UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 2019June 27, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number: 001-06024
 __________________________________________________________ 
WOLVERINE WORLD WIDE, INC.
(Exact Name of Registrant as Specified in its Charter)
 __________________________________________________________ 
Delaware38-1185150
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Delaware38-1185150
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
9341 Courtland Drive N.E.,Rockford,Michigan49351
(Address of principal executive offices)(Zip Code)
(616)866-5500
(Registrant’s telephone number, including area code)
________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading symbolName of each exchange on which registered
Common Stock, $1 Par ValueWWWNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Fileraccelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
There were 80,875,73681,877,131 shares of common stock, $1 par value, outstanding as of October 25, 2019.

July 27, 2020.

Table of Contents

Table of Contents

Table of Contents
Table of Contents
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1A.
Item 2.
Item 6.

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FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements,” which are statements relating to future, not past, events. Such forward-looking statements include, for example, statements about the future impact of the COVID-19 pandemic on the Company. In this context, forward-looking statements often address management’s current beliefs, assumptions, expectations, estimates and projections about future business and financial performance, national, regional or global political, economic and market conditions, and the Company itself. Such statements often contain words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “should,” “will,” variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Uncertainties that could cause the Company’s performance to differ materially from what is expressed in forward-looking statements include, but are not limited to, the following:
the effects of the COVID-19 pandemic on the Company’s business, operations, financial results and liquidity, including the duration and magnitude of such effects, which will depend on numerous evolving factors that the Company cannot currently fully predict or assess, including: the duration and scope of the pandemic, the negative impact on global and regional markets, economies and economic activity, including the duration and magnitude of its impact on unemployment rates, consumer discretionary spending and levels of consumer confidence; actions that governments, businesses and individuals may take in response to the pandemic; and the effects of the pandemic, including all of the foregoing, on the Company's manufacturers, distributors, suppliers, joint venture partners, wholesale customers, and other counterparties. The timing and scope of recovery after the pandemic is also uncertain;
changes in general economic conditions, employment rates, business conditions, interest rates, tax policies and other factors affecting consumer spending in the markets and regions in which the Company’s products are sold;
the inability for any reason to effectively compete in global footwear, apparel and consumer-direct markets;
the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences;
the inability to effectively manage inventory levels;
increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export;
foreign currency exchange rate fluctuations;
currency restrictions;
capacity constraints, production disruptions, quality issues, price increases or other risks associated with foreign sourcing;
the cost and availability of raw materials, inventories, services and labor for contract manufacturers;
labor disruptions;
changes in relationships with, including the loss of, significant wholesale customers;
risks related to the significant investment in, and performance of, the Company’s consumer-direct operations;
risks related to expansion into new markets and complementary product categories as well as consumer-direct operations;
the impact of seasonality and unpredictable weather conditions;
changes in general economic conditions and/or the credit markets on the Company’s manufacturers, distributors, suppliers and retailers;
increaseschanges in the Company’s effective tax rates;
failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company;
the risks of doing business in developing countries and politically or economically volatile areas;
the ability to secure and protect owned intellectual property or use licensed intellectual property;
the impact of regulation, regulatory and legal proceedings and legal compliance risks, including compliance with federal, state and local laws and regulations relating to the protection of the environment, environmental remediation and other related costs, and litigation or other legal proceedings relating to the protection of the environment or environmental effects on human health;
the potentialrisks of breach of the Company’s databases or other systems, or those of its vendors, which contain certain personal information, payment card data or proprietary information, due to cyberattack or other similar event;
problems affecting the Company’s distribution system, including service interruptions at shipping and receiving ports;
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strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company’s success in integrating acquired businesses, and implementing new initiatives and ventures;
the risk of impairment to goodwill and other intangibles;
the success of the Company’s restructuring and realignment initiatives undertaken from time to time; and
changes in future pension funding requirements and pension expenses.
These or other uncertainties could cause a material difference between an actual outcome and a forward-looking statement. The uncertainties included here are not exhaustive and are described in more detail in Part I, Item 1A: “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 201828, 2019 (the “2018“2019 Form 10-K”). Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company does not undertake an obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

4
PART I.FINANCIAL INFORMATION

Table of Contents
PART I.  FINANCIAL INFORMATION
ITEM 1.
ITEM 1. Financial Statements


WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations and Comprehensive Income
(Unaudited)
Quarter Ended Year-To-Date Ended Quarter EndedYear-To-Date Ended
(In millions, except per share data)September 28,
2019
 September 29,
2018
 September 28,
2019
 September 29,
2018
(In millions, except per share data)June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Revenue$574.3
 $558.6
 $1,666.3
 $1,659.6
Revenue$349.1  $568.6  $788.4  $1,092.0  
Cost of goods sold331.0
 326.5
 972.4
 965.4
Cost of goods sold201.9  338.2  459.4  641.4  
Gross profit243.3
 232.1
 693.9
 694.2
Gross profit147.2  230.4  329.0  450.6  
Selling, general and administrative expenses165.9
 161.6
 498.6
 488.6
Selling, general and administrative expenses143.6  168.7  299.7  332.7  
Environmental and other related costs9.1
 2.1
 19.1
 7.6
Environmental and other related costs, net of recoveriesEnvironmental and other related costs, net of recoveries(3.9) 6.2  4.9  10.0  
Operating profit68.3
 68.4
 176.2
 198.0
Operating profit7.5  55.5  24.4  107.9  
Other expenses:       Other expenses:
Interest expense, net8.2
 5.8
 21.8
 18.7
Interest expense, net10.5  6.7  18.3  13.6  
Debt extinguishment and other costsDebt extinguishment and other costs0.2  —  0.2  —  
Other income, net(0.9) (1.3) (3.2) (7.2)Other income, net(1.7) (1.0) (2.3) (2.3) 
Total other expenses7.3
 4.5
 18.6
 11.5
Total other expenses9.0  5.7  16.2  11.3  
Earnings before income taxes61.0
 63.9
 157.6
 186.5
Income tax expense12.4
 5.0
 28.2
 25.5
Net earnings48.6
 58.9
 129.4
 161.0
Earnings (loss) before income taxesEarnings (loss) before income taxes(1.5) 49.8  8.2  96.6  
Income tax expense (benefit)Income tax expense (benefit)0.4  9.6  (2.7) 15.8  
Net earnings (loss)Net earnings (loss)$(1.9) $40.2  10.9  80.8  
Less: net earnings (loss) attributable to noncontrolling interests(0.1) 0.1
 
 0.2
Less: net earnings (loss) attributable to noncontrolling interests(0.3) —  (0.5) 0.1  
Net earnings attributable to Wolverine World Wide, Inc.$48.7
 $58.8
 $129.4
 $160.8
Net earnings (loss) attributable to Wolverine World Wide, Inc.Net earnings (loss) attributable to Wolverine World Wide, Inc.$(1.6) $40.2  $11.4  $80.7  
       
Net earnings per share (see Note 3):       
Net earnings (loss) per share (see Note 3):Net earnings (loss) per share (see Note 3):
Basic$0.57
 $0.62
 $1.46
 $1.69
Basic$(0.02) $0.45  $0.14  $0.89  
Diluted$0.57
 $0.60
 $1.44
 $1.65
Diluted$(0.02) $0.45  $0.14  $0.88  
       
Comprehensive income$45.6
 $60.8
 $128.8
 $163.3
Comprehensive income (loss)Comprehensive income (loss)$(1.8) $39.8  $0.4  $83.2  
Less: comprehensive income (loss) attributable to noncontrolling interests(0.5) 0.3
 (0.3) 0.4
Less: comprehensive income (loss) attributable to noncontrolling interests(0.2) (0.1) (1.6) 0.2  
Comprehensive income attributable to Wolverine World Wide, Inc.$46.1
 $60.5
 $129.1
 $162.9
Comprehensive income (loss) attributable to Wolverine World Wide, Inc.Comprehensive income (loss) attributable to Wolverine World Wide, Inc.$(1.6) $39.9  $2.0  $83.0  
       
Cash dividends declared per share$0.10
 $0.08
 $0.30
 $0.24
Cash dividends declared per share$0.10  $0.10  $0.20  $0.20  
See accompanying notes to consolidated condensed financial statements.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
(In millions, except share data)September 28,
2019

December 29,
2018

September 29,
2018
(In millions, except share data)June 27,
2020
December 28,
2019
June 29,
2019
ASSETS     ASSETS
Current assets:     Current assets:
Cash and cash equivalents$125.2
 $143.1
 $228.1
Cash and cash equivalents$422.6  $180.6  $116.5  
Accounts receivable, less allowances:     
September 28, 2019 – $24.0     
December 29, 2018 – $26.6     
September 29, 2018 – $29.7357.3
 361.2
 364.0
Accounts receivable, less allowances of $38.2, $26.7 and $25.6Accounts receivable, less allowances of $38.2, $26.7 and $25.6263.8  331.2  363.7  
Inventories:     Inventories:
Finished products, net410.0
 301.4
 309.2
Finished products, net376.5  342.0  397.0  
Raw materials and work-in-process, net7.7
 16.2
 15.2
Raw materials and work-in-process, net10.0  6.2  9.5  
Total inventories417.7
 317.6
 324.4
Total inventories386.5  348.2  406.5  
Prepaid expenses and other current assets48.4
 45.8
 32.2
Prepaid expenses and other current assets45.7  107.1  42.6  
Total current assets948.6
 867.7
 948.7
Total current assets1,118.6  967.1  929.3  
Property, plant and equipment:     Property, plant and equipment:
Gross cost399.1
 381.8
 393.7
Gross cost327.7  325.0  392.2  
Accumulated depreciation(256.1) (250.9) (262.3)Accumulated depreciation(192.8) (184.0) (254.0) 
Property, plant and equipment, net143.0
 130.9
 131.4
Property, plant and equipment, net134.9  141.0  138.2  
Lease right-of-use assets, net163.9
 
 
Lease right-of-use assets, net152.4  160.8  157.8  
Other assets:     Other assets:
Goodwill437.0
 424.4
 427.5
Goodwill435.6  438.9  438.5  
Indefinite-lived intangibles604.5
 604.5
 604.5
Indefinite-lived intangibles604.5  604.5  604.5  
Amortizable intangibles, net79.6
 71.9
 73.1
Amortizable intangibles, net75.1  77.8  82.0  
Deferred income taxes3.2
 3.1
 4.0
Deferred income taxes2.4  2.9  3.2  
Other88.7
 80.6
 79.9
Other65.9  87.0  89.4  
Total other assets1,213.0
 1,184.5
 1,189.0
Total other assets1,183.5  1,211.1  1,217.6  
Total assets$2,468.5
 $2,183.1
 $2,269.1
Total assets$2,589.4  $2,480.0  $2,442.9  
See accompanying notes to consolidated condensed financial statements.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets – continued
(Unaudited)
(In millions, except share data)September 28,
2019
 December 29,
2018
 September 29,
2018
(In millions, except share data)June 27,
2020
December 28,
2019
June 29,
2019
LIABILITIES AND STOCKHOLDERS’ EQUITY     LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:     Current liabilities:
Accounts payable$155.6
 $202.3
 $139.5
Accounts payable$154.9  $202.1  $212.7  
Accrued salaries and wages25.5
 31.9
 32.2
Accrued salaries and wages11.6  20.8  18.1  
Other accrued liabilities116.0
 106.4
 124.4
Other accrued liabilities163.9  157.9  105.3  
Lease liabilities33.5
 
 
Lease liabilities37.5  34.1  30.8  
Current maturities of long-term debt10.0
 7.5
 60.0
Current maturities of long-term debt183.5  12.5  10.0  
Borrowings under revolving credit agreements and other short-term notes493.3
 125.0
 1.5
Borrowings under revolving credit agreementsBorrowings under revolving credit agreements125.0  360.0  368.0  
Total current liabilities833.9
 473.1
 357.6
Total current liabilities676.4  787.4  744.9  
Long-term debt, less current maturities430.7
 438.0
 601.0
Long-term debt, less current maturities715.9  425.9  433.0  
Accrued pension liabilities92.3
 92.0
 81.2
Accrued pension liabilities109.4  109.7  92.2  
Deferred income taxes112.0
 107.9
 99.4
Deferred income taxes86.0  99.0  111.2  
Lease liabilities, noncurrent151.0
 
 
Lease liabilities, noncurrent139.2  147.2  146.0  
Other liabilities54.7
 80.5
 67.6
Other liabilities126.6  132.4  60.4  
Stockholders’ equity:     Stockholders’ equity:
Wolverine World Wide, Inc. stockholders’ equity:     Wolverine World Wide, Inc. stockholders’ equity:
Common stock – par value $1, authorized 320,000,000 shares; shares issued (including shares in treasury):     
September 28, 2019 – 108,058,005 shares     
December 29, 2018 – 107,609,206 shares     
September 29, 2018 – 107,587,377 shares108.1
 107.6
 107.6
Common stock – par value $1, authorized 320,000,000 shares; 110,006,517, 108,329,250 and 107,997,808 shares issuedCommon stock – par value $1, authorized 320,000,000 shares; 110,006,517, 108,329,250 and 107,997,808 shares issued110.0  108.3  108.0  
Additional paid-in capital221.3
 201.4
 190.6
Additional paid-in capital227.1  233.4  213.2  
Retained earnings1,273.2
 1,169.7
 1,138.3
Retained earnings1,258.3  1,263.3  1,232.8  
Accumulated other comprehensive loss(88.6) (88.3) (81.2)Accumulated other comprehensive loss(111.5) (102.1) (86.0) 
Cost of shares in treasury:     
September 28, 2019 – 26,992,711 shares     
December 29, 2018 – 15,905,681 shares     
September 29, 2018 – 12,746,435 shares(731.1) (404.4) (299.0)
Cost of shares in treasury; 28,146,537, 27,181,512 and 22,741,032 sharesCost of shares in treasury; 28,146,537, 27,181,512 and 22,741,032 shares(759.9) (736.2) (624.3) 
Total Wolverine World Wide, Inc. stockholders’ equity782.9
 986.0
 1,056.3
Total Wolverine World Wide, Inc. stockholders’ equity724.0  766.7  843.7  
Noncontrolling interest11.0
 5.6
 6.0
Noncontrolling interest11.9  11.7  11.5  
Total stockholders’ equity793.9
 991.6
 1,062.3
Total stockholders’ equity735.9  778.4  855.2  
Total liabilities and stockholders’ equity$2,468.5
 $2,183.1
 $2,269.1
Total liabilities and stockholders’ equity$2,589.4  $2,480.0  $2,442.9  
See accompanying notes to consolidated condensed financial statements.


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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)

Year-To-Date EndedYear-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
(In millions)June 27,
2020
June 29,
2019
OPERATING ACTIVITIES   OPERATING ACTIVITIES
Net earnings$129.4
 $161.0
Net earnings$10.9  $80.8  
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:   
Adjustments to reconcile net earnings to net cash provided by operating activities:Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization23.3
 22.6
Depreciation and amortization15.4  15.0  
Deferred income taxes0.3
 12.3
Deferred income taxes(13.4) (1.2) 
Stock-based compensation expense17.3
 21.2
Stock-based compensation expense10.2  10.2  
Pension contribution
 (60.7)
Pension and SERP expense4.2
 4.0
Pension and SERP expense4.3  2.8  
Cash payments related to restructuring costs(0.1) (4.8)
Environmental and other related costs, net of cash payments(3.7) (6.3)
Net loss on sale of assets
 0.3
Debt extinguishment costsDebt extinguishment costs0.2  —  
Environmental and other related costs, net of cash payments and recoveries receivedEnvironmental and other related costs, net of cash payments and recoveries received34.2  (3.5) 
Other(9.4) 6.5
Other4.3  (9.4) 
Changes in operating assets and liabilities:   Changes in operating assets and liabilities:
Accounts receivable0.3
 (95.4)Accounts receivable64.5  (3.9) 
Inventories(94.8) (49.2)Inventories(41.0) (81.1) 
Other operating assets(1.2) (3.2)Other operating assets6.3  3.6  
Accounts payable(46.9) (21.8)Accounts payable(45.9) 10.2  
Income taxes payable9.3
 8.2
Income taxes payable3.5  (0.3) 
Other operating liabilities(12.0) (28.7)Other operating liabilities(14.5) (19.3) 
Net cash provided by (used in) operating activities16.0
 (34.0)
Net cash provided by operating activitiesNet cash provided by operating activities39.0  3.9  
INVESTING ACTIVITIES   INVESTING ACTIVITIES
Business acquisition, net of cash acquired(15.1) 
Business acquisition, net of cash acquired(5.5) (15.1) 
Additions to property, plant and equipment(28.7) (15.3)Additions to property, plant and equipment(6.6) (18.3) 
Proceeds from sale of assets0.1
 2.2
Investment in joint ventures(8.5) 
Investment in joint ventures(3.5) (8.5) 
Proceeds from company-owned life insurance policy liquidationsProceeds from company-owned life insurance policy liquidations25.6  —  
Other(1.2) (1.7)Other(0.8) (0.5) 
Net cash used in investing activities(53.4) (14.8)
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities9.2  (42.4) 
FINANCING ACTIVITIES   FINANCING ACTIVITIES
Net borrowings under revolving credit agreements and other short-term notes368.3
 1.0
Payments under revolving credit agreementsPayments under revolving credit agreements(773.0) (142.0) 
Borrowings under revolving credit agreementsBorrowings under revolving credit agreements538.0  385.0  
Proceeds from company-owned life insurance policiesProceeds from company-owned life insurance policies24.5  —  
Borrowings of long-term debtBorrowings of long-term debt471.0  —  
Payments on long-term debt(5.0) (122.6)Payments on long-term debt(5.0) (2.5) 
Payments of debt issuance costs(0.3) 
Payments of debt issuance costs(6.4) (0.3) 
Cash dividends paid(25.4) (21.0)Cash dividends paid(17.0) (16.8) 
Purchases of common stock for treasury(314.2) (69.9)Purchases of common stock for treasury(21.0) (207.4) 
Employee taxes paid under stock-based compensation plans(16.7) (8.1)Employee taxes paid under stock-based compensation plans(19.9) (16.5) 
Proceeds from the exercise of stock options7.0
 23.2
Proceeds from the exercise of stock options2.1  5.8  
Contributions from noncontrolling interests5.7
 
Contributions from noncontrolling interests1.8  5.7  
Net cash provided by (used in) financing activities19.4
 (197.4)
Net cash provided by financing activitiesNet cash provided by financing activities195.1  11.0  
Effect of foreign exchange rate changes0.1
 (6.7)Effect of foreign exchange rate changes(1.3) 0.9  
Decrease in cash and cash equivalents(17.9) (252.9)
Increase (decrease) in cash and cash equivalentsIncrease (decrease) in cash and cash equivalents242.0  (26.6) 
Cash and cash equivalents at beginning of the year143.1
 481.0
Cash and cash equivalents at beginning of the year180.6  143.1  
Cash and cash equivalents at end of the quarter$125.2
 $228.1
Cash and cash equivalents at end of the quarter$422.6  $116.5  
See accompanying notes to consolidated condensed financial statements.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Stockholders' Equity
(Unaudited)
 Wolverine World Wide, Inc. Stockholders' Equity    
(In millions, except share and per share data)Common Stock Additional Paid-In Capital Retained Earnings Accumulated
Other
Comprehensive
Loss
 Treasury Stock Non-controlling Interest Total
Balance at June 30, 2018$107.3
 $177.1
 $1,087.1
 $(82.9) $(279.0) $5.7
 $1,015.3
Net earnings    58.8
     0.1
 58.9
Other comprehensive income      1.7
   0.2
 1.9
Shares forfeited, net of shares issued under stock incentive plans (13,836 shares)
 (0.1)         (0.1)
Shares issued for stock options exercised, net (321,546 shares)0.3
 6.5
         6.8
Stock-based compensation expense  7.0
         7.0
Cash dividends declared ($0.08 per share)    (7.6)       (7.6)
Issuance of treasury shares (3,005 shares)  0.1
     
   0.1
Purchase of common stock for treasury (529,966 shares)        (20.0)   (20.0)
Balance at September 29, 2018$107.6
 $190.6
 $1,138.3
 $(81.2) $(299.0) $6.0
 $1,062.3
              
Balance at June 29, 2019108.0
 213.2
 1,232.8
 (86.0) (624.3) 11.5
 $855.2
Net earnings (loss)    48.7
     (0.1) 48.6
Other comprehensive loss      (2.6)   (0.4) (3.0)
Shares forfeited, net of shares issued under stock incentive plans (1,917 shares)0.1
 (0.2)         (0.1)
Shares issued for stock options exercised, net (62,114 shares)
 1.2
         1.2
Stock-based compensation expense  7.1
         7.1
Cash dividends declared ($0.10 per share)    (8.3)       (8.3)
Issuance of treasury shares (1,831 shares)  
     0.1
   0.1
Purchase of common stock for treasury (4,250,070 shares)        (106.8)   (106.8)
Purchases of shares under employee stock plans (3,440 shares)        (0.1)   (0.1)
Balance at September 28, 2019$108.1
 $221.3
 $1,273.2
 $(88.6) $(731.1) $11.0
 $793.9
Wolverine World Wide, Inc. Stockholders' Equity
(In millions, except share and per share data)Common StockAdditional Paid-In CapitalRetained EarningsAccumulated
Other
Comprehensive
Loss
Treasury StockNon-controlling InterestTotal
Balance at March 30, 2019$107.9  $208.0  $1,201.2  $(85.7) $(520.0) $5.9  $917.3  
Net earnings40.2  —  40.2  
Other comprehensive loss(0.3) (0.1) (0.4) 
Shares forfeited, net of shares issued under stock incentive plans (29,962 shares)—  (0.1) (0.1) 
Shares issued for stock options exercised, net (86,790 shares)0.1  1.6  1.7  
Stock-based compensation expense3.6  3.6  
Cash dividends declared ($0.10 per share)(8.6) (8.6) 
Issuance of treasury shares (2,062 shares)0.1  0.1  0.2  
Purchase of common stock for treasury (3,589,131 shares)(104.3) (104.3) 
Purchases of shares under employee stock plans (1,579 shares)(0.1) (0.1) 
Capital contribution from noncontrolling interest5.7  5.7  
Balance at June 29, 2019$108.0  $213.2  $1,232.8  $(86.0) $(624.3) $11.5  $855.2  
Balance at March 28, 2020$109.2  $219.8  $1,268.1  $(111.5) $(760.0) $10.3  $735.9  
Net loss(1.6) (0.3) (1.9) 
Other comprehensive income—  0.1  0.1  
Shares issued, net of shares forfeited under stock incentive plans (757,617 shares)0.8  (0.9) (0.1) 
Shares issued for stock options exercised, net (40,068 shares)—  0.7  0.7  
Stock-based compensation expense7.5  7.5  
Cash dividends declared ($0.10 per share)(8.2) (8.2) 
Issuance of treasury shares (1,701 shares)—  0.1  0.1  
Capital contribution from noncontrolling interest1.8  1.8  
Balance at June 27, 2020$110.0  $227.1  $1,258.3  $(111.5) $(759.9) $11.9  $735.9  
See accompanying notes to consolidated condensed financial statements.







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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Stockholders' Equity – continued
(Unaudited)(Unaudited)
 Wolverine World Wide, Inc. Stockholders' Equity    
(In millions, except share and per share data)Common Stock Additional Paid-In Capital Retained Earnings Accumulated
Other
Comprehensive
Loss
 Treasury Stock Non-controlling Interest Total
Balance at December 30, 2017$106.4

$149.2

$992.2

$(75.2)
$(223.0)
$5.6
 $955.2
Net earnings    160.8
     0.2
 161.0
Other comprehensive income      2.1
   0.2
 2.3
Shares forfeited, net of shares issued under stock incentive plans (135,700 shares)(0.1) (1.8)         (1.9)
Shares issued for stock options exercised, net (1,317,628 shares)1.3
 21.9
         23.2
Stock-based compensation expense  21.2
         21.2
Cash dividends declared ($0.24 per share)    (22.8)       (22.8)
Issuance of treasury shares (6,006 shares)  0.1
     0.1
   0.2
Purchase of common stock for treasury (2,207,909 shares)        (69.9)   (69.9)
Purchases of shares under employee stock plans (199,391 shares)        (6.2)   (6.2)
Change in accounting principle    8.1
 (8.1)     
Balance at September 29, 2018$107.6
 $190.6
 $1,138.3
 $(81.2) $(299.0) $6.0
 $1,062.3
              
Balance at December 29, 2018$107.6
 $201.4
 $1,169.7
 $(88.3) $(404.4) $5.6
 $991.6
Net earnings    129.4
     
 129.4
Other comprehensive loss      (0.3)   (0.3) (0.6)
Shares issued, net of shares forfeited under stock incentive plans (36,588 shares)0.1
 (4.1)         (4.0)
Shares issued for stock options exercised, net (412,211 shares)0.4
 6.6
         7.0
Stock-based compensation expense  17.3
         17.3
Cash dividends declared ($0.30 per share)    (25.9)       (25.9)
Issuance of treasury shares (5,831 shares)  0.1
     0.2
   0.3
Purchase of common stock for treasury (10,730,962 shares)        (314.2)   (314.2)
Purchases of shares under employee stock plans (361,899 shares)        (12.7)   (12.7)
Capital contribution from noncontrolling interest          5.7
 5.7
Balance at September 28, 2019$108.1
 $221.3
 $1,273.2
 $(88.6) $(731.1) $11.0
 $793.9
Wolverine World Wide, Inc. Stockholders' Equity
(In millions, except share and per share data)Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury StockNon-controlling InterestTotal
Balance at December 29, 2018$107.6  $201.4  $1,169.7  $(88.3) $(404.4) $5.6  $991.6  
Net earnings80.7  0.1  80.8  
Other comprehensive income2.3  0.1  2.4  
Shares issues, net of shares forfeited under stock incentive plans (38,505 shares)—  (3.9) (3.9) 
Shares issued for stock options exercised, net (350,097 shares)0.4  5.4  5.8  
Stock-based compensation expense10.2  10.2  
Cash dividends declared ($0.20 per share)(17.6) (17.6) 
Issuance of treasury shares (4,000 shares)0.1  0.1  0.2  
Purchase of common stock for treasury (6,480,892 shares)(207.4) (207.4) 
Purchases of shares under stock-based compensation plans (358,459 shares)(12.6) (12.6) 
Capital contribution from noncontrolling interest5.7  5.7  
Balance at June 29, 2019$108.0  $213.2  $1,232.8  $(86.0) $(624.3) $11.5  $855.2  
Balance at December 28, 2019$108.3  $233.4  $1,263.3  $(102.1) $(736.2) $11.7  $778.4  
Net earnings (loss)11.4  (0.5) 10.9  
Other comprehensive loss(9.4) (1.1) (10.5) 
Shares issued, net of shares forfeited under stock incentive plans (1,485,553 shares)1.5  (18.5) (17.0) 
Shares issued for stock options exercised, net (191,714 shares)0.2  2.0  2.2  
Stock-based compensation expense10.2  10.2  
Cash dividends declared ($0.20 per share)(16.4) (16.4) 
Issuance of treasury shares (2,768 shares)0.1  0.1  
Purchase of common stock for treasury (877,624 shares)(21.0) (21.0) 
Purchases of shares under stock-based compensation plans (90,169 shares)(2.8) (2.8) 
Capital contribution from noncontrolling interest1.8  1.8  
Balance at June 27, 2020$110.0  $227.1  $1,258.3  $(111.5) $(759.9) $11.9  $735.9  
See accompanying notes to consolidated condensed financial statements.

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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
Quarters Ended September 28,June 27, 2020 and June 29, 2019 and September 29, 2018
(Unaudited)
 
1.BASIS OF PRESENTATION
1. BASIS OF PRESENTATION
Nature of Operations
Wolverine World Wide, Inc. (the “Company”) is a leading designer, marketer and licensor of a broad range of quality casual footwear and apparel; performance outdoor and athletic footwear and apparel; children’skids’ footwear; industrial work shoes, boots and apparel; and uniform shoes and boots. The Company’s portfolio of owned and licensed brands includes: Bates®, Cat®, Chaco®, Harley-Davidson®, Hush Puppies®, HyTestHytest®, Keds®, Merrell®, Saucony®, Sperry®, Stride Rite® and Wolverine®. The Company’s products are marketed worldwide through owned operations, and through licensing and distribution arrangements with third parties.parties, and joint ventures. The Company also operates retail stores and eCommerce sites to market both its own brands and branded footwear and apparel from other manufacturers, as well as a leathers division that markets Wolverine Performance Leathers™.
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for a complete presentation of the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included in the accompanying financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s 20182019 Form 10-K.
As described in Note 2, the Company adopted ASU 2016-02, Leases, at the beginning of the first quarter of fiscal 2019. Under the modified retrospective method, comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As described in Note 16, the Company realigned certain brands into a new operating segment during the first quarter of fiscal 2019. All prior period disclosures have been restated to reflect the new reportable operating segments.
Fiscal Year
The Company’s fiscal year is the 52 or 53-week period that ends on the Saturday nearest to December 31. Fiscal yearsyear 2020 has 53 weeks and fiscal year 2019 and 2018 both havecontained 52 weeks. The Company reports its quarterly results of operations on the basis of 13-week quarters for each of the first three fiscal quarters and a 13 or 14-week period for the fiscal fourth quarter. References to particular years or quarters refer to the Company’s fiscal years ended on the Saturday nearest to December 31 or the fiscal quarters within those years.
Seasonality
The Company’s business is subject to seasonal influences that can cause significant differences in revenue, earnings and cash flows from quarter to quarter; however, the differences have followed a consistent pattern in recent years.

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2.NEW ACCOUNTING STANDARDS

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2.NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board (“FASB”) issued the following Accounting Standards Updates (“ASU”) that the Company has adopted during fiscal 2019.year 2020. The following is a summary of the effect of adoption of this new standard.
StandardDescriptionEffect on the Financial Statements or Other Significant Matters
ASU 2016-02, Leases (as amended by ASUs 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01)
The core principle is that a lessee shall recognize a lease liability in its statement of financial position for the present value of all future lease payments. A lessee would also recognize a right-of-use asset representing its right to use the underlying asset for the lease term. Under a new transition method, a reporting entity will apply the new lease requirements as of the effective date and continue to report comparative periods presented in the financial statements under GAAP in effect during the comparable periods.The Company adopted ASU 2016-02 at the beginning of the first quarter using the modified retrospective approach and elected the package of practical expedients for its existing leases. The Company recognized a lease liability of $178.1 million, which was equal to the present value of the future lease payments for its portfolio of operating leases. The Company recognized a right-of-use asset of $157.3 million, which was equal to the lease liabilities adjusted for the balance of accrued rent and unamortized lease incentives as of the effective date. The adoption of ASU 2016-02 did not have a material impact on the Company’s results of operations or cash flows. See Note 8 for additional information on the adoption of this standard and disclosures regarding the Company’s leases.

The FASB has issued the following ASU that has not yet been adopted by the Company. The following is a summary of the planned adoption period and anticipated impact of adopting this new standard.
StandardDescriptionPlanned Period of AdoptionEffect on the Financial Statements or Other Significant Matters
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (as amended by ASU 2018-19)
Seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates.Q1 2020The Company is evaluatingadopted ASU 2016-13 at the impactsbeginning of the new standardfirst quarter on a prospective basis. The Company adjusted its existingbusiness policies and processes relating to the measurement of allowances for credit losses to consider reasonable and supportable information to determine expected credit losses on accounts receivable. The adoption of the ASU did not have a material effect on the consolidated financial instruments, including trade receivables.statements.
ASU 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill ImpairmentEliminates step two of the goodwill impairment test under legacy US GAAP. Annual and interim goodwill impairment tests are performed by comparing the fair value of a reporting unit with its carrying amount and the amount by which the carrying amount exceeds the reporting unit’s fair value will be recognized as an impairment charge.
The Company adopted the ASU at the beginning of the first quarter on a prospective basis. The adoption of the ASU did not have a significant impact on the Company’s financial statements and all prospective impairment tests will be completed under this standard.

3.
EARNINGS PER SHARE
3.EARNINGS PER SHARE
The Company calculates earnings per share in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share (“ASC 260”). ASC 260 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. Under the guidance in ASC 260, the Company’s unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and must be included in the computation of earnings per share pursuant to the two-class method.

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The following table sets forth the computation of basic and diluted earnings per share.
 Quarter Ended Year-To-Date Ended
(In millions, except per share data)September 28,
2019
 September 29,
2018
 September 28,
2019
 September 29,
2018
Numerator:       
Net earnings attributable to Wolverine World Wide, Inc.$48.7
 $58.8
 $129.4
 $160.8
Adjustment for earnings allocated to non-vested restricted common stock(1.0) (1.2) (2.6) (3.4)
Net earnings used in calculating basic earnings per share47.7
 57.6
 126.8
 157.4
Adjustment for earnings reallocated from non-vested restricted common stock
 
 0.1
 0.1
Net earnings used in calculating diluted earnings per share$47.7
 $57.6
 $126.9
 $157.5
Denominator:       
Weighted average shares outstanding83.5
 94.9
 87.3
 95.2
Adjustment for non-vested restricted common stock(0.5)
 (1.7)
 (0.7)
 (1.8)
Shares used in calculating basic earnings per share83.0
 93.2
 86.6
 93.4
Effect of dilutive stock options0.9
 2.1
 1.4
 2.0
Shares used in calculating diluted earnings per share83.9
 95.3
 88.0
 95.4
Net earnings per share:       
Basic$0.57
 $0.62
 $1.46
 $1.69
Diluted0.57
 0.60
 1.44
 1.65

Quarter EndedYear-To-Date Ended
(In millions, except per share data)June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Numerator:
Net earnings (loss) attributable to Wolverine World Wide, Inc.$(1.6) $40.2  $11.4  $80.7  
Adjustment for earnings allocated to non-vested restricted common stock(0.2) (0.8) (0.4) (1.6) 
Net earnings (loss) used in calculating basic earnings per share(1.8) 39.4  11.0  79.1  
Adjustment for earnings reallocated from non-vested restricted common stock—  —  —  0.1  
Net earnings (loss) used in calculating basic and diluted earnings per share$(1.8) $39.4  $11.0  $79.2  
Denominator:
Weighted average shares outstanding81.787.481.689.2
Adjustment for non-vested restricted common stock(0.8)(0.5)(0.6)(0.8)
Shares used in calculating basic earnings per share80.986.981.088.4
Effect of dilutive stock options1.40.51.7
Shares used in calculating diluted earnings per share80.988.381.590.1
Net earnings (loss) per share:
Basic$(0.02) $0.45  $0.14  $0.89  
Diluted$(0.02) $0.45  $0.14  $0.88  
For the quarter and year-to-date ended September 28, 2019, 1,228,157June 27, 2020, 1,955,425 and 131,0041,183,907 outstanding stock options, respectively, have not been included in the denominator for the computation of diluted earnings per share because they were anti-dilutive.
For the quarter and year-to-date ended SeptemberJune 29, 2018, 18,7792019, 134,549 and 24,25038,932 outstanding stock options, respectively, have not been included in the denominator for the computation of diluted earnings per share because they were anti-dilutive.
4.GOODWILL AND INDEFINITE-LIVED INTANGIBLES
4.GOODWILL AND INDEFINITE-LIVED INTANGIBLES
The changes in the carrying amount of goodwill are as follows:
 Year-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
Goodwill balance at beginning of the year$424.4
 $429.8
Acquisition of a business (see Note 17)12.3
 
Foreign currency translation effects0.3
 (2.3)
Goodwill balance at end of the quarter$437.0
 $427.5

Year-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
Goodwill balance at beginning of the year$438.9  $424.4  
Acquisition of a business (see Note 17)—  12.0  
Foreign currency translation effects(3.3) 2.1  
Goodwill balance at end of the quarter$435.6  $438.5  
The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $604.5 million as of SeptemberJune 27, 2020, December 28, 2019 Decemberand June 29, 2018 and September 29, 2018.2019. The carrying value of the Company’s Sperry® trade name was $518.2 million as of September 28, 2019.June 27, 2020. Based on the interim impairment assessment as of June 27, 2020, it was determined there were no triggering events of impairment for goodwill and indefinite-lived intangible assets. If the operating results for Sperry® were to decline in future periods compared to current projections, or if further deterioration of macroeconomic conditions due to the COVID-19 pandemic adversely affect the value of the Company’s Sperry® trade name and goodwill balances, the Company may need to record a non-cash impairment charge. We continue to monitor the effects of the COVID-19 pandemic, and actions taken by governments, businesses and individuals in response to the pandemic, on the global economy to assess the outlook for demand for our products and the impact on our business and financial performance.
5.ACCOUNTS RECEIVABLE
5.ACCOUNTS RECEIVABLE
The Company has an agreement with a financial institution to sell selected trade accounts receivable on a recurring, nonrecourse basis that expires in the fourth quarter of fiscal 2019.2020. Under the agreement, up to $150.0 million of accounts receivable may be sold to the financial institution and remain outstanding at any point in time. After the sale, the Company does
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not retain any interests in the accounts receivable and removes them from its consolidated condensed balance sheet, but continues to service and collect the outstanding accounts receivable on behalf of the financial institution. The Company recognizes a servicing asset or servicing liability, initially measured at fair value, each time it undertakes an obligation to service the accounts receivable under the agreement. The fair value of this obligation resulted in a nominal servicing liability as of the end of the third quarter of 2018. For receivables

sold under the agreement, 90% of the stated amount is paid in cash to the Company at the time of sale, with the remainder paid to the Company at the completion of the collection process. During the third quarter of fiscal 2018, the Company discontinued selling accounts receivables under the agreement. The Company continued to service the outstanding receivables until they were collected.
The following is a summary of the stated amount of accounts receivable that was sold as well as fees charged by the financial institution.
 Quarter Ended Year-To-Date Ended
(In millions)September 29, 2018
Accounts receivable sold$40.1
 $264.3
Fees charged0.2
 1.3

Quarter EndedYear-To-Date Ended
(In millions)June 27, 2020
Accounts receivable sold$— $14.1 
Fees charged— 0.1 
The fees charged are recorded in other expense. Net proceeds of this program are classified in operating activities in the consolidated condensed statements of cash flows. ThisThere were no amounts outstanding under this program reduced the Company's accounts receivable by $7.5 million as of SeptemberJune 27, 2020 and June 29, 2018.2019, respectively.
6.REVENUE FROM CONTRACTS WITH CUSTOMERS
6.REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue Recognition and Performance Obligations
The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers. Revenue is recognized upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration to be received in exchange for those goods or services. The Company identifies the performance obligation in the contract, determines the transaction price, allocates the transaction price to the performance obligations and recognizes revenue upon completion of the performance obligation. Revenue is recognized net of variable consideration and any taxes collected from customers, which are subsequently remitted to governmental authorities.
The Company holdshas agreements to license symbolic intellectual property with minimum guarantees or fixed consideration. The Company has $35.2is due $27.9 million of remaining fixed transaction price under its license agreements as of September 28, 2019,June 27, 2020, which it expects to recognize per the terms of its contracts over the course of time through December 2024. The Company has elected to omit the remaining variable consideration under its license agreements given the Company recognizes revenue equal to what it has the right to invoice and that amount corresponds directly with the value to the customer of the Company’s performance to date.
The Company provides disaggregated revenue by sales channel, including the wholesale and consumer-direct sales channels, reconciled to the Company’s reportable operating segments. The wholesale channel includes royalty revenues due to the similarity in the Company’s oversight and management, customer base, the performance obligation (footwear and apparel goods) and point in time completion of the performance obligation.
Quarter Ended September 28, 2019 Quarter Ended September 29, 2018 Quarter Ended June 27, 2020Quarter Ended June 29, 2019
(In millions)Wholesale Consumer-Direct Total Wholesale Consumer-Direct Total(In millions)WholesaleConsumer-DirectTotalWholesaleConsumer-DirectTotal
Wolverine Michigan Group$279.5
 $39.3
 $318.8
 $291.1
 $36.6
 $327.7
Wolverine Michigan Group$149.0  $68.4  $217.4  $277.3  $40.9  $318.2  
Wolverine Boston Group203.5
 37.8
 241.3
 183.7
 30.9
 214.6
Wolverine Boston Group74.5  48.0  122.5  191.7  39.0  230.7  
Other12.9
 1.3
 14.2
 14.4
 1.9
 16.3
Other8.8  0.4  9.2  18.4  1.3  19.7  
Total$495.9
 $78.4
 $574.3
 $489.2
 $69.4
 $558.6
Total$232.3  $116.8  $349.1  $487.4  $81.2  $568.6  
Year-To-Date Ended September 28, 2019 Year-To-Date Ended September 29, 2018Year-To-Date Ended June 27, 2020Year-To-Date Ended June 29, 2019
(In millions)Wholesale Consumer-Direct Total Wholesale Consumer-Direct Total(In millions)WholesaleConsumer-DirectTotalWholesaleConsumer-DirectTotal
Wolverine Michigan Group$829.1
 $110.6
 $939.7
 $842.2
 $95.5
 $937.7
Wolverine Michigan Group$363.3  $101.9  $465.2  $549.6  $71.3  $620.9  
Wolverine Boston Group570.7
 106.1
 676.8
 577.3
 87.4
 664.7
Wolverine Boston Group223.6  81.0  304.6  367.2  68.3  435.5  
Other46.3
 3.5
 49.8
 51.3
 5.9
 57.2
Other17.5  1.1  18.6  33.4  2.2  35.6  
Total$1,446.1
 $220.2
 $1,666.3
 $1,470.8
 $188.8
 $1,659.6
Total$604.4  $184.0  $788.4  $950.2  $141.8  $1,092.0  
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Reserves for Variable Consideration
Revenue is recorded at the net sales price (“transaction price”), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, customer

markdowns, customer rebates and other sales incentives relating to the sale of the Company’s products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales. These estimates take into consideration a range of possible outcomes, which are probability-weighted in accordance with the expected value method for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Revenue recognized during the fiscal periods presented related to the Company’s contract liabilities was nominal.
The Company’s contract balances are as follows:
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Product returns reserve$9.5
 $13.6
 $13.7
Customer markdowns reserve3.6
 4.0
 4.9
Other sales incentives reserve1.9
 2.3
 2.5
Customer rebates liability10.8
 12.8
 14.0
Customer advances liability5.4
 3.8
 3.9

(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Product returns reserve$11.8  $11.4  $10.5  
Customer markdowns reserve5.7  4.4  4.8  
Other sales incentives reserve3.4  2.3  1.9  
Customer rebates liability11.0  12.0  10.2  
Customer advances liability5.8  7.2  4.1  
The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from initial estimates. If actual results in the future vary from initial estimates, the Company subsequently adjusts these estimates, which affects net revenue and earnings in the period such variances become known.
7.DEBT
7.DEBT
Total debt consists of the following obligations:
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Term Loan A, due December 6, 2023$195.0
 $200.0
 $415.6
Senior Notes, 5.00% interest, due September 1, 2026250.0
 250.0
 250.0
Borrowings under revolving credit agreements and other short-term notes493.3
 125.0
 1.5
Capital lease obligation
 0.4
 0.4
Unamortized deferred financing costs(4.3) (4.9) (5.0)
Total debt$934.0
 $570.5
 $662.5

(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Term Loan A, due December 6, 2023$187.5  $192.5  $197.5  
Incremental Term Loan, due May 4, 2021171.0  —  —  
Senior Notes, 5.000% interest, due September 1, 2026250.0  250.0  250.0  
Senior Notes, 6.375% interest, due May 15, 2025300.0  —  —  
Borrowings under revolving credit agreements125.0  360.0  368.0  
Unamortized deferred financing costs(9.1) (4.1) (4.5) 
Total debt$1,024.4  $798.4  $811.0  
On May 5, 2020, the Company entered into a Second Amendment (the “Amendment”) which amended its senior credit facility that was most recently amended and restated as of December 6, 2018 (as so amended by the Amendment, the “Amended Senior Credit Facility”). In connection with the Amendment, the Company amended its credit agreement (as amended, the "Credit Agreement"borrowed $171.0 million in aggregate principal amount of incremental term loan (the “Incremental Term Loan”). The Incremental Term Loan will mature on May 4, 2021 and bear interest at a rate equal either to (i) the applicable base rate plus 1.250% or (ii) LIBOR plus 2.250%. The Amended Senior Credit Agreement includesFacility also included a $200.0 million term loan facility (“Term Loan A”) and an $800.0 million Revolving Credit Facility, both with maturity dates of December 6, 2023.2023, that remain unchanged as a result of the Amendment. The Amended Senior Credit Agreement’sFacility’s debt capacity is limited to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt) not to exceed $1,750.0 million, unless certain specified conditions set forth in the Amended Senior Credit AgreementFacility are met. Term Loan A requires quarterly principal payments with a balloon payment due on December 6, 2023. The scheduled principal payments due under Term Loan A and the Incremental Term Loan over the next 12 months total $10.0$183.5 million as of September 28, 2019June 27, 2020 and are recorded as current maturities of long-term debt on the consolidated condensed balance sheets.
The Revolving Credit Facility allows the Company to borrow up to an aggregate amount of $800.0 million, which includes a $200.0 million foreign currency subfacility under which borrowings may be made, subject to certain conditions, in Canadian dollars, British pounds, euros, Hong Kong dollars, Swedish kronor, Swiss francs and such additional currencies as are determined in accordance with the Amended Senior Credit Agreement.Facility. The Revolving Credit Facility also includes a $50.0 million
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swingline subfacility and a $50.0 million letter of credit subfacility. The Company had outstanding letters of credit under the Revolving Credit Facility of $3.9$5.8 million, $2.5$5.7 million and $2.5$3.9 million as of SeptemberJune 27, 2020, December 28, 2019 Decemberand June 29, 2018 and September 29, 2018,2019, respectively. These outstanding letters of credit reduce the borrowing capacity under the Revolving Credit Facility.
The interest rates applicable to amounts outstanding under Term Loan A and to U.S. dollar denominated amounts outstanding under the Revolving Credit Facility will be, at the Company’s option, either (1) the Alternate Base Rate plus an Applicable Margin as determined by the Company’s Consolidated Leverage Ratio, within a range of 0.125% to 0.750%1.000%, or (2) the Eurocurrency Rate plus an Applicable Margin as determined by the Company’s Consolidated Leverage Ratio, within a range of 1.125% to 1.750%2.000% (all capitalized terms used in this sentence are as defined in the Amended Senior Credit Agreement)Facility). The Company has two interest rate swap

arrangements that reduce the Company’s exposure to fluctuations in interest rates on its variable rate debt. At September 28, 2019,June 27, 2020, Term Loan A and the Incremental Term Loan had a weighted-average interest rate of 3.27% and the Revolving Credit Facility had a weighted-average interest ratesrate of 3.24% and 3.20%, respectively.3.34%.
The obligations of the Company pursuant to the Amended Senior Credit AgreementFacility are guaranteed by substantially all of the Company’s material domestic subsidiaries and secured by substantially all of the personal and real property of the Company and its material domestic subsidiaries, subject to certain exceptions.
The Amended Senior Credit AgreementFacility also contains certain affirmative and negative covenants, including covenants that limit the ability of the Company and its Restricted Subsidiaries to, among other things: incur or guarantee indebtedness; incur liens; pay dividends or repurchase stock; enter into transactions with affiliates; consummate asset sales, acquisitions or mergers; prepay certain other indebtedness; or make investments, as well as covenants restricting the activities of certain foreign subsidiaries of the Company that hold intellectual property related assets. Further, the Amended Senior Credit AgreementFacility requires compliance with the following financial covenants: a maximum Consolidated Leverage Ratio and a minimum Consolidated Interest Coverage Ratio (all capitalized terms used in this paragraph are as defined in the Amended Senior Credit Agreement)Facility). As of September 28, 2019,June 27, 2020, the Company was in compliance with all covenants and performance ratios under the Amended Senior Credit Agreement.Facility.
On May 11, 2020 the Company issued $300.0 million aggregate principal amount of 6.375% Senior Notes due on May 15, 2025. Related interest payments are due semi-annually beginning on November 15, 2020. These senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries.
The Company has $250.0 million of senior notes outstanding that are due on September 1, 2026 (the “Senior Notes”). The Senior Notes2026. These senior notes bear interest at 5.00% with the related interest payments due semi-annually. The Senior Notessemi-annually and are guaranteed by substantially all of the Company’s domestic subsidiaries.
The Company has a foreign revolving credit facility with aggregate available borrowings of $4.0 million that are uncommitted and, therefore, each borrowing against the facility is subject to approval by the lender. BorrowingsThere were no borrowings against this facility were $0.3 million, $0.0as of June 27, 2020, December 28, 2019 and June 29, 2019.
The Company included in interest expense the amortization of deferred financing costs of $0.7 million and $1.5$1.1 million as of September 28, 2019, December 29, 2018for the quarter and September 29, 2018,year-to-date ended June 27, 2020, respectively.
Prior to fiscal 2019, the Company had a capital lease obligation. As a result of the adoption of ASU 2016-02, Leases, the capital lease is now classified as a financing lease and is no longer included in long term debt.
The Company included in interest expense the amortization of deferred financing costs of $0.4 million and $1.2$0.8 million for the quarter and year-to-date ended September 28,June 29, 2019, respectively. The Company included in interest expense the amortization of deferred financing costs of $0.6 million and $2.2 million for the quarter and year-to-date ended September 29, 2018, respectively.
8. LEASES
The Company adopted ASU 2016-02, Leases, at the beginning of the first quarter of fiscal 2019 using the modified retrospective approach applied to all leases as of the date of application. The Company elected the package of practical expedients for leases existing as of the effective date under which it did not reassess whether contracts contain leases under the new definition of a lease, the lease classification or whether previously capitalized initial direct costs would qualify for capitalization under ASU 2016-02. In addition, the Company did not elect the hindsight practical expedient for considering judgments and estimates relating to its existing leases such as determining the remaining lease term.
Description of Leases
The Company’s leases consist primarily of corporate offices, retail stores, distribution centers, showrooms, vehicles and office equipment. The Company leases assets in the normal course of business to meet its current and future needs while providing flexibility to its operations. The Company enters into contracts with third parties to lease specifically identified assets. Most of the Company’s leases have contractually specified renewal periods. Most retail store leases have early termination clauses that the Company can elect if stipulated sales amounts are not achieved. The Company determines the lease term for each lease based on the terms of each contract and factors in renewal and early termination options if such options are reasonably certain to be exercised.
Accounting for Leases
16

Under FASB ASC Topic 842, Leases, the Company has elected the practical expedient to account for lease components and nonlease components associated with individual leases as a single lease component for allTable of its leases. In addition, the Company has elected to account for multiple lease components as a single lease component. The Company’s leases may include variable lease costs such as payments based on changes to an index, payments based on a percentage of retail store sales, and maintenance, utilities, shared marketing or other service costs that are paid directly to the lessor under terms of the lease. The Company recognizes variable lease payments when the amounts are incurred and determinable. The Company has elected to account for leases less than one year as short-term leases and accordingly does not recognize a right-of-use asset or lease liability for these leases. The Company recognizes rent expense on a straight-line basis over the lease term.Contents

The Company subleases certain portions of leased offices and distribution centers that exceed the Company’s current operational needs. Since the Company utilizes the majority of the leased space and retains the obligation to the lessor, the underlying leases continue to be accounted for as operating leases. Sublease income is recognized on a straight-line basis over the term of the sublease, and beginning in fiscal 2019, is recognized in Other income, net on the consolidated condensed statements of operations and comprehensive income.
The Company recognizes a lease liability in current and noncurrent liabilities equal to the present value of the fixed future lease payments using an incremental borrowing rate as of the commencement date of each lease. The incremental borrowing rate is based on interest rate that the Company would normally pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments. The weighted-average discount rate for operating leases as of September 28, 2019 is 5.2%. The Company also recognizes a right-of-use asset, which is equal to the lease liability as of September 28, 2019 adjusted for the remaining balance of accrued rent and unamortized lease incentives.
The following is a summary of the Company’s lease cost.
 Quarter Ended Year-To-Date Ended
(In millions)September 28, 2019
Operating lease cost$8.1
 $24.3
Variable lease cost3.6
 10.9
Short-term lease cost0.3
 0.9
Sublease income(1.0) (2.9)
Total lease cost$11.0
 $33.2

Quarter EndedYear-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Operating lease cost$8.1  $8.2  $16.3  $16.2  
Variable lease cost2.7  3.8  6.1  7.3  
Short-term lease cost0.2  0.4  0.5  0.6  
Sublease income(1.1) (0.9) (2.3) (1.9) 
Total lease cost$9.9  $11.5  $20.6  $22.2  
The weighted-average remaining lease term for operating leases as of September 28, 2019 is 10.3 years. Future undiscounted cash flows for operating leases for the fiscal periods subsequent to September 28, 2019June 27, 2020 are as follows:
(In millions)Operating Leases
Remainder of 2020$21.5  
202130.8  
202228.1  
202321.0  
202418.1  
Thereafter107.6  
Total future payments227.1  
Less: imputed interest50.4  
Recognized lease liability$176.7  
(In millions)Operating Leases
Remainder of 2019$8.7
202032.1
202129.3
202226.7
202319.9
Thereafter122.3
Total future payments239.0
Less: imputed interest54.5
Recognized lease liability$184.5

9.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company made cash payments of $24.4 million for operating lease liabilities during the year-to-date ended September 28, 2019. During the year-to-date ended September 28, 2019, the Company entered into new or amended leases that resulted in the noncash recognition of right-of-use assets and lease liabilities of $25.0 million. In addition, the Company entered into real estate leases which will commence subsequent to September 28, 2019 with future undiscounted rental payments of $4.8 million. The Company has a financing lease with future payments of $0.3 million and a remaining term of 2.3 years.
9.DERIVATIVE FINANCIAL INSTRUMENTS
The Company follows FASB ASC Topic 815, Derivatives and Hedging ("ASC 815"), which requires that all derivative instruments be recorded on the consolidated condensed balance sheets at fair value by establishing criteria for designation and effectiveness of hedging relationships. The Company does not hold or issue financial instruments for trading purposes.
The Company utilizes foreign currency forward exchange contracts designated as cash flow hedges to manage the volatility associated primarily with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. These foreign currency forward exchange hedge contracts extended out to a maximum of 412 days, 545 days 524 days and 545468 days, as of SeptemberJune 27, 2020, December 28, 2019 Decemberand June 29, 2018 and September 29, 2018,2019, respectively. If, in the future, the foreign exchange contracts are determined not to be highly effective or are terminated before their contractual termination dates, the Company would remove the hedge designation from those contracts and reclassify into earnings the unrealized gains or losses that would otherwise be included in accumulated other comprehensive income (loss) (“AOCI”) within stockholders’ equity. During the quarter ended June 27, 2020, the Company reclassified $1.3 million to other income for foreign currency contracts that were no longer deemed highly effective.
The Company also utilizes foreign currency forward exchange contracts that are not designated as hedging instruments to manage foreign currency transaction

exposure. Foreign currency derivatives not designated as hedging instruments are offset by foreign exchange gains or losses resulting from the underlying exposures of foreign currency denominated assets and liabilities.
The Company has two interest rate swap arrangements, which unless otherwise terminated, will mature on July 13, 2020 and December 6, 2023,, respectively. These agreements, which exchange floating rate for fixed rate interest payments over the life of the agreements without the exchange of the underlying notional amounts, have been designated as cash flow hedges of the underlying debt. The notional amounts of the interest rate swap arrangements are used to measure interest to be paid or received and do not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap arrangements is recognized as interest expense. In accordance with ASC 815, the Company has formally documented the relationship between the interest rate swaps and the variable rate borrowing, as well as its risk management objective and strategy for undertaking the hedge transactions. This process included linking the derivative to the specific liability or asset on the balance sheet. The Company also assessed at the inception of each hedge, and continues to assess on an ongoing basis, whether the derivatives used in the hedging transactions are highly effective in offsetting changes in the cash flows of the hedged item.
The Company has a cross currency swap to minimize the impact of exchange rate fluctuations. The hedging instrument, which, unless otherwise terminated, will mature on September 1, 2021,, has been designated as a hedge of a net investment in a foreign
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operation. The Company will pay 2.75% on the euro-denominated notional amount and receive 5.00% on the U.S. dollar notional amount, with an exchange of principal at maturity. Changes in fair value related to movements in the foreign currency exchange spot rate are recorded in AOCI, offsetting the currency translation adjustment related to the underlying net investment that is also recorded in AOCI. All other changes in fair value are recorded in interest expense. In accordance with ASC 815, the Company has formally documented the relationship between the cross-currency swap and the Company’s investment in its euro-denominated subsidiary, as well as its risk management objective and strategy for undertaking the hedge transaction. This process included linking the derivative to its net investment on the balance sheet. The Company also assessed at the hedge’s inception, and continues to assess on an ongoing basis, whether the derivative used in the hedging transaction is highly effective in offsetting changes in expected cash flows of the hedged item.
The notional amounts of the Company’s derivative instruments are as follows:
(Dollars in millions)September 28,
2019
 December 29,
2018
 September 29,
2018
(Dollars in millions)June 27,
2020
December 28,
2019
June 29,
2019
Foreign exchange contracts:     Foreign exchange contracts:
Hedge contracts$237.7
 $220.3
 $215.5
Hedge contracts$161.1  $246.3  $238.1  
Non-hedge contracts
 4.8
 8.1
Non-hedge contracts—  7.3  8.5  
Interest rate swaps366.2
 181.3
 376.1
Interest rate swaps314.6  355.8  141.9  
Cross currency swap79.8
 95.8
 95.8
Cross currency swap79.8  79.8  79.8  
The recorded fair values of the Company’s derivative instruments are as follows:
(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Financial assets:
Foreign exchange contracts - hedge$4.1  $2.3  $4.3  
Financial liabilities:
Foreign exchange contracts - hedge$(0.1) $(1.8) $(0.1) 
Interest rate swaps(9.8) (1.8) (0.2) 
Cross currency swap(1.9) (3.0) (5.3) 
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Financial assets:     
Foreign exchange contracts - hedge$6.3
 $8.7
 $3.9
Interest rate swaps
 1.6
 3.6
Financial liabilities:     
Foreign exchange contracts - hedge$(0.2) $
 $(0.2)
Interest rate swaps(3.0) 
 
Cross currency swap(2.1) (8.2) (12.1)

10.
STOCK-BASED COMPENSATION
10.STOCK-BASED COMPENSATION
The Company recognized compensation expense of $7.1$7.5 million and $17.3$10.2 million, and related income tax benefits of $1.5 million and $3.5$2.0 million, for grants under its stock-based compensation plans for the quarter and year-to-date ended September 28, 2019,June 27,2020, respectively. The Company recognized compensation expense of $7.0$3.6 million and $21.2$10.2 million, and related income tax benefits of $1.4$0.7 million and $4.3$2.0 million, for grants under its stock-based compensation plans for the quarter and year-to-date ended SeptemberJune 29, 2018,2019, respectively.
The Company grants restricted stock or units (“restricted awards”), performance-based restricted stock or units (“performance awards”) and stock options under its stock-based compensation plans.

During the year-to-date ended September 28, 2019,June 27, 2020, the Company issued 547,1691,325,475 restricted awards at a weighted average grant date fair value of $34.80$22.28 per award. During the year-to-date ended SeptemberJune 29, 2018,2019, the Company issued 601,320531,383 restricted awards at a weighted average grant date fair value of $31.78$35.01 per award.
During the year-to-date ended September 28, 2019,June 27, 2020, the Company issued 344,433346,584 performance awards at a weighted average grant date fair value of $37.33$35.02 per award. During the year-to-date ended SeptemberJune 29, 2018,2019, the Company issued 384,657329,089 performance awards at a weighted average grant date fair value of $32.13$37.65 per award.
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11.RETIREMENT PLANS
11.RETIREMENT PLANS
The following is a summary of net pension and Supplemental Executive Retirement Plan (“SERP”) expense recognized by the Company.
 Quarter Ended Year-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
 September 28,
2019
 September 29,
2018
Service cost pertaining to benefits earned during the period$1.3
 $1.5
 $4.1
 $4.6
Interest cost on projected benefit obligations3.8
 4.1
 11.4
 12.4
Expected return on pension assets(4.4) (5.4) (13.3) (15.5)
Net amortization loss0.7
 0.8
 2.0
 2.5
Net pension expense$1.4
 $1.0
 $4.2
 $4.0

 Quarter EndedYear-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Service cost pertaining to benefits earned during the period$1.6  $1.4  $3.2  $2.8  
Interest cost on projected benefit obligations3.6  3.8  7.1  7.6  
Expected return on pension assets(4.7) (4.5) (9.3) (8.9) 
Net amortization loss1.7  0.7  3.3  1.3  
Net pension expense$2.2  $1.4  $4.3  $2.8  
The non-service cost components of net pension expense is recorded in the Other income, net line item on the consolidated condensed statements of operations and comprehensive income. The Company made contributions to its pension plans of $60.7 million for the year-to-date ended September 29, 2018.
12.INCOME TAXES
12.INCOME TAXES
The Company maintains management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are different than the U.S. federal statutory income tax rate. A significant amount of the Company’s earnings are generated by its Canadian, European and Asian subsidiaries and, to a lesser extent, in jurisdictions that are not subject to income tax.
The Company intends to permanently reinvest all non-cash undistributed earnings outside of the U.S. and has, therefore not established a deferred tax liability on that amount of foreign unremitted earnings. However, if these non-cash undistributed earnings were repatriated, the Company would be required to accrue and pay applicable U.S. taxes and withholding taxes payable to various countries. It is not practicable to estimate the amount of the deferred tax liability associated with these non-cash unremitted earnings due to the complexity of the hypothetical calculation.
The Company’s effective tax rates for the quarter and year-to-date ended September 28, 2019June 27, 2020 were 20.3%(28.3)% and 17.9%(33.0)%, respectively. The Company’s effective tax rates for the quarter and year-to-date ended SeptemberJune 29, 20182019 were 7.8%19.4% and 13.7%16.4%, respectively. The increasechange in the effective tax rate foris driven by a decrease of pretax book income in the current year periods is due primarily toCompany's material tax jurisdictions as a result of the favorable impact on the prior year tax rate for voluntary pension contributions made in 2018.global COVID-19 pandemic.
The Company is subject to periodic audits by U.S. federal, state, local and non-U.S. tax authorities. Currently, the Company is undergoing routine periodic audits in both U.S. federal, state, local and non-U.S. tax jurisdictions. It is reasonably possible that the amounts of unrecognized tax benefits could change in the next 12 months as a result of the audits; however, any payment of tax is not expected to be significant to the consolidated condensed financial statements. The Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 20142015 in the majority of tax jurisdictions.
13.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
13.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
AOCI represents net earnings and any revenue, expenses, gains and losses that, under U.S. GAAP, are excluded from net earnings and recognized directly as a component of stockholders’ equity.

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The change in AOCI during the quarters ended September 28,June 27, 2020 and June 29, 2019 and September 29, 2018 is as follows:
(In millions)Foreign
currency
translation
adjustments
DerivativesPension
adjustments
Total
Balance of AOCI as of March 30, 2019$(50.6) $0.6  $(35.7) $(85.7) 
Other comprehensive income (loss) before reclassifications (1)
2.6  (2.1) —  0.5  
Amounts reclassified from AOCI—  (1.7) 
(2)
0.7  
(3)
(1.0) 
Income tax expense (benefit)—  0.4  (0.2) 0.2  
Net reclassifications—  (1.3) 0.5  (0.8) 
Net current-period other comprehensive income (loss) (1)
2.6  (3.4) 0.5  (0.3) 
Balance of AOCI as of June 29, 2019$(48.0) $(2.8) $(35.2) $(86.0) 
Balance of AOCI as of March 28, 2020$(58.5) $(5.6) $(47.4) $(111.5) 
Other comprehensive income (loss) before reclassifications (1)
2.6  (1.8) —  0.8  
Amounts reclassified from AOCI—  (2.4) 
(2)
1.7  
(3)
(0.7) 
Income tax expense (benefit)—  0.3  (0.4) (0.1) 
Net reclassifications—  (2.1) 1.3  (0.8) 
Net current-period other comprehensive income (loss) (1)
2.6  (3.9) 1.3  —  
Balance of AOCI as of June 27, 2020$(55.9) $(9.5) $(46.1) $(111.5) 
(In millions)
Foreign
currency
translation
adjustments
 Derivatives 
Pension
adjustments
 Total
Balance of AOCI as of June 30, 2018$(45.7) $(4.0) $(33.2) $(82.9)
Other comprehensive income (loss) before reclassifications (1)
1.0
 (0.2) 
 0.8
Amounts reclassified from AOCI
 0.8
(2) 
0.8
(3) 
1.6
Income tax expense (benefit)
 (0.5) (0.2) (0.7)
Net reclassifications
 0.3
 0.6
 0.9
Net current-period other comprehensive income (loss) (1)
1.0
 0.1
 0.6
 1.7
Balance of AOCI as of September 29, 2018$(44.7) $(3.9) $(32.6) $(81.2)
        
Balance of AOCI as of June 29, 2019$(48.0) $(2.8) $(35.2) $(86.0)
Other comprehensive income (loss) before reclassifications (1)
(5.6) 5.5
 
 (0.1)
Amounts reclassified from AOCI
 (4.2)
(2) 
0.7
(3) 
(3.5)
Income tax expense (benefit)
 1.1
 (0.1) 1.0
Net reclassifications
 (3.1) 0.6
 (2.5)
Net current-period other comprehensive income (loss) (1)
(5.6) 2.4
 0.6
 (2.6)
Balance of AOCI as of September 28, 2019$(53.6) $(0.4) $(34.6) $(88.6)
(1)Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
(1)
(2)Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to foreign currency derivatives that are no longer deemed to be highly effective are included in other income. Amounts related to interest rate swaps and the cross-currency swap are included in interest expense.
(3)Amounts reclassified are included in the computation of net pension expense.
Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
(2)
Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to interest rate swaps and the cross-currency swap are included in interest expense.
(3)
Amounts reclassified are included in the computation of net pension expense.
The change in AOCI during the year-to-dateyear-to-dates ended September 28,June 27, 2020 and June 29, 2019 and September 29, 2018 is as follows:
(In millions)Foreign
currency
translation
adjustments
DerivativesPension
adjustments
Total
Balance of AOCI as of December 29, 2018$(53.0) $0.9  $(36.2) $(88.3) 
Other comprehensive income (loss) before reclassifications (1)
5.0  (0.8) —  4.2  
Amounts reclassified from accumulated other comprehensive income (loss)—  (3.5) 
(2)
1.3  
(3)
(2.2) 
Income tax expense (benefit)—  0.6  (0.3) 0.3  
Net reclassifications—  (2.9) 1.0  (1.9) 
Net current-period other comprehensive income (loss) (1)
5.0  (3.7) 1.0  2.3  
Balance of AOCI as of June 29, 2019$(48.0) $(2.8) $(35.2) $(86.0) 
Balance of AOCI as of December 28, 2019$(47.6) $(5.8) $(48.7) $(102.1) 
Other comprehensive income (loss) before reclassifications (1)
(8.3) (0.7) —  (9.0) 
Amounts reclassified from accumulated other comprehensive income (loss)—  (3.6) 
(2)
3.3  
(3)
(0.3) 
Income tax expense (benefit)—  0.6  (0.7) (0.1) 
Net reclassifications—  (3.0) 2.6  (0.4) 
Net current-period other comprehensive income (loss) (1)
(8.3) (3.7) 2.6  (9.4) 
Balance of AOCI as of June 27, 2020$(55.9) $(9.5) $(46.1) $(111.5) 
(1)Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
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(In millions)
Foreign
currency
translation
adjustments
 Derivatives 
Pension
adjustments
 Total
Balance of AOCI as of December 30, 2017$(32.7) $(13.9) $(28.6) $(75.2)
Other comprehensive income (loss) before reclassifications (1)
(12.0) 7.4
 
 (4.6)
Amounts reclassified from AOCI
 6.7
(2) 
2.5
(3) 
9.2
Income tax expense (benefit)
 (2.0) (0.5) (2.5)
Net reclassifications
 4.7
 2.0
 6.7
Net current-period other comprehensive income (loss) (1)
(12.0) 12.1
 2.0
 2.1
Reclassifications to retained earnings (4)

 (2.1) (6.0) (8.1)
Balance of AOCI as of September 29, 2018$(44.7) $(3.9) $(32.6) $(81.2)
        
Balance of AOCI as of December 29, 2018$(53.0) $0.9
 $(36.2) $(88.3)
Other comprehensive income (loss) before reclassifications (1)
(0.6) 4.7
 
 4.1
Amounts reclassified from AOCI
 (7.7)
(2) 
2.0
(3) 
(5.7)
Income tax expense (benefit)
 1.7
 (0.4) 1.3
Net reclassifications
 (6.0) 1.6
 (4.4)
Net current-period other comprehensive income (loss) (1)
(0.6) (1.3) 1.6
 (0.3)
Balance of AOCI as of September 28, 2019$(53.6) $(0.4) $(34.6) $(88.6)
(2)Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to foreign currency derivatives that are no longer deemed to be highly effective are included in other income. Amounts related to interest rate swaps and the cross-currency swap are included in interest expense.
(1)
(3)Amounts reclassified are included in the computation of net pension expense.
14.FAIR VALUE MEASUREMENTS
Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
(2)
Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to interest rate swaps and the cross-currency swap are included in interest expense.

(3)
Amounts reclassified are included in the computation of net pension expense.
(4)
Amounts reclassified to retained earnings upon adoption of ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities and ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.
14.FAIR VALUE MEASUREMENTS
The Company follows FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a consistent definition of fair value, focuses on exit price, prioritizes the use of market-based inputs over entity-specific inputs for measuring fair value and establishes a three-tier hierarchy for fair value measurements. ASC 820 requires fair value measurements to be classified and disclosed in one of the following three categories:
Level 1:Fair value is measured using quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2:Fair value is measured using either direct or indirect inputs, other than quoted prices included within Level 1, which are observable for similar assets or liabilities.
Level 3:Fair value is measured using valuation techniques in which one or more significant inputs are unobservable.

Recurring Fair Value Measurements
The following table sets forth financial assets and liabilities measured at fair value in the consolidated condensed balance sheets and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy.
 Fair Value Measurements
 Quoted Prices With Other Observable Inputs (Level 2)
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Financial assets:     
Derivatives$6.3
 $10.3
 $7.5
Financial liabilities:     
Derivatives$(5.3) $(8.2) $(12.3)

 Fair Value Measurements
Quoted Prices With Other Observable Inputs (Level 2)
(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Financial assets:
Derivatives$4.1  $2.3  $4.3  
Financial liabilities:
Derivatives$(11.8) $(6.6) $(5.6) 
The fair value of foreign currency forward exchange contracts represents the estimated receipts or payments necessary to terminate the contracts. The two interest rate swaps are valued based on the current forward rates of the future cash flows. The fair value of the cross-currency swap is determined using the current forward rates and changes in the spot rate.
Fair Value Disclosures
The Company’s financial instruments that are not recorded at fair value consist of cash and cash equivalents, accounts and notes receivable, accounts payable, borrowings under revolving credit agreements and other short-term and long-term debt. The carrying amount of these financial instruments is historical cost, which approximates fair value, except for the debt. The carrying value and the fair value of the Company’s debt, excluding capital leases, are as follows:
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Carrying value$934.0
 $570.1
 $662.1
Fair value952.8
 566.8
 668.7

(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Carrying value$1,024.4  $798.4  $811.0  
Fair value1,062.4  817.6  828.9  
The fair value of the fixed rate debt was based on third-party quotes (Level 2). The fair value of the variable rate debt was calculated by discounting the future cash flows to its present value using a discount rate based on the risk-free rate of the same maturity (Level 3).
15.LITIGATION AND CONTINGENCIES
15.LITIGATION AND CONTINGENCIES
Litigation
The Company operated a leather tannery in Rockford, Michigan from the early 1900s through 2009 (the “Tannery”). The Company also owns a parcel on House Street in Plainfield Township that the Company used for the disposal of Tannery byproducts until about 1970 (the "House Street" site). Beginning in the late 1950s, the Company used 3M Company’s Scotchgard™ in its processing of certain leathers at the Tannery. Until 2002 when 3M Company changed its Scotchgard™ formula, Tannery byproducts disposed of by the Company at the House Street site and other locations may have contained
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PFOA and/or PFOS, two chemicals in the family of compounds known as per- and polyfluoroalkyl substances (together, “PFAS”). PFOA and PFOS help provide non-stick,

stain-resistant, and water-resistant qualities, and were used for many decades in commercial products like firefighting foams and metal plating, and in common consumer items like food wrappers, microwave popcorn bags, pizza boxes, Teflon™, carpets and Scotchgard™.
The United States Centers for Disease Control and Prevention has concluded that studies of the health effects of PFOA and PFOS are “inconsistent and inconclusive,” but in May 2016, the Environmental Protection Agency (“EPA”) announced a lifetime health advisory level of 70 parts per trillion ("ppt"(“ppt”) combined for PFOA and PFOS. Lifetime health advisories, while not enforceable, serve as guidance and are benchmarks for determining if concentrations of chemicals in tap water from public utilities are safe for public consumption. In January 2018, the Michigan Department of Environmental Quality (“MDEQ”) enacted a drinking water criterion of 70 ppt combined for PFOA and PFOS, which set an official state standard for acceptable concentrations of these contaminants in groundwater used for drinking water purposes. On April 22, 2019, the MDEQ was reorganized into the Michigan Department of Environment, Great Lakes, and Energy (“EGLE”). On August 3, 2020 Michigan drinking water standards became effective for PFOA, PFOS, PFNA, PFHxA, PFHxS, PFBS, and HFPO-DA.
The Company has been served with two regulatory actions including a civil action filed by the EGLE under the federal Resource Conservation and Recovery Act of 1976 (“RCRA”), Part 201 of the Michigan Natural Resources and Environmental Protection Act (“NREPA”) and Part 31 of NREPA, and a Unilateral Administrative Order issued by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) Section 106. The Company has also been served with individual lawsuits and three putative class action lawsuits. The three putative class action lawsuits were subsequently refiled as a single consolidated putative class action lawsuit.
Civil and Regulatory Actions of EGLE and EPA
On January 10, 2018, EGLE filed a civil action against the Company in the U.S District Court for the Western District of Michigan under RCRA and Parts 201 and 31 of NREPA alleging that the Company’s past and present handling, storage, treatment, transportation and/or disposal of solid waste at the Company’s properties has contributed to the disposal of solid wastes that was done in a way that resulted in releases of PFAS at levels that resulted in detections exceeding applicable Michigan cleanup criteria for PFOA and PFOS (the "EGLE Action"). Plainfield and Algoma Townships have intervened in the EGLE Action alleging claims under RCRA, CERCLA, Part 201 of NREPA, and common law nuisance.
The EGLE Action seeks to require the Company to investigate the location and extent of PFAS in the environment, develop and implement plans for the continued sampling and analysis of impacts to drinking water wells from PFAS released or disposed of by the Company, and provide alternative drinking water supplies to homes impacted by PFAS for which the Company is allegedly responsible. The EGLE Action further seeks to require the Company to connect users of drinking water wells to municipal drinking water supplies to address allegedly unacceptable risks posed by a release or threat of release of PFAS attributable to the Company. On December 19, 2018, the Company filed a third-party complaint against the 3M Company seeking, among other things, recovery of the Company’s remediation and other costs incurred in defense of the EGLE Action.Action ("the 3M Action"). On June 20, 2019, the 3M Company filed a counterclaim against the Company in response to the Company’s third-party complaint in the EGLE3M Action, seeking, among other things, contractual and common law indemnity and contribution under CERCLA and Part 201 of NREPA. In July 2019,On February 3, 2020, the Court ordered all parties toentered into a consent decree resolving the EGLE Action, (includingwhich was approved by U.S. District Judge Janet T. Neff on February 19, 2020 (the “Consent Decree”). On February 20, 2020, the Company and the 3M Company asentered into a third-party defendant)settlement agreement resolving the 3M Action, under which 3M Company paid the Company a lump sum amount of $55.0 million during the first quarter of 2020.
Under the Consent Decree, the Company will pay to participateextend Plainfield Township’s municipal water system to more than 1,000 properties in confidential mediation. Initial mediation sessions were held in September 2019,Plainfield and Algoma Townships, subject to an aggregate cap of $69.5 million. The Consent Decree also obligates the parties remain engaged in discussions.
The Company is working withto continue maintaining water filters for certain homeowners, resample certain residential wells for PFAS, continue remediation at the EGLE to analyze theCompany’s Tannery property and House Street site, and other relevant disposal sites, test nearby residentialconduct further investigations and monitoring to the assess the presence of PFAS in area groundwater. The Company’s activities under the Consent Decree are not materially impacted by the drinking water wells and coordinate communications to impacted homeowners. The Company’s current remediation efforts have included, among other items, providing alternate drinking water to impacted homes, including bottled water and water filtration systems, sampling residential wells, installing and sampling monitoring wells, collecting and analyzing soil and sediment samples and designing and installing a groundwater extraction and treatment system at the Tannery property. The Company continues to collect and analyze this datastandards that became effective on a continuing basis with the EGLE and EPA.August 3, 2020.
On January 10, 2018, the EPA entered a Unilateral Administrative Order (the “Order”) under Section 106(a) of CERCLA, 42 U.S.C. § 9606(a). The effective date of the Order was February 1, 2018. The Order pertained to the Company's Tannery and House Street sites and directed the Company to conduct specified removal actions, including certain time critical removal actions subsequently identified in an April 29, 2019 letter from the EPA, to abate the actual or threatened release of hazardous substances at or from the sites. On October 28, 2019, the EPA and the Company entered into an Administrative Settlement and Order on Consent (“AOC”) that supersedes the Order and addresses the agreed-upon removal actions outlined in the Order. The Company has already completed somealmost all of these activities related to the AOC, and submitted work plans for completion ofwill complete the remaining items.activities in 2020 pursuant to approved work plans.
The Company discusses its reserve for remediation costs in the environmental liabilities section below.
Individual and Class Action Litigation
Individual lawsuits and three putative class action lawsuits have been filed against the Company that raise a variety of claims, including claims related to property, remediation, and human health effects. The three putative class action lawsuits were

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subsequently refiled in the U.S. District Court for the Western District of Michigan as a single consolidated putative class action lawsuit. The 3M Company, which sold Scotchgard containing PFAS to the Company, has been named as a co-defendant in the individual lawsuits and consolidated putative class action lawsuit. In addition, the current owner of a former landfill and gravel mining operation has sued the Company seeking damages and cost recovery for property damage allegedly caused by the Company’s disposal of tannery waste containing PFAS (collectively(this suit collectively with the individual lawsuits and putative class action, the “Litigation Matters”).
Assessing potential liability with respect to the Litigation Matters at this time however, is difficult. The Litigation Matters are in various stages of discovery and related motions. In addition, there is minimal direct and relevant precedent for these types of claims related to PFAS, and the science regarding the human health effects of PFAS exposure in the environment remains inconclusive and inconsistent, thereby creating additional uncertainties. Due to these factors, combined with the complexities and uncertainties of litigation, the Company is unable to conclude that adverse verdicts resulting from the Litigation Matters are probable, and therefore no amounts are currently reserved for these claims. The Company intends to continue to vigorously defend itself against these claims.
In addition, in December 2018 the Company filed a lawsuit against certain of its historic liability insurers, seeking their participation in Wolverine'sthe Company's defense and remediation efforts.During the second quarter of 2020, the Company recognized $5.8 million in recoveries from legacy insurance policies. The recoveries resulted from interim payment agreements reached with the insurers and are pending final resolution of the lawsuit.
Other Litigation
The Company is also involved in litigation incidental to its business and is a party to legal actions and claims, including, but not limited to, those related to employment and intellectual property. Some of the legal proceedings include claims for compensatory as well as punitive damages. While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the meritorious legal defenses available and liabilities that have been recorded along with applicable insurance, it is management’s opinion that the outcome of these items are not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Environmental Liabilities
The following is a summary of the activity with respect to anthe environmental remediation reserve established by the Company:
 Year-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
Remediation liability at beginning of the year$22.6
 $31.1
Changes in estimate
 0.9
Amounts paid(7.8) (8.6)
Remediation liability at the end of the quarter$14.8
 $23.4

Year-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
Remediation liability at beginning of the year$124.4  $22.6  
Changes in estimate—  —  
Amounts paid(17.7) (5.3) 
Remediation liability at the end of the quarter$106.7  $17.3  
The reserve balance as of September 28, 2019 comprises $10.5June 27, 2020 includes $34.5 million that is expected to be paid within the next twelve months and is recorded as a current obligation in other accrued liabilities, with the remaining $4.3$72.2 million expected to be paid over the course of up to 2725 years, recorded in other liabilities.
The Company establishes a reserve for estimated environmental remediation costs based upon the evaluation of currently-available facts with respect to each individual site. The liabilities are recognized on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. Liabilities for estimated costs of environmental remediation are based primarily upon third-party environmental studies, other internal analysis and the extent of the contamination and the nature of required remedial actions at each site. No estimated recoveries from legacy insurance policies or other responsible parties are included in the reserve.
The Company's remediation activity at the Tannery property, House Street site and other relevant disposal sites is ongoing. ItAlthough the recent Consent Decree has made near-term costs more clear, it is difficult to estimate the long-term cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. DevelopmentsFuture developments may occur that could materially change the Company’s current cost estimates, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company’s operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) changes to the form of remediation; (v) success in allocating liability to other potentially responsible parties; and (vi) the financial viability of other potentially responsible parties and third-party indemnitors. For locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the associated established reserves for the reasons described above. The Company adjusts recorded liabilities as further information develops or circumstances change.

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Minimum Royalties and Advertising Commitments
MinimumThe Company has future minimum royalty and advertising obligations for the fiscal periods subsequent to September 28, 2019due under the terms of certain licenses held by the CompanyCompany. These minimum future obligations for the fiscal periods subsequent to June 27, 2020 are as follows:
(In millions)2019 2020 2021 2022 2023 Thereafter
Minimum royalties$
 $1.5
 $1.7
 $1.8
 $
 $
Minimum advertising0.3
 3.2
 3.3
 3.4
 3.5
 3.6

(In millions)20202021202220232024Thereafter
Minimum royalties$0.5  $1.7  $1.8  $—  $—  $—  
Minimum advertising2.2  3.3  3.4  3.5  3.6  —  
Minimum royalties are based on both fixed obligations and assumptions regarding the Consumer Price Index. Royalty obligations in excess of minimum requirements are based upon future sales levels. In accordance with these agreements, the Company incurred royalty expense of $0.6$0.4 million and $1.6$0.8 million for the quarter and year-to-date ended September 28, 2019,June 27, 2020, respectively. For the quarter and year-to-date ended SeptemberJune 29, 2018,2019, the Company incurred royalty expense in accordance with these agreements of $0.6$0.5 million and $1.7$1.0 million, respectively.
The terms of certain license agreements also require the Company to make advertising expenditures based on the level of sales of the licensed products. In accordance with these agreements, the Company incurred advertising expense of $0.9$0.4 million and $2.8$1.0 million for the quarter and year-to-date ended September 28, 2019,June 27, 2020, respectively. For the quarter and year-to-date ended SeptemberJune 29, 2018,2019, the Company incurred advertising expense in accordance with these agreements of $0.5$1.5 million and $2.2$1.9 million, respectively.
16.BUSINESS SEGMENTS
16.BUSINESS SEGMENTS
The Company’s portfolio of brands is organized into the following two operating segments, which the Company has determined to be reportable operating segments. During the first quarter of fiscal 2019, the brands that were formerly aligned with the Wolverine Outdoor & Lifestyle Group and Wolverine Heritage Group were realigned into a new operating segment, the
Wolverine Michigan Group. The change was to align our brands under key leadership to best support innovationGroup, consisting of Merrell® footwear and efficiency. All prior-period disclosures have been restated to reflect these new reportable operating segments.
Wolverine Michigan Group, consisting of Merrellapparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies®footwearand apparel, Bates® uniform footwear, Harley-Davidson® footwear and Hytest® safety footwear; and
Wolverine Boston Group, consisting of Sperry® footwear and apparel, Saucony® footwear and apparel, Keds® footwear and apparel, and the Kids’ footwear business, which includes the Stride Rite® licensed business, as well as kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat® footwear and apparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies®footwearand apparel, Bates® uniform footwear, Harley-Davidson® footwear and HyTest® safety footwear; and
Wolverine Boston Group, consisting of Sperry® footwear and apparel, Saucony® footwear and apparel, Keds® footwear and apparel, and the Kids footwear business, which includes the Stride Rite® licensed business, as well as kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat®.
The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. Revenue for the reportable operating segments includes revenue from the sale of branded footwear, apparel and accessories to third-party customers; revenue from third-party licensees and distributors; and revenue from the Company’s consumer-direct businesses.
The Company also reports “Other” and “Corporate” categories. The Other category consists of the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, such as reorganization costs, environmental and other related costs. The Company’s operatingreportable segments are determined based on how the Company internally reports and evaluates financial information used to make operating decisions. The operatingreportable segment managers all report directly to the chief operating decision maker.

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Company management uses various financial measures to evaluate the performance of the reportable operating segments. The following is a summary of certain key financial measures for each reportable operating segment.
 Quarter EndedYear-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Revenue:
Wolverine Michigan Group$217.4  $318.2  $465.2  $620.9  
Wolverine Boston Group122.5  230.7  304.6  435.5  
Other9.2  19.7  18.6  35.6  
Total$349.1  $568.6  $788.4  $1,092.0  
Operating profit (loss):
Wolverine Michigan Group$38.4  $59.3  $81.5  $117.8  
Wolverine Boston Group8.6  37.2  27.4  69.2  
Other0.4  1.5  0.3  2.3  
Corporate(39.9) (42.5) (84.8) (81.4) 
Total$7.5  $55.5  $24.4  $107.9  
Quarter Ended Year-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
 September 28,
2019
 September 29,
2018
(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Revenue:       
Wolverine Michigan Group$318.8
 $327.7
 $939.7
 $937.7
Wolverine Boston Group241.3
 214.6
 676.8
 664.7
Other14.2
 16.3
 49.8
 57.2
Total$574.3
 $558.6
 $1,666.3
 $1,659.6
Operating profit (loss):       
Total assets:Total assets:
Wolverine Michigan Group$66.0
 $69.4
 $183.8
 $195.2
Wolverine Michigan Group$714.4  $773.8  $774.9  
Wolverine Boston Group46.5
 37.6
 115.7
 120.0
Wolverine Boston Group1,307.0  1,354.8  1,426.2  
Other0.7
 0.4
 3.0
 2.9
Other37.0  38.4  43.6  
Corporate(44.9) (39.0) (126.3) (120.1)Corporate531.0  313.0  198.2  
Total$68.3
 $68.4
 $176.2
 $198.0
Total$2,589.4  $2,480.0  $2,442.9  
Goodwill:Goodwill:
Wolverine Michigan GroupWolverine Michigan Group$143.2  $144.4  $143.8  
Wolverine Boston GroupWolverine Boston Group292.4  294.5  294.7  
TotalTotal$435.6  $438.9  $438.5  

17.
BUSINESS ACQUISITIONS
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Total assets:     
Wolverine Michigan Group$814.8
 $626.8
 $650.3
Wolverine Boston Group1,404.6
 1,282.2
 1,264.1
Other43.8
 50.0
 45.2
Corporate205.3
 224.1
 309.5
Total$2,468.5
 $2,183.1
 $2,269.1
Goodwill:     
Wolverine Michigan Group$143.1
 $143.8
 $144.4
Wolverine Boston Group293.9
 280.6
 283.1
Total$437.0
 $424.4
 $427.5

17.BUSINESS ACQUISITIONS
On April 30, 2019, the Company acquired assets and assumed liabilities from Sportlab S.R.L. (“Sportlab”), the distributor of Saucony® footwear in Italy. Total purchase consideration of $25.1$25.2 million includes cash paid, extinguishment of Sportlab’s accounts payable balance that was due to the Company at the time of acquisition and contingent consideration. The contingent consideration iswas based on sales activity from the date of the acquisition through the remainderend of fiscal 2019 and is valued based on the order backlog at the acquisition date. The maximum amount of contingent consideration for which the Company would be liable is $5.7 million and if earned, would bewas paid in the first quarter of fiscal 2020. The detailed amounts of each component of the purchase consideration are as follows:
(In millions)Purchase Consideration
Cash paid$15.1
Extinguishment of Sportlab’s accounts payable balance4.6
Contingent consideration5.4
Total purchase consideration$25.1

(In millions)Purchase Consideration
Cash paid$15.1 
Extinguishment of Sportlab’s accounts payable balance4.6 
Contingent consideration5.5 
Total purchase consideration$25.2 
The Company accounted for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations. The related assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The operating results for the acquired Saucony® distribution business are included in the Company’s consolidated condensed results of operations beginning April 30, 2019, and are included in the Wolverine Boston Group reporting group for segment reporting purposes.

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The preliminaryfinal allocation of the purchase price through Septemberas of December 28, 2019 was:
(In millions)Initial Valuation
Accounts receivable$1.8
Inventories6.2
Goodwill12.3
Amortizable intangibles12.9
Total assets acquired33.2
Deferred income taxes3.6
Other liabilities4.5
Total liabilities assumed8.1
Net assets acquired$25.1

The allocation of the purchase price above is considered preliminary and was based upon valuation information available and estimates and assumptions made at September 28, 2019. The Company is still in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, deferred taxes. uncertain tax positions, remaining contingent consideration and the resulting effects on the amount of recorded goodwill.
(In millions)Initial Valuation
Accounts receivable$1.8 
Inventories6.2 
Goodwill12.0 
Amortizable intangibles12.9 
Total assets acquired32.9 
Deferred income taxes3.2 
Other liabilities4.5 
Total liabilities assumed7.7 
Net assets acquired$25.2 
The excess of the purchase price over the fair value of the net assets acquired, amounting to $12.3$12.0 million, was preliminarily recorded as goodwill in the condensed consolidated balance sheet and was assigned to the Wolverine Boston Group operatingreportable segment. The goodwill that was recognized is attributable to the efficiencies to be gained by integrating operations with the Saucony® distribution business purchased from Sportlab. Other intangible assets acquired include order backlog, valued at $1.7 million, and customer relationship assets, valued at $11.2 million, which havehad estimated useful lives at the acquisition date of 7 months and 14 years,, respectively.

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ITEM 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of the Company’s results of operations and liquidity and capital resources. This section should be read in conjunction with the Company’s consolidated condensed financial statements and related notes included elsewhere in this Quarterly Report.
BUSINESS OVERVIEW
The Company is a leading global designer, marketer and licensor of branded footwear, apparel and accessories. The Company’s vision statement is “to build a family of the most admired performance and lifestyle brands on earth.Theand the Company seeks to fulfill this vision by offering innovative products and compelling brand propositions; complementing its footwear brands with strong apparel and accessories offerings; expanding its global consumer-direct footprint; and delivering supply chain excellence.
The Company’s brands are marketed in approximately 170 countries and territories at June 27, 2020, including through owned operations in the U.S., Canada, the United Kingdom and certain countries in continental Europe and Asia Pacific. In other regions (Latin America, portions of Europe and Asia Pacific, the Middle East and Africa), the Company relies on a network of third-party distributors, licensees and joint ventures. As of September 28, 2019,At June 27, 2020, the Company operated 9492 retail stores in the United StatesU.S. and Canada and 4136 consumer-direct websites.eCommerce sites.
2019 FINANCIALCOVID-19
In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. COVID-19 has had a negative effect on the global economy and on the Company’s 2020 operating and financial results to date. The full financial effects of the COVID-19 pandemic cannot be reasonably estimated at this time due to uncertainty as to its severity and duration. The Company has taken the following proactive and precautionary measures to mitigate known areas of risk and navigate the future environment:
To increase liquidity and flexibility of the Company’s capital structure, the Company borrowed $171 million in incremental 364-day term loan under its senior credit facility and sold $300 million of 6.375% Senior Notes (refer to Note 7, “Debt”), delayed most capital projects, suspended share repurchases, implemented select employee furloughs and organizational changes, compensation changes for the Company's management team and Board of Directors, delayed or canceled certain future product purchases across its portfolio of brands, initiated conversations with landlords to seek lease concessions, and took additional steps to reduce discretionary spending and other expenditures.
The Company temporarily closed all U.S. and Canada retail stores on March 17, 2020. Stores began reopening in May under a phased approach and as of the end of the second quarter all stores had reopened with newly instituted health and safety protocols for customers and employees following regulatory guidance and protocols promulgated and health authorities and government officials. During the period stores were closed, the Company’s distribution centers remained open and the Company’s direct on-line channels continued to serve customer demand.
The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the Company’s financial results. The full nature and extent of the impact will depend on future developments, including, among other things; the continued spread and duration of the pandemic; the negative impact on global and regional economies and economic activity; actions governments, businesses and individuals take in response to the pandemic; the effects of the pandemic, including all of the foregoing, on the Company’s manufacturers, distributors, suppliers, joint venture partners, wholesale customers and other counterparties, and how quickly the global economy and demand for the Company's products recovers after the pandemic subsides. The Company continues to monitor the situation closely.
2020 FINANCIAL OVERVIEW
Revenue was $574.3$349.1 million for the thirdsecond quarter of 2019,2020, representing growtha decline of 2.8%38.6% compared to the thirdsecond quarter of 2018.2019. The change in revenue reflected a 2.7%31.7% decline from the Michigan Group and a 12.4% increase46.9% decline from the Boston Group. Changes in foreign exchange rates decreased revenue by $4.7$2.0 million during the thirdsecond quarter of 2020. Owned eCommerce revenue increased during the second quarter of 2020 by 96.0% compared to the second quarter of 2019.
Gross margin was 42.4%42.2% in the thirdsecond quarter of 20192020 compared to 41.6%40.5% in the thirdsecond quarter of 2018.2019.
The effective tax rates in the thirdsecond quarters of 2020 and 2019 were (28.3)% and 2018 were 20.3% and 7.8%19.4%, respectively.
Diluted earnings (loss) per share for the thirdsecond quarters of 2020 and 2019 and 2018 were $0.57$(0.02) per share and $0.60$0.45 per share, respectively.
The Company declared cash dividends of $0.10 per share and $0.08 per share in both the thirdsecond quarters of 2020 and 2019.
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Table of Contents
Cash flow provided by operating activities was $39.0 million and $3.9 million for the first two quarters of 2020 and 2019, respectively, and 2018,was $115.6 million and $136.3 million for the second quarter of 2020 and 2019, respectively.
The Company repurchased $106.8 million of shares inCompared to the thirdsecond quarter of 2019, at an average price of $25.13 per share.inventory decreased $20.0 million, or 4.9%.

RESULTS OF OPERATIONS
 Quarter EndedYear-To-Date Ended
(In millions, except per share data)June 27,
2020
June 29,
2019
Percent
Change
June 27,
2020
June 29,
2019
Percent
Change
Revenue$349.1  $568.6  (38.6)%$788.4  $1,092.0  (27.8)%
Cost of goods sold201.9  338.2  (40.3) 459.4  641.4  (28.4) 
Gross profit147.2  230.4  (36.1) 329.0  450.6  (27.0) 
Selling, general and administrative expenses143.6  168.7  (14.9) 299.7  332.7  (9.9) 
Environmental and other related costs, net of recoveries(3.9) 6.2  (162.9) 4.9  10.0  (51.0) 
Operating profit7.5  55.5  (86.5) 24.4  107.9  (77.4) 
Interest expense, net10.5  6.7  56.7  18.3  13.6  34.6  
Debt extinguishment and other costs0.2  —  —  0.2  —  —  
Other income, net(1.7) (1.0) (70.0) (2.3) (2.3) —  
Earnings (loss) before income taxes(1.5) 49.8  (103.0) 8.2  96.6  (91.5) 
Income tax expense (benefit)0.4  9.6  (95.8) (2.7) 15.8  (117.1) 
Net earnings (loss)(1.9) 40.2  (104.7) 10.9  80.8  (86.5) 
Less: net earnings (loss) attributable to noncontrolling interests(0.3) —  —  (0.5) 0.1  (600.0) 
Net earnings (loss) attributable to Wolverine World Wide, Inc.$(1.6) $40.2  (104.0)%$11.4  $80.7  (85.9)%
Diluted earnings (loss) per share$(0.02) $0.45  (104.4)%$0.14  $0.88  (84.1)%
 Quarter Ended   Year-To-Date Ended
(In millions, except per share data)September 28,
2019
 September 29,
2018
 
Percent
Change
 September 28,
2019
 September 29,
2018
 
Percent
Change
Revenue$574.3
 $558.6
 2.8 % $1,666.3
 $1,659.6
 0.4 %
Cost of goods sold331.0
 326.5
 1.4
 972.4
 965.4
 0.7
Gross profit243.3
 232.1
 4.8
 693.9
 694.2
 
Selling, general and administrative expenses165.9
 161.6
 2.7
 498.6
 488.6
 2.0
Environmental and other related costs9.1
 2.1
 333.3
 19.1
 7.6
 151.3
Operating profit68.3
 68.4
 (0.1) 176.2
 198.0
 (11.0)
Interest expense, net8.2
 5.8
 41.4
 21.8
 18.7
 16.6
Other income, net(0.9) (1.3) 30.8
 (3.2) (7.2) 55.6
Earnings before income taxes61.0
 63.9
 (4.5) 157.6
 186.5
 (15.5)
Income tax expense12.4
 5.0
 148.0
 28.2
 25.5
 10.6
Net earnings48.6
 58.9
 (17.5) 129.4
 161.0
 (19.6)
Less: net earnings (loss) attributable to noncontrolling interests(0.1) 0.1
 (200.0) 
 0.2
 (100.0)
Net earnings attributable to Wolverine World Wide, Inc.$48.7
 $58.8
 (17.2)% $129.4
 $160.8
 (19.5)%
            
Diluted earnings per share$0.57
 $0.60
 (5.0)% $1.44
 $1.65
 (12.7)%
REVENUEREVENUE
Revenue was $574.3$349.1 million for the thirdsecond quarter of 2019,2020, representing an increasea decline of 2.8%38.6% compared to the thirdsecond quarter of 2018.2019. The change in revenue reflected a 2.7%31.7% decline from the Michigan Group and a 12.4% increase46.9% decline from the Boston Group. The Michigan Group’s revenue decline was driven by high-teens declineslow-thirties decline from Merrell®, high-thirties decline from Cat®, high-twenties decline from andWolverine®, mid-teens decline from Chaco®, partially offset by high-single digit increaseand a high-forties decline from MerrellHush Puppies®. The Boston Group’s revenue increasedecline was driven by a low-teens increase forlow-sixties decline from Sperry®, high-twenties decline from Saucony®, high-forties decline from Keds®, and a mid-teens increase for Saucony®low-fifties decline from Kids’. Changes in foreign exchange rates decreased revenue by $4.6$2.0 million during the thirdsecond quarter of 2020. Owned eCommerce revenue increased during the second quarter of 2020 by 96.0% compared to the second quarter of 2019.
Revenue was $1,666.3$788.4 million infor the first threetwo quarters of 2019, an increase2020, representing a decline of 0.4% from27.8% compared to the first threetwo quarters of 2018.2019. The change in revenue reflected an increase of 0.2%a 25.1% decline from the Michigan Group and a 1.8% increase30.1% decline from the Boston Group. The Michigan Group’s revenue increasedecline was driven by mid-single digit growthlow-twenties decline from Merrell® and high-single digit growth, mid-thirties decline from Cat®, partially offset by a mid-teenslow-twenties decline forfrom Wolverine®, mid-twenties decline from Chaco®, and a high-thirties decline from Hush Puppies®. The Boston Group’s revenue increasedecline was driven by mid-teens growth forlow-forties decline from Sperry®, low-teens decline from Saucony®, high-twenties decline from Keds®, and a mid-thirties decline from Kids’. Changes in foreign exchange rates decreased revenue by $14.9$4.9 million during the first threetwo quarters of 2020. Owned eCommerce revenue increased during the first two quarters of 2020 by 61.8% compared to the first two quarters of 2019.
GROSS MARGIN
Gross margin was 42.4%42.2% in the thirdsecond quarter of 20192020 compared to 41.6%40.5% in the thirdsecond quarter of 2018.2019. Gross margin was 41.6%41.7% in the first threetwo quarters of 20192020 compared to 41.8%41.3% during the first threetwo quarters of 2018.2019. The gross margin increase in the third quarter of 2019current year periods resulted from a favorable sales channel shift to higher margin eCommerce and favorable wholesale product mix, and the acquisition of a distributor in Italy, partially offset by business model changes for certain international wholesale customers and higher closeout sales. The decrease in the first three quartersincreased tariffs on inventory sourced from China.
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Table of 2019 resulted from unfavorable product mix and business model changes for certain international wholesale customers, partially offset by the acquisition of a distributor in Italy, a higher mix of higher gross margin consumer-direct revenue and reduced markdowns.Contents
OPERATING EXPENSES
Operating expenses increased $11.3decreased $35.2 million, from $163.7$174.9 million in the thirdsecond quarter of 20182019 to $175.0$139.7 million in the thirdsecond quarter of 2019.2020. The increasedecrease was driven by higherlower selling costs ($20.1 million), lower product development costs ($4.0 million), lower distribution costs ($2.4 million), lower general and administrative costs ($13.4 million), and lower environmental and other related costs, net of insurance recoveries ($7.010.1 million), partially offset by higher advertising ($1.0 million), higher incentive compensation ($1.2 million), and higher non-operating costs incurred due to COVID-19 ($12.7 million).
Operating expenses decreased $38.1 million, from $342.7 million in the first two quarters of 2019 to $304.6 million in the first two quarters of 2020. The decrease was driven by lower selling costs ($20.4 million), lower product development costs ($5.8 million), lower distribution costs ($3.9 million), lower incentive compensation ($7.5 million), lower general and administrative costs ($3.911.5 million), higher sellingand lower environmental and other related costs, net of insurance recoveries ($2.7 million), higher reorganization costs ($2.5 million) and higher distribution costs ($1.35.1 million), partially offset by lower advertisinghigher non-operating costs ($4.1 million) and lower employee incentive compensation costs ($1.5 million).
Operating expenses increased $21.5 million, from $496.2 million in the first three quarters of 2018 to $517.7 million in the first three quarters of 2019. The increase isincurred due to higher environmental and other related costsCOVID-19 ($11.5 million), higher general and administrative costs ($7.2 million), higher distribution costs ($5.3 million), higher selling costs ($4.5 million), higher business

development costs ($3.0 million) and higher reorganization costs ($2.5 million), partially offset by lower employee incentive compensation costs ($9.5 million) and lower advertising costs ($3.116.2 million).
INTEREST, OTHER AND INCOME TAXES
Net interest expense was $8.2$10.5 million in the thirdsecond quarter of 20192020 compared to $5.8$6.7 million in the thirdsecond quarter of 2018.2019. Net interest expense was $21.8$18.3 million in the first threetwo quarters of 20192020 compared to $18.7$13.6 million in the first threetwo quarters of 2018.2019. Interest expense increased by $1.1 million duringin the third quarter of 2019current year periods due primarily to higher average debt balances in 2019. Interest income was $1.3 million lower in third quarter of 2019 as a result of lower cash balances compared to 2018. The increase in net interest expense for the first three quarters of 2019 was due to lower interest income ($3.7 million) as a result of lower cash balances, partially offset by reduced interest expense ($0.6 million) due primarily to lower amortization expense on deferred financing fees.2020.
Other income was $0.9$1.7 million in the thirdsecond quarter of 2019,2020, compared to $1.3$1.0 million in the thirdsecond quarter of 2018.2019. The decreaseincrease was driven by foreign exchange derivative gains reclassified from AOCI ($1.3 million), partially offset by higher non-service pension costs ($0.60.5 million), partially offset by the inclusion of sublease. Other income was $2.3 million in 2019 ($1.0 million) due to the implementation of ASU 2016-02 during the first two quarter of 2020, compared to $2.3 million in the first two quarters of 2019. Other income was $3.2 million in the first three quarters of 2019 compared to $7.2 million in the first three quarters of 2018. This decline was driven by acurrent period included higher non-service pension costs ($1.0 million) and gains on foreign currency remeasurement gain in 2018exchange derivatives reclassified from AOCI ($5.9 million), which was partially offset by the inclusion of sublease income in 2019 due to the implementation of ASU 2016-02 during the first quarter of 2019 ($2.91.3 million).
The effective tax rates in the third quarterssecond quarter of 2020 and 2019 were (28.3)% and 2018 were 20.3% and 7.8%19.4%, respectively. The effective tax rates in the first threetwo quarters of 2020 and 2019 were (33.0)% and 2018 were 17.9% and 13.7%16.4%, respectively. The increasechange in the effective tax rate foris driven by a decrease of pretax book income in the current year periods is due primarily toCompany's material tax jurisdictions as a result of the favorable impact on the prior year tax rate for voluntary pension contributions made in 2018.global COVID-19 pandemic.
REPORTABLE OPERATING SEGMENTS
The Company’s portfolio of brands is organized into the following two operating segments, which the Company has determined to be reportable operating segments. During the first quarter of 2019, the brands that were formerly aligned with the Wolverine Outdoor & Lifestyle Group and Wolverine Heritage Group were realigned into a new operating segment, the
Wolverine Michigan Group. The change was to align our brands under key leadership to best support innovationGroup, consisting of Merrell® footwear and efficiency. All prior period disclosures have been restated to reflect these new reportable operating segments.
Wolverine Michigan Group, consisting of Merrellapparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies®footwearand apparel, Bates® uniform footwear, Harley-Davidson® footwear and Hytest® safety footwear; and
Wolverine Boston Group, consisting of Sperry® footwear and apparel, Saucony® footwear and apparel, Keds® footwear and apparel, and the Kids’ footwear business, which includes the Stride Rite® licensed business, as well as kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat® footwear and apparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies®footwearand apparel, Bates® uniform footwear, Harley-Davidson® footwear and HyTest® safety footwear; and
Wolverine Boston Group, consisting of Sperry® footwear and apparel, Saucony® footwear and apparel, Keds® footwear and apparel, and the Kids footwear business, which includes the Stride Rite® licensed business, as well as kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat®.
The Company also reports “Other” and “Corporate” categories. The Other category consists of the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, such as environmental and other related costs.

29

Table of Contents
The reportable operating segment results are as follows:
 Quarter EndedYear-To-Date Ended
(In millions)June 27,
2020
June 29,
2019
ChangePercent ChangeJune 27,
2020
June 29,
2019
ChangePercent
Change
REVENUE
Wolverine Michigan Group$217.4  $318.2  $(100.8) (31.7)%$465.2  $620.9  $(155.7) (25.1)%
Wolverine Boston Group122.5  230.7  (108.2) (46.9) 304.6  435.5  (130.9) (30.1) 
Other9.2  19.7  (10.5) (53.3) 18.6  35.6  (17.0) (47.8) 
Total$349.1  $568.6  $(219.5) (38.6)%$788.4  $1,092.0  $(303.6) (27.8)%
 Quarter Ended Year-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
 Change Percent Change September 28,
2019
 September 29,
2018
 Change 
Percent
Change
REVENUE               
Wolverine Michigan Group$318.8
 $327.7
 $(8.9) (2.7)% $939.7
 $937.7
 $2.0
 0.2 %
Wolverine Boston Group241.3
 214.6
 26.7
 12.4
 676.8
 664.7
 12.1
 1.8
Other14.2
 16.3
 (2.1) (12.9) 49.8
 57.2
 (7.4) (12.9)
Total$574.3
 $558.6
 $15.7
 2.8 % $1,666.3
 $1,659.6
 $6.7
 0.4 %
Quarter Ended Year-To-Date Ended Quarter EndedYear-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
 Change Percent Change September 28,
2019
 September 29,
2018
 Change 
Percent
Change
(In millions)June 27,
2020
June 29,
2019
ChangePercent ChangeJune 27,
2020
June 29,
2019
ChangePercent
Change
OPERATING PROFIT (LOSS)               OPERATING PROFIT (LOSS)
Wolverine Michigan Group$66.0
 $69.4
 $(3.4) (4.9)% $183.8
 $195.2
 $(11.4) (5.8)%Wolverine Michigan Group$38.4  $59.3  $(20.9) (35.2)%$81.5  $117.8  $(36.3) (30.8)%
Wolverine Boston Group46.5
 37.6
 8.9
 23.7
 115.7
 120.0
 (4.3) (3.6)Wolverine Boston Group8.6  37.2  (28.6) (76.9) 27.4  69.2  (41.8) (60.4) 
Other0.7
 0.4
 0.3
 75.0
 3.0
 2.9
 0.1
 3.4
Other0.4  1.5  (1.1) (73.3) 0.3  2.3  (2.0) (87.0) 
Corporate(44.9) (39.0) (5.9) (15.1) (126.3) (120.1) (6.2) (5.2)Corporate(39.9) (42.5) 2.6  6.1  (84.8) (81.4) (3.4) (4.2) 
Total$68.3
 $68.4
 $(0.1) (0.1)% $176.2
 $198.0
 $(21.8) (11.0)%Total$7.5  $55.5  $(48.0) (86.5)%$24.4  $107.9  $(83.5) (77.4)%
Further information regarding the reportable operating segments can be found in Note 16 to the consolidated condensed financial statements.
Wolverine Michigan Group
The Michigan Group’s revenue decreased $8.9$100.8 million, or 2.7%31.7%, in the thirdsecond quarter of 20192020 compared to the third quarter of 2018. The revenue decrease included high-teens declines from Cat® and Chaco® and a mid-teens decline from Hush Puppies®, partially offset by high-single digit growth from Merrell®. The Cat® decline is due to shipments scheduled for the third quarter of 2019 that shipped in the second quarter of 2019. The revenue decline included low-thirties decline from Merrell®, high-thirties decline from Cat®, high-twenties decline from Wolverine®, mid-teens decline from Chaco®, and a high-forties decline is due to higher inventories at retail and competitive pricing pressure on certain key sandal offerings. Thefrom Hush Puppies®decline is due to slow sell through at retail in the U.S. and declines in Canada and Latin America. The Merrell® increase is due to growth in most geographic regions and growth in the Lifestyle, Work and Nature’s Gym categories and strong eCommerce growth in the high-teens.
. The Michigan Group’s revenue increased $2.0decreased $155.7 million, or 0.2%,25.1% in the first threetwo quarters of 20192020 compared to the first threetwo quarters of 2018. This growth included a mid-single digit increase2019. The revenue decline was driven by low-twenties decline from Merrell® and a high-single digit increase, mid-thirties decline from Cat®, low-twenties decline from Wolverine®, mid-twenties decline from Chaco®, and a high-thirties decline from Hush Puppies®. The decline across all brands is due to the COVID-19 pandemic, partially offset by mid-teens declines from eCommerce growth.ChacoThe closure of Merrell® and Hush Puppies®. The Cat® increase for the first three quarters wasowned retail stores due to strengththe COVID-19 pandemic also contributed to the revenue decline.
The Michigan Group’s operating profit decreased $20.9 million in the Work category, business model changes for certain international customers and growth in Europe and Latin America.second quarter of 2020 compared to the second quarter of 2019. The Merrell® increase was due to increased wholesale demand in the U.S., growth in Latin America and Asia Pacific and strong eCommerce growth in the mid-twenties. The Chaco®operating profit decline was due to the late start to Spring, high inventory levels at retailers and competitive pricing pressure on certain key sandal offerings. The Hush Puppies® decline was due to late deliveries of product and lower demand in the U.S. due to slow sell through at retail andrevenue declines, in Canada, Europe and Latin America.
The Michigan Group’s operating profit declined $3.4 million in the third quarter of 2019 compared to the third quarter of 2018. This decline was due to the group’s lower revenue and a 50 basis point gross margin decline due to product mix and higher close-out sales. In the first three quarters of 2019, the Michigan Group’s operating profit declined $11.4 million, or 5.8%, compared to the first three quarters of 2018. The change was drivenpartially offset by a 70 basis point decline in gross margin and a $5.7$17.4 million increasedecrease in selling, general and administrative costs. The gross marginMichigan Group’s operating profit decreased $36.3 million in the first two quarters of 2020 compared to the first two quarters of 2019. The operating profit decline was due to the bankruptcy of an international distributor, product mixrevenue declines, partially offset by a $25.5 million decrease in selling, general and business model changes for certain international distributors.administrative costs. The increasedecrease in selling, general and administrative expenses in the current year periods was due to higherdeclines in distribution, advertising and product developmentreductions in employee costs investments in eCommerce growth and new Merrell® stores.other discretionary spending.
Wolverine Boston Group
The Boston Group’s revenue increased by $26.7decreased $108.2 million, or 12.4%46.9%, during the thirdsecond quarter of 2019 compared2020 compared to the thirdsecond quarter of 2018. 2019. The increase was due to a low-teens increase inrevenue decline included low-sixties decline for Sperry®, a mid-teens increase inhigh-twenties decline for Saucony®, high-forties decline for Keds®, and a high-teens increase in

the Kids footwear business. The Sperry® increase in the third quarter was due to growth in the U.S. wholesale business from strong boot sales, strong low-twenties eCommerce growth and new retail store openings. The Saucony® increase in the third quarter was due to the acquisition of the Saucony® distributor in Italy and strong low-thirties eCommerce growth. The Kids increase was due to strength in the Sperry® and Merrell® kids business and low-forties eCommerce growth.
low-fifties decline for Kids’. The Boston Group’s revenue increaseddecreased by $12.1$130.9 million, or 1.8%30.1%, during the first threetwo quarters of 20192020 compared to the first threetwo quarters of 2018. This resulted from a mid-teens increase from2019. The revenue decline included low-forties decline for Sperry®, low-teens decline for Saucony®, high-twenties decline for Keds®, and a high-single digit increase inmid-thirties decline for Kids’. The decline across all brands is due to the Kids footwear business,COVID-19 pandemic, partially offset by a low-single digit decline in Saucony®. The increase in Keds®eCommerce growth. wasThe closure of Sperry® owned retail stores due to growth in the U.S. wholesale business, growth in Asia and strong eCommerce growth inCOVID-19 pandemic also contributed to the high-twenties. The Kids increase was due to strength in the Sperry and revenue decline.
Merrell® kids business and low-sixties eCommerce growth. The decrease for Saucony® was due to lower demand for products in the U.S. wholesale channel and in certain international third-party markets, partially offset by the acquisition of the Saucony® distributor in Italy.
The Boston Group’s operating profit increased $8.9decreased $28.6 million in the thirdsecond quarter of 20192020 compared to the thirdsecond quarter of 2018 due primarily to the increase in revenue for the quarter and a 120 basis point gross margin improvement2019. The operating profit decline was due to the acquisition of the Saucony® distributor in Italy and lower close-out sales,revenue declines, partially offset by highera $13.5 million decrease in selling, general and administrative expense due to the Italy acquisition and new Sperry® stores.costs. The Boston Group’s operating profit declined $4.3decreased $41.8 million in the first threetwo quarters of 20192020 compared to the first threetwo quarters of 2018. This2019. The operating profit decline was due primarily higherto the revenue declines, partially offset by a $10.0 million decrease in selling, general and administrative expensecosts. The decrease in selling, general and administrative expenses
30

Table of $10.7 millionContents
in the current year periods was due to the acquisition of the Saucony® distributordeclines in Italy, new Sperry® storesdistribution, advertising and higher distributionreductions in employee costs and advertising costs, partially offset by the group’s higher revenue and gross margin improvement.other discretionary spending.
Other
The Other category’s revenue decreased $2.1$10.5 million, or 12.9%53.3%, in the thirdsecond quarter of 20192020 compared to the thirdsecond quarter of 2018. This decline reflected lower revenue from third-party sourcing commission revenue. During the first three quarters of 2019, the2019. The Other category’s revenue declined $7.4decreased $17.0 million, or 12.9%47.8%, during the first two quarters of 2020 compared to the first threetwo quarters of 2018.2019. The decline reflected lower third-party sourcing commission revenue, a decrease in sales at multi-branded stores andthe current year periods was due to a low-single digit decline in the performance leathers business due toas a result of lower demand.demand and lower revenue from multi-branded stores and third-party sourcing commission revenue resulting from the COVID-19 pandemic.
LIQUIDITY AND CAPITAL RESOURCES
(In millions)June 27,
2020
December 28,
2019
June 29,
2019
Cash and cash equivalents$422.6  $180.6  $116.5  
Debt1,024.4  798.4  811.0  
Available revolving credit facility (1)
669.2  434.3  428.1  
(In millions)September 28,
2019
 December 29,
2018
 September 29,
2018
Cash and cash equivalents$125.2
 $143.1
 $228.1
Debt (1)
934.0
 570.5
 662.5
Available revolving credit facility (2)
303.1
 672.5
 597.5
(1)(1)Amounts are net of both borrowings, if any, and outstanding standby letters of credit in accordance with the terms of the Revolving Credit Facility.
Prior to 2019, Debt includes capital lease obligations.
(2)
Amounts are net of both borrowings, if any, and outstanding standby letters of credit in accordance with the terms of the Revolving Credit Facility.
Year-To-Date EndedYear-To-Date Ended
(In millions)September 28,
2019
 September 29,
2018
(In millions)June 27,
2020
June 29,
2019
Net cash provided by (used in) operating activities$16.0
 $(34.0)
Net cash used in investing activities(53.4) (14.8)
Net cash provided by (used in) financing activities19.4
 (197.4)
Net cash provided by operating activitiesNet cash provided by operating activities$39.0  $3.9  
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities9.2  (42.4) 
Net cash provided by financing activitiesNet cash provided by financing activities195.1  11.0  
Additions to property, plant and equipment28.7
 15.3
Additions to property, plant and equipment6.6  18.3  
Depreciation and amortization23.3
 22.6
Depreciation and amortization15.4  15.0  
Liquidity
Cash and cash equivalents of $125.2$422.6 million as of September 28, 2019June 27, 2020 were $102.9$306.1 million lowerhigher compared to SeptemberJune 29, 2018.2019. The decreaseincrease is due primarily to share repurchasesthe issuance of $419.0$300.0 million increased investing activity of $60.8 million and cash dividends paid of $33.0 million, partially offset by increased net borrowings under the Credit Agreement of $272.4 millionSenior Notes on May 11, 2020 and cash provided by operating activities during the previous four quarters of $147.5$257.7 million, partially offset by share repurchases of $132.8 million, net repayments under the Amended Senior Credit Facility of $82.0 million, increased investing activity of $9.9 million and cash dividends paid of $33.8 million. The Company had $303.1$669.2 million of borrowing capacity available under the Revolving Credit Facility as of September 28, 2019.June 27, 2020. Cash and cash equivalents located in foreign jurisdictions totaled $81.8$105.0 million as of September 28, 2019.

June 27, 2020.
Cash flow from operating activities and borrowings on the Revolving Credit Facility areis expected to be sufficient to meet the Company’s working capital needs for the foreseeable future. Any excess cash flow from operating activities is expected to be used to fund organic growth initiatives, reduce debt, pay dividends, repurchase the Company’s common stock and pursue acquisitions.debt.
A detailed discussion of environmental remediation costs is found in Note 15 to the consolidated condensed financial statements. The Company has established a reserve for estimated environmental remediation costs based upon an evaluation of currently available facts with respect to each individual site. As of September 28, 2019,June 27, 2020, the Company had a reserve of $14.8$106.7 million, of which $10.5$34.5 million is expected to be paid in the next 12 months and is recorded as a current obligation in other accrued liabilities with the remaining $4.3$72.2 million recorded in other liabilities expected to be paid over the course of up to 2725 years. The Company's remediation activity at its former Tannery site and sites where the Company disposed of Tannery byproducts is ongoing. It is difficult to estimate the cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Developments may occur that could materially change the Company’s current cost estimates. The Company adjusts recorded liabilities as further information develops or circumstances change.
There is significant uncertainty regarding the future impact of the COVID-19 pandemic on the Company’s statement of operations and cash flows. The actions the Company has taken and continues to take to improve the Company’s liquidity are discussed above in this Item 2.
Operating Activities
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The principal source of the Company’s operating cash flow is net earnings, including cash receipts from the sale of the Company’s products, net of costs of goods sold.
For the first threetwo quarters of 2019,2020, an increase in net working capital represented a use of cash of $145.3$27.1 million. Working capital balances were unfavorably impacted by an increase in inventories of $94.8 million, by a decrease in accounts payable of $46.9$45.9 million, an increase in inventories of $41.0 million, and a decrease in other operating liabilities of $12.0$14.5 million, partially offset by a decrease in accounts receivable of $64.5 million, a decrease in other operating assets of $6.3 million, and an increase in income taxes payable of $9.3$3.5 million. The increase in inventory is due primarily toOperating cash flows were favorably impacted by Environmental and other related costs, net of cash payments and recoveries received of $34.2 million, which are inclusive of a lump sum amount of $55.0 million from 3M Company during the Company’s strategy to mitigate potential changes in tariffs on imported footwear, anticipated growth in sales and new stores.first quarter of 2020. See Note 15 for additional information regarding this settlement.
Investing Activities
The Company made capital expenditures of $28.7$6.6 million and $15.3$18.3 million in the first threetwo quarters of 20192020 and 2018,2019, respectively, for building improvements, new retail stores and information system enhancements. During the second quarter of 2019,2020, the Company made a cash investmentsinvestment of $15.1$3.5 million in joint ventures. During the first quarter of 2020, the Company made a contingent consideration payment of $5.5 million related to a business acquisition and $8.5 million related to investments in joint ventures.the Saucony® Italy distributor acquisition. See Note 17 for additional information regarding the acquisition. During the second quarter of 2020, the Company received proceeds of $25.6 million from company-owned life insurance policy liquidations.
Financing Activities
On December 6, 2018,May 5, 2020, the Company amendedentered into a Second Amendment to its senior credit facility. In connection with the Second Amendment, the Company borrowed an incremental $171.0 million in aggregate principal in Incremental Term Loan. The Incremental Term Loan will mature on May 4, 2021 and bear interest at a rate equal either to (i) the applicable base rate plus 1.250% or (ii) LIBOR plus 2.250%. The Amended Senior Credit Agreement. The Credit AgreementFacility also includes a $200.0 million Term Loan Aterm loan facility and an $800.0 million Revolving Credit Facility, both with maturity dates of December 6, 2023.2023, that remain unchanged as a result of the Second Amendment. The Amended Senior Credit Agreement’sFacility’s debt capacity is limited to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt) not to exceed $1,750.0 million, unless certain specified conditions set forth in the Amended Senior Credit AgreementFacility are met. Term Loan A requires quarterly principal payments with a balloon payment due on December 6, 2023.
On May 11, 2020, the Company issued $300.0 million aggregate principal amount of 6.375% Senior Notes due on May 15, 2025 with related interest payments due semi-annually beginning on November 15, 2020. These senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries.
As of September 28, 2019,June 27, 2020, the Company was in compliance with all covenants and performance ratios under the Senior Credit Agreement.Facility.
The Company’s debt at September 28, 2019June 27, 2020 totaled $934.0$1,024.4 million compared to $570.5$798.4 million at December 29, 2018.28, 2019. The increase was due primarilyCompany expects to stock repurchasesuse the increased borrowings for working capital and to fund a business acquisitiongeneral corporate purposes. The increased cash position resulted from net incremental borrowings under the Amended Senior Credit Facility and investmentsthe May 11, 2020 Senior Notes allow for greater financial flexibility in joint ventures.light of current uncertainty in the global markets resulting from the COVID-19 pandemic.
The Company repurchased $314.2$21.0 million and $69.9$207.4 million of shares in the first threetwo quarters of 20192020 and 2018,2019, respectively. The Company may purchase up to an additional $513.4$487.4 million of shares under its existing common stock repurchase program thatwhich expires in 2023. As part of its strategy to increase liquidity and flexibility of Company’s capital structure as result of the COVID-19 pandemic, the Company suspended share repurchases in March 2020. The Company also paid $16.7$19.9 million in the first threetwo quarters of 20192020 in connection with shares or units withheld to pay employee taxes related to awards under stock incentive plans.plans and received $24.5 million in connection with company-owned life insurance policies.
The Company declared a cash dividend of $0.10 per share in the second quarter of 2020 and $0.08 per share,2019, respectively, or $8.3$8.2 million and $7.6$8.6 million, for the third quarters of 2019 and 2018, respectively. A quarterly dividend of $0.10 per share was declared on November 1, 2019April 29, 2020 to shareholders of record on January 2,July 1, 2020.
CRITICAL ACCOUNTING POLICIES
The preparation of the Company’s consolidated condensed financial statements, which have been prepared in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of
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which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically,

actual results have not been materially different from the Company’s estimates. However, actual results may differ materially from these estimates under different assumptions or conditions.
The Company has identified the critical accounting policies used in determining estimates and assumptions in the amounts reported in itsand for information regarding our critical accounting policies refer to Management Discussion and Analysis of Financial Conditions and Results of Operations in its 2018the 2019 Form 10-K.10-K and Note 5, Goodwill and indefinite-lived intangibles for discussion regarding the valuation of goodwill and indefinite-lived intangible assets. Management believes there have been no material changes in those critical accounting policies.
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ITEM 3.Quantitative and Qualitative Disclosures about Market Risk
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
The Company faces market risk to the extent that changes in foreign currency exchange rates affect the Company’s foreign assets, liabilities and inventory purchase commitments. The Company manages these risks by attempting to denominate contractual and other foreign arrangements in U.S. dollars. The Company does not believe that there has been a material change in the nature of the Company’s primary market risk exposures, including the categories of market risk to which the Company is exposed and the particular markets that present the primary risk of loss to the Company. As of the date of this Quarterly Report on Form 10-Q, the Company does not know of any material change in the near-term in the general nature of its primary market risk exposure.
Under the provisions of FASB ASC 815, the Company is required to recognize all derivatives on the balance sheet at fair value. Derivatives that are not qualifying hedges must be adjusted to fair value through earnings. If a derivative is a qualifying hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in AOCI until the hedged item is recognized in earnings.
The Company conducts wholesale operations outside of the U.S. in Canada, continental Europe, United Kingdom, Colombia, Hong Kong, China and Mexico where the functional currencies are primarily the Canadian dollar, euro, British pound, Colombian peso, Hong Kong dollar, Chinese renminbi and Mexican peso, respectively. The Company utilizes foreign currency forward exchange contracts to manage the volatility associated primarily with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business as well as to manage foreign currency translation exposure. As of September 28,June 27, 2020 and June 29, 2019, and September 29, 2018, the Company had outstanding forward currency exchange contracts to purchase primarily U.S. dollars in the amounts of $237.7$161.1 million and $215.5$238.1 million, respectively, with maturities ranging up to 545 days.412 and 468 days, respectively.
The Company also has sourcing locations in Asia, where financial statements reflect the U.S. dollar as the functional currency. However, operating costs are paid in the local currency. Revenue generated by the Company from third-party foreign licensees is calculated in the local currencies but paid in U.S. dollars. Accordingly, the Company’s reported results are subject to foreign currency exposure for this stream of revenue and expenses. Any associated foreign currency gains or losses on the settlement of local currency amounts are reflected within the Company's consolidated condensed statement of operations and comprehensive income.
Assets and liabilities outside the U.S. are primarily located in the United Kingdom, Canada and the Netherlands. The Company’s investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. As of September 28, 2019,June 27, 2020, a stronger U.S. dollar compared to certain foreign currencies decreased the value of these investments in net assets by $0.6$8.3 million from their value as of December 29, 2018.28, 2019. As of SeptemberJune 29, 2018,2019, a strongerweaker U.S. dollar compared to certain foreign currencies decreasedincreased the value of these investments in net assets by $12.0$5.0 million from their value at December 30, 2017.29, 2018. The Company has a cross currency swap, which has been designated as a hedge of a net investment in a foreign operation. As of September 28, 2019,June 27, 2020, the hedge had a notional amount of $79.8 million and will mature on September 1, 2021.
The Company is exposed to interest rate changes primarily as a result of interest expense on borrowings used to finance acquisitions and working capital requirements. As of September 28, 2019,June 27, 2020, the Company’s total variable-rate debt was $688.3$483.5 million and the Company held two interest rate swap agreements, denominated in U.S. dollars, that effectively converted $366.2$314.6 million to fixed-rate debt.
The Company does not enter into contracts for speculative or trading purposes, nor is it a party to any leveraged derivative instruments.

ITEM 4.Controls and Procedures
ITEM 4. Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on, and as of the time of such evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as defined in Securities Exchange Act Rule 13a-15(e), were effective as of the end of the period covered by this report. There have been no changes during the quarter ended September 28, 2019June 27, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION
PART II.  OTHER INFORMATION
ITEM 1A.Risk Factors
ITEM 1A. Risk Factors
There have been no material changes in the assessment of the Company’s risk factors from those set forth in the Company’s Annual Report on Form 10-K for the year ended December 28, 2019, except for the risk factors included below:
The COVID-19 pandemic has had a material adverse impact on the Company’s operations and financial results, and such impact could worsen and last for an unknown period of time.

The COVID-19 pandemic has negatively affected the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets both globally and in the United States. This has led to a decline in discretionary spending by consumers and, in turn, a negative effect on the Company’s financial condition and results of operations. The extent to which the COVID-19 pandemic impacts the Company’s business, operations, and financial results, including the duration and magnitude of such effects, will depend on numerous evolving factors outside of our control that we cannot currently fully predict or assess, the duration and scope of the pandemic and effectiveness of containment efforts; the negative impact on global and regional economies and economic activity, including the duration and magnitude of its 2018 Form 10-K.impact on unemployment rates, consumer discretionary spending and levels of consumer confidence; and actions governments, businesses and individuals may take in response to the pandemic. The timing of recovery after the pandemic is also uncertain. The Company’s business has been and could continue to be materially adversely affected by several factors related to the COVID-19 pandemic, including, but not limited to:

The inability of our employees, suppliers, and other business providers to carry out tasks at ordinary levels of performance as a result of measures taken to limit the spread of COVID-19, such as those promulgated by governmental authorities.
Further outbreaks could require the closure of our and our wholesale customers recently reopened retail stores. As a result, there can be no assurance as to whether recently reopened stores can remain open.
Decreased retail traffic resulting from social distancing restrictions.
Negative effects on consumer spending due to general macroeconomic conditions, decreased disposable income and increased unemployment.
Wholesale and distributor customer order cancellations resulting from lower consumer demand.
Decline in the performance or financial condition of the Company’s major wholesale customers as a result of retail store closures, bankruptcy, or liquidation.
Disruption to the operations of the Company’s distribution centers and our third-party manufacturers because of facility closures, reductions in operating hours, labor or material shortages, travel limitations or mass transit disruptions.
Additional expenses related to mitigating the pandemic’s impact on regular operations.
Increased cyber security risk due to the increase in the number of employees working remotely.

The disruption to the global economy and to our business may lead to triggering events that may indicate that the carrying value of certain assets, such as long-lived assets, intangibles and goodwill, may not be recoverable. Any related non-cash impairment charges will adversely affect our results of operations.

COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider as presenting significant risks to our operations.
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ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information regarding the Company’s purchases of its own common stock during the thirdsecond quarter of 2019.2020.
Issuer Purchases of Equity Securities
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Dollar Amount that May Yet Be Purchased Under the Plans or Programs
Period 4 (March 29, 2020 to May 2, 2020)
Common Stock Repurchase Program(1)
—  $—  —  $487,440,708  
Employee Transactions(2)
4,796  $20.54  —  
Period 5 (May 3, 2020 to May 30, 2020)
Common Stock Repurchase Program(1)
—  $—  —  $487,440,708  
Employee Transactions(2)
—  $—  —  
Period 6 (May 31, 2020 to June 27, 2020)
Common Stock Repurchase Program(1)
—  $—  —  $487,440,708  
Employee Transactions(2)
988  $22.97  —  
Total for the second Quarter Ended June 27, 2020
Common Stock Repurchase Program(1)
—  $—  —  $487,440,708  
Employee Transactions(2)
5,784  $20.96  —  
(1)On February 11, 2019, the Company’s Board of Directors approved a common stock repurchase program that authorized the repurchase of $400.0 million of common stock over a four-year period. On September 11, 2019, the Company’s Board of Directors approved a new common stock repurchase program that authorizes the repurchase of $400.0 million of common stock over a four-year period, incremental to the $113.4 million remaining under the previous program. The annual amount of any stock repurchases is restricted under the terms of the Company's Amended Senior Credit Facility and senior notes indenture. As part of the Company’s strategy to increase liquidity and flexibility of the capital structure as a result of the COVID-19 pandemic, the Company suspended share repurchases in March 2020.
(2)Employee transactions include: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) restricted shares and units withheld to offset statutory minimum tax withholding that occurs upon vesting of restricted shares and units. The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs.
36
PeriodTotal Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount that May Yet Be Purchased Under the Plans or Programs
Period 7 (June 30, 2019 to August 3, 2019)       
Common Stock Repurchase Program(1)
1,000
 $26.01
 1,000
 $220,165,985
Employee Transactions(2)
7,950
 $27.46
 
  
Period 8 (August 4, 2019 to August 31, 2019)       
Common Stock Repurchase Program(1)
3,967,203
 $25.03
 3,967,203
 $120,848,303
Employee Transactions(2)
249
 $23.43
 
  
Period 9 (September 1, 2019 to September 28, 2019)       
Common Stock Repurchase Program(1)
281,867
 $26.46
 281,867
 $513,389,908
Employee Transactions(2)
492
 $26.69
 
  
Total for Quarter Ended September 28, 2019       
Common Stock Repurchase Program(1)
4,250,070
 $25.13
 4,250,070
 $513,389,908
Employee Transactions(2)
8,691
 $27.30
 
 
On February 11, 2019, the Company’s Board of Directors approved a common stock repurchase program that authorized the repurchase of $400.0 million of common stock over a four-year period. On September 11, 2019, the Company’s Board of Directors approved a new common stock repurchase program that authorizes the repurchase of $400.0 million of common stock over a four-year period, incremental to the $113.4 million remaining under the previous program. The annual amount of any stock repurchases is restricted under the terms of the Company's Credit Agreement and senior notes indenture.
(2)
Employee transactions include: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) restricted shares and units withheld to offset statutory minimum tax withholding that occurs upon vesting of restricted shares and units. The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs.

ITEM 6.Exhibits
ITEM 6. Exhibits
Exhibits filed as a part of this Form 10-Q are incorporated by reference herein.
Exhibit NumberDocument
Exhibit Number3.1Document
3.1
3.2
31.14.1
4.2
10.1
31.1
31.2
32
101
101The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2019,June 27, 2020, formatted in Inline XBRL: (i) Consolidated Condensed Statements of Operations and Comprehensive Income; (ii) Consolidated Condensed Balance Sheets; (iii) Consolidated Condensed Statements of Cash Flows; (iv) Consolidated Condensed Statements of Stockholders’ Equity; and (v) Notes to Consolidated Condensed Financial Statements.
104The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2019,June 27, 2020, formatted in Inline XBRL (included in Exhibit 101).
* Management contract or compensatory plan or arrangement.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WOLVERINE WORLD WIDE, INC.
August 6, 2020WOLVERINE WORLD WIDE, INC.
November 7, 2019/s/ Blake W. Krueger
Date
Blake W. Krueger

Chairman, Chief Executive Officer and President

(Principal Executive Officer and Duly Authorized Signatory for Registrant)
November 7, 2019August 6, 2020/s/ Michael D. Stornant
Date
Michael D. Stornant

Senior Vice President, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer and Duly Authorized Signatory for Registrant)


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