# ACCO BRANDS Corp: Form 10-K for the period ended Dec 31, 2022

- Company: [ACCO BRANDS Corp](/companies/acco.md) (CIK 712034)
- Form: 10-K
- Filed: 2023-02-24
- Accepted by EDGAR: Feb 24, 2023, 15:26 ET
- Period: 2022-12-31
- Accession: 0000950170-23-004360
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/712034/000095017023004360/acco-20221231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/712034/000095017023004360/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 12 months, 2022-01-01 to 2022-12-31 | $1.95bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 12 months, 2022-01-01 to 2022-12-31 | $1.40bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 12 months, 2022-01-01 to 2022-12-31 | $552.3m | us-gaap:GrossProfit |
| Research and development | 12 months, 2022-01-01 to 2022-12-31 | $26.3m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 12 months, 2022-01-01 to 2022-12-31 | $376.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 12 months, 2022-01-01 to 2022-12-31 | $34.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2022-01-01 to 2022-12-31 | $45.6m | us-gaap:InterestExpense |
| Income tax | 12 months, 2022-01-01 to 2022-12-31 | $28.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 12 months, 2022-01-01 to 2022-12-31 | −$13.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 12 months, 2022-01-01 to 2022-12-31 | −$0.14 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 12 months, 2022-01-01 to 2022-12-31 | −$0.14 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2022-01-01 to 2022-12-31 | 95,300,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2022-01-01 to 2022-12-31 | $77.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 12 months, 2022-01-01 to 2022-12-31 | $17.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 12 months, 2022-01-01 to 2022-12-31 | $28.6m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 12 months, 2022-01-01 to 2022-12-31 | $19.4m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2022-12-31 | $882.3m | us-gaap:AssetsCurrent |
| Total assets | at 2022-12-31 | $2.79bn | us-gaap:Assets |
| Current liabilities | at 2022-12-31 | $589.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-12-31 | $1.98bn | us-gaap:Liabilities |
| Long-term debt | at 2022-12-31 | $936.5m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2022-12-31 | $49.7m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2022-12-31 | $810.1m | us-gaap:StockholdersEquity |

## Business

As filed, 20,024 characters.

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.

For a description of certain factors that may have had, or may in the future have, a significant impact on our business, results of operations or financial condition, see "Part I. Item 1A. *Risk Factors"* of this report.

### 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. 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. We have an experienced management team with a proven ability to grow brands, integrate acquisitions, manage seasonal businesses, run lean organizations and navigate challenging environments. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.

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. 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.

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. 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.

Historically we have made acquisitions that have meaningfully expanded our portfolio of well-known brands, enhanced our competitive position from both a product and channel perspective, added scale to our operations and increased our geographic presence. 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.

### Operating Segments

ACCO Brands has three operating business segments based in different geographic regions: North America, EMEA, and International. Each business segment designs, markets, sources, manufactures, and sells recognized consumer, technology and business branded products used in schools, homes and at work. Product designs are tailored to end-user preferences in each geographic region, and where possible, leverage common engineering, design, and sourcing.

| 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. 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. 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 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.

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. 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.

For further information on the seasonality of our net sales, earnings and cash flow, see "Part II. Item 7. *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. 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. We also sell directly through e-commerce sites and our direct sales organization.

### Competition

ACCO Brands competes with numerous branded consumer products manufacturers, as well as many private label suppliers and importers, including various customers who import their own private label products directly from foreign sources. Examples of branded competitors include Bi-Silque, Blue Sky, Corsair, Dominion Blueline, Fellowes, Hamelin, Logitech, PDP, Razer, SteelSeries, and Targus, among others.

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. We also believe that our experience and skill in managing complex assortments and large seasonal demand is a competitive advantage, as is our strong relationships with technology and content providers in our technology accessories categories.

### Product Development

We seek opportunities to invest in new products and adjacencies. 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 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.

### Marketing and Demand Generation

We support our brands with a significant investment in targeted marketing and advertising, including on shelf and in store, and through digital and social media and consumer promotions that increase brand awareness, drive conversion, and highlight the innovation and differentiation of our products. 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 currently manufacture approximately 40 percent of our products in our own facilities located in the countries where we operate, and source the remaining 60 percent from lower cost countries, primarily in Asia. 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. 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. Some of our more significant trademarks include ACCO®, AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Marbig®, Mead®, NOBO®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, and Tilibra®. We own rights to these trademarks in various countries throughout the world. We protect these trademarks as appropriate through registrations in the U.S. and other jurisdictions. Depending on the jurisdiction, trademarks are generally valid as long as they are in use or their registrations are properly maintained and they have not been found to have become generic. Registrations of trademarks can generally be renewed indefinitely as long as the trademarks are in use. We also own numerous patents worldwide. Additionally, our gaming accessories business depends on maintaining our licensing rights with key gaming console manufacturers and video game publishers.

### Human Capital Resources

As the Home of Great Brands Built by Great People, we believe our employees are our greatest assets and key enablers of our success. In alignment with our Vision, Values and Leadership Promise, we are intentional about providing a great work experience that attracts top talent and motivates them to stay and contribute to our winning team.

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. There have been no strikes or material labor disputes at any of our facilities during the past five years.

#### Diversity and Inclusion

At ACCO Brands, our values include respecting the individual and embracing diversity. We believe that an equitable and inclusive environment with diverse teams produces more creative solutions, results in improved and more innovative products and services, and is crucial to our efforts to attract and retain key talent. We also believe that our leadership should closely reflect the diversity of our employees. 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.

To continue to drive our diversity goals and build a culture of inclusion, we have established a multi-year roadmap and a governance model that engages leadership at all levels of the organization. We have also developed an enhanced diversity and inclusion dashboard to track our actions and outcomes. 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. We know that offering the right mix of developmental roles and learning experiences will support our goal of building strong talent to lead the Company. At the same time, we recognize that building new capabilities may also require adding external talent in key roles to accelerate growth. 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. Throughout the year, we also deliver Company-required learning to ensure compliance with our Code of Conduct and other important policies.

Finally, an important factor in our ability to deliver sustainable, long-term value and optimize resource utilization is our proactive management of employee engagement. 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. 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.

#### 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. 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. 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. We support a wide range of charities worldwide, the most significant of which is the City of Hope in the U.S. which has been ongoing for many years.

### Sustainability/Environment

We continued to make progress on our three Planet, People and Products global sustainability goals relating to energy efficiency, diversity and third-party certification that we announced in 2020. 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. We strive for greater efficiencies in the procurement, use and disposal of resources and are committed to reducing our greenhouse gas emissions. We also report key metrics which we have determined are significant to our business according to the Sustainability Accounting Standards Board (SASB) Materiality Matrix. 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.

### 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.

|  |  |
| --- | --- |
| Mark C. Anderson, 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. 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. 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. 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. 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. 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. 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. 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. 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

## Risk factors

As filed, 54,806 characters.

**The factors that are discussed below, as well as the matters that are generally set forth in this Annual Report on Form 10-K and the documents incorporated by reference herein, could materially and adversely affect the Company’s business, results of operations and financial condition. Additional risks and uncertainties that are not presently known to us or that are not deemed material also may materially adversely affect the Company’s business, results of operations and financial condition in the future.**

### 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. 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. 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. 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.

***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.***

Our top ten customers accounted for 42.9 percent of our net sales for the year ended December 31, 2022. The loss of, or a significant reduction in sales to, or gross profit from, one or more of our top customers, or significant adverse changes to the terms on which we sell our products to one or more of our top customers, has and may continue to have a material adverse effect on our business, results of operations and financial condition.

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. If any of our larger customers were to face liquidity issues, become insolvent or file for bankruptcy, we could be adversely impacted due to not only a reduction in future sales but also delays or defaults in the payment of existing accounts receivable balances. Such a result could adversely impact our cash flows, results of operations, and financial condition.

***Sales of our products have been, and we expect they will continue to be, materially and adversely affected by general economic and business conditions globally and in the countries in which we operate, including high inflation, fear of recession and overall economic uncertainty or weakness.***

Our business depends on discretionary spending, and, as a result, our sales and operating results are highly dependent on consumer and business confidence and the health of the economies in the countries in which we operate. 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. Overall, adverse economic conditions and 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, and we expect will continue to negatively affect, our sales and profitability, results of operations, cash flow and financial condition.

***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. Our primary exposure to currency movements relative to the U.S. dollar is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Currency exchange rates can be volatile especially in times of global, political and economic tension or uncertainty. 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.

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. 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.

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. 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. Due to competitive pressures and the timing of these price increases relative to the changes in the foreign currency exchange rates, it is often difficult to increase prices fast enough to fully offset the cumulative impact of the foreign-exchange-related inflation on our cost of goods sold in these markets.

We use hedging instruments to mitigate transactional exposure to changes in foreign currencies. The effectiveness of our hedges in part depends on our ability to accurately forecast future cash flows, which is particularly difficult during periods of uncertain demand for our products and highly volatile exchange rates. For additional information, see "Part II, Item 7A. *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.***

We operate in a highly competitive environment characterized by large, sophisticated customers, low barriers to entry for certain of our products, and competition from a wide range of products and services (including private label products and electronic and digital products and services that can replace or render certain of our products obsolete). 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.

ACCO Brands competes with numerous branded consumer products manufacturers, as well as numerous private label suppliers and importers, including many of our customers who import their own private label products directly from foreign sources. Many of our competitors have strong, sought-after brands. Their ability to manufacture products locally at a lower cost or source them from other countries with lower production costs can give them a competitive advantage in terms of price under certain circumstances. 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.

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. 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 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. 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.

***Growth in emerging geographies may be difficult to achieve and exposes us to financial, operational, regulatory, compliance, and other risks not present, or not as prevalent, in more established markets.***

The profitable growth of our business in emerging markets is a key element to our long-term growth strategy. Emerging markets generally involve more financial, operational, regulatory and compliance risks than more mature markets. As we expand and grow in these markets, we increase our exposure to these risks. These risks include currency transfer restrictions, currency fluctuations, changes in international trade and tax policies and regulations (including import and export restrictions), and a lack of well-established or reliable legal systems. Additionally, in some cases, emerging markets also have greater political and economic volatility, greater vulnerability to infrastructure and labor disruptions, and are more susceptible to corruption, civil unrest, military disruptions, terrorism, public health emergencies, severe weather conditions, and natural disasters. Weak or corrupt legal systems may affect our ability to protect and enforce our intellectual property, contractual and other rights. Further, these emerging markets are generally more remote from our headquarters' location and have different cultures that may make it be more difficult to impose corporate standards and procedures and the extraterritorial laws of the U.S. and other jurisdictions, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other similar laws.

If we are unable to profitably grow our existing emerging market businesses or expand into other emerging markets, achieve the return on capital we expect as a result of our investments, or effectively manage the risks inherent in operating in these markets, our business, results of operations and financial condition could be adversely affected.

***Continued declines in the use of certain of our products have and will continue to adversely affect our business.***

A number of our products and brands consist of paper-based and related products. 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. 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.***

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. In addition, our customers often change their order patterns for the peak season, making forecasting of production schedules and inventory purchases more challenging. 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. 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. 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. Funding obligations are determined by government regulations and are measured each year based on the value of assets and liabilities on a specific date. 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. The markets can be, and recently have been, very volatile, and therefore the Company’s estimate of future contribution requirements and/or non-cash expenses can change dramatically in relatively short periods of time. Similarly, changes in interest rates and legislation enacted by governmental authorities can impact the timing and amounts of contribution requirements and/or non-cash expenses. An adverse change in the funded status of the plans could significantly increase our required future contributions and/or non-cash expenses and adversely impact our liquidity.

We also participate in a multi-employer pension plan for our union employees at our Ogdensburg, New York facility. The plan has reported significant underfunded liabilities and declared itself in critical and declining status. As a result, the trustees of the plan adopted a rehabilitation plan in an effort to forestall insolvency. Our current contributions to this plan (which are not significant) could increase due to the shrinking contribution base resulting from the insolvency or withdrawal of other participating employers, the inability or the failure of withdrawing participating employers to pay their withdrawal liability, lower than expected returns on pension fund assets, and other funding deficiencies. 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. 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. 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. Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on our sales and customer base, the unfavorable resolution of litigation, a material adverse change in our relationship with significant customers, or a sustained decline in our stock price. We continue to evaluate the impact of developments from our reporting units to assess whether impairment indicators are present. See also "Note 10. Goodwill and Identifiable Intangible Assets" to the consolidated financial statements contained in Part II, Item 8. of this report.

***Our inability to secure, protect and maintain rights to intellectual property could have an adverse impact on our business. In particular, the success and future growth of our gaming accessories business depends on its ability to license the right to use the trademarks and other intellectual property of the major gaming console makers and video game publishers.***

We consider our intellectual property rights, particularly and most notably our trademarks and trade names, but also our patents, trade secrets, trade dress, copyrights, and licensing agreements, to be an important and valuable part of our business. Our failure to obtain or adequately protect our intellectual property rights, or any change in law or other changes that serve to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness, dilute the value of our brands, cause confusion in the marketplace, and materially impact our sales and profitability.

Our gaming accessories business licenses trademarks and other intellectual property from the three major gaming console manufacturers and numerous video game publishers. The loss or non-renewal of one or more of these licenses would, in all likelihood, materially and adversely impact our sales, results of operations and financial condition. Additionally, our ability to expand our gaming accessories business into certain new geographies requires that we obtain additional licensing rights from the gaming console manufacturers and video game publishers. There can be no assurance that we will be able to obtain these additional licensing rights.

### 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. 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 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. 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. 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.***

The price and availability of raw materials, transportation, labor, and other necessary supplies and services used in our business, as well as the cost of finished goods, can be volatile due to numerous factors beyond our control, including general economic and competitive conditions, inflation, supply chain disruptions, supplier business strategies, and political instability, war and other geopolitical tensions. 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. 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. 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. 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, raw materials and component parts we use in our domestic manufacturing. 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.

During periods of inflation and rising costs, we manage this volatility through a variety of actions, including targeted advance or periodic purchases, future delivery purchases, long-term contracts, sales price increases and the use of certain derivative instruments. 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. 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 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.

***Our gaming and computer accessories have been and, we expect that they will continue to be, impacted by the global shortage of microchips.***

Our gaming and computer accessories have been recently impacted by the global shortage of microchips which are components of many of our gaming and other technology products. Additionally, the demand for gaming controllers is significantly impacted by the availability of gaming consoles which have been in short supply due to the microchip shortage. Although we carry a supply of microchips for our gaming controllers, the shortage of microchips, including chipsets for many of our popular technology products, such as docking stations and certain of our wireless controllers, has affected our ability to source sufficient quantities of these products, which has resulted in lost sales, increased costs and additional safety stock. In addition, the limited availability of new gaming consoles has reduced the demand for our controllers and other gaming accessories which, we believe, has negatively impacted our sales. While we expect these impacts will mitigate as the supply of microchips increases to meet demand, it is uncertain when the supply constraints will abate and there can be no assurance that we will recover the lost sales in the future. Likewise, should the shortage continue or worsen, there is no assurance that we will be able to obtain sufficient microchips at acceptable pricing to meet the demand for our products which could affect our sales and profitability. 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 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. 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. We also expect our suppliers to conform to our and our customers’ and licensors' codes of conduct and expectations with respect to product safety, product quality, social responsibility and environmental sustainability, and be responsive to our audits. 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. Substitute suppliers might not be available or, if available, might be unwilling or unable to offer products on acceptable terms or in a timely manner. Moreover, if one or more of our suppliers is unable or unwilling to continue to provide products of acceptable quality, at acceptable cost or in a timely manner due to financial difficulties, insolvency or otherwise, including as a result of disruptions associated with circumstances outside their control, or if customer demand for our products increases, we may be unable to secure sufficient additional capacity from our current suppliers, or others, in a timely manner or on acceptable terms. 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. 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. 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. 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. Any material failure, inadequacy, or interruption of that technology or its supporting infrastructure could materially adversely affect our business, results of operations and financial condition.***

We rely extensively on our information technology systems, many of which are outsourced to third-party service providers. We depend on these systems and our third-party service providers to effectively manage our business and execute the production, distribution and sale of our products, as well as to manage and report our financial results and run other support functions. Although we have implemented service level agreements and have established monitoring controls, if our third-party service providers fail to perform their obligations in a timely manner or at satisfactory levels, our business could suffer. Additionally, if one or more of our information technology suppliers is unable or unwilling to continue to provide services at acceptable cost due to financial difficulties, insolvency or otherwise, our business could be adversely affected.

Further, our failure to properly maintain and successfully upgrade or replace any of these systems, especially our enterprise resource planning systems, could disrupt our business and our ability to service our customers or negatively impact our ability to report our financial results in a timely and accurate manner.

If our day-to-day business operations or our ability to service our customers is negatively impacted by the failure or disruption of our information technology systems, if we are unable to accurately and timely report our financial results, or if we conclude that we do not have effective internal control over financial reporting and effective disclosure controls and procedures, it could damage our reputation and adversely affect our business, results of operations and financial condition.

***Security breaches could compromise our confidential and proprietary information, as well as any personally identifiable information we hold, and expose us to operational and legal risks that could cause our business and reputation to suffer and materially adversely affect our results of operations and financial condition.***

We maintain information and applications necessary to conduct our business in data centers, on our networks and with third-party cloud services, including confidential and proprietary information, as well as personally identifiable information regarding our customers and employees. Our information technology infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, or other disruptions which creates the risk that our digital information could be stolen or tampered with or that our business operations could be materially and adversely impacted. This risk is heightened now that most of our office-based employees work remotely several days a week.

We maintain systems designed to prevent and monitor for such intrusion, tampering, and theft, and we continue to enhance and update these technologies as security threats evolve and become more sophisticated. We also obtain assurances from outsourced service providers regarding the sufficiency of their security procedures and, where appropriate, assess the protections employed by these third parties. 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. Further, our costs to maintain and upgrade our security systems could increase significantly as cybersecurity threats increase.

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. To date these incidents have not had a material impact on our business, but there can be no assurance that future incidents will not cause material impacts. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target. Additionally, there can be no assurance that the actions we and our outsourced providers take will prevent a breach of, or attack on the information technology systems which support the day-to-day operation of our business or house our confidential, proprietary and personally identifiable information.

Any such intrusion, tampering or theft (and any resulting disclosure or use of confidential, proprietary or personally identifiable information) could compromise our network, the network or data center of a third-party hosting key operating systems or data, or to whom we have disclosed confidential, proprietary or personally identifiable information, or a third-party cloud service provider. 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. Contractual provisions with third parties, including cloud service providers, may limit our ability to recover these losses.

In the event a significant cybersecurity event is detected, we maintain disclosure controls and procedures that are designed to enable us to promptly analyze the impact on our business, respond expediently, appropriately and effectively and repair any damage caused by such incident, as well as consider whether such incident should be disclosed publicly. The Company also employs technology designed to detect potential incidents of intrusion, tampering and theft before they impact the Company, and we continue to enhance and update these technologies. However, there can be no assurance that we will successfully identify such an incident in a timely manner or at all, and in advance of it impacting the Company, and any such impact could be material.

### Merger and Acquisition Risks

***Our strategy is partially based on growth through acquisitions. 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. 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. 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.

***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.***

We may face challenges in integrating our acquisitions with our existing operations and expanding the acquired business geographically. These challenges may include, among other things: difficulties or delays in integrating or consolidating business activities or expanding them into new geographies; challenges with integrating the business cultures; difficulties in retaining key employees and key customers; and difficulties integrating the acquired business's finance, accounting, information technology and other business systems with our own. 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. 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.

We generally expect that we will realize synergies, including cost savings and other financial and operating benefits from our acquisitions. Our success in realizing these benefits, and the timing of this realization, depends on the successful integration of the business operations of the acquired company. We cannot predict with certainty if or when these synergy savings and other benefits will occur, or the extent to which we will be successful.

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 unable to successfully complete these tasks and accurately report our financial results in a timely manner and establish internal control over financial reporting and disclosure controls and procedures that are effective, our business, results of operations and financial condition, investor, supplier and customer confidence in our reported financial information, the market perception of our Company and/or the trading price of our common stock could be materially adversely affected.

### Liquidity, Capital Resources and Capital Allocation Risks

***Our existing borrowing arrangements limit our ability to engage in certain activities. If we are contractually restricted from pursuing activities or transactions that we believe are in our long-term best interests, or are unable to meet our obligations under our loan agreements, our business, results of operations and financial condition could be materially adversely affected.***

The terms of our debt agreements limit our ability to engage in certain activities and transactions that may be in our and our stockholders' long-term interests. Among other things, the covenants and financial ratios and tests contained in our debt agreements restrict or limit our ability to incur additional indebtedness, grant certain liens on our assets, issue preferred stock or certain disqualified stock, make restricted payments (including dividends and share repurchases), make investments, sell our assets or merge with other companies, and enter into certain transactions with affiliates. We are also required to maintain specified financial ratios under certain circumstances and satisfy financial condition tests. Our ability to comply with these covenants and financial ratios and tests may be affected by events beyond our control, and we may not be able to continue to meet those covenants, ratios and tests.

Our debt service obligations require us to dedicate a portion of our cash flow from operating activities to make interest and principal payments on our indebtedness, which reduces the availability of our cash flow to fund working capital, capital expenditures, research and product development efforts, potential acquisitions and other general corporate purposes. A portion of our outstanding indebtedness bears interest at a floating rate which fluctuates with changes in interest rates.

Our ability to meet our debt obligations, including our financial covenants, and to refinance our existing indebtedness upon maturity, will depend upon our future operating performance, which will be affected by general economic, financial, competitive, regulatory, business, and other factors. 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. If our lenders accelerate our indebtedness, or we are not able to refinance our debts at maturity, our assets may not be sufficient to repay in full such indebtedness and any other indebtedness that would become due as a result of such acceleration. If we then are unable to obtain replacement financing or any such replacement financing is on terms that are less favorable than the indebtedness being replaced, our liquidity, results of operations, and financial condition would be adversely affected.

***We may not continue to pay dividends at historic rates, or at all, or engage in stock repurchases.***

We have a history of paying quarterly dividends and engaging in stock repurchase programs; however, any determination to continue to pay cash dividends at recent rates or at all, or resume repurchasing our shares in the market, is contingent on a variety of factors, including our financial condition, results of operations, business requirements, and our board of directors' continuing determination that such dividends or share repurchases are in the best interests of our stockholders and in compliance with all applicable laws and agreements. 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.

### Legal and Regulatory Risks

***Product liability claims, recalls or regulatory actions could materially adversely affect our financial results or harm our reputation or brands.***

Claims for losses or injuries purportedly caused by one of our products arise in the ordinary course of our business. Litigation or regulatory enforcement actions and the associated costs and potential for monetary judgments and penalties could have an adverse effect on our results of operations and financial condition. Additionally, product liability claims or regulatory actions, regardless of merit, could result in negative publicity that could harm our reputation in the marketplace or the value of our brands. We also may be, and in the past have been, required to recall and discontinue the sale of allegedly defective or unsafe products, which has resulted in lost sales and unplanned expenses. Any future recall or quality issue could result in lost sales, adverse publicity, and significant expenses, and adversely impact our results of operations or financial condition.

***Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.***

We are party to various lawsuits and regulatory proceedings, primarily related to alleged patent infringement, as well as other claims incidental to our business. In addition, we may be unaware of third-party claims of intellectual property infringement relating to our technology, brands, or products, and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. We also may be subject to injunctions against development and sale of certain of our products.

It is the opinion of management that (other than the Brazil Tax Assessments described below) the ultimate resolution of currently outstanding matters will not have a material adverse effect on our financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition, or cash flow. Further, future claims, lawsuits and legal proceedings could materially adversely affect our business, reputation, results of operations, and financial condition.

In connection with our May 1, 2012 acquisition of the Mead Consumer and Office Products business, we assumed all of the tax liabilities for its acquired foreign operations, including its operating entity in Brazil ("ACCO Brazil"). In December of 2012, the Federal Revenue Department of the Ministry of Finance of Brazil ("FRD") issued a tax assessment against ACCO Brazil, challenging the tax deduction of goodwill from ACCO Brazil’s taxable income for the year 2007 (the "First Assessment"). 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. 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.

***Laws, rules and regulations and self-regulatory requirements that affect our business, including the costs of compliance, as well as the impact of changes in such laws, could materially adversely affect our business, reputation and results of operations.***

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.

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. Capital and operating expenses required to establish and maintain compliance with all of these laws, rules and regulations and self-regulatory requirements can be significant, and violations may result in substantial fines, penalties, and civil damages as well as damage to our reputation. 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. 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. Changes in income tax laws could change our effective tax rate while changes in U.S. trade policies, including tariffs on imports from China and on commodities we use in our manufacturing operations, could affect our cost of products sold and margins.

### General Risk Factors

### Our success depends on our ability to attract and retain qualified personnel.

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. For our executives, we rely to a significant degree on performance-based incentive awards that pay out only if specified performance goals have been met. To the extent these performance goals are not met, and our incentive awards do not pay out, or pay out less than the targeted amount, it may motivate certain executive officers and more senior management employees to seek other opportunities. Our ability to maintain competitive pay and benefits and an attractive culture will affect our ability to attract and retain qualified personnel. The loss of key management personnel or other employees with highly sought-after expertise or our potential inability to attract qualified and diverse personnel in sufficient numbers to meet our business needs may adversely affect our ability to manage our overall operations and successfully implement our business strategy.

### Our stock price is volatile.

The market price for our common stock has been volatile historically. Our stock price may be significantly affected by factors, including those described elsewhere in this "Part I, Item 1A. *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.

Volatility in our stock price could adversely affect our business and financing opportunities, which could hurt our operating results and reduce the percentage ownership of our existing stockholders.

***Circumstances outside our control, including telecommunication failures, labor strikes, power and/or water shortages, acts of God, public health emergencies, including the occurrence of a pandemic, severe weather conditions, natural disasters, war, terrorism, and other geopolitical incidents have, and in the future could, materially and adversely impact our business, sales, results of operations and financial condition.***

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. 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. Any such future disruptions could materially adversely impact our business, sales, results of operations, and financial condition.

Political instability, civil unrest, war or terrorism, public health crises, including the occurrence of pandemics such as COVID-19, or other public health emergencies, and severe weather or natural disasters may also affect consumer and business confidence and the health of the economies in the countries in which we operate. 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.

## Properties

As filed, 2,318 characters.

We have manufacturing facilities in North America, Europe, Brazil, Mexico and Australia, and maintain distribution centers in the regional markets we service. We lease our corporate and U.S. headquarters in Lake Zurich, Illinois. The 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.

## Legal proceedings

As filed, 1,479 characters.

We are party to various lawsuits and regulatory proceedings, primarily related to alleged patent infringement, as well as other claims incidental to our business. In addition, we may be unaware of third-party claims of intellectual property infringement relating to our technology, brands, or products, and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. We also may be subject to injunctions against development and sale of certain of our products.

It is the opinion of management that (other than the Brazil Tax Assessments) the ultimate resolution of currently outstanding matters will not have a material adverse effect on our financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition, or cash flow. Further, future claims, lawsuits and legal proceedings could materially and adversely affect our business, reputation, results of operations, and financial condition. 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.

## Management's discussion and analysis

As filed, 53,338 characters.

### INTRODUCTION

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained in Item 8. of this report. The following discussion and analysis are for the year ended December 31, 2022, compared with the same period in 2021 unless otherwise stated. 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.

### 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. We have an experienced management team with a proven ability to grow brands, integrate acquisitions, manage seasonal businesses, run lean organizations and navigate challenging environments. Our products are sold primarily in the U.S., Europe, Australia, Canada, Brazil and Mexico.

ACCO Brands has three operating business segments based in different geographic regions: North America, EMEA, and International. Each business segment designs, markets, sources, manufactures, and sells recognized consumer, technology and business branded products used in schools, homes and at work. Product designs are tailored to end-user preferences in each geographic region, and where possible, leverage common engineering, design, and sourcing.

Our product categories include gaming and computer accessories; storage and organization; notebooks; shredding; laminating and binding machines; stapling; punching; planners; dry erase boards; and do-it-yourself tools, among others. 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. 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. 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. 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.

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. 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.

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 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. 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.

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.

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.

### Consolidated Results of Operations for the Years Ended December 31, 2022 and 2021

*(in millions, except per share data)*

|  | Year Ended December 31, 2022 | 2021 | Amount of Change $%/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. 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. 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.

#### 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.

For the year ended December 31, 2022, cost of products sold decreased $15.1 million, or 1.1 percent, due to foreign exchange and reduced sales, partially offset by increased inflation specifically related to inbound and outbound freight, purchased finished goods and raw materials. Foreign exchange reduced cost of products sold $69.6 million, or 4.9 percent.

#### Gross Profit

For the year ended December 31, 2022, gross profit decreased $62.6 million, or 10.2 percent. Gross profit margin decreased 200 basis points. The reduction in gross profit reflects the decline in sales volume. The decrease in the gross profit margin is primarily due to the cumulative impact of inflationary costs which exceeded our sales price increases. Foreign exchange reduced gross profit $24.3 million, or 4.0 percent.

#### Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") include advertising, marketing, selling (including commissions), research and development, customer service, depreciation related to assets outside the manufacturing and distribution processes, and all other general and administrative expenses outside the manufacturing and distribution functions (e.g., finance, human resources, information technology).

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. The current year restructuring expense was primarily for severance costs in North America and EMEA related to cost reduction initiatives. Prior year restructuring expense was primarily related to severance costs in North America and International.

#### 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.

#### 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 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, 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. 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. Interest expense was similar to prior year with significantly higher rates on our variable debt mitigated by the impact of lower rates due to the bond refinancing.

#### Other (Income) Expense, Net

For the year ended December 31, 2022, other (income) expense, net increased $16.0 million primarily due to charges of $13.5 million related to the refinancing of our debt in the prior year that did not recur, and a $3.5 million gain on the sale of our Ogdensburg, New York facility in 2022.

#### 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. 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.

#### Net (Loss) Income/Diluted (Loss) Income per Share

For the year ended December 31, 2022, net loss was $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 current year net loss reflects the decline in operating income which includes a non-cash goodwill impairment charge.

### Segment Net Sales and Operating Income for the Years Ended December 31, 2022 and 2021

### ACCO Brands North America

*(in millions)*

|  | Year Ended December 31, 2022 | 2021 | Amount of Change $%/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. 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.

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. The volume decline is primarily due to lower sales of gaming accessories from lower industry-wide demand and the continued impact of semiconductor chip shortages. The lower sales of gaming accessories were partly offset by increases in sales of business and school products and computer accessories. Sales were also negatively impacted by lower inventory replenishment by our retailer customers during the second half of the year due to the challenging macroeconomic environment.

For the year ended December 31, 2022, operating loss was $4.9 million compared to operating income of $121.9 million, primarily due to the non-cash goodwill impairment charge of $98.7 million. The decrease in operating results and operating margin was also impacted by lower sales volume and higher inflation on raw materials, finished goods and inbound and outbound freight costs.

### ACCO Brands EMEA

*(in millions)*

|  | Year Ended December 31, 2022 | 2021 | Amount of Change $%/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. 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.

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. Price increases partly offset the lower volume, adding $62.7 million, or 9.5 percent.

For the year ended December 31, 2022, operating income decreased $40.0 million, or 64.8 percent. Adverse foreign exchange reduced operating income by $4.8 million, or 7.8 percent. Operating income and operating margin decreased due to lower sales volume, higher costs for raw materials and freight due to inflation that exceeded the impact of price increases and negative fixed cost leverage.

### ACCO Brands International

*(in millions)*

|  | Year Ended December 31, 2022 | 2021 | Amount of Change $%/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. 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.

For the year ended December 31, 2022, net sales increased $49.3 million, or 15.4 percent. Adverse foreign exchange reduced sales $11.4 million, or 3.6 percent. Comparable net sales increased 19.0 percent, due to price increases, which added $38.9 million or 12.2 percent, and increased volume of $21.7 million, or 6.8 percent, primarily in Latin America due to a return to in-person education and work.

For the year ended December 31, 2022, operating income increased $18.9 million, or 59.8 percent. The increase in operating income was due to higher sales volumes, pricing, and improved expense leverage. Foreign exchange reduced operating income $1.3 million.

### 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"). 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). We had $62.2 million cash on hand as of December 31, 2022.

Effective November 7, 2022, we entered into an amendment to our bank credit agreement, which increases our maximum consolidated leverage ratio financial covenant ("Consolidated Leverage Ratio"), beginning with the fourth quarter of 2022 through December 2023 and for the first and second quarters of each year thereafter, and favorably amends several other items. 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. We have no debt maturities before March 2026.

The $429.9 million of debt currently outstanding under our senior secured credit facilities has a weighted average interest rate of 4.90 percent as of December 31, 2022, 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.

### Summary of Cash Flow by Quarter and Full-Year for 2022 and 2021

*(in millions)*

|  | 2022 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Full Year |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net cash (used) provided by operating activities: | $(104.2) | $6.3 | $88.3 | $87.2 | $77.6 |
| Net cash (used) provided by investing activities: | (3.4) | (3.4) | (4.8) | 2.3 | (9.3) |
| Net cash provided (used) by financing activities: | 153.5 | 0.4 | (95.6) | (106.6) | (48.3) |
| Effect of foreign exchange rate changes on cash and cash equivalents | 4.2 | (2.9) | (1.6) | 1.3 | 1.0 |
| Net increase (decrease) in cash and cash equivalents | $50.1 | $0.4 | $(13.7) | $(15.8) | $21.0 |
|  | **2021** |  |  |  |  |
|  | **1st Quarter** | **2nd Quarter** | **3rd Quarter** | **4th Quarter** | **Full Year** |
| Net cash (used) provided by operating activities: | $(42.4) | $(12.7) | $99.1 | $115.6 | $159.6 |
| Net cash provided (used) by investing activities: | 14.4 | (8.3) | (4.6) | (7.3) | (5.8) |
| Net cash provided (used) by financing activities: | 68.3 | 21.9 | (112.7) | (124.7) | (147.2) |
| Effect of foreign exchange rate changes on cash and cash equivalents | (1.8) | 1.9 | (1.6) | (0.5) | (2.0) |
| Net increase (decrease) in cash and cash equivalents | $38.5 | $2.8 | $(19.8) | $(16.9) | $4.6 |

Because of the seasonality of our business, 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. 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 Brazilian business is highly seasonal due to the timing of the back-to-school season, which coincides with the calendar year-end in the fourth quarter. Due to various tax laws, it is costly to transfer short-term working capital in and out of Brazil; therefore, our normal practice is to hold seasonal cash requirements in Brazil and invest them in short-term Brazilian government securities.

### 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"). 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.

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.

#### Other Covenants and Restrictions

The Credit Agreement, as amended, contains customary affirmative and negative covenants as well as events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults, certain bankruptcy or insolvency events, certain ERISA-related events, changes in control or ownership and invalidity of any loan document. The Credit Agreement, as amended, also establishes limitations on the aggregate amount of Permitted Acquisitions and Investments (each as defined in the Credit Agreement, as amended) that the Company and its subsidiaries may make during the term of the Credit Agreement, as amended.

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.

#### 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. 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.

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. Restructuring charges in 2022 were primarily for severance costs related to cost reduction initiatives which are expected to generate approximately $13.0 million of savings in our North America and EMEA segments, the majority of which will be realized in the next twelve months. For further information, see "Note 11. Restructuring" to the consolidated financial statements contained in Part II. Item 8. of this report.

In addition, during the year ended December 31, 2021, the Company recorded an aggregate $2.6 million in integration and transaction expenses related to the acquisitions of PowerA and Foroni.

### 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. The decrease in cash provided by operating activities was primarily driven by lower net income of $115.1 million, partially offset by non-cash add backs of $70.5 million, which includes a goodwill impairment charge. 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 table below shows our cash flow provided (used) by accounts receivable, inventories and accounts payable for the years ended December 31, 2022 and 2021:

*(in millions)*

|  | Year Ended December 31, 2022 | 2021 | Amount of Change |
| --- | ---: | ---: | ---: |
| Accounts receivable | $31.6 | $(77.6) | $109.2 |
| Inventories | 23.2 | (131.8) | 155.0 |
| Accounts payable | (66.0) | 131.2 | (197.2) |
| Cash flow used by trade working capital | $(11.2) | $(78.2) | $67.0 |

- Accounts receivable was a source of cash of $31.6 million during the twelve months ended December 31, 2022, a favorable change of $109.2 million compared to a use of cash of $77.6 million during the twelve months ended December 31, 2021. The $109.2 million favorable change was due to increased recovery of past due accounts and a reduction of accounts receivable due to lower sales in the current year. The prior year included an increase in accounts receivable due to the acquisition of PowerA.
- Inventories was a source of cash of $23.2 million during the twelve months ended December 31, 2022, a favorable change of $155.0 million when compared with the $131.8 million cash used during the twelve months ended December 31, 2021. The favorable change was primarily driven by a reduction in inventory levels when compared to the prior year during which significant safety stock was purchased to mitigate supply chain issues. These reductions are partly offset by higher costs driven by inflation on raw materials and finished goods.
- Accounts payable was a use of cash of $66.0 million during the twelve months ended December 31, 2022, an unfavorable change of $197.2 million when compared to a source of cash of $131.2 million during the twelve months ended December 31, 2021. The $197.2 million unfavorable change was due to lower inventory purchases in 2022 and a higher level of accounts payable at the end of the prior year.

#### Cash Flow from Investing Activities

Cash used by investing activities was $9.3 million and $5.8 million for the twelve months ended December 31, 2022 and 2021, respectively. 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.

#### 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. The decrease of $98.9 million primarily relates to an increase in cash provided by our incremental net borrowings of $119.8 million, compared to the prior year. In addition, cash outflows related to our debt refinancing decreased $19.1 million compared to the prior year. Partly offsetting the cash provided by financing activities were uses of cash for share repurchases of $19.4 million and increases in the contingent earnout payment of $17.4 million and dividends paid of $2.8 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.

### 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. Our future operating performance is dependent on many factors, some of which are beyond our control, including prevailing economic, financial and industry conditions. For further information on these risks, see "Part I, Item1A. *Risk Factors"* of this report.

### Off-Balance-Sheet Arrangements and Contractual Financial Obligations

The Company does not have any material off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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.

(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. 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 2023, along with estimated future payments, for pension and post-retirement plans that are not paid from assets held in a plan trust.

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. 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"). Preparation of our financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses presented for each reporting period in the financial statements and the related accompanying notes. Actual results could differ significantly from those estimates. We regularly review our assumptions and estimates, which are based on historical experience and, where appropriate, current business trends. We believe that the following discussion addresses our critical accounting policies, which require significant, subjective and complex judgments to be made by our management.

#### Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount reflective of the consideration we expect to receive in exchange for those goods or services. Taxes we collect concurrent with revenue producing activities are excluded from revenue. Incidental items incurred that are immaterial in the context of the contract are expensed.

At the inception of each contract, the Company assesses the products and services promised and identifies each distinct performance obligation. To identify the performance obligations, the Company considers all products and services promised regardless of whether they are explicitly stated or implied within the contract or by standard business practices.

For our products, we transfer control and recognize a sale primarily when we either ship the product from our manufacturing facility or distribution center, or upon delivery to a customer-specified location depending upon the terms in the customer agreement. 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. We incur Customer Program Costs to obtain favorable product placement, to promote sell-through of products and to maintain competitive pricing. The amount of consideration we receive and revenue we recognize is impacted by Customer Program Costs, including sales rebates; in-store promotional allowances; shared media and customer catalog allowances; other cooperative advertising arrangements; freight allowance programs offered to our customers; allowances for discounts and reserves for returns. We recognize Customer Program Costs, primarily as a deduction to gross sales, at the time that the associated revenue is recognized. Customer Program Costs are based on management's best estimates using the most likely amount method and is an amount that is probable of not being reversed. In the absence of a signed contract, estimates are based on historical or projected experience for each program type or customer. We adjust our estimate of revenue when the most likely amount of consideration we expect to receive changes.

#### Inventories

Inventories are priced at the lower of cost (principally first-in, first-out) or net realizable value. When necessary, the write-down of inventory to its net realizable value is recorded for obsolete or slow-moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions and specific identification of items, such as product discontinuance or engineering/material changes. 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. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate. Certain of our trade names have been assigned an indefinite life as we currently anticipate that these trade names will contribute cash flows to ACCO Brands indefinitely. Amortizable intangible assets are amortized over their useful lives.

We test indefinite-lived intangibles for impairment annually, during the second quarter, and during any interim period when market or business events indicate there may be a potential adverse impact on a particular intangible. The test may be on a qualitative or quantitative basis as allowed by GAAP. We consider the implications of both external factors (e.g., market growth, pricing, competition, and technology) and internal factors (e.g., product costs, margins, support expenses, and capital investment) and their potential impact on cash flows in both the near and long term, as well as their impact on any identifiable intangible asset associated with the business. Based on recent business results, consideration of significant external and internal factors, and the resulting business projections, indefinite-lived intangible assets are reviewed to determine whether they are likely to remain indefinite-lived, or whether a finite life is more appropriate. In addition, based on events in the period and future expectations, management considers whether the potential for impairment exists. 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. During 2022, our revenue generated from our Leitz indefinite-lived trade name declined. Accordingly, as of August 31, 2022, we completed an impairment assessment, on a quantitative basis, for our Leitz indefinite-lived trade name. The result of our assessment was that the fair value of the Leitz indefinite-lived trade name exceeded its carrying value by less than five percent and we concluded that no impairment existed. In addition, we have not identified a triggering event through December 31, 2022 that more likely than not would result in impairment.

#### 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 authoritative guidance on goodwill and other intangible assets requires that goodwill be tested for impairment at a reporting unit level. We have determined that our reporting units are North America, EMEA and International.

We test goodwill for impairment annually, during the second quarter, or any interim period when market or business events indicate there may be a potential adverse impact on goodwill. As permitted by GAAP, we may perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test as required by GAAP. 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. 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. 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 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. 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 implied fair values of all three of our reporting units, more likely than not, exceed their carrying values at December 31, 2022. In addition, we have not identified a triggering event that would cause us to perform another quantitative goodwill impairment analysis. 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. However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future. If our assumptions regarding future performance are not achieved, we may be required to record additional goodwill impairment charges in future periods.

#### Employee Benefit Plans

We provide a range of benefits to our employees and retired employees, including pension, post-retirement, post-employment and health care benefits. We record annual amounts relating to these plans based on calculations specified by GAAP, which include various actuarial assumptions, including discount rates, assumed rates of return, mortality rate tables, compensation increases, turnover rates and health care cost trends. Actuarial assumptions are reviewed on an annual basis and modifications to these assumptions are made based on current rates and trends when it is deemed appropriate. As required by GAAP, the effect of our modifications and unrecognized actuarial gains and losses are generally recorded to a separate component of accumulated other comprehensive income (loss) ("AOCI") in stockholders’ equity and amortized over future periods. We believe that the assumptions utilized in recording our obligations under the plans are reasonable based on our experience. 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.

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. For the majority of the obligations, the assumed discount rates reflect market rates for high-quality corporate bonds currently available and were determined by constructing a yield curve based on a large population of high quality corporate bonds. Where the corporate bond market is not sufficiently deep, government bond yields are used instead. The resulting discount rates reflect the matching of plan liability cash flows to the yield curves.

For the ACCO Europe Pension Plan, the Company’s discount rate assumption methodology was based on the yield curve that uses a dataset of bonds rated AA by at least one of the main rating agencies.

The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested based on our investment profile to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns, while also considering historical returns over the last 10 years, asset allocation and investment strategy.

We estimate the service and interest components of net periodic benefit cost (income) for pension and post-retirement benefits utilizing a full yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

At the end of each calendar year an actuarial evaluation is performed to determine the funded status of our pension and post-retirement obligations and any actuarial gain or loss is recognized in AOCI and then amortized into the income statement in future periods, based on the average remaining lifetime or average remaining service expected.

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.

The weighted average assumptions used to determine benefit obligations for the years ended December 31, 2022, 2021, and 2020 were as follows:

|  | Pension U.S. 2022 | 2021 | 2020 | International 2022 | 2021 | 2020 | Post-retirement 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 U.S. 2022 | 2021 | 2020 | International 2022 | 2021 | 2020 | Post-retirement 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.

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 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.

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. 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. 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.

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. 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. 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. 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 believe comparable sales provide management and investors with a more complete understanding of our underlying operational results and trends, facilitate meaningful period-to-period comparisons and enhance an overall understanding of our past and future financial performance. 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.

The following tables provide a reconciliation of GAAP net sales change as reported to non-GAAP comparable sales change:

*(in millions)*

|  | Comparable Sales - Year Ended December 31, 2022 GAAP Net Sales | Non-GAAP Currency Translation | Comparable 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

*(in millions)*

|  | Amount of Change - Year Ended December 31, 2022 compared to the Year Ended December 31, 2021 $ Change - Net Sales GAAP Net Sales Change | Non-GAAP Currency Translation | Comparable Net Sales 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 GAAP Net Sales Change | Non-GAAP Currency Translation | Comparable Net Sales 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

## Market risk

As filed, 5,731 characters.

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions.

See also "Part I. Item 1A. *Risk Factors"* of this report.

### Foreign Exchange Risk Management

We enter into forward foreign currency contracts to reduce the effect of fluctuating foreign currencies, primarily on foreign inventory purchases and intercompany loans, which create foreign exchange exposure relative to the trading currency of the foreign operating unit. 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. 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. 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. Consistent with the use of these contracts to neutralize the effect of exchange rate fluctuations, such unrealized losses or gains would be offset by corresponding gains or losses, respectively, in the remeasurement of the underlying transactions being hedged. When taken together, we believe these forward contracts and the offsetting underlying commitments do not create material market risk.

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.

### 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. Undrawn amounts under the Revolving Facility are subject to a commitment fee rate of 0.20 percent to 0.50 percent per annum, depending on the Company’s Consolidated Leverage Ratio. As of December 31, 2022, the commitment fee rate was 0.35 percent.

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. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. In addition, fair market values will also reflect the credit markets' view of credit risk spreads and our risk profile. 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.

### Debt Obligations

*(in millions)*

| Long term debt: | Stated Maturity Date 2023 2024 2025 2026 | 2027 Thereafter | Total | Fair Value |
| --- | ---: | ---: | ---: | ---: |
| 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 | $$ — | $34.9 | $34.9 |
| U.S. Dollar Senior Secured Revolving Credit Facility, due March 2026 | $23.6 $$ $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.

## Controls and procedures

As filed, 3,547 characters.

### (a) Management's Evaluation of Disclosure Controls and Procedures

We seek to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the applicable Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation under the supervision of the Chief Executive Officer and the Chief Financial Officer, and with the participation of our Disclosure Committee, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2022.

### (b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

### (c) Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed by and under the supervision of our Chief Executive Officer and Chief Financial Officer and effected by management and our board of directors to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the U.S.

In designing and evaluating our internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving the desired control objective. Also, projections of any evaluation of the effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-Oxley Act of 2002, management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in *Internal Control-Integrated Framework (2013)*. Our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8. of this report.

Filed Feb 24, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-004360. Last ingested by Listed: Oct 30, 2026, 11:41 ET. No prices; not investment advice.