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What changed in ACCO BRANDS Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ACCO BRANDS Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+242 added−254 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in ACCO BRANDS Corp's 2023 10-K

242 paragraphs added · 254 removed · 191 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

37 edited+4 added−5 removed20 unchanged
Biggest changeAnderson , age 60 • 2007 - present, Senior Vice President, Corporate Development • Joined the Company in 2007 Angela Jones , age 59 • 2020 - present, Senior Vice President and Global Chief People Officer • 2018 - 2020, Senior Vice President and Chief People Officer, Compass Minerals • 2016 - 2018, Vice President, Human Resources Rembrandt Foods • Joined the Company in 2020 Roxanne Bernstein , age 48 • 2021 - present, Executive Vice President and President, North America • 2020 - 2021, President Crystal Farms Dairy Company • 2016 - 2020, Senior Vice President, Chief Marketing Officer, Post Consumer Brands • Joined the Company in 2021 Gregory J.
Biggest changeDudek, Jr. , age 52 • 2020 - present, Senior Vice President, Corporate Controller and Chief Accounting Officer • 2017 - 2020, Vice President and Corporate Controller • 2016 - 2017, Chief Accounting Officer, Innerworkings, Inc. • Joined the Company in 2017 Boris Elisman, age 61 • 2023 - present, Executive Chairman • 2021 - 2023, Chairman and Chief Executive Officer • 2016 - 2021, Chairman, President and Chief Executive Officer • Joined the Company in 2004 Angela Jones , age 60 • 2020 - present, Senior Vice President and Global Chief People Officer • 2018 - 2020, Senior Vice President and Chief People Officer, Compass Minerals • 2016 - 2018, Vice President, Human Resources Rembrandt Foods • Joined the Company in 2020 Gregory J.
Using a combination of our own manufacturing and third-party sourcing also enables us to reduce costs and effectively manage our production assets by lowering capital investment and working capital requirements. Our overall strategy is to manufacture locally those products that would incur a relatively high freight and/or duty expense or that have high customer service needs.
Using a combination of our own manufacturing and third-party sourcing also enables us to reduce costs and effectively manage our production assets by lowering capital investment and working capital requirements. Our overall strategy is to manufacture locally those products that would incur a relatively high freight and/or duty expense or that have high 3 customer service needs.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Cash Flow by Quarter and Full-Year." 2 Customers We distribute our products through a wide variety of channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Cash Flow by Quarter and Full-Year." Customers We distribute our products through a wide variety of channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop.
Note: Artline ® in Australia/N.Z. only Business Strategy The Company is currently executing a transformation strategy that will enable us to achieve long-term sustainable organic growth and profit improvement.
Note: Artline ® in Australia/N.Z. only Business Strategy The Company is currently executing a strategy that will enable us to achieve long-term sustainable organic growth and profit improvement.
We work with third-party vendors, such as Nielsen, NPD Group, GfK SE, NEWZOO and Kantar Group, to capture and analyze consumer buying habits and product trends. Supply Chain We have built a customer-focused business model with a flexible supply chain to ensure that we are able to supply our customers with value-added, high-quality products at an attractive price.
We work with third-party vendors, such as Nielsen, Circana, GfK SE, NEWZOO and Kantar Group, to capture and analyze consumer buying habits and product trends. Supply Chain We have built a customer-focused business model with a flexible supply chain to ensure that we are able to supply our customers with value-added, high-quality products at an attractive price.
The Company meets competitive challenges by creating and maintaining leading brands and differentiated products that deliver superior value, performance, and benefits to consumers. Our products are sold to consumers and end-users through diverse distribution channels. We further meet consumer needs by developing, producing, and procuring products at a competitive cost, enabling them to be sold at attractive selling prices.
The Company meets competitive challenges by creating and maintaining leading brands and differentiated products that deliver superior value, performance, and benefits to consumers and other end-users. Our products are sold through diverse distribution channels. We further meet consumer and end-user needs by developing, producing, and procuring products at a competitive cost, enabling them to be sold at attractive selling prices.
ITEM 1. BUSINESS As used in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation, a Delaware corporation incorporated in 2005, and its consolidated domestic and international subsidiaries.
ITEM 1. BUSINESS As used in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation, a Delaware corporation incorporated in 2005, and its consolidated domestic and international subsidiaries.
Our roadmap is focused on three key priorities: ensuring diverse candidate slates for all director-level-and-above job opportunities, integrating talent development and succession planning, and building manager capability to lead inclusively. Talent Management and Employee Engagement Building and sustaining strong talent is critical to our success.
Our roadmap is focused on three key priorities: ensuring diverse candidate slates for all director-level-and-above job opportunities, integrating talent development and succession planning, and building manager capability to lead inclusively. Talent Management Building and sustaining strong talent is critical to our success.
Our key strategic priorities are to: • Drive sustainable organic sales growth by focusing on innovative new product development, strengthening our brand positioning, and increasing our presence in faster growing sales channels. • Use our strong brand recognition and supply chain expertise to expand relationships with new and existing customers. • Improve operating margins by introducing higher margin product offerings, rationalizing product assortments, improving operating productivity, and leveraging SG&A costs. • Manage declining and commoditized product categories, which remain important profit and cash generators. 1 Through this strategy we have shaped and expanded our product portfolio, focusing on innovative consumer and end-user products for use in schools, homes and businesses.
Our key strategic priorities are to: • Drive sustainable organic sales growth by focusing on innovative new product development, strengthening our brand positioning, and increasing our presence in faster growing sales channels. • Use our strong brand recognition and supply chain expertise to expand relationships with new and existing customers. • Improve operating margins by introducing higher margin product offerings, rationalizing product assortments, improving operating productivity, and leveraging SG&A costs. • Manage declining product categories which remain important profit and cash generators. 1 Through this strategy we have diversified and expanded our product portfolio, focusing on innovative consumer and end-user products for use in schools, homes and businesses, with an emphasis on faster growing product categories.
These metrics are focused in the areas of Energy Management, Data Security, Workforce Diversity and Inclusion, Product Sourcing, Packaging and Marketing, and Labor Conditions in the Supply Chain. 5 Executive Leadership of the Company As of February 24, 2023, the executive leadership team of the Company consisted of the following executive officers. Ages are as of December 31, 2022.
These metrics are focused in the areas of Energy Management, Data Security, Workforce Diversity and Inclusion, Product Sourcing, Packaging and Marketing, and Labor Conditions in the Supply Chain. 5 Executive Leadership of the Company As of February 23, 2024, the executive leadership team of the Company consisted of the following executive officers. Ages are as of December 31, 2023.
Overview of the Company ACCO Brands is a leading global consumer, technology and business branded products company, providing well-known brands and innovative product solutions used in schools, homes and at work. Approximately 73 percent of our net sales come from brands that are in the No. 1 or No. 2 position in the product categories in which we compete.
Overview of the Company ACCO Brands is a leading global consumer, technology and business branded products company, providing well-known brands and innovative product solutions used in schools, homes and at work. Approximately 77 percent of our 2023 net sales came from brands that are in the No. 1 or No. 2 position in the product categories in which we compete.
These commitments are 1) improving the energy efficiency of our facilities, 2) increasing the percentage of female leaders globally, and 3) raising the percentage of our revenue generated from certified or sustainable products. We published our fourth annual ESG Report for 2021.
These commitments are 1) improving the energy efficiency of our facilities, 2) increasing the percentage of female leaders globally, and 3) raising the percentage of our revenue generated from certified or sustainable products. We published our fifth annual ESG Report for 2022.
As a result of the seasonal nature of the demand for our products, we expect to continue to generate a significant percentage of our sales and profit during the second, third, and fourth quarters, although the amounts generated in each of these quarters may vary due to changing customer behaviors.
In Mexico, back-to-school historically straddles the second and third quarters. As a result of the seasonal nature of the demand for our products, we expect to continue to generate a significant percentage of our sales and profit during the second, third, and fourth quarters, although the amounts generated in each of these quarters may vary due to changing customer behaviors.
Tedford , age 52 • 2021 - present, President and Chief Operating Officer • 2015 - 2021, Executive Vice President and President, ACCO Brands North America • Joined the Company in 2010 6
Tedford , age 53 • 2023 - present, President and Chief Executive Officer • 2021 - 2023, President and Chief Operating Officer • 2015 - 2021, Executive Vice President and President, ACCO Brands North America • Joined the Company in 2010 6
As of December 31, 2022, we had approximately 6,000 full-time and part-time employees worldwide, with approximately 4,200 employees based outside of the U.S. Approximately 500 manufacturing and distribution employees in our North America operating segment are covered by collective bargaining agreements. Outside the U.S., we have government-mandated collective bargaining arrangements in certain countries, particularly in Europe and Brazil.
As of December 31, 2023, we had approximately 5,600 full-time and part-time employees worldwide, with approximately 4,100 employees based outside of the U.S. Approximately 500 manufacturing and distribution employees in our North America operating segment are covered by collective bargaining agreements. Outside the U.S., we have government-mandated collective bargaining arrangements in certain countries, particularly in Europe and Brazil.
More recently we have prioritized the use of our operating cash flow to invest in internal capital projects to support our long-term growth and public company compliance, fund our quarterly dividend and for debt reduction, but will consider opportunistic acquisitions that focus on growing product categories, including adjacencies.
More recently, we have prioritized the use of our operating cash flow to invest in internal capital projects to support our long-term growth, fund our quarterly dividend and reduce our debt. We will also consider opportunistic acquisitions that focus on growing product categories, including adjacencies.
All our operating cash flow is generated in the second half of the year, as the cash inflows in the first and second quarters are consumed building working capital and for making our annual performance-based compensation payments, when earned. Our third and fourth quarter cash flow comes from completing the working capital cycle.
All our operating cash flow is generated in the second half of the year, as the cash inflows in the first and second quarters are consumed building working capital, and for making our annual performance-based compensation payments when earned.
Daniel , age 57 • August 2022 - present, Senior Vice President and Chief Information Officer • February 2020 - August 2022, Vice President, Infrastructure and Operations • April 2017 - February 2020 - Vice President, Global IT Operations, Tate & Lyle PLC • Joined the Company in 2020 Deborah A.
Daniel , age 58 • August 2022 - present, Senior Vice President and Chief Information Officer • February 2020 - August 2022, Vice President, Infrastructure and Operations • April 2017 - February 2020 - Vice President, Global IT Operations, Tate & Lyle PLC • Joined the Company in 2020 James M.
We use third parties to source those products that require more direct labor to produce. We also look for opportunities to leverage our manufacturing facilities to improve operating efficiencies, as well as customer service. 3 Intellectual Property Our products are marketed under a variety of trademarks.
Under our global footprint rationalization program, we will continue to rationalize our facilities as appropriate. We use third parties to source those products that require more direct labor to produce. We also look for opportunities to leverage our manufacturing facilities to improve operating efficiencies, as well as customer service. Intellectual Property Our products are marketed under a variety of trademarks.
This focus was key to our ability to fill 64 percent of our director level and above open positions in 2022 with internal talent. Additionally, 21 percent of our director level employees have mentors, while 61 percent have completed our "Raising the Bar" leadership development program.
This focus was key to our ability to fill 60 percent of our director-level and above open positions in 2023 with internal talent. Additionally, 18 percent of our director-level employees have mentors, while 54 percent have completed our "Raising the Bar" leadership development program.
Our corporate values include acting responsibly in our global communities through numerous employee volunteer and outreach initiatives. We encourage our employees to make a difference in our Company and in their communities by building on a fundamental commitment to integrity, teamwork, respect and inclusivity.
Community Involvement We aim to give back to the communities where we live and work. Our corporate values include acting responsibly in our global communities through numerous employee volunteer and outreach initiatives. We encourage our employees to make a difference in our Company and in their communities by building on a fundamental commitment to integrity, teamwork, respect and inclusivity.
O'Connor , age 60 • 2022 - present, Executive Vice President and Chief Financial Officer • 2020 - 2021, President and Chief Financial Officer, True Value Company • 2015 - 2020, Senior Vice President and Chief Financial Officer, True Value Company • Joined the Company in 2022 James M.
O'Connor , age 61 • 2022 - present, Executive Vice President and Chief Financial Officer • 2020 - 2021, President and Chief Financial Officer, True Value Company • 2015 - 2020, Senior Vice President and Chief Financial Officer, True Value Company • Joined the Company in 2022 Pamela R.
ACCO Brands’ diversity goals are to increase the percentage of director-level-and-above female leaders to 33 percent by 2025. For the total Company, we made good progress in 2022, moving from our 2019 baseline of 26.6 percent to 31.7 percent.
ACCO Brands’ diversity goals are to increase the percentage of director-level-and-above female leaders to 33 percent by 2025. For the total Company, we made excellent progress in 2023, moving from our 2019 baseline of 26.6 percent to reach our goal ending the year at 33.0 percent.
Our top 12 brands represented approximately $1.5 billion of our 2022 net sales. Through our transformation strategy we have successfully increased the mix of our sales to higher growth product categories and sales channels including retail and mass merchants, e-tailers, and technology specialists.
Our top 12 brands represented approximately $1.3 billion of our 2023 net sales. Through our strategy, we have expanded into higher growth product categories, while increasing our sales mix to higher growth channels including retail and mass merchants, e-tailers, and technology specialists.
Buchenroth, age 55 • 2017 - present, Executive Vice President and President, ACCO Brands International • 2013 - 2017, Senior Vice President and President, Emerging Markets • Joined the Company in 2002 Cezary L.
Buchenroth, age 56 • 2024 - present, Executive Vice President and President, Americas • 2017 - 2023, Executive Vice President and President, ACCO Brands International • 2013 - 2017, Senior Vice President and President, Emerging Markets • Joined the Company in 2002 Paul P.
Monko , age 61 • 2017 - present, Executive Vice President and President, ACCO Brands EMEA • 2014 - 2017, President and Chief Executive Officer, Esselte • Joined the Company in 1992 Paul P.
Monko , age 62 • 2024 - present, Executive Vice President and President, International • 2017 - 2023, Executive Vice President and President, ACCO Brands EMEA • 2014 - 2017, President and Chief Executive Officer, Esselte • Joined the Company in 1992 Deborah A.
For further information on the seasonality of our net sales, earnings and cash flow, see "Part II. Item 7.
Our third and fourth quarter cash flow comes from completing the working capital cycle. 2 For further information on the seasonality of our net sales, earnings and cash flow, see "Part II. Item 7.
McCormack , age 59 • 2018 - present, Senior Vice President, Global Products and Operations • 2013 - 2018, Senior Vice President, Global Products • Joined the Company in 1996 Patrick H.
McCormack , age 60 • 2024 - present - Senior Vice President, Global Operations and Supply Chain • 2018 - 2023, Senior Vice President, Global Products and Operations • 2013 - 2018, Senior Vice President, Global Products • Joined the Company in 1996 Cezary L.
CESMP audits are completed by our EHS teams to measure the proactive steps each location is taking to prevent injuries. We have been recognized as one of the safest companies in America and the U.K. on multiple occasions. Community Involvement We aim to give back to the communities where we live and work.
We have implemented our Comprehensive Environmental and Safety Management Plan ("CESMP") as an overall management system for our manufacturing and distribution locations. CESMP audits are completed by our EHS teams to measure the proactive steps each location is taking to prevent injuries. We have been recognized as one of the safest companies in America and the U.K. on multiple occasions.
The North America back-to-school season mainly occurs in the second and third quarters. The holiday season drives significant sales of technology accessories. The EMEA segment experiences much less seasonality than the other segments, but the first and fourth quarters are typically stronger, with the second and third impacted by lower demand due to summer vacations.
The EMEA segment experiences much less seasonality than the other segments, but the first and fourth quarters are typically stronger, with the second and third impacted by lower demand due to summer vacations. The International segment historically has strong back-to-school sales in the fourth quarter and into January as Brazil and Australia are in the Southern hemisphere.
Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report Seasonality Historically, each of our segments has demand that varies based on certain seasonal drivers. For North America, the important seasonal selling periods are related to back-to-school and the holiday season.
Seasonality Historically, each of our segments has demand that varies based on certain seasonal drivers. For North America, the important seasonal selling periods are related to back-to-school and the holiday season. The North America back-to-school season mainly occurs in the second and third quarters. The holiday season drives significant sales of technology accessories.
Sales Percentage by Operating Segment 2022 2021 2020 ACCO Brands North America 51% 51% 50% ACCO Brands EMEA 30% 33% 32% ACCO Brands International 19% 16% 18% 100% 100% 100% For more information on our operating business segments see "Note 18.
Sales Percentage by Operating Segment 2023 2022 2021 ACCO Brands North America 48% 51% 51% ACCO Brands EMEA 30% 30% 33% ACCO Brands International 22% 19% 16% 100% 100% 100% For more information on our operating business segments see "Note 17. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report.
Our products are developed by our internal research and development teams or through partnership initiatives with inventors, vendors and technology providers. Costs related to product development when paid directly by ACCO Brands are included in selling, general and administrative expenses.
Costs related to product development when paid directly by ACCO Brands are included in selling, general and administrative expenses.
Our innovation efforts focus on generating new, exciting, and differentiated consumer-oriented products that meet consumer and other end-user needs and provide the opportunity to meaningfully grow sales and margins. Our commitment to understanding consumers and designing products that fulfill their needs drives our product development strategy, which we believe will continue to be a key contributor to our success.
Our innovation efforts focus on generating new, exciting, and differentiated products that meet consumer and other end-user needs and provide the opportunity to meaningfully grow sales and margins.
Schneider , age 63 • 2012 - present, Senior Vice President, General Counsel and Secretary • 2010 - 2012, General Counsel, Accertify, Inc. • Joined the Company in 2012 Boris Elisman, age 60 • 2021 - present, Chairman and Chief Executive Officer • 2016 - 2021, Chairman, President and Chief Executive Officer • 2013 - 2016, President and Chief Executive Officer • 2010 - 2013, President and Chief Operating Officer • 2008 - 2010, President, ACCO Brands Americas • 2008, President, Global Office Products Group • 2004 - 2008, President, Computer Products Group • Joined the Company in 2004 Thomas W.
Schneider , age 64 • 2012 - present, Senior Vice President, General Counsel and Secretary • 2010 - 2012, General Counsel, Accertify, Inc. • Joined the Company in 2012 Thomas W.
The transformation has diversified our product portfolio into faster growing product categories and broadened our geographic reach and sales channels. Our Technology Accessories product group, which consists of our gaming and computer accessories, is one such high growth category and we seek opportunities to expand sales of these products throughout our North America, EMEA and International operating segments.
Our Technology Accessories product group, which consists of our gaming and computer accessories, is one such higher growth category where we seek opportunities to expand sales globally.
Employee Health and Safety ("EHS") We are committed to Mission Zero— pursuing continuous improvement in health and safety within all our locations and to attain our goal of zero accidents and zero incidents. We have implemented our Comprehensive Environmental and Safety Management Plan ("CESMP") as an overall management system for our manufacturing and distribution locations.
Throughout the year, we also deliver Company-required learning to ensure compliance with our Code of Conduct and other important policies. 4 Employee Health and Safety ("EHS") We are committed to Mission Zero— pursuing continuous improvement in health and safety within all our locations and to attain our goal of zero accidents and zero incidents.
Removed
The International segment historically has strong back-to-school sales in the fourth quarter and into January as Brazil and Australia are in the Southern hemisphere. In Mexico, back-to-school historically straddles the second and third quarters.
Added
Beginning on January 1, 2024, the Company will reorganize its previously reported North America, EMEA and International operating segments into two operating segments, Americas and International. The Americas will include the U.S., Canada, Brazil, Mexico and Chile and the International reportable segment will include EMEA, Australia, New Zealand and Asia.
Removed
Throughout the year, we also deliver Company-required learning to ensure compliance with our Code of Conduct and other important policies. 4 Finally, an important factor in our ability to deliver sustainable, long-term value and optimize resource utilization is our proactive management of employee engagement.
Added
This change will simplify and delayer the Company's operating structure and reduce costs through headcount reductions, supply change optimization, global footprint rationalization, and better leverage of our sourcing capabilities. The Company will recast prior period comparable results in early 2024 to reflect this operating segment change.
Removed
We periodically invite employees to give candid feedback about their experiences working for ACCO Brands through an Employee Engagement Survey, the most recent of which occurred in late 2021 with a 91 percent response rate.
Added
Our commitment to understanding our consumers and end-users and designing products that fulfill their needs drives our product development strategy, which we believe will continue to be a key contributor to our success. Our products are developed by our internal research and development teams or through partnership initiatives with inventors, vendors and technology providers.
Removed
Each key region and function are actively working on specific engagement plans based on this employee feedback, with an emphasis on work simplification and employee development. This active engagement of leadership and employees not only drives our workplace culture, it also results in positive business performance.
Added
Mark C. Anderson , age 61 • 2007 - present, Senior Vice President, Corporate Development • Joined the Company in 2007 Patrick H.
Removed
Dudek, Jr. , age 51 • 2020 - present, Senior Vice President, Corporate Controller and Chief Accounting Officer • 2017 - 2020, Vice President and Corporate Controller • 2016 - 2017, Chief Accounting Officer, Innerworkings, Inc. • Joined the Company in 2017 Pamela R.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+18 added−17 removed86 unchanged
Biggest changeGenerally, the strengthening of the U.S. dollar against foreign currencies negatively impacts the Company’s reported sales and operating margins. Conversely, the weakening of the U.S. dollar against foreign currencies generally has a positive effect. We source approximately 60 percent of our products from lower cost countries, primarily in Asia using U.S. dollars. This creates transactional exposure in our foreign markets.
Biggest changeWe source approximately 60 percent of our products from lower cost countries, primarily in Asia using U.S. dollars. This creates transactional exposure in our foreign markets. The strengthening of the U.S. dollar against local foreign currencies increases our cost of goods and reduces our margins on products sold in local currency.
Any such future disruptions could materially adversely impact our business, sales, results of operations, and financial condition.
Any such future disruptions could materially and adversely impact our business, sales, results of operations, and financial condition.
Any of these impacts could result in a disruption to our information technology infrastructure, interruption of our business operations, violation of applicable privacy and other laws or standards, significant legal and financial exposure beyond the scope or limits of any insurance coverage (including legal claims and proceedings and regulatory enforcement actions and penalties), increased operating costs associated with remediation activities, and a loss of confidence in our security measures, all of which could harm our reputation with our customers, end-users, employees and other stakeholders and materially adversely affect our business and results of operation.
Any of these impacts could result in a disruption to our information technology infrastructure, interruption of our business operations, violation of applicable privacy and other laws or standards, significant legal and financial exposure beyond the scope or limits of any insurance coverage (including legal claims and proceedings and regulatory enforcement actions and penalties), increased operating costs associated with remediation activities, and a loss of confidence in our security measures, all of which could harm our reputation with our customers, end-users, employees and other stakeholders and materially adversely affect our business and results of operations.
Such a disruption could occur as a result of any number of events, including but not limited to, a major equipment failure, labor stoppages, transportation failures affecting the supply and shipment of materials and finished goods, unavailability of raw materials, severe weather conditions, natural disasters, civil unrest, fire, explosions, public health emergencies, including the occurrence of pandemics such as COVID-19, war or terrorism, and disruptions in utility and other services.
Such a disruption could occur as a result of any number of events, including but not limited to, a major equipment failure, labor stoppages, transportation failures affecting the supply and shipment of materials and finished goods, unavailability of raw materials, severe weather conditions, natural disasters, civil and geopolitical unrest, fire, explosions, public health emergencies, including the occurrence of pandemics such as COVID-19, war or terrorism, and disruptions in utility and other services.
During periods of economic uncertainty or weakness, we have experienced and may continue to experience lower demand from our reseller 7 customers who often reduce inventories, both to reduce their own working capital investments and because demand for our products decreases as consumers switch to private label and other branded and/or generic products that compete on price and quality, or forgo purchases altogether.
During periods of economic uncertainty or weakness, we have experienced and may continue to experience lower demand from our reseller customers who often reduce inventories, both to reduce their own working capital investments and because demand for our products decreases as consumers switch to private label and other branded and/or generic products that compete on price and quality, or forgo purchases altogether.
Outsourcing of information technology services creates risks to our business, which are similar to those created by our product production outsourcing. In addition, we outsource certain administrative functions, such as payroll processing and benefit plan administration, to third-party service providers and may outsource other functions in the future to achieve cost savings and efficiencies.
Outsourcing of information technology services creates risks to our business, which are similar to those created by our product production outsourcing. 12 In addition, we outsource certain administrative functions, such as payroll processing and benefit plan administration, to third-party service providers and may outsource other functions in the future to achieve cost savings and efficiencies.
Any of these events could result in unforeseen production delays and increased costs and negatively affect our ability to deliver our products to our customers, all of which could adversely affect our business, sales, results of operations, and financial condition. 12 We also outsource important portions of our information technology infrastructure and systems support to third-party service providers.
Any of these events could result in unforeseen production delays and increased costs and negatively affect our ability to deliver our products to our customers, all of which could adversely affect our business, sales, results of operations, and financial condition. We also outsource important portions of our information technology infrastructure and systems support to third-party service providers.
Historically, each of our segments has demand that varies based on certain seasonal drivers related to the product categories it sells as discussed in "Part I. Item 1. Business - Seasonality " of this report. 9 As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year.
Historically, each of our segments has demand that varies based on certain seasonal drivers related to the product categories it sells as discussed in "Part I. Item 1. Business - Seasonality " of this report. As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year.
Any significant increase in our costs to comply with applicable legal and self-regulatory requirements, or any liability arising from noncompliance, could have a material adverse effect on our business, results of operations, and financial condition. Additionally, our future results of operations could be adversely impacted by changes in these laws.
Any significant increase in our costs to comply with applicable legal and self-regulatory requirements, or any liability arising from noncompliance, could have a material adverse effect on our business, results of operations, and financial condition. 17 Additionally, our future results of operations could be adversely impacted by changes in these laws.
Overall, adverse changes in economic conditions or sustained periods of economic uncertainty or weakness in one or more of the geographic markets in which we operate, whatever the cause, have negatively affected our historical sales and profitability, and in the future could have an adverse effect on our sales, business, results of operations, cash flow and financial condition.
Overall, adverse changes in economic conditions or sustained periods of economic uncertainty or weakness in one or more of the geographic markets in which we operate, whatever 18 the cause, have negatively affected our historical sales and profitability, and in the future could have an adverse effect on our sales, business, results of operations, cash flow and financial condition.
Breach of any of the covenants, ratios, and tests contained in the agreements governing our indebtedness, or our inability to pay interest on, or principal of, our outstanding debt as it becomes due, could result in an 15 event of default, in which case our lenders could declare all amounts outstanding to be immediately due and payable.
Breach of any of the covenants, ratios, and tests contained in the agreements governing our indebtedness, or our inability to pay interest on, or principal of, our outstanding debt as it becomes due, could result in an event of default, in which case our lenders could declare all amounts outstanding to be immediately due and payable.
Failure to meet any of these requirements may result in our having to cease doing business with a supplier or cease production at a particular facility, stop selling or recall non-conforming products, or having imported product detained at the port or subject to exclusion or seizure.
Failure to meet any of these requirements may result in our having to cease doing business with a supplier or cease production at a particular facility, stop selling or recall non-conforming products, or having imported products detained at the port or subject to exclusion or seizure.
A second assessment challenging the deduction of goodwill from ACCO Brazil’s taxable income for the years 2008, 2009 and 2010 was issued by FRD in October 2013 (the "Second Assessment" and together with the First Assessment, the "Brazil Tax 16 Assessments"). ACCO Brazil continues to dispute both of the Brazil Tax Assessments.
A second assessment challenging the deduction of goodwill from ACCO Brazil’s taxable income for the years 2008, 2009 and 2010 was issued by FRD in October 2013 (the "Second Assessment" and together with the First Assessment, the "Brazil Tax Assessments"). ACCO Brazil continues to dispute both of the Brazil Tax Assessments.
Our success depends on our ability to attract and retain qualified personnel at all levels and maintain a diverse, global workforce. The market for talent is currently extremely competitive and our current pay and benefits packages may not be 17 sufficiently attractive.
Our success depends on our ability to attract and retain qualified personnel at all levels and maintain a diverse, global workforce. The market for talent is currently extremely competitive and our current pay and benefits packages may not be sufficiently attractive.
In addition, as we continue to expand our business into emerging and new markets and into new product categories, we increase the number of legal and self-regulatory requirements with which we are required to comply, which increases the complexity and costs of compliance, as well as the risks of noncompliance.
In addition, as we continue to expand our business into new markets and into new product categories, we increase the number of legal and self-regulatory requirements with which we are required to comply, which increases the complexity and costs of compliance, as well as the risks of noncompliance.
Under certain circumstances, the terms of our debt agreements limit our ability to return capital to stockholders through stock repurchases, dividends or otherwise. There is no assurance that we will continue to make dividend payments or repurchase stock.
Under certain circumstances, the terms of our debt agreements limit our ability to return 15 capital to stockholders through stock repurchases, dividends or otherwise. There is no assurance that we will continue to make dividend payments or repurchase stock.
We have seen, and expect to continue to see, increased competition from private label brands, especially in periods of economic uncertainty and weakness when consumers turn to alternative or lower cost products.
We have seen, and expect to continue to see, increased competition from private label brands, especially in periods of economic uncertainty and weakness when customers and consumers turn to alternative or lower cost products.
Additionally, we rely on our suppliers to ensure that our products meet our design and product content specifications, and all applicable laws, including product safety, security, labor, and environmental laws.
Additionally, we rely on our suppliers to ensure that our products meet our design and product content specifications, and all applicable laws, including product safety, security, labor, sustainability and environmental laws.
If the FRD’s initial position is ultimately sustained, payment of the amount assessed would materially adversely affect our cash flow in the year of settlement. For additional details regarding the Brazil Tax Assessments, see "Note 12. Income Taxes – Brazil Tax Assessments" to the consolidated financial statements contained in Part II, Item 8. of this report.
If the FRD’s initial position is ultimately sustained, payment of the amount assessed would materially adversely affect our cash flow in the year of settlement. For additional details regarding the Brazil Tax Assessments, see "Note 11. Income Taxes – Brazil Tax Assessments" to the consolidated financial statements contained in Part II, Item 8. of this report.
Additionally, because of these quarterly fluctuations, comparisons of our operating results across different fiscal quarters may not be meaningful. The level of investment returns on pension plan assets and the assumptions used for valuation purposes could affect the Company’s earnings and cash flows in future periods.
Additionally, because of these quarterly fluctuations, comparisons of our operating results across different fiscal quarters may not be meaningful. The level of investment returns on pension plan assets and the assumptions used for valuation purposes have affected the Company's earnings, and could affect the Company’s earnings and cash flows in future periods.
The size, scale and relative competitive market position of certain large customers gives them significant leverage in business negotiations. Additionally, the competitive environment in which our large customers operate have made and will continue to make our business with them challenging and unpredictable. Our customer concentration increases our customer credit risk.
The size, scale and relative competitive market position of certain large customers gives them significant leverage in business negotiations. Additionally, the competitive environment in which our large customers operate has made and will continue to make our business with them challenging and unpredictable. Our customer concentration increases our customer credit risk.
A disruption at one of our suppliers' manufacturing facilities, one of our office, manufacturing or distribution locations, or elsewhere in our global supply chain due to circumstances outside our control, have, and in the future could, materially and adversely impact our business operations.
A disruption at one of our suppliers' manufacturing facilities, one of our offices, manufacturing or distribution locations, or elsewhere in our global supply chain due to circumstances outside our control, have, and in the future could, materially and adversely impact our business operations.
The present value of our withdrawal liability payments could be significant and would be recorded as an expense in our Consolidated Statements of Income and as a liability on our Consolidated Balance Sheets in the first year of our withdrawal. See also "Note 6.
The present value of our withdrawal liability payments could be significant and would be recorded as an expense in our Consolidated Statements of Income and as a liability on our Consolidated Balance Sheets in the first year of our withdrawal. See also "Note 5.
We outsource certain manufacturing functions, such as product design and production, to third-party suppliers. This creates a number of risks, including decreased control over the engineering and manufacturing processes which can result in cost overruns, delayed deliveries or shortages, inferior product quality, and loss or misappropriation of trade secrets.
We outsource certain product development and manufacturing functions, such as product design and production, to third-party suppliers. This creates a number of risks, including decreased control over the engineering and manufacturing processes which can result in cost overruns, delayed deliveries or shortages, inferior product quality, and loss or misappropriation of trade secrets and intellectual property.
Depending on the function involved, such errors may lead to business disruption, processing inefficiencies, internal control deficiencies, loss of or damage to intellectual property, legal and regulatory exposure, or harm to employee morale. Technology and Cybersecurity Risks We rely extensively on information technology systems to operate, transact and otherwise manage our business.
Depending on the function involved, such issues may also lead to business disruption, processing inefficiencies, internal control deficiencies, loss of or damage to intellectual property, legal and regulatory exposure, or harm to employee morale. Technology and Cybersecurity Risks We rely extensively on information technology systems to operate, transact and otherwise manage our business.
The decline in the overall demand for certain of the products we sell has adversely impacted our business and results of operations, and we expect it will continue to do so. Our school and technology accessories businesses are seasonal, which may impair our ability to accurately forecast our operating results and working capital requirements.
The decline in the overall demand for certain of the products we sell has adversely impacted our business and results of operations, and we expect it will continue to do so. Our school and technology accessories businesses are seasonal, which has impacted, and may in the future impact, our ability to accurately forecast our operating results and working capital requirements.
A limited number of large customers account for a significant percentage of our net sales, and the loss of, or a substantial reduction in sales to, or gross profit from, or significant decline in the financial condition of one or more of these customers has and may continue to adversely impact our business and results of operations.
Economic and Strategic Risks A limited number of large customers account for a significant percentage of our net sales, and the loss of, or a substantial reduction in sales to, or gross profit from, or significant decline in the financial condition of one or more of these customers has and may continue to adversely impact our business and results of operations.
Pension and Other Retiree Benefits" to the consolidated financial statements contained in Part II, Item 8. of this report. Impairment of goodwill and indefinite-lived intangible assets have had, and could in the future have, a material adverse effect on our financial results. We have approximately $1.5 billion of goodwill and other specifically identifiable intangible assets as of December 31, 2022.
Pension and Other Retiree Benefits" to the consolidated financial statements contained in Part II, Item 8. of this report. Impairment of goodwill and indefinite-lived intangible assets have had, and could in the future have, a material adverse effect on our financial results. We have approximately $1.4 billion of goodwill and other specifically identifiable intangible assets as of December 31, 2023.
We are subject to national, state, provincial and/or local laws, rules and regulations, as well as self-regulatory requirements, in numerous countries due to the nature of our operations and the products we sell, including: • Laws and regulations applicable to U.S. public companies with securities listed on the New York Stock Exchange; • Laws relating to the discharge and emission of certain materials and waste, and laws establishing standards for their use, disposal, and management; • Laws governing the content of toxic chemicals and materials in the products we sell; • Laws relating to the environmental sustainability of our operations and products (including packaging) and the protection of human rights in our supply chain; • Laws regulating wellness products, including pesticides and pesticide devices; • Product safety laws; • International trade laws, including tariffs, trade sanctions and embargoes; • Tax laws; • Privacy and data security laws and self-regulatory requirements regarding the acceptance, processing, storage, and transmission of credit card data; • Laws governing fair competition and marketing and advertising, including laws and regulations regarding "green" claims; and • Anti-bribery, anti-corruption and anti-money laundering laws.
We are subject to national, state, provincial and/or local laws, rules and regulations, as well as self-regulatory requirements, in numerous countries due to the nature of our operations and the products we sell, including: • Laws and regulations applicable to U.S. public companies with securities listed on the New York Stock Exchange; • Laws relating to the discharge and emission of certain materials and waste, and laws establishing standards for their use, disposal, and management; • Laws governing the content of toxic chemicals and materials in the products we sell; • Laws relating to corporate governance, the environmental sustainability of our operations and products (including packaging) and the protection of human rights in our supply chain, including reporting obligations; • Product safety laws; • International trade laws, including tariffs, trade sanctions and embargoes; • Tax laws; • Privacy and data security laws and self-regulatory requirements regarding the acceptance, processing, storage, and transmission of credit card data; • Laws governing fair competition and marketing and advertising, including laws and regulations regarding "green" claims; and • Anti-bribery, anti-corruption and anti-money laundering laws.
The Company has foreign currency translation and transaction exposure that has, and is likely to continue to, materially affect the Company’s sales, results of operations, financial condition and liquidity. Approximately 54 percent of our net sales for the year ended December 31, 2022, were transacted in a currency other than the U.S. dollar.
The Company has foreign currency translation and transaction exposure that has, and is likely to continue to, materially affect the Company’s sales, results of operations, financial condition and liquidity. Approximately 57 percent of our net sales for the year ended December 31, 2023, were transacted in a currency other than the U.S. dollar.
We continue to evaluate the impact of developments from our reporting units to assess whether impairment indicators are present. See also "Note 10.
We continue to evaluate the impact of developments from our reporting units to assess whether impairment indicators are present. See also "Note 9.
In addition, an acquisition may not perform as anticipated, be accretive to earnings, or prove to be beneficial to our operations and cash flow. If we fail to effectively identify, value, consummate, or manage any acquired company, we may not achieve the financial results anticipated at the time of its acquisition.
In addition, an acquisition may not perform as anticipated, be accretive to earnings, or prove to be beneficial to our operations and cash flow. If we fail to effectively identify, value, consummate, or manage any acquired company, we may not achieve the financial results, including cost savings and synergies, anticipated at the time of its acquisition.
Risk Factors ," as well as the following: • quarterly fluctuations in our operating results compared with market expectations; • investors' perceptions of the industries in which we operate; • changes in financial estimates by us or securities analysts and recommendations by securities analysts; and • the composition of our stockholders, particularly the presence of "short sellers" or high frequency traders trading in our stock.
Risk Factors ," as well as the following: • quarterly fluctuations in our operating results compared with market expectations; • investors' perceptions; • changes in financial estimates by us or securities analysts and recommendations by securities analysts; and • the composition of our stockholders, particularly the presence of "short sellers" or high frequency traders trading in our stock.
Quantitative and Qualitative Disclosures About Market Risk - Foreign Exchange Risk Management" of this report. Challenges related to the highly competitive business environment in which we operate could have a material adverse effect on our business, results of operations and financial condition.
Quantitative and Qualitative Disclosures About Market Risk - Foreign Exchange Risk Management" of this report. Challenges related to the highly competitive business environment in which we operate has, and may continue to have, a material adverse effect on our business, results of operations and financial condition.
While we believe that inflationary costs for most raw materials, purchased finished goods, and freight and transportation are beginning to moderate, there can be no assurance that inflation will abate.
While we believe that inflationary costs for most raw materials, purchased finished goods, and freight and transportation will continue to moderate, there can be no assurance that inflation will abate.
Further supply chain disruptions could adversely affect our operations, sales, profitability and cash flow. Our operating results have been, and continue to be, adversely affected by inflation, and changes in the cost or availability of raw materials, transportation, labor and other necessary supplies and services, including the cost of finished goods.
These events as well as further supply chain disruptions could adversely affect our operations, sales, profitability and cash flow. 11 Our operating results have been, and continue to be, adversely affected by inflation and changes in the cost or availability of raw materials, transportation, labor and other necessary supplies and services, including the cost of finished goods.
Changes in government regulations, as well as the significant unfunded liabilities, including the unfunded liabilities of the U.S. multi-employer pension plan in which we are a participant, could also affect the Company’s pension plan expenses and funding requirements. As of December 31, 2022, the Company had $159.6 million recorded as pension liabilities in its Consolidated Balance Sheet.
Changes in government regulations, as well as the significant unfunded liabilities, including the unfunded liabilities of the U.S. multi-employer pension plan in which we are a participant, could also affect the Company’s pension plan expenses and funding requirements. As of December 31, 2023, the Company had $162.1 million recorded as pension liabilities in its Consolidated Balance Sheet.
The continued impact of COVID-19 may also exacerbate other risks discussed in this "Part I, Item 1A. Risk Factors ," any of which could have a material effect on the business, results of operations or financial condition of the Company.
The continued longer-term impacts of the COVID-19 pandemic may also exacerbate other risks discussed in this "Part I, Item 1A. Risk Factors ," any of which could have a material effect on the business, results of operations or financial condition of the Company.
All of these legal frameworks are complex and change frequently. Moreover, the requirements of these and other laws can vary significantly from jurisdiction to jurisdiction. Additionally, laws relating to sustainability and human rights are rapidly being adopted around the world.
All of these legal frameworks are complex and change frequently. Moreover, the requirements of these and other laws can vary significantly from jurisdiction to jurisdiction. Additionally, laws relating to sustainability and human rights, including enhanced transparency and reporting obligations, are rapidly being adopted around the world.
If the financial markets do not provide the long-term returns that are expected, or discount rates increase the present value of liabilities, the Company could be required to make larger contributions and/or record higher non-cash expenses related to its pension liabilities.
When the financial markets do not provide the long-term returns that are expected, or discount rates increase the present value of liabilities, the Company has been, and in the future could be, required to make larger contributions and/or record higher non-cash expenses related to its pension liabilities.
If we are unable to accurately forecast and prepare for customer orders or our working capital needs, or if there is a downturn in business or economic conditions during these periods, our business, results of operation, liquidity and financial condition could be adversely affected.
When we are unable to accurately forecast and prepare for customer orders or our working capital needs, or if there is a downturn in business or economic conditions during these periods, our business, 9 results of operations, liquidity and financial condition have been, and in the future could be, adversely affected.
Failure to properly identify, value and manage acquisitions may materially impact our business, results of operations and financial condition. Our growth strategy includes continued focus on mergers and acquisitions. We may not be successful in identifying suitable acquisition opportunities, prevailing against competing potential acquirers, negotiating appropriate acquisition terms, obtaining financing, or completing proposed acquisitions.
Failure to properly identify, value and manage acquisitions, and successfully integrate them may materially impact our business, results of operations and financial condition. Our strategy is partially based on growth through acquisitions. We may not be successful in identifying suitable acquisition opportunities, prevailing against competing potential acquirers, negotiating appropriate acquisition terms, obtaining financing, or completing proposed acquisitions.
Historically, we have not been able to raise prices fast enough to effectively mitigate the adverse impact of these cost increases on our margins and there can be no assurance that we will be able to do so in the future.
Historically, we have not been able to raise prices fast enough to effectively mitigate the adverse impact of these cost increases on our margins and there can be no assurance that we will be able to do so in the future. Additionally, we have lost, and may continue to lose, sales due to increasing our selling prices to our customers.
If the service providers to whom we outsource these functions do not perform effectively, we may not be able to achieve the expected cost savings and may incur additional costs to correct errors they make.
If the service providers to whom we outsource these functions do not perform effectively or experience deficiencies or material weaknesses in their internal controls, we may not be able to achieve the expected cost savings and may incur additional costs to correct errors they make.
The process of integrating and expanding operations also could cause an interruption of, or loss of momentum in, the activities of one or more of our businesses due to the considerable time and attention needed for the process.
We may face challenges in integrating our acquisitions with our existing operations and expanding the acquired business geographically. The process of integrating and expanding operations also could cause an interruption of, or loss of momentum in, the activities of one or more of our businesses due to the considerable time and attention needed for the process.
Despite these efforts, there can be no assurance that we will successfully identify an incident of 13 intrusion, tampering or theft in a timely manner or at all, and in advance of it impacting the Company, and any such impact could be material. Further, our costs to maintain and upgrade our security systems could increase significantly as cybersecurity threats increase.
Despite these efforts, there can be no assurance that we will successfully identify an incident of intrusion, tampering or theft in a timely manner or at all, and in advance of it impacting the Company, and any such impact could be material.
Our top ten customers accounted for 42.9 percent of our net sales for the year ended December 31, 2022.
Our top ten customers accounted for 41.6 percent of our net sales for the year ended December 31, 2023.
Despite our efforts to secure and monitor our information technology systems, the possibility of intrusion, tampering, and theft cannot be eliminated entirely. We have from time to time experienced cybersecurity breaches, such as "phishing" attacks, business email compromises, employee or insider error, brute force attacks, unauthorized parties gaining access to our information technology systems, and similar incidents.
We have from time to time experienced cybersecurity breaches, such as "phishing" attacks, business email compromises, employee or insider error, brute force attacks, unauthorized parties gaining access to our information technology systems, and similar incidents.
An acquisition could also adversely impact our operating performance or cash flow due to the issuance of acquisition-related debt, pre-acquisition assumed liabilities, undisclosed facts about the business, expenses incurred to consummate the acquisition, increases in amortization due to the acquisition, or possible future impairments of goodwill or intangible assets associated with the acquisition. 14 We may face challenges with integrating acquisitions and achieving the sales growth and other financial results anticipated at the time of acquisition, including planned synergies.
An acquisition could also adversely impact our operating performance or cash flow due to the issuance of acquisition-related debt, pre-acquisition assumed liabilities, undisclosed facts about the business, expenses incurred to consummate the acquisition, increases in amortization due to the acquisition, or possible future impairments of goodwill or intangible assets associated with the acquisition.
The integration of any acquisition will involve changes to or implementation of critical information technology systems, modifications to our internal control systems, processes and accounting and financial systems, and the establishment of disclosure controls and procedures and internal control over financial reporting necessary to meet our obligations as a public company.
If we are not able to effectively manage the integration process, or if any significant business activities are interrupted as a result thereof, our business and financial results could suffer. 14 The integration of any acquisition will involve changes to or implementation of critical information technology systems, modifications to our internal control systems, processes and accounting and financial systems, and the establishment of disclosure controls and procedures and internal control over financial reporting necessary to meet our obligations as a public company.
The global economy is currently experiencing the highest levels of inflation in decades. Additionally, the global imbalance between the supply and demand for commodities, component parts, transportation and labor have impacted their availability and increased their cost. This has been exacerbated by the war in Ukraine which has also impacted the cost and availability of energy in EMEA.
In recent years, the global economy has experienced the highest levels of inflation in decades. Additionally, the global imbalance between the supply and demand for commodities, component parts, transportation and labor have impacted their availability and increased their cost. This has been exacerbated by the geopolitical unrest in Europe and the Middle East.
In addition, as economic and competitive pressures cause our customers to close or reduce the size of their retail locations, and diversify their product offerings, the available retail space devoted to our products is further limited. 8 Our business has been, and we expect it will continue to be, affected by actions taken by our customers and competitors to compete more effectively.
In addition, as economic and competitive pressures cause our customers to close or reduce the size of their retail locations, and diversify their product offerings, the available retail space devoted to our products is further limited.
In addition, our customers often change their order patterns for the peak season, making forecasting of production schedules and inventory purchases more challenging.
In addition, our customers often change their order patterns for the peak season, making forecasting of production schedules and inventory purchases more challenging. These fluctuations have impacted our ability to accurately forecast our inventory and working capital needs as well as our operating results.
During the third quarter of 2022, we recorded a $98.7 million non-cash goodwill impairment charge related to our North America reporting unit. Future events may occur that could adversely affect the reported value, or fair value, of our goodwill or indefinite-lived intangible assets that would require future impairment charges which would negatively impact our financial results.
Future events may occur that could adversely affect the reported value, or fair value, of our goodwill or indefinite-lived intangible assets that would require future impairment charges which would negatively impact our financial results.
As use of technology-based tools continues to rise worldwide and the nature of work and school evolves, demand for traditional paper-based and related products, such as planners, ring binders, lever arch files and other paper storage and organization products, and mechanical binding equipment, has declined. We expect that demand for these products will continue to decline.
As use of technology-based tools continues to rise worldwide and the nature of work and school evolves demand for many of our products, especially for our traditional paper-based and related products has declined. This trend was accelerated by the COVID-19 pandemic and we expect that demand for these products will continue to decline.
Additionally, government actions such as currency devaluations, foreign exchange controls, imposition of tariffs or other trade restrictions, and price or profit controls can further negatively impact, and increase the volatility of, foreign currency exchange rates.
Additionally, government actions such as currency devaluations, foreign exchange controls, imposition of tariffs or other trade restrictions, and price or profit controls can further negatively impact, and increase the volatility of, foreign currency exchange rates. 7 The fluctuations in the foreign currency rates relative to the U.S. dollar can cause translation, transaction, and other gains and losses in our non-U.S.-based businesses, which impact our sales, profitability and cash flow.
Our success depends on our ability to invest in innovation and product development and successfully anticipate, develop and market products that appeal to the changing needs and preferences of consumers. Additionally, part of our strategy is to develop new, exciting and differentiated products that support our shift towards a faster growing, more consumer-oriented business.
Our success depends on our ability to invest in innovation and product development and successfully anticipate, develop and market products that appeal to the changing needs and preferences of consumers and other end-users.
We have experienced significant disruptions in our global supply chain due to insufficient freight carrier capacity, port delays and closures, the cost and availability of international and domestic freight carriers, and labor shortages. These and other supply chain disruptions, which have affected all of our operating segments, began in late 2020 and continued to escalate throughout 2021 and 2022.
Additionally, we rely on international freight carriers and domestic trucking and rail lanes to import and distribute products to our customers throughout the world. We have experienced disruptions in our global supply chain due to insufficient freight carrier capacity, port delays and closures, the cost and availability of international and domestic freight carriers, labor shortages and geopolitical unrest.
Any such actions could result in lower sales and margins and adversely affect our business, results of operations, and financial condition. Our success depends on our ability to develop and market innovative products that meet consumer demands, including price expectations, and to expand into new and adjacent product categories that are experiencing higher growth rates.
Our success depends on our ability to develop and market innovative products that meet consumer and other end-user demands, including price expectations, and to expand into new and adjacent product categories that we believe will have higher long-term growth rates.
We implemented price increases in 2021 and throughout 2022, and will implement additional price increases if inflation continues to escalate, in an effort to offset the inflationary and supply-chain related cost increases noted above which have and continue to negatively impact our margins and overall profitability.
We implemented price increases in 2022 and throughout 2023, and will implement additional price increases if necessary to offset future inflationary and supply-chain related cost increases.
The strengthening of the U.S. dollar against local foreign currencies increases our cost of goods and reduces our margins on products sold in local currency. When this occurs, we seek to raise prices in our foreign markets to recover the lost margin.
When this occurs, we seek to raise prices in our foreign markets to recover the lost margin.
We have experienced cost increases from our suppliers of raw materials, component parts and purchased finished goods, as well as increased labor, energy and commodity costs. In particular, we are experiencing a significant increase in cost of certain commodity paper that is used in our school and office products in both North America and Brazil which we expect to continue.
As a result, we have experienced cost increases from our suppliers of raw materials, component parts and purchased finished goods, as well as increased labor, energy and commodity costs. During the fourth quarter of 2023, we began to see signs of moderating inflation.
Operational Risks Our business, results of operations and cash flow have been, and may continue to be, adversely impacted by disruptions in the global supply chain. We manufacture approximately 40 percent of the products we sell where we operate and purchase the remaining 60 percent from suppliers in lower cost countries, primarily in Asia.
If we are not able to effectively manage the restructuring process our business and financial results could suffer. Our business, results of operations and cash flow have been, and may continue to be, adversely impacted by disruptions in the global supply chain.
There can be no assurance that we will make the right investment choice or be successful in developing innovative, consumer-oriented products in categories that are experiencing higher growth rates. If we are unable to successfully increase sales and margins by expanding our product assortment, our business, results of operations and financial condition could be adversely affected.
If we are unable to successfully increase sales and margins by expanding our product assortment, our business, results of operations and financial condition could be adversely affected. 8 Our business and results of operations have been and may continue to be adversely affected by the long-term impacts of the COVID-19 global pandemic.
Additionally, ongoing constraints on the availability of, or a future reduction in sales of, gaming consoles may also adversely impact our sales and profitability. Outsourcing the production of certain of our products, our information technology systems and other administrative functions could materially adversely affect our business, results of operations and financial condition.
We have also seen customers and consumers purchase lower priced products which generate lower margins due to our price increases and we expect this trend may continue. Outsourcing the development and production of certain of our products, our information technology systems and other administrative functions could materially adversely affect our business, results of operations and financial condition.
We also purchase component parts and raw materials for our manufactured products from third parties many of which are also imported from Asia. Additionally, we rely on international freight carriers and domestic trucking and rail lanes to import and distribute products to our customers throughout the world.
We manufacture approximately 40 percent of the products we sell where we operate and purchase the remaining 60 percent from suppliers in lower cost countries, primarily in Asia. We also purchase component parts and raw materials for our manufactured products from third parties many of which are also imported from Asia.
Economic and Strategic Risks Our business and results of operations have been and may continue to be adversely affected by the ongoing impact of the COVID-19 global pandemic. The COVID-19 pandemic has had, and may continue to have, a negative effect on our business and results of operation.
The long-term impacts of the COVID-19 pandemic, including the prevalence of hybrid work, and changes in the behavior of customers, consumers and end-users, has had, and will continue to have, a negative effect on our business and results of operations.
Removed
This includes the impact of business and school closures, remote and hybrid education and work, disruptions or restrictions in our employees’ ability to work effectively, temporary facilities closures, supply chain disruptions, increases in raw material and commodity costs, and changes in customer and consumer spending and purchasing behavior.
Added
Our primary exposure is from translation of our foreign operations' results. Generally, the strengthening of the U.S. dollar against foreign currencies negatively impacts the Company’s reported sales and operating margins. Conversely, the weakening of the U.S. dollar against foreign currencies generally has a positive effect.
Removed
The extent of the impact of COVID-19 on our future business and financial results depends on future developments that are uncertain and cannot be predicted at this time, including the severity and continued spread of the COVID-19 virus and its existing and future variants within the markets in which we operate, the effectiveness of and impacts caused by public health measures and other actions taken throughout the world to contain or mitigate the effects of the pandemic, any resulting economic recession or depression, and temporary or permanent changes in the behavior of customers, consumers and other end-users, among other factors.
Added
Our business has been, and we expect it will continue to be, affected by actions taken by our customers and competitors to compete more effectively. Such actions have, and in the future may, result in lost sales and lower margins, and adversely affect our business, results of operations, and financial condition.
Removed
The fluctuations in the foreign currency rates relative to the U.S. dollar can cause translation, transaction, and other gains and losses in our non-U.S.-based businesses, which impact our sales, profitability and cash flow. Our primary exposure is from translation of our foreign operations' results.
Added
Additionally, part of our strategy is to develop new, exciting and differentiated products in our technology accessories and learning and creative categories which we believe offer significant long-term growth opportunities. There can be no assurance that we will make the right investment choice or be successful in developing innovative products in these and other categories.
Removed
These disruptions also resulted in increased logistic expenses, product availability issues, lost sales and customer fines for late deliveries, and an increase in our inventory levels. Although we have seen a significant reduction in supply chain disruptions and deflation in transportation costs, there can be no assurance that this trend will continue.
Added
During 2023, office occupancy rates stabilized at levels well below pre-pandemic levels and the rate of decline in the demand for our traditional paper-based and related products continues to accelerate. The extent of the impact of these trends on our future business and financial results depends on future developments that are uncertain.
Removed
Our third-party manufacturers have also been affected by these inflationary pressures which has, in turn, resulted in an increase in the amount we pay for finished goods.
Added
During the fourth quarter of 2023, we recorded a $89.5 million non-cash goodwill impairment charge related to our North America reporting unit. This follows a $98.7 million non-cash goodwill impairment charge related to our North America reporting unit recorded during the third quarter of 2022.
Removed
Further, the disruptions in the global supply chain noted above have resulted in increased freight and transportation costs and have affected the availability of imported products, 11 raw materials and component parts we use in our domestic manufacturing.
Added
Operational Risks Failure to successfully implement our multi-year restructuring and cost savings program could adversely affect our future results of operations and cash flow. In January 2024, the Company announced a multi-year restructuring and cost savings program, with anticipated annualized pre-tax cost savings of at least $60 million when fully implemented in 2026.
Removed
Additionally, we have lost, and may continue to lose, sales as a result of lack of product availability or due to increasing our selling prices to our customers as we seek to offset these cost increases. We have also seen customers and consumers purchase lower priced products which generate lower margins due to our price increases.

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Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeThe following table lists our principal facilities by segment as of December 31, 2022: Location Functional Use Owned/Leased (number of properties) ACCO Brands North America: Burlingame, California Office Leased Booneville, Mississippi Distribution/Manufacturing Owned Sidney, New York Distribution/Manufacturing Owned Kettering, Ohio Office Leased Alexandria, Pennsylvania Distribution/Manufacturing Owned Woodinville, Washington Office Leased Mississauga, Canada Distribution/Manufacturing/Office Leased Hong Kong Office Leased Taipei, Taiwan Office Leased ACCO Brands EMEA: Sint-Niklaas, Belgium Distribution/Manufacturing Leased Shanghai, China Manufacturing Leased Lanov, Czech Republic Distribution/Manufacturing Leased Aylesbury, England Office Leased Halesowen, England Distribution Owned Lillyhall, England Manufacturing Leased Saint-Ame, France Distribution Owned Heilbronn, Germany Distribution Owned Stuttgart, Germany Office Leased Uelzen, Germany Manufacturing Owned Gorgonzola, Italy Distribution/Manufacturing Leased Kozienice, Poland Distribution/Manufacturing Owned Warsaw, Poland Office Leased Arcos de Valdevez, Portugal Manufacturing Owned Hestra, Sweden Distribution/Manufacturing/Office Owned ACCO Brands International: Sydney, Australia Distribution/Manufacturing/Office Owned/Leased (2) Bauru, Brazil Distribution/Manufacturing/Office Owned (2) Sao Paulo, Brazil Manufacturing/Office Leased (2) Tokyo, Japan Office Leased Lerma, Mexico Manufacturing/Office Owned Mexico City, Mexico Office Leased Auckland, New Zealand Distribution/Office Leased Singapore Distribution/Office Leased (2) We believe that the properties are suitable to the respective businesses and have production capacities adequate to meet the needs of our businesses. 19
Biggest changeThe following table lists our other principal facilities by segment as of December 31, 2023: Location Functional Use Owned/Leased (number of properties) ACCO Brands North America: Burlingame, California Office Leased Booneville, Mississippi Distribution/Manufacturing Owned Sidney, New York (a) Distribution/Manufacturing Owned Kettering, Ohio Office Leased Alexandria, Pennsylvania Distribution/Manufacturing Owned Woodinville, Washington Office Leased Mississauga, Canada Distribution/Manufacturing/Office Leased Hong Kong Office Leased Taipei, Taiwan Office Leased ACCO Brands EMEA: Sint-Niklaas, Belgium Distribution/Manufacturing Leased Shanghai, China Manufacturing Leased Aylesbury, England Office Leased Halesowen, England Distribution Owned Lillyhall, England Manufacturing Leased Saint-Ame, France Distribution Owned Heilbronn, Germany Distribution Owned Stuttgart, Germany Office Leased Uelzen, Germany Manufacturing Owned Gorgonzola, Italy Distribution/Manufacturing Leased Kozienice, Poland Distribution/Manufacturing Owned Warsaw, Poland Office Leased Arcos de Valdevez, Portugal (a) Manufacturing Owned Hestra, Sweden Distribution/Manufacturing/Office Owned ACCO Brands International: Sydney, Australia Distribution/Manufacturing/Office Owned/Leased (2) Bauru, Brazil Distribution/Manufacturing/Office Owned (2) Sao Paulo, Brazil Manufacturing/Office Leased (2) Tokyo, Japan Office Leased Lerma, Mexico Manufacturing/Office Owned Mexico City, Mexico Office Leased Auckland, New Zealand Distribution/Office Leased Singapore Distribution/Office Leased (2) (a) Scheduled to be closed in 2024 We believe that the properties are suitable to the respective businesses and have production capacities adequate to meet the needs of our businesses. 22

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed4 unchanged
Biggest changeFor additional details regarding the Brazil Tax Assessments, see "Note 12. Income Taxes – Brazil Tax Assessments" to the consolidated financial statements contained in Part II, Item 8. of this report. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 20 PART II
Biggest changeFor additional details regarding the Brazil Tax Assessments, see "Note 11. Income Taxes – Brazil Tax Assessments" to the consolidated financial statements contained in Part II, Item 8. of this report. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCumulative Total Return 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 ACCO Brands Corporation $100.00 $56.79 $80.59 $75.86 $76.45 $54.07 Russell 2000 100.00 88.99 111.70 134.00 153.85 122.41 S&P Office Services and Supplies (SuperCap1500) 100.00 87.00 105.89 110.54 123.89 95.52 21 Common Stock Purchases The following table provides information about our purchases of equity securities during the quarter ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1, 2022 to October 31, 2022 — $ — — $ 105,645,579 November 1, 2022 to November 30, 2022 — — — 105,645,579 December 1, 2022 to December 31, 2022 — — — 105,645,579 Total — $ — — $ 105,645,579 (1) On February 14, 2018, the Company announced that its Board of Directors authorized the repurchase of up to $100 million in shares of its common stock.
Biggest changeCumulative Total Return 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 ACCO Brands Corporation $100.00 $138.05 $124.63 $121.83 $82.45 $89.68 Russell 2000 100.00 123.72 146.44 166.50 130.60 150.31 S&P Office Services and Supplies (SuperCap1500) 100.00 119.09 121.92 134.46 101.47 125.28 24 Common Stock Purchases The following table provides information about our purchases of equity securities during the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1, 2023 to October 31, 2023 — $ — — $ 105,645,579.0 November 1, 2023 to November 30, 2023 — — — 105,645,579.0 December 1, 2023 to December 31, 2023 — — — 105,645,579.0 Total — $ — — $ 105,645,579.0 (1) On February 14, 2018, the Company announced that its Board of Directors authorized the repurchase of up to $100 million in shares of its common stock.
The Company currently believes its capital structure and cash resources can continue to support the funding of future dividends. Our long-term strategy remains to deploy cash to fund dividends, reduce debt, make acquisitions, and repurchase shares of our common stock. ITEM 6. [RESERVED] 22
The Company currently believes its capital structure and cash resources can continue to support the funding of future dividends. Our long-term strategy remains to deploy cash to fund dividends, reduce debt, make acquisitions, and repurchase shares of our common stock. ITEM 6. [RESERVED] 25
Dividend information for each quarter for the years ended December 31, 2022, 2021 and 2020 is summarized below: 2022 2021 2020 First quarter $ 0.075 $ 0.065 $ 0.065 Second quarter 0.075 0.065 0.065 Third quarter 0.075 0.065 0.065 Fourth quarter 0.075 0.075 0.065 Total $ 0.300 $ 0.270 $ 0.260 The continued declaration and payment of dividends is at the discretion of the Board of Directors and will be dependent upon, among other things, the Company's financial position, results of operations, cash flows and other factors.
Dividend information for each quarter for the years ended December 31, 2023, 2022 and 2021 is summarized below: 2023 2022 2021 First quarter $ 0.075 $ 0.075 $ 0.065 Second quarter 0.075 0.075 0.065 Third quarter 0.075 0.075 0.065 Fourth quarter 0.075 0.075 0.075 Total $ 0.300 $ 0.300 $ 0.270 The continued declaration and payment of dividends is at the discretion of the Board of Directors and will be dependent upon, among other things, the Company's financial position, results of operations, cash flows and other factors.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock to that of the S&P Office Services and Supplies (SuperCap1500) Index and the Russell 2000 Index assuming an investment of $100 in each from December 31, 2017 through December 31, 2022.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock to that of the S&P Office Services and Supplies (SuperCap1500) Index and the Russell 2000 Index assuming an investment of $100 in each from December 31, 2018 through December 31, 2023.
On August 7, 2019, the Company announced that its Board of Directors had authorized the repurchase of up to an additional $100 million in shares of its common stock. During the year ended December 31, 2022, we repurchased 2.7 million of our common stock in the open market.
On August 7, 2019, the Company announced that its Board of Directors had authorized the repurchase of up to an additional $100 million in shares of its common stock. During the year ended December 31, 2023, we did not repurchase any of our common stock in the open market.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "ACCO." As of February 16, 2023 we had approximately 8,099 record holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "ACCO." As of February 15, 2024 we had approximately 7,610 record holders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeConsolidated Results of Operations for the Years Ended December 31, 2022 and 2021 Year Ended December 31, Amount of Change (in millions, except per share data) 2022 2021 $ %/pts Net sales $ 1,947.6 $ 2,025.3 $ (77.7) (3.8)% Cost of products sold 1,395.3 1,410.4 (15.1) (1.1)% Gross profit 552.3 614.9 (62.6) (10.2)% Gross profit margin 28.4 % 30.4 % (2.0) pts Selling, general and administrative expenses 376.7 392.6 (15.9) (4.0)% SG&A% to net sales 19.3 % 19.4 % (0.1) pts Amortization of intangibles 41.5 46.3 (4.8) (10.4)% Restructuring charges 9.6 6.0 3.6 60.0 % Goodwill impairment 98.7 — 98.7 NM Change in fair value of contingent consideration (9.0) 19.0 (28.0) NM Operating income 34.8 151.0 (116.2) (77.0)% Operating (loss) income margin 1.8 % 7.5 % (5.7) pts Interest expense 45.6 46.3 (0.7) (1.5)% Interest income (8.3) (1.9) (6.4) NM Non-operating pension income (4.5) (7.9) 3.4 (43.0)% Other (income) expense, net (12.9) 3.1 (16.0) NM Income before income tax 14.9 111.4 (96.5) (86.6)% Income tax expense 28.1 9.5 18.6 NM Effective tax rate 188.6 % 8.5 % 180.1 pts Net (loss) income (13.2) 101.9 (115.1) NM Weighted average number of diluted shares outstanding: 95.3 97.1 (1.8) (1.9)% Diluted income per share $ (0.14) $ 1.05 $ (1.19) NM Comparable net sales (Non-GAAP) $ 2,041.5 $ 2,025.3 $ 16.2 0.8 % Net Sales For the year ended December 31, 2022, net sales decreased $77.7 million, or 3.8 percent.
Biggest changeConsolidated Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Amount of Change (in millions, except per share data) 2023 2022 $ %/pts Net sales $ 1,832.8 $ 1,947.6 $ (114.8 ) (5.9 )% Cost of products sold 1,234.5 1,395.3 (160.8 ) (11.5 )% Gross profit 598.3 552.3 46.0 8.3 % Gross profit margin 32.6 % 28.4 % 4.2 pts Selling, general and administrative expenses 393.5 376.7 16.8 4.5 % SG&A% to net sales 21.5 % 19.3 % 2.2 pts Amortization of intangibles 43.4 41.5 1.9 4.6 % Restructuring charges 27.2 9.6 17.6 NM Goodwill impairment 89.5 98.7 (9.2 ) (9.3 )% Change in fair value of contingent consideration — (9.0 ) 9.0 (100.0 )% Operating income 44.7 34.8 9.9 28.4 % Operating income margin 2.4 % 1.8 % 0.6 pts Interest expense 58.6 45.6 13.0 28.5 % Interest income (7.1 ) (8.3 ) 1.2 (14.5 )% Non-operating pension expense (income) 1.8 (4.5 ) 6.3 NM Other expense (income), net 4.5 (12.9 ) 17.4 NM (Loss) income before income tax (13.1 ) 14.9 (28.0 ) NM Income tax expense 8.7 28.1 (19.4 ) (69.0 )% Effective tax rate (66.4 )% 188.6 % NM Net (loss) income (21.8 ) (13.2 ) (8.6 ) 65.2 % Weighted average number of diluted shares outstanding: 95.3 95.3 - — % Diluted loss per share $ (0.23 ) $ (0.14 ) $ (0.09 ) 64.3 % Comparable sales (Non-GAAP) (1) $ 1,821.5 $ 1,947.6 $ (126.1 ) (6.5 )% Net Sales For the year ended December 31, 2023, net sales decreased $114.8 million, or 5.9 percent.
In addition, we recognize revenue for private label products as the product is manufactured (or over time) when a contract has an enforceable right to payment. For consignment arrangements, revenue is not recognized until the products are sold to the end customer. 33 Customer programs and incentives ("Customer Program Costs") are a common practice in our industry.
In addition, we recognize revenue for private label products as the product is manufactured (or over time) when a contract has an enforceable right to payment. For consignment arrangements, revenue is not recognized until the products are sold to the end customer. Customer programs and incentives ("Customer Program Costs") are a common practice in our industry.
These estimates could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels or competitive conditions differ from our expectations. Intangible Assets Intangible assets are comprised primarily of indefinite-lived and amortizable intangible assets acquired and arising from the application of purchase accounting.
These estimates could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels or competitive conditions differ from our expectations. 35 Intangible Assets Intangible assets are comprised primarily of indefinite-lived and amortizable intangible assets acquired and arising from the application of purchase accounting.
(2) For further information on leases, see "Note 5. Leases" to the consolidated financial statements contained in Item 8. of this report. (3) Purchase obligations primarily consist of contracts and non-cancelable purchase orders for raw materials and finished goods. (4) The U.S.
(2) For further information on leases, see "Note 4. Leases" to the consolidated financial statements contained in Item 8. of this report. (3) Purchase obligations primarily consist of contracts and non-cancelable purchase orders for raw materials and finished goods. (4) The U.S.
Adequacy of Liquidity Sources Based on our 2023 business plan and current forecasts, we believe that cash flow from operations, our current cash balance and borrowings available under our Revolving Facility will be adequate to support our requirements for working capital, capital expenditures, dividend payments, share repurchases and debt service in both the short and long-term.
Adequacy of Liquidity Sources Based on our 2024 business plan and current forecasts, we believe that cash flow from operations, our current cash balance and borrowings available under our Revolving Facility will be adequate to support our requirements for working capital, capital expenditures, dividend payments, share repurchases and debt service in both the short and long-term.
International 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate 2.9 % 3.1 % 3.2 % 1.8 % 1.0 % 1.6 % 2.4 % 2.2 % 2.7 % Expected long-term rate of return 6.5 % 6.8 % 7.0 % 4.0 % 4.0 % 4.2 % N/A N/A N/A Rate of compensation increase N/A N/A N/A 3.0 % 2.7 % 2.9 % N/A N/A N/A In 2023, we expect pension income of approximately $0.4 million and post-retirement expense of approximately $1.6 million.
International 2023 2022 2021 2023 2022 2021 2023 2022 2021 Discount rate 5.1 % 2.9 % 3.1 % 4.5 % 1.8 % 1.0 % 5.0 % 2.4 % 2.2 % Expected long-term rate of return 7.5 % 6.5 % 6.8 % 6.9 % 4.0 % 4.0 % N/A N/A N/A Rate of compensation increase N/A N/A N/A 3.0 % 3.0 % 2.7 % N/A N/A N/A In 2024, we expect pension income of approximately $0.3 million and post-retirement expense of approximately $2.5 million.
For further information, see "Note 12. Income Taxes" to the consolidated financial statements contained in Part II. Item 8. of this report. Critical Accounting Policies Our financial statements are prepared in conformity with generally accepted accounting principles in the U.S. ("GAAP").
For further information, see "Note 11. Income Taxes" to the consolidated financial statements contained in Part II. Item 8. of this report. Critical Accounting Policies Our financial statements are prepared in conformity with generally accepted accounting principles in the U.S. ("GAAP").
Tax Cuts and Jobs Act requires companies to pay a one-time Transition Toll Tax, which is payable over eight years. 32 (5) Other long-term liabilities consist of estimated expected employer contributions for 2023, along with estimated future payments, for pension and post-retirement plans that are not paid from assets held in a plan trust.
Tax Cuts and Jobs Act requires companies to pay a one-time Transition Toll Tax, which is payable over eight years. (5) Other long-term liabilities consist of estimated expected employer contributions for 2024, along with estimated future payments for pension and post-retirement plans that are not paid from assets held in a plan trust.
Pursuant to the Sixth Amendment, the Credit Agreement was amended to, among other things: • increase the maximum Consolidated Leverage Ratio financial covenant from then current levels for each of the five fiscal quarters beginning December 31, 2022, and ending December 31, 2023, as follows: Quarter Ended Maximum Consolidated Leverage Ratio December 2022 4.50:1.00 March 2023 5.00:1.00 June 2023 5.00:1.00 September 2023 4.75:1.00 December 2023 4.25:1.00 29 • modify the maximum Consolidated Leverage Ratio financial covenant for all first and second fiscal quarters after December 31, 2023, from the current level of 4.00x to 4.50x, while maintaining the current level of 4.00x for all third and fourth fiscal quarters; • limit the maximum Consolidated Leverage Ratio to 5.00:1.00 at any time, thereby capping any material acquisition step ups for the fiscal quarters ending March 31, 2023, June 30, 2023 and September 30, 2023; • increase the Company’s flexibility under the restricted payments baskets; • remove the anti-cash hoarding provision; and • change the U.S. dollar reference rate from LIBOR-based pricing to SOFR-based pricing, with no changes to existing margins.
Pursuant to the Sixth Amendment, the Credit Agreement was amended to, among other things: • increase the maximum Consolidated Leverage Ratio financial covenant from then current levels for each of the five fiscal quarters beginning December 31, 2022, and ending December 31, 2023, as follows: Quarter Ended Maximum Consolidated Leverage Ratio December 2022 4.50:1.00 March 2023 5.00:1.00 June 2023 5.00:1.00 September 2023 4.75:1.00 December 2023 4.25:1.00 • modify the maximum Consolidated Leverage Ratio financial covenant for all first and second fiscal quarters after December 31, 2023, from the current level of 4.00x to 4.50x, while maintaining the current level of 4.00x for all third and fourth fiscal quarters; • limit the maximum Consolidated Leverage Ratio to 5.00:1.00 at any time, thereby capping any material acquisition step ups for the fiscal quarters ending March 31, 2023, June 30, 2023 and September 30, 2023; • increase the Company’s flexibility under the restricted payments baskets; and • change the U.S. dollar reference rate from LIBOR-based pricing to SOFR-based pricing, with no changes to existing margins.
International 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate 5.1 % 2.9 % 2.6 % 4.5 % 1.8 % 1.2 % 3.8 % 2.4 % 1.9 % Rate of compensation increase N/A N/A N/A 3.0 % 3.0 % 2.9 % N/A N/A N/A The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020 were as follows: Pension Post-retirement U.S.
International 2023 2022 2021 2023 2022 2021 2023 2022 2021 Discount rate 5.0 % 5.1 % 2.9 % 4.2 % 4.5 % 1.8 % 4.8 % 3.8 % 2.4 % Rate of compensation increase N/A N/A N/A 2.9 % 3.0 % 3.0 % N/A N/A N/A The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2023, 2022 and 2021 were as follows: Pension Post-retirement U.S.
The result of our assessment for the International and EMEA reporting units was that the fair value of each exceeded its carrying values by greater than ten percent and fifty percent, respectively, and we concluded that no impairment existed. Estimating the fair value of each reporting unit requires us to make assumptions and estimates regarding our future.
The result of our assessments for the International and EMEA reporting units was that the fair value of each exceeded its carrying values by approximately ten percent and greater than fifty percent, respectively, and we concluded that no impairment existed. Estimating the fair value of each reporting unit requires us to make assumptions and estimates regarding our future.
As of and for the periods ended December 31, 2022 and December 31, 2021, the Company was in compliance with all applicable loan covenants under its senior secured credit facilities and the Senior Unsecured Notes.
As of and for the periods ended December 31, 2023 and December 31, 2022, the Company was in compliance with all applicable loan covenants under its senior secured credit facilities and the Senior Unsecured Notes.
Long-term Debt and Short-term Borrowings" to the consolidated financial statements contained in Part II. Item 8. of this report. Restructuring and Integration Activities From time to time the Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.
Long-term Debt and Short-term Borrowings" to the consolidated financial statements contained in Part II. Item 8. of this report. Restructuring The Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.
See "Note 18. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment operating income" to "Income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
See "Note 17. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment operating (loss) income" to "(Loss) income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
See "Note 18. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment operating income" to "Income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
See "Note 17. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment (loss) operating income" to "(Loss) income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
See "Note 18. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment operating income" to "Income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
See "Note 17. Information on Business Segments" to the consolidated financial statements contained in Part II, Item 8. of this report for a reconciliation of total "Segment operating (loss) income" to "(Loss) income before income tax." (2) See reconciliation to GAAP, contained in Part II, Item 7. "Supplemental Non-GAAP Financial Measures" of this report.
Guarantees and Security Generally, obligations under the Credit Agreement, as amended, are guaranteed by certain of the Company's existing and future subsidiaries, and are secured by substantially all of the Company's and certain guarantor subsidiaries' assets, subject to certain exclusions and limitations. For further information, see "Note 4.
Guarantees and Security Generally, obligations under the Credit Agreement, as amended, are guaranteed by certain of the Company's existing and future subsidiaries, and are secured by substantially all of the Company's and certain guarantor subsidiaries' assets, subject to certain exclusions and limitations. 32 For further information, see "Note 3.
For a discussion and analysis of the year ended December 31, 2021 compared with the same period in 2020, please refer to " Management’s Discussion and Analysis of Financial Condition and Results of Operations " included in Part II, Item 7. of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC") on February 23, 2022.
For a discussion and analysis of the year ended December 31, 2022 compared with the same period in 2021, please refer to " Management’s Discussion and Analysis of Financial Condition and Results of Operations " included in Part II, Item 7. of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the "SEC") on February 24, 2023.
The following discussion and analysis are for the year ended December 31, 2022, compared with the same period in 2021 unless otherwise stated.
The following discussion and analysis are for the year ended December 31, 2023, compared with the same period in 2022 unless otherwise stated.
Although down, our seasonal operating cash flow followed our historic pattern of outflow in the first half followed by strong inflows in both quarters of the second half.
Our seasonal operating cash flow followed our historic pattern of outflow in the first half followed by strong inflows in both quarters of the second half.
Overview of the Company ACCO Brands is a leading global consumer, technology and business branded products company, providing well-known brands and innovative product solutions used in schools, homes and at work. Recently we have successfully increased the mix of our sales to higher growth product categories and sales channels, including retail and mass merchants, e-tailers, and technology specialists.
Overview of the Company ACCO Brands is a leading global consumer, technology and business branded products company, providing well-known brands and innovative product solutions used in schools, homes and at work. We have expanded into higher growth product categories, while increasing our sales mix to higher growth channels, including retail and mass merchants, e-tailers, and technology specialists.
Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at December 31, 2022, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $39.1 million of unrecognized tax benefits have been excluded from the contractual obligations table above.
Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at December 31, 2023, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $28.0 million of unrecognized tax benefits have been excluded from the contractual obligations 34 table above.
The current maturity of the Credit Agreement, as amended, is March 31, 2026. Financial Covenants As of December 31, 2022, our Consolidated Leverage Ratio was approximately 4.16 to 1.00 versus our maximum covenant of 4.50 to 1.00. Our Interest Coverage Ratio was approximately 6.56 to 1.00 versus the minimum covenant of 3.00 to 1.00.
The current maturity of the Credit Agreement, as amended, is March 31, 2026. Financial Covenants As of December 31, 2023, our Consolidated Leverage Ratio was approximately 3.42 to 1.00 versus our maximum covenant of 4.25 to 1.00. Our Interest Coverage Ratio was approximately 5.18 to 1.00 versus the minimum covenant of 3.00 to 1.00.
Comparable sales should not be considered in isolation or as a substitute for, or superior to, GAAP net sales and should be read in connection with the Company's financial statements presented in accordance with GAAP.
Comparable sales should not be considered in isolation or as a substitute for, or superior to, GAAP net sales and should be read in connection with the Company's consolidated financial statements presented in accordance with GAAP and contained in Part II. Item 8 of this report.
Goodwill Impairment For the twelve months ended December 31, 2022, we recorded a non-cash goodwill impairment charge of $98.7 million for our North America reporting unit. Our goodwill balance could be at risk of further impairment if operating performance is not as expected. See "Note 10.
Goodwill Impairment For the year ended December 31, 2023, we recorded a non-cash goodwill impairment charge of $89.5 million for our North America reporting unit compared to $98.7 million in the prior year. Our goodwill balance could be at risk of further impairment if operating performance is not as expected. See "Note 9.
A 25-basis point decrease (0.25 percent) in our discount rate assumption would lead to an increase in our pension and post-retirement expense of approximately $0.7 million for 2023.
A 25-basis point decrease (0.25 percent) in our discount rate assumption would lead to a decrease in our pension and post-retirement expense of approximately $0.2 million for 2024. A 25-basis point change in our long-term rate of return assumption would lead to an increase or decrease in pension and post-retirement expense of approximately $1.2 million for 2024.
We performed our annual assessment in the second quarter of 2022, on a quantitative basis, and concluded that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount. During the third quarter of 2022, our market capitalization declined further compared to the second quarter of 2022.
We performed our annual assessment in the second quarter of 2023, on a qualitative basis, and concluded that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.
As of December 31, 2022, there was $72.8 million in borrowings outstanding under the Revolving Facility ($23.6 million reported in "Current portion of long-term debt" and $49.2 million reported in "Long-term debt, net"), and the amount available for borrowings was $517.8 million (allowing for $9.4 million of letters of credit outstanding on that date).
As of December 31, 2023, there was $21.6 million in borrowings outstanding under the Revolving Facility ($7.3 million reported in "Current portion of long-term debt" and $14.3 million reported in "Long-term debt, net"), and the amount available for borrowings was $565.7 million (allowing for $12.7 million of letters of credit outstanding on that date).
The weighted average assumptions used to determine benefit obligations for the years ended December 31, 2022, 2021, and 2020 were as follows: Pension Post-retirement U.S.
The increase in pension expense was due to higher discount rates in our pension plans. 37 The weighted average assumptions used to determine benefit obligations for the years ended December 31, 2023, 2022, and 2021 were as follows: Pension Post-retirement U.S.
The actuarial assumptions used to record our plan obligations could differ materially from actual results due to changing economic and market conditions, higher or lower withdrawal rates or other factors which may impact the amount of retirement-related benefit expense recorded by us in future periods. 35 The discount rate assumptions used to determine the pension and post-retirement obligations of the benefit plans are based on a spot-rate yield curve that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments.
The actuarial assumptions used to record our plan obligations could differ materially from actual results due to changing economic and market conditions, higher or lower withdrawal rates or other factors which may impact the amount of retirement-related benefit expense recorded by us in future periods.
ACCO Brands EMEA Year Ended December 31, Amount of Change (in millions) 2022 2021 $ %/pts Net sales $ 580.3 $ 662.9 $ (82.6) (12.5)% Segment operating income⁽¹⁾ 21.7 61.7 (40.0) (64.8)% Segment operating income margin 3.7% 9.3% -5.6 pts Comparable net sales (Non-GAAP)⁽²⁾ $ 658.5 $ 662.9 $ (4.4) (0.7)% (1) Segment operating income excludes corporate costs.
ACCO Brands EMEA Year Ended December 31, Amount of Change (in millions) 2023 2022 $ %/pts Net sales $ 547.2 $ 580.3 $ (33.1 ) (5.7 )% Segment operating income⁽¹⁾ 38.7 21.7 17.0 78.3 % Segment operating income margin 7.1 % 3.7 % 3.4 pts Comparable sales (Non-GAAP)⁽²⁾ $ 541.7 $ 580.3 $ (38.6 ) (6.7 )% (1) Segment operating income for EMEA excludes corporate costs.
We utilized a combination of both discounted cash flows and a market approach. The financial projections used in the valuation models reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, discount rate, and other expectations about the anticipated short-term and long-term operating results for each of our three reporting units.
The financial projections used in the valuation models reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, discount rate, and other expectations about the anticipated short-term and long-term operating results for each of our three reporting units. 36 We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit.
Pension income was $3.1 million, $5.4 million and $2.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Post-retirement income was $0.4 million for each of the years ended December 31, 2022, 2021, and 2020. The decrease in pension income was due to higher discount rates in our foreign pension plans.
Pension expense was $2.8 million and pension income was $3.1 million and $5.4 million for the years ended December 31, 2023, 2022, and 2021, respectively. Post-retirement income was $0.3 million for the year ended December 31, 2023, and $0.4 million for each of the years ended December 31, 2022 and 2021.
Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held and seasonal borrowings under our $600 million multi-currency revolving credit facility (the "Revolving Facility").
Liquidity and Capital Resources Our primary liquidity needs are to support our working capital requirements, service indebtedness and fund capital expenditures, dividends, repurchase stock, and acquisitions. Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held and seasonal borrowings under our $600 million multi-currency revolving credit facility (the "Revolving Facility").
We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period any assessments are received, revised or resolved. Recently Adopted Accounting Standards For information on recently adopted accounting pronouncements, see "Note 2.
However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period any assessments are received, revised or resolved. Recently Adopted Accounting Standards For information on recently adopted accounting pronouncements, see "Note 2. Significant Accounting Policies, Recent Accounting Pronouncements and Adopted Accounting Standards" to the consolidated financial statements contained in Part II.
Comparable sales represent net sales excluding the impact of material acquisitions and with current-period foreign operation sales translated at prior-year currency rates. We sometimes refer to comparable sales as comparable net sales. We use comparable sales both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business.
We sometimes refer to comparable sales as comparable net sales. We use comparable sales both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business.
During the year ended December 31, 2022, the Company recorded $9.6 million in restructuring expenses: $5.3 million of restructuring expense for our North America segment; $3.4 million for our EMEA segment; $0.7 million for our International segment; and $0.2 million for Corporate.
During the year ended December 31, 2023, the Company recorded $27.2 million in restructuring expenses: $16.7 million of restructuring expense for our North America segment; $8.9 million for our EMEA segment; $1.0 million for our International segment; and $0.6 million for Corporate. Restructuring charges in 2023 were primarily for severance costs related to cost reduction initiatives.
Income Tax Expense For the year ended December 31, 2022, we recorded income tax expense of $28.1 million on income before taxes of $14.9 million. This reflects no income tax benefit on the non-deductible goodwill impairment charge of $98.7 million.
Income Tax Expense For the year ended December 31, 2023, we recorded income tax expense of $8.7 million on loss before taxes of $13.1 million. This compared with an income tax expense of $28.1 million on income before taxes of $14.9 million for the year ended December 31, 2022.
ACCO Brands International Year Ended December 31, Amount of Change (in millions) 2022 2021 $ %/pts Net sales $ 369.3 $ 320.0 $ 49.3 15.4 % Segment operating income⁽¹⁾ 50.5 31.6 18.9 59.8 % Segment operating income margin 13.7% 9.9% 3.8 pts Comparable net sales (Non-GAAP)⁽²⁾ $ 380.7 $ 320.0 $ 60.7 19.0 % 27 (1) Segment operating income excludes corporate costs.
Favorable foreign exchange increased operating income by $1.2 million, or 5.5 percent. 30 ACCO Brands International Year Ended December 31, Amount of Change (in millions) 2023 2022 $ %/pts Net sales $ 398.4 $ 369.3 $ 29.1 7.9 % Segment operating income⁽¹⁾ 60.7 50.5 10.2 20.2 % Segment operating income margin 15.2 % 13.7 % 1.5 pts Comparable sales (Non-GAAP)⁽²⁾ $ 388.7 $ 369.3 $ 19.4 5.3 % (1) Segment operating income for International excludes corporate costs.
Our contractual obligations and related payments by period as of December 31, 2022 were as follows: (in millions) 2023 2024 - 2025 2026 - 2027 Thereafter Total Debt $ 60.1 $ 64.2 $ 305.6 $ 575.0 $ 1,004.9 Interest on debt (1) 43.9 81.8 56.3 29.5 211.5 Operating lease obligations (2) 25.4 35.9 21.8 29.1 112.2 Purchase obligations (3) 132.3 10.6 1.0 0.1 144.0 Transition Toll Tax (4) 5.8 17.3 — — 23.1 Other long-term liabilities (5) 16.6 14.9 15.2 37.5 84.2 Total $ 284.1 $ 224.7 $ 399.9 $ 671.2 $ 1,579.9 (1) Interest calculated at December 31, 2022, rates for variable rate debt.
Our contractual obligations and related payments by period as of December 31, 2023 were as follows: (in millions) 2024 2025 - 2026 2027 - 2028 Thereafter Total Debt $ 36.7 $ 313.9 $ — $ 575.0 $ 925.6 Interest on debt (1) 45.6 71.9 48.9 5.1 171.5 Operating lease obligations (2) 26.6 44.2 26.8 25.5 123.1 Purchase obligations (3) 102.1 10.0 0.3 0.1 112.5 Transition Toll Tax (4) 7.7 9.6 — — 17.3 Other long-term liabilities (5) 16.0 15.6 15.7 38.9 86.2 Total $ 234.7 $ 465.2 $ 91.7 $ 644.6 $ 1,436.2 (1) Interest calculated at December 31, 2023, rates for variable rate debt.
Segment Net Sales and Operating Income for the Years Ended December 31, 2022 and 2021 ACCO Brands North America Year Ended December 31, Amount of Change (in millions) 2022 2021 $ %/pts Net sales $ 998.0 $ 1,042.4 $ (44.4) (4.3)% Segment operating income⁽¹⁾ (4.9) 121.9 (126.8) NM Segment operating (loss) income margin (0.5)% 11.7 % NM Comparable net sales (Non-GAAP)⁽²⁾ $ 1,002.3 $ 1,042.4 $ (40.1) (3.9)% 26 (1) Segment operating income for North America includes goodwill impairment charges but excludes corporate costs.
Net Income (Loss)/Diluted Income (Loss) per Share For the year ended December 31, 2023, net loss was $21.8 million, or $(0.23) per share, compared to a net loss of $13.2 million, or $(0.14) per share, in the prior year. 29 Segment Net Sales and Operating Income for the Years Ended December 31, 2023 and 2022 ACCO Brands North America Year Ended December 31, Amount of Change (in millions) 2023 2022 $ %/pts Net sales $ 887.2 $ 998.0 $ (110.8 ) (11.1 )% Segment operating loss⁽¹⁾ (5.9 ) (4.9 ) (1.0 ) 20.4 % Segment operating loss margin (0.7 )% (0.5 )% (0.2 ) pts Comparable sales (Non-GAAP)⁽²⁾ $ 891.1 $ 998.0 $ (106.9 ) (10.7 )% (1) Segment operating loss for North America includes goodwill impairment charges but excludes corporate costs.
Accordingly, as of August 31, 2022, we completed a goodwill impairment assessment, on a quantitative basis, for goodwill for each of our three reporting units. The result of our assessment was that the fair value of the North America reporting unit did not exceed its carrying value resulting in an impairment charge of $98.7 million.
The result of our assessment was that the fair value of the North America reporting unit did not exceed its carrying value resulting in an impairment charge of $89.5 million.
These factors were the primary reasons for the actuarial gains of $204.5 million that were recognized in 2022. Income Taxes Deferred tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse.
Income Taxes Deferred tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred tax assets to an amount that is more likely than not to be realized.
The following tables provide a reconciliation of GAAP net sales change as reported to non-GAAP comparable sales change: Comparable Sales - Year Ended December 31, 2022 Non-GAAP GAAP Currency Comparable (in millions) Net Sales Translation Net Sales ACCO Brands North America $ 998.0 $ (4.3) $ 1,002.3 ACCO Brands EMEA 580.3 (78.2) 658.5 ACCO Brands International 369.3 (11.4) 380.7 Total $ 1,947.6 $ (93.9) $ 2,041.5 37 Amount of Change - Year Ended December 31, 2022 compared to the Year Ended December 31, 2021 $ Change - Net Sales Non-GAAP GAAP Comparable Net Sales Currency Net Sales (in millions) Change Translation Change ACCO Brands North America $ (44.4) $ (4.3) $ (40.1) ACCO Brands EMEA (82.6) (78.2) (4.4) ACCO Brands International 49.3 (11.4) 60.7 Total $ (77.7) $ (93.9) $ 16.2 % Change - Net Sales Non-GAAP GAAP Comparable Net Sales Currency Net Sales Change Translation Change ACCO Brands North America (4.3)% (0.4)% (3.9)% ACCO Brands EMEA (12.5)% (11.8)% (0.7)% ACCO Brands International 15.4% (3.6)% 19.0% Total (3.8)% (4.6)% 0.8% 38
The following tables provide a reconciliation of GAAP net sales as reported to non-GAAP comparable sales by segment: Comparable Sales - Year Ended December 31, 2023 Non-GAAP (in millions) GAAP Net Sales Currency Translation Comparable Sales ACCO Brands North America $887.2 $(3.9) $891.1 ACCO Brands EMEA 547.2 5.5 541.7 ACCO Brands International 398.4 9.7 388.7 Total $1,832.8 $11.3 $1,821.5 Amount of Change - Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 $ Change - Net Sales Non-GAAP (in millions) GAAP Net Sales Change Currency Translation Comparable Sales ACCO Brands North America $(110.8) $(3.9) $(106.9) ACCO Brands EMEA (33.1) 5.5 (38.6) ACCO Brands International 29.1 9.7 19.4 Total $(114.8) $11.3 $(126.1) % Change - Net Sales Non-GAAP GAAP Net Sales Change Currency Translation Comparable Sales ACCO Brands North America (11.1)% (0.4)% (10.7)% ACCO Brands EMEA (5.7)% 1.0% (6.7)% ACCO Brands International 7.9% 2.6% 5.3% Total (5.9)% 0.6% (6.5)% 39
For the year ended December 31, 2022, net sales decreased $44.4 million, or 4.3 percent. Decreased volume of $100.5 million, or 9.6 percent, was partly offset by sales price increases which added $60.3 million, or 5.8 percent.
For the year ended December 31, 2023, net sales increased $29.1 million, or 7.9 percent. Favorable foreign exchange increased sales $9.7 million, or 2.6 percent. Comparable sales increased 5.3 percent, primarily due to price increases which added $27.6 million, or 7.5 percent, partly offset by lower volume of $8.1 million, or 2.2 percent.
The amount of income taxes that we pay is subject to ongoing audits by federal, state and foreign tax authorities. Our estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at that time.
Our estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters.
The lower volume was driven by North America and EMEA due to challenging macroeconomic conditions in the second half, and lower demand for gaming accessories in North America, partly offset by higher sales volume in International. 24 Cost of Products Sold Cost of products sold includes all manufacturing, product sourcing and distribution costs, including depreciation related to assets used in manufacturing; procurement and distribution processes; allocation of certain information technology costs supporting those processes; inbound and outbound freight; shipping and handling costs; purchasing costs associated with materials and packaging used in the production processes; and inventory valuation adjustments.
Cost of Products Sold Cost of products sold includes all manufacturing, product sourcing and distribution costs, including depreciation related to assets used in manufacturing; procurement and distribution processes; allocation of certain information technology costs supporting those processes; inbound and outbound freight; shipping and handling costs; purchasing costs associated with materials and packaging used in the production processes; and inventory valuation adjustments. 27 For the year ended December 31, 2023, cost of products sold decreased $160.8 million, or 11.5 percent, primarily due to lower net sales and the favorable impact of global restructuring and cost reduction initiatives.
Debt Effective November 7, 2022, the Company entered into a Sixth Amendment (the "Sixth Amendment") to its Third Amended and Restated Credit Agreement, as amended, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto (the "Credit Agreement").
Debt The $350.6 million of debt currently outstanding under our senior secured credit facilities has a weighted average interest rate of 6.75 percent as of December 31, 2023, and the $575.0 million outstanding principal amount of our senior unsecured notes due March 2029 ("Senior Unsecured Notes") has a fixed interest rate of 4.25 percent. 31 Effective November 7, 2022, the Company entered into a Sixth Amendment (the "Sixth Amendment") to its Third Amended and Restated Credit Agreement, as amended, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto (the "Credit Agreement").
Goodwill and Identifiable Intangible Assets" to the consolidated financial statements contained in Part II, Item 8. of this report for more information. 25 Operating Income For the year ended December 31, 2022, operating income decreased $116.2 million to $34.8 million compared to $151.0 million in the prior year, primarily due to the non-cash goodwill impairment charge of $98.7 million for our North America reporting unit, partly offset by the favorable change in our contingent earnout expense of $28.0 million.
Goodwill and Identifiable Intangible Assets" to the consolidated financial statements contained in Part II, Item 8. of this report for more information. Operating Income For the year ended December 31, 2023, operating income increased $9.9 million to $44.7 million compared to $34.8 million in the prior year.
Cash Flow from Financing Activities Cash used by financing activities was $48.3 million for the twelve months ended December 31, 2022, a decrease of cash used of $98.9 million, compared with cash used of $147.2 million by financing activities during the prior year.
Cash Flow from Investing Activities Cash used by investing activities during the twelve months ended December 31, 2023, increased $1.9 million compared to the prior year.
Capitalization The Company had 94.3 million and 95.8 million shares of common stock outstanding as of December 31, 2022, and 2021, respectively.
During the prior year we used cash to repurchase shares of $19.4 million and paid a contingent earnout of $17.8 million. Capitalization The Company had 94.9 million and 94.3 million shares of common stock outstanding as of December 31, 2023, and 2022, respectively.
The current year net loss reflects the decline in operating income which includes a non-cash goodwill impairment charge. Our operating cash flow for the year was cash provided of $77.6 million, compared to $159.6 million of cash provided in the prior year with the shortfall due to lower net income.
The reported net loss reflects higher interest and non-operating pension expenses. Our operating cash flow for the year was cash provided of $128.7 million, compared to $77.6 million of cash provided in the prior year.
A valuation allowance is recorded to reduce deferred tax assets to an amount that is more likely than not to be realized. Facts and circumstances may change and cause us to revise our conclusions regarding our ability to realize certain net operating losses and other deferred tax attributes.
Facts and circumstances may change and cause us to revise our conclusions regarding our ability to realize certain net operating losses and other deferred tax attributes. The amount of income taxes that we pay is subject to ongoing audits by federal, state and foreign tax authorities.
For the year ended December 31, 2022, SG&A decreased $15.9 million, or 4.0 percent, primarily due to lower incentive compensation and the favorable impact of foreign exchange, partially offset by increased sales and marketing expense. Restructuring Charges For the year ended December 31, 2022, restructuring charges were $9.6 million compared with $6.0 million in 2021.
For the year ended December 31, 2023, SG&A increased $16.8 million, or 4.5 percent, primarily due to higher people costs, including higher incentive compensation expense, partially offset by the impact of cost reduction actions. Adverse foreign exchange, increased SG&A by $1.4 million, or 0.4 percent.
In addition, we have not identified a triggering event through December 31, 2022 that more likely than not would result in impairment. 34 Goodwill Goodwill has been recorded on our balance sheet and represents the excess of the cost of an acquisition when compared with the fair value of the net assets acquired.
The change was made as a result of decisions regarding the Company's future use of the trade name. Goodwill Goodwill has been recorded on our balance sheet and represents the excess of the cost of an acquisition when compared with the fair value of the net assets acquired.
Our third and fourth quarter cash flow comes from completing the working capital cycle. Although down, our 2022 operating cash flow followed our historical seasonal pattern. Consolidated cash and cash equivalents were $62.2 million as of December 31, 2022, approximately $43.3 million of which was held in Brazil.
Our third and fourth quarter cash flow comes from completing the working capital cycle. Our 2023 operating cash flow followed our historical seasonal pattern.
Significant Accounting Policies, Recent Accounting Pronouncements and Adopted Accounting Standards" to the consolidated financial statements contained in Part II. Item 8. of this report. SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), we provide investors with certain non-GAAP financial measures, including comparable sales.
Item 8. of this report. SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements presented in accordance with GAAP, we provide investors with certain non-GAAP financial measures, including comparable sales. Comparable sales represent net sales excluding the impact of 38 material acquisitions and with current-period foreign operation sales translated at prior-year currency rates.
These channels include mass retailers, e-tailers, discount, drug/grocery and variety chains, warehouse clubs, hardware and specialty stores, independent office product dealers, office superstores, wholesalers, contract stationers, and specialist technology businesses. Overview of 2022 Financial Performance Our net sales decreased $77.7 million, or 3.8 percent in 2022, including 4.6 percent from adverse foreign exchange. Comparable net sales increased 0.8 percent.
These channels include mass retailers, e-tailers, discount, drug/grocery and variety chains, warehouse clubs, hardware and specialty stores, independent office product dealers, office superstores, wholesalers, contract stationers, and specialist technology businesses. Overview of 2023 Financial Performance During 2023, the Company continued to be impacted by softening global demand, reflecting a weaker macroeconomic environment.
Cash Flow for the Years Ended December 31, 2022 and 2021 Cash Flow from Operating Activities Cash provided by operating activities during the year ended December 31, 2022 was $77.6 million, a decrease of $82.0 million compared to cash provided by operating activities of $159.6 million during the prior year.
Cash Flow for the Years Ended December 31, 2023 and 2022 During the year ended December 31, 2023, our cash and cash equivalents increased $4.2 million compared to an increase of $21.0 million during the prior year.
For the year ended December 31, 2022, net sales decreased $82.6 million, or 12.5 percent. Adverse foreign exchange reduced sales by $78.2 million, or 11.8 percent. Comparable net sales decreased 0.7 percent, reflecting lower volume of $67.0 million, or 10.1 percent, primarily from reduced demand for business products due to a challenging macroeconomic environment.
For the year ended December 31, 2023, net sales decreased $33.1 million, or 5.7 percent. Favorable foreign exchange increased sales $5.5 million, or 1.0 percent. Comparable sales decreased 6.7 percent mainly due to lower volume, which was down $99.2 million, or 17.1 percent. The lower volume was partly offset by price increases of $60.6 million, or 10.4 percent.
In addition, our forecasted cash flows for our North America and EMEA reporting units decreased due to lower inventory replenishment by major retailers, lower sales of gaming accessories, and a challenging demand environment in several countries within EMEA. As a result, we identified a triggering event indicating it was more likely than not that an impairment loss had been incurred.
As a result, we identified a triggering event indicating it was more likely than not that an impairment loss had been incurred. Accordingly, as of December 31, 2023, we completed an impairment assessment, on a quantitative basis, for goodwill for each of our three reporting units.
The decline in operating income also reflects the impact of inflation that exceeded the benefit of price increases and reduced volumes, partially offset by reduced SG&A expense, which includes lower incentive compensation expense. 23 We reported a net loss of $13.2 million, or ($0.14) per share compared to net income of $101.9 million, or $1.05 per share in the prior year.
The increase was primarily due to the higher gross margin, and a lower non-cash goodwill impairment charge compared to the prior year, partially offset by higher restructuring charges and SG&A expenses, 26 We reported a net loss of $21.8 million, or $(0.23) per share, compared to a net loss of $13.2 million, or $(0.14) per share in the prior year.
The decrease reflects the lower gross profit, higher restructuring expense and adverse foreign exchange of $6.3 million. This was partially offset by lower SG&A expenses. Interest (Income) Expense For the year ended December 31, 2022, interest income increased $6.4 million due to higher cash balances and increased interest rates in Brazil.
The increase in operating income was primarily due to higher gross profit of $46.0 million and a lower non-cash goodwill impairment charge of $9.2 million, partially offset by a $17.6 million increase in restructuring expense and a $16.8 million increase in SG&A expense.
This compared with an income tax expense of $9.5 million on income before taxes of $111.4 million for the twelve months ended December 31, 2021 which included a $15.5 million benefit from the reversal of a valuation allowance. See "Note 12. Income Taxes" to the Consolidated Financial Statements contained in Part II, Item 8. of this report for more information.
Income Taxes" to the Consolidated Financial Statements contained in Part II, Item 8. of this report for more information.
Change in Fair Value of Contingent Consideration For the year ended December 31, 2022, the change in fair value of contingent consideration related to the earnout for the PowerA acquisition was a favorable change of $28.0 million, due to the reversal of prior period accruals. The PowerA financial results did not warrant any additional earnout payments.
Change in Fair Value of Contingent Consideration In the prior year, the change in fair value of contingent consideration from the PowerA earnout resulted in a benefit of $9.0 million that did not repeat.
Cash provided by acquisitions decreased by $15.4 million primarily because the prior year period included a working capital adjustment received from the seller of PowerA that did not recur. Partially offsetting this were proceeds from the sale of our Ogdensburg, New York facility of $6.6 million and lower cash used for capital expenditures of $4.7 million.
The increase was primarily due to proceeds from the sale of our Ogdensburg, New York facility of $6.6 million in 33 the prior year, exceeding proceeds from the sale of our facility in Japan of $2.2 million in the current year. Partially offsetting this was a reduction in capital expenditures of $2.7 million.
A 25-basis point change in our long-term rate of return assumption would lead to an increase or decrease in pension and post-retirement expense of approximately $1.1 million for 2023. 36 Pension and post-retirement liabilities of $155.5 million as of December 31, 2022, decreased from $222.3 million at December 31, 2021, primarily due to the higher discount rate assumptions compared to the prior year, partly offset by investment losses in 2022.
Pension and post-retirement liabilities of $157.6 million as of December 31, 2023, increased from $155.5 million at December 31, 2022. The increase was primarily due to updated assumptions and foreign exchange, partly offset by cash contributions.
Cash provided by operating activities was also down due to higher annual incentive payments of $15.3 million, a contingent earnout payment of $9.2 million, an increase in cash used for customer programs, income taxes, and higher payments related to all other current and non-current liabilities, partially offset by lower investments in trade working capital of $67.0 million.
The increase in cash provided by operating activities was driven by lower cash payments for operating expenses in 2023 compared to the prior year, which was partially offset by higher cash payments for interest and taxes and an increase in cash used for investments in our trade working capital, which includes accounts receivable, inventory and accounts payable.
Finite lived intangibles are amortized over 5, 7, 10, 15, 23 or 30 years. We performed our annual assessment, in the second quarter of 2022, on a qualitative basis, and concluded that it was not more likely than not that the fair value of any indefinite-lived intangible was less than its carrying amount.
Finite lived intangibles are amortized over 5, 7, 10, 15, 23 or 30 years. Effective January 1, 2023, we changed the indefinite-lived Leitz ® trade name to an amortizable intangible asset and began amortizing the trade name on a straight-line basis over a life of 30 years.
Volume declines reflect weaker sales of gaming accessories in North America, and lower demand in both North America and EMEA due to the challenging macroeconomic environment in the second half.
The lower volume reflects reduced demand due to a weaker macroeconomic environment in Australia and Asia, especially for technology accessories, partially offset by volume growth in Latin America.
Removed
Price increases added 8.0 percent while volume declined 7.2 percent. Our EMEA and North America segments reported sales declines of 12.5 percent and 4.3 percent, respectively, which was partially offset by 15.4 percent sales growth in our International segment.
Added
Inflationary pressures and higher interest rates have reduced both business and consumer discretionary spending, especially business IT spending. Lower than anticipated return to office trends also impacted year over year demand. In addition, major retailers in North America continued to focus on maintaining lower inventory levels.
Removed
Operating income was $34.8 million compared to $151.0 million in 2021, with the decline primarily due to the non-cash goodwill impairment charge of $98.7 million related to the North America segment, partially offset by the favorable change in fair value of $28.0 million related to the PowerA contingent earnout.
Added
In 2023, our net sales decreased $114.8 million, or 5.9 percent, compared to the prior year. The decrease was due to reduced volumes, reflecting the challenging macroeconomic environment, which led to lower global technology spending, and lower than anticipated return to office trends, partly offset by the benefit of global price increases, and favorable foreign exchange.
Removed
We have seen most foreign currencies significantly weaken against the U.S. dollar, which has also adversely affected the sales, profitability and cash flow of our foreign operations which transact business in their local currency. We expect foreign currency fluctuations to continue to impact our results.
Added
Gross margin increased 420 basis points, or $46.0 million, compared to the prior-year period, primarily due to the cumulative effect of global price increases and cost reduction actions. We reported operating income of $44.7 million in 2023 compared to $34.8 million in 2022.
Removed
We experienced high levels of inflation in our cost of products that continued to escalate throughout the year. We responded by increasing our selling prices but typically the impact of price increases lag the inflationary increase. We expect the timing of inflation and pricing actions to continue to impact our results.
Added
Favorable foreign exchange increased sales $11.3 million, or 0.6 percent. Comparable net sales decreased 6.5 percent. The sales declines were driven by lower volume of 13.3 percent across all three segments due to the challenging macroeconomic environment, lower than anticipated return to office trends and tight inventory management by our customers primarily in North America.
Removed
Adverse foreign exchange reduced sales $93.9 million, or 4.6 percent. Comparable net sales increased 0.8 percent. Higher prices across all segments, which added 8.0 percent, were partly offset by lower sales volume of 7.2 percent.
Added
Sales of technology accessories were most negatively impacted. The volume decline more than offset the benefit of global price increases which added 6.8 percent.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDebt Obligations Stated Maturity Date (in millions) 2023 2024 2025 2026 2027 Thereafter Total Fair Value Long term debt: Fixed rate Senior Unsecured Notes, due March 2029 $ — $ — $ — $ — $ — $ 575.0 $ 575.0 $ 480.1 Fixed interest rate 4.25% Euro Senior Secured Term Loan A, due March 2026 $ 17.1 $ 18.7 $ 23.4 $ 168.2 $ — $ — $ 227.4 $ 227.4 USD Senior Secured Term Loan A, due March 2026 6.4 6.9 8.7 62.4 — 84.4 84.4 Australian Dollar Senior Secured Term Loan A, due March 2026 $ 2.6 $ 2.9 $ 3.6 $ 25.8 $ $ — $ 34.9 $ 34.9 U.S.
Biggest changeDebt Obligations Stated Maturity Date (in millions) 2024 2025 2026 2027 2028 Thereafter Total Fair Value Long term debt: Fixed rate Senior Unsecured Notes, due March 2029 $ — $ — $ — $ — $ — $ 575.0 $ 575.0 $ 520.4 Fixed interest rate 4.25 % Euro Senior Secured Term Loan A, due March 2026 $ 19.3 $ 24.3 $ 174.6 $ — $ — $ — $ 218.2 $ 218.2 USD Senior Secured Term Loan A, due March 2026 $ 6.9 $ 8.7 $ 62.4 $ — $ — $ — $ 78.0 $ 78.0 Australian Dollar Senior Secured Term Loan A, due March 2026 $ 2.9 $ 3.6 $ 26.0 $ — $ — $ — $ 32.5 $ 32.5 U.S.
Interest Rate Risk Management Amounts outstanding under the Credit Agreement, as amended, bear interest at a rate per annum equal to the Euro Rate (with a zero percent floor for Euro borrowings), the Australian BBSR Rate, the Canadian BA Rate or the Base Rate, as applicable and as each such rate is defined in the Credit Agreement, as amended, plus an "applicable rate." The applicable rate applied to outstanding Euro, Australian and Canadian dollar denominated loans and Base Rate loans is based on the Company’s Consolidated Leverage Ratio as follows: Consolidated Leverage Ratio Applicable Rate on Euro/AUD/CDN Dollar Loans Applicable Rate on Base Rate Loans Undrawn Fee > 4.50 to 1.00 2.50 % 1.50 % 0.500 % ≤ 4.50 to 1.00 and > 4.00 to 1.00 2.25 % 1.25 % 0.375 % ≤ 4.00 to 1.00 and > 3.50 to 1.00 2.00 % 1.00 % 0.350 % ≤ 3.50 to 1.00 and > 3.00 to 1.00 1.75 % 0.75 % 0.300 % ≤ 3.00 to 1.00 and > 2.00 to 1.00 1.50 % 0.50 % 0.250 % ≤ 2.00 to 1.00 1.25 % 0.25 % 0.200 % As of December 31, 2022, the applicable rate on Euro, Australian and Canadian dollar loans was 2.00 percent and the applicable rate on Base Rate loans was 1.00 percent.
Interest Rate Risk Management Amounts outstanding under the Credit Agreement, as amended, bear interest at a rate per annum equal to the Euro Rate (with a zero percent floor for Euro borrowings), the Australian BBSR Rate, the Canadian BA Rate or the Base Rate, as applicable and as each such rate is defined in the Credit Agreement, as amended, plus an "applicable rate." The applicable rate applied to outstanding Euro, Australian and Canadian dollar denominated loans and Base Rate loans is based on the Company’s Consolidated Leverage Ratio as follows: Consolidated Leverage Ratio Applicable Rate on Euro/AUD/CDN Dollar Loans Applicable Rate on Base Rate Loans Undrawn Fee > 4.50 to 1.00 2.50 % 1.50 % 0.500 % ≤ 4.50 to 1.00 and > 4.00 to 1.00 2.25 % 1.25 % 0.375 % ≤ 4.00 to 1.00 and > 3.50 to 1.00 2.00 % 1.00 % 0.350 % ≤ 3.50 to 1.00 and > 3.00 to 1.00 1.75 % 0.75 % 0.300 % ≤ 3.00 to 1.00 and > 2.00 to 1.00 1.50 % 0.50 % 0.250 % ≤ 2.00 to 1.00 1.25 % 0.25 % 0.200 % As of December 31, 2023, the applicable rate on Euro, Australian and Canadian dollar loans was 2.00 percent and the applicable rate on Base Rate loans was 1.00 percent.
These interest rate changes may affect the fair market value of our fixed interest rate debt and any decisions we may make to repurchase the Senior Unsecured Notes, but do not impact our earnings or cash flow. The following table summarizes information about our major debt components as of December 31, 2022, including the principal cash payments and interest rates.
These interest rate changes may affect the fair market value of our fixed interest rate debt and any decisions we may make to repurchase the Senior Unsecured Notes, but do not impact our earnings or cash flow. The following table summarizes information about our major debt components as of December 31, 2023, including the principal cash payments and interest rates.
For further information related to outstanding foreign currency forward exchange contracts, see "Note 14. Derivative Financial Instruments" and "Note 15. Fair Value of Financial Instruments" to the consolidated financial statements contained in Part II, Item 8. of this report.
For further information related to outstanding foreign currency forward exchange contracts, see "Note 13. Derivative Financial Instruments" and "Note 14. Fair Value of Financial Instruments" to the consolidated financial statements contained in Part II, Item 8. of this report.
Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen.
Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona and British pound.
As of December 31, 2022, the commitment fee rate was 0.35 percent. 39 The Senior Unsecured Notes have a fixed interest rate and, accordingly, are not exposed to market risk resulting from changes in interest rates. However, the fair market value of our long-term fixed interest rate debt is subject to interest rate risk.
As of December 31, 2023, the commitment fee rate was 0.35 percent. 40 The Senior Unsecured Notes have a fixed interest rate and, accordingly, are not exposed to market risk resulting from changes in interest rates. However, the fair market value of our long-term fixed interest rate debt is subject to interest rate risk.
Increases and decreases in the fair market values of our forward agreements are expected to be offset by gains/losses in recognized net underlying foreign currency transactions or loans. Notional amounts of outstanding foreign currency forward exchange contracts were $187.8 million and $214.8 million at December 31, 2022, and 2021, respectively.
Increases and decreases in the fair market values of our forward contracts are expected to be offset by gains/losses in recognized net underlying foreign currency transactions or loans. Notional amounts of outstanding foreign currency forward exchange contracts were $182.5 million and $187.8 million at December 31, 2023, and 2022, respectively.
The net fair value of these foreign currency contracts was $1.7 million and $5.6 million at December 31, 2022, and 2021, respectively. At December 31, 2022, a 10-percent unfavorable exchange rate movement in our portfolio of foreign currency forward contracts would have reduced our unrealized gains $18.6 million.
The net fair value of these foreign currency contracts was $(0.4) million and $1.7 million at December 31, 2023, and 2022, respectively. At December 31, 2023, a 10-percent unfavorable exchange rate movement in our portfolio of foreign currency forward contracts would have reduced our unrealized gains $16.4 million.
Dollar Senior Secured Revolving Credit Facility, due March 2026 $ 23.6 $ $ $ 35.0 $ — $ — $ 58.6 $ 58.6 Australian Dollar Senior Secured Revolving Credit Facility, due March 2026 $ $ $ $ 14.2 $ — $ — $ 14.2 $ 14.2 Average variable interest rate (1) 4.90 % 4.90 % 4.90 % 4.90 % 4.90 % (1) Rates presented are as of December 31, 2022. 40
Dollar Senior Secured Revolving Credit Facility, due March 2026 $ 7.3 $ — $ — $ — $ — $ — $ 7.3 $ 7.3 Australian Dollar Senior Secured Revolving Credit Facility, due March 2026 $ — $ — $ 14.3 $ — $ — $ — $ 14.3 $ 14.3 Average variable interest rate (1) 6.35 % 6.35 % 6.35 % (1) Rates presented are as of December 31, 2023. 41

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