UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form	10-Q



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, ~~2019~~2020



o ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-08454

ACCO Brands Corporation

(Exact Name of Registrant as Specified in Its Charter)



Delaware	36-2704017
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

Four Corporate Drive

~~Four Corporate Drive~~

~~Lake Zurich, Illinois 60047~~

~~(Address of Registrant’s Principal Executive Office, Including Zip Code)~~

~~(847) 541-9500~~

~~(Registrant’s Telephone Number, Including Area Code)~~

Lake Zurich, Illinois60047

(Address of Registrant’s Principal Executive Office, Including Zip Code)

(847) 541-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ACCO	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesx No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ~~large~~"large accelerated filer, ~~accelerated~~" "accelerated filer, ~~smaller~~" "smaller reporting company," and ~~emerging~~"emerging growth ~~company~~company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x☒	Accelerated filer	o☐
Non-accelerated filer	o ☐(Do not check if a smaller reporting company)	Smaller reporting company	o☐
		Emerging growth company	o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x

As of April ~~23, 2019,~~27, 2020, the registrant had outstanding ~~102,089,019~~94,462,147 shares of Common Stock.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, including without limitation, statements concerning the impacts of the COVID-19 pandemic on the Company’s business, operations, results of operations, liquidity and financial condition, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to us at the time such statements are made. These statements, which are generally identifiable by the use of the words "will," "believe," "expect," "intend," "anticipate," "estimate," "forecast," "project," "plan," and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or obligation to update them. Because actual results may differ materially from those suggested or implied by such forward-looking statements, you should not place undue reliance on them when deciding whether to buy, sell or hold the Company's securities.

~~Some~~Our outlook is based on certain assumptions, which we believe to be reasonable under the circumstances. These include, without limitation, assumptions regarding both the near-term and long-term impact of the COVID-19 pandemic on the global economy and other changes in the macro environment; changes in the competitive landscape, including ongoing uncertainties in the traditional office products channels; as well as the impact of fluctuations in foreign currency and acquisitions and the other factors described below.

Among the factors that could cause our actual results to differ materially from our forward-looking statements are: the scope and duration of the COVID-19 pandemic, government actions and other third party responses to it and the consequences for the global economy, uncertainties regarding how geographies, distribution channels and consumer behaviors will evolve over time in response to the pandemic, and its impact on our business, operations, results of operations and financial condition, including, among others, manufacturing, distribution and supply chain disruptions, reduced demand for our products and services, and the financial condition of our suppliers and customers, including their ability to fund their operations and pay their invoices. Additionally, many of the other risk factors affecting us are currently elevated by, and may continue to be elevated by, the COVID-19 pandemic.

Other factors that could affect our results or cause plans, actions and results to differ materially from current expectations are detailed in "Part I, Item 1. Business" and "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, as updated under "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q, and the discussion under the heading "COVID-19 Impact" as well as the financial statement line item discussions set forth in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q and from time to time in our other Securities and Exchange Commission (the "SEC") filings.

Website Access to Securities and Exchange Commission Reports

The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the SEC.

TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss	6
Condensed Consolidated Statements of Cash Flows	7
Consolidated Statement of Stockholders’ Equity	8
Notes to Condensed Consolidated Financial Statements	910
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3638
Item 4. Controls and Procedures	3638
PART II — OTHER INFORMATION	3739
Item 1. Legal Proceedings	3739
Item 1A. Risk Factors	3739
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3741
Item 3. Defaults Upon Senior Securities	3741
Item 4. Mine Safety Disclosures	3841
Item 5. Other Information	3841
Item 6. Exhibits	3841
SIGNATURES	3943

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCO Brands Corporation and Subsidiaries

Condensed Consolidated Balance Sheets


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
(in millions)	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	100.5		$	67.0		$	93.4		$	27.8
Accounts receivable, net	318.1			428.4			298.9			453.7
Inventories	399.7			340.6			291.6			283.3
Other current assets	49.1			44.2			54.1			41.2
Total current assets	867.4			880.2			738.0			806.0
Total property, plant and equipment	622.5			618.7			631.6			651.7
Less: accumulated depreciation	(362.2		)	(355.0		)	(381.0		)	(384.6		)
Property, plant and equipment, net	260.3			263.7			250.6			267.1
Right of use asset, leases	83.6			—			92.1			101.9
Deferred income taxes	106.3			115.1			109.2			119.0
Goodwill	706.9			708.9			717.7			718.6
Identifiable intangibles, net	776.2			787.0			725.9			758.6
Other non-current assets	26.7			31.5			19.7			17.4
Total assets	$	2,827.4		$	2,786.4		$	2,653.2		$	2,788.6
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$	9.5		$	—		$	15.7		$	3.7
Current portion of long-term debt	47.1			39.5			51.5			29.5
Accounts payable	193.4			274.6			185.9			245.7
Accrued compensation	38.2			41.6			28.3			48.5
Accrued customer program liabilities	92.9			114.5			64.2			99.7
Lease liabilities	22.8			—			19.9			21.8
Other current liabilities	111.6			129.0			104.0			139.9
Total current liabilities	515.5			599.2			469.5			588.8
Long-term debt, net	949.4			843.0			856.9			777.2
Long-term lease liabilities	69.7			11.0			81.7			89.8
Deferred income taxes	173.4			176.2			167.3			177.5
Pension and post-retirement benefit obligations	245.9			257.2			268.9			283.2
Other non-current liabilities	108.7			110.1			91.0			98.4
Total liabilities	2,062.6			1,996.7			1,935.3			2,014.9
Stockholders' equity:
Common stock	1.1			1.1			1.0			1.0
Treasury stock	(38.2		)	(33.9		)	(39.9		)	(38.2		)
Paid-in capital	1,931.9			1,941.0			1,874.3			1,890.8
Accumulated other comprehensive loss	(467.0		)	(461.7		)	(545.1		)	(505.7		)
Accumulated deficit	(663.0		)	(656.8		)	(572.4		)	(574.2		)
Total stockholders' equity	764.8			789.7			717.9			773.7
Total liabilities and stockholders' equity	$	2,827.4		$	2,786.4		$	2,653.2		$	2,788.6

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
(in millions, except per share data)	2019			2018			2020			2019
Net sales	$	393.9		$	405.8		$	384.1		$	393.9
Cost of products sold	268.1			278.3			271.9			268.1
Gross profit	125.8			127.5			112.2			125.8
Operating costs and expenses:
Selling, general and administrative expenses	95.9			101.8			86.1			95.9
Amortization of intangibles	9.3			9.3			8.4			9.3
Restructuring charges	2.7			4.7			0.3			2.7
Total operating costs and expenses	107.9			115.8			94.8			107.9
Operating income	17.9			11.7			17.4			17.9
Non-operating expense (income):
Interest expense	10.4			9.4			8.6			10.4
Interest income	(0.9		)	(1.0		)	(0.3		)	(0.9		)
Non-operating pension income	(1.4		)	(2.2		)	(1.5		)	(1.4		)
Other income, net	(0.2		)	(0.6		)	(0.5		)	(0.2		)
Income before income tax	10.0			6.1			11.1			10.0
Income tax expense (benefit)	10.6			(4.3		)
Net (loss) income	$	(0.6	)	$	10.4
Income tax expense							3.1			10.6
Net income (loss)							$	8.0		$	(0.6	)

Per share:
Basic (loss) income per share	$	(0.01	)	$	0.10
Diluted (loss) income per share	$	(0.01	)	$	0.09
Basic income (loss) per share							$	0.08		$	(0.01	)
Diluted income (loss) per share							$	0.08		$	(0.01	)

Weighted average number of shares outstanding:
Basic	102.3			106.8			96.0			102.3
Diluted	102.3			110.0			97.5			102.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss

(Unaudited)

Three Months Ended March 31,
(in millions) 2019 2018
Net (loss) income $ (0.6 ) $ 10.4
Other comprehensive income (loss), net of tax:
Unrealized income (loss) on derivative instruments, net of tax benefit (expense) of $0.4 and $(0.3), respectively (1.1 ) 0.6

Foreign currency translation adjustments, net of tax expense of $(3.8) and $(2.7), respectively (3.1 ) (4.3 )

Recognition of deferred pension and other post-retirement items, net of tax benefit of $0.4 and $0.9, respectively (1.1 ) (2.6 )
Other comprehensive (loss) income, net of tax (5.3 ) (6.3 )

Comprehensive income (loss) $ (5.9 ) $ 4.1



	Three Months Ended March 31,
(in millions)	2020			2019
Net income (loss)	$	8.0		$	(0.6	)
Other comprehensive income (loss), net of tax:
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(0.9) and $0.4, respectively	2.4			(1.1		)

Foreign currency translation adjustments, net of tax benefit (expense) of $2.1 and $(3.8), respectively	(49.7		)	(3.1		)

Recognition of deferred pension and other post-retirement items, net of tax (expense) benefit of $(2.4) and $0.4, respectively	7.9			(1.1		)
Other comprehensive loss, net of tax	(39.4		)	(5.3		)

Comprehensive loss	$	(31.4	)	$	(5.9	)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
(in millions)	2019			2018			2020			2019
Operating activities
Net (loss) income	$	(0.6	)	$	10.4
Net income (loss)							$	8.0		$	(0.6	)
Amortization of inventory step-up	0.1			—			—			0.1
Loss on disposal of assets	0.1			0.1			—			0.1
Depreciation	8.8			9.0			8.6			8.8
Amortization of debt issuance costs	0.5			0.5			0.5			0.5
Amortization of intangibles	9.3			9.3			8.4			9.3
Stock-based compensation	2.0			3.2			0.9			2.0
Changes in balance sheet items:
Accounts receivable	108.1			162.0			112.0			108.1
Inventories	(57.3		)	(43.5		)	(26.2		)	(57.3		)
Other assets	(10.1		)	(8.0		)	(13.8		)	(10.1		)
Accounts payable	(79.9		)	8.8			(45.2		)	(79.9		)
Accrued expenses and other liabilities	(41.1		)	(78.7		)	(72.1		)	(41.1		)
Accrued income taxes	(1.2		)	(12.7		)	(6.3		)	(1.2		)
Net cash (used) provided by operating activities	(61.3		)	60.4
Net cash used by operating activities							(25.2		)	(61.3		)
Investing activities
Additions to property, plant and equipment	(7.2		)	(8.0		)	(6.9		)	(7.2		)
Proceeds from the disposition of assets	0.1			—			—			0.1
Cost of acquisitions, net of cash acquired							0.6			—
Other assets acquired	(5.4		)	—			—			(5.4		)
Net cash used by investing activities	(12.5		)	(8.0		)	(6.3		)	(12.5		)
Financing activities
Proceeds from long-term borrowings	123.7			21.5			117.4			123.7
Repayments of long-term debt	—			(11.6		)	(5.3		)	—
Borrowings of notes payable, net	4.8			0.7			12.4			4.8
Dividends paid	(6.2		)	(6.4		)	(6.2		)	(6.2		)
Repurchases of common stock	(10.5		)	(9.1		)	(18.9		)	(10.5		)
Payments related to tax withholding for stock-based compensation	(4.2		)	(7.4		)	(1.7		)	(4.2		)
Proceeds from the exercise of stock options	—			5.3			1.5			—
Net cash provided (used) by financing activities	107.6			(7.0		)
Net cash provided by financing activities							99.2			107.6
Effect of foreign exchange rate changes on cash and cash equivalents	(0.3		)	0.4			(2.1		)	(0.3		)
Net increase in cash and cash equivalents	33.5			45.8			65.6			33.5
Cash and cash equivalents
Beginning of the period	67.0			76.9			27.8			67.0
End of the period	$	100.5		$	122.7		$	93.4		$	100.5
Cash paid during the year for:
Interest							$	2.9		$	4.3
Income taxes							$	10.1		$	11.4

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statement of Stockholders' Equity

(Unaudited)



(in millions)	Common Stock		Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Accumulated Deficit			Total
Balance at December 31, 2019	$	1.0	$	1,890.8		$	(505.7	)	$	(38.2	)	$	(574.2	)	$	773.7
Net income	—		—			—			—			8.0			8.0
Gain on derivative financial instruments, net of tax	—		—			2.4			—			—			2.4
Translation impact	—		—			(49.7		)	—			—			(49.7		)
Pension and post-retirement adjustment, net of tax	—		—			7.9			—			—			7.9
Common stock repurchases	—		(18.9		)	—			—			—			(18.9		)
Stock-based compensation	—		0.9			—			—			—			0.9
Common stock issued, net of shares withheld for employee taxes	—		1.5			—			(1.7		)	—			(0.2		)
Dividends declared, $.065 per share	—		—			—			—			(6.2		)	(6.2		)
Balance at March 31, 2020	$	1.0	$	1,874.3		$	(545.1	)	$	(39.9	)	$	(572.4	)	$	717.9

Shares of Capital Stock

(in millions) Common
Stock Paid-in
Capital Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock Accumulated
Deficit Total
Balance at December 31, 2018 $ 1.1
$ 1,941.0
$ (461.7 ) $ (33.9 ) $ (656.8 ) $ 789.7
Net loss —
—
—
—
(0.6 ) (0.6 )
Gain on derivative financial instruments, net of tax —
—
(1.1 ) —
—
(1.1 )
Translation impact —
—
(3.1 ) —
—
(3.1 )
Pension and post-retirement adjustment, net of tax —
—
(1.1 ) —
—
(1.1 )
Common stock repurchases —
(11.0 ) —
—
—
(11.0 )
Stock-based compensation —
2.0
—
—
—
2.0
Common stock issued, net of shares withheld for employee taxes —
—
—
(4.3 ) —
(4.3 )
Dividends declared, $0.06 per share —
—
—
—
(6.2 ) (6.2 )
Other —
(0.1 ) —
—
0.1
—
Cumulative effect due to the adoption of ASU 2016-02 —
—
—
—
0.5
0.5
Balance at March 31, 2019 $ 1.1
$ 1,931.9
$ (467.0 ) $ (38.2 ) $ (663.0 ) $ 764.8



	Common Stock		Treasury Stock	Net Shares
Shares at December 31, 2019	100,412,933		3,967,445	96,445,488
Common stock issued, net of shares withheld for employee taxes	898,664		206,243	692,421
Common stock repurchases	(2,690,292	)	—	(2,690,292	)
Shares at March 31, 2020	98,621,305		4,173,688	94,447,617

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statement of Stockholders' Equity

Continued (Unaudited)



(in millions)	Common Stock		Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Accumulated Deficit			Total
December 31, 2018	$	1.1	$	1,941.0		$	(461.7	)	$	(33.9	)	$	(656.8	)	$	789.7
Net loss	—		—			—			—			(0.6		)	(0.6		)
Loss on derivative financial instruments, net of tax	—		—			(1.1		)	—			—			(1.1		)
Translation impact	—		—			(3.1		)	—			—			(3.1		)
Pension and post-retirement adjustment, net of tax	—		—			(1.1		)	—			—			(1.1		)
Common stock repurchases	—		(11.0		)	—			—			—			(11.0		)
Stock-based compensation	—		2.0			—			—			—			2.0
Common stock issued, net of shares withheld for employee taxes	—		—			—			(4.3		)	—			(4.3		)
Dividends declared, $.06 per share	—		—			—			—			(6.2		)	(6.2		)
Other	—		(0.1		)	—			—			0.1			—
Cumulative effect due to the adoption of ASU 2016-02	—		—			—			—			0.5			0.5
Balance at March 31, 2019	$	1.1	$	1,931.9		$	(467.0	)	$	(38.2	)	$	(663.0	)	$	764.8

Shares of Capital Stock



	Common Stock		Treasury Stock	Net Shares
Shares at December 31, 2018	106,249,322		3,500,622	102,748,700
Common stock issued, net of shares withheld for employee taxes	1,437,021		458,987	978,034
Common stock repurchases	(1,260,163	)	—	(1,260,163	)
Shares at March 31, 2019	106,426,180		3,959,609	102,466,571

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

As used in this Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2019~~2020, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation and its consolidated subsidiaries.

The management of ACCO Brands Corporation is responsible for the accuracy and internal consistency of the preparation of the condensed consolidated financial statements and notes contained in this Quarterly Report on Form 10-Q.

The condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Although the Company believes the disclosures are adequate to make the information presented not misleading, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to those rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019.

The Condensed Consolidated Balance Sheet as of March 31, ~~2019,~~2020, the related Consolidated Statements of Operations, ~~and~~ the Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss, and the Consolidated Statement of Stockholders' Equity for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 are unaudited. The December 31, ~~2018~~2019 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all annual disclosures required by GAAP. The above referenced financial statements included herein were prepared by management and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of results of operations and cash flows for the interim periods ended March 31, ~~2019~~2020 and ~~2018,~~2019, and the financial position of the Company as of March 31, ~~2019.~~2020. Interim results may not be indicative of results for a full year.

~~On July 2, 2018,~~Effective August 1, 2019, we completed the acquisition (the ~~"GOBA~~"Foroni Acquisition") of ~~GOBA Internacional, S.A. de C.V.~~Indústria Gráfica Foroni Ltda. ("~~GOBA"~~Foroni"), a leading provider of Foroni^®branded notebooks and paper-based school and ~~craft~~office products in ~~Mexico under the Barrilito~~^®~~brand, for a preliminary~~Brazil. The purchase price ~~of approximately $37.2~~was $41.5 million ~~net~~inclusive of ~~cash acquired, and subject to~~ working capital ~~and other~~ adjustments. The ~~GOBA~~Foroni Acquisition ~~has increased the breadth~~advanced our strategy to expand in faster growing geographies and ~~depth of~~product categories, add consumer-centric brands and diversify our ~~distribution, especially with wholesalers and retailers throughout Mexico, and complements our existing office products portfolio with a strong offering of school and craft products.~~customer base. The results of ~~GOBA~~Foroni are included in the ACCO Brands International segment ~~as of July 2, 2018.~~

effective August 1, 2019. See "Note 3. Acquisitions" for details on the ~~GOBA Acquisition.~~Foroni acquisition.

On January 1, 2019, the Company adopted accounting standard ASU No. 2016-02, Leases (Topic 842), applying the transition method in accounting standard ASU 2018-11 Leases (Topic 842), Targeted Improvements. ASU 2018-11 allows an entity to initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. For more information, see "Note 2. Recent Accounting Pronouncements and Adopted Accounting Standards" and "Note 5. Leases."

Certain prior year amounts have been reclassified for consistency with the current year presentation in our Condensed Consolidated Balance Sheet, primarily due to the Company's adoption of ASU No. 2016-02, Leases (Topic 842) at the beginning of 2019.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.

2. Recent Accounting Pronouncements and Adopted Accounting Standards

Recent Accounting Pronouncements

In ~~August 2018,~~December 2019, the Financial Accounting Standards Board ~~(the "FASB"~~("FASB") issued ASU ~~No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40),~~ ~~Customer’s~~2019-12, Income Taxes (Topic 740): Simplifying the Accounting for ~~Implementation Costs Incurred~~Income Taxes, which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the effects the standard will have on its consolidated financial statements.

There are no other recently issued accounting standards that are expected to have an impact on the Company’s financial condition, results of operations or cash flow.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, an accounting standard that requires companies to utilize an impairment model (current expected credit loss, or "CECL") for most financial assets measured at amortized cost and certain other financial instruments, which include, but are not limited to, trade and other receivables. This accounting standard replaced the incurred loss model with a ~~Cloud Computing Arrangement That Is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs~~

model that

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~incurred in~~reflects expected credit losses and requires consideration of a ~~hosting arrangement that is a service contract with~~broader range of reasonable and supportable information to estimate those losses. Effective January 1, 2020, the ~~requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The~~ Company ~~is currently in~~adopted this standard. As of March 31, 2020 the ~~process of evaluating the impact of~~ adoption of ~~ASU 2018-15 on the Company’s consolidated financial statements. ASU 2018-015 is effective for fiscal years ending after December 15, 2019. Early adoption of the~~this standard ~~is permitted, including adoption in any interim period for which financial statements have~~did not ~~been issued.~~

~~There are no other recently issued accounting standards that are expected to~~ have a material ~~effect on the Company’s financial condition, results of operations or cash flow.~~

~~Recently Adopted Accounting Standards~~

~~The cumulative effect of the changes~~impact on our ~~January 1, 2019 opening Condensed Consolidated Balance Sheet due to the adoption of ASU 2016-02 was as follows:~~condensed consolidated financial statements.

(in millions) Balance at December 31, 2018 Adjustments due to ASU 2016-02 Balance at January 1, 2019
Assets:
Property, plant and equipment, net $ 263.7
$ (0.9 ) $ 262.8
Right of use asset, leases —
90.9
90.9

Liabilities and stockholders' equity:
Current portion of long-term debt 39.5
(0.1 ) 39.4
Lease liabilities —
24.1
24.1
Long-term debt, net 843.0
(0.1 ) 842.9
Long-term lease liabilities 11.0
65.6
76.6
Accumulated deficit (656.8 ) 0.5
(656.3 )

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~The impact of the adoption of ASU 2016-02 on our Condensed Consolidated Balance Sheet for the period ended March 31, 2019 was as follows:~~

March 31, 2019
(in millions) As Reported Balances without adoption of ASU 2016-02 Effect of Change Higher/(Lower)
Condensed Consolidated Balance Sheet:
Assets:
Property, plant and equipment, net $ 260.3
$ 261.1
$ (0.8 )
Right of use asset, leases 83.6
—
83.6

Liabilities and stockholders' equity:
Current portion of long-term debt 47.1
47.2
(0.1 )
Lease liabilities 22.8
—
22.8
Long-term debt, net 949.4
949.5
(0.1 )
Long-term lease liabilities 69.7
10.0
59.7
Accumulated deficit (663.0 ) (663.5 ) 0.5

~~See "Note 5. Leases" for further details and the required disclosures related to ASU 2016-02.~~

~~The adoption of ASU 2016-02 did not materially affect our Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows.~~

There were no other accounting standards that were adopted in the first ~~quarter~~three months of ~~2019~~2020 that had a material effect on the Company’s financial condition, results of operations or cash flow.

3. Acquisitions

On January 31, 2019, the Company completed the purchase of certain assets, including inventory and certain identifiable intangibles, for the Cumberland brand (the "Cumberland Asset Acquisition") in Australia for a purchase price of A$8.2 million (US$6.0 million based on January 31, 2019 exchange rates), of which $0.6 million is expected to be paid during the second quarter of 2019. The Cumberland Asset Acquisition extends our presence in Australia into new product categories. The Company accounted for the transaction as an asset acquisition, as the set of assets acquired does not meet the criteria to be classified as a business under GAAP. During the quarter ended March 31, 2019, transaction costs related to the Cumberland Asset Acquisition were $0.1 million. These costs were reported as selling, general and administrative ("SG&A") expenses in the Company's Consolidated Statements of Operations.

~~The following table summarizes the fair value of assets acquired:~~

(in millions) At January 31, 2019
Inventory 2.8
Identifiable intangibles 3.2
Fair value of assets acquired $ 6.0

Acquisition of ~~GOBA~~Foroni

~~On July 2, 2018, the Company~~Effective August 1, 2019, we completed the ~~GOBA Acquisition. GOBA is~~acquisition of Foroni, a leading provider of Foroni^®branded notebooks and paper-based school and ~~craft~~office products in ~~Mexico under the Barrilito~~^®~~brand.~~Brazil. The ~~GOBA~~Foroni Acquisition ~~is expected~~advanced our strategy to ~~increase the breadth~~expand in faster growing geographies and ~~depth of~~product categories, add consumer-centric brands and diversify our ~~distribution, especially with wholesalers and retailers throughout Mexico, and complements our existing office products portfolio with a strong offering of school and craft products.~~customer base. The results of ~~GOBA~~Foroni are included in the ACCO Brands International segment ~~as of July 2, 2018.~~effective August 1, 2019.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The purchase price ~~paid at closing~~ was ~~Mex$796.8~~R$157.2 million (US$~~39.9~~41.5 million based on July ~~2, 2018~~31, 2019, exchange rates)~~, subject to~~ inclusive of working capital ~~and other adjustments that reduced it by $0.8 million. The preliminary purchase price, net of cash acquired of $1.9~~adjustments. We also assumed $7.6 million ~~was $37.2 million.~~in debt. A portion of the purchase price ~~(Mex$115.0~~(R$25.0 million ~~(US$5.8~~or US$6.6 million based on July ~~2, 2018~~31, 2019 exchange rates)) is being held in an escrow account for a period of up to 56 years after closing in the event of any claims against the sellers under the ~~stock~~quota purchase agreement. The Company may also make claims against the sellers directly, subject to limitations in the ~~stock~~quota purchase agreement, if the escrow is depleted. The ~~GOBA~~Foroni Acquisition and related expenses were funded by ~~increased borrowing under our revolving facility.~~cash on hand.

For accounting purposes, the Company was the acquiring enterprise. The ~~GOBA~~Foroni Acquisition is being accounted for as a purchase business ~~combination.~~combination and Foroni's results are included in the Company’s condensed consolidated financial statements as of August 1, 2019. The net sales for ~~GOBA~~Foroni for the three months ended March 31, ~~2019~~2020 were ~~$11.8~~$14.4 million.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The following table presents the preliminary allocation of the consideration given to the fair values of the assets acquired and liabilities assumed at the date of ~~acquisition.~~acquisition:



(in millions)	At August 1, 2019
Calculation of Goodwill:
Purchase price, net of working capital adjustment	$	41.5

Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities	12.4
Deferred tax liabilities	3.9
Debt	7.6
Lease liabilities	5.6
Fair value of liabilities assumed	$	29.5

Less fair value of assets acquired:
Cash acquired	—
Accounts receivable	17.5
Inventory	12.2
Property and equipment	9.1
Identifiable intangibles	11.1
Deferred tax assets	2.6
Right of use asset, leases	5.6
Other assets	3.6
Fair value of assets acquired	$	61.7

Goodwill	$	9.3

(in millions) At July 2, 2018
Calculation of Goodwill:
Purchase price, net of working capital adjustment $ 39.1

Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities 10.2
Deferred tax liabilities 3.1
Other non-current liabilities 5.6
Fair value of liabilities assumed $ 18.9

Less fair value of assets acquired:
Cash acquired 1.9
Accounts receivable 30.0
Inventory 7.1
Property, plant and equipment 0.6
Identifiable intangibles 10.3
Deferred tax assets 1.9
Other assets 4.2
Fair value of assets acquired $ 56.0

Goodwill $ 2.0

We are continuing our review of our fair value estimate of assets acquired and liabilities assumed during the measurement period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed as of the acquisition date or learn that more information is not available. This measurement period will not exceed one year from the acquisition date. The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill. The preliminary goodwill of $9.3 million is primarily attributable to synergies expected to be realized from facility integration, headcount reduction and other operational streamlining activities, and from the existence of an assembled workforce.

Our fair value estimate of assets acquired and liabilities assumed is pending the completion of several elements, including the ~~final determination of purchase price related to the settlement of differences in working capital, and the valuation of the~~ fair value of the assets acquired and liabilities assumed and the final review by our management. The primary areas that are not yet finalized relate to inventory, intangible assets, property and equipment, reserves and liabilities, and income and other taxes. Accordingly, there could be material adjustments to our condensed consolidated financial ~~statements.~~statements, including changes in our amortization and depreciation expense related to the valuation of intangible assets and property and equipment acquired and their respective useful lives, among other adjustments.

The final determination of the purchase price, fair values and resulting goodwill may differ significantly from what is reflected in these condensed consolidated financial statements.

During the year ended December 31, 2019, transaction costs related to the Foroni Acquisition were $1.5 million, and for the quarter ending March 31, 2020, they were $0.2 million. These costs were reported as selling, general and administrative ("SG&A") expenses in the Company's Consolidated Statements of Operations.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

During the year ended December 31, 2018, transaction costs related to the GOBA Acquisition were $1.1 million. These costs were reported as interest and SG&A expenses in the Company's Consolidated Statements of Operations.

4. Long-term Debt and Short-term Borrowings

Notes payable and long-term debt, listed in order of the priority of security interests in assets of the Company, consisted of the following as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019:



(in millions)	March 31, 2020		December 31, 2019
Euro Senior Secured Term Loan A, due May 2024 (floating interest rate of 1.50% at March 31, 2020 and 1.50% at December 31, 2019)	$	268.7	$	275.9
USD Senior Secured Term Loan A, due May 2024 (floating interest rate of 2.57% at March 31, 2020 and 3.44% at December 31, 2019)	96.2		97.5
Australian Dollar Senior Secured Term Loan A, due May 2024 (floating interest rate of 2.20% at March 31, 2020 and 2.45% at December 31, 2019)	36.2		41.6
U.S. Dollar Senior Secured Revolving Credit Facility, due May 2024 (floating interest rate of 2.40% at March 31, 2020 and 3.26% at December 31, 2019)	120.7		8.2
Australian Dollar Senior Secured Revolving Credit Facility, due May 2024 (floating interest rate of 1.98% at March 31, 2020 and 2.44% at December 31, 2019)	16.7		14.0
Senior Unsecured Notes, due December 2024 (fixed interest rate of 5.25%)	375.0		375.0
Other borrowings	15.7		3.8
Total debt	929.2		816.0
Less:
Current portion	67.2		33.2
Debt issuance costs, unamortized	5.1		5.6
Long-term debt, net	$	856.9	$	777.2

(in millions) March 31,
2019 December 31,
2018
Euro Senior Secured Term Loan A, due January 2022 (floating interest rate of 1.5% at March 31, 2019 and 1.50% at December 31, 2018) $ 283.6
$ 289.0
Australian Dollar Senior Secured Term Loan A, due January 2022 (floating interest rate of 3.39% at March 31, 2019 and 3.56% at December 31, 2018) 43.2
43.0
U.S. Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 4.25% at March 31, 2019 and 4.36% at December 31, 2018) 222.2
106.8
Australian Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 3.48% at March 31, 2019 and 3.54% at December 31, 2018) 77.8
73.9
Senior Unsecured Notes, due December 2024 (fixed interest rate of 5.25%) 375.0
375.0
Other borrowings 9.5
0.3
Total debt 1,011.3
888.0
Less:
Current portion 56.6
39.5
Debt issuance costs, unamortized 5.3
5.5
Long-term debt, net $ 949.4
$ 843.0

The Company entered into a Third Amended and Restated Credit Agreement (the ~~"2017 Credit~~"Credit Agreement"), dated as of January 27, 2017, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other agents and various lenders party thereto. The ~~2017~~ Credit Agreement ~~provides~~provided for a five-year senior secured credit facility, which ~~consists~~consisted of a €300.0 million (US$320.8 million based on January 27, 2017, exchange rates) term loan facility, an A$80.0 million (US$60.4 million based on January 27, 2017, exchange rates) term loan facility, and a US$400.0 million multi-currency revolving credit facility (the ~~"2017 Revolving~~"Revolving Facility").

Effective July 26, 2018, the Company entered into the First Amendment (the "First Amendment") to the ~~2017~~ Credit Agreement among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto. The First Amendment increased the aggregate revolving credit commitments under the ~~revolving facility~~Revolving Facility by $100.0 million such that, after giving effect to such increase, the aggregate amount of revolving credit available under the ~~2017~~ Revolving Facility iswas $500.0 million. In addition, the First Amendment also affected certain technical amendments to the ~~2017~~ Credit Agreement, including the addition of provisions relating to LIBOR successor rate procedures if LIBOR becomes unascertainable or is discontinued in the future and to expressly permit certain intercompany asset transfers. The changes related to LIBOR successor rate procedures are not expected to have a material effect on the Company.

As of March 31, 2019, there were $300.0 million in borrowings outstanding under the 2017 Revolving Facility. The remaining amount available for borrowings as of March 31, 2019 was $183.6 million (allowing for $16.4 million of letters of credit outstanding on that date).

As described in the Company's 2018 Annual Report on Form 10-K, we must meet certain restrictive debt covenants under the senior secured credit facilities. The indenture governing our outstanding senior unsecured notes also contains certain covenants. As of and for the periods ended March 31, 2019 and December 31, 2018, the Company was in compliance with all applicable loan covenants.

~~5. Leases~~

~~On January 1,~~Effective May 23, 2019, the Company adopted accounting standard ASU No. 2016-02, Leases (Topic 842), applying the transition method in accounting standard ASU 2018-11 Leases (Topic 842), Targeted Improvements. ASU 2018-11 allows an entity to initially apply ASU 2016-02 at the adoption date and recognizeentered into a ~~cumulative-effect adjustment~~Second Amendment (the "Second Amendment") to the ~~opening balance~~Credit Agreement. Pursuant to the Second Amendment, the Credit Agreement was amended to, among other things:

extend the maturity date to May 23, 2024;

increase the aggregate revolving credit commitments under the Revolving Facility from $500.0 million to $600.0 million;

establish a new term loan facility denominated in U.S. Dollars in an aggregate principal amount of ~~retained earnings~~$100.0 million (the "USD Term Loan");

replace the minimum fixed coverage ratio of 1.25:1.00 with a minimum interest coverage ratio, as calculated under the Credit Agreement, of 3.00:1.00;

reflect a more favorable restricted payment covenant, with the consolidated leverage ratio hurdle for unlimited restricted

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

payments (including share repurchases and dividends) as calculated under the Credit Agreement increasing from 2.50x to 3.25x;

reflect, in certain cases, more favorable pricing with a 25 basis point reduction in the ~~period~~applicable rate on outstanding loans than was in effect prior to the Second Amendment based on the Company's current consolidated leverage ratio, along with lower fees on undrawn amounts;

eliminate the requirement to make annual principal prepayments of ~~adoption. The comparative information has not been restated~~excess cash flow;

reduce amortization payments for the term loans; and ~~continues~~

increase the qualified receivables transaction basket with respect to ~~be reported~~sales or financings of certain receivables.

Effective upon the closing of the Second Amendment, the Company borrowed the entire principal amount committed under the ~~accounting standards~~USD Term Loan, which was used to repay revolver borrowings and, in ~~effect~~combination with the increase in the Revolving Facility, resulted in $200.0 million of additional liquidity becoming available under the Revolving Facility.

As of March 31, 2020, there were $137.4 million in borrowings outstanding under the Revolving Facility. The remaining amount available for ~~those periods. The~~borrowings was $450.1 million (allowing for $12.5 million of letters of credit outstanding on that date).

As of and for the periods ended March 31, 2020 and December 31, 2019, the Company recorded a net increase to beginning retained earnings of $0.5 million as of January 1, 2019 due to the cumulative impact of adopting ASU 2016-02. The impact of adopting ASU 2016-02 on our Condensed Consolidated Balance Sheet was ~~material, but the impact was immaterial for our Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows.~~in compliance with all applicable loan covenants.

5. Leases

The Company leases its corporate ~~headquarters;~~headquarters, various other facilities for distribution, manufacturing, and ~~offices; and~~offices, as well as vehicles, forklifts and other equipment. The Company determines if an arrangement is a lease at inception. Leases are included in "Right of use asset, leases" ("~~ROU"~~ROU Assets") ~~assets,~~, and the current portion of the lease liability is included in "Lease liabilities" and the non-current portion is included in "Long-term lease liabilities" in the Condensed Consolidated Balance Sheet. The Company currently has an immaterial amount of financing leases and leases with ~~a term~~terms of more than one month and less than 12 months. ROU ~~assets~~Assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because most of the Company’s leases do not provide an implicit rate of return, the Company uses its incremental collateralized borrowing rate, on a regional basis, in determining the present value of lease payments. The incremental borrowing rate is dependent upon duration of the lease and has been segmented into three groups of time. All leases within the same region and the same group of time share the same incremental borrowing rate. The Company has lease agreements with lease and non-lease components, which are combined for accounting ~~purposes.~~purposes for all classes of assets except information technology equipment.

The components of lease expense were as follows:


	Three Months Ended March 31,			Three Months Ended March 31,
(in millions)	2019			2020			2019
Operating lease cost	$	7.0		$	7.3		$	7.0
Sublease income	(0.4		)	(0.4		)	(0.4		)
Total lease cost	$	6.6		$	6.9		$	6.6

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Other information related to leases was as follows:


	Three Months Ended March 31,			Three Months Ended March 31,
(in millions, except lease term and discount rate)	2019			2020			2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8.0		$	7.3		$	8.0
Right-of-use assets obtained in exchange for lease obligations:
Operating leases⁽¹⁾	$	(1.4	)	$	1.0		$	(1.4	)

Weighted average remaining lease term:
Operating leases	5.4 years			6.9 years

Weighted average discount rate:
Operating leases	5.2		%	5.3		%

(1) In the first quarter of 2019, the Company signed a sub-lease for one of its distribution centers.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Future minimum lease payments, net of sub-lease income, for all non-cancelable leases as of March 31, ~~2019~~2020 were as follows:



(in millions)
2020	$	18.9
2021	22.0
2022	18.0
2023	13.8
2024	11.8
2025	8.8
Thereafter	31.0
Total minimum lease payments	124.3
Less imputed interest	22.7
Future minimum payments for leases, net of sublease rental income and imputed interest	$	101.6

(in millions)
2019 $ 21.2
2020 23.2
2021 18.8
2022 15.3
2023 9.9
2024 7.0
Thereafter 11.9
Total minimum lease payments 107.3
Less imputed interest 14.8
Future minimum payments for leases, net of sublease rental income and imputed interest $ 92.5

As of March 31, 2019, the Company had one operating lease for property that had not yet commenced. In addition, early in the second quarter of 2019, the Company signed a renewal of the lease for its corporate headquarters.

6. Pension and Other Retiree Benefits

The components of net periodic benefit (income) cost for pension and post-retirement plans for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:



	Three Months Ended March 31,
	Pension												Post-retirement
	U.S.						International
(in millions)	2020			2019			2020			2019			2020			2019
Service cost	$	0.4		$	0.4		$	0.4		$	0.3		$	—		$	—
Interest cost	1.5			1.8			2.4			3.4			—			0.1
Expected return on plan assets	(2.9		)	(2.9		)	(4.7		)	(5.1		)	—			—
Amortization of net loss (gain)	0.8			0.5			1.2			0.8			(0.1		)	(0.1		)
Amortization of prior service cost	0.1			0.1			0.1			—			—			—
Net periodic benefit income⁽¹⁾	$	(0.1	)	$	(0.1	)	$	(0.6	)	$	(0.6	)	$	(0.1	)	$	—

Net periodic benefit income⁽¹⁾

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

We expect to contribute approximately $19.5 million to our defined benefit plans in 2020. For the three months ended March 31, 2020, we have contributed $5.7 million to these plans.

7. Stock-Based Compensation

The following table summarizes our stock-based compensation expense (including stock options, restricted stock units ("RSUs") and performance stock units ("PSUs")) for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019:



	Three Months Ended March 31,
(in millions)	2020			2019
Stock option compensation expense	$	0.8		$	0.5
RSU compensation expense	1.0			1.0
PSU compensation expense	(0.9		)	0.5
Total stock-based compensation expense	$	0.9		$	2.0

Three Months Ended March 31,
(in millions) 2019 2018
Stock option compensation expense $ 0.5
$ 0.5
RSU compensation expense 1.0
0.9
PSU compensation expense 0.5
1.8
Total stock-based compensation expense $ 2.0
$ 3.2

We generally recognize compensation expense for stock-based awards ratably over the vesting period. During the first quarter of ~~2019,~~2020, the Company's Board of Directors approved stock compensation grants which consisted of~~1,303,255~~ 1,402,829 stock options, ~~354,695~~600,014 RSUs and ~~365,893~~918,911 PSUs.

The following table summarizes our unrecognized compensation expense and the weighted-average period over which the expense will be recognized as of March 31, ~~2019:~~2020:



	March 31, 2020
	Unrecognized	Weighted Average
	Compensation	Years Expense To Be
(in millions, except weighted average years)	Expense	Recognized Over
Stock options	$6.9	2.4
RSUs	$9.3	2.3
PSUs	$3.2	2.5

The components of inventories were as follows:



(in millions)	March 31, 2020		December 31, 2019
Raw materials	$	45.6	$	44.4
Work in process	2.9		3.5
Finished goods	243.1		235.4
Total inventories	$	291.6	$	283.3

(in millions) March 31,
2019 December 31,
2018
Raw materials $ 65.4
$ 55.4
Work in process 4.2
4.3
Finished goods 330.1
280.9
Total inventories $ 399.7
$ 340.6

9. Goodwill and Identifiable Intangible Assets

As more fully described in the Company’s ~~2018~~2019 Annual Report on Form 10-K, we test goodwill for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The Company performed this annual assessment, on a qualitative basis, as allowed by GAAP, in the second quarter of ~~2018~~2019 and concluded that no impairment existed.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Changes in the net carrying amount of goodwill by segment were as follows:



(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International			Total
(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International			Total
Balance at December 31, 2019	$	375.6	$	165.7	$	177.3		$	718.6
Acquisitions	—		—		(0.5		)	(0.5		)
Foreign currency translation	—		2.1		(2.5		)	(0.4		)
Balance at March 31, 2020	$	375.6	$	167.8	$	174.3		$	717.7

(in millions) ACCO
Brands
North America ACCO
Brands
EMEA ACCO
Brands
International Total

Balance at December 31, 2018 $ 375.6
$ 165.6
$ 167.7
$ 708.9
GOBA Acquisition —
—
(0.3 ) (0.3 )
Foreign currency translation —
(1.7 ) —
(1.7 )
Balance at March 31, 2019 $ 375.6
$ 163.9
$ 167.4
$ 706.9

The goodwill balance is net of $215.1 million of accumulated impairment losses, which occurred prior to December 31, 2016.

Identifiable Intangible Assets

The valuation of identifiable intangible assets of ~~$3.2~~$11.1 million acquired in the ~~Cumberland Asset~~Foroni Acquisition includes an amortizable trade name, ~~and amortizable customer relationships,~~"Foroni^®," which ~~have~~has been recorded at ~~their~~its estimated fair ~~values.~~value. The fair value of the trade name was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The ~~fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of the projected after-tax cash flows.~~

The amortizable trade name is expected be amortized over 10 years on a straight-line basis while the customer relationships will be amortized on an accelerated basis over 7 years from January 31, 2019, the date the Cumberland assets were acquired by the Company. The allocations of the identifiable intangibles acquired in the Cumberland Asset Acquisition were as follows:

(in millions) Fair Value Remaining Useful Life Ranges
Trade name - amortizable $ 0.8
10 Years
Customer relationships 2.4
7 Years
Total identifiable intangibles acquired $ 3.2

The valuation of identifiable intangible assets of $10.3 million acquired in the GOBA Acquisition include an amortizable trade name and amortizable customer relationships, which have been recorded at their estimated fair values. The fair value of the trade name was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of the projected after-tax cash flows.

~~The amortizable~~Foroni^® trade name is expected to be amortized over 1523 years on a straight-line basis, while the customer relationships will be amortized on an accelerated basis over 10 years from July 2, 2018, the date GOBA was acquired by the Company. The allocations of the identifiable intangibles acquired in the GOBA Acquisition were as follows:basis.

(in millions) Fair Value Remaining Useful Life Ranges
Trade name - amortizable $ 3.8
15 Years
Customer relationships 6.5
10 Years
Total identifiable intangibles acquired $ 10.3

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019, was as follows:

The ~~Company’s~~ intangible amortization expense was ~~$9.3~~$8.4 million and $9.3 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Estimated amortization expense for amortizable intangible assets as of March 31, ~~2019~~2020, for the current year and the next five years ~~are~~is as follows:



(in millions)	2020		2021		2022		2023		2024		2025
Estimated amortization expense⁽²⁾	$	32.0	$	28.4	$	24.9	$	22.6	$	21.0	$	19.4

(in millions) 2019 2020 2021 2022 2023 2024
Estimated amortization expense⁽²⁾
$ 35.5
$ 31.9
$ 28.3
$ 24.7
$ 22.4
$ 20.8

We test indefinite-lived intangibles for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. We performed this annual assessment, on a qualitative basis, as allowed by GAAP, for our indefinite-lived trade names in the second quarter of ~~2018~~2019 and concluded that no impairment existed.

We continue to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for our products and the impact on our business and our overall financial performance. This includes our risk of impairment losses to our goodwill and indefinite-lived intangible assets. Although the potential impact of COVID-19 related demand is uncertain, we remain committed to the strategic actions necessary to preserve the long-term forecasted financial performance and expect the macroeconomic environment will recover in the medium to long-term. As a result of our analysis, and consideration of events and circumstances, we concluded that there were no triggering events that would make it more likely than not that our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020.

The Company recorded $0.3 million and $2.7 million of restructuring ~~expenses~~expense for the three months ended March 31, 2020 and 2019, ~~of $2.7 million~~respectively. The restructuring expenses are primarily for severance costs related to ~~additional changes~~cost reduction initiatives in ~~the operating structure of~~ our North America and International segments.

The summary of the activity in the restructuring ~~account~~liability for the three months ended March 31, ~~2019~~2020, was as follows:



(in millions)	Balance at December 31, 2019		Provision		Cash Expenditures			Non-cash Items/ Currency Change			Balance at March 31, 2020
Employee termination costs⁽¹⁾	$	10.7	$	0.3	$	(2.0	)	$	(0.4	)	$	8.6
Termination of lease agreements⁽²⁾	0.6		—		(0.5		)	—			0.1
Other⁽³⁾	0.5		—		(0.1		)	—			0.4
Total restructuring liability	$	11.8	$	0.3	$	(2.6	)	$	(0.4	)	$	9.1

(in millions) Balance at December 31, 2018 Provision Cash
Expenditures Non-cash
Items/
Currency Change Balance at March 31, 2019
Employee termination costs⁽¹⁾
$ 7.9
$ 2.7
$ (2.9 ) $ —
$ 7.7
Termination of lease agreements⁽²⁾
1.8
—
(1.0 ) —
0.8
Total restructuring liability $ 9.7
$ 2.7
$ (3.9 ) $ —
$ 8.5

(1) We expect the remaining ~~$7.7~~$8.6 million employee termination costs to be substantially paid in the next twelve months.

(2) We expect the remaining ~~$0.8~~$0.1 million termination of lease costs to be substantially paid in the next three months.

(3) We expect the remaining $0.4 million of other costs to be substantially paid in the next six months.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The summary of the activity in the restructuring ~~account~~liability for the three months ended March 31, ~~2018~~2019, was as follows:



(in millions)	Balance at December 31, 2018		Provision		Cash Expenditures			Non-cash Items/ Currency Change		Balance at March 31, 2019
Employee termination costs	$	7.9	$	2.7	$	(2.9	)	$	—	$	7.7
Termination of lease agreements	1.8		—		(1.0		)	—		0.8
Total restructuring liability	$	9.7	$	2.7	$	(3.9	)	$	—	$	8.5

(in millions) Balance at December 31, 2017 Provision Cash
Expenditures Non-cash
Items/
Currency Change Balance at March 31, 2018
Employee termination costs $ 12.0
$ 3.8
$ (2.6 ) $ 0.3
$ 13.5
Termination of lease agreements 0.8
0.9
(0.7 ) —
1.0
Other 0.5
—
(0.1 ) (0.1 ) 0.3
Total restructuring liability $ 13.3
$ 4.7
$ (3.4 ) $ 0.2
$ 14.8

For the three months ended March 31, 2020, we recorded an income tax expense of $3.1 million on income before taxes of $11.1 million, for an effective rate of 27.9 percent. The decrease in effective tax rate for the period was primarily due to a reduction in nondeductible interest expense in the current year, and an increase in reserves for uncertain tax positions in the prior year.

For the three months ended March 31, 2019, we recorded an income tax expense of $10.6 million on income before taxes of $10.0 million, for an effective rate of ~~106.0%.~~106.0 percent. The high effective tax rate for the quarter iswas primarily due to the Company increasing its reserves for uncertain tax positions in connection with the Brazil Tax Assessments (see Brazil Tax Assessments below) in the amount of ~~$5.6~~$5.6 million, and the recording of deferred state taxes on unremitted non-U.S. earnings in the amount of ~~$0.8~~$0.8 million and other reserves related to various tax contingencies.

~~Immaterial Out-of-Period Adjustment~~

~~The~~ ~~$5.6 million~~ increase in tax expense resulting from the increase in the reserve related to uncertain tax positions in connection with the Brazil Tax Assessments that was recorded in the first quarter of 2019 should properly have been recorded in 2018 when the Company decided to appeal the administrative decision to the judicial level. The impact of recording this out-of-period adjustment to our Consolidated Statements of Operations for the three months ended March 31, 2019 is a $5.6 million increase in our income tax expense and a $5.6 million decrease to our Net Income, resulting in a Net Loss; the Company has concluded that this amount would not have been material to its Net Income for the twelve months ended December 31, 2018 or its expected Net Income for the twelve months ended December 31, 2019. Further, the impact of the correction was not material to either our Condensed Consolidated Balance Sheets or our Condensed Consolidated Statements of Cash Flows. This amount is not expected to be paid in cash in the foreseeable future, and would only be paid in the event that we do not ultimately prevail in the case.

For the three months ended March 31, 2018, we recorded an income tax benefit of $4.3 million on income before taxes of $6.1 million. The tax benefit for the three months ended March 31, 2018 was primarily due to the excess tax benefit resulting from the realization of stock-based compensation related tax deductions, the partial release of the reserve for the Brazil Tax Assessments resulting from the expiration of the statute of limitation for the 2011 tax year, the positive impacts attributable to the U.S. Tax Act and foreign tax refunds. This was partially offset by the revaluation of the deferred tax assets and liabilities resulting from the decrease in the Swedish corporate tax rate.

The U.S. federal statute of limitations remains open for the years ~~2015~~2016 and forward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 2 to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include Australia (2015 forward), Brazil (2014 forward), ~~Brazil (2013 forward),~~ Canada ~~(2014~~(2015 forward), Germany ~~(2014~~(2015 forward), Sweden ~~(2013~~(2015 forward) and the U.K. ~~(2017~~(2018 forward). We are currently under examination in certain foreign jurisdictions.

Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead Consumer and Office Products business ("Mead C&OP"), we assumed all of the tax liabilities for the acquired foreign operations including Tilibra Produtos de Papelaria Ltda. ("Tilibra"). In December of 2012, the Federal Revenue Department of the Ministry of Finance of Brazil ("FRD") issued a tax assessment against Tilibra, challenging the tax deduction of goodwill from Tilibra's taxable income for the year 2007 (the "First Assessment"). A second assessment challenging the deduction of goodwill from Tilibra'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"). Tilibra is disputing both of the tax assessments.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The final administrative appeal of the Second Assessment was decided against the Company in 2017. In 2018, ~~the Company~~we decided to appeal this decision to the judicial level. In the event we do not prevail at the judicial level, ~~the Company~~we will be required to pay an additional ~~amount~~penalty representing attorneys' costs and ~~fees. Accordingly,~~fees; accordingly, in ~~March~~the first quarter of 2019, the Company recorded an additional

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

reserve in the amount of $5.6 million ~~reflecting the increased liability bringing the total reserve to~~ ~~$27.5 million~~ ~~for the Second Assessment.~~. In connection with the judicial challenge, we were required to provide security to guarantee payment of the Second Assessment should we not prevail. The First Assessment is still being challenged through established administrative procedures.

We believe we have meritorious defenses and intend to vigorously contest both of the assessments; however, there can be no assurances that we will ultimately prevail. The ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which is expected to take a number of years. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

Because there is no settled legal precedent on which to base a definitive opinion as to whether we will ultimately prevail, we consider the outcome of ~~these disputes~~this dispute to be uncertain. Since it is not more likely than not that we will prevail, in 2012, we recorded a reserve in the amount of $44.5 million (at December 31, 2012 exchange rates) in consideration of this contingency, of which $43.3 million was recorded as an adjustment to the purchase price and which included the 2007-2012 tax years plus penalties and interest through December 2012. Included in this reserve is an assumption of penalties at ~~75%,~~75 percent, which is the standard penalty. While there is a possibility that a penalty of ~~150%~~150 percent could be imposed in connection with the First Assessment, based on the facts in our case and existing precedent, we believe the likelihood of a ~~150%~~150 percent penalty is not more likely than not as of March 31, ~~2019.~~2020. We will continue to actively monitor administrative and judicial court decisions and evaluate their impact, if any, on our legal assessment of the ultimate outcome of our disputes. In addition, we will continue to accrue interest related to this contingency until such time as the outcome is known or until evidence is presented that we are more likely than not to prevail. The time limit for issuing an assessment for 2011 and 2012 expired in January 2018 and January 2019, respectively. Since we did not receive an ~~assessment;~~assessments for either of these periods, we ~~therefore~~ reversed the amounts previously accrued, including $5.6 million ~~of reserves~~ related to 2011, which was reversed in the first quarter of 2018. During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we accrued additional interest as a charge to current income tax expense of ~~$0.3~~$0.1 million and $0.3 million, respectively. At current exchange rates, our accrual through March 31, ~~2019,~~2020, including tax, penalties and interest is ~~$35.1 million.~~$27.0 million (reported in "Other non-current liabilities").

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

12. Earnings per Share

Total outstanding shares as of March 31, ~~2019~~2020 and ~~2018~~2019, were 94.4 million and 102.5 million ~~and~~ ~~107.8 million~~, respectively. Under our stock repurchase program, for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we repurchased and retired ~~1.3~~2.7 million and ~~0.8~~1.3 million, shares, respectively. For the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we acquired ~~0.5~~0.2 million and ~~0.6~~0.5 million shares, respectively, related to tax withholding for share-based compensation.

The calculation of basic earnings per share of common stock is based on the ~~weighted average~~weighted-average number of shares of common stock outstanding in the year, or period, over which they were outstanding. Our calculation of diluted earnings per share of common stock assumes that any shares of common stock outstanding were increased by shares that would be issued upon exercise of those stock awards for which the average market price for the period exceeds the exercise price less the shares that could have been purchased by the Company with the related proceeds, including compensation expense measured but not yet recognized.

Our weighted-average shares outstanding for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 was as follows:



	Three Months Ended March 31,
(in millions)	2020	2019
Weighted-average number of shares of common stock outstanding - basic	96.0	102.3
Stock options	0.2	—
Restricted stock units	1.3	—
Weighted-average shares and assumed conversions - diluted⁽¹⁾	97.5	102.3

Weighted-average shares and assumed conversions - diluted⁽¹⁾

Awards of potentially dilutive shares of common stock, which have exercise prices that were higher than the average market price during the period, are not included in the computation of dilutive earnings per share as their effect would have been ~~anti-~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~dilutive.~~anti-dilutive. For the three months ended March 31, ~~2019~~2020 and ~~2018~~2019, the number of anti-dilutive shares was approximately 5.2 million, and 5.8 million, ~~and 2.8 million,~~ respectively.

13. Derivative Financial Instruments

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. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged ~~include~~against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments.

When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis.

Forward Currency Contracts

We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. The majority of the Company’s exposure to local currency movements is in Europe (the Euro, the Swedish krona and the British pound), Brazil, Australia, Canada, ~~Brazil,~~ and Mexico.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated Other Comprehensive Income ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the "Consolidated Statements of Operations." As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~cash-flow-designated~~cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$96.3~~$91.8 million and ~~$98.7~~$96.7 million, ~~respectively.~~respectively, which were designated as hedges.

Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other income, net" in the "Consolidated Statements of Operations" and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, and do not extend beyond ~~March 2020, except for one relating to intercompany loans which extends to December 2020.~~May 2024. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~undesignated~~ foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$150.3~~$159.5 million and ~~$113.3~~$182.6 million, ~~respectively.~~respectively, which were not designated as hedges.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The following table summarizes the fair value of our derivative financial instruments as of March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:

The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:



	The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
	Location of (Gain) Loss Recognized in Income on Derivatives	Amount of (Gain) Loss Recognized in Income
		Three Months Ended March 31,
(in millions)		2020			2019
Foreign exchange contracts	Other income, net	$	(9.3	)	$	1.2

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

14. Fair Value of Financial Instruments

In establishing a fair value, there is a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The basis of the fair value measurement is categorized in three levels, in order of priority, as described below:



Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

We utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

We have determined that our financial assets and liabilities described in "Note 13. Derivative Financial Instruments" are Level 2 in the fair value hierarchy. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:



(in millions)	March 31, 2020		December 31, 2019
Assets:
Forward currency contracts	$	13.0	$	8.0
Liabilities:
Forward currency contracts	$	5.6	$	9.5

(in millions) March 31,
2019 December 31,
2018
Assets:
Forward currency contracts $ 10.1
$ 16.6
Liabilities:
Forward currency contracts $ 9.2
$ 14.5

Our forward currency contracts are included in "~~Other~~"Other current assets,," "Other current liabilities," "Other non-current assets,~~" "Other current liabilities~~" or "Other non-current liabilities." The forward foreign currency exchange contracts are primarily valued based on the foreign currency spot and forward rates quoted by banks or foreign currency dealers. As such, these derivative instruments are classified within Level 2.

The fair values of cash and cash equivalents, notes payable to banks, accounts receivable and accounts payable approximate carrying amounts due principally to their short maturities. The carrying amount of total debt was ~~$1,011.3~~$929.2 million and ~~$888.0~~$816.0 million and the estimated fair value of total debt was $~~1,003.8~~906.7 million and $~~848.6~~831.4 million at March 31, ~~2019~~2020 and December 31, ~~2018~~2019, respectively. The fair values are determined from quoted market prices, where available, and from investment bankers using current interest rates considering credit ratings and the remaining time to maturity.

15. Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss) ("AOCI") is defined as net income (loss) ~~income~~ and other changes in stockholders’ equity from transactions and other events from sources other than stockholders. The components of, and changes in, ~~accumulated other comprehensive income (loss), net of tax~~AOCI were as follows:



(in millions)	Derivative Financial Instruments			Foreign Currency Adjustments			Unrecognized Pension and Other Post-retirement Benefit Costs			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(0.2	)	$	(299.5	)	$	(206.0	)	$	(505.7	)
Other comprehensive income (loss) before reclassifications, net of tax	3.3			(49.7		)	6.3			(40.1		)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(0.9		)	—			1.6			0.7
Balance at March 31, 2020	$	2.2		$	(349.2	)	$	(198.1	)	$	(545.1	)

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The reclassifications out of ~~accumulated other comprehensive income (loss)~~AOCI for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:

16. 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 be received 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.

Freight and distribution activities performed before the customer obtains control of the goods are not considered promised services under customer contracts and therefore are not distinct performance obligations. The Company has chosen to account for shipping and handling activities as a fulfillment activity, and therefore accrues the expense of freight and distribution in "Cost of products sold" when product is shipped.

Service or Extended Maintenance Agreements ("EMAs") As of December 31, ~~2018,~~2019, there was ~~$5.0~~$5.5 million of unearned revenue associated with outstanding EMAs, primarily reported in "Other current liabilities." During the three months ended March 31, ~~2019, $1.6~~2020, $2.8 million of the unearned revenue was earned and recognized. As of March 31, ~~2019,~~2020, the amount of unearned revenue from EMA's was $5.4 million. We expect to earn and recognize approximately ~~$4.1~~$4.7 million of the unearned amount in the next 12 months and ~~$1.3~~$0.7 million in ~~future~~ periods beyond the next 12 months.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The following tables ~~presents~~present our net sales disaggregated by regional geography⁽¹⁾, based upon our reporting business segments and our net sales disaggregated by the timing of revenue recognition for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:

ACCO Brands EMEA⁽²⁾

(1) Net sales are attributed to geographic areas based on the location of the selling subsidiaries.

(2) ACCO Brands EMEA is comprised largely of Europe, but also includes export sales to the Middle East and Africa.



	Three Months Ended March 31,
(in millions)	2020		2019
Product and services transferred at a point in time	$	363.6	$	378.4
Product and services transferred over time	20.5		15.5
Net sales	$	384.1	$	393.9

Three Months Ended March 31,
(in millions) 2019 2018
Product and services transferred at a point in time $ 373.4
$ 391.4
Product and services transferred over time 20.5
14.4
Net sales $ 393.9
$ 405.8

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

17. Information on Business Segments

The Company has ~~three~~3 operating business segments each of which is comprised of different geographic regions. The Company's ~~three~~3 segments are as follows:



Operating Segment	Geography	Primary Brands	Primary Products
ACCO Brands North America	United States and Canada	Five Star^®, Quartet^®, AT-A-GLANCE^®, GBC^®, Swingline^®, Kensington^®, Mead^®, and Hilroy^®	School notebooks, planners, dry erase boards, storage and organization products (3-ring binders), stapling, punching, laminating, binding products, and computer accessories

ACCO Brands EMEA	Europe, Middle East and Africa	Leitz^®, Rapid^®, Esselte^®, Kensington^®, Rexel^® GBC^®, NOBO^®, and Derwent^®	Storage and organization products (lever-arch binders, sheet protectors, indexes), stapling, punching, laminating, shredding, do-it-yourself tools, dry erase boards, writing instruments and computer accessories

ACCO Brands International	Australia/N.Z., Latin America and Asia-Pacific	Tilibra^®, GBC^®, Barrilito^®, Foroni^®, Marbig^®, Kensington^®, Artline^®, Wilson Jones^®,Quartet^®, Spirax^®, and Rexel^®Australia/N.Z. only	School notebooks, planners, dry erase boards, storage and organization products (binders, sheet protectors and indexes), stapling, punching, laminating, shredding, writing instruments, janitorial supplies and computer accessories

Each ~~of the Company's three operating segments~~business segment designs, markets, sources, manufactures and sells recognized consumer and other end-user demanded branded products used in businesses, schools and homes. Product designs are tailored ~~based on~~to end-user preferences in each geographic ~~region.~~region, and where possible, leverage common engineering, design, and sourcing.

Our product categories include storage and organization; stapling; punching; laminating, shredding and binding ~~and shredding machines and related consumable supplies; whiteboards;~~machines; dry erase boards; notebooks; calendars; computer accessories; and do-it-yourself tools, among others. Our portfolio ~~of consumer and other end-user demanded brands~~ includes both globally and regionally recognized brands.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~ACCO Brands North America~~

The ~~ACCO Brands~~revenue in North America ~~segment is comprised of the United States~~ and ~~Canada where the Company is a leading branded supplier~~International segments includes significant sales of consumer products that have very important, seasonal selling periods related to back-to-school and ~~business products under brands such as AT-A-GLANCE~~^®~~, Five Star~~^®~~, GBC~~^®~~, Hilroy~~^®~~, Kensington~~^®~~, Mead~~^®~~, Quartet~~^®~~, and Swingline~~^®.~~The ACCO Brands~~calendar year-end. For North America ~~segment designs, sources or manufactures~~ and ~~distributes school notebooks, calendars, whiteboards, storage~~Mexico, back-to-school straddles the second and ~~organization products (such as three-ring binders, sheet protectors~~third quarters, and ~~indexes), stapling, punching, laminating, binding~~for Southern hemisphere it takes place in the fourth and shredding products, and computer accessories, among others, which are primarily used in schools, homes and businesses. The majority of revenue in this segment is related to consumer and home products and is associated with the "back-to-school" season and year-end calendar purchases.first quarter. We expect sales of consumer products to become ~~an increasingly~~a greater percentage of our revenue asbecause demand for consumer back-to-school products is growing faster ~~growing~~ than demand for most business-related and calendar products.

~~ACCO Brands EMEA~~

The ACCO Brands EMEA segment is comprised largely of Europe, but also includes export sales to the Middle East and Africa. The Company is a leading branded supplier of consumer and business products under brands such as Derwent^®~~, Esselte~~^®~~, GBC~~^®~~, Kensington~~^®~~, Leitz~~^®~~, NOBO~~^®~~, Rapid~~^®~~, and Rexel~~^®.The ACCO Brands EMEA segment designs, manufactures or sources and distributes storage and organization products (such as lever-arch binders, sheet protectors and indexes), stapling, punching, laminating, binding and shredding products, do-it-yourself tools, and computer accessories, among others, which are primarily used in businesses, homes and schools.

~~ACCO Brands International~~

The ACCO Brands International segment is comprised of Australia/N.Z., Latin America and Asia-Pacific where the Company is a leading branded supplier of consumer and business products under brands such as Artline^®~~, Barrilito~~^®~~, GBC~~^®~~, Kensington~~^®~~, Marbig~~^®~~, Quartet~~^®~~, Rexel~~^®~~, Tilibra~~^®~~, and Wilson Jones~~^®, among others. The ACCO Brands International segment designs, sources or manufactures and distributes school notebooks, calendars, whiteboards, storage and organization products (such as three-ring binders, sheet protectors and indexes), stapling, punching, laminating, binding and shredding products, writing instruments, and janitorial supplies, among others, which are primarily used in schools, businesses and homes. The majority of revenue in this segment is related to consumer products and is associated with the "back-to-school" season and year-end calendar purchases. We expect sales of consumer products to become an increasingly greater percentage of our revenue as demand for consumer products is faster growing than most business-related products.

We distribute our products through a wide variety of retail and commercial channels to ensure that ~~our products~~they 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; and contract stationers. We also sell directly to commercial and consumer end-users through our e-commerce ~~platform~~sites and our direct sales organization.

~~Net sales by business segment for the three months ended March 31, 2019 and 2018 were as follows:~~

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Net sales by business segment for the three months ended March 31, 2020 and 2019 were as follows:



	Three Months Ended March 31,
(in millions)	2020		2019
ACCO Brands North America	$	167.8	$	160.4
ACCO Brands EMEA	127.5		146.5
ACCO Brands International	88.8		87.0
Net sales	$	384.1	$	393.9

Operating income by business segment for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 was as follows:

Operating income⁽¹⁾

18. Commitments and Contingencies

Pending Litigation - Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead C&OP business, we assumed all of the tax liabilities for the acquired foreign operations including Tilibra Produtos de Papelaria Ltda. ("Tilibra"). For further information, see "Note 11. Income Taxes - Brazil Tax Assessments" for details on tax assessments issued by the FRD against Tilibra challenging the tax deduction of goodwill from Tilibra's taxable income for the years 2007 through 2010. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

In March 2017, the Supreme Court of Brazil ruled against the Brazilian tax authority in a leading case related to the computation of certain indirect taxes. The Supreme Court ruled that the indirect tax base should not include a value-added tax known as "ICMS." The Supreme Court decision, in principle, affects all applicable judicial proceedings in progress, and reduces future indirect taxes on our Brazilian subsidiary, Tilibra. However, the Brazilian tax authority has filed an appeal seeking clarification of certain matters, including the amount by which taxpayers would be entitled to reduce their indirect tax base (i.e. the gross ICMS collected or the net ICMS paid). The appeal also requests a modulation of the decision’s effects, which may limit its retrospective impact on taxpayers, including Tilibra.

Tilibra has paid and continues to pay these indirect taxes on a tax base which includes the gross ICMS collected. It has also filed legal actions in Brazil to request reimbursement of these excess tax payments by way of future credits ("Tax Credits") and

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

for permission to exclude the gross ICMS collected from the tax base in future periods. Tilibra’s legal actions cover various time periods and some have been finally decided in a court of law in favor of Tilibra, while others are still pending a final decision.

Due to the uncertainties associated with the scope of the application of the Brazilian Supreme Court’s ruling, taking into account the Brazilian tax authority’s appeal and request for modulation, the Company has and will recognize income only for the amount of Tax Credits actually monetized, which will occur when Tilibra receives a cash flow benefit from applying the Tax Credits against various taxes payable in Brazil. The benefit of the Tax Credits realized by the Company has and will be recorded in the Consolidated Statements of Operations in the line item "Other income, net."

Tilibra has received final decisions for Tax Credits in the amount of $4.3 million, of which $3.3 million was offset against Brazilian taxes in the fourth quarter of 2019, with the balance used during the first quarter of 2020. This amount of Tax Credits assumes that only the net amount of ICMS paid can be excluded from the tax base. The total value of these Tax Credits was recorded as a gain in Tilibra’s local statutory accounts during the third quarter of 2019, resulting in Brazilian federal taxes payable of approximately $1.6 million.

Final decisions in the remaining legal actions Tilibra has filed may result in additional Tax Credits that could be monetized in future periods. Further, a favorable decision in the leading case by the Brazilian Supreme Court on the methodology to compute the Tax Credits (i.e. gross ICMS collected) would result in additional Tax Credits being available to Tilibra. The amount of these additional Tax Credits may be material.

Foroni, in years prior to acquisition, also filed legal actions in Brazil to recover these excess indirect tax payments; however all of Foroni's claims are still pending a final decision. In the event any Tax Credits are recovered on behalf of Foroni, in accordance with the terms of the quota purchase agreement we are required to remit such recovery to the former owners of Foroni on a net income tax paid basis and therefore will not recognize any benefit in the Consolidated Statements of Operations.

Other Pending Litigation

We are party to various lawsuits and regulatory proceedings, primarily related to alleged patent infringement, ~~and employee terminations~~ 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.

We are subject to national, state, provincial and/or local environmental laws and regulations concerning the discharge of materials into the environment and the handling, disposal and clean-up of waste materials and ~~otherwise~~other items relating to the protection of the environment. This includes environmental laws and regulations that affect the design and composition of certain of our products. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that we may undertake in the future. In the opinion of our management, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect upon our capital expenditures, financial condition and results of operations or competitive position.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

19. Subsequent Events

On May ~~2, 2019,~~1, 2020, the Company's Board of Directors declared a quarterly cash dividend of ~~$0.06~~$0.065 per share on its common stock. The dividend is payable on June 19, ~~2019~~2020 to stockholders of record as of the close of business on May ~~24, 2019.~~27, 2020. The declaration and payment of future dividends will be at the discretion of the Board of Directors and will be dependent upon, among

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

other things, the Company's financial position, results of operations, cash flows, debt covenant compliance, anticipated liquidity needs, and other factors.

On May 1, 2020, the Company entered into a Third Amendment (the "Third Amendment") to its Third Amended and Restated Credit Agreement, as amended (the "Credit Agreement"), among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto. Pursuant to the Third Amendment, the Credit Agreement was amended to, among other things:

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

~~INTRODUCTION~~

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

Overview of the Company

ACCO Brands ~~is a designer, marketer~~designs, markets and ~~manufacturer of recognized~~manufactures well-recognized consumer, school, and ~~other end-user demanded brands used in businesses, schools, and homes.~~office products. Our widely known brands include AT-A-GLANCE^®, Barrilito^®, Derwent^®, Esselte^®, Five Star^®, Foroni^®, GBC^®, Hilroy^®, Kensington^®,Leitz^®, Marbig^®, Mead^®, NOBO^®, Quartet^®, Rapid^®, Rexel^®, Swingline^®, Tilibra^® and Wilson Jones^®. ~~More than 75%~~Approximately 75 percent of our net sales come from brands that occupy the ~~number-one~~No. 1 or ~~number-two positions~~No. 2 position in the ~~select~~ product categories in which we compete. We distribute our products through a wide variety of retail and commercial 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; and contract stationers. Our products are sold primarily in the U.S., Europe, Brazil, Australia, Canada, ~~Brazil~~ and Mexico. For the year ended December 31, ~~2018,~~2019, approximately ~~42%~~43 percent of our net sales were in the U.S.~~; down~~

Our leading product category positions provide the scale to invest in marketing and product innovation to drive profitable growth. Over the long term, we expect to derive much of our growth from ~~45% in 2017. This decrease was primarily~~emerging markets such as Latin America and parts of Asia, the ~~result~~Middle East, and Eastern Europe. These areas exhibit sales growth for our product categories. In all of ~~the Esselte~~our markets, we see opportunities for sales growth through share gains, channel expansion, and ~~GOBA acquisitions, which further extended our geographic reach.~~product enhancements.

~~The Company's~~Our strategy is to grow ~~its~~our global portfolio of consumer brands, offer more innovative products, increase ~~its~~our presence in faster growing geographies and channels, and diversify ~~its~~our customer base. ~~The Company continues~~We plan to ~~focus on leveraging its~~supplement organic growth with strategic acquisitions in both existing and adjacent product categories. We generate strong operating cash flow, and will continue to leverage our cost structure through synergies and productivity savings to drive long-term profit ~~improvement and on strong free cash flow generation. We plan to supplement organic growth globally with strategic acquisitions in both existing and adjacent product categories.~~improvement.

In ~~furtherance~~support of ~~our strategy,~~these strategic imperatives, we have ~~transformed~~been transforming our business by acquiring companies with consumer and other end-user demanded brands, ~~and by continuing to diversify~~diversifying our distribution ~~channels. In 2012, we acquired the Mead Consumer~~channels and ~~Office Products business ("Mead C&OP"), which substantially increased~~increasing our presence in North America and Brazil in school and calendar products with well-known consumer brands. In 2016, we purchased the remaining equity interest in Pelikan Artline from our joint venture partner, which enhanced our competitive position in school and business products in Australia and New Zealand and added new categories, including writing instruments and janitorial supplies. In early 2017, we acquired Esselte Group Holdings AB ("Esselte"), which more than doubled our presence in Europe and added several iconic business brands, a significant base of independent dealer customers, and a new product category of do-it-yourself hardware tools. On July 2, 2018, we completed the acquisition of GOBA Internacional, S.A. de C.V. in Mexico to extend our presence into new categories. Together theseglobal presence. These acquisitions have meaningfully expanded our portfolio of well-known ~~end-user demanded~~ brands, enhanced our competitive position from both a product and channel perspective, and added scale to our ~~business~~ operations.

Today ~~our Company~~ACCO Brands is a global enterprise focused on developing innovative, branded consumer products for use in businesses, schools, and homes.

Overview of Performance

For the three months ended March 31, 2020, net sales declined $9.8 million, or 2.5 percent, primarily driven by weakness in EMEA, particularly in March, from COVID-19-related business closures and negative foreign exchange of $10.6 million, which was partially offset by sales from Foroni, which contributed $14.4 million to net sales. Excluding foreign exchange and Foroni, comparable net sales were down 3.5 percent, primarily due to the weakness in EMEA. Operating income declined 2.8 percent, primarily due to foreign exchange, which impacted our operating income by $1.2 million.

Operating cash outflow for the three months ended March 31, 2020, was $25.2 million, which was significantly better than last year's operating cash outflow of $61.3 million. The $36.1 million year-over-year improvement was due to our decision in 2018 to purchase raw materials and finished goods inventory for the 2019 year in late 2018 to secure supply and partially mitigate the effect of anticipated inflation and tariffs. These purchases were paid for in the first quarter of 2019. This year-end inventory build did not repeat in 2019.

COVID-19 Impact

As discussed in more detail in "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q, COVID-19 and the actions being taken by national, state and local governments to address it have caused and continue to cause significant disruptions to normal business operations both in and outside of affected areas and have had significant adverse impacts on businesses and financial markets worldwide. Similarly, our business and results of operations have been and will continue to be adversely affected

by these events, as well as the current and expected continued negative impact on the global economy and uncertainties regarding how geographies, distribution channels and consumer behaviors will evolve over time.

Health and Safety of our People

Our top priority is the health and safety of our employees and, in the face of the developing pandemic we immediately took actions to address their safety. Those employees who could do their jobs from home began doing so. In our plants and distribution centers we made modifications to our normal operations because of the COVID-19 outbreak. These modifications vary from country to country depending on local conditions and government mandates but include taking workers’ temperatures daily, practicing social distancing, wearing protective equipment, quarantines consistent with CDC and WHO guidelines, and adjusting schedules as appropriate to reduce unnecessary employee interaction. We also instituted heightened cleaning and sanitization standards. We will continue to monitor our operations and government recommendations regarding employee health and safety and make changes as appropriate. We are beginning to consider the policies and procedures that will need to be in place to ensure the health and safety of our office and administrative employees when they return to the workplace.

Facilities and Supply Chain

During the first quarter, COVID-19 impacted our Chinese supply chain and we experienced and are continuing to experience some out-of-stocks and lost sales, but we have seen continued improvement since then. We currently believe the most significant supply chain issues are largely behind us, but there can be no assurance that there will not be future supply chain disruptions or a reemergence of supply chain impacts as a result of COVID-19. While a small number of our ~~leading product category positions provide~~manufacturing and distribution operations were or currently are closed temporarily, we have been declared an essential business in most jurisdictions and most of our facilities remain open and operating. We are shipping, but at a reduced level based on lower demand, particularly in the ~~scale~~traditional office products area.

Our second and third quarters are heavily driven by the North America back-to-school season. We currently do not anticipate any significant supply chain issues in meeting back-to-school orders. We manufacture approximately 50 percent of our U.S. back-to-school supply domestically, and our manufacturing facilities are open and operating. Additionally, over the past two years we have moved a sizeable amount of manufacturing from China to ~~enable us~~Vietnam. Approximately 30 percent of back-to-school items now come from Vietnam and less than 20 percent come from China.

Cost Reductions

To begin to ~~invest~~address the financial impact of the pandemic on our results of operations, we have undertaken cost-cutting initiatives to better align our cost structure with the expected decline in ~~marketing and product innovation to drive profitable growth.~~2020 sales. We expect these cost reduction actions, when combined with our normal productivity savings, to ~~derive much~~reduce costs by approximately $20 million for the second quarter. These actions include reducing discretionary spending such as travel, freezing hiring, delaying non-essential capital spending, as well as numerous actions to reduce payroll and benefit costs. Among others, the payroll-related actions include: temporary salary reductions for most of the staff, ranging from 50 percent for the CEO, to 30 percent for executives, to 10 percent to 30 percent for most other global employees; a temporary 50-percent reduction to the Board of Directors' annual cash retainers; indefinite postponement of 2020 merit increases except where mandated by law; release of 2020 bonus accruals due to lack of achievement; temporary furloughs across the organization; the suspension of company match for the U.S. 401(k) plan; and layoffs of production and distribution employees commensurate with the drop in demand. We are doing everything we can in the short term to mitigate the impact of the pandemic to ensure the long-term health and prosperity of our ~~growth, over~~company and our employees.

Where we qualify, we have also sought to take full advantage of government assistance available to employers in the ~~long~~countries outside the U.S. where we operate. We do not expect these cost reductions to fully offset the impact of reduced sales due to COVID-19 in the second quarter. Further, there can be no assurance that these cost-savings measures, and any additional cost-savings measures we may implement in the future will be sufficient to offset the current and future adverse financial impacts of COVID-19 on our business, results of operation or financial condition. Over the longer term, we will evaluate the need to extend, adjust or convert these actions into more permanent changes depending on the economic and business situation.

Liquidity, Capital Resources and Other Assets

We are in ~~faster-growing emerging geographies~~a strong financial position with $93.4 million cash on hand and $450.1 million available for borrowings under our $600 million committed revolving credit facility as of the end of the first quarter. We also recently amended our bank debt maintenance covenant increasing the net debt to EBITDA leverage ratio to 4.75x from 3.75x through the first quarter ending after June 30, 2021. This will provide us additional financial flexibility to cover the anticipated financial impact of COVID-19 should we need it. As of March 31, 2020, our net leverage ratio was 2.8x. We have no debt maturities before May 2024. We also recently

announced that we do not intend to repurchase additional shares during 2020. Our planned use of cash for the remainder of 2020, after funding operating needs, will be to pay dividends and reduce debt.

Given our financial strength, we currently expect to be able to maintain adequate liquidity as we manage through the current environment. We also believe that our seasonal borrowings could be higher in the second quarter because lower sales in April will result in lower collections from accounts receivables in the quarter.

Likewise, we are monitoring our working capital, including accounts receivable and inventory. We anticipate an increased level of late payments and potential bad debts as our customers deal with the COVID-19 impacts on their businesses from the prolonged period of closure. We are actively managing our receivables and will potentially restrict our own sales to mitigate our risk. In addition, we did not anticipate such a steep drop in demand when we placed orders for purchased finished goods earlier in the year, which is likely to result in elevated inventory levels at the end of the second quarter.

We continue to monitor the significant global economic uncertainty as ~~Latin America and parts~~a result of ~~Asia,~~COVID-19 to assess the ~~Middle East and Eastern Europe, which exhibit growing~~outlook for demand for our ~~product categories. In all~~products and the impact on our business and our overall financial performance. This includes our risk of impairment losses to our goodwill and indefinite-lived intangible assets. Although the potential impact of COVID-19 related demand is uncertain, we remain committed to the strategic actions necessary to preserve the long-term forecasted financial performance and expect the macroeconomic environment will recover in the medium to long-term. As a result of our analysis, and consideration of events and circumstances, we concluded that there were no triggering events that would make it more likely than not that our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020.

Outlook

During the back half of March 2020, we began to experience a decline in the demand for our products resulting in decreased sales, particularly in our EMEA and International segments, which were the first to experience the full effects of COVID-19 and the government and business response to the pandemic. This trend has continued and expanded into most of our markets and will continue to materially and negatively impact our sales, earnings and results of operations at least through year-end.

We expect demand in the second quarter to be down significantly due to business and school closures, with April anticipated to be the weakest month. While back-to-school sell-in to mass merchants and e-tailers is expected to be similar to last year, we ~~see opportunities~~anticipate that sales to ~~grow~~our traditional office products customers and other retailers will be down with their customers not open and/or themselves not being operational. Our outlook for second quarter sales ~~through share gains, channel expansion~~decline is a range of 25 percent to 40 percent, including 3 percent impact from adverse foreign exchange. For the full year, visibility is limited and ~~innovative products.~~we expect overall demand to be down relative to 2019, with a slowly improving demand level with a wide range of sales outcomes as the year progresses. There may be some variation in the timing of school openings versus normal which could affect the timing of back-to-school sales, but we expect most schools will be open in the fall.

We have limited visibility beyond the second quarter, and we previously withdrew our full year guidance due to our inability to provide a longer-term outlook with confidence. We expect that the pandemic will materially and adversely affect our business, sales, and results of operations for the remainder of 2020; however, we are uncertain as to the magnitude of the longer term impact on our results of operations, financial condition, liquidity, customers, consumers, suppliers, industry and employees.

Acquisitions

~~GOBA Internacional, S.A. de C.V.~~Indústria Gráfica Foroni Ltda Acquisition

~~On July 2, 2018,~~Effective August 1, 2019, we completed the acquisition (the ~~"GOBA~~"Foroni Acquisition") of ~~GOBA Internacional, S.A. de C.V.~~Indústria Gráfica Foroni Ltda. ("~~GOBA"~~Foroni"), a leading provider of Foroni^®branded notebooks and paper-based school and ~~craft~~office products in ~~Mexico under the Barrilito~~^®~~brand, for a preliminary~~Brazil. The purchase price ~~of approximately $37.2~~was $41.5 million ~~net~~inclusive of ~~cash acquired, and subject to~~ working capital adjustments. We also assumed $7.6 million of debt. The Foroni Acquisition advanced our strategy to expand in faster growing geographies and ~~other adjustments. The GOBA Acquisition has increased the breadth~~product categories, add consumer-centric brands and ~~depth of~~diversify our ~~distribution, especially with wholesalers and retailers throughout Mexico, and complements our existing office products portfolio with a strong offering of school and craft products.~~customer base. The results of ~~GOBA~~Foroni are included in the ACCO Brands International segment ~~as of July 2, 2018.~~effective August 1, 2019.

For further information on the ~~GOBA~~Foroni Acquisition, see "Note 3. Acquisitions" to the condensed consolidated financial statements contained in Item 1. of this ~~report.~~Quarterly Report on Form 10-Q.

~~OVERVIEW OF PERFORMANCE~~

Our financial results for the three months ended March 31, 2019 reflect the positive impact of price increases, cost reductions and improved operating efficiencies, which increased the operating income and operating income margin in our North America segment, and the impact of the GOBA Acquisition which contributed $11.8 million of net sales and $2.5 million of operating income to our International segment. Conversely, foreign currency translation negatively impacted our net sales by $21.6 million, our operating income by $2.2 million.Foreign Exchange Rates

The quarterly average foreign exchange rates ~~have moved relative to the prior-year quarter as follows~~ for most of our major currencies have declined relative to the U.S. ~~dollar:~~dollar from the prior-year period as detailed below:



		~~2019~~2020 1^ST QTR Average Versus ~~2018~~2019 1^ST QTR Average
Currency		Increase/(Decline)
Euro		~~(8)~~(3)%
Brazilian real		(15)%
Australian dollar		~~(9)~~(8)%
Canadian dollar		~~(5)~~(1)%
~~Brazilian real~~Mexican peso		~~(14)~~(3)%
Swedish krona		~~(12)~~(5)%
British pound		~~(6)%~~
~~Mexican peso~~		(2)%
Japanese yen		~~(1)%~~1%

In North America, price increases and cost savings initiatives were initiated in late 2018 in order to offset the negative impact of inflationary increases in input costs, as well as increased tariffs that increased our cost of goods sold and reduced our gross profit margins during the second half of 2018. While we expect these higher input costs and tariffs will continue to negatively impact on our costs of goods sold in 2019, we expect the price increases and additional cost reduction initiatives we have already implemented to fully offset currently known inflation. Should the rate of tariffs on purchased finished goods we source from China increase again, or should we experience additional cost inflation, we may need to increase prices again which may result in a decrease in sales volume.

Operating cash flow for the three months ended March 31, 2019 decreased by $121.7 million compared to the prior-year quarter primarily due to the payments for inventory in the first quarter of 2019 that was purchased at the end of 2018. The 2018 inventory purchases were primarily in the U.S. in order to secure paper supply and pricing for the 2019 back-to-school season and to mitigate the previously expected additional inflationary cost increases on purchased finished goods sourced from China. Due to this shift in timing of inventory purchases, we also anticipate a much lower cash outflow in the second quarter of 2019 when compared to second quarter of 2018 because the normal buildup of back-to-school inventory will be offset by a reduction in the previously purchased inventory.

Consolidated Results of Operations for the Three Months Ended March 31, 2020 and March 31, 2019 ~~and~~ ~~March 31, 2018~~


	Three Months Ended March 31,						Amount of Change						Three Months Ended March 31,						Amount of Change
(in millions, except per share data)	2019			2018			$			%/pts			2020			2019			$			%/pts
Net sales	$	393.9		$	405.8		$	(11.9	)	(2.9	)%		$	384.1		$	393.9		$	(9.8	)	(2.5	)%
Cost of products sold	268.1			278.3			(10.2		)	(3.7	)%		271.9			268.1			3.8			1.4	%
Gross profit	125.8			127.5			(1.7		)	(1.3	)%		112.2			125.8			(13.6		)	(10.8	)%
Gross profit margin	31.9		%	31.4		%				0.5		pts	29.2		%	31.9		%				(2.7)		pts
Selling, general and administrative expenses	95.9			101.8			(5.9		)	(5.8	)%		86.1			95.9			(9.8		)	(10.2	)%
Amortization of intangibles	9.3			9.3			—			-			8.4			9.3			(0.9		)	(9.7	)%
Restructuring charges	2.7			4.7			(2.0		)	(42.6	)%		0.3			2.7			(2.4		)	(88.9	)%
Operating income	17.9			11.7			6.2			53.0	%		17.4			17.9			(0.5		)	(2.8	)%
Operating income margin	4.5		%	2.9		%				1.6		pts	4.5		%	4.5		%				0.0		pts
Interest expense	10.4			9.4			1.0			10.6	%		8.6			10.4			(1.8		)	(17.3	)%
Interest income	(0.9		)	(1.0		)	(0.1		)	(10.0	)%		(0.3		)	(0.9		)	(0.6		)	(66.7	)%
Non-operating pension income	(1.4		)	(2.2		)	(0.8		)	(36.4	)%		(1.5		)	(1.4		)	0.1			7.1	%
Other income, net	(0.2		)	(0.6		)	0.4			(66.7	)%		(0.5		)	(0.2		)	0.3			150.0	%
Income tax expense (benefit)	10.6			(4.3		)	14.9			NM
Income before income tax													11.1			10.0			1.1			11.0	%
Income tax expense													3.1			10.6			(7.5		)	(70.8	)%
Effective tax rate	106.0		%	(70.5		)%				NM		pts	27.9		%	106.0		%				(78.1)		pts
Net income (loss)	(0.6		)	10.4			(11.0		)	NM			8.0			(0.6		)	8.6			NM
Weighted average number of diluted shares outstanding:	102.3			110.0			(7.7		)	(7.0	)%		97.5			102.3			(4.8		)	(4.7	)%
Diluted (loss) income per share	$	(0.01	)	$	0.09		$	(0.10	)	NM
Diluted income (loss) per share													$	0.08		$	(0.01	)	$	0.09		NM

Net sales ofdecreased 2.5 percent to $384.1 million from $393.9 million ~~including $11.8 million attributable~~in 2019 due to ~~GOBA, decreased $11.9~~adverse foreign exchange of $10.6 million, or ~~2.9%, from $405.8 million~~2.7 percent. The Foroni acquisition added $14.4 million. Comparable sales decreased 3.5 percent driven by weakness in the ~~prior-year period due to foreign currency translation, which reduced net sales by $21.6 million, or 5.3%,~~EMEA and International segments, particularly in ~~the current-year period. Comparable net sales, excluding the sales~~March from ~~GOBA and foreign currency translation, decreased slightly, 0.5%, as lower volume was~~COVID-19-related business closures. These declines were partially offset by ~~higher pricing.~~growth in North America.

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 process costs; allocation of ~~$268.1 million, including $7.4 million attributable to GOBA, decreased $10.2 million, or 3.7%, from $278.3 million~~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 ~~prior-year period.~~ production processes; and inventory valuation adjustments.

Foreign ~~currency translation~~exchange reduced cost of products sold ~~by $14.6~~$7.3 million, or ~~5.2%, in~~2.7 percent and the ~~current-year period. Underlying~~Foroni acquisition added $12.0 million, or 4.5%. Excluding Foroni and foreign exchange, cost of products sold ~~excluding GOBA and foreign currency translation,~~ decreased due to lower comparable net sales and cost savings, partially offset by ~~higher input costs~~lower levels of fixed cost absorption (primarily in the ~~U.S.~~North America segment) and ~~Europe.~~an unfavorable product mix (primarily in the EMEA segment).

We believe that gross profit and gross profit margin provide enhanced ~~stockholder~~shareholder understanding of our underlying operating profit drivers. ~~Gross profit of $125.8 million, including $4.4 million attributable to GOBA, decreased $1.7 million, or 1.3%, from $127.5 million in the prior-year period.~~

Foreign ~~currency translation~~exchange reduced gross profit ~~by $7.0~~$3.3 million, or ~~5.5%,~~2.6 percent and the Foroni acquisition added $2.4 million, or 1.9%. Excluding Foroni and foreign exchange, gross profit decreased due to lower net comparable sales, primarily in the ~~current-year period. Underlying gross profit, excluding GOBA~~EMEA and ~~foreign currency translation, increased primarily due to cost savings and higher pricing in the North America segment.~~International segments.

Gross profit as a percent of net sales ~~increased~~decreased to ~~31.9%~~29.2 percent from ~~31.4%,~~31.9 percent, with 50 basis points of the decline attributable to Foroni. Excluding Foroni and foreign exchange, gross profit margin declined in all segments, primarily due to lower levels of fixed cost ~~savings~~absorption (primarily in the North America segment) and ~~higher pricing.~~an unfavorable product mix (primarily in the EMEA segment). International segment gross profit margin was flat.

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, and information technology).

Foreign exchange reduced SG&A ~~of $95.9 million, including $1.6 million attributable to GOBA, decreased $5.9~~$1.9 million, or ~~5.8%, from $101.8 million in~~2.0 percent and the ~~prior-year period. Foreign currency translation reduced SG&A by $4.3~~Foroni acquisition added $2.2 million, or ~~4.2%, in the current-year period.~~2.3%. The ~~current-year period~~current year includes ~~$0.4~~$0.3 million of ~~transaction~~integration and ~~integration~~transaction costs related to the ~~Cumberland asset and GOBA acquisitions.~~Foroni acquisition. The prior-year period included ~~$1.6~~$0.4 million in integration costs related ~~primarily~~ to ~~the Esselte acquisition. Underlying SG&A, excluding GOBA,~~prior acquisitions. Excluding Foroni, integration and transaction ~~and integration~~ costs, and foreign ~~currency translation, decreased~~exchange, SG&A declined due to $7 million in lower incentive accruals and cost savings.

SG&A as a percentage of net sales decreased to 22.4% from 24.3% ~~from 25.1% in the prior-year period,~~last year, primarily due to ~~cost savings.~~the reasons mentioned above. Foroni accounted for 30 basis points of the decrease.

Restructuring Charges

Restructuring charges ofwere $0.3 million, down $2.4 million from $2.7 million ~~decreased $2.0 million, or 42.6%, from $4.7 million in the prior-year period.~~last year. The current-year ~~period~~charges related to incremental costs associated with cost reduction programs initiated at the end of 2019 in all of our segments. The prior year charges related to severance costs associated with additional changes in the operating structure of our North America and International segments. ~~The prior-year period charges primarily related to Esselte integration activities and changes in the operating structure of the North America segment.~~

Operating income was $17.4 million, a decrease of $0.5 million, from $17.9 million ~~including $2.5 million attributable~~in 2019, primarily due to ~~GOBA, increased $6.2 million, or 53.0%,~~lower comparable sales from ~~$11.7 million in~~ the ~~prior-year period.~~impact of COVID-19-related business closures. The Foroni acquisition was immaterial. Foreign ~~currency translation~~exchange reduced operating income ~~by $2.2~~$1.2 million ~~or 18.8%, in the current-year period. Underlying operating income, excluding GOBA,~~and lower restructuring charges ~~transaction and integration costs, and foreign currency translation, increased primarily due to cost savings and higher pricing.~~were a $2.4 million benefit.

Interest Expense ~~and Non-Operating Pension Income~~

~~Interest~~The decrease in interest expense of ~~$10.4~~$1.8 million, ~~increased $1.0 million, or 10.6%, from $9.4 million in the prior-year period. The increase~~ was primarily due to ~~higher~~lower average debt outstanding and ~~higher~~lower interest rates on our variable rate ~~debt~~debt.

Income tax expense was $3.1 million on income before taxes of $11.1 million, or an effective tax rate of 27.9 percent. The decrease in effective tax rate for the period was primarily due to a reduction in nondeductible interest expense in the ~~current-year period.~~

~~Non-operating pension income of $1.4 million decreased $0.8 million, or 36.4% from $2.2 million~~current year, and an increase in reserves for uncertain tax positions in the ~~prior-year period. The decrease is due to lower expected rates of return on plan assets in our foreign plans.~~prior year.

For the ~~current-year period,~~prior year, income tax expense was $10.6 million on income before taxes of $10.0 million, or an effective tax rate of ~~106.0%.~~106.0 percent. The high effective tax rate for the ~~quarter is primarily~~prior-year period was due to ~~the Company~~ recording of (i) additional reserves for uncertain tax positions ~~in connection with~~related to the Brazil Tax Assessments ($($5.6 ~~million~~)million), ~~the recording of~~(ii) deferred state taxes on unremitted non-U.S. earnings ($($0.8 ~~million~~)million) and ~~the recording of other~~(iii) reserves related to various tax contingencies. The increase of ~~$5.6~~$5.6 million in the reserve related to uncertain tax positions in connection with the Brazil Tax Assessments was recorded in ~~March,~~the first quarter of 2019, ~~though~~although the increase should ~~properly~~ have been recorded in 2018 when ~~the Company~~we decided to appeal an administrative decision to the judicial level.

The lower effective tax rate in the prior-year period was due to a $5.6 million benefit resulting from the partial release of the reserve for the Brazil Tax Assessments due to the expiration of the statute of limitations for the 2011 tax year, and $2.5 million of excess tax benefits from stock-based compensation.

See "Note 11. Income Taxes ~~-Brazil~~- Brazil Tax ~~Assessments"~~Assessments" to the condensed consolidated financial statements contained in Item 1. of this report for additional details on the Brazil Tax Assessments.

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

~~For the current-year period, the Company reported~~Net income was $8.0 million, or $0.08 per share, compared with a net loss in 2019 of ~~$0.6 million compared to $10.4 million in net income in the prior-year period. Foreign currency translation reduced net income by $0.4~~$(0.6) million, or ~~3.8%, in the current-year period. Diluted loss~~$(0.01) per share, ~~was $0.01, compared to $0.09~~because of an unusually high tax rate and higher restructuring charges and integration and transaction costs in 2019. Diluted income per ~~diluted~~ share ~~in the prior-year period. The decrease in net income was primarily driven by higher income tax expense, partially offset by cost savings.~~benefited from fewer outstanding shares.

Segment Net Sales and Operating Income for the Three Months Ended March 31, ~~2019~~2020 and March 31, ~~2018~~2019


	Three Months Ended March 31, 2019									Amount of Change Compared to the Three Months Ended March 31, 2018															Three Months Ended March 31, 2020											Amount of Change Compared to the Three Months Ended March 31, 2019
	Net Sales		Segment Operating Income (A)				Segment Operating Income Margin			Net Sales				Net Sales		Segment Operating Income (A)				Segment Operating Income			Margin Points		Net Sales				Segment Operating Income (A)				Segment Operating Income Margin			Net Sales				Net Sales		Segment Operating Income (A)				Segment Operating Income			Margin Points

(in millions)						$							%			$				%												$				%		$				%
ACCO Brands North America	$	160.4				$			6.8			4.2	%		$	(5.2	)		(3.1)%		$	3.9			134.5	%		240				$			167.8			$	7.6			4.5	%		$	7.4			4.6%		$	0.8			11.8	%	30
ACCO Brands EMEA	146.5				15.9						10.9	%		(8.0		)		(5.2)%		1.8				12.8	%		180		127.5				12.0				9.4	%		(19.0		)		(13.0)%		(3.9		)		(24.5	)%		(150	)
ACCO Brands International	87.0		5.6				6.4	%		1.3				1.5%		(0.2		)		(3.4	)%		(40	)	88.8				5.9				6.6	%		1.8				2.1%		0.3				5.4	%		20
Total	$	393.9	$	28.3						$	(11.9	)				$	5.5								$	384.1			$	25.5						$	(9.8	)				$	(2.8	)

	Three Months Ended March 31, 2018																								Three Months Ended March 31, 2019
	Net Sales		Segment Operating Income (A)				Segment Operating Income Margin																		Net Sales				Segment Operating Income (A)				Segment Operating Income Margin

(in millions)
ACCO Brands North America	$	165.6			$	2.9					1.8	%																			$	160.4					$	6.8			4.2	%
ACCO Brands EMEA	154.5				14.1						9.1	%																			146.5						15.9				10.9	%
ACCO Brands International	85.7		5.8				6.8	%																		87.0					5.6				6.4	%
Total	$	405.8	$	22.8																						$	393.9				$	28.3

(A) Segment operating income excludes corporate costs. See "Part I, Item 1. Note 17. Information on Business ~~Segments,"~~Segments" for a reconciliation of total "Segment operating income" to "Income before income tax."

ACCO Brands North America

ACCO Brands North America net sales of $160.4 million decreased $5.2 million, or 3.1%, from $165.6 million in the prior-year period with foreign currency translation reducing net sales by $1.0 million, or 0.6%, in the current-year period. Comparable net sales, excluding foreign currency translation, decreased 2.5%. Net sales and comparable sales increased from higher pricing and included growth in Kensington^®, Swingline^®, Quartet^®, and Five Star^® brands. Unfavorable foreign exchange reduced net sales ~~declined primarily due to the timing of orders and some lost placements, which were partially offset by price increases.~~

~~ACCO Brands North America operating income of $6.8 million increased $3.9~~$0.2 million, or ~~134.5%, from $2.9 million in the prior-year period, and operating income margin increased to 4.2% from 1.8%.~~ 0.1 percent.

Operating income and operating margin increased ~~despite lower sales volume and inflationary increases in input costs, primarily~~ due to lower restructuring charges in the current year. The benefits of higher sales and lower SG&A from reduced incentive accruals were offset by adverse gross margin due to lower fixed cost ~~savings~~absorption, unfavorable product and ~~price increases.~~customer mix, and increased reserves for obsolete inventory.

Net sales and comparable sales declined primarily as the result of COVID-19-related customer closures in March. Unfavorable foreign exchange reduced net sales $4.3 million, or 2.9 percent.

Operating income and operating margin both declined primarily due to lower sales. In addition, gross margin also declined due to lower fixed cost absorption and the impact of the stronger U.S. dollar on purchased Asian-sourced products partially offset by cost savings, including lower incentive accruals. Foreign exchange reduced operating income $0.5 million, or 3.1 percent.

ACCO Brands ~~EMEA~~International

Net sales increased as a result of the Foroni acquisition which added $14.4 million, or 16.6 percent, partially offset by unfavorable foreign exchange of $6.1 million, or 7.0 percent. Excluding Foroni and foreign exchange, comparable net sales ~~of $146.5 million~~ decreased ~~$8.0~~$6.5 million, or ~~5.2%, from $154.5 million in the prior-year period~~7.5 percent, primarily due to ~~foreign currency translation, which reduced net sales by $13.5 million, or 8.7%, in the current-year period. Comparable net sales, excluding foreign currency translation, increased 3.5%~~slowing demand due to ~~strong growth~~COVID-19-related business closures and supply chain disruptions in ~~sales of computer products and shredders.~~China.

ACCO Brands EMEA operating income of $15.9 million increased $1.8 million, or 12.8%, from $14.1 million in the prior-year period, and operating income margin increased to 10.9% from 9.1%. Foreign currency translationAdverse foreign exchange reduced operating income ~~by $1.6~~$0.7 million, or ~~11%, in the current-year period. Underlying~~12.5 percent. Foroni contributed an immaterial operating loss. Excluding Foroni and foreign exchange, operating income ~~excluding foreign currency translation,~~ increased ~~primarily~~ due to ~~$3.1 million in~~ lower restructuring charges and ~~integration costs.~~

~~ACCO Brands International~~

~~ACCO Brands International net sales of $87.0 million increased $1.3 million, or 1.5%, from $85.7 million in the prior-year period due to $11.8 million in net sales attributable to GOBA, which was~~SG&A, including reduced incentive accruals, partially offset by ~~foreign currency translation, which reduced net~~lower sales ~~by $7.1 million, or 8.3%, in the current-year period. Comparable net sales, excluding GOBA and foreign currency translation, decreased 4.0% primarily~~ due to ~~lower net sales in Australia, which offset growth in Brazil.~~COVID-19.

ACCO Brands International operating income of $5.6 million, including $2.5 million attributable to GOBA, decreased $0.2 million, or 3.4%, from $5.8 million in the prior-year period and operating income margin decreased to 6.4% from 6.8%. Foreign

currency translation reduced operating income by $0.5 million, or 8.6%, in the current-year period. Underlying operating income, excluding GOBA and foreign currency translation, decreased due to lower comparable net sales and lower gross profit.


	March 31, 2019								December 31, 2018								March 31, 2020								December 31, 2019
(in millions)	Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names	$	469.1	$	(44.5	)	⁽¹⁾	$	424.6	$	471.7	$	(44.5	)	⁽¹⁾	$	427.2	$	454.2	$	(44.5	)	⁽¹⁾	$	409.7	$	467.3	$	(44.5	)	⁽¹⁾	$	422.8
Amortizable intangible assets:
Trade names	306.1		(73.9		)		232.2		306.0		(70.5		)		235.5		308.4		(85.8		)		222.6		316.7		(83.7		)		233.0
Customer and contractual relationships	241.0		(126.0		)		115.0		240.2		(120.5		)		119.7		232.9		(143.2		)		89.7		241.0		(142.3		)		98.7
Patents	5.4		(1.0		)		4.4		5.5		(0.9		)		4.6		5.4		(1.5		)		3.9		5.5		(1.4		)		4.1
Subtotal	552.5		(200.9		)		351.6		551.7		(191.9		)		359.8		546.7		(230.5		)		316.2		563.2		(227.4		)		335.8
Total identifiable intangibles	$	1,021.6	$	(245.4	)		$	776.2	$	1,023.4	$	(236.4	)		$	787.0	$	1,000.9	$	(275.0	)		$	725.9	$	1,030.5	$	(271.9	)		$	758.6



(in millions)	Balance at December 31, 2018			Adjustments due to ASU 2016-02			Balance at January 1, 2019
Assets:
Property, plant and equipment, net	$	263.7		$	(0.9	)	$	262.8
Right of use asset, leases	—			90.9			90.9

Liabilities and stockholders' equity:
Current portion of long-term debt	39.5			(0.1		)	39.4
Lease liabilities	—			24.1			24.1
Long-term debt, net	843.0			(0.1		)	842.9
Long-term lease liabilities	11.0			65.6			76.6
Accumulated deficit	(656.8		)	0.5			(656.3		)



	March 31, 2019
(in millions)	As Reported			Balances without adoption of ASU 2016-02			Effect of Change Higher/(Lower)
Condensed Consolidated Balance Sheet:
Assets:
Property, plant and equipment, net	$	260.3		$	261.1		$	(0.8	)
Right of use asset, leases	83.6			—			83.6

Liabilities and stockholders' equity:
Current portion of long-term debt	47.1			47.2			(0.1		)
Lease liabilities	22.8			—			22.8
Long-term debt, net	949.4			949.5			(0.1		)
Long-term lease liabilities	69.7			10.0			59.7
Accumulated deficit	(663.0		)	(663.5		)	0.5



(in millions)	At January 31, 2019
Inventory	2.8
Identifiable intangibles	3.2
Fair value of assets acquired	$	6.0



(in millions)	At July 2, 2018
Calculation of Goodwill:
Purchase price, net of working capital adjustment	$	39.1

Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities	10.2
Deferred tax liabilities	3.1
Other non-current liabilities	5.6
Fair value of liabilities assumed	$	18.9

Less fair value of assets acquired:
Cash acquired	1.9
Accounts receivable	30.0
Inventory	7.1
Property, plant and equipment	0.6
Identifiable intangibles	10.3
Deferred tax assets	1.9
Other assets	4.2
Fair value of assets acquired	$	56.0

Goodwill	$	2.0



(in millions)
2019	$	21.2
2020	23.2
2021	18.8
2022	15.3
2023	9.9
2024	7.0
Thereafter	11.9
Total minimum lease payments	107.3
Less imputed interest	14.8
Future minimum payments for leases, net of sublease rental income and imputed interest	$	92.5


(1)	The components, other than service cost, are included in the line "Non-operating pension income" in the Consolidated Statements of Operations.



(in millions)	Fair Value		Remaining Useful Life Ranges
Trade name - amortizable	$	0.8	10 Years
Customer relationships	2.4		7 Years
Total identifiable intangibles acquired	$	3.2


(1)	Accumulated amortization prior to the adoption of authoritative guidance on goodwill and other intangible assets, at which time further amortization ceased.


(2)	Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.



(in millions)	Balance at December 31, 2017		Provision		Cash Expenditures			Non-cash Items/ Currency Change			Balance at March 31, 2018
Employee termination costs	$	12.0	$	3.8	$	(2.6	)	$	0.3		$	13.5
Termination of lease agreements	0.8		0.9		(0.7		)	—			1.0
Other	0.5		—		(0.1		)	(0.1		)	0.3
Total restructuring liability	$	13.3	$	4.7	$	(3.4	)	$	0.2		$	14.8


	Fair Value of Derivative Instruments										Fair Value of Derivative Instruments
	Derivative Assets					Derivative Liabilities					Derivative Assets					Derivative Liabilities
(in millions)	Balance Sheet Location	March 31, 2019		December 31, 2018		Balance Sheet Location	March 31, 2019		December 31, 2018		Balance Sheet Location	March 31, 2020		December 31, 2019		Balance Sheet Location	March 31, 2020		December 31, 2019
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other current assets	$	1.8	$	3.3	Other current liabilities	$	0.1	$	0.1	Other current assets	$	3.7	$	0.4	Other current liabilities	$	0.4	$	0.9
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets	0.4		0.6		Other current liabilities	1.2		1.7		Other current assets	5.3		7.6		Other current liabilities	1.2		8.6
Foreign exchange contracts	Other non-current assets	7.9		12.7		Other non-current liabilities	7.9		12.7		Other non-current assets	4.0		—		Other non-current liabilities	4.0		—
Total derivatives		$	10.1	$	16.6		$	9.2	$	14.5		$	13.0	$	8.0		$	5.6	$	9.5


		The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements												The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
		Amount of Gain (Loss) Recognized in AOCI (Effective Portion)					Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)						Amount of Gain (Loss) Recognized in AOCI (Effective Portion)				Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
		Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,					Three Months Ended March 31,
(in millions)		2019		2018				2019			2018			2020		2019			2020			2019
Cash flow hedges:	Cash flow hedges:												Cash flow hedges:
Foreign exchange contracts	Foreign exchange contracts	$	0.2	$	(0.3	)	Cost of products sold	$	(1.7	)	$	1.2	Foreign exchange contracts	$	4.5	$	0.2	Cost of products sold	$	(1.2	)	$	(1.7	)


(1)	These ~~accumulated other comprehensive income~~AOCI components are included in the computation of net periodic benefit cost for pension and post-retirement plans. See "Note 6. Pension and Other Retiree Benefits" for additional details.


(1)	Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.


	Amount of Change - Three Months Ended March 31, 2019 compared to the Three Months Ended 31, 2018					Amount of Change - Three Months Ended March 31, 2020 compared to the Three Months Ended March 31, 2019
	$ Change - Net Sales					$ Change - Net Sales
		Non-GAAP					Non-GAAP
	GAAP				Comparable	GAAP				Comparable
	Net Sales		Currency		Net Sales	Net Sales		Currency		Net Sales
(in millions)	Change		Translation	Acquisition	Change	Change		Translation	Acquisition	Change
ACCO Brands North America	$(5.2)		$(1.0)	$—	$(4.2)	$7.4		$(0.2)	$—	$7.6
ACCO Brands EMEA	(8.0)		(13.5)	—	5.5	(19.0)		(4.3)	—	(14.7)
ACCO Brands International	1.3		(7.1)	11.8	(3.4)	1.8		(6.1)	14.4	(6.5)
Total	$(11.9)		$(21.6)	$11.8	$(2.1)	$(9.8)		$(10.6)	$14.4	$(13.6)

	% Change - Net Sales					% Change - Net Sales
		Non-GAAP					Non-GAAP
	GAAP				Comparable	GAAP				Comparable
	Net Sales		Currency		Net Sales	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change	Change		Translation	Acquisition	Change
ACCO Brands North America	(3.1)%		(0.6)%	—%	(2.5)%	4.6%		(0.1)%	—%	4.7%
ACCO Brands EMEA	(5.2)%		(8.7)%	—%	3.5%	(13.0)%		(2.9)%	—%	(10.1)%
ACCO Brands International	1.5%		(8.3)%	13.8%	(4.0)%	2.1%		(7.0)%	16.6%	(7.5)%
Total	(2.9)%		(5.3)%	2.9%	(0.5)%	(2.5)%		(2.7)%	3.7%	(3.5)%


	Three Months Ended						Three Months Ended						Amount of Change
(in millions)	March 31, 2019			March 31, 2018			March 31, 2020			March 31, 2019			Amount of Change
Accounts receivable	$	108.1		$	162.0		$	112.0		$	108.1		$	3.9
Inventories	(57.3		)	(43.5		)	(26.2		)	(57.3		)	31.1
Accounts payable	(79.9		)	8.8			(45.2		)	(79.9		)	34.7
Cash flow provided by net working capital	$	(29.1	)	$	127.3
Cash flow provided (used) by net working capital							$	40.6		$	(29.1	)	$	69.7



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program⁽¹⁾
January 1, 2019 to January 31, 2019	541,449	$	7.61	541,449	$	104,843,854
February 1, 2019 to February 28, 2019	173,957	9.30		173,957	103,226,863
March 1, 2019 to March 31, 2019	603,009	8.79		603,009	97,926,171
Total	1,318,415	$	8.37	1,318,415	$	97,926,171


10.1	2019 ACCO Brands Corporation Incentive Plan Nonqualified Stock Option Agreement*


31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *


31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *


32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **


32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **


101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)



REGISTRANT:

ACCO BRANDS CORPORATION

By:	/s/ Boris Elisman
Boris Elisman
Chairman, President and Chief Executive Officer (principal executive officer)

By:	/s/ Neal V. Fenwick
Neal V. Fenwick
Executive Vice President and Chief Financial Officer (principal financial officer)

By:	/s/ ~~Kathleen D. Hood~~James M. Dudek, Jr.
~~Kathleen D. Hood~~James M. Dudek, Jr.
Senior Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer)