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 13 weeks ended March ~~30, 2019~~28, 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 1-11657

TUPPERWARE BRANDS CORPORATION

(Exact name of registrant as specified in its charter)

________________________________________



	Delaware		36-4062333
	(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

14901 South Orange Blossom Trail, ~~Orlando, Florida~~			32837

	Orlando,	Florida
	(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: ~~(407)~~ (407) 826-5050

________________________________________

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, $0.01 par value	TUP	New York Stock Exchange

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. Yes x☒ No o☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). Yes x☒ 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 accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large ~~accelerated filer~~Accelerated Filer	x☒	Accelerated ~~filer~~Filer	o☐

Non-accelerated ~~filer~~Filer	o☐	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 ~~30, 2019~~24, 2020, ~~48,736,747~~49,013,959 shares of the common stock, ~~$0.01~~$0.01 par value, of the registrant were outstanding.

~~Table of Contents~~

TABLE OF CONTENTS

		Page Number
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Income ~~13 weeks ended March 30, 2019 and March 31, 2018~~	3

	Consolidated Statements of Comprehensive Income ~~13 weeks ended March 30, 2019 and March 31, 2018~~	4

	Consolidated Balance Sheets ~~March 30, 2019 and December 29, 2018~~	5

	Consolidated Statements of Shareholders' Equity ~~13 weeks ended March 30, 2019 and March 31, 2018~~	6

	Consolidated Statements of Cash Flows ~~13 weeks ended March 30, 2019 and March 31, 2018~~	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2830

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3841

Item 4.	Controls and Procedures	4246

PART II. OTHER INFORMATION

Item 2.1.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~Legal Proceedings	4347

Item 1A.	Risk Factors	47

Item 6.	Exhibits	4350

Signatures		4451


Item 1.	Financial Statements (Unaudited)

TUPPERWARE BRANDS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	13 weeks ended					13 weeks ended
(In millions, except per share amounts)	March 30, 2019			March 31, 2018		March 28, 2020			March 30, 2019
Net sales	$	487.3		$	542.6	$	375.9		$	487.3
Cost of products sold	161.2			179.0		129.7			161.2
Gross margin	326.1			363.6		246.2			326.1

Delivery, sales and administrative expense	262.7			289.2		242.9			262.7
Re-engineering and impairment charges	4.3			7.6
(Loss) gain on disposal of assets	(0.9		)	2.2
Operating income	58.2			69.0
Re-engineering charges						3.9			4.3
Loss on disposal of assets						(0.1		)	(0.9		)
Operating income (loss)						(0.7		)	58.2

Interest income	0.6			0.7		0.5			0.6
Interest expense	10.2			11.1		10.2			10.2
Other (income) expense	(3.3		)	0.2
Income before income taxes	51.9			58.4
Other income, net						(2.1		)	(3.3		)
Income (Loss) before income taxes						(8.3		)	51.9

Provision for income taxes	15.0			22.7
Net income	$	36.9		$	35.7
Provision (Benefit) for income taxes						(0.5		)	15.0
Net income (loss)						$	(7.8	)	$	36.9

Earnings per share:
Earnings (Loss) per share:
Basic	$	0.76		$	0.70	$	(0.16	)	$	0.76
Diluted	0.76			0.70		(0.16		)	0.76

Weighted-average shares outstanding:
Basic	48.7			51.1		48.9			48.7
Diluted	48.8			51.3		48.9			48.8

See accompanying Notes to Consolidated Financial Statements (Unaudited).

TUPPERWARE BRANDS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

13 weeks ended
(In millions) March 30,
2019 March 31,
2018
Net income $ 36.9
$ 35.7
Other comprehensive income:
Foreign currency translation adjustments 20.7
10.1
Deferred loss on cash flow hedges, net of tax benefit of $0.6 and $0.3, respectively (1.8 ) (0.7 )
Pension and other post-retirement benefits (costs), net of tax (provision) benefit of ($0.1) and $0.6, respectively 0.1
(1.7 )
Other comprehensive income 19.0
7.7
Total comprehensive income $ 55.9
$ 43.4



	13 weeks ended
(In millions)	March 28, 2020			March 30, 2019
Net income (loss)	$	(7.8	)	$	36.9
Other comprehensive (loss) income:
Foreign currency translation adjustments	(93.6		)	20.7
Deferred gain (loss) on cash flow hedges, net of tax benefit (provision) of $0 and $0.6, respectively	10.1			(1.8		)
Pension and other post-retirement benefit, net of tax provision of $0.8 and $0.1, respectively	2.0			0.1
Other comprehensive income (loss)	(81.5		)	19.0
Total comprehensive income (loss)	$	(89.3	)	$	55.9

See accompanying Notes to Consolidated Financial Statements (Unaudited).

TUPPERWARE BRANDS CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except share amounts)	March 30, 2019			December 29, 2018			March 28, 2020			December 28, 2019
ASSETS
Cash and cash equivalents	$	146.8		$	149.0		$	174.5		$	123.2
Accounts receivable, less allowances of $49.5 and $45.3, respectively	167.0			144.7
Accounts receivable, less allowances of $61.3 and $63.6, respectively							97.5			110.7
Inventories	269.0			257.7			226.0			245.2
Non-trade amounts receivable, net	51.8			49.9			118.9			39.1
Prepaid expenses and other current assets	21.0			19.3			20.7			20.3
Total current assets	655.6			620.6			637.6			538.5
Deferred income tax benefits, net	226.7			217.0			169.2			186.1
Property, plant and equipment, net	277.9			276.0			241.6			267.5
Long-term receivables, less allowances of $16.8 and $16.0, respectively	17.6			18.7
Operating lease assets							80.4			84.1
Long-term receivables, less allowances of $10.3 and $13.9, respectively							13.1			15.0
Trademarks and tradenames, net	52.3			52.9			21.5			24.6
Goodwill	77.5			76.1			53.6			59.5
Operating lease assets	82.0			—
Other assets, net	49.2			47.5			78.2			87.1
Total assets	$	1,438.8		$	1,308.8		$	1,295.2		$	1,262.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	81.5		$	129.2		$	80.4		$	125.4
Short-term borrowings and current portion of long-term debt and finance lease obligations	367.8			285.5			389.7			273.2
Accrued liabilities	347.6			344.4			359.8			290.3
Total current liabilities	796.9			759.1			829.9			688.9
Long-term debt and finance lease obligations	603.0			603.4			601.8			602.2
Operating lease liabilities	52.7			—			53.7			56.0
Other liabilities	170.2			181.5			173.8			192.3
Shareholders' deficit:
Preferred stock, $0.01 par value, 200,000,000 shares authorized; none issued	—			—			—			—
Common stock, $0.01 par value, 600,000,000 shares authorized; 63,607,090 shares issued	0.6			0.6			0.6			0.6
Paid-in capital	216.5			219.3			216.9			215.0
Retained earnings	1,121.8			1,086.8			1,054.7			1,067.3
Treasury stock, 14,872,114 and 14,940,286 shares, respectively, at cost	(934.8		)	(939.8		)
Treasury stock, 14,597,007 and 14,678,742 shares, respectively, at cost							(916.4		)	(921.6		)
Accumulated other comprehensive loss	(588.1		)	(602.1		)	(719.8		)	(638.3		)
Total shareholders' deficit	(184.0		)	(235.2		)	(364.0		)	(277.0		)
Total liabilities and shareholders' deficit	$	1,438.8		$	1,308.8		$	1,295.2		$	1,262.4

See accompanying Notes to Consolidated Financial Statements (Unaudited).

~~Tupperware Brands Corporation~~TUPPERWARE BRANDS CORPORATION

~~Consolidated Statements of Shareholders' Equity~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

Common Stock Treasury Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders' Equity
(Dollars in millions) Shares Dollars Shares Dollars
December 30, 2017 63.6 $ 0.6
12.6 $ (851.5 ) $ 217.8
$ 1,043.1
$ (529.4 ) $ (119.4 )
Net income 35.7
35.7
Other Comprehensive income 7.7
7.7
Cash dividends declared ($0.68 per share) (34.9 ) (34.9 )
Stock and options issued for incentive plans (0.1 ) 4.4
(2.8 ) 0.9
2.5
March 31, 2018 63.6 $ 0.6
12.5 $ (847.1 ) $ 215.0
$ 1,044.8
$ (521.7 ) $ (108.4 )



	Common Stock			Treasury Stock					Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders' Equity (Deficit)
(In millions, except per share amounts)	Shares	Dollars		Shares		Dollars			Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders' Equity (Deficit)
December 28, 2019	63.6	$	0.6	14.7		$	(921.6	)	$	215.0	$	1,067.3		$	(638.3	)	$	(277.0	)
Net loss											(7.8		)				(7.8		)
Other comprehensive loss														(81.5		)	(81.5		)
Stock and options issued for incentive plans				(0.1	)	5.2			1.9		(4.8		)				2.3
March 28, 2020	63.6	$	0.6	14.6		$	(916.4	)	$	216.9	$	1,054.7		$	(719.8	)	$	(364.0	)


	Common Stock			Treasury Stock					Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Loss			Total Shareholders' Equity			Common Stock					Treasury Stock					Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders' Equity (Deficit)
(in millions, except per share amounts)	Shares	Dollars		Shares		Dollars
(In millions, except per share amounts)																							Shares		Dollars			Shares		Dollars			Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders' Equity (Deficit)
December 29, 2018	63.6	$	0.6	15.0		$	(939.8	)				$				219.3							$	1,086.8			$	(602.1	)	$	(235.2	)													63.6	$	0.6	15.0	$	(939.8	)
Net income													36.9							36.9																36.9						36.9
Cumulative effect of change in accounting principles													12.1				(5.0		)	7.1																12.1			(5.0		)	7.1
Other Comprehensive income																	19.0			19.0
Other comprehensive income																																							19.0			19.0
Cash dividends declared ($0.27 per share)													(12.9		)					(12.9		)														(12.9		)				(12.9		)
Stock and options issued for incentive plans				(0.1	)	5.0			(2.8		)		(1.1		)					1.1								(0.1	)	5.0			(2.8		)	(1.1		)				1.1
March 30, 2019	63.6	$	0.6	14.9		$	(934.8	)	$	216.5			$	1,121.8			$	(588.1	)	$	(184.0	)	63.6		$	0.6		14.9		$	(934.8	)	$	216.5		$	1,121.8		$	(588.1	)	$	(184.0	)

See accompanying Notes to Consolidated Financial Statements (Unaudited).

TUPPERWARE BRANDS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	13 weeks ended
(In millions)	March 28, 2020			March 30, 2019
Operating Activities:
Net income (loss)	$	(7.8	)	$	36.9
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	11.7			14.1
Unrealized foreign exchange loss	0.1			—
Equity compensation	2.2			1.9
Amortization of deferred debt costs	0.4			0.2
Net loss on disposal of assets, including insurance proceeds	—			0.8
Provision for bad debts	7.0			5.0
Write-down of inventories	2.9			2.7
Net change in deferred income taxes	(14.3		)	(4.5		)
Changes in assets and liabilities:
Accounts and notes receivable	(6.5		)	(25.0		)
Inventories	(10.5		)	(11.5		)
Non-trade amounts receivable	(3.2		)	(11.5		)
Prepaid expenses	(1.2		)	(0.5		)
Other assets	(1.2		)	(0.1		)
Accounts payable and accrued liabilities	(19.2		)	(32.5		)
Income taxes payable	(0.3		)	(14.5		)
Other liabilities	(4.9		)	(2.5		)
Net cash impact from hedging activity	(1.9		)	0.8
Other	(0.3		)	0.1
Net cash used in operating activities	(47.0		)	(40.1		)
Investing Activities:
Capital expenditures	(8.2		)	(12.9		)
Proceeds from disposal of property, plant and equipment	0.5			0.6
Net cash used in investing activities	(7.7		)	(12.3		)
Financing Activities:
Dividend payments to shareholders	—			(33.9		)
Repurchase of common stock	—			(0.7		)
Repayment of finance lease obligations	(0.3		)	(0.3		)
Net increase in short-term debt	121.0			84.1
Debt issuance costs	(1.7		)	(1.3		)
Net cash provided by financing activities	119.0			47.9
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(12.4		)	3.1
Net change in cash, cash equivalents and restricted cash	51.9			(1.4		)
Cash, cash equivalents and restricted cash at beginning of year	126.1			151.9
Cash, cash equivalents and restricted cash at end of period	$	178.0		$	150.5

13 weeks ended
(In millions) March 30,
2019 March 31,
2018
Operating Activities:
Net income $ 36.9
$ 35.7
Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 14.1
15.5
Equity compensation 1.9
3.3
Amortization of deferred debt costs 0.2
0.2
Net loss (gain) on disposal of assets 0.8
(2.2 )
Provision for bad debts 5.0
4.3
Write-down of inventories 2.7
2.3
Net change in deferred income taxes (4.5 ) 16.4
Changes in assets and liabilities:

Accounts and notes receivable (25.0 ) (24.1 )
Inventories (11.5 ) (21.0 )
Non-trade amounts receivable (11.5 ) (4.8 )
Prepaid expenses (0.5 ) (3.7 )
Other assets (0.1 ) (0.4 )
Accounts payable and accrued liabilities (32.5 ) (22.0 )
Income taxes payable (14.5 ) (42.5 )
Other liabilities (2.5 ) (3.4 )
Net cash impact from hedging activity 0.8
5.4
Other 0.1
0.2
Net cash used in operating activities $ (40.1 ) $ (40.8 )
Investing Activities:

Capital expenditures (12.9 ) (15.2 )
Proceeds from disposal of property, plant and equipment 0.6
5.9
Net cash used in investing activities (12.3 ) (9.3 )
Financing Activities:

Dividend payments to shareholders (33.9 ) (35.4 )
Proceeds from exercise of stock options —
0.2
Repurchase of common stock (0.7 ) (1.0 )
Repayment of finance lease obligations (0.3 ) (0.5 )
Net change in short-term debt 84.1
97.2
Debt issuance costs (1.3 ) —
Net cash provided by financing activities 47.9
60.5
Effect of exchange rate changes on cash, cash equivalents and restricted cash 3.1
4.1
Net change in cash, cash equivalents and restricted cash (1.4 ) 14.5
Cash, cash equivalents and restricted cash at beginning of year 151.9
147.2
Cash, cash equivalents and restricted cash at end of period $ 150.5
$ 161.7

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 1:	Summary of Significant Accounting Policies

Basis of Presentation: The ~~condensed~~ consolidated financial statements include the accounts of Tupperware Brands Corporation and its subsidiaries, collectively “Tupperware” or the “Company”, with all intercompany transactions and balances having been eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with the audited 2018 financial statements included in the Company's Annual Report on Form 10-K for the year ended December 29, 2018.

~~These condensed~~ consolidated financial statements are unaudited and have been prepared following the rules and regulations of the United States Securities and Exchange Commission and, in the Company's opinion, reflect all adjustments, including normal recurring items that are necessary for a fair statement of the results for the interim periods.

Certain information and note disclosures normally included in the balance sheet, statements of income, comprehensive income, statements of shareholder’s equity and cash flows prepared in conformity with accounting principles generally accepted in the United States of America for complete financial statements have been condensed or omitted as permitted by such rules and regulations. As such, these consolidated financial statements and related notes should be read in conjunction with the audited 2019 consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 28, 2019. Operating results of any interim period presented herein are not necessarily indicative of the results that may be expected for a full fiscal year.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates.

~~Hedging:~~ ~~On December 30, 2018,~~Liquidity and Impact of COVID-19: The global spread of the novel coronavirus (COVID-19), which has been declared by the World Health Organization to be a “pandemic,” has spread to many countries and is impacting worldwide economic activity. Many governments have implemented policies intended to stop or slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of schools and non-essential businesses, and these measures may remain in place for a significant period of time. During the first quarter of 2020, the impact of COVID-19 on the Company’s business was most pronounced in Europe and Asia Pacific where the Company ~~adopted new guidance~~experienced partial or country-wide lockdowns of operations in various markets, including China, France, Italy, and the Philippines. The first quarter impact of COVID-19 largely affected March revenues, financial results and liquidity, specifically in the second half of the month. While the duration and severity of this pandemic is uncertain, the Company currently expects that its results of operations in the second quarter of 2020 will have the most significant impact of the effects of COVID-19, and that subsequent periods will also be negatively impacted. The extent to which the COVID-19 pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

A top priority for the Company as it navigates through the global COVID-19 pandemic is the safety of its employees and their families, sales force and consumers, and to mitigate the impact on ~~hedge accounting, which required a cumulative-effect adjustment~~its operations and financial results. The Company will continue to proactively respond to the ~~opening balance~~situation and may take further actions that alter the Company’s business operations as may be required by governmental authorities, or that the Company determines are in the best interests of ~~retained earnings~~its employees, sales force and ~~accumulated other comprehensive income of $5.0 million, net of taxes. As part~~consumers. In order to ensure safety and protect the health of the ~~adoption,~~employees, and to comply with applicable government directives, the Company ~~elected~~has modified its business practices to ~~include forward points in the assessment of hedge effectiveness for net equity~~allow its employees to work remotely from home wherever possible, incorporate virtual meetings and cash flow hedges and exclude forward points in the assessment for fair value hedges. In addition, the Company now records the entire change in fair value of hedging instruments in the same income statement line item as the earnings effect of the hedged item. Prior to adoption, the impact from forward points was recorded as interest expense. Refer to Note 11 to the Consolidated Financial Statements for further discussion on impact from new hedge accounting guidance.restrict all employee travel.

~~Leases:~~ On December 30, 2018, the Company adopted new guidance on lease accounting using the modified retrospective method, which required a cumulative-effect adjustment to the opening balance of retained earnings of $7.1 million, net of taxes. Prior periods have not been restated. The standard did not materially impact consolidated net income or liquidity, and did not have an impact on debt-covenant compliance under the Company's debt agreements. The new guidance was applied to all operating and capital leases at the date of initial application. Leases historically referred to as capital leases are now referred to as finance leases under the new guidance.

The Company elected the package of practical expedients permitted under the transition guidance, and as a basis for its lease policies, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company also elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee, and made an accounting policy election to not account for leases with an initial term of 12 months or less on the balance sheet. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company recognizes payments on these leases on a straight-line basis over the lease term.

Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $82.0 million and $83.3 million, respectively, as of March 30, 2019 related to the Company's operating leases. The standard did not materially impact the Company's consolidated net earnings or cash flows. Refer to Note 8 to the Consolidated Financial Statements for further information.

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Foreign Currency Translation:~~ ~~Inflation in Argentina and Venezuela has been at a high level the past several years.~~ The Company ~~uses~~has taken, and plans to continue to take, certain measures, to enhance its liquidity position and provide additional financial flexibility, including in response to the impact of COVID-19, including reductions in discretionary spending, revisiting investment strategies, the potential sale of land, and reducing payroll costs, including through organizational redesign, employee furloughs and permanent reductions in employee headcount. As of March 28, 2020, the Company is in compliance with its financial covenants under its Credit Agreement. The Company currently forecasts that it will be in compliance with its financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the measures noted above. If the impact of COVID-19 is more severe than currently forecasted this may impact the Company’s compliance with its financial covenantswhich could have a ~~blended index~~material adverse effect on the Company. See Note 10 to the Consolidated Financial Statements for further discussion of the Consumer Price Index and National Consumer Price Index for determining highly inflationary status in these countries. For Argentina, this blended index reached cumulative three-year inflation in excessimpact of ~~100 percent in 2018 and as such,~~an Event of Default.

Additionally, during the beginning of the second quarter of 2020, on March 30, 2020, the Company ~~transitioned to highly inflationary status~~drew $225.0 million of revolving loans under its Credit Agreement, $175.0 million of which was drawn as ~~of July 1, 2018. Venezuela was determined to be highly inflationary starting in 2010. Gains and losses~~a proactive measure given the uncertain environment resulting from the ~~translation of the financial statements of subsidiaries operating in highly inflationary economies are recorded in earnings. As of March 30, 2019,~~COVID-19 pandemic and to provide the Company ~~had approximately $1.7 million~~with further financial flexibility. See Note 10 to the Consolidated Financial Statements for further discussion of net monetary assets in Argentina, which are of a nature that will generate income or expense for the change in value associated with exchange rate fluctuations versus the U.S. dollar. There were no material monetary assets or liabilities in Venezuela as of March 30, 2019.our debt and borrowing capacity.


Note 2:	Shipping and Handling Costs

The cost of products sold line item includes costs related to the purchase and manufacture of goods sold by the Company. Among these costs are inbound freight charges, duties, purchasing and receiving costs, inspection costs, depreciation expense, internal transfer costs and warehousing costs of raw material, work in process and packing materials. The warehousing and distribution costs of finished goods are included in delivery, sales and administrative expenses ("DS&A"). Distribution costs are comprised of outbound freight and associated labor costs. Fees billed to customers associated with the distribution of products are classified as revenue. The distribution costs included in DS&A were ~~$32.8~~$29.1 million and ~~$35.5~~$32.8 million for the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.


Note 3:	Promotional Costs

The Company frequently makes promotional offers to members of its independent sales force to encourage them to fulfill specific goals or targets for other activities, ancillary to the Company's business, but considered separate and distinct services from sales, which are measured by defined group/team sales levels, party attendance, addition of new sales force members or other business-critical functions. The awards offered are in the form of product awards, special prizes or trips.

The Company accrues for the costs of these awards during the period over which the sales force qualifies for the award and reports these costs primarily as a component of DS&A expense. These accruals require estimates as to the cost of the awards, based upon estimates of achievement and actual cost to be incurred. During the qualification period, actual results are monitored, and changes to the original estimates are made when known. Promotional and other sales force compensation expenses included in DS&A expense totaled ~~$78.6~~$58.5 million and ~~$88.4~~$78.6 million for the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.


Note 4:	Inventories



(In millions)	March 28, 2020		December 28, 2019
Finished goods	$	178.4	$	197.1
Work in process	22.3		22.4
Raw materials and supplies	25.3		25.7
Total inventories	$	226.0	$	245.2

(In millions) March 30,
2019 December 29,
2018
Finished goods $ 208.7
$ 203.9
Work in process 28.6
25.0
Raw materials and supplies 31.7
28.8
Total inventories $ 269.0
$ 257.7


Note 5:	Net Income (Loss) Per Common Share

Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of potential common stock on both net income and the weighted average number of shares outstanding.

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The elements of the earnings per share computations were as follows:



	13 weeks ended
(In millions, except per share amounts)	March 28, 2020			March 30, 2019
Net income (loss)	$	(7.8	)	$	36.9
Weighted-average shares of common stock outstanding	48.9			48.7
Common equivalent shares:
Assumed exercise of dilutive options, restricted shares, restricted stock units and performance share units	—			0.1
Weighted-average common and common equivalent shares outstanding	48.9			48.8
Basic earnings per share	$	(0.16	)	$	0.76
Diluted earnings per share	$	(0.16	)	$	0.76
Shares excluded from the determination of potential common stock because inclusion would have been anti-dilutive	4.2			3.9

13 weeks ended
(In millions, except per share amounts) March 30,
2019 March 31,
2018
Net income $ 36.9
$ 35.7
Weighted average shares of common stock outstanding 48.7
51.1
Common equivalent shares:
Assumed exercise of dilutive options, restricted shares, restricted stock units and performance share units 0.1
0.2
Weighted average common and common equivalent shares outstanding 48.8
51.3
Basic earnings per share $ 0.76
$ 0.70
Diluted earnings per share $ 0.76
$ 0.70
Shares excluded from the determination of potential common stock because inclusion would have been anti-dilutive 3.9
2.0


Note 6:	Accumulated Other Comprehensive Loss



(In millions, net of tax)	Foreign Currency Items			Cash Flow Hedges			Pension and Other Post-retirement Items			Total
Balance at December 28, 2019	$	(600.2	)	$	(2.4	)	$	(35.7	)	$	(638.3	)
Other comprehensive income (loss) before reclassifications	(93.6		)	10.5			1.7			(81.4		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			(0.4		)	0.3			(0.1		)
Net current-period other comprehensive income (loss)	(93.6		)	10.1			2.0			(81.5		)
Balance at March 28, 2020	$	(693.8	)	$	7.7		$	(33.7	)	$	(719.8	)



(In millions, net of tax)	Foreign Currency Items			Cash Flow Hedges			Pension and Other Post-retirement Items			Total
Balance at December 29, 2018	$	(579.1	)	$	1.7		$	(24.7	)	$	(602.1	)
Cumulative effect of change in accounting principle	(3.8		)	(1.2		)	—			(5.0		)
Other comprehensive income (loss) before reclassifications	20.7			(2.1		)	0.2			18.8
Amounts reclassified from accumulated other comprehensive loss	—			0.3			(0.1		)	0.2
Net current-period other comprehensive income (loss)	20.7			(1.8		)	0.1			19.0
Balance at March 30, 2019	$	(562.2	)	$	(1.3	)	$	(24.6	)	$	(588.1	)

(In millions, net of tax) Foreign Currency Items Cash Flow Hedges Pension and Other Post-retirement Items Total
Balance at December 30, 2017 $ (501.9 ) $ 1.6
$ (29.1 ) $ (529.4 )
Other comprehensive income (loss) before reclassifications 10.1
(0.8 ) (1.6 ) 7.7
Amounts reclassified from accumulated other comprehensive loss —
0.1
(0.1 ) —
Net current-period other comprehensive income (loss) 10.1
(0.7 ) (1.7 ) 7.7
Balance at March 31, 2018 $ (491.8 ) $ 0.9
$ (30.8 ) $ (521.7 )

Pretax amounts reclassified from accumulated other comprehensive loss that related to cash flow hedges consisted of net ~~loss~~gain of $0.5 million and a ~~gain~~loss of ~~$0.1~~$0.5 million in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively. Associated with these items ~~were~~was a tax ~~benefit~~provision of ~~$0.2~~$0.1 million and a ~~provision~~benefit of $0.2 million, respectively. See Note 11 for further discussion of derivatives.

~~Table of Contents~~

~~TUPPERWARE BRANDS CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

InFor the first quarters of ~~2019~~2020 and ~~2018,~~2019, pretax amounts reclassified from accumulated other comprehensive loss related to pension and other post-retirement items consisted of prior service benefits of $0.1 million and $0.3 million, and ~~$0.4 million, respectively, and~~ in ~~2018,~~2020, an actuarial loss of $0.5 million. Associated with these items was a tax benefit of $0.1 million and a ~~pension settlement cost of $0.1 million. Associated with these items were tax provisions~~provision of $0.2 million in 2020 and ~~$0.1 million in~~ 2019, ~~and 2018,~~ respectively. See Note 13 to the Consolidated Financial Statements for further discussion of pension and other post-retirement benefit costs.


~~Note 7:~~	~~Re-engineering and Impairment Costs~~

~~The Company recorded $4.3 million and $7.6 million in re-engineering charges during the first quarters of 2019 and 2018, respectively.~~

In 2019 and 2018, the re-engineering and impairment charges incurred were primarily related to severance costs and restructuring actions taken in connection with the Company's plans to rationalize its supply chain and to adjust the cost base of several marketing units. The Company incurred $3.1 million and $7.6 million in the first quarters of 2019 and 2018, respectively, related to the revitalization program announced in July 2017.

In January 2019, the Company announced an acceleration of investment in its Global Growth Strategy initiatives through the commencement of a transformation program running through 2022. In the first quarter of 2019, the Company incurred $1.2 million in transformation program costs in Europe, primarily related to outside consulting services and project team expenses.

~~The re-engineering charges related to the 2017 revitalization program by segment during the first quarter of 2019 and 2018 were as follows:~~

13 weeks ended
(In millions) March 30, 2019 March 31, 2018
Europe $ 1.3
$ 5.7
Asia Pacific 0.9
0.8
North America 0.5
0.7
South America 0.4
0.4
Total re-engineering charges $ 3.1
$ 7.6

~~The balances included in accrued liabilities related to re-engineering and impairment charges for the 2017 revitalization program as of March 30, 2019 and December 29, 2018 were as follows:~~

(In millions) March 30,
2019 December 29,
2018
Beginning of the year balance $ 23.3
$ 45.4
Provision 3.1
15.9
Non-cash charges —
(2.0 )
Adjustments —
5.0
Cash expenditures:
Severance (6.5 ) (27.1 )
Other (1.8 ) (12.8 )
Currency translation adjustment (0.1 ) (1.1 )
End of period balance $ 18.0
$ 23.3

~~The balance included in accrued liabilities related to re-engineering and impairment charges for the 2019 transformation program, as of March 30, 2019, was $0.8 million.~~

1110

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 7:	Re-engineering Costs

The Company recorded $3.9 million and $4.3 million in re-engineering charges during the first quarters of 2020 and 2019, respectively. These re-engineering costs were mainly related to the transformation program, which was announced in January 2019 and re-assessed in December 2019 (collectively the "Turnaround Plan") and the July 2017 revitalization program ("2017 program"). The Company continually reviews its business models and operating methods for opportunities to increase efficiencies and/or align costs with business performance.

In relation to the turnaround plan, the Company incurred $3.3 million and $1.2 million of charges in the first quarters of 2020 and 2019, respectively, primarily related to severance costs, outside consulting services, project team expenses, and distributor support.

The re-engineering charges related to the turnaround plan by segment during the first quarters of 2020 and 2019 were as follows:



	13 weeks ended
(In millions)	March 28, 2020		March 30, 2019
Europe	$	—	$	1.2
Asia Pacific	0.4		—
South America	0.2		—
Corporate	2.7		—
Total re-engineering charges	$	3.3	$	1.2

The balances included in accrued liabilities related to re-engineering charges for the turnaround plan as of March 28, 2020 and December 28, 2019 were as follows:



(In millions)	March 28, 2020			December 28, 2019
Beginning of the year balance	$	12.9		$	—
Provision	3.3			26.4
Adjustments and other charges	1.7			(1.7		)
Cash expenditures:
Severance	(2.9		)	(0.9		)
Other	(1.0		)	(10.9		)
Currency translation adjustment	0.2			—
End of period balance	$	14.2		$	12.9

In relation to the 2017 program, the Company incurred $0.6 million and $3.1 million of charges in the first quarters of 2020 and 2019, respectively.

The re-engineering charges related to the 2017 program by segment during the first quarters of 2020 and 2019 were as follows:

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	13 weeks ended
(In millions)	March 28, 2020		March 30, 2019
Europe	$	0.3	$	1.3
Asia Pacific	—		0.9
North America	0.3		0.5
South America	—		0.4
Total re-engineering charges	$	0.6	$	3.1

The balances included in accrued liabilities related to re-engineering charges for the 2017 program as of March 28, 2020 and December 28, 2019 were as follows:



(In millions)	March 28, 2020			December 28, 2019
Beginning of the year balance	$	3.1		$	23.3
Provision	0.6			4.5
Adjustments and other charges	(0.9		)	(0.3		)
Cash expenditures:
Severance	(1.3		)	(20.3		)
Other	(0.4		)	(3.6		)
Currency translation adjustment	—			(0.5		)
End of period balance	$	1.1		$	3.1

The accrual balance as of March 28, 2020, related primarily to payments to be made during 2020.


Note 8:	Leases

The Company leases certain equipment, vehicles, office space, and manufacturing and distribution facilities, and recognizes the associated lease expense on a straight-line basis over the lease term. ~~Leases with an initial term of 12 months or less are not recorded on the balance sheet.~~

Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 5five years, or more. The exercise of lease renewal options is at the Company's discretion and renewal options that are reasonably certain to be exercised have been included in the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain lease agreements held by the Company include rental payments adjusted periodically for inflation. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense in the first ~~quarter~~quarters of 2020 and 2019 were as follows:


	13 weeks ended		13 weeks ended
(In millions)	March 30, 2019		March 28, 2020		March 30, 2019
Operating lease cost ^{(a) (c)}	$	13.0	$	11.8	$	13.0
Finance lease cost
Amortization of right-of-use assets ^(a)	0.2		0.2		0.2
Interest on lease liabilities ^(b)	0.1		—		0.1
Total finance lease cost	$	0.3	$	0.2	$	0.3

____________________


^(a)	Included in DS&A and cost of products sold.


^(b)	Included in interest expense.

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


^(c)	Includes immaterial amounts related to short-term rent expense and variable rent expense.

Supplemental cash flow information related to leases is as follows:



	13 weeks ended
(In millions)	March 28, 2020			March 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(11.7	)	$	(12.6	)
Operating cash flows from finance leases	—			(0.1		)
Financing cash flows from finance leases	(0.3		)	(0.3		)
Leased assets obtained in exchange for new operating lease liabilities	$	7.5		$	7.7

13 weeks ended
(In millions) March 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ (12.6 )
Operating cash flows from finance leases (0.1 )
Financing cash flows from finance leases (0.3 )
Leased assets obtained in exchange for new operating lease liabilities $ 7.7

~~Table of Contents~~

~~TUPPERWARE BRANDS CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Supplemental balance sheet information related to leases is as follows:


(In millions, except lease term and discount rate)	March 30, 2019			March 28, 2020			December 28, 2019
Operating Leases
Operating lease right-of-use assets	$	82.0		$	80.4		$	84.1

Accrued liabilities	$	30.6		$	27.8		$	29.2
Operating lease liabilities	52.7			53.7			56.0
Total Operating lease liabilities	$	83.3		$	81.5		$	85.2

Finance Leases
Property, plant and equipment, at cost	$	18.2		$	17.5		$	17.9
Accumulated amortization	9.8			(10.3		)	(10.3		)
Property, plant and equipment, net	$	8.4		$	7.2		$	7.6

Current portion of finance lease obligations	$	1.6		$	1.3		$	1.3
Long-term finance lease obligations	3.4			2.0			2.3
Total Finance lease liabilities	$	5.0		$	3.3		$	3.6

Weighted Average Remaining Lease Term
Operating Leases	4.6 years			4.3 years			4.5 years
Finance Leases	3.2 years			2.4 years			2.8 years
Weighted Average Discount Rate ^(a)
Operating Leases	5.4		%	4.9		%	5.2		%
Finance Leases	4.8		%	5.1		%	5.1		%

_________________________

^(a)Calculated using Company's incremental borrowing rate.

~~Maturities of lease liabilities as of March 30, 2019 were as follows:~~

(In millions) Operating Leases Finance Leases
2019 $ 27.1
$ 1.5
2020 22.6
1.4
2021 14.5
1.4
2022 7.8
1.1
2023 5.0
—
Thereafter 15.9
—
Total lease payments $ 92.9
$ 5.4
Less imputed interest 9.6
0.4
Total $ 83.3
$ 5.0

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Maturities of lease liabilities as of March 28, 2020 and December ~~29, 2018~~28, 2019 were as follows:

(In millions) Operating Leases Finance Leases
2019 $ 28.3
$ 1.6
2020 19.2
1.3
2021 15.8
1.4
2022 8.3
1.0
2023 6.3
—
Thereafter 25.3
—
Total $ 103.2
$ 5.3

~~Rental expense for operating leases totaled $32.2 million and gross payments of financing leases totaled $2.5 million in fiscal year 2018.~~



	March 28, 2020				December 28, 2019
(In millions)	Operating Leases		Finance Leases		Operating Leases		Finance Leases
2020	$	24.5	$	1.1	$	32.8	$	1.4
2021	24.0		1.4		22.6		1.4
2022	14.0		1.0		13.0		1.0
2023	8.6		—		7.5		—
2024	5.8		—		5.6		—
Thereafter	12.8		—		13.0		—
Total lease payments	$	89.7	$	3.5	$	94.5	$	3.8
Less imputed interest	8.2		0.2		9.3		0.2
Total	$	81.5	$	3.3	$	85.2	$	3.6

As of March ~~30, 2019,~~28, 2020, the Company had an immaterial amount of operating ~~and finance~~ leases that had not yet commenced.


Note 9:	Segment Information

The Company manufactures and distributes a broad portfolio of products, primarily through independent direct sales ~~consultants.~~force members. Certain operating segments have been aggregated based upon ~~geography,~~ consistency of economic substance, geography, products, production process, class of customers and distribution method.

The Company's reportable segments primarily sell design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware® brand. Europe also includes Avroy Shlain® in South Africa and Nutrimetics® in France, which sell beauty and personal care products. Some units in Asia Pacific also sell beauty and personal care products under the NaturCare®, Nutrimetics® and Fuller® brands. North America also includes the Fuller Mexico beauty and personal care products business and sells products under the Fuller Cosmetics® brand in that unit and in Central America. South America also sells beauty products under the Fuller®, Nutrimetics® and Nuvo® brands.

Worldwide sales of beauty and personal care products totaled ~~$66.1~~$53.6 million and ~~$72.8~~$66.1 million in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


	13 weeks ended						13 weeks ended
(In millions)	March 30, 2019			March 31, 2018			March 28, 2020			March 30, 2019
Net sales:
Europe	$	138.6		$	143.9		$	105.7		$	138.6
Asia Pacific	156.1			172.2			120.4			156.1
North America	119.6			135.0			101.3			119.6
South America	73.0			91.5			48.5			73.0
Total net sales	$	487.3		$	542.6		$	375.9		$	487.3
Segment profit:
Europe	$	17.7		$	12.4		$	2.5		$	17.7
Asia Pacific	30.0			37.9			17.3			30.0
North America	17.4			19.0			6.5			17.4
South America	8.9			17.3			3.0			8.9
Total segment profit	$	74.0		$	86.6		$	29.3		$	74.0

Unallocated expenses	(7.3		)	(12.4		)	(23.9		)	(7.3		)
Re-engineering and impairment charges ^(a)	(4.3		)	(7.6		)
(Loss) gain on disposal of assets	(0.9		)	2.2
Re-engineering charges^(a)							(3.9		)	(4.3		)
Loss on disposal of assets							(0.1		)	(0.9		)
Interest expense, net	(9.6		)	(10.4		)	(9.7		)	(9.6		)
Income before taxes	$	51.9		$	58.4
Income (Loss) before taxes							$	(8.3	)	$	51.9


(In millions)	March 30, 2019		December 29, 2018		March 28, 2020		December 28, 2019
Identifiable assets:
Europe	$	335.2	$	291.0	$	264.7	$	269.7
Asia Pacific	312.2		281.2		276.7		300.3
North America	294.1		250.9		198.5		235.9
South America	139.5		125.0		105.9		125.2
Corporate	357.8		360.7		449.4		331.3
Total identifiable assets	$	1,438.8	$	1,308.8	$	1,295.2	$	1,262.4

_________________________


^(a)	See Note 7 to the Consolidated Financial Statements for a discussion of re-engineering ~~and impairment~~ charges.


Note 10:	Debt

Debt Obligations



(In millions)	March 28, 2020		December 28, 2019
Fixed rate senior notes due 2021	$	599.8	$	599.8
Revolving Credit Agreement^(a)	388.1		272.0
Finance lease	3.3		3.6
Other	0.3		—
Total debt obligations	$	991.5	$	875.4

(In millions) March 30,
2019 December 29, 2018
Fixed rate senior notes due 2021 $ 599.6
$ 599.7
Five year Revolving Credit Agreement ^(a)
366.2
283.9
Belgium facility finance lease 5.0
5.3
Total debt obligations $ 970.8
$ 888.9

____________________


^(a)	$~~204.5~~245.1 million and ~~$186.8~~$174.9 million denominated in ~~euros~~Euro as of March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, respectively.

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Credit Agreement

On March 29, 2019, the Company and its wholly owned subsidiaries Tupperware Nederland B.V., Administradora Dart, S. de R.L. de C.V., and Tupperware Brands Asia Pacific Pte. Ltd. (the “Subsidiary Borrowers”), amended and restated its multicurrency Credit Agreement, ~~(the “Credit Agreement”~~amended by Amendment No. 1 dated August 28, 2019 (so as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A. as administrative agent (the “Administrative Agent”), swingline lender, joint lead arranger and joint bookrunner, and Credit Agricole Corporate and Investment Bank, HSBC Securities (USA) Inc., Mizuho Bank, Ltd. and Wells Fargo Securities, LLC, as syndication agents, joint lead arrangers and joint bookrunners. The Credit Agreement replaces the ~~Credit Agreement~~credit agreement dated September 11, 2013 and as amended (the “Old Credit Agreement”) and, other than an increased aggregate amount that may be borrowed, an improvement in the consolidated leverage ratio covenant and a slightly more favorable commitment fee rate, has terms and conditions similar to that of the Old Credit Agreement. The Credit Agreement makes available to the Company and the Subsidiary Borrowers a committed ~~five-year~~ credit facility in an aggregate amount of ~~$650~~$650.0 million (the “Facility Amount”). The Credit Agreement provides (i) a revolving credit facility, available up to the full amount of the Facility Amount, (ii) a letter of credit facility, available up to ~~$50~~$50.0 million of the Facility Amount, and (iii) a swingline facility, available up to ~~$100~~$100.0 million of the Facility Amount. Each of such facilities is fully available to the Company and the Facility Amount is available to the Subsidiary Borrowers up to an aggregate amount not to exceed ~~$325~~$325.0 million. With the agreement of its lenders, the Company is permitted to increase, on up to ~~three~~3 occasions, the Facility Amount by a total of up to ~~$200~~$200.0 million (for a maximum aggregate Facility Amount of ~~$850~~$850.0 million), subject to certain conditions. As of March ~~30, 2019,~~28, 2020, the Company had total borrowings of ~~$366.2~~$388.1 million outstanding under ~~the~~its Credit Agreement, with ~~$204.5~~$245.1 million of that amount denominated in ~~euros.~~Euro.

Loans made under the Credit Agreement will be composed of (i) “Eurocurrency Borrowings”, bearing interest determined in reference to the London interbank offered rate ("LIBOR") or the EURIBOR rate for the applicable currency and interest period, plus a margin, and/or (ii) “ABR Borrowings”, bearing interest at the sum of (A) the greatest of (x) the ~~rate of interest publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate,~~Prime Rate, (y) the NYFRB rate plus ~~0.5%,~~0.5 percent, and (z) adjusted LIBOR on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus ~~1%,~~1 percent, and (B) a margin. The applicable margin in each case will be determined by reference to a pricing schedule and will be based upon the better for the Company of (a) the Consolidated Leverage Ratio (computed as consolidated funded indebtedness of the Company and its subsidiaries to the consolidated EBITDA (as defined in the Credit Agreement) of the Company and its subsidiaries for the four fiscal quarters then most recently ended) for the fiscal quarter referred to in the quarterly or annual financial statements most recently delivered, or (b) the Company’s then existing long-term debt securities rating by Moody’s Investor Service, Inc. or Standard and Poor’s Financial Services, Inc. Under the Credit Agreement, the applicable margin for ABR Borrowings ranges from ~~0.375%~~0.375 percent to ~~0.875%,~~0.875 percent, the applicable margin for Eurocurrency Borrowings ranges from ~~1.375%~~1.375 percent to ~~1.875%,~~1.875 percent, and the applicable margin for the commitment fee ranges from ~~0.150%~~0.150 percent to ~~0.275%.~~0.275 percent. Loans made under the swingline facility will bear interest, if denominated in U.S. Dollars, at the same rate as an ABR Borrowing and, if denominated in another currency, at the same rate as a Eurocurrency Borrowing. As of March ~~30, 2019,~~28, 2020, the ~~Credit Agreement dictated~~Company had a weighted average interest rate of 2.0 percent with a base rate spread of 150 basis points ~~which gave the Company a weighted average interest rate of 2.6 percent~~ on LIBOR-based borrowings under the Credit Agreement that has a final maturity date of March 29, 2024.

Similar to the Old Credit Agreement, the Credit Agreement contains customary covenants that, among other things, ~~generally restrict~~limit the ability of the Company's ~~ability~~subsidiaries to incur ~~subsidiary~~ indebtedness and limit the ability of the Company and its subsidiaries to create liens on and sell assets, engage in certain liquidations or dissolutions, engage in certain mergers or consolidations, or change lines of business. These covenants are subject to significant exceptions and qualifications.

~~The~~On February 28, 2020, the Company amended the Credit Agreement (the “Amendment”) in order to modify certain provisions, including the financial ~~covenants provide for~~covenant. Previously, the Company had to maintain at specified measurement periods a ~~maximum~~ Consolidated Leverage Ratio ofthat was not greater than or equal to 3.75 to ~~1.0~~1.00. Following the Amendment, the Company is required to maintain at the last day of each quarterly measurement period a Consolidated Leverage Ratio not greater than or equal to the ratio as set forth below opposite the period that includes such day (or, if such day does not end on the last day of the calendar quarter, that includes the last day of the calendar quarter that is nearest to such day):

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Period	Consolidated Leverage Ratio
From the Amendment effective date to and including June 27, 2020	5.75 to 1.00
September 26, 2020	5.25 to 1.00
December 26, 2020	4.50 to 1.00
March 27, 2021	4.00 to 1.00
June 26, 2021 and thereafter	3.75 to 1.00

Under the Credit Agreement and consistent with the Old Credit Agreement, Dart Industries Inc. (the “Guarantor”) unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrowers relating to the Credit Agreement, supported by a ~~minimum~~security interest ~~coverage ratio~~in certain "Tupperware" trademarks and service marks. The Amendment eliminated the requirement that a Non-Investment Grade Ratings Event, as defined in the Credit Agreement, must occur before the Company is required to cause the Additional Guarantee and Collateral Requirement, as defined in the Credit Agreement, to be satisfied. Pursuant to the Amendment, the Company is required to cause certain of ~~3.0~~its domestic subsidiaries to ~~1.0 (defined as consolidated EBITDA divided by consolidated total interest expense)~~become guarantors and the Company and certain of its domestic subsidiaries are required to pledge additional collateral (the “Additional Guarantee and Collateral”).

For purposes of the Credit Agreement, consolidated EBITDA represents earnings before interest, income taxes, depreciation and amortization, as adjusted to exclude unusual, non-recurring gains as well as non-cash charges and certain other items. As of March ~~30, 2019,~~28, 2020, and currently, the Company ~~had considerable cushion under its~~was in compliance with the financial covenants ~~as well as~~in the ~~necessary bond credit ratings~~Credit Agreement. The Credit Agreement was amended to prevent ~~default.~~the Company from exceeding the Consolidated Leverage Ratio for the four fiscal quarters ending in March 2020. If the Company had exceeded the Consolidated Leverage Ratio, this could have constituted an Event of Default, potentially resulting in a cross default under cross-default provisions with respect to other of the Company's debt obligations, giving the lenders the ability to terminate the revolving commitments, accelerate outstanding amounts under the Credit Agreement, exercise certain remedies relating to the collateral securing the Credit Agreement and require the Company to post cash collateral for all outstanding letters of credit. In addition to the relief provided in the Amendment, the Company has reduced certain operating expenses beginning in 2020 and could use available cash, including repatriating cash held outside of the United States, to make debt repayments to lower its Consolidated Leverage Ratio.

The Company routinely increases its revolver borrowings under the Credit Agreement during each quarter to fund operating, investing and financing activities and uses cash available at the end of each quarter to temporarily reduce borrowing levels. As a result, the Company incurs more interest expense and has higher foreign exchange exposure on the value of its cash and debt during each quarter than would relate solely to the quarter end balances.

At March 28, 2020, the Company had $318.4 million of unused lines of credit, including $260.6 million under the committed, secured Credit Agreement, and $57.8 million available under various uncommitted lines around the world.

Senior Notes

The Company has outstanding approximately $600.0 million aggregate principal amount of 4.75% senior notes (the “Senior Notes”). The Senior Notes will mature on June 1, 2021. The Notes were issued under an indenture (the “Indenture”), by and among the Company, the “Guarantor and Wells Fargo Bank, N.A., as trustee. As security for its obligations under the guarantee of the Senior Notes, the Guarantor has granted a security interest in certain “Tupperware” trademarks and service marks. As security for its obligations under the guarantee of the Credit Agreement, the Guarantor has granted a security interest in those certain “Tupperware” trademarks and service marks as well. The Indenture includes, among others, covenants that limit the ability of the Company and its subsidiaries to (i) incur indebtedness secured by liens on certain real property, (ii) enter into certain sale and leaseback transactions, (iii) with respect to the Company only, consolidate or merge with another entity, or sell or transfer all or substantially all of its properties and assets and (iv) sell the capital stock of the Guarantor or sell or transfer all or substantially all of its assets or properties. See Note 8 to the Consolidated Financial Statements in Part II, Item 8 in the Company's Annual Report on Form 10-K for the year ended December 28, 2019 for further details regarding the Senior Notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Under~~Whether the ~~Credit Agreement~~Company will be able to repay or refinance the Senior Notes will depend on economic, financial, competitive and ~~consistent~~other factors that may be beyond its control, including the COVID-19 pandemic, and on the Company’s financial performance at the time. The COVID-19 pandemic and measures implemented to slow the spread of COVID-19 may negatively impact the Company's ability to repay or refinance the Senior Notes. The extent to which the COVID-19 pandemic ultimately impacts the Company’s ability to repay or refinance the Senior Notes will depend on future developments, which are highly uncertain and cannot be predicted with ~~the Old Credit Agreement, the Guarantor unconditionally guarantees all obligations and liabilities~~certainty. Any refinancing of the Senior Notes may be at a higher interest rate and may require the Company to comply with additional covenants and obligations, which could further restrict the ~~Subsidiary Borrowers~~Company's business operations. If the Company is unable to repay or refinance the Senior Notes, the holders of the Seniors Notes may pursue certain remedies relating to the ~~Credit Agreement, supported by~~collateral securing the guaranty of the Senior Notes or pursue other remedies, in each case in accordance with the Indenture and the documents relating to such collateral, all of which could have a security interest in certain "Tupperware" trademarks and service marks. The Credit Agreement includes a trigger whereby the Company would be required to provide additional collateral and subsidiary guarantees if either Moody's Investors Services, Inc. or S&P Global Ratings downgrades its existing ratings two notches or more.

The Company had routinely increased its revolver borrowings under the Old Credit Agreement each quarter, and expects to continue to do so under the Credit Agreement, to fund operating, investing and other financing activities. It also has in the past and expects to in the future, use cash available at the end of each quarter to reduce borrowing levels. As a result, the Company has higher interest expense and foreign exchange exposurematerial adverse effect on the ~~value of its cash during each quarter than would relate solely to the quarter end cash and debt balances.~~

At March 30, 2019, the Company had $364.9 million of unused lines of credit, including $282.2 million under the committed, secured Credit Agreement, and $82.7 million available under various uncommitted lines around the world.Company.


Note 11:	Derivative Instruments and Hedging Activities

The Company is exposed to fluctuations in foreign currency exchange rates on the earnings, cash flows and financial position of its international operations. Although this currency risk is partially mitigated by the natural hedge arising from the Company's local manufacturing in many markets, a strengthening U.S. dollar generally has a negative impact on the Company. In response, the Company uses financial instruments to hedge certain of its exposures and to manage the foreign exchange impact to its financial statements. At its inception, a derivative financial instrument is designated as a fair value, cash flow or net ~~equity~~investment hedge.

Fair value hedges are entered into with financial instruments such as forward contracts, with the objective of limiting exposure to certain foreign exchange risks primarily associated with accounts payable and non-permanent intercompany transactions. For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings. In assessing hedge effectiveness, as of the beginning of 2019, the Company made the accounting policy election in accordance with ASU 2017-12 to exclude forward points and record their impact in the same income statement line item that is used to present the earnings effect of the hedged item for 2019, Other ~~(income) expense. Prior to 2019, the forward points had been included as a component of interest expense.~~income, net. The forward points on fair value hedges resulted in pretax income of ~~$3.7~~$5.0 million and ~~$6.1~~$3.7 million in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.

The Company also uses derivative financial instruments to hedge foreign currency exposures resulting from certain forecasted purchases and classifies these as cash flow hedges. The majority of cash flow hedge contracts that the Company enters into relate to inventory purchases. At initiation, the Company's cash flow hedge contracts are generally for periods ranging from one month to fifteen months. The effective portion of the gain or loss on the open hedging instrument is recorded in other comprehensive income and is reclassified into earnings when settled through the same line item as the transaction being hedged. As such, the balance at the end of the current reporting period in other comprehensive income, related to cash flow hedges, will generally be reclassified within the next twelve months. The associated asset or liability on the open hedges is recorded in other current assets or accrued liabilities, as applicable. In assessing hedge effectiveness, the Company made an accounting policy change as of ~~December 30, 2018~~the beginning of 2019 to include forward points in the assessment of effectiveness for cash flow hedges causing the impact from forward points to be recorded as part of other comprehensive income compared to interest expense as it previously had been recorded. Based on the interest expense incurred for open cash flow hedges as of December 30, 2018, the Company recorded an adjustment of $1.2 million, net of taxes, to accumulated comprehensive income and retained earnings to reflect this accounting policy change. ~~The~~There was an immaterial impact from forward points recorded in other comprehensive income for activity related to the first ~~quarter~~quarters of ~~2019 was $0.8 million.~~2020 and 2019. The Company recognized $0.8 million and $1.0 million ~~expense in cost~~ of ~~products sold~~manufacturing variances that will be capitalized and amortized over actual months of inventory turns related to the forward point impact from the settlement of cash flow hedges in the first ~~quarter~~quarters of ~~2019.~~2020 and 2019, respectively.

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company also uses financial instruments, such as forward contracts and certain ~~euro~~Euro denominated borrowings under its Credit Agreement, to hedge a portion of its net equity investment in international operations and classifies these as net ~~equity~~investment hedges. Changes in the value of these financial instruments, excluding any ineffective portion of the hedges, are included in foreign currency translation adjustments within accumulated other comprehensive loss. The Company recorded, net of tax, in other comprehensive income a net ~~losses~~gain of $56.2 million and a net loss of $13.1 ~~million and $16.9~~ million associated with these hedges in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively. Due to the permanent nature of the investments, the Company does not anticipate reclassifying any portion of these amounts to the income statement in the next twelve months. In assessing hedge effectiveness, the Company made an accounting policy change as of ~~December 30, 2018~~the beginning of 2019 to include forward points in the assessment of effectiveness for net ~~equity~~investment hedges causing the impact from forward points to be recorded as part of other comprehensive income compared to interest expense as it previously had been recorded. Based on the interest expense associated with forward points incurred for open net equity hedges as of December 30, 2018, the Company recorded an adjustment of $3.8 million, net of taxes, to accumulated comprehensive income to reflect this accounting policy change. Beginning in 2019, theThe impact of forward points is being recorded in other comprehensive income and will remain there indefinitely since that is where the gains and losses on hedges of net equity are recorded. Based on the interest expense associated with forward points incurred for open net investment hedges as of December 30, 2018, the Company recorded an adjustment of $3.8 million, net of taxes, to accumulated comprehensive income to reflect this accounting policy change. The impact related to forward points on hedges of net equity investment recorded as a component of other comprehensive income in the first ~~quarter~~quarters of 2020 and 2019 was a loss of $6.3 million and a gain of $4.3 ~~million.~~million, respectively.

While the forward contracts used for net equity and fair value hedges of non-permanent intercompany balances mitigate its exposure to foreign exchange gains or losses, they result in an impact to operating cash flows as they are settled, whereas the hedged items do not generate offsetting cash flows. The net cash flow impact ~~of these currency hedges~~from hedging activity for the first quarters of 2020 and 2019 was an outflow of $1.9 million and ~~2018 were inflows~~an inflow of $0.8 ~~million and $5.4~~ million, respectively.

The Company considers the total notional value of its forward contracts as the best measure of the volume of derivative transactions. As of March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, the notional amounts of outstanding forward contracts to purchase currencies were ~~$87.9~~$90.8 million and ~~$186.8~~$137.7 million, respectively, and the notional amounts of outstanding forward contracts to sell currencies were ~~$89.1~~$82.5 million and ~~$184.6~~$143.5 million, respectively. As of March ~~30, 2019,~~28, 2020, the notional values of the largest positions outstanding were to purchase ~~$28.8~~$69.8 million of U.S. dollars ~~$26.9~~and $12.2 million of euros, and ~~$19.9~~to sell $19.6 million of Swiss francs and ~~to sell $26.2~~$16.3 million of Mexican pesos.

The following table summarizes the Company's derivative positions, which are the only assets and liabilities recorded at fair value on a recurring basis, and the impact they had on the Company's financial position as of March ~~30, 2019~~28, 2020 and December ~~29, 2018.~~28, 2019. Fair values were determined based on third party quotations (Level 2 fair value measurement):

Asset derivatives

Liability derivatives

Asset derivatives

Liability derivatives

Fair value

Derivatives designated as hedging instruments (in millions)

Balance sheet location

Mar 30,
2019

Dec 29,
2018

Balance sheet location

Mar 30,
2019

Dec 29,
2018

Derivatives designated as hedging
instruments (in millions)

Balance sheet
location

Mar 28,
2020

Dec 28,
2019

Balance sheet
location

Mar 28,
2020

Dec 28,
2019

Foreign exchange contracts

Non-trade amounts receivable

17.3

26.7

Accrued liabilities

16.6

22.6

Non-trade amounts receivable

95.5

16.0

Accrued liabilities

86.5

19.8

The following table summarizes the impact ~~of the Company's fair value hedging positions~~ on the results of operations for the first quarters of 2020 and 2019 ~~and 2018:~~for the components included in the hedge effectiveness assessment of the Company's fair value hedging positions:


Derivatives designated as fair value hedges (in millions)	Location of gain or (loss) recognized in income on derivatives	Amount of gain or (loss) recognized in income on derivatives				Location of gain or (loss) recognized in income on related hedged items	Amount of gain or (loss) recognized in income on related hedged items						Location of (loss) gain recognized in income on derivatives	Amount of (loss) gain recognized in income on derivatives					Location of gain (loss) recognized in income on related hedged items	Amount of gain (loss) recognized in income on related hedged items
		2019		2018			2019			2018				2020			2019			2020		2019
Foreign exchange contracts	Other expense	$	17.3	$	15.1	Other expense	$	(17.3	)	$	(14.7	)	Other expense	$	(75.3	)	$	17.3	Other expense	$	75.3	$	(17.3	)

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table summarizes the impact of the Company's hedging activities on comprehensive income for the first quarters of ~~2019~~2020 and ~~2018:~~2019:



Derivatives designated as cash flow and net equity hedges (in millions)	Amount of gain (loss) recognized in OCI on derivatives (effective portion)				Location of gain (loss) reclassified from accumulated OCI into income (effective portion)	Amount of gain (loss) reclassified from accumulated OCI into income (effective portion)
Cash flow hedging relationships	2020		2019			2020		2019
Foreign exchange contracts	$	10.6	(2.8	)	Cost of products sold	$	0.5	$	(0.5	)
Net investment hedging relationships
Foreign exchange contracts	70.7		(17.7	)
Euro denominated debt	1.8		0.8

Cash flow and net equity hedges
(in millions)
Amount of gain or (loss) recognized in OCI (effective portion)
Location of gain or (loss) reclassified
from accumulated
OCI into income (effective portion)
Amount of gain or (loss) reclassified from accumulated OCI into income (effective portion)
Location of gain or (loss) recognized in income (ineffective
portion and amount excluded from effectiveness testing)
Amount of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cash flow hedging relationships 2019 2018 2019 2018 2019 2018
Foreign exchange contracts $ (2.8 ) $ (0.9 ) Cost of products sold $ (0.5 ) $ 0.1
Interest expense $ —
$ (1.1 )
Net equity hedging relationships
Foreign exchange contracts (17.7 ) (17.6 ) Interest expense —
(6.0 )
Euro denominated debt 0.8
(4.1 )


Note 12:	Fair Value Measurements

Due to their short maturities or their insignificance, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued liabilities, leased assets and liabilities and short-term borrowings approximated their fair values at March ~~30, 2019~~28, 2020 and December ~~29, 2018.~~28, 2019. The Company estimates that, based on current market conditions, the value of its ~~4.75%, 2021 senior notes~~Senior Notes was ~~$617.2~~$386.9 million at March ~~30, 2019,~~28, 2020, compared with the carrying value of ~~$599.6~~$599.8 million. The ~~higher~~lower fair value resulted from changes, since issuance, in the corporate debt markets and investor preferences. The fair value of debt is classified as a Level 2 liability and is estimated using quoted market prices as provided in secondary markets that consider the Company's credit risk and market related conditions. See Note 11 to the Consolidated Financial Statements for discussion of the Company's derivative instruments and related fair value measurements.


Note 13:	Retirement Benefit Plans

Components of net periodic benefit cost for the first quarters ended March ~~30, 2019~~28, 2020 and March ~~31, 2018~~30, 2019 were as follows:



	First Quarter
	Pension benefits						Post-retirement benefits
(In millions)	2020			2019			2020			2019
Service cost	$	2.1		$	1.9		$	—		$	—
Interest cost	1.1			1.5			0.1			0.1
Expected return on plan assets	(1.0		)	(1.1		)	—			—
Net amortization	0.7			—			(0.3		)	(0.3		)
Net periodic benefit cost	$	2.9		$	2.3		$	(0.2	)	$	(0.2	)

First Quarter
Pension benefits Post-retirement benefits
(In millions) 2019 2018 2019 2018
Service cost $ 1.9
$ 2.6
$ —
$ —
Interest cost 1.5
1.4
0.1
0.1
Expected return on plan assets (1.1 ) (1.1 ) —
—
Settlement/curtailment —
0.1
—
—
Net amortization —
—
(0.3 ) (0.3 )
Net periodic benefit cost $ 2.3
$ 3.0
$ (0.2 ) $ (0.2 )

During the first quarters of 2020 and 2019, approximately $0.4 million of pretax loss and ~~2018, approximately~~ $0.3 ~~million and $0.2~~ million of pretax gain were reclassified from other comprehensive income to a component of net periodic benefit cost, respectively. As they relate to non-U.S. plans, the Company uses current exchange rates to make these reclassifications. The impact of exchange rate fluctuations is included on the net amortization line of the table above. The Company included $0.6 million and $0.2 million related to the components of net periodic benefit cost, excluding service cost, in other expense in the first quarters of ~~both~~2020 and 2019, ~~and 2018.~~respectively.

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 14:	Income Taxes

The effective tax ~~rates~~rate for the first ~~quarters~~quarter of ~~2019 and 2018 were~~2020 was 5.4 percent compared with 28.9 percent ~~and 38.8 percent, respectively.~~for 2019. The ~~change~~decrease in the rate was primarily ~~due~~attributable to ~~a lower estimated full-year provision~~the overall decline in profitability for the ~~Global Intangible Low-Taxed income (GILTI) tax.~~quarter ended March 28, 2020 as compared to the same period last year and lower cash tax costs driven by lower profits.

As of March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, the Company's accrual for uncertain tax positions was ~~$15.4 million and $15.1 million, respectively. The increase in the accrual for uncertain tax positions was primarily due to the commencement of additional audits in various jurisdictions.~~$13.5 million. The Company estimates that as of March ~~30, 2019,~~28, 2020, approximately ~~$15.1~~$13.2 million of the unrecognized tax benefits, if recognized, will impact the effective tax rate. Interest and penalties related to uncertain tax positions in the Company's global operations are recorded as a component of the provision for income taxes. Accrued interest and penalties were ~~$5.4~~$0.7 million and ~~$5.5~~$4.0 million as of the periods ended March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, respectively.

In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company ~~estimates~~is currently under examination or contesting proposed adjustments by various state and international tax authorities for fiscal years ranging from 2004 through 2018. It is reasonably possible that ~~it may settle one~~there could be a significant decrease or ~~more audits in~~increase to the unrecognized tax benefit balance during the course of the next twelve months ~~that may result in cash payments decreasing the amount~~as these examinations continue, other tax examinations commence or various statutes of ~~accrual for uncertain tax positions by up to $3.3 million. For the remaining balance as of March 30, 2019, the Company is not able to reliably estimate the timing or ultimate settlement amount.~~limitations expire. While the Company does not currently expect material changes, it is possible that the amount of unrecognized benefit with respect to the uncertain tax positions will significantly increase or decrease related to audits in various foreign jurisdictions that may conclude during that period or new developments that could also, in turn, impact the Company's assessment relative to the establishment ~~or reversal~~ of valuation allowances against certain existing deferred tax assets. These valuation allowances relate to tax assets in jurisdictions where it is management's best estimate that there is not a greater than 50 percent probability that the benefit of the assets will be realized in the associated tax returns. The likelihood of realizing the benefit of deferred tax assets is assessed on an ongoing basis. This assessment requires estimates as to future operating results, as well as an evaluation of the effectiveness of the Company's tax planning strategies. At this time, the Company is not able to make a reasonableAn estimate of the range of ~~impact on the balance of~~possible changes cannot be made for remaining unrecognized tax benefits orbecause of the ~~impact~~significant number of jurisdictions in which the Company does business and the number of open tax periods.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by the President of the U.S. on March 27th, 2020. This legislation is aimed at providing relief for individuals and businesses impacted by the ~~effective~~Coronavirus outbreak. The CARES Act includes several significant business tax ~~rate related~~provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (NOL) and allow businesses to ~~these items.~~carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years, suspend the excess business loss rules, accelerate refunds of previously generated corporate Alternative Minimum Tax credits, loosen the business interest limitation under section 163(j) from 30 percent to 50 percent, allow for deferral of payroll taxes and establish an employer retention credit. While the enactment period impacts to the Company are expected to be minimal to none to income taxes, the Company continues to assess other aspects of the CARES Act, such as employee retention credits, payroll tax deferrals and the alternative minimum tax acceleration, for applicability.


Note 15:	Statement of Cash Flow Supplemental Disclosure

Under the Company's stock incentive programs, in certain jurisdictions, employees are allowed to use shares retained by the Company to satisfy minimum statutorily required withholding taxes. In the first quarters of 2020 and 2019, 1,127 and ~~2018,~~ 23,088 ~~and 20,145~~ shares, respectively, were retained to fund withholding taxes, with values totaling ~~$0.7~~$0.01 million and ~~$1.0~~$0.70 million, respectively, which were included as stock repurchases in the ~~Condensed~~ Consolidated Statements of Cash Flows.

Restricted cash is recorded in prepaid and other current assets or in the long-term other assets balance sheet line items.

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 16:	Stock Based Compensation

Stock option activity for ~~the first quarter ended March 30, 2019~~2020 is summarized in the following table:



	Shares subject to option		Weighted average exercise price per share		Aggregate intrinsic value (in millions)
Outstanding at December 28, 2019	3,340,739		$	56.28
Granted	1,000,000		2.61
Expired / Forfeited	(62,824	)	50.01
Outstanding at March 28, 2020	4,277,915		$	43.83	$	—
Exercisable at March 28, 2020	2,875,945		$	57.82	$	—

Shares subject to option Weighted average exercise price per share
Aggregate intrinsic value
(in millions)
Outstanding at December 29, 2018 3,630,684
$ 55.66

Expired / Forfeited (13,758 ) 66.76

Outstanding at March 30, 2019 3,616,926
$ 55.62
$ —
Exercisable at March 30, 2019 2,368,571
$ 59.33
$ —

~~Table of Contents~~

~~TUPPERWARE BRANDS CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The Company also has time-vested, performance-vested and market-vested share awards. The activity for such awards in ~~the first quarter ended March 30, 2019~~2020 is summarized in the following table:



	Shares outstanding		Weighted average grant date fair value
December 28, 2019	528,289		$	28.82
Time-vested shares granted	1,461,510		5.90
Market-vested shares granted	900,053		1.82
Performance shares granted	265,046		5.90
Vested	(3,801	)	52.62
Forfeited	(59,210	)	46.70
March 28, 2020	3,091,887		$	7.79

Shares outstanding Weighted average grant date fair value
December 29, 2018 684,184
$ 47.68
Market-vested shares granted 42,365
27.12
Performance shares granted 111,536
30.90
Performance share adjustments (58,194 ) 49.12
Vested (89,796 ) 50.64
Forfeited (42,217 ) 51.96
March 30, 2019 647,878
$ 42.63

Compensation expense related to the Company's stock-based compensation for the first ~~quarters~~quarter ended March 28, 2020 and March 30, 2019 ~~and March 31, 2018 was~~were as follows:



	First Quarter
(In millions)	2020		2019
Stock options	$	0.3	$	0.6
Time, performance and market vested share awards	1.9		1.3

First Quarter
(In millions) 2019 2018
Stock options $ 0.6
$ 0.8
Time, performance and market vested share awards 1.3
2.5

As of March ~~30, 2019,~~28, 2020, total unrecognized stock-based compensation expense related to all ~~stock based~~stock-based awards was ~~$22.9~~$19.6 million, which is expected to be recognized over a weighted average period of ~~2.1~~2.3 years.


Note 17:	Allowance for Long-Term Receivables

As of March ~~30, 2019, $16.8~~28, 2020, $9.7 million of long-term receivables from both active and inactive customers were considered past due, the majority of which were reserved through the Company's allowance for uncollectible accounts.

The balance of the allowance for long-term receivables as of March ~~30, 2019~~28, 2020 was as follows:



(In millions)
Balance at December 28, 2019	$	13.9
Write-offs	(3.0		)
Provision and reclassifications	0.4
Currency translation adjustment	(1.0		)
Balance at March 28, 2020	$	10.3

(In millions)
Balance at December 29, 2018 $ 16.0
Provision and reclassifications 0.8
Balance at March 30, 2019 $ 16.8

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 18:	Guarantor Information

The Company's payment obligations under ~~its senior notes due in 2021~~the Senior Notes are fully and unconditionally guaranteed, on a senior secured basis, by ~~Dart Industries Inc. (the "Guarantor"), as are~~ the ~~payment obligations under the Company's Credit Agreement. Both guarantees are~~Guarantor. The guarantee is secured by certain "Tupperware" trademarks and service marks owned by the ~~Guarantor.~~Guarantor, as discussed in Note 10 to the Consolidated Financial Statements. In addition, under the Credit Agreement and consistent with the Old Credit Agreement, the Guarantor unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrowers relating to the Credit Agreement, supported by a security interest in those certain "Tupperware" trademarks and service marks as well.

Condensed consolidated financial information as of March ~~30, 2019~~28, 2020 and December ~~29, 2018,~~28, 2019, and for the ~~quarters~~quarter ended March 28, 2020 and March 30, 2019, ~~and March 31, 2018,~~ for ~~the Company~~Tupperware Brands Corporation (the "Parent"), ~~the~~ Guarantor and all other subsidiaries (the "Non-Guarantors") is as follows.

Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent and Guarantor of the equity method of accounting to reflect ownership interests in subsidiaries that are eliminated upon consolidation. The Guarantor is 100% owned by the Parent, and there are certain entities within the ~~Non-Guarantors'~~Non-Guarantors’ classification ~~that~~which the Parent owns directly. There are no significant restrictions on the ability of either the Parent or the Guarantor ~~to obtain~~from obtaining adequate funds from their respective subsidiaries by dividend or loan that should interfere with their ability to meet their operating needs or debt repayment obligations.

2123

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Consolidating Statement of Income


	13 weeks ended March 30, 2019															13 weeks ended March 28, 2020
(In millions)	Parent			Guarantor			Non-Guarantors			Eliminations			Total			Parent			Guarantor			Non-Guarantors			Eliminations			Total
Net sales	$	—		$	—		$	488.3		$	(1.0	)	$	487.3		$	—		$	—		$	376.7		$	(0.8	)	$	375.9
Other revenue	—			19.9			9.5			(29.4		)	—			—			19.6			6.2			(25.8		)	—
Cost of products sold	—			9.6			182.0			(30.4		)	161.2			—			6.2			150.0			(26.5		)	129.7
Gross margin	—			10.3			315.8			—			326.1			—			13.4			232.9			(0.1		)	246.2
Delivery, sales and administrative expense	1.5			18.9			242.3			—			262.7			1.8			32.4			208.8			(0.1		)	242.9
Re-engineering and impairment charges	—			0.6			3.7			—			4.3
Re-engineering charges																—			2.5			1.4			—			3.9
Loss on disposal of assets	—			—			(0.9		)	—			(0.9		)	—			—			(0.1		)	—			(0.1		)
Operating income (loss)	(1.5		)	(9.2		)	68.9			—			58.2			(1.8		)	(21.5		)	22.6			—			(0.7		)
Interest income	5.5			0.7			10.1			(15.7		)	0.6			4.7			0.5			7.0			(11.7		)	0.5
Interest expense	9.5			13.2			3.2			(15.7		)	10.2			9.5			10.0			2.4			(11.7		)	10.2
Income from equity investments in subsidiaries	40.8			60.3			—			(101.1		)	—
(Loss) Income from equity investments in subsidiaries																(0.7		)	0.8			—			(0.1		)	—
Other expense (income)	(0.5		)	3.0			(5.8		)	—			(3.3		)	—			(29.6		)	27.5			—			(2.1		)
Income (loss) before income taxes	35.8			35.6			81.6			(101.1		)	51.9
Income (Loss) before income taxes																(7.3		)	(0.6		)	(0.3		)	(0.1		)	(8.3		)
Provision (benefit) for income taxes	(1.1		)	(3.4		)	19.5			—			15.0			0.5			0.1			(1.1		)	—			(0.5		)
Net income	$	36.9		$	39.0		$	62.1		$	(101.1	)	$	36.9
Comprehensive income (loss)	$	55.9		$	57.6		$	93.0		$	(150.6	)	$	55.9
Net income (loss)																$	(7.8	)	$	(0.7	)	$	0.8		$	(0.1	)	$	(7.8	)
Comprehensive loss																$	(89.3	)	$	(82.9	)	$	(123.8	)	$	206.7		$	(89.3	)

Consolidating Statement of Income


	13 weeks ended March 31, 2018														13 weeks ended March 30, 2019
(In millions)	Parent			Guarantor			Non-Guarantors			Eliminations			Total		Parent			Guarantor			Non-Guarantors			Eliminations			Total
Net sales	$	—		$	—		$	542.8		$	(0.2	)	$	542.6	$	—		$	—		$	488.3		$	(1.0	)	$	487.3
Other revenue	—			21.7			10.1			(31.8		)	—		—			19.9			9.5			(29.4		)	—
Cost of products sold	—			10.0			198.7			(29.7		)	179.0		—			9.6			182.0			(30.4		)	161.2
Gross margin	—			11.7			354.2			(2.3		)	363.6		—			10.3			315.8			—			326.1
Delivery, sales and administrative expense	3.0			22.3			266.2			(2.3		)	289.2		1.5			18.9			242.3			—			262.7
Re-engineering and impairment charges	—			0.3			7.3			—			7.6
Gain on disposal of assets	—			—			2.2			—			2.2
Re-engineering charges															—			0.6			3.7			—			4.3
Loss on disposal of assets															—			—			(0.9		)	—			(0.9		)
Operating income (loss)	(3.0		)	(10.9		)	82.9			—			69.0		(1.5		)	(9.2		)	68.9			—			58.2
Interest income	5.1			0.5			10.8			(15.7		)	0.7		5.5			0.7			10.1			(15.7		)	0.6
Interest expense	9.2			15.5			2.1			(15.7		)	11.1		9.5			13.2			3.2			(15.7		)	10.2
Income from equity investments in subsidiaries	40.8			70.5			—			(111.3		)	—		40.8			60.3			—			(101.1		)	—
Other expense (income)	(0.6		)	12.0			(11.2		)	—			0.2		(0.5		)	3.0			(5.8		)	—			(3.3		)
Income before income taxes	34.3			32.6			102.8			(111.3		)	58.4		35.8			35.6			81.6			(101.1		)	51.9
Provision (benefit) for income taxes	(1.4		)	(6.3		)	30.4			—			22.7
Provision (Benefit) for income taxes															(1.1		)	(3.4		)	19.5			—			15.0
Net income	$	35.7		$	38.9		$	72.4		$	(111.3	)	$	35.7	$	36.9		$	39.0		$	62.1		$	(101.1	)	$	36.9
Comprehensive income	$	43.4		$	51.9		$	98.3		$	(150.2	)	$	43.4	$	55.9		$	57.6		$	93.0		$	(150.6	)	$	55.9

2224

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet



	March 28, 2020
(In millions)	Parent			Guarantor		Non-Guarantors		Eliminations			Total
ASSETS
Cash and cash equivalents	$	—		$	3.9	$	170.6	$	—		$	174.5
Accounts receivable, net	—			—		97.5		—			97.5
Inventories	—			—		226.0		—			226.0
Non-trade amounts receivable, net	—			214.7		118.0		(213.8		)	118.9
Intercompany receivables	325.9			1,495.2		207.0		(2,028.1		)	—
Prepaid expenses and other current assets	0.8			17.0		41.4		(38.5		)	20.7
Total current assets	326.7			1,730.8		860.5		(2,280.4		)	637.6
Deferred income tax benefits, net	41.7			42.2		89.0		(3.7		)	169.2
Property, plant and equipment, net	—			84.8		156.8		—			241.6
Operating lease assets	—			4.5		75.9		—			80.4
Long-term receivables, net	—			0.1		13.0		—			13.1
Trademarks and tradenames, net	—			—		21.5		—			21.5
Goodwill	—			2.9		50.7		—			53.6
Investments in subsidiaries	1,221.8			1,083.8		—		(2,305.6		)	—
Intercompany loan receivables	512.3			82.6		963.4		(1,558.3		)	—
Other assets, net	3.3			10.5		142.0		(77.6		)	78.2
Total assets	$	2,105.8		$	3,042.2	$	2,372.8	$	(6,225.6	)	$	1,295.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	—		$	3.5	$	76.9	$	—		$	80.4
Short-term borrowings and current portion of long-term debt and finance lease obligations	230.8			—		158.9		—			389.7
Intercompany payables	1,391.6			403.3		233.2		(2,028.1		)	—
Accrued liabilities	246.4			101.4		264.3		(252.3		)	359.8
Total current liabilities	1,868.8			508.2		733.3		(2,280.4		)	829.9
Long-term debt and finance lease obligations	599.8			—		2.0		—			601.8
Intercompany notes payable	—			1,282.5		275.8		(1,558.3		)	—
Operating lease liabilities	—			3.8		49.9		—			53.7
Other liabilities	1.2			106.1		147.8		(81.3		)	173.8
Shareholders' (deficit) equity	(364.0		)	1,141.6		1,164.0		(2,305.6		)	(364.0		)
Total liabilities and shareholders' equity	$	2,105.8		$	3,042.2	$	2,372.8	$	(6,225.6	)	$	1,295.2

March 30, 2019
(In millions) Parent Guarantor Non-Guarantors Eliminations Total
ASSETS

Cash and cash equivalents $ —
$ 0.3
$ 146.5
$ —
$ 146.8
Accounts receivable, net —
—
167.0
—
167.0
Inventories —
—
269.0
—
269.0
Non-trade amounts receivable, net —
166.5
96.1
(210.8 ) 51.8
Intercompany receivables 310.5
1,358.4
230.2
(1,899.1 ) —
Prepaid expenses and other current assets 1.0
5.3
41.5
(26.8 ) 21.0
Total current assets 311.5
1,530.5
950.3
(2,136.7 ) 655.6
Deferred income tax benefits, net 41.7
42.2
142.8
—
226.7
Property, plant and equipment, net —
74.6
203.3
—
277.9
Operating lease assets —
0.5
81.5
—
82.0
Long-term receivables, net —
0.1
17.5
—
17.6
Trademarks and tradenames, net —
—
52.3
—
52.3
Goodwill —
2.9
74.6
—
77.5
Investments in subsidiaries 1,371.9
1,514.5
—
(2,886.4 ) —
Intercompany notes receivable 486.6
97.7
1,117.7
(1,702.0 ) —
Other assets, net 1.1
0.3
76.5
(28.7 ) 49.2
Total assets $ 2,212.8
$ 3,263.3
$ 2,716.5
$ (6,753.8 ) $ 1,438.8
LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ 0.1
$ 3.8
$ 77.6
$ —
$ 81.5
Short-term borrowings and current portion of long-term debt and finance lease obligations 253.3
—
114.5
—
367.8
Intercompany payables 1,276.2
428.5
194.4
(1,899.1 ) —
Accrued liabilities 265.6
57.7
261.9
(237.6 ) 347.6
Total current liabilities 1,795.2
490.0
648.4
(2,136.7 ) 796.9
Long-term debt and finance lease obligations 599.6
—
3.4
—
603.0
Intercompany notes payable —
1,424.7
277.3
(1,702.0 ) —
Operating lease liabilities —
0.3
52.4
—
52.7
Other liabilities 2.0
47.4
149.5
(28.7 ) 170.2
Shareholders' equity (deficit) (184.0 ) 1,300.9
1,585.5
(2,886.4 ) (184.0 )
Total liabilities and shareholders' equity $ 2,212.8
$ 3,263.3
$ 2,716.5
$ (6,753.8 ) $ 1,438.8

2325

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet



	December 28, 2019
(In millions)	Parent			Guarantor		Non-Guarantors		Eliminations			Total
ASSETS
Cash and cash equivalents	$	—		$	0.3	$	122.9	$	—		$	123.2
Accounts receivable, net	—			—		110.7		—			110.7
Inventories	—			—		245.2		—			245.2
Non-trade amounts receivable, net	—			166.2		84.9		(212.0		)	39.1
Intercompany receivables	325.9			1,546.3		209.9		(2,082.1		)	—
Prepaid expenses and other current assets	1.2			16.0		41.1		(38.0		)	20.3
Total current assets	327.1			1,728.8		814.7		(2,332.1		)	538.5
Deferred income tax benefits, net	41.7			42.2		105.6		(3.4		)	186.1
Property, plant and equipment, net	—			85.7		181.8		—			267.5
Operating lease assets	—			4.7		79.4		—			84.1
Long-term receivables, net	—			0.1		14.9		—			15.0
Trademarks and tradenames, net	—			—		24.6		—			24.6
Goodwill	—			2.9		56.6		—			59.5
Investments in subsidiaries	1,305.2			1,208.8		—		(2,514.0		)	—
Intercompany loan receivables	514.8			95.7		1,046.1		(1,656.6		)	—
Other assets, net	1.9			12.7		150.0		(77.5		)	87.1
Total assets	$	2,190.7		$	3,181.6	$	2,473.7	$	(6,583.6	)	$	1,262.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	—		$	8.3	$	117.1	$	—		$	125.4
Short-term borrowings and current portion of long-term debt and finance lease obligations	186.8			—		86.4		—			273.2
Intercompany payables	1,440.8			406.2		235.1		(2,082.1		)	—
Accrued liabilities	239.1			65.6		235.6		(250.0		)	290.3
Total current liabilities	1,866.7			480.1		674.2		(2,332.1		)	688.9
Long-term debt and finance lease obligations	599.8			—		2.4		—			602.2
Intercompany notes payable	—			1,362.2		294.4		(1,656.6		)	—
Operating lease liabilities	—			4.0		52.0		—			56.0
Other liabilities	1.2			110.7		161.3		(80.9		)	192.3
Shareholders' (deficit) equity	(277.0		)	1,224.6		1,289.4		(2,514.0		)	(277.0		)
Total liabilities and shareholders' equity	$	2,190.7		$	3,181.6	$	2,473.7	$	(6,583.6	)	$	1,262.4

December 29, 2018
(In millions) Parent Guarantor Non-Guarantors Eliminations Total
ASSETS

Cash and cash equivalents $ —
$ 0.3
$ 148.7
$ —
$ 149.0
Accounts receivable, net —
—
144.7
—
144.7
Inventories —
—
257.7
—
257.7
Non-trade amounts receivable, net —
169.0
71.0
(190.1 ) 49.9
Intercompany receivables 309.2
1,430.1
230.5
(1,969.8 ) —
Prepaid expenses and other current assets 1.1
3.7
48.2
(33.7 ) 19.3
Total current assets 310.3
1,603.1
900.8
(2,193.6 ) 620.6
Deferred income tax benefits, net 41.7
42.2
133.1
—
217.0
Property, plant and equipment, net —
71.3
204.7
—
276.0
Long-term receivables, net —
0.1
18.6
—
18.7
Trademarks and tradenames, net —
—
52.9
—
52.9
Goodwill —
2.9
73.2
—
76.1
Investments in subsidiaries 1,305.3
1,346.8
—
(2,652.1 ) —
Intercompany notes receivable 515.3
95.4
1,069.4
(1,680.1 ) —
Other assets, net 0.3
0.5
75.3
(28.6 ) 47.5
Total assets $ 2,172.9
$ 3,162.3
$ 2,528.0
$ (6,554.4 ) $ 1,308.8
LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable $ —
$ 5.7
$ 123.5
$ —
$ 129.2
Short-term borrowings and current portion of long-term debt and finance lease obligations 189.4
—
96.1
—
285.5
Intercompany payables 1,330.9
436.3
202.6
(1,969.8 ) —
Accrued liabilities 278.6
69.2
220.4
(223.8 ) 344.4
Total current liabilities 1,798.9
511.2
642.6
(2,193.6 ) 759.1
Long-term debt and finance lease obligations 599.7
—
3.7
—
603.4
Intercompany notes payable 6.6
1,366.7
306.8
(1,680.1 ) —
Other liabilities 2.9
48.1
159.1
(28.6 ) 181.5
Shareholders' equity (deficit) (235.2 ) 1,236.3
1,415.8
(2,652.1 ) (235.2 )
Total liabilities and shareholders' equity $ 2,172.9
$ 3,162.3
$ 2,528.0
$ (6,554.4 ) $ 1,308.8

2426

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Cash Flows



	13 weeks ended March 28, 2020
(In millions)	Parent			Guarantor			Non-Guarantors			Eliminations			Total
Operating Activities:
Net cash provided by (used in) operating activities	$	2.9		$	16.1		$	(98.8	)	$	32.8		$	(47.0	)
Investing Activities:
Capital expenditures	—			(5.2		)	(3.0		)	—			(8.2		)
Proceeds from disposal of property, plant and equipment	—			—			0.5			—			0.5
Net intercompany loans	2.5			67.0			83.9			(153.4		)	—
Net cash provided by (used in) investing activities	2.5			61.8			81.4			(153.4		)	(7.7		)
Financing Activities:
Dividend payments to parent	—			—			(1.9		)	1.9			—
Repayment of finance lease obligations	—			—			(0.3		)	—			(0.3		)
Net change in short-term debt	45.9			—			75.1			—			121.0
Debt issuance costs	(1.7		)	—			—			—			(1.7		)
Net intercompany borrowings	(49.6		)	(74.3		)	5.2			118.7			—
Net cash (used in) provided by financing activities	(5.4		)	(74.3		)	78.1			120.6			119.0
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(12.4		)	—			(12.4		)
Net change in cash, cash equivalents and restricted cash	—			3.6			48.3			—			51.9
Cash, cash equivalents and restricted cash at beginning of year	—			0.3			125.8			—			126.1
Cash, cash equivalents and restricted cash at end of period	$	—		$	3.9		$	174.1		$	—		$	178.0

13 weeks ended March 30, 2019
(In millions) Parent Guarantor Non-Guarantors Eliminations Total
Operating Activities:
Net cash provided by (used in) operating activities $ 3.8
$ (115.4 ) $ 74.4
$ (2.9 ) $ (40.1 )
Investing Activities:
Capital expenditures —
(7.5 ) (5.4 ) —
(12.9 )
Proceeds from disposal of property, plant and equipment —
—
0.6
—
0.6
Net intercompany loans 22.2
53.6
(64.3 ) (11.5 ) —
Net cash provided by (used in) investing activities 22.2
46.1
(69.1 ) (11.5 ) (12.3 )
Financing Activities:
Dividend payments to shareholders (33.9 ) —
—
—
(33.9 )
Dividend payments to parent —
—
(2.7 ) 2.7
—
Proceeds from exercise of stock options —
—
—
—
—
Repurchase of common stock (0.7 ) —
—
—
(0.7 )
Repayment of finance lease obligations —
—
(0.3 ) —
(0.3 )
Net change in short-term debt 64.6
—
19.5
—
84.1
Debt issuance cost (1.3 ) —
—
—
(1.3 )
Net intercompany borrowings (54.7 ) 69.3
(26.3 ) 11.7
—
Net cash provided by (used in) financing activities (26.0 ) 69.3
(9.8 ) 14.4
47.9
Effect of exchange rate changes on cash, cash equivalents and restricted cash —
—
3.1
—
3.1
Net change in cash, cash equivalents and restricted cash —
—
(1.4 ) —
(1.4 )
Cash, cash equivalents and restricted cash
at beginning of year
—
0.3
151.6
—
151.9
Cash, cash equivalents and restricted cash
at end of period
$ —
$ 0.3
$ 150.2
$ —
$ 150.5

2527

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TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Cash Flows



	13 weeks ended March 30, 2019
(In millions)	Parent			Guarantor			Non-Guarantors			Eliminations			Total
Operating Activities:
Net cash provided by (used in) operating activities	$	3.8		$	(115.4	)	$	74.4		$	(2.9	)	$	(40.1	)
Investing Activities:
Capital expenditures	—			(7.5		)	(5.4		)	—			(12.9		)
Proceeds from disposal of property, plant and equipment	—			—			0.6			—			0.6
Net intercompany loans	22.2			53.6			(64.3		)	(11.5		)	—
Net cash provided by (used in) investing activities	22.2			46.1			(69.1		)	(11.5		)	(12.3		)
Financing Activities:
Dividend payments to shareholders	(33.9		)	—			—			—			(33.9		)
Dividend payments to parent	—			—			(2.7		)	2.7			—
Repurchase of common stock	(0.7		)	—			—			—			(0.7		)
Repayment of finance lease obligations	—			—			(0.3		)	—			(0.3		)
Net change in short-term debt	64.6			—			19.5			—			84.1
Debt issuance costs	(1.3		)	—			—			—			(1.3		)
Net intercompany borrowings	(54.7		)	69.3			(26.3		)	11.7			—
Net cash (used in) provided by financing activities	(26.0		)	69.3			(9.8		)	14.4			47.9
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			3.1			—			3.1
Net change in cash, cash equivalents and restricted cash	—			—			(1.4		)	—			(1.4		)
Cash, cash equivalents and restricted cash at beginning of year	—			0.3			151.6			—			151.9
Cash, cash equivalents and restricted cash at end of period	$	—		$	0.3		$	150.2		$	—		$	150.5

13 weeks ended March 31, 2018
(In millions) Parent Guarantor Non-Guarantors Eliminations Total
Operating Activities:
Net cash provided by (used in) operating activities $ (4.4 ) $ (42.9 ) $ 10.6
$ (4.1 ) $ (40.8 )
Investing Activities:
Capital expenditures —
(5.5 ) (9.7 ) —
(15.2 )
Proceeds from disposal of property, plant and equipment —
—
5.9
—
5.9
Net intercompany loans (64.3 ) (5.5 ) (56.7 ) 126.5
—
Net cash provided by (used in) investing activities (64.3 ) (11.0 ) (60.5 ) 126.5
(9.3 )
Financing Activities:
Dividend payments to shareholders (35.4 ) —
—
—
(35.4 )
Dividend payments to parent —
—
(1.2 ) 1.2
—
Proceeds from exercise of stock options 0.2
—
—
—
0.2
Repurchase of common stock (1.0 ) —
—
—
(1.0 )
Repayment of finance lease obligations —
—
(0.5 ) —
(0.5 )
Net change in short-term debt 87.0
—
10.2
—
97.2
Net intercompany borrowings 17.9
54.1
51.6
(123.6 ) —
Net cash provided by (used in) financing activities 68.7
54.1
60.1
(122.4 ) 60.5
Effect of exchange rate changes on cash, cash equivalents and restricted cash —
—
4.1
—
4.1
Net change in cash, cash equivalents and restricted cash —
0.2
14.3
—
14.5
Cash, cash equivalents and restricted cash
at beginning of year
—
0.1
147.1
—
147.2
Cash, cash equivalents and restricted cash
at end of period
$ —
$ 0.3
$ 161.4
$ —
$ 161.7


Note 19:	New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2018, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”, an amendment to existing guidance on the accounting for implementation, setup, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor that is a service contract. Under the amendment, the requirement for capitalizing implementation costs incurred in a hosting environment that is a service contract is aligned with the requirements for capitalizing implementation costs incurred for an internal-use software license. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. ~~Early adoption is permitted.~~ The Company ~~does not expect~~adopted this guidance at the beginning of the first quarter of 2020 and the adoption ~~of this amendment to~~did not have a material impact on ~~the Company’s~~its Consolidated Financial Statements.

Table of Contents

TUPPERWARE BRANDS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”, an amendment to existing guidance on disclosure requirements on fair value measurement as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to the financial statements. Under this amendment, certain disclosure requirements for fair value measurement were eliminated, modified and added. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance at the beginning of the first quarter of 2020 and the adoption did not have any impact on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, an amendment to existing guidance for the measurement of credit losses on financial instruments and subsequent updates to that amendment. This guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information when recording credit loss estimates. The new standard is effective for fiscal years and interim periods beginning after December 15, 2019. The Company adopted this guidance at the beginning of the first quarter of 2020 and the adoption did not have a material impact on its Consolidated Financial Statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, an optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The amendments should be applied on a prospective basis. The Company is currently evaluating the impact of the potential adoption of this amendment on its Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this amendment on its Consolidated Financial Statements, including accounting policies and processes.

In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans”, an amendment to existing guidance on disclosure requirements for employers that sponsor defined benefit pension or other ~~postretirement~~post-retirement plans. Under the amendment, the entity is required to disclose the weighted-average interest crediting rates used, reasons for significant gains and losses affecting the benefit obligation and an explanation of any other significant changes in the benefit obligation or plan assets. The amendment also removed certain required disclosures that no longer are considered cost beneficial. This guidance is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company ~~is currently evaluating~~has evaluated the impact of ~~the~~ adoption of this amendment ~~on its disclosure,~~ and does not expect any impact on its ~~basic financial statements.~~

~~Table of Contents~~

~~TUPPERWARE BRANDS CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

In August 2018, the FASB issued an amendment to existing guidance on disclosure requirements on fair value measurement as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to the financial statements. Under this amendment, certain disclosure requirements for fair value measurement were eliminated, modified and added. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of either the entire standard or only the provisions that eliminate or modify requirements is permitted. The Company is currently evaluating the impact of the adoption of this amendment on its Consolidated Financial Statements.


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of the results of operations for the 13 weeks ended March ~~30, 2019,~~28, 2020, compared with the 13 weeks ended March ~~31, 2018,~~30, 2019, and changes in financial condition during the 13 weeks ended March ~~30, 2019.~~28, 2020.

The Company's core sales are derived from the distribution of its products through independent sales organizations and individuals, ~~which in many cases are~~who may also be its ~~customers. The vast majority of the Company's products are,~~customers, who then, in turn, ~~sold~~sell to end consumers who are not members of its sales force. The Company is largely dependent upon these independent sales organizations and individuals to reach end consumers, and any significant disruption of this distribution network would have a negative financial impact on the Company and its ability to generate sales, earnings and operating cash flows. The Company's primary business drivers are the size, activity, diversity and productivity of its independent sales organizations.

In ~~2019,~~2020, the Company continued to sell directly and/or through its sales force as well as to end consumers via the Internet and through ~~a limited number of~~ business-to-business transactions, in which it sells products to a partner company. ~~These business-to-business transactions are not considered part of the Company's core sales and are not material to overall sales.~~

As the impacts of foreign currency translation are an important factor in understanding period-to-period comparisons, the Company believes the presentation of results on a local currency basis, as a supplement to reported results, helps improve readers' ability to understand the Company's operating results and evaluate performance in comparison with prior periods. The Company presents local currency information that compares results between periods as if current period exchange rates had been used to translate results in the prior period. The Company uses results on a local currency basis as one measure to evaluate performance. The Company generally refers to such amounts as calculated on a "local currency" basis, or "excluding the impact of foreign currency." These results should be considered in addition to, not as a substitute for, results reported in accordance with generally accepted accounting principles in the United States ("GAAP"). Results on a local currency basis may not be comparable to similarly titled measures used by other companies.

The global spread of the novel coronavirus (COVID-19), which has been declared by the World Health Organization to be a “pandemic,” has spread to many countries and is impacting worldwide economic activity. Many governments have implemented policies intended to stop or slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of schools and non-essential businesses, and these measures may remain in place for a significant period of time. During the first quarter of 2020, the impact of COVID-19 on the Company’s business was most pronounced in Europe and Asia Pacific where the Company ~~defines established market economies as those~~experienced partial or country-wide lockdowns of operations in ~~Western Europe (including Scandinavia), Australia, Canada, Japan,~~various markets, including China, France, Italy, and the ~~United States. All other countries~~Philippines. The first quarter impact of COVID-19 largely affected March revenues, financial results and liquidity, specifically in the second half of the month. While the duration and severity of this pandemic is uncertain, the Company currently expects that its results of operations in the second quarter of 2020 will have the most significant impact of the effects of COVID-19, and that subsequent periods will also be negatively impacted. The extent to which the COVID-19 pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

A top priority for the Company as it navigates through the global COVID-19 pandemic is the safety of its employees and their families, sales force and consumers, and to mitigate the impact on its operations and financial results. The Company will continue to proactively respond to the situation and may take further actions that alter the Company’s business operations as may be required by governmental authorities, or that the Company determines are ~~classified as having emerging market economies.~~in the best interests of its employees, sales force and consumers.

~~Overview~~

Results of Operations


	13 weeks ended						Change			Change excluding the impact of foreign exchange			Foreign exchange impact			13 weeks ended						Change			Change excluding the impact of foreign exchange			Foreign exchange impact
(In millions, except per share amounts)	Mar 30, 2019			Mar 31, 2018						Change excluding the impact of foreign exchange		Mar 28, 2020				Mar 30, 2019						Change			Change excluding the impact of foreign exchange			Foreign exchange impact
Net sales	$	487.3		$	542.6		Change		(10	)%		(2	Foreign exchange impact		)%	$	(44.0	)	$	375.9		$	487.3			(22.9	)%		(17.4	)%	$	(32.2	)
Gross margin as percent of sales	66.9		%	67.0		%	(0.1	)	pp	na			na			65.5		%	66.9		%	(1.4	)	pp	n/a			n/a
DS&A as percent of sales	53.9		%	53.3		%	0.6		pp	na			na			64.6		%	53.9		%	10.7		pp	n/a			n/a
Operating income	$	58.2		$	69.0		(16	)%		(5	)%		$	(7.9	)
Net income	$	36.9		$	35.7		3	%		22	%		$	(5.4	)
Net income per diluted share	$	0.76		$	0.70		9	%		29	%		$	(0.11	)
Operating income (loss)																$	(0.7	)	$	58.2		n/a			n/a			$	(6.4	)
Net income (loss)																$	(7.8	)	$	36.9		n/a			n/a			$	(4.7	)
Net income (loss) per diluted share																$	(0.16	)	$	0.76		n/a			n/a			$	(0.10	)

_________________________



nan/a	not applicable
pp	percentage points

Net Sales

Reported sales decreased 1022.9 percent in the first quarter of 2020 compared with the first quarter of ~~2018.~~2019. Excluding the impact of changes in foreign currency exchange rates, sales decreased 217.4 percent. The Company's businesses operating in emerging market economies had a 3 percent decline in sales in local currency. The significant sales decreases were in Brazil, Fuller Mexico, India and Indonesia. The most significant sales increases were in Argentina, China, and the Commonwealth of Independent States (CIS). Local currency sales in the Company's businesses that operate in established economy markets, as a group, decreased 2 percent, primarily driven by the impact from sales decreases in Germany and the United States and Canada. The most significant sales increases were in France and Switzerland, from large business-to-business arrangements.

In the first quarter, operating income decreased 16 percent and net income increased 3 percent. Excluding the impact of changes in foreign currency exchange rates, operating income decreased 5 percent and net income increased 22 percent, respectively. The decrease in operating income reflected the impact of lower sales, together with higher costs in South America, partially offset by lower management incentive costs. The increase in net income reflected the decrease in segment profit, which was more than offset by lower re-engineering costs, and benefit from a change in the accounting for net equity hedges. Net income was also positively impacted by a lower income tax rate.

Net cash flow from operating activities for the periods ending March 30, 2019 and March 31, 2018 were outflows of $40.1 million and $40.8 million, respectively. The slightly favorable comparison was primarily due to lower cash outflows related to inventory, timing of tax payments and prepaid expenses. This was partially offset by an increase in cash outflow related to accounts payable, mainly from a higher balance at the end of 2018 compared with the prior year, and reduced recurring purchases in light of a lower level of business in certain units.

~~Net Sales~~

Reported sales decreased 10 percent in the first quarter of 2019 compared with the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, sales decreased 2 percent. This included a 3 percentage point positive impact from the benefit of business-to-business sales, mainly in France and Switzerland. On average, prices were even in the first quarter compared with 2018.

The Company's emerging market units accounted for 69 percent and 70 percent of sales in the first quarters of 2019 and 2018, respectively. In 2019, reported sales in these units decreased $43.5 million, or 11 percent, which included a negative $34.9 million impact from foreign currency exchange rates. Excluding the impact of changes in foreign currency exchange rates, sales declined 3 percent. The most significant local currency sales increase was in China due to the net addition of outlets. Other units with meaningful increases were Argentina, mainly from pricing, and CIS from a larger, more productive sales force. The sales growth in these units was more than offset by decreases in Brazil, from a less active sales force, Fuller Mexico, from a smaller and less productive sales force, and India and Indonesia from smaller, less active sales forces. The average impact of higher prices ~~in the emerging market units~~ was 1about 3 percent.

~~Reported sales~~The net decrease in ~~the established market units decreased 7 percent. Excluding a negative $9.1 million impact of changes in foreign currency exchange rates, sales decreased 2 percent. The~~ local currency sales ~~decrease~~ was mainly ~~due to less active sellers~~driven by decreases in:

Brazil, from lower sales force ~~additions~~activity and recruiting mainly due to increased competition and lower consumer spending

China, from less outlet openings, a shift in ~~Germany~~product mix, and lower consumer spending. China had the earliest impact of COVID-19 beginning in January and extending throughout the quarter. China was able to partially mitigate the impact of this health crisis by leveraging e-commerce and social media capabilities and launching support programs to outlet owners.

France and Switzerland, mainly from lower business-to-business sales compared with 2019 and France, from government mandated lock down due to COVID-19

Indonesia, from a less active sales force

Tupperware Mexico, from a less active and less productive sales force

the United States and ~~Canada. These decreases were partially offset by the benefit of significant business-to-business~~Canada, from a smaller, less active and less productive sales force

The estimated impact to net sales in ~~France~~the first quarter of 2020 as a result of COVID-19 is estimated at 5pp of the decline versus the first quarter of 2019. The Company continues to monitor the effects of COVID-19 on its reported sales and ~~Switzerland.~~has taken several steps to mobilize its resources to ensure adequate liquidity, business continuity and employee safety during this pandemic. The ~~average impact of lower prices in~~Company continues to provide digital tools and training to its sales force, where available, to enable them to connect with end consumers through social media and sell through the ~~established market units was 1 percent.~~Internet.

A more detailed discussion of the sales results by reporting segment is included in the segment results section in this Part I, Item 2.

As discussed in Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this Report, the Company includes certain promotional costs in ~~delivery, sales and administrative expense (DS&A).~~DS&A. As a result, the Company's net sales may not be comparable with other companies that treat these costs as a reduction of revenue.

Gross Margin

Gross margin as a percentage of sales was ~~66.9~~65.5 percent and ~~67.0~~66.9 percent in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively. The factors leading to the 1.4pp decrease ~~of 0.1 percentage point ("pp")~~ primarily reflected ~~an unfavorable mix impact from relatively higher sales in certain units with~~increased negative manufacturing variances, mainly volume, related to Brazil, Mexico and United States and Canada, partially offset by lower ~~than average gross margins (0.1 pp).~~resin costs.

As discussed in Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this Report, the Company includes costs related to the distribution of its products in DS&A. As a result, the Company's gross margin may not be comparable with other companies that include these costs in costs of products sold.

~~Costs and~~Operating Expenses

DS&A as a percentage of sales was ~~53.9~~64.6 percent in the first quarter of ~~2019,~~2020, compared with ~~53.3~~53.9 percent in ~~2018.~~2019. The 10.7 pp increase in comparison ~~reflected~~primarily reflected:

increased administration and other expenses mainly due to fees for professional services firms supporting business turnaround efforts, leadership transition costs, net reduction of long-term management incentive costs last year versus expense in 2020 and lower absorption of fixed costs (7.4 pp)

increased selling expenses mainly from higher bad debt expense, primarily in France, higher commissions in Indonesia reflecting the new compensation program and outlet support expenses in response to COVID-19 in China (3.6 pp)

increased distribution expenses mainly from lower fixed costs ~~as a percentage of sales, mainly in~~absorption predominantly impacting Brazil, Europe and the United States and Canada ~~in light of lower sales (1.0~~(1.6 pp), an unfavorable impact from the translation effect of changes in foreign currency exchange rates (0.4 pp), less efficient promotional spending, primarily in Germany, Indonesia and the United States and Canada (0.3 pp), and an increase in fixed costs due to inflation (0.3 pp), higher bad debt expense (0.2 pp), and increased commissions (0.1 pp) primarily in South America. This was partially

Partially offset by ~~a favorable mix impact from higher sales in certain units with lower than average DS&A (1.2 pp), and lower administrative~~decreased promotional expenses mainly in Indonesia reflecting the new compensation program, France, Germany and Mexico (1.9 pp)

The Company segregates corporate operating expenses into allocated and unallocated components based upon the estimated time spent managing segment operations. The allocated costs are then apportioned on a local currency basis to each segment based primarily upon segment revenues. The unallocated expenses reflect amounts unrelated to segment operations. Operating expenses to be allocated are determined at ~~Corporate due to lower~~ the beginning of the year based upon estimated expenditures. Total unallocated expenses in the first quarter of 2020 increased $16.6 million compared with 2019, reflecting:

non-recurring fees for professional services firms supporting business turnaround efforts and leadership transition costs ( about $13.0 million)

management incentives ~~(0.6 pp).~~from a net reduction of long-term incentives last year versus expense this year

Specific segment impacts are discussed in the segment results section in this Part I, Item 2.

Re-engineering Costs

Refer to Note 7 to the Consolidated Financial Statements in Part I, Item 1 of this Report, for a discussion of re-engineering activities and accruals.

The multi-year decline in revenue led the Company to evaluate its operating structure leading to actions designed to reduce costs, improve operating efficiency and otherwise turnaround its business. These actions often result in re-engineering costs related to headcount reductions and to facility downsizing and closure, other costs that may be necessary in light of the revised operating landscape including structural changes impacting how its sales force operates, as well as related asset write downs. The Company may recognize gains or losses upon disposal of excess facilities or other activities directly related to its re-engineering efforts.

The Company recorded ~~$4.3~~$3.9 million and ~~$7.6~~$4.3 million in re-engineering charges during the first quarters of 2020 and 2019, respectively. These re-engineering costs were mainly related to the transformation program, which was announced in January 2019 and ~~2018, respectively.~~re-assessed in December 2019 (collectively the "Turnaround Plan") and the July 2017 revitalization program ("2017 program").

~~In 2019,~~The turnaround plan was launched with the ~~re-engineering~~focus to drive innovation, sales force engagement and ~~impairment charges incurred were primarily related to severance~~consumer experiences through a contemporized and streamlined service model. Since the inception of the turnaround plan, a reassessment of costs and ~~restructuring actions taken~~priorities has occurred with a shift from a segment to a global focus with increased emphasis on procurement, sourcing and organizational realignment. This plan is expected to run through 2021 and incur approximately $50.0 million in ~~connection~~pretax cost, with ~~the Company's plans to rationalize its supply chain and to adjust the cost base of several marketing units. As part of this program, the~~100 percent paid in cash. The Company ~~recorded $3.1~~incurred $3.3 million and ~~$7.6~~$1.2 million in the first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively, primarily related to severance costs, outside consulting services, project team expenses, and distributor support. Once fully executed, the plan is expected to enable annual local currency sales growth and to generate about $100.0 million in annualized savings.

In relation to the 2017 program, the Company incurred ~~for headcount reductions~~$0.6 million and $3.1 million of charges in ~~several~~the first quarters of ~~the Company’s operations in connection with changes in its management~~2020 and ~~organizational structures.~~2019, respectively. Under this program, ~~which was announced in July 2017,~~ the Company has incurred ~~$82.8~~$84.7 million of pretax costs starting in the second quarter of 2017 through ~~the~~ first quarter of ~~2019. The Company~~2020 and expects to incur an additional ~~$6.5~~$2.0 million of pretax re-engineering costs ~~starting~~ in the ~~second quarter~~remaining of ~~2019 and onward.~~2020. The annualized benefit of these actions ~~once fully implemented, is estimated to be $35 million with $5 million realized in 2017, $22 million realized in 2018, and the remainder in 2019.~~has been approximately $36.0 million. After reinvestment of a portion of the benefits, improved profitability ~~will be~~is reflected most significantly through lower cost of products sold, but also through lower DS&A; however, overall profitability has not risen in light of lower sales and higher costs.

In January 2019, the Company announced a transformation program running through 2022 that is expected to cost approximately $100 million in pretax cost, with 90 percent paid in cash. Once fully implemented, the transformation projects are expected to enable annual local currency sales growth and to generate about $50 million in annualized savings. The Company incurred $1.2 million in the first quarter of 2019 related to the transformation program in Europe, primarily related to outside consulting services and project team expenses.

Net Interest Expense

Net interest expense was ~~$9.6~~$9.7 million in the first quarter of ~~2019, a decrease~~2020, an increase of ~~$0.8~~$0.1 million compared to the first quarter of ~~2018.~~2019. The ~~decrease~~increase in interest expense related to the ~~$1.1 million benefit from the accounting policy change for forward points from the Company's hedging activities, partially offset by the~~ impact of higher ~~average borrowings in the year-over-year comparisons.~~interest on borrowings.

~~Tax Rate~~Income Taxes

The effective tax ~~rates~~rate for the first ~~quarters~~quarter of ~~2019 and 2018 were~~2020 was 5.4 percent compared with 28.9 percent ~~and 38.8 percent.~~for 2019. The ~~change~~decrease in the rate was primarily ~~due~~attributable to ~~a lower estimated full-year provision~~the overall decline in profitability for the ~~Global Intangible Low-Taxed income (GILTI) tax.~~

quarter ended March 28, 2020 as compared to the same period last year and lower cash tax costs driven by lower profits.

As discussed in Note 14 to the Consolidated Financial Statements in Part I, Item 1 of this Report, the Company's uncertain tax positions increase the potential for volatility in its tax rate. As such, it is reasonably possible that the effective tax rates in any individual quarter will vary from the full year expectation. At this time, the Company is unable to estimate what impact that may have on any individual quarter.

Net Income

Net income ~~increased $1.2~~decreased $44.7 million in the first quarter of ~~2019~~2020 compared with ~~2018,~~2019, which included a ~~$5.4~~$4.7 million negative impact on the comparison from changes in foreign currency exchange rates.

The ~~increase~~net decrease primarily ~~reflected $3.3 million~~reflected:

decreased segment profit in Asia Pacific, primarily in China

decreased segment profit for North America, primarily at Fuller Mexico and in the United States and Canada

decreased segment profit in Europe, primarily from lower ~~pre-tax re-engineering costs in connection with the Company's restructuring plan announced in July 2017, lower corporate~~business-to-business sales

increased unallocated expenses related to fees for professional services firms supporting business turnaround efforts, leadership transition costs and ~~lower income tax~~a net reduction of long-term management incentive costs last year versus expense in 2020

decreased segment profit, estimated at 25% of the total decline versus ~~2018.~~ the first quarter of 2019, from the impact of COVID-19.

These decreases were partially offset by lower ~~segment profit, less efficient promotional spending, higher fixed costs in Argentina and Brazil, increased bad debt expense in Brazil and Fuller Mexico and increased commission expense in Brazil.~~income taxes.

A more detailed discussion of the results by reporting segment is included in the segment results section below in this Part I, Item 2.

International operations generated ~~93 percent and 92~~92.2 percent of sales in the first quarter of ~~2019~~2020, and ~~2018, respectively.~~92.7 percent of sales in the first quarter 2019. These units generated ~~98 percent and 97~~104.6 percent of net segment profit in the first quarter of ~~2019~~2020, and ~~2018, respectively.~~97.7 percent of net segment profit in the first quarter of 2019.

The sale of beauty products generated 1414.3 percent of sales in the first quarter of ~~2019,~~2020, and 1313.6 percent in the first quarter of ~~2018.~~2019.

Segment Results

The Company did see an impact to sales and profit results by reporting segment in the first quarter of 2020 as a result of COVID-19. Also, the Company expects that its results of operations in the second quarter of 2020 will reflect the most severe impact of the effects of COVID-19, and subsequent periods may also be negatively impacted. The Company continues to monitor the effects of COVID-19 on its reported sales and profit and has taken several steps to mobilize its resources to ensure adequate liquidity, business continuity and employee safety during this pandemic.

Europe


(In millions)	13 weeks ended						Change			Change excluding the impact of foreign exchange		Foreign exchange impact			Percent of total		13 weeks ended						Change			Change excluding the impact of foreign exchange		Foreign exchange impact			Percent of total
(In millions)	Mar 30, 2019			Mar 31, 2018			Change			Change excluding the impact of foreign exchange		Foreign exchange impact			2019	2018	Mar 28, 2020			Mar 30, 2019			Change			Change excluding the impact of foreign exchange		Foreign exchange impact			2020	2019
Net sales	$	138.6		$	143.9		(4	)%		8	%	$	(16.1	)	28	26	$	105.7		$	138.6		(23.7	)%		(19.4	)%	$	(7.4	)	28	28
Segment profit	17.7			12.4			43			65		(1.7		)	24	14	2.5			17.7			(85.9	)		(85.0	)	(1.0		)	9	24

Segment profit as percent of sales	12.8		%	8.6		%	4.2		pp	na		na			na	na	2.4		%	12.8		%	(10.4	)	pp	n/a		n/a			n/a	n/a

_________________________



nan/a	not applicable
pp	percentage points

Reported sales decreased 423.7 percent compared with the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, sales increased 8 percent compared with the first quarter of 2018, primarily due to higher business-to-business sales. On average, the impact of lower prices was 1 percent in the first quarter of 2019, primarily related to more aggressive promotional pricing.

Emerging markets accounted for $52.3 million and $59.0 million, or 38 percent and 41 percent of the reported sales in the segment in the first quarters of 2019 and 2018, respectively. Excluding the impact of changes in foreign currency exchange rates, the emerging market units' sales increased by 5 percent, primarily reflecting a larger, more productive sales force in CIS.

The established market units' reported sales increased 2 percent compared to the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, these units' sales increased by 11 percent, reflecting the benefit of relatively large business-to-business sales in France and Switzerland. This was partially offset by a decrease in sales in Germany, due to smaller, less active sales force, and in Scandinavia from a smaller, less productive sales force.

Segment profit increased $5.3 million in the first quarter of 2019 versus 2018. Excluding the impact of changes in foreign currency exchange rates, segment profit increased $7.0 million, reflecting higher than average profitability on the increased business-to-business sales and lower promotional spending.

The euro, South African rand and Turkish lira were the main currencies that impacted the first quarter year-over-year sales comparison, with the euro and South African rand having the most impact on the profit comparison.

~~Asia Pacific~~

(In millions) 13 weeks ended Change Change excluding the impact of foreign exchange Foreign exchange impact Percent of total
Mar 30,
2019 Mar 31,
2018 2019 2018
Net sales $ 156.1
$ 172.2
(9 )% (5 )% $ (8.7 ) 32 32
Segment profit 30.0
37.9
(21 ) (16 ) (2.2 ) 41 44

Segment profit as percent of sales 19.2 % 22.0 % (2.8 ) pp na
na
na na

~~__________________________~~



na	~~not applicable~~
pp	~~percentage points~~

Reported sales decreased 9 percent compared with the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, sales decreased 5 percent. On average, the impact of lower prices was 2 percent in the first quarter compared with 2018, primarily related to more aggressive promotional pricing.

Emerging markets accounted for $137.7 million and $150.2 million, or 88 percent and 87 percent of reported sales in the first quarters of 2019 and 2018, respectively. Excluding the negative $7.3 million impact from changes in foreign currency exchange rates, sales in these units decreased 4 percent compared with 2018. The most significant decreases were in India and Indonesia from smaller, less active sales forces from lower sales force additions, and the response to the Company's product and promotional programs, as well as lower productivity in India. This was partially offset by China, primarily related to the net additions of outlets. China ended the quarter with approximately 6,800 outlets, which was 6 percent more than at the end of the first quarter of 2018.

The units operating in the established markets decreased 16 percent and 10 percent in reported and local currency sales, respectively, primarily reflecting a smaller, less productive sales force in Tupperware Australia and New Zealand.

Segment profit decreased 21 percent compared with the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, segment profit was down 16 percent, primarily reflecting lower drop-through on lower sales in India and Indonesia, along with investment in gross margin and promotional costs in Indonesia to better engage the sales force and consumers. The decrease was partially offset by profit on higher sales in China.

The Chinese renminbi and the Malaysian ringgit had the most meaningful impact on the first quarter sales comparisons with the Chinese renminbi having the most meaningful impact on the profit comparisons.

~~North America~~

(In millions) 13 weeks ended Change Change excluding the impact of foreign exchange
Foreign exchange impact
Percent of total
Mar 30,
2019 Mar 31,
2018 2019 2018
Net sales $ 119.6
$ 135.0
(11 )% (10 )% $ (2.8 ) 25 25
Segment profit 17.4
19.0
(8 ) (6 ) (0.5 ) 23 22

Segment profit as percent of sales 14.5 % 14.1 % 0.4
pp na
na
na na

~~_________________________~~



na	~~not applicable~~
pp	~~percentage points~~

Reported sales in the first quarter of 2019 decreased 11 percent compared with the first quarter of 2018. Excluding the impact of changes in foreign currency exchange rates, sales decreased 10 percent. The average impact of higher prices was 2 percent.

Emerging markets accounted for $72.8 million and $78.6 million, or 61 percent and 58 percent of the reported sales in the segment in the first quarters of 2019 and 2018, respectively. On a local currency basis, the emerging market units' sales decreased 5 percent, primarily reflecting a less active sales force in Fuller Mexico. Tupperware and Fuller Mexico results were negatively impacted by a gasoline shortage in Mexico during the beginning of the quarter, and uncertainty associated with the new government.

The established markets' reported sales decreased 17 percent. Excluding the impact of changes in foreign currency exchange rates, sales decreased 16 percent due to less active sellers in the response to the Company's product and promotional programs in the United States and Canada.

Reported segment profit decreased 8 percent in the first quarter of 2019. Excluding the impact of foreign currency exchange rates, profit decreased 6 percent, in line with the change in sales in local currency.

~~The Mexican peso was the main foreign currency impacting the sales and profit comparisons.~~

~~South America~~

(In millions) 13 weeks ended Change Change excluding the impact of foreign exchange Foreign exchange impact Percent of total
Mar 30,
2019 Mar 31,
2018 2019 2018
Net sales $ 73.0
$ 91.5
(20 )% (3 )% $ (16.4 ) 15 17
Segment profit 8.9
17.3
(49 ) (38 ) (2.9 ) 12 20

Segment profit as percent of sales 12.2 % 18.9 % (6.7 ) pp na
na
na na

~~_________________________~~



na	~~not applicable~~
pp	~~percentage points~~

~~Reported sales for the segment decreased 20 percent in~~ the first quarter of 2019. Excluding the impact of changes in foreign currency exchange rates, sales decreased 319.4 percent compared with the first quarter of 2019. On average, the impact of higher prices was about 2 percent in the first quarter compared with 2019.

The net decrease in local currency sales was mainly driven by:

France and Switzerland, mainly from lower business-to-business sales compared with 2019 and France, from government mandated lock down due to COVID-19

Italy, mainly from a less active and less productive sales force negatively impacted by social gathering restrictions starting at the end of February and a country-wide lockdown by mid-March as a result of COVID-19

partial or country-wide lockdowns in March due to COVID-19

Segment profit decreased $15.2 million in the first quarter of 2020 versus 2019. Excluding the impact of changes in foreign currency exchange rates, segment profit decreased $14.2 million compared to the first quarter of 2019, primarily driven by:

decreased business-to-business sales mainly in France and Switzerland with higher than average profitability

increased distribution mainly from lower fixed costs absorption and selling expenses from higher bad debt expense

impact from COVID-19

The Euro and South African rand were the main currencies that impacted the first quarter sales comparisons while the South African rand had a meaningful impact on profit comparisons.

Asia Pacific



(In millions)	13 weeks ended						Change			Change excluding the impact of foreign exchange		Foreign exchange impact			Percent of total
(In millions)	Mar 28, 2020			Mar 30, 2019			Change			Change excluding the impact of foreign exchange		Foreign exchange impact			2020	2019
Net sales	$	120.4		$	156.1		(22.9	)%		(20.1	)%	$	(5.4	)	32	32
Segment profit	17.3			30.0			(42.3	)		(40.1	)	(1.1		)	59	41
Segment profit as percent of sales	14.4		%	19.2		%	(4.8	)	pp	n/a		n/a			n/a	n/a

______________________



n/a	not applicable
pp	percentage points

Reported sales decreased 22.9 percent compared with the first quarter of 2019. Excluding the impact of changes in foreign currency exchange rates, sales decreased 20.1 percent. On average, the impact of higher prices was about 4 percent in the first quarter compared with 2019, primarily related to less promotional pricing.

The main drivers for the decrease in local currency sales were:

China, from a reduction in outlet openings, lower productivity from a shift in mix to mid-priced products from premium priced products due to lower consumer spending trends and outlet activities disruption from COVID-19. China was able to partially mitigate the impact of this health crisis by leveraging e-commerce and social media capabilities and launching support programs to outlet owners.

Indonesia and the Philippines, mainly from a less active sales force ~~in Brazil. The average impact of higher prices was 5 percent, mainly~~and the Philippines, from mandated lock down due to ~~inflation~~COVID-19

Malaysia & Singapore, due to a less active sales force in ~~Argentina. All of the businesses~~addition to lower consumer spending

Partial or country-wide lockdowns due to COVID-19 negatively impacted all business units in this ~~segment operate in emerging market economies.~~segment.

~~Reported segment~~Segment profit decreased ~~$8.4 million or 49~~42.3 percent incompared with the first quarter of 2019. Excluding the impact of changes in foreign currency exchange rates, segment profit decreased 3840.1 percent, ~~reflecting~~ primarily reflecting:

the impact from lower sales ~~together with higher product costs from lower production~~ volume and shift in product mix in China, in addition to lower margins from an increase in selling expenses driven by higher ~~distribution~~headcount and ~~operating costs~~fees for professional services firms supporting business turnaround efforts and an increase in ~~Brazil, along with inflation~~outlet support expenses related ~~higher costs~~to COVID-19

lower sales volumes in ~~Argentina.~~Indonesia and the Philippines

impact from COVID-19

The ~~Argentine peso and the Brazilian real~~Chinese renminbi had the most ~~significant impacts on the year-over-year sales comparison, with the Brazilian real having the most significant~~meaningful impact on the first quarter sales and profit ~~comparison.~~comparisons.

~~Inflation~~North America



(In millions)	13 weeks ended						Change			Change excluding the impact of foreign exchange		Foreign exchange impact			Percent of total
(In millions)	Mar 28, 2020			Mar 30, 2019			Change			Change excluding the impact of foreign exchange		Foreign exchange impact			2020	2019
Net sales	$	101.3		$	119.6		(15.4	)%		(10.5	)%	$	(6.5	)	27	25
Segment profit	6.5			17.4			(62.6	)		(57.8	)	(2.0		)	22	23
Segment profit as percent of sales	6.4		%	14.5		%	(8.1	)	pp	n/a		n/a			n/a	n/a

_________________________



n/a	not applicable
pp	percentage points

Reported sales in ~~Argentina and Venezuela has been at a high level~~ the ~~past several years. The Company uses a blended index~~first quarter of the Consumer Price Index and National Consumer Price Index for determining highly inflationary status in these countries. For Argentina, this blended index reached cumulative three-year inflation in excess of 1002020 decreased 15.4 percent in 2018 and as such, the Company transitioned to highly inflationary status as of July 1, 2018. Venezuela was determined to be highly inflationary starting in 2010. Gains and losses resulting from the translation of the financial statements of subsidiaries operating in highly inflationary economies are recorded in earnings. As of March 30, 2019, the Company had approximately $1.7 million of net monetary assets in Argentina, which are of a nature that will generate income or expense for the change in value associated with exchange rate fluctuations versus the U.S. dollar. There were no material monetary assets or liabilities in Venezuela as of March 30, 2019.

~~Financial Condition~~

~~Liquidity and Capital Resources:~~ ~~The Company's net working capital position decreased by $2.8 million~~ compared with the ~~end~~first quarter of ~~2018.~~2019. Excluding the impact of changes in foreign currency exchange rates, sales decreased 10.5 percent. The average impact of higher prices was about 1 percent.

The net decrease in local currency sales was mainly driven by:

Tupperware Mexico, due to a less active and less productive sales force mainly from lower recruiting, negatively impacted by COVID-19 starting in mid-March

the United States and Canada, reflecting a smaller sales force from lower recruiting mainly due to fewer sales force members at or above manager level, resulting in a reduction in activity and productivity

This segment, along with South America, were the last to start being affected by COVID-19 in the first quarter, with a greater impact expected in the second quarter.

Reported and local currency segment profit decreased 62.6 percent and 57.8 percent in the first quarter of 2020, respectively, related to:

Fuller Mexico, due to lower gross margin driven by product mix

the United States and Canada, from lower sales volume and lower gross margin driven by product mix

impact from COVID-19

The Mexican peso had the most meaningful impact on the first quarter sales and profit comparisons.

South America



(In millions)	13 weeks ended						Change			Change excluding the impact of foreign exchange		Foreign exchange impact			Percent of total
(In millions)	Mar 28, 2020			Mar 30, 2019			Change			Change excluding the impact of foreign exchange		Foreign exchange impact			2020	2019
Net sales	$	48.5		$	73.0		(33.5	)%		(19.2	)%	$	(12.9	)	13	15
Segment profit	3.0			8.9			(66.3	)		(58.9	)	(1.6		)	10	12
Segment profit as percent of sales	6.2		%	12.2		%	(6.0	)	pp	n/a		n/a			n/a	n/a

_________________________



n/a	not applicable
pp	percentage points

Reported sales for the segment decreased 33.5 percent in the first quarter of 2020. Excluding the impact of changes in foreign currency exchange rates, sales decreased 19.2 percent, reflecting lower sales force activity and recruiting in Brazil due to increased competition, the need for digitization to attract and retain the sales force, and unfavorable macroeconomic trends, including lower consumer spending. The average impact of higher prices was about 3 percent. This segment had the least impact from COVID-19 in the first quarter of 2020, with a greater impact expected in the second quarter.

Reported segment profit decreased $5.9 million or 66.3 percent in the first quarter of 2020. Excluding the impact of changes in foreign currency exchange rates, segment profit decreased 58.9 percent, primarily reflecting the impact from lower sales volume and lower gross margin driven by unfavorable product mix and higher product costs in Brazil.

The Argentine peso and the Brazilian real were the main currencies that impacted the first quarter sales comparisons while the Brazilian real had a meaningful impact on profit comparisons.

Financial Condition

Liquidity and Capital Resources: The Company's net working capital position decreased by $41.9 million compared with the end of 2019. Excluding the impact of changes in foreign currency exchange rates, net working capital decreased ~~$6.2~~$26.4 million, primarily ~~reflecting an $88.4~~reflecting:

a $57.5 million increase in short-term borrowings, net of cash and cash equivalents ~~and~~

a ~~$3.4~~$1.4 million decrease ~~related to amounts on~~in accounts receivable driven by lower sales at quarter-end, including from the ~~balance sheet for hedging activities,~~impact of COVID-19

These were partially offset by favorable impacts from:

a ~~$41.5~~$7.9 million net decrease in accounts payable and accrued liabilities due to the timing of payments around year-end, lower purchases and overall reduction in discretionary spending, partially offset by higher accruals for professional services in support of business turnaround efforts

a ~~$21.2~~$12.1 million increase in ~~accounts receivable due~~receivables related to the ~~level and timing of sales around~~net amounts on the ~~end of each period, including higher receivables from business-to-business transactions, and~~ balance sheet for hedging activities

a ~~$9.2~~$7.7 million increase in inventory mainly related to lower than expected sales trends, including from the impact of COVID-19, and timing of sales and ~~shipments.~~shipments

a $4.8 million increase in non-trade receivables and prepaid expenses driven by timing of payments

On March ~~29, 2019 ,~~20, 2020 Moody’s downgraded the Company’s credit rating from Ba3 to B3. On April 6, 2020, S&P downgraded the Company’s credit rating from B to CCC+. Although each downgrade exceeded the threshold for additional guarantee and collateral requirements to be triggered under the Credit Agreement, at the time of the downgrade the Company had already amended ~~and restated its multicurrency~~the Credit Agreement (the ~~"Credit Agreement"~~“Amendment”) on February 28, 2020. Among other things, the Amendment eliminated the requirement that a Non-Investment Grade Ratings Event, as defined in the Credit Agreement, must occur before the Company is required to cause the Additional Guarantee and Collateral Requirement, as defined in the Credit Agreement, to be satisfied. As a result, the Company is required to cause certain of its domestic subsidiaries to become guarantors and the Company and certain of its domestic subsidiaries are required to pledge additional collateral. The Amendment also includes its wholly owned subsidiaries Tupperware Nederland B.V., Administradora Dart, S. de R.L. de C.V., and Tupperware Brands Asia Pacific Pte. Ltd. (the “Subsidiary Borrowers”) with JPMorgan Chase Bank, N.A. as administrative agent (the “Administrative Agent”), swingline lender, joint lead arranger and joint bookrunner, and Credit Agricole Corporate and Investment Bank, HSBC Securities (USA) Inc., Mizuho Bank, Ltd. and Wells Fargo Securities, LLC, as syndication agents, joint lead arrangers and joint bookrunners.modified the financial covenant. Previously, the Company had to maintain at specified measurement periods a Consolidated Leverage Ratio that was not greater than or equal to 3.75 to 1.00. The Credit Agreement ~~replaces~~was amended to prevent the Company from exceeding the Consolidated Leverage Ratio for the four fiscal quarters ending in March 2020. If the Company had exceeded the Consolidated Leverage Ratio, this could have constituted an Event of Default, potentially resulting in a cross default under cross-default provisions with respect to other of the Company's debt obligations, giving the lenders the ability to terminate the revolving commitments, accelerate outstanding amounts under the Credit Agreement, ~~dated September 11, 2013~~exercise certain remedies relating to the collateral securing the Credit Agreement, and ~~as amended (the “Old Credit Agreement”) and, other than an increased aggregate amount that may be borrowed, an improvement~~require the Company to post cash collateral for all outstanding letters of credit. In addition to the relief provided in the ~~consolidated leverage ratio covenant~~Amendment, the Company has reduced certain operating expenses beginning in 2020 and ~~a slightly more favorable commitment fee rate, has terms and conditions similar to that~~could use available cash, including repatriating cash held outside of the ~~Old Credit Agreement. The Credit Agreement makes available~~United States, to make debt repayments to lower its Consolidated Leverage Ratio. Following the Company and the Subsidiary Borrowers a committed five-year credit facility in an aggregate amount of $650 million (the “Facility Amount”). The Credit Agreement provides (i) a revolving credit facility, available up to the full amount of the Facility Amount, (ii) a letter of credit facility, available up to $50 million of the Facility Amount, and (iii) a swingline facility, available up to $100 million of the Facility Amount. Each of such facilities is fully available to the Company and the Facility Amount is available to the Subsidiary Borrowers up to an aggregate amount not to exceed $325 million. With the agreement of its lenders,Amendment, the Company is ~~permitted~~required to ~~increase,~~maintain at the last day of each quarterly measurement period a Consolidated Leverage Ratio not greater than or equal to the ratio as set forth below opposite the period that includes such day (or, if such day does not end on upthe last day of the calendar quarter, that includes the last day of the calendar quarter that is nearest to ~~three occasions,~~such day):



Period	Consolidated Leverage Ratio
From the Amendment effective date to and including June 27, 2020	5.75 to 1.00
September 26, 2020	5.25 to 1.00
December 26, 2020	4.50 to 1.00
March 27, 2021	4.00 to 1.00
June 26, 2021 and thereafter	3.75 to 1.00

See the ~~Facility Amount by~~Company’s Form 8-K with a ~~total~~filing date of ~~up to $200 million (for a maximum aggregate Facility Amount of $850 million), subject to certain conditions.~~ March 2, 2020 for more information.

As of March ~~30, 2019,~~28, 2020, the Company had total borrowings of ~~$366.2~~$388.1 million outstanding under the Credit Agreement, with ~~$204.5~~$245.1 million of that amount denominated in ~~euros.~~

Loans taken under the Credit Agreement bear interest under a formula that includes a base rate selected dependent upon currency borrowed, plus an applicable spread. The Company generally selects LIBOR as the base rate.Euro. As of March ~~30, 2019,~~28, 2020, the ~~Credit Agreement dictated~~Company had a weighted average interest rate of 2.0 percent with a base rate spread of 150 basis points ~~which gave the Company a weighted average interest rate of 2.6 percent~~ on LIBOR-based borrowings under the Credit Agreement.

The Company had routinely increased its revolver borrowings under the Old Credit Agreement each quarter, and expects to continue to do so under the Credit Agreement, to fund operating, investing and other financing activities. It also has in the past and expects to in the future, use cash available at the end of each quarter to reduce borrowing levels. As a result, the Company has higher interest expense and foreign exchange exposure on the value of its cash during each quarter than would relate solely to the quarter end cash and debt balances.

Similar to the Old Credit Agreement, the Credit Agreement contains customary covenants that, among other things, generally restrict the Company's ability to incur subsidiary indebtedness, create liens on and sell assets, engage in certain liquidations or dissolutions, engage in certain mergers or consolidations, or change lines of business. These covenants are subject to significant exceptions and qualifications. The agreement also has customary financial covenants related to interest coverage and maximum amount of leverage. These restrictions are not expected to impact the Company's operations.

Under the Credit Agreement and consistent with the Old Credit Agreement, the Guarantor unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrowers relating to the Credit Agreement, supported by a security interest in certain "Tupperware" trademarks and service marks. The Credit Agreement includes a trigger whereby the Corporation would be required to provide additional collateral and subsidiary guarantees if either Moody's Investors Services, Inc. or S&P Global Ratings downgrades its existing ratings by two or more rating levels.

As of March ~~30, 2019,~~28, 2020, and currently, the Company ~~had considerable cushion under its~~was in compliance with the financial covenants. However, economic conditions, adverse changes in foreign exchange rates, lower than foreseen sales, profit and/or cash flow generation, including from restructuring actions, the payment of dividends, the ability to access cash generated internationally, share repurchases or the occurrence of other events discussed under “Forward Looking Statements” in this Part I, Item 3 andcovenants in the ~~Company’s other reports filed with the SEC could impact the Company’s ability to comply with these covenants.~~Credit Agreement.

At March ~~30, 2019,~~28, 2020, the Company had ~~$364.9~~$318.4 million of unused lines of credit, including ~~$282.2~~$260.6 million under the committed, secured Credit Agreement, and ~~$82.7~~$57.8 million available under various uncommitted lines around the world. ~~If necessary, with~~With the agreement of its lenders, the Company is permitted to increase its borrowing capacity under the Credit Agreement by a total of up to ~~$200~~$200.0 million (for a maximum aggregate Facility Amount of $850.0 million) subject to certain conditions.

The Company has outstanding approximately $600.0 million aggregate principal amount of 4.75% senior notes (the “Senior Notes”). The Senior Notes will mature on June 1, 2021. The Notes were issued under an indenture (the “Indenture”), by and among the Company, its 100 percent subsidiary, the Guarantor, and Wells Fargo Bank, N.A., as trustee. As security for its obligations under the guarantee of the Senior Notes, the Guarantor has granted a security interest in certain “Tupperware” trademarks and service marks. As security for its obligations under the guarantee of the Credit Agreement, the Guarantor has granted a security interest in those certain “Tupperware” trademarks and service marks as well. The Indenture includes, among others, covenants that limit the ability of the Company and its subsidiaries to (i) incur indebtedness secured by liens on certain real property, (ii) enter into certain sale and leaseback transactions, (iii) with respect to the Company only, consolidate or merge with another entity, or sell or transfer all or substantially all of its properties and assets and (iv) sell the capital stock of the Guarantor or sell or transfer all or substantially all of its assets or properties. See Note 8 to the Consolidated Financial Statements in Part II, Item 8 in the Company's Annual Report on Form 10-K for the year ended December 28, 2019 filed with the SEC (the “2019 Form 10-K”) for further details regarding the Senior Notes.

Whether the Company will be able to repay or refinance the Senior Notes will depend on economic, financial, competitive and other factors that may be beyond its control, including the COVID-19 pandemic, and on the Company’s financial performance at the time. The COVID-19 pandemic and measures implemented to slow the spread of COVID-19 may negatively impact the Company's ability to repay or refinance the Senior Notes. The extent to which the COVID-19 pandemic ultimately impacts the Company’s ability to repay or refinance the Senior Notes will depend on future developments, which are highly uncertain and cannot be predicted with certainty. Any refinancing of the Senior Notes may be at a higher interest rate and may require the Company to comply with additional covenants and obligations, which could further restrict the Company's business operations. If the Company is unable to repay or refinance the Senior Notes, the holders of the Seniors Notes may pursue certain remedies relating to the collateral securing the guaranty of the Senior Notes or pursue other remedies, in each case in accordance with the Indenture and the documents relating to such collateral, all of which could have a material adverse effect on the Company.

Given the fast-moving nature of the COVID-19 pandemic and the resulting uncertainty on financial markets and the economy as a whole, the Company’s capital position and availability of capital to fund the Company’s liquidity requirements, including repayment or refinancing of the Senior Notes, could be adversely impacted. The Company is taking proactive measures to maximize liquidity and increase available cash by reducing costs and spending across the organization.

See Note 10 to the Consolidated Financial Statements in Part I, Item 1 of this Report for further details regarding the Company's debt.

The Company monitors the third-party depository institutions that hold its cash and cash equivalents with an emphasis primarily on safety and liquidity of principal and secondarily on maximizing yield on those funds. The Company diversifies its cash and cash equivalents among counterparties, which minimizes exposure to any one of these entities. Furthermore, the Company is exposed to financial market risk resulting from changes in interest rates, foreign currency rates, and the possible liquidity and credit risks of its counterparties. The Company believes that it has sufficient liquidity to fund its working capital, capital spending needs and current and anticipated restructuring ~~actions, as well as its current dividend.~~actions. This liquidity includes to the extent that it is accessible, its cash and cash equivalents, which totaled ~~$146.8~~$174.5 million as of March ~~30, 2019,~~28, 2020, cash flows from operating activities, and access to its Credit Agreement, as well as access to other various uncommitted lines of credit around the world. The Company has not experienced any limitations on its ability to access its committed facility.

Cash and cash equivalents (“cash”) totaled ~~$146.8~~$174.5 million as of March ~~30, 2019.~~28, 2020. Of this amount, ~~$146.5~~$170.1 million was held by foreign subsidiaries. Of the cash held outside of the United States, ~~approximately 6~~less than 1 percent was ~~not eligible~~deemed ineligible for ~~repatriation due to~~repatriation. Other than deferred tax liability of $8.8 million for the ~~level~~withholding tax liability for future distribution of ~~past statutory~~unrepatriated foreign earnings, ~~by the foreign units in which the cash was held~~no U.S. federal income taxes or other ~~local restrictions.~~foreign taxes have been recorded related to permanently reinvested earnings.

The Company’s most significant foreign currency exposures ~~are to the~~ include:

Brazilian real

Chinese renminbi

Indonesian rupiah

Malaysian ringgit

Mexican peso ~~and~~

South African ~~rand.~~ rand

Business units in which the Company generated at least $100 million of sales in ~~2018 included~~ 2019 included:

Brazil

China

Fuller Mexico ~~Germany, Indonesia,~~

Tupperware Mexico ~~and the United States and Canada. Of these units, sales by Brazil, China and~~

the United States and Canada ~~exceeded $200 million.~~

A significant downturn in the Company’s business in these units would adversely impact its ability to generate operating cash flows. Operating cash flows would also be adversely impacted by significant difficulties in the ~~addition,~~additions, retention and activity of the Company’s independent sales force or the success of new products, promotional programs and/or possibly changes in sales force compensation programs.

The Company has taken, and plans to continue to take, certain measures, to enhance its liquidity position and provide additional financial flexibility, including in response to the impact of COVID-19, including reductions in discretionary spending, revisiting investment strategies, the potential sale of land, and reducing payroll costs, including through organizational redesign, employee furloughs and permanent reductions in employee headcount. As of March 28, 2020, the Company is in compliance with its financial covenants under its Credit Agreement. The Company currently forecasts that it will be in compliance with its financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the measures noted above. If the impact of COVID-19 is more severe than currently forecasted this may impact the Company’s compliance with its financial covenantswhich could have a material adverse effect on the Company. Additionally, during the beginning of the second quarter of 2020, on March 30, 2020, the Company drew $225.0 million of revolving loans under its Credit Agreement, $175.0 million of which was drawn as a proactive measure given the uncertain environment resulting from the COVID-19 pandemic and to provide the Company with further financial flexibility. See Part II, Item 1A under “The Outbreak of the Novel Coronavirus (COVID-19) Pandemic” for more information regarding COVID-19 and how it could affect the Company’s business, financial condition, results of operations, cash flows and liquidity.

Operating Activities: Net cash from operating activities in the first quarters of ~~2019~~2020 and ~~2018~~2019 were outflows of ~~$40.1~~$47.0 million and ~~$40.8~~$40.1 million, respectively. The ~~slightly favorable~~net unfavorable comparison was primarily due to an unfavorable impact from lower ~~cash outflows related to inventory, timing of tax payments and prepaid expenses. This was~~segment profit, partially offset by ~~an increase~~a reduction in accounts receivable driven by lower sales and increased collection activity and lower cash ~~outflow~~tax payments.

Investing Activities: During the quarter ended March 28, 2020, the Company had $8.2 million of capital expenditures invested in:

$3.6 million related to ~~accounts payable, mainly from a higher balance at~~global information technology projects

$2.7 million related to molds used in the ~~end~~manufacturing of ~~2018 compared with~~products

$1.7 million related to buildings and improvements, and other machinery and equipment

$0.2 million primarily related to land development near the ~~prior year, and reduced recurring purchases in light of a lower level of business in certain units.~~Company's Orlando, Florida headquarters

~~Investing Activities:~~ ~~During~~In the ~~first quarters of~~quarter ended March 30, 2019, ~~and 2018,~~ the Company had $12.9 million ~~and $15.2 million, respectively,~~ of capital ~~expenditures. In both 2019 and 2018, the most significant capital~~ expenditures ~~were~~consisting of:

$5.8 million related to ~~molds. In 2019 and 2018, capital expenditures included $1.1~~molds used in the manufacturing of products

$4.3 million ~~and $1.0~~on various global information technology projects

$0.6 million ~~respectively,~~related to the land development near the Company's Orlando, Florida headquarters

$1.1 million related to supply chain capabilities, excluding molds ~~and $4.3~~

$1.1 million ~~and $2.9 million, respectively, on~~related to various ~~global information technology projects, $1.1 million and $0.7 million on~~expenditures consisting primarily of vehicles ~~respectively, and $0.6 million and $2.4 million, respectively, for land development near its Orlando headquarters. There~~

Partially offsetting capital spending were proceeds from the sale of long-term assets of $0.5 million and $0.6 million in 2020 and ~~$5.9 million in~~ 2019, ~~and 2018,~~ respectively.

Financing Activities: Dividends paid to shareholders ~~were~~was $33.9 ~~million and $35.4~~ million in the first ~~three months~~quarter of ~~2019 and 2018, respectively.~~2019. The Company suspended its dividend beginning the fourth quarter of 2019. The Company also increased revolver borrowings by ~~$84.1~~$121.0 million and ~~$97.2~~$84.1 million in the first ~~three months~~quarters of ~~2019~~2020 and ~~2018,~~2019, respectively, for the funding of operating, investing and financing activities.

Open market share repurchases by the Company ~~are~~were permitted under an authorization that ~~runs until~~ran through February 1, 2020 and ~~allows~~allowed up to $2.0 billion to be ~~spent.~~spent and was not extended. Under this program, there were no share repurchases in the first quarters of ~~2019~~2020 or ~~2018.~~2019. Since 2007, the Company has spent $1.39 billion to repurchase 23.8 million shares under this program. Going forward, in setting share repurchase amounts, the Company expects to target, over time, a debt-to-EBITDA ratio of below 2.0 times consolidated funded debt (as defined in the Company's Credit Agreement); however, it has indicated it may opportunistically repurchase in 2019 up to $100 million worth of shares, notwithstanding, it expects its debt-to-EBITDA ratio to be above 2.0 times throughout the year.

Repurchases under the Company’s stock incentive programs are made when employees use shares to satisfy the minimum statutorily required withholding taxes. In the first ~~three months~~quarters of 2020 and 2019, 1,127 and ~~2018,~~ 23,088 ~~and 20,145~~ shares were retained to fund withholding taxes, totaling ~~$0.7~~$0.01 million and ~~$1.0~~$0.70 million, respectively.

New Pronouncements

Refer to Note 19 to the Consolidated Financial Statements in Part I, Item 1 of this Report for a discussion of new pronouncements.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

~~One of the Company's market risks is its exposure to the impact of~~The Company may be impacted by interest rate changes on its borrowings. The Company accesses the short-term and long-term markets to obtain financing. Access to, and the availability of acceptable terms and conditions of, such financing are impacted by many factors, including: the credit ratings; liquidity and volatility of the overall capital markets; and the current state of the economy. The Company has elected to manage this risk through the maturity structure of its borrowings and the currencies in which it borrows.

Interest Rate Risk

Loans taken under the Credit Agreement are of a short duration and bear interest under a formula that includes, aat the Company's option, one of four different base ~~rate selected dependent upon currency borrowed,~~rates, plus an applicable spread. The Company generally selects LIBOR as ~~the~~its base rate. As of March ~~30, 2019,~~28, 2020, the ~~Credit Agreement dictated~~Company had a weighted average interest rate of 2.0 percent with a base rate spread of 150 basis points ~~which gave~~on its U.S. dollar and euro denominated LIBOR/EURIBOR-based borrowings under the Credit Agreement.

On July 27, 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced that it would phase-out LIBOR by the end of 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021, or if alternative rates or benchmarks will be adopted. Changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect interest rates. The Company cannot predict the effect of the potential changes to LIBOR or the establishment of alternative rates or benchmarks. The Credit Agreement allows for the use of select alternative rates and benchmarks and based on the assessment of such rates and benchmarks, the Company does not expect a ~~weighted average interest rate~~material impact from the phase-out of ~~2.6 percent on LIBOR-based borrowings.~~LIBOR.

As of March ~~30, 2019,~~28, 2020, the Company had total borrowings of ~~$366.2~~$388.1 million outstanding under ~~the~~its Credit Agreement, with ~~$204.5~~$245.1 million denominated in ~~euro.~~Euro. If short-term interest rates varied by 10 percent, which in the Company's case would mean short duration U.S. dollar and euro LIBOR, with all other variables remaining constant, the Company's annual interest expense would not be significantly impacted.

The Company ~~had~~ routinely ~~increased~~increases its revolver borrowings under the ~~Old~~ Credit Agreement during each quarter ~~and expects to continue to do so under the Credit Agreement,~~ to fund operating, investing and ~~other~~ financing ~~activities. It also has in the past~~activities and ~~expects to in the future, use~~uses cash available at the end of each quarter to temporarily reduce borrowing levels. As a result, the Company ~~has higher~~incurs more interest expense and has higher foreign exchange exposure on the value of its cash and debt during each quarter than would relate solely to the quarter end ~~cash and debt~~ balances.

Foreign Exchange Rate Risk

A significant portion of the Company's sales and profit ~~comes~~come from its international operations. Although these operations are geographically dispersed, which partially mitigates the risks associated with operating in particular countries, the Company is subject to the usual risks associated with international operations. These risks include local political and economic environments and relations between foreign and U.S. governments.

Another economic risk of the Company is exposure to changes in foreign currency exchange rates on the earnings, cash flows and financial position of its international operations. The Company is not able to project, in any meaningful way, the effect of these possible fluctuations on translated amounts or future earnings. This is due to the Company's constantly changing exposure to various currencies, the fact that all foreign currencies do not react in the same manner in relation to the U.S. dollar and the large number of currencies involved, although the Company's most significant income and cash flow exposures are to the Brazilian real, Chinese renminbi, Indonesian rupiah, Malaysian ringgit, Mexican peso and South African rand.

Although this currency risk is partially mitigated by the natural hedge arising from the Company's local product sourcing in many countries, a strengthening U.S. dollar generally has a negative impact on the Company. In response to this fact, the Company uses financial instruments, such as forward contracts, to hedge its exposure to certain foreign exchange risks associated with a portion of its investment in international operations. In addition to hedging against the balance sheet impact of changes in exchange rates, the hedge of investments in international operations also has the effect of hedging cash flow generated by those operations. The Company also hedges, with these instruments, certain other exposures to various currencies arising from amounts payable and receivable, non-permanent intercompany transactions and a portion of purchases forecasted for generally up to the following 15 months. The Company does not seek to hedge the impact of currency fluctuations on the translated value of the sales, profit or cash flow generated by its operations.

While the Company's derivatives that hedge a portion of its equity in its foreign subsidiaries and its fair value hedges of balance sheet risks all work together to mitigate its exposure to foreign exchange gains or losses, they result in an impact to operating cash flows as they are settled. For the first quarters of ~~2019~~2020 and ~~2018,~~2019, the cash flow impact of these currency hedges ~~were inflows~~was an outflow of $1.9 million and an inflow of $0.8 million, ~~and $5.4 million,~~ respectively.

The U.S. dollar equivalent of the Company's most significant net open forward contracts as of March ~~30, 2019~~28, 2020 were to buy ~~$28.8~~$69.8 million of U.S. dollars, ~~$26.9~~$12.2 million of euros and ~~$19.9~~to sell $19.6 million of Swiss francs and ~~to sell $26.2~~$16.3 million of Mexican pesos. In agreements to sell foreign currencies in exchange for U.S. dollars, for example, an appreciating dollar versus the opposing currency would generate a cash inflow for the Company at settlement, with the opposite result in agreements to buy foreign currencies for U.S. dollars. The notional amounts change based upon changes in the Company's outstanding currency exposures. Based on rates existing as of March ~~30, 2019,~~28, 2020, the Company was in a net receivable position of approximately ~~$0.7~~$9.0 million related to its currency hedges under forward contracts. Currency fluctuations could have a significant impact on the Company's cash flow upon the settlement of its forward contracts.

A precise calculation of the impact of currency fluctuations is not practical since some of the contracts are between non-U.S. dollar currencies. The Company continuously monitors its foreign currency exposure and expects to enter into additional contracts to hedge exposure in the future. See further discussion regarding the Company's hedging activities for foreign currency in Note 11 to the Consolidated Financial Statements.

The Company is subject to credit risks relating to the ability of counterparties of hedging transactions to meet their contractual payment obligations. The risks related to creditworthiness and non-performance have been considered in the determination of fair value for the Company's foreign currency forward exchange contracts. The Company continues to closely monitor its counterparties and will take action, as appropriate and possible, to further manage its counterparty credit risk.

Commodity Price Risk

The Company is also exposed to rising material prices in its manufacturing operations and, in particular, the cost of oil and natural gas-based resins, including the fact that in some cases resin prices are actually in, or are based on, currencies other than that of the unit buying the resin, which introduces a currency exposure that is incremental to the exposure to changing market prices. Resins are the primary material used in production of most Tupperware^® products, and the Company estimates that ~~2019~~2020 cost of sales will include approximately ~~$125~~$80.0 million for the cost of resin in the Tupperware^® brand products it produces and has contract manufactured. The Company uses many different kinds of resins in its products. About three-fourths of the value of its resin purchases are “polyolefins” (simple chemical structure, easily refined from oil and natural gas). The remaining one-fourth of the value of its resin purchases is more highly engineered. With a comparable product mix and exchange rates, a 10 percent fluctuation in the cost of resin would impact the Company's annual cost of sales by approximately ~~$13~~$8.0 million compared with the prior year. The amount the Company pays for its resins is impacted by the relative changes in supply and demand. The Company partially manages its risk associated with rising resin costs by utilizing a centralized procurement function that is able to take advantage of bulk discounts while maintaining multiple suppliers, and also enters into short-term pricing arrangements. It also manages its margin through cash flow hedges in some cases when it purchases resin in currencies, or effectively in currencies, other than that of the purchasing ~~unit,~~unit. This is done through the pricing of its products, with price increases over time on its product offerings generally in line with consumer inflation in each market, and its mix of sales through its promotional programs and promotionally priced offers. It also, on occasion, makes advance material purchases to take advantage of current favorable pricing.

Real Estate Risk

The Company has a program to sell land held for development around its Orlando, Florida headquarters. This program is exposed to the risks inherent in the real estate development process. Included among these risks is the ability to obtain all necessary government approvals, the success of attracting tenants for commercial or residential developments in the Orlando real estate market, obtaining financing and general economic conditions, such as interest rate increases. Based on the variety of factors that impact the Company's ability to close sales transactions, it cannot predict when the program will be completed.

Forward-Looking Statements

Certain statements made or incorporated by reference in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not based on historical facts or information are forward-looking statements. Statements that include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future tense or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations at the time this report is filed with the SEC or, with respect to any documents or statements incorporated by reference, on the then current plans and expectations at the time such document was filed with the SEC, or statement was made. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. Except as required by law, and as outlined below the Company undertakes no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise. Such risks and uncertainties include, among others, the following:

successful recruitment, retention and productivity levels of the Company's independent sales forces;

disruptions caused by the introduction of new or revised distributor operating models or sales force compensation systems or allegations by equity analysts, former distributors or sales force members, government agencies or others as to the legality or viability of the Company's business model, particularly in India;

disruptions caused by restructuring ~~and transformation~~ activities, including facility closure, and the combination and exit of business units, ~~impacting~~including impacts on business models and the supply chain, as well as not fully realizing expected savings or benefits related to increasing sales from actions taken;

success of new products and promotional programs;

the ability to implement appropriate product mix and pricing strategies;

governmental regulation of materials used in products coming into contact with food (e.g. polycarbonate and polyethersulfone), as well as beauty, personal care and nutritional products;

governmental regulation and consumer tastes related to the use of plastic in products and/or packaging material;

the ability to procure and pay for at reasonable economic cost, sufficient raw materials and/or finished goods to meet current and future consumer demands at reasonable suggested retail pricing levels in certain markets, particularly those with stringent government regulations and restrictions;

the impact of changes in consumer spending patterns and preferences, particularly given the global nature of the Company's business;

the value of long-term assets, particularly goodwill and indefinite and definite-lived intangibles associated with acquisitions, and the realizability of the value of recognized tax assets;

changes in plastic resin prices, other raw materials and packaging components, the cost of converting such items into finished goods and procured finished products and the cost of delivering products to customers;

the introduction of Company operations in new markets outside the United States;

general social, economic and political conditions in markets, such as in Argentina, Brazil, China, France, India, Mexico, Russia and Turkey and other countries impacted by such events;

issues arising out of the sovereign debt in the countries in which the Company operates, such as in Argentina and those in the Euro zone, resulting in potential economic and operational challenges for the Company's supply chains, heightened counterparty credit risk due to adverse effects on customers and suppliers, exchange controls (such as in Argentina and Egypt) and translation risks due to potential impairments of investments in affected markets;

disruptions resulting from either internal or external labor strikes, work stoppages, or similar difficulties, particularly in Brazil, France, India and South Africa;

changes in cash flow resulting from changes in operating results, including from changes in foreign exchange rates, restructuring ~~and transformation~~ activities, working capital management, debt payments, share repurchases and hedge settlements;

the impact of currency fluctuations on the value of the Company's operating results, assets, liabilities and commitments of foreign operations generally, including their cash balances during and at the end of quarterly reporting periods, the results of those operations, the cost of sourcing products across geographies and the success of foreign hedging and risk management strategies;

the impact of natural disasters, terrorist activities and epidemic or pandemic disease ~~outbreaks;~~outbreaks, including the coronavirus (COVID-19) outbreak;

the ability to repatriate, or otherwise make available, cash in the United States and to do so at a favorable foreign exchange rate and with favorable tax ramifications, particularly from Brazil, China, India, Indonesia, Malaysia, Mexico and South Africa;

the ability to obtain all government approvals on, and to control the cost of infrastructure obligations associated with, property, plant and equipment;

the ability to timely and effectively implement, transition, maintain and protect necessary information technology systems and infrastructure;

cyberattacks and ransomware demands that could cause the Company to not be able to operate its systems and/or access or control its data, including private data;

the ability to attract and retain certain executive officers and key management personnel and the success of transitions or changes in leadership or key management personnel;

the success of land buyers in attracting tenants for commercial and residential development and obtaining required government approvals and financing;

the Company's access to, and the costs of, financing and the potential ~~for~~that banks with which the Company maintains lines of credit tomay be unable to fulfill their commitments; the costs and covenant restrictions associated with the Company's credit arrangements and ~~senior notes due in mid 2021;~~Senior Notes; the Company’s ability to comply with, or further amend, financial covenants under its credit agreements and its ability to refinance the debt outstanding under its Credit Agreement or Senior Notes and take other actions to address its capital structure, as well as potential downgrades to the Company’s credit ratings;

integration of non-traditional product lines into Company operations;

the effect of legal, regulatory and tax proceedings, as well as restrictions imposed on the Company's operations or Company representatives by foreign governments, including changes in interpretation of employment status of the sales force by government authorities, exposure to tax responsibilities imposed on the sales force and their potential impact on the sales force's value chain and resulting disruption to the business and actions taken by governments to set or restrict the freedom of the Company to set its own prices or its suggested retail prices for product sales by its sales force to end consumers and actions taken by governments to restrict the ability to convert local currency to other currencies in order to satisfy obligations outside the country generally, and in particular in Argentina and Egypt;

the effect of competitive forces in the markets in which the Company operates, particularly related to sales of beauty, personal care and nutritional products, where there are a greater number of competitors;

the impact of counterfeit and knocked-off products and programs in the markets in which the Company operates and the effect this can have on the confidence of, and competition for, the Company's sales force members;

the impact of changes, changes in interpretation of or challenges to positions taken by the Company with respect to U.S. federal, state and foreign tax or other laws, including with respect to the Tax Act in the United States and non-income taxes issues in Brazil, India, Indonesia and ~~the Philippines;~~Mexico;

~~other risks discussed in Part I, Item 1A,~~ ~~Risk Factors~~, of the Company's 2018 Annual Report on Form 10-K, as well as the Company's Consolidated Financial Statements, Notes to Consolidated Financial Statements, other financial information appearing elsewhere in this Report and the Company's other filings with the SEC.


•	other risks discussed in Part I, Item 1A, Risk Factors, of the Company's 2019 Annual Report on the Form 10-K, as well as the Company's Consolidated Financial Statements, Notes to Consolidated Financial Statements, other financial information appearing elsewhere in this Report and the Company's other filings with the SEC.

Other than updating for changes in foreign currency exchange rates through its monthly website updates, the Company does not intend to update forward-looking information, except through its quarterly earnings releases, unless it expects diluted earnings per share for the current quarter, excluding items impacting comparability and changes versus its guidance of the impact of changes in foreign exchange rates, to be significantly below its previous guidance.releases.

Investors should also be aware that while the Company does, from time to time, communicate with securities analysts, it is against the Company's policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, it should not be assumed that the Company agrees with any statement or report issued by any analyst irrespective of the content of the confirming financial forecasts or projections issued by others.


Item 4.	Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) that are designed to ensure that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.

As of the end of the period covered by this report, management, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of the disclosure controls and procedures were effective.

Changes in Internal Controls

There have been no significant changes in the Company's internal control over financial reporting during the Company's first quarter that have materially affected or are reasonably likely to materially affect its internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended ~~( the~~(the "Exchange Act").

PART II

OTHER INFORMATION


Item 2.1.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~Legal Proceedings.

~~None.~~A number of ordinary-course legal and administrative proceedings against the Registrant or its subsidiaries are pending. In addition to such proceedings, there are certain proceedings that involve the discharge of materials into, or otherwise relating to the protection of, the environment. Certain of such proceedings involve federal environmental laws such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as well as state and local laws. The Registrant has established reserves with respect to certain of such proceedings. Because of the involvement of other parties and the uncertainty of potential environmental impacts, the eventual outcomes of such actions and the cost and timing of expenditures cannot be determined with certainty. It is not expected that the outcome of such proceedings, either individually or in the aggregate, will have a material adverse effect upon the Registrant.

As part of the 1986 reorganization involving the formation of Premark, Premark was spun-off by Dart & Kraft, Inc., and Kraft Foods, Inc. assumed any liabilities arising out of any legal proceedings in connection with certain divested or discontinued former businesses of Dart Industries Inc., a subsidiary of the Registrant, including matters alleging product and environmental liability. The assumption of liabilities by Kraft Foods, Inc. (now Mondelez International, Inc.) remains effective subsequent to the distribution of the equity of the Registrant to Premark shareholders in 1996.

In February, March and April 2020, three putative stockholder class actions and one shareholder derivative action were filed against the Company and certain current and former officers and directors. One putative class action was filed in the United States District Court for the Central District of California and the other three actions were filed in the United States District Court for the Middle District of Florida. The putative stockholder class action complaints allege that statements in public filings between January 30, 2019 and February 24, 2020 (the “potential class period”) regarding the Company’s disclosure of controls and procedures and financial guidance, as well as the need for an amendment of its credit facility, violated Sections 10(b) and 20(a) of the Securities Act of 1934. The plaintiffs seek to represent a class of stockholders who purchased the Company’s shares during the potential class period and demand unspecified monetary damages. The shareholder derivative action complaint alleges that certain officers and directors breached fiduciary duties to the Company, were unjustly enriched, and violated Sections 10(b), 14(a) and 20(a) of the Securities Act of 1934, on generally the same fact pattern. The Company believes the complaints and allegations to be without merit and intends to vigorously defend itself against the actions. The Company is unable at this time to determine whether the outcome of these actions would have a material impact on its results of operations, financial condition or cash flows.


Item 1A.	Risk Factors.

Reference is made to “Part I - Item 1A. Risk Factors” in the 2019 Form 10-K for information concerning risk factors. The Company is adding the following risk factors as set forth below.

The following risk factors should be read in conjunction with, and supplement, the risk factors set forth in “Part I - Item 1A. Risk Factors” of the 2019 Form 10-K. Before making an investment in the Company’s securities, investors should carefully consider the risk factors discussed below, together with the other information in this Report, including the sections entitled “Forward-Looking Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other reports and materials filed by the Company with the SEC. Additional risks and uncertainties not presently known by the Company or that are currently deemed immaterial may also impair the Company’s business operations. If any of these risks actually occur, the Company’s business, financial condition and results of operations could be materially affected.

The Outbreak of the Novel Coronavirus (COVID-19) Pandemic

The global spread of the novel coronavirus (COVID-19) which has been declared by the World Health Organization to be a “pandemic,” has spread to many countries and is impacting worldwide economic activity. Many governments have implemented policies intended to stop or slow the further spread of the disease, such as shelter-in-place orders, resulting in the temporary closure of schools and non-essential businesses, and these measures may remain in place for a significant period of time. The Company has experienced and may continue to experience disruptions that prevent it from meeting the demands of its sales force and customers, including disruptions to the manufacturing of its products and its supply chain, disruptions to its distribution network, disruptions in or restrictions on the ability of its employees, contractors, sales force and other business partners to work effectively and disruptions to the shipment of its products. The COVID-19 pandemic and measures implemented to slow the spread of COVID-19 may negatively impact the Company's ability to repay or refinance the $600.0 million aggregate principal amount of 4.75% senior notes (the “Senior Notes”) due on June 1, 2021, which were issued under an indenture (the “Indenture”) between the Company and its 100 percent subsidiary, Dart Industries Inc. (the “Guarantor”) and Wells Fargo Bank, N.A., as trustee. The extent to which the COVID-19 pandemic ultimately impacts the Company’s ability to repay or refinance the Senior Notes will depend on future developments, which are highly uncertain and cannot be predicted with certainty. The impact of COVID-19 and measures implemented to slow the spread could also cause delay in, or limit the ability of, the Company’s sales force to make timely payments to the Company. In addition, the pandemic has resulted in a widespread health crisis that is adversely affecting the economies and financial markets of many countries. During the COVID-19 pandemic and even after it has subsided, the Company may continue to experience adverse impacts to the Company’s business as a result of the pandemic’s global economic impact, including any recession, economic downturn, government spending cuts, tightening of credit markets or increased unemployment that has occurred or may occur in the future, which could cause its ultimate customers and potential customers to postpone or reduce spending on its products or put downward pressure on prices. The Company's top priority is to protect its employees and their families, the sales force and consumers, and its operations from any adverse impacts. The Company is taking precautionary measures as directed by health authorities and the local government.

Individually and collectively, the consequences of the COVID-19 pandemic could adversely impact its business, financial condition, results of operations, cash flows and liquidity. The extent to which the COVID-19 pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. The extent to which the COVID-19 pandemic adversely affects the Company’s business, financial condition, results of operations, cash flows and liquidity, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to the Company’s level of indebtedness, its ability to comply with the financial covenants contained in the agreements that govern the Company’s indebtedness and volatility of the Company’s common stock price.

Technology and Cyber-Security

The Company relies extensively on information technology systems to conduct its business, some of which are managed by third-party service providers. These systems include, but are not limited to, programs and processes relating to internal communications and communications with other parties, ordering and managing materials from suppliers, converting materials to finished products, receiving orders and shipping product to customers, billing customers and receiving and applying payments, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements, collecting and storing certain customer, employee, investor, and other stakeholder information and personal data, and other processes necessary to manage the Company’s business. Current and increased information technology security threats, and current and more sophisticated computer crime, including advanced persistent threats, pose a potential risk to the security of the information technology systems, networks, and services of the Company, its customers and other business partners, as well as the confidentiality, availability, and integrity of the data of the Company, its customers and other business partners. As a result, the Company’s information technology systems, networks or service providers could be damaged or cease to function properly or the Company could suffer a loss or disclosure of business, personal or stakeholder information, due to any number of causes, including catastrophic events, power outages and security breaches. Although the Company has business continuity plans in place, if these plans do not provide effective alternative processes on a timely basis, the Company may suffer interruptions in its ability to manage or conduct its operations, which may adversely affect its business. The Company may need to expend additional resources in the future to continue to protect against, or to address problems caused by, any business interruptions or data security breaches. Any business interruptions or data security breaches, including cyber-security breaches resulting in private data disclosure, could result in lawsuits or regulatory proceedings, damage the Company’s reputation or adversely impact the Company’s results of operations, cash flows and financial condition. While the Company maintains insurance coverage that could cover some of these types of issues, the coverage has limitations and includes deductibles such that it may not be adequate to offset losses incurred.

The Company could also be adversely affected by system or network disruptions if new or upgraded information technology systems or software are defective, not installed properly or not properly integrated into its operations. Various measures have been implemented to manage the risks related to the implementation and modification of hardware and software, but any significant disruption or deficiency in the design and implementation of new or upgraded information technology systems or software could have a material adverse effect on the Company’s business, financial position and results of operations and could, if not successfully implemented, adversely impact the effectiveness of internal controls over financial reporting. The Company is continuing to upgrade its systems on a worldwide basis.


Item 6.	Exhibits


(a)	Exhibits




10.1	Amendment No. 2, dated as of February 28, 2020, to Credit Agreement, dated as of March 29, 2019, among Tupperware Brands Corporation, Tupperware Nederland B.V., Administradora Dart, S. de R.L. de C.V. and Tupperware Brands Asia Pacific Pte. Ltd, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (attached as Exhibit 10.1 to Form 8-K, filed with the Commission on February 28, 2020 and incorporated herein by reference).

10.2	Offer Letter dated as of March 11, 2020 by and between Miguel Angel Fernandez Calero and the Company (Attached as Exhibit 10.1 to Form S-8, filed with the Commission on March 12, 2020 and incorporated herein by reference).

10.3	Offer Letter dated as of March 11, 2020 by and between Richard Goudis and the Company (Attached as Exhibit 10.2 to Form S-8, filed with the Commission on March 12, 2020 and incorporated herein by reference).

10.4	Form of Change of Control Employment Agreement (Tier 1) (Attached as Exhibit 10.3 to Form 8-K, filed with the Commission on March 13, 2020 and incorporated herein by reference).

31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer

31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer

32.1	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by the Chief Executive Officer

32.2	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by the Chief Financial Officer

101	The following financial statements from ~~Tupperware Brands Corporation's~~the Company’s Quarterly Report on Form 10-Q for the quarter ended March ~~30, 2019, filed on May 2, 2019,~~28, 2020, formatted in ~~XBRL (eXtensible Business Reporting Language):~~Inline XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance ~~Sheets,~~Sheets; (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and ~~(vi)~~(iv) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags

104	Cover Page Interactive Data File (embedded as Inline XBRL and contained in ~~detail.~~Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.



	TUPPERWARE BRANDS CORPORATION

	By:	/S/ Cassandra Harris
		Executive Vice President and Chief Financial Officer

	By:	/S/ Madeline Otero
		Vice President and Controller

Orlando, Florida

~~May 2, 2019~~April 29, 2020

4451



Cash flow and net equity hedges (in millions)	Amount of gain or (loss) recognized in OCI (effective portion)						Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)	Amount of gain or (loss) reclassified from accumulated OCI into income (effective portion)					Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)	Amount of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cash flow hedging relationships	2019			2018				2019			2018			2019		2018
Foreign exchange contracts	$	(2.8	)	$	(0.9	)	Cost of products sold	$	(0.5	)	$	0.1	Interest expense	$	—	$	(1.1	)
Net equity hedging relationships
Foreign exchange contracts	(17.7		)	(17.6		)							Interest expense	—		(6.0		)
Euro denominated debt	0.8			(4.1		)



	Shares subject to option		Weighted average exercise price per share		Aggregate intrinsic value (in millions)
Outstanding at December 29, 2018	3,630,684		$	55.66
Expired / Forfeited	(13,758	)	66.76
Outstanding at March 30, 2019	3,616,926		$	55.62	$	—
Exercisable at March 30, 2019	2,368,571		$	59.33	$	—



	Shares outstanding		Weighted average grant date fair value
December 29, 2018	684,184		$	47.68
Market-vested shares granted	42,365		27.12
Performance shares granted	111,536		30.90
Performance share adjustments	(58,194	)	49.12
Vested	(89,796	)	50.64
Forfeited	(42,217	)	51.96
March 30, 2019	647,878		$	42.63