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Item 9A. Controls and Procedures

2021-02-23 compared with 2020-02-24 · 935 added, 961 removed, 1391 unchanged (58% of the section changed)

3 unchanged sentences

These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer (“CEO”) and principal financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the Company’s CEO and CFO, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report and, based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2019 because of the material weaknesses in our internal control over financial reporting described below.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s internal control over financial reporting.

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, of the effectiveness of the Company’s internal control over financial reporting.

The Company’s management used the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) to perform this evaluation.

Based on this evaluation, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2019 , due to the material weaknesses identified below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018, management determined that we did not maintain a sufficient complement of personnel in our Europe operations with the appropriate level of knowledge, experience and training in internal control over financial reporting commensurate with our financial reporting requirements to allow for the consistent execution of control activities.

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing under Item 8- Financial Statements and Supplementary Data .

Remediation of Material Weaknesses

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019, we identified material weaknesses in our internal control over financial reporting, including that we did not maintain a sufficient complement of personnel in our Europe operations with the appropriate level of knowledge, experience and training in internal control over financial reporting commensurate with our financial reporting requirements to allow for the consistent execution of control activities.

Further, monitoring controls maintained at the Europe operations and corporate levels did not operate with a sufficient degree of precision to provide for the appropriate level of oversight of activities related to our internal control over financial reporting.

These material weaknesses contributed to the following additional material weaknesses in that we did not design and maintain effective controls within certain of our Europe operations related to the review and approval of customer pricing, the review and approval of manual journal entries, and the reconciliation of subsidiary ledger financial information used in the consolidated financial statements.

Specifically, we did not design and maintain controls to ensure (i) the review and approval of the initial set-up, and subsequent changes/modifications, of customer pricing related

to revenue arrangements;

Specifically, we did not design and maintain controls to ensure (i) the review and approval of the initial set-up, and subsequent changes/modifications, of customer pricing related to revenue arrangements;

(ii) that journal entries were properly prepared with sufficient supporting documentation, were reviewed and approved to ensure accuracy and completeness of the journal entries, and were reviewed by an appropriate individual separate from the preparer of such journal entry;

and (iii) the subsidiary financial information used in the preparation of the consolidated financial statements agreed to the financial information recorded in the subsidiary ledger, and to the extent there were differences, that they were appropriately validated.

These material weaknesses resulted in the revision of the Company’s consolidated financial statements for the years ended December 31, 2016, 2017 and 2018 and each of the interim periods of 2018 and the first quarter of 2019.

Additionally, these material weaknesses could result in a misstatement of substantially all account balances or disclosures within the European operations that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Management has excluded from its assessment of the Company’s internal control over financial reporting as of December 31, 2019 certain elements of the internal control over financial reporting of VPI Quality Windows, Inc., which is a wholly-owned subsidiary of the Company that was acquired by the Company in 2019.

Subsequent to the acquisition of each entity, certain elements of the acquired business’s internal control over financial reporting and related functions, processes and systems were integrated into the Company’s existing internal control over financial reporting and related functions, processes and systems.

Those elements of the acquired business’s internal control over financial reporting that were not integrated have been excluded from management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2019 .

The excluded elements represent approximately 0.6% of consolidated total assets and 1.1% of consolidated net revenues as of and for the year ended December 31, 2019 .

The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing under "Item 8.

Financial Statements and Supplementary Data".

Remediation Plan for Previously Identified Material Weaknesses as of December 31, 2019

In order to address the material weaknesses described in the Company’s 2018 Annual Report on Form 10-K, the Company’s management implemented a remediation plan to address the control deficiencies that led to the material weaknesses identified above.

The remediation plan includes the following:

Enhance and supplement the finance team in Europe by increasing the number of roles, reassigning responsibilities, and adding additional resources with an appropriate level of knowledge and experience in internal control over financial reporting commensurate with the financial reporting complexities of the organization;

Enhance the tone, communication and overall awareness of the importance of internal control over financial reporting from executive management;

Evaluate corporate and segment monitoring controls to ensure they are designed and operating at the appropriate level of precision required to support risk mitigation;

Implement enhancements to the design of our customer pricing controls in Europe;

Implement enhancements to the design of our journal entry controls in Europe;

Implement enhancements to the design of our controls related to the reconciliation of subsidiary ledger financial information used in the consolidated financial statements;

Strengthen procedures and set guidelines for documentation of controls throughout our domestic and international locations for consistency of application;

Institute additional training programs that occur on a regular basis related to internal control over financial reporting for our world-wide finance and accounting personnel.

During the period ended December 31, 2019 , we executed the remediation plan above by:

hiring additional personnel in Europe with knowledge and experience in internal control over financial reporting;

however, due to contractual notice periods within Europe (typically three to six months), many of the individuals retained were not available until the fourth quarter of 2019;

conducted quarterly in-person training sessions on internal controls over financial reporting, monitoring controls, complex accounting topics, account reconciliations and journal entry controls in Europe;

implemented enhancements to closing processes that included the centralization of certain tasks, development of manuals and standardized templates to enhance the evidence supporting the local teams’ execution of internal control over financial reporting;

developed a global accounting manual to provide guidance on critical accounting policies and procedural outlines for their implementation.

Based on the actions taken to date, while management believes that it now has the requisite personnel to consistently operate the controls as designed, additional controls may need to be designed and implemented as part of the remediation plan, especially with respect to pricing.

Additionally, for controls that were newly designed and implemented in 2019, management determined that a sustained period of operating effectiveness is required to conclude that the controls are operating effectively.

Accordingly, the material weaknesses described have not been remediated as of December 31, 2019.

As of June 27, 2020, we concluded that the enhancements to the design of our control activities related to the reconciliation of subsidiary ledger financial information used in the consolidated financial statements were satisfactorily implemented and had operated effectively for a sufficient time.

Therefore, we concluded the material weakness was remediated as of June 27, 2020.

As of December 31, 2020, management concluded that each of the remaining previously identified material weaknesses had been remediated as a result of actions taken by us implementing new controls and procedures that were part of our remediation plan.

These actions included:

• Enhancing and supplementing the finance team in Europe by increasing the number of roles, reassigning responsibilities, and adding additional resources with an appropriate level of knowledge and experience in internal control over financial reporting commensurate with the financial reporting complexities of the organization;

• Enhancement of the onboarding process for finance team personnel in Europe to ensure familiarity with policies and internal control over financial reporting;

• Enhancing the tone and increasing the frequency of communications from executive management to employees on the importance of internal control over financial reporting;

• Evaluating corporate and segment monitoring controls to ensure they are designed and operating at the appropriate level of precision required to support risk mitigation;

• Implementing enhancements to the design of our customer pricing controls in Europe;

• Implementing enhancements to the design of our journal entry controls in Europe;

• Implementing enhancements to the close processes which includes the centralization of certain tasks and the development of manuals and standardized templates to enhance the evidence supporting the local teams’ execution of internal control over financial reporting.

• Strengthening procedures and setting guidelines for documentation of controls throughout our domestic and international locations for consistency of application;

• Instituting additional training programs that occur on a regular basis related to internal control over financial reporting, monitoring controls, complex accounting topics, account reconciliations, and journal entry controls for our world-wide finance and accounting personnel.

Changes in Internal Control over Financial Reporting

Except for the remediation efforts described above under the caption "Remediation Plan for Previously Identified Material Weaknesses," there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recently completed quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As of December 31, 2020, management remediated the material weaknesses previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019 as outlined above.

Except for certain changes related to the review and approval of customer pricing in Europe, the changes related to the remediation of the previously reported material weaknesses processes have not materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Therefore, in accordance with Rule 13a-15(d) of the Exchange Act, management, with the participation of our CEO and CFO, determined that elements of the changes to the review and approval of customer pricing in Europe have materially affected or are reasonably likely to materially affect our internal control over financial reporting during the Company’s most recently completed quarter ended December 31, 2020.

Item 9B - Other Information

The Company is committed to effective corporate governance that is informed by our stockholders and promotes the long-term interests of our stockholders.

In response to the feedback we have received in connection with our ongoing stockholder engagement efforts and after careful consideration, our Board of Directors has approved certain corporate governance enhancements and is recommending to our stockholders for approval at our 2020 Annual Meeting of Stockholders certain amendments to our Restated Certificate of Incorporation and Amended and Restated Bylaws.

The enhancements include amendments to declassify our Board of Directors, which will result in one-year terms for all directors and will be phased in over the next two years, and to eliminate all supermajority voting provisions.

In addition, the Board of Directors is recommending amendments to our stockholders that would establish new stockholder rights to call a special meeting and to take action by written consent.

These items will be discussed in more detail under the section “Proposals to be Voted on at the Annual Meeting” in our Proxy Statement.

In connection with the proposed corporate governance enhancements to be voted on at the 2020 Annual Meeting of Stockholders, the Company entered into a Letter Agreement with Onex Partners Management LP (“Onex Partners”) on February 19, 2020.

Under the Letter Agreement, Onex Partners has agreed to vote all shares of our Common Stock beneficially owned by any of the Onex Entities (as defined in the Letter Agreement) in favor of our proposed corporate governance enhancements at the 2020 Annual Meeting of Stockholders and, if necessary, at the Company’s 2021 Annual Meeting of Stockholders.

In exchange, the Company will nominate for election to the Board of Directors at any annual or special meeting at which the election of directors is an item of business (i) two qualified persons designated by Onex Partners for so long as Onex Entities beneficially own and have a pecuniary interest in at least twenty percent (20%) of our Common Stock and (ii) one qualified person designated by Onex Partners for so long as the Onex Entities beneficially own and have a pecuniary interest in less than twenty percent (20%) but greater than twelve and a half percent (12.5%) of our Common Stock.

Onex Partners and its affiliates owned approximately 32.6% of our outstanding shares of Common Stock as of December 31, 2019, and two of our current directors are affiliates of Onex Partners, fulfilling the terms of the Letter Agreement, and neither are subject to election at the 2020 Annual Meeting of Stockholders.

The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by the full text of the Letter Agreement, the form of which is filed as Exhibit 10.38 to this 10-K and is incorporated by reference herein.

O n February 20, 2020, Laura W.

Doerre notified the Company that she intends to resign as Executive Vice President, General Counsel and Chief Compliance Officer, effective March 4, 2020.

Doerre’s resignation is not the result of any disagreement with the Company regarding its operations, policies or practices.

Item 10 - Directors, Executive Officers and Corporate Governance

The information required by this item with respect to our executive officers appears in Part I of this Form 10-K under the heading, “Executive Officers”.

The other information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for its 2020 Annual Meeting of Stockholders to be held on May 7, 2020 , which will be filed with the SEC within 120 days of the Company’s fiscal year end covered by this Form 10-K (“Proxy Statement”).

The information required by this item with respect to our executive officers appears in Part I of this Form 10-K under the heading, “Executive Officers of the Registrant”.

The other information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for its 2021 Annual Meeting of Stockholders to be held on April 29, 2021, which will be filed with the SEC within 120 days of the Company’s fiscal year end covered by this Form 10-K (“Proxy Statement”).

Item 11 - Executive Compensation

3 unchanged sentences

The following table sets forth information with respect to shares of our common stock that may be issued under our existing equity compensation plans, as of December 31, 2020:

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1)

Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1)

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

3 unchanged sentences

Equity compensation plans not approved by security holders

5,163,091 $20.41 3,120,289

(1) Excludes RSUs and PSUs, which have no exercise price.

14 unchanged sentences

The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this 10-K and such Exhibit Index is incorporated herein by reference.

Exhibit Description

Restated Certificate of Incorporation of JELD-WEN Holding, Inc., filed February 1, 2017.

February 3, 2017

Amended and Restated Bylaws of JELD-WEN Holding, Inc.

January 5, 2017

Exhibit Description Form File No.

Exhibit Filing Date

3.1 Amended and Restated Certificate of Incorporation of JELD-WEN Holding, Inc.

8-K 001-38000 3.1 May 13, 2020

3.2 Second Amended and Restated Bylaws of JELD-WEN Holding, Inc.

8-K 001-38000 3.2 May 13, 2020

4.1* Description of Securities .

4.2 Specimen Common Stock Certificate of JELD-WEN Holding Inc.

January 5, 2017

S-1/A 333-211761 4.1 January 5, 2017

4.3 Amended and Restated Registration Rights Agreement, among JELD-WEN Holding, Inc., Onex Partners III LP, Onex Advisor III LLC, Onex Partners III GP LP, Onex Partners III PV LP, Onex Partners III Select LP, Onex US Principals LP, Onex Corporation, Onex American Holdings II LLC, BP EI LLC, 1597257 Ontario Inc.

and the other parties thereto, dated January 24, 2017.

March 3, 2017

10-K 001-38000 4.2 March 3, 2017

4.4 Amendment No.

1 unchanged sentence

and the other parties thereto, dated May 12, 2017.

S-1 333-221538 4.3 May 15, 2017

4.5 Amendment No.

1 unchanged sentence

and the other parties thereto, dated November 12, 2017.

November 13, 2017

S-1 333-221538 4.4 November 13, 2017

4.6 Indenture, dated as of December 14, 2017, among JELD-WEN, Inc., the guarantors party thereto and Wilmington Trust, National Association, as Trustee (including for of Note).

December 14, 2017

8-K 001-38000 4.1 December 14, 2017

4.7 First Supplemental Indenture, dated as of December 21, 2018, among American Building Supply, Inc., J B L Hawaii, Limited and Wilmington Trust, National Association, as Trustee.

December 27, 2018

8-K 001-38000 4.1 December 27, 2018

4.8 Second Supplemental Indenture, dated as of September 24, 2020, among Milliken Millwork, Inc., VPI Quality Windows, Inc., subsidiaries of JELD-WEN, Inc.

and Wilmington Trust, National Association, as Trustee.

10-Q 001-38000 4.2 November 3, 2020

4.9* Third Supplemental Indenture, dated as of December 31, 2020, among JELD-WEN, Inc., the guarantors party thereto and Wilmington Trust, National Association, as Trustee.

4.10 Indenture, dated as of May 4, 2020, among JELD-WEN, Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee and notes collateral agent (including form of Notes).

8-K 001-38000 4.1 May 5, 2020

Exhibit Description Form File No.

Exhibit Filing Date

4.11 First Supplemental Indenture, dated September 24, 2020, to the Senior Secured Notes Indenture, dated May 4, 2020, to the Senior Secured Notes Indenture, dated May 4, 2020, among Milliken Millwork, Inc., subsidiaries of JELD-WEN, Inc., and Wilmington Trust, National Association, as Trustee.

10-Q 001-38000 4.1 November 3, 2020

4.12* Second Supplemental Indenture, dated as of December 31, 2020, among JELD-WEN, Inc., the guarantors party thereto and WilmingtonTrust, National Association, as Trustee and Notes Collateral Agent.

4.13 Pledge and Security Agreement, dated as of May 4, 2020, among JELD-WEN, Inc., JELD-WEN Holding, Inc., the other grantors party thereto and Wilmington Trust, National Association, as notes collateral agent.

8-K 001-38000 4.2 May 5, 2020

4.14 Guarantor Joinder Agreement, dated as of September 24, 2020, to the Term Loan Credit Agreement, dated as of October 15, 2014 (as amended on July 1, 2015, November 1, 2016, March 7, 2017, December 14, 2017, September 20, 2019) among Milliken Millwork, Inc., VPI Quality Windows, Inc., and Bank of America, N.A., as Administrative Agent.

10-Q 001-38000 4.3 November 3, 2020

4.15 Borrower Joinder Agreement, dated as of September 24, 2020, to the Revolving Credit Agreement, dated as of October 15, 2014 (as amended on July 1, 2015, November 1, 2016, December 14, 2017, December 21, 2018 and December 31, 2019) among Milliken Millwork, Inc., VPI Quality Windows, Inc., and Wells Fargo Bank, National Association, as Administrative Agent.

10-Q 001-38000 4.4 November 3, 2020

10.1 Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., the other guarantors party thereto, Wells Fargo Bank, National Association, and the lenders party thereto, dated October 15, 2014.

S-1 333-211761 10.1 June 1, 2016

10.2 Amendment No.

1 to Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, and the lenders party thereto, dated July 1, 2015.

S-1 333-211761 10.1.1 June 1, 2016

10.3 Amendment No.

2 to Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., Karona, Inc., the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, and the lenders party thereto, dated November 1, 2016.

November 17, 2016

Exhibit Description

S-1/A 333-211761 10.1.2 November 17, 2016

10.4 Amendment No.

3 to Credit Agreement, among JELD-WEN, Inc., JELD-WEN Holding, Inc., JELD-WEN of Canada, Ltd., the other borrowers party thereto, the subsidiary guarantors party thereto, the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, issuing bank and swingline lender and the other parties thereto, dated as of December 14, 2017.

December 15, 2017

8-K 001-38000 10.1 December 15, 2017

10.5 Amendment No.

4, dated as of December 21, 2018, among JELD-WEN, Inc., American Building Supply, Inc., J B L Hawaii, Limited, the other borrowers party thereto, the subsidiary guarantors party thereto, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent.

December 27, 2018

8-K 001-38000 10.1 December 27, 2018

10.6 Amendment No.

5, dated as of December 31, 2019, among JELD-WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., the other borrowers and subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto .

January 6, 2020

8-K 001-38000 10.1 January 6, 2020

10.7 Term Loan Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN, Inc., Onex BP Finance LP, the other guarantors party thereto, Bank of America, N.A.

and the lenders party thereto, dated October 15, 2014.

S-1 333-211761 10.2 June 1, 2016

10.8 Amendment No.

1 to Term Loan Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN, Inc., Onex BP Finance LP, the subsidiary guarantors party thereto, Bank of America, N.A., and the lenders party thereto, dated July 1, 2015.

S-1 333-211761 10.2.1 June 1, 2016

10.9 Amendment No.

1 unchanged sentence

the subsidiary guarantors party thereto, Onex BP Finance LP, Bank of America, N.A., and the lenders party thereto, dated November 1, 2016.

November 17, 2016

S-1/A 333-211761 10.2.2 November 17, 2016

10.10 Amendment No.

1 unchanged sentence

the subsidiary guarantors party thereto, Onex BP Finance LP, Bank of America, N.A., and the lenders party thereto, dated March 7, 2017.

March 8, 2017

8-K 001-38000 10.1 March 8, 2017

Exhibit Description Form File No.

Exhibit Filing Date

10.11 Amendment No.

4, by and among JELD-WEN, Inc., JELD-WEN Holding, Inc., the subsidiary guarantors party thereto, the lenders party thereto, Bank of America, N.A., as administrative agent and the other parties thereto, dated as of December 14, 2017.

December 15, 2017

8-K 001-38000 10.2 December 15, 2017

10.12 Amendment No.

5, dated as of September 20, 2019, among JELD-WEN Holding, Inc., JELD-WEN, Inc., the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent.

September 20, 2019

8-K 001-38000 10.1 September 20, 2019

10.13 Stock Purchase Agreement, among JELD-WEN Holding, Inc., Onex Partners III LP and the other investors party thereto, dated August 30, 2012.

December 16, 2016

S-1/A 333-211761 10.3 December 16, 2016

10.14 Amendment to Stock Purchase Agreements, among JELD-WEN Holding, Inc.

and Onex Partners III LP, dated April 3, 2013.

December 16, 2016

S-1/A 333-211761 10.3.1 December 16, 2016

10.15 Amendment to Stock Purchase Agreement, among JELD-WEN Holding, Inc.

and Onex Partners III LP, dated May 31, 2016.

December 16, 2016

S-1/A 333-211761 10.3.2 December 16, 2016

10.16 Form of Joinder to Stock Purchase Agreement, among JELD-WEN Holding, Inc., Onex Partners III LP and the other investors party thereto.

December 16, 2016

S-1/A 333-211761 10.3.3 December 16, 2016

10.17 Amended and Restated Stock Purchase Agreement, among JELD-WEN Holding, Inc., Onex Partners III LP, Onex Advisor III LLC, Onex Partners III GP LP, Onex Partners III PV LP, Onex Partners III Select LP, Onex US Principals LP, Onex Corporation, Onex American Holdings II LLC, BP EI LLC and 1597257 Ontario Inc., dated July 29, 2011.

December 16, 2016

S-1/A 333-211761 10.4 December 16, 2016

10.18 Amendment No.

1 unchanged sentence

and Onex Partners III LP, dated September 1, 2011.

December 16, 2016

S-1/A 333-211761 10.4.1 December 16, 2016

10.19 Amendment to Amended and Restated Stock Purchase Agreement, among JELD-WEN Holding, Inc.

and Onex Partners III LP, dated May 31, 2016.

December 16, 2016

S-1/A 333-211761 10.4.2 December 16, 2016

10.20+ JELD-WEN Holding, Inc.

Amended and Restated Stock Incentive Plan, dated January 30, 2017.

10-Q 001-38000 10.14 May 12, 2017

10.21+ Form of Nonstatutory Common Stock Option Agreement under JELD-WEN Holding, Inc.

Amended and Restated Stock Incentive Plan.

December 16, 2016

Exhibit Description

S-1/A 333-211761 10.7 December 16, 2016

10.22+ Form of Nonstatutory Class B-1 Common Stock Option Agreement under JELD-WEN Holding, Inc.

Amended and Restated Stock Incentive Plan.

December 16, 2016

S-1/A 333-211761 10.8 December 16, 2016

10.23+ Form of Restricted Stock Unit Award Agreement under JELD-WEN Holding, Inc.

Amended and Restated Stock Incentive Plan.

December 16, 2016

Management Employment Agreement, by and between JELD-WEN Holding, Inc., JELD-WEN, Inc.

and Laura Doerre, dated September 6, 2016.

January 5, 2017

Letter Agreement, by and between JELD-WEN, Inc.

and Laura Doerre, dated July 25, 2016.

January 5, 2017

S-1/A 333-211761 10.9 December 16, 2016

10.26+ JELD-WEN Holding, Inc.

2017 Omnibus Equity Plan.

January 5, 2017

S-1/A 333-211761 10.17 January 5, 2017

10.27+ Form of Nonqualified Stock Option Agreement under JELD-WEN Holding, Inc.

2017 Omnibus Equity Plan.

January 5, 2017

S-1/A 333-211761 10.18 January 5, 2017

10.28+ Amendment to Form of Nonqualified Stock Option Agreement under JELD-WEN Holding, Inc.

2017 Omnibus Equity Plan.

March 6, 2018

10-K 001-38000 10.37 March 6, 2018

10.29+ Form of Restricted Stock Unit Award Agreement under JELD-WEN Holding, Inc.

2017 Omnibus Plan.

January 5, 2017

S-1/A 333-211761 10.19 January 5, 2017

10.30+ Amendment to Form of Restricted Stock Unit Award Agreement under JELD-WEN Holding, Inc.

2017 Omnibus Plan.

March 6, 2018

10-K 001-38000 10.38 March 6, 2018

10.31+ Form of Performance Share Unit Award Agreement under JELD-WEN Holding, Inc.

2017 Omnibus Plan.

March 6, 2018

10-K 001-38000 10.39 March 6, 2018

10.32+ JELD-WEN Holding, Inc.

2017 Management Incentive Plan.

January 5, 2017

S-1/A 333-211761 10.20 January 5, 2017

10.33+ Letter Agreement, by and between JELD-WEN Holding, Inc.

and the shareholders party thereto, dated January 24, 2017.

March 6, 2018

10-K 001-38000 10.36 March 6, 2018

10.34+ Form of Indemnification Agreement.

S-1 333-211761 10.25 June 1, 2016

10.35+ Form of Executive Employment Agreement between JELD-WEN Holding, Inc.

and each of John Linker, Laura W.

Doerre, Mark A.

Brooks Mallard, effective August 7, 2017 and October 1, 2018.

March 1, 2019

Executive Employment Agreement, by and between JELD-WEN UK Limited and Peter Maxwell, dated February 1, 2018 .

March 1, 2019

and each of Roya Behnia, Daniel J.

Castillo, Timothy R.

Craven, John R.

Linker, and Gary S.

10-Q 001-38000 10.1 August 5, 2020

10.37+ Executive Employment Agreement between JELD-WEN Australia Pty Ltd and Perter Farmakis, dated March 1, 2018 .

March 1, 2019

10-K 001-38000 10.40 March 1, 2019

10.38 Letter Agreement, by and between JELD-WEN Holding, Inc.

and the shareholder party thereto, dated February 19, 2020.

10-K 001-38000 10.38 February 24, 2020

21.1* List of subsidiaries of JELD-WEN Holding, Inc.

Exhibit Description Form File No.

Exhibit Filing Date

22.1* Subsidiary Guarantors and Issuers of Guaranteed Securities.

23.1* Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.

4 unchanged sentences

Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.INS* Inline XBRL Instance Document.

101.SCH* Inline XBRL Taxonomy Extension Schema Document.

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.

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

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Linker and Laura W.

Doerre, jointly and severally, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Linker and Roya Behnia, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities and Exchange Act of 1934, this 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

President, Chief Executive Officer and Director (Principal Executive Officer)

February 24, 2020

/s/ John Linker

Chief Financial Officer (Principal Financial Officer)

February 24, 2020

/s/ Scott Vining

Chief Accounting Officer (Principal Accounting Officer)

February 24, 2020

/s/ Matthew Ross

February 24, 2020

Signature Title Date

Michel President, Chief Executive Officer and Director (Principal Executive Officer) February 23, 2021

/s/ John Linker Chief Financial Officer (Principal Financial Officer) February 23, 2021

/s/ Scott Vining Chief Accounting Officer (Principal Accounting Officer) February 23, 2021

/s/ Matthew Ross Chairman February 23, 2021

/s/ Roderick C.

Vice Chairman

February 24, 2020

/s/ William Banholzer

February 24, 2020

Wendt Vice Chairman February 23, 2021

/s/ William Banholzer Director February 23, 2021

William Banholzer

/s/ Martha Byorum

February 24, 2020

/s/ Martha Byorum Director February 23, 2021

Martha (Stormy) Byorum

February 24, 2020

/s/ Anthony Munk

February 24, 2020

/s/ Suzanne Stefany

February 24, 2020

Maxwell Director February 23, 2021

/s/ Anthony Munk Director February 23, 2021

/s/ Suzanne Stefany Director February 23, 2021

Suzanne Stefany

/s/ Bruce Taten

February 24, 2020

Signature Title Date

/s/ Bruce Taten Director February 23, 2021

/s/ Steven E.

February 24, 2020

Wynne Director February 23, 2021

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Equity for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm F- 2

Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019, and 2018 F- 4

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2020, 2019, and 2018 F- 5

Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 6

Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019, and 2018 F- 7

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019, and 2018 F- 8

Notes to Consolidated Financial Statements F- 9

Index to Financial Statement Schedules

Schedule I - Parent Company Information as of December 31, 2019 and 2018 and for the Years Ended December 31, 2019, 2018 and 2017

Schedule I - Parent Company Information as of December 31, 2020 and 2019 and for the Years Ended December 31, 2020, 2019, and 2018 F- 52

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of JELD-WEN Holding, Inc.

and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income (loss), of equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (1) the ineffective control environment in its Europe operations due to a lack of a sufficient complement of personnel with the appropriate level of knowledge, experience and training, (2) ineffective monitoring controls at the Europe operations and corporate levels as they did not operate with a sufficient degree of precision to provide for the appropriate level of oversight of activities, (3) a lack of controls designed and maintained at certain European locations to ensure the review and approval of the initial set-up, and subsequent changes/modifications, of customer pricing related to revenue arrangements, (4) a lack of controls designed and maintained at certain European locations to ensure journal entries were properly prepared with sufficient supporting documentation, were reviewed and approved to ensure accuracy and completeness of the journal entries, and were reviewed by an appropriate individual separate from the preparer of such journal entry, and (5) a lack of controls designed and maintained at certain European locations to ensure the subsidiary financial information used in the preparation of the consolidated financial statements agreed to the financial information recorded in the subsidiary ledger, and to the extent there were differences, that they were appropriately validated.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses referred to above are described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2019 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

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Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

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Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded certain elements of the internal control over financial reporting of VPI Quality Windows, Inc.

from its assessment of the Company’s internal control over financial reporting as of December 31, 2019 because it was acquired by the Company in a purchase business combination during 2019.

Subsequent to the acquisition, certain elements of VPI Quality Windows, Inc.’s internal control over financial reporting and related processes were integrated into the Company’s existing systems and internal control over financial reporting.

Those controls that were not integrated have been excluded from management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2019.

We have also excluded these elements of the internal control over financial reporting of VPI Quality Windows, Inc.

from our audit of the Company’s internal control over financial reporting.

The excluded elements represent controls over approximately 0.6% of consolidated total assets and 1.1% of the consolidated net revenues as of and for the year ended December 31, 2019.

Definition and Limitations of Internal Control over Financial Reporting

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Fair value of the reporting units is determined by management using a discounted cash flow model.

Management’s cash flow projections included significant judgments and assumptions relating to future revenue and terminal growth rates, profit margins, and the cost of capital.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment is a critical audit matter are there was significant judgment by management when developing the fair value estimate of the reporting units.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s cash flow projections and significant assumptions, including future revenue and terminal growth rates, profit margins, and the cost of capital.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.

Management’s cash flow projections included significant judgments and assumptions relating to expected revenue and terminal growth rates, profit margins, and the cost of capital.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to expected revenue and terminal growth rates, profit margins, and the cost of capital;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s

goodwill impairment assessment, including controls over the valuation of the Company’s reporting units.

These procedures also included, among others, testing management’s process for developing the fair value estimates, evaluating the appropriateness of the discounted cash flow model, testing the completeness, accuracy, and relevance of underlying data used in the model, and evaluating the reasonableness of significant assumptions used by management, including future revenue and terminal growth rates, profit margins, and the cost of capital.

Evaluating management’s assumptions related to future revenue and terminal growth rates and profit margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and certain significant assumptions, including the cost of capital.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimates;

(ii) evaluating the appropriateness of the discounted cash flow model;

(iii) testing the completeness and accuracy of underlying data used in the model;

and (iv) evaluating the significant assumptions used by management related to expected revenue and terminal growth rates, profit margins, and the cost of capital.

Evaluating management’s assumptions related to expected revenue and terminal growth rates and profit margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and the cost of capital assumption.

/s/ PricewaterhouseCoopers LLP

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(amounts in thousands, except share and per share data) 2020 2019 2018

Net revenues $ 4,235,677 $ 4,289,761 $ 4,346,847

Cost of sales 3,333,770 3,417,222 3,428,311

Gross margin 901,907 872,539 918,536

Selling, general and administrative 702,715 660,574 734,166

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Interest expense, net 74,800 71,778 70,818

Other (income) expense

Income before taxes and equity earnings

Other income ( 2,752 ) ( 1,409 ) ( 34,887 )

Income before taxes 116,675 120,045 131,111

Income tax expense (benefit) 25,089 57,074 ( 10,058 )

Income from continuing operations, net of tax

91,586 62,971 141,169

Equity earnings of non-consolidated entities — — 738

Convertible preferred stock dividends

Net income (loss) attributable to common shareholders

Net income $ 91,586 $ 62,971 $ 141,907

Weighted average common shares outstanding:

Basic 100,633,392 100,618,105 104,530,572

Diluted 101,681,981 101,464,325 106,360,657

Net income per share

Basic $ 0.91 $ 0.63 $ 1.36

Diluted $ 0.90 $ 0.62 $ 1.33

The accompanying notes are an integral part of these Consolidated Financial Statements.

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(amounts in thousands) 2020 2019 2018

Net income $ 91,586 $ 62,971 $ 141,907

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax benefit of $0, ($1,892), and $0, respectively

Interest rate hedge adjustments, net of tax (benefit) expense of ($4,831), ($538), and $5,001, respectively

Foreign currency translation adjustments, net of tax benefit $ 0 , $ 0 , ($ 1,892 )

105,442 ( 15,335 ) ( 65,185 )

Interest rate hedge adjustments, net of tax benefit of ($ 468 ), ($ 4,831 ), and ($ 538 ), respectively

( 1,384 ) 6,173 2,636

Defined benefit pension plans, net of tax (benefit) expense of ($ 3,800 ), $ 1,152 , and $ 4,214 , respectively

( 11,476 ) 2,692 12,237

Total other comprehensive income (loss), net of tax 92,582 ( 6,470 ) ( 50,312 )

Comprehensive income $ 184,168 $ 56,501 $ 91,595

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CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share data)

(amounts in thousands, except share and per share data) December 31, 2020 December 31, 2019

Current assets

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Accounts receivable, net 477,472 469,762

Inventories 512,228 505,078

Other current assets 34,359 38,562

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Deferred tax assets 199,194 183,837

Goodwill 639,867 602,500

Intangible assets, net 246,055 250,327

Operating lease assets, net 214,727 202,053

Other assets 31,604 34,962

Total assets $ 3,964,685 $ 3,381,332

LIABILITIES AND EQUITY

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CONSOLIDATED STATEMENTS OF EQUITY

December 31, 2019

December 31, 2018

December 31, 2017

(amounts in thousands, except share and per share amounts)

December 31, 2020 December 31, 2019 December 31, 2018

(amounts in thousands, except share and per share amounts) Shares Amount Shares Amount Shares Amount

Preferred stock, $ 0.01 par value per share

— $ — — $ — — $ —

Common stock, $ 0.01 par value per share

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Shares issued for exercise/vesting of share-based compensation awards

Shares repurchased

427,950 5 645,957 7 907,068 9

Shares repurchased

( 265,589 ) ( 3 ) ( 1,192,419 ) ( 12 ) ( 5,287,964 ) ( 53 )

Shares issued upon conversion of Class B-1 Common Stock

Shares issued upon conversion of convertible preferred stock to Common Stock

Shares surrendered for tax obligations for employee share-based transactions

Shares issued in initial public offering

Balance at period end

Class B-1 Common Stock

Balance as of January 1

Class B-1 Common Stock converted to common

Balance at period end

( 24,296 ) ( 1 ) ( 96,397 ) ( 1 ) ( 298,725 ) ( 3 )

Balance at period end 100,806,068 $ 1,008 100,668,003 $ 1,007 101,310,862 $ 1,013

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Balance at beginning of period

$ 672,445 $ 659,241 $ 653,327

Shares issued for exercise/vesting of share-based compensation awards

Shares repurchased

2,979 1,970 192

Shares surrendered for tax obligations for employee share-based transactions

Conversion of convertible preferred stock

Initial public offering proceeds, net of underwriting fees and commissions

Costs associated with initial public offering

( 463 ) ( 1,956 ) ( 8,887 )

Amortization of share-based compensation

16,399 13,190 14,609

Balance at period end

691,360 672,445 659,241

Employee stock notes

Balance at beginning of period

( 673 ) ( 648 ) ( 661 )

Net issuances, payments and accrued interest on notes

Balance at period end

( 673 ) ( 673 ) ( 648 )

Balance at period end

(continued on next page)

JELD-WEN HOLDING, INC.

CONSOLIDATED STATEMENTS OF EQUITY

$ 690,687 $ 671,772 $ 658,593

Retained earnings

Balance at beginning of period

$ 290,583 $ 246,833 $ 229,903

Share repurchased

( 4,997 ) ( 19,982 ) ( 124,977 )

Adoption of new accounting standard ASU No.

Adoption of new accounting standard ASU 2016-09

( 5,710 ) — —

Adoption of new accounting standard ASU No.

2016-02 — 761 —

91,586 62,971 141,907

Balance at period end

$ 371,462 $ 290,583 $ 246,833

Accumulated other comprehensive income (loss)

Balance at beginning of period

$ ( 151,275 ) $ ( 144,805 ) $ ( 94,493 )

Foreign currency adjustments 105,442 ( 15,335 ) ( 65,185 )

Unrealized gain on interest rate hedges

Net actuarial pension gain

Unrealized (loss) gain on interest rate hedges ( 1,384 ) 6,173 2,636

Net actuarial pension (loss) gain ( 11,476 ) 2,692 12,237

Balance at period end

$ ( 58,693 ) $ ( 151,275 ) $ ( 144,805 )

Total shareholders’ equity at period end $ 1,004,464 $ 812,087 $ 761,634

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OPERATING ACTIVITIES

Net income $ 91,586 $ 62,971 $ 141,907

Adjustments to reconcile net income to cash used in operating activities:

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Amortization of deferred financing costs 2,679 1,971 2,107

Loss on extinguishment of debt

Non-cash gain on previously held shares of an equity investment — — ( 20,767 )

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Contributions to U.S.

pension plan ( 12,619 ) ( 7,760 ) ( 4,125 )

Amortization of U.S.

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Accounts receivable 10,819 8,426 16,507

Inventories 9,849 4,190 ( 33,092 )

Other assets 5,520 6,938 ( 18,966 )

Accounts payable and accrued expenses 62,880 37,611 39,540

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Change in long-term debt 210,858 13,101 70,468

Payments of notes payable

Employee note repayments — — 39

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Payments to tax authorities for employee share-based compensation ( 933 ) ( 1,495 ) ( 9,452 )

Proceeds from sale of common stock, net of underwriting fees and commissions

Payments associated with initial public offering

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities 207,909 ( 6,411 ) ( 67,475 )

Effect of foreign currency exchange rates on cash 25,157 903 ( 6,648 )

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and its subsidiaries.

We have facilities located in the U.S., Canada, Europe, Australia, Asia, Mexico, and South America.

We have facilities located in the U.S., Canada, Europe, Australia, Asia, and Mexico.

Our products are marketed primarily under the JELD-WEN brand name in the U.S.

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The peak season for home construction and remodeling in many of our markets generally corresponds with the second and third calendar quarters, and therefore, sales volume is typically higher during those quarters.

Our first and fourth quarter sales volumes are generally lower due to reduced repair and remodeling activity and reduced activity in the building and construction industry as a result of colder and more inclement weather in certain of our geographic end markets.

Basis of Presentation – Certain prior year amounts have been reclassified to conform to current year presentation.

The consolidated balance sheets, statements of operations and statements of cash flows have been revised to reflect the correction of certain errors and other accumulated misstatements as described in Note 32 - Revision of Prior Period Financial Statements .

We do not believe the errors corrected were material to our previously issued financial statements.

Basis of Presentation – The accompanying consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC.

Certain prior year amounts have been reclassified to conform to current year presentation.

dollar and other currency amounts, except per share amounts, are presented in thousands unless otherwise noted.

Ownership – On October 3, 2011 , Onex invested $ 700.0 million in return for shares of our Series A Convertible Preferred Stock.

Concurrent with the investment, Onex provided $ 171.0 million in the form of a convertible bridge loan due in April 2013 .

In October 2012 , Onex invested an additional $ 49.8 million in return for additional shares of our Series A Convertible Preferred Stock to fund an acquisition.

In April 2013 , the $ 71.6 million outstanding balance of the convertible bridge loan was converted into additional shares of our Series A Convertible Preferred Stock.

In March 2014 , Onex purchased $ 65.8 million in common stock from another investor.

As part of the IPO, Onex sold 6,477,273 shares of our Common Stock.

In May 2017 and November 2017, Onex sold a total of 15,693,139 and 14,211,736 shares of our Common Stock, respectively, in secondary offerings.

We did not receive any proceeds from the shares of Common Stock sold by Onex, in any offering.

As of December 31, 2019 , Onex owned approximately 32.6 % of the outstanding shares of our Common Stock.

Stock Split – On January 3, 2017, our shareholders approved amendments to our then-existing certificate of incorporation increasing the authorized number of shares and effecting an 11 -for-1 stock split of our then-outstanding common stock and Class B-1 Common Stock.

Accordingly, all share and per share amounts for all periods presented in these consolidated financial statements and notes thereto have been adjusted to reflect this stock split.

Stock Conversion and Initial Public Offering – Prior to the IPO, we had the authority to issue up to 8,750,000 shares of preferred stock, par value of $ 0.01 , of which 8,749,999 shares were designated as Series A Convertible Preferred Stock and one share was designated as Series B Preferred Stock.

Series A Convertible Preferred Stock consisted of 2,922,634 shares of Series A-1 Stock, 208,760 shares of Series A-2 Stock, 843,132 shares of Series A-3 Stock, and 4,775,473 shares of Series A-4 Stock.

On February 1, 2017, immediately prior to the closing of our IPO, the outstanding shares of our Series A Convertible Preferred Stock and all accumulated and unpaid dividends converted into 64,211,172 shares of our Common Stock, and all of the outstanding shares of our Class B-1 Common Stock converted into 309,404 shares of our Common Stock.

In addition, the one outstanding share of our Series B Preferred Stock was canceled.

We filed our Charter with the Secretary of State of the State of Delaware, and our Bylaws became effective, each as contemplated by the registration statement we filed as part of our IPO.

The Charter, among other things, provided that our authorized capital stock consists of 900,000,000 shares of Common Stock, par value $ 0.01 per share and 90,000,000 shares of preferred stock, par value $ 0.01 per share.

On February 1, 2017, we closed our IPO and received $ 472.4 million in proceeds, net of underwriting discounts, fees and commissions and $ 7.9 million of offering expenses from the issuance of 22,272,727 shares of our Common Stock.

Ownership – As of December 31, 2020, Onex owned approximately 33 % of the outstanding shares of our Common Stock.

Share Repurchases – In April 2018, our Board of Directors authorized the repurchase of up to $ 250.0 million of our Common Stock through December 2019.

Share repurchases are recorded on their trade date and reduce shareholders’ equity and increase accounts payable.

Repurchased shares are retired, and the excess of the repurchase price over the par value of the shares is charged to retained earnings.

During the years ended December 31, 2019 and December 31,

2018 , we repurchased 1,192,419 and 5,287,964 shares, respectively, of our common stock for aggregate consideration of $ 20.0 million and $ 125.0 million , respectively.

Through October 2019, we had repurchased $ 145.0 million of our Common Stock under this authorization.

On November 4, 2019, the Board of Directors authorized an increase to the remaining authorization under the share repurchase program to a total of $ 175.0 million with no expiration date.

As of December 31, 2020, $ 170.0 million was remaining under the repurchase authorization.

During the years ended December 31, 2020, December 31, 2019, and December 31, 2018, we repurchased 265,589 , 1,192,419 , and 5,287,964 shares of our Common Stock, respectively, for aggregate consideration of $ 5.0 million, $ 20.0 million, and $ 125.0 million, respectively.

Fiscal Year – We operate on a fiscal calendar year, and each interim quarter is comprised of two 4-week periods and one 5-week period, with each week ending on a Saturday.

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As a result, our first and fourth quarters may have more or fewer days included than a traditional 91-day fiscal quarter.

Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and related notes.

Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and allocations that affect amounts reported in the consolidated financial statements and related notes.

Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets including goodwill and other intangible assets, employee benefit obligations, income tax uncertainties, contingent assets and liabilities, provisions for bad debt, inventory, warranty liabilities, legal claims, valuation of derivatives, environmental remediation, and claims relating to self-insurance.

Actual results could differ due to the uncertainty inherent in the nature of these estimates.

COVID-19 – The CARES Act in the U.S.

and similar legislation in other jurisdictions includes measures that assist companies in responding to the COVID-19 pandemic.

These measures consisted primarily of cash assistance to support employment levels and deferment of remittance of certain non-income tax expense payments.

The most significant impact was the CARES Act in the U.S., which included a provision that allows employers to defer the remittance of the employer portion of the social security tax.

The deferred employment tax must be paid over two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.

For the year ended December 31, 2020, the Company deferred $ 20.9 million of the employer portion of social security tax, of which $ 10.4 million is included in accrued payroll and benefits, and the remaining is included in deferred credits and other liabilities in the

consolidated balance sheet.

The $ 20.9 million deferral is included in other items, net in our consolidated statements of cash flows.

For our Europe and Australasia regions, the deferrals totaled approximately $ 11.5 million and $ 1.8 million, respectively.

The impact of the CARES Act and similar legislation in prospective periods may differ from our estimates as of December 31, 2020 due to changes in interpretations and assumptions, guidance that may be issued, and actions we may take in respect to these measures.

The CARES Act and similar legislation in other jurisdictions are highly detailed and we will continue to assess the impact that various provisions will have on our business.

Segment Reporting – Our reportable segments are organized and managed principally by geographic region:

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Checks written and not presented to these banks for payment are reflected as book overdrafts and are a component of accounts payable.

Restricted Cash – Restricted cash consists primarily cash held in escrow due to timing and cash required to meet certain bank guarantees and projected self-insurance obligations.

Restricted Cash – Restricted cash consists primarily of cash required to meet certain bank guarantees and projected self-insurance obligations.

New funding is generated from employees’ portion of contributions and is added to the deposit account weekly as claims are paid.

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We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.

We estimate the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of our customers, unusual macroeconomic conditions and historical experience.

We estimate the allowance for doubtful accounts our assessment of credit risk relating to our accounts receivable based on quantitative and qualitative factors, primarily historical credit collections within each region where we have operations.

If the financial condition of a customer deteriorates or other circumstances occur that result in an impairment of a customer’s ability to make payments, we record additional allowances as needed.

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The balance consists primarily of installment notes and affiliate notes.

The allowance for doubtful notes is based upon historical loss trends and specific reviews of delinquent notes.

The allowance for doubtful notes is based upon credit risks, historical loss trends, and specific reviews of delinquent notes.

We write off uncollectible note receivables against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by us has been concluded.

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Related amortization is included in SG&A expense in the accompanying consolidated statements of operations and was $ 7.9 million in 2020, $ 8.7 million in 2019, and $ 9.0 million in 2018.

Cloud Computing Arrangements –We capitalize qualified cloud computing implementation costs associated with the application development stage and subsequently amortize these costs over the term of the hosting agreement and stated renewal period, if it is reasonably certain we will renew.

Capitalized costs are included in other assets on the consolidated balance sheet and amortization is included in SG&A expense in the accompanying consolidated statement of operations.

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Depreciation is generally provided over the following estimated useful service lives:

Land improvements

10 - 20 years

15 - 45 years

Machinery and equipment

Land improvements 10 - 20 years

Buildings 15 - 45 years

Machinery and equipment 3 - 20 years

Intangible Assets –Intangible assets are accounted for in accordance with ASC 350, Intangibles – Goodwill and Other .

Definite lived intangible assets are amortized based on the pattern of economic benefit over the following estimated useful lives:

Trademarks and trade names

Licenses and rights

Customer relationships

Trademarks and trade names 5 - 40 years

Software 3 - 10 years

Licenses and rights 3 - 14 years

Customer relationships 4 - 20 years

Patents 5 - 25 years

The lives of definite lived intangible assets are reviewed and reduced if necessary, whenever changes in their planned use occur.

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Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value.

We do not amortize our indefinite-lived intangible assets, but test for impairment annually, or when indications of potential impairment exist.

We do not amortize indefinite-lived intangible assets, but test for impairment annually, or when indications of potential impairment exist.

For intangible assets other than goodwill, if the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess.

No material impairments were identified during fiscal years 2019 , 2018 and 2017 .

No material impairments were identified during fiscal years December 31, 2020, December 31, 2019 and December 31, 2018.

We capitalize certain qualified internal use software costs during the application development stage and subsequently amortize these costs over the estimated useful life of the asset.

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Long-lived assets currently available for sale and expected to be sold within one year are classified as held for sale in other current assets.

Leases – We lease certain warehouses, distribution centers, office space, land, vehicles and equipment.

Leases – We lease certain warehouses, distribution centers, office spaces, land, vehicles and equipment.

We determine if an arrangement is a lease at inception.

A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.

A contract contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.

Amounts associated with operating leases are included in operating lease assets (“ROU assets”), net, accrued expense and other current liabilities and noncurrent operating lease liability in our consolidated balance sheet.

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ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

If the leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

If the lease does not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

The incremental borrowing rate for operating leases that commenced in the period is determined by using the prior quarter end’s incremental borrowing rates.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

Variable lease payments that are dependent on usage, output, or may vary for other reasons, are excluded from lease payments in the measurement of the ROU asset and lease liability, and accordingly are recognized as lease expense in the period the obligation for those payments is incurred.

For lease agreements entered into or reassessed after the adoption of Topic 842, we combine lease and nonlease components.

Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more, and the exercise of lease renewal options under these leases is at our sole discretion.

Certain leases include renewal and/or termination options, with renewal terms that can extend the lease term from one to 20 years or more, and the exercise of lease renewal options under these leases is at our sole discretion.

These options are included in the lease term used to determine ROU assets and corresponding liabilities when we are reasonably certain we will exercise the option.

The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Goodwill – Goodwill is tested for impairment on an annual basis and between annual tests if indicators of potential impairment exist, using a fair-value-based approach.

Current accounting guidance provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test.

If this is the case, the two-step goodwill impairment test is required.

If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required.

If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including attributable goodwill).

If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement).

Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Fair value of the reporting unit is determined using a discounted cash flow analysis.

If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed.

Goodwill – Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests if indicators of potential impairment exist, using a fair-value-based approach.

Current accounting guidance provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is impaired.

If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the fair value of the reporting unit exceeds its carrying amount, we calculate the estimated fair value of the reporting unit.

We estimated the fair value of our reporting units using a discounted cash flow model (implied fair value measured on a non-recurring basis using level 3 inputs).

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companies, transactions denominated in a currency other than their functional currency.

We record all derivative instruments in the consolidated balance sheets at fair value.

Changes in a derivative’s fair value are recognized in earnings unless specific hedge criteria are met, and we elect hedge accounting prior to entering into the derivative.

If a derivative is designated as a fair value hedge, the changes in fair value of both the derivative and the hedged item attributable to the hedged risk are recognized in the results of operations.

If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in consolidated other comprehensive income (loss) and subsequently classified to the consolidated statements of operations when the hedged item impacts earnings.

At the inception of a fair value or cash flow hedge transaction, we formally document the hedge relationship and the risk management objective for undertaking the hedge.

In addition, we assess both at inception of the fair value or cash flow

hedge and on an ongoing basis, whether the derivative in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item and whether the derivative is expected to continue to be highly effective.

The impact of any ineffectiveness is recognized in our consolidated statements of operations.

All derivatives are recorded as assets or liabilities in the consolidated balance sheets at their respective fair values.

As of December 31, 2020, December 31, 2019 and December 31, 2018, we had netting provisions in certain agreements with our counterparties.

We have elected to not offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable netting agreements.

Changes in a derivative’s fair value are recognized in earnings unless specific hedge criteria are met, and we elect hedge accounting prior to entering into the hedge.

If a derivative is designated as a fair value hedge, the changes in fair value of both the derivative and the hedged item attributable to the hedged risks are recognized in the same line item in the results of operations.

If the derivative is designated as a cash flow hedge, changes in the fair value related to the derivatives considered highly effective are initially recorded in accumulated other comprehensive income (loss) and subsequently classified to the consolidated statements of operations when the hedged item impacts earnings, and in the same line item on the consolidated statements of operations as the impact of the hedge transaction.

At the inception of a fair value or cash flow hedge, we formally document the hedge relationship and the risk management objective for undertaking the hedge.

In addition, for derivatives that qualify for hedge accounting, we assess, both at inception of the hedge and on an ongoing basis, whether the derivative financial instrument is and will continue to be highly effective in offsetting cash flows or fair value of the hedged item and whether it is probable that the hedged forecasted transaction will occur.

Changes in the fair value of derivatives that do not qualify for hedge accounting, or fail to meet the criteria, thereafter, are also recognized in the consolidated statements of operations.

See Note 24 - Fair Value of Financial Instruments for additional information on the fair value of our derivative assets and liabilities.

Revenue Recognition – Revenue is recognized when obligations under the terms of a contract with our customer are satisfied.

Generally, this occurs with the transfer of control of our products or services.

The transfer of control to the customer occurs at a point in time, usually upon satisfaction of the shipping terms within the contract.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

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Incentive payments to customers that directly relate to future business are recorded as a reduction of net revenues over the periods benefited.

Shipping and handling costs and the related expenses are reported as fulfillment revenues and expenses for all customers.

Therefore, all shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in cost of sales.

Shipping and handling costs are treated as fulfillment costs and are not considered a separate performance obligation.

Shipping and handling costs charged to customers and the related expenses are reported in revenues and cost of sales for all customers.

The expected costs associated with our base warranties and field service actions continue to be recognized as expense when the products are sold (see Note 12 - Warranty Liability ).

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We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less.

We do not typically include extended payment terms in our contracts with customers.

We do not typically include extended payment terms

in our contracts with customers.

Incidental items that are immaterial in the context of the contract are recognized as expense.

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See Note 16 - Segment Information for further information on disaggregated revenue.

Shipping Costs – Shipping costs charged to customers are included in net revenues.

The cost of shipping is included in cost of sales.

Advertising Costs – All costs of advertising our products and services are charged to expense as incurred.

Advertising and promotion expenses included in SG&A expenses were $ 31.7 million in 2020, $ 40.0 million in 2019, and $ 43.4 million in 2018.

Interest Expense and Extinguishment of Debt Costs – We record debt extinguishment costs separately from interest expense within other (income) expense in the consolidated statements of operations.

Interest Expense and Extinguishment of Debt Costs – We record debt extinguishment costs separately from interest expense within other income in the consolidated statements of operations.

Foreign Currency Translation and Adjustments – Typically, our foreign subsidiaries maintain their accounting records in their local currency.

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We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit and the tax related to the position would be due to the entity and not the owners.

For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement

with the relevant tax authority.

We apply this accounting standard to all tax positions for which the statute of limitations remains open.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Tax Act passed in December 2017 had significant effects on our financial statements.

The Tax Act passed in December 2017 continues to have significant effects on our financial statements primarily through Treasury regulations, whether proposed or final, which continue to be issued in relation to specific provisions of the Tax Act.

In accordance with Staff Accounting Bulletin No.

118 issued by the SEC in December 2017 immediately following the passage of the Tax Act, we made provisional estimates for certain direct and indirect effects of the Tax Act based on information available to us at that time.

In the fourth quarter of 2018, we completed our accounting for all of the enactment-date income tax effects of the Tax Act and recorded adjustments as a component of income tax expense from continuing operations.

In the fourth quarter of 2018, we completed our accounting for the enactment-date income tax effects of the Tax Act and recorded adjustments as a component of income tax expense from continuing operations.

The Tax Act subjects a U.S.

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Certain subsidiaries file separate tax returns in certain countries and states.

federal, state and foreign income taxes refundable and payable are reported in other current assets and accrued income taxes payable in the consolidated balance sheets.

We recorded a non-current U.S.

receivable of $ 0.8 million at December 31, 2018 related to the one-time deemed repatriation tax liability, which is included in other assets in the accompanying consolidated balance sheet.

We do not have any non-current taxes receivable or payable at December 31, 2019.

federal, state, and foreign income taxes refundable and payable are reported in other current assets and accrued expenses and other current liabilities in our consolidated balance sheet.

We do not have any non-current taxes receivable or payable at December 31, 2020 or December 31, 2019.

We record interest and penalties on amounts due to tax authorities as a component of income tax expense (benefit) in the consolidated statements of operations.

Contingent Liabilities – Contingent liabilities arising from claims, assessments, litigation, fines, penalties, and other sources require significant judgment in determining the probability of loss and the amount of the potential loss.

Each quarter, we review significant new claims and litigation for the probability of an adverse outcome.

quarter, we review significant new claims and litigation for the probability of an adverse outcome.

Estimates are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable.

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that are country specific.

The most significant of these plans is in the U.S.

which is no longer open to new employees.

The most significant of these plans is in the U.S., which is no longer open to new employees.

Amounts relating to these plans are recorded based on actuarial calculations, which use various assumptions, such as discount rates and expected return on assets.

See Note 26 - Employee Retirement and Pension Benefits .

Factoring Arrangements – Our ABS subsidiary, acquired in March 2018, has entered into factoring agreements with a U.S.-based financial institution under which it can elect to sell certain of its accounts receivable under non-recourse agreements.

These transactions are treated as a sale and are accounted for as a reduction in accounts receivable because the agreements transfer effective control over and risk of non-collection to the factor.

Thus, cash proceeds from these arrangements are reflected as operating activities, including the change of accounts receivable on our statement of cash flows each period.

We do not service any factored accounts after the factoring has occurred and do not have any servicing assets or liabilities.

We utilize factoring arrangements as part of our financing to manage working capital.

The aggregate gross amount factored under these arrangements was $ 74.5 million and $ 56.3 million for the year ended December 31, 2019 and December 31, 2018 , respectively.

The cost of factoring is reflected in the accompanying consolidated statements of operations as interest expense with other financing costs and was $ 0.5 million and $ 0.4 million for the year ended December 31, 2019 and December 31, 2018 , respectively.

Recently Adopted Accounting Standards – In August 2018, the FASB issued ASU No.

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, which clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that are service contracts with the requirement for capitalizing implementation costs incurred to develop or acquire internal-use-software.

We early adopted this standard in the first quarter of 2019 on a prospective basis.

The adoption did not have a material impact to the consolidated financial statements or related disclosures.

In June 2018, the FASB issued ASU No.

2018-07 - Compensation - Stock Compensation (Topic 718) Improvements to Non-employee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services.

Under ASU No.

2018-07, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees.

We adopted this standard in the

first quarter of 2019, and the adoption did not have an impact on our consolidated financial statements or related disclosures.

In February 2018, the FASB issued ASU No.

2018-02, Income Statement - Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Act.

We have chosen not to make any reclassifications under this standard.

In August 2017, the FASB issued ASU No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities .

The targeted amendments help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements.

For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach.

In October 2018, the FASB issued ASU No.

2018-16, ASU 2018-16, Derivatives and Hedging (Topic 815):

Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which adds the overnight index swap rate (OIS) based on the secured overnight financing rate as a fifth U.S.

benchmark interest rate.

We adopted this standard in the first quarter of 2019, and it did not have an impact on our consolidated financial statements or related disclosures.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) Section A - Leases:

Amendments to the FASB Accounting Standards Codification .

The standard requires lessees to recognize the assets and liabilities arising from leases on the balance sheet and retains a distinction between finance leases and operating leases.

The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance.

We adopted this standard in the first quarter of 2019 including the practical expedients outlined in ASU No.

2018-01, Leases (Topic 842) Land Easement Practical Expedient for transition to ASC 842 , the additional transition method and election to combine lease and nonlease components for real estate leases outlined in ASU No.

2018-11, Leases (Topic 842) Targeted Improvements, and the accounting policy election outlined in ASU No.

2018-20, Leases (Topic 842) Narrow-scope Improvements for Lessors .

The adoption of the standard has had a significant impact on our consolidated balance sheet due to the recognition of approximately $ 200 million of lease liabilities with corresponding right-of-use assets for operating leases.

Additionally, we recognized a $ 0.8 million cumulative effect adjustment credit, net of tax, to retained earnings.

The adjustment to retained earnings was driven by a build-to-suit capital lease that transitioned to an operating lease under the new standard.

The deferred tax impact on adoption was immaterial.

Recent Accounting Standards Not Yet Adopted – In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles of ASC 740, including, but not limited to, accounting relating to intraperiod tax allocations, deferred tax liabilities related to outside basis differences, and year to date losses in interim periods.

This guidance is effective for fiscal years beginning after December 15, 2020.

Early adoption is permitted.

We are currently assessing the impact of this ASU on our consolidated financial statements and disclosures.

Recently Adopted Accounting Standards – In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.

In January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope , to clarify the scope of ASU No.

The amendments are effective for all entities as of March 12, 2020 through December 31, 2022.

In May 2020, we elected the expedient within ASC 848 which allows us to assume that our hedged interest payments are probable of occurring regardless of any expected modifications in their terms related to reference rate return.

In addition, ASC 848 allows for the option to change the method of assessing effectiveness upon a change in critical terms of the derivative or the hedged transactions and upon the end of relief under ASC 848.

At this time, we have elected to continue the method of assessing effectiveness as documented in the original hedge documentation and apply the practical expedients related to probability to assume that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument.

We plan to evaluate the remaining expedients for adoption, as applicable, when contracts are modified.

Refer to Note 23 - Derivative Financial Instruments for additional disclosure information relating to our hedging activity.

In August 2018, the FASB issued ASU No.

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Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, which adds, modifies, and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other post retirement plans.

This guidance is effective for fiscal years ending after December 15, 2020.

Early adoption is permitted.

We are currently assessing the effect that this ASU will have on our disclosures.

We adopted this guidance as of December 31, 2020.

The adoption did not have a material impact to our financial statements or related disclosures.

In January 2017, the FASB issued ASU No.

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Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

The guidance will be effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.

Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

We adopted this standard in the first quarter of 2020 and the adoption did not have an impact on our consolidated financial statements.

In June 2016, the FASB issued ASU No.

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2019-04, Codification Improvements to (Topic 326), Financial Instruments-Credit Losses, (Topic 815), Derivatives and Hedging, and (Topic 825), Financial Instruments , to clarify and address certain items related to the amendments of ASU No.

We adopted this standard in the first quarter of 2020 using the modified retrospective approach, which primarily impacted our allowance for doubtful accounts as a result of our analysis of customer historical credit and collections data.

Additionally, we recognized a $ 5.7 million cumulative effect adjustment, net of tax, to retained earnings, which includes a $ 7.6 million increase to the allowance for doubtful accounts and a $ 1.9 million net impact to deferred tax assets.

Recent Accounting Standards Not Yet Adopted – In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

This guidance is effective for fiscal years beginning after December 15, 2020.

Early adoption is permitted.

We have evaluated the impact of this ASU, which will primarily

impact our allowance for doubtful accounts, and based on our analysis of customer historical credit and collections data and determined the impact is not expected to be material to our consolidated financial statements or disclosures.

In March 2019, we acquired VPI Quality Windows, Inc (“VPI”).

We are currently assessing the impact of this ASU on our consolidated financial statements and disclosures.

We have considered the applicability and impact of all ASUs.

We have assessed ASUs not listed above and have determined that they were either not applicable or were not expected to have a material impact on our financial statements.

In March 2019, we acquired VPI Quality Windows, Inc.

VPI is a leading manufacturer of vinyl windows, specializing in customized solutions for mid-rise multi-family, industrial, hospitality and commercial projects, primarily in the western U.S.

VPI is located in Spokane, Washington and is a part of our North America segment.

The preliminary fair values of the assets and liabilities acquired of this acquisition are summarized below:

(amounts in thousands)

Preliminary Allocation

Measurement Period Adjustment

Revised Preliminary Allocation

The fair values of the assets and liabilities acquired of this acquisition are summarized below:

(amounts in thousands) Preliminary Allocation Measurement Period Adjustment Final Allocation

Fair value of identifiable assets and liabilities:

Accounts receivable $ 11,417 $ ( 420 ) $ 10,997

Inventories 2,555 ( 141 ) 2,414

Other current assets 261 40 301

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Operating lease assets 3,739 — 3,739

Goodwill 26,553 ( 3,053 ) 23,500

Other assets 10 — 10

Total assets $ 65,403 $ 2,337 $ 67,740

Accounts payable 2,629 — 2,629

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Cash consideration, net of cash acquired $ 57,486 $ 313 $ 57,799

The revised preliminary goodwill of $ 23.5 million , calculated as the excess of the purchase price over the fair value of net assets, represents operational efficiencies and sales synergies, and the full amount is expected to be tax-deductible.

The intangible assets include customer relationships and tradenames and will be amortized over an estimated weighted average amortization period of 8 years .

Total 2019 net revenues and net loss, excluding retention bonuses disclosed below, relating to VPI since the date of acquisition were $ 46.6 million and $ 0.8 million , respectively.

Acquisition-related costs are expensed as incurred and are included in selling, general and administrative expense in our accompanying consolidated statements of operations.

The final goodwill of $ 23.5 million, calculated as the excess of the purchase price over the fair value of net assets, represents operational efficiencies and sales synergies, and the full amount is expected to be tax-deductible.

The intangible assets include customer relationships and tradenames and will be amortized over a weighted average amortization period of eight years .

Acquisition-related costs are expensed as incurred and are included in SG&A expense in our accompanying consolidated statements of operations.

We incurred acquisition-related costs of $ 0.4 million during the year ended December 31, 2019.

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The cash used to pay the retention bonuses was excluded from our determination of purchase price.

In 2019, we expensed the post-acquisition value of these retention bonuses as acquisition-related cost totaling $ 7.1 million , which are included in SG&A expense in our consolidated statements of operations for the year ended December 31, 2019 .

In 2019, we expensed the post-acquisition value of these retention bonuses as acquisition-related cost totaling $ 7.1 million, which are included in SG&A expense in our accompanying consolidated statements of operations for the year ended December 31, 2019.

The purchase price allocation was considered complete as of March 28, 2020.

During 2018, we completed four acquisitions.

The fair values of the assets and liabilities acquired of the completed acquisitions are summarized below:

(amounts in thousands)

Preliminary Allocation

Measurement Period Adjustment

Final Allocation

The fair values of the assets and liabilities acquired in these acquisitions are summarized below:

(amounts in thousands) Preliminary Allocation Measurement Period Adjustment Final Allocation

Fair value of identifiable assets and liabilities:

Accounts receivable $ 58,714 $ ( 2,079 ) $ 56,635

Inventories 97,305 ( 8,069 ) 89,236

Other current assets 14,910 ( 6,137 ) 8,773

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Identifiable intangible assets 70,057 ( 1,363 ) 68,694

Goodwill 64,950 ( 4,330 ) 60,620

Other assets 7,283 ( 3,528 ) 3,755

Total assets $ 366,347 $ 664 $ 367,011

Accounts payable 29,512 ( 6,097 ) 23,415

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The gain on previously held shares relates to the remeasurement of our existing 50 % ownership interest to fair value for one of the recent acquisitions.

During the second and third quarters of 2017, we completed three acquisitions for total consideration of approximately $ 131.7 million , net of cash acquired, with $ 46.7 million of the purchase price allocated to intangible assets.

The intangible assets included tradenames, software, and customer relationships and are being amortized over an estimated weighted average amortization period of 18 years.

Goodwill is the excess of the purchase price over the fair value of net assets acquired in business combinations and was $ 25.1 million for these acquisitions with $ 14.2 million expected to be tax-deductible.

There were $ 1.8 million of acquisition-related costs included in SG&A expense in the accompanying consolidated statements of operations for the year ended December 31, 2017.

In 2017, the measurement period adjustment reduced the preliminary allocation of goodwill by $ 23.6 million and increased the preliminary allocation of property and equipment, intangible assets, and cash consideration, net of cash acquired by $ 16.7 million , $ 16.3 million and $ 7.7 million , respectively, with the remaining preliminary allocation changes related to other working capital accounts.

In 2018, the measurement period adjustment increased the preliminary allocation of goodwill by $ 0.9 million with the offset primarily to working capital accounts.

The purchase price allocation was considered completed within the appropriate remeasurement period for all three acquisitions.

We evaluated these acquisitions quantitatively and qualitatively and determined them to be insignificant both individually and in the aggregate.

We evaluated the acquisitions quantitatively and qualitatively and determined them to be insignificant both individually and in the aggregate.

Therefore, certain pro forma disclosures under ASC 805-10-50 have been omitted.

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We sell our manufactured products to a large number of customers, primarily in the residential housing construction and remodel sectors, broadly dispersed across many domestic and foreign geographic regions.

We assess the credit risk relating to our accounts receivable based on quantitative and qualitative factors, primarily historical credit collections within each region where we have operations.

We perform ongoing credit evaluations of our customers to minimize credit risk.

We do not usually require collateral for accounts receivable but will require advance payment, guarantees, a security interest in the products sold to a customer, and/or letters of credit in certain situations.

Customer accounts receivable converted to notes receivable are primarily collateralized by inventory or other collateral.

Customer accounts receivable converted to notes receivable are collateralized by inventory or other collateral.

One window and door customer from our North America segment represents 15.4 %, 14.6 %, and 14.2 % of net revenues in 2020, 2019, and 2018, respectively.

As of January 1, 2020, we adopted ASC 326 - Measurement of Credit Losses on Financial Instruments on a modified retrospective basis, which increased the allowance for doubtful accounts by $ 7.6 million on the date of adoption.

The following is a roll forward of our allowance for doubtful accounts as of December 31:

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Acquisitions (Note 2)

— ( 235 ) ( 1,668 )

Additions charged to expense

( 649 ) ( 961 ) ( 2,769 )

Additions related to adoption of 2016-09 ( 7,635 ) — —

1,898 1,407 2,301

Currency translation

( 581 ) 49 377

Balance at period end $ ( 12,934 ) $ ( 5,967 ) $ ( 6,227 )

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Inventories are stated at the lower of cost or net realizable value.

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Raw materials

$ 382,698 $ 372,289

Work in process

35,712 38,432

Finished goods

93,818 94,357

Total inventories $ 512,228 $ 505,078

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Other Current Assets

(amounts in thousands)

December 31, 2019

December 31, 2018

Prepaid assets

Refundable income taxes

Fair value of derivative instruments ( Note 26 )

Total other current assets

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Property and Equipment, Net

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Land improvements

$ 32,312 $ 34,211

536,376 511,563

Machinery and equipment

1,508,979 1,423,809

Total depreciable assets 2,077,667 1,969,583

Accumulated depreciation ( 1,349,423 ) ( 1,252,092 )

728,244 717,491

72,525 69,262

Construction in progress

71,816 77,622

Total property and equipment, net $ 872,585 $ 864,375

The prior year figures in the table above have been revised to correct for errors associated with our accounting for retirements and disposal of the fair value adjustments of buildings, machinery and equipment, and accumulated depreciation associated with a 2006 acquisition in Europe.

The effect of the errors was to understate the amounts previously reported for buildings by $ 9.3 million, machinery and equipment by $ 54.6 million, total depreciable assets by $ 63.9 million, and accumulated depreciation by $ 63.9 million.

In the fourth quarter of 2019, we placed in service a newly constructed plant and corresponding machinery and equipment located within our Australasia segment.

In November 2016, we entered into a 17 -year, non-cancelable build-to-suit arrangement for a corporate headquarters facility in Charlotte, North Carolina that was accounted for under the previously effective build-to-suit guidance contained in ASC840, Leases .

Since we were involved in the construction of structural improvements prior to the commencement of the lease and took some level of construction risk, we were considered the accounting owner of the assets and land during the construction period.

Further, since certain terms of the lease did not meet normal sale-leaseback criteria under ASC 840, Leases , we were considered the accounting owner after the construction period.

In 2018, we recorded $ 20.0 million of build-to-suit assets included in property and equipment, net, and set up a corresponding financial obligation of $ 20.4 million included within long-term debt.

In addition, in 2018, we received a tenant improvement allowance, increasing long-term debt by $ 4.2 million .

Under current recently adopted guidance, ASC 842, Leases , this lease was reclassified as an operating lease and is now reflected within our operating lease balances included within Note 9 - Leases and is no longer reflected in our 2019 property and equipment, net, or long-term debt on the accompanying consolidated balance sheet.

We monitor all property and equipment for any indicators of potential impairment.

We recorded impairment charges of $ 3.7 million , $ 1.1 million , and $ 1.5 million during the years ended December 31, 2019 , 2018 , and 2017 respectively.

The effect on our carrying value of property and equipment due to currency translations for foreign assets was a decrease of $ 2.0 million and $ 23.1 million for the years ended December 31, 2019 and 2018 , respectively.

We recorded impairment charges of $ 2.0 million, $ 3.7 million, and $ 1.1 million during the years ended December 31, 2020, December 31, 2019, and December 31, 2018, respectively.

The effect on our carrying value of property and equipment due to currency translations for foreign assets was an increase of $ 27.1 million and a decrease of $ 2.0 million for the years ended December 31, 2020 and December 31, 2019, respectively.

Depreciation expense was recorded as follows:

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Cost of sales

$ 88,551 $ 84,449 $ 85,357

Selling, general and administrative

9,594 9,882 8,699

Total depreciation expense $ 98,145 $ 94,331 $ 94,056

The following table summarizes the changes in goodwill by reportable segment:

(amounts in thousands)

(amounts in thousands) North

America Europe Australasia Total

Balance as of December 31, 2018 $ 223,562 $ 279,688 $ 82,692 $ 585,942

26,553 — — 26,553

Acquisition remeasurements

( 1,535 ) — ( 1,248 ) ( 2,783 )

Sale of business unit ( 1,343 ) — — ( 1,343 )

Currency translation

265 ( 5,776 ) ( 358 ) ( 5,869 )

Balance as of December 31, 2019 $ 247,502 $ 273,912 $ 81,086 $ 602,500

Acquisitions - preliminary allocation

Acquisition remeasurements

Sale of business unit

Currency translation

148 29,485 7,734 37,367

Balance as of December 31, 2020 $ 247,650 $ 303,397 $ 88,820 $ 639,867

We have recorded impairments in prior periods related to the divestiture of certain operations.

Cumulative impairments of goodwill totaled $ 1.6 million at December 31, 2019 , 2018 and 2017 .

Cumulative impairments of goodwill totaled $ 1.6 million at December 31, 2018.

In accordance with current accounting guidance, we identified three reporting units for the purpose of conducting our goodwill impairment review.

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Intangible Assets, Net

Changes in the carrying amount of intangible assets were as follows for the periods indicated:

(amounts in thousands)

Balance as of December 31, 2017

Acquisition remeasurements

Additions, (net of $172 write-offs)

Currency translation

Balance as of December 31, 2018

Acquisition remeasurements

Additions, (net of $112 write-offs)

Currency translation

Balance as of December 31, 2019

The cost and accumulated amortization values of our intangible assets were as follows as of December 31:

(amounts in thousands)

The cost and accumulated amortization values of our intangible assets were as follows:

December 31, 2020

(amounts in thousands) Cost Accumulated

Amortization Net

Customer relationships and agreements

$ 155,006 $ ( 68,186 ) $ 86,820

106,697 ( 26,801 ) 79,896

Trademarks and trade names

60,699 ( 9,821 ) 50,878

Patents, licenses and rights

48,759 ( 20,298 ) 28,461

Total amortizable intangibles $ 371,161 $ ( 125,106 ) $ 246,055

(amounts in thousands)

December 31, 2019

(amounts in thousands) Cost Accumulated

Amortization Net

Customer relationships and agreements

$ 151,540 $ ( 57,326 ) $ 94,214

92,821 ( 18,222 ) 74,599

Trademarks and trade names

58,088 ( 7,512 ) 50,576

Patents, licenses and rights

45,392 ( 14,454 ) 30,938

Total amortizable intangibles $ 347,841 $ ( 97,514 ) $ 250,327

We have capitalized a total of $ 60.2 million related to the application development stage of our global ERP system implementation, including $ 31.8 million during the year ended December 31, 2019 .

As of December 31, 2019 , we have placed $ 52.0 million in service and began amortizing the cost of our global ERP system over its estimated useful life of 15 years .

Through December 31, 2020, we have capitalized software costs of $ 76.4 million related to the application development stage of our global ERP system implementation, including $ 16.2 million during the year ended December 31, 2020 and

$ 31.8 million during the year ended December 31, 2019.

In March 2020, we impaired $ 3.4 million of capitalized software within impairment and restructuring charges in the accompanying consolidated statements of operations due to delays in implementation of certain ERP modules and the uncertainty of its future.

In the third quarter 2020, we reduced the estimated useful life of our initial ERP instance from 15 years to 10 years to align with our current plans for our future global ERP system.

In the fourth quarter, we placed in service and began amortizing our current global ERP instance over its estimated useful life of 10 years.

As of December 31, 2020, we have placed $ 68.7 million in service and are amortizing the cost of our global ERP system over its estimated useful life.

The effect on our carrying value of intangible assets due to currency translations for foreign assets was an increase of $ 9.2 million and a decrease of $ 1.5 million for the years ended December 31, 2020 and December 31, 2019, respectively.

See Note 2 - Acquisitions for a discussion of our acquisitions and associated intangible assets.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

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(amounts in thousands)

We lease certain warehouses, distribution centers, office space, land, vehicles and equipment.

We determine if an arrangement is a lease at inception.

Amounts associated with finance leases are included in property and equipment, net, current maturities of long-term debt and long-term debt in our consolidated balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The incremental borrowing rate for operating leases that commenced in the period is determined by using the prior quarter end’s incremental borrowing rates.

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

For lease agreements entered into or reassessed after the adoption of Topic 842, we combine lease and nonlease components.

The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

2021 $ 32,501

Thereafter 94,824

We lease certain warehouses, distribution centers, office spaces, land, vehicles and equipment.

Effective January 1, 2019, we adopted ASU No.

2016-02 “Leases” using the modified retrospective approach.

Lease ROU assets and liabilities at December 31 were as follows:

(amounts in thousands)

Balance Sheet Location

Operating lease assets, net

Property and equipment, net (1)

(amounts in thousands) Balance Sheet Location 2020 2019

Operating Operating lease assets, net $ 214,727 $ 202,053

Finance Property and equipment, net (1)

Total lease assets $ 220,518 $ 206,098

Accrued expense and other current liabilities

Current maturities of long-term debt

Operating lease liability

Long-term debt

Operating Accrued expense and other current liabilities $ 44,319 $ 45,254

Finance Current maturities of long-term debt 1,740 1,280

Operating Operating lease liability 177,491 164,026

Finance Long-term debt 4,086 2,820

Total lease liability $ 227,636 $ 213,380

Finance lease assets are recorded net of accumulated depreciation of $ 1.5 million as of December 31, 2019 .

During the year ended December 31, 2019 , we obtained $ 28.6 million in right-of-use assets in exchange for operating lease liabilities, primarily relating to manufacturing equipment.

(1) Finance lease assets are recorded net of accumulated depreciation of $ 3.0 million and $ 1.5 million as of December 31, 2020 and December 31, 2019, respectively.

During the years ended December 31, 2020 and December 31, 2019, we obtained $ 55.5 million and $ 49.0 million in right-of-use assets, respectively, in exchange for operating lease liabilities, primarily relating to manufacturing equipment.

have revised the prior year right-of-use asset in exchange for operating lease liabilities amount to include all noncash operating lease activity.

In December 2019, we entered into a 10 year operating lease for a replacement corporate airplane with an ROU asset of $ 11.7 million.

The components of lease expense for the year ended December 31, 2019 were as follows:

During the years ended December 31, 2020 and December 31, 2019, we obtained $ 3.3 million and $ 3.2 million in right-of-use assets, respectively, in exchange for finance lease liabilities.

The components of lease expense for the years ended December 31 were as follows:

(amounts in thousands) 2020 2019

Operating $ 56,066 $ 54,535

Short term 12,803 11,543

Variable 4,989 3,806

Low value 1,714 1,738

Finance 193 90

Total lease costs $ 75,765 $ 71,712

Weighted average remaining lease terms (years):

Operating 6.6 6.7

Finance 3.8 3.7

Weighted average discount rate:

Future minimum lease payment obligations under operating and capital leases are as follows:

Operating 4.2 % 4.7 %

Finance 3.5 % 4.4 %

Future minimum lease payment obligations under operating and finance leases are as follows:

December 31, 2020

(amounts in thousands)

Operating Leases (1)

Finance Leases

(amounts in thousands) Operating Leases (1)

Finance Leases Total

2021 $ 53,958 $ 1,950 $ 55,908

2022 47,133 1,529 48,662

2023 39,399 1,416 40,815

2024 30,854 1,107 31,961

2025 24,219 167 24,386

Thereafter 62,856 67 62,923

Total lease payments 258,419 6,236 264,655

Interest 36,609 410 37,019

Present value of lease liability $ 221,810 $ 5,826 $ 227,636

(1) Operating lease payments include $ 8.4 million related to options to extend lease terms that are reasonably certain of being exercised.

Disclosures related to period prior to adoption of the Standard

Operating lease rent expense was $ 63.7 million and $ 50 million during the years ended December 31, 2018 and 2017 respectively.

Future minimum lease payment obligations under operating and capital leases are as follows:

December 31, 2018

(amounts in thousands)

Operating Leases

Capital Leases (1)

Total future minimum lease payment obligations

(1) As of December 31, 2018, capital leases included maturities of approximately $ 24.5 million related to a build-to-suit lease that transitioned to an operating lease under the new leasing standard.

(amounts in thousands)

Customer displays

Cloud computing arrangements

Long-term notes receivable

Overfunded pension benefit obligation

Other prepaid expenses

Debt issuance costs on unused portion of revolver facility

Other long-term accounts receivable

Other long-term assets

Long-term taxes receivable

Total other assets

Domestic debt issuance costs associated with revolving credit facilities are capitalized and amortized according to the effective interest rate method over the life of the new debt agreements.

Non-cash additions are disclosed in Note 30 - Supplemental Cash Flow Information .

Customer displays are amortized over the life of the product line and $ 8.7 million , $ 9.0 million and $ 8.6 million of amortization is included in total depreciation and amortization in SG&A expense for the years ended December 31, 2019 , 2018 and 2017 , respectively.

In 2019, we adopted ASU 2018-15, as outlined in Note 1- Summary of Significant Accounting Policies, and began capitalizing qualified cloud computing costs.

Cloud computing arrangements are expensed over the term of the hosting arrangement plus the renewal period, if reasonably certain.

We have capitalized a total of $ 7.0 million relating to cloud computing arrangements.

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

As of December 31, 2019 and December 31, 2018, our investments consist of six investments accounted for under the cost method.

As of December 31, 2017, our equity investments consisted of a 50 % owned investment.

During the first quarter of 2018, we purchased the remaining outstanding shares of that entity, and we recognized a gain of $ 20.8 million on the previously held shares.

During the first quarter of 2018, we purchased the remaining outstanding shares of a 50 % owned equity method investment and we recognized a gain of $ 20.8 million on the previously held shares.

This investment is now eliminated in consolidation.

A summary of our equity and cost method investments, which are included in other assets in the accompanying consolidated balance sheets, is as follows:

(amounts in thousands)

Ending balance, December 31, 2017

Equity earnings

Acquired equity method investment

Ending balance, December 31, 2018

Ending balance, December 31, 2019

Loans or advances to affiliates were fully impaired as of December 31, 2019 and December 31, 2018.

The combined results of operations for the equity method investment as of December 31 is summarized below:

The results of operations for the equity method investment as of December 31, 2018 is summarized below:

(amounts in thousands)

Net sales $ 91,234

Gross profit 18,261

Net income 1,752

Adjustment for profit (loss) in inventory ( 138 )

Net income attributable to Company 738

Sales to affiliates totaled $ 16.5 million and $ 59.3 million in 2018 and 2017 , respectively, and purchases from affiliates totaled $ 1.0 million and $ 4.0 million for 2018 and 2017 , respectively.

No impairments were recorded during fiscal years 2019 , 2018 , or 2017 .

Sales to affiliates totaled $ 16.5 million, purchases from affiliates totaled $ 1.0 million, and no impairments were recorded in 2018.

Accrued Payroll and Benefits

7 unchanged sentences

Total accrued payroll and benefits $ 151,742 $ 109,386

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Accrued payroll taxes relates to provisions included within the CARES Act for the deferral of payroll taxes.

Additional information is disclosed within Note 1 - Summary of Significant Accounting Policies within COVID-19.

Accrued Expenses and Other Current Liabilities

(amounts in thousands) 2020 2019

Current portion of legal claims provision

Legal claims provision $ 108,629 $ 79,332

Accrued sales and advertising rebates

87,030 67,250

Current portion of operating lease liability (Note 8)

Accrued expenses

44,319 45,254

Non-income related taxes

31,436 23,178

Current portion of warranty liability (Note 12)

21,766 21,054

Accrued freight 18,967 10,715

Accrued expenses

15,751 17,278

Deferred revenue 13,453 7,986

Current portion of accrued claim costs relating to self-insurance programs

Current portion of deferred revenue

Current portion of restructuring accrual (Note 23)

11,882 12,312

Accrued income taxes payable 11,224 1,999

Current portion of derivative liability (Note 23)

Accrued interest payable

Current portion of accrued income taxes payable

Current portion of restructuring accrual (Note 20)

Total accrued expenses and other current liabilities $ 379,289 $ 298,603

In the table above, the legal claims provision balances relate primarily to the $ 76.5 million litigation contingency associated with the ongoing antitrust litigation with Steves & Sons, Inc.

For further information regarding this litigation, see Note 28 - Commitments and Contingencies .

The accrued sales and advertising rebates, accrued interest payable, and non-income related taxes can fluctuate significantly period over period due to timing of payments.

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

The legal claims provision relates primarily to contingencies associated with the ongoing legal matters disclosed in Note 25 - Commitments and Contingencies .

The accrued sales and advertising rebates, accrued interest payable, accrued freight, and non-income related taxes can fluctuate significantly period-over-period due to timing of payments.

Warranty Liability

1 unchanged sentence

Warranties are normally limited to servicing or replacing defective components for the original customer.

Product defects arising within six months of sale are classified as manufacturing defects and are not included in the current period expense below.

Product defects arising within six months of sale are

classified as manufacturing defects and are not included in the current period expense below.

Some warranties are transferable to subsequent owners and are either limited to 10 years from the date of manufacture or require pro-rata payments from the customer.

4 unchanged sentences

Current period expense

23,906 20,853 21,822

Liabilities assumed due to acquisition

— 2,104 1,550

Experience adjustments

3,213 1,890 1,227

( 25,113 ) ( 21,818 ) ( 23,410 )

Currency translation

574 219 ( 977 )

Balance at period end 52,296 49,716 46,468

Current portion

( 21,766 ) ( 21,054 ) ( 20,529 )

Long-term portion

$ 30,530 $ 28,662 $ 25,939

The most significant component of our warranty liability is in the North America segment, which totaled $ 45.6 million at December 31, 2020, after discounting future estimated cash flows at rates between 0.57 % and 4.75 %.

2 unchanged sentences

Our long-term debt, net of original issue discount and unamortized debt issuance costs, consisted of the following:

December 31, 2019

(amounts in thousands)

Interest Rate

December 31, 2020 December 31, 2020 December 31, 2019

(amounts in thousands) Interest Rate

Senior Secured Notes and Senior Notes 4.63 % - 6.25 %

$ 1,050,000 $ 800,000

Term loans 1.06 % - 2.15 %

588,881 591,153

2 unchanged sentences

Mortgage notes 1.65 % 29,296 28,175

Revolving credit facilities

Installment notes for stock — % — 205

Unamortized debt issuance costs and original issue discount

1,781,351 1,528,146

Unamortized debt issuance costs and original issue discounts ( 13,309 ) ( 10,774 )

Current maturities of long-term debt ( 66,702 ) ( 65,846 )

Long-term debt $ 1,701,340 $ 1,451,526

Maturities by year:

Maturities by year, excluding unamortized debt issuance costs and original issue discounts:

2021 $ 66,702

Summaries of our significant changes to outstanding debt agreements as of December 31, 2020 are as follows:

Senior Secured Notes and Senior Notes

In May 2020, we issued $ 250.0 million of Senior Secured Notes bearing interest at 6.25 % and maturing in May 2025 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The proceeds were net of fees and expenses associated with debt issuance, including an underwriting fee of 1.25 %.

Interest is payable semiannually, in arrears, each May and November through maturity, beginning November 2020.

In December 2017, we issued $ 800.0 million of unsecured Senior Notes in two tranches:

$ 400.0 million bearing interest at 4.63 % and maturing in December 2025, and $ 400.0 million bearing interest at 4.88 % and maturing in December 2027 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

Each tranche was issued at par.

Interest is payable semiannually in arrears each June and December through maturity.

Debt issuance costs incurred in 2017 of $ 11.7 million are being amortized to interest expense over the life of the notes using the effective interest method.

Facility - In February 2017, we prepaid $ 375.0 million of outstanding principal with a portion of the proceeds from our IPO.

As a result, we recorded a proportional write-off of $ 5.2 million of unamortized debt issuance costs and $ 0.9 million of original issue discount to interest expense.

In March 2017, we amended the facility to reduce the interest rate and remove the cap on the amount of cash used in the calculation of net debt.

The offering price of the amended term loans was par.

Pursuant to this amendment, certain lenders converted their aggregate commitments, along with an additional commitment advanced by a replacement lender.

We incurred $ 1.1 million of debt issuance costs in 2017 related to this amendment, which are being amortized to interest expense over the life of the notes using the effective interest method.

In December 2017, along with the issuance of the Senior Notes, we re-priced and amended the facility and repaid $ 787.4 million of outstanding borrowings with the net proceeds from the Senior Notes, which resulted in a principal balance of $ 440.0 million .

In connection with the debt extinguishment, we expensed the related unamortized original discount of $ 5.9 million , unamortized debt issuance costs of $ 15.4 million , and bank fees of $ 1.7 million as a loss on extinguishment of debt within other (income) expense in our consolidated statements of operations.

Facility - In December 2017, along with the issuance of the Senior Notes, we re-priced and amended the facility, which resulted in a principal balance of $ 440.0 million.

These re-priced term loans were offered at par and bear interest at the further reduced rate of LIBOR (subject to a floor of 0.00 %) plus a margin of 1.75 % to 2.00 %, determined by our corporate credit ratings.

This compares favorably to the previous rate of LIBOR (subject to a floor of 1.00 % ) plus a margin of 2.75 % to 3.00 % , determined by our net leverage ratio, under the prior amendment.

This amendment also modified other terms and provisions, including providing for additional covenant flexibility and additional capacity under the facility, removing the quarterly required repayments of 0.25 % of the aggregate principal balance, and conforming to certain terms and provisions of the Senior Notes.

The facility is essentially secured by the same collateral and guaranteed by the same guarantors as it was under each of the prior amendments, and we incurred $ 0.7 million of debt issuance costs related to this amendment, which are being amortized to interest expense over the life of the facility using the effective interest method.

This amendment also modified other terms and provisions, including providing for additional covenant flexibility and additional capacity under the facility.

In February 2019, we purchased interest rate caps in order to effectively fix a 3.0 % per annum ceiling on the LIBOR component of an aggregate $ 150.0 million of our term loans.

5 unchanged sentences

At December 31, 2020, the outstanding principal balance, net of original issue discount, was $ 549.4 million.

Australia Facility - In February 2018, we amended the Australia Senior Secured Credit Facility to include an additional AUD 55 million floating rate term loan facility with a base rate of BBSY plus a margin ranging from 1.00 % to 1.10 % .

We paid a quarterly line fee of 1.25 % per annum on the facility commitment.

The facility is secured by guarantees of JWA.

In June 2019, we reallocated AUD 5.0 million from the term loan commitment to the interchangeable commitment of the Australia Senior Secured Credit Facility.

In May 2020, we entered into interest rate swap agreements with a weighted average fixed rate of 0.395 % paid against one-month LIBOR floored at 0.00 % with outstanding notional amounts aggregating to $ 370.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility.

The interest rate swap agreements are designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and mature in December 2023.

See Note 23- Derivative Financial Instruments for additional information on our derivative assets and liabilities.

Australia Facility - In June 2019, we reallocated AUD 5.0 million from the term loan commitment to the interchangeable commitment of the Australia Senior Secured Credit Facility.

The amended AUD 50.0 million floating rate term loan facility bears interest at a base rate of BBSY plus a margin ranging from 1.00 % to 1.10 %, includes a line fee of 1.25 % on the commitment amount, and matures in February 2023.

This facility had an outstanding principal balance of $ 35.0 million as of December 31, 2019 .

This facility had an outstanding principal balance of AUD 50.0 million ($ 38.5 million ) as of December 31, 2020.

Both the term loan and non-term loan portions of the Australia Senior Secured Credit Facility are secured by guarantees of JWA and its subsidiaries, fixed and floating charges on the assets of JWA group, and mortgages on certain real properties owned by the JWA group.

The agreement requires that JWA maintain certain financial ratios, including a minimum

consolidated interest coverage ratio and a maximum consolidated debt to EBITDA ratio.

The agreement requires that JWA maintain certain financial ratios, including a minimum consolidated interest coverage ratio and a maximum consolidated debt to EBITDA ratio.

The agreement limits dividends and repayments of intercompany loans where the JWA group is the borrower and limits acquisitions without the bank’s consent.

Other Acquired Facilities - In 2018, we acquired a $ 11.6 million term loan facility associated with our ABS acquisition, as well as $ 9.6 million in various term loan facilities associated with our Domoferm acquisition.

In December 2018, we terminated the ABS facility having repaid all outstanding borrowings.

As of December 31, 2019 , we had $ 0.6 million outstanding under the remaining Domoferm term loan facilities.

Revolving Credit Facilities

ABL Facility - In December 2017, along with the offering of the Senior Notes and repricing of the Term Loan Facility, we amended our ABL Facility, which had a total of $ 300 million in U.S.

and Canadian revolving credit commitments.

The facility will mature in December 2022, extended from October 2019, and bears interest primarily at LIBOR (subject to a floor of 0.00 % ) plus a margin of 1.25 % to 1.75 % , determined by availability.

This compares favorably to the rate of LIBOR (subject to a floor of 0.00 % ) plus a margin of 1.50 % to 2.00 % under the previous amendment.

ABL Facility - In December 2019, we amended the ABL facility, a $ 400 million asset-based loan revolving credit facility maturing in December 2022, which did not have a financial impact.

This facility bears interest primarily at LIBOR (subject to a floor of 0.00 %) plus a margin of 1.25 % to 1.75 %, determined by availability.

Extensions of credit are limited by a borrowing base calculated based on specified percentages of the value of eligible accounts receivable and inventory, subject to certain reserves and other adjustments.

1 unchanged sentence

The ABL Facility has a minimum fixed charge coverage ratio that we are obligated to comply with under certain circumstances.

The ABL Facility has various non-financial covenants, including restrictions on liens, indebtedness, and dividends, customary representations and warranties, and customary events of defaults and remedies.

This amendment also made certain adjustments to the borrowing base and modified other terms and provisions, including providing for additional covenant flexibility, and conforming to certain terms and provisions of the Senior Notes and Term Loan Facility.

In connection with the amendment to the ABL Facility, we expensed $ 0.2 million of unamortized loan fees as a loss on extinguishment of debt within other (income) expense in our consolidated statements of operations.

In December 2018, we amended the ABL Facility, providing for an increase of $ 100 million to a total of $ 400 million in U.S.

and Canadian revolving credit commitments.

The maturity date remains unchanged.

In December 2019, we amended our ABL facility to reflect current banking regulatory requirements, which do not have a financial impact.

The ABL Facility has various non-financial covenants, including restrictions on liens, indebtedness, dividends, customary representations and warranties, and customary events of defaults and remedies.

In March 2020, we drew $ 100.0 million under our ABL Facility as a precautionary measure to ensure funding of our seasonal working capital cash requirements given the significant impact of the COVID-19 pandemic on global financial markets and economies.

In May 2020, we utilized a portion of the proceeds received from our issuance of the $ 250.0 million of Senior Secured Notes to repay the outstanding balance on our ABL Facility.

In the fourth quarter of 2020, we began to include the accounts receivable and inventory balances of certain recently acquired U.S.

businesses in determining our availability, which expanded our borrowing base.

As of December 31, 2020, we had no outstanding borrowings, $ 38.5 million in letters of credit and $ 346.0 million available under the ABL Facility.

Australia Senior Secured Credit Facility - In February 2018, we amended the Australia Senior Secured Credit Facility to provide for an AUD 15.0 million floating rate revolving loan facility, an AUD 12.0 million interchangeable facility for guarantees and letters of credit, an AUD 7.0 million electronic payaway facility, an AUD 2.5 million asset finance facility, an AUD 1.0 million commercial card facility and an AUD 5.0 million .

In June 2019, we further amended the Australia Senior Secured Credit Facility, reallocating availability from the Australia Term Loan Facility and collapsing the floating rate revolving loan facility into a AUD 35.0 million interchangable facility to be used for guarantees, asset financing, and loans of 12 months or less bearing interest at BBSY plus a margin of 1.10 % and a line fee of 0.50 % , compared to BBSY plus a margin of 0.75 % and a line fee of 1.15 % on the revolving facility limit under the previous amendment.

Australia Senior Secured Credit Facility - In June 2019, we amended the Australia Senior Secured Credit Facility, reallocating availability from the Australia Term Loan Facility and collapsing the floating rate revolving loan facility into an AUD 35.0 million interchangeable facility to be used for guarantees, asset financing, and loans of 12 months or less.

May 2020, we amended this facility to relax certain financial covenants and provide for a supplemental AUD 30.0 million floating rate revolving loan facility to be used for loans bearing interest at BBSY plus a margin of 1.10 %, and a line fee of 0.90 %, and maturing on June 30, 2021.

The facility may be used only if and when the AUD 35.0 million interchangeable facility is fully utilized.

As of December 31, 2020, we had AUD 30.0 million ($ 23.1 million) available under this facility.

In addition, the AUD 35.0 million interchangeable facility was renewed with relaxed financial maintenance covenants to at least June 30, 2021 and its line fee increased to 0.70 %, compared to a line fee of 0.50 % under the previous amendment.

The non-term loan portion of the Australia Senior Secured Credit Facility no longer has a set maturity date but is instead subject to an annual review.

As of December 31, 2020, we had AUD 21.6 million ($ 16.6 million) available under this facility.

Overdraft balances bear interest at the bank’s reference rate minus a margin of 1.00 % , and a line fee of 1.15 % is paid on the overdraft facility limit.

Euro Revolving Facility - In January 2019, we allowed our € 39 million Euro Revolving Facility to expire due to operating cash generation in Europe as well as expenses and restrictions associated with the facility.

At December 31, 2019 , we had combined borrowing availability of $ 328.5 million under our revolving credit facilities.

At December 31, 2020, we had combined borrowing availability o f $ 385.7 million under our revolving credit facilities.

Mortgage Notes – In December 2007, we entered into thirty-year mortgage notes secured by land and buildings with principal payments which began in 2018.

At December 31, 2019 , we had DKK 187.8 million (or $ 28.2 million ) outstanding under these notes.

At December 31, 2020, we had DKK 177.4 million ( $ 29.3 million) outstanding under these notes.

Finance leases and other financing arrangements – In addition to finance leases, we include insurance premium financing arrangements and loans secured by equipment in this category.

At December 31, 2020, we had $ 113.2 million outstanding in this category, with maturities ranging from 2021 to 2028.

At December 31, 2018, this category included a $ 24.5 million build-to-suit capital lease that was reclassified as an operating lease under the recently issued leasing standards and is no longer reflected in long-term debt as of January 1, 2019 (Note 9 - Leases ).

Increases in this category during 2019 were primarily due to additional equipment financing.

Installment Notes for Stock – We entered into installment notes for stock representing amounts due to former or retired employees for repurchases of our stock that are payable over 10 years depending on the amount, with payments through 2020.

As of December 31, 2019 , we had $ 0.2 million outstanding under these notes.

As of December 31, 2019 , we were in compliance with the terms of all of our credit facilities.

As of December 31, 2020, we were in compliance with the terms of all of our credit facilities and the indentures governing the Senior Notes and Senior Secured Notes.

Deferred Credits and Other Liabilities

2 unchanged sentences

Warranty liability (Note 12)

$ 30,530 $ 28,662

Uncertain tax positions (Note 15)

21,764 20,234

Workers' compensation claims accrual 16,856 14,604

Accrued payroll taxes 10,427 —

Environmental contingencies (Note 25)

Other liabilities 2,590 3,190

Long term derivative liability (Note 23)

Restructuring accrual (Note 20)

Over-market lease liabilities

Deferred income

Total deferred credits and other liabilities $ 91,368 $ 67,682

At December 31, 2018 , the over-market lease liabilities related to our Melton operations in the U.K.

Under recently adopted guidance, ASC 842, Leases , this lease is now reflected within our operating lease asset, net balance included within Note 9 - Leases.

Income (loss) before taxes, equity earnings was comprised of the following for the years ended December 31:

Accrued payroll taxes relates to provisions included within the CARES Act for the deferral of payroll taxes.

Additional information is disclosed within Note 1 - Summary of Significant Accounting Policies within COVID-19.

Income (loss) before taxes, equity earnings is comprised of the following for the years ended December 31:

(amounts in thousands) 2020 2019 2018

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Total income before taxes, equity earnings $ 116,675 $ 120,045 $ 131,111

Our foreign income is primarily driven by our subsidiaries in Australia, Canada and the U.K.

Our foreign income is primarily driven by our subsidiaries in Australia, Canada, Germany, and the U.K.

The statutory tax rates are 30 %, 27 %, 29 %, and 19 %, respectively.

1 unchanged sentence

(amounts in thousands) 2020 2019 2018

$ 3,053 $ 5,037 $ ( 9,760 )

30,343 29,264 34,742

Current taxes 34,152 35,236 25,746

( 8,134 ) 11,771 ( 24,445 )

68 6,620 ( 12,760 )

( 997 ) 3,447 1,401

Deferred taxes ( 9,063 ) 21,838 ( 35,804 )

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On December 22, 2017, the Tax Act was enacted in the U.S.

The specific provisions of the Tax Act had both direct and indirect impacts on our 2017 and 2018 results and may continue to materially affect our financial results in the future as regulations continue to be finalized.

The direct impacts recorded as provisional estimates in 2017 were due primarily to the change in the U.S.

corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017 and the one-time deemed repatriation tax.

As a result of the lowering of the U.S.

federal tax rate, we revalued our net deferred tax

assets in the U.S.

reflecting the lower expected benefit in the U.S.

in the future.

This revaluation resulted in an estimated additional tax expense of approximately $ 21.1 million .

Our provisional estimate of the one-time deemed repatriation tax, which effectively subjected the Company’s net aggregate historic foreign earnings to taxation in the U.S., resulted in a further tax charge of $ 11.3 million .

During the fourth quarter of 2017, the Company undertook certain transactions which premised the repatriation of certain earnings from foreign subsidiaries.

While these transactions were not undertaken as a direct result of tax reform, the U.S.

tax implications were heavily impacted due to the timing of the transactions and the measurement dates as outlined in the Tax Act.

We recorded a provisional estimate of the effects of certain steps completed in 2017 as well as further steps premised to be completed in 2018 which would have retroactive effect into 2017 resulting in a net increase to tax expense of $ 65.8 million related to these transactions and their impacts under the Tax Act.

The specific provisions of the Tax Act had both direct and indirect impacts on our 2017 and 2018 results and continue to materially affect our financial results as regulations continue to be finalized.

As of December 31, 2018, we completed our accounting for the income tax effects of the Tax Act as of the enactment date.

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These adjustments were accounted for as a component of income tax expense from continuing operations.

The specific adjustments recorded were (i) an increase to the tax expense recorded related to the revaluation of our net deferred tax assets from $ 21.1 million to $ 55.3 million resulting in an additional charge to 2018 earnings of $ 34.2 million , (ii) a reduction of the estimate of the one-time deemed repatriation tax from $ 11.3 million to zero resulting in a tax benefit recorded in 2018 earnings of $ 11.3 million , (iii) a reduction of the additional tax expense recorded related to the premised repatriation of funds from foreign subsidiaries from $ 65.8 million to $ 2.7 million resulting in a tax benefit recorded in 2018 earnings of $ 63.1 million .

The completion of the Company’s accounting for the enactment of the Tax Act reflects, among other things, (i) the issuance of guidance by the U.S.

Treasury regarding provisions of the Tax Act, (ii) certain elections and accounting policy decisions pursuant to the Tax Act, (iii) adjustments to historic foreign earnings and profits or the associated tax credit pools which are significant factors in the calculation of the repatriation tax, and (iv) changes in interpretations and assumptions that we have made.

We note that final guidance and regulations surrounding the implementation of all provisions in the Tax Act have not been issued to date.

This guidance, once issued, may materially affect our conclusions regarding the net related effects of the Tax Act on our financial statements.

The specific adjustments recorded were (i) an increase to the tax expense recorded related to the revaluation of our net deferred tax assets from $ 21.1 million to $ 55.3 million resulting in an additional charge to 2018 earnings of $ 34.2 million, (ii) a reduction of the estimate of the one-time deemed repatriation tax from $ 11.3 million to zero resulting in a tax benefit recorded in 2018 earnings of $ 11.3 million, and (iii) a reduction of the additional tax expense recorded related to the premised repatriation of funds from foreign subsidiaries from $ 65.8 million to $ 2.7 million resulting in a tax benefit recorded in 2018 earnings of $ 63.1 million.

The Tax Act subjects a U.S.

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We have elected to account for the impact of GILTI in the period in which it is incurred.

During 2020, the US Treasury issued final regulations governing the treatment of GILTI under IRC§ 951A.

Included in these final regulations was a provision to allow taxpayers to make an annual election to exclude certain foreign income which is subject to a threshold level of tax in their respective foreign jurisdiction from US tax as GILTI (the High Tax Exclusion or “HTE election”).

While this HTE election had been outlined in the proposed regulations issued in 2019, the final regulations allowed the election to be applied retroactively to tax years 2018 and 2019.

By making this election as well as finalizing other related planning steps, we were able to effectively restore certain tax attributes recorded as deferred tax assets consisting primarily of U.S.

net operating losses originally impacted by GILTI resulting in net tax benefit of $ 10.8 million.

The CARES Act, among other things, increased the limitation on the deductibility of business interest to 50% of "adjusted taxable income" for taxable years beginning after December 31, 2018 and before January 1, 2021 and allows taxpayers to elect to compute the limitation on business interest expense for 2020 by using its "adjusted taxable income" from 2019.

The CARES Act also suspends the 80% limitation on the deduction of net operating losses for taxable years beginning before January 1, 2021 and enables taxpayers to carry back net operating losses generated in a taxable year beginning after December 31, 2017 and before January 1, 2021 to each of the five preceding taxable years.

The CARES Act also contains provisions relating to refundable payroll tax credits, deferment of employer side social security payments, alternative minimum tax credit refunds, and technical corrections, among others.

We have considered the impacts of these provisions with respect to certain deferrals of tax and other payments, as well as the enhanced depreciation provisions for qualified improvement property and certain elections relating to interest expense limitations.

The significant components of the deferred income tax benefit attributed to income from continuing operations for the year ended December 31, 2020, were the net increases in deferred tax assets related to the HTE election explained above.

The significant components of deferred income tax expense attributed to income from continuing operations for the year ended December 31, 2019, were increases to the valuation allowances for deferred tax assets, primarily in the U.S.

The significant components of the deferred income tax benefit attributed to income from continuing operations for the year ended December 31, 2018, were the adjustments related to the provisional amounts of the income tax effects of the Tax Act and the additional release of valuation allowances, primarily in the U.S.

The significant components of the deferred income tax expense attributed to income from continuing operations for the year ended December 31, 2017, were the revaluation of our U.S.

deferred tax assets under the Tax Act and the increases in valuation allowances for deferred tax assets, primarily in the U.S.

Reconciliation of the U.S.

federal statutory income tax rate to our effective tax rate is as follows for the years ended December 31:

(amounts in thousands)

2020 2019 2018

(amounts in thousands) Amount % Amount % Amount %

Statutory rate

$ 24,502 21.0 $ 25,209 21.0 $ 27,515 21.0

State income tax, net of federal benefit

( 444 ) ( 0.4 ) 3,180 2.6 ( 1,207 ) ( 0.9 )

Foreign source dividends and deemed inclusions 11,170 9.6 10,797 9.0 16,295 12.4

Valuation allowance

( 17,489 ) ( 15.0 ) 10,144 8.4 ( 85,876 ) ( 65.5 )

Nondeductible expenses

1,653 1.4 1,276 1.1 1,097 0.8

Acquisition of ABS

— — — — ( 10,189 ) ( 7.8 )

Equity based compensation

Deferred benefit on acquisitions

2,185 1.9 2,526 2.1 54 —

Foreign tax rate differential

1,613 1.4 1,964 1.6 3,557 2.7

Tax rate differences and credits

26,001 22.3 ( 1,867 ) ( 1.5 ) 96,231 73.4

Uncertain tax positions

IRS audit adjustments

( 2,685 ) ( 2.3 ) 1,604 1.3 5,443 4.2

Termination of hedge accounting

— — 4,533 3.8 — —

( 21,797 ) ( 18.7 ) — — ( 62,836 ) ( 47.9 )

Disposition of subsidiary

— — ( 2,384 ) ( 2.0 ) — —

380 0.3 92 0.1 ( 142 ) ( 0.1 )

Effective rate for continuing operations $ 25,089 21.5 % $ 57,074 47.5 % $ ( 10,058 ) ( 7.7 )%

In 2020, we recorded tax benefit of $ 10.8 million related to the HTE election and related planning.

Specifically, this benefit consisted of 1) benefits directly related to the HTE election of $ 21.8 million disclosed as U.S.

Tax Reform above, 2) reduction of the U.S.

valuation allowance in the amount of $ 20.1 million disclosed as a component of the Valuation Allowance line above, partially offset by 3) tax expense related to a reduction in U.S.

foreign tax credit carryforwards totaling $ 28.0 million, and 4) additional state tax expense related to the adjustments above totaling $ 3.1 million.

In 2019, we recorded tax expense of $ 4.5 million upon the termination of hedge accounting to relieve the disproportionate tax effect previously in Accumulated Other Comprehensive Income.

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In 2018, we recorded a benefit of $ 10.2 million related to certain tax effects of ABS transitioning to a wholly-owned subsidiary and the tax effects of the gain recognized on the acquisition.

For the year ended December 31, 2017, we recorded provisional estimates of the items directly impacted by the Tax Act within the “U.S.

Tax Reform” line in the reconciliation of tax expense above.

The tax charge of $ 32.4 million is comprised of (i) the repricing our U.S.

deferred tax balances of $ 21.1 million from 35% to 21%, and (ii) one-time deemed repatriation tax of $ 11.3 million .

As previously, discussed, certain other transactions undertaken by the Company in the fourth quarter of 2017 were indirectly impacted by the Tax Act and the measurement periods as outlined therein.

The provisional estimates of the following amounts are included in the Company’s tax expense for 2018:

additional tax expense of $ 85.5 million included as “Foreign Source Dividends”, a tax benefit of $ 90.8 million included as “Tax rate differences and credits”, and additional tax expense of $ 71.1 million included as “Valuation allowance” above.

In 2017, we recorded a benefit of $ 0.7 million as a result of favorable audit settlements in the U.S., which allowed the use of tax attributes that previously had a valuation allowance reserve.

We recorded a tax benefit of $ 6.2 million primarily relating to the change in disposition for certain intellectual property in the “Deferred benefit on acquisitions” line and a corresponding tax charge in the same amount in the “Valuation allowance” line, resulting in no impact to the effective rate for continuing operations in 2017.

We did not incur or recognize tax expense or benefit associated with these categories in 2019 or 2018.

Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of our assets, liabilities, and operating loss carryforwards.

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Net operating loss and tax credit carryforwards

$ 180,203 $ 199,889

Operating lease liabilities

58,405 54,448

Employee benefits and compensation

53,135 47,760

Accrued liabilities and other

52,057 38,494

Investments and marketable securities

Allowance for doubtful accounts and notes receivable

Deferred credits

Gross deferred tax assets 356,934 350,842

Valuation allowance

( 51,847 ) ( 67,664 )

Deferred tax assets 305,087 283,178

Depreciation and amortization

( 56,844 ) ( 55,994 )

Operating lease assets

( 56,370 ) ( 52,635 )

Deferred tax liabilities ( 113,214 ) ( 108,629 )

2 unchanged sentences

Long-term assets

$ 199,194 $ 183,837

Long-term liabilities

( 7,321 ) ( 9,288 )

Net deferred tax assets $ 191,873 $ 174,549

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To fully utilize the NOL and tax credits carryforwards, we will need to generate sufficient future taxable income in each respective jurisdiction before the expiration of the deferred tax assets governed by the applicable tax code.

Our valuation allowance was $ 67.7 million as of December 31, 2019 , which represents an increase of $ 10.1 million from December 31, 2018 and was allocated to continuing operations.

The increase in the valuation allowance primarily relates to the following:

(i) an increase of $ 3.9 million due to expiring foreign tax credits, (ii) an increase of $ 3.6 million for state net operating losses ("NOL") and credits due to the impact of forecasted taxable income in the carry-forward period, (iii) an increase of $ 1.8 million for our Chilean subsidiary, and (iv) other changes to existing valuation allowances totaling approximately $ 0.8 million for changes in current year earnings for certain other subsidiaries and foreign exchange.

Our valuation allowance was $ 51.8 million as of December 31, 2020, which represents a decrease of $ 15.8 million from December 31, 2019 and was allocated to continuing operations.

The decrease in the valuation allowance primarily related to the following:

(i) a decrease of $ 75.0 million relating to the Company’s finalization of the accounting for the effects of the Tax Act, (ii) a decrease of $ 2.2 million due to expiring foreign tax credits, (iii) a decrease of $ 8.3 million for state NOL and credits due to the impact of increases in forecasted taxable income in the carry-forward period, and (iv) and other changes to existing valuation allowances totaling approximately $ 1.6 million for changes in the current year earnings for certain other subsidiaries and foreign exchange.

The decrease in the valuation allowance primarily relates to a decrease of $ 20.1 million for U.S.

foreign tax credits, partially offset by an increase of $ 1.1 million for state net operating losses ("NOL") and credits due to the impact of forecasted taxable income in the carry-forward period, an increase of $ 1.5 million for changes in current year earnings for certain other subsidiaries, and foreign exchange.

Our valuation allowance was $ 67.7 million as of December 31, 2019, which represents an increase of $ 10.1 million from December 31, 2018 and was allocated to continuing operations.

The increase in the valuation allowance primarily relates to an increase of $ 3.9 million due to expiring foreign tax credits, an increase of $ 3.6 million for state net operating losses ("NOL") and credits due to the impact of forecasted taxable income in the carry-forward period, an increase of $ 1.8 million for our Chilean subsidiary, and other changes to existing valuation allowances totaling approximately $ 0.8 million for changes in current year earnings for certain other subsidiaries and foreign exchange.

The following is the activity in our valuation allowance:

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Valuation allowances established

— ( 2,001 ) ( 260 )

Changes to existing valuation allowances

( 2,622 ) ( 8,043 ) 85,828

Release of valuation allowances

Currency translation

( 1,672 ) ( 49 ) 1,562

Balance as of December 31, $ ( 51,847 ) $ ( 67,664 ) $ ( 57,571 )

Loss Carryforwards – We reduced our income tax payments by utilizing NOL carryforwards of $ 97.7 million in 2020, $ 208.0 million in 2019 and $ 163.7 million in 2018.

The 2020 utilization is offset by the restoration of certain NOL’s totaling approximately $ 203.4 million primarily as a result of the HTE election and related planning as outlined above and differences arising from tax return filings.

At December 31, 2020, our federal, state and foreign NOL carryforwards totaled $ 1,428.9 million, of which $ 94.1 million does not expire and the remainder expires as follows:

(amounts in thousands)

2021 $ 15,323

Thereafter 1,213,430

Total loss carryforwards $ 1,334,807

We utilized approximately $ 146.2 million of NOL carryforwards in the US in 2018;

We utilized approximately $ 146.2 million of NOL carryforwards in the U.S.

however, the deferred tax asset related to these NOLs actually increased due to the restoration of certain loss carryforwards upon the finalization of the accounting for effects of the Tax Act.

We have previously revised the total amount of NOLs utilized in 2017 to reflect the reduced income recognized under the Tax Act.

At December 31, 2020, our capital loss carryforwards totaled $ 22.4 million, which are all foreign and do not expire.

Section 382 Net Operating Loss Limitation – On November 20, 2017 and October 3, 2011 , we had a change in ownership pursuant to Section 382 of the Internal Revenue Code of 1986 as amended (“Code”).

Section 382 Net Operating Loss Limitation – On November 20, 2017 and October 3, 2011, we had a change in ownership pursuant to Section 382 of the Code.

Under this provision of the Code, the utilization of any of our NOL or tax credit carryforwards, incurred prior to the date of ownership change, may be limited.

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Tax Credit Carryforwards – Our tax credit carryforwards expire as follows:

(amounts in thousands)

Foreign Tax Credit

Work Opportunity & Welfare to Work Credit

State Investment Tax Credits

Earnings of Foreign Subsidiaries – Historically, the Company has not provided for US tax impacts of any unremitted earnings of its foreign subsidiaries.

(amounts in thousands) EZ Credit R & E credit Foreign Tax Credit Work Opportunity & Welfare to Work Credit State Investment Tax Credits Tip Credit TOTAL

2021 $ — $ 194 $ — $ — $ 24 $ — $ 218

2022 — 173 1,061 — 11 — 1,245

2023 — 14 5,735 — 1,687 — 7,436

2024 — 147 3,514 — 87 — 3,748

2025 — 164 4,863 — 4 — 5,031

Thereafter 68 11,277 3,108 7,326 66 102 21,947

$ 68 $ 11,969 $ 18,281 $ 7,326 $ 1,879 $ 102 $ 39,625

Earnings of Foreign Subsidiaries – Historically, we have not provided for U.S.

tax impacts of any unremitted earnings of its foreign subsidiaries.

The Tax Act made significant changes to the taxation of undistributed foreign earnings, including that all previously untaxed earnings and profits of our controlled foreign corporations be subjected to a one-time deemed repatriation tax in 2017.

In its final analysis of the effects of the Tax Act, the Company provided for US income taxes on approximately $ 121.0 million of earnings of our foreign subsidiaries deemed to be repatriated.

In its final analysis of the effects of the Tax Act, the Company provided for U.S.

income taxes on approximately $ 121.0 million of earnings of our foreign subsidiaries deemed to be repatriated.

Beginning in 2018, the Tax Act provides for a 100% dividends received deduction for untaxed earnings received from most foreign corporations.

The repatriation tax substantially eliminated the basis difference that existed previously for purposes of ASC

The repatriation tax substantially eliminated the basis difference that existed previously for purposes of ASC Topic 740.

Although dividend income is now generally exempt from U.S.

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We have concluded that a majority of the unremitted earnings of our foreign subsidiaries are indefinitely reinvested, with certain minor exceptions that do not have an associated tax cost.

We hold a combined book-over-tax outside basis difference of $ 217.5 million in our investment in foreign subsidiaries and may incur up to $ 7.6 million of local country income and withholding taxes in case of distribution of unremitted earnings.

Dual-Rate Jurisdiction – Estonia taxes the corporate profits of resident corporations at different rates depending upon whether the profits are distributed.

We hold a combined book-over-tax outside basis difference of $ 449.4 million in

our investment in foreign subsidiaries and may incur up to $ 22.0 million of local country income and withholding taxes in case of distribution of unremitted earnings.

Dual-Rate Jurisdiction – Estonia and Latvia tax the corporate profits of resident corporations at different rates depending upon whether the profits are distributed.

The undistributed profits of resident corporations are exempt from taxation while any distributed profits are subject to a 20% corporate income tax rate.

1 unchanged sentence

The amount of retained earnings at December 31, 2020 and 2019 for our Estonia subsidiary, which, if distributed, would be subject to this tax was $ 74.8 million and $ 69.2 million, respectively.

During 2017, Latvia enacted a similar system in which an entity’s local earnings are not subject to tax until distributed.

The amount of retained earnings at December 31, 2020 and 2019 for our Latvian subsidiary which, if distributed, would be subject to a 20% corporate income tax rate is $ 24.3 million and $ 21.4 million, respectively.

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We recorded foreign payables for taxes of $ 11.2 million at December 31, 2020 and $ 2.0 million at December 31, 2019, which is included in accrued income taxes payable in the accompanying consolidated balance sheets.

We recorded a non-current U.S.

receivable of $ 0.8 million at December 31, 2018 , which is included in other assets in the accompanying consolidated balance sheets.

We do not have any non-current taxes receivable or payable as of December 31, 2020.

3 unchanged sentences

Increase for tax positions taken during the prior period

1,105 1,383 3,397

Decrease for settlements with taxing authorities

( 34 ) ( 426 ) ( 157 )

(Decrease) increase for tax positions taken during the current period

Decrease due to statute expiration ( 1,569 ) — —

Other decreases — — ( 92 )

Currency translation

1,288 ( 214 ) ( 564 )

Balance at period end - unrecognized tax benefit 16,995 16,205 15,500

Accrued interest and penalties

5,567 5,671 3,677

$ 22,562 $ 21,876 $ 19,177

The prior period information in the table above has been reclassified to conform with current period presentation.

Unrecognized tax benefits were $ 17.0 million, $ 16.2 million, and $ 15.5 million at December 31, 2020, 2019, and 2018, respectively.

The changes during the current period relate to the establishment of an uncertain tax positions for certain tax examinations offset by currency translation during the period.

The changes during the current period relate to the establishment of an uncertain tax positions for accounting method changes and currency translation during the period, offset by the release due to the expiration of applicable statutes of limitation.

Interest and penalties related to uncertain tax positions are reported as a component of tax expense and included in the total uncertain tax position balance within deferred credits and other liabilities in the accompanying consolidated balance sheets.

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Limited (the “Managing Subsidiary”) entered into an agreement (the “Managing Agreement”) with several of our other subsidiaries in Europe (collectively, the “Operating Subsidiaries”).

The Managing Agreement provides that the Managing Subsidiary will receive a fee from the Operating Subsidiaries in exchange for performing

various management and decision-making services for the Operating Subsidiaries.

The Managing Agreement provides that the Managing Subsidiary will receive a fee from the Operating Subsidiaries in exchange for performing various management and decision-making services for the Operating Subsidiaries.

As a result, the Managing Agreement shifts certain risks (and correlated benefits) from the Operating Subsidiaries to the Managing Subsidiary.

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In the U.S., we are open to examination at the federal level for tax years 2013 and forward and at state and local jurisdictions for tax years 2015 and forward.

We are under examination in Austria, the Czech Republic, Denmark, Germany, Indonesia, Latvia, Switzerland, and the United Kingdom for tax years 2011 through 2017, and generally remain open to examination for other non-US jurisdictions for tax years 2013 forward.

We are under examination in Austria, the Czech Republic, Denmark, Germany, Hong Kong, Hungary, Indonesia, Latvia, Switzerland, and the United Kingdom for tax years 2011 through 2017, and generally remain open to examination for other non-US jurisdictions for tax years 2015 forward.

Segment Information

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The following tables set forth certain information relating to our segments’ operations:

(amounts in thousands)

Total Operating

(amounts in thousands) North

America Europe Australasia Total Operating

Segments Corporate

Year Ended December 31, 2020

Total net revenues

$ 2,529,960 $ 1,189,974 $ 529,882 $ 4,249,816 $ — $ 4,249,816

Intersegment net revenues

( 967 ) ( 2,197 ) ( 10,975 ) ( 14,139 ) — ( 14,139 )

Net revenues from external customers

$ 2,528,993 $ 1,187,777 $ 518,907 $ 4,235,677 $ — $ 4,235,677

Depreciation and amortization

$ 77,361 $ 29,712 $ 19,341 $ 126,414 $ 8,209 $ 134,623

Impairment and restructuring charges

3,164 3,682 320 7,166 3,303 10,469

Adjusted EBITDA

315,952 136,363 62,449 514,764 ( 68,350 ) 446,414

Capital expenditures

34,815 32,353 10,207 77,375 19,521 96,896

Segment assets

$ 1,498,778 $ 1,152,251 $ 598,411 $ 3,249,440 $ 715,245 $ 3,964,685

Year Ended December 31, 2019

Total net revenues

$ 2,535,810 $ 1,178,589 $ 585,341 $ 4,299,740 $ — $ 4,299,740

Intersegment net revenues

( 1,474 ) ( 148 ) ( 8,357 ) ( 9,979 ) — ( 9,979 )

Net revenues from external customers

$ 2,534,336 $ 1,178,441 $ 576,984 $ 4,289,761 $ — $ 4,289,761

Depreciation and amortization

$ 81,905 $ 28,944 $ 17,787 $ 128,636 $ 5,333 $ 133,969

Impairment and restructuring charges

7,301 6,182 7,111 20,594 957 21,551

Adjusted EBITDA

267,335 116,193 74,484 458,012 ( 42,974 ) 415,038

Capital expenditures

46,799 23,611 32,619 103,029 33,163 136,192

Segment assets

$ 1,530,135 $ 974,076 $ 510,845 $ 3,015,056 $ 366,276 $ 3,381,332

Year Ended December 31, 2018

Total net revenues

$ 2,462,914 $ 1,216,204 $ 681,160 $ 4,360,278 $ — $ 4,360,278

Intersegment net revenues

( 1,281 ) ( 905 ) ( 11,245 ) ( 13,431 ) — ( 13,431 )

Net revenues from external customers

$ 2,461,633 $ 1,215,299 $ 669,915 $ 4,346,847 $ — $ 4,346,847

Depreciation and amortization

$ 71,945 $ 31,132 $ 17,730 $ 120,807 $ 4,293 $ 125,100

Impairment and restructuring charges

4,933 6,111 7,170 18,214 ( 886 ) 17,328

Adjusted EBITDA

279,526 122,810 90,885 493,221 ( 34,003 ) 459,218

Capital expenditures

57,805 25,369 12,146 95,320 23,380 118,700

Segment assets

$ 1,355,101 $ 898,901 $ 482,493 $ 2,736,495 $ 311,030 $ 3,047,525

Reconciliations of net income to Adjusted EBITDA are as follows:

Years Ended December 31,

(amounts in thousands) 2020 2019 2018

Net income $ 91,586 $ 62,971 $ 141,907

Equity earnings of non-consolidated entities — — ( 738 )

Income tax expense

Income tax expense (benefit) 25,089 57,074 ( 10,058 )

Depreciation and amortization 134,623 133,969 125,100

1 unchanged sentence

Impairment and restructuring charges (1)

10,732 22,748 17,328

Gain on previously held shares of equity investment — — ( 20,767 )

Loss (gain) on sale of property and equipment

(Gain) loss on sale of property and equipment ( 4,153 ) 1,745 144

Share-based compensation expense 16,399 13,315 15,052

Non-cash foreign exchange transaction/translation (income) loss

Non-cash foreign exchange transaction/translation loss (income) 12,904 3,438 ( 1,267 )

Other items (2)

Other non-cash items (4)

84,282 47,266 117,546

Costs relating to debt restructuring and debt refinancing

Other non-cash items (3)

( 18 ) 734 3,859

Adjusted EBITDA $ 446,414 $ 415,038 $ 459,218

Interest expense for the year ended December 31, 2017 includes $ 6,097 related to the write-off of a portion of the unamortized debt issuance costs and original issue discount associated with the Term Loan Facility.

Impairment and restructuring charges consist of (i) impairment and restructuring charges that are included in our consolidated statements of operations plus (ii) additional charges relating to inventory and/or manufacturing of our products that are included in cost of sales in the accompanying consolidated statements of operations in the amount of $ 1,197 , $ 0 , and $ 1 for the years ended December 31, 2019, 2018, and 2017, respectively.

(1) Impairment and restructuring charges consist of (i) impairment and restructuring charges that are included in our accompanying audited consolidated statements of operations plus (ii) additional charges relating to inventory and/or manufacturing of our products that are included in cost of sales in our accompanying audited consolidated statements of operations $ 263 , $ 1,197 , and $ 0 for the years ended December 31, 2020, 2019, and 2018, respectively.

For further explanation of impairment and restructuring charges that are included in our consolidated statements of operations, see Note 20 - Impairment and Restructuring Charges in our financial statements.

(2) Other non-recurring items not core to ongoing business activity include:

(i) in the year ended December 31, 2019 (1) $ 19,147 in facility closure and consolidation costs related to our facility footprint rationalization program, (2) $ 14,963 in acquisition and integration costs including $ 7,077 related to purchase price structured by the former owners as retention payments for key employees of a recent acquisition, (3) $ 12,860 in legal cost and professional fees relating primarily to litigation, (4) $( 3,053 ) of realized gains on hedges of intercompany notes, (5) $ 1,998 in other miscellaneous costs, (6) $ 731 in equity compensation to employees in our Australasia region, and (7) $ 725 in costs related to the departure of former executives.;

(ii) in the year ended December 31, 2018 , (1) $ 76,500 in litigation contingency accruals, (2) $ 26,529 in legal and professional fees relating primarily to litigation, (3) $ 10,324 in acquisition and integration costs, (4) $( 5,396 ) of realized gains on hedges of intercompany notes, (4) $ 3,856 in costs related to the departure of former executives, (5) $ 2,901 in entity consolidation and reorganization costs, (6) $ 2,347 in miscellaneous costs, and (7) $ 485 in stock compensation payroll taxes;

(iii) in the year ended December 31, 2017, (1) $ 34,178 in legal costs, (2) $ 4,176 in realized loss on hedges relating to intercompany notes, (3) $ 3,484 in acquisition and integration costs, (4) $( 2,247 ) gain on settlement of contract escrow, (5) $ 2,202 in secondary offering costs, (6) $ 754 in tax consulting fee, (7) $ 678 in legal entity consolidation costs, (8) $ 649 in stock compensation payroll taxes, and (9) $ 578 in facility ramp down cost.

Other non-cash items include:

(i) derivative losses of $ 235 in the year ended December 31, 2019 ;

(ii) charges of $ 3,740 for the fair value of inventory acquired as part of our Domoferm acquisitions in the year ended December 31, 2018 ;

and (iii) charges of $ 439 for the fair value adjustment to the inventory acquired as part of our Mattiovi acquisition in the year ended December 31, 2017.

Included in the year ended December 31, 2017 is a loss on debt extinguishment of $ 23,262 associated with the refinancing of our term loan.

(i) i n the year ended December 31, 2020 (1) $ 67,130 in legal costs and accruals and professional expenses relating primarily to litigation, (2) $ 7,467 in expenses related to environmental matters, (3) $ 6,724 in facility closure, consolidation, and startup costs , (4) $ 1,235 one-time lease termination charges, and (5) $ 1,142 of realized losses on hedges of intercompany notes;

(ii) i n the year ended December 31, 2019, (1) $ 19,147 in facility closure, consolidation, and startup costs, (2) $ 14,963 in acquisition and integration costs including $ 7,077 related to purchase price structured by the former owners as retention payments for key employees of a recent acquisition, (3) $ 12,860 in legal costs and professional expenses relating primarily to litigation, (4) ($ 3,053 ) of realized gains on hedges of intercompany notes, (5) $ 1,893 in miscellaneous costs, (6) $ 731 in equity compensation to employees in our Australasia region, and (7) $ 725 in costs related to departure of former executives;

(iii) i n the year ended December 31, 2018, (1) $ 76,500 in litigation contingency accruals, (2) $ 26,529 in legal costs and professional expenses relating primarily to litigation, (3) $ 10,324 in acquisition and integration costs, (4) ($ 5,396 ) of realized gains on hedges of intercompany notes, (5) $ 3,856 in costs related to the departure of former executives, (6) $ 2,901 in entity consolidation and reorganization costs , (7) $ 2,347 in miscellaneous costs, and (8) $ 485 in stock compensation payroll taxes.

(3) Other non-cash items include $ 734 and $ 3,740 for inventory adjustments in the years ended December 31, 2019 and December 31, 2018, respectively.

The prior period information has been reclassified to conform with current period presentation.

Net revenues by locality are as follows for the years ended December 31,:

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Net revenues by location of external customer

$ 188,041 $ 187,095 $ 201,134

2,322,079 2,327,186 2,228,748

South America (including Mexico)

22,323 29,637 34,422

1,212,810 1,195,207 1,239,732

485,852 544,140 634,976

Africa and other

4,572 6,496 7,835

Total $ 4,235,677 $ 4,289,761 $ 4,346,847

Geographic information regarding property, plant, and equipment which exceed 10% of consolidated property, plant, and equipment used in continuing operations is as follows for the years ended December 31,:

(amounts in thousands) 2020 2019 2018

$ 469,092 $ 485,278 $ 459,506

27,722 28,096 24,911

North America 496,814 513,374 484,417

Europe 203,424 181,390 181,038

118,778 115,335 113,922

32,944 28,786 10,297

Australasia 151,722 144,121 124,219

Corporate (U.S.) 20,625 25,490 53,729

Total property and equipment, net $ 872,585 $ 864,375 $ 843,403

The prior period information has been revised and reclassified to conform with current period presentation.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Series A Convertible Preferred Shares

Prior to the IPO, we had the authority to issue up to 8,750,000 shares of preferred stock, par value of $ 0.01 , of which 8,749,999 shares were designated as Series A Convertible Preferred Stock and one share was designated as Series B Preferred Stock.

At December 31, 2016, all of the authorized shares of Series A-1, Series A-2, and Series A-3 Stock and one Series B Stock were issued and outstanding.

Immediately prior to the closing of our IPO, the outstanding shares and accumulated and unpaid dividends of the Series A Convertible Preferred Stock converted into 64,211,172 common shares by applying the applicable conversion rates as prescribed in our then-existing certificate of incorporation.

Dividend - Prior to converting to common stock, the Series A Stock had a preferred annual dividend of 10 % per annum on the Equity Constant, with the Equity Constant being $ 21.77 for dividends accruing prior to April 30, 2013.

The cumulative dividends accrued continually and compounded annually at the rate of 10 % whether or not they had been declared and whether or not there were funds available for the payment.

In October of 2016, the Board of Directors authorized $ 256.3 million in distributions to the holders of the 3,974,525 shares of Series A Stock ( 62,645,538 as-converted common shares) through participation in the $ 4.09 per share of Common Stock

distribution (see Note 20 - Capital Stock ).

The Board of Directors authorized an additional distribution of $ 51.0 million to holders of Series A Stock representing dividends accruing between May 31, 2016 and November 3, 2016.

Total distributions paid to holders of our Series A Stock were $ 306.7 million and were paid on or about November 3, 2016.

Cumulative unpaid dividends were approximately $ 390.6 million at December 31, 2016.

The Series A Stock and cumulative unpaid dividends converted into 64,211,172 shares of our common stock on February 1, 2017.

Capital Stock

On February 1, 2017, immediately prior to the closing of the IPO, the Company filed its Charter with the Secretary of State of the State of Delaware, and the Company’s Bylaws became effective, each as contemplated by the registration statement we filed in connection with our IPO.

The Charter, among other things, provides that the Company’s authorized capital stock consists of 900,000,000 shares of Common Stock, par value $ 0.01 per share and 90,000,000 shares of preferred stock, par value $ 0.01 per share.

Preferred Stock - Our Board of Directors is authorized to issue Preferred Stock from time to time in one or more series and with such rights, privileges, and preferences as the Board of Directors shall from time to time determine.

We have not issued any shares of Preferred Stock.

Common Stock - On January 3, 2017, our pre-IPO charter was amended authorizing us to issue 904,732,200 shares of Common Stock, with a par value of $ 0.01 per share, of which 900,000,000 shares were designated Common Stock and 4,732,200 shares were designated as Class B-1 Common Stock.

Each share of Common Stock (whether Common Stock or Class B-1 Common Stock) had the same rights, privileges, interest and attributes and was subject to the same limitations as every other share treating the Class B-1 Common Stock on an as-converted basis.

Each share of Class B-1 Common Stock was convertible at the option of the holder into shares of Common Stock at the same ratio on the date of conversion as a share of Series A-1 Stock would have been convertible on such date of conversion, assuming that no cash dividends had been paid on the Series A-1 Stock (or its predecessor security) since the date of initial issuance.

Immediately prior to the closing of our IPO, all of the outstanding shares of Class B-1 Common Stock were converted into 309,404 shares of Common Stock.

Common Stock includes the basis of shares outstanding plus amounts recorded as additional paid-in capital.

Common Stock - Common Stock includes the basis of shares outstanding plus amounts recorded as additional paid-in capital.

Shares outstanding exclude the shares issued to the Employee Benefit Trust that are considered similar to treasury shares and total 193,941 shares at both December 31, 2020 and December 31, 2019 with a total original issuance value of $ 12.4 million.

On February 1, 2017, we closed our IPO and received $ 480.3 million in proceeds, net of underwriting discounts and commissions.

Costs associated with our initial public offering of $ 7.9 million , including $ 5.9 million of capitalized costs were charged to equity upon completion of the IPO.

In April 2018, our Board of Directors authorized the repurchase of up to $ 250.0 million of our Common Stock through December 2019.

Share repurchases are recorded on their trade date and reduce shareholders’ equity and increase accounts payable.

We record share repurchases on their trade date and reduce shareholders’ equity and increase accounts payable.

Repurchased shares are retired, and the excess of the repurchase price over the par value of the shares is charged to retained earnings.

During the years ended December 31, 2019 and December 31, 2018 , we repurchased 1,192,419 and 5,287,964 shares, respectively, of our Common Stock for aggregate consideration of $ 20.0 million and $ 125.0 million , respectively.

In April 2018, our Board of Directors authorized the repurchase of up to $ 250.0 million of our Common Stock through December 2019.

On November 4, 2019, the Board of Directors authorized an increase to the remaining authorization under the share repurchase program to a total of $ 175.0 million with no expiration date.

As of December 31, 2020, $ 170.0 million was remaining under the repurchase authorization.

During the year ended December 31, 2020, December 31, 2019, and December 31, 2018, we repurchased 265,589 , 1,192,419 , and 5,287,964 shares of our Common Stock, respectively, at an average price per share of $ 18.83 , $ 16.77 , and $ 23.64 , respectively.

Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average shares outstanding during the period, without consideration for Common Stock equivalents.

Diluted net earnings per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common share equivalents outstanding for the period, determined using the treasury-stock method.

Common Stock options, unvested Common Restricted Stock Units and unvested Common Performance Share Units are considered to be Common Stock equivalents included in the calculation of diluted net income (loss) per share.

The basic and diluted income (loss) per share calculations are presented below :

(amounts in thousands, except share and per share amounts)

Earnings per share basic:

Income from continuing operations

Equity earnings of non-consolidated entities

Undeclared Series A Convertible Preferred Stock dividends

Net income (loss) attributable to common shareholders

Weighted average outstanding shares of Common Stock basic

Net income (loss) per share - basic

(amounts in thousands, except share and per share amounts)

Earnings per share diluted:

Net income (loss) - attributable to common shareholders

The basic and diluted income per share calculations were determined based on the following share data :

2020 2019 2018

Weighted average outstanding shares of Common Stock basic 100,633,392 100,618,105 104,530,572

Restricted stock units, performance share units, and options to purchase Common Stock

1,048,589 846,220 1,830,085

Weighted average outstanding shares of Common Stock diluted

Net income (loss) per share - diluted

The following table provides the securities that could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive:

101,681,981 101,464,325 106,360,657

The following table provides the securities that could potentially dilute basic earnings per share in the future but were not included in the computation of diluted income per share as their inclusion would be anti-dilutive:

2020 2019 2018

Common Stock options 1,721,921 1,657,437 1,019,930

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Performance share units 249,084 9,704 84,809

The prior period information has been revised.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

Stock Compensation

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Share-based compensation expense included in SG&A expenses totaled $ 16.4 million, $ 13.3 million, and $ 15.1 million in 2020, 2019, and 2018, respectively.

We recognized a windfall tax benefit of $ 12.7 million in 2017, which included a benefit of $ 14.1 million in the U.S., offset by disallowances in our foreign subsidiaries of $ 1.4 million .

There were no material related tax benefits for the years 2019 or 2018 .

As of December 31, 2019 , there was $ 24.2 million of total

unrecognized compensation expense related to non-vested share-based compensation arrangements.

There were no material related tax benefits for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.

As of December 31, 2020, there was $ 24.4 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements.

This cost is expected to be recognized over the remaining weighted-average vesting period of 1.8 years.

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Key assumptions used in the valuation models were as follows for the years ended December 31:

Expected volatility

2020 2019 2018

Expected volatility 37.52 % - 37.66 %

37.90 % - 40.02 %

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2.04 % - 2.96 %

1.83% - 2.19%

The following table represents stock option activity:

Weighted Average Exercise Price Per Share

Aggregate Intrinsic Value (millions)

Weighted Average Remaining Contract Term in Years

Shares Weighted Average Exercise Price Per Share Aggregate Intrinsic Value (millions) Weighted Average Remaining Contract Term in Years

Outstanding as of January 1, 2018 4,926,668 $ 14.56

Issued upon conversion of class B-1 Common Stock

838,912 32.16

( 1,548,484 ) 13.79

( 884,391 ) 18.80

Balance as of December 31, 2018 3,332,705 $ 18.22

443,170 20.94

( 641,706 ) 10.56

( 301,370 ) 26.07

Balance as of December 31, 2019 2,832,799 $ 19.55

407,607 24.30

( 335,553 ) 12.27

( 273,022 ) 27.53

Balance as of December 31, 2020 2,631,831 $ 20.41 $ 16.5 5.6

Exercisable as of December 31, 2020 1,781,797 $ 18.47 $ 14.7 4.3

RSUs – RSUs are subject to the continued service of the recipient through the vesting date, which is generally 12 to 60 months from issuance.

RSUs – RSUs are subject to the continued service of the recipient through the vesting date, which is generally 1 to 5 years from issuance.

Once vested, the recipient will receive one share of Common Stock for each restricted stock unit.

Prior to the IPO, the grant-date fair value per share used for RSUs was determined using the aggregate value of our common equity, as determined by a third-party valuation firm, as of the most recent calendar quarter-end and applying a 10 % discount based upon reflecting the differential economic rights and preferences of the Preferred or the ESOP common shares relative to the common shares, with that amount rounded down to the nearest whole percent.

After the IPO, the grant-date fair value per share used for RSUs was determined using the closing price of our Common Stock on the NYSE on the date of the grant.

The grant-date fair value per share used for RSUs was determined using the closing price of our Common Stock on the NYSE on the date of the grant.

We apply this grant-date fair value per share to the total number of shares that we anticipate will fully vest and amortize the fair value to compensation expense over the vesting period using the straight-line method.

In February 2018, we granted 314,267 RSUs to our then Chairman of the Board and interim CEO which vested daily through

the first anniversary of the date of grant, subject to continuous employment.

In February 2018, we granted 314,267 RSUs to our then Chairman of the Board and interim CEO which vested daily through the first anniversary of the date of grant, subject to continuous employment.

On June 30, 2018, 208,364 RSUs were forfeited at the end of his interim service.

The following table represents RSU activity:

Weighted Average Grant-Date Fair Value Per Share

Shares Weighted Average Grant-Date Fair Value Per Share

Outstanding as of January 1, 2018 562,368 $ 27.51

766,927 29.14

( 124,560 ) 25.21

( 530,867 ) 29.69

Balance as of December 31, 2018 673,868 $ 28.07

952,801 20.07

( 232,666 ) 30.08

( 154,498 ) 23.38

Balance as of December 31, 2019 1,239,505 $ 22.13

865,091 19.62

( 138,245 ) 26.22

( 179,554 ) 23.63

Balance as of December 31, 2020 1,786,797 $ 21.43

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Once vested, the recipient will receive one share of Common Stock for each vested PSU.

The number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and free cash flow and is adjusted based upon a market condition measured by our relative total shareholder return (“TSR”) as compared to the TSR of the Russell 3000 index.

The number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and free cash flow, each as reported over the applicable three year performance period and is adjusted based upon a market condition measured by our relative total shareholder return (“TSR”) over the applicable three year performance period as compared to the TSR of the Russell 3000 index.

The fair value of the award is estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on historical volatility, risk free rates of return, and correlation matrix.

The following table represents PSU activity for the awarded shares at target performance measures:

Weighted Average Grant-Date Fair Value Per Share

Shares Weighted Average Grant-Date Fair Value Per Share

Outstanding as of January 1, 2018 — $ —

193,763 31.60

( 19,093 ) 33.31

Balance as of December 31, 2018 174,670 $ 31.41

401,935 22.21

( 65,832 ) 25.24

Balance as of December 31, 2019 510,773 $ 24.97

311,275 25.50

( 77,585 ) 25.96

Balance as of December 31, 2020 744,463 $ 25.09

Impairment and Restructuring Charges

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Asset impairment charges were recorded in addition to our restructuring costs.

In 2019, the asset impairment charges were primarily related to ROU assets held by operations impacted by restructuring.

During 2018 and 2017, lease costs were recorded within other exit costs in the tables below in accordance with effective restructuring and leasing guidance during those time periods.

The following table summarizes the restructuring charges for the periods indicated:

(amounts in thousands)

In the year ended December 31, 2020, impairment charges primarily related to capitalized costs of certain ERP modules due to delays in implementation and uncertainty of their future use.

In the year ended December 31, 2019, impairment charges were primarily related to ROU assets and property and equipment held by operations impacted by restructuring.

During 2018, lease costs were recorded within other exit costs in the tales below in accordance with effective restructuring and leasing guidance during the time period.

(amounts in thousands) North

America Europe Australasia Corporate

Year Ended December 31, 2020

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Total restructuring costs

2,056 2,738 194 ( 56 ) 4,932

1,108 944 126 3,359 5,537

Total impairment and restructuring charges

$ 3,164 $ 3,682 $ 320 $ 3,303 $ 10,469

Year Ended December 31, 2019

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Total restructuring costs

3,375 6,025 4,569 957 14,926

3,926 157 2,542 — 6,625

Total impairment and restructuring charges

$ 7,301 $ 6,182 $ 7,111 $ 957 $ 21,551

Year Ended December 31, 2018

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Total restructuring costs

4,239 6,133 7,170 ( 1,444 ) 16,098

694 ( 22 ) — 558 1,230

Total impairment and restructuring charges

Short-term restructuring accruals are recorded in accrued expenses and totaled $ 6.1 million and $ 6.6 million as of December 31, 2019 and December 31, 2018 , respectively.

Long-term restructuring accruals are recorded in deferred credits and other liabilities and totaled $ 1.0 million and $ 2.0 million as of December 31, 2019 and December 31, 2018 , respectively.

$ 4,933 $ 6,111 $ 7,170 $ ( 886 ) $ 17,328

The following is a summary of the restructuring accruals recorded and charges incurred:

(amounts in thousands)

(amounts in thousands) Beginning

Balance Additions

Expense Payments

Utilization Ending

December 31, 2020

Severance costs

$ 5,314 $ 5,114 $ ( 9,096 ) $ 1,332

Other exit costs

1,729 ( 182 ) ( 1,502 ) 45

Total $ 7,043 $ 4,932 $ ( 10,598 ) $ 1,377

December 31, 2019

Severance costs

$ 5,352 $ 13,540 $ ( 13,578 ) $ 5,314

Other exit costs

3,287 1,386 ( 2,944 ) 1,729

Total $ 8,639 $ 14,926 $ ( 16,522 ) $ 7,043

December 31, 2018

Severance costs

$ 7,232 $ 11,766 $ ( 13,646 ) $ 5,352

Other exit costs

The prior period information has been reclassified to conform to current period presentation.

3,807 4,332 ( 4,852 ) 3,287

Total $ 11,039 $ 16,098 $ ( 18,498 ) $ 8,639

Further detail regarding restructuring accruals is disclosed within Note 11- Accrued Expenses and Other Current Liabilities and Note 14 - Deferred Credits and Other Liabilities .

Interest Expense

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Interest expense also includes amortization of debt issuance costs that are amortized using the effective interest method and amortization of original issue discounts.

Other (Income) Expense

The table below summarizes the amounts included in other (income) expense in the accompanying consolidated statements of operations:

The table below summarizes the amounts included in other income in the accompanying consolidated statements of operations:

(amounts in thousands) 2020 2019 2018

Pension benefit expense

Foreign currency (gain) loss

Foreign currency losses (gains) $ 11,858 $ ( 7,361 ) $ ( 11,258 )

Governmental pandemic assistance reimbursement ( 7,377 ) — —

(Gain) loss on sale of business units, property, and equipment ( 4,122 ) ( 1,506 ) 556

Pension expense 1,646 10,738 6,975

Insurance reimbursement ( 1,388 ) — —

Other items ( 3,369 ) ( 2,033 ) ( 2,852 )

Legal settlement income — ( 1,247 ) ( 7,541 )

Gain on sale of business

Gain on previously held shares of an equity investment

Loss on debt extinguishment

Settlement of contract escrow

Total other (income) expense

— — ( 20,767 )

Total other income $ ( 2,752 ) $ ( 1,409 ) $ ( 34,887 )

Governmental pandemic assistance reimbursement for the year ended December 31, 2020 primarily consisted of cash received from governmental pandemic assistance programs within our North America and Europe segments as a result of COVID-19.

The gain on previously held shares of an equity investment relates to an equity method investment that was remeasured on the date we acquired the company in 2018.

The prior period information has been revised and reclassified to conform to current period presentation.

Please refer to Note 32 - Revision of Prior Period Financial Statements .

The prior period information has been reclassified to conform to current period presentation.

Derivative Financial Instruments

All derivatives are recorded as assets or liabilities in the consolidated balance sheets at their respective fair values.

For derivatives that qualify for hedge accounting, changes in the fair value related to the effective portion of the hedge are recognized in earnings at the same time as either the change in fair value of the underlying hedged item or the effect of the hedged item’s exposure to the variability of cash flows.

Changes in fair value related to the ineffective portion of the hedge are recognized immediately in earnings.

Changes in the fair value of derivatives that do not qualify for hedge accounting, or fail to meet the criteria, thereafter, are also recognized in the consolidated statements of operations.

See Note 27 - Fair Value of Financial Instruments for additional information on the fair value of our derivative assets and liabilities.

Foreign currency derivatives – We are exposed to the impact of foreign currency fluctuations in certain countries in which we operate.

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To mitigate the exposure, we enter into a variety of foreign currency derivative contracts, such as forward contracts, option collars, and cross-currency hedges.

We use foreign currency derivative contracts, with a total notional amount of $ 91.6 million , to manage the effect of exchange fluctuations on forecasted sales, purchases, acquisitions, inventory and capital expenditures and certain intercompany transactions that are denominated in foreign currencies.

We use foreign currency derivative contracts, with a total notional amount of $ 29.5 million , to hedge the effects of translation gains and losses on intercompany loans and interest.

We also use foreign currency derivative contracts, with a total notional amount of $ 116.5 million , to mitigate the impact to the consolidated earnings of the Company from the effect of the translation of certain subsidiaries’ local currency results into U.S.

To manage the effect of exchange fluctuations on forecasted sales, purchases, acquisitions, inventory and capital expenditures, and certain intercompany transactions that are denominated in foreign currencies, we have foreign currency derivative contracts with a total notional amount of $ 96.6 million.

We have foreign currency derivative contracts, with a total notional amount of $ 23.7 million, to hedge the effects of translation gains and losses on intercompany loans and interest.

To mitigate the impact to the consolidated earnings of the Company from the effect of the translation of certain subsidiaries’ local currency results into U.S.

dollars, we have foreign currency derivative contracts with a total notional amount of $ 55.7 million.

We do not use derivative financial instruments for trading or speculative purposes.

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We record mark-to-market changes in the values of these derivatives in other (income) expense.

We recorded mark-to-market losses of $ 9.8 million in the year ended December 31, 2019 , gains of $ 7.8 million in the year ended December 31, 2018 , and losses of $ 6.3 million in the year ended December 31, 2017.

We recorded mark-to-market losses of $ 5.4 million in the year ended December 31, 2020, losses of $ 9.8 million in the year ended December 31, 2019, and gains of $ 7.8 million in the year ended December 31, 2018.

Interest rate derivatives – We are exposed to interest rate risk in connection with our variable rate long-term debt and partially mitigate this risk through interest rate derivatives such as swaps and caps.

In conjunction with the December 2017

refinancing of the Term Loan Facility (see Note 15 - Long-Term Debt ), we terminated all of the interest rate swaps which had outstanding notional amounts aggregating to $ 914.3 million and recorded a loss on termination of $ 3.6 million in consolidated other comprehensive income (loss), which was being amortized as interest expense over the pre-termination life of the interest rate swaps.

As of December 31, 2019, the loss on termination has been fully amortized.

The unamortized, pre-tax balance of this loss recorded in consolidated other comprehensive income (loss) was $ 1.3 million and $ 3.4 million at December 31, 2018 and 2017, respectively.

The interest rate swap agreements were designated as cash flow hedges and, prior to their termination in December 2017, effectively changed the LIBOR-based portion of the interest rate (or “base rate”) on a portion of the debt outstanding under our Term Loan Facility to the weighted average fixed rates.

For the period of December 2016 to December 2017, the weighted average rate was 2.188 % , on a notional value of $ 914,250 .

We recorded interest expense deriving from the amortization of the loss on termination of interest rate swaps of $ 1.3 million , $ 2.1 million and $ 8.9 million during the years ended December 31, 2019 , 2018 and 2017 , respectively.

In May 2020, we entered into interest rate swap agreements to manage this risk.

The interest rate swaps have outstanding notional amounts aggregating to $ 370.0 million and mature in December 2023 with a weighted average fixed rate of 0.395 % paid against one-month LIBOR floored at 0.00 %.

The interest rate swap agreements are designated as cash flow hedges and will effectively fix the interest rate on a corresponding portion of the aggregate debt outstanding under our Term Loan Facility.

No portion of these interest rate contracts were deemed ineffective during the year ended December 31, 2020.

We recorded a cumulative pre-tax mark-to-market loss of $ 2.3 million, offset by a cumulative tax benefit of $ 0.6 million in consolidated other comprehensive income during the year ended December 31, 2020.

We reclassified $ 0.5 million previously recorded in other comprehensive income to interest expense and $ 0.1 million as a benefit to income tax expense, resulting in a $ 0.4 million decrease in net income during the year ended December 31, 2020, respectively.

As of December 31, 2020, approximately $ 1.0 million is expected to be reclassified to interest expense over the next 12 months.

The derivative agreements with our swap counterparties contain a provision whereby we could be declared in default on our derivative obligations if we either default or, in certain cases, are capable of being declared in default of any of our indebtedness greater than specified thresholds.

These agreements also contain a provision where we could be declared in default subsequent to a merger or restructuring type event if the creditworthiness of the resulting entity is materially weaker.

During the first quarter of 2019, we entered into two interest rate cap contracts against three-month U.S.-dollar LIBOR, each with a cap rate of 3.00 %.

These caps have a combined notional amount of $ 150.0 million, were effective as of March 2019, and terminate in December 2021.

We have not elected hedge accounting and have recorded insignificant mark-to-market adjustments in the year ended December 31, 2019 .

We have not elected hedge accounting and have recorded insignificant mark-to-market adjustments in the year ended December 31, 2020 and December 31, 2019.

In conjunction with the December 2017 refinancing of the Term Loan Facility, we terminated all of the interest rate swaps which had outstanding notional amounts aggregating to $ 914.3 million and recorded a loss on termination of $ 3.6 million in consolidated other comprehensive income (loss), which was being amortized as interest expense over the pre-termination life of the interest rate swaps.

As of December 31, 2019, the loss on termination was fully amortized.

The unamortized, pre-tax balance of this loss recorded in consolidated comprehensive income (loss) was $ 1.3 million at December 31, 2018.

We recorded interest expense deriving from the amortization of the loss on termination of interest rate swaps of $ 1.3 million and $ 2.1 million during the year ended December 31, 2019 and 2018, respectively.

The fair values of derivative instruments held are as follows:

Derivative assets

(amounts in thousands)

Balance Sheet Location

(amounts in thousands) Balance Sheet Location December 31, 2020 December 31, 2019

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

Other current assets

Interest rate cap contracts

Foreign currency forward contracts Other current assets $ 542 $ 1,372

Interest rate cap contracts Other assets $ — $ 6

Derivatives liabilities

(amounts in thousands)

Balance Sheet Location

Derivatives not designated as hedging instruments:

Foreign currency forward contracts

(amounts in thousands) Balance Sheet Location December 31, 2020 December 31, 2019

Derivatives designated as hedging instruments:

Interest rate contracts

Accrued expenses and other current liabilities $ 955 $ —

Interest rate contracts

Deferred credits and other liabilities $ 897 $ —

Derivatives not designated as hedging instruments:

Foreign currency forward contracts Accrued expenses and other current liabilities $ 8,823 $ 4,068

Fair Value of Financial Instruments

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December 31, 2020

(amounts in thousands)

Carrying Amount

Assets measured at NAV (1)

(amounts in thousands) Carrying Amount Total

Fair Value Level 1 Level 2 Level 3 Assets measured at NAV (1)

Cash equivalents $ 380,236 $ 380,236 $ — $ 380,236 $ — $ —

Derivative assets, recorded in other current assets

Derivative assets, recorded in other assets

542 542 — 542 — —

Pension plan assets:

3 unchanged sentences

Equity securities 33,099 33,099 33,099 — — —

Mutual funds 78,810 78,810 — 78,810 — —

Common and collective funds 144,171 144,171 — — — 144,171

Derivative liabilities, recorded in accrued expenses and deferred credits

Debt, recorded in long-term debt and current maturities of long-term debt

$ 1,781,351 $ 1,834,057 $ — $ 1,834,057 $ — $ —

Derivative liabilities, recorded in accrued expenses and other current liabilities

9,778 9,778 — 9,778 — —

Derivative liabilities, recorded in deferred credits and other liabilities

897 897 — 897 —

December 31, 2019

(amounts in thousands)

Carrying Amount

Assets measured at NAV (1)

(amounts in thousands) Carrying Amount Total

Fair Value Level 1 Level 2 Level 3 Assets measured at NAV (1)

Cash equivalents $ — $ — $ — $ — $ — $ —

Derivative assets, recorded in other current assets

1,372 1,372 — 1,372 — —

Derivative assets, recorded in other assets

Pension plan assets:

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Equity securities 28,249 28,249 28,249 — — —

Mutual funds 70,230 70,230 — 70,230 — —

Common and collective funds 132,600 132,600 — — — 132,600

Senior notes, recorded in long-term debt

Term loans, recorded in long-term debt and current maturities of long-term debt

Derivative liabilities, recorded in accrued expenses and deferred credits

Debt, recorded in long-term debt and current maturities of long-term debt

$ 1,528,146 $ 1,554,425 $ — $ 1,554,425 $ — $ —

Derivative liabilities, recorded in accrued expenses and other current assets

4,068 4,068 — 4,068 — —

(1) Certain pension assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

These include investments in large cap equity and commingled real estate funds.

These include investments in large cap equity and commingled real estate funds, which are valued using the NAV provided by the administrator of the funds.

Redemption of these funds is not subject to restriction.

Derivative assets and liabilities reported in level 2 include foreign currency and interest rate cap contracts.

Derivative assets and liabilities reported in level 2 include foreign currency and interest rate contracts.

See Note 23- Derivative Financial Instruments for additional information about our derivative assets and liabilities.

The non-financial assets that are measured at fair value on a non-recurring basis are presented below:

December 31, 2019

(amounts in thousands)

Carrying Value

Closed operations

December 31, 2018

(amounts in thousands)

Carrying Value

Continuing operations

There are no material non-financial assets or liabilities as of December 31, 2020 or December 31, 2019.

Commitments and Contingencies

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We record our best estimate of a loss when the loss is considered probable and the amount of such loss can be reasonably estimated.

Legal judgments and estimated settlements have been included in accrued expenses in the accompanying consolidated balance sheets.

When a loss is probable and there is a range of estimated loss with no best estimate within the range, we record the minimum estimated liability related to the lawsuit or claim.

As additional information becomes available, we assess the potential liability related to pending litigation and claims and revise our accruals, if necessary.

As additional information becomes available, we reassess the potential liability and revise our accruals, if necessary.

Because of uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ materially from our estimates.

In the opinion of management and based on the liability accruals provided, other than as described below, as of December 31, 2019 , there are no current proceedings or litigation matters involving the Company or its property that we believe would have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our operating results for a particular reporting period.

Other than the matters described below, as of December 31, 2020, there are no current proceedings or litigation matters involving the Company or its property that we believe would have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our operating results for a particular reporting period.

Steves & Sons, Inc.

vs JELD-WEN – We sell molded door skins to certain customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace.

vs JELD-WEN, Inc.

– We sell molded door skins to certain customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace.

We gave notice of termination of one of these contracts and, on June 29, 2016, the counterparty to the agreement, Steves and Sons, Inc.

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The complaint sought declaratory relief, ordinary and treble damages, and injunctive relief, including divestiture of certain assets acquired in the CMI acquisition.

In February 2018, a jury in the Eastern District of Virginia returned a verdict that was unfavorable to JWI with respect to Steves’ claims that our acquisition of CMI violated Section 7 of the Clayton Act and found that JWI breached the supply agreement between the parties.

The verdict awarded Steves $ 12.2 million for past damages under both the Clayton Act and breach of contract claims and $ 46.5 million in future lost profits under the Clayton Act claim.

On March 13, 2019, the presiding judge entered an Amended Final Judgment Order awarding $ 36.5 million in past damages under the Clayton Act (representing a trebling of the jury’s verdict) and granting divestiture of CMI, subject to appeal.

The judgment also conditionally awarded damages in the event the judgment is overturned on appeal.

Specifically, the court awarded $ 139.4 million as future antitrust damages in the event the divestiture order is overturned on appeal and $ 9.9 million as past contract damages in the event both the divestiture and antitrust claims are overturned on appeal.

JELD-WEN filed a supersedeas bond and notice of appeal of the judgment, which is scheduled for hearing by the Fourth Circuit Court of Appeals in May 2020.

On April 12, 2019, the plaintiffs filed a petition requesting an award of their fees and a bill of costs seeking $ 28.4 million in attorneys’ fees and $ 1.7 million in costs.

That petition remains pending and subject to further appeal.

On November 19, 2019, the presiding judge entered an order for further relief awarding Steves an additional $ 7.1 million in damages for pricing differences from the date of the underlying jury verdict through May 31, 2019.

We have also appealed that ruling.

We continue to believe that Steves’ claims lack merit, Steves’ damages calculations are speculative and excessive, and Steves is not entitled in any event to the extraordinary remedy of divestiture of CMI.

We believe that multiple pretrial and

trial rulings were erroneous and improperly limited the Company’s defenses, and that the judgment in accordance with the verdict was improper for several reasons under applicable law.

However, based upon the rulings described above, the Company has recorded charges of $ 78.6 million associated with these matters.

The judgment, if ultimately upheld after exhaustion of our appellate remedies, could have a material adverse effect on our financial position, operating results, or cash flows, particularly for the reporting period in which a loss is recorded.

Because the operations acquired from CMI have been fully integrated into the Company’s operations, divestiture of those operations would be difficult if not impossible and, therefore, it is not possible to estimate the cost of any final divestiture order or the extent to which such an order would have a material adverse effect on our financial position, operating results or cash flows.

During the course of the proceedings in the Eastern District of Virginia, we discovered certain facts that led us to conclude that Steves, its principals, and certain former employees of the Company had misappropriated Company trade secrets, violated the terms of various agreements between the Company and those parties, and violated other laws.

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The presiding judge entered a judgment in our favor for those damages and the entire amount has been paid by Steves.

On August 16, 2019, the presiding judge granted Steves’ request for an injunction, prohibiting us from pursuing certain claims against individual defendants pending in Bexar County, Texas.

On August 16, 2019, the presiding judge granted Steves’ request for an injunction, prohibiting us from pursuing certain claims against individual defendants pending in Bexar County, Texas (the “Steves Texas Trade Secret Theft Action”).

These claims have been stayed pending appeal.

On March 13, 2019, the presiding judge entered an Amended Final Judgment Order in the Original Action, awarding $ 36.5 million in past damages under the Clayton Act (representing a trebling of the jury’s verdict) and granting divestiture of CMI, subject to appeal.

The judgment also conditionally awarded damages in the event the judgment was overturned on appeal.

Specifically, the court awarded $ 139.4 million as future antitrust damages in the event the divestiture order was overturned on appeal and $ 9.9 million as past contract damages in the event both the divestiture and antitrust claims were overturned on appeal.

On April 12, 2019, the plaintiffs filed a petition requesting an award of their fees and a bill of costs seeking $ 28.4 million in attorneys’ fees and $ 1.7 million in costs in connection with the Original Action.

That petition remains pending and subject to further appeal.

We also appealed that ruling.

On April 14, 2020, Steves filed a motion for further supplemental relief for pricing differences from the date of the prior order and going forward through the end of the parties’ current supply agreement (the “Future Pricing Action”).

We opposed that request for further relief.

JELD-WEN filed a supersedeas bond and notice of appeal of the judgment, which was heard by the Fourth Circuit Court of Appeals (the “Fourth Circuit”) on May 29, 2020.

On February 18, 2021, the Fourth Circuit issued its decision on appeal in the Original Action, affirming the Amended Final Judgment Order in part and vacating and remanding in part.

The Fourth Circuit vacated the Eastern District of Virginia’s alternative $ 139.4 million lost-profits award, holding that award was premature because Steves has not suffered the purported injury on which its claim for future lost profits rests.

The Fourth Circuit also vacated the Eastern District of Virginia’s judgment for Sam Steves, Edward Steves, and John Pierce on JELD-WEN’s trade secrets claims, which will allow JELD-WEN to continue pursuing the Texas Trade Secrets Theft Action.

The Fourth Circuit affirmed the Eastern District of Virginia’s finding of antitrust injury and its award of $ 36.5 million in past antitrust damages, which continues to accrue post-judgment interest.

It also affirmed the Eastern District of Virginia’s

divestiture order, while clarifying that JELD-WEN retains the right to challenge the terms of any divestiture, including whether a sale to any particular buyer will serve the public interest, and made clear that the Eastern District of Virginia may need to revisit its divestiture order if the special master cannot locate a satisfactory buyer.

We continue to believe that Steves’ claims lack merit and Steves is not entitled to the extraordinary remedy of divestiture of CMI.

We believe that multiple pretrial and trial rulings were erroneous and improperly limited the Company’s defenses and that the judgment in accordance with the verdict was improper for several reasons under applicable law, and we intend to pursue appellate remedies available to us.

It is not possible to estimate the impact of any final divestiture order if ultimately upheld, or whether such an order would have a material adverse effect on our financial position, operating results, or cash flows.

During the pendency of the Original Action, on February 14, 2020, Steves filed a complaint and motion for preliminary injunction in the Eastern District of Virginia alleging that we breached the long-term supply agreement between the parties, among other claims, including by incorrectly calculating the allocation of door skins owed to Steves (the “Allocation Action”).

Steves sought an additional allotment of door skins and damages for violation of antitrust laws, tortious interference, and breach of contract.

On April 10, 2020, the presiding judge granted Steves’ motion for preliminary injunction and the parties settled the issues underlying the preliminary injunction on April 30, 2020 and reserved the right to appeal the ruling in the Fourth Circuit Court of Appeals.

The Company believed all the claims lacked merit and moved to dismiss the antitrust and tortious interference claims.

On June 2, 2020, we entered into a settlement agreement with Steves to resolve the Pricing Action, the Future Pricing Action, and the Allocation Action.

As a result of the settlement, Steves filed a notice of satisfaction of judgment in the Pricing Action, withdrew its Future Pricing Action with prejudice, and filed a stipulated dismissal with prejudice in the Allocation Action.

The Company also withdrew its appeal of the Pricing Action.

The parties agreed to bear their own respective attorneys’ fees and costs in these actions.

In partial consideration of the settlement, JWI and Steves entered into an amended supply agreement satisfactory to both parties that ends on September 10, 2021.

This settlement had no effect on the Original Action between the parties except to agree that certain specific terms of the Amended Final Judgment Order in the Original Action will apply to the amended supply agreement during the pendency of the appeal of the Original Action, nor does this settlement have any effect on the Steves Texas Trade Secret Theft Action, which remains on appeal in the Fourth Circuit.

We continue to believe the claims in the settled actions lacked merit and made no admission of liability in these matters.

Cambridge Retirement System v.

3 unchanged sentences

The lawsuit seeks compensatory damages, equitable relief and an award of attorneys’ fees and costs.

The Company has not yet been served with the complaint but has reviewed the allegations.

The Company believes the claims lack merit and intends to vigorously defend against the action.

Because the lawsuit is in the very initial stages, no assessment as to the likelihood or range of any potential adverse outcome can be made at this time.

Interior Molded Doors Antitrust Litigation – On October 19, 2018, Grubb Lumber Company, on behalf of itself and others similarly situated, filed a putative class action lawsuit against us and one of our competitors in the doors market, Masonite Corporation (“Masonite”), in the Eastern District of Virginia.

On May 8, 2020, the Public Employees Retirement System of Mississippi and the Plumbers and Pipefitters National Pension Fund were named as co-lead plaintiffs and filed an amended complaint on June 22, 2020.

We filed a motion to dismiss the amended complaint on July 29, 2020, which was denied on October 26, 2020.

Discovery is ongoing, and trial in this matter is currently set for July 12, 2021.

In re Interior Molded Doors Antitrust Litigation – On October 19, 2018, Grubb Lumber Company, on behalf of itself and other similarly situated, filed a putative class action lawsuit against us and one of our competitors in the doors market, Masonite Corporation (“Masonite”), in the Eastern District of Virginia.

We subsequently received additional complaints from and on behalf of direct and indirect purchasers of interior molded doors.

The suits have been consolidated into two separate actions, a Direct Purchaser Action and an Indirect Purchaser Action.

The suits allege that Masonite and we violated Section 1 of the Sherman Act, and in the Indirect Purchaser Action, related state law antitrust and consumer protection laws, by engaging in a scheme to artificially raise, fix, maintain or stabilize the prices of interior molded doors in the United States.

The complaints seek unquantified ordinary and treble damages, declaratory relief, interest, costs and attorneys’ fees.

The Company believes the claims lack merit and intends to vigorously defend against the actions.

On September 18, 2019, the court denied the defendants’ motions to dismiss the lawsuits in their entirety and granted the defendants’ motions to dismiss various state law claims and to limit all claims to a four-year statute of limitations.

As a result, the plaintiffs’ damages period is limited to the four-year period between 2014 and 2018.

At this early stage of the proceedings, we are unable to conclude that a loss is probable or to estimate the potential magnitude of any loss in the matters, although a loss could have a material adverse effect on our operating results, consolidated financial position or cash flows.

The suits were consolidated into two separate actions, a Direct Purchaser Action and an Indirect Purchaser Action.

The suits allege that Masonite and JELD-WEN violated Section 1 of the Sherman Act, and in the Indirect Purchaser Action, related state law antitrust and consumer protection laws, by engaging in a scheme to artificially raise, fix, maintain, or stabilize the prices of interior molded doors in the United States.

The complaints sought ordinary and treble damages, declaratory relief, interest, costs, and attorneys’ fees.

The Company believes the claims lack merit and vigorously defended against the actions.

On September 18, 2019, the court granted in part and denied in part the defendants’ motions to dismiss the lawsuits, dismissing various state law claims and limiting plaintiffs’ damages claims to a four-year period (from 2014-2018) under the applicable statute of limitations.

Together with Masonite, we filed motions to oppose class certification in both the Direct Purchaser and Indirect Purchaser Actions on May 19, 2020.

On August 31, 2020, JELD-WEN and Masonite entered into a settlement agreement to resolve the Direct Purchaser Action.

In exchange for a full release of claims through the date of preliminary court approval of the settlement, each defendant originally agreed to pay $ 28.0 million to the named plaintiffs and the settlement class.

On January 27, 2021, the parties to the Direct Purchaser Action revised the settlement agreement to modify certain terms, and each defendant agreed to pay a total of $ 30.8 million to the named plaintiffs and the settlement class in exchange for a full release of claims through the

date of preliminary approval of the revised settlement, which the court granted on February 5, 2021.

In addition, on September 4, 2020, JELD-WEN and Masonite entered into a separate settlement agreement to resolve the Indirect Purchaser Action.

Each defendant agreed to pay $ 9.75 million to the named plaintiffs and the settlement class in exchange for a full release of claims through the execution date of the settlement agreement, and the court has granted preliminary approval of this settlement in the Indirect Purchaser Action.

The Company continues to believe that the plaintiffs’ claims lack merit and has denied any liability or wrongdoing for the claims made against the Company.

The settlement agreements remain subject to final court approval and other conditions.

The final fairness hearing in the Direct Purchaser Action is scheduled to be in June 2021, and the final fairness hearing in the Indirect Purchaser Action is scheduled to be in July 2021.

Canadian Antitrust Litigation – On May 15, 2020, Développement Émeraude Inc., on behalf of itself and others similarly situated, filed a putative class action lawsuit against us and Masonite in the Superior Court of the Province of Quebec, Canada, which was served on us on September 18, 2020 (“the Quebec Action”).

The putative class consists of any person in Canada who, since October 2012, purchased one or more interior molded doors from us or Masonite.

The suit alleges an illegal conspiracy between us and Masonite to agree on prices, the distribution of market shares and/or the production levels of interior molded doors and that the plaintiffs suffered damages in that they were charged and paid higher prices for interior molded doors than they would have had to pay but for the alleged anti-competitive conduct.

The plaintiffs are seeking compensatory and punitive damages, attorneys’ fees and costs.

On September 9, 2020, Kate O’Leary Swinkels, on behalf of herself and others similarly situated, filed a putative class action against JELD-WEN and Masonite in federal court in the province of Ontario, which was served on us on September 29, 2020 (the “Ontario Action”).

The Ontario Action makes substantially similar allegations to the Quebec Action and the putative class is represented by the same counsel.

In February 2021, the plaintiff in the Ontario Action noticed a proposed Amended Statement of Claim that replaces the named plaintiff, Kate O’Leary Swinkels, with David Regan.

The plaintiff further anticipates staying the Quebec Action while the Ontario Action proceeds, although we do not anticipate a hearing on the certification of the Ontario Action until early 2022.The Company believes both the Quebec Action and the Ontario Action lack merit and intends to vigorously defend against them.

We have evaluated the claims against us and recorded provisions based on management’s judgment about the probable outcome of the litigation and have included our estimates in accrued expenses in the accompanying balance sheets.

See Note 11 - Accrued Expenses and Other Current Liabilities .

While we expect a favorable resolution to these matters, the dispute resolution process could be lengthy, and if the plaintiffs were to prevail completely or substantially in the respective matters described above, such an outcome could have a material adverse effect on our operating results, consolidated financial position, or cash flows.

Self-Insured Risk – We self-insure substantially all of our domestic business liability risks including general liability, product liability, warranty, personal injury, auto liability, workers’ compensation and employee medical benefits.

Excess insurance policies from independent insurance companies generally cover exposures between $ 3.0 million and $ 200.0 million for domestic product liability risk and exposures between $ 0.5 million and $ 200.0 million for auto, general liability, personal injury and workers’ compensation.

We have no stop-gap coverage on claims covered by our self-insured domestic employee medical plan and are responsible for all claims thereunder.

We have no stop loss insurance covering our self-insured employee medical plan and are responsible for all claims thereunder.

We estimate our provision for self-insured losses based upon an evaluation of current claim exposure and historical loss experience.

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From time to time and in limited geographic areas, we have entered into agreements for the sale of our products to certain customers that provide additional indemnifications for liabilities arising from construction or product defects.

We cannot estimate the potential magnitude of such exposures, but to the extent specific liabilities have been

identified related to product sales, liabilities have been provided in the warranty accrual in the accompanying consolidated balance sheets.

Performance Bonds and Letters of Credit – At times, we are required to provide letters of credit, surety bonds or guarantees to customers, vendors and others.

We cannot estimate the potential magnitude of such exposures, but to the extent specific liabilities have been identified related to product sales, liabilities have been provided in the warranty accrual in the accompanying consolidated balance sheets.

Other Financing Arrangements – At times we are required to provide letters of credit, surety bonds, or guarantees to meet various performance, legal, warranty, environmental, workers compensation, licensing, utility, and governmental requirements.

Stand-by letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers, and future funding commitments.

During 2019, we filed bonds in the amount of $ 47.7 million related to the Steves and Sons legal proceeding.

The outstanding performance bonds and stand-by letters of credit were as follows:

(amounts in thousands)

Self-insurance workers’ compensation

Liability and other insurance

Environmental

Total outstanding performance bonds and stand-by letters of credit

Prior period balances in the table above have been reclassified to conform to current period presentation.

The stated values of these letters of credit agreements, surety bonds, and guarantees were

$ 122.7 million and $ 122.6 million at December 31, 2020 and December 31, 2019, respectively.

We have revised our 2019 value to include additional insured guarantees and guarantees associated with our Australia Senior Secured Credit Facility.

Environmental Contingencies – We periodically incur environmental liabilities associated with remediating our current and former manufacturing sites as well as penalties for not complying with environmental rules and regulations.

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Accordingly, it is likely that adjustments to the estimated liabilities will be necessary as additional information becomes available.

Short-term environmental liabilities and settlements are recorded in accrued expenses in the accompanying consolidated balance sheets and totaled $ 0.7 million and $ 0.5 million as of December 31, 2019 and December 31, 2018 , respectively.

Long-term environmental liabilities are recorded in deferred credits and other liabilities in the accompanying consolidated balance sheets.

No long-term environmental liabilities were recorded at either December 31, 2019 or December 31, 2018 .

Short-term environmental liabilities and settlements are recorded in accrued expenses in the accompanying consolidated balance sheets and totaled $ 0.7 million at both December 31, 2020 and December 31, 2019.

Long-term environmental liabilities are recorded in deferred credits and other liabilities in the accompanying consolidated balance sheets and totaled $ 8.3 million at December 31, 2020.

No long-term environmental liabilities were recorded at December 31, 2019.

Everett, Washington WADOE Action –In 2008, we entered into an Agreed Order with the WADOE to assess historic environmental contamination and remediation feasibility at our former manufacturing site in Everett, Washington.

As part of this agreement, we also agreed to develop a CAP, arising from the feasibility assessment.

We are currently working with WADOE to finalize our RI/FS (Remedial Investigation and Feasibility Study), and, once final, we will develop the CAP.

We estimate the remaining cost to complete our RI/FS and develop the CAP at $ 0.5 million , which we have fully accrued.

However, because we cannot at this time reasonably estimate the cost associated with any remedial actions we would be required to undertake, we have not provided accruals for any remedial action in our accompanying consolidated financial statements.

Towanda, Pennsylvania Consent Order – In 2015, we entered into a COA with the PaDEP to remove a pile of wood fiber waste from our site in Towanda, Pennsylvania, which we acquired in connection with our acquisition of CMI in 2013, by using it as fuel for a boiler at that site.

The COA replaced a 1995 Consent Decree between CMI’s predecessor Masonite, Inc.

As part of this agreement, we also agreed to develop a Corrective Action Plan (“CAP”), arising from the feasibility assessment.

On April 30, 2020, we provided the WADOE with a revised draft of our feasibility assessment.

On June 19, 2020, we received substantive comments from the WADOE that included additional remedial alternatives and changes to the scoring of the alternatives.

We worked with WADOE on its comments with respect to and the scoring of the remedial alternatives, and we submitted the draft final feasibility assessment to the WADOE in December 2020, which we considered substantially complete.

The draft final feasibility assessment included remedial alternatives ranging from $ 8.3 million to $ 57.0 million.

We expect to deliver a draft CAP to the WADOE in late-April 2021.

The final feasibility assessment and draft final of the CAP are expected to be delivered to the WADOE in May 2021.

At that time, the WADOE will release the documents to the public for a 30-day comment period.

Once the public comment period has expired and any comments incorporated, the WADOE will select the remedial actions we will be required to perform, and a final CAP will be developed and delivered to the WADOE 15 days thereafter.

While we have made provisions in our financial statements within the range of possible outcomes for this matter, it is unclear at this time which remedial actions we will be required to undertake or the cost thereof.

As a result, the cost of the final CAP could vary materially from our provisions and have a material impact on our statement of operations and statement of cash flows.

Towanda, Pennsylvania Consent Order – In December 2020, we entered into a COA with the PaDEP to remove a pile of wood fiber waste from our site in Towanda, Pennsylvania, which we acquired in connection with our acquisition of CMI in 2013, by using it as fuel for a boiler at that site.

The COA replaced a 2018 Consent Decree between PaDep and us.

Under the COA, we are required to achieve certain periodic removal objectives and ultimately remove the entire pile by August 31, 2025.

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We do not anticipate that we will fund future distributions.

Purchase Obligations - As of December 31, 2019, we have purchase obligations of $ 9.0 million due in 2020 and $ 3.9 million due in 2021-2024.

Purchase Obligations - As of December 31, 2020, we have purchase obligations of $ 9.9 million due in 2021 and $ 21.6 million due in 2022 and thereafter.

These purchase obligations are primarily relating to raw materials purchase agreements and software hosting services.

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The plan is not open to new employees.

Beginning in 2017, we moved from utilizing a weighted average discount rate, which was derived from the yield curve used to measure the pension benefit obligation at the beginning of the period, to a spot rate yield curve to estimate the pension benefit obligation and net periodic benefits costs.

The change in estimate provides a more accurate measurement of service and interest cost by applying the spot rate that could be used to settle each projected cash flow individually.

In 2020, we elected to utilize the alternative method when calculating the Pension Benefit Guarantee Corporation premiums for 2020 and the succeeding 4 years, rather than the stand alone method utilized during the previous 5 years, resulting in a reduction to pension benefit expenses in 2020.

We use a spot rate yield curve to estimate the pension benefit obligation and net periodic benefits costs.

The components of net periodic benefit cost are summarized as follows for the years ended December 31:

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Components of pension benefit expense - U.S.

benefit plan 2020 2019 2018

$ 3,090 $ 4,890 $ 4,170

Interest cost

12,236 14,861 13,180

Expected return on plan assets

( 21,860 ) ( 18,622 ) ( 20,769 )

Amortization of net actuarial pension loss

6,852 8,919 9,314

Pension benefit expense $ 318 $ 10,048 $ 5,895

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Expected long-term rate of return on assets 6.25 % 6.25 % 6.25 %

Compensation increase rate

Compensation increase rate N/A N/A N/A

In October 2019, the Society of Actuaries released the PRI-2012 Mortality Tables (update to RP-2014 mortality tables), which were adopted in 2019 and represent our best estimate of future experience for the base mortality table.

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As the discount rate is reduced or increased, the pension obligation would increase or decrease, respectively, and future pension expense would increase or decrease, respectively.

Pension benefit expense from amortization of net actuarial pension loss is estimated to be $ 7.2 million in 2020 .

We maintain policies for investment of pension plan assets.

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We have selected an expected return on plan assets based on a historical analysis of rates of return, our investment mix, market conditions and other factors.

The fair value of plan assets increased in 2019 due primarily to investment returns and contributions in excess of our benefit payments and decreased in 2018 due primarily to investment losses and benefit payments in excess of our discretionary contributions.

The fair value of plan assets increased in 2020 and 2019 due primarily to investment returns and contributions in excess of our benefit payments.

(amounts in thousands)

Change in fair value of plan assets - U.S.

benefit plan 2020 2019

Balance as of January 1, $ 358,577 $ 302,763

Actual return on plan assets

47,391 69,767

Company contribution

Benefits paid

( 18,538 ) ( 16,751 )

Administrative expenses paid

( 3,196 ) ( 4,962 )

Balance at period end $ 396,853 $ 358,577

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Summary of plan investments - U.S.

benefit plan 2020 2019

Equity securities 8.3 7.9

Debt securities 36.3 36.1

Other 55.4 56.0

The plan’s projected benefit obligation is determined by using weighted-average assumptions made on December 31, of each year as summarized below:

1 unchanged sentence

Change in projected benefit obligation - U.S.

benefit plan 2020 2019

Balance as of January 1, $ 433,408 $ 383,936

Interest cost

12,236 14,861

Actuarial loss

47,085 51,434

Benefits paid

( 18,538 ) ( 16,751 )

Administrative expenses paid

( 3,196 ) ( 4,962 )

Balance at period end $ 474,085 $ 433,408

Discount rate 2.55 % 3.31 %

Compensation increase rate

Compensation increase rate N/A N/A

As of December 31, 2020, the plan’s estimated benefit payments for the next ten years are as follows (amounts in thousands):

The company made cash contributions to the plan of $ 7.8 million and $ 4.1 million for the year ended December 31, 2019 and 2018 , respectively.

During fiscal year 2020 , we expect to make cash contributions to the plan of approximately $ 8.1 million .

2021 $ 18,142

2026-2030 112,711

The company made cash contributions to the plan of $ 12.6 million and $ 7.8 million for the year ended December 31, 2020 and December 31, 2019, respectively.

During fiscal year 2021, no cash contributions are required to be made to the plan.

The plan’s accumulated benefit obligation of $ 474.1 million is determined by taking the projected benefit obligation and removing the impact of the assumed compensation increases.

2 unchanged sentences

Unfunded pension liability - U.S.

benefit plan 2020 2019

Projected benefit obligation at end of period

$ 474,085 $ 433,408

Fair value of plan assets at end of period

( 396,853 ) ( 358,577 )

Unfunded pension liability $ 77,232 $ 74,831

1 unchanged sentence

(amounts in thousands)

Accumulated other comprehensive (income) loss - U.S.

Accumulated other comprehensive loss - U.S.

benefit plan 2020 2019 2018

Net actuarial pension loss beginning of period $ 87,459 $ 96,090 $ 112,632

Amortization of net actuarial loss

( 6,852 ) ( 8,919 ) ( 9,314 )

Net loss (gain) occurring during year

21,554 288 ( 7,228 )

Net actuarial pension loss at end of period 102,161 87,459 96,090

( 6,860 ) ( 3,145 ) ( 5,344 )

Net actuarial pension loss at end of period, net of tax $ 95,301 $ 84,314 $ 90,746

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benefit plans 2020 2019 2018

$ 2,548 $ 2,386 $ 2,070

Interest cost

908 1,398 1,417

Expected return on plan assets

( 435 ) ( 589 ) ( 833 )

Amortization of net actuarial pension loss

1 unchanged sentence

Discount rate 0.2 % - 7.8 %

0.6 % - 8.5 %

0.2 % - 9.0 %

Expected long-term rate of return on assets 0.0 % - 4.6 %

0.0 % - 5.8 %

0.0 % - 5.3 %

Compensation increase rate 0.5 % - 7.0 %

pension benefit expenses from amortization of net actuarial pension losses are estimated to be $ 0.4 million in 2020 .

0.5 % - 7.0 %

(amounts in thousands)

2 unchanged sentences

Balance as of January 1, $ 10,924 $ 12,676

Actual return on plan assets

Actual (loss) return on plan assets ( 106 ) 1,398

Company contribution

Benefits paid

( 547 ) ( 3,272 )

Administrative expenses paid

( 13 ) ( 21 )

Cumulative translation adjustment

7 unchanged sentences

Debt securities 19.8 20.7

Other 29.9 33.5

The projected benefit obligation for the non-U.S.

4 unchanged sentences

Balance as of January 1, $ 47,707 $ 42,803

Pension obligation acquired

Interest cost

1 unchanged sentence

Benefits paid

( 2,756 ) ( 5,240 )

Administrative expenses paid

( 15 ) ( 21 )

Cumulative translation adjustment

1 unchanged sentence

Discount rate 0.2 % - 7.8 %

0.6 % - 8.5 %

Compensation increase rate 1.0 % - 7.0 %

0.5 % - 7.0 %

As of December 31, 2020, the estimated benefit payments for the non-U.S.

plans over the next ten years are as follows (amounts in thousands):

2026-2030 11,901

The accumulated benefit obligations of $ 42.5 million for the non-U.S.

7 unchanged sentences

Projected benefit obligation at end of period

$ 53,871 $ 47,707

Fair value of plan assets at end of period

( 11,471 ) ( 10,924 )

Net pension liability $ 42,400 $ 36,783

Long-term unfunded pension liability

$ 37,845 $ 33,106

Current portion

1 unchanged sentence

Total overfunded pension liability $ 1,679 $ 1,928

The current portion of the unfunded pension liability is recorded in accrued payroll and benefits in the accompanying consolidated balance sheets and is equal to the expected employer contributions in the following year.

The current portion of the unfunded pension liability is recorded in accrued payroll and benefits in the accompanying consolidated balance sheets.

The overfunded pension liability is recorded in long-term other assets in the accompanying consolidated balance sheets.

1 unchanged sentence

(amounts in thousands)

Accumulated other comprehensive income (loss) - Non-U.S.

Accumulated other comprehensive loss - Non-U.S.

benefit plans 2020 2019 2018

1 unchanged sentence

Amortization of net actuarial loss

( 849 ) ( 553 ) ( 1,442 )

Net gain occurring during year

1,339 5,232 1,462

Cumulative translation adjustment

Net actuarial pension loss at end of period 12,811 12,237 7,450

( 3,043 ) ( 2,958 ) ( 1,911 )

Net actuarial pension loss at end of period, net of tax $ 9,768 $ 9,279 $ 5,539

5 unchanged sentences

Supplemental Cash Flow Information

(amounts in thousands)

(amounts in thousands) December 31, 2020 December 31, 2019 December 31, 2018

Cash Operating Activities:

4 unchanged sentences

Issuances of notes receivable

$ ( 57 ) $ ( 58 ) $ ( 77 )

Cash received on notes receivable

2 unchanged sentences

Property, equipment and intangibles purchased in accounts payable

$ 5,862 $ 10,439 $ 6,961

Property, equipment and intangibles purchased for debt

Notes receivable and accrued interest from employees and directors settled with return of JWH stock

18,813 40,323 32,262

Customer accounts receivable converted to notes receivable

Cash Financing Activities:

Proceeds from issuance of new debt, net of discount

Proceeds from issuance of new debt

$ 250,000 $ 124,375 $ 38,823

Borrowings on long-term debt

100,941 358,027 464,119

Payments of long-term debt

( 135,250 ) ( 468,637 ) ( 432,122 )

Payments of debt issuance and extinguishment costs, including underwriting fees

( 4,833 ) ( 664 ) ( 352 )

Change in long-term debt

$ 210,858 $ 13,101 $ 70,468

Cash paid for amounts included in the measurement of finance lease liabilities

$ 1,721 $ 917 $ —

Non-cash Financing Activities:

Prepaid insurance funded through short-term debt borrowings

$ 10,785 $ 4,948 $ 2,757

Prepaid ERP costs funded through short-term debt borrowings

1 unchanged sentence

Accounts payable converted to installment notes

914 757 12,886

Other Supplemental Cash Flow Information:

Cash taxes paid, net of refunds

$ 20,443 $ 26,656 $ 46,295

Cash interest paid

71,659 71,181 68,892

We have revised prior year borrowings and payments of long-term debt to reflect gross activity relating to our ABL Facility.

There is no impact to the disclosed Change in long-term debt amount for any previously reported period.

Related Party Transactions

Sale of subsidiary – In May 2019, we sold Creative Media Development, Inc.

“CMD”, a subsidiary, which was part of our North America segment, for $ 6.5 million .

(“CMD”), a subsidiary, which was part of our North America segment, for $ 6.5 million, resulting in a gain of $ 2.8 million in the second quarter of 2019.

A minority shareholder of the buying group also serves on our Board of Directors.

The impact of this sale was a gain of $ 2.8 million in the year ended December 31, 2019 included within other expense (income) in the consolidated statement of operations.

Included in the Stock Purchase Agreement for CMD, we agreed to use CMD for certain advertising services totaling $ 7.0 million between 2019 and 2023.

As of December 31, 2019 , the remaining balance is $ 4.1 million , which is included within our disclosures regarding purchase obligations.

Under the Stock Purchase Agreement for CMD, we agreed to use CMD for certain advertising services totaling $ 7.0 million between 2019 and 2023.

As of December 31, 2020, the remaining balance is $ 1.2 million.

At December 31, 2020, there is no amount due from the related party.

This sale did not have a material impact on our results of operations.

Acquired lease – As part our acquisition of VPI, we assumed operating leases on two buildings.

The leases are with a former shareholder of VPI, are at market rates and resulted in an operating lease asset of $ 3.6 million as of the opening balance sheet.

One of the leases was modified in August 2019, which increased the value to $ 3.9 million at December 31, 2019 .

Revision of Prior Period Financial Statements

During the quarter ended June 29, 2019, we identified errors relating to accounting for fulfillment costs associated with our installation contracts at one of our European business units.

This resulted in errors in accounts receivable, net, other current assets, and accrued expenses and other current liabilities.

The effect of these errors was to overstate accounts receivable, net, other current assets and understate accrued expenses and other current liabilities, cost of sales and SG&A expense for the years ended December 31, 2016, 2017 and 2018, including the related quarterly periods contained therein, and the three-months ended March 30, 2019.

Using the guidance in ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 250-S99-1, Assessing Materiality, and ASC Topic 250-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated whether our previously issued consolidated financial statements were materially misstated due to these errors and other accumulated misstatements.

Based upon our evaluation of both quantitative and qualitative factors, we believe that the effects of these errors and other accumulated misstatements were not material individually or in the aggregate to any previously reported quarterly or annual period.

We have revised the prior period financial statements included in this filing to reflect the correction of these errors and other accumulated misstatements.

Twelve months ended

December 31, 2017

(amounts in thousands, except per share data)

Consolidated Statement of Operations:

Cost of sales

Selling, general and administrative

Operating income (loss)

Other (income) expense

Income before taxes, equity earnings and discontinued operations

Income tax expense (benefit)

Income from continuing operations, net of tax

Net income (loss) attributable to common shareholders

Weighted Average Common Shares:

Income (loss) per share from continuing operations:

Net income (loss) per share:

December 31, 2018

(amounts in thousands)

Consolidated Balance Sheet:

Accounts receivable, net

Other current assets

Total current assets

Deferred tax assets

Accounts payable

Accrued payroll and benefits

Accrued expenses and other current liabilities

Total current liabilities

Deferred credits and other liabilities (1)

Deferred tax liabilities

Total liabilities

Retained earnings

Accumulated other comprehensive loss

Total shareholders' equity attributable to common shareholders

Total shareholders' equity (1)

Total liabilities and shareholders’ equity

Non-controlling interest of $ 17 at December 31, 2018 has been reclassified to Deferred credits and other liabilities to conform to the current year’s presentation.

Twelve months ended

December 31, 2018

(amounts in thousands, except per share data)

Consolidated Statement of Operations:

Cost of sales

Selling, general and administrative

Operating income (loss)

Other (income) expense (1)

Income before taxes and equity earnings

Income tax expense (benefit)

Income from continuing operations, net of tax

Net income (loss) attributable to common shareholders (1)

Weighted Average Common Shares:

Income (loss) per share from continuing operations:

Net income (loss) per share:

Non-controlling interest of $ 87 for the twelve months ended December 31, 2018 has been reclassified to Other (income) expense to conform to the current year’s presentation.

Consolidated Statement of Cash Flow

The errors did not impact the subtotals for cash flows from operating activities, investing activities, or financing activities for any of the periods affected.

Reconciliation of pre-tax net income (loss) to Note 18 - Segment Information, Adjusted EBITDA

Twelve months ended

December 31, 2017

(amounts in thousands)

Income tax (benefit) expense

Non-cash foreign exchange transaction/translation (income) loss

Adjusted EBITDA

Twelve months ended

December 31, 2018

(amounts in thousands)

Income tax (benefit) expense

Non-cash foreign exchange transaction/translation (income) loss

Adjusted EBITDA

Segment Information:

Adjusted EBITDA

Twelve months ended

December 31, 2017

(amounts in thousands)

Total Operating

Twelve months ended

December 31, 2018

(amounts in thousands)

Total Operating

Quarterly Financial Data (unaudited)

Summarized quarterly financial data for the years ended December 31, 2019 and 2018 are as follows:

Three Months Ended

(dollars in thousands)

Statements of Operations Data:

Operating income

Income before taxes and equity earnings

Net income per share basic

Net income per share diluted

We plan to revise the three months ended March 30, 2019 in connection with future filings.

Refer to Note 32 - Revision of Prior Period Financial Statements.

The prior period information has been reclassified to conform to current period presentation.

Three Months Ended (1)(2)

(dollars in thousands)

Statements of Operations Data:

Operating income

Income before taxes and equity earnings

Net income per share basic

Net income per share diluted

We have revised the prior period information for the three months ended March 31, 2018, June 30, 2018, September 29, 2018 and December 31, 2018 to reflect the correction of errors and other accumulated misstatements disclosed in Note 32 - Revision of Prior Period Financial Statements .

The prior period information has been reclassified to conform to current period presentation.

Acquired lease – In conjunction with our acquisition of VPI, we assumed operating leases on two buildings with a former shareholder of VPI and current employee.

The leases are at market rates and resulted in an operating lease asset of $ 3.6 million as of the opening balance sheet.

One of the leases was modified in August 2019, which increased the value by $ 0.6 million.

At December 31, 2020, the operating lease asset was $ 3.5 million.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF JELD-WEN HOLDING, INC.

8 unchanged sentences

Interest expense — 12 45

Other ( 436 ) ( 398 ) ( 411 )

Income before taxes 91,586 62,971 141,907

Income tax (benefit) expense

Income tax expense — — —

Net income $ 91,586 $ 62,971 $ 141,907

Comprehensive income (loss):

Net income $ 91,586 $ 62,971 $ 141,907

Other comprehensive (loss) income, net of tax

6 unchanged sentences

CONDENSED BALANCE SHEETS

(amounts in thousands, except share and per share data)

December 31, 2019

December 31, 2018

(amounts in thousands, except share and per share data) December 31, 2020 December 31, 2019

Current assets

Cash and cash equivalents $ 4,216 $ 4,818

Receivable from subsidiaries

Other current assets — 10

3 unchanged sentences

Long-term notes receivable — 35

Total assets $ 1,066,600 $ 966,938

LIABILITIES AND EQUITY

5 unchanged sentences

Total current liabilities 3,443 3,576

Long-term debt

Total liabilities 3,443 3,576

15 unchanged sentences

OPERATING ACTIVITIES

Net income $ 91,586 $ 62,971 $ 141,907

Adjustments to reconcile net income to cash used in operating activities:

Depreciation 127 128 161

Income from subsidiaries investment ( 109,509 ) ( 77,950 ) ( 157,429 )

3 unchanged sentences

Receivables and payables from subsidiaries 3,891 19,564 123,366

Other assets 3 10 ( 5 )

Accounts payable and accrued expenses ( 408 ) 829 ( 859 )

Net cash (used in) provided by operating activities

Net cash provided by operating activities 1,619 19,303 122,731

INVESTING ACTIVITIES

Additional Investment in subsidiaries

Cash received on notes receivable

Proceeds from sales of subsidiaries' shares

Distribution received from subsidiaries — 2,000 1,500

Net cash provided by (used in) investing activities

Net cash provided by investing activities — 2,000 1,500

FINANCING ACTIVITIES

3 unchanged sentences

Common stock repurchased ( 5,000 ) ( 19,994 ) ( 125,030 )

Proceeds from sale of common stock, net of underwriting fees and commissions

Payments associated with initial public offering

Net cash (used in) provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net cash (used in) financing activities ( 2,221 ) ( 18,774 ) ( 125,772 )

Net (decrease) increase in cash and cash equivalents ( 602 ) 2,529 ( 1,541 )

Cash, cash equivalents and restricted cash, beginning 4,818 2,289 3,830

21 unchanged sentences

Depreciation is generally provided over the following estimated useful service lives:

15 - 45 years

Buildings 15 - 45 years

Property and Equipment, Net

(amounts in thousands) 2020 2019

Buildings $ 3,632 $ 3,632

Total depreciable assets 3,632 3,632

1 unchanged sentence

Total property and equipment, net $ 2,947 $ 3,074

Depreciation expense was $ 0.1 million in the years ended December 31, 2019 , $ 0.2 million in the year ended 2018 , and $ 0.1 million in the year ended 2017 .

Depreciation expense was $ 0.1 million in the year ended December 31, 2020, $ 0.1 million in the year ended December 31, 2019, and $ 0.2 million in the year ended December 31, 2018.

Long-Term Debt

2020 Year-end Effective Interest Rate December 31, 2020 December 31, 2019

(amounts in thousands)

2019 Year-end Effective Interest Rate

Installment notes for stock — % $ — $ 205

Current maturities of long-term debt $ — $ ( 205 )

Long-term debt

Maturities by year:

Installment Notes for Stock - We entered into installment notes for stock representing amounts due to former or retired employees for repurchases of our stock that are payable over 10 years depending on the amount with payments through 2020.

As of December 31, 2019 , we had $ 0.2 million outstanding under these notes.

As of December 31, 2020, we had no outstanding notes.

Stock Compensation

5 unchanged sentences

Non-cash Investing Activities:

Notes receivable and accrued interest from employees and directors settled with return of JWH stock

Dividend from subsidiary settled with payable to subsidiary

$ 3,410 $ 22,090 $ 132,295

Non-cash Financing Activities:

Shares surrendered for tax obligations for employee share-based transactions in accrued liabilities

Costs associated with initial public offering formerly capitalized in prepaid expenses

$ — $ 469 $ 7

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures