SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-08454

Delaware

36-2704017

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

(Address of Registrant’s Principal Executive Office, Including Zip Code)

~~(847)~~

(847) 541-9500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

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 x No o

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 and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 x

As of ~~October 21, 2021,~~August 1, 2022, the registrant had outstanding ~~95,730,863~~94,260,926 shares of Common Stock.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, including without limitation, statements concerning the impacts of the COVID-19 pandemic on the Company's business, operations, results of operations, liquidity and financial condition, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to us at the time such statements are made. These statements, which are generally identifiable by the use of the words "will," "believe," "expect," "intend," "anticipate," "estimate," "forecast," "project," "plan," and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or obligation to update them. Because actual results may differ materially from those suggested or implied by such forward-looking statements, you should not place undue reliance on them when deciding whether to buy, sell or hold the Company's securities.

~~Our outlook is based on certain assumptions, which we believe to be reasonable under the circumstances. These include, without limitation, assumptions regarding both the near-term and long-term impact~~

Some of the COVID-19 pandemic on the economy and our business, our customers and the end-users of our products, and other changes in the macro environment; changes in the competitive landscape, including ongoing uncertainties in the traditional office products channels; as well as the impact of fluctuations in foreign currency and acquisitions and the other factors ~~described below.~~

~~Factors~~ that could affect our results or cause our plans, actions and results to differ materially from those expressed in the forward-looking statements contained in this Quarterly Report on Form 10-Q are detailed in "Part I, Item 1. Business" and "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2020, in "Part II, Item 1A. Risk Factors" of the Quarterly Report on Form 10-Q for the quarter ended June 30,~~ 2021, as well as ~~the financial statement line item discussions set forth~~ in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q and from time to time in our other Securities and Exchange Commission (the "SEC") filings.

The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the SEC.

ITEM 1. FINANCIAL STATEMENTS

September 30,
2021 December 31,
2020
(in millions) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 58.1 $ 36.6
Accounts receivable, net 362.6 356.0
Inventories 413.9 305.1
Other current assets 52.0 30.5
Total current assets 886.6 728.2
Total property, plant and equipment 656.3 657.8
Less: accumulated depreciation (436.8) (416.4)
Property, plant and equipment, net 219.5 241.4
Right of use asset, leases 84.0 89.2
Deferred income taxes 126.6 136.5
Goodwill 804.2 827.4
Identifiable intangibles, net 919.4 977.0
Other non-current assets 31.7 49.0
Total assets $ 3,072.0 $ 3,048.7
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 8.1 $ 5.7
Current portion of long-term debt 28.1 70.8
Accounts payable 233.5 180.2
Accrued compensation 53.5 41.0
Accrued customer program liabilities 91.6 91.4
Lease liabilities 21.8 22.6
Current portion of contingent consideration 22.8 10.4
Other current liabilities 126.7 134.8
Total current liabilities 586.1 556.9
Long-term debt, net 1,083.9 1,054.6
Long-term lease liabilities 70.4 76.5
Deferred income taxes 156.6 170.6
Pension and post-retirement benefit obligations 275.9 317.1
Contingent consideration 11.9 7.8
Other non-current liabilities 102.2 122.5
Total liabilities 2,287.0 2,306.0
Stockholders' equity:
Common stock 1.0 1.0
Treasury stock (40.8) (39.9)
Paid-in capital 1,898.4 1,883.1
Accumulated other comprehensive loss (565.4) (564.2)
Accumulated deficit (508.2) (537.3)
Total stockholders' equity 785.0 742.7
Total liabilities and stockholders' equity $ 3,072.0 $ 3,048.7


		June 30, 2022				December 31, 2021
(in millions)		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$		91.7		$		41.2
Accounts receivable, net			423.9				416.1
Inventories			471.5				428.0
Other current assets			56.2				39.6
Total current assets			1,043.3				924.9
Total property, plant and equipment			594.7				656.4
Less: accumulated depreciation			(398.7	)			(441.8	)
Property, plant and equipment, net			196.0				214.6
Right of use asset, leases			96.8				105.2
Deferred income taxes			105.0				115.9
Goodwill			779.2				802.5
Identifiable intangibles, net			864.6				902.2
Other non-current assets			6.0				26.0
Total assets	$		3,090.9		$		3,091.3
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$		20.2		$		9.4
Current portion of long-term debt			33.9				33.6
Accounts payable			254.4				308.2
Accrued compensation			36.1				56.9
Accrued customer program liabilities			98.0				101.4
Lease liabilities			22.4				24.4
Current portion of contingent consideration			2.7				24.8
Other current liabilities			122.8				149.9
Total current liabilities			590.5				708.6
Long-term debt, net			1,124.5				954.1
Long-term lease liabilities			81.9				89.0
Deferred income taxes			147.7				145.2
Pension and post-retirement benefit obligations			194.2				222.3
Contingent consideration			0.3				12.0
Other non-current liabilities			78.9				95.3
Total liabilities			2,218.0				2,226.5
Stockholders' equity:
Common stock			1.0				1.0
Treasury stock			(43.4	)			(40.9	)
Paid-in capital			1,894.7				1,902.2
Accumulated other comprehensive loss			(539.3	)			(535.5	)
Accumulated deficit			(440.1	)			(462.0	)
Total stockholders' equity			872.9				864.8
Total liabilities and stockholders' equity	$		3,090.9		$		3,091.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).


		Three Months Ended June 30,								Six Months Ended June 30,
(in millions, except per share data)		2022				2021				2022				2021
Net sales	$		521.0		$		517.8		$		962.6		$		928.3
Cost of products sold			371.0				353.7				693.0				648.7
Gross profit			150.0				164.1				269.6				279.6
Operating costs and expenses:
Selling, general and administrative expenses			91.6				97.7				190.4				191.7
Amortization of intangibles			10.5				11.6				21.6				23.6
Restructuring charges			1.9				0				2.2				3.9
Change in fair value of contingent consideration			(9.4	)			4.9				(6.8	)			11.6
Total operating costs and expenses			94.6				114.2				207.4				230.8
Operating income			55.4				49.9				62.2				48.8
Non-operating expense (income):
Interest expense			10.8				11.6				20.5				24.8
Interest income			(2.2	)			(0.5	)			(3.6	)			(0.6	)
Non-operating pension income			(1.3	)			(2.5	)			(2.7	)			(3.3	)
Other (income) expense, net			(3.7	)			(9.0	)			(2.8	)			3.9
Income before income tax			51.8				50.3				50.8				24.0
Income tax expense (benefit)			12.4				1.7				14.1				(4.2	)
Net income	$		39.4		$		48.6		$		36.7		$		28.2

Per share:
Basic income per share	$		0.41		$		0.51		$		0.38		$		0.30
Diluted income per share	$		0.40		$		0.50		$		0.37		$		0.29

Weighted average number of shares outstanding:
Basic			96.2				95.5				96.2				95.3
Diluted			97.4				97.2				98.0				96.9

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Net income $ 20.2 $ 18.8 $ 48.4 $ 32.2
Other comprehensive income (loss), net of tax:
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(1.0) and $0.2 and $(2.9) and $0.3, respectively 2.4 (0.6) 6.7 (0.6)
Foreign currency translation adjustments, net of tax benefit (expense) of $0.2 and $0.1 and $(1.1) and $1.1, respectively (22.3) 3.6 (18.6) (53.7)
Recognition of deferred pension and other post-retirement items, net of tax (expense) benefit of $(2.1) and $1.2 and $(3.4) and $(1.7), respectively 6.6 (4.0) 10.7 5.8
Other comprehensive loss, net of tax (13.3) (1.0) (1.2) (48.5)
Comprehensive income (loss) $ 6.9 $ 17.8 $ 47.2 $ (16.3)


		Three Months Ended June 30,							Six Months Ended June 30,
(in millions)		2022				2021			2022				2021
Net income	$		39.4		$		48.6	$		36.7		$		28.2
Other comprehensive income (loss), net of tax:
Unrealized income on derivative instruments, net of tax expense of $(1.6) and $(0.1) and $(0.9) and $(1.9), respectively			3.9				0.2			2.5				4.3
Foreign currency translation adjustments, net of tax benefit (expense) of $1.5 and $0.2 and $2.1 and $(1.3), respectively			(37.2	)			24.4			(21.9	)			3.7
Recognition of deferred pension and other post-retirement items, net of tax expense of $(3.5) and $(0.1) and $(4.9) and $(1.3), respectively			10.8				0.5			15.6				4.1
Other comprehensive (loss) income, net of tax			(22.5	)			25.1			(3.8	)			12.1

Comprehensive income	$		16.9		$		73.7	$		32.9		$		40.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Nine Months Ended September 30,
(in millions) 2021 2020
Operating activities
Net income $ 48.4 $ 32.2
Amortization of inventory step-up 3.0 —
Change in fair value of contingent liability 16.5 —
Depreciation 29.4 28.2
Other non-cash items — 0.5
Amortization of debt issuance costs 2.1 1.7
Amortization of intangibles 35.2 24.1
Stock-based compensation 12.2 5.2
Loss on debt extinguishment 3.7 —
Changes in balance sheet items:
Accounts receivable (18.3) 78.7
Inventories (116.2) (28.4)
Other assets (14.4) (1.0)
Accounts payable 55.1 (67.1)
Accrued expenses and other liabilities 3.2 (47.3)
Accrued income taxes (15.9) (5.0)
Net cash provided by operating activities 44.0 21.8
Investing activities
Additions to property, plant and equipment (13.9) (11.8)
Cost of acquisitions, net of cash acquired 15.4 0.6
Net cash provided (used) by investing activities 1.5 (11.2)
Financing activities
Proceeds from long-term borrowings 651.4 231.5
Repayments of long-term debt (638.8) (146.4)
Proceeds of notes payable, net 2.3 2.5
Payment for debt premium (9.8) —
Payments for debt issuance costs (10.5) (1.6)
Dividends paid (18.6) (18.4)
Repurchases of common stock — (18.9)
Payments related to tax withholding for stock-based compensation (0.9) (1.8)
Proceeds from the exercise of stock options 2.4 1.7
Net cash (used) provided by financing activities (22.5) 48.6
Effect of foreign exchange rate changes on cash and cash equivalents (1.5) (1.2)
Net increase in cash and cash equivalents 21.5 58.0
Cash and cash equivalents
Beginning of the period 36.6 27.8
End of the period $ 58.1 $ 85.8
Cash paid during the year for:
Interest $ 33.7 $ 21.4
Income taxes $ 21.2 $ 20.1


		Six Months Ended June 30,
(in millions)		2022				2021
Operating activities
Net income	$		36.7		$		28.2
Amortization of inventory step-up			0				2.4
Payments of contingent consideration			(9.2	)			0
Loss on disposal of assets			(0.2	)			0
Change in fair value of contingent liability			(6.8	)			11.6
Depreciation			19.6				19.6
Amortization of debt issuance costs			1.4				1.5
Amortization of intangibles			21.6				23.6
Stock-based compensation			7.2				9.0
Loss on debt extinguishment			0				3.7
Changes in balance sheet items:
Accounts receivable			(12.4	)			(54.5	)
Inventories			(51.4	)			(77.9	)
Other assets			(18.7	)			(32.2	)
Accounts payable			(47.2	)			42.3
Accrued expenses and other liabilities			(34.8	)			(12.3	)
Accrued income taxes			(3.7	)			(20.1	)
Net cash used by operating activities			(97.9	)			(55.1	)
Investing activities
Additions to property, plant and equipment			(7.0	)			(9.3	)
Proceeds from the disposition of assets			0.2				0
Cost of acquisitions, net of cash acquired			0				15.4
Net cash (used) provided by investing activities			(6.8	)			6.1
Financing activities
Proceeds from long-term borrowings			218.0				648.8
Repayments of long-term debt			(25.6	)			(529.2	)
Proceeds of notes payable, net			11.3				2.2
Payment for debt premium			0				(9.8	)
Payments for debt issuance costs			0				(10.5	)
Dividends paid			(14.4	)			(12.4	)
Payments of contingent consideration			(17.8	)			0
Repurchases of common stock			(19.4	)			0
Payments related to tax withholding for stock-based compensation			(2.5	)			(0.9	)
Proceeds from the exercise of stock options			4.3				2.0
Net cash provided by financing activities			153.9				90.2
Effect of foreign exchange rate changes on cash and cash equivalents			1.3				0.1
Net increase in cash and cash equivalents			50.5				41.3
Cash and cash equivalents
Beginning of the period			41.2				36.6
End of the period	$		91.7		$		77.9
Cash paid during the year for:
Interest	$		18.9		$		16.8
Income taxes	$		17.9		$		15.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).


(in millions)		Common Stock			Paid-in Capital				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Accumulated Deficit				Total
Balance at December 31, 2021	$		1.0	$		1,902.2		$		(535.5	)	$		(40.9	)	$		(462.0	)	$		864.8
Net income			—			—				—				—				(2.7	)			(2.7	)
Loss on derivative financial instruments, net of tax			—			—				(1.4	)			—				—				(1.4	)
Translation impact, net of tax			—			—				15.3				—				—				15.3
Pension and post-retirement adjustment, net of tax			—			—				4.8				—				—				4.8
Stock-based compensation			—			4.9				—				—				(0.1	)			4.8
Common stock issued, net of shares withheld for employee taxes			—			4.3				—				(1.2	)			—				3.1
Dividends declared, $0.075 per share			—			—				—				—				(7.3	)			(7.3	)
Other			—			0.1				—				—				—				0.1
Balance at March 31, 2022	$		1.0	$		1,911.5		$		(516.8	)	$		(42.1	)	$		(472.1	)	$		881.5
Net income			—			—				—				—				39.4				39.4
Gain on derivative financial instruments, net of tax			—			—				3.9				—				—				3.9
Translation impact, net of tax			—			—				(37.2	)			—				—				(37.2	)
Pension and post-retirement adjustment, net of tax			—			—				10.8				—				—				10.8
Common stock repurchases			—			(19.4	)			—				—				—				(19.4	)
Stock-based compensation			—			2.6				—				—				(0.2	)			2.4
Common stock issued, net of shares withheld for employee taxes			—			—				—				(1.3	)			—				(1.3	)
Dividends declared, $0.075 per share			—			—				—				—				(7.1	)			(7.1	)
Other			—			—				—				—				(0.1	)			(0.1	)
Balance at June 30, 2022	$		1.0	$		1,894.7		$		(539.3	)	$		(43.4	)	$		(440.1	)	$		872.9

Shares of Capital Stock


	Common Stock			Treasury Stock		Net Shares
Shares at December 31, 2021		100,118,494			4,300,548		95,817,946
Common stock issued, net of shares withheld for employee taxes		1,128,030			106,598		1,021,432
Shares at March 31, 2022		101,246,524			4,407,146		96,839,378
Common stock issued, net of shares withheld for employee taxes		330,408			183,509		146,899
Common stock repurchases		(2,742,589	)		—		(2,742,589	)
Shares at June 30, 2022		98,834,343			4,590,655		94,243,688

See Notes to Condensed Consolidated Financial Statements (Unaudited).


(in millions)		Common Stock			Paid-in Capital				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Accumulated Deficit				Total
Balance at December 31, 2020	$		1.0	$		1,883.1		$		(564.2	)	$		(39.9	)	$		(537.3	)	$		742.7
Net loss			—			—				—				—				(20.4	)			(20.4	)
Gain on derivative financial instruments, net of tax			—			—				4.1				—				—				4.1
Translation impact, net of tax			—			—				(20.7	)			—				—				(20.7	)
Pension and post-retirement adjustment, net of tax			—			—				3.6				—				—				3.6
Stock-based compensation			—			5.0				—				—				(0.2	)			4.8
Common stock issued, net of shares withheld for employee taxes			—			1.9				—				(0.9	)			—				1.0
Dividends declared, $.065 per share			—			—				—				—				(6.2	)			(6.2	)
Other			—			(0.1	)			—				—				—				(0.1	)
Balance at March 31, 2021	$		1.0	$		1,889.9		$		(577.2	)	$		(40.8	)	$		(564.1	)	$		708.8
Net income			—			—				—				—				48.6				48.6
Gain on derivative financial instruments, net of tax			—			—				0.2				—				—				0.2
Translation impact, net of tax			—			—				24.4				—				—				24.4
Pension and post-retirement adjustment, net of tax			—			—				0.5				—				—				0.5
Stock-based compensation			—			4.4				—				—				(0.2	)			4.2
Common stock issued, net of shares withheld for employee taxes			—			0.1				—				—				—				0.1
Dividends declared, $.065 per share			—			—				—				—				(6.2	)			(6.2	)
Other			—			0.2				—				—				(0.1	)			0.1
Balance at June 30, 2021	$		1.0	$		1,894.6		$		(552.1	)	$		(40.8	)	$		(522.0	)	$		780.7

Shares of Capital Stock


	Common Stock		Treasury Stock		Net Shares
Shares at December 31, 2020		99,129,455		4,186,890		94,942,565
Common stock issued, net of shares withheld for employee taxes		652,755		109,599		543,156
Shares at March 31, 2021		99,782,210		4,296,489		95,485,721
Common stock issued, net of shares withheld for employee taxes		97,160		—		97,160
Shares at June 30, 2021		99,879,370		4,296,489		95,582,881

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

As used in this Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation and its consolidated subsidiaries.

The management of ACCO Brands Corporation is responsible for the accuracy and internal consistency of the preparation of the condensed consolidated financial statements and notes contained in this Quarterly Report on Form 10-Q.

The condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Although the Company believes the disclosures are adequate to make the information presented not misleading, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to those rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

The Condensed Consolidated Balance Sheet as of ~~September~~June 30, ~~2021,~~2022 and the related Consolidated Statements of Income, ~~the~~ Consolidated Statements of Comprehensive Income (Loss), ~~the~~and Consolidated Statements of Stockholders' Equity for the three and ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, and ~~2020 and~~the Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are unaudited. The December 31, ~~2020~~2021 Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all annual disclosures required by GAAP. The financial statements included herein were prepared by management and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of results of operations and cash flows for the interim periods ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, and the financial position of the Company as of ~~September~~June 30, ~~2021.~~2022. Interim results may not be indicative of results for a full year.

Effective December 17, 2020, we completed the acquisition of PowerA (the "PowerA Acquisition"), a leading provider of third-party video gaming console accessories primarily in North America. The results of PowerA are included in all three of the Company's operating business segments effective December 17, 2020. The purchase price was $321.8 million, plus an additional earnout of up to $55.0 million in cash, which is contingent upon PowerA achieving one- and two- year sales and profit growth objectives and has a fair value of $34.7 million as of September 30, 2021. The PowerA Acquisition and related expenses were funded by cash on hand, as well as borrowings from our revolving credit facility. See "Note 3. Acquisitions" for details on the PowerA Acquisition.

On April 1, 2021, we completed the acquisition of Franken Planungs-und Organisationsmittel GmbH (“Franken”), for a purchase price of €2.4 million (US$2.8 million, based on April 1, 2021 exchange rates), net of cash acquired of $1.1 million. Franken is a provider of visual communication products, including boards, markers, planning tools, as well as creative and training products. Franken is a German company that is included in the Company’s EMEA reporting segment.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for applying current GAAP to contracts, hedging relationships, and other transactions affected by the transition from the use of LIBOR to an alternative reference rate. We are currently evaluating our contracts and hedging relationships that reference LIBOR and the potential effects of adopting this new guidance. However, we do not expect the changes related to the LIBOR successor rate procedures to have a material effect on the Company. The guidance can be adopted immediately and is applicable to contracts entered into on or before December 31, 2022.

There are no ~~other~~ recently issued accounting standards that are expected to have an impact on the Company’s financial condition, results of operations or cash flow.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Recently Adopted Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

reduce complexity in accounting for income taxes. Effective January 1, 2021, the Company adopted this standard. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

There were no ~~other~~ accounting standards that were adopted in the first ~~nine~~six months of ~~2021~~2022 that had a material effect on the Company’s financial condition, results of operations or cash flow.

Acquisition of Franken

On April 1, 2021, we completed the acquisition of Franken, for a purchase price of ~~€2.4~~€2.4 million (US$2.8 million, based on April 1, 2021 exchange rates), net of cash acquired of ~~$1.1~~$1.1 million. Franken is a provider of visual communication products, including boards, markers, planning tools, as well as creative and training products. Franken is a German company that is included in the Company’s EMEA reporting segment.

Pro forma financial information is not presented due to immateriality.

~~Acquisition of PowerA~~

Effective December 17, 2020, we completed the acquisition of PowerA, a leading provider of third-party video gaming console accessories primarily in North America. The results of PowerA are included in all 3 of the Company's reporting units effective December 17, 2020.

The purchase price was $321.8 million, net of a working capital adjustment received of $18.2 million, plus an additional earnout of up to $55.0 million in cash. The earnout is contingent upon PowerA achieving one- and two- year sales and profit growth objectives. The fair value of the contingent earnout liability was $34.7 million as of September 30, 2021. The PowerA Acquisition and related expenses were funded by cash on hand, as well as borrowings from our revolving credit facility.

For accounting purposes, the Company was the acquiring enterprise. The PowerA Acquisition is being accounted for as a purchase business combination and PowerA's results are included in the Company’s consolidated financial statements as of December 31, 2020. The additional net sales from PowerA ~~during the~~ ~~three and nine~~ ~~months ended September 30, 2021~~ we~~re $56.8 million and $170.2 million, respectively.~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

During the third quarter of 2021 we finalized our fair value estimate of assets acquired and liabilities assumed as of the acquisition date. The following table presents the allocation of the consideration given to the fair values of the assets acquired and liabilities assumed at the date of the PowerA Acquisition:


~~(in millions)~~	~~At December 17, 2020~~
~~Calculation of Goodwill:~~
~~Purchase price, net of working capital adjustment~~	$	~~321.8~~



~~Fair value of contingent consideration~~	$	~~18.2~~

~~Plus fair value of liabilities assumed:~~
~~Accrued liabilities~~	~~9.2~~

~~Fair value of liabilities assumed~~	$	~~9.2~~

~~Less fair value of assets acquired:~~


~~Inventory~~	~~29.3~~
~~Property and equipment~~	~~0.2~~
~~Identifiable intangibles~~	~~235.4~~
~~Other assets~~	~~13.2~~
~~Fair value of assets acquired~~	$	~~278.1~~

~~Goodwill~~	$	~~71.1~~

~~During the year ended December 31, 2020, transaction costs related to the PowerA Acquisition were $3.7 million, and for the nine months ended September 30, 2021, they were $0.1 million.~~ ~~These costs were reported as SG&A expenses in the Company's Consolidated Statements of Income.~~

~~Unaudited Pro Forma Consolidated Results~~

The unaudited pro forma information presented below is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of the Company that would have been reported had the PowerA Acquisition been completed on January 1, 2019. Furthermore, the unaudited pro forma information does not give effect to the anticipated synergies or other anticipated benefits of the PowerA Acquisition.

~~Had the PowerA Acquisition occurred on January 1, 2019, unaudited pro forma consolidated results of the Company for the three and nine months~~ ~~ended~~ ~~September 30, 2021~~ ~~and~~ ~~2020~~ w~~ould have been as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Net sales $ 526.7 $ 501.4 $ 1,455.0 $ 1,325.5
Net income 20.2 24.9 48.4 41.6
Net income per diluted common share $ 0.21 $ 0.26 $ 0.50 $ 0.43

The pro forma amounts are based on the Company's historical results and the historical results for the acquired PowerA business. The pro forma results of operations have been adjusted to include amortization of finite-lived intangibles, and other charges related to the accounting by the Company for the PowerA Acquisition.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Notes payable and long-term debt, listed in order of the priority of security interests in assets of the Company, consisted of the following as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


(in millions)		June 30, 2022			December 31, 2021
Euro Senior Secured Term Loan A, due March 2026 (floating interest rate of 2.00% at June 30, 2022 and 2.00% at December 31, 2021)	$		228.8	$		254.8
USD Senior Secured Term Loan A, due March 2026 (floating interest rate of 4.25% at June 30, 2022 and 2.22% at December 31, 2021)			86.7			89.0
Australian Dollar Senior Secured Term Loan A, due March 2026 (floating interest rate of 3.86% at June 30, 2022 and 2.11% at December 31, 2021)			36.4			39.4
U.S. Dollar Senior Secured Revolving Credit Facility, due March 2026 (floating interest rate of 3.45% at June 30, 2022 and 2.10% at December 31, 2021)			214.8			13.7
Australian Dollar Senior Secured Revolving Credit Facility, due March 2026 (floating interest rate of 3.18% at June 30, 2022 and 2.06% at December 31, 2021)			25.5			25.4
Senior Unsecured Notes, due March 2029 (fixed interest rate of 4.25%)			575.0			575.0
Other borrowings			20.2			9.4
Total debt			1,187.4			1,006.7
Less:
Current portion			54.1			43.0
Debt issuance costs, unamortized			8.8			9.6
Long-term debt, net	$		1,124.5	$		954.1

(in millions) September 30,
2021 December 31,
2020
Euro Senior Secured Term Loan A, due March 2026 (floating interest rate of 2.25% at September 30, 2021) $ 264.3 $ —
Euro Senior Secured Term Loan A, due May 2024 (floating interest rate of 2.50% at December 31, 2020) — 287.4
USD Senior Secured Term Loan A, due March 2026 (floating interest rate of 2.38% at September 30, 2021) 90.2 —
USD Senior Secured Term Loan A, due May 2024 (floating interest rate of 3.50% at December 31, 2020) — 92.5
Australian Dollar Senior Secured Term Loan A, due March 2026 (floating interest rate of 2.32% at September 30, 2021) 39.5 —
Australian Dollar Senior Secured Term Loan A, due May 2024 (floating interest rate of 2.57% at December 31, 2020) — 43.4
U.S. Dollar Senior Secured Revolving Credit Facility, due March 2026 (floating interest rate of 2.33% at September 30, 2021) 120.4 —
U.S. Dollar Senior Secured Revolving Credit Facility, due May 2024 (floating interest rate of 3.50% at December 31, 2020) — 307.2
Australian Dollar Senior Secured Revolving Credit Facility, due March 2026 (floating interest rate of 2.31% at September 30, 2021) 32.6 —
Australian Dollar Senior Secured Revolving Credit Facility, due May 2024 (floating interest rate of 2.57% at December 31, 2020) — 25.4
Senior Unsecured Notes, due March 2029 (fixed interest rate of 4.25%) 575.0 —
Senior Unsecured Notes, due December 2024 (fixed interest rate of 5.25%) — 375.0
Other borrowings 8.1 5.7
Total debt 1,130.1 1,136.6
Less:
Current portion 36.2 76.5
Debt issuance costs, unamortized 10.0 5.5
Long-term debt, net $ 1,083.9 $ 1,054.6

Credit Agreement

The Company ~~entered into~~is party to a Third Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of January 27, 2017, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other agents and various lenders party thereto. The Credit Agreement, ~~provided~~as amended, provides for a five-year senior secured credit facility, which ~~consisted~~consists of a ~~€300.0~~€300.0 million (US$320.8 million based on January 27, 2017, exchange rates) term loan facility, ~~(the "Euro Term Loan"),~~ an A$80.0 million (US$60.4 million based on January 27, 2017, exchange rates) term loan facility, ~~(the "Australian Term Loan"),~~a US$100.0 million term loan facility, and a US$~~400.0~~600.0 million multi-currency revolving credit facility (the "Revolving Facility").

~~Effective~~

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

From July ~~26,~~ 2018 to March 2021, the Company entered into ~~the First Amendment~~five amendments (the ~~"First Amendment"~~"Amendments") to the Credit Agreement. The ~~First Amendment increased~~following are the aggregate revolving credit commitments under the Revolving Facility by $100.0 million such that, after giving effect to such increase, the aggregate amount of revolving credit available under the Revolving Facility was $500.0 million. In addition, the First Amendment also affected certain technical amendmentskey changes, among other things, to the Credit Agreement ~~including~~as a result of the ~~addition of~~Amendments:

•

added provisions relating to LIBOR successor rate procedures if LIBOR becomes unascertainable or is discontinued in the future and to expressly permit certain intercompany asset transfers. The changes related to the LIBOR successor rate procedures are not expected to have a material effect on the ~~Company.~~

Effective May 23, 2019, the Company entered into a Second Amendment (the "Second Amendment") to the Credit Agreement. Pursuant to the Second Amendment, the Credit Agreement was amended to, among other things:

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Company;

•~~extend the maturity date to May 23, 2024;~~

•~~further increase the aggregate revolving credit commitments under the Revolving Facility~~ ~~from $500.0 million to $600.0 million;~~

•~~establish a new term loan facility denominated in U.S. Dollars in an aggregate principal amount of $100.0 million (the "USD Term Loan");~~

•~~replace~~replaced the minimum fixed coverage ratio of ~~1.25:~~1.25:1.00 with a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of ~~3.00:~~3.00:1.00; ~~and~~

•reflect a more favorable restricted payment covenant, with the Consolidated Leverage Ratio (as defined in the Credit Agreement) hurdle for unlimited restricted payments (including share repurchases and dividends) as calculated under the Credit Agreement increasing from 2.50:1.00 to 3.25:1.00.

~~Effective May 1, 2020, the Company entered into a Third Amendment (the "Third Amendment") to the Credit Agreement pursuant to which the Credit Agreement was amended to, among other things:~~

•~~increase the maximum Consolidated Leverage Ratio from 3.75:1.00 to 4.75:1.00, stepping back down to 3.75:1.00 for the first fiscal quarter ending after June 30, 2021;~~

•~~amend the pricing based on the Company’s Consolidated Leverage Ratio, with a scaled increase in interest rates and fees, effective May 1, 2020;~~

•~~reduce the Company’s capacity to incur certain other indebtedness, and impose additional limitations on certain restricted payments (other than dividends) and permitted acquisitions; and~~

•~~require~~required that the Company pay down any amounts on the Revolving Facility when cash and cash equivalents of the loan parties exceed ~~$100.0 million.~~$100.0 million; and

In connection with the PowerA Acquisition, effective November 10, 2020, the Company entered into a Fourth Amendment (the "Fourth Amendment") to the Credit Agreement pursuant to which the Credit Agreement was amended to, among other things:

•~~provide flexibility under the permitted acquisition provisions to accommodate the acquisition of PowerA;~~

•~~further amend~~amended the maximum Consolidated Leverage Ratio financial covenant for ~~each of~~ the ~~six~~ fiscal quarters beginning March 31, 2021, ~~and ending June 30, 2022,~~ as follows:


Quarter Ended		Maximum Consolidated Leverage Ratio
March 2021		~~5.25:~~ 5.25:1.00
June 2021		~~5.25:~~ 5.25:1.00
September 2021		~~4.75:~~ 4.75:1.00
December 2021		~~4.25:~~ 4.25:1.00
March 2022		~~4.25:~~ 4.25:1.00
June 2022		~~4.25:~~ 4.25:1.00
September 2022 and thereafter		~~3.75:~~ 4.00:1.00

•~~exempt the borrowings made under~~The current maturity of the Credit Agreement ~~as amended, to fund the PowerA Acquisition from the Credit Agreement’s anti-cash hoarding clause.~~

~~We incurred and capitalized approximately~~is ~~$3.2 million~~ ~~in bank, legal and other fees associated with the Third and Fourth Amendments.~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~Effective~~ March 31, ~~2021,~~2026 and the ~~Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Credit Agreement. Pursuant to the Fifth Amendment, the Credit Agreement was amended to, among other things:~~current pricing is as follows:


Consolidated Leverage Ratio	Applicable Rate on Euro/AUD/CDN Dollar Loans	Applicable Rate on Base Rate Loans	Undrawn Fee
> 4.50 to 1.00	2.50 %	1.50 %	0.500 %
≤ 4.50 to 1.00 and > 4.00 to 1.00	2.25 %	1.25 %	0.375 %
≤ 4.00 to 1.00 and > 3.50 to 1.00	2.00 %	1.00 %	0.350 %
≤ 3.50 to 1.00 and > 3.00 to 1.00	1.75 %	0.75 %	0.300 %
≤ 3.00 to 1.00 and > 2.00 to 1.00	1.50 %	0.50 %	0.250 %
≤ 2.00 to 1.00	1.25 %	0.25 %	0.200 %

•~~further extend the maturity date from May 23, 2024 to March 31, 2026;~~

•~~further modify the maximum Consolidated Leverage Ratio financial covenant such that for the fiscal quarter ending September~~As of June 30, 2022, ~~and thereafter,~~there was $240.3 million in borrowings outstanding under the ~~maximum leverage ratio is set at 4.00:1.00;~~

•Revolving Facility. The remaining amount available for borrowings was $~~reflect more favorable pricing at higher Consolidated Leverage Ratio levels along with lower fees~~348.7 million (allowing for $11.0 million of letters of credit outstanding on ~~undrawn amounts,~~ that date).

~~as follows:~~

Consolidated Leverage Ratio Applicable Rate on Euro/AUD/CDN Dollar Loans Applicable Rate on Base Rate Loans Undrawn Fee
> 4.50 to 1.00 2.50% 1.50% 0.500%
≤ 4.50 to 1.00 and > 4.00 to 1.00 2.25% 1.25% 0.375%
≤ 4.00 to 1.00 and > 3.50 to 1.00 2.00% 1.00% 0.350%
≤ 3.50 to 1.00 and > 3.00 to 1.00 1.75% 0.75% 0.300%
≤ 3.00 to 1.00 and > 2.00 to 1.00 1.50% 0.50% 0.250%
≤ 2.00 to 1.00 1.25% 0.25% 0.200%

•~~eliminate the LIBOR rate floor for U.S. dollar loans.~~

Under the Fifth Amendment, pricing was locked at LIBOR plus 2.25 percent until the Company published its financial results for the fiscal quarter ended June 30, 2021, and it became subject to the above leverage-based pricing grid thereafter.

Senior Unsecured Notes

On March 15, 2021, the Company completed a private offering of ~~$575.0~~$575.0 million in aggregate principal amount of ~~4.25%~~4.25 percent Senior Unsecured Notes (the "Notes") due March 2029 (the "New Notes"), which were issued under an indenture, dated as of March 15, 2021 (the "New Indenture"), among the Company, as issuer, the guarantors named therein and Wells Fargo Bank, National Association, as trustee.2029. Interest on the ~~New~~ Notes is payable semiannually on March 15 and September 15 of each ~~year, beginning on September 15, 2021.~~

year. The ~~New~~ Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of the ~~Company’s~~Company's existing and future U.S. subsidiaries, other than certain excluded subsidiaries.

The New Indenture contains covenants that limit the ability of the Company and its restricted subsidiaries’ ability to, among other things: (i) incur additional indebtedness or issue disqualified stock or, in the case of the Company’s restricted subsidiaries, preferred stock; (ii) create liens; (iii) pay dividends, make certain investments or make other restricted payments; (iv) sell certain assets or merge with or into other companies; (v) enter into transactions with affiliates; and (vi) in the case of a restricted subsidiary, pay dividends, loans, or assets to the Company or other restricted subsidiaries. These covenants are subject to a number of important limitations and exceptions. The New Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, and accrued but unpaid interest on all the then outstanding New Notes to be immediately due and payable.

In addition, effective March 15, 2021, the Company irrevocably deposited with the trustee of its 5.25% Senior Notes due 2024 (the "Prior Notes") an amount necessary to pay the aggregate redemption price for the Prior Notes, and satisfied and discharged all its obligations related to the Prior Notes indenture. Proceeds from the offering of the New Notes were applied toward the payment of the aggregate redemption price for the Prior Notes, the repayment of approximately $178.0 million of the Company’s outstanding borrowings under its Revolving Facility and to pay fees and expenses related to the offering of the New Notes. The Prior Notes were redeemed on March 31, 2021 at an aggregate redemption price of $390.6 million, consisting

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~of $375 million of the principal due and payable on the Prior Notes, a call premium of $9.8 million (included in "Other expense, net~~

~~"), and accrued and unpaid interest of $5.8 million (included in "Interest expense").~~

~~Also included in "Other expense, net~~" is a $3.7 million charge for the write-off of debt issuance costs. Additionally, we incurred and capitalized approximately $8.2 million in bank, legal and other fees associated with the issuance of the New Notes.

As of ~~September~~June 30, 2021, there were $153.0 million in borrowings outstanding under the Revolving Facility. The remaining amount available for borrowings was $434.5 million (allowing for $12.5 million of letters of credit outstanding on that date).

~~As of September 30, 2021,~~2022, our Consolidated Leverage Ratio was approximately ~~3.8~~3.97 to 1.00 versus our maximum covenant of ~~4.75~~4.25 to 1.00.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Guarantees and Security

Generally, obligations under the Credit Agreement are guaranteed by certain of the Company’s existing and future subsidiaries, and are secured by substantially all of the Company’s and certain guarantor subsidiaries’ assets, subject to certain exclusions and limitations.

5. Leases

The Company leases its corporate headquarters, various other facilities for distribution, manufacturing, and offices, as well as vehicles, forklifts and other equipment. The Company determines if an arrangement is a lease at inception. Leases are included in "Right of use asset, leases" ("ROU Assets"), and the current portion of the lease liability is included in "Lease liabilities" and the non-current portion is included in "Long-term lease liabilities" in the Condensed Consolidated Balance Sheets. The Company currently has an immaterial amount of financing leases and leases with terms of more than one month and less than 12 months. ROU Assets and ~~lease~~Lease liabilities are recognized based on the present value of lease payments over the lease term. Because most of the Company’s leases do not provide an implicit rate of return, the Company uses its incremental collateralized borrowing rate, on a regional basis, in determining the present value of lease payments. The incremental borrowing rate is dependent upon the duration of the lease and has been segmented into three groups of time. All leases within the same region and the same group of time share the same incremental borrowing rate. The Company has lease agreements with lease and non-lease components, which are combined for accounting purposes for all classes of assets except information technology equipment.

The components of lease expense were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Operating lease cost $ 8.1 $ 6.7 $ 22.3 $ 21.0
Sublease income (0.9) (0.2) (1.5) (0.9)
Total lease cost $ 7.2 $ 6.5 $ 20.8 $ 20.1


		Three months ended June 30,								Six Months Ended June 30,
(in millions)		2022				2021				2022				2021
Operating lease cost	$		7.8		$		7.0		$		15.5		$		14.2
Sublease income			(0.6	)			(0.3	)			(1.2	)			(0.6	)
Total lease cost	$		7.2		$		6.7		$		14.3		$		13.6

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Other information related to leases was as follows:


		Six Months Ended June 30,
(in millions, except lease term and discount rate)		2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$		16.5	$		15.1
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$		6.9	$		3.7


	As of June 30, 2022
Weighted average remaining lease term:
Operating leases	6.5 years

Weighted average discount rate:
Operating leases		4.6	%

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30,
(in millions, except lease term and discount rate) 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 23.8 $ 21.5
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 15.0 3.3
As of
September 30, 2021
Weighted average remaining lease term:
Operating leases 6.15 years
Weighted average discount rate:
Operating leases 5.1 %

Future minimum lease payments, net of sub-lease income, for all non-cancelable leases as of ~~September~~June 30, ~~2021,~~2022, were as follows:

(in millions)
2021 $ 6.9
2022 24.1
2023 18.3
2024 14.8
2025 12.0
2026 9.4
Thereafter 24.2
Total minimum lease payments 109.7
Less imputed interest 17.4
Future minimum payments for leases, net of sublease rental income and imputed interest $ 92.3


(in millions)		Operating Leases
2022	$		13.9
2023			22.7
2024			18.9
2025			15.8
2026			12.8
2027			8.6
Thereafter			29.1
Total minimum lease payments			121.8
Less imputed interest			17.5
Future minimum payments for leases, net of sublease rental income and imputed interest	$		104.3

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

6. Pension and Other Retiree Benefits

The components of net periodic benefit (income) cost for pension and post-retirement plans for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

Three Months Ended September 30,
Pension Post-retirement
U.S. International
(in millions) 2021 2020 2021 2020 2021 2020
Service cost $ — $ 0.4 $ 0.4 $ 0.4 $ — $ —
Interest cost 1.2 1.5 1.5 2.4 — —
Expected return on plan assets (2.9) (2.8) (4.7) (4.7) — —
Amortization of net loss (gain) 0.9 0.8 1.7 1.3 (0.1) (0.1)
Amortization of prior service cost — 0.1 0.1 0.1 — —
Net periodic benefit cost (income) (1)
$ (0.8) $ — $ (1.0) $ (0.5) $ (0.1) $ (0.1)
Nine Months Ended September 30,
Pension Post-retirement
U.S. International
(in millions) 2021 2020 2021 2020 2021 2020
Service cost $ 0.5 $ 1.2 $ 1.2 $ 1.1 $ — $ —
Interest cost 3.4 4.4 4.7 7.2 — 0.1
Expected return on plan assets (8.5) (8.5) (14.5) (13.8) — —
Amortization of net loss (gain) 2.7 2.4 5.3 3.7 (0.3) (0.4)
Amortization of prior service cost 0.1 0.3 0.2 0.2 — —
Curtailment loss(2)
1.4 — — — — —
Net periodic benefit cost (income) (1)
$ (0.4) $ (0.2) $ (3.1) $ (1.6) $ (0.3) $ (0.3)


		Three Months Ended June 30,
		Pension																Post-retirement
		U.S.								International
(in millions)		2022				2021				2022				2021				2022				2021
Service cost	$		0		$		0.1		$		0.2		$		0.4		$		0		$		0
Interest cost			1.2				1.2				2.4				1.6				0				0
Expected return on plan assets			(2.7	)			(2.8	)			(4.5	)			(5.0	)			0				0
Amortization of prior service cost			0				0				0.1				0				0				0
Amortization of net loss (gain)			0.9				0.8				1.3				1.8				(0.1	)			(0.1	)
Net periodic benefit income(2)	$		(0.6	)	$		(0.7	)	$		(0.5	)	$		(1.2	)	$		(0.1	)	$		(0.1	)


		Six Months Ended June 30,
		Pension																Post-retirement
		U.S.								International
(in millions)		2022				2021				2022				2021				2022				2021
Service cost	$		0		$		0.5		$		0.5		$		0.8		$		0		$		0
Interest cost			2.4				2.2				4.9				3.2				0				0
Expected return on plan assets			(5.4	)			(5.6	)			(9.1	)			(9.8	)			0				0
Amortization of prior service cost			0				0.1				0.1				0.1				0				0
Amortization of net loss (gain)			1.8				1.8				2.7				3.6				(0.2	)			(0.2	)
Curtailment loss(1)			0				1.4				0				0				0				0
Net periodic benefit (income) cost (2)	$		(1.2	)	$		0.4		$		(0.9	)	$		(2.1	)	$		(0.2	)	$		(0.2	)

(1)~~The components of net periodic benefit cost (income), other than service cost, are included in the line "Non-operating pension income" in the Consolidated Statements of Income.~~

~~(2)~~Curtailment loss of ~~$1.4~~$1.4 million due to the pension benefit freeze for the Sidney group under the ACCO Brands Corporation Pension Plan.

(2)

The components of net periodic benefit (income) cost, other than service cost, are included in the line "Non-operating pension income" in the Consolidated Statements of Income.

The following table summarizes our stock-based compensation expense (including stock options, restricted stock units ("RSUs") and performance stock units ("PSUs")) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		Three months ended June 30,						Six Months Ended June 30,
(in millions)		2022			2021			2022			2021
Stock option compensation expense	$		0.6	$		0.6	$		2.7	$		2.3
RSU compensation expense			0.9			0.9			3.0			3.4
PSU compensation expense			0.8			2.7			1.5			3.3
Total stock-based compensation expense	$		2.3	$		4.2	$		7.2	$		9.0

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Stock option compensation expense $ 0.6 $ 0.5 $ 2.9 $ 2.1
RSU compensation expense 0.9 1.3 4.3 4.3
PSU compensation expense 1.7 — 5.0 (1.2)
Total stock-based compensation expense $ 3.2 $ 1.8 $ 12.2 $ 5.2

We generally recognize compensation expense for stock-based awards ratably over the vesting period. Stock-based compensation expense for the three and nine months ended September 30, 2021 includes $0.2 million and $0.4 million of expense related to stock awards granted to eligible non-employee directors, respectively. For each of the three and nine months ended September 30, 2020, stock-based compensation expense includes $1.0 million of expense related to stock awards granted to non-employee directors.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

During the ~~third~~second quarter of ~~2021,~~2022, stock compensation grants were made consisting of ~~4,773~~127,174 stock options, ~~22,288~~38,153 RSUs and ~~2,864~~703,379 PSUs.

The following table summarizes our unrecognized compensation expense and the weighted-average period over which the expense will be recognized as of ~~September~~June 30, ~~2021:~~2022:


	June 30, 2022
(in millions, except weighted average years)	Unrecognized Compensation Expense	Weighted Average Years Expense To Be Recognized Over
Stock options	$4.9	2.3
RSUs	$5.7	2.2
PSUs	$11.0	2.1

The components of inventories were as follows:


(in millions)		June 30, 2022			December 31, 2021
Raw materials	$		71.8	$		67.5
Work in process			4.3			4.1
Finished goods			395.4			356.4
Total inventories	$		471.5	$		428.0

We test goodwill for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. ~~Historically, we performed this annual test using June 30th as the measurement date.~~ During the second quarter of 2021, we elected to change the measurement date of our annual impairment test from June 30th to May 31st. A measurement date of May 31st is preferable as it better aligns with the timing of our forecasting process.

~~During the second quarter of 2021,~~2022, we completed the annual goodwill impairment assessment, on a quantitative basis, for goodwill for each of our 3 reporting units. The result of our annual assessment was that the fair value of the North America, International and EMEA reporting units exceeded their carrying values as of our measurement date of May 31, ~~2021~~2022 and we concluded that no0 impairment existed.

Estimating the fair value of each reporting unit requires us to make assumptions and estimates regarding our future. We utilized a combination of both a discounted cash flows and market approach. The financial projections used in the valuation

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

models reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, and other expectations about the anticipated short-term and long-term operating results for each of our 3 reporting units.

In management’s opinion, the goodwill balance for ~~the~~our ACCO Brands North America and ACCO Brands International reporting ~~unit~~units could be at risk for impairment if operating performance does not ~~recover~~improve as ~~expected from the current impacts of COVID-19, if we experience~~expected. This includes negative changes to ~~the~~our long-term outlook for ~~the~~our business ~~or changes in factors~~ and other assumptions which impact ~~the~~ fair value ~~of the reporting unit such as~~including low or declining revenue growth rates, depressed operating margins, or adverse changes to ~~the~~ discount ~~rates impacting this~~rates. The excess fair value over carrying value for both our North America and International reporting ~~unit.~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Changes in the net carrying amount of goodwill by segment were as follows:


(in millions)		ACCO Brands North America			ACCO Brands EMEA				ACCO Brands International			Total
Balance at December 31, 2021	$		446.7	$		178.6		$		177.2	$		802.5
Foreign currency translation			0			(24.0	)			0.7			(23.3	)
Balance at June 30, 2022	$		446.7	$		154.6		$		177.9	$		779.2

~~(1)~~Goodwill has been recorded on our Consolidated Balance Sheet related to the Franken acquisition, which is part of our EMEA segment, and represents the excess of the cost of the Franken acquisition when compared to the fair value estimate of the net assets acquired on April 1, 2021 (the date of the Franken acquisition). Goodwill has been recorded on our Consolidated Balance Sheet related to the PowerA Acquisition and represents the excess of the cost of the PowerA Acquisition when compared to the fair value estimate of the net assets acquired on December 17, 2020 (the date of the PowerA Acquisition) and includes a working capital adjustment of $18.2 million recorded in the first quarter of 2021 as a reduction to the purchase price, partially offset by purchase accounting adjustments of $3.7 million. See "Note 3. Acquisitions" for details on the calculation of the goodwill acquired in the PowerA Acquisition.

The goodwill balance includes ~~$215.1~~$215.1 million of accumulated impairment losses, which occurred prior to December 31, 2016.

Identifiable Intangible Assets

~~PowerA Acquisition~~

The valuation of identifiable intangible assets of $235.4 million acquired in the PowerA Acquisition includes amortizable customer relationships, vendor relationships, trade names and developed technology, which have been recorded at their estimated fair values. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of the projected after-tax cash flows. The fair value of the vendor relationships was determined using the lost income method. The fair value of the trade name and the developed technology was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The determination of the acquisition date fair value of the intangible assets required the Company to make significant estimates and assumptions regarding future revenue growth rates, future cost of sales, operating expenses and earnings before income tax, attrition rate, future cash flows without vendor relationships and discount rates.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The amortizable trade name, customer and vendor relationships will be amortized over 15 years while the developed technology will be amortized over 5 years on a straight-line basis. The allocation of the identifiable intangibles acquired in the PowerA Acquisition was as follows:


~~(in millions)~~	~~Fair Value~~		~~Remaining Useful Life~~
~~Trade name~~	$	~~21.6~~	~~15 years~~
~~Customer relationships~~	~~128.6~~		~~15 years~~
~~Vendor relationships~~	~~82.4~~		~~15 years~~
~~Developed technology~~	~~2.8~~		~~5 years~~
~~Total identifiable intangibles acquired~~	$	~~235.4~~

~~Intangible Assets~~

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, were as follows:

September 30, 2021 December 31, 2020
(in millions) Gross
Carrying
Amounts Accumulated
Amortization Net
Book
Value Gross
Carrying
Amounts Accumulated
Amortization Net
Book
Value
Indefinite-lived intangible assets:
Trade names $ 420.5 $ (44.5) (1) $ 376.0 $ 467.5 $ (44.5) (1) $ 423.0
Amortizable intangible assets:
Trade names 375.7 (107.2) 268.5 343.5 (97.7) 245.8
Customer and contractual relationships 368.7 (177.4) 191.3 376.8 (162.9) 213.9
Vendor relationships 82.4 (4.6) 77.8 87.7 (0.2) 87.5
Patents 8.6 (2.8) 5.8 8.9 (2.1) 6.8
Subtotal 835.4 (292.0) 543.4 816.9 (262.9) 554.0
Total identifiable intangibles $ 1,255.9 $ (336.5) $ 919.4 $ 1,284.4 $ (307.4) $ 977.0

(1)

Accumulated amortization prior to the adoption of authoritative guidance on goodwill and other intangible assets, at which time further amortization ceased.

The Company's intangible amortization expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$11.6~~$10.5 million and ~~$35.2~~$21.6 million, respectively, and ~~$7.9~~$11.6 million and ~~$24.1~~$23.6 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

Estimated amortization expense for amortizable intangible assets, as of ~~September~~June 30, ~~2021,~~2022, for the current year and the next five years is as follows:

Estimated amortization expense(2)

~~(2)~~ Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.

We test indefinite-lived intangibles for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. We performed this annual assessment, on a ~~quantitative~~qualitative basis, for our indefinite-lived trade names and concluded that no0 impairment existed as of our measurement date of May 31, ~~2021.~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~The result of our impairment testing of our indefinite-lived intangible assets determined the fair value of our five indefinite-lived trade names ACCO Brands~~2022.®

~~As of May 31, 2021, we changed the indefinite-lived Tilibra~~® ~~trade name to an amortizable intangible asset. The change was made as a result of decisions regarding the Company's future use of the trade name. The Company began amortizing the Tilibra~~® ~~trade name on a straight-line basis over a life of 30 years effective June 1, 2021.~~

The Company recorded ~~$4.2~~$2.2 million and ~~$7.3~~$3.9 million of restructuring expense for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020, respectively,~~ ~~and recorded $0.3 million and $0.5 million~~respectively. Restructuring expense for the three months ended ~~September~~June 30, ~~2021~~2022 was $1.9 million and net restructuring provision was ~~2020, respectively~~0. ~~The restructuring~~ for the three months ended June 30, 2021. Restructuring expenses were primarily for severance costs ~~and termination of lease agreements~~ related to cost reduction initiatives in our North America and ~~International~~EMEA segments.

The summary of the activity in the restructuring liability for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, was as follows:

Employee termination costs(1)

Termination of lease agreements(2)

~~(1)~~ We expect the remaining ~~$3.8~~$3.1 million employee termination costs to be substantially paid in the next ~~nine months.~~ twelve months.

(2)

We expect the remaining ~~$1.0~~$0.3 million lease termination costs to be substantially paid in the next ~~nine months.~~

six months.

The summary of the activity in the restructuring liability for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, was as follows:

(in millions) Balance at December 31, 2019 Provision Cash
Expenditures Non-cash
Items/
Currency Change Balance at September 30, 2020
Employee termination costs $ 10.7 $ 6.7 $ (8.4) $ (0.1) $ 8.9
Termination of lease agreements 0.6 0.1 (0.5) — 0.2
Other 0.5 0.5 (0.5) (0.4) 0.1
Total restructuring liability $ 11.8 $ 7.3 $ (9.4) $ (0.5) $ 9.2


		Balance at										Non-cash Items /				Balance at
(in millions)		December 31, 2020			Provision			Cash Expenditures				Currency Change				June 30, 2021
Employee termination costs	$		8.1	$		3.4	$		(5.1	)	$		(0.1	)	$		6.3
Termination of lease agreements			1.0			0.3			(0.7	)			1.3				1.9
Other			0.2			0.2			(0.2	)			(0.1	)			0.1
Total restructuring liability	$		9.3	$		3.9	$		(6.0	)	$		1.1		$		8.3

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) ~~(Continued)~~

For the three months ended ~~September~~June 30, 2022, we recorded income tax expense of $12.4 million on income before taxes of $51.8 million. For the three months ended June 30, 2021, we recorded income tax expense of $1.7 million on income before taxes of $50.3 million. The $10.7 million increase in tax expense compared to the prior year period was driven by the tax benefit associated with the revaluation of deferred tax assets due to changes in the enacted statutory rates which was recorded in the prior year.

For the six months ended June 30, 2022, we recorded income tax expense of $14.1 million on income before taxes of $50.8 million. For the six months ended June 30, 2021, we recorded an income tax ~~expense~~benefit of ~~$10.0~~$4.2 million on income before taxes of $~~$30.2 million,~~24.0 ~~for an effective rate of~~ million. The $~~33.1 percent~~18.3~~. For the three months ended September 30, 2020, we recorded an income~~ million increase in tax expense ~~of $6.8 million on income before taxes of $25.6 million, for an effective rate of 26.6 percent. The increase in~~compared to the ~~effective rate versus the three months ended September 30, 2020~~prior year period was ~~primarily driven by an increase in the global intangible low-taxed income tax.~~

~~For the nine months ended September 30, 2021, we recorded an income tax expense of $5.8 million on income before taxes of $54.2 million~~, for an effective rate of 10.7 percent. For the nine months ended September 30, 2020, we recorded an income tax expense of $13.7 million on income before taxes of $45.9 million, for an effective rate of 29.8 percent. The decrease in the effective rate versus the nine months ended September 30, 2020 was primarily driven by the tax benefit associated with the revaluation of ~~the~~ deferred tax assets due to changes in the enacted statutory ~~tax rate changes~~rates which was recorded in the prior year, and the ~~release~~increase in income before taxes during the first half of ~~non-U.S. reserves for unrecognized tax benefits for which~~2022 compared to the ~~time to assess has lapsed.~~first half of 2021.

The U.S. federal statute of limitations remains open for the years ~~2017~~2018 and forward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 2 to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include Australia ~~(2017~~(2017 forward), Brazil ~~(2015~~(2015 forward), Canada ~~(2017~~(2017 forward), Germany ~~(2016~~(2016 forward), Sweden ~~(2016~~(2016 forward) and the U.K. ~~(2019~~(2019 forward). We are currently under examination in certain foreign jurisdictions.

Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead Consumer and Office Products business ("Mead C&OP"), we assumed all of the tax liabilities for the acquired foreign operations including Tilibra Produtos de Papelaria Ltda. ("Tilibra"). In December of 2012, the Federal Revenue Department of the Ministry of Finance of Brazil ("FRD") issued a tax assessment against Tilibra, challenging the tax deduction of goodwill from Tilibra's taxable income for the year 2007 (the "First Assessment"). A second assessment challenging the deduction of goodwill from Tilibra's taxable income for the years 2008, 2009 and 2010 was issued by FRD in October 2013 (the "Second Assessment" and together with the First Assessment, the "Brazil Tax Assessments"). ~~Tilibra is disputing both of the Brazil Tax Assessments.~~

The final administrative appeal of the Second Assessment was decided against the Company in 2017. In 2018, we appealed this decision to the judicial level. In the event we do not prevail at the judicial level, we will be required to pay an additional penalty representing attorneys' costs and fees; accordingly, in the first quarter of 2019, the Company recorded an additional reserve in the amount of ~~$5.6~~$5.6 million. In connection with the judicial challenge, we were required to provide security to guarantee payment of the Second Assessment should we not prevail.

In the third quarter of 2020, the final administrative appeal of the First Assessment was decided against the ~~Company. We decided to~~Company and we determined that we would challenge this decision. In 2022, we challenged this adverse decision in the tax authority's lawsuit at the judicial level seeking to collect the ~~tax when the collection action is filed.~~tax. We recorded an additional expense in the third quarter of 2020 of $$1.2 ~~million~~ million representing additional attorneys' costs and fees, which we will be required to pay if we do not prevail at the judicial level. In ~~anticipation of~~connection with the judicial challenge, we were required to provide security to guarantee payment of the First Assessment should we not prevail.

We believe we have meritorious defenses and intend to vigorously contest both of the Brazil Tax Assessments; however, there can be no assurances that we will ultimately prevail. The ultimate outcome will not be determined until the Brazilian judicial process is complete, which is expected to take a number of years. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

Because there is no settled legal precedent on which to base a definitive opinion as to whether we will ultimately prevail, we consider the outcome of these disputes to be uncertain. Since it is not more likely than not that we will prevail, in 2012, we

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

recorded a reserve in the amount of ~~$44.5~~$44.5 million (at December 31, 2012 exchange rates) in consideration of this contingency, of which ~~$43.3~~$43.3 million was recorded as an adjustment to the purchase price and which included the 2007-2012 tax years plus penalties and interest through December 2012. ~~Included in this reserve is~~Because the Brazilian courts have determined that we will have to pay the standard penalty of 75 percent if we do not prevail on our challenges of the Brazil Tax Assessments instead of the 150 percent that could be imposed, we have included an assumption of penalties at 75 percent ~~which is the standard penalty. While there is a possibility that a penalty of 150 percent could be imposed~~ in ~~connection with the First Assessment, based on the facts in our case and existing precedent, we believe the likelihood of a 150 percent penalty is not more likely than not as of September 30, 2021.~~this reserve. We will continue to actively monitor administrative and judicial court decisions and evaluate their impact, if any, on our legal assessment of the ultimate outcome of our disputes. In addition, we will continue

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

to accrue interest related to this contingency until such time as the outcome is known or until evidence is presented that we are more likely than not to prevail. The time limit for issuing an assessment for 2011 and 2012 expired ~~in January 2018~~ and ~~January 2019, respectively. Since~~ we ~~did not receive an assessment for either of these periods, we~~have reversed the amounts previously accrued for them. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we accrued additional interest as a charge to current income tax expense of ~~$0.3~~$0.7 million and ~~$0.3~~$0.2 million, respectively. At current exchange rates, our accrual through ~~September~~June 30, ~~2021,~~2022, including tax, penalties and interest is ~~$27.3~~$30.0 million (reported in "Other non-current liabilities").

Total outstanding shares as of ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ were ~~95.7~~94.2 million and ~~94.5~~95.6 million, respectively. Under our stock repurchase program, ~~for~~during each of the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 and for the three months ended September 30, 2020, no shares were repurchased, and for the nine months ended September 30, 2020,~~2022, we repurchased and retired 2.7 million shares, and during each of the three and six months ended June 30, 2021, we repurchased and retired 0 shares. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we acquired ~~0.1~~0.3 million and ~~0.2~~0.1 million shares, respectively, related to tax withholding for share-based compensation.

The calculation of basic earnings per share of common stock is based on the weighted-average number of shares of common stock outstanding in the year, or period, over which they were outstanding. Our calculation of diluted earnings per share of common stock assumes that any shares of common stock outstanding were increased by shares that would be issued upon exercise of those stock awards for which the average market price for the period exceeds the exercise price less the shares that could have been purchased by the Company with the related proceeds, including compensation expense measured but not yet recognized.

The number of our weighted-average shares outstanding for the ~~three and nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 was as follows:


	Three months ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Weighted-average number of shares of common stock outstanding - basic		96.2		95.5		96.2		95.3
Stock options		0		0.2		0		0.1
Restricted stock units		1.2		1.5		1.8		1.5
Weighted-average shares and assumed conversions - diluted		97.4		97.2		98.0		96.9

Awards of potentially dilutive shares of common stock, which have exercise prices that were higher than the average market price during the period, are not included in the computation of dilutive earnings per share as their effect would have been anti-dilutive. For ~~each of~~ the three and ~~nine~~six months ended ~~September~~June 30, 2022, the number of anti-dilutive shares was approximately 10.2 million and 9.0 million, respectively. For the three and six months ended June 30, 2021, the number of anti-dilutive shares was approximately ~~8.0 million. For the three and nine months ended September 30, 2020, the number of anti-dilutive shares was approximately 8.0~~8.1 million and ~~7.5~~7.7 million, respectively.

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments.

When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Forward Currency Contracts

We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. ~~The majority of the Company’s~~Our primary exposure to ~~local~~ currency movements is in ~~Europe (the~~the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the ~~British pound), Brazil, Australia, Canada, and Mexico.~~

Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated Other Comprehensive Income ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the ~~"Consolidated~~Consolidated Statements of ~~Income."~~Operations. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$133.8~~$138.3 million and ~~$134.3~~$130.6 million, respectively, which were designated as hedges.

Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other expense (income), net" in the ~~"Consolidated~~Consolidated Statements of ~~Income"~~Operations and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, with some relating to intercompany loans which extend beyond ~~September 2022.~~March 2023. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$93.1~~$114.9 million and ~~$164.7~~$84.2 million, respectively, which were not designated as hedges.

The following table summarizes the fair value of our derivative financial instruments as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


	Fair Value of Derivative Instruments
	Derivative Assets							Derivative Liabilities
(in millions)	Balance Sheet Location		June 30, 2022			December 31, 2021		Balance Sheet Location		June 30, 2022			December 31, 2021
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other current assets	$		8.9	$		5.6	Other current liabilities	$		0	$		0.1
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets			0.9			0.7	Other current liabilities			0.6			0.6
Foreign exchange contracts	Other non-current assets			9.5			10.2	Other non-current liabilities			9.5			10.2
Total derivatives		$		19.3	$		16.5		$		10.1	$		10.9

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
		Amount of Gain (Loss) Recognized in AOCI (Effective Portion)						Location of (Gain) Loss Reclassified from AOCI to Income		Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
		Three Months Ended June 30,								Three Months Ended June 30,
(in millions)		2022			2021					2022				2021
Cash flow hedges:
Foreign exchange contracts	$		9.3	$		(1.0	)	Cost of products sold	$		(3.4	)	$		1.3


		The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
		Amount of Gain (Loss) Recognized in AOCI (Effective Portion)					Location of (Gain) Loss Reclassified from AOCI to Income		Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
		Six Months Ended June 30,							Six Months Ended June 30,
(in millions)		2022			2021				2022				2021
Cash flow hedges:
Foreign exchange contracts	$		9.1	$		3.4	Cost of products sold	$		(5.8	)	$		2.8


	The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
	Location of (Gain) Loss Recognized in Income on Derivatives		Amount of (Gain) Loss Recognized in Income								Amount of (Gain) Loss Recognized in Income
			Three months ended June 30,								Six Months Ended June 30,
(in millions)			2022				2021				2022				2021
Foreign exchange contracts	Other expense, net	$		(3.1	)	$		(1.2	)	$		(3.7	)	$		—

The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
Amount of Gain (Loss) Recognized in AOCI (Effective Portion) Location of (Gain) Loss Reclassified from AOCI to Income Amount of (Gain) Loss
Reclassified from AOCI to Income (Effective Portion)
Three Months Ended September 30, Three Months Ended September 30,
(in millions) 2021 2020 2021 2020
Cash flow hedges:
Foreign exchange contracts $ 3.9 $ (2.1) Cost of products sold $ (0.5) $ 1.3
The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
Amount of Gain (Loss) Recognized in AOCI (Effective Portion) Location of (Gain) Loss Reclassified from AOCI to Income Amount of (Gain) Loss
Reclassified from AOCI to Income (Effective Portion)
Nine Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Cash flow hedges:
Foreign exchange contracts $ 7.3 $ 0.3 Cost of products sold $ 2.3 $ (1.2)

The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
Location of (Gain) Loss Recognized in
Income on Derivatives Amount of (Gain) Loss
Recognized in Income Amount of (Gain) Loss
Recognized in Income
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Foreign exchange contracts Other expense, net $ 0.3 $ 2.8 $ 0.3 $ (2.4)

In establishing a fair value, there is a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The basis of the fair value measurement is categorized in three levels, in order of priority, as described below:

We utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

We have determined that our financial assets and liabilities described in "Note 13. Derivative Financial Instruments" are Level 2 in the fair value hierarchy. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


(in millions)		June 30, 2022			December 31, 2021
Assets:
Forward currency contracts	$		19.3	$		16.5
Liabilities:
Forward currency contracts	$		10.1	$		10.9

(in millions) September 30,
2021 December 31,
2020
Assets:
Forward currency contracts $ 21.8 $ 33.8
Liabilities:
Forward currency contracts $ 17.1 $ 38.3

Our forward currency contracts are included in "Other current assets," "Other current liabilities," "Other non-current assets," or "Other non-current liabilities." The forward foreign currency exchange contracts are primarily valued based on the foreign currency spot and forward rates quoted by banks or foreign currency dealers. As such, these derivative instruments are classified within Level 2.

The fair values of cash and cash equivalents, notes payable to banks, accounts receivable and accounts payable approximate carrying amounts due principally to their short maturities. The carrying amount of total debt was ~~$1,130.1~~$1,187.4 million and ~~$1,136.6~~$1,006.7 million and the estimated fair value of total debt was ~~$1,173.2~~$1,083.2 million and ~~$1,146.9~~$1,002.3 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The fair values are determined from quoted market prices, where available, and from ~~investment bankers~~ using current interest rates ~~considering~~based on credit ratings and the remaining ~~time to~~terms of maturity.

Contingent consideration: The PowerA ~~Acquisition~~acquisition included an ~~additional~~ earnout of up to ~~$55.0~~$55.0 million in cash, contingent upon PowerA achieving one- and two- year sales and profit growth objectives. Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred in the related business combination and subsequent changes in fair value recorded in operating income on the condensed consolidated statements of income.

We use a Monte Carlo simulation model for contingent earnout payments, which are then discounted to present value. We classify the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes. There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table provides a reconciliation of the beginning and ending balance of the contingent consideration for the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~

2022:


(in millions)		Contingent Consideration
Balance at December 31, ~~2020~~2021	$	~~18.2~~	36.8
Change in fair value	~~16.5~~		(6.8	)
Payments			(27.0	)
Balance at ~~September~~June 30, ~~2021~~2022	$	~~34.7~~	3.0

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

AOCI is defined as net income (loss) and other changes in stockholders’ equity from transactions and other events from sources other than stockholders. The components of, and changes in, AOCI were as follows:


(in millions)		Derivative Financial Instruments				Foreign Currency Adjustments				Unrecognized Pension and Other Post-retirement Benefit Costs				Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$		4.0		$		(342.2	)	$		(197.3	)	$		(535.5	)
Other comprehensive income (loss) before reclassifications, net of tax			6.5				(21.9	)			12.2				(3.2	)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax			(4.0	)			0				3.4				(0.6	)
Balance at June 30, 2022	$		6.5		$		(364.1	)	$		(181.7	)	$		(539.3	)

(in millions)
Derivative
Financial
Instruments

Foreign
Currency
Adjustments
Unrecognized
Pension and Other
Post-retirement
Benefit Costs
Accumulated
Other
Comprehensive
Income (Loss)
Balance at December 31, 2020 $ (3.1) $ (318.8) $ (242.3) $ (564.2)
Other comprehensive income (loss) before reclassifications, net of tax 5.0 (18.6) 3.6 (10.0)
Amounts reclassified from accumulated other comprehensive income, net of tax 1.7 — 7.1 8.8
Balance at September 30, 2021 $ 3.6 $ (337.4) $ (231.6) $ (565.4)

The reclassifications out of AOCI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(in millions) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Location on Income Statement
Details about Accumulated Other Comprehensive Income (Loss) Components
Gain (loss) on cash flow hedges:
Foreign exchange contracts $ 0.5 $ (1.3) $ (2.3) $ 1.2 Cost of products sold
Tax (expense) benefit (0.2) 0.5 0.6 (0.3) Income tax expense
Net of tax $ 0.3 $ (0.8) $ (1.7) $ 0.9
Defined benefit plan items:
Amortization of actuarial loss $ (2.5) $ (2.0) $ (7.7) $ (5.7) (1)
Amortization of prior service cost (0.1) (0.2) (1.7) (0.5) (1)
Total before tax (2.6) (2.2) (9.4) (6.2)
Tax benefit 0.7 0.6 2.3 1.3 Income tax expense
Net of tax $ (1.9) $ (1.6) $ (7.1) $ (4.9)
Total reclassifications for the period, net of tax $ (1.6) $ (2.4) $ (8.8) $ (4.0)


		Three months ended June 30,								Six Months Ended June 30,
(in millions)		2022				2021				2022				2021
Details about Accumulated Other Comprehensive Income (Loss) Components		Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Amount Reclassified from Accumulated Other Comprehensive Income (Loss)							Location on Income Statement
Gain (loss) on cash flow hedges:
Foreign exchange contracts	$		3.4		$		(1.3	)	$		5.8		$		(2.8	)	Cost of products sold
Tax (expense) benefit			(1.1	)			0.4				(1.8	)			0.8		Income tax expense (benefit)
Net of tax	$		2.3		$		(0.9	)	$		4.0		$		(2.0	)
Defined benefit plan items:
Amortization of actuarial loss	$		(2.1	)	$		(2.5	)	$		(4.3	)	$		(5.2	)	(1)
Amortization of prior service cost			(0.1	)			0				(0.1	)			(1.6	)	(1)
Total before tax			(2.2	)			(2.5	)			(4.4	)			(6.8	)
Tax benefit			0.5				0.6				1.0				1.6		Income tax expense (benefit)
Net of tax	$		(1.7	)	$		(1.9	)	$		(3.4	)	$		(5.2	)

Total reclassifications for the period, net of tax	$		0.6		$		(2.8	)	$		0.6		$		(7.2	)

(1) These AOCI components are included in the computation of net periodic benefit (income) cost for pension and post-retirement plans. See "Note 6. Pension and Other Retiree Benefits" for additional details.

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount reflective of the consideration we expect to receive in exchange for those goods or services. Taxes we collect concurrent with revenue producing activities are excluded from revenue. Incidental items incurred that are immaterial in the context of the contract are expensed.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

At the inception of each contract, the Company assesses the products and services promised and identifies each distinct performance obligation. To identify the performance obligations, the Company considers all products and services promised regardless of whether they are explicitly stated or implied within the contract or by standard business practices.

Freight and distribution activities performed before the customer obtains control of the goods are not considered promised services under customer contracts and therefore are not distinct performance obligations. The Company has chosen to account for shipping and handling activities as a fulfillment activity, and therefore accrues the expense of freight and distribution in "Cost of products sold" when products are shipped.

Service or Extended Maintenance Agreements ("EMAs"). As of December 31, ~~2020,~~2021, there was ~~$3.0~~$2.4 million of unearned revenue associated with outstanding EMAs, primarily reported in "Other current liabilities." During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, $0.4~~2022, $0.2 million and ~~$2.1~~$0.4 million of the unearned revenue was earned and recognized, respectively. As of ~~September~~June 30, ~~2021,~~2022, the amount of unearned revenue from EMAs was ~~$2.5~~$2.7 million. We expect to earn and recognize approximately ~~$2.1~~$2.3 million of the unearned amount in the next 12 months and ~~$0.4~~$0.4 million in periods beyond the next 12 months.

The following tables present our net sales disaggregated by regional geography(1), by reporting business segments and our net sales disaggregated by the timing of revenue recognition for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:


		Three months ended June 30,						Six Months Ended June 30,
(in millions)		2022			2021			2022			2021
United States	$		274.4	$		261.3	$		462.9	$		431.6
Canada			32.2			33.8			52.2			52.3
ACCO Brands North America			306.6			295.1			515.1			483.9

ACCO Brands EMEA(2)			137.9			157.0			294.0			313.9

Australia/N.Z.			26.2			29.4			56.2			61.5
Latin America			36.4			21.9			70.8			41.4
Asia-Pacific			13.9			14.4			26.5			27.6
ACCO Brands International			76.5			65.7			153.5			130.5
Net sales	$		521.0	$		517.8	$		962.6	$		928.3

(1) Net sales are attributed to geographic areas based on the location of the selling subsidiaries.

(2) ACCO Brands EMEA is comprised largely of Europe, but also includes export sales to the Middle East and Africa.

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Product and services transferred at a point in time $ 515.4 $ 431.1 $ 1,416.0 $ 1,148.5
Product and services transferred over time 11.3 13.0 39.0 46.6
Net sales $ 526.7 $ 444.1 $ 1,455.0 $ 1,195.1

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) ~~(Continued)~~

17. Information on Business Segments

The Company has 3 operating business segments, each of which is comprised of different geographic regions. The Company's 3 segments are as follows:

PowerA®, Five Star®, ~~Kensington~~®, AT-A-GLANCE®, Quartet®, Kensington®, Swingline®, GBC®, Mead®, Hilroy®

Leitz®, Rapid®, ~~Esselte~~Kensington®, ~~Kensington~~Esselte®, Rexel® ~~GBC~~, PowerA®, ~~PowerA~~GBC®, NOBO®, Derwent®

Tilibra®, GBC®, Kensington®, Marbig®, Foroni®, ~~GBC~~®, Barrilito®~~, Marbig~~®~~, Kensington~~®, Artline®*, PowerA®, Spirax®

~~, Quartet~~®~~, Wilson Jones~~®~~, Rexel~~®

*Australia/N.Z. only

We distribute our products through a wide variety of ~~retail and commercial~~ channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop. These channels include mass retailers, e-tailers, discount, drug/grocery and variety chains, warehouse clubs, hardware and specialty stores, independent office product dealers, office superstores, wholesalers, contract stationers, and specialist technology businesses. We also sell directly ~~to commercial and consumer end-users~~ through e-commerce sites and our direct sales organization.

Net sales by reportable business segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) ~~(Continued)~~

Operating income (loss) by business segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 was as follows:

(1)

Operating income (loss) is defined as i) net sales; ii) less cost of products sold; iii) less selling, general and administrative expenses; iv) less amortization of intangibles; v) less restructuring charges; and vi) less change in the fair value of contingent consideration.

Pending Litigation - Brazil Tax Assessments

In connection with our May 1, 2012, acquisition of the Mead C&OP business, we assumed all of the tax liabilities for the acquired foreign operations including Tilibra. For further information, see "Note 11. Income Taxes - Brazil Tax Assessments" for details on tax assessments issued by the FRD against Tilibra challenging the tax deduction of goodwill from Tilibra's taxable income for the years 2007 through 2010. If the FRD's initial position is ultimately sustained, payment of the amount assessed would materially and adversely affect our cash flow in the year of settlement.

In May 2021, the Supreme Court of Brazil issued its final ruling in a leading case related to the computation of certain indirect taxes which provides that the indirect tax base should not include the gross amount of the value-added tax known as “ICMS.” The Supreme Court further ruled that taxpayers can recognize future operating credits ("Tax Credits") for excess indirect tax payments from past periods due to the inclusion of ICMS in the indirect tax base to the extent the taxpayer had filed judicial challenges seeking to recover excess tax payments prior to March 15, 2017 and for any excess tax payments made after March 15, 2017.

Tilibra, one of our Brazilian subsidiaries, filed legal actions requesting recovery of these excess tax payments by way of future Tax Credits covering various time periods prior to March 15, 2017. Some of these cases have been finally decided in a court of law in favor of Tilibra, while others are still ~~pending a final decision which we expect to issue in the future based on the Supreme Court decision.~~

~~In the second quarter, the Company recorded Tax Credits in the amount~~pending. Finalization of ~~$9.1 million with respect to the finally decided cases as Other income, net. In addition, the recording of the Tax Credits resulted in additional income tax expense of $3.1 million.~~

~~Final decisions in~~ the remaining legal actions Tilibra has filed will result in additional Tax ~~Credits,~~Credits.

Foroni, in years prior to its acquisition, also filed a legal action in Brazil to recover these excess indirect tax payments and this legal action has been finalized. We are required under the ~~amount~~quota purchase agreement to remit any recovered tax credits, less the applicable tax, to the former owners of ~~these Tax Credits, in~~Foroni to the ~~aggregate, may be material.~~

extent they relate to a tax period prior to the acquisition date.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) ~~(Continued)~~

For the six months ended June 30, 2022, we recorded Tax Credits of $

We are party to various lawsuits and regulatory proceedings, primarily related to alleged patent infringement, as well as other claims incidental to our business. In addition, we may be unaware of third-party claims of intellectual property infringement relating to our technology, brands, or products, and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. We also may be subject to injunctions against development and sale of certain of our products.

It is the opinion of management that (other than the Brazil Tax Assessments) the ultimate resolution of currently outstanding matters will not have a material adverse effect on our financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition or cash flow. Further, future claims, lawsuits and legal proceedings could materially and adversely affect our business, reputation, results of operations and financial condition.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

ACCO Brands designs, ~~markets,~~manufactures, and ~~manufactures~~markets well-recognized consumer, school, technology and office products. Our widely known brands include AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®,Leitz®, Marbig®, Mead®, NOBO®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, ~~TruSens~~®and ~~Wilson Jones~~TruSens®. Approximately 75 70 percent of our sales come from brands that occupy the No. 1 or No. 2 position in the product categories in which we compete. Our top 12 brands represented ~~$1.3~~$1.5 billion of our ~~2020~~2021 net sales. We distribute our products through a wide variety of ~~retail and commercial~~ channels to ensure that our products are readily and conveniently available for purchase by consumers and other end-users, wherever they prefer to shop. These channels include mass ~~retailers, e-tailers,~~retailers; e-tailers; discount, drug/grocery and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; wholesalers; contract ~~stationers,~~stationers; technology specialty ~~businesses,~~businesses; and our direct-to-consumer channel. Our products are sold primarily in the U.S., Europe, ~~Brazil,~~ Australia, Canada, Brazil and Mexico. ~~For the year ended December 31, 2020, approximately 44 percent of~~

We have transformed our ~~net sales were~~business by investing in ~~the U.S.~~

~~ACCO Brands is in the midst of a substantial transformation of its business. Today we are a global enterprise focused on developing~~ innovative branded consumer and technology products for use in businesses, schools, and ~~homes. We have refocused~~homes, both organically and through acquisitions. This change should enable us to continue to organically grow sales and increase profitability by focusing our ~~business to sell more in the mass merchant, e-commerce and technology~~selling efforts on growing channels, ~~to increase growth and profitability and to reduce reliance on~~as well as strategically managing declining customers and commoditized product ~~categories. In particular,~~categories, which remain important profit and cash generators. Our top five customers represented 36 percent of our sales in the commercial channels have been declining for several years, and customers within the channel have been consolidating. The commercial channel and school customers also were impacted significantly by COVID-19.

~~We have been strategically transforming our~~Our business ~~to be more~~is consumer- and brand-centric, product differentiated, and geographically diverse. We ~~are successfully achieving this transformation through both organic initiatives and acquisitions. Organically, we~~ have organically grown our ~~Kensington®~~ PowerA® video gaming accessories, Kensington® computer accessories ~~offerings~~ and ~~entered the wellness category with TruSens® branded air purifiers, which we plan to expand over the next few years.~~Leitz® and Rexel® European range of shredders and organization product offerings. ACCO Brands remains a leading supplier of school products, including our top-selling Five ~~Star®~~Star® line of school notebooks in North America, laminating machines, and stapling and punching products, among others. We have refreshed most of our line of shredders in EMEA over the past three years, improving consumer designs. This refresh includes a new line of personal shredders to capitalize on the work-from-home environment. Shredder sales have remained strong, and we plan to leverage our platforms more globally. During 2020, our EMEA business also launched organization and storage products for home offices under the Leitz® WOW and Leitz® Cosy brands.

Our approach to acquisitions has been focused on consolidation, geographic expansion, and adjacency opportunities that meet our strategic and financial criteria. Strategically, we are focusing on categories or geographies that provide opportunities for growth, leading brands, and channel diversity. We have made five major acquisitions over the past ~~five~~six years. These acquisitions have meaningfully expanded our portfolio of well-known brands, enhanced our competitive position from both a product and channel perspective, and added scale to our operations. ~~As a result,~~We believe that these acquisitions have cumulatively set us up to achieve organic growth in the long-term. Historically, our ~~foreign businesses contributed over half of~~approach to acquisitions has focused on consolidation and geographic expansion opportunities that met our ~~sales in 2020, up from 43 percent in 2016.~~

strategic and financial criteria. Strategically, we have targeted categories or geographies that provided opportunities for growth, leading brands, and channel diversity. More recently we have prioritized debt reduction, but will still consider opportunistic acquisitions that focus on growing product categories, including adjacencies.

Our most recent acquisition of PowerA ~~(the "PowerA Acquisition")~~ in late 2020 ~~was about accelerating growth and entering into an~~allowed us to enter the attractive ~~consumer~~ product ~~adjacency~~category of third-party video ~~game~~gaming accessories, including controllers, power charging stations, and headsets. The addition of PowerA has ~~already~~ meaningfully improved ~~our~~ACCO Brands' potential for organic sales growth and profitability and ~~increased~~reinforced our presence in the faster growing mass and e-commerce channels. ~~PowerA has and is expected~~The Company plans to ~~continue to experience strong double-digit sales growth in the U.S., as well as opportunities for expansion~~expand this business internationally, particularly in ~~Europe. It greatly advances~~Europe and Asia, adding to organic growth over the longer term. PowerA® and Kensington® are our ~~strategic shift toward consumer, school~~largest and ~~technology products as more than half~~fastest growing brands but they continue to be constrained by the lack of ~~our sales will now come from these faster growing product categories. On a pro forma basis for 2020, including full year PowerA sales~~worldwide semiconductor chip availability, which we expect to gradually improve throughout the remainder of ~~$210 million, gaming and computer products would represent approximately 22 percent of our sales.~~

Our leading product category positions provide the scale to invest in marketing and product innovation to drive profitable growth. We ~~now~~ expect to grow in mature markets in ~~consumer,~~the gaming, technology, and ~~adjacent categories driven by new product development.~~branded school and office categories. We ~~will~~ also ~~continue to grow~~anticipate continuing recovery in ~~emerging markets once~~areas depressed from COVID-19 as the ~~impact~~level of ~~COVID-19 subsides~~office use and in person education increases globally, particularly in Latin America and parts of Asia, the Middle East, and Eastern Europe. In all of our markets, we see opportunities for sales growth through share gains, channel and geographic expansion, and product enhancements.

We generate strong operating cash flow and will continue to leverage our cost structure through acquisitions, synergies and productivity savings to drive long-term profit and operating cash flow improvement.

~~Our third~~During the second quarter our net sales increased ~~18.6~~$3.2 million, or 0.6 percent, ~~to $526.7 million, primarily~~including 4.6 percent from ~~the acquisition of PowerA, which~~adverse foreign exchange. Comparable net sales increased 5.2 percent. Price increases added ~~$56.8 million. Excluding PowerA,~~8.1 percent while volume declined 2.9 percent. Our International segment reported 16.4 percent sales ~~increased~~ ~~5.8 percent~~growth as ~~a result of higher~~ demand ~~as offices and schools~~for school products continued to ~~reopen,~~increase in Brazil and ~~we had some benefit from price increases.~~ ~~EMEA continues~~Mexico following a return to ~~exhibit growth above pre-pandemic sales levels. Both~~in-person education. Our North America ~~and International were above 2020 levels~~segment’s sales increased 3.9 percent due to higher ~~demand related to increased in-person education~~prices and ~~use of offices, despite some of our customers having excess inventory on hand.~~ ~~The prior-year period for North America included a large~~volume increases in school products, computer ~~accessory sale that did not repeat in~~accessories, and business products.

In the ~~current year. Favorable foreign exchange was $6.6 million, or 1.5 percent. Demand growth varied by channel as depicted in~~second quarter, the ~~table below, which includes the benefit of PowerA (mainly in the Mass/Retail and Etail channels):~~


~~Channel~~	~~Change vs. Q3 2020~~
~~Commercial/B2B~~	20	%
~~Mass/Retail~~	34	%
~~E-tail/D2C~~	28	%
~~Tech specialist~~	~~(32)~~	%
~~Total sales (including PowerA)~~*	19	%
*Numbers may not add due to rounding

~~The~~ Company ~~recorded~~reported operating income of ~~$38.6~~$55.4 million, a $5.5 million increase, compared with operating income of $49.9 million for the prior year's second quarter. Operating income increased due to a favorable change to the contingent earnout, partially offset by higher restructuring expense of $1.9 million. ~~PowerA's underlying performance was impacted by a charge~~Operating income included contingent earnout income of $9.4 million compared with earnout expense of $4.9 million ~~related~~in the prior year. Operating income was negatively affected by higher inflation that was not fully mitigated with price increases, lower volume, and adverse foreign exchange of $1.0 million. Gross margin declined 290 basis points reflecting the margin erosion from higher costs despite multiple price increases. This is particularly acute in EMEA.

We have been experiencing substantial levels of inflation in the cost of our products, including freight. We have responded, and will continue to respond, by increasing selling prices more frequently than we have historically, but these increases continue to lag the ~~change in fair value~~cumulative impact of inflation. We expect moderating inflationary pressures and supply chain disruptions to continue for the remainder of the ~~contingent consideration~~year. We have seen most foreign currencies weaken against the U.S. dollar which has also adversely affected our financial results and we also expect that was part of the purchase price ("PowerA Earnout"), and $4.1 million of additional amortization resulting from the acquisition. Gross margin rose 120 basis points as improvements in North America and International offset a decline in EMEA. SG&A expenditures increased due to the PowerA acquisition and because the prior-year quarter contained many short-term cost reductions related to COVID-19 impacts, including lower management incentive expenses and $3.1 million in higher government assistance. Foreign exchange benefitedcontinue.

Our operating ~~income $0.8 million, or 2.3 percent, and added $0.7 million to net income.~~

~~Operating~~ cash flow for the ~~nine~~first six months ~~ended September 30, 2021,~~ was ~~$44.0~~a use of cash of $97.9 million, compared ~~with~~to a use of cash of $55.1 million in the prior year. Our operating cash flow is seasonal with a historic pattern of ~~$21.8 million for~~outflow in the ~~nine months ended September 30, 2020. The $22.2 million year-over-year improvement was after $4.5 million for funding PowerA's adverse operating cash flow.~~

Higher logistics expense, commodity cost increases, international shipping delays and overall supply chain disruptions continue to adversely affect 2021 results. Our logistics and commodity costs and those usedfirst half followed by ~~our suppliers remain high. In~~strong inflows in both quarters of the ~~third quarter, we raised prices to partly offset these higher costs and also benefited from smaller price increases we had taken earlier in 2021. Throughout 2022, we~~second half. We anticipate that ~~we will experience continuing higher logistics and commodity costs, as well as additional cost increases from~~seasonal flow pattern to be repeated again this year.

In management’s opinion, the goodwill balance for our suppliers, necessitating additional increases in our selling prices. Overall, pricing still lags the cost increases we are experiencing, particularly in EMEA where price increases were not effective until October 1.

In 2020, to address the financial impact of the pandemic on our results of operations, we took a series of cost reductions, both temporary and then more long term, that will continue to impact our results and prior-period comparisons throughout 2021. In addition, during the first quarter of 2021, we recorded $3.9 million in restructuring charges to further reduce long-term expenses. The temporary cost reductions were gradually rescinded in late 2020 and early 2021, so the current period reflected, and the fourth quarter will continue to reflect, these operating expenses at more normalized levels.

While our business is benefiting from the gradual reopening of offices and the return of mostly in-person education in many of our regions this fall, the impact of the COVID-19 pandemic is not yet fully behind us. We expect the impact of the


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ACCO	NYSE


PART I — FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets	4
Consolidated Statements of ~~Operations~~Income	5
Consolidated Statements of Comprehensive ~~Loss~~Income	6
Condensed Consolidated Statements of Cash Flows	7
Consolidated Statement of Stockholders’ Equity	8
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3328
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4439
Item 4. Controls and Procedures	4439
PART II — OTHER INFORMATION	4640
Item 1. Legal Proceedings	4640
Item 1A. Risk Factors	4640
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4640
Item 3. Defaults Upon Senior Securities	4741
Item 4. Mine Safety Disclosures	4741
Item 5. Other Information	4741
Item 6. Exhibits	4741
SIGNATURES	4842


	Common Stock	Treasury Stock	Net Shares
Shares at December 31, 2019	100,412,933	3,967,445	96,445,488
Common stock issued, net of shares withheld for employee taxes	898,664	206,243	692,421
Common stock repurchases	(2,690,292)	—	(2,690,292)
Shares at March 31, 2020	98,621,305	4,173,688	94,447,617
Common stock issued, net of shares withheld for employee taxes	26,957	12,427	14,530

Shares at June 30, 2020	98,648,262	4,186,115	94,462,147
Common stock issued, net of shares withheld for employee taxes	35,465	775	34,690

Shares at September 30, 2020	98,683,727	4,186,890	94,496,837


ACCO Brands Corporation
(Exact Name of Registrant as Specified in Its Charter)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


	September 30, 2021		December 31, 2020
(in millions)	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	58.1	$	36.6
Accounts receivable, net	362.6		356.0
Inventories	413.9		305.1
Other current assets	52.0		30.5
Total current assets	886.6		728.2
Total property, plant and equipment	656.3		657.8
Less: accumulated depreciation	(436.8)		(416.4)
Property, plant and equipment, net	219.5		241.4
Right of use asset, leases	84.0		89.2
Deferred income taxes	126.6		136.5
Goodwill	804.2		827.4
Identifiable intangibles, net	919.4		977.0
Other non-current assets	31.7		49.0
Total assets	$	3,072.0	$	3,048.7
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$	8.1	$	5.7
Current portion of long-term debt	28.1		70.8
Accounts payable	233.5		180.2
Accrued compensation	53.5		41.0
Accrued customer program liabilities	91.6		91.4
Lease liabilities	21.8		22.6
Current portion of contingent consideration	22.8		10.4
Other current liabilities	126.7		134.8
Total current liabilities	586.1		556.9
Long-term debt, net	1,083.9		1,054.6
Long-term lease liabilities	70.4		76.5
Deferred income taxes	156.6		170.6
Pension and post-retirement benefit obligations	275.9		317.1
Contingent consideration	11.9		7.8
Other non-current liabilities	102.2		122.5
Total liabilities	2,287.0		2,306.0
Stockholders' equity:
Common stock	1.0		1.0
Treasury stock	(40.8)		(39.9)
Paid-in capital	1,898.4		1,883.1
Accumulated other comprehensive loss	(565.4)		(564.2)
Accumulated deficit	(508.2)		(537.3)
Total stockholders' equity	785.0		742.7
Total liabilities and stockholders' equity	$	3,072.0	$	3,048.7


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	2021		2020		2021		2020
Net sales	$	526.7	$	444.1	$	1,455.0	$	1,195.1
Cost of products sold	369.5		317.0		1,018.2		845.8
Gross profit	157.2		127.1		436.8		349.3
Operating costs and expenses:
Selling, general and administrative expenses	101.8		84.4		293.5		247.7
Amortization of intangibles	11.6		7.9		35.2		24.1
Restructuring charges	0.3		0.5		4.2		7.3
Change in fair value of contingent consideration	4.9		—		16.5		—
Total operating costs and expenses	118.6		92.8		349.4		279.1
Operating income	38.6		34.3		87.4		70.2
Non-operating expense (income):
Interest expense	11.2		10.2		36.0		28.7
Interest income	(0.6)		(0.2)		(1.2)		(0.8)

Non-operating pension income	(2.3)		(1.4)		(5.6)		(4.4)
Other expense, net	0.1		0.1		4.0		0.8
Income before income tax	30.2		25.6		54.2		45.9
Income tax expense	10.0		6.8		5.8		13.7


Net income	$	20.2	$	18.8	$	48.4	$	32.2

Per share:



Basic income per share	$	0.21	$	0.20	$	0.51	$	0.34



Diluted income per share	$	0.21	$	0.20	$	0.50	$	0.34

Weighted average number of shares outstanding:
Basic	95.6		94.5		95.4		95.0
Diluted	97.3		95.6		97.0		96.2


(in millions)	Common Stock		Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Accumulated Deficit		Total
Balance at December 31, 2020	$	1.0	$	1,883.1	$	(564.2)	$	(39.9)	$	(537.3)	$	742.7
Net loss	—		—		—		—		(20.4)		(20.4)
Gain on derivative financial instruments, net of tax	—		—		4.1		—		—		4.1
Translation impact, net of tax	—		—		(20.7)		—		—		(20.7)
Pension and post-retirement adjustment, net of tax	—		—		3.6		—		—		3.6

Stock-based compensation	—		5.0		—		—		(0.2)		4.8
Common stock issued, net of shares withheld for employee taxes	—		1.9		—		(0.9)		—		1.0
Dividends declared, $.065 per share	—		—		—		—		(6.2)		(6.2)
Other	—		(0.1)		—		—		—		(0.1)
Balance at March 31, 2021	1.0		1,889.9		(577.2)		(40.8)		(564.1)		708.8
Net income	—		—		—		—		48.6		48.6
Gain on derivative financial instruments, net of tax	—		—		0.2		—		—		0.2
Translation impact, net of tax	—		—		24.4		—		—		24.4
Pension and post-retirement adjustment, net of tax	—		—		0.5		—		—		0.5

Stock-based compensation	—		4.4		—		—		(0.2)		4.2
Common stock issued, net of shares withheld for employee taxes	—		0.1		—		—		—		0.1
Dividends declared, $.065 per share	—		—		—		—		(6.2)		(6.2)
Other	—		0.2		—		—		(0.1)		0.1

Balance at June 30, 2021	1.0		1,894.6		(552.1)		(40.8)		(522.0)		780.7
Net income	—		—		—		—		20.2		20.2
Gain on derivative financial instruments, net of tax	—		—		2.4		—		—		2.4
Translation impact	—		—		(22.3)		—		—		(22.3)
Pension and post-retirement adjustment, net of tax	—		—		6.6		—		—		6.6

Stock-based compensation	—		3.4		—		—		(0.2)		3.2
Common stock issued, net of shares withheld for employee taxes	—		0.4		—		—		—		0.4
Dividends declared, $.0.065 per share	—		—		—		—		(6.2)		(6.2)


Balance at September 30, 2021	$	1.0	$	1,898.4	$	(565.4)	$	(40.8)	$	(508.2)	785.0


	September 30, 2021
	Unrecognized	Weighted Average
	Compensation	Years Expense To Be
(in millions, except weighted average years)	Expense	Recognized Over
Stock options	$3.9	1.9
RSUs	$4.3	1.7
PSUs	$10.7	1.8


(in millions)	ACCO Brands North America		ACCO Brands EMEA		ACCO Brands International		Total

Balance at December 31, 2020	$	461.2	$	188.2	$	178.0	$	827.4

Acquisitions(1)	(14.5)		2.0		—		(12.5)
Foreign currency translation	—		(10.2)		(0.5)		(10.7)
Balance at September 30, 2021	$	446.7	$	180.0	$	177.5	$	804.2


		June 30, 2022										December 31, 2021
(in millions)		Gross Carrying Amounts			Accumulated Amortization				Net Book Value			Gross Carrying Amounts			Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names(1)	$		408.2	$		(44.5	)	$		363.7	$		417.6	$		(44.5	)	$		373.1
Amortizable intangible assets:
Trade names			370.5			(116.3	)			254.2			373.2			(110.5	)			262.7
Customer and contractual relationships			355.5			(187.5	)			168.0			366.5			(182.4	)			184.1
Vendor relationships			82.4			(8.5	)			73.9			82.4			(5.7	)			76.7
Patents			8.0			(3.2	)			4.8			8.6			(3.0	)			5.6
Subtotal			816.4			(315.5	)			500.9			830.7			(301.6	)			529.1
Total identifiable intangibles	$		1,224.6	$		(360.0	)	$		864.6	$		1,248.3	$		(346.1	)	$		902.2


(in millions)	Balance at December 31, 2019		Provision		Cash Expenditures		Non-cash Items/ Currency Change		Balance at September 30, 2020
Employee termination costs	$	10.7	$	6.7	$	(8.4)	$	(0.1)	$	8.9
Termination of lease agreements	0.6		0.1		(0.5)		—		0.2
Other	0.5		0.5		(0.5)		(0.4)		0.1

Total restructuring liability	$	11.8	$	7.3	$	(9.4)	$	(0.5)	$	9.2


	The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
	Location of (Gain) Loss Recognized in Income on Derivatives	Amount of (Gain) Loss Recognized in Income				Amount of (Gain) Loss Recognized in Income
		Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)		2021		2020		2021		2020
Foreign exchange contracts	Other expense, net	$	0.3	$	2.8	$	0.3	$	(2.4)


Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability


(in millions)	Derivative Financial Instruments		Foreign Currency Adjustments		Unrecognized Pension and Other Post-retirement Benefit Costs		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2020	$	(3.1)	$	(318.8)	$	(242.3)	$	(564.2)
Other comprehensive income (loss) before reclassifications, net of tax	5.0		(18.6)		3.6		(10.0)
Amounts reclassified from accumulated other comprehensive income, net of tax	1.7		—		7.1		8.8
Balance at September 30, 2021	$	3.6	$	(337.4)	$	(231.6)	$	(565.4)


		Three Months Ended June 30,								Amount of Change								Six Months Ended June 30,								Amount of Change
(in millions, except per share data)		2022				2021				$			%/pts					2022				2021				$			%/pts
Net sales	$		521.0		$		517.8		$		3.2			0.6	%		$		962.6		$		928.3		$		34.3			3.7	%
Cost of products sold			371.0				353.7				17.3			4.9	%				693.0				648.7				44.3			6.8	%
Gross profit			150.0				164.1				(14.1	)		(8.6	)%				269.6				279.6				(10.0	)		(3.6	)%
Gross profit margin			28.8	%			31.7	%						(2.9	)	pts			28.0	%			30.1	%						(2.1	)	pts
Selling, general and administrative expenses			91.6				97.7				(6.1	)		(6.2	)%				190.4				191.7				(1.3	)		(0.7	)%
SG&A% to net sales			17.6	%			18.9	%						(1.3	)	pts			19.8	%			20.7	%						(0.9	)	pts
Amortization of intangibles			10.5				11.6				(1.1	)		(9.5	)%				21.6				23.6				(2.0	)		(8.5	)%
Restructuring charges			1.9				—				1.9		NM						2.2				3.9				(1.7	)		(43.6	)%
Change in fair value of contingent consideration			(9.4	)			4.9				(14.3	)	NM						(6.8	)			11.6				(18.4	)	NM
Operating income			55.4				49.9				5.5			11.0	%				62.2				48.8				13.4			27.5	%
Operating income margin			10.6	%			9.6	%						1.0		pts			6.5	%			5.3	%						1.2		pts
Interest expense			10.8				11.6				(0.8	)		(6.9	)%				20.5				24.8				(4.3	)		(17.3	)%
Interest income			(2.2	)			(0.5	)			(1.7	)	NM						(3.6	)			(0.6	)			(3.0	)	NM
Non-operating pension income			(1.3	)			(2.5	)			1.2			(48.0	)%				(2.7	)			(3.3	)			0.6			(18.2	)%
Other (income) expense, net			(3.7	)			(9.0	)			5.3			(58.9	)%				(2.8	)			3.9				(6.7	)	NM
Income before income tax			51.8				50.3				1.5			3.0	%				50.8				24.0				26.8			111.7	%
Income tax expense (benefit)			12.4				1.7				10.7		NM						14.1				(4.2	)			18.3		NM
Effective tax rate			23.9	%			3.4	%						20.5		pts			27.8	%			(17.5	)%						45.3		pts
Net income			39.4				48.6				(9.2	)		(18.9	)%				36.7				28.2				8.5			30.1	%
Weighted average number of diluted shares outstanding:			97.4				97.2				0.2			0.2	%				98.0				96.9				1.1			1.1	%
Diluted income per share	$		0.40		$		0.50		$		(0.10	)		(20.0	)%		$		0.37		$		0.29		$		0.08			27.6	%
Comparable net sales (Non-GAAP)⁽¹⁾	$		544.6		$		517.8		$		26.8			5.2	%		$		1,001.1		$		928.3		$		72.8			7.8	%


FX Impact vs US$	2022 2nd QTR Avg vs. 2021 2nd QTR Avg	2022 YTD Avg vs. 2021 YTD Avg
Currency	Increase/(Decline)	Increase/(Decline)
Canadian dollar	(4)%	(2)%


FX Impact vs US$	2021 3rd QTR Avg vs. 2020 3rd QTR Avg	2021 YTD Avg vs. 2020 YTD Avg
Currency	Increase/(Decline)	Increase/(Decline)
Euro	1%	6%
Swedish krona	3%	11%
British pound	7%	9%


	Nine Months Ended				Amount of Change
(in millions)	September 30, 2021		September 30, 2020
Accounts receivable	$	(18.3)	$	78.7	$	(97.0)
Inventories	(116.2)		(28.4)		(87.8)
Accounts payable	55.1		(67.1)		122.2
Cash flow (used) provided by net working capital	$	(79.4)	$	(16.8)	$	(62.6)


		Six Months Ended
(in millions)		June 30, 2022				June 30, 2021				Amount of Change
Accounts receivable	$		(12.4	)	$		(54.5	)	$		42.1
Inventories			(51.4	)			(77.9	)			26.5
Accounts payable			(47.2	)			42.3				(89.5	)
Cash flow used by net working capital	$		(111.0	)	$		(90.1	)	$		(20.9	)


	Comparable Net Sales - Three Months Ended September 30, 2021
		Non-GAAP
	GAAP		Currency		Comparable
(in millions)	Net Sales		Translation	Acquisition	Net Sales
ACCO Brands North America	$287.5		$2.0	$45.1	$240.4
ACCO Brands EMEA	161.1		2.3	8.3	150.5
ACCO Brands International	78.1		2.3	3.4	72.4
Total	$526.7		$6.6	$56.8	$463.3




	Amount of Change - Three Months Ended September 30, 2021 compared to the Three Months Ended September 30, 2020
	$ Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
(in millions)	Change		Translation	Acquisition	Change
ACCO Brands North America	$49.0		$2.0	$45.1	$1.9
ACCO Brands EMEA	24.7		2.3	8.3	14.1
ACCO Brands International	8.9		2.3	3.4	3.2
Total	$82.6		$6.6	$56.8	$19.2




	% Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change
ACCO Brands North America	20.5%		0.8%	18.9%	0.8%
ACCO Brands EMEA	18.1%		1.7%	6.1%	10.3%
ACCO Brands International	12.9%		3.3%	4.9%	4.7%
Total	18.6%		1.5%	12.8%	4.3%


	Amount of Change - Three Months Ended June 30, 2022 compared to the Three Months Ended June 30, 2021
	$ Change - Net Sales
				Non-GAAP
		GAAP				Comparable
		Net Sales		Currency		Net Sales
(in millions)		Change		Translation		Change
ACCO Brands North America	$	11.5	$	(1.4)	$	12.9
ACCO Brands EMEA		(19.1)		(19.8)		0.7
ACCO Brands International		10.8		(2.4)		13.2
Total	$	3.2	$	(23.6)	$	26.8


	Comparable Net Sales - Six Months Ended June 30, 2022
				Non-GAAP
		GAAP		Currency		Comparable
(in millions)		Net Sales		Translation		Net Sales
ACCO Brands North America	$	515.1	$	(1.4)	$	516.5
ACCO Brands EMEA		294.0		(32.2)		326.2
ACCO Brands International		153.5		(4.9)		158.4
Total	$	962.6	$	(38.5)	$	1,001.1


	Comparable Net Sales - Nine Months Ended September 30, 2021
		Non-GAAP
	GAAP		Currency		Comparable
(in millions)	Net Sales		Translation	Acquisition	Net Sales
ACCO Brands North America	$771.4		$6.9	$137.1	$627.4
ACCO Brands EMEA	475.0		28.1	24.1	422.8
ACCO Brands International	208.6		11.0	9.0	188.6
Total	$1,455.0		$46.0	$170.2	$1,238.8




	Amount of Change - Nine Months Ended September 30, 2021 compared to the Nine Months Ended September 30, 2020
	$ Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
(in millions)	Change		Translation	Acquisition	Change
ACCO Brands North America	$133.4		$6.9	$137.1	$(10.6)
ACCO Brands EMEA	122.8		28.1	24.1	70.6
ACCO Brands International	3.7		11.0	9.0	(16.3)
Total	$259.9		$46.0	$170.2	$43.7




	% Change - Net Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change
ACCO Brands North America	20.9%		1.1%	21.5%	(1.7)%
ACCO Brands EMEA	34.9%		8.0%	6.8%	20.1%
ACCO Brands International	1.8%		5.4%	4.4%	(8.0)%
Total	21.7%		3.8%	14.2%	3.7%


	Amount of Change - Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021
	$ Change - Net Sales
				Non-GAAP
		GAAP				Comparable
		Net Sales		Currency		Net Sales
(in millions)		Change		Translation		Change
ACCO Brands North America	$	31.2	$	(1.4)	$	32.6
ACCO Brands EMEA		(19.9)		(32.2)		12.3
ACCO Brands International		23.0		(4.9)		27.9
Total	$	34.3	$	(38.5)	$	72.8


Exhibit Number		Description of Exhibit

10.1		Form of Nonqualified Stock Option Award Agreement under the 2022 ACCO Brands Corporation Incentive Plan*
	~~Filed herewith.~~
10.2		Form of Performance Stock Unit Award Agreement under the 2022 ACCO Brands Corporation Incentive Plan *

10.3		Form of Restricted Stock Unit Award Agreement under the 2022 ACCO Brands Corporation Incentive Plan *

10.4		Form of Directors Restricted Stock Unit Award Agreement under the 2022 ACCO Brands Corporation Incentive Plan *

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


~~REGISTRANT:~~

REGISTRANT:

ACCO BRANDS CORPORATION

By:	/s/ Boris Elisman
Boris Elisman
Chairman and Chief Executive Officer (principal executive officer)

By:	/s/ ~~Neal V. Fenwick~~Deborah A. O'Connor
~~Neal V. Fenwick~~Deborah A. O'Connor
Executive Vice President and Chief Financial Officer (principal financial officer)

By:	/s/ James M. Dudek, Jr.
James M. Dudek, Jr.
Senior Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer)