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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Quarterly Period Ended March 31, 20202021
Commission File Number 1-9608

NEWELL BRANDS INC.
(Exact name of registrant as specified in its charter)
Delaware36-3514169
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
6655 Peachtree Dunwoody Road,
Atlanta, Georgia 30328
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (770) 418-7000
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASSTRADING SYMBOLNAME OF EXCHANGE ON WHICH REGISTERED
Common stock, $1 par value per shareNWLNasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:    None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” ���accelerated“accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of common stock outstanding (net of treasury shares) as of April 27, 2020: 424.126, 2021: 425.3 million.


Table of Contents

TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
32
Item 1. Financial Statements
32
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
3326
Item 3. Quantitative and Qualitative Disclosures about Market Risk
4837
Item 4. Controls and Procedures
4838
PART II. OTHER INFORMATION
5139
Item 1. Legal Proceedings
5139
Item 1A. Risk Factors
5139
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
4839
Item 6. Exhibits
5340
SIGNATURES
5441

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in millions, except per share data)
Three Months Ended
March 31,
20202019
Net sales$1,886  $2,042  
Cost of products sold1,269  1,387  
Gross profit617  655  
Selling, general and administrative expenses548  569  
Restructuring costs, net2  11  
Impairment of goodwill, intangibles and other assets1,475  63  
Operating income (loss)(1,408) 12  
Non-operating expenses:
Interest expense, net63  80  
Other expense, net12  26  
Loss before income taxes(1,483) (94) 
Income tax benefit(204) (20) 
Loss from continuing operations(1,279) (74) 
Loss from discontinued operations, net of tax—  (77) 
Net loss$(1,279) $(151) 
Weighted average common shares outstanding:
Basic423.8  423.0  
Diluted423.8  423.0  
Loss per share:
Basic:
Loss from continuing operations$(3.02) $(0.18) 
Loss from discontinued operations—  (0.18) 
Net loss$(3.02) $(0.36) 
Diluted:
Loss from continuing operations$(3.02) $(0.18) 
Loss from discontinued operations—  (0.18) 
Net loss$(3.02) $(0.36) 
Three Months Ended
 March 31,
20212020
Net sales$2,288 $1,886 
Cost of products sold1,557 1,269 
Gross profit731 617 
Selling, general and administrative expenses534 548 
Restructuring costs, net5 2 
Impairment of goodwill, intangibles and other assets0 1,475 
Operating income (loss)192 (1,408)
Non-operating expenses:
Interest expense, net67 63 
Other (income) expense, net(1)12 
Income (loss) before income taxes126 (1,483)
Income tax provision (benefit)37 (204)
Net income (loss)$89 $(1,279)
Weighted average common shares outstanding:
Basic424.9 423.8 
Diluted427.6 423.8 
Earnings (loss) per share:
Basic$0.21 $(3.02)
Diluted$0.21 $(3.02)
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(Amounts in millions)
Three Months Ended
March 31,
20212020
Comprehensive income (loss):
Net income (loss)$89 $(1,279)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments(44)(156)
Pension and postretirement costs5 (5)
Derivative financial instruments5 26 
Total other comprehensive loss, net of tax(34)(135)
Comprehensive income (loss)55 (1,414)
Total comprehensive loss attributable to noncontrolling interests(1)(5)
Total comprehensive income (loss) attributable to parent$56 $(1,409)
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)BALANCE SHEETS (Unaudited)
(Amounts in millions)millions, except par values)
Three Months Ended
March 31,
20202019
Comprehensive loss:
Net loss$(1,279) $(151) 
Other comprehensive loss, net of tax
Foreign currency translation adjustments(156) (2) 
Unrecognized pension and postretirement costs(5) (13) 
Derivative financial instruments26  (9) 
Total other comprehensive loss, net of tax(135) (24) 
Comprehensive loss$(1,414) $(175) 
March 31,
2021		December 31,
2020
Assets:
Cash and cash equivalents$682 $981 
Accounts receivable, net1,530 1,678
Inventories1,901 1,638
Prepaid expenses and other current assets272 331
Total current assets4,3854,628
Property, plant and equipment, net1,151 1,176
Operating lease assets513 530
Goodwill3,525 3,553
Other intangible assets, net3,506 3,564
Deferred income taxes843 838
Other assets417 411
Total assets$14,340 $14,700 
Liabilities:
Accounts payable$1,501 $1,526 
Accrued compensation165 236
Other accrued liabilities1,340 1,393
Short-term debt and current portion of long-term debt357 466
Total current liabilities3,3633,621
Long-term debt5,135 5,141
Deferred income taxes438 414
Operating lease liabilities458 472
Other noncurrent liabilities1,085 1,152
Total liabilities10,47910,800
Commitments and contingencies (Footnote 16)00
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, 0 shares issued at March 31, 2021 and December 31, 2020)0 0 
Common stock (800.0 authorized shares, $1.00 par value, 449.8 shares and 448.4 shares issued at March 31, 2021 and December 31, 2020, respectively)450 448 
Treasury stock, at cost (24.4 shares and 24.0 shares at March 31, 2021 and December 31, 2020, respectively)(608)(598)
Additional paid-in capital7,993 8,078 
Retained deficit(3,085)(3,174)
Accumulated other comprehensive loss(914)(880)
Stockholders’ equity attributable to parent3,836 3,874 
Stockholders’ equity attributable to noncontrolling interests25 26 
Total stockholders’ equity3,861 3,900 
Total liabilities and stockholders’ equity$14,340 $14,700 
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF CASH FLOWS (Unaudited)
(Amounts in millions, except par values)millions)
March 31,
2020		December 31,
2019
Assets:
Cash and cash equivalents$476  $349  
Accounts receivable, net1,398  1,842  
Inventories1,700  1,606  
Prepaid expenses and other343  313  
Total current assets3,917  4,110  
Property, plant and equipment, net1,123  1,155  
Operating lease assets, net561  615  
Goodwill3,483  3,709  
Other intangible assets, net3,567  4,916  
Deferred income taxes873  776  
Other assets379  361  
Total assets$13,903  $15,642  
Liabilities:
Accounts payable$1,036  $1,102  
Accrued compensation124  204  
Other accrued liabilities1,152  1,340  
Short-term debt and current portion of long-term debt639  332  
Total current liabilities2,951  2,978  
Long-term debt5,375  5,391  
Deferred income taxes498  625  
Long-term operating lease liabilities503  541  
Other noncurrent liabilities1,097  1,111  
Total liabilities10,424  10,646  
Commitments and contingencies (Footnote 18)
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, 0 shares issued at March 31, 2020 and December 31, 2019)—  —  
Common stock (800.0 authorized shares, $1.00 par value, 448.0 shares and 447.1 shares issued at March 31, 2020 and December 31, 2019)448  447  
Treasury stock, at cost (23.9 shares and 23.6 shares issued at March 31, 2020 and December 31, 2019)(596) (590) 
Additional paid-in capital8,340  8,430  
Retained deficit(3,683) (2,404) 
Accumulated other comprehensive loss(1,055) (920) 
Stockholders’ equity attributable to parent3,454  4,963  
Stockholders’ equity attributable to noncontrolling interests25  33  
Total stockholders’ equity3,479  4,996  
Total liabilities and stockholders’ equity$13,903  $15,642  
Three Months Ended
March 31,
20212020
Cash flows from operating activities:
Net income (loss)$89 $(1,279)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization86 91 
Impairment of goodwill, intangibles and other assets0 1,475 
Deferred income taxes1 (234)
Stock based compensation expense14 8 
Loss on change in fair value of investments0 3 
Changes in operating accounts:
Accounts receivable122 369 
Inventories(283)(142)
Accounts payable(18)(49)
Accrued liabilities and other(36)(219)
Net cash provided by (used in) operating activities(25)23 
Cash flows from investing activities:
Capital expenditures(54)(58)
Other investing activities, net0 2 
Net cash used in investing activities(54)(56)
Cash flows from financing activities:
Net proceeds from short-term debt0 305 
Payments on current portion of long-term debt(94)0 
Payments on long-term debt(6)(16)
Cash dividends(100)(99)
Equity compensation activity and other, net(39)(17)
Net cash provided by (used in) financing activities(239)173 
Exchange rate effect on cash, cash equivalents and restricted cash(14)(24)
Increase (decrease) in cash, cash equivalents and restricted cash(332)116 
Cash, cash equivalents and restricted cash at beginning of period1,021 371 
Cash, cash equivalents and restricted cash at end of period$689 $487 
Supplemental disclosures:
Restricted cash at beginning of period$40 $22 
Restricted cash at end of period7 11 
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTSSTATEMENT OF CASH FLOWSSTOCKHOLDERS’ EQUITY (Unaudited)
(Amounts in millions)
Three Months Ended
March 31,
20202019
Cash flows from operating activities:
Net loss$(1,279) $(151) 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization91  87  
Impairment of goodwill, intangibles and other assets1,475  175  
Gain from sale of businesses, net(1) (5) 
Deferred income taxes(234) (47) 
Stock based compensation expense8  5  
Loss on change in fair value of investments3  17  
Other, net1  1  
Changes in operating accounts excluding the effects of acquisitions and divestitures:
Accounts receivable369  246  
Inventories(142) (259) 
Accounts payable(49) (107) 
Accrued liabilities and other(219) (162) 
Net cash provided by (used in) operating activities23  (200) 
Cash flows from investing activities:
Capital expenditures(58) (58) 
Other investing activities, net2  (18) 
Net cash used in investing activities(56) (76) 
Cash flows from financing activities:
Net receipts of short term debt305  521  
Payments on current portion of long-term debt—  (268) 
Payments on long-term debt(16) (5) 
Loss on extinguishment of debt—  (3) 
Cash dividends(99) (98) 
Equity compensation activity and other, net(17) (2) 
Net cash provided by financing activities173  145  
Exchange rate effect on cash, cash equivalents and restricted cash(24) (1) 
Increase (decrease) in cash, cash equivalents and restricted cash116  (132) 
Cash, cash equivalents and restricted cash at beginning of period371  496  
Cash, cash equivalents and restricted cash at end of period$487  $364  
Supplemental disclosures:
Restricted cash at beginning of period$22  $—  
Restricted cash at end of period11  —  
Net cash provided by discontinued operating activities—  8  
Net cash used in discontinued investing activities—  (8) 
Capital expenditures for discontinued operations—  8  
Common
Stock		Treasury
Stock		Additional Paid-In CapitalRetained Earnings (Deficit)Accumulated Other Comprehensive LossStockholders' Equity Attributable to ParentNoncontrolling InterestTotal Stockholders' Equity
Balance at December 31, 2020$448 $(598)$8,078 $(3,174)$(880)$3,874 $26 $3,900 
Comprehensive income (loss)— — — 89 (32)57 (2)55 
Dividends declared on common stock - $0.23 per share— — (101)— — (101)— (101)
Equity compensation, net of tax2 (10)16 — — 8 — 8 
Other changes attributable to noncontrolling interests— — — — (2)(2)1 (1)
Balance at March 31, 2021$450 $(608)$7,993 $(3,085)$(914)$3,836 $25 $3,861 


Common
Stock		Treasury
Stock		Additional Paid-In CapitalRetained DeficitAccumulated Other Comprehensive LossStockholders' Equity Attributable to ParentNoncontrolling InterestTotal Stockholders' Equity
Balance at December 31, 2019$447 $(590)$8,430 $(2,404)$(920)$4,963 $33 $4,996 
Comprehensive loss— — — (1,279)(130)(1,409)(5)(1,414)
Dividends declared on common stock - $0.23 per share— — (97)— — (97)— (97)
Equity compensation, net of tax1 (6)7 — — 2 — 2 
Other changes attributable to noncontrolling interests— — — — (5)(5)— (5)
Distributions to noncontrolling interests— — — — — — (3)(3)
Balance at March 31, 2020$448 $(596)$8,340 $(3,683)$(1,055)$3,454 $25 $3,479 

See Notes to Condensed Consolidated Financial Statements (Unaudited).
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+NEWELL BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)
(Amounts in millions)
Common
Stock		Treasury
Stock		Additional Paid-In CapitalRetained DeficitAccumulated Other Comprehensive LossStockholders' Equity Attributable to ParentNoncontrolling InterestTotal Stockholders' Equity
Balance at December 31, 2019$447  $(590) $8,430  $(2,404) $(920) $4,963  $33  $4,996  
Comprehensive loss—  —  —  (1,279) (135) (1,414) —  (1,414) 
Dividends declared on common stock—  —  (97) —  —  (97) —  (97) 
Equity compensation, net of tax1  (6) 7  —  —  2  —  2  
Distribution to non-controlling interests holder—  —  —  —  —  —  (3) (3) 
Other—  —  —  —  —  —  (5) (5) 
Balance at March 31, 2020$448  $(596) $8,340  $(3,683) $(1,055) $3,454  $25  $3,479  

Common
Stock		Treasury
Stock		Additional Paid-In CapitalRetained DeficitAccumulated Other Comprehensive LossStockholders' Equity Attributable to ParentNoncontrolling InterestTotal Stockholders' Equity
Balance at December 31, 2018$446  $(585) $8,781  $(2,511) $(913) $5,218  $35  $5,253  
Comprehensive loss—  —  —  (151) (24) (175) —  (175) 
Dividends declared on common stock—  —  (98) —  —  (98) —  (98) 
Equity compensation, net of tax1  (3) 5  —  —  3  —  3  
Balance at March 31, 2019$447  $(588) $8,688  $(2,662) $(937) $4,948  $35  $4,983  
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NEWELL BRANDS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Footnote 1 — Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Newell Brands Inc. (formerly, Newell Rubbermaid Inc., and collectively(collectively with its subsidiaries, the “Company”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (including normal recurring accruals) considered necessary for a fair statement of the financial position and the results of operations of the Company. It is recommended that theseThese unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, and the footnotes thereto, included in the Company’s most recent Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet at December 31, 2019,2020, has been derived from the audited financial statements as of that date, but it does not include all the information and footnotes required by U.S. GAAP for a complete financial statements.statement. Certain reclassifications have been made in the Company’s financial statements of the prior year to conform to the current year presentation.

Beginning January 1, 2021, the Company reported the operating results of its cookware product lines as part of the Food reporting unit within the Home Solutions segment, and no longer as part of the former Appliances and Cookware segment. This change was the result of an assessment by the chief operating decision maker (“CODM”) to better align the cookware product lines with other similar product lines in various food categories. In connection with this change, the Company’s decisionChief Executive Officer (“CEO”) for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines. The Company determined this product line change did not result in a change to retaineither of its Home Solutions or former Appliances and Cookware reportable segments. In connection with this change, the Rubbermaid Commercial Products, Rubbermaid Outdoor, Closet, Refuse, GarageAppliances and Cleaning businesses, andCookware segment was renamed as the Mapa/Spontex and Quickie businesses,Home Appliances segment. Prior period comparable results for both of these segments have been reclassified to conform to this product line change. The Company also revised the Company realigned its management reporting structure in the third and fourth quarterscalculation of 2019. All prior periodsoperating income (loss) by segment to include restructuring charges. Prior period comparable results have been reclassified to conform to the current reporting structure.

The Company operates and reports financial informationchange in the following 4 reportable segments: Appliances and Cookware, Food and Commercial, Home and Outdoor Living, and Learning and Development. The Company also provides general corporate services to its segments which will be reported as a non-operating segment, Corporate (seecalculation (See Footnote 17)15).

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

Beginning late inSince early 2020, the fourth quarter 2019 and into 2020, a novel strain of the coronavirus, or COVID-19 initiallypandemic has resulted in various federal, state and local governments, as well as private entities, mandating restrictions on travel disruption and impacted portionspublic gatherings, closure of non-essential commerce, stay at home orders and quarantining of people to limit exposure to the Company’s and its suppliers’ operations in China. Since then, the spread of COVID-19 has developed into a global pandemic, impacting the economies of most countries around the world.virus. The Company’sCompany's global operations, similar to those of many large, multi-national corporations, have beenwere adversely impacted by the COVID-19 pandemic.

During the first quarter of 2020, the Company concluded that an impairment triggering event had occurred as it had experienced significant COVID-19 related disruption for all of its reporting units as the Company has experienced significant COVID-19 related disruption to its business in three primary areas: supply chain, as certain manufacturing and distribution facilities are temporarily closed in line with government guidelines; the temporary closure of secondary customer retail stores as well as the Company's Yankee Candle retail stores in North America; and changes in consumer demand patterns to certain focused categories. As a result, the Company performed an impairment test for its goodwill and indefinite-lived intangible assets. In addition, the Company performedassets and a recoverability test for its long-lived assets, which primarily include finite-lived intangible assets, property plant and equipment and right of use lease assets. As a result of the impairment and recoverability testing performed in connection with the triggering event, the Company determined that certain of its goodwill, indefinite-lived intangible assets, property plant and equipment and right of use operating leases assets were impaired. TheDuring the first quarter of 2020, the Company recorded an aggregate non-cash charge of approximately $1.5 billion during the three months ended March 31, 2020 in connection with these impairments. See Footnotes 5 and6 7 and 13 for further information.
As
While the negative effects from the COVID-19 global pandemic continuesin the first half of 2020 were material to evolve,the Company's operating results, the Company saw sales growth during the second half of 2020 and first quarter of 2021. The Company believes, however, the extent of the impact of the COVID-19 pandemic to its businesses, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the COVID-19 pandemic, the impact of new strains and variants of the coronavirus, the pandemic’s impact on the U.S. and global economies, and the timing, scope and effectiveness of federal, state and local governmental responsesplans to administer vaccines to the pandemic. Thosegeneral public, especially in areas where conditions have recently worsened and lockdowns or travel bans have been reinstituted, as well as the timing and amount of fiscal stimulus and relief programs packages that are available to the general public. These primary drivers are beyond the Company's knowledge and control, and as a result, at this time the Companyit is unabledifficult to predict the cumulative impact, both in terms of severity and duration, COVID-19 will have on its businesses,future sales, operating results, cash flows and financial condition. Furthermore, the impact to the Company's businesses, operating results, cash flows, liquidity and financial condition but it couldmay be materialadversely impacted if the current circumstances continueCOVID-19 global pandemic continues to exist or worsens for a prolonged period of time.time, new variants of the coronavirus emerge, or if plans to administer vaccines are delayed.
The consolidated condensed financial statements are prepared in conformity with U.S. GAAP.
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Management’s application of U.S. GAAP in preparing the Company's consolidated financial statements requires the pervasive use of estimates and assumptions in preparing the unaudited condensed consolidated financial statements.assumptions. As discussed above, the world is currently experiencingcontinues to be impacted by the global COVID-19 pandemic which has required greater use of estimates and assumptions in the preparation of our condensedthe consolidated financial statements. Morestatements, more specifically, those estimates and assumptions utilized in the Company’s forecasted cash flows that form the basis in developing the fair values utilized in its impairment assessments as well as its annual effective tax rate. This has includedThese estimates also include assumptions as to the duration and severity of the pandemic, timing and amount of demand shifts amongst sales channels, workforce availability, supply chain
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continuity, and timing as to a return to normalcy. We are experiencing short-term disruptions and anticipate such to continue inAlthough the foreseeable future, but anticipate an eventual return to normal demand. Although we haveCompany has made ourits best estimates based upon current information, the effects of the COVID-19 pandemic on ourits business may result in future changes to management’s estimates and assumptions, especially if the severity of the pandemic continues to exist or worsens for a prolonged period of time, new variants of the coronavirus emerge, or duration lengthens.if plans to administer the vaccines are delayed. Actual results could materially differ from the estimates and assumptions developed by management. If so, the Company may be subject to future incremental impairment charges as well as changes to recorded reserves and valuations.
Discontinued Operations

On December 31, 2019, the Company completed the sale of its Playing Cards business to Cartamundi Inc. and Cartamundi España S.L., which completed its previously announced Accelerated Transformation Plan (“ATP”).

In connection with the ATP, the Company completed the sale of several businesses during 2018 and 2019. In 2018, the Company sold Goody Products, Inc. (“Goody”), Jostens, Inc. (“Jostens”), Pure Fishing, Inc. (“Pure Fishing”), the Rawlings Sporting Goods Company, Inc. (“Rawlings”), The Waddington Group, Inc. (“Waddington”) and other related subsidiaries. In 2019, the Company sold: the Process Solutions business, Rexair Holdings Inc. ("Rexair") and The United States Playing Card Company and other related subsidiaries. These businesses were classified as discontinued operations in periods prior to January 1, 2020.

Seasonal Variations

Sales of the Company’s products tend to be seasonal, with sales, operating income and operating cash flow in the first quarter generally lower than any other quarter during the year, driven principally by reduced volume and the mix of products sold in the first quarter. The seasonality of the Company’s sales volume combined with the accounting for fixed costs, such as depreciation, amortization, rent, personnel costs and interest expense, impacts the Company’s results on a quarterly basis. In addition, the Company typically tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers. Accordingly, the Company’s results of operations for the three months ended March 31, 20202021 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2020.2021.

In 2020, the Company's sales and operating results were disrupted by the COVID-19 pandemic, negatively impacting the Company's performance during the first half of the year, partially offset by positive performance during the second half of the year and into the first quarter of 2021. The Company believes the seasonality of its businesses will revert back to historical patterns as the impact of the global pandemic lessens.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs.

In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 modifies disclosure requirements for defined benefit pension and other postretirement plans. ASU 2018-14 is effective for fiscal years ending after December 15, 2020. Since ASU 2018-14 only impacts the disclosure requirements related to defined benefit pension and other postretirement plans, the adoption of ASU 2018-14 will not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" (Topic 740). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the potential effects of the adoption of ASU 2019-12.
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In March 2020, the FASB issued ASU 2020-04, "Reference“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting."” In January 2021, the FASB clarified the scope of this guidance with the issuance of ASU 2021-01, Reference Rate Reform: Scope. ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBORthe London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met. ASU 2020-04 is effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.

Adoption of New Accounting Guidance

The Company’s accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our 20192020 Annual Report on Form 10-K. Such significant accounting policies are applicable for periods prior to the adoption of the following new accounting standards and updated accounting policies.

In June 2016,December 2019, the FASB issued ASU 2016-13, “2019-12, Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 involves several aspects of“Simplifying the accounting for credit losses related to certain financial instruments including assets measured at amortized cost, available-for-sale debt securities and certain off-balance sheet commitments. ASU 2016-13, and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of assets measured either collectively or individually to include historical experience, current conditions and reasonable and supportable forecasts, replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (“CECL”) model. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2016-13 on a modified retrospective basis effective January 1, 2020. The adoption of ASU 2016-03 did not have a material impact on the Company’s consolidated financial statements. The Company's reserves for doubtful accounts at March 31, 2020 and December 31, 2019 were $31 million and $29 million respectively.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs IncurredIncome Taxes” (Topic 740). ASU 2019-12 removes certain exceptions to the general principles in a Cloud Computing Arrangement That Is a Service Contract.”Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2018-15 clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-152019-12 is effective for public business entities for years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2018-15 prospectively to all implementation costs incurred after the date of adoption, or January 1, 2020. The adoption of ASU 2018-15this guidance did not have a material impact on the Company’s consolidated financial statements.

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Sales of Accounts Receivables

DuringFactored receivables at the three months ended March 31, 2020,end of the Company amended itsfirst quarter of 2021 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) with a financial institution providing forwere approximately $400 million, an increase in the amount of certain customer receivables that may be sold. The Company has since increased receivables factored by $100 million under the amended Customer Receivables Purchase Agreement at March 31, 2020 from its previous position of factored receivables of approximately $200$50 million atfrom December 31, 2019.2020. Transactions under this agreement continue to be accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction. The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the unaudited Condensed Consolidated Statement of Cash Flows. The Company records the discount as other (income) expense, net in the Condensed Consolidated Statement of Operations and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow.

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Footnote 2 — Divestitures and Held for SaleAccumulated Other Comprehensive Income (Loss)

Discontinued Operations

The Company completed its previously announced ATP on December 31, 2019. As such, there were 0 businesses held for sale at March 31, 2020, nor income or loss from discontinued operations for the three months ended March 31, 2020. The following table provides a summary of amounts included in discontinued operations for the period indicated (in millions):
Three Months
Ended
March 31, 2019
Net sales$211 
Cost of products sold160 
Gross profit51 
Selling, general and administrative expenses25 
Impairment of goodwill, intangibles and other assets112 
Operating loss(86)
Non-operating income, net(5)
Loss before income taxes(81)
Income tax benefit(4)
Net loss$(77)

2019 Divestiture Activity

On May 1, 2019, the Company sold its Rexair business to investment funds affiliated with Rhône Capital for approximately $235 million, subject to customary working capital and other post-closing adjustments.
On May 1, 2019, the Company sold its Process Solutions business to an affiliate of One Rock Capital Partners, LLC, for approximately $500 million, subject to customary working capital and other post-closing adjustments.

On December 31, 2019, the Company sold its U.S. Playing Cards business to Cartamundi Inc. and Cartamundi España S.L. for approximately $220 million, subject to customary working capital and other post-closing adjustments.
During the three months ended March 31, 2019, the Company recorded impairment charges totaling $112 million, which is included in the loss from discontinued operations, related to the write-down of the carrying value of the net assets of certain held for sale businesses based on their estimated fair value.

Footnote 3 — Accumulated Other Comprehensive Loss
The following tables displaydisplays the changes in Accumulated Other Comprehensive LossIncome (Loss) (“AOCL”) by component, net of tax, for the three months ended March 31, 20202021 (in millions):
Cumulative
Translation
Adjustment
Pension and 
Postretirement
Costs
Derivative
Financial
Instruments		AOCLCumulative
Translation
Adjustment
Pension and 
Postretirement
Costs
Derivative
Financial
Instruments		AOCL
Balance at December 31, 2019$(479) $(399) $(42) $(920) 
Balance at December 31, 2020Balance at December 31, 2020$(481)$(356)$(43)$(880)
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications(156) (9) 25  (140) Other comprehensive income (loss) before reclassifications(44)1 2 (41)
Amounts reclassified to earningsAmounts reclassified to earnings—  4  1  5  Amounts reclassified to earnings0 4 3 7 
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)(156) (5) 26  (135) Net current period other comprehensive income (loss)(44)5 5 (34)
Balance at March 31, 2020$(635) $(404) $(16) $(1,055) 
Balance at March 31, 2021Balance at March 31, 2021$(525)$(351)$(38)$(914)

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For the three months ended March 31, 2020 and 2019, reclassificationsReclassifications from AOCL to the results of operations for the Company’s pensionthree months ended March 31, 2021 and postretirement benefit plans2020 were a pretaxpre-tax expense of $6 million and $2 million, respectively, and primarily represent(in millions):
Three Months Ended
 March 31,
20212020
Pension and postretirement benefit plans (1)$5 $6 
Derivative financial instruments for effective cash flow hedges (2)4 1 
(1)Primarily represents the amortization of net actuarial losses (see Footnote 11). These costs areand plan settlements recorded in cost of products sold, selling, general and administrative expenses (“SG&A”) and other (income) expense, net. Fornet in the three months ended March 31, 2020 and 2019, reclassifications from AOCL to the resultsConsolidated Statements of operationsOperations. See Footnote 10 for the Company’s derivative financial instrumentsfurther information.
(2)See Footnote 9 for effective cash flow hedges were pretax expense of $1 million and income of $4 million, respectively (see Footnote 10).further information.

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

Three Months Ended
March 31,		Three Months Ended
 March 31,
2020201920212020
Foreign currency translation adjustmentsForeign currency translation adjustments$(7) $—  Foreign currency translation adjustments$12 $7 
Unrecognized pension and postretirement costs3  4  
Pension and postretirement benefit costsPension and postretirement benefit costs1 (3)
Derivative financial instrumentsDerivative financial instruments(9) 2  Derivative financial instruments2 9 
Income tax (expense) benefit related to AOCL$(13) $6  
Income tax provision related to AOCLIncome tax provision related to AOCL$15 $13 

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Footnote 43 — Restructuring Costs
Restructuring provisions were determined based on estimates prepared at the time the restructuring actions were approved by management and are periodically updated for changes. Restructuring amounts also include amounts recognized as incurred.
Accelerated Transformation Plan
The Company’s ATP, which was initiated during the first quarter of 2018 and completed at the end of 2019, was designed in part, to divest the Company’s non-core consumer businesses and focus on the realignment of the Company’s management structure and overall cost structure as a result of the completed divestitures. Restructuring costs associated with the ATP included employee-related costs, including severance, retirement and other termination benefits, as well as contract termination costs and other costs.
Restructuring costs, net incurred by reportable business segments for all restructuring activities in continuing operations for the periods indicated are as follows (in millions):
Three Months Ended
March 31,
20202019
Food and Commercial$—  $1  
Home and Outdoor Living1  3  
Learning and Development1  4  
Corporate—  3  
$2  $11  
Three Months Ended
 March 31,
20212020
Home Appliances$1 $0 
Home Solutions2 1 
Learning and Development1 1 
Outdoor and Recreation1 0 
$5 $2 

Accrued restructuring costs activity for the three months ended March 31, 20202021 are as follows (in millions):
Balance at December 31, 2019Restructuring
Costs, Net		PaymentsBalance at
March 31, 2020
Employee severance and termination benefits$10  $1  $(4) $7  
Exited contractual commitments and other12  1  (5) 8  
$22  $2  $(9) $15  
Balance at December 31, 2020Restructuring
Costs, Net		PaymentsBalance at
 March 31, 2021
Severance and termination costs$7 $4 $(4)$7 
Contract termination and other costs4 1 (1)4 
$11 $5 $(5)$11 

2020 Restructuring Plan

The Company’s 2020 restructuring program, which was initiated during the second quarter of 2020 largely in response to the impact of the COVID-19 pandemic, was designed to reduce overhead costs, streamline certain underperforming operations and improve future profitability. The restructuring costs, which impact all segments, include employee-related costs, including severance and other termination benefits. During the three months ended March 31, 2021, the Company recorded restructuring charges of $5 million in connection with the program and has incurred cumulative charges of $24 million since inception. The Company currently estimates aggregate restructuring charges of approximately $30 million to $35 million to be incurred for projects launched in connection with the program. All cash payments are expected to be paid within one year of charges incurred.

Accelerated Transformation Plan

During the three months ended March 31, 2020 the company recorded restructuring charges of $2 million in connection with the Company's completed Accelerated Transformation Plan (“ATP”). The Company's ATP was designed in part, to divest the Company's non-core consumer businesses and focus on the realignment of the Company's management structure and overall costs structure as a result of the completed divestitures.

Other Restructuring-Related Costs

The Company regularly incurs other restructuring-related costs in connection with various discrete initiatives which are recorded in cost of products sold and selling, general and administrative expense (“SG&A”)&A in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.
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Footnote 54 — Inventories
Inventories are comprised of the following at the dates indicated (in millions):
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
Raw materials and suppliesRaw materials and supplies$254  $231  Raw materials and supplies$269 $252 
Work-in-processWork-in-process153  135  Work-in-process163 157 
Finished productsFinished products1,293  1,240  Finished products1,469 1,229 
$1,700  $1,606  $1,901 $1,638 

Footnote 65 — Property, Plant and Equipment, Net
Property, plant and equipment, net, is comprised of the following at the dates indicated (in millions):
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
LandLand$82  $86  Land$83 $86 
Buildings and improvementsBuildings and improvements633  641  Buildings and improvements662 664 
Machinery and equipmentMachinery and equipment2,146  2,151  Machinery and equipment2,309 2,314 
2,861  2,878  3,054 3,064 
Less: Accumulated depreciationLess: Accumulated depreciation(1,738) (1,723) Less: Accumulated depreciation(1,903)(1,888)
$1,123  $1,155  $1,151 $1,176 

Depreciation expense for continuing operations was $48$52 million and $40$48 million for the three months ended March 31, 2021 and 2020, and 2019, respectively. Depreciation expense for discontinued operations was NaN for 2019 as the Company ceased depreciating property, plant and equipment relating to businesses which satisfied the criteria to be classified as held for sale.

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 pandemic. Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets (the lowest level for which identifiable cash flows are available) to their respective carrying amount. As a result of the impairment testing performed in connection with the triggering event, the Companyamount and recorded a non-cash fixed asset impairment charge of approximately $1 million during the three months ended March 31, 2020, in the Home and Outdoor LivingSolutions segment associated with its Yankee Candle retail store business. The impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value. See Footnote 1 for further information.

During the first quarter of 2020, the Company also recorded a non-cash impairment charge of $5 million to reflect a reduction in the carrying values of operating lease assets, mostly related to its Yankee Candle retail store business.


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Footnote 76 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the three months ended March 31, 20202021 is as follows (in millions):

March 31, 2020
SegmentsNet Book Value at December 31,
2019		Impairment Charges
Foreign
Exchange and Other
Gross
Carrying
Amount
Accumulated
Impairment
Charges
Net Book
Value
Appliances and Cookware$212  $(212) $—  $744  $(744) $—  
Food and Commercial747  —  —  2,266  (1,519) 747  
Home and Outdoor Living164  —  —  2,155  (1,991) 164  
Learning and Development2,586  —  (14) 3,418  (846) 2,572  
$3,709  $(212) $(14) $8,583  $(5,100) $3,483  
SegmentsNet Book Value at December 31, 2020
Foreign
Exchange and Other
Gross
Carrying
Amount
Accumulated
Impairment
Charges
Net Book Value at
March 31, 2021
Home Appliances$0 $0 $569 $(569)$0 
Commercial Solutions747 0 1,241 (494)747 
Home Solutions164 0 2,567 (2,403)164 
Learning and Development2,642 (28)3,460 (846)2,614 
Outdoor and Recreation0 0 788 (788)0 
$3,553 $(28)$8,625 $(5,100)$3,525 

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 global pandemic. Pursuant to the authoritative literature, the Company performed an impairment test and determined that theits goodwill associated with its Home Appliances and CookwareFood reporting unit was fullyunits were impaired. During the three months ended March 31, 2020, the Company recorded an impairmentaggregate non-cash charge of $212 million to reflect the impairmentimpairments of its goodwill. goodwill as the reporting unit carrying values exceeded their fair values. See Footnote 1 for further information.

During the three months ended March 31, 2019, the Company recorded an impairment charge of $63 million to reflect a decrease in the carrying values of Mapa/Spontex and Quickie while these businesses were classified as held for sale.

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

March 31, 2020December 31, 2019March 31, 2021December 31, 2020
Gross
Carrying
Amount
Accumulated Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Amortization
Periods
(in years)
Gross
Carrying
Amount
Accumulated Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Trade names — indefinite lifeTrade names — indefinite life$2,270  $—  $2,270  $3,560  $—  $3,560  N/ATrade names — indefinite life$2,305 $— $2,305 $2,331 $— $2,331 
Trade names — otherTrade names — other158  (49) 109  169  (50) 119  2-15Trade names — other154 (56)98 157 (55)102 
Capitalized softwareCapitalized software590  (445) 145  587  (435) 152  3-12Capitalized software632 (498)134 625 (486)139 
Patents and intellectual propertyPatents and intellectual property135  (106) 29  135  (102) 33  3-14Patents and intellectual property67 (55)12 67 (52)15 
Customer relationships and distributor channelsCustomer relationships and distributor channels1,308  (294) 1,014  1,328  (283) 1,045  3-30Customer relationships and distributor channels1,253 (296)957 1,259 (282)977 
Other109  (109) —  109  (102) 7  3-5
$4,570  $(1,003) $3,567  $5,888  $(972) $4,916  
$4,411 $(905)$3,506 $4,439 $(875)$3,564 

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Amortization expense for intangible assets for continuing operations was $43were $34 million and $47$43 million for the three months ended March 31, 2021 and 2020, and 2019, respectively. Amortization expense for intangible assets for discontinued operations was NaN for the three months ended March 31, 2019, as the Company ceased amortizing other finite-lived intangible assets relating to businesses which satisfied the criteria to be classified as held for sale.

As a result of the impairment testing performed in connection with the COVID-19 pandemic triggering event during the first quarter of 2020, the Company determined that certain of its indefinite-lived intangible assets in the Appliances and Cookware, Home and Outdoor Living and Learning and Developmentall of its operating segments were impaired. During the three months ended March 31, 2020, and 2019, the Company recorded impairment charges of $1.3 billion and nil, respectively, to reflect impairment of these indefinite-lived trade names because their carrying values exceeded their fair valuesvalues.

The impairment charges for the three months ended March 31, 2020 were allocated to the Company’s reporting segments as follows:follows (in millions):

Three Months Ended March 31, 2020
Impairment of indefinite-lived intangibles assetsassets:
Home Appliances
Appliances and Cookware$87 
Commercial Solutions320 
Home and Outdoor LivingSolutions1,092 290 
Learning and Development78 
Outdoor and Recreation482 
$1,257 
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The Company believes the circumstances and global disruption caused by COVID-19 will continue to affect its businesses, operating results, cash flows and financial condition and that the scope and duration of the pandemic is highly uncertain. In addition, some of the other inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates, and labor inflation and tariffs, including the current trade negotiations with China.inflation. Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy, there can be no assurance that the Company's estimates and assumptions made for purposes of the goodwill and indefinite-lived intangible asset impairment testing performed during the first quarter of 2020 will prove to be accurate predictions of the future. See Footnote 1 for further information.

In addition, as a result of several impairment charges recorded over the past three years and as most recently as of December 1, 2019, some of the Company's reporting units and several of the Company's indefinite-lived tradenames were either recorded at fair value or with fair values within 10% of the associated carrying values. While the Company believes it has made reasonable estimates and assumptions to calculate the fair values of the reporting units and other indefinite-lived intangible assets which were based on facts and circumstances known at this time, it is possible that new events may occur or actual events may result in forecasted cash flows, revenue and earnings that differ from those that formed the basis of the Company’s estimates and assumptions. For each of the Company’s reporting units, particularly if the global pandemic caused by COVID-19 continues to persist for an extended period of time, the reporting unit’s actual results could be materially different from the Company’s estimates and assumptions used to calculate fair value. If so, the Company may be required to recognize material impairments to goodwill and/or indefinite-lived intangible assets. The Company will continue to monitor its reporting units for any triggering events or other signs of impairment. The Company may be required to perform additional impairment testing based on further deterioration of the global economic environment, continued disruptions to the Company’s business, further declines in operating results of the Company’s reporting units and/or tradenames, further sustained deterioration of the Company’s market capitalization, and other factors, which could result in impairment charges in the future. Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending decline significantly in the future or if commercial and industrial economic activity experiences a sustained deterioration from current levels, it is reasonably likely the Company will be required to record impairment charges in the future.

As of March 31, 2020, there were no reporting units and 9 indefinite-lived trade names with fair values within 10% of the associated carrying values. A hypothetical 10% reduction in forecasted earnings before interest, taxes and amortization used in the discounted cash flows to estimate the fair value of the reporting unit would not have resulted in an incremental goodwill impairment charge. A hypothetical 10% reduction in the forecasted debt-free cash flows used in the excess earnings method to determine the fair of certain indefinite-lived intangibles in the Company’s Home and Outdoor Living and Learning and Development segments would have resulted in incremental impairment charges of $39 million and $13 million, respectively. A hypothetical 10% reduction in forecasted revenue used in the relief from royalty method to determine the fair value of certain indefinite-lived intangibles would have resulted in incremental impairment charges in the Company's following segments: Appliances and Cookware, Home and Outdoor Living and Learning and Development of $6 million, $6 million and $16 million, respectively.
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Footnote 87 — Other Accrued Liabilities
Other accrued liabilities are comprised of the following at the dates indicated (in millions):
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
Customer accrualsCustomer accruals$476  $605  Customer accruals$638 $683 
Accrued interest expenseAccrued interest expense125 60 
Operating lease liabilitiesOperating lease liabilities126  132  Operating lease liabilities125 129 
Accrued interest expense107  63  
Accrued self-insurance liabilities, contingencies and warrantyAccrued self-insurance liabilities, contingencies and warranty103  124  Accrued self-insurance liabilities, contingencies and warranty105 108 
Accrued income taxesAccrued income taxes100  114  Accrued income taxes81 66 
Accruals for manufacturing, marketing and freight expenses37  50  
Accruals for marketing and freight expensesAccruals for marketing and freight expenses56 57 
OtherOther203  252  Other210 290 
$1,152  $1,340  $1,340 $1,393 

Footnote 98 — Debt
Debt is comprised of the following at the dates indicated (in millions):
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
4.70% senior notes due 2020$305  $305  
3.15% senior notes due 20213.15% senior notes due 202194  94  3.15% senior notes due 2021$0 $94 
3.75% senior notes due 20213.75% senior notes due 2021336  342  3.75% senior notes due 2021354 369 
4.00% senior notes due 20224.00% senior notes due 2022249  249  4.00% senior notes due 2022250 250 
3.85% senior notes due 20233.85% senior notes due 20231,388  1,388  3.85% senior notes due 20231,085 1,090 
4.00% senior notes due 20244.00% senior notes due 2024200  199  4.00% senior notes due 2024200 200 
4.875% senior notes due 20254.875% senior notes due 2025493 492 
3.90% senior notes due 20253.90% senior notes due 202547  47  3.90% senior notes due 202547 47 
4.20% senior notes due 20264.20% senior notes due 20261,972  1,986  4.20% senior notes due 20261,974 1,973 
5.375% senior notes due 20365.375% senior notes due 2036416  416  5.375% senior notes due 2036416 416 
5.50% senior notes due 20465.50% senior notes due 2046657  657  5.50% senior notes due 2046657 657 
Commercial paper40  25  
Receivables facilities289  —  
Other debtOther debt21  15  Other debt16 19 
Total debtTotal debt6,014  5,723  Total debt5,492 5,607 
Short-term debt and current portion of long-term debtShort-term debt and current portion of long-term debt(639) (332) Short-term debt and current portion of long-term debt(357)(466)
Long-term debtLong-term debt$5,375  $5,391  Long-term debt$5,135 $5,141 

Credit Revolver and Commercial PaperSenior Notes

On March 9, 2020, Moody’s Corporation ("Moody’s"1, 2021 (the “Redemption Date”) downgraded the Company’s debt rating to “Ba1” based on a view that, the Company would failredeemed its 3.15% senior notes that were scheduled to meet Moody's target debt level for 2020. In addition, on November 1, 2019, S&P Global Inc. ("S&P") downgraded the Company’s debt rating to “BB+” as S&P believed the Company would fail to meet S&P’s target debt level for 2019. As a result of both downgrades, the Company’s ability to borrow under its commercial paper program was eliminated. Subsequently on April 15, 2020, Fitch Ratings ("Fitch") downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020.

Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Company’s $1.25 billion revolving credit facility that matures in December 2023 (“the Credit Revolver”). The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades. The interest rate for borrowings under the Credit Revolver is the borrowing period referenced LIBOR rate plus 127.5 basis points. At March 31, 2020, the Company had $40 million outstanding under its commercial paper program, which was subsequently repaidmature in April when2021 (the “April 2021 Notes”) at a redemption price equal to 100% of the Company accessed $125 million underoutstanding aggregate principal amount of the Credit Revolver. At March 31, 2020,notes, plus accrued and unpaid interest to the Company did not have any amounts outstanding under the Credit Revolver.

Redemption Date.

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Senior Notes

During the three months ended March 31, 2020,first quarter of 2021, the Company repurchased $15$5 million of the 4.20%3.85% senior notes due 20262023 at approximately 5% above par value. The total consideration, excluding accrued interest, was approximately $15$5 million. As a result of the partial debt extinguishment,repurchase the Company recorded an immaterial loss.

As a result of the aforementioned debt rating downgrades of Moody's and S&P, certain of the Company’s Senior Notes aggregating to approximately $4.5 billion are subject to an interest rate adjustment of 25 basis points as a result of each downgrade, for a total of 50 basis points. This increase to the interest rates of each series of the Company's senior notes subject to adjustment is expected to increase the Company’s interest expense for 2020 by approximately $17 million and approximately $23 million on an annualized basis. The Fitch downgrade did not impact the interest rates on any of the Company's senior notes.

Receivables Facility

The Company maintains an Accounts Receivable Securitization Facility (the “Securitization Facility”). The aggregate commitment under the Securitization Facility is $600 million. The Securitization Facility matures in October 2022 and bears interest at a margin over a variable interest rate. At March 31, 2020, the Company drew down theThe maximum net availability under the Securitization Facility which fluctuates based on eligible accounts receivable balances. InAt March 2020,31, 2021, the Company amended its Securitization Facility with respect to certain customer receivables and to remove an originator fromdid 0t have any amounts outstanding under the Securitization Facility.

Revolving Credit Facility

The Company has a $1.25 billion revolving credit facility that matures in December 2023 (the “Credit Revolver”). At March 31, 2021, the Company did 0t have any amounts outstanding under the Credit Revolver.

Other
The fair value of the Company’s senior notes are based on quoted marketupon prices of similar instruments in the marketplace and are as follows (in millions):
March 31, 2020December 31, 2019
Fair ValueBook ValueFair ValueBook Value
Senior notes$5,724  $5,664  $5,990  $5,683  
March 31, 2021December 31, 2020
Fair ValueBook ValueFair ValueBook Value
Senior notes$6,123 $5,476 $6,277 $5,588 
The carrying amounts of all other significant debt approximates fair value.

Net Investment Hedge

The Company has designated the €300 million principal balance of the 3.75% senior notes due October 2021 as a net investment hedge of the foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets. At March 31, 2020, $92021, $11 million of deferred gainslosses have been recorded in AOCL. See Footnote 109 for disclosures regarding the Company’s derivative financial instruments.

Footnote 10—Derivatives9 —Derivatives
From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.
Interest Rate Contracts
The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. Interest rate swap contracts are therefore used by the Company to separate interest rate risk management from the debt funding decision. The cash paid and received from the settlement of interest rate swaps is included in interest expense.
Fair Value Hedges
At March 31, 2020,2021, the Company had approximately $377$100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against $277 million of principal on the 4.7% senior notes due in August 2020 and $100 million of principal on the 4.0%4.00% senior notes due 2024 for the remaining life of these notes.the note. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.
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Cross-Currency Contracts

The Company uses cross-currency swaps to hedge foreign currency risk on certain intercompany financing arrangements with foreign subsidiaries. During the three months ended March 31, 2020, thearrangements. The Company previously entered into 2 cross-currency swaps with an aggregate notional amount of $900 million, which were designated as
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net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets. TheseWith these cross-currency swaps, which mature in January and February 2025, payrespectively, the Company pays a fixed rate of Euro-based interest and receivereceives a fixed rate of U.S. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended March 31, 2021, the Company recognized income of $4 million in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through December 2020.2021. The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges. The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL anduntil it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item. At March 31, 2020,2021, the Company had approximately $413$397 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions. At March 31, 2020,2021, the Company had approximately $801$879 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through JanuaryDecember 2021. Fair market value gains or losses are included in the results of operations and are classified in other (income), expense, net.

The following table presents the fair value of derivative financial instruments at the dates indicated (in millions):
March 31, 2020December 31, 2019
Fair Value of DerivativesFair Value of Derivatives
Asset (a)Liability (a)Asset (a)Liability (a)
Derivatives designated as effective hedges:
Cash flow hedges:
Foreign currency contracts$23  $2  $1  $13  
Fair value hedges:
Interest rate swaps8  —  2  1  
Net investment hedges:
Cross-currency swaps21  —  —  —  
Derivatives not designated as effective hedges:
Foreign currency contracts32  16  10  4  
Total$84  $18  $13  $18  
(a) Consolidated balance sheet location:
Asset: Prepaid expenses and other, and other noncurrent assets
Liability: Other accrued liabilities, and current and noncurrent liabilities

Fair Value of Derivatives
Assets (Liabilities)
Balance Sheet LocationMarch 31, 2021December 31, 2020
Derivatives designated as effective hedges:
Cash Flow Hedges
Foreign currency contractsPrepaid expenses and other current assets$3 $1 
Foreign currency contractsOther accrued liabilities(11)(19)
Fair Value Hedges
Interest rate swapsOther assets5 7 
Net Investment Hedges
Cross-currency swapsPrepaid expenses and other current assets7 10 
Cross-currency swapsOther noncurrent liabilities(63)(102)
Derivatives not designated as effective hedges:
Foreign currency contractsPrepaid expenses and other current assets13 10 
Foreign currency contractsOther accrued liabilities(5)(17)
Total$(51)$(110)
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The following tables presenttable presents gain and loss(loss) activity (on a pretaxpre-tax basis) for the three months ended March 31, 2020 and 2019 related to derivative financial instruments designated or previously designated, as effective hedges (in millions):
Three Months
Ended
March 31, 2020		Three Months
Ended
March 31, 2019		Three Months
 Ended
March 31, 2021		Three Months
 Ended
March 31, 2020
Gain/(Loss)Gain/(Loss)Gain/(Loss)Gain/(Loss)
Location of gain/(loss) recognized in income
Recognized
in OCI
(effective portion)
Reclassified
from AOCL
to Income
Recognized
in OCI
(effective portion)
Reclassified
from AOCL
to Income
Location of gain/(loss) recognized in income
Recognized
in OCI
(effective portion)
Reclassified
from AOCL
to Income
Recognized
in OCI
(effective portion)
Reclassified
from AOCL
to Income
Interest rate swapsInterest rate swapsInterest expense, net$—  $(2) $—  $(2) Interest rate swapsInterest expense, net$0 $(2)$0 $(2)
Foreign currency contractsForeign currency contractsNet sales and cost of products sold35  1  (6) 6  Foreign currency contractsNet sales and cost of products sold3 (2)35 1 
Commodity contractsCost of products sold—  —  (1) —  
Cross-currency swapsCross-currency swapsOther expense, net21  —  —  —  Cross-currency swapsOther (income) expense, net36 0 21 0 
TotalTotal$56  $(1) $(7) $4  Total$39 $(4)$56 $(1)

At March 31, 2020,2021, net deferred net gainslosses of approximately $22$14 million within AOCL are expected to be reclassified to earnings over the next twelve months.
During the three months ended March 31, 2021 and 2020, the Company recognized income of $7 million and $12 million, respectively, in other expense, net, related to derivatives that are not designated as hedging instruments. During the three months ended March 31, 2019, the Company recognized expense of $6 million, in other(income) expense, net, related to derivatives that are not designated as hedging instruments. Gains and losses on these derivatives are mostly offset by foreign currency movement in the underlying exposure.

Footnote 1110 — Employee Benefit and Retirement Plans

The components of pension and postretirement benefit (income) expense for continuing operations for the periods indicated, are as follows (in millions):
Pension Benefits
Three Months Ended March 31,
U.S.International
2020201920202019
Service cost$—  $—  $1  $2  
Interest cost9  12  2  3  
Expected return on plan assets(15) (15) (2) (3) 
Amortization, net6  4  1  —  
Settlements1  —  —  —  
Total expense$1  $1  $2  $2  

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Pension Benefits
Postretirement BenefitsThree Months Ended March 31,
Three Months Ended
March 31,		U.S.International
202020192021202020212020
Service costService cost$—  $—  Service cost$0 $0 $1 $1 
Interest costInterest cost—  —  Interest cost5 9 2 2 
Amortization, net(1) (2) 
Total income$(1) $(2) 
Expected return on plan assetsExpected return on plan assets(12)(15)(1)(2)
AmortizationAmortization5 6 1 1 
SettlementsSettlements0 1 0 0 
Total (income) expenseTotal (income) expense$(2)$1 $3 $2 


Postretirement Benefits
Three Months Ended
March 31,
20212020
Amortization$(1)$(1)
Total income$(1)$(1)

The components of net periodic pension and postretirement costs other than the service cost component are included in other (income) expense, net in the Condensed Consolidated Statements of Operations.

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Footnote 1211 — Income Taxes

The Company’s effective income tax rate for the three months ended March 31, 2021 and 2020 was 29.4% and 2019 was 13.8% and 21.3%, respectively. The Company’s effective income tax rate fluctuates based on, among other factors, the geographic mix of income.

The difference between the U.S. federal statutory income tax rate of 21.0% and the Company’s effective income tax rate for the three months ended March 31, 2021 and 2020 and 2019 waswere impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned as well as certain taxable income inclusion items in the U.S. based on foreign earnings.

The three months ended March 31, 2021 were also impacted by $1 million of discrete tax items. The three months ended March 31, 2020 were also impacted by certain discrete tax items. Income tax expense for three months ended March 31, 2020 included a discrete tax benefit of $15 million related to statute of limitations expirations and $8 million of prior period adjustments offset by tax expense of $27 million related to a change in the tax status of certain entities upon Internal Revenue Service approval during the first quarter, $7 million of excess book deductions related to equity-based compensation, and $5 million for effects of adopting the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Company concluded the effects of such prior period adjustments were not material to the current period or previously issued financial statements.

The three months ended March 31, 2019 also included discrete tax adjustments of $10 million for certain state tax return to provision adjustments offset by tax expense of $4 million for additional interest related to uncertain tax liabilities and $4 million for prior period adjustments.

On June 18, 2019, the U.S. Treasury and the Internal Revenue Service (“IRS”) released temporary regulations under IRC Section 245A (“Section 245A”) as enacted by the 2017 U.S. Tax Reform Legislation (“2017 Tax Reform”) and IRC Section 954(c)(6) (the “Temporary Regulations”) to apply retroactively to the date the 2017 Tax Reform was enacted. On August 21, 2020, the U.S. Treasury and IRS released finalized versions of the Temporary Regulations (collectively with the Temporary Regulations, the “Regulations”). The Temporary Regulations seek to limit the 100% dividends received deduction permitted by Section 245A for certain dividends received from controlled foreign corporations and to limit the applicability of the look-through exception to foreign personal holding company income for certain dividends received from controlled foreign corporations. Before the retroactive application of the Temporary Regulations, the Company benefited in 2018 from both the 100% dividends received deduction and the look-through exception to foreign personal holding company income. The Company has analyzed the Temporary Regulations and concluded that the relevant Temporary Regulations were not validly issued. Therefore, the Company has not accounted for the effects of the Temporary Regulations in its Condensed Consolidated Financial Statements for the period ending March 31, 2020.2021. The Company believes it has strong arguments in favor of its position and believes it has met the more likely than not recognition threshold that its position will be sustained. However, due to the inherent uncertainty involved in challenging the validity of regulations as well as a potential litigation process, there can be no assurances that the relevant Temporary Regulations will be invalidated or that a court of law will rule in favor of the Company. If the Company’s position on the Temporary Regulations is not sustained, the Company would be required to recognize an income tax expense of approximately $180 million to $220 million related to an income tax benefit from fiscal year 2018 that was recorded based on regulations in existence at the time. In addition, the Company may be required to pay any applicable interest and penalties. The Company intends to vigorously defend its position.

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Footnote 13 — Leases
Supplemental Condensed Consolidated Balance Sheet information related to leases for the period indicated, is as follows (in millions):
ClassificationMarch 31, 2020December 31, 2019
Assets
Operating leasesOperating lease assets, net (1)$561  $615  
Finance leasesProperty, plant and equipment, net (2)14  15  
Total lease assets$575  $630  
Liabilities
Current
Operating leasesOther accrued liabilities$126  $132  
Finance leasesShort-term debt and current portion of long-term debt3  3  
Noncurrent
Operating leasesLong-term operating lease liabilities503  541  
Finance leasesLong-term debt9  10  
Total lease liabilities$641  $686  

(1) During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of overall macroeconomic conditions and developments in the equity and credit markets primarily driven by the COVID-19 pandemic. Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets at the lowest level for which identifiable cash flows are available to their respective carrying amount. As a result of the impairment testing performed in connection with the triggering event, the Company recorded a non-cash impairment charge of $3 million during the three months ended March 31, 2020 in the Home and Outdoor segment related to the operating leases of its Yankee Candle retail store business. In addition, the Company recorded an impairment charge of $2 million in the Corporate segment to reflect a reduction in the carrying values of certain operating lease assets.
(2) Net of accumulated depreciation of $10 million and $8 million at March 31, 2020 and December 31, 2019.
Components of lease expense as of the date indicated, are as follows (in millions):
Three Months Ended March 31,
20202019
Operating lease cost:
Operating lease cost (1)$48  $53  
Variable lease costs (2)6  6  
Finance lease cost:
Amortization of leased assets1  1  
(1)Includes short-term leases, which are immaterial.
(2)Consists primarily of additional payments for non-lease components, such as maintenance costs, payments of taxes and additional rent based on a level of the Company’s retail store sales.
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Remaining lease term and discount rates as of the date indicated, are as follows:
March 31, 2020
Weighted average remaining lease term (years):
Operating leases7
Finance leases3
Weighted average discount rate:
Operating leases4.3%
Finance leases3.5%
Supplemental cash flow information related to leases for the period indicated is as follows (in millions):
Three Months Ended
March 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$47  $42  
Financing cash flows from finance leases1  1  
Right of use assets obtained in exchange for lease liabilities:
Operating leases7  27  
Finance leases—  7  
Maturities of lease liabilities for continuing operations at March 31, 2020, are as follows (in millions):
Operating
Leases
Finance
Leases
2020 (Excludes three months ended March 31, 2020)$123  $4  
2021139  4  
2022114  3  
202386  1  
202469  —  
Thereafter214  —  
Total lease payments745  12  
Less: imputed interest(116) —  
Present value of lease liabilities$629  $12  

Footnote 1412 — Earnings Per Share
The computations of the weighted average shares outstanding for the periods indicated are as follows (in millions):
Three Months Ended
March 31,		Three Months Ended
 March 31,
2020201920212020
Weighted average shares outstandingWeighted average shares outstanding423.8  422.8  Weighted average shares outstanding424.9 423.8 
Share-based payment awards classified as participating securities (1)Share-based payment awards classified as participating securities (1)—  0.2  Share-based payment awards classified as participating securities (1)0 0 
Basic weighted average shares outstandingBasic weighted average shares outstanding423.8  423.0  Basic weighted average shares outstanding424.9 423.8 
Dilutive securities (2)Dilutive securities (2)—  —  Dilutive securities (2)2.7 0 
Diluted weighted average shares outstandingDiluted weighted average shares outstanding423.8  423.0  Diluted weighted average shares outstanding427.6 423.8 
(1)For the three months ended March 31, 20202021 and 2019,2020, dividends and equivalents for share-based awards that are expected to be forfeited do not have a material effect on net income for basic and diluted earnings per share.
(2)The three months ended March 31, 2020 and 2019 excludeexcludes 1.1 million and 0.4 million, respectively, of potentially dilutive share-based awards as their effect would be anti-dilutive.
At March 31, 2021 there were 0 potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share. At March 31, 2020, there were 0.7 million potentially dilutive restricted stock awards with performance-based vesting targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

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Footnote 1513 — Share-Based Compensation

During the three months ended March 31, 2020,2021, the Company awarded 1.21.1 million performance-based restricted stock units (RSUs), which had an aggregate grant date fair value of $27 million and entitle the recipients to shares of the Company’s common stock primarily at the end of a three-yearthree-year vesting period. The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions.

During the three months ended March 31, 2020,2021, the Company also awarded 0.6 million time-based RSUs with an aggregate grant date fair value of $11$15 million. These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest either at the end of a three-year period or in equal installments over a three-yearthree-year period.

During the three months ended March 31, 2020,2021, the Company also awarded 1.02.3 million time-based stock options with an aggregate grant date fair value of $6$14 million. These stock options entitle recipients to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of the underlying shares as of the grant date and primarily vest in equal installments over a three-yearthree-year period.

The weighted average assumptions used to determine the fair value of stock options granted for the three months ended March 31, 2020,2021, is as follows:

Risk-free interest rates1.40.8 %
Expected volatility41.344.2 %
Expected dividend yield3.95.1 %
Expected life (in years)6.26
Exercise price$20.02 23.79
Intrinsic value$— 

Dividends per share were $0.23, for both the three months ended March 31, 2020 and 2019.

Footnote 1614 — Fair Value Disclosures
Recurring Fair Value Measurements
The following table presents the Company’s non-pension financial assets and liabilities, which are measured at fair value on a recurring basis (in millions):
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
Fair value Asset (Liability)Fair value Asset (Liability)Fair value Asset (Liability)Fair value Asset (Liability)
Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Derivatives:Derivatives:Derivatives:
AssetsAssets$—  $84  $—  $84  $—  $13  $—  $13  Assets$0 $28 $0 $28 $0 $28 $0 $28 
LiabilitiesLiabilities—  (18) —  (18) —  (18) —  (18) Liabilities0 (79)0 (79)0 (138)0 (138)
Investment securities, including mutual fundsInvestment securities, including mutual funds6  1  —  7  10  1  —  11  Investment securities, including mutual funds9 0 0 9 10 0 0 10 
For publicly traded investment securities, including mutual funds, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1. Other investment securities are primarily comprised of money market accounts that are classified as Level 2. The Company determines the fair value of its derivative instruments using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. Accordingly, the Company’s derivative instruments are classified as Level 2.
During the first quarter of 2019, the Company acquired an equity investment for $18 million, which is traded on an active exchange and therefore has a readily determinable fair value. At March 31, 2020, the fair value of the equity investment was $6 million. For equity investments with readily determinable fair values held at March 31, 2020, the Company recorded $3 million and $5 million of unrealized losses within other expense, net in the Condensed Consolidated Statement of Operations for the three months period ended March 31, 2020 and 2019, respectively.
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Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, derivative instruments, notes payable and short and long-term debt. The carrying values for current financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate fair value due to the short maturity of such instruments. The fair values of the Company’s debt and derivative instruments are disclosed in Footnote 8 and Footnote 9 and Footnote 10,, respectively.

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Nonrecurring Fair Value Measurements

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

The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows. Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business growth rates, terminal values and discount rates. The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use of judgment and assumptions, such as the estimation of cash flow projections, terminal values, royalty rates, contributory cross charges, where applicable, and discount rates. Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy. These assets and certain liabilities are measured at fair value on a nonrecurring basis as part of the Company’s annual impairment testing and as circumstances require.

The following table summarizes In connection with the assets that are measuredCompany's annual impairment testing at Level 3December 1, 2020, an intangible asset was fair valuevalued at $135 million on a non-recurring basis at the dates indicated:
March 31, 2020December 31, 2019
Indefinite-lived intangible assets$796  $1,365  
basis.

At March 31, 2020, certain intangible assets are recorded at fair value based upon the Company's impairment testing as circumstances require, while only certain intangible assets are recorded at fair value at March 31, 2020 (See Footnote 7).
The Company reviews property, plant and equipment and operating lease assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows. If the Company concludes that impairment exists, the carrying amount is reduced to fair value. See Footnotes 6 and 13, respectively, Footnote 5 for further information.
Footnote 1715 — Segment Information

During the first quarter,Beginning January 1, 2021, the Company appointed separate Presidentsreported the operating results of its cookware product lines as part of the Food reporting unit within the Home Solutions segment, and no longer as part of the former Appliances and Cookware segment. This change was the result of an assessment by the CODM to better align the cookware product lines with other similar product lines in various food categories. In connection with this change, the CEO for itsthe Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and Commercial business units, each reporting directly to the chief operating decision maker (CODM).innovation of these product lines. The Company determined these appointments requiredthis product line change did not result in a reassessmentchange to either of its operatingHome Solutions or former Appliances and Cookware reportable segments. As a resultIn connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment. Prior period comparable results for both of its assessment,these segments have been reclassified to conform to this product line change. The Company also revised the Company concluded thatcalculation of operating income (loss) by segment to include restructuring charges. Prior period comparable results have been reclassified to conform to the Food and Commercial business units are 2 separate operating segments but meet the requirements to be aggregated into a single reportable segment, pursuant to authoritative accounting literature, as they have similar economic and qualitative characteristics. There were no changes to its other reportable segments.change in calculation.

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The Company’s 4Company's 5 primary reportable segments are as follows:are:

SegmentKey BrandsDescription of Primary Products
Home Appliances and CookwareCalphalon®, Crock-Pot®, Mr. Coffee®, Oster® and Sunbeam®Household products, including kitchen appliances gourmet cookware, bakeware and cutlery
Food and Commercial SolutionsBall® (1)BRK®, FoodSaver®First Alert®, Rubbermaid®Mapa®, Quickie®, Rubbermaid Commercial Products®, Sistema®, Mapa®, Quickie® and Spontex®Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling solutions; connected home and security and smoke and carbon monoxide alarms
Home
Solutions		Ball® (1), Calphalon®, Chesapeake Bay Candle®, FoodSaver®, Rubbermaid®, Sistema®, WoodWick® and Yankee Candle®Food storage and home storage products,products; fresh preserving products, vacuum sealing products, commercial cleaninggourmet cookware, bakeware and maintenance solutions, hygiene systemscutlery and material handling solutions
Home and 
Outdoor Living		Chesapeake Bay Candle®, Coleman®, Contigo®, ExOfficio®, First Alert®, Marmot®, WoodWick® and Yankee Candle®Products for outdoor and outdoor-related activities, home fragrance products and connected home and security
Learning and 
Development		Aprica®, Baby Jogger®, Dymo®, Elmer’s®, EXPO®, Graco®, Mr. Sketch®, NUK®, Paper Mate®, Parker®, Prismacolor®, Sharpie®, Tigex® Waterman® and X-Acto®WritingBaby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based adhesive and cutting products;products and labeling solutions; baby gearsolutions
Outdoor and infant care productsRecreationColeman®, Contigo®, ExOfficio®, Marmot®Products for outdoor and outdoor-related activities

(1)nwl-20210331_g1.gifand Ball® TM of Ball Corporation, used under license.

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This structure reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. As a result of the aforementioned changes, net sales, operating income (loss) and impairment of goodwill and indefinite-lived intangible assets for the three months ended March 31, 2020 and segment assets as of December 31, 2020 have been recast. Selected information by segment is presented in the following tables (in millions):

Three Months Ended
March 31,
20202019
 Net sales (1)
Appliances and Cookware$291  $330  
Food and Commercial520  504  
Home and Outdoor Living547  627  
Learning and Development528  581  
$1,886  $2,042  
 Operating income (loss) (2)
Appliances and Cookware$(308) $(4) 
Food and Commercial84  1  
Home and Outdoor Living(1,121) (2) 
Learning and Development5  89  
Corporate(66) (61) 
Restructuring(2) (11) 
$(1,408) $12  
March 31, 2020December 31, 2019
Segment assets
Appliances and Cookware$1,064  $1,468  
Food and Commercial3,780  3,795  
Home and Outdoor Living2,802  3,833  
Learning and Development5,007  4,800  
Corporate1,250  1,746  
$13,903  $15,642  
Three Months Ended
March 31,
20202019
Impairment of goodwill and indefinite-lived intangibles assets (3)
Appliances and Cookware$299  $—  
Food and Commercial—  63  
Home and Outdoor Living1,092  —  
Learning and Development78  —  
$1,469  $63  
Three Months Ended
 March 31,
20212020
 Net sales (1)
Home Appliances$360 $261 
Commercial Solutions471 413 
Home Solutions504 377 
Learning and Development617 528 
Outdoor and Recreation336 307 
$2,288 $1,886 
 Operating income (loss) (2)
Home Appliances$3 $(299)
Commercial Solutions50 (272)
Home Solutions61 (301)
Learning and Development110 4 
Outdoor and Recreation15 (474)
Corporate(47)(66)
$192 $(1,408)
March 31, 2021December 31, 2020
Segment assets
Home Appliances$902 $970 
Commercial Solutions2,530 2,529 
Home Solutions3,032 3,087 
Learning and Development4,568 4,663 
Outdoor and Recreation991 988 
Corporate2,317 2,463 
$14,340 $14,700 
Three Months
Ended
March 31, 2020
Impairment of goodwill and indefinite-lived intangibles assets (3)
Home Appliances$287 
Commercial Solutions320 
Home Solutions302 
Learning and Development78 
Outdoor and Recreation482 
$1,469 

(1)All intercompany transactions have been eliminated.
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(2)Operating income (loss) by segment is net sales less cost of products sold, SG&A, restructuring and impairment of goodwill, intangibles and other assets for continuing operations.assets. Certain Corporate expenses of an operational nature are allocated to business segments primarily on a net sales basis. Corporate depreciation and amortization is allocated to the segments on a percentage of net sales basis, and included in segment operating income.
(3)DuringThe Company did 0t record any impairment charges during the three months ended March 31, 2021. During the three months ended March 31, 2020, the Company recorded impairment charges to reflect impairment of intangible assets related to certain of the Company’s indefinite-lived trade names and goodwill. See During the three months ended March 31, 2019, the Company recorded an impairment charge to reflect a decrease in the carrying values of Mapa/Spontex and Quickie while these businesses were classified as held for sale.Footnote 6 See Footnote 7 for further information.
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The following tables disaggregates revenue by major product grouping source and geography for the periods indicated (in millions):
Three Months Ended March 31, 2020
Appliances and CookwareFood and CommercialHome and
Outdoor Living		Learning and DevelopmentTotal
Appliances and Cookware$291  $—  $—  $—  $291  
Food—  184  —  —  184  
Commercial—  336  —  —  336  
Connected Home and Security—  —  77  —  77  
Home Fragrance—  —  163  —  163  
Outdoor and Recreation—  —  307  —  307  
Baby and Parenting—  —  —  244  244  
Writing—  —  —  284  284  
Total$291  $520  $547  $528  $1,886  
North America$184  $374  $387  $374  $1,319  
International107  146  160  154  567  
Total$291  $520  $547  $528  $1,886  

Three Months Ended March 31, 2019
 Appliances and CookwareFood and CommercialHome and
Outdoor Living		Learning and DevelopmentTotal
Appliances and Cookware$330  $—  $—  $—  $330  
Food—  175  —  —  175  
Commercial Products—  329  —  —  329  
Connected Home and Security—  —  84  —  84  
Home Fragrance—  —  197  —  197  
Outdoor and Recreation—  —  346  —  346  
Baby and Parenting—  —  —  236  236  
Writing—  —  —  345  345  
Total$330  $504  $627  $581  $2,042  
North America$214  $363  $440  $391  $1,408  
International116  141  187  190  634  
Total$330  $504  $627  $581  $2,042  



Three Months Ended March 31, 2021
Home
Appliances		Commercial SolutionsHome
Solutions		Learning and DevelopmentOutdoor and RecreationTotal
Home Appliances$360 $0 $0 $0 $0 $360 
Commercial0 380 0 0 0 380 
Connected Home Security0 91 0 0 0 91 
Food0 0 274 0 0 274 
Home Fragrance0 0 230 0 0 230 
Baby and Parenting0 0 0 281 0 281 
Writing0 0 0 336 0 336 
Outdoor and Recreation0 0 0 0 336 336 
Total$360 $471 $504 $617 $336 $2,288 
North America$195 $344 $401 $426 $177 $1,543 
International165 127 103 191 159 745 
Total$360 $471 $504 $617 $336 $2,288 
Three Months Ended March 31, 2020
Home
Appliances		Commercial SolutionsHome
Solutions		Learning and DevelopmentOutdoor and RecreationTotal
Home Appliances$261 $0 $0 $0 $0 $261 
Commercial0 336 0 0 0 336 
Connected Home Security0 77 0 0 0 77 
Food0 0 214 0 0 214 
Home Fragrance0 0 163 0 0 163 
Baby and Parenting0 0 0 244 0 244 
Writing0 0 0 284 0 284 
Outdoor and Recreation0 0 0 0 307 307 
Total$261 $413 $377 $528 $307 $1,886 
North America$154 $302 $297 $374 $192 $1,319 
International107 111 80 154 115 567 
Total$261 $413 $377 $528 $307 $1,886 

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Footnote 1816 — Litigation and Contingencies

The Company is subject to various claims and lawsuits in the ordinary course of business, including from time to time, contractual disputes, employment and environmental matters, product and general liability claims, claims that the Company has infringed on the intellectual property rights of others, and consumer and employment class actions. Some of the legal proceedings include claims for punitive as well as compensatory damages. In the ordinary course of business, the Company is also subject to legislative requests, regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. On January 31, 2020, theThe Company previously disclosed that it had received a subpoena and related informal document requests from the U.S. Securities and Exchange Commission (the “SEC”)SEC primarily relating to its sales practices and certain accounting matters duringfor the time period beginning from January 1, 2016 to the date of the subpoena. The subpoena followed various informal document requests from the SEC staff, including several requests primarily related to the impairment of goodwill and other intangible assets.2016. The Company has cooperated in providing documents and information towith the SEC in connection with its investigation and ongoing requests for documents and information and intends to continue to do so in connection with the subpoena.so. The Company cannot predict the timing or outcome of this investigation.

Securities Litigation

Certain of the Company’s current and former officers and directors have been named in shareholder derivative lawsuits. On October 29, 2018, a shareholder filed a putative derivative complaint, Streicher v. Polk, et al., in the United States District Court for the District of Delaware (the “Streicher Derivative Action”), purportedly on behalf of the Company against certain of the Company's current and former officers and directors. On October 30, 2018, another shareholder filed a putative derivative complaint, Martindale v. Polk, et al., in the United States District Court for the District of Delaware (the “Martindale Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against the same defendants. The complaints allege, among other things, violations of the federal securities laws, breaches of fiduciary duties, unjust enrichment, and waste of corporate assets. The factual allegations underlying these claims are similar to the factual allegations made in the In re Newell Brands, Inc. Securities Litigation pending in the United States District Court for the District of New Jersey, further described below. The complaints seek unspecified damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures. The Streicher Derivative Action and the Martindale Derivative Action have been consolidated and the case is now known as In re Newell Brands Inc. Derivative Litigation (the "Newell“Newell Brands Derivative Action”), which is pending in the United States District Court for the District of Delaware. On January 31, 2019,March 22, 2021, the United States District Court for the District of Delaware stayed the Newell Brands Derivative Action pending the resolution of theany motions to dismissfor summary judgment filed in In reOklahoma Firefighters Pension and Retirement System v. Newell Brands Inc. Securities Litigation, et al. (described below). On December 30, 2020, two shareholders filed a putative derivative complaint, Weber, et al. v. Polk, et al., in the United States District Court for the District of Delaware (the “Weber Derivative Action”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors. The complaint in the Weber Derivative Action alleges, among other things, breaches of fiduciary duty and waste of corporate assets. The factual allegations underlying these claims are similar to the factual allegations made in the Newell Brands Derivative Action. On March 19, 2021, the United States District Court for the District of Delaware stayed the Weber Derivative Action pending final disposition of Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al. (described below).

The Company and certain of its current and former officers and directors have been named as defendants in a putative securities class action lawsuit filed in the Superior Court of New Jersey, Hudson County, on behalf of all persons who acquired Company common stock pursuant or traceable to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden (the “Registration Statement”). The action was filed on September 6, 2018, and is captioned Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al., Civil Action No. HUD-L-003492-18. The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions in the Registration Statement regarding the Company’s financial results, trends, and metrics. The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief, but has not specified the amount of damages being sought. The Company intends to defend the litigation vigorously.

The Company and certain of its officers have been named as defendants in two2 putative securities class action lawsuits, each filed in the United States District Court for the District of New Jersey, on behalf of all persons who purchased or otherwise acquired the Company's common stock between February 6, 2017 and January 24, 2018. The first lawsuit was filed on June 21, 2018 and is captioned Bucks County Employees Retirement Fund, Individually and on behalf of All Others Similarly Situated v. Newell Brands Inc., Michael B. Polk, Ralph J. Nicoletti, and James L. Cunningham, III, Civil Action No. 2:18-cv-10878 (United States District Court for the District of New Jersey). The second lawsuit was filed on June 27, 2018 and is captioned Matthew Barnett, Individually and on Behalf of All Others Similarly Situated v. Newell Brands Inc., Michael B. Polk, Ralph J. Nicoletti, and James L. Cunningham, III, Civil Action No. 2:18-cv-11132 (United States District Court for the District of New Jersey). On
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September 27, 2018, the court consolidated these two2 cases under Civil Action No. 18-cv-10878 (JMV)(JBC) bearing the caption In re Newell Brands, Inc. Securities Litigation. The court also named Hampshire County Council Pension Fund as the lead plaintiff in the consolidated case. The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations, and prospects between February 6, 2017 and January 24, 2018. The plaintiffs seek compensatory damages
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and attorneys’ fees and costs, among other relief, but have not specified the amount of damages being sought. The Company intends to defend the litigation vigorously. On January 10, 2020, the court in In re Newell Brands Inc. Securities Litigation entered a dismissal with prejudice after granting the Company’s motion to dismiss. On February 7, 2020, the plaintiffs filed an appeal to the United States Court of Appeals for the Third Circuit.

Jarden Acquisition

Under the Delaware General Corporation Law (“DGCL”), any Jarden stockholder who did not vote in favor of adoption of the Merger Agreement, and otherwise complies with the provisions of Section 262 of the DGCL, was entitled to seek an appraisal of his or her shares of Jarden common stock by On December 1, 2020, the Court of Chancery ofAppeals affirmed the State of Delaware as provided under Section 262 of the DGCL. Two separate appraisal petitions, styled as Dunham Monthly Distribution Fund v. Jarden Corporation, Case No. 12454-VCS (Court of Chancery of the State of Delaware), and Merion Capital LP v. Jarden Corporation, Case No. 12456-VCS (Court of Chancery of the State of Delaware), respectively, were filed on June 14, 2016 by a total of ten purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL. A third appraisal petition, Fir Tree Value Master Fund, LP v. Jarden Corporation, Case No. 12546-VCS (Court of Chancery of the State of Delaware), was filed on July 8, 2016 by 2 purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL. A fourth appraisal petition, Veritian Partners Master Fund LTP v. Jarden Corporation, Case No. 12650-VCS (Court of Chancery of the State of Delaware), was filed on August 12, 2016 by 2 purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL. On or about October 3, 2016, the foregoing petitions were consolidated for joint prosecution under Case No. 12456-VCS, and, except as provided below, the litigation is ongoing. The holders of a total of approximately 10.6 million former Jarden shares were represented in these actions initially.

On July 5, 2017 and July 6, 2017, Jarden and 11 of the dissenting stockholders, specifically including Merion Capital ERISA LP, Merion Capital LP, Merion Capital II LP, Dunham Monthly Distribution Fund, WCM Alternatives: Event-Driven Fund, Westchester Merger Arbitrage Strategy sleeve of the JNL Multi-Manager Alternative Fund, JNL/Westchester Capital Event Driven Fund, WCM Master Trust, The Merger Fund, The Merger Fund VL and SCA JP Morgan Westchester (collectively, the “Settling Petitioners”), entered into settlement agreements with respect to approximately 7.7 million former Jarden shares (collectively, the “Settlement Agreements”). Pursuant to the Settlement Agreements, in exchange for withdrawing their respective demands for appraisal of their shares of Jarden common stock and a full and final release of all claims, among other things, the Settling Petitioners received the original merger consideration provided for under the Merger Agreement, specifically (1) 0.862 of a share of Newell common stock, and (2) $21.00 in cash, per share of Jarden common stock (collectively, the “Merger Consideration”), excluding any and all other benefits, including, without limitation, the right to accrued interest, dividends, and/or distributions. Accordingly, pursuant to the terms of the Settlement Agreements, Newell issued 6.6 million shares of Newell common stock to the Settling Petitioners (representing the stock component of the Merger Consideration), and authorized payment to the Settling Petitioners of approximately $162 million (representing the cash component of the Merger Consideration). The Court of Chancery of the State of Delaware has dismissed with prejudice the appraisal claims for the Settling Petitioners.

Following the settlements, claims from the holders of approximately 2.9 million former Jarden shares remained outstanding in the proceedings. The value of the merger consideration attributable to such shares based on the Company’s stock price on the closing date of the Jarden acquisition would have been approximately $171 million in the aggregate. The fair value of the shares of Jarden common stock held by these dissenting stockholders, as determined by the court, is payable in cash and could be lower or higher than the Merger Consideration to which such Jarden stockholders would have been entitled under the Merger Agreement.

On July 19, 2019, the Court issued an order in which it determined that the fair value of the remaining Jarden shares at the date of the Merger was $48.31 per share, reflecting approximately $140 million in value to be paid to the remaining dissenting shareholders. The Court also ordered the payment of accrued interest, compounded quarterly, and accruing from the date of closing to the date of payment. On July 26, 2019, the remaining dissenting shareholders filed a Motion for Reargument asking the Court to amend its valuation to no less than the deal price of $59.21 per share. On September 16, 2019, the Court denied the Motion for Reargument and affirmed its $48.31 per share valuation. The Court entered judgment on October 2, 2019. On October 4, 2019, the Company paid the judgment in the amount of approximately $177 million, which cuts off interest accumulation on the judgment amount. The Company reflected $171 million and $6 million as a financing cash outflow and operating cash outflow, respectively, within the Company’s Consolidated Statement of Cash Flows for the year ended December 31, 2019. On November 1, 2019, the dissenting shareholders filed an appeal to the Supreme Court of Delaware.


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Gizmo Children’s Cup Recall

In June 2019, a subsidiary of the Company conducted an internal investigation to determine the root cause of an issue related to a product line in the Home and Outdoor Living segment that was reported to the Company by one of its retailers. The Company determined that because of an issue occurring infrequently, but on a random basis, during the manufacturing process, the Gizmo Children’s cup may present users with a potential safety concern because the silicone spout may detach from the nylon base. The Company reported the issue to the Consumer Product Safety Commission and Health Canada, and issued a return authorization notice to retail customers. The Company announced a recall of the product on August 27, 2019 offering consumers a replacement lid if they had an affected product. In late 2019, the Company discovered that some product that had been inspected and subsequently resold or used as replacement lids for the recall was exhibiting the same type of separation of the spout from the lid base. The Company investigated the issue and ultimately determined to extend the recall to include the inspected product. The Company has reported this conclusion to the relevant authorities and on February 19, 2020 announced an expansion of the recall. The Company incurred inception to date charges associated with this matter of $21 million, including $1 million during the first quarter of 2020, net of recoveries from a third-party manufacturer.dismissal.

Environmental Matters

The Company is involved in various matters concerning federal and state environmental laws and regulations, including matters in which the Company has been identified by the U.S. Environmental Protection Agency (“U.S. EPA”) and certain state environmental agencies as a potentially responsible party (“PRP”) at contaminated sites under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and equivalent state laws. In assessing its environmental response costs, the Company has considered several factors, including the extent of the Company’s volumetric contribution at each site relative to that of other PRPs; the kind of waste; the terms of existing cost sharing and other applicable agreements; the financial ability of other PRPs to share in the payment of requisite costs; the Company’s prior experience with similar sites; environmental studies and cost estimates available to the Company; the effects of inflation on cost estimates; and the extent to which the Company’s, and other parties’, status as PRPs is disputed.

The Company’s estimate of environmental remediation costs associated with these matters at March 31, 20202021 was $43$41 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets. No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters. Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

Lower Passaic River Matter

U.S. EPA has issued General Notice Letters (“GNLs”) to over 100 entities, including the Company and Berol Corporation, a subsidiary of the Company (“Berol”), alleging that they are PRPs at the Diamond Alkali Superfund Site, which includes a 17-mile stretch of the Lower Passaic River and its tributaries. NaN of the GNL recipients, including the Company on behalf of itself and Berol (the “Company Parties”), have taken over the performance of the remedial investigation (“RI”) and feasibility study (“FS”) for the Lower Passaic River. On April 11, 2014, while work on the RI/FS remained underway, U.S. EPA issued a Source Control Early Action Focused Feasibility Study (“FFS”), which proposed 4 alternatives for remediation of the lower 8.3 miles of the Lower Passaic River. U.S. EPA’s cost estimates for its cleanup alternatives ranged from approximately $315 million to approximately $3.2 billion in capital costs plus from approximately $1 million to $2 million in annual maintenance costs for 30 years, with its preferred alternative carrying an estimated cost of approximately $1.7 billion plus an additional approximately $2 million in annual maintenance costs for 30 years. In February 2015, the participating parties submitted to the U.S. EPA a draft RI, followed by submission of a draft FS in April 2015. The draft FS sets forth various alternatives for remediating the lower 17 miles of the Passaic River, ranging from a “no action” alternative, to targeted remediation of locations along the entire lower 17 mile stretch of the river, to remedial actions consistent with U.S. EPA’s preferred alternative as setsset forth in the FFS for the lower 8.3 miles coupled with monitored natural recovery and targeted remediation in the upper 9 miles. The cost estimates for these alternatives ranged from approximately $28 million to $2.7 billion, including related operation, maintenance and monitoring costs. U.S. EPA issued a conditional approval of the RI report in June 2019.

U.S. EPA issued a Record of Decision for the lower 8.3 miles of the Lower Passaic River in March 2016 (the “2016 ROD”). The 2016 ROD finalizes as the selected remedy the preferred alternative set forth in the FFS, which U.S. EPA estimates will cost $1.4 billion. Subsequent to the release of the 2016 ROD, U.S. EPA issued GNLs for the lower 8.3 miles of the Lower Passaic River
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(the (the “2016 GNL”) to numerous entities, apparently including all previous recipients of the initial GNL, including Company Parties, as well as several additional entities. The 2016 GNL states that U.S. EPA would like to determine whether one entity, Occidental Chemical Corporation (“OCC”), will voluntarily perform the remedial design for the selected remedy for the lower 8.3 miles, and that following execution of an agreement for the remedial design, U.S. EPA plans to begin negotiation of a remedial
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action consent decree “under which OCC and the other major PRPs will implement and/or pay for U.S. EPA’s selected remedy for the lower 8.3 miles of the Lower Passaic River and reimburse U.S. EPA’s costs incurred for the Lower Passaic River.”

In September 2016, OCC and EPA entered into an Administrative Order on Consent for performance of the remedial design. On March 30, 2017, U.S. EPA sent a letter offering a cash settlement in the amount of $0.3 million to 20 PRPs, not including the Company Parties, for CERCLA Liability (with reservations, such as for Natural Resource Damages) in the lower 8.3 miles of the Lower Passaic River. U.S. EPA further indicated in related correspondence that a cash-out settlement might be appropriate for additional parties that are “not associated with the release of dioxins, furans, or PCBs to the Lower Passaic River.” Then, by letter dated September 18, 2017, U.S. EPA announced an allocation process involving all GNL recipients except those participating in the first-round cash-out settlement, and five5 public entities. The letter affirms that U.S. EPA anticipates eventually offering cash-out settlements to a number of parties, and that it expects “that the private PRPs responsible for release of dioxin, furans, and/or PCBs will perform the OU2 lower 8.3 mile remedial action.” At this time, it is unclear how the cost of any cleanup would be allocated among any of the parties, including the Company Parties or any other entities. The site is also subject to a Natural Resource Damage Assessment.

Following discussion with U.S. EPA regarding the 2015 draft FS, and U.S. EPA’s issuance of the 2016 ROD, the participating parties refocused the FS on the upper 9 miles of the Lower Passaic River. The parties submitted most portions of a draftfinal Interim Remedy FS (the “Draft IR FS”) on August 12, 2019,7, 2020, setting forth remedial alternatives ranging from “no further action” to targeted dredging and capping with different targets for post-remedy surface weighted average concentration of contamination. The cost estimates for these active alternatives range from approximately $6$321 million to $460$468 million. EPA has indicated it aims to have the IR FS finalized and to issue a Record of Decision for the upper 9 miles in 2020.early 2021.

OCC has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) for its liability in connection with the Diamond Alkali Superfund Site. OCC has also asserted that Maxus’s parent company, YPF, S.A., and certain other affiliates (the “YPF Entities”) similarly must indemnify OCC, including on an “alter ego” theory. On June 17, 2016, Maxus and certain of its affiliates commenced a chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the District of Delaware. In connection with that proceeding, the YPF Entities are attempting to resolve any liability they may have to Maxus and the other Maxus entities undergoing the chapter 11 bankruptcy. An amended Chapter 11 plan of liquidation became effective in July 2017. In conjunction with that plan, Maxus and certain other parties, including the Company, entered into a mutual contribution release agreement (“Passaic Release”) pertaining to certain costs, but not costs associated with ultimate remedy.

On June 30, 2018, OCC sued 120 parties, including the Company and Berol, in the U.S. District Court in New Jersey (“OCC Lawsuit”). OCC subsequently filed a separate, related complaint against 5five additional defendants. The OCC Lawsuit includes claims, counterclaims and cross-claims for cost recovery, contribution, and declaratory judgement under CERCLA. The current, primary focus of the claims, counterclaims and cross-claims against the defendants is on certain past and future costs for investigation, design and remediation of the 17- mile17-mile stretch of the Lower Passaic River and its tributaries, other than those subject to the Passaic Release. The complaint notes, however, that OCC may broaden its claims in the future if and when EPA selects remedial actions for other portions of the Site or completes a Natural Resource Damage Assessment. Given the uncertainties pertaining to this matter, including that U.S. EPA is still reviewing the FS, that no framework for or agreement on allocation for the investigation and ultimate remediation has been developed, and that there exists the potential for further litigation regarding costs and cost sharing, the extent to which the Company Parties may be held liable or responsible is not yet known. OCC stated in a subsequent filing that it “anticipates” asserting additional claims against the defendants “regarding Newark Bay,” which is also part of the Diamond Alkali Superfund Site, after U.S. EPA has decided the Newark Bay remedy.

Based on currently known facts and circumstances, the Company does not believe that this matter is reasonably likely to have a material impact on the Company’s results of operations, including, among other factors, because there are numerous other parties who will likely share in any costs of remediation and/or damages. However, in the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

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

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Other Matters

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

In the normal course of business and as part of its acquisition and divestiture strategy, the Company may provide certain representations and indemnifications related to legal, environmental, product liability, tax or other types of issues. Based on the nature of these representations and indemnifications, it is not possible to predict the maximum potential payments under all of these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements did not have a material effect on the Company’s business, financial condition or results of operations. In connection with the 2018 sale of The Waddington Group, Novolex Holdings, Inc. (the “Buyer”) filed suit against the Company in October 2019 in the Superior Court of Delaware. The Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group. The Company intends to defend the litigation vigorously.

At March 31, 2020,2021, the Company had approximately $50$53 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Newell Brands Inc.’s (“Newell Brands,” the “Company,” “we,” “us” or “our”) consolidated financial condition and results of operations. The discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto.

Forward-Looking Statements

Forward-looking statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,”, “explore”, “project,” “target,” “plan,” “expect,” “setting"setting up,” “beginning" "beginning to,”" “will,” “should,” “would,” “resume,”"resume," "are confident that," "remain optimistic that" or similar statements. The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results, including the impact of the COVID-19 pandemic. In addition, there are no assurances that the Company will complete any or all of the potential transactions, or other initiatives referenced here.results. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to:

•the Company’sCompany's ability to manage the demand, supply and operational challenges associated with the actual or perceived effects of the COVID-19 pandemic;
•the Company’s dependence on the strength of retail, commercial and industrial sectors of the economy in various parts of the world;
•competition with other manufacturers and distributors of consumer products;
•major retailers’ strong bargaining power and consolidation of the Company’s customers;
•risks related to the Company’s substantial indebtedness, potential increases in interest rates or additional adverse changes in the Company’s credit ratings;
•the Company’s ability to improve productivity, reduce complexity and streamline operations;
•future events that could adversely affect the valueCompany’s ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of our assets and/or stock priceincreased advertising and require additional impairment charges;promotion spend;
•the Company’sCompany's ability to successfully remediate theits material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting;
•risks related to the Company's ability to develop innovative new products, to develop, maintainCompany’s substantial indebtedness, potential increases in interest rates or changes in the Company’s credit ratings;
•future events that could adversely affect the value of the Company’s assets and/or stock price and strengthen end user brands and to realize the benefits of increased advertising promotion and spend;require additional impairment charges;
•the Company’simpact of cost associated with acquisition and divestitures;
•our ability to complete planned divestitures, and other unexpected costs or expenses associated with dispositions;effectively execute our turnaround plan;
•changes in the prices of raw materials and sourced products, including inflation, and the Company’sCompany's ability to obtain raw materials and sourced products in a timely manner;
•the impact of governmental investigations,investigation, inspections, lawsuits, legislation requests or other actions or other activities by third parties;
•the risks inherent to the Company’s foreign operations, including currency fluctuations, exchange controls and pricing restrictions;
•a failure of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s services providers;
•the impact of U.S.United States or foreign regulations on the Company’s operations, including the escalationimpact of tariffs on imports into the U.S. and exports to Canada, China and the European Union and environmental remediation costs;
•the potential inability to attract, retain and motivate key employees;
•new Treasury or tax regulations and the resolution of tax contingencies resulting in additional tax liabilities;
•product liability, product recalls or related regulatory actions;
•the Company’s ability to protect its intellectual property rights;
•significant increases in the funding obligations related to the Company’s pension plans;plans and
•other factors listed from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
The information contained in this Report is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this Report as a result of new information or future events or developments. In addition, there can be no assurance that the Company has correctly identified and assessed all of the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct.
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Overview

Newell Brands is a leading global marketer of consumer and commercial products that make life better every day for consumers, where they live, learn, work and play. Our products are marketed undergoods company with a strong portfolio of leadingwell-known brands, including Rubbermaid®, Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®Mr.Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert®, Mapa®, Spontex®, Quickie® and Yankee Candle®. Newell Brands is committed to enhancing the lives of consumers around the world with planet friendly, innovative and attractive products that create moments of joy and provide peace of mind. The Company sells its products in nearly 200 countries around the world and has operations on the ground in nearly 100over 40 of these countries.countries, excluding third-party distributors.
Business Strategy

The Company is currently executing acontinuing to execute on its turnaround strategy with the vision of building a global, next generation consumer products company that can unleash the full potential of its brands in a fast moving omni-channel environment. These strategies areThe strategy, developed in 2019, is designed to addressdrive sustainable top line growth, improve operating margins, accelerate cash conversion cycle and strengthen the portfolio, organizational capabilities and employee engagement, while addressing key challenges facing the Company, including:Company. These challenges include: shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail landscape, including the growth in e-commerce; continued macroeconomic and political volatility;volatility and an evolving regulatory landscape. The COVID-19 pandemic and its impact to the Company’s business resulted in the acceleration of these initiatives in many respects.

The Company has identifiedmade significant progress on the following strategic imperatives to address and adapt to these challenges duringit previously identified as part of its turnaround period:strategy:

•StrengthenStrengthening the portfolio by investing in attractive categories aligned with its capabilities and strategy;
•SustainableDriving sustainable profitable growth by focusing on innovation, as well as growth in digital marketing, e-commerce and its international businesses;
•AttractiveImproving margins by driving productivity and overhead savings, to reinvestwhile reinvesting into the business;
•CashEnhancing cash efficiency by improving key working capital metrics, resulting in a lower cash conversion cycle; and
•BuildBuilding a winning team through engagement and focusing the best people on the right things.

Execution onContinued execution of these strategic imperatives will better position the Company for long-term sustainable growth in order to achieve its short-to-near-term goals of:growth.

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•Growing core sales;Table of Contents
•Improving operating margins;
•Accelerating cash conversion cycle; and
•Strengthening organizational capability and employee engagement.

Organizational Structure

The Company’s fourCompany's five primary reportable segments are as follows:the following:

SegmentKey BrandsDescription of Primary Products
Home Appliances and CookwareCalphalon®, Crock-Pot®, Mr. Coffee®, Oster® and Sunbeam®Household products, including kitchen appliances gourmet cookware, bakeware and cutlery
Food and Commercial SolutionsBall® (1)BRK®, FoodSaver®First Alert®, Rubbermaid®Mapa®, Quickie®, Rubbermaid Commercial Products®, Sistema®, Mapa®, Quickie® and Spontex®Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling solutions; connected home and security and smoke and carbon monoxide alarms
Home
Solutions		Ball® (1), Calphalon®, Chesapeake Bay Candle®, FoodSaver®, Rubbermaid®, Sistema®, WoodWick® and Yankee Candle®Food storage and home storage products,products; fresh preserving products, vacuum sealing products, commercial cleaninggourmet cookware, bakeware and maintenance solutions, hygiene systemscutlery and material handling solutions
Home and 
Outdoor Living		Chesapeake Bay Candle®, Coleman®, Contigo®, ExOfficio®, First Alert®, Marmot®, WoodWick® and Yankee Candle®Products for outdoor and outdoor-related activities, home fragrance products and connected home and security
Learning and 
Development		Aprica®, Baby Jogger®, Dymo®, Elmer’s®, EXPO®, Graco®, Mr. Sketch®, NUK®, Paper Mate®, Parker®, Prismacolor®, Sharpie®, Tigex® Waterman® and X-Acto®WritingBaby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based adhesive and cutting products;products and labeling solutions; baby gearsolutions
Outdoor and infant care productsRecreationColeman®, Contigo®, ExOfficio®, Marmot®Products for outdoor and outdoor-related activities
(1)nwl-20210331_g1.gifand Ball® TM of Ball Corporation, used under license.

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The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. See Footnote 17 15of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Recent Developments

Coronavirus (COVID-19)

BeginningThe COVID-19 pandemic, which began in late in2019, has continued to disrupt the fourth quarter and into 2020, COVID-19 emerged and subsequently spread globally, ultimately being declared as a pandemic by the World Health Organization. The pandemic has resulted in various federal, state and local governments as well as private entities mandating restrictions, including travel restrictions, restrictions on public gatherings, closureCompany’s global operations, similar to those of non-essential commerce, stay at home orders and quarantining of people who may have been exposed to the virus. The Company began to experience significant COVID-19 related disruption to its businessmany large, multi-national corporations in three primary areas:

•Supply chain.Supply chain. WhileOf the majority of the Company’s factories are considered essential in their applicable jurisdictions and are operational, the company is experiencing disruption at certain of its facilities. Of itsCompany's 135 manufacturing and distribution facilities, approximately 20 arewere temporarily closed at the end of the first quarter of 2020, the most significant of which arewere its South Deerfield, MA, Home Fragrance plant, its Mexicali, Mexico and India Writing facilities and its Juarez, Mexico Connected Home and Security facility, all of which were closed in lineaccordance with state government guidelines. The Mexicali, Mexico facility hasmajority of the Company’s manufacturing and distribution facilities reopened during the second and third quarter of 2020, and have since reopened on a limited basis and is currently in the process of ramping up to full operations.been operating at or near capacity with inventory levels replenished. The Company is also facingdoes, however, continue to face intermittent supply and labor shortages, capacity constraints, transportation and logistical challenges.challenges, and higher than expected inflation in resin, sourced finished goods and components, freight and fuel. These various disruptions are expected to persist until the current economic and public health conditions improve globally.

•Retail. While the Company’s largest retail customers are experiencingexperienced a surge in sales as their stores remainremained open, a number of secondary customers, primarily in the specialty and department store channels, have temporarily closed their brick and mortar doors.doors in March 2020, and began to reopen in certain regions where conditions improved towards the end of the second quarter of 2020. These dynamics, in combination with some retailers’ prioritization of essential items, have had a meaningful impact on retailers'the Company's traditional order patterns. In addition, the Company temporarily closed its Yankee Candle retail stores in North America asin mid-March of mid-March.2020. These stores reopened by the end of the third quarter in 2020 and have remained open since.

•Consumer demand patternspatterns.. As During the quarantine phase of the pandemic has taken hold,in 2020, consumer purchasing behavior has strongly shifted to certain focused categories. While certainCertain of the Company’s businessesproduct categories have benefitedcontinued to benefit from this shift, includingprimarily in Food, Commercial and Commercial, othersHome Appliances. Some of the Company’s other businesses have seen significant slowing.positive momentum with a rebound in demand post lockdowns, in particular Writing, Baby and Parenting and Home Fragrance.

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In response to the COVID-19 pandemic, the Company has focused on three priorities: protecting the health and well-beingTable of its employees; maintaining financial viability and business continuity; and keeping manufacturing facilities and distribution centers operating, where deemed prudent, to provide products to our consumers. The Company has established internal protocols including the establishment of a COVID-19 task force to monitor the situation, as well as communications and guidance issued by foreign, federal, state and local governments. In the first quarter 2020, the Company instituted mandatory work-from-home policies for employees able to work from home in various locations around the world and implemented a number of precautionary measures at its manufacturing plants, warehouses, distribution centers and R&D centers to reduce person to person contact and improve the personal safety for our front-line employees. Furthermore, beginning in mid-March 2020, the Company began temporarily closing all of the world-wide retail stores within its Home and Outdoor Living segment. While most of the Company’s manufacturing and distribution sites remain open, the Company has also experienced temporary closure of certain key operating facilities in the Home and Outdoor Living and Learning & Development segments, and additional COVID-19 related closures could further disrupt the Company’s supply chain. The Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level to evaluate possible cessation or extensions to all or part of such initiatives. As part of the Company's efforts to contain costs and maintain financial liquidity and flexibility, it has taken certain actions including: instituting a hiring freeze for non-essential roles, furloughed all field-based and most corporate retail employees in North America, effective April 1, 2020, tightened discretionary spending as well as reducing and optimizing advertising and promotional expenses.Contents

As the COVID-19 pandemic continues to evolve, theThe Company believes the extent of the impact of the COVID-19 pandemic to its businesses, operating results, cash flows, liquidity and financial condition will will be primarily driven by the severity and duration of the pandemic, the impact of new strains and variants of the coronavirus, the pandemic’s impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responsesadministration of vaccines to the pandemic.general public, especially in areas where conditions have recently worsened and lockdowns or travel bans have been reinstituted. Those primary drivers are beyond the Company's knowledge and control, and as a result, at this time it is difficult to predict the cumulative impact, both in terms of severity and duration, COVID-19 pandemic will have on its future sales, operating results, cash flows and financial condition. However, the effects that the Company has experienced in the first quarter have been material to its operating results and we anticipate the Company's second quarter results will worsen sequentially. Furthermore, the impact to the Company's businesses, operating results, cash flows, liquidity and financial condition may be further adversely impacted if the current circumstances continueCOVID-19 pandemic continues to exist or worsens for a prolonged period of time.time, new variants of the coronavirus emerge, or if plans to administer vaccines are delayed.

35Redemption of Senior Notes
Table
On March 1, 2021 (the “Redemption Date”), the Company redeemed its 3.15% senior notes that were scheduled to mature in April 2021 (the “April 2021 Notes”) at a redemption price equal to 100% of Contentsthe outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.

During the first quarter of 2020,2021, the Company concluded that an impairment triggering event had occurred asrepurchased $5 million of the 3.85% senior notes due 2023 at approximately 5% above par value. The total consideration, excluding accrued interest, was approximately $5 million. As a result of the COVID-19 global pandemic. partial debt repurchase the Company recorded an immaterial loss.

See Footnotes 1 and 7 Footnote 8of the Notes to the Unaudited Condensed Consolidated Financial Statements Goodwill and Other Indefinite-Lived Intangible Asset Trigger Event, Liquidity and Capital Resources, Significant Accounting Policies and Critical Estimates for information and Risk Factors in Part II, Item 1A.

Goodwill and Other Indefinite-Lived Intangible Asset Trigger Event

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 global pandemic. Pursuant to the authoritative literature the Company performed an impairment test and determined that certain of its indefinite-lived intangible assets in the Appliances and Cookware, Home and Outdoor Living and Learning and Development segments were impaired. During the three months ended March 31, 2020, the Company recorded an aggregate non-cash charge of $1.3 billion to reflect impairment of these indefinite-lived trade names as their carrying values exceeded their fair values. In addition, the Company determined that its goodwill associated with its Appliances and Cookware segment was impaired. During, the three months ended March 31, 2020, the Company recorded a non-cash charge of $212 million to reflect the impairment of its goodwill as its carrying value exceeded its fair value.

See Footnotes 1 and 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements and Significant Accounting Policies and Critical Estimates for information.

Ratings Downgrades and Commercial Paper Access

On March 9, 2020, Moody’s Corporation ("Moody’s") downgraded the Company’s debt rating to “Ba1” based on a view that the Company would fail to meet Moody's target debt level for 2020. Prior to that, on November 1, 2019, S&P Global Inc. ("S&P") downgraded the Company’s debt rating to “BB+” as S&P believed the Company would fail to meet S&P’s target debt level for 2019. As a result of both downgrades, the Company’s ability to borrow under its commercial paper program was eliminated. Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Company’s $1.25 billion unsecured revolving credit facility that matures in December 2023 (“the Credit Revolver”). The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades. The interest rate for borrowings under the Credit Revolver is the borrowing period referenced LIBOR rate plus 127.5 basis points. As such, the Company does not expect any change in its ability to access liquidity in the short term as a result of the downgrades. At March 31, 2020, the Company had $40 million outstanding under its commercial paper program, which was subsequently repaid in April when the Company accessed $125 million under the Credit Revolver. At March 31, 2020, the Company did not have any amounts outstanding under the Credit Revolver. Subsequently on April 15, 2020, Fitch Ratings ("Fitch") downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020.

Certain of the Company’s senior notes aggregating to approximately $4.5 billion are subject to an interest rate adjustment of 25 basis points as a result of each downgrade, for a total of 50 basis points. This increase to the interest rates of the Company's senior notes subject to adjustment is expected to increase the Company’s interest expense for 2020 by approximately $17 million and approximately $23 million on an annualized basis. The Fitch downgrade did not impact the interest rates on any of the Company's senior notes.

See Footnote 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements and Liquidity and Capital Resources for further information.

Impacts of Tariffs

The United States Trade Representative (“USTR”) has imposed increased tariffs on some Chinese goods imported into the United States, resulting in increased costs for the Company. The Company has been successful at securing from the USTR exemptions and exclusions for some of its products, with the most notable exemptions being for certain of its baby gear products, which represents a substantial portion of the Company’s tariff exposure. The Company has largely mitigated its tariff exposure, in part through pricing, productivity and, in some cases, relocation. The Phase 1 agreement signed on January 15, 2020 with China reduced tariffs under List 4a from 15% to 7.5%, effective February 14, 2020, and suspended tariffs under List 4b at 15%, which were due to go into effect on December 15, 2019. The terms of the agreement significantly reduced the estimated impact on tariffs for 2020. In spite of the agreement, a full year of previously implemented tariffs, could have a material impact on the Company's operating results and cash flows, with an estimated gross impact of approximately $75 million in 2020, primarily relating to its Appliances and Cookware, Consumer and Commercial, and Outdoor and Recreation businesses. During the three months ended March 31, 2020, the gross impact was approximately $20 million. The Company will continue to monitor the trade negotiations and deploy mitigation efforts to offset the gross exposure. However, there can be no assurance that the Company will be successful in its mitigation efforts.
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New Treasury Regulations

On June 18, 2019, the U.S. Treasury and the Internal Revenue Service released temporary regulations under IRC Section 245A (“Section 245A”) as enacted by the 2017 U.S. Tax Reform Legislation (“2017 Tax Reform”) and IRC Section 954(c)(6) (the “Temporary Regulations”) to apply retroactively to the date the 2017 Tax Reform was enacted. The Temporary Regulations seek to limit the 100% dividends received deduction permitted by Section 245A for certain dividends received from controlled foreign corporations and to limit the applicability of the look-through exception to foreign personal holding company income for certain dividends received from controlled foreign corporations. Before the retroactive application of the Temporary Regulations, the Company benefited in 2018 from both the 100% dividends received deduction and the look-through exception to foreign personal holding company income. The Company has analyzed the Temporary Regulations and concluded that the relevant Temporary Regulations were not validly issued. Therefore, the Company has not accounted for the effects of the Temporary Regulations in its Condensed Consolidated Financial Statements for the period ending March 31, 2020. The Company believes it has strong arguments in favor of its position and believes it has met the more likely than not recognition threshold that its position will be sustained. However, due to the inherent uncertainty involved in challenging the validity of regulations as well as a potential litigation process, there can be no assurances that the relevant Temporary Regulations will be invalidated or that a court of law will rule in favor of the Company. If the Company’s position on the Temporary Regulations is not sustained, the Company would be required to recognize an income tax expense of approximately $180 million to $220 million related to an income tax benefit from fiscal year 2018 that was recorded based on regulations in existence at the time. In addition, the Company may be required to pay any applicable interest and penalties. The Company intends to vigorously defend its position.


Results of Operations

Three Months Ended March 31, 20202021 vs. Three Months Ended March 31, 20192020

Consolidated Operating Results
Three Months Ended
March 31,		Three Months Ended
March 31,
(in millions)(in millions)20202019$ Change% Change(in millions)20212020$ Change% Change
Net salesNet sales$1,886  $2,042  $(156) (7.6)%Net sales$2,288 $1,886 $402 21.3%
Gross profitGross profit617  655  (38) (5.8)%Gross profit731 617 114 18.5%
Gross marginGross margin32.7 %32.1 %Gross margin31.9 %32.7 %
Operating income (loss)Operating income (loss)(1,408) 12  (1,420) NMOperating income (loss)192 (1,408)1,600 NM
Operating marginOperating margin(74.7)%0.6 %Operating margin8.4 %(74.7)%
Interest expense, netInterest expense, net63  80  (17) (21.3)%Interest expense, net67 63 4 6.3%
Other expense, net12  26  (14) (53.8)%
Loss before income taxes(1,483) (94) (1,389) NM
Income tax benefit(204) (20) (184) NM
Other (income) expense, netOther (income) expense, net(1)12 (13)NM
Income (loss) before income taxesIncome (loss) before income taxes126 (1,483)1,609 NM
Income tax provision (benefit)Income tax provision (benefit)37 (204)241 NM
Income tax rateIncome tax rate13.8 %21.3 %Income tax rate29.4 %13.8 %
Diluted loss per share - continuing operations$(3.02) $(0.18) 
Diluted earnings (loss) per share - discontinued operations—  (0.18) 
Diluted loss per share - attributable to common shareholders$(3.02) $(0.36) 
Diluted earnings (loss) per share attributable to common shareholdersDiluted earnings (loss) per share attributable to common shareholders$0.21 $(3.02)
NM - NOT MEANINGFULNM - NOT MEANINGFUL

NM - Not meaningfulNet sales increased 21%, with all segments and major geographic regions showing growth. This growth reflects strong demand from e-commerce channels and large retail store customers for stay at home, food preservation, baby care, cleaning and sanitation products, pens, markers, fine writing and labeling categories, as well as scented candles. Changes in foreign currency favorably impacted net sales by $32 million, or 2%.


Gross profit increased 18% and gross profit margin declined to 31.9% as compared with 32.7% in the prior year period. The gross margin decline was driven by input cost inflation, primarily for resin, transportation and logistics costs and labor, partially offset
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Net sales for the three months ended March 31, 2020 decreased 8%, due to a decline in sales within the Homeby gross productivity and Outdoor Living, Learning and Development and Appliances and Cookware segments. The net sales of these segments for the first quarter were adversely impacted by the circumstances and disruption caused by the COVID-19 global pandemic. At this time, the Company is unable to predict the cumulative impact, both in terms of severity and duration, COVID-19 will have on its businesses, customers and suppliers. However, the Company anticipates such downward trend in net sales will worsen sequentially in the second quarter and potentially beyond. These declines in sales were partially offset by an increase in sales within the Food and Commercial segment which have experienced an increase in demand for certain of its consumable products as a result of the COVID-19 pandemic.pricing. Changes in foreign currency unfavorablyexchange rates favorably impacted net salesgross profit by $33$12 million, or 2%.

Gross profit forIn addition to the three months ended March 31, 2020 decreased 6%,increase in net sales and gross profit margin improved to 32.7% as compared with 32.1% in the prior year period. Gross margin benefited from productivity improvement and net pricing, which were partially offset by product mix and inflation related to input costs and tariffs. Changes in foreign currency exchange rates unfavorably impacted gross profit by $11 million, or 2%. As mentionednoted above, the Company has already begun experiencing disruption at certain of its operating facilities, as approximately 20 have been temporarily closed, in line with government guidelines or due to other conditions. The Company is also facing intermittent transportation and logistical challenges. The Company anticipates these closures and the time required to ramp up to full operations will adversely impact results in the second quarter and potentially beyond depending on the duration of which our locations remain closed or limited.

Notablenotable items impacting operating income (loss) for the three months ended March 31, 20202021 and 20192020 are as follows:

Three Months Ended
March 31,
20202019$ Change
Impairment of goodwill and intangible assets (see Footnote 7)$1,469  $63  $1,406  
Restructuring (see Footnote 4) and restructuring-related costs6  18  (12) 
Three Months Ended
 March 31,
20212020$ Change
Impairment of goodwill and intangible assets (See Footnote 6)$— $1,469 $(1,469)
Restructuring (See Footnote 3) and restructuring-related costs13 6 7 

Operating income increased to $192 million as compared to an operating loss of $1.4 billion in the prior year period. The operating results in the prior year period included $1.5 billion of non-cash impairment charges of goodwill, certain indefinite-lived intangible and other assets. The current period performance reflected the higher gross profit noted above, lower overhead costs, which include savings from Yankee Candle retail store closures as well as the exiting of its fundraising business in the prior year, and lower discretionary spending, partially offset by higher restructuring and restructuring-related charges and incentive compensation expense.

Interest expense, net increased primarily due to higher interest rates. The weighted average interest rates for the three months ended March 31, 2021 and 2020 was $1.4 billion as compared to operating incomewere approximately 4.8% and 4.3%, respectively. See Footnote 8 of $12 million in the prior year period. Operating loss for the three months ended March 31, 2020 included non-cash impairment charges of goodwill and certain indefinite-lived intangible assets of $1.5 billion as compared to $63 million in the prior-year period, which included non-cash impairment charges of goodwill for businesses previously classified as held for sale. Operating income was also unfavorably impacted dueNotes to the decline in sales mentioned above. This performance was partially offset by continued productivity improvement from various initiatives commenced in the prior year as well as lower restructuring and restructuring-related charges and lower transaction and related costs associated with the completion of the Company's Accelerated Transformation Plan in the prior year.
Unaudited Condensed Consolidated Financial Statements
Interest expense, net for the three months ended March 31, 2020 decreased primarily due to lower debt levels. The weighted average interest rate for the three months ended March 31, 2020 and 2019 was approximately 4.3% and 4.5%, respectively.further information.

Other (income) expense, net for three months ended March 31, 2021 and 2020 and 2019 includeincludes the following items:

Three Months Ended
March 31,
20202019
Foreign exchange (gains) losses$11  $9  
Fair value equity adjustments (see Footnote 16)3  17  
Other gains, net(2) —  
$12  $26  
Three Months Ended
 March 31,
20212020
Foreign exchange losses, net$— $11 
Fair value equity adjustments (See Footnote 14)— 3 
Other gains, net(1)(2)
$(1)$12 

Income tax provision for the three months ended March 31, 2021 was $37 million as compared to income tax benefit for the three months ended March 31, 2020 and 2019 wasof $204 million and $20 million, respectively.million. The effective tax rate for the three months ended March 31, 20202021 was 13.8%29.4% as compared to 21.3%benefit of 13.8% for the three months ended March 31, 2019.2020. The incomechange in effective tax benefit for the three months ended March 31, 2020provision is driven primarily relates toby the impact of goodwill impairment charges. The income tax benefit forcharges in the three months ended March 31, 2019 primarily relates to pre-tax net loss for the prior-yearprior year period.

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See Footnote 1211 of the Notes to the Unaudited Condensed Consolidated Financial Statements and New Treasury Regulations in Recent Developments for information regarding income taxes.taxes, including the inherent uncertainty associated with the Company's position on recently enacted U.S. Treasury Regulations.

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Business Segment Operating Results
Three Months Ended March 31, 20202021 vs. Three Months Ended March 31, 20192020

Home Appliances and Cookware
Three Months Ended
March 31,
(in millions)20212020$ Change% Change
Net sales$360 $261 $99 37.9%
Operating income (loss)3 (299)302 NM
Operating margin0.8 %NM
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)$— $287 
NM - NOT MEANINGFUL

Three Months Ended
March 31,
(in millions)20202019$ Change% Change
Net sales$291  $330  $(39) (11.8)%
Operating loss(308) (4) (304) NM
Operating margin(105.8)%(1.2)%
Notable items impacting operating loss comparability:
Impairment of goodwill and other intangible assets (See Footnote 7)$299  $—  
Home Appliances and Cookware net sales for the three months ended March 31, 2020 decreased 12%2021 increased 38%, primarily due to the temporary closures of department and specialty stores in North America and EMEA, as well as the impact resulting from government imposed country-wide shutdowns, notably in Latin America, as a result of the ongoing COVID-19 pandemic. The Company anticipates such downward trend in netwhich reflects sales will worsen sequentially in the second quarter and potentially beyond. The decline in net sales also includes the continued loss in domestic market share in North America for certain appliance categoriesgrowth driven by the success of newly launched competitive products. strong demand for stay at home usage products across all major geographic regions. Changes in foreign currency unfavorably impacted net sales by $11$3 million, or 4%1%.

Operating lossincome for the three months ended March 31, 2020 increased to $3082021 was $3 million as compared to $4operating loss of $299 million in the prior year period. The improvement in operating result is primarily due to the lapping of prior year non-cash impairment charges of goodwill and certain indefinite-lived intangible assets, as well as gross profit leverage, gross productivity and pricing, partially offset by input cost inflation associated with transportation and logistics costs.

Commercial Solutions
Three Months Ended
March 31,
(in millions)20212020$ Change% Change
Net sales$471 $413 $58 14.0%
Operating income (loss)50 (272)322 NM
Operating margin10.6 %(65.9)%
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)$— $320 
NM - NOT MEANINGFUL

Commercial Solutions net sales for the three months ended March 31, 2021 increased 14%, which reflected sales growth in both the Commercial and Connected Home and Security business units, primarily in the U.S. The Commercial business unit performance reflected increased demand in hand protection, closet, garage and outdoor organization categories. The increase in net sales in the Connected Home and Security business unit was primarily due to higher demand from retail and contractor channels, and higher sales in certain areas impacted by inclement weather in certain parts of the U.S. The increase in net sales in the Connected Home and Security business also reflected the lapping of the prior-year impact of lower demand and store closures resulting from the COVID-19 pandemic. Changes in foreign currency favorably impacted net sales by $6 million, or 1%.

Operating income for the three months ended March 31, 2021 was $50 million as compared to operating loss of $272 million in the prior year. The improvement in operating result is primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets, as well as gross profit leverage, gross productivity and lower discretionary spending. The increase in operating income was partially offset by input cost inflation, particularly for resin, labor and sourced finished goods, and increased transportation and logistics costs.
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Home Solutions
Three Months Ended
March 31,
(in millions)20212020$ Change% Change
Net sales$504 $377 $127 33.7%
Operating income (loss)61 (301)362 NM
Operating margin12.1 %(79.8)%
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)$— $302 
NM - NOT MEANINGFUL

Home Solutions net sales for the three months ended March 31, 2021 increased 34%, due to strong sales performance in the Food and Home Fragrance business units. The increase in Food business unit sales reflected increased demand across the vacuum sealing, fresh preserving, Rubbermaid Food Storage and cookware and bakeware categories. The increase in Home Fragrance sales was primarily due to increases in the wholesale and direct-to-consumer markets, primarily in the U.S., and an increase in international markets, partially offset by permanent Yankee Candle retail store closures in the prior year. The increase in net sales in the Home Fragrance business also reflected the lapping of the prior-year impact of temporary retail store closures resulting from the COVID-19 pandemic. Changes in foreign currency favorably impacted net sales by $10 million, or 3%.

Operating income for the three months ended March 31, 2021 increased to $61 million as compared to $301 million operating loss in the prior year period. The increase in operating lossincome is primarily due to the lapping of prior year non-cash impairment charges of goodwill, and certain indefinite-lived intangible assets. Operatingassets and other assets, gross profit leverage, pricing, lower overhead costs and lower discretionary spending. The increase in operating income was also unfavorably impacted due toreflected savings from Yankee Candle retail store closures in the declineprior year and the exiting of its fundraising business in sales mentioned above. See Footnote 7 of the Notes to the Unaudited Condensed Consolidated Financial Statementsprior year, partially offset by input cost inflation, particularly for resin, and Significant Accounting Policiesincreased transportation and Critical Estimates for information.logistics costs.


Learning and Development
Food and Commercial
Three Months Ended
March 31,
(in millions)20212020$ Change% Change
Net sales$617 $528 $89 16.9%
Operating income110 4 106 NM
Operating margin17.8 %0.8 %
Notable items impacting operating income comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)$— $78 
NM - NOT MEANINGFUL

Three Months Ended
March 31,
(in millions)20202019$ Change% Change
Net sales$520  $504  $16  3.2%
Operating income84  1  83  NM
Operating margin16.2 %0.2 %
Notable items impacting operating income comparability:
Impairment of goodwill (See Footnote 7)$—  $63  
FoodLearning and CommercialDevelopment net sales for the three months ended March 31, 20202021 increased 3%, primarily17% due to strong sales performance in the Baby and Parenting and Writing business units as they lap the negative prior-year impact of shifting consumer demand and store closures resulting from the COVID-19 pandemic. The Baby and Parenting business unit performance reflected increased demand in FoodSaver® appliance products as well as consumable washroomthe baby gear and cleaning products,infant care categories. The Writing unit performance reflected strong demand in pens, markers, fine writing and labeling categories, partially offset by weakness in the restaurantprevious divestitures and hospitality vertical channels for the Commercial business unit as a result of the ongoing COVID-19 pandemic.
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product line exits. Changes in foreign currency unfavorablyfavorably impacted net sales by $10$12 million, or 2%.

Operating income for the three months ended March 31, 20202021 increased to $84$110 million as compared to $1$4 million in the prior year. Operating income was favorably impacted due to the increase in sales mentioned above as well as productivity improvement and deflation primarily related to commodity costs. In addition, theprior-year period. The increase in operating income is primarily due to the lapping of prior year non-cash impairment charges of goodwill in the prior year which reflected a decrease in the carrying valuescertain
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indefinite-lived intangible assets and Quickie while these businesses were classified as heldgross productivity, partially offset by higher tariff costs, input cost inflation, particularly for sale. In addition, manufacturing facilities for this segment in New Zealand, Franceresin, and Malaysia have been temporarily closed as a result of the COVID-19 pandemic, which the Company anticipates will continue to impact the segment's performance through the second quarter of 2020.increased transportation and logistics costs.

HomeOutdoor and Outdoor LivingRecreation
Three Months Ended
March 31,
(in millions)20212020$ Change% Change
Net sales$336 $307 $29 9.4%
Operating income (loss)15 (474)489 NM
Operating margin4.5 %NM
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)$— $482 
NM - NOT MEANINGFUL

Three Months Ended
March 31,
(in millions)20202019$ Change% Change
Net sales$547  $627  $(80) (12.8)%
Operating loss(1,121) (2) (1,119) NM
Operating margin(204.9)%(0.3)%
Notable items impacting operating loss comparability:  
Impairment of intangible assets (See Footnote 7) $1,092  $—  

HomeOutdoor and Outdoor LivingRecreation net sales for the three months ended March 31, 2020 decreased 13%, as sales declined across all of its business units. The decrease was2021 increased 9% primarily due to the temporary closure of all of our North American Yankee Candle retail stores within our Home Fragrances business, other department and specialty store closures in North America and EMEA, and a shiftimprovement in consumer purchasing patterns impactingfor outdoor related products as well as heating and lighting products, partially offset by decreased demand in apparel and beverage products. The increase in net sales also reflected the Outdoor and Recreation and Connected Home and Security businesses, as a resultlapping of the ongoingnegative prior-year impact of lower demand and store closures resulting from the COVID-19 pandemic.The Company anticipates these factors will adversely impact results in the second quarter and potentially beyond depending on the duration of which our locations remain closed. In addition, net sales declined from the exit of 44 underperforming Yankee Candle retail stores within our Home Fragrance business. Changes in foreign currency unfavorably impacted net sales by $5 million, or 1%.

Operating loss for the three months ended March 31, 2020 increased to $1.1 billion as compared to $2 million in the prior year period. The increase in operating loss is primarily due to non-cash impairment charges of certain indefinite-lived intangible assets. Operating income was also unfavorably impacted due to the decline in sales mentioned above.

In addition, the State of Massachusetts has required the shut-down of one of the segment’s primary manufacturing and distribution centers within our Home Fragrance business as a result of the COVID-19 pandemic through at least May 4, 2020, which will have an adverse impact to the segment’s operating results. In addition, a key manufacturing facility in Mexico associated with our Connected Home and Security business has been temporarily closed related to the COVID-19 pandemic. The Company anticipates these closures will adversely impact results in the second quarter and potentially beyond depending on the duration of which our locations remain closed. The Company will deploy cost containment initiatives to mitigate the impact of the closures of its retails stores and operating facilities, including employee furloughs. However, such actions may not be sufficient to mitigate the entire impact. The Company will continue to monitor developments, including government requirements and recommendations to evaluate possible further cessation or extensions of its operations. See Footnote 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements and Significant Accounting Policies and Critical Estimates for information.


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Learning and Development

Three Months Ended
March 31,
(in millions)20202019$ Change% Change
Net sales$528  $581  $(53) (9.1)%
Operating income5  89  (84) (94.4)%
Operating margin0.9 %15.3 %
Notable items impacting operating income comparability:
Impairment of intangible assets (See Footnote 7)$78  $—  

Learning and Development net sales for the three months ended March 31, 2020 decreased 9% primarily due to a shift in consumer purchasing patterns affecting the Writing business unit as a result of the ongoing COVID-19 pandemic, which we anticipate will worsen through the second quarter of 2020 and potentially beyond. The net sales decline was also driven by softening trends in the Writing business related to sales of slime-related adhesive products, as well as the temporary closures of schools and offices, partially offset by growth in demand in the Baby business unit. Given adverse changes in shifting consumer demands late in the first quarter and continuing into the second quarter, the Company anticipates net sales to decline in the Baby business unit in the second quarter of 2020. Changes in foreign currency unfavorablyfavorably impacted net sales by $7 million or 1%2%.

Operating income for the three months ended March 31, 2020 decreased to $52021 was $15 million as compared to $89 million in the prior year period. The decrease in operating income isloss of $474 million. This improvement was primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets. Operating income was also unfavorably impacted due to the decline in sales mentioned above. The decrease in operating income wasassets, gross productivity and lower discretionary spending, including advertising and promotional costs, partially offset by productivity improvements from various initiatives.

In addition, key Writing manufacturing facilities in Mexicoincreased transportation and India were temporarily closed due to government orders related to the COVID-19 pandemic. While the facility in Mexico has since reopened on a limited basis, the Company anticipates these closureslogistics costs and the time required to ramp up to full operations will adversely impact results in the second quarter and potentially beyond depending on the duration of which our locations remain closed or limited. The Company will deployinput cost containment initiatives to mitigate the impact of the closures of its operating facilities. However, such actions may not be sufficient to mitigate the entire impact. The Company will continue to monitor developments, including government requirements and recommendations to evaluate possible further cessation or extensions of its operations. See Footnote 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements and Significant Accounting Policies and Critical Accounting Estimatesinflation, particularly for further information.resin.

Liquidity and Capital Resources
Liquidity

In light of current uncertainty in the global economy, as well as equity and bond markets, due to the COVID-19 pandemic, the Company has taken several actions and may continue to take actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility, including, evaluating supply purchases, enhanced customer credit review processes, reviewing operating expenses, prioritizing capital expenditures, as well as the extension of payment terms for goods and services. The Company also has the ability to borrow under its existing Accounts Receivable Securitization Facility (the “Securitization Facility”) and Revolving Credit Revolver.Facility (the "Credit Revolver"). At March 31, 2020,2021, the Company had $290 million and nilno outstanding underdrawings against the Securitization Facility and Credit Revolver, respectively. Subsequent to March 31, 2020, the Company had $125 million outstanding under the Credit Revolver. In addition, the Company does not anticipate repurchasing any of its common shares outstanding on the open market. While the Company repurchased $15 million of its 4.20% senior notes due 2026 during the first quarter of 2020, it will suspend retiring any of its outstanding public debt prior to maturity or repurchasing any of its common shares outstanding on the open market. In addition, while theThe Company currently believes its capital structure and cash resources can continue to support the funding of future dividends the Companyand will continue to evaluate all actions to strengthen its financial position and balance sheet, and to maintain its financial liquidity, and flexibility including the issuance of debt and maintaining its capital allocation strategy.

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At March 31, 2020,2021, the Company had cash and cash equivalents of approximately $476$682 million, of which approximately $308$544 million was held by the Company’s non-U.S. subsidiaries. The Company’sOverall, the Company believes that available cash and cash equivalents, cash flows generated byfrom future operating activities and borrowing capacity along with the actions described above, provide the Company with continued financial viability and adequate liquidity to fund its operations.operations, support its growth platforms, pay down debt and debt maturities as they come due and complete its ongoing turnaround initiatives. The Company’s cash requirements are subject to change as business conditions warrant. As the COVID-19 pandemic is complex and rapidly evolving, the Company's plans as described above may change. At this point,Although the Company continued to see improved sales performance during the first quarter of 2021, the Company is still unable to predict the duration and severity of this pandemic; however, the pandemic, which could have a material adverse impact on the Company’s future sales, results of operations, financial position and cash flows, particularly if the current circumstances continueglobal pandemic continues to exist or worsens for a prolonged period of time, whichnew variants of the coronavirus emerge, or if plans to administer vaccines are delayed. Any such material adverse impacts could impactresult in the Company's abilityinability to satisfy financial maintenance covenants and could limit the ability to make future borrowings under existing debt instruments. For further information regarding the impact of COVID-19 on the Company, refer to Recent DevelopmentsRisk Factors in Part I - Item 2.1A and Recent Developments in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors in Part II - Item 1A.of the Company's most recent Annual Report on Form 10-K, filed on February 18, 2021.
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Cash, and cash equivalents and restricted cash increased (decreased) as follows for the three months ended March 31, 20202021 and 20192020 (in millions):

20202019Increase (Decrease)20212020Increase (Decrease)
Cash provided by (used in) operating activitiesCash provided by (used in) operating activities$23  $(200) $223  Cash provided by (used in) operating activities$(25)$23 $(48)
Cash used in investing activitiesCash used in investing activities(56) (76) 20  Cash used in investing activities(54)(56)2 
Cash provided by financing activities173  145  28  
Cash provided by (used in) financing activitiesCash provided by (used in) financing activities(239)173 (412)
Exchange rate effect on cash, cash equivalents and restricted cashExchange rate effect on cash, cash equivalents and restricted cash(24) (1) (23) Exchange rate effect on cash, cash equivalents and restricted cash(14)(24)10 
Increase (decrease) in cash, cash equivalents and restricted cashIncrease (decrease) in cash, cash equivalents and restricted cash$116  $(132) $248  Increase (decrease) in cash, cash equivalents and restricted cash$(332)$116 $(448)

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

Factors Affecting Liquidity 

On November 1, 2019, S&P Global Inc. (“S&P”) downgraded the Company’s debt rating to “BB+” as S&P believed the Company would fail to meet S&P’s target debt level for 2019. In addition, on March 9, 2020, Moody’s Corporation ("Moody’s") downgraded the Company’s debt rating to “Ba1” based on a view that the Company would fail to meet Moody's target debt level for 2020. Subsequently on April 15, 2020, Fitch Ratings ("Fitch") downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020. As a result of the debt ratingsS&P and Moody's downgrades, by Moody's and S&P described above, the Company’s ability toCompany could no longer borrow under itsfrom the commercial paper program was eliminated.market on terms it deems acceptable or favorable. Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Company’s $1.25 billion revolving credit facility that matures in December 2023 (“the Credit Revolver.Revolver”). The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades. The interest rate for borrowings under the Credit Revolver is the borrowing period referenced LIBORthe London Interbank Offered Rate (“LIBOR”) rate plus 127.5 basis points. As such, the Company does not expect any change in its ability to access liquidity in the short term as a result of the downgrades. At March 31, 2020,2021, the Company had $40 milliondid not have any amounts outstanding under its commercial paper program, which was subsequently repaid upon the Company accessing $125 million under the Credit Revolver. Subsequently on April 15, 2020, Fitch downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020.

The Credit Revolver requires the maintenance of certain financial covenants. A failure to maintain our financial covenants would impair our ability to borrow under the Credit Revolver. At the time of filing this Quarterly Report on Form 10-Q, the Company is compliantin compliance with all of its financial covenants.

In addition, certain of the Company’s Senior Notesoutstanding senior notes aggregating to approximately $4.5$4.2 billion are subject to an interest rate adjustment of 25 basis points as a result of each downgrade,the Moody's and S&P downgrades, for a total of 50 basis points. This increase to the interest rates of the Senior Notes subject to adjustment is expected to increase the Company’s interest expense for 2020 by approximately $17 million and approximately $23 million on an annualized basis. The Fitch downgrade did not impact the interest rates on any of the Company's senior notes.

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

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Cash Flows from Operating Activities

The change in net cash provided byused in operating activities is primarily duereflects inventory build to favorable working capital management, reflectingsupport forecasted demand and higher annual incentive compensation payments, partially offset by benefits from extension of payment terms for goods and services with vendors and higher accounts receivable sold under the Customer Receivables Purchase Agreement which commenced in the second quarter of 2019, partially offset by higher annual incentive compensation payments in the current period.year. In addition, this performance reflects the impact of the COVID-19 pandemic in the prior year, which included lower operating results and favorable working capital performance. See Capital Resources for further information.

Cash Flows from Investing ActivitiesActivities

The change in cash used in investing activities was primarily due to the lapping of the Company's acquisition of an equity investment for $18 million in the prior year period. See Footnote 16 of the lower capital expendituresNotes to the Unaudited Condensed Consolidated Financial Statements for further information..

Cash Flows from Financing Activities

The change in net cash used in financing activities was primarily due to proceeds from borrowings on short-term debt in the period-over-period changeprior year and payments of long-term debt in debt during the three months ended March 31, 2020 and 2019.current year. See Footnote 98 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

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Capital Resources

On March 1, 2021, the Company redeemed its 3.15% senior notes that were scheduled to mature in April 2021 at a redemption price equal to 100% of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.

During the three months ended March 31, 2020,first quarter of 2021, the Company repurchased $15$5 million of the 4.20%3.85% senior notes due 20262023 at approximately 5% above par value. The total consideration, excluding accrued interest, was approximately $15$5 million. As a result of the partial debt extinguishment,repurchase the Company recorded an immaterial loss.

Under the Company's $1.25 billion Credit Revolver that matures in December 2023, the Company may borrow funds on a variety of interest rate terms. Prior to the Moody’s and S&P downgrades discussed above, the Credit Revolver provided the committed backup liquidity required to issue commercial paper. As a result of both downgrades, the Company’s ability to borrow under its commercial paper program was eliminated. Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Credit Revolver. The Credit Revolver also provides for the issuance of up to $100 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Credit Revolver. At March 31, 2020,2021, there was $40 million ofwere no commercial paper outstanding,balance borrowings. In addition, there were approximately $20$21 million of outstanding standby letters of credit issued against the Credit Revolver and there were no borrowings outstanding under the Credit Revolver. At March 31, 2020,2021, the net availability under the Credit Revolver was approximately $1.2$1.23 billion. Subsequent to March 31, 2020, the Company accessed $125 million under the Credit Revolver, a portion of which was utilized to repay the outstanding commercial paper at March 31, 2020.

DuringThe Company maintains an Accounts Receivable Securitization Facility. The aggregate commitment under the three months endedSecuritization Facility is $600 million. The Securitization Facility matures in October 2022 and bears interest at a margin over a variable interest rate. The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances. At March 31, 2020,2021, the Company amended itsdid not have any amounts outstanding under the Securitization Facility.

Factored receivables at the end of the first quarter of 2021 associated with the existing factoring agreement (the “Customer Receivables Purchase Agreement”) with a financial institution providing forwere approximately $400 million, an increase in the amount of certain customer receivables that would be sold. The Company has since increased receivables factored by $100 million under the amended agreement at March 31, 2020 from its previous position of factored receivables of approximately $200$50 million atfrom December 31, 2019.2020. Transactions under this agreement continue to be accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction. The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the unaudited Condensed Consolidated Statement of Cash Flows. The Company records the discount as other (income) expense, (income), net in the Condensed Consolidated Statement of Operations.

The Company maintains its $600 million Securitization Facility that matures in October 2022Operations and bears interest atcollections of accounts receivables not yet submitted to the financial institution as a margin over a variable interest rate. At March 31, 2020, the Company drew down the maximum net availability under the Securitization Facility, which fluctuates based on eligible accounts receivable balances. In March 2020, the Company amended its Securitization Facility with respect to certain customer receivables and to remove an originator from the Securitization Facility.financing cash flow.

The Company was in compliance with all of its debt covenants under these instruments at March 31, 2020.2021.
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Risk Management
From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.
Interest Rate Contracts
The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. Interest rate swap contracts are therefore used by the Company to separate interest rate risk management from the debt funding decision. The cash paid and received from the settlement of interest rate swaps is included in interest expense.

Fair Value Hedges

At March 31, 2020,2021, the Company had approximately $377$100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against $277 million of principal on the 4.7% senior notes due in August 2020 and $100 million of principal on the 4.0%4.00% senior notes due 2024 for the remaining life of these notes.the note. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.
Cross-Currency Contracts
During the three months ended March 31, 2020, the
The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements. The Company previously entered into two cross-currency swaps with an aggregate notional amount of $900 million, which were designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency
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subsidiaries with Euro-denominated net assets. TheseWith these cross-currency swaps, which mature in January and February 2025, payrespectively, the Company pays a fixed rate of Euro-based interest and receivereceives a fixed rate of U.S. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended March 31, 2021, the Company recognized income of $4 million in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.
Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through December 2020.2021. The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges. The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL anduntil it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item. At March 31, 2020,2021, the Company had approximately $413$397 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions. At March 31, 2020,2021, the Company had approximately $801$879 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through JanuaryDecember 2021. Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net.

The following table presents the net fair value of derivative financial instruments at the date indicated March 31, 2020 (in millions):
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March 31,
20202021
Asset
(Liability)
Derivatives designated as effective hedges:
Cash flow hedges:
Foreign currency contracts$21 (8)
Fair value hedges:
Interest rate swaps85 
Net investment hedges:
Cross-currency swaps21 (56)
Derivatives not designated as effective hedges:
Foreign currency contracts168 
Total$66 (51)


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Significant Accounting Policies and Critical Estimates

Goodwill and Indefinite-Lived Intangibles

Goodwill and indefinite-lived intangibles are tested and reviewed for impairment annually (duringduring the fourth quarter)quarter (on December 1), or more frequently if facts and circumstances warrant.

Goodwill

Goodwill is tested for impairment at a reporting unit level, and all of the Company’s goodwill is assigned to its reporting units. Reporting units are determined based upon the Company’s organizational structure in place at the date of the goodwill impairment
testing and generally one level below the operating segment level. The Company’s operations are comprised of eight reporting units, within its fourfive primary operating segments.

During the first quarter of 2020, the Company concluded that an impairment triggeringimpairment-triggering event had occurred for all of its reporting
units as the Company has experienced significant COVID-19 related disruption to its business in three primary areas: supply chain, as certain manufacturing and distribution facilities arewere temporarily closed in line with government guidelines; the temporary closure of secondary customer retail stores as well as the Company's Yankee Candle retail stores in North America; and changes in consumer demand patterns to certain focused categories. The Company bypassed the qualitative approach to testing goodwill and used a quantitative approach, which involves comparing the fair value of each of the reporting units to the carrying value of those reporting units. If the carrying value
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of a reporting unit exceeds its fair value, an impairment loss would be calculated as the differences between these amounts, limited to the amount of reporting unit goodwill allocated to the reporting unit.

The quantitative goodwill impairment testing requires significant use of judgment and assumptions, such as the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business growth rates, terminal values, discount rates and total enterprise value. The income approach used is the discounted cash flow methodology and is based on five-year cash flow projections. The cash flows projected are analyzed on a “debt-free” basis (before cash payments to equity and interest-bearing debt investors) in order to develop an enterprise value from operations for the reporting unit. A provision is made, based on these projections, for the value of the reporting unit at the end of the forecast period, or terminal value. The present value of the finite-period cash flows and the terminal value are determined using a selected discount rate. The Company estimated the fair values of its reporting units based on discounted cash flow methodology reflecting its latest projections which included, among other things, the impact of tariffs on Chinese imports, the current expectations as to the impact of COVID-19 on its operations, as well as other inflation at the time for the Company’s impairment testing performed during the first quarter of 2020.

As a result of the impairment testing performed in connection with the COVID-19 global pandemic triggering event, the Company determined that its goodwill associated with its Home Appliances and Cookware segment wasHome Solutions segments were impaired. During the three months ended March 31,first quarter of 2020, the Company recorded aan aggregate non-cash charge of $212 million to reflect the impairmentimpairments of its goodwill as itsthe reporting unit carrying valuevalues exceeded itstheir fair value.

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

Indefinite-lived intangibles

The testing of indefinite-lived intangibles (primarily trademarks and tradenames) under established guidelines for impairment also requires significant use of judgment and assumptions (such as cash flow projections, royalty rates, terminal values and discount rates). An indefinite-lived intangible asset is impaired by the amount its carrying value exceeds its estimated fair value. For impairment testing purposes, the fair value of indefinite-lived intangibles is determined using the same method which was used for determining the initial value. The first method iseither the relief from royalty method whichor the excess earnings method. The relief from royalty method estimates the value of a tradename by discounting the hypothetical avoided royalty payments to their present value over the economic life of the asset. The second method, the excess earnings method estimates the value of the intangible asset by quantifying the residual (or excess) cash flows generated by the asset and discounts those cash flows to the present. The excess earnings methodology requires the application of contributory asset charges. Contributory asset charges typically include assumed payments for the use of working capital, tangible assets and other intangible assets. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

As a result of the impairment testing performed in connection with the COVID-19 global pandemic triggering event during the first quarter of 2020, the Company determined that certain of its indefinite-lived intangible assets in the Appliances and Cookware, Home and Outdoor Living and Learning and Developmentall of its operating segments were impaired. During the three months ended March 31, 2020, the Company recorded an aggregate non-cash chargeimpairment charges of $1.3 billion to reflect impairment of these indefinite-lived trade names asbecause their carrying values exceeded their fair values.
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See Footnotes 1 and 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

The Company believes the circumstances and global disruption caused by COVID-19 willmay continue to affect its sales, businesses, future
operating results, cash flows and financial condition forand that the foreseeable future.scope and duration of the pandemic is highly uncertain. In addition, some of the other inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates, labor inflation and tariffs including the current trade negotiations with China.inflation. Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy, there can be no assurance that the Company's estimates and assumptions made for purposes of the goodwill and indefinite-lived intangible asset impairment testing performed during the firstfourth quarter of 2020 will prove to be accurate predictions of the future.

In addition, as a result of several impairment charges recorded overAlthough the past three years and as recently as December 1, 2019, certainCompany has made its best estimates based upon current information, the effects of the Company's reporting units as well as several ofCOVID-19 pandemic on its indefinite-lived tradenames were either recorded at fair value or with fair values within 10% of the associated carrying values. While the Company believes it has made reasonablebusiness may result in future changes to management’s estimates and assumptions, to calculateespecially if the fair valuesseverity of the reporting units and other indefinite-lived intangible assets which were based on facts and circumstances known at this time, it is possible new events may occur or actual events may result in differing forecasted cash flows, revenue and earnings that differ from those that formed the basis of the Company’s estimates and assumptions. For each of the Company’s reporting units, if the global pandemic caused by COVID-19 continues to persistexist or worsens for an extendeda prolonged period of time, re-occurs duringnew variants of the fiscal year,coronavirus emerge, or if in future years,plans to administer the reporting unit’s actualvaccines are delayed. Actual results could be materially differentdiffer from the Company’s estimates and assumptions used to calculate fair value.developed by management. If so, the Company may be requiredsubject to recognize material impairments to goodwill and/or indefinite-lived intangible assets. The Company will continue to monitor its reporting units for any triggering events or other signs of impairment. The Company may be required to perform additional impairment testing based on further deterioration of the global economic environment, continued disruptions to the Company’s business, further declines in operating results of the Company’s reporting units and/or tradenames, further sustained deterioration of the Company’s market capitalization, and other factors, which could result infuture incremental impairment charges in the future. Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidenceas well as changes to recorded reserves and consumer spending decline significantly in the future or if commercial and industrial economic activity or the market capitalization experiences a sustained deterioration significantly from current levels, it is reasonably likely the Company will be required to record impairment charges in the future.valuations.

As of March 31, 2020, there were no reporting unitsSee Footnotes 1 and nine indefinite-lived trade names with fair values within 10% of the associated carrying values. A hypothetical 10% reduction in forecasted earnings before interest, taxes and amortization used in the discounted cash flows to estimate the fair value of the reporting unit’s would not have resulted in an incremental goodwill impairment charge. A hypothetical 10% reduction in forecasted debt free cash flows used in the excess earnings method to determine the fair of certain indefinite-lived intangibles in the Company’s Home and Outdoor Living and Learning and Development segments would have resulted in incremental impairment charges of $39 million and $13 million, respectively. A hypothetical 10% reduction in forecasted revenue used in the relief from royalty method to determine the fair value of certain indefinite-lived intangibles would have resulted in incremental impairment charges in the Company's following segments: Appliances and Cookware, Home and Outdoor Living and Learning and Development of $6 million, $6 million and $16 million, respectively.
6
See Footnote 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.



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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information about the Company’s purchases of equity securities during the three months ended March 31, 2020:
Calendar Month
Total Number
of Shares
Purchased (2)
Average
Price Paid
Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum
Approximate Dollar Value of
Shares that May Yet Be Purchased
Under the Plans or Programs (1)
January—  $—  —  $—  
February291,310  20.04  —  —  
March—  —  —  —  
Total291,310  $20.04  —  
(1)The Company’s then existing share repurchase program (“SRP”) expired on December 31, 2019 and was not extended.
(2)All shares during the three months ended March 31, 2020, were acquired to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock units, which were purchased by the Company based on their fair market value on the vesting date.

Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes from the information previously reported under Part II, Item 7A. in the Company’s Annual Report on Form 10-K for the fiscal year endedended.
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Item 4. Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating such controls and procedures, the Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by Rule 13a-15(b) of the Exchange Act, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective at March 31, 2020,2021, due to the material weakness in internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Continuing Material Weakness

We continue to have a material weaknessesweakness in our internal control over financial reporting as disclosed in Management’s Annual Report on Internal Control over Financial Reportingthe 2019 and 2020 Forms 10-K, in Item 9A., Controls and Procedures, of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”) in that the Company has not designed and maintained effective controls over the accounting for the impact of the divestitures. Specifically, the Company did not design and maintain effective controls to ensure that deferred taxes were included completely and accurately in the carrying values of assets held for sale and that the intraperiod tax allocation between continuing and discontinued operations was accurate. In addition, the Company did not design and maintain effective controls to ensure that the current and noncurrent classification of assets and liabilities held for sale was accurate.
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During the first quarter of 2019, management identified that the Company did not maintain effective controls to ensure changes in the underlying data utilized in determining the estimated fair value were complete and accurate and to ensure that the expected form of sale of the disposal groups were appropriately reflected in the Company’s impairment tests prior to filing the 2018 Form 10-K.
Collectively, these deficiencies resulted in the revision of the Company’s Consolidated Financial Statements for the year ended December 31, 2018, and adjustments to the assets and liabilities held for sale; loss from discontinued operations, net of tax; net loss and deferred income taxes accounts to the Company’s condensed consolidated financial statements for the quarter ended September 30, 2018 as well as the income tax benefit to continuing operations; loss from continuing operations and loss from discontinued operations, net of tax for the quarter and year ended December 31, 2018; assets and liabilities held for sale and other balance sheet accounts primarily deferred income taxes at December 31, 2018 as well as in the current and noncurrent classification of assets and liabilities held for sale in the prior year balance sheet as presented in the December 31, 2018 financial statements. Additionally, any of these control deficiencies could result in a misstatement of the Company’s aforementioned accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, the Company’s management has determined that these control deficiencies constitute a material weakness.

Additionally, the Company did not design and maintain effective controls over the accounting for certain aspects of income taxes. Specifically, the Company did not design and maintain controls related to the completeness and accuracy of accounting for state income tax and over the accuracy of determining uncertain tax positions, including but not limited to verifying the accrued interest associated with uncertain tax positions was properly determined and recorded. Additionally, management identified that the Company did not design and maintain effective controls to ensure the accuracy of accounting for non-recurring tax planning transactions. These deficiencies resulted in errors recorded as of and for the quarter ended December 31, 2020 impacting the current tax benefit for the quarter ended December 31, 2020; and deferred tax liabilities and other non-current liabilities as of December 31, 2020 and errors previously recorded as of and for the quarter ended December 31, 2019 impacting the current tax benefit for the quarter ended December 31, 2019; and goodwill, other assets, deferred tax liabilities, other non-current liabilities and accumulated other comprehensive loss as of December 31, 2019. Additionally,

These control deficiencies, in aggregate, these control deficiencies could result in a misstatement of the Company’s aforementioned accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, Managementmanagement has determined that these control deficiencies, in aggregate, constitute a material weakness.
Because of the material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting at March 31, 2020.
Remediation Plan

Management believes it hasAs of March 31, 2021, management designed and implemented the following measures to remediate the deficiencies resulting inrelated to the material weakness in thecompleteness and accuracy of accounting for divestitures. Specific remedial actions undertaken by management include without limitation:state income tax and the accuracy of determining uncertain tax positions, including but not limited to verifying that the accrued interest associated with uncertain tax positions was properly determined and recorded:

•Enhanced the level of review of deferred tax balances for each business that is categorized as held for sale considering the form of divestiture transaction;
•Supplemented the review of deferred tax balances by legal entity and account to ensure proper presentation for financial
•reporting purposes;
•Enhanced the review of the intraperiod tax allocation between continuing and discontinued operations;
•Enhanced the review of the calculation of historical and current tax basis utilized in the gain/loss calculation;
•Enhanced the held for sale footnote reconciliation process; and
•Enhanced the review and approval process for the underlying data utilized in determining the estimated fair value and expected form of sale reflected in the Company’s impairment test.
Management has effectively designed and tested the operating effectiveness related to the review of the held for sale footnote reconciliation process, review and approval process for the underlying data utilized in determining the estimated fair value and expected form of sale reflected in the Company’s impairment tests. However, this material weakness will not be considered remediated until Management has concluded, through testing of divestiture transactions or otherwise that each component of the material weakness is operating effectively as needed for a sufficient period of time.

During the course of 2019 and early 2020, Management made certain changes as part of the remediation of the material weakness related to accounting for divestitures, which the Company believes will contribute to the remediation efforts of the material weakness for accounting for income taxes. These changes include:

•HiringHired experienced resources with substantive backgrounds in accounting for income taxes as well as U.S. multinational public company experience;
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•EngagingEngaged a third party to review the Company’s tax provision processes, identify inefficiencies, and recommend process enhancements;

•
Subsequent to the identification of the material weakness for accounting for income taxes, management began to implementImplemented a tax reporting software solution that has enhanced our visibility of uncertain tax positions in order to remediate the material weakness. The Company plans to implement the following additional steps to remediate the material weakness for accounting foras well as a software solution that has enhanced our state income taxes:

tax reporting capabilities;
•ImplementingImplemented enhancements and process improvements to the quarterly and annual provision with respect to the accuracy of uncertain tax positions and completeness and accuracy of state income taxes; and
•UndertakingUndertook extensive training for key personnel in each reporting jurisdiction on tax reporting requirements and our redesigned processes; andprocesses.
•
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In addition, management has developed its remediation plan and Implementing ahas begun enhancing certain controls to include refinements and improvements to the controls with respect to the deficiencies related to the accuracy of accounting for non-recurring tax reporting software solution that will enhance our state incomeplanning transactions, including enhancing the precision of the control over the calculation and analysis of non-recurring tax reporting capabilities.planning transactions.

While Managementmanagement believes that it now has the requisite personnel to operatemeasures already designed and implemented in both the controls in thestate tax functionincome and the remediation actions described above should remediateuncertain tax positions processes are effective, the material weakness, with respect to accounting for income taxes, as Management continuesin the remediation process, it may determine certain additional enhancements are necessary. This material weaknessaggregate, will not be considered fully remediated until all affected aspects of the applicable remediatedassociated income tax controls operate for a sufficient period of time and Managementmanagement has concluded, through testing, that these controls are operating effectively. The Company will monitor the effectiveness of its remediation plan and will refine its remediation plan as appropriate.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2020,2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information required under this Item is contained above in Part I. Financial Information, Item 1 and is incorporated herein by reference.
Item 1A. Risk Factors

In addition to the other information set forthThere have been no material changes in this report, you should carefully consider the risk set forth below and theour risk factors describedfrom those disclosed in Part I, Item 1A1A. of the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which could materially affect our business, liquidity, financial condition or future results. The risk described below, and the risks described in our 2019 Annual Report on Form 10-K are not the only risks the Company faces. Additional risks and uncertainties not currently known or that the Company currently deems to be immaterial also may materially and adversely affect its business, liquidity, financial condition or operating results.

We must successfully manage the demand, supply, and operational challenges associated with the actual or perceived effects of the COVID-19 pandemic or any other disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.

Our business may be unfavorably impacted by the fear of exposure to or actual effects of the COVID-19 pandemic or any other disease outbreak, epidemic, pandemic, or similar widespread public health concern, such as reduced travel or recommendations or mandates from governmental authorities to cease particular business activities. These impacts include, but are not limited to:

•Significant reductions in demand or significant volatility in demand for one or more of our products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, store closures, quarantine or other travel restrictions, or financial hardship among customers, retailers and consumers, shifts in demand away from one or more of our more discretionary or higher priced products to lower priced products, or stockpiling; if prolonged, such impacts can further increase the difficulty in planning our operations, which may adversely impact our results, liquidity and financial condition;

•Inability to meet our customers’ needs and achieve cost targets due to disruptions in our manufacturing operations and supply arrangements as well as distribution centers caused by the loss or disruption of essential manufacturing and supply elements such as raw materials or other finished product components, transportation, workforce, or other manufacturing and distribution capability including as a result of governmental mandates to close certain of our manufacturing and distribution facilities;

•Failure of third parties on which we rely, including our suppliers, contract manufacturers, distributors, contractors, commercial banks, joint venture partners and external business partners, to meet their obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, which may adversely impact our operations, liquidity and financial condition; or

•Significant changes in the political and labor conditions in markets in which we manufacture, sell or distribute our products, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close our manufacturing, distribution, research and development and retail facilities; restrict our employees’ ability or willingness to travel or perform necessary business functions, or otherwise prevent our facilities or our third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results, liquidity and financial condition.

There are no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the outbreak is highly uncertain and subject to change. We do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. Despite our efforts to manage and remedy these impacts to the Company, the ultimate impact of COVID-19 could materially and adversely impact our business, results of operations, liquidity and financial condition, and depends on factors beyond our knowledge or control, including the duration and severity of any such outbreak as well as third-party actions taken to contain its spread and mitigate its public health effects.

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We have experienced significant COVID-19-related disruptions to our businesses and if we are unable to re-commence normal operations in the near-to-medium term, we may be unable to maintain compliance with the financial covenants or borrowing base requirements in certain of our debt facilities.

Under the terms of certain of our debt facilities, including the AR Securitization and Credit Revolver, we are required to maintain certain financial covenants or satisfy certain borrowing basis requirements. As a result of the COVID-19 pandemic, our operations have been and could be further disrupted and if we are unable to re-commence normal operations in the near-to-medium term, we may be not be able to satisfy such requirements.

Covenant waivers may result in us incurring additional fees associated with obtaining the waiver, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable to us under these debt facilities. Our ability to provide additional lender protections under these facilities, including the granting of security interests in collateral, will be limited by the restrictions in our indebtedness. There can be no assurance that we would be able to obtain future waivers in a timely manner, on acceptable terms or at all. If we were not able to obtain a covenant waiver under any one or more of these debt facilities, we would be in default of such agreements, which could result in cross defaults to our other debt agreements. As a consequence, we would need to refinance or repay the applicable debt facility or facilities, and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities. If we were to be unable to obtain a covenant waiver in the future under any one or more of these debt facilities, there can be no assurance that we would be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay such facility or facilities.

With respect to each of these debt facilities, if we were unable to obtain a waiver or refinance or repay such debt facilities, it would lead to an event of default under such facilities, which could lead to an acceleration of the indebtedness under such debt facilities. In turn, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contract liabilities. As a result, the inability to obtain the covenant waivers described above would have a material adverse effect.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information about the Company’s purchases of equity securities during the three months ended March 31, 2021:
Calendar Month
Total Number
of Shares
Purchased (1)
Average
Price Paid
Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum
Approximate Dollar Value of
Shares that May Yet Be Purchased
Under the Plans or Programs
January16,045 $21.23 — $— 
February411,893 24.14 — — 
March— — — — 
Total427,938 $24.03 — $— 
(1)All shares purchased during the three months ended March 31, 2021, were acquired to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock units, which were purchased by the Company based on their fair market value on the vesting date.

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Item 6. Exhibits
Exhibit NumberDescription of Exhibit
10.1†
10.2†
Amended and Restated Newell Brands Inc. Management Bonus Plan, effective January 1, 2021(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated February 20, 2020)17, 2021).
10.2*10.3*†
Form of 20202021 Restricted Stock Unit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan (as amended February 14, 2018, and July 26, 2019) for Awards to Employees (Management Committee).the Chief Executive Officer.
10.3*10.4*†
Form of 20202021 Restricted Stock Unit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to the Chief Executive Officer.Employees (Director Level).
10.4*10.5*†
Form of 2020 Non-Qualified2021 Restricted Stock OptionUnit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to Employees (Management Committee)(Vice President Level and above).
10.5*10.6*†
Form of 20202021 Non-Qualified Stock Option Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to the Chief Executive Officer.
10.6*10.7*†
Form of 20202021 Non-Qualified Stock Option Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to the Chief Financial Officer.Employees.
10.8*†
Form of Kristine K. Malkoski Restricted Stock Unit Award Agreement for August 6, 2020 Award.
10.7*10.9*†
Eighth Omnibus Amendment Form of David M. Hammer Separation Agreement and General Release dated as of March 20, 2020, July 19, 2020.to Amended and Restated Loan and Servicing Agreement, dated as of October 2, 2019, among Jarden Receivables, as Borrower, Newell Brands Inc., as Servicer, the Conduit Lenders, the Committed Lenders and the Managing Agents named therein, PNC Bank, National Association and Royal Bank of Canada, each as an Issuing lender, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent.
31.1*
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCHXBRL Taxonomy Extension Schema
101.CALXBRL Taxonomy Extension Calculation Linkbase
101.DEFXBRL Taxonomy Extension Definition Linkbase
101.LABXBRL Taxonomy Extension Label Linkbase
101.PREXBRL Taxonomy Extension Presentation Linkbase
* Filed herewithherewith.
† Represents management contracts and compensatory plans and arrangements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEWELL BRANDS INC.
Registrant
Date:May 1, 2020April 30, 2021/s/ Christopher H. Peterson
Christopher H. Peterson
Chief Financial Officer &and President, Business Operations
Date:May 1, 2020April 30, 2021/s/ Robert A. SchmidtJeffrey M. Sesplankis
Robert A. SchmidtJeffrey M. Sesplankis
Senior Vice President, Chief Accounting Officer

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