 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to the Realignment Plan.

Current wording

(1)For the three months ended June 30, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) were $1 million and $5 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously disclosed but substantially completed restructuring activities. For the three months ended June 30, 2024, restructuring-related costs reported in cost of products sold, SG&A and impairment of other assets were $7 million, $3 million and $6 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives. Restructuring costs were $6 million and $10 million for the three months ended June 30, 2025 and 2024, respectively, primarily related to the Realignment Plan.

Previous wording

Interest expense, net increased by $2 million due to higher interest rates and lower interest income. The weighted average interest rates for the three months ended March 31, 2025 and 2024 were approximately 6.0% and 5.6%, respectively. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Current wording

Interest expense, net increased by $4 million due to higher interest rates and lower interest income. The weighted average interest rates for the three months ended June 30, 2025 and 2024 were approximately 6.3% and 6.0%, respectively.

Previous wording

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

Current wording

Other expense, net for the three months ended June 30, 2025 and 2024 includes the following items:

Previous wording

The income tax benefit for the three months ended March 31, 2025 was $18 million as compared to $51 million for the three months ended March 31, 2024. The Company’s effective income tax rates for the three months ended March 31, 2025 and 2024 were benefits of 32.7% and 85.0%, respectively, due to a decrease in the forecasted tax rate for 2025 that was primarily driven by improved forecasted pretax book income year over year.

Current wording

The income tax provision for the three months ended June 30, 2025 was $25 million as compared to $39 million for the three months ended June 30, 2024. The Company’s effective income tax rates for the three months ended June 30, 2025 and 2024 were provision of 35.2% and 46.4% respectively, primarily due to a decrease in the forecasted tax rate for 2025 that was mainly driven by improved forecasted pretax book income year over year. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Previous wording

L&D net sales for the three months ended March 31, 2025 increased 2%, as growth in the Baby business, primarily as a result of improved orders from major retailers and launches of product innovations, was partially offset by a decline in the Writing business due to soft demand in certain markets, partially offset by contribution from launches of product innovations. Changes in foreign currency unfavorably impacted net sales by $11 million, or 2%.

Current wording

L&D net sales for the three months ended June 30, 2025 decreased less than 1%. Net sales in the Writing business increased primarily due to net distribution gains, pricing actions and contributions from launches of product innovations, as well as the timing of back-to-school shipments. Net sales in the Baby business declined primarily due to soft demand in certain markets and net distribution losses, partially offset by pricing actions, including actions to mitigate recently announced tariffs, and contributions from launches of product innovations. Changes in foreign currency favorably impacted net sales by approximately $1 million, or less than 1%.

Previous wording

Operating income for the three months ended March 31, 2025 increased to $98 million as compared to $94 million in the prior-year period. The increase in operating income is primarily due to higher gross profit of $7 million primarily due to higher net sales and gross productivity, partially offset by inflation and higher advertising and promotion costs of $2 million.

Current wording

Operating income for the three months ended June 30, 2025 decreased to $202 million as compared to $205 million in the prior-year period. The decrease in operating income is primarily due to lower gross profit of $7 million, reflecting the impact of lower net sales and inflation, partially offset by gross productivity. The decrease in gross profit was partially offset by lower advertising and promotion costs of approximately $4 million, as well as savings from restructuring actions primarily related to the Realignment Plan.

Previous wording

O&R net sales for the three months ended March 31, 2025 decreased 9% as improvements in certain international markets of approximately 11%, were more than offset by declines in the U.S. of approximately 19%, primarily due to distribution losses. Changes in foreign currency unfavorably impacted net sales by $5 million, or 2%.

Current wording

O&R net sales for the three months ended June 30, 2025 decreased 9% primarily due to distribution losses, soft demand and to a lesser extent, business exits. These declines were partially offset by pricing actions, including actions to mitigate recently announced tariffs, and contribution from the launches of product innovation. Changes in foreign currency favorably impacted net sales by approximately $4 million, or 2%.

Previous wording

Net sales for the three months ended March 31, 2025 decreased 5%. Net sales were unfavorably impacted by soft global demand and net distribution losses. Business exits, primarily in the H&CS segment, also unfavorably impacted net sales by approximately $8 million, or less than 1%. These unfavorable factors were partially mitigated by launches of product innovations in the L&D segment and pricing actions, primarily in international markets to offset inflation and unfavorable foreign currency movement. Changes in foreign currency unfavorably impacted net sales by $44 million, or 3%.

Current wording

Net sales for the six months ended June 30, 2025 decreased approximately 5%. Net sales were unfavorably impacted by soft global demand across all segments and net distribution losses in the H&CS and O&R segments. Business exits, primarily in the H&CS and O&R segments also unfavorably impacted net sales. These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments and to a lesser extent in the O&R segment. In addition, pricing actions and shipment timing ahead of back-to-school season in the L&D segment favorably impacted net sales. Changes in foreign currency unfavorably impacted net sales by $48 million, or 1%.

Previous wording

(2)Transaction costs and other for the three months ended March 31, 2025 primarily related to hyperinflationary currency movements. For the three months ended March 31, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer.

Current wording

(2)Transaction costs and other for the six months ended June 30, 2025 primarily related to hyperinflationary currency movements. For the six months ended June 30, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer, hyperinflationary currency movements and accelerated amortization and write-off of other assets associated with integration projects.

Previous wording

H&CS net sales for the three months ended March 31, 2025 decreased 9%, which reflected soft demand across all businesses, as well as net distribution losses. Business exits also unfavorably impacted net sales by approximately 1%. Pricing actions partially offset these unfavorable factors. Changes in foreign currency unfavorably impacted net sales by $28 million, or 3%.

Current wording

H&CS net sales for the six months ended June 30, 2025 decreased 8%, which reflected soft global demand across all businesses, primarily in the Kitchen business, as well as net distribution losses. Business exits also unfavorably impacted net sales by approximately 1%. Pricing actions and contributions from new product launches, partially offset these unfavorable factors. Changes in foreign currency unfavorably impacted net sales by $37 million, or 2%.

Previous wording

Operating loss for the three months ended March 31, 2025 was $2 million as compared to operating income of $16 million in the prior year. The decrease in operating income is primarily due to lower gross profit of $15 million resulting from unfavorable fixed cost leverage associated with the lower sales volume, as described above, and inflation, partially offset by gross productivity and lower restructuring and restructuring-related charges of $10 million.

Current wording

Operating income for the six months ended June 30, 2025 was $22 million as compared to $64 million in the prior year. The decrease in operating income is primarily due to lower gross profit of $34 million, resulting from unfavorable fixed cost leverage associated with lower sales volume and inflation, partially offset by gross productivity. The decrease in gross profit was partially offset by savings from restructuring actions primarily related to the Realignment Plan and lower restructuring and restructuring-related charges of $5 million.

Previous wording

Operating loss for the three months ended March 31, 2025 was $5 million as compared to $18 million in the prior-year period. The improvement in operating performance was due to higher gross profit of $7 million driven primarily by gross productivity and favorable pricing, as well as lower restructuring-related charges of $2 million and lower amortization of certain tradenames of approximately $2 million.

Current wording

Operating income for the six months ended June 30, 2025 was $3 million as compared to operating loss of $29 million in the prior-year period. The improvement in operating performance was due to higher gross profit of $19 million driven primarily by gross productivity, pricing actions and mix. Savings from restructuring actions and lower amortization of certain tradenames of approximately $3 million also contributed to the improvement of operating income.

Previous wording

The Company believes the aforementioned individual actions or a combination of such actions, its cash generating capability, and available cash and cash equivalents, would provide adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due, including the 2026 Notes, and execute its ongoing business initiatives over the next twelve months from the issuance of these financial statements. However, there can be no assurances that the Company will be successful in generating the additional liquidity, through a debt refinancing on terms acceptable to the Company or otherwise, that would be necessary to meet its obligations over the next twelve months from the issuance of these financial statements. If the Company is unable to make the payment on the 2026 Notes upon maturity, the Company would be in default of such senior notes, which would trigger cross-default provisions within other debt instruments and would have a significant adverse effect on the Company’s business, financial condition and operating results. The Company regularly assesses its cash requirements and the available sources to fund these needs. The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as recently imposed tariffs by the current U.S. presidential administration, including those most recently announced reciprocal tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

Current wording

The Company regularly assesses its cash requirements and the available sources to fund these needs. The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as recently imposed tariffs by the current U.S. presidential administration, including those most recently announced reciprocal tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

Previous wording

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

Current wording

At June 30, 2025, the Company had cash and cash equivalents of approximately $219 million, of which approximately $185 million was held by the Company’s non-U.S. subsidiaries.

Previous wording

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

Current wording

Cash, cash equivalents and restricted cash increased (decreased) as follows for the six months ended June 30, 2025 and 2024 (in millions):

Previous wording

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

Current wording

The change in net cash used in operating activities reflects higher working capital requirements of the Company due to lapping of prior year reductions, decrease in factored accounts receivable and higher incentive compensation payments in the current year, partially offset by lower restructuring payments.

Previous wording

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

Current wording

The higher cash used in investing activities was primarily due to higher capital expenditures.

Previous wording

The change in net cash provided by financing activities was due to the period-over-period net change in short-term debt. See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Current wording

The change in net cash provided by financing activities was due to higher utilization of the Credit Revolver (defined hereafter) during the current period. See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Previous wording

The Company maintains a $1.0 billion senior secured revolving credit facility (the “Credit Revolver”) maturing in August 2027. Under the Credit Revolver, the Company may borrow funds on a variety of interest terms. The Credit Revolver agreement (i) requires the Company to satisfy financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) requires the Company and certain of its domestic and foreign subsidiaries (the “Guarantors”) to guaranty Company obligations under the Credit Revolver and (iii) requires the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations. Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver. At March 31, 2025 there was $870 million of availability based on the value of the pledged collateral prior to giving effect to outstanding borrowings and letters of credit under the Credit Revolver.

Current wording

The Company maintains a $1.00 billion senior secured revolving credit facility (the “Credit Revolver”) maturing in August 2027. Under the Credit Revolver, the Company may borrow funds on a variety of interest terms. The Credit Revolver agreement (i) requires the Company to satisfy financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) requires the Company and certain of its domestic and foreign subsidiaries (the “Guarantors”) to guaranty Company obligations under the Credit Revolver and (iii) requires the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations. Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver. At June 30, 2025, there was $989 million of availability under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

Previous wording

The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver. At March 31, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $350 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $485 million. See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statementsfor further information.

Current wording

The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver. At June 30, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $495 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $459 million.