What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-30 · 171 added, 140 removed, 714 unchanged (30% of the section changed)

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

24 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

14 unchanged sentences

(Amounts in millions, except par values)

September 30,

2021 December 31,

23 unchanged sentences

Stockholders’ equity:

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at June 30, 2021 and December 31, 2020)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 449.9 shares and 448.4 shares issued at June 30, 2021 and December 31, 2020, respectively)

Treasury stock, at cost ( 24.5 shares and 24.0 shares at June 30, 2021 and December 31, 2020, respectively)

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at September 30, 2021 and December 31, 2020)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 449.9 shares and 448.4 shares issued at September 30, 2021 and December 31, 2020, respectively)

Treasury stock, at cost ( 24.5 shares and 24.0 shares at September 30, 2021 and December 31, 2020, respectively)

( 609 ) ( 598 )

11 unchanged sentences

(Amounts in millions)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

14 unchanged sentences

Capital expenditures ( 181 ) ( 158 )

Acquisition of noncontrolling interests ( 4 ) —

Proceeds from sale of divested businesses — 15

Other investing activities, net 1 5

6 unchanged sentences

Cash dividends ( 296 ) ( 294 )

Acquisition of noncontrolling interests ( 26 ) —

Equity compensation activity and other, net ( 25 ) ( 22 )

Net cash provided by (used in) financing activities ( 334 ) 239

Net cash used in financing activities ( 800 ) ( 174 )

Exchange rate effect on cash, cash equivalents and restricted cash ( 14 ) ( 14 )

11 unchanged sentences

Stock Treasury

Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Stockholders' Equity Attributable to Parent Noncontrolling Interests Total Stockholders' Equity

Balance at March 31, 2021 $ 450 $ ( 608 ) $ 7,993 $ ( 3,085 ) $ ( 914 ) $ 3,836 $ 25 $ 3,861

Comprehensive income — — — 197 38 235 3 238

Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Stockholders' Equity Attributable to Parent Noncontrolling Interests Total Stockholders' Equity

Balance at June 30, 2021 $ 450 $ ( 609 ) $ 7,906 $ ( 2,888 ) $ ( 873 ) $ 3,986 $ 25 $ 4,011

Comprehensive income (loss) — — — 190 ( 33 ) 157 ( 1 ) 156

Dividends declared on common stock - $ 0.23 per share

3 unchanged sentences

Other changes attributable to noncontrolling interests — — — — ( 1 ) ( 1 ) 1 —

Balance at June 30, 2021 $ 450 $ ( 609 ) $ 7,906 $ ( 2,888 ) $ ( 873 ) $ 3,986 $ 25 $ 4,011

Balance at September 30, 2021 $ 450 $ ( 609 ) $ 7,819 $ ( 2,698 ) $ ( 907 ) $ 4,055 $ 2 $ 4,057

Balance at December 31, 2020 $ 448 $ ( 598 ) $ 8,078 $ ( 3,174 ) $ ( 880 ) $ 3,874 $ 26 $ 3,900

Comprehensive income — — — 286 6 292 1 293

Comprehensive income (loss) — — — 476 ( 27 ) 449 — 449

Dividends declared on common stock - $ 0.69 per share

3 unchanged sentences

Other changes attributable to noncontrolling interests — — — — — — 2 2

Balance at June 30, 2021 $ 450 $ ( 609 ) $ 7,906 $ ( 2,888 ) $ ( 873 ) $ 3,986 $ 25 $ 4,011

Balance at September 30, 2021 $ 450 $ ( 609 ) $ 7,819 $ ( 2,698 ) $ ( 907 ) $ 4,055 $ 2 $ 4,057

Stock Treasury

Balance at March 31, 2020 $ 448 $ ( 596 ) $ 8,340 $ ( 3,683 ) $ ( 1,055 ) $ 3,454 $ 25 $ 3,479

Balance at June 30, 2020 $ 448 $ ( 597 ) $ 8,252 $ ( 3,605 ) $ ( 1,006 ) $ 3,492 $ 24 $ 3,516

Comprehensive income (loss) — — — 304 19 323 ( 1 ) 322

3 unchanged sentences

Other changes attributable to noncontrolling interests — — — — ( 1 ) ( 1 ) 1 —

Balance at June 30, 2020 $ 448 $ ( 597 ) $ 8,252 $ ( 3,605 ) $ ( 1,006 ) $ 3,492 $ 24 $ 3,516

Balance at September 30, 2020 $ 448 $ ( 597 ) $ 8,164 $ ( 3,301 ) $ ( 988 ) $ 3,726 $ 24 $ 3,750

Balance at December 31, 2019 $ 447 $ ( 590 ) $ 8,430 $ ( 2,404 ) $ ( 920 ) $ 4,963 $ 33 $ 4,996

5 unchanged sentences

Distributions to noncontrolling interests — — — — — — ( 3 ) ( 3 )

Balance at June 30, 2020 $ 448 $ ( 597 ) $ 8,252 $ ( 3,605 ) $ ( 1,006 ) $ 3,492 $ 24 $ 3,516

Balance at September 30, 2020 $ 448 $ ( 597 ) $ 8,164 $ ( 3,301 ) $ ( 988 ) $ 3,726 $ 24 $ 3,750

See Notes to Condensed Consolidated Financial Statements (Unaudited).

27 unchanged sentences

See Footnotes 5 and 6 for further information.

While the negative effects from the COVID-19 pandemic in the first half of 2020 were material to the Company's operating results, the Company experienced sales growth during the second half of 2020 and first half of 2021.

The extent of the impact of the COVID-19 pandemic to the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company cannot accurately predict and which will vary by jurisdiction and market, including the severity and duration of the pandemic, the emergence of new strains and variants of the coronavirus, the likelihood of a resurgence of positive cases, the development and availability of effective treatments and vaccines, especially in areas where conditions have recently worsened and lockdowns or travel bans have been reinstituted, the rate at which vaccines are administered to the general public, the timing and amount of fiscal stimulus and relief programs packages that are available to the general public, and any changes in consumer demand patterns for the Company's products as the impact of the global pandemic lessens.

The extent of the impact of the COVID-19 pandemic to the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company cannot accurately predict and which will vary by jurisdiction and market, including the severity and duration of the pandemic, the emergence of new strains and variants of the coronavirus, the likelihood of a resurgence of positive cases, the development and availability of effective treatments and vaccines, especially in areas where conditions have recently worsened and lockdowns or travel bans have been reinstituted, the rate at which vaccines are administered to the general public, the impact of any vaccine mandates on our global businesses, the timing and amount of fiscal stimulus and relief programs packages that are available to the general public, the availability and prices of supply chain resources, including materials, products and transportation;

and changes in consumer demand patterns for the Company's products as the impact of the global pandemic lessens.

These primary drivers are beyond the Company's knowledge and control, and as a result, at this time it is difficult to predict the cumulative impact, both in terms of severity and duration, COVID-19 will have on its future sales, operating results, cash flows and financial condition.

9 unchanged sentences

In addition, the Company typically tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers.

Accordingly, the Company’s results of operations for the three and six months ended June 30, 2021 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2021.

The Company's sales and operating results were disrupted by the COVID-19 pandemic, negatively impacting the Company's performance during the first half of 2020, partially offset by positive performance during the second half of 2020 and in the first half of 2021.

While the Company believes the seasonality of its businesses will revert back to historical patterns as the impact of the global pandemic lessens, there still remains uncertainty over the volatility of the direction of future consumer demand patterns.

Accordingly, the Company’s results of operations for the three and nine months ended September 30, 2021 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2021.

The Company's sales and operating results were disrupted by the COVID-19 pandemic, negatively impacting the Company's performance during the first half of 2020, with improved performance thereafter.

While the Company believes the seasonality of its businesses will revert back to historical patterns as the impact of the global pandemic lessens, uncertainty still remains over the volatility of the direction of future consumer demand patterns.

Recent Accounting Pronouncements

16 unchanged sentences

Sales of Accounts Receivables

Factored receivables at the end of the second quarter of 2021 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 450 million, an increase of approximately $ 100 million from December 31, 2020.

Factored receivables at September 30, 2021 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 450 million, an increase of approximately $ 100 million from December 31, 2020.

Transactions under this agreement continue to be accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction.

2 unchanged sentences

During the quarter ended June 30, 2021, the Company received a notice from a noncontrolling interest holder exercising its redemption rights in an international subsidiary, requiring the purchase of such interest by the Company.

The transaction is expected to be completed during the second half of 2021 and is not expected to be material to the Company.

In the third quarter, the Company completed the transaction for approximately $ 22 million.

The difference between the consideration paid and the noncontrolling interest was not material to the Company.

On August 31, 2020, the Company divested the foam board product line in its Learning and Development segment.

As a result, during the three and nine months ended September 30, 2020, the Company recorded a pretax loss of $ 8 million, which was included in the other (income) expense, net in the Condensed Consolidated Statement of Operations.

Footnote 2 — Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the six months ended June 30, 2021 (in millions):

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the nine months ended September 30, 2021 (in millions):

Adjustment Pension and

2 unchanged sentences

Balance at December 31, 2020 $ ( 481 ) $ ( 356 ) $ ( 43 ) $ ( 880 )

Other comprehensive loss before reclassifications ( 10 ) — ( 1 ) ( 11 )

Other comprehensive income (loss) before reclassifications ( 65 ) 2 8 ( 55 )

Amounts reclassified to earnings — 13 15 28

Net current period other comprehensive income (loss) ( 65 ) 15 23 ( 27 )

Balance at June 30, 2021 $ ( 491 ) $ ( 347 ) $ ( 35 ) $ ( 873 )

Reclassifications from AOCL to the results of operations for the three and six months ended June 30, 2021 and 2020 were pre-tax expense of (in millions):

Balance at September 30, 2021 $ ( 546 ) $ ( 341 ) $ ( 20 ) $ ( 907 )

Reclassifications from AOCL to the results of operations for the three and nine months ended September 30, 2021 and 2020 were pre-tax (income) expense of (in millions):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Pension and postretirement benefit plans (1)

$ 5 $ 6 $ 16 $ 17

Derivative financial instruments (2)

8 ( 6 ) 19 ( 5 )

(1) Primarily represents the amortization of net actuarial losses and plan settlements recorded in other (income) expense, net in the Consolidated Statements of Operations.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

6 unchanged sentences

$ 6 $ 4 $ 16 $ 14

Accrued restructuring costs activity for the six months ended June 30, 2021 are as follows (in millions):

Accrued restructuring costs activity for the nine months ended September 30, 2021 are as follows (in millions):

Balance at December 31, 2020 Restructuring

Costs, Net Payments Balance at

June 30, 2021

September 30, 2021

Severance and termination costs $ 7 $ 13 $ ( 8 ) $ 12

4 unchanged sentences

The restructuring costs, which impact all segments, include employee-related costs, including severance and other termination benefits.

During the three and six months ended June 30, 2021, the Company recorded restructuring charges of $ 4 million and $ 9 million, respectively, and $ 8 million during the three and six months ended June 30, 2020.

During the nine months ended September 30, 2021, the Company recorded restructuring charges of $ 9 million.

During the three and nine months ended September 30, 2020, the Company recorded $ 4 million and $ 12 million, respectively.

In connection with the program, the Company has incurred cumulative charges of $ 28 million since inception.

The Company currently estimates aggregate restructuring charges of approximately $ 30 million to $ 35 million to be incurred for projects launched in connection with the program.

All cash payments are expected to be paid within one year of charges incurred.

This restructuring program is substantially complete and all cash payments are expected to be paid within one year of charges incurred.

Accelerated Transformation Plan

During the six months ended June 30, 2020 the company recorded restructuring charges of $ 2 million in connection with the Company's completed Accelerated Transformation Plan (“ATP”).

During the nine months ended September 30, 2020 the company recorded restructuring charges of $ 2 million in connection with the Company's completed Accelerated Transformation Plan (“ATP”).

The Company's ATP was designed in part, to divest the Company's non-core consumer businesses and focus on the realignment of the Company's management structure and overall costs structure as a result of the completed divestitures.

Other Restructuring-Related Costs

The Company regularly incurs other restructuring-related costs in connection with various discrete initiatives which are recorded in cost of products sold and SG&A in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.

Other Restructuring and Restructuring-Related Costs

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives.

Restructuring-related costs are recorded in cost of products sold and SG&A in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.

Footnote 4 — Inventories

Inventories are comprised of the following at the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Raw materials and supplies $ 314 $ 252

4 unchanged sentences

Property, plant and equipment, net, is comprised of the following at the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Land $ 83 $ 86

3 unchanged sentences

$ 1,155 $ 1,176

Depreciation expense was $ 51 million and $ 46 million for the three months ended June 30, 2021 and 2020, respectively, and $ 103 million and $ 94 million for the six months ended June 30, 2021 and 2020, respectively.

Depreciation expense was $ 50 million and $ 52 million for the three months ended September 30, 2021 and 2020, respectively, and $ 153 million and $ 146 million for the nine months ended September 30, 2021 and 2020, respectively.

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 pandemic.

Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets (the lowest level for which identifiable cash flows are available) to their respective carrying amount and recorded a non-cash impairment charge of approximately $ 1 million during the six months ended June 30, 2020, in the Home Solutions segment associated with its Yankee Candle retail store business.

Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets (the lowest level for which identifiable cash flows are available) to their respective carrying amount and recorded a non-cash impairment charge of approximately $ 1 million during the nine months ended September 30, 2020, in the Home Solutions segment associated with its Yankee Candle retail store business.

The impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value.

See Footnote 1 for further information.

During the three and six months ended June 30, 2020, the Company also recorded a non-cash impairment charge of $ 5 million and $ 10 million, respectively, to reflect a reduction in the carrying values of operating lease assets, mostly related to its Yankee Candle retail store business.

During the nine months ended September 30, 2020, the Company also recorded a non-cash impairment charge of $ 10 million, to reflect a reduction in the carrying values of operating lease assets, mostly related to its Yankee Candle retail store business.

Footnote 6 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the six months ended June 30, 2021 is as follows (in millions):

Goodwill activity for the nine months ended September 30, 2021 is as follows (in millions):

Segments Net Book Value at December 31, 2020

1 unchanged sentence

Net Book Value at

June 30, 2021

September 30, 2021

Commercial Solutions $ 747 $ — $ 1,241 $ ( 494 ) $ 747

4 unchanged sentences

$ 3,553 $ ( 37 ) $ 8,616 $ ( 5,100 ) $ 3,516

During the third quarter of 2020, the Company divested a product line in its Learning and Development segment and allocated $ 3 million of reporting unit goodwill to the calculation of loss on disposal of business.

See Footnote 1 for further information.

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 global pandemic.

Pursuant to the authoritative literature, the Company performed an impairment test and determined that its goodwill associated with its Home Appliances and Food reporting units were impaired.

During the six months ended June 30, 2020, the Company recorded an aggregate non-cash charge of $ 212 million to reflect the impairments of goodwill as the reporting unit carrying values exceeded their fair values.

During the nine months ended September 30, 2020, the Company recorded an aggregate non-cash charge of $ 212 million to reflect the impairments of goodwill as the reporting unit carrying values exceeded their fair values.

See Footnote 1 for further information.

Other intangible assets, net, are comprised of the following at the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Accumulated Amortization

5 unchanged sentences

$ 4,370 $ ( 909 ) $ 3,461 $ 4,439 $ ( 875 ) $ 3,564

Amortization expense for intangible assets for the three months ended June 30, 2021 and 2020 were $ 29 million and $ 39 million, respectively and $ 63 million and $ 82 million for the six months ended June 30, 2021 and 2020, respectively.

Amortization expense for intangible assets for the three months ended September 30, 2021 and 2020 were $ 28 million and $ 39 million, respectively and $ 91 million and $ 121 million for the nine months ended September 30, 2021 and 2020, respectively.

During the third quarter of 2020, the Company concluded that a triggering event had occurred for an indefinite-lived intangible asset in the Learning and Development segment as a result of a product line divestiture.

Pursuant to the authoritative literature, the Company performed an impairment test and determined that the indefinite-lived asset was impaired, as its carrying value exceeded its fair value.

During the three and nine months ended September 30, 2020, the Company recorded a non-cash charge of $ 2 million to reflect the impairment of this indefinite-lived intangible asset.

See Footnote 1 for further information.

As a result of the impairment testing performed in connection with the COVID-19 pandemic triggering event during the first quarter of 2020, the Company determined that certain of its indefinite-lived intangible assets in all of its operating segments were impaired.

During the six months ended June 30, 2020, the Company recorded impairment charges of $ 1.3 billion to reflect impairment of these indefinite-lived trade names because their carrying values exceeded their fair values.

The impairment charges for the six months ended June 30, 2020 were allocated to the Company’s reporting segments as follows (in millions):

During the nine months ended September 30, 2020, the Company recorded impairment charges of $ 1.3 billion to reflect impairment of these indefinite-lived trade names because their carrying values exceeded their fair values.

The impairment charges for the three and nine months ended September 30, 2020 were allocated to the Company’s reporting segments as follows (in millions):

September 30, 2020 Nine Months

September 30, 2020

Impairment of indefinite-lived intangibles assets:

5 unchanged sentences

The Company believes the circumstances and global disruption caused by COVID-19 will continue to affect its businesses, operating results, cash flows and financial condition and that the scope and duration of the pandemic is highly uncertain.

In addition, some of the other inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates, and labor inflation.

Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy, there can be no assurance that the Company's estimates and assumptions will prove to be accurate predictions of the future.

See Footnote 1 for further information.

Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy as discussed further in Footnote 1 , there can be no assurance that the Company's estimates and assumptions will prove to be accurate predictions of the future.

Footnote 7 — Other Accrued Liabilities

Other accrued liabilities are comprised of the following at the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Customer accruals $ 739 $ 683

Operating lease liabilities 123 129

Accrued self-insurance liabilities, contingencies and warranty 106 108

Accrued income taxes 125 66

Accruals for marketing and freight expenses 67 57

Operating lease liabilities 120 129

Accrued interest expense 118 60

Accrued self-insurance liabilities, contingencies and warranty 116 108

Accrued marketing and freight expenses 68 57

Other 220 290

2 unchanged sentences

Debt is comprised of the following at the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

3.15 % senior notes due 2021

11 unchanged sentences

Long-term debt $ 4,884 $ 5,141

On March 1, 2021 (the “Redemption Date”), the Company redeemed its 3.15 % senior notes that were scheduled to mature in April 2021 (the “April 2021 Notes”) at a redemption price equal to 100 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.

On October 15, 2021 the Company delivered a notice of redemption to the holders of the 4.00 % senior notes due June 2022 (the “June 2022 Notes”) that the Company will redeem the June 2022 Notes on November 22, 2021 for a redemption price equal to the current outstanding aggregate principal amount of the notes, subject to a customary make-whole premium, plus accrued and unpaid interest to the date of redemption.

On September 28, 2021, the Company redeemed its 3.75 % senior notes that were scheduled to mature in October 2021 (the “October 2021 Notes”) at a redemption price equal to 100 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the redemption date.

On March 1, 2021, the Company redeemed its 3.15 % senior notes due April 2021 (the “April 2021 Notes”) at a redemption price equal to 100 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the redemption date.

During the first quarter of 2021, the Company repurchased $ 5 million of the 3.85 % senior notes due 2023 at approximately 5 % above par value.

6 unchanged sentences

The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances.

At June 30, 2021, the Company did no t have any amounts outstanding under the Securitization Facility.

At September 30, 2021, the Company did no t have any amounts outstanding under the Securitization Facility.

Revolving Credit Facility

The Company has a $ 1.25 billion revolving credit facility that matures in December 2023 (the “Credit Revolver”).

At June 30, 2021, the Company did no t have any amounts outstanding under the Credit Revolver.

At September 30, 2021, the Company did no t have any amounts outstanding under the Credit Revolver.

The fair value of the Company’s senior notes are based upon prices of similar instruments in the marketplace and are as follows (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Fair Value Book Value Fair Value Book Value

2 unchanged sentences

Net Investment Hedge

The Company has designated the € 300 million principal balance of the 3.75 % senior notes due October 2021 as a net investment hedge of the foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets.

At June 30, 2021, $ 15 million of deferred losses have been recorded in AOCL.

The Company previously designated the € 300 million principal balance of the 3.75 % senior notes due October 2021 as a net investment hedge of the foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets.

In conjunction with the redemption of the October 2021 Notes, the Company settled this net investment hedge.

At September 30, 2021, $ 11 million of deferred losses have been recorded in AOCL.

See Footnote 9 for disclosures regarding the Company’s derivative financial instruments.

9 unchanged sentences

Fair Value Hedges

At June 30, 2021, the Company had approximately $ 100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread.

At September 30, 2021, the Company had approximately $ 100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread.

These floating rate swaps are designated as fair value hedges against $ 100 million of principal on the 4.00 % senior notes due 2024 for the remaining life of the note.

2 unchanged sentences

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements.

The Company previously entered into two cross-currency swaps with an aggregate notional amount of $ 900 million which were designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets.

With these cross-currency swaps, which mature in January and February 2025, respectively, the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S.

The Company previously entered into two cross-currency swaps, maturing in January and February 2025, respectively, with an aggregate notional amount of $ 900 million.

During the third quarter of 2021, the Company entered into another cross-currency swap with a notional amount of $ 358 million, maturing in September 2027.

Each of these cross-currency swaps were designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S.

dollar interest.

The Company has elected the spot method for assessing the effectiveness of these contracts.

During the three and six months ended June 30, 2021, the Company recognized income of $ 3 million and $ 7 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

During the three and nine months ended September 30, 2021, the Company recognized income of $ 4 million and $ 11 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

During the three and nine months ended September 30, 2020, the Company recognized income of $ 3 million and $ 10 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through June 2022.

The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges.

The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item.

At June 30, 2021, the Company had approximately $ 464 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

At September 30, 2021, the Company had approximately $ 525 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward contracts, to mitigate the exposure of foreign currency transactions.

At June 30, 2021, the Company had approximately $ 988 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through May 2022.

At September 30, 2021, the Company had approximately $ 1.0 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through September 2022.

Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net.

2 unchanged sentences

Assets (Liabilities)

Balance Sheet Location June 30, 2021 December 31, 2020

Balance Sheet Location September 30, 2021 December 31, 2020

Derivatives designated as effective hedges:

12 unchanged sentences

The following table presents gain and (loss) activity (on a pre-tax basis) related to derivative financial instruments designated or previously designated, as effective hedges (in millions):

June 30, 2021 Three Months

June 30, 2020

September 30, 2021 Three Months

September 30, 2020

Gain/(Loss) Gain/(Loss)

6 unchanged sentences

Total $ 36 $ ( 8 ) $ ( 50 ) $ 6

June 30, 2021 Six Months

June 30, 2020

September 30, 2021 Nine Months

September 30, 2020

Gain/(Loss) Gain/(Loss)

9 unchanged sentences

Total $ 64 $ ( 19 ) $ ( 16 ) $ 5

At June 30, 2021, net deferred losses of approximately $ 12 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three and six months ended June 30, 2021, the Company recognized expense of $ 3 million and income of $ 4 million, respectively, in other (income) expense, net, related to derivatives that are not designated as hedging instruments.

During the three and six months ended June 30, 2020, the Company recognized expense of $ 3 million and income of $ 9 million, respectively, in other (income) expense, net, related to derivatives that are not designated as hedging instruments.

At September 30, 2021, net deferred gains of approximately $ 4 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three and nine months ended September 30, 2021, the Company recognized income of $ 7 million and $ 11 million, respectively, in other (income) expense, net, related to derivatives that are not designated as hedging instruments.

During the three and nine months ended September 30, 2020, the Company recognized expense of $ 3 million and income of $ 6 million, respectively, in other (income) expense, net, related to derivatives that are not designated as hedging instruments.

Gains and losses on these derivatives are mostly offset by foreign currency movement in the underlying exposure.

2 unchanged sentences

Pension Benefits

Three Months Ended June 30,

International

2021 2020 2021 2020

Service cost $ — $ — $ 1 $ 1

Interest cost 5 9 1 3

Expected return on plan assets ( 13 ) ( 15 ) ( 1 ) ( 1 )

Amortization 6 6 1 —

Total (income) expense $ ( 2 ) $ — $ 2 $ 3

Pension Benefits

Six Months Ended June 30,

International U.S.

International

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020 2021 2020 2021 2020

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Footnote 11 — Income Taxes

The Company’s effective income tax rate for the three months ended June 30, 2021 and 2020 was 18.9 % and 16.1 %, respectively and 22.5 % and 13.6 % for the six months ended June 30, 2021 and 2020, respectively.

The Company’s effective income tax rate for the three months ended September 30, 2021 and 2020 were 11.6 % and ( 7.4 )%, respectively and 18.5 % and 19.0 % for the nine months ended September 30, 2021 and 2020, respectively.

The Company’s effective income tax rate fluctuates based on, among other factors, the geographic mix of income.

The difference between the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three and six months ended June 30, 2021 and 2020 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned as well as certain taxable income inclusion items in the U.S.

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three and nine months ended September 30, 2021 and 2020 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned as well as certain taxable income inclusion items in the U.S.

based on foreign earnings.

The three and six months ended June 30, 2021 were also impacted by certain discrete items.

Income tax expense for the three and six months ended June 30, 2021 included a discrete benefit of $ 13 million associated with a reduction in valuation allowance related to the integration of certain U.K.

The three and nine months ended September 30, 2021 were also impacted by certain discrete items.

Income tax expense for the three months ended September 30, 2021 included a discrete benefit of $ 37 million associated with a reduction in valuation allowance related to the integration of certain Luxembourg operations.

Income tax expense for the nine months ended September 30, 2021 also included discrete benefits of $ 13 million associated with a reduction in valuation allowance related to the integration of certain U.K.

operations and $ 9 million related to statute of limitation expiration in France.

The three and six months ended June 30, 2020 were also impacted by certain discrete tax items.

Income tax expense for the three months ended June 30, 2020 included a discrete tax benefit of $ 23 million associated with the execution of certain tax planning strategies, partially offset by $ 4 million of additional interest related to uncertain tax positions.

Income tax expense for the six months ended June 30, 2020 also included a discrete tax benefit of $ 15 million related to statute of limitations expirations and $ 8 million of prior period adjustments identified during the first quarter of 2020 offset by tax expense of $ 27 million related to a

change in the tax status of certain entities upon Internal Revenue Service approval during the first quarter, $ 8 million of excess book deductions related to equity-based compensation, $ 4 million for additional interest related to uncertain tax positions, and $ 5 million for effects of adopting the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

The three and nine months ended September 30, 2020 were also impacted by certain discrete tax items.

Income tax expense for three months ended September 30, 2020 included a discrete tax benefit of $ 87 million associated with the execution of certain tax planning strategies and $ 53 million for a reduction in valuation allowance related to the integration of certain U.S.

operations, partially offset by $ 47 million of deferred tax effects associated with certain outside basis differences.

Income tax expense for the nine months ended September 30, 2020 also included discrete tax benefits of $ 15 million related to statute of limitations expirations, $ 8 million of prior period adjustments identified during the first quarter of 2020 and $ 23 million associated with the execution of certain tax planning strategies, offset by tax expense of $ 27 million related to a change in the tax status of certain entities upon Internal Revenue Service approval during the first quarter, $ 8 million of excess book deductions related to equity-based compensation, $ 8 million for additional interest related to uncertain tax positions, and $ 5 million for effects of adopting the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

The Company concluded the effects of such prior period adjustments were not material to the current period or previously issued financial statements.

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The Company analyzed the Regulations and concluded the relevant Regulations were not validly issued.

Therefore, the Company has not accounted for the effects of the Regulations in its Condensed Consolidated Financial Statements for the period ending June 30, 2021.

Therefore, the Company has not accounted for the effects of the Regulations in its Condensed Consolidated Financial Statements for the period ending September 30, 2021.

The Company believes it has strong arguments in favor of its position and believes it has met the more likely than not recognition threshold that its position will be sustained.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Diluted weighted average shares outstanding 428.5 425.4 427.9 424.1

(1) The six months ended June 30, 2020 excludes 0.8 million of potentially dilutive share-based awards as their effect would be anti-dilutive.

At June 30, 2021 there were no potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

At June 30, 2020, there were 0.7 million potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

(1) The nine months ended September 30, 2020 excludes 0.9 million of potentially dilutive share-based awards as their effect would be anti-dilutive.

At September 30, 2021 and 2020 potentially dilutive restricted stock awards with performance-based vesting targets that have been met are included in the computation of diluted earnings per share.

Footnote 13 — Share-Based Compensation

During the six months ended June 30, 2021, the Company awarded 1.1 million performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of $ 28 million and entitle the recipients to shares of the Company’s common stock primarily at the end of a three-year vesting period.

During the nine months ended September 30, 2021, the Company awarded 1.1 million performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of $ 29 million and entitle the recipients to shares of the Company’s common stock primarily at the end of a three-year vesting period.

The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions.

During the six months ended June 30, 2021, the Company also awarded 0.7 million time-based RSUs with an aggregate grant date fair value of $ 17 million.

During the nine months ended September 30, 2021, the Company also awarded 0.7 million time-based RSUs with an aggregate grant date fair value of $ 18 million.

These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest either at the end of a three-year period or in equal installments over a three-year period.

During the six months ended June 30, 2021, the Company also awarded 2.4 million time-based stock options with an aggregate grant date fair value of $ 14 million.

During the nine months ended September 30, 2021, the Company also awarded 2.4 million time-based stock options with an aggregate grant date fair value of $ 14 million.

These stock options entitle recipients to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of the underlying shares as of the grant date and primarily vest in equal installments over a three-year period.

The weighted average assumptions used to determine the fair value of stock options granted for the six months ended June 30, 2021, is as follows:

The weighted average assumptions used to determine the fair value of stock options granted for the nine months ended September 30, 2021, is as follows:

Risk-free interest rates 0.8 %

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The following table presents the Company’s non-pension financial assets and liabilities, which are measured at fair value on a recurring basis (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Fair value Asset (Liability) Fair value Asset (Liability)

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The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate.

As a result of the aforementioned changes, net sales, operating income (loss) and impairment of goodwill and indefinite-lived intangible assets for the three and six months ended June 30, 2020 and segment assets as of December 31, 2020 have been recast.

As a result of the aforementioned changes, net sales, operating income (loss) and impairment of goodwill and indefinite-lived intangible assets for the three and nine months ended September 30, 2020 and segment assets as of December 31, 2020 have been recast.

Selected information by segment is presented in the following tables (in millions):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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$ 281 $ 363 $ 778 $ ( 882 )

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Segment assets

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$ 14,520 $ 14,700

June 30, 2020

September 30, 2020 Nine Months

September 30, 2020

Impairment of goodwill and indefinite-lived intangibles assets (3)

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Corporate depreciation and amortization is allocated to the segments on a percentage of net sales basis, and included in segment operating income.

(3) The Company did no t record any impairment charges during the six months ended June 30, 2021.

During the six months ended June 30, 2020 , the Company recorded impairment charges to reflect impairment of intangible assets related to certain of the Company’s indefinite-lived trade names and goodwill.

(3) The Company did no t record any impairment charges during the nine months ended September 30, 2021.

During the three months ended September 30, 2020, the Company concluded that a triggering event had occurred for an indefinite-lived intangible asset in the Learning and Development segment as a result of a product line divestiture.

During the three and nine months ended September 30, 2020, the Company recorded a non-cash charge of $ 2 million to reflect the impairment of this indefinite-lived intangible asset.

During the nine months ended September 30, 2020 , the Company recorded impairment charges to reflect impairment of intangible assets related to certain of the Company’s indefinite-lived trade names and goodwill.

See Footnote 6 for further information.

The following tables disaggregates revenue by major product grouping source and geography for the periods indicated (in millions):

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Commercial Solutions Home

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Total $ 486 $ 443 $ 598 $ 869 $ 391 $ 2,787

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Commercial Solutions Home

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Total $ 535 $ 430 $ 623 $ 728 $ 383 $ 2,699

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Commercial Solutions Home

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Total $ 1,450 $ 1,197 $ 1,627 $ 2,330 $ 1,180 $ 7,784

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Commercial Solutions Home

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That matter was dismissed by the District Court on January 10, 2020, and the dismissal was affirmed by the United States District Court of Appeals for the Third Circuit on December 1, 2020.

The complaints seek unspecified damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.

The complaints seek damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.

The Streicher Derivative Action and the Martindale Derivative Action have been consolidated and the case is now known as In re Newell Brands Inc.

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The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions in the Registration Statement regarding the Company’s financial results, trends, and metrics.

The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief, but has not specified the amount of damages being sought.

The Company intends to defend the litigation vigorously.

The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief.

The Company is currently unable to predict the ultimate timing or outcome of this litigation or reasonably estimate the range of possible losses.

The Company maintains insurance intended to cover losses arising out of this litigation up to specified limits (subject to deductibles, coverage limits and other terms and conditions), but any losses may exceed our current coverage levels, which could have an adverse impact on our financial results.

Environmental Matters

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and the extent to which the Company’s, and other parties’, status as PRPs is disputed.

The Company’s estimate of environmental remediation costs associated with these matters at June 30, 2021 was $ 40 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Company’s estimate of environmental remediation costs associated with these matters at September 30, 2021 was $ 38 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters.

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EPA has issued General Notice Letters (“GNLs”) to over 100 entities, including the Company and Berol Corporation, a subsidiary of the Company (“Berol”), alleging that they are PRPs at the Diamond Alkali Superfund Site, which includes a 17 -mile stretch of the Lower Passaic River and its tributaries.

The site is also subject to a Natural Resource Damage Assessment.

Seventy-two of the GNL recipients, including the Company on behalf of itself and Berol (the “Company Parties”), have taken over the performance of the remedial investigation (“RI”) and feasibility study (“FS”) for the Lower Passaic River.

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EPA sent a letter offering a cash settlement in the amount of $ 0.3 million to 20 PRPs, not including the Company Parties, for CERCLA Liability (with reservations, such as for Natural Resource Damages) in the lower 8.3 miles of the Lower Passaic River.

EPA further indicated in related correspondence that a cash-out settlement might be appropriate for additional parties that are “not associated with the release of dioxins, furans, or PCBs to the Lower Passaic River.” Then, by letter dated September 18, 2017, U.S.

EPA announced an allocation process involving all GNL recipients except those participating in the first-round cash-out settlement, and five public entities.

The letter affirms that U.S.

EPA anticipates eventually offering cash-out settlements to a number of parties, and that it expects “that the private PRPs responsible for release of dioxin, furans, and/or

PCBs will perform the OU2 lower 8.3 mile remedial action.” At this time, it is unclear how the cost of any cleanup would be allocated among any of the parties, including the Company Parties or any other entities.

The site is also subject to a Natural Resource Damage Assessment.

EPA further indicated in related correspondence that a cash-out settlement might be appropriate for additional parties that are not associated with the release of dioxins, furans, or PCBs to the Lower Passaic River.

In September 2017, U.S.

EPA announced an allocation process involving all GNL recipients except those participating in the first-round cash-out settlement, and five public entities, with the intent of eventually offering cash-out settlements to a number of

parties, and the expectation that the private PRPs responsible for release of dioxin, furans, and/or PCBs will perform the lower 8.3 mile remedial action.

The allocation process has concluded.

EPA and certain parties to the allocation process, including the Company (for itself and Berol), are presently engaged in settlement discussions, the outcome of which remains uncertain.

Following discussion with U.S.

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EPA’s issuance of the 2016 ROD, the participating parties refocused the FS on the upper 9 miles of the Lower Passaic River.

The parties submitted most portions of a final Interim Remedy FS (the “Draft IR FS”) on August 7, 2020, setting forth remedial alternatives ranging from “no further action” to targeted dredging and capping with different targets for post-remedy surface weighted average concentration of contamination.

The cost estimates for these active alternatives range from approximately $ 321 million to $ 468 million.

EPA has indicated it aims to have the IR FS finalized and to issue a Record of Decision for the upper nine miles in 2021.

The parties submitted most portions of a final Interim Remedy FS (the “IR FS”) on August 7, 2020, setting forth remedial alternatives ranging from no further action to targeted dredging and capping with different targets for post-remedy surface weighted average concentration of contamination.

The parties subsequently completed their submittal of the IR FS, and on September 7, 2021, U.S.

EPA approved the IR FS.

On October 4, 2021, U.S.

EPA issued an interim ROD selecting a combination of dredging and capping as the remedial alternative to this portion of the river, at a total cost of $ 441 million.

The amount of this total cost allocable to the Company is not yet known.

OCC has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) for its liability in connection with the Diamond Alkali Superfund Site.

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The complaint notes, however, that OCC may broaden its claims in the future if and when EPA selects remedial actions for other portions of the Site or completes a Natural Resource Damage Assessment.

Given the uncertainties pertaining to this matter, including that U.S.

Given the uncertainties pertaining to this matter, including that the U.S.

EPA is still reviewing the FS, that no framework for or agreement on allocation for the investigation and ultimate remediation has been established, and that there exists the potential for further litigation regarding costs and cost sharing, the extent to which the Company Parties may be held liable or responsible is not yet known.

OCC stated in a subsequent filing that it “anticipates” asserting additional claims against the defendants “regarding Newark Bay,” which is also part of the Diamond Alkali Superfund Site, after U.S.

OCC stated in a subsequent filing that it anticipates asserting additional claims against the defendants regarding Newark Bay, which is also part of the Diamond Alkali Superfund Site, after the U.S.

EPA has decided the Newark Bay remedy.

Based on currently known facts and circumstances, the Company does not believe that this matter is reasonably likely to have a material impact on the Company’s results of operations, including, among other factors, because there are numerous other parties who will likely share in any costs of remediation and/or damages.

However, in the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

The Company is currently unable to reasonably estimate the range of possible losses for this matter.

Based on currently known facts and circumstances, however, the Company does not believe that this matter is reasonably likely to have a material impact on the Company’s results of operations, including, among other factors, because there are numerous other parties who will likely share in any costs of remediation and/or damages.

In the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

Other Matters

Although management of the Company cannot predict the ultimate outcome of these proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Consolidated Financial Statements, except as otherwise described above.

In the normal course of business and as part of its acquisition and divestiture strategy, the Company may provide certain representations and indemnifications related to legal, environmental, product liability, tax or other types of issues.

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(the “Buyer”) filed suit against the Company in October 2019 in the Superior Court of Delaware.

Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group.

The Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group.

The Company intends to defend the litigation vigorously.

Further, in connection with the Company’s sale of The United States Playing Card Company (“USPC”), Cartamundi, Inc.

Further, in connection with the Company’s sale of The United States Playing

Card Company (“USPC”), Cartamundi, Inc.

and Cartamundi España, S.L., (the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was recently filed against USPC.

At June 30, 2021, the Company had approximately $ 52 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

Although management of the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 16 .

At September 30, 2021, the Company had approximately $ 48 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

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-Q

Item 1. Financial Statements