What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-14 compared with 2021-02-19 · 334 added, 398 removed, 401 unchanged (65% of the section changed)

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This section should be read along with the relevant portions of this 2021 Annual Report for a complete discussion of the events and items summarized below.

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid®, Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr.

Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Contigo®, First Alert®, Mapa®, Spontex® and Yankee Candle®.

Newell Brands is committed to enhancing the lives of consumers around the world with planet-friendly, innovative and attractive products that create moments of joy and provide peace of mind.

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Rubbermaid Commercial Products, First Alert, Spontex, Coleman, Campingaz, Oster, Sunbeam and Mr.

Newell Brands' beloved brands enhance and brighten consumers lives at home and outside by creating moments of joy, building confidence and providing peace of mind.

The Company sells its products in nearly 200 countries around the world and has operations on the ground in over 40 of these countries, excluding third-party distributors.

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The Company is continuing to execute on its turnaround strategy of building a global, next generation consumer products company that can unleash the full potential of its brands in a fast-moving omni-channel environment.

The strategy, developed in 2019, is designed to drive sustainable top line growth, improve operating margins, accelerate cash conversion cycle and strengthen the portfolio, organizational capabilities and employee engagement, while addressing key challenges facing the Company.

These challenges include:

shifting consumer preferences and behaviors;

The strategy, developed in 2019, is designed to:

• Drive sustainable top line growth by focusing on innovation, sharpening brand positioning, strengthening the international businesses, enhancing digital marketing and omni-channel capabilities, and building customer relationships;

• Improve operating margins by driving productivity and overhead savings, while reinvesting in the business;

• Accelerate cash conversion cycle by focusing on cash efficiency and improving key working capital metrics;

• Strengthen the portfolio by investing in attractive categories that are aligned with its capabilities and strategy and optimizing product mix;

• Strengthen organizational capabilities and employee engagement by building a winning team and focusing the best people on the right things.

The Company is implementing this strategy while addressing key challenges such as shifting consumer preferences and behaviors;

a highly competitive operating environment;

a rapidly changing retail landscape, including the growth in e-commerce;

a rapidly changing retail landscape;

continued macroeconomic and political volatility;

and an evolving regulatory landscape.

The coronavirus (COVID-19) pandemic and its impact to the Company’s business resulted in the acceleration of these initiatives in many respects.

The Company has made significant progress on the following imperatives it previously identified as part of its turnaround strategy:

• Strengthening the portfolio by investing in attractive categories aligned with its capabilities and strategy;

• Driving sustainable profitable growth by focusing on innovation, as well as growth in digital marketing, e-commerce and its international businesses;

• Improving margins by driving productivity and overhead savings, while reinvesting into the business;

• Enhancing cash efficiency by improving key working capital metrics, resulting in a lower cash conversion cycle;

• Building a winning team through engagement and focusing the best people on the right things.

Continued execution of these strategic imperatives will better position the Company for long-term sustainable growth.

significant inflationary and supply chain pressures, and an evolving regulatory landscape.

The coronavirus (COVID-19) pandemic and its impact to the Company’s business resulted in the acceleration of the turnaround initiatives in many respects.

Continued execution of these strategic imperatives, in combination with new initiatives aimed to build operational excellence, will better position the Company for long-term sustainable growth.

One such initiative that was announced in the third quarter of 2021 is Project Ovid, a multi-year, customer centric supply chain initiative to transform the Company's go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies.

This initiative is expected to leverage technology to further simplify the organization by harmonizing and automating processes.

Project Ovid is designed to optimize the Company’s distribution network by creating a single integrated supply chain from 23 business-unit-centric supply chains.

The initiative is intended to reduce administrative complexity, improve inventory and invoicing workflow for our customers and enhance product availability for consumers through omni-channel enablement.

This new operating model is also expected to drive efficiencies by better utilizing the Company's transportation and distribution network.

Organizational Structure

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Segment Key Brands Description of Primary Products

Appliances and Cookware Calphalon®, Crock-Pot®, Mr.

Coffee®, Oster® and Sunbeam® Household products, including kitchen appliances, gourmet cookware, bakeware and cutlery

Commercial Solutions BRK, First Alert, Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, and Spontex Commercial cleaning and maintenance solutions;

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connected home and security and smoke and carbon monoxide alarms

Home Solutions Ball® (1), Chesapeake Bay Candle®, FoodSaver®, Rubbermaid®, Sistema®, WoodWick® and Yankee Candle® Food and home storage products;

fresh preserving products, vacuum sealing products and home fragrance products

Home Appliances Calphalon, Crockpot, Mr.

Coffee, Oster and Sunbeam Household products, including kitchen appliances

Home Solutions Ball (1) , Calphalon, Chesapeake Bay Candle, FoodSaver, Rubbermaid, Sistema, WoodWick and Yankee Candle

Food and home storage products;

fresh preserving products;

vacuum sealing products;

gourmet cookware, bakeware and cutlery and home fragrance products

Learning and Development Aprica, Baby Jogger, Dymo, Elmer’s, EXPO, Graco, Mr.

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activity-based adhesive and cutting products and labeling solutions

Outdoor and Recreation Coleman®, Contigo®, ExOfficio®, Marmot® Products for outdoor and outdoor-related activities

(1) and Ball®, TMs Ball Corporation, used under license.

Outdoor and Recreation Campingaz, Coleman, Contigo, ExOfficio, and Marmot Products for outdoor and outdoor-related activities

(1) and Ball®, TM of Ball Corporation, used under license.

This structure reflects the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of resources.

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

See Footnote 17 of the Notes to the Consolidated Financial Statements for further information.

See Footnotes 1 and 17 of the Notes to the Consolidated Financial Statements for further information.

Recent Developments

Sale of Connected Home & Security Business

On February 6, 2022, the Company signed a definitive agreement to sell its Connected Home & Security (“CH&S”) business unit to Resideo Technologies, Inc., for a purchase price of $593 million, subject to customary working capital and transaction adjustments.

The transaction is expected to be completed by the end of the first quarter of 2022, subject to customary closing conditions, including regulatory approval.

See Liquidity and Capital Resources in Item 7, Management’s Discussion and Analysis of Financial Condition and Footnotes 1 and 17 of the Notes to Consolidated Financial Statements for further information.

Coronavirus (COVID-19)

Beginning late in the fourth quarter of 2019 through 2020 and into 2021, COVID-19 emerged and subsequently spread globally, ultimately being declared a pandemic by the World Health Organization.

The pandemic resulted in various federal, state and local governments, as well as private entities, mandating restrictions on travel and public gatherings, closure of non-essential commerce, stay at home orders and quarantining of people to limit exposure to the virus.

The Company's global operations, similar to those of many large, multi-national corporations, experienced significant COVID-19 related disruption to its business in three primary areas:

The COVID-19 pandemic, which began in late 2019, has continued to disrupt the Company’s global operations, similar to those

of many large, multi-national corporations in three primary areas:

Supply chain.

While the majority of the Company’s factories are considered essential in their applicable jurisdictions and have remained operational, the Company experienced disruption at certain of its facilities.

Of its 135 manufacturing and distribution facilities, approximately 20 were temporarily closed at the end of the first quarter of 2020, the most significant of which were its South Deerfield, MA, Home Fragrance plant, its Mexicali, Mexico and India Writing facilities and its Juarez, Mexico Connected Home and Security facility, all of which were closed in accordance with state government guidelines.

By the end of the third quarter of 2020, substantially all of the Company's manufacturing and distribution facilities reopened and were operating at or near capacity.

Since then, the Company's facilities have replenished most of the inventory levels that were depleted by lost production during the temporary closure period.

The Company does, however,

continue to face intermittent supply and labor shortages, capacity constraints, and transportation and logistical challenges and expects this to persist until the current economic and public health conditions improve globally.

Of its 135 manufacturing and distribution facilities, approximately 20 were temporarily closed at the end of the first quarter of 2020, the most significant of which were its South Deerfield, Massachusetts, Home Fragrance plant, its Mexicali, Mexico and India Writing facilities, and its Juarez, Mexico Connected Home and Security facility, all of which were closed in accordance with applicable government guidelines.

The majority of the Company’s manufacturing and distribution facilities reopened during the second and third quarter of 2020 and have since been operating at or near capacity with inventory levels replenished.

The Company does, however, continue to face significant product, supply and labor shortages, capacity constraints and logistical challenges across its businesses, including port congestion, constrained shipping container availability and delays in carrier pickup, which have negatively impacted the Company's ability to satisfy demand for its products, creating order backlog in a number of categories.

The Company also continues to face significantly higher than expected inflation for commodities, primarily resin, sourced finished goods, transportation and labor, which had a negative high-single-digit-percentage impact to costs of products sold for 2021.

These various disruptions are expected to persist, at least in the near-term.

To help mitigate the negative impact of inflation to the operating performance of its businesses, the Company has secured selective pricing increases, accelerated productivity initiatives and deployed overhead cost containment efforts.

While the Company’s largest retail customers experienced a surge in sales as their stores remained open, a number of secondary customers, primarily in the specialty and department store channels, temporarily closed their brick and mortar doors in March 2020, and began to reopen in certain regions where conditions improved towards the end of the second quarter of 2020.

These dynamics, in combination with some retailers’ prioritization of essential items, have had a meaningful impact on the Company's traditional order patterns.

In addition, the Company temporarily closed its Yankee Candle retail stores in North America as of mid-March.

All of these stores reopened by the end of the third quarter and have remained open since.

In addition, the Company temporarily closed its Yankee Candle retail stores in North America as of mid-March of 2020 due to COVID-19.

These stores reopened by the end of the third quarter of 2020 and have remained open since.

Consumer demand patterns.

During the quarantine phase of the pandemic, consumer purchasing behavior strongly shifted to certain focused categories.

While certain of the Company’s product categories in the Food, Commercial and Appliances and Cookware business benefited from this shift, others, particularly the Writing business, experienced significant slowing.

Changes in consumer purchasing patterns, temporary office closures, as well as the shift to remote learning for schools and other higher education programs in the Fall semester of 2020 adversely impacted the performance of the Writing business during 2020.

In response to the COVID-19 pandemic, the Company focused on protecting the health and well-being of its employees;

maintaining financial viability and business continuity;

and keeping manufacturing facilities and distribution centers operating, where permitted and deemed prudent, to provide products to our consumers.

The Company put in place internal protocols including the establishment of a COVID-19 task force to monitor the situation, as well as communications and guidance issued by foreign, federal, state and local governments.

The Company instituted mandatory work-from-home policies for employees able to work from home in various locations around the world and implemented a number of precautionary measures at its manufacturing plants, warehouses, distribution centers and R&D centers to reduce person-to-person contact and improve the personal safety for our front-line employees.

Furthermore, the Company temporarily closed all of the world-wide Yankee Candle retail stores.

By the end of the third quarter of 2020, all of the Company’s temporarily closed manufacturing and distribution sites reopened and were operating at or near capacity.

In addition, most of the Company's office locations have reopened on a limited basis.

The Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level to evaluate possible cessation or extensions to all or part of such COVID-19 precautionary initiatives.

As part of the Company's efforts to contain costs and maintain financial liquidity and flexibility, it instituted a hiring freeze for non-essential roles, furloughed all field-based and most corporate retail employees in North America, from April 1, 2020 through the third quarter of 2020, tightened discretionary spending, reduced non-essential travel and optimized advertising and promotional expenses.

In addition, the Company announced a restructuring program during the second quarter of 2020 to reduce overhead costs, streamline certain underperforming operations and improve future profitability.

While the negative effects from the COVID-19 global pandemic in the first half of 2020 were material to the Company's operating results, the Company saw positive momentum, which included sales growth during the second half of the year and strong liquidity with over $1.4 billion in operating cash flow for the year ended December 31, 2020.

The Company believes, however, the extent of the impact of the COVID-19 pandemic to its businesses, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the pandemic, the impact of new strains and variants of the coronavirus, the pandemic’s impact on the U.S.

and global economies and the timing, scope and effectiveness of federal, state and local governmental plans to administer vaccines to the general public, especially in areas where conditions have recently worsened and lockdowns or travel bans have been reinstituted.

Those 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.

Furthermore, the impact to the Company's businesses, operating results, cash flows, liquidity and financial condition may be further adversely impacted if the COVID-19 global pandemic continues to exist or worsens for a prolonged period of time or if plans to administer vaccines are delayed.

See Results of Operations, Critical Accounting Estimates and Footnotes 1 and 7 of the Notes to Consolidated Financial Statements for further information.

During the quarantine phase of the pandemic in 2020, consumer purchasing behavior strongly shifted to certain focused categories.

Certain of the Company’s product categories benefited from this shift, primarily in Food, Commercial and Home Appliances.

Some of the Company’s other businesses were negatively impacted but have seen positive momentum with an increase in demand post lockdowns, in particular Writing, Baby and Home Fragrance.

While the seasonality of its businesses reverted to historical trends in 2021, uncertainty still remains over the volatility and direction of future consumer demand patterns.

The Company believes the extent of the impact of the COVID-19 pandemic on 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 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 work restrictions, operational 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 may become available to the general public in the future, and any changes in consumer demand patterns for the Company's products as the impact of the global pandemic lessens.

With the spread of new strains and variants of the coronavirus, the Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level on whether to reinstate and/or extend certain initiatives previously implemented to help contain the spread of COVID-19 and currently plans to mandate vaccinations for its U.S.

See Results of Operations, Critical Accounting Estimates and Footnote 1 of the Notes to Consolidated Financial Statements for further information.

Goodwill and Other Indefinite-Lived Intangible Asset Impairments

In conjunction with the Company's annual impairment testing of goodwill and indefinite-lived intangible assets during the fourth quarter (on December 1), the Company recorded a non-cash impairment charge of $20 million associated with a tradename in the Learning and Development segment, as its carrying value exceeded its fair value.

The impairment reflected a downward revision of forecasted results due to the impact of the delayed and limited re-opening of schools and offices as a result of the COVID-19 global pandemic, as well as the continued deterioration in sales for slime-related adhesive products.

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.

Pursuant to the authoritative literature the Company performed an impairment test and determined that an indefinite-lived intangible asset was impaired.

During the three months ended September 30, 2020, the Company recorded a non-cash charge of $2 million to reflect impairment of this indefinite-lived tradename as its carrying value exceeded its fair value.

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 certain of its indefinite-lived intangible assets in the Appliances and Cookware, Home and Outdoor Living and Learning and Development segments were impaired.

During the three months ended March 31, 2020, the Company recorded an aggregate non-cash charge of $1.3 billion to reflect impairment of these indefinite-lived tradenames as their carrying values exceeded their fair values.

In addition, the Company determined that its goodwill associated with its Appliances and Cookware segment was fully impaired.

During, the three months ended March 31, 2020, the Company recorded a non-cash charge of $212 million to reflect the impairment of its goodwill as its carrying value exceeded its fair value.

See Results of Operations, Critical Accounting Estimates and Footnotes 1 and 7 of the Notes to Consolidated Financial Statements for further information.

Impacts of Tariffs

The United States Trade Representative (“USTR”) imposed increased tariffs on some Chinese goods imported into the United States, resulting in increased costs for the Company.

In 2020, the Company was successful at securing from the USTR exemptions and exclusions for some of its products, with the most notable exemptions being for certain of its baby gear products, which represents a substantial portion of the Company’s tariff exposure.

The Company has largely mitigated its tariff exposure, in part through pricing, productivity and, in some cases, relocation.

The Phase 1 agreement signed on January 15, 2020 with China reduced tariffs under List 4a from 15% to 7.5%, effective February 14, 2020, and suspended 301 tariffs under List 4b, which went into effect on December 15, 2019.

The terms of the agreement significantly reduced the estimated impact on tariffs for 2020.

In spite of the agreement, a full year of previously implemented tariffs had a material impact on the Company's operating results and cash flows, with gross impact of approximately $91 million in 2020, primarily relating to its Appliances and Cookware, Commercial Solutions, and Outdoor and Recreation businesses.

The Company will continue to monitor the impact, if any, of new trade policy under the new U.S.

Presidential administration and deploy mitigation efforts to offset the gross exposure.

However, there can be no assurance that the Company will be successful in its mitigation efforts.

Treasury Regulations

On June 18, 2019, the U.S.

Treasury and the Internal Revenue Service (“IRS”) released temporary regulations under IRC Section 245A (“Section 245A”) as enacted by the 2017 U.S.

Tax Reform Legislation (“2017 Tax Reform”) and IRC Section 954(c)(6) (the “Temporary Regulations”) to apply retroactively to the date the 2017 Tax Reform was enacted.

On August 21, 2020, the U.S.

Treasury and IRS released finalized versions of the Temporary Regulations (collectively with the Temporary Regulations, the “Regulations”).

The Regulations seek to limit the 100% dividends received deduction permitted by Section 245A for certain dividends received from controlled foreign corporations and to limit the applicability of the look-through exception to foreign personal holding company income for certain dividends received from controlled foreign corporations.

Before the retroactive application of the Regulations, the Company benefited in 2018 from both the 100% dividends received deduction and the look-through exception to foreign personal holding company income.

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 Consolidated Financial Statements for the period ending December 31, 2020.

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.

However, due to the inherent uncertainty involved in challenging the validity of regulations as well as a potential litigation process, there can be no assurances that the relevant Regulations will be invalidated or that a court of law will rule in favor of the Company.

If the Company’s position on the Regulations is not sustained, the Company would be required to recognize an income tax expense of approximately $180 million to $220 million related to an income tax benefit from fiscal year 2018 that was recorded based on regulations in existence at the time.

In addition, the Company may be required to pay any applicable interest and penalties.

The Company intends to vigorously defend its position.

Debt Redemption

In November 2020, the Company repurchased $300 million of the 3.85% Senior Notes due 2023 with available cash on hand.

The total consideration, excluding accrued interest, was approximately $318 million.

The Company recorded a loss on extinguishment of

debt of $20 million as a result of the partial debt repayment.

See Footnote 9 in Notes to Consolidated Financial Statements for further information.

On November 22, 2021, the Company redeemed its 4.00% senior notes due June 2022 at a redemption price equal to 102% of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the date of the redemption.

The total consideration was approximately $259 million, and the Company recorded a debt extinguishment loss of $5 million.

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

2022 Share Repurchase Program

On February 6, 2022, the Company's Board of Directors authorized a $375 million Share Repurchase Program, effective immediately through the end of 2022.

The Company’s common shares may be purchased by the Company in the open market, in negotiated transactions or in other manners as permitted by federal securities laws and other legal requirements.

Results of Operations

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Gross margin 31.1 % 32.8 %

Operating loss (634) (482) (152) (31.5)%

Operating income (loss) 946 (634) 1,580 NM

Operating margin 8.9 % (6.8) %

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Loss on extinguishment of debt 5 20 (15) (75.0)%

Other expense, net 78 39 39 100.0%

Loss before income taxes (1,006) (852) (154) (18.1)%

Income tax benefit (236) (1,038) 802 77.3%

Other (income) expense, net (8) 78 (86) NM

Income (loss) before income taxes 693 (1,006) 1,699 NM

Income tax provision (benefit) 121 (236) 357 NM

Income tax rate 17.4 % 23.5 %

Diluted earnings (loss) per share - continuing operations $ (1.82) $ 0.44

Diluted earnings (loss) per share - discontinued operations — (0.19)

Net income (loss) $ 572 $ (770) 1,342 NM

Diluted earnings (loss) per share - attributable to common shareholders $ 1.34 $ (1.82)

Net sales for 2020 decreased 3%, due to a decline in sales within Learning and Development and Outdoor and Recreation segments.

The Learning and Development segment was impacted by changes in consumer purchasing patterns as well as delays and limited opening of schools and offices caused by the COVID-19 pandemic.

Net sales in the Outdoor and Recreation segment were impacted by lower overall demand.

The net sales decline was partially offset by growth in the Appliances and Cookware, Commercial Solutions and Home Solutions segments due to an increase in demand, notably through online channels.

Changes in foreign currency unfavorably impacted net sales by $108 million, or 1%.

Gross profit for 2020 decreased 4% and gross profit margin declined to 32.8% as compared with 33.1% in the prior year period.

The gross margin decline was driven by higher costs associated with lower sales volume and certain temporary manufacturing closures, primarily during the first half of the year, as well as business unit mix and inflation related to input costs.

The decline in gross margin also reflected increased costs across most of its business units related to the COVID-19 pandemic, including increased employee costs, such as expanded benefits and frontline incentives, and other costs, such as procurement of personal protective equipment.

The gross profit decline was partially offset by the cumulative depreciation expense recorded during the prior year, as a result of the Company’s decision to retain the Commercial Business, as well as gross productivity and lower product recall costs.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $25 million, or 1%.

All of the Company's manufacturing and distribution facilities are operating at or near capacity and its facilities have replenished most of the inventory levels that were depleted by lost production during the temporary closure period, however, the Company does continue to face intermittent supply and labor shortages, capacity constraints, and transportation and logistical challenges, which have negatively impacted net sales growth, and expects this to persist until the conditions improve globally.

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 saw positive momentum during the second half of the year.

At this time, the Company is unable to predict any further impact, both in terms of severity and duration, that the COVID-19 global pandemic will have on its businesses, customers and suppliers.

While the Company has deployed cost containment initiatives to mitigate the impact of the pandemic, such actions may not be sufficient to mitigate the entire impact.

The Company will continue to monitor developments, including government requirements and recommendations to evaluate possible further cessation or extensions of its operations.

See Recent Developments, Critical Accounting Estimates and Footnote 1 in the Notes to Consolidated Financial Statements for further information.

Notable items impacting operating loss for 2020 and 2019 are as follows:

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Net sales for 2021 increased 13%, with all segments and major geographic regions showing growth.

This growth reflects favorable net pricing (including lower promotion spending with customers), as well as strong demand for the hand protection, garage and outdoor organization, kitchen appliance, fresh preserving, cookware, bakeware, scented candle, baby gear, writing, labeling, and outdoor categories.

Net sales growth was negatively impacted by supply chain shortages and logistical challenges which the Company expects to continue into 2022.

Changes in foreign currency favorably impacted net sales by $101 million, or 1%.

Gross profit for 2021 increased 7% and gross profit margin declined to 31.1% as compared with 32.8% in the prior year period.

The increase in gross profit was driven by gross volume leverage, gross productivity and favorable net pricing, partially offset by significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor, which had a negative high-single-digit-percentage impact to costs of products sold.

The gross margin decline reflected, in part, a timing lag between inflation and the full impact of responsive pricing actions.

Changes in foreign currency exchange rates favorably impacted gross profit by $30 million, or 1%.

Notable items impacting operating income (loss) for 2021 and 2020 are as follows:

Years Ended December 31,

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Impairment of goodwill and intangible assets ( See Footnote 7)

Restructuring and restructuring related (See Footnote 4) (a) 44 82 (38)

Held for sale depreciation and amortization catch-up adjustments (See Footnotes 6 and 7) — 57 (57)

Product recall costs (See Footnote 18) 2 20 (18)

Transactions and related costs 4 30 (26)

$ 60 $ 1,491 $ (1,431)

Restructuring ( See Footnote 4) and restructuring-related (a)

Transactions and other costs (b)

(a) Restructuring-related costs reported in cost of products sold and selling, general and administrative expenses (“SG&A”) for 2021 were $22 million and $8 million, respectively, and primarily relate to facility closures.

Restructuring-related costs reported in cost of products sold and SG&A for 2020 were $4 million and $19 million, respectively, and primarily relate to accelerated depreciation associated with restructuring activities.

Operating loss increased to $634 million in 2020 as compared to $482 million in 2019.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $1.5 billion recorded in 2020 as compared to $1.2 billion of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2019, which included non-cash impairment charges of goodwill for businesses previously classified as held for sale.

This performance was partially offset by productivity improvement from various initiatives, lower restructuring and restructuring-related charges, lower overhead costs and discretionary spending, including advertising and promotional costs, cumulative depreciation expense recorded during the prior year, as a result of the Company’s decision to retain the Commercial Business, lower transaction and related costs associated with the completion of the Accelerated Transformation Plan (“ATP”) in the prior year and lower costs associated with a 2019 product recall in the Outdoor and Recreation segment.

See Footnotes 7 and 18 of the Notes to Consolidated Financial Statements for further information.

Interest expense, net for 2020 decreased primarily due to lower debt levels, slightly offset by the higher rate as a result of previously disclosed debt ratings downgrades.

Restructuring costs for 2021 and 2020 were $16 million and $21 million, respectively.

(b) Transaction and other costs for 2021 and 2020 primarily related to completed divestitures and fees for certain legal proceedings.

Operating income increased to $946 million in 2021 as compared to an operating loss of $634 million in 2020.

The operating results in the prior year period included $1.5 billion of non-cash impairment charges of goodwill and certain indefinite-lived intangibles and other assets.

The current year performance reflected the gross profit performance noted above and cost savings from Yankee Candle retail store closures, partially offset by higher incentive compensation expense and advertising and promotional costs.

The year-over-year comparison of the Company's operating results to the prior year reflects the impact of the most depressed consumption levels resulting from the COVID-19 related lockdowns which occurred in the second quarter of 2020, and the lapping of the improved operating performance in the second half of 2020, as the Company's manufacturing sites and Yankee Candle stores were reopened, other retail stores were reopened, and consumer demand for certain categories returned.

In addition, the Company's operating results for 2021 were impacted by the volatility and uncertainty of the direction of demand patterns, as well as continued inflation and supply chain shortages and logistical challenges which the Company expects to continue into 2022.

Interest expense, net for 2021 decreased primarily due to lower debt levels.

The weighted average interest rates for 2021 and 2020 were approximately 4.7% and 4.6%, respectively.

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

The weighted average interest rate for 2020 and 2019 was approximately 4.6% and 4.4%, respectively.

The loss on the extinguishment of debt of $5 million and $20 million for 2021 and 2020, respectively, are related to the Company’s tender offer of certain of its senior notes and debt redemptions.

See Footnote 9 of the Notes to the Consolidated Financial Statements for further information.

Other expense, net, for 2020 and 2019 include the following items:

Other (income) expense, net, for 2021 and 2020 include the following items:

Years Ended December 31,

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Foreign exchange losses, net (See Footnote 10 )

Fair value equity adjustments (See Footnote 16) — 21

Loss on disposition of businesses, net 9 —

Income tax benefit for 2020 was $236 million as compared to $1.0 billion in 2019.

(Gain) loss on disposition of businesses, net (See Footnote 2 )

Other gains, net (12) (1)

The income tax provision for 2021 was $121 million as compared to benefit of $236 million in 2020.

The effective tax rate for 2021 was 17.4% as compared to 23.5% in 2020.

The income tax benefit for 2020 primarily relates to the impact of goodwill impairment charges, discrete tax benefits associated with the execution of certain tax planning strategies, $53 million for a reduction in valuation allowance related to integration of certain U.S.

operations, partially offset by $54 million for a reduction of an uncertain tax position due to a statute of limitation expiration, $47 million deferred tax effects associated with certain outside basis differences and tax expense of $27 million related to a change in the tax status of certain entities upon Internal Revenue Service approval.

The income tax benefit for 2019 primarily relates to a benefit of $522 million related to the deferred tax effects associated with the internal realignment of certain intellectual property rights, a benefit of $227 million associated with a taxable loss related to the impairment of certain assets and the pre-tax net loss for the year.

See Footnote 12 of the Notes to Consolidated Financial Statements for information.

The change in effective tax provision is driven primarily by the impact of goodwill impairment charges in the prior-year, the geographic mix of where income was earned as well as certain taxable income inclusion items in the U.S.

based on foreign earnings and certain discrete items.

The income tax provision for the year ended December 31, 2021 included a net valuation allowance decrease of $27 million, primarily related to NOLs in the U.K.

and Luxembourg, and other miscellaneous changes in the U.S., state and non-U.S.

valuation allowances related to ongoing operations.

See Footnote 12 of the Notes to Consolidated Financial Statements for information regarding income taxes, including the inherent uncertainty associated with the Company's position on U.S.

Treasury Regulations enacted in 2020.

Business Segment Operating Results 2021 vs.

Appliances and Cookware

Commercial Solutions

Years Ended December 31,

1 unchanged sentence

Net sales $ 1,953 $ 1,859 $ 94 5.1%

Operating loss (217) (535) 318 59.4 %

Operating income (loss) 123 (89) 212 NM

Operating margin 6.3 % (4.8) %

Notable items impacting operating loss comparability:

Notable items impacting operating income (loss) comparability:

Impairment of goodwill and other intangible assets (See Footnote 7 )

Appliances and Cookware net sales for 2020 increased 1%, which reflects strong sales growth driven by category growth at stay at home products including cooking appliances, most notably in Latin America, the U.K.

and Australia.

This performance was partially offset by continued loss in domestic market share in North America for certain appliance categories driven by the success of newly launched competitor products.

Changes in foreign currency unfavorably impacted net sales by $77 million, or 4%.

Operating loss for 2020 decreased to $217 million as compared to $535 million in 2019.

The improvement in operating results is primarily due to lower non-cash impairment charges of goodwill and certain indefinite-lived intangible assets as well as productivity improvements and lower discretionary spending including advertising and promotional costs, partially offset by transactional foreign exchange losses in Latin America.

Commercial Solutions

$ 29 $ 320 $ (291)

NM - NOT MEANINGFUL

Commercial Solutions net sales for 2021 increased 5% which reflected sales growth in both the Commercial and Connected Home and Security business units.

The Commercial business unit performance reflected the impact of favorable net pricing as well as increased demand in the hand protection and garage and outdoor organization categories, partially offset by a decline in demand for consumable washroom products as well as supply chain shortages and logistical constraints.

The increase in net sales in the Connected Home and Security business unit was primarily due to higher demand from retail and contractor channels, partially offset by supply chain shortages and logistical constraints.

The increase in net sales in the Connected Home and Security business also reflected the lapping of the prior-year impact of lower demand and store closures.

Changes in foreign currency favorably impacted net sales by $12 million, or 1%.

Operating income for 2021 increased to $123 million as compared to operating loss of $89 million in 2020.

The improvement in operating results is primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets, as well as gross profit leverage, including the lapping of the prior-year absorption impact associated with the temporary closure of a key Connected Home and Security manufacturing facility in Mexico, as a result of the COVID-19 pandemic, gross productivity and pricing.

The increase in operating income was partially offset by significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor.

The operating margin in the current year was negatively impacted by a timing lag between inflation and the full impact of responsive pricing actions.

Home Appliances

Years Ended December 31,

1 unchanged sentence

Net sales $ 1,738 $ 1,539 $ 199 12.9 %

Operating loss (85) (136) 51 37.5%

Operating income (loss) 70 (238) 308 NM

Operating margin 4.0 % (15.5) %

Notable items impacting operating loss comparability:

Notable items impacting operating income (loss) comparability:

Impairment of goodwill and other intangible assets (See Footnote 7 )

Held for sale depreciation and amortization catch-up adjustment

(See Footnotes 6 and 7) — 57 (57)

Commercial Solutions net sales for 2020 increased 4% which reflected sales growth in the Commercial business, partially offset by decline in the Connected Home and Security business unit.

The Commercial business unit performance reflected increased demand in consumable washroom, refuse, hand protection, and outdoor and laundry categories, partially offset by weakness in food service and hospitality vertical channels as a result of the ongoing COVID-19 pandemic.

The decline in net sales in the Connected Home and Security business unit was primarily due to the ongoing COVID-19 pandemic, which shifted consumer purchasing patterns and caused supply chain constraints, impacting sales to its retail and contractor channels.

Changes in foreign currency unfavorably impacted net sales by $18 million, or 1%.

Operating loss for 2020 decreased to $85 million as compared to $136 million in 2019.

The improvement in operating results is primarily due to the cumulative depreciation and amortization expense adjustment in the prior year, as a result of the Company’s decision to retain the Commercial Business.

The improvement in the operating results also reflects cost containment initiatives to mitigate the impact of the COVID-19 pandemic while facilities were closed, including employee furloughs, gross productivity and lower discretionary spending, including advertising and promotional costs.

This operating performance was partially offset by the higher costs in Connected Home and Security associated with lower sales volumes and the temporary closure of its key manufacturing facility in Mexico during the first half of the year, as well as higher non-cash impairment charges of goodwill and certain indefinite-lived intangible assets.

$ — $ 287 $ (287)

NM — NOT MEANINGFUL

Home Appliances net sales for 2021 increased 13%, which reflects net pricing and strong sales growth, primarily in North America and Latin America, partially offset by supply chain shortages and logistical constraints.

Changes in foreign currency favorably impacted net sales by $11 million, or 1%.

Operating income for 2021 increased to $70 million as compared to operating loss of $238 million in 2020.

The improvement in operating results is primarily due to the lapping of prior year non-cash impairment charges of goodwill and certain indefinite-lived intangible assets, as well as gross profit leverage, most notably from North America and Latin America, gross productivity and pricing, partially offset by significant input cost inflation associated with sourced finished goods and transportation, as well as higher labor costs and advertising and promotional costs.

Home Solutions

2 unchanged sentences

Net sales $ 2,386 $ 2,138 $ 248 11.6%

Operating loss (12) (17) 5 29.4%

Operating income (loss) 313 (2) 315 NM

Operating margin 13.1 % (0.1) %

Notable items impacting operating loss comparability:

Notable items impacting operating income (loss) comparability:

Impairment of goodwill and other intangible assets (See Footnote 7 )

Home Solutions net sales for 2020 increased 5%, as strong sales performance in the Food business unit was partially offset by sales declines in the Home Fragrance business unit.

The increase in Food business unit sales reflected increased demand across the vacuum sealing, fresh preserving and Rubbermaid Food Storage categories, as a result of the ongoing COVID-19 pandemic, partially offset by supply chain disruption related to the temporary closure of the since re-opened Sistema manufacturing facility in New Zealand, as well as supply and capacity constraints negatively affecting the fresh preserving and vacuum sealing categories.

The decrease in Home Fragrance sales was primarily due to the temporary closure of all of its North American Yankee Candle retail stores, supply chain disruptions resulting from the temporary closure of its key manufacturing facility in Massachusetts and the temporary closure of certain third-party retail stores in the first half of 2020 as a result of the ongoing COVID-19 global pandemic.

Yankee Candle retail stores re-opened during the third quarter.

The decrease in Home Fragrance sales also reflected the exit of 77 underperforming Yankee Candle retail stores as well as the exiting of its fundraising business in third quarter of 2020.

Changes in foreign currency favorably impacted net sales by $4 million.

Operating loss for 2020 decreased to $12 million as compared to $17 million in 2019.

The decrease in operating loss reflects higher sales volume in the Food business unit, cost containment initiatives to mitigate the impact while Yankee Candle retail stores and operating facilities were temporarily closed, including employee furloughs, lower discretionary spending, including promotional costs, and gross productivity.

This performance was partially offset by non-cash impairment charges of certain indefinite-lived intangible assets of $290 million recorded in 2020 as compared to $158 million of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2019.

Operating loss was also unfavorably impacted by higher costs associated with lower sales volume in the Home Fragrance business unit and the temporary closure of their key manufacturing facility in Massachusetts, during the first half of 2020, and non-cash impairment charges of $8 million primarily related to operating leases of its Yankee Candle retail store business.

NM — NOT MEANINGFUL

Home Solutions net sales for 2021 increased 12%, due to strong sales performance in the Food and Home Fragrance business units.

The increase in Food business unit sales reflected the impact of favorable net pricing as well as increased demand across the fresh preserving, and cookware and bakeware categories, partially offset by supply chain shortages and logistical constraints.

The increase in Home Fragrance sales was primarily due to increases in the retail channel in the U.S.

and Europe, as well as, Yankee Candle retail stores, partially offset by supply chain shortages, logistical constraints and permanent Yankee Candle retail store closures in the prior year.

The increase in net sales in the Home Fragrance business also reflected the lapping of the prior-year impact of temporary retail store closures and supply chain disruptions resulting from temporary closure of its key manufacturing facility in Massachusetts, both resulting from the COVID-19 pandemic.

Changes in foreign currency favorably impacted net sales by $33 million, or 1%.

Operating income for 2021 increased to $313 million as compared to operating loss of $2 million in 2020.

The increase in operating income is primarily due to the lapping of prior year non-cash impairment charges of goodwill, certain indefinite-lived intangible assets and other assets, gross profit leverage, including the lapping of the prior year absorption impact associated with the temporary closure of a key Home Fragrance manufacturing facility in Massachusetts, gross productivity and pricing.

The increase in operating income also reflected savings from Yankee Candle retail store closures and the exiting of its fundraising business in the prior year.

The increase in operating income was partially offset by significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor.

The operating margin in the current year was negatively impacted by a timing lag between inflation and the full impact of responsive pricing actions.

Learning and Development

6 unchanged sentences

Impairment of goodwill and other intangible assets (See Footnote 7 )

Learning and Development net sales for 2020 decreased 13% primarily due to the shift in consumer purchasing patterns, third-party retail store closures and supply chain disruptions affecting the Writing and Baby and Parenting business units as a result of the ongoing COVID-19 global pandemic, including the impact of the delayed re-opening of schools and offices.

In particular, the ongoing COVID-19 global pandemic negatively impacted consumption patterns of markers, pens and dry erase products.

In addition, the net sales decline also reflected softening trends related to sales of slime-related adhesive products, which is expected to continue in 2021, as well as the exiting of the North American distribution of Uniball® products in the prior year.

Net sales for the Baby and Parenting business were relatively flat for 2020.

Changes in foreign currency unfavorably impacted net sales by $5 million.

Operating income for 2020 decreased to $362 million as compared to $588 million in the prior year period.

Operating income was unfavorably impacted by lower sales as mentioned above, higher costs associated with lower sales volume and certain temporary manufacturing closures, higher non-cash impairment charges and increased costs associated with the COVID-19 global pandemic, partially offset by lower overhead, productivity improvements and discretionary spending, including advertising and promotional costs.

$ 31 $ 100 $ (69)

Learning and Development net sales for 2021 increased 18% primarily due to strong sales performance in the Baby and Writing business units as they lap the negative prior-year impact of shifting consumer demand, temporary store closures and supply chain disruption resulting from the COVID-19 pandemic.

The Baby business unit performance reflected favorable net pricing as well as increased demand in the baby gear and infant care categories, driven in part by government-related stimulus spending in the U.S.

The Writing business unit performance reflected favorable net pricing as well as strong demand in the pens, markers, fine writing and labeling categories, driven by return to in-person learning and gradual reopening of more offices, partially offset by previous divestitures and business exits as well as supply chain shortages and logistical constraints.

Changes in foreign currency favorably impacted net sales by $29 million, or 1%.

Operating income for 2021 increased to $594 million as compared to $359 million in the prior year period.

The increase in operating income is primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets, pricing, gross productivity and gross profit leverage, including the prior year absorption impact of certain temporary manufacturing closures, partially offset by higher tariff costs, significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor, as well as higher advertising and promotional costs.

Outdoor and Recreation

2 unchanged sentences

Net sales $ 1,484 $ 1,292 $ 192 14.9%

Operating loss (418) (64) (354) NM

Operating income (loss) 89 (420) 509 NM

Operating margin 6.0 % (32.5) %

Notable items impacting operating loss comparability:

Notable items impacting operating income (loss) comparability:

Impairment of goodwill and other intangible assets (See Footnote 7 )

Product recall costs (See Footnote 18) 2 20 (18)

$ — $ 482 $ (482)

NM — NOT MEANINGFUL

Outdoor and Recreation segment net sales for 2020 decreased 9% primarily due to a shift in consumer purchasing patterns, as a result of the ongoing COVID-19 pandemic, which negatively impacted performance during the first half of the year.

During the second half of the year, demand for outdoor products and coolers, primarily in North America and Asia improved, partially offset by decreased demand in apparel and beverage products.

Changes in foreign currency unfavorably impacted net sales by $12 million, or 1%.

Operating loss for 2020 was $418 million as compared to $64 million in the prior year period.

This performance was primarily due to higher non-cash impairment charges of certain indefinite-lived intangibles assets, lower sales volume as noted above, unfavorable product mix, partially offset by lower overhead costs and lower discretionary spending, including advertising and promotional costs, as well as lower costs associated with a product recall in the prior year, and productivity improvements.

Outdoor and Recreation segment net sales for 2021 increased 15% primarily due to favorable net pricing and improvement in consumer purchasing patterns for outdoor equipment, partially offset by supply chain shortages and logistical constraints.

The increase in net sales also reflected the lapping of the negative prior-year impact of lower demand and temporary store closures resulting from the COVID-19 pandemic.

Changes in foreign currency favorably impacted net sales by $16 million, or 1%.

Operating income for 2021 was $89 million as compared to operating loss of $420 million in the prior year period.

This improvement was primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets, gross profit leverage, pricing and gross productivity, partially offset by significant input cost inflation for commodities, primarily resin, sourced finished goods and transportation.

The operating margin in the current year was negatively impacted by a timing lag between inflation and the full impact of responsive pricing actions.

Consolidated Operating Results 2020 vs.

7 unchanged sentences

Interest expense, net 274 303 (29) (9.6)%

Loss on extinguishment of debt 28 4 24 NM

Other (income) expense, net 39 (12) 51 NM

Loss on extinguishment of debt 20 28 (8) (28.6)%

Other expense, net 78 39 39 100.0%

Loss before income taxes (1,006) (852) (154) (18.1)%

1 unchanged sentence

Income tax rate 23.5 % 121.9 %

Net income (loss) $ (770) $ 107 $ (877) NM

Diluted earnings (loss) per share - continuing operations $ (1.82) $ 0.44

2 unchanged sentences

NM — NOT MEANINGFUL

Net sales for 2019 decreased 4%, with declines across all segments, primarily within the Appliances and Cookware, Commercial Solutions, and Outdoor and Recreation segments.

Net sales for 2020 decreased 3%, due to a decline in sales within Learning and Development and Outdoor and Recreation segments.

The Learning and Development segment was impacted by changes in consumer purchasing patterns as well as delays and limited opening of schools and offices caused by the COVID-19 pandemic.

Net sales in the Outdoor and Recreation segment were impacted by lower overall demand.

The net sales decline was partially offset by growth in the Home Appliances, Commercial Solutions and Home Solutions segments due to an increase in demand, notably through online channels.

Changes in foreign currency exchange rates unfavorably impacted net sales by $108 million, or 1%.

Gross profit for 2019 decreased 8% and gross profit margin declined to 33.1% in 2019 as compared with 34.6% in 2018.

This performance was primarily due to lower net sales, product mix, inflation related to input costs and tariffs.

Gross profit and margin in 2019 were also unfavorably impacted by a cumulative catch-up adjustment for depreciation expense of $48 million related to the Company’s decision to retain the Commercial Business.

Approximately $27 million of this depreciation expense related to the amounts that would have been recorded in the prior year had the Commercial Business been continuously classified as held and used.

See Footnote 6 of the Notes to the Consolidated Financial Statements for further information.

In addition, gross profit and margin in 2019 were unfavorably impacted by approximately $20 million of costs associated with a product recall in the Outdoor and Recreation segment.

See Footnote 18 of the Notes to the Consolidated Financial Statements for further information.

The gross profit decrease was partially offset by productivity improvement in 2019 from various initiatives.

Gross profit for 2020 decreased 4% and gross profit margin declined to 32.8% as compared with 33.1% in 2019.

The gross margin decline was driven by higher costs associated with lower sales volume and certain temporary manufacturing closures, primarily during the first half of 2020, as well as business unit mix and inflation related to input costs.

The gross profit decline was partially offset by the cumulative depreciation expense recorded during 2019, as a result of the Company’s decision to retain the Rubbermaid Outdoor, Closet, Refuse, Garage and Cleaning businesses and the Mapa/Spontex and Quickie businesses (collectively referred to as the “Commercial Business”), as well as gross productivity and lower product recall costs.

Changes in foreign currency exchange rates unfavorably impacted gross profit by $25 million, or 1%.

3 unchanged sentences

Impairment of intangible assets (See Footnote 7 )

Restructuring and restructuring related

(See Footnote 4) (a) 82 98 (16)

$ 1,491 $ 1,213 $ 278

Restructuring and restructuring-related (See Footnote 4 ) (a)

Held for sale depreciation and amortization catch-up adjustments

(See Footnotes 6 and 7 ) (b)

Product recall costs (See Footnote 18) 20 — 20

Bad debt write-off for large customer — 26 (26)

(a) Restructuring-related costs reported in cost of products sold and SG&A for 2019 were $16 million and $39 million, respectively, and primarily relate to accelerated depreciation associated with restructuring activities.

Restructuring-related costs of $11 million for 2018 were reported in SG&A.

Restructuring costs for 2019 and 2018 were $27 million and $87 million, respectively, and primarily represent costs associated with the ATP, which was completed at the end of 2019.

Product recall costs 2 20 (18)

Transactions and other costs (c)

(a) Restructuring-related costs reported in cost of products sold and SG&A for 2020 were $4 million and $19 million, respectively, and primarily related to facility closures.

Restructuring-related costs for 2019 were $16 million reported in cost of products sold and $39 million reported in SG&A and primarily relate to accelerated depreciation associated with restructuring activities.

Restructuring costs for 2020 and 2019 were $21 million and $27 million, respectively.

(b) Amounts reported in cost of products sold and SG&A for 2019 were $48 million and $9 million, respectively.

Operating loss decreased to $482 million in 2019 as compared to $7.6 billion in 2018.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $1.2 billion recorded in 2019 as compared to $8.3 billion of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2018.

This performance also included overhead reduction driven by various initiatives, lower restructuring and restructuring-related charges in 2019 primarily related to the now completed ATP, and the lapping of a bad debt write off of $26 million from a large customer in the prior year.

These decreases in operating loss and operating margin were partially offset by the cumulative catch-up adjustment for depreciation and amortization expense of $57 million recorded in 2019 as a result of the Company’s decision to retain the Commercial Business.

Approximately $33 million of this depreciation and amortization expense in 2019 related to the amounts that would have been recorded in the prior year had the Commercial Business been continuously classified as held and used.

In addition, operating loss and operating margin in 2019 were unfavorably impacted by $20 million of costs associated with a product recall in the Outdoor and Recreation segment.

Interest expense, net for 2019 decreased primarily due to lower debt levels.

(c) Transaction and other costs for 2020 and 2019 primarily reflect fees for certain legal proceedings and other costs associated with completed divestitures.

Operating loss increased to $634 million in 2020 as compared to $482 million in 2019.

This performance was partially offset by productivity improvement from various initiatives, lower restructuring and restructuring-related charges, lower overhead costs and discretionary spending, including advertising and promotional costs, cumulative depreciation expense recorded during 2019, as a result of the Company’s decision to retain the Commercial Business, lower transaction and related costs associated with the completion of the Accelerated Transformation Plan (“ATP”) in 2019 and lower costs associated with a product recall in the Outdoor and Recreation segment.

See Footnote 7 of the Notes to Consolidated Financial Statements for further information.

Interest expense, net for 2020 decreased primarily due to lower debt levels, slightly offset by higher interest rates due to debt rating downgrades.

See Liquidity and Capital Resources for further information.

The weighted average interest rates for 2020 and 2019 were approximately 4.6% and 4.4%, respectively.

1 unchanged sentence

See Footnote 9 of the Notes to the Consolidated Financial Statements for further information.

Other (income) expense, net for 2019 and 2018 include the following items:

Other expense, net for 2020 and 2019 include the following items:

Years Ended December 31,

(in millions) 2020 2019

Pension-related non-service costs, net (See Footnote 11 )

Foreign exchange losses, net (See Footnote 10 )

Fair value equity adjustments (See Footnote 16 )

Pension-related non-service costs, net (See Footnote 11) 1 (6)

Gain on legacy Jarden investment — (11)

Gain on disposition of businesses, net — (2)

Income tax benefit for 2019 was $1.0 billion as compared to $1.4 billion in 2018.

Loss on disposition of businesses (See Footnote 2 )

Other (gains) losses, net (1) 4

Income tax benefit for 2020 was $236 million as compared to $1.0 billion in 2019.

The effective tax rate for 2020 was 23.5% as compared to 121.9% in 2019.

operations, and $54 million for a reduction of an uncertain tax position due to a statute of limitation expiration, partially offset by $47 million of deferred tax effects associated with certain outside basis differences and tax expense of $27 million related to a change in the tax status of certain entities upon Internal Revenue Service approval.

See Footnote 12 of the Notes to Consolidated Financial Statements for information.

The income tax benefit for 2018 primarily relates to the pre-tax net loss for the year, partially offset by the impact of goodwill impairment charges which were not tax effected.

Business Segment Operating Results 2020 vs.

Appliances and Cookware

Commercial Solutions

Years Ended December 31,

5 unchanged sentences

Impairment of goodwill and other intangible assets (See Footnote 7 )

Appliances and Cookware net sales for 2019 decreased 7% primarily due to a loss in domestic market share in North America for certain appliance categories driven by the success of newly launched competitive products.

The net sales decline in North America was partially offset by sales growth in Latin America primarily due to higher volume.

$ 320 $ 310 $ 10

Held for sale depreciation and amortization catch-up adjustment

(See Footnotes 6 and 7 )

Commercial Solutions net sales for 2020 increased 4% which reflected sales growth in the Commercial business unit, partially offset by decline in the Connected Home and Security business unit.

The Commercial business unit performance reflected increased demand in consumable washroom, refuse, hand protection, and outdoor and laundry categories, partially offset by weakness in food service and hospitality channels as a result of the ongoing COVID-19 pandemic.

Changes in foreign currency exchange rates unfavorably impacted net sales by $18 million, or 1%.

Operating loss decreased to $535 million in 2019 as compared to $1.6 billion in 2018.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $600 million recorded in 2019 as compared to $1.7 billion of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2018.

This decrease in operating loss and operating margin was partially offset by the unfavorable impact of lower sales and inflation related to input costs and tariffs.

Commercial Solutions

Operating loss decreased to $89 million in 2020 as compared to $139 million in 2019.

The improvement in operating results was primarily due to the cumulative depreciation and amortization expense adjustment in 2019, as a result of the Company’s decision to retain the Commercial Business.

This operating performance was partially offset by the higher costs in Connected Home and Security associated with lower sales volumes and the temporary closure of its key manufacturing facility in Mexico during the first half of 2020, as well as higher non-cash impairment charges of goodwill and certain indefinite-lived intangible assets.

Home Appliances

Years Ended December 31,

5 unchanged sentences

Impairment of goodwill and other intangible assets (See Footnote 7 )

Held for sale depreciation and amortization catch-up adjustment

(See Footnotes 6 and 7) 57 — 57

Commercial Solutions net sales for 2019 decreased 6% primarily due to lower sales in the Commercial business unit, in part due to volume declines at certain major retailers, and softness in the cleaning and outdoor organization categories, partially offset by effective net pricing in certain categories.

287 600 (313)

Home Appliances net sales for 2020 increased 3% which reflected strong sales growth driven by category growth in stay at home products including cooking appliances, most notably in Latin America, the U.K.

and Australia.

This performance was partially offset by continued loss in domestic market share in North America for certain appliance categories driven by the success of newly launched competitor products.

Changes in foreign currency exchange rates unfavorably impacted net sales by $77 million, or 5%.

Operating loss was $136 million in 2019 as compared to $134 million in 2018.

Operating loss decreased to $238 million in 2020 as compared to $573 million in 2019.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $287 million recorded in 2020 as compared to $600 million of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2019.

This decrease in operating loss and operating margin also reflected productivity improvement in 2019 from various initiatives, partially offset by the unfavorable impact of lower sales and inflation.

In addition, operating loss was unfavorably impacted by the cumulative catch-up adjustment for depreciation and amortization expense of $57 million recorded in 2019 as a result of the Company’s decision to retain the Commercial Business.

See Footnotes 2, 6 and 7 of the Notes to the Consolidated Financial Statements for further information.

Operating results were also favorably impacted by improvements in productivity and lower discretionary spending, including advertising and promotional costs, partially offset by transactional foreign exchange losses in Latin America.

Home Solutions

2 unchanged sentences

Net sales $ 2,138 $ 2,067 $ 71 3.4%

Operating loss (17) (4,270) 4,253 99.6%

Operating income (loss) (2) 10 (12) NM

Operating margin (0.1) % 0.5 %

Notable items impacting operating loss comparability:

Notable items impacting operating income (loss) comparability:

Impairment of goodwill and other intangible assets (See Footnote 7 )

Home Solutions net sales for 2019 decreased 3% primarily due to decline in the Food business unit, in part due to volume declines at certain major retailers and softness in the fresh preserving and food storage categories, partially offset by growth in sales from Sistema products.

Net sales declined in the Home Fragrance business unit due to the exit of 75 underperforming Yankee Candle

retail stores, partially offset by growth in Europe.

Changes in foreign currency exchange rates unfavorably impacted net sales by $20 million, or 1%.

Operating loss for 2019 was $17 million as compared to $4.3 billion in 2018.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $4.4 billion recorded in 2018.

This decrease in operating loss and operating margin was also impacted by lower overhead and advertising and promotional costs.

$ 302 $ 158 $ 144

NM — NOT MEANINGFUL

Home Solutions net sales for 2020 increased 3% as strong sales performance in the Food business unit was partially offset by sales declines in the Home Fragrance business unit.

Yankee Candle retail stores re-opened during the third quarter of 2020.

The decrease in Home Fragrance sales also reflected the exit of 77 underperforming Yankee Candle retail stores as well as the exiting of its fundraising business in third quarter of 2020.

Changes in foreign currency exchange rates favorably impacted net sales by $4 million.

Operating loss for 2020 was $2 million as compared to operating income of $10 million in 2019.

Operating results were unfavorably impacted by higher costs associated with lower sales volume in the Home Fragrance business unit and the temporary closure of its key manufacturing facility in Massachusetts during the first half of 2020, non-cash impairment charges of certain indefinite-lived intangible assets of $302 million recorded in 2020 as compared to $158 million of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2019, as well as, non-cash impairment charges of $8 million recorded in 2020 primarily related to operating leases of its Yankee Candle retail store business.

These were partially offset by higher gross profit due to higher sales volume in the Food business unit, cost containment initiatives to mitigate the impact of the temporarily closed Yankee Candle retail stores and operating facilities, including employee furloughs, lower discretionary spending, including promotional costs, and gross productivity.

Learning and Development

2 unchanged sentences

Net sales $ 2,557 $ 2,956 $ (399) (13.5) %

Operating income 588 238 350 NM

Operating income 359 582 (223) (38.3) %

Operating margin 14.0 % 19.7 %

1 unchanged sentence

Impairment of goodwill and other intangible assets (See Footnote 7 )

Fire-related losses, net of insurance recoveries — (11) 11

Bad debt write off for large customer — 26 (26)

NM — Not meaningful

Learning and Development net sales for 2019 decreased 1%.

Changes in foreign currency exchange rates unfavorably impacted net sales by $43 million or 1%.

The decrease in net sales was also driven by softening trends in the Writing business related to sales of slime-related adhesive products , partially offset by international net sales growth in the Writing business.

Operating income increased to $588 million in 2019 as compared to $238 million in 2018.

Operating income and operating margins

improved primarily due to lower non-cash impairment charges of certain indefinite-lived intangible assets of $25 million recorded in 2019 as compared to $351 million of non-cash impairment charges of goodwill and certain indefinite-lived intangible assets recorded in 2018.

The increase in operating income also included overhead reduction driven by various initiatives in the current year and the lapping of a bad debt write off from a large customer in the prior year, partially offset by higher advertising and promotion costs in the current year and net insurance recoveries from a fire-related loss in the prior year.

$ 100 $ 25 $ 75

Learning and Development net sales for 2020 decreased 13% primarily due to the shift in consumer purchasing patterns, third-party retail store closures and supply chain disruptions affecting the Writing and Baby business units as a result of the ongoing COVID-19 global pandemic, including the impact of the delayed re-opening of schools and offices.

In particular, the ongoing COVID-19 global pandemic negatively impacted consumption patterns of markers, pens and dry erase products.

In addition, the net sales decline also reflected softening trends related to sales of slime-related adhesive products, as well as the exiting of the North American distribution of Uniball® products in 2019.

Net sales for the Baby business were relatively flat for 2020.

Changes in foreign currency

unfavorably impacted net sales by $5 million.

Operating income decreased to $359 million in 2020 as compared to $582 million in 2019.

Operating income was unfavorably impacted by lower sales as mentioned above, higher costs associated with lower sales volume and certain temporary manufacturing closures, higher non-cash impairment charges and increased costs associated with the COVID-19 global pandemic, partially offset by lower overhead, productivity improvements and lower discretionary spending, including advertising and promotional costs.

Outdoor and Recreation

2 unchanged sentences

Net sales $ 1,292 $ 1,413 $ (121) (8.6)%

Operating loss (64) (1,293) 1,229 95.1%

Operating loss (420) (66) (354) NM

Operating margin (32.5) % (4.7) %

1 unchanged sentence

Impairment of goodwill and other intangible assets (See Footnote 7 )

Product recall costs (See Footnote 18) $ 20 $ — $ 20

Outdoor and Recreation segment net sales for 2019 decreased 7% reflecting lost distribution in certain product categories and unfavorable weather conditions affecting the Coleman business, partially offset by increased sales in airbeds and outdoor cooking categories.

$ 482 $ 120 $ 362

Product recall costs 2 20 (18)

NM — NOT MEANINGFUL

Outdoor and Recreation segment net sales for 2020 decreased 9% primarily due to a shift in consumer purchasing patterns as a result of the ongoing COVID-19 pandemic, which negatively impacted performance during the first half 2020.

During the second half of 2020, demand for outdoor products and coolers, primarily in North America and Asia improved, partially offset by decreased demand in apparel and beverage products.

Changes in foreign currency exchange rates unfavorably impacted net sales by $12 million, or 1%.

Operating loss decreased to $64 million in 2019 as compared to $1.3 billion in 2018.

Operating loss included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $120 million recorded in 2019 as compared to $1.4 billion of non-cash impairment charges of certain indefinite-lived intangible assets recorded in 2018.

The decrease in operating loss was also due to overhead reduction driven by various initiatives.

These decreases in operating loss were partially offset by the unfavorable impact of lower sales, cost of goods inflation and $20 million of costs associated with a product recall.

Operating loss for 2020 was $420 million as compared to $66 million in 2019.

This performance was primarily due to higher non-cash impairment charges of certain indefinite-lived intangibles assets, lower sales volume as noted above and unfavorable product mix, partially offset by lower overhead costs and lower discretionary spending, including advertising and promotional costs, as well as lower costs associated with a product recall in 2019, and productivity improvements.

Liquidity and Capital Resources

At the onset of the COVID-19 global pandemic, in light of uncertainty in the global economy as well as equity and bond markets, the Company undertook several actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility, including, issuing debt, evaluating supply purchases, enhancing customer credit review processes, reviewing operating expenses, prioritizing capital expenditures, as well as extending payment terms for goods and services.

While the Company has the ability to continue to take more of these actions, if needed, it also has the ability to borrow under its existing Accounts Receivable Securitization Facility (the “Securitization Facility”) and $1.25 billion revolving credit facility that matures in December 2023 (the “Credit Revolver”).

At December 31, 2020, the Company had no outstanding drawings against the Securitization Facility and Credit Revolver.

The Company currently believes its capital structure and cash resources can continue to support the funding of future dividends and will continue to evaluate all actions to strengthen its financial position and balance sheet, and to maintain its financial liquidity, flexibility and capital allocation strategy.

The Company believes that its cash generating capability, together with its borrowing capacity and available cash and cash equivalents, provide continued financial viability and adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and execute its ongoing business initiatives.

The Company regularly assesses its cash requirements and the available sources to fund these needs.

At December 31, 2021, the Company had cash and cash equivalents of approximately $440 million, of which approximately $330 million was held by the Company’s non-U.S.

subsidiaries.

Overall, the Company believes that available cash and cash equivalents, cash flows generated from future operating activities and borrowing capacity, along with the actions noted above, provide the Company with continued financial viability and adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and complete its ongoing turnaround initiatives.

The Company’s cash requirements are subject to change as business conditions warrant.

As the COVID-19 global pandemic is complex and rapidly evolving, the Company's plans as described above may change.

Although the Company saw positive momentum and strong cash generated from operating activities over the second half of 2020, the Company is still unable to predict the duration and severity of this pandemic, which could have a material adverse impact on the Company’s future sales, results of operations, financial position and cash flows, particularly if the global pandemic continues to exist or worsens for a prolonged period of time, or if plans to administer vaccines are delayed.

In addition, the Company anticipates using after-tax proceeds from the sale of its CH&S business in 2022 towards the pay down of debt and share repurchases.

The Company believes the extent of the impact of the COVID-19 pandemic to its future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company is not able to accurately predict and which will vary by jurisdiction and market.

Any such material adverse impacts could result in the Company's inability to satisfy financial maintenance covenants and could limit the ability to make future borrowings under existing debt instruments.

Cash, cash equivalents and restricted cash changed as follows for 2020, 2019 and 2018 (in millions):

Risk Factors - COVID-19 Related Risks and Financial Risks , for further information.

The table below summarizes the Company's cash activity for 2021, 2020 and 2019 (in millions):

Increase (Decrease)

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Discontinued Operations

Cash provided by (used in) operating activities $ — $ (46) $ 123 $ 46 $ (169)

Cash used in operating activities $ — $ — $ (46) $ — $ 46

Cash provided by investing activities — — 978 — (978)

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

Factors Affecting Liquidity

As a result of the debt ratings downgrades by Moody’s Corporation ("Moody’s") and S&P Global Inc.

("S&P") described in Footnote 9 of the Notes to Consolidated Financial Statements, the Company’s ability to borrow from the commercial paper market on terms it deems acceptable or favorable was eliminated.

Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Credit Revolver.

The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades.

As such, the Company does not expect any change in its ability to access liquidity in the short term as a result of the downgrades.

The interest rate for borrowings under the

Credit Revolver is the borrowing period referenced LIBOR rate plus 127.5 basis points.

On April 15, 2020, Fitch Ratings ("Fitch") downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020.

The Credit Revolver requires the maintenance of certain financial covenants.

A failure by the Company to maintain its financial covenants would impair its ability to borrow under the Credit Revolver.

At the time of filing this Annual Report on Form 10-K, the Company is in compliance with all of its financial covenants.

In addition, certain of the Company’s Senior Notes aggregating to approximately $4.3 billion in principal amount outstanding are subject to an interest rate adjustment of 25 basis points as a result of the downgrades from S&P and Moody's, for a total of 50 basis points.

This increase to the interest rates of each series of the Company's senior notes subject to adjustment increased the Company’s interest expense for 2020 by approximately $17 million and approximately $21 million thereafter, on an annualized basis.

The Fitch downgrade did not impact the interest rates on any of the Company's senior notes.

Furthermore, the Company may be required to pay a higher interest rate in future financings, and its potential pool of investors and funding sources could decrease as a result of the downgrades.

Cash Flows from Operating Activities

The change in net cash provided by operating activities is primarily due to successful working capital initiatives, which included:

the extension of payment terms for goods and services with vendors, enhanced customer credit review and collections processes and evaluating supply purchases and focused inventory management.

In addition, net cash from operating activities benefited from higher accounts receivable sold under the Customer Receivables Purchase Agreement and a timing benefit from higher payables due to inventory build to support demand, which is expected to partially reverse in 2021.

The change in net cash was partially offset by higher annual incentive compensation payments in the current year.

The change in net cash provided by operating activities from continuing operations for 2019 is primarily due to favorable working capital management as a result of the Company’s continued focus on improving its working capital.

Accounts receivable decreased in 2019 due to better terms compliance as a result of improvements in the Company’s dispute resolution process and accounts receivable sold under the Customer Receivables Purchase Agreement.

Operating cash flow also benefited from a decrease in cash paid for interest and income taxes of approximately $154 million and $136 million, respectively.

The change in net cash provided by operating activities for 2021 reflects inventory build to support forecasted demand, including the impact of significant input cost inflation, supply chain shortages and logistical challenges, as well as higher annual incentive compensation payments, partially offset by benefits from extension of payment terms for goods and services with vendors and higher accounts receivable sold under the Customer Receivables Purchase Agreement in the current year.

In addition, this performance reflects the impact of the COVID-19 pandemic in the prior year, which included lower operating results and favorable working capital performance.

The change in net cash provided by operating activities for 2020 is primarily due to successful working capital initiatives, which included:

the extension of payment terms for goods and services with vendors, enhanced customer credit review, collections processes and evaluation of supply purchases and focused inventory management.

The change in net cash was partially offset by higher annual incentive compensation payments in 2020.

See Capital Resources for further information.

Cash Flows from Investing Activities

The change in cash used in investing activities for 2020 was primarily due to higher proceeds from the sale of divested businesses in the prior year, partially offset by lower capital expenditures.

The change in cash used in investing activities for 2019 was primarily due to higher proceeds from the sale of divested businesses in 2018, cash received by the Company in 2018 for insurance claims, which include a claim from fire-related losses and settlement of a note receivable related to a legacy Jarden investment, partially offset by lower capital expenditures.

The change in net cash used in investing activities for 2021 was primarily due to higher capital expenditures.

The change in net cash used in investing activities for 2020 was primarily due to higher proceeds from the sale of divested businesses in 2019, partially offset by lower capital expenditures.

Cash Flows from Financing Activities

The change in net cash used in financing activities was primarily due to higher payments of long-term debt in the prior year, as well as current-year proceeds from the issuance of the June 2025 Notes (defined below).

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

The change in financing activities for 2019 was primarily due to the year-over-year change in debt (approximately $2.2 billion) and a decrease in shares repurchased (approximately $1.5 billion), partially offset by payments to dissenting shareholders in 2019 (approximately $171 million) in connection with the Jarden acquisition.

The change in net cash used in financing activities for 2021 was primarily due to proceeds from the issuance of senior notes in the prior year and payments of long-term debt in the current year as well as the acquisition of noncontrolling interests.

The change in net cash used in financing activities for 2020 was primarily due to higher payments of long-term debt in 2019, as well as proceeds from the issuance of the $500 million, 4.875% senior notes due June 2025 in 2020.

See Footnote 9 of the Notes to Consolidated Financial Statements for further information.

Capital Resources

In March 2020, the Company repurchased $15 million of the 4.20% senior notes due 2026 at approximately par value.

The total consideration, excluding accrued interest, was approximately $15 million.

As a result of the partial debt extinguishment, the Company recorded an immaterial loss.

In May 2020, the Company completed a registered public offering of $500 million in aggregate principal amount of 4.875% senior notes that mature in June 2025 (the “June 2025 Notes”) and received proceeds of approximately $491 million, net of fees and expenses paid.

The June 2025 Notes are subject to similar restrictive and financial covenants as the Company’s existing senior notes, however, they are not subject to the interest rate adjustment or coupon step up provisions of certain other notes described below.

The June 2025 Notes are redeemable in whole or in part, at the option of the Company (1) at any time prior to one month before the stated maturity at a redemption price equal to the greater of (a) 100% of the principal amount or (b) the discounted present value of principal and interest at the Treasury Rate plus 50 basis points, plus accrued interest to but excluding the redemption date;

or (2) at any time on or after one month prior to the stated maturity at a price equal to 100% of the principal amount being redeemed, plus accrued interest to but excluding the redemption date.

The Company used the net proceeds from the June 2025 Notes for general corporate purposes, including repayment of outstanding borrowings under the Credit Revolver and accounts receivable securitization facility, and the redemption of the outstanding 4.70% Senior Notes due in August 2020 at maturity.

In November 2020, the Company repurchased $300 million of the 3.85% Senior Notes due 2023 with available cash on hand.

The total consideration, excluding accrued interest, was approximately $318 million.

The Company recorded a loss on extinguishment of debt of $20 million as a result of the partial debt repayment.

On January 25, 2021, the Company delivered a notice of redemption to the holders of the 3.150% senior notes that will mature in April 2021 (the “April 2021 Notes”) that the Company will redeem the April 2021 Notes on March 1, 2021 (the “Redemption Date”) for a redemption price equal to 100% of the current outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.

Under the Company's $1.25 billion Credit Revolver that matures in December 2023, the Company may borrow funds on a variety of interest rate terms.

Prior to the Moody’s and S&P downgrades discussed above, the Credit Revolver provided the committed backup liquidity required to issue commercial paper.

As a result of the S&P and Moody's downgrades, the Company could no longer borrow from the commercial paper market on terms it deems acceptable or favorable.

Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Credit Revolver.

The Credit Revolver also provides for the issuance of up to $100 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Credit Revolver.

During the second quarter of 2020, the Company drew down $125 million on the Credit Revolver and used a portion of the proceeds to repay the outstanding commercial paper of $40 million outstanding at March 31, 2020.

At December 31, 2020, there were no commercial paper balance borrowings.

In addition, there were approximately $20 million of outstanding standby letters of credit issued against the Credit Revolver and there were no borrowings outstanding under the Credit Revolver.

At December 31, 2020, the net availability under the Credit Revolver was approximately $1.2 billion.

The Company maintains an Accounts Receivable Securitization Facility.

The total consideration was approximately $259 million, and the Company recorded a debt extinguishment loss of $5 million.

On September 28, 2021, the Company redeemed its 3.75% senior notes due October 2021 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 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.

The total consideration, excluding accrued interests was approximately $5 million.

As a result of the partial debt repurchase, the Company recorded an immaterial loss.

The Company has the ability to borrow under its existing Revolving Credit Facility (the “Credit Revolver”) and Accounts Receivable Securitization Facility (the “Securitization Facility”).

Under the Company's $1.25 billion Credit Revolver that matures in December 2023, the interest rate is London Interbank Offered Rate (“LIBOR”) rate plus 127.5 basis points.

The Credit Revolver provides for the issuance of up to $100 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Credit Revolver.

At December 31, 2021 there were approximately $22 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $1.2 billion.

There were no borrowings outstanding under the Credit Revolver or commercial paper borrowings at December 31, 2021.

The Credit Revolver requires the maintenance of certain financial covenants.

A failure to maintain our financial covenants would impair our ability to borrow under the Credit Revolver.

In addition, if economic conditions caused by the COVID-19 pandemic do not improve or otherwise worsen, our earnings and operating cash flows could be negatively impacted, which could impact our ability to maintain compliance with our financial covenants and require us to seek amendments to the Credit Revolver.

The Company was in compliance with all of its debt covenants at December 31, 2021.

The aggregate commitment under the Securitization Facility is $600 million.

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

In March 2020, the Company amended its Securitization Facility with respect to certain customer receivables and to remove an originator from the Securitization Facility.

At December 31, 2021, the Company did not have any amounts outstanding under the Securitization Facility.

During the first quarter of 2020, the Company amended its existing factoring agreement (the “Customer Receivables Purchase Agreement”) to increase the amount of certain customer receivables that may be sold.

The balance of factored receivables at December 31, 2020 was approximately $350 million.

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.

The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in Consolidated Statement of Cash Flows.

The Company records the discount as other (income) expense, net in the Consolidated Statement of Operations and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow.

The Company was in compliance with all of its debt covenants at December 31, 2020.

Factored receivables at the end of 2021 associated with the existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $500 million, an increase of approximately $150 million from December 31, 2020.

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

The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow in the Consolidated Statement of Cash Flows.

The Company records the discount as other (income) expense, net in the Consolidated Statement of Operations.

On November 1, 2019, S&P Global Inc.

(“S&P”) downgraded the Company’s debt rating to “BB+” as S&P believed the Company would fail to meet S&P’s target debt level for 2019.

In addition, on March 9, 2020, Moody’s Corporation (“Moody’s”) downgraded the Company’s debt rating to “Ba1” based on a view that the Company would fail to meet Moody's target debt level for 2020.

As a result of the S&P and Moody's downgrades, certain of the Company’s outstanding senior notes currently aggregating to approximately $4.2 billion were subject to an interest rate adjustment of 25 basis points for each downgrade, totaling 50 basis points.

This increase to the interest rates of each series of the Company's senior notes subject to adjustment increased the Company’s annualized interest expense by approximately $21 million.

In addition, the Company’s ability to borrow from the commercial paper market on terms it deemed acceptable or favorable was eliminated and its cost of borrowing increased.

The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades.

On February 11, 2022, S&P upgraded the Company’s debt rating to “BBB-” from “BB+” as S&P believed the Company has been able to achieve S&P’s target debt level.

As a result of this upgrade, the Company will again be in a position to access the commercial paper market, up to a maximum of $800 million provided there is a sufficient amount available for borrowing under the Credit Revolver.

In addition, the interest rates on certain of the Company’s outstanding senior notes aggregating to approximately $4.2 billion will decrease by 25 basis points, reducing the Company’s interest expense by approximately $10 million on an annualized basis (approximately $8 million in 2022) as a result of the S&P upgrade.

However, these senior notes will remain subject to the interest rate adjustment of 25 basis points resulting from the 2020 debt rating downgrade by Moody’s, which has an

annualized impact on interest expense of approximately $11 million.

Furthermore, the Company may be required to pay a higher interest rates in future financings, and its potential pool of investors and funding sources could decrease, as a result of any future downgrades.

On February 6, 2022, the Company's Board of Directors authorized a $375 million Share Repurchase Program, effective immediately through the end of 2022.

The Company’s common shares may be purchased by the Company in the open market, in negotiated transactions or in other manners as permitted by federal securities laws and other legal requirements.

The repurchase of additional shares in the future will depend upon many factors, including the Company’s financial condition, liquidity and legal requirements.

The Company currently believes its capital structure and cash resources will continue to support the funding of future dividends and the Company will continue to evaluate all actions to strengthen its financial position and balance sheet, and to maintain its financial liquidity, flexibility and capital allocation strategy.

Risk Management

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Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs.

Interest rate swap contracts are therefore used by the Company to separate interest rate risk from the debt funding decision.

The cash paid and received from the settlement of interest rate swaps is included in interest expense.

Fair Value Hedges

At December 31, 2020, the Company had approximately $100 million notional of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread.

At December 31, 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.

The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.

On August 15, 2020, a $277 million notional interest rate swap matured concurrently with the maturity of the 4.70% senior notes which were repaid during the third quarter.

Cross-Currency Contracts

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

During the first quarter of 2020, the Company 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, 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 year ended December 31, 2020, the Company recognized income of $14 million in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

The Company had no cross-currency swaps used as hedging instruments in 2019.

During the years ended December 31, 2021 and 2020, the Company recognized income of $16 million and $14 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

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The effective portion of the gains or losses on these derivatives is deferred as a component of accumulated other comprehensive income (loss) (“AOCL”) and 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 December 31, 2020, the Company had approximately $509 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

At December 31, 2021, the Company had approximately $523 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 foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions.

At December 31, 2020, the Company had approximately $994 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through December 2021.

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

Commodity Contracts

To a lesser extent, the Company also enters into commodity-based derivatives in order to mitigate the risk that the rising price of these commodities could have on the cost of certain of the Company’s raw materials.

These commodity-based derivatives provide the Company with cost certainty.

At December 31, 2020, the Company had no notional amount outstanding of commodity-based derivatives that are designated as effective hedges for accounting purposes.

Fair market value gains or losses are included in the results of operations and are classified in cost of products sold.

At December 31, 2021, the Company had approximately $1.6 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through December 2022.

Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company's Consolidated Statement of Operations.

The following table presents the fair value of derivative financial instruments at December 31, 2021 (in millions):

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Foreign currency contracts (7)

Total $ (110)

Contractual Obligations, Commitments and Off-Balance Sheet Arrangements

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(in millions) Total 1 year 2-3 years 4-5 years After

Debt (1) $ 5,633 $ 465 $ 1,348 $ 748 $ 3,072

$ 4,913 $ 3 $ 1,291 $ 2,532 $ 1,087

Interest on debt (2)

1,961 245 413 284 1,019

Lease obligations (3)

705 145 218 144 198

Purchase obligations (4)

1,267 529 260 114 364

Tax obligations (5)

Total (6) $ 9,012 $ 1,153 $ 2,166 $ 1,326 $ 4,367

(1) Amounts represent contractual obligations based on the earliest date that the obligation may become due, excluding interest, based on borrowings outstanding at December 31, 2020.

$ 8,927 $ 943 $ 2,242 $ 3,074 $ 2,668

(1) Amounts represent contractual obligations based on the earliest date that the obligation may become due, including finance leases, excluding interest, based on borrowings outstanding at December 31, 2021.

For further information relating to these obligations, see Footnote 9 of the Notes to Consolidated Financial Statements .

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For further information, see Footnote 9 of the Notes to Consolidated Financial Statements .

(3) Amounts represent lease liabilities on operating and financing leases at December 31, 2020.

(3) Amounts represent lease liabilities on operating leases at December 31, 2021.

See Footnote 13 of the Notes to Consolidated Financial Statements .

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(6) Total does not include contractual obligations reported on the December 31, 2021 balance sheet as current liabilities, except for current portion of long-term debt, short-term debt and accrued interest.

The Company has entered into agreements for certain right of use operating leases that it has not yet taken possession of and are not reflected in the Consolidated Balance Sheet at December 31, 2021.

The total future obligations of these right of use operating leases have been excluded from the preceding table and are approximately $130 million.

See Footnote 13 of the Notes to Consolidated Financial Statements for additional information.

The Company also has liabilities for uncertain tax positions and unrecognized tax benefits.

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Actual results will differ from those estimates, and such differences may be material to the Consolidated Financial Statements.

The following sections describe the Company’s critical accounting policies.

The Company’s most critical accounting policies, which are those that have or are reasonably likely to have a material impact on its financial condition and results of operations, are described below.

Revenue Recognition

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Certain customers may receive cash and/or non-cash incentives such as cash discounts, returns, credits or reimbursements related to defective products, customer discounts (such as volume or trade discounts), cooperative advertising and other customer-related programs, which are accounted for as variable consideration.

In some cases, the Company must apply judgment, including contractual rates and historical payment trends, when estimating variable consideration.

In some cases, the Company applies judgment, including contractual rates and historical payment trends, when estimating variable consideration.

In addition, the Company participates in various programs and arrangements with customers designed to increase the sale of products by these customers.

Among the programs negotiated are arrangements under which allowances are earned by customers for attaining agreed-upon sales levels or for participating in specific marketing programs.

Coupon programs are also developed on a customer- and territory-specific basis with the intent of increasing sales by all customers.

Coupon programs are also developed on a customer- and territory-specific basis.

Under customer programs and arrangements that require sales incentives to be paid in advance, the Company amortizes the amount paid over the period of benefit or contractual sales volume.

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These estimates are determined using historical customer experience and other factors, which sometimes require significant judgment.

Due to the length of time necessary to obtain relevant data from customers, among other factors, actual amounts paid can differ from these estimates.

to the length of time necessary to obtain relevant data from customers, among other factors, actual amounts paid can differ from these estimates.

Sales taxes and other similar taxes are excluded from revenue.

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The Company’s operations are comprised of eight reporting units, within its five primary operating segments.

During the first quarter of 2020, the Company concluded that an impairment triggering event had occurred for all of its reporting units as the Company has experienced significant COVID-19 related disruption to its business in three primary areas:

supply chain, as certain manufacturing and distribution facilities were temporarily closed in line with government guidelines;

the temporary closure of secondary customer retail stores as well as the Company's Yankee Candle retail stores in North America;

and changes in consumer demand patterns to certain focused categories.

The Company used a quantitative approach, which involves comparing the fair value of each of the reporting units to the carrying value of those reporting units.

If the carrying value of a reporting unit exceeds its fair value, an impairment loss would be calculated as the differences between these amounts, limited to the amount of reporting unit goodwill allocated to the reporting unit.

The quantitative goodwill impairment testing requires significant use of judgment and assumptions, such as the identification of reporting units;

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The present value of the finite-period cash flows and the terminal value are determined using a selected discount rate.

The Company estimated the fair values of its reporting units based on discounted cash flow methodology reflecting its latest projections which included, among other things, the impact of tariffs on Chinese imports, the current expectations as to the impact of COVID-19 on its operations, as well as other inflation at the time the Company performed its impairment testing.

As a result of the impairment testing performed in connection with the COVID-19 global pandemic triggering event, the Company determined that its goodwill associated with its Appliances and Cookware segment was impaired.

During first quarter of 2020, the Company recorded a non-cash charge of $212 million to reflect the impairment of its goodwill as its carrying value exceeded its fair value.

The Company estimated the fair values of its reporting units based on discounted cash flow methodology reflecting its latest projections which included, among other things, the impact of significant input cost inflation for commodities, primarily resin, sourced finished goods,

transportation and labor on its operations at the time the Company performed its impairment testing.

There was no goodwill impairment recorded in conjunction with the Company’s annual impairment testing in the fourth quarter, and, as of December 31, 2021, there were no reporting units with fair values within 10% of the associated carrying values.

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Changes in business conditions could potentially require adjustments to these asset valuations.

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 the Appliances and Cookware, Commercial Solutions, Home Solutions, Learning and Development and Outdoor and Recreation segments were impaired.

During the first quarter of 2020, the Company recorded impairment charges of $1.3 billion to reflect impairment of these indefinite-lived tradenames because their carrying values exceeded their fair values.

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 intangible asset was impaired as its carrying value

exceeded its fair value.

During the third quarter of 2020, the Company recorded a non-cash charge of $2 million to reflect the impairment of this indefinite-lived intangible asset.

During the fourth quarter of 2021, in connection with its annual impairment testing, the Company recorded non-cash impairment charges of $29 million and $31 million associated with tradenames in the Commercial Solutions and Learning and Development segments, respectively, as their carrying values exceeded their fair values, reflecting a downward revision of future expected cash flows, which include the impact of the COVID-19 global pandemic.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of these tradenames would have resulted in increased impairment charges of approximately $1 million and $7 million, respectively.

The remaining value of these tradenames were $5 million and $47 million, respectively.

The remaining tradenames within the Company's Commercial Solutions and Learning and Development segments with no impairment during the fourth quarter of 2021 impairment test had carrying values of $523 million and $436 million, respectively, and fair values in excess of 10% of carrying values.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of these remaining tradenames would not have resulted in an impairment charge.

There were no impairments of the Company’s tradenames within the Home Appliances, Home Solutions and Outdoor and Recreation segments during the fourth quarter of 2021 impairment test.

The carrying value of tradenames within these segments were $58 million, $1.0 billion and $119 million, respectively, and fair values in excess of 10% of the carrying values.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of these tradenames would not have resulted in an impairment charge.

At December 31, 2021, all remaining indefinite-lived tradenames had fair values in excess of 10% of their associated carrying values.

See Footnotes 1 and 7 of the Notes to Consolidated Financial Statements for further information.

During the fourth quarter of 2020, in conjunction with its annual impairment testing, the Company recorded a non-cash impairment charge of $20 million associated with a tradename in the Learning and Development segment, as its carrying value exceeded its fair value.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of this tradename would have resulted in an increase to the impairment charge of approximately $14 million.

The remaining carrying value of this tradename is approximately $135 million.

The remaining tradenames within the Company's Learning and Development segment with no impairment during the fourth quarter of 2020 impairment test had carrying values of $387 million, with $310 million of those with fair values in excess of 10% of carrying values, respectively.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of the remaining Learning and Development tradenames would have resulted in an impairment charge of approximately $5 million.

There were no impairments of the Company’s tradenames within the Appliances and Cookware and Outdoor and Recreation segments during the fourth quarter of 2020 impairment test.

The remaining carrying value of tradenames within these segments were approximately $58 million and $119 million, respectively, with $54 million and $113 million of those tradenames with fair values in excess of 10% of the carrying values, respectively.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of the Appliances and Cookware tradenames would not have resulted in an impairment charge.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of the Outdoor and Recreation tradenames would have resulted in an impairment charge of approximately $1 million.

There were no impairments of the Company’s tradenames within the Commercial Solutions and Home Solutions segments during the fourth quarter of 2020 impairment test.

The remaining carrying value of tradenames within these segments were approximately $$576 million and $1.0 billion, respectively, and all tradenames have fair values in excess of 10% of the carrying values.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of the Commercial Solutions tradenames would have resulted in an impairment charge of approximately $6 million.

An increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of the Home Solutions tradenames would not have resulted in an impairment charge.

The Company believes the circumstances and global disruption caused by COVID-19 may continue to affect its businesses, future 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, labor inflation and tariffs.

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 made for purposes of the goodwill and indefinite-lived intangible asset impairment testing performed during the fourth quarter of 2021 will prove to be accurate predictions of the future.

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Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending decline significantly in the future or if commercial and industrial economic activity experiences a sustained deterioration from current levels, it is reasonably likely the Company will be required to record impairment charges in the future.

At December 31, 2020, there were four indefinite-lived tradenames with fair values less than 10% of their associated carrying values within the Appliances and Cookware, Learning and Development, and Outdoor and Recreation segments.

A hypothetical 10% reduction in the forecasted debt-free cash flows used in the excess earnings method to determine the fair value of certain indefinite-lived intangibles of the Company would not have resulted an impairment.

A hypothetical 10% reduction in forecasted revenue used in the relief from royalty method to determine the fair value of certain indefinite-lived intangibles would have resulted in incremental impairment charges in the Company's Learning and Development and Outdoor and Recreation segments of $35 million and $1 million, respectively.

See Footnote 7 of the Notes to Consolidated Financial Statements for further information.

Other Long-Lived Assets

The Company continuously evaluates whether impairment indicators related to its property, plant and equipment, operating leases and other long-lived assets are present.

These impairment indicators may include a significant decrease in the market price of a long-lived asset or asset group, early termination of an operating lease, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group.

These impairment indicators may include a significant decrease in the market price of a long-lived asset or asset group, early termination of an operating lease, a significant adverse change to the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group.

If impairment indicators are present, the Company estimates the future cash flows for the asset or group of assets.

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For example, if items are favorably resolved or management determines a deferred tax asset is realizable that was previously reserved, the Company will recognize period tax benefits.

Conversely, to the extent tax matters are

unfavorably resolved or management determines a valuation allowance is necessary for a tax asset that was not previously reserved, the Company will recognize incremental period tax expense.

Conversely, to the extent tax matters are unfavorably resolved or management determines a valuation allowance is necessary for a tax asset that was not previously reserved, the Company will recognize incremental period tax expense.

These matters are expected to contribute to the tax rate differing from the statutory rate and continued volatility in the Company’s effective tax rate.

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Actual asset allocations may vary from the targeted allocations for various reasons, including market conditions and the timing of transactions.

For 2020, 2019 and 2018, the actual return (loss) on plan assets for the Company’s U.S.

For 2021, 2020 and 2019, the actual return on plan assets for the Company’s U.S.

pension plan assets was approximately $48 million, $178 million and $213 million, respectively, versus an expected return on plan assets of approximately $51 million, $59 million and $59 million, respectively.

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The healthcare cost trend rates used in valuing the Company’s postretirement benefit obligation are established based upon actual healthcare cost trends and consultation with actuaries and benefit providers.

At the 2020 measurement date, the current weighted average healthcare cost trend rate assumption was approximately 6.7%.

At December 31, 2021, the current weighted average healthcare cost trend rate assumption was approximately 6.2%.

The current healthcare cost trend rate is assumed to gradually decrease to an ultimate healthcare cost trend rate of 4.5%.

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International Operations

For 2020, 2019 and 2018, the Company’s non-U.S.

businesses accounted for approximately 33% of net sales (see Footnote 17 of the Notes to Consolidated Financial Statements ).

For 2021, the Company’s non-U.S.

businesses accounted for approximately 35% of net sales and 33% for 2020 and 2019 (see Footnote 17 of the Notes to Consolidated Financial Statements ).

Forward-Looking Statements

Forward-looking statements in this Report are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” "setting up," "beginning to," “will,” “should,” “would,” "resume," "are confident that," "remain optimistic that" or similar statements.

These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “setting up,” “beginning to,” “will,” “should,” “would,” “could,” “resume,” “are confident that,” “remain optimistic that,” “seek to,” or similar statements.

The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results.

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Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to:

• the Company's ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 pandemic;

• the Company’s dependence on the strength of retail, commercial and industrial sectors of the economy in various parts of the world;

• the Company's ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 pandemic, including as a result of any additional variants of the virus or the efficacy and distribution of vaccines;

• the Company’s dependence on the strength of retail, commercial and industrial sectors of the economy in various countries around the world;

• competition with other manufacturers and distributors of consumer products;

• major retailers’ strong bargaining power and consolidation of the Company’s customers;

• changes in the prices and availability of labor, transportation, raw materials and sourced products, including significant inflation, and the Company's ability to obtain them in a timely manner;

• the Company’s ability to improve productivity, reduce complexity and streamline operations;

• the cost and outcomes of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties, including but not limited to those described in Footnote 18 of the Notes to the Condensed

Consolidated Financial Statements , the potential outcomes of which could exceed policy limits, to the extent insured;

• the Company’s ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;

• the Company's ability to successfully remediate its material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting;

• the Company's ability to consistently maintain effective internal control over financial reporting;

• risks related to the Company’s substantial indebtedness, potential increases in interest rates or changes in the Company’s credit ratings;

• future events that could adversely affect the value of the Company’s assets and/or stock price and require additional impairment charges;

• the impact of cost associated with acquisition and divestitures;

• the Company's ability to complete planned divestitures, and other unexpected costs or expenses associated with dispositions;

• our ability to effectively execute our turnaround plan;

• changes in the prices of raw materials and sourced products and the Company's ability to obtain raw materials and sourced products in a timely manner;

• the impact of governmental investigation, inspections, lawsuits, legislation requests or other actions or other activities by third parties;

• the risks inherent to the Company’s foreign operations, including currency fluctuations, exchange controls and pricing restrictions;

• a failure of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s services providers;

• a failure or breach of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s service providers;

• the impact of United States or foreign regulations on the Company’s operations, including the impact of tariffs and environmental remediation costs;

• the potential inability to attract, retain and motivate key employees;

• the resolution of tax contingencies resulting in additional tax liabilities;

• changes in tax laws and the resolution of tax contingencies resulting in additional tax liabilities;

• product liability, product recalls or related regulatory actions;

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• significant increases in the funding obligations related to the Company’s pension plans;

• other factors listed from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

The information contained in this Annual Report on Form 10-K is as of the date indicated.

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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 7. Management’s Discussion and Analysis