What changed in this filing

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Item 1A. Risk Factors

2022-02-10 compared with 2021-02-11 · 95 added, 90 removed, 230 unchanged (45% of the section changed)

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These statements, which are intended to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, are based on current projections about operations, industry conditions, financial condition and liquidity.

Words that identify forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or merger, or our businesses.

Words that identify forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," “guarantee”, “seek” and the negative of these words and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or merger, or our businesses.

In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

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Our financial condition and results of operations have been impacted and may in the future be adversely affected by the ongoing COVID-19 outbreak.

We continue to closely monitor the impact of the global COVID-19 pandemic on all aspects of our operations and regions, including its effect on our consumers, employees, trade customers, suppliers and distribution channels.

In 2020, the pandemic created significant business disruption and economic uncertainty which adversely impacted our manufacturing operations, supply chain, and distribution channels.

While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption and resulting decline in global business activity remains uncertain.

Many factors that have impacted us and others that will impact us in the future, such as availability of effective treatments and vaccines, are out of our control.

We continue to closely monitor the impact of the global COVID-19 pandemic on all aspects of our operations and regions, including its effect on our consumers, operations, employees, trade customers, suppliers and distribution channels.

In 2020 and 2021, the pandemic created significant business disruption and economic uncertainty which adversely impacted our manufacturing operations, supply chain, and distribution channels.

While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption, including supply chain disruption, and resulting impact in global business activity remains uncertain.

Many factors that have impacted us and others that may impact us in the future, such as timing and availability of effective treatments and vaccines, as well as vaccination rates among the population in the United States and many of the countries in which we operate, are out of our control.

The adverse impact of the pandemic is expected to continue and may materially affect our financial statements in future periods.

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• Production shutdowns and slowdowns because of COVID as well as COVID-related government orders and supply or labor shortages, in individual or collective groups of factories in impacted countries, which have and could in the future result in increased costs and decreased efficiency, and which have and could impact our ability to respond to rapid changes in demand;

• Uncertainty regarding the timing for our production facilities to return to pre-COVID operational speed and production capacity;

• Uncertainty regarding production facility operational speed and production capacity;

• Lack of availability of component materials in our supply chain and an increase in raw material and component costs;

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• Potential future impairment in value of certain tangible or intangible assets could be recorded as a result of weaker economic conditions;

• Significant disruption of global financial markets, which could have a negative impact on our ability to access capital in the future, and which, together with operational impacts noted above, necessitated certain liquidity creation and preservation actions as a precautionary measure in 2020;

• Fluctuations in forecasted earnings before tax and corresponding volatility in our effective tax rate;

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and abroad, including uncertainty regarding impacts to our current global tax positions and future tax planning;

• Operational risk, including but not limited to data privacy and cybersecurity incidents, as a result of salaried workforce extended remote work arrangements, and operational delays as a result of salaried employee furlough and collective vacation actions in certain countries, and restrictions on employee travel;

• Operational risk, including but not limited to data privacy and cybersecurity incidents, as a result of salaried workforce extended remote work arrangements, uncertainty regarding return-to-office timing and duration at various administrative facilities around the world, and operational delays as a result of salaried employee furlough and collective vacation actions in certain countries, and restrictions on employee travel;

• Operational disruption if key employees terminate their employment or become ill, as well as diversion of our management team's attention from non-COVID-19 related matters;

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Several of these competitors, such as those set forth in the Business section of this annual report, are large, well-established companies, ranking among the Global Fortune 150.

We also face competition that may be able to quickly adapt to changing consumer preferences, particularly in the connected appliance space.

Moreover, our customer base includes large, sophisticated trade customers who have many choices and demand competitive products, services and prices, and which may in the future merge, consolidate, form alliances or further increase their relative purchasing scale.

We also face competition that may be able to quickly adapt to changing consumer preferences, particularly in the connected appliance space, or may be able to adapt more quickly to changes brought about by the global pandemic, supply chain constraints, or other factors.

Moreover, our customer base includes large, sophisticated trade customers who have many choices and demand competitive products, services and prices, and which have and may in the future merge, consolidate, form alliances or further increase their relative purchasing scale.

Competition in the global appliance industry is based on a number of factors including selling price, product features and design, consumer taste, performance, innovation, reputation, energy efficiency, service, quality, cost, distribution, and financial incentives, such as promotional funds, sales incentives, volume rebates and terms.

Many of our competitors are increasingly expanding beyond their existing manufacturing footprints.

Our competitors, especially global competitors with low-cost sources of supply and/or highly protected home countries outside the United States, have aggressively priced their products and/or introduced new products to increase market share and expand into new geographies.

Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the shifting of consumer purchasing practices towards e-commerce and other channels, and the increasing global prevalence of direct-to-consumer sales models.

In addition, technological innovation is a significant competitive factor for our products.

unable to successfully compete in this highly competitive environment, our business and financial performance could be negatively affected.

Our competitors, especially global competitors with low-cost sources of supply, vertically integrated business models and/or highly protected home countries outside the United States, have aggressively priced their products and/or introduced new products to increase market share and expand into new geographies.

Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the shifting of consumer purchasing practices towards e-commerce and

other channels, and the increasing global prevalence of direct-to-consumer sales models.

In addition, technological innovation is a significant competitive factor for our products, as consumers continually look for new product features that save time, effort and natural resources.

If we are unable to successfully compete in this highly competitive environment, our business and financial performance could be negatively affected.

The loss of, or substantial decline in, volume of sales to any of our key trade customers, major buying groups, and/or builders could adversely affect our financial performance.

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Most of our products are not sold through long-term contracts, allowing trade customers to change volume among suppliers like us.

As the trade customers continue to become larger through merger, consolidation or organic growth, they may seek to use their position to improve their profitability by various means, including improved efficiency, lower pricing, and increased promotional programs.

As the trade customers continue to become larger through merger, consolidation or organic growth, they may seek and have sought to use their position to improve their profitability by various means, including improved efficiency, lower pricing, and increased promotional programs.

If we are unable to meet their demand requirements, our volume growth and financial results could be negatively affected.

We also continue to pursue direct-to-consumer sales globally, including the launch of direct-to-consumer sales on many of our brand websites in recent years, which may impact our relationships with existing trade customers.

We also continue to pursue direct-to-consumer sales globally, including the launch of direct-to-consumer sales on most of our brand websites in recent years, which may impact our relationships with existing trade customers.

The loss or substantial decline in volume of sales to our key trade customers, major buying groups, builders, or any other trade customers to which we sell a significant amount of products, could adversely affect our financial performance.

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Inaccurate or negative posts or comments about us on social networking and other websites that spread rapidly through such forums could seriously damage our reputation and brand image.

If we do not maintain, extend and expand our brand image, then our financial statements could be materially and adversely affected.

If we do not maintain, extend and expand our brand image, then our financial statements could be materially adversely affected.

An inability to effectively execute and manage our business objectives and global operating platform initiative could adversely affect our financial performance.

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We consider our intellectual property rights, including patents, trademarks, copyrights and trade secrets, and the licenses we hold, to be a significant and valuable aspect of our business.

We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third party nondisclosure and assignment agreements.

We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements, as well as agreements and policies with our employees and other parties.

Our failure to obtain protection for or adequately protect our trademarks, products, new features of our products, or our processes may diminish our competitiveness.

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OPERATIONAL RISKS

We face risks associated with our divestitures, acquisitions and other investments and risks associated with our increased presence in emerging markets.

From time to time, we make strategic acquisitions or divestitures, investments and participate in joint ventures.

For example, in 2019 we sold our Embraco compressor business.

In addition, we acquired Indesit and a majority interest in Hefei Sanyo in 2014.

We face risks associated with our divestitures, acquisitions, other investments and joint ventures.

From time to time, we make strategic divestitures, acquisitions, investments and participate in joint ventures.

For example, in 2021, we divested our majority interest in Whirlpool China (formerly Hefei Sanyo) and sold our manufacturing entity in Turkey, and in 2019 we sold our Embraco compressor business.

In addition, we acquired Indesit in 2014.

These transactions, and other transactions that we have entered into or which we may enter into in the future, can involve significant challenges and risks, including that the transaction does not advance our business strategy or fails to produce a satisfactory return on our investment.

We have encountered and may encounter difficulties in integrating acquisitions with our operations, undertaking post-

acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems and controls of acquired companies.

We have encountered and

may encounter difficulties in integrating acquisitions with our operations, undertaking post-acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems and controls of acquired companies.

Integrating acquisitions and carving out divestitures is often costly and may require significant attention from management.

There might also be differing or inadequate cybersecurity and data protection controls, which could impact our exposure to data security incidents and potentially increase anticipated costs or time to integrate the business.

Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into a transaction.

While our evaluation of any potential transaction includes business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities or costs associated with any quality issues with an acquisition target's legacy products.

While our evaluation of any potential transaction includes business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities, costs associated with any quality issues with an acquisition target's legacy products or difficulties and costs associated with obtaining necessary regulatory approvals.

In addition, certain liabilities may be retained by Whirlpool when closing a facility, divesting an entity or selling physical assets, and such liabilities may be material.

For example, we agreed to retain certain liabilities relating to Embraco antitrust, tax, environmental, labor and products in connection with the Embraco sale.

In addition, the current and proposed changes to the U.S.

and foreign regulatory approval process and requirements in connection with an acquisition may cause approvals to take longer than anticipated to obtain, not be forthcoming or contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits of the transaction to us and could impede the execution of our business strategy.

We face risks associated with our presence in emerging markets.

Our growth plans include efforts to increase revenue from emerging markets, including through acquisitions.

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changes in tax rates and tax laws;

and work stoppages and labor relations.

and work stoppages and labor relations, in addition to other risks described below under "Risks associated with unanticipated social, political and/or economic events may materially and adversely impact our business."

Risks associated with our international operations may decrease our revenues and increase our costs.

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These risks include the following:

• COVID-19-related shutdowns and other pandemic-related uncertainties in the countries in which we operate;

• COVID-19-related shutdowns, the timing, availability and effectiveness of treatments and vaccines, and other pandemic-related uncertainties in the countries in which we operate;

• Political, legal, and economic instability and uncertainty;

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Additionally, any determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on us.

Terrorist attacks, cyber events, armed conflicts, civil unrest, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.

Such events could directly impact our physical facilities or those of our suppliers or customers.

Risks associated with unanticipated social, political and/or economic events may materially and adversely impact our business.

Terrorist attacks, cyber events, armed conflicts, civil unrest, espionage, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.

Many of such events have impacted and could directly impact our physical facilities or those of our suppliers or customers.

We have been and may be subject to information technology system failures, network disruptions, cybersecurity attacks and breaches in data security, which may materially adversely affect our operations, financial condition and operating results.

We depend on information technology to improve the effectiveness of our operations and to interface with our customers, consumers and employees, as well as to maintain financial accuracy and efficiency.

In addition, we collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, personal data or other information that is subject to privacy and security laws, regulations and/or customer-imposed controls.

Our business processes and data sharing across functions, suppliers, and vendors is dependent on information technology integration.

The failure of any systems, whether internal or third-party, during normal operation, system upgrades, implementations, or connections, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other financial and business disruptions, or the loss of or damage to intellectual property and the personally identifiable data of consumers and employees.

In addition, we have outsourced certain information technology support services and administrative functions, such as system application maintenance and certain benefit plan administration functions, to third-party service providers and may outsource other functions in the future to achieve cost savings and efficiencies.

If these service providers do not perform effectively, we may not achieve the expected cost savings and may incur additional costs to correct errors made by such service providers.

Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies or the loss of or damage to intellectual property and personally identifiable information through system compromise, or harm employee morale.

Our information systems, or those of our third-party service providers, have been in the past and could be in the future impacted by inappropriate activity of parties intent on extracting or corrupting information or disrupting business processes, or by inadvertent data security-compromising activities by our employees or service providers.

We depend on information technology to improve the effectiveness of our operations, to interface with our customers, consumers and employees, to maintain the continuity of our manufacturing operations, and to maintain financial accuracy and efficiency.

In addition, we collect, store, and process confidential or sensitive data, including proprietary business information, personal data or other information that is subject to privacy and security laws, regulations and/or customer-imposed controls.

Our business processes and data sharing across suppliers and vendors is dependent on technology system availability.

Our systems may depend, directly or indirectly, on software developed by third parties (such as open source libraries or vendor software) and we may have limited visibility into the robustness of the security practices followed during design, development, or remediation of this third party software.

The failure of any such systems, whether internal or third-party, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other financial and business disruptions, employee relations issues, the loss of or damage to intellectual property and the unauthorized disclosure or

compromise of personally identifiable data of consumers and employees or of commercially sensitive information.

In addition, we have outsourced certain technology services and administrative functions to third-party service providers and may outsource additional functions in the future.

If these service providers do not perform effectively or experience failures, we may experience similar issues depending on the function involved.

In addition, we may not achieve expected cost savings of outsourcing and may incur additional costs to correct errors made by such service providers.

Our information systems, or those of our third-party service providers, have been in the past and could be in the future impacted by malicious activity of threat actors intent on extracting or corrupting information or disrupting business processes, or by unintentional data-compromising activities by our employees or service providers.

Such unauthorized access has in the past and could in the future disrupt our business and result in the loss of assets.

Cyber attacks are becoming more sophisticated and include malicious software, including ransomware attacks, attempts to gain unauthorized access to data, and other electronic security breaches that have in the past and could in the future lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data.

Our growth in the areas of connected appliances and the "Internet of Things," as well as our reliance on pandemic-driven

remote work arrangements, has increased these risks.

These events have in the past and could in the future impact our customers, consumers, employees, third-parties and reputation and lead to financial losses from remediation actions, loss of business or potential liability or an increase in expense.

Cyber attacks are becoming more sophisticated and include ransomware attacks, attempts to gain unauthorized access to data, social engineering and other security breaches that have in the past and could in the future lead to disruptions in availability of critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data.

Our growth in the areas of direct-to-consumer sales and connected appliances (the "Internet of Things"), accompanied by increasing handling of consumer information, and our reliance on pandemic-driven remote work arrangements, has increased these risks.

While we have not experienced any material impacts from a cyber attack, any one or more future cyber attacks could have a material adverse effect on our financial statements.

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We would be unable to obtain these proprietary components for an indeterminate period of time if these single-source suppliers were to cease or interrupt production or otherwise fail to supply these components to us, which could adversely affect our product sales and operating results.

Our operations and those of our suppliers are subject to disruption for a variety of reasons, including COVID-19-related supplier plant shutdowns or slowdowns, work stoppages, labor relations, intellectual property claims against suppliers, financial issues such as supplier bankruptcy, information technology failures, and hazards such as fire, earthquakes, flooding, or other natural disasters.

Our operations and those of our suppliers are subject to disruption for a variety of reasons, including COVID-19-related supplier plant shutdowns or slowdowns, transportation delays, work stoppages, labor relations, governmental regulatory and enforcement actions, intellectual property claims against suppliers, disputes with suppliers, distributors or transportation providers, financial issues such as supplier bankruptcy, information technology failures, hazards such as fire, earthquakes, flooding, or other natural disasters, including due to climate change, and increased homeland security requirements in the U.S.

and other countries.

For example, we expect to continue to be impacted by supply chain issues, due to factors largely beyond our control:

a global shortage of certain components, such as semiconductors, a strain on raw material and input cost inflation, all of which could escalate in future quarters.

These issues have and could delay importation of products and/or components or require us to locate alternative providers to avoid disruption to customers.

These alternatives have not and in the future may not be available on short notice and have and in the future could result in higher transit costs, which could have an adverse impact on our business and financial statements.

Insurance for certain disruptions may not be available, affordable or adequate.

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Such disruption has in the past and could in the future interrupt our ability to manufacture certain products.

Any significant disruption could negatively impact our financial statements.

Any significant disruption could have a material adverse impact on our financial statements.

Our ability to attract, develop and retain executives and other qualified employees is crucial to our results of operations and future growth.

We depend upon the continued services and performance of our key executives, senior management and skilled personnel, particularly professionals with experience in our business and operations and the home appliance industry.

While we strive to attract, develop and retain these individuals through execution of our human capital strategy (see “Human Capital Management” in Item 1), we cannot be sure that any of these individuals will continue to be employed by us.

In the case of talent losses, significant time is required to hire, develop and train skilled replacement personnel.

We must also attract, develop, and retain individuals with the requisite engineering and technical expertise to develop new technologies and introduce new products, particularly as we increase investment in our digital and “Internet of Things” capabilities.

An inability to hire, develop, transfer retained knowledge, engage and retain a sufficient number of qualified employees could materially hinder our business by, for example, delaying our ability to bring new products to market or impairing the success of our operations.

We must also attract, develop, and retain individuals with the requisite engineering and technical expertise to develop new technologies and introduce new products and services, particularly as we increase investment in our digital and “Internet of Things” capabilities.

Like many other companies, we are subject to fluctuations in the availability of qualified labor in certain key positions.

As an example, in today's labor market, it is challenging to attract and retain qualified talent for key roles within the company, which could lead to increased wage inflation or impede our ability to execute certain key strategic initiatives as we respond to this labor shortage.

A shortage of key employees can jeopardize the Company’s ability to implement its business objectives, and changes in key executives can result in loss of continuity, loss of accumulated knowledge, departures of other key employees, disruptions to our operations and inefficiency during transition periods.

In addition, if we are unable to enforce certain non-compete covenants and confidentiality provisions when key employees leave for a competitor, we may lose a competitive advantage arising from confidential and proprietary company information known to such former employees.

An inability to hire, develop, transfer retained knowledge, engage and retain a sufficient number of qualified employees could materially hinder our business by, for example, delaying our ability to bring new products and services to market or impairing the success of our operations.

A deterioration in labor relations could adversely impact our global business.

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FINANCIAL RISKS

Fluctuations and volatility in the cost of raw materials and purchased components could adversely affect our operating results.

The sources and prices of the primary materials (such as steel, resins, and base metals) used to manufacture our products and components containing those materials are susceptible to significant global and regional price fluctuations due to supply and demand trends, transportation costs, labor costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic climate, and other unforeseen circumstances.

In addition, we engage in contract negotiations and enter into commodity swap contracts to manage risk associated with certain commodities purchases.

Significant increases in materials costs and other costs now and in the future could have a material adverse effect on our financial statements.

Fluctuations and volatility in the cost and availability of raw materials and purchased components could adversely affect our operating results.

The sources and prices of the primary materials (such as steel, resins, and base metals) used to manufacture our products and components containing those materials are susceptible to significant global and regional price fluctuations or availability due to supply and demand trends, the COVID-19 pandemic, transportation and fuel costs, port and shipping capacity, labor costs or disputes, government regulations, including increased homeland security requirements, and tariffs, changes in currency exchange rates, price controls, the economic climate, severe weather, climate change and other unforeseen circumstances.

For example, we experienced raw material inflation of approximately $1.0 billion in 2021, in addition to many other cost increases throughout our business.

In addition, we engage in contract negotiations and enter into commodity swap contracts to manage risk associated with certain commodities purchases, and we have in the past and may in the future experience losses based on commodity price changes.

Significant increases in materials cost and availability and other costs now and in the future could have a material adverse effect on our financial statements.

As an example, in recent years the company has experienced and expects to continue to experience significant levels of commodity, logistics and wage inflation across our businesses.

We have responded to these inflationary factors with strong cost reduction initiatives and cost-based price increases.

An inability to respond to inflationary pressures effectively could have a material adverse effect on our financial statements.

Foreign currency fluctuations may affect our financial performance.

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Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units or declines in projected revenue for our trademarks, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable.

We recorded an immaterial impairment charge related to other intangibles for the year ended December 31, 2020 and an impairment of $747 million related to goodwill ($579 million) and other intangibles ($168 million) for the year ended December 31, 2018 related to the EMEA reporting unit.

We did not record any impairment charges for the year ended December 31, 2021.

We recorded an immaterial impairment charge related to other intangibles for the year ended December 31, 2020 related to the EMEA reporting unit.

We may in the future be required to record a goodwill or intangible asset impairment charge that, if incurred, could have a material adverse effect on our financial statements.

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Significant differences in results or significant changes in assumptions may materially affect our postretirement obligations and related future contributions and expenses.

Changes in the method of determining the London Interbank Offered Rate, or LIBOR, or the replacement of LIBOR with one or more alternative reference rates, could adversely affect our financial condition and results of operations.

Certain of our financial obligations and instruments are or may be made at variable interest rates that use LIBOR (or metrics derived from or related to LIBOR) as a benchmark.

On July 27, 2017, the United Kingdom's Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021.

On November 18, 2020, ICE Benchmark Administration (“IBA”) announced that all LIBOR rates for certain currencies (other than U.S.

Dollar LIBOR (“USD LIBOR”) would cease publication at the end of 2021.

On November 30, 2020, IBA announced that, following a consultation period, it intends to announce that for USD LIBOR, it intends to cease publication of 1-week and 2-month LIBOR at the end of 2021 and that it does not intend to cease publication of other tenors of USD LIBOR until June 30, 2023.

Regulators are generally supportive of these announcements and confident that USD LIBOR will remain a “representative” rate pursuant to procedures to be adopted, which could include new or alternative methods of determining LIBOR.

The pending cessation of LIBOR for various currencies at the end of 2021 (and in 2023 for certain tenors of USD LIBOR) will also result in replacement rates being used more widely, including in the instruments documenting certain of our financial obligations.

For example, in the U.S., a group convened by the Federal Reserve Board and the Federal Reserve Bank of New York, called the Alternative Reference Rate Committee ("ARRC") and comprised of a diverse set of private sector entities, has identified the Secured Overnight Financing Rate (or "SOFR") as its preferred alternative rate for the U.S.

LIBOR and the Federal Reserve Bank of New York has begun publishing SOFR daily.

Many banks in the U.S.

have begun entering into transactions where interest is determined based on SOFR or plan to do so during the course of 2021, as recommended by ARRC and certain regulators.

Additionally, many financial contracts, including some which govern our financial obligations, include replacement alternatives for LIBOR upon the cessation of LIBOR.

It is possible that some U.S.

lenders will elect to use alternative rates other than SOFR.

Central banks in several other jurisdictions have also announced plans for alternative reference rates for other currencies.

The potential consequences of these changes cannot be fully predicted and could have an adverse impact on the market value for LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us, and could adversely affect our financial statements.

Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows.

In addition, any transaction process could involve, among other things, increased volatility or illiquidity in markets for instruments that rely on LIBOR, reductions in the value of certain instruments, mismatches between rates in hedging documentation and in the documentation for the underlying obligation being hedged, increased borrowing costs, uncertainty under applicable documentation, and/or difficult and costly consent processes.

LEGAL & COMPLIANCE RISKS

Unfavorable results of legal and regulatory proceedings could materially adversely affect our business and financial condition and performance.

We are subject to a variety of litigation and legal compliance risks relating to, among other things:

We are or may in the future become subject to a variety of litigation and legal compliance risks relating to, among other things:

intellectual property rights;

income and indirect taxes;

environmental matters;

environmental matters (including matters related to climate change);

corporate matters;

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customs and duties;

occupational health and safety (including matters related to the COVID-19 pandemic), anti–bribery and anti–corruption regulations;

occupational health and safety (including matters related to the COVID-19 pandemic), industrial accidents, anti–bribery and anti–corruption regulations;

energy regulations;

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The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements.

Changes in the legal and regulatory environment, including data privacy, potential climate regulations and changes in taxes and tariffs, could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation.

Changes in the legal and regulatory environment, including data privacy and protection, and changes in taxes and tariffs, could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation or regulatory action.

The conduct of our businesses, and the production, distribution, sale, advertising, labeling, safety, transportation and use of many of our products, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to foreign laws and regulations administered by government entities and agencies in countries in which we operate.

In addition, we operate in an environment in which there are different and potentially conflicting data privacy and data access laws in effect in the various U.S.

states and foreign jurisdictions in which we operate and we must understand and comply with each law and standard in each of these jurisdictions while ensuring the data is secure.

For example, the European Union’s General Data Protection Regulation, which became effective in May 2018, the

California Consumer Privacy Act of 2018, which came into effect on January 1, 2020, and the California Privacy Rights and Enforcement Act, which will become effective on January 1, 2023, collectively impose or will impose new regulatory data privacy standards for which we must comply.

In addition, we operate in an environment in which there are different and potentially conflicting data privacy and data protection laws in effect in the various U.S.

states and foreign jurisdictions in which we operate and we must understand and comply with each law and standard in each of these jurisdictions.

For example, the European Union’s General Data Protection Regulation, which became effective in May 2018, the Brazilian General Data Protection Law, which came into effect in September 2020 and various other privacy and data protection laws that have been passed or are pending in other countries collectively impose or will impose new regulatory data privacy and protection standards for which we must comply.

Some of the laws allow for significant fines, reaching several percentage points of global corporate revenues or more.

These laws and regulations may change, sometimes dramatically, as a result of political, economic or social events.

Changes in laws, regulations or governmental policy and the related interpretations may alter the environment in which we do business and may impact our results or increase our costs or liabilities.

In addition, we incur and will continue to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency.

Climate change regulations at the federal, state or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other costly activities.

We are also subject to global regulations related to chemical substances and materials in our products (such as the U.S.

Toxic Substances Control Act), which may require us to modify the materials used in our products or undertake activities which may have a cost impact.

There is also increased focus by governmental and non-governmental entities on sustainability matters.

We have set rigorous science-based targets for greenhouse gas reductions and related sustainability goals, and any failure to achieve our sustainability goals or reduce our impact on the environment, any changes in the scientific or governmental metrics utilized to objectively measure success, or the perception that we have failed to act responsibly regarding climate change could result in negative publicity and adversely affect our business and reputation.

Additionally, we could be subjected to future liabilities, fines or penalties or the suspension of product production for failing to comply, or being alleged as failing to comply, with various laws and regulations, including environmental regulations.

Cleanup obligations that might arise at any of our manufacturing sites or the imposition of more stringent environmental laws in the future could also adversely affect us.

Additionally, as a global company based in the United States, we are exposed to the impact of U.S.

tax changes, especially those that affect the effective corporate income tax rate.

and global tax changes, especially those that affect the effective corporate income tax rate.

In addition, the current domestic and international political environment, including government shutdowns and changes to U.S.

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For additional information about our consolidated tax provision, see Note 15 to the Consolidated Financial Statements, and for additional information about global trade and tariffs, please see "Other Matters" in the Management's Discussion and Analysis section of this Annual Report on Form 10-K.

The impact of climate change and climate change or other environmental regulation may adversely impact our business.

The effects of climate change could have an impact on our business and cause us to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency.

Climate change regulations at the federal, state or local level, or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other costly activities.

We are also subject to global regulations related to chemical substances and materials in our products (such as the U.S.

Toxic Substances Control Act), which may require us to modify the materials used in our products or undertake activities which may have a cost impact.

There is also increased focus by governmental and non-governmental entities on sustainability matters.

In addition, a number of governmental bodies have finalized, proposed or are contemplating additional legislative and regulatory changes in response to the potential effects of climate change.

In particular, cleanup obligations that might arise at any of our manufacturing sites or the imposition of more stringent environmental laws in the future could adversely affect our business.

We have set rigorous science-based targets for greenhouse gas reductions and related sustainability goals, including a "net-zero" emissions target in our plants and operations that was

announced in 2021.

Any failure to achieve our sustainability goals or reduce our impact on the environment, any changes in the scientific or governmental metrics utilized to objectively measure success, or the perception that we have failed to act responsibly regarding climate change could result in negative publicity and adversely affect our business and reputation.

GENERAL RISKS

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Economic uncertainty and related factors exacerbate negative trends in business and consumer spending and has caused and may cause certain customers to push out, cancel, or refrain from placing orders for our products.

Uncertain market conditions, difficulties in obtaining capital, or

reduced profitability has caused and may cause some customers to scale back operations, exit markets, merge with other retailers, or file for bankruptcy protection and potentially cease operations, which can also result in lower sales and/or additional inventory.

Uncertain market conditions, difficulties in obtaining capital, or reduced profitability has caused and may cause some customers to scale back operations, exit markets, merge with other retailers, or file for bankruptcy protection and potentially cease operations, which can also result in lower sales and/or additional inventory.

These conditions have affected and may similarly affect key suppliers, which could impair their ability to deliver parts and result in delays for our products or added costs.

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Regional, political and economic instability in countries in which we do business may adversely affect business conditions, disrupt our operations, and have an adverse effect on our financial condition and results of operations.

For example, the effect of the UK's exit from the European Union (“Brexit”), despite their December 2020 trade agreement, remains uncertain and could adversely impact certain areas of our business, including, but not limited to, an increase in duties and delays in the delivery of products, and adverse impacts to our suppliers and financing institutions.

In addition, we expect to continue to be impacted by the global supply chain issues discussed above under Operational Risks.

Uncertainty about future economic and industry conditions also makes it more challenging for us to forecast our operating results, make business decisions, and identify and prioritize the risks that may affect our businesses, sources and uses of cash, financial condition and results of operations.

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In addition, our operations are subject to general credit, liquidity, foreign exchange, market and interest rate risks.

Our ability to invest in our businesses, fund strategic acquisitions and refinance maturing debt obligations depends in part on access to the capital markets.

Our ability to access liquidity or borrow to invest in our businesses, fund strategic acquisitions and refinance maturing debt obligations depends in part on access to the capital markets.

If we do not timely and appropriately adapt to changes resulting from the uncertain macroeconomic environment and industry conditions, or to difficulties in the financial markets, or if we are unable to continue to access the capital markets, our financial statements may be materially and adversely affected.

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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 1A. Risk Factors