Kenvue (KVUE) Financial History

We are subject to a broad range of laws and regulations in the United States and globally, including but not limited to those described in Part I, Item 1, “Business—Government Regulations.” Furthermore, changes in gov…

Although we currently intend to continue paying a quarterly cash dividend to holders of our common stock, we have no obligation to do so, and our dividend policy may change at any time at the discretion of our Board w…

The risks described above will increase with the amount of indebtedness we incur in the future.

Our financing arrangements include the Senior Notes, the commercial paper program, the Revolving Credit Facility, and finance lease liabilities (each as described in Note 5, “Borrowings,” to the Consolidated Financial…

In the future, your percentage ownership in us may be diluted if we issue additional shares of our common stock or convertible securities in connection with acquisitions, capital market transactions, or other corporat…

The process of designing and testing the internal control over financial reporting required to comply with this obligation is complex, time-consuming, and costly.

As an independent, publicly traded company, we are required to maintain internal control over financial reporting, to report any material weaknesses in our internal control, and to furnish a report by management on th…

The market price of shares of our common stock may be highly volatile and fluctuate significantly due to a number of factors, some of which may be beyond our control, including the market’s reaction to announcement of…

Pursuant to the Separation Agreement and certain other agreements we have entered into with J&J in connection with the Separation, J&J agreed to indemnify us for certain liabilities.

The Separation Agreement provides for indemnification obligations (for uncapped amounts, reduced by any insurance proceeds or other third-party proceeds that the party being indemnified receives) designed to make us f…

manufacturing operations for such product to our own internal organization or to obtain alternative third-party sources to provide these services.

We are relying on J&J to satisfy its obligations under the Transition Agreements during the applicable term.

J&J is providing us with certain manufacturing services pursuant to the Transition Manufacturing Agreement for a transitional period following the completion of the Kenvue IPO.

The Separation Agreement provides that we and J&J will use our respective reasonable best efforts to effect any transfer that was not completed prior to the completion of the Kenvue IPO as promptly following the compl…

Pursuant to the Separation Agreement, in order to ensure compliance with applicable law, to obtain necessary governmental approvals and other consents, and for other business reasons, we and J&J have deferred certain…

Our continued use of legacy J&J branding could adversely affect our reputation.

•the Separation will continue to require management’s time and effort, which may divert management’s attention from operating and growing our business;

For additional information about the past financial performance of our business and the basis of presentation of the Consolidated Financial Statements of our business included herein, see Part II, Item 7, “Management’…

•Our historical financial results reflect the direct and indirect costs for the services historically provided by J&J to us.

For additional information regarding goodwill and other intangible assets, including our assessment of the long-term outlook for the Skin Health and Beauty business, see Note 4, “Intangible Assets and Goodwill,” to th…

In seeking to expand our operations in geographic markets where we currently have a presence or to establish operations in new geographic markets where we do not currently have a presence, we expect, as we have in the…

Furthermore, new trade actions, including the imposition of new or increased tariffs on various products, have introduced greater uncertainty with respect to trade policies and government regulations affecting trade b…

•rising geopolitical trade tensions impacting our key markets, including but not limited to tensions in the United States, China, Western Europe, and Latin America;

Changes in tax laws or regulations in jurisdictions in which we operate, including changing laws in the United States and changes led by the Organization for Economic Co-operation and Development, such as the continui…

In addition, we are subject to laws and regulations pertaining to sanctions imposed by the United States and other authorities that may prohibit us or our affiliates from doing business in certain countries or restric…

We are also subject to an increasing number of laws and regulations designed to combat abuses of human rights in our value chain.

These laws and regulations include the California Consumer Privacy Act (as modified by the California Privacy Rights Act), the EU GDPR, the U.K.

We are subject to increasingly complex and changing privacy and data protection laws and regulations in the United States and around the world that impose broad compliance obligations on the collection, transmission,…

Furthermore, we have employed, and expect to employ in the future, individuals who were previously employed at other companies, including our competitors or potential competitors.

Furthermore, we have been, and may continue to be, subject to claims arising out of the sale of talc-based products that do not constitute Talc-Related Liabilities, such as claims relating to the sale of talc-based Jo…

In October 2021, Old JJCI implemented a corporate restructuring, as a result of which LTL Management LLC (“LTL”), a subsidiary of J&J, was established through a demerger procedure and assumed sole responsibility for a…

If we remove certain ingredients from our products, either voluntarily or pursuant to a regulatory mandate, we may not be able to successfully develop an alternative formulation or obtain necessary regulatory approval…

Furthermore, in September 2023, the Nonprescription Drugs Advisory Committee (the “NDAC”) of the FDA met to discuss new data on the effectiveness of orally administered phenylephrine (“PE”) and concluded that the curr…

Product recalls, reformulations, and withdrawals of various magnitudes have occurred in each of our reportable business segments and may occur in the future.

See Note 17, “Commitments and Contingencies,” to the Consolidated Financial Statements included herein for additional information regarding our legal proceedings.

In the ordinary course of business, we have been, and anticipate we will be in the future, subject to a wide variety of claims, lawsuits, and regulatory and governmental investigations involving various issues such as…

We are, and could become, subject to significant legal proceedings and governmental or regulatory investigations that may result in significant expenses, fines, and reputational damage.

We are subject to a broad range of laws and regulations in the United States and globally, and compliance with or enforcement actions related to these laws and regulations could adversely affect us.

Increasing scrutiny, emerging legal requirements, and rapidly evolving expectations from stakeholders regarding sustainability matters could adversely affect us.

Climate change could adversely affect our business, results of operations, or financial condition.

Some of our employees and contractors are members of unions or trade associations, represented by works councils or otherwise subject to collective bargaining agreements in certain jurisdictions, including the United…

Our business depends on our ability to attract and retain talented, highly skilled employees who represent our consumers and on the succession of our senior management.

adversely affected by an information security or cybersecurity incident involving us or a third party with which we partner or its vendor, which could result in reputational, competitive, operational, or other busines…

Cyberattacks and other cybersecurity incidents are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage) and expertise.

Our Technology Systems and those of third-party partners could be misused, interrupted, damaged, invaded, corrupted, breached, or cease to function properly due to any number of causes, including catastrophic events,…

Statements included herein) that aims to optimize our operating model, transform our supply chain, reduce complexity, and drive operational efficiencies, while strengthening core capabilities.

We may not fully realize the expected cost savings and/or operating efficiencies associated with our restructuring programs or our strategic initiatives, which could adversely affect us.

In addition, in certain cases, our relationship with a particular supplier may not be governed by a formal supply contract and, although other risks are addressed on an order-by-order basis, through purchasing on our…

Inflationary pressures have increased in recent years, and the costs of raw materials, packaging components, and other inputs for our products may increase in the future.

(such as trucks, containers, and ocean freight), and logistics services.

In connection with the Separation, we have replaced certain of our existing contracts with third parties and, with respect to certain contracts, including contracts related to information technology and cybersecurity…

We rely on relationships with third parties, including manufacturers, suppliers, distributors, contractors, logistics providers, and other external business partners.

Our industry, including our business, continues to be challenged by illegal counterfeiting and illicit trade.

In addition, our ability to develop innovative new products could be adversely affected if third parties allege that we are infringing on, misappropriating, or otherwise violating their intellectual property rights.

regulatory action, reputational damage, product recalls, product reformulations, or product withdrawals, which could adversely affect us.”

Developing new products and technologies is a complex, time-consuming, and costly process.

Our products are sold in a highly competitive global marketplace, which, in recent years, has experienced increased retail trade concentration, the emergence of retail buying alliances, including the consolidation of…

The legal, regulatory, and ethics landscapes around the use of artificial intelligence technologies, including generative artificial intelligence, is rapidly evolving and uncertain, including in relation to the areas…

We face challenges implementing our digital strategy, which could adversely affect us.

Furthermore, as we continue to expand our global operations, the variety and magnitude of risks associated with conducting business around the world may increase, which could have an adverse effect on our business, re…

marketing efforts, and our operations will be accepted or successful in any particular market, and it is possible that positive returns on our investments in a market will not be achieved for several years, or at all.

In recent years, we have grown, and we intend to continue to grow, our business by expanding our global operations.

Our business, results of operations, or financial condition could be adversely affected if we are unable to maintain and promote a favorable perception of our brands and products on a cost-effective basis.

Our success is increasingly dependent on our ability to anticipate, understand, and respond appropriately to market trends and rapidly changing consumer and customer preferences more quickly than our competitors.

Our products also compete with retailers’ private-label brands and generic non-branded products, which are typically sold at lower prices than our branded products.

We compete with a range of businesses, including large multinational corporations and agile regional players that may pose challenges to our growth and market position.

Our ability to compete successfully depends on the strength of our brands.

•The stock price of our common stock may fluctuate significantly, including as a result of the Proposed Transaction.

•J&J has agreed to indemnify us for certain liabilities, including the Talc-Related Liabilities (as defined below) for products sold in the United States and Canada, but such indemnity may not be sufficient to protect…

•Our continued use of legacy J&J branding, including ongoing use of the “Johnson’s®” brand.

•We may not achieve some or all of the expected benefits of the Separation.

•Our ability to successfully establish, maintain, protect, and enforce intellectual property rights and our ability to successfully avoid violation of the intellectual property rights of others.

•Concerns about the reliability, safety, and efficacy of our products and their ingredients, including acetaminophen, talc, and phenylephrine, have resulted and could in the future result in litigation, regulatory act…

•Our ability to comply with a broad range of laws and regulations, and other stakeholder requirements globally, including rapidly evolving requirements related to tax, trade, tariffs, manufacturing, ingredients, clima…

•Our ability to attract and retain a skilled workforce, reflecting our consumers, and to implement succession plans.

•Failure to realize benefits of acquisitions and divestitures we have pursued or may pursue could adversely affect us.

•We may face challenges in implementing our digital strategy across all aspects of our operations, and our digital strategy may lead us to pursue new offerings and expose us to digital-related risks.

•We face intense competition, including from multinational corporations, smaller regional companies, private-label brands, and generic non-branded products, in each of our reportable business segments and product line…

•Damage to our or our brands’ reputation could impact our brand loyalty with consumers, customers, and third parties.

•We have incurred, and will continue to incur, significant costs in connection with the Proposed Transaction.

We believe these provisions will protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board and by providing our Board with more time to as…

In addition, because we have not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the “DGCL”), this provision could also delay or prevent a change of control that shareholders may favor.

Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospec…

Certain provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of us, which could decrease the trading price o…

and we may not be able to borrow money, sell assets, or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.

price of shares of our common stock could be adversely affected.

We cannot assure you that an active trading market for shares of our common stock will be sustained.

We cannot be certain that an active trading market for our common stock will be sustained.

required to bear these losses.

To preserve the tax-free treatment of certain steps of the Separation and the Exchange Offer for U.S.

We may be affected by significant restrictions, including on our ability to engage in certain corporate transactions, for a two-year period after the Exchange Offer, in order to avoid triggering significant tax-relate…

better quality, at the same or lower costs or otherwise on the same or more favorable terms and conditions from third parties.

The Separation Agreement provides that we and J&J will use our respective reasonable best efforts to effect any transfer that was not completed prior to the completion of the Kenvue IPO as promptly following the compl…

In particular, our day-to-day business operations, including a significant portion of the communications among our customers, manufacturers, suppliers and other third-party partners, rely on Technology Systems.

We cannot predict with certainty the long-term effect that the Separation will have on our brands and our reputation.

Our rebranding strategy in connection with the Separation involves substantial costs and may not produce the intended benefits if it is not favorably received by our consumers, customers, or third-party partners.

•to preserve the tax-free treatment for U.S.

Summary of Significant Accounting Policies—Basis of Presentation,” to the Consolidated Financial Statements included herein.

Our operations and presence in Russia and Ukraine are limited.

Acts of war, military actions, terrorist attacks, or civil unrest may adversely affect prevailing economic conditions and our business, results of operations, or financial condition.