What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-29 compared with 2021-10-29 · 218 added, 396 removed, 489 unchanged (56% of the section changed)

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net sales $ 2,388 $ 2,288

3 unchanged sentences

Restructuring costs, net 5 5

Impairment of goodwill, intangibles and other assets — 2 — 1,482

Operating income (loss) 281 363 778 ( 882 )

Operating income 217 192

Non-operating expenses:

Interest expense, net 59 67

Other (income) expense, net 1 9 ( 3 ) 20

Income (loss) before income taxes 215 283 584 ( 1,107 )

Income tax provision (benefit) 25 ( 21 ) 108 ( 210 )

Net income (loss) $ 190 $ 304 $ 476 $ ( 897 )

Other income, net ( 124 ) ( 1 )

Income before income taxes 282 126

Income tax provision 48 37

Net income $ 234 $ 89

Weighted average common shares outstanding:

1 unchanged sentence

Diluted 424.7 427.6

Earnings (loss) per share:

Earnings per share:

Basic $ 0.55 $ 0.21

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Comprehensive income (loss):

Net income (loss) $ 190 $ 304 $ 476 $ ( 897 )

Net income $ 234 $ 89

Other comprehensive income (loss), net of tax

3 unchanged sentences

Total other comprehensive income (loss), net of tax 28 ( 34 )

Comprehensive income (loss) 156 322 449 ( 965 )

Total comprehensive income (loss) attributable to noncontrolling interests — — 2 ( 6 )

Total comprehensive income (loss) attributable to parent $ 156 $ 322 $ 447 $ ( 959 )

Comprehensive income 262 55

Total comprehensive loss attributable to noncontrolling interests — ( 1 )

Total comprehensive income attributable to parent $ 262 $ 56

See Notes to Condensed Consolidated Financial Statements (Unaudited).

3 unchanged sentences

(Amounts in millions, except par values)

September 30,

2022 December 31,

23 unchanged sentences

Stockholders’ equity:

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

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

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

Preferred stock ( 10.0 authorized shares, $ 1.00 par value, no shares issued at March 31, 2022 and December 31, 2021)

Common stock ( 800.0 authorized shares, $ 1.00 par value, 440.8 shares and 450.0 shares issued at March 31, 2022 and December 31, 2021, respectively)

Treasury stock, at cost ( 25.0 shares and 24.5 shares at March 31, 2022 and December 31, 2021, respectively)

( 623 ) ( 609 )

2 unchanged sentences

Accumulated other comprehensive loss ( 854 ) ( 882 )

Stockholders’ equity attributable to parent 4,055 3,874

Stockholders’ equity attributable to noncontrolling interests 2 26

Total stockholders’ equity 3,980 4,091

5 unchanged sentences

(Amounts in millions)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income (loss) $ 476 $ ( 897 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 234 $ 89

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

Depreciation and amortization 76 86

Impairment of goodwill, intangibles and other assets — 1,482

Gain from sale of business ( 130 ) —

Deferred income taxes 326 1

1 unchanged sentence

Other, net ( 2 ) —

Changes in operating accounts:

Changes in operating accounts excluding the effects of divestiture:

Accounts receivable 14 122

2 unchanged sentences

Accrued liabilities and other ( 426 ) ( 36 )

Net cash provided by operating activities 490 820

Net cash used in operating activities ( 272 ) ( 25 )

Cash flows from investing activities:

Proceeds from sale of divested business 620 —

Capital expenditures ( 70 ) ( 54 )

Proceeds from sale of divested businesses — 15

Other investing activities, net 9 —

Net cash used in investing activities ( 180 ) ( 138 )

Net cash provided by (used in) investing activities 559 ( 54 )

Cash flows from financing activities:

Net payments of short-term debt — ( 26 )

Net proceeds from issuance of debt — 492

Payments on current portion of long-term debt ( 1 ) ( 94 )

Payments on long-term debt — ( 6 )

Repurchase of shares of common stock ( 275 ) —

Cash dividends ( 100 ) ( 100 )

Acquisition of noncontrolling interests ( 26 ) —

Equity compensation activity and other, net ( 17 ) ( 39 )

1 unchanged sentence

Exchange rate effect on cash, cash equivalents and restricted cash 8 ( 14 )

Increase (decrease) in cash, cash equivalents and restricted cash ( 504 ) 494

Decrease in cash, cash equivalents and restricted cash ( 98 ) ( 332 )

Cash, cash equivalents and restricted cash at beginning of period 477 1,021

9 unchanged sentences

Stock Treasury

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

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

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

Dividends declared on common stock - $ 0.23 per share

— — ( 99 ) — — ( 99 ) — ( 99 )

Equity compensation, net of tax — — 12 — — 12 — 12

Acquisition of noncontrolling interests — — — — — — ( 23 ) ( 23 )

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

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

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

Balance at December 31, 2021 $ 450 $ ( 609 ) $ 7,734 $ ( 2,602 ) $ ( 882 ) $ 4,091

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

Comprehensive income — — — 234 28 262

Dividends declared on common stock - $ 0.23 per share

1 unchanged sentence

Equity compensation, net of tax 2 ( 14 ) 12 — — —

Acquisition of noncontrolling interests — — — — — — ( 26 ) ( 26 )

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

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

Common stock purchased and retired ( 11 ) — ( 264 ) — — ( 275 )

Other — — ( 1 ) — — ( 1 )

Balance at March 31, 2022 $ 441 $ ( 623 ) $ 7,384 $ ( 2,368 ) $ ( 854 ) $ 3,980

Stock Treasury

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

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

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

Dividends declared on common stock - $ 0.23 per share

— — ( 98 ) — — ( 98 ) — ( 98 )

Equity compensation, net of tax — — 10 — — 10 — 10

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

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

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

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

Comprehensive loss — — — ( 897 ) ( 61 ) ( 958 ) ( 7 ) ( 965 )

Comprehensive income (loss) — — — 89 ( 32 ) 57 ( 2 ) 55

Dividends declared on common stock - $ 0.23 per share

2 unchanged sentences

Other changes attributable to noncontrolling interests — — — — ( 2 ) ( 2 ) 1 ( 1 )

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

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

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

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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GAAP for a complete financial statement.

Certain reclassifications have been made in the Company’s financial statements of the prior year to conform to the current year presentation.

Beginning January 1, 2021, the Company reported the operating results of its cookware product lines as part of the Food reporting unit within the Home Solutions segment, and no longer as part of the former Appliances and Cookware segment.

This change was the result of an assessment by the chief operating decision maker (“CODM”) to better align the cookware product lines with other similar product lines in various food categories.

In connection with this change, the Chief Executive Officer (“CEO”) for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines.

The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments.

In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment.

Prior period comparable results for both of these segments have been reclassified to conform to this product line change.

The Company also revised the calculation of operating income (loss) by segment to include restructuring charges.

Prior period comparable results have been reclassified to conform to the change in calculation (See Footnote 15 ).

Use of Estimates and Risks and Uncertainty of Coronavirus (COVID-19)

Since early 2020, the COVID-19 pandemic has 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, were adversely impacted by the COVID-19 pandemic.

During the first quarter of 2020, the Company concluded that an impairment triggering event had occurred, as it had experienced significant COVID-19 related disruption for all of its reporting units, and performed an impairment test for its goodwill and indefinite-lived intangible assets and a recoverability test for its long-lived assets, which primarily include finite-lived intangible assets, property plant and equipment and right of use lease assets.

As a result of the impairment and recoverability testing performed in connection with the triggering event, the Company determined that certain of its goodwill, indefinite-lived intangible assets, property plant and equipment and right of use operating leases assets were impaired.

During the first quarter of 2020, the Company recorded an aggregate non-cash charge of approximately $ 1.5 billion in connection with these impairments.

On March 31, 2022, the Company sold its Connected Home & Security (“CH&S”) business unit to Resideo Technologies, Inc.

See Footnotes 2 and 16 for further information.

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

Use of Estimates and Risks and Uncertainty of Coronavirus (COVID-19)

Since early 2020, the COVID-19 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.

Although restrictions have eased since the first quarter of 2021 in certain areas, the Company's global operations, similar to those of many large, multi-national corporations, were adversely impacted by the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic to the Company's future sales, operating results, cash flows, liquidity and financial condition continues to be driven by numerous evolving factors that the Company cannot reasonably predict and which will vary by jurisdiction and market, including the severity and duration of the pandemic, the emergence of new strains and variants of the coronavirus, the likelihood of a resurgence of positive cases, the development and availability of effective treatments and vaccines, especially in areas where conditions have recently worsened and 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 are available to the general public, the availability and prices of supply chain resources, including materials, products and transportation;

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

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

These primary drivers are beyond the Company's knowledge and control, and as a result, at this time it is difficult to reasonably 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.

Management’s application of U.S.

1 unchanged sentence

As discussed above, the world continues to be impacted by the COVID-19 pandemic which has required greater use of estimates and assumptions in the preparation of the consolidated financial statements, more specifically, those estimates and assumptions utilized in the Company’s forecasted cash flows that form the basis in developing the fair values utilized in its impairment assessments as well as its annual effective tax rate.

These estimates also include assumptions as to the duration and severity of the pandemic, timing and amount of demand shifts amongst sales channels, workforce availability, supply chain continuity, and timing as to a return to normalcy.

These estimates also include assumptions as to the duration and severity of the pandemic, timing and amount of demand shifts amongst sales channels, workforce availability and supply chain continuity.

Although management has made its best estimates based upon current information, actual results could materially differ from those estimates and may require future changes to such estimates and assumptions.

4 unchanged sentences

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

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

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

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

Accordingly, the Company’s results of

operations for the three months ended March 31, 2022 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2022.

The Company's sales and operating results, previously disrupted by the COVID-19 pandemic, reverted back to historical patterns in 2021, however, uncertainty still remains over the volatility and direction of future consumer demand patterns.

Recent Accounting Pronouncements

8 unchanged sentences

The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.

Adoption of New Accounting Guidance

The Company’s accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our 2020 Annual Report on Form 10-K.

Such significant accounting policies are applicable for periods prior to the adoption of the following new accounting standards and updated accounting policies.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740) .

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

ASU 2019-12 became effective for years, and interim periods within those years, beginning after December 15, 2020.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Sales of Accounts Receivables

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

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

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

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

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

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

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

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

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

Factored receivables at March 31, 2022 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 535 million, an increase of approximately $ 35 million from December 31, 2021.

Transactions under this agreement are 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 the Condensed Consolidated Statement of Cash Flows.

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

Footnote 2 — Divestiture Activity

On March 31, 2022, the Company sold its CH&S business unit to Resideo Technologies, Inc., for approximately $ 593 million, subject to customary working capital and other post-closing adjustments.

As a result, the Company recorded a pretax gain of $ 130 million, which was included in other income, net in its Condensed Consolidated Statements of Operations.

Footnote 3 — Accumulated Other Comprehensive Income (Loss)

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

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the three months ended March 31, 2022 (in millions):

Adjustment Pension and

4 unchanged sentences

Amounts reclassified to earnings 6 4 1 11

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

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

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

Net current period other comprehensive income 23 5 — 28

Balance at March 31, 2022 $ ( 552 ) $ ( 287 ) $ ( 15 ) $ ( 854 )

Reclassifications from AOCL to the results of operations for the three months ended March 31, 2022 and 2021 were pretax expense of (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Cumulative translation adjustment (1)

Pension and postretirement benefit plans (2)

$ 5 $ 6 $ 16 $ 17

Derivative financial instruments (3)

8 ( 6 ) 19 ( 5 )

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

(1) See Footnote 2 for further information.

(2) See Footnote 11 for further information.

(3) See Footnote 10 for further information.

The income tax provision (benefit) allocated to the components of AOCL for the periods indicated are as follows (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Foreign currency translation adjustments $ 1 $ 12

1 unchanged sentence

Derivative financial instruments ( 1 ) 2

Income tax provision (benefit) related to AOCL $ 12 $ ( 13 ) $ 26 $ ( 3 )

Income tax provision related to AOCL $ — $ 15

Footnote 4 — Restructuring Costs

Restructuring provisions were determined based on estimates prepared at the time the restructuring actions were approved by management and are periodically updated for changes.

Restructuring amounts also include amounts recognized as incurred.

Restructuring costs, net incurred by reportable business segments for all restructuring activities for the periods indicated are as follows (in millions):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Commercial Solutions $ 1 $ —

3 unchanged sentences

Outdoor and Recreation — 1

Corporate 3 — 4 1

$ 6 $ 4 $ 16 $ 14

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

Accrued restructuring costs activity for the three months ended March 31, 2022 are as follows (in millions):

Balance at December 31, 2021 Restructuring

Costs, Net Payments Balance at

September 30, 2021

March 31, 2022

Severance and termination costs $ 8 $ 4 $ ( 5 ) $ 7

2 unchanged sentences

2020 Restructuring Plan

The Company’s 2020 restructuring program, which was initiated during the second quarter of 2020 largely in response to the impact of the COVID-19 pandemic, was designed to reduce overhead costs, streamline certain underperforming operations and improve future profitability.

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

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

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

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

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

Accelerated Transformation Plan

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

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

The Company’s 2020 restructuring program, which was substantially complete at the end of 2021, was designed to reduce overhead costs, streamline certain underperforming operations and improve future profitability.

The restructuring costs, which

impacted all segments, include employee-related costs such as severance and other termination benefits.

During the three months ended March 31, 2021, the Company recorded restructuring charges of $ 5 million.

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

Other Restructuring and Restructuring-Related Costs

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

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

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, including certain costs associated with Project Ovid.

Restructuring-related costs are recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.

During the three months ended March 31, 2022, the Company recorded restructuring charges of $ 5 million.

Footnote 5 — Inventories

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Raw materials and supplies $ 321 $ 310

4 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Land $ 80 $ 82

3 unchanged sentences

$ 1,144 $ 1,204

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

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

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

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

See Footnote 1 for further information.

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

Depreciation expense was $ 49 million and $ 52 million for the three months ended March 31, 2022 and 2021, respectively.

During the quarter ended March 31, 2022, the Company took possession of a right of use operating lease asset with future obligations of approximately $ 64 million.

Footnote 7 — Goodwill and Other Intangible Assets, Net

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

Goodwill activity for the three months ended March 31, 2022 is as follows (in millions):

Segments Net Book Value at December 31, 2021

Exchange and Other

Net Book Value at

September 30, 2021

March 31, 2022

Commercial Solutions $ 747 $ — $ 916 $ ( 169 ) $ 747

4 unchanged sentences

$ 3,504 $ ( 18 ) $ 8,261 $ ( 4,775 ) $ 3,486

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

See Footnote 1 for further information.

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

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

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

See Footnote 1 for further information.

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Accumulated Amortization

5 unchanged sentences

$ 3,878 $ ( 832 ) $ 3,046 $ 4,247 $ ( 877 ) $ 3,370

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

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

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

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

See Footnote 1 for further information.

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

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

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

September 30, 2020 Nine Months

September 30, 2020

Impairment of indefinite-lived intangibles assets:

Commercial Solutions $ — $ 320

Home Appliances — 87

Home Solutions — 290

Learning and Development 2 80

Outdoor and Recreation — 482

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

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

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

Amortization expense for intangible assets was $ 27 million and $ 34 million for the three months ended March 31, 2022 and 2021, respectively.

Footnote 8 — Other Accrued Liabilities

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Customer accruals $ 652 $ 715

Accrued income taxes 125 66

Operating lease liabilities 125 122

Accrued interest expense 118 60

Accrued self-insurance liabilities, contingencies and warranty 121 125

Accrued interest expense 115 56

Accrued marketing and freight expenses 66 59

Accrued income taxes 54 43

Other 242 244

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

September 30, 2021 December 31, 2020

3.15 % senior notes due 2021

3.75 % senior notes due 2021

4.00 % senior notes due 2022

March 31, 2022 December 31, 2021

3.85 % senior notes due 2023

$ 1,087 $ 1,086

4.00 % senior notes due 2024

7 unchanged sentences

Long-term debt $ 4,880 $ 4,883

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

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

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

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

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

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

On February 11, 2022, S&P Global Inc.

(“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 is now 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 (defined hereafter).

In addition, the interest rate on the relevant senior notes decreased by 25 basis points due to the upgrade, reducing the Company’s interest expense by approximately $ 10 million on an annualized basis (approximately $ 8 million in 2022).

However, certain of the Company’s outstanding senior notes aggregating to approximately $ 4.2 billion are still subject to an interest rate adjustment of 25 basis points in connection with the Moody’s Corporation (“Moody’s”) downgraded debt rating in 2020.

Receivables Facility

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

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

At March 31, 2022, the Company did not have any amounts outstanding under the Securitization Facility.

Revolving Credit Facility

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

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

At March 31, 2022, the Company did not have any amounts outstanding under the Credit Revolver.

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Fair Value Book Value Fair Value Book Value

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The carrying amounts of all other significant debt approximates fair value.

Net Investment Hedge

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

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

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

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

Footnote 10 — Derivatives

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Fair Value Hedges

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

At March 31, 2022, 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.

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

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.

The Company previously entered into three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of $ 1.3 billion.

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.

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

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

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

During the three months ended March 31, 2022 and 2021, the Company recognized income of $ 5 million and $ 4 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

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

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

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

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

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

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

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

At March 31, 2022, the Company had approximately $ 467 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 March 31, 2022, the Company had approximately $ 1.2 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, net in the Company's Condensed Consolidated Statement of Operations.

The following table presents the fair value of derivative financial instruments at the dates indicated (in millions):

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Assets (Liabilities)

Balance Sheet Location September 30, 2021 December 31, 2020

Balance Sheet Location March 31, 2022 December 31, 2021

Derivatives designated as effective hedges:

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Interest rate swaps Other assets — 3

Interest rate swaps Other accrued liabilities ( 1 ) —

Net Investment Hedges

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Total $ ( 21 ) $ ( 17 )

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

September 30, 2021 Three Months

September 30, 2020

Gain/(Loss) Gain/(Loss)

Location of gain/(loss) recognized in income Recognized

(effective portion)

Interest rate swaps Interest expense, net $ — $ ( 1 ) $ — $ ( 2 )

Foreign currency contracts Net sales and cost of products sold 11 ( 7 ) ( 3 ) 8

Cross-currency swaps Other (income) expense, net 25 — ( 47 ) —

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

September 30, 2021 Nine Months

September 30, 2020

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

March 31, 2022 Three Months

March 31, 2021

Gain/(Loss) Gain/(Loss)

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Cross-currency swaps

Other (income) expense, net 53 — ( 43 ) —

Other income, net 4 — 36 —

Total $ 3 $ ( 1 ) $ 39 $ ( 4 )

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

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

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

At March 31, 2022, net deferred gains of approximately $ 10 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three months ended March 31, 2022 and 2021, the Company recognized expense of $ 3 million and income of $ 7 million, respectively, in other income, net, related to derivatives that are not designated as hedging instruments.

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

The Company is not a party to any derivatives that require collateral to be posted prior to settlement.

Footnote 11 — Employee Benefit and Retirement Plans

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Pension Benefits

International U.S.

International

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

Three Months Ended March 31,

2022 2021 2022 2021

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Amortization 4 5 1 1

Settlements — — — — — 1 — —

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Interest cost $ — $ — $ — $ 1

Amortization $ ( 1 ) $ ( 1 )

Total income $ ( 1 ) $ ( 1 )

Defined Benefit Plan Buy-in

In February 2022, the Company entered into an agreement with an insurance company for a bulk annuity purchase or “buy-in” for one of its U.K.

defined benefit pension plans, resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations to covered participants.

The Company anticipates the “buy-out” for the plan to be completed by the end of 2022 or early 2023.

The non-cash settlement charge associated with the transaction is expected to be material to the Company's results of operations.

Footnote 12 — Income Taxes

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

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

The Company’s effective income tax rate for the three months ended March 31, 2022 and 2021 were 17.0 % and 29.4 %, respectively, reflecting an increase in discrete tax benefits and a lower effective income tax rate associated with the divestiture of the CH&S business.

The difference between the U.S.

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

federal statutory income tax rate of 21.0 % and the Company’s effective income tax rate for the three months ended March 31, 2022 and 2021 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned as well as certain taxable income inclusion items in the U.S.

based on foreign earnings.

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

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

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

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

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

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

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

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

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

The three months ended March 31, 2022 were also impacted by certain discrete items.

Income tax expense for the three months ended March 31, 2022 included a discrete benefit of $ 4 million associated with the approval of certain state tax credits, offset by $ 14 million of income tax expense related to the divestiture of the CH&S business unit.

The three months ended March 31, 2021 were also impacted by $ 1 million of discrete tax items.

During the three months ended March 31, 2022, the Company amended its 2017 U.S.

federal income tax return to carryback foreign tax credits generated in 2018 and capital losses generated in 2018 and 2020.

This resulted in an increase in noncurrent income taxes receivable of approximately $ 261 million, a decrease in income taxes payable of approximately $ 95 million, and an increase in deferred tax liabilities of approximately $ 356 million.

The Company’s U.S.

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

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

Therefore, the Company has not accounted for the effects of the Regulations in its Condensed Consolidated Financial Statements for the period ending March 31, 2022.

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

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

The Company intends to vigorously defend its position.

On April 4, 2022, in a case not involving the Company, the United States District Court for the District of Colorado granted the taxpayer's motion for summary judgment that the Temporary Regulations were not validly issued on the basis of improper promulgation.

The Company is monitoring the impact of this decision and intends to continue to vigorously defend its position.

Footnote 13 — Earnings Per Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Basic weighted average shares outstanding 421.9 424.9

Dilutive securities 2.8 2.7

3.1 1.1 2.7 —

Diluted weighted average shares outstanding 424.7 427.6

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

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

Footnote 13 — Share-Based Compensation

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

At March 31, 2022 and 2021 dividends and equivalents for share-based awards expected to be forfeited did not have a material impact on net income for basic and diluted earnings per share.

Footnote 14 — Stockholders' Equity and Share-Based Compensation

During the three months ended March 31, 2022, the Company awarded 1.0 million performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of $ 28 million and entitle the recipients to shares of the Company’s common stock primarily at the end of a three-year vesting period.

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

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

During the three months ended March 31, 2022, the Company also awarded 0.6 million time-based RSUs with an aggregate grant date fair value of $ 16 million.

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

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

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

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

During the three months ended March 31, 2022, the Company also awarded 2.2 million time-based stock options with an aggregate grant date fair value of $ 14 million.

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

The weighted average assumptions used to determine the fair value of stock options granted for the three months ended March 31, 2022, is as follows:

Risk-free interest rates 1.9 %

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Exercise price $ 25.86

Share Repurchase Program

On February 6, 2022, the Company's Board of Directors authorized a $ 375 million Share Repurchase Program (“SRP”), 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.

On February 25, 2022, the Company repurchased $ 275 million of its shares of common stock beneficially owned by Carl C.

Icahn and certain of his affiliates (collectively, “Icahn Enterprises”), at a purchase price of $ 25.86 per share, the closing price of the Company's common shares on February 18, 2022.

At March 31, 2022, the Company has remaining authority to repurchase approximately $ 100 million of shares of common stock under the SRP.

Footnote 15 — Fair Value Disclosures

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

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

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The Company’s nonfinancial assets, which are measured at fair value on a nonrecurring basis, include property, plant and equipment, goodwill, intangible assets and certain other assets.

The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows.

Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units;

the assignment of assets and liabilities to reporting units;

and the estimation of future cash flows, business growth rates, terminal values and discount rates.

The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use of judgment and assumptions, such as the estimation of cash flow projections, terminal values, royalty rates, contributory cross charges, where applicable, and discount rates.

Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy.

These assets and certain liabilities are measured at fair value on a nonrecurring basis as part of the Company’s annual impairment testing and as circumstances require.

In connection with the Company's annual impairment testing at December 1, 2020, an intangible asset was fair valued at $ 135 million on a non-recurring basis.

The Company reviews property, plant and equipmen t and operating lease assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows.

If the Company concludes that impairment exists, the carrying amount is reduced to fair value.

See Footnote 5 for further information.

In connection with the Company's annual impairment testing at December 1, 2021, a tradename within the Learning and Development segment was fair valued at $ 47 million on a non-recurring basis.

Footnote 16 — Segment Information

This change was the result of an assessment by the CODM to better align the cookware product lines with other similar product lines in various food categories.

In connection with this change, the CEO for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines.

The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments.

In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment.

Prior period comparable results for both of these segments have been reclassified to conform to this product line change.

The Company also revised the calculation of operating income (loss) by segment to include restructuring charges.

Prior period comparable results have been reclassified to conform to the change in calculation.

On March 31, 2022, the Company sold its CH&S business unit to Resideo Technologies, Inc.

The results of operations for CH&S continued to be reported in the Condensed Consolidated Statements of Operations as part of the Commercial Solutions segment through March 31, 2022.

The Company's five primary reportable segments are:

Segment Key Brands Description of Primary Products

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

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

closet and garage organization;

hygiene systems and material handling solutions

connected home and security and smoke and carbon monoxide alarms

Home Appliances Calphalon®, Crock-Pot®, Mr.

Home Appliances Calphalon, Crockpot, Mr.

Coffee, Oster and Sunbeam Household products, including kitchen appliances

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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

Outdoor and Recreation 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 CODM regularly assesses information for decision-making purposes, including the allocation of resources.

This structure reflects the manner in which the chief operating decision maker (“CODM”) 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.

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net sales (1)

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Corporate ( 56 ) ( 47 )

$ 281 $ 363 $ 778 $ ( 882 )

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Segment assets

Commercial Solutions (3)

$ 1,973 $ 2,522

Home Appliances 1,081 1,055

4 unchanged sentences

$ 14,204 $ 14,179

September 30, 2020 Nine Months

September 30, 2020

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

Commercial Solutions $ — $ 320

Home Appliances — 287

Home Solutions — 302

Learning and Development 2 80

Outdoor and Recreation — 482

(1) All intercompany transactions have been eliminated.

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

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

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

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

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

See Footnote 6 for further information.

(3) The reduction in the Commercial Solutions segment assets is primarily due to the sale of the CH&S business.

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

Three Months Ended September 30, 2021

Commercial Solutions Home

Appliances Home

Solutions Learning and Development Outdoor and Recreation Total

Commercial $ 381 $ — $ — $ — $ — $ 381

Connected Home Security 105 — — — — 105

Home Appliances — 443 — — — 443

Food — — 330 — — 330

Home Fragrance — — 268 — — 268

Baby and Parenting — — — 359 — 359

Writing — — — 510 — 510

Outdoor and Recreation — — — — 391 391

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

North America $ 363 $ 249 $ 480 $ 651 $ 236 $ 1,979

International 123 194 118 218 155 808

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

Three Months Ended September 30, 2020

Commercial Solutions Home

Appliances Home

Solutions Learning and Development Outdoor and Recreation Total

Commercial $ 416 $ — $ — $ — $ — $ 416

Connected Home Security 119 — — — — 119

Home Appliances — 430 — — — 430

Food — — 353 — — 353

Home Fragrance — — 270 — — 270

Baby and Parenting — — — 307 — 307

Writing — — — 421 — 421

Outdoor and Recreation — — — — 383 383

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

North America $ 407 $ 249 $ 510 $ 529 $ 232 $ 1,927

International 128 181 113 199 151 772

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Commercial Solutions Home

6 unchanged sentences

Home Fragrance — — 198 — — 198

Baby and Parenting — — — 959 — 959

Baby — — — 291 — 291

Writing — — — 359 — 359

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Total $ 510 $ 340 $ 500 $ 650 $ 388 $ 2,388

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Commercial Solutions Home

6 unchanged sentences

Home Fragrance — — 230 — — 230

Baby and Parenting — — — 790 — 790

Baby — — — 281 — 281

Writing — — — 336 — 336

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The Company previously disclosed that it had received a subpoena and related informal document requests from the SEC primarily relating to its sales practices and certain accounting matters for the time period beginning from January 1, 2016.

The Company has cooperated with the SEC in connection with its investigation and ongoing requests for documents, testimony, and information and intends to continue to do so.

has cooperated with the SEC in connection with its investigation and ongoing requests for documents, testimony and information and intends to continue to do so.

The Company cannot predict the timing or outcome of this investigation.

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

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

The Company’s estimate of environmental remediation costs associated with these matters at March 31, 2022 was $ 37 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

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

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Lower Passaic River Matter

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

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

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

On April 11, 2014, while work on the RI/FS remained underway, U.S.

EPA issued a Source Control Early Action Focused Feasibility Study (“FFS”), which proposed four alternatives for remediation of the lower 8.3 miles of the Lower Passaic River.

EPA’s cost estimates for its cleanup alternatives ranged from approximately $ 315 million to approximately $ 3.2 billion in capital costs plus from approximately $ 1 million to $ 2 million in annual maintenance costs for 30 years, with its preferred alternative carrying an estimated cost of approximately $ 1.7 billion plus an additional approximately $ 2 million in annual maintenance costs for 30 years.

In February 2015, the participating parties submitted to the U.S.

EPA a draft RI, followed by submission of a draft FS in April 2015.

The draft FS sets forth various alternatives for remediating the lower 17 miles of the Passaic River, ranging from a no action alternative, to targeted remediation of locations along the entire lower 17 mile stretch of the river, to remedial actions consistent with U.S.

EPA’s preferred alternative as set forth in the FFS for the lower 8.3 miles coupled with monitored natural recovery and targeted remediation in the upper nine miles.

The cost estimates for these alternatives ranged from approximately $ 28 million to $ 2.7 billion, including related operation, maintenance and monitoring costs.

EPA issued a conditional approval of the RI report in June 2019.

EPA issued a Record of Decision for the lower 8.3 miles of the Lower Passaic River in March 2016 (the “2016 ROD”).

The 2016 ROD finalizes as the selected remedy the preferred alternative set forth in the FFS, which U.S.

EPA estimates will cost $ 1.4 billion.

Subsequent to the release of the 2016 ROD, U.S.

EPA issued GNLs for the lower 8.3 miles of the Lower Passaic River (the “2016 GNL”) to numerous entities, apparently including all previous recipients of the initial GNL, including Company Parties, as well as several additional entities.

The 2016 GNL states that U.S.

EPA would like to determine whether one entity, Occidental Chemical Corporation (“OCC”), will voluntarily perform the remedial design for the selected remedy for the lower 8.3 miles, and that following execution of an agreement for the remedial design, U.S.

EPA plans to begin negotiation of a remedial action consent decree under which OCC and the other major PRPs will implement and/or pay for U.S.

EPA’s selected remedy for the lower 8.3 miles of the Lower Passaic River and reimburse U.S.

EPA’s costs incurred for the Lower Passaic River.

In September 2016, OCC and EPA entered into an Administrative Order on Consent for performance of the remedial design.

On March 30, 2017, U.S.

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

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

In September 2017, U.S.

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

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

EPA has issued General Notice Letters to over 100 entities, including the Company and its subsidiary, Berol Corporation (together, the “Company Parties”), alleging that they are PRPs at the Diamond Alkali Superfund Site (“Site”) pursuant to the CERCLA.

The Site is the subject of investigation and remedial activities (the “CERCLA Administrative Actions”) and related settlement negotiations with the U.S.

In addition, the Company Parties are defendants in related litigation, and the Site is also subject to a Natural Resource Damage Assessment.

CERCLA Administrative Actions

The Site is divided into four “operable units,” and the Company Parties have received General Notice Letters in connection with operable unit 2, which comprises the lower 8.3 miles of the Lower Passaic River and its tributaries (“Unit 2”), and operable unit 4, which comprises a 17 -mile stretch of the Lower Passaic River and its tributaries (“Unit 4”).

Unit 2 is geographically subsumed within Unit 4.

Unit 4 Investigation

The Company received its first general notice letter pertaining to Unit 4 in 2003.

Beginning in 2004, the Company Parties, together with numerous other PRPs, entered into several administrative agreements with the U.S.

EPA to fund and perform various investigation and clean-up activities in Unit 4.

Pursuant to a 2007 Administrative Order on Consent, over 70 PRPs, including the Company Parties, have been performing or funding the remedial investigation and feasibility study for Unit 4.

The parties performing the remedial investigation and feasibility study submitted the results of their remedial investigation to the U.S.

EPA in July 2019.

They also submitted an interim remedy feasibility study focused on the upper 9 miles of Unit 4 in September 2021.

Activity under the remedial investigation and feasibility study for Unit 4 is not yet complete and remains underway.

In October 2021, the U.S.

EPA issued a Record of Decision for an interim remedy for the upper 9 miles of Unit 4, selecting a combination of dredging and capping as the remedial alternative, which the U.S.

EPA estimates will cost $ 441 million in the aggregate.

Unit 2 Investigation

Concurrent with activities under the remedial investigation and feasibility study for Unit 4, the U.S.

EPA performed a Source Control Early Action Focused Feasibility Study for Unit 2, which culminated in a Record of Decision in 2016.

EPA estimates that the selected remedy for Unit 2 set forth in its Record of Decision will cost $ 1.4 billion in the aggregate.

EPA then issued a General Notice Letter for Unit 2 to the Company Parties and over 100 other entities, including those that received a General Notice Letter in connection with Unit 4.

The Unit 2 General Notice Letter requested that Occidental Chemical Corporation (“OCC”) perform the remedial design for Unit 2, which OCC subsequently agreed to perform.

The General Notice Letter indicated that, following execution of a remedial design consent decree, the U.S.

EPA would begin negotiating a remedial action consent decree for Unit 2 with OCC and other major PRPs.

2016 Record of Decision and 2021 Record of Decision Remedy Performance

In March 2022, U.S.

EPA issued a Notice of Potential Liability and Notice of Consent Decree Negotiations to OCC and several other entities, excluding the Company Parties, encouraging those parties to finance and perform the remedies selected in the 2016 and 2021 Records of Decision.

EPA specifically identified OCC and four other companies as “work parties” in connection with Units 2 and 4.

The Company Parties were not recipients of this notice and were not identified as work parties.

EPA Settlement

In September 2017, the U.S.

EPA announced an allocation process involving roughly 80 Unit 2 General Notice Letter recipients, with the intent of offering cash-out settlements to a number of parties (the “U.S.

EPA Settlement”).

The PRPs responsible for release of dioxin, furans, and/or polychlorinated biphenyls would be expected to perform the remedial action for Unit 2 and would be excluded from the U.S.

EPA Settlement.

The allocation process has concluded.

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

Following discussion with U.S.

EPA regarding the 2015 draft FS, and U.S.

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

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

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

EPA approved the IR FS.

On October 4, 2021, U.S.

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

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

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

OCC has also asserted that Maxus’s parent company, YPF, S.A., and certain other affiliates (the “YPF Entities”) similarly must indemnify OCC, including on an “alter ego” theory.

On June 17, 2016, Maxus and certain of its affiliates commenced a chapter 11 bankruptcy case in the U.S.

Bankruptcy Court for the District of Delaware.

In connection with that proceeding, the YPF Entities are attempting to resolve any liability they may have to Maxus and the other Maxus entities undergoing the chapter 11 bankruptcy.

An amended Chapter 11 plan of liquidation became effective in July 2017.

In conjunction with that plan, Maxus and certain other parties, including the Company, entered into a mutual contribution release agreement (“Passaic Release”) pertaining to certain costs, but not costs associated with ultimate remedy.

On June 30, 2018, OCC sued 120 parties, including the Company and Berol, in the U.S.

District Court in New Jersey (“OCC Lawsuit”).

OCC subsequently filed a separate, related complaint against five additional defendants.

The OCC Lawsuit includes claims, counterclaims and cross-claims for cost recovery, contribution, and declaratory judgement under CERCLA.

The current, primary focus of the claims, counterclaims and cross-claims against the defendants is on certain past and future costs for investigation, design and remediation of the 17 -mile stretch of the Lower Passaic River and its tributaries, other than those subject to the Passaic Release.

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

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

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

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

EPA has decided the Newark Bay remedy.

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

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

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

In February 2022, the U.S.

EPA and certain parties to the allocation, including the Company Parties, reached an agreement in principle concerning a cash-out settlement for both Unit 2 and Unit 4.

The agreement in principle remains subject to the negotiation and court entry of a consent decree finalizing the U.S.

EPA Settlement.

The OCC Litigation

In June 2018, OCC sued over 100 parties, including the Company Parties, in the U.S.

District Court in New Jersey pursuant to CERCLA, requesting cost recovery, contribution, and a declaratory judgement.

The defendants, in turn, filed claims against 42 third-party defendants, and filed counterclaims against OCC (collectively, the “OCC Litigation”).

The primary focus of the OCC Litigation has been certain past and future costs for investigation, design and remediation of Units 2 and 4.

However, OCC has stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the Site, after the U.S.

EPA has selected the Newark Bay remedy.

OCC has also stated that it may broaden its claims in the future after completion of the Natural Resource Damage Assessment described below.

In a Motion for Stay of Proceedings filed in January 2022, certain defendants and all third-party defendants in the OCC Litigation moved to stay the case for a six-month period to allow the final stage of the parallel allocation proceedings and resulting settlement negotiations in the U.S.

EPA Settlement to conclude.

District Court denied the motion in March 2022.

The Company Parties continue to vigorously defend the OCC Litigation.

At this time, the Company cannot predict the eventual outcome.

The Natural Resource Damage Assessment

In 2007, the National Oceanic and Atmospheric Administration (“NOAA”), acting as the lead administrative trustee on behalf of itself and the U.S.

Department of the Interior, issued a Notice of Intent to Perform a Natural Resource Damage Assessment to the Company Parties, along with numerous other entities, identifying the recipients as PRPs.

The federal trustees (who now include the United States Department of Commerce, represented by NOAA, and the Department of the Interior, represented by the United States Fish and Wildlife Service) are presently undertaking the Natural Resource Damage Assessment.

As of the date of filing of this Quarterly Report, based on the agreement in principle noted above, the Company does not expect that its allocation in the U.S.

EPA Settlement relating to Unit 2 and Unit 4, if the settlement is finalized, will be material to the Company.

With respect to the OCC Litigation and Natural Resource Damage Assessment, the Company is currently unable to reasonably estimate the range of possible losses.

Based on currently known facts and circumstances, the Company does not believe that the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of operations.

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

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

3 unchanged sentences

Historically, payments made by the Company under these agreements did not have a material effect on the Company’s business, financial condition or results of operations.

In connection with the 2018 sale of The Waddington Group, Novolex Holdings, Inc.

In connection with the 2018 sale of The Waddington Group,

Novolex Holdings, Inc.

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

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

The Company intends to defend the litigation vigorously.

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

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

In the year ended December 31, 2021 the Company recorded an immaterial reserve to continuing operations in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter.

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

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

Although management of the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 17 .

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

At March 31, 2022, the Company had approximately $ 48 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements