Add files using upload-large-folder tool

3M CO_10-Q_2021-07-27 00:00:00_66740-0001558370-21-009338.html

@@ -0,0 +1 @@
+MD&A section not found.

ABBOTT LABORATORIES_10-Q_2021-08-04 00:00:00_1800-0001104659-21-100055.html

@@ -0,0 +1 @@
+MD&A section not found.

ADVANCED MICRO DEVICES INC_10-Q_2021-07-28 00:00:00_2488-0000002488-21-000116.html

@@ -0,0 +1 @@
+MD&A section not found.

AFLAC INC_10-Q_2021-07-29 00:00:00_4977-0000004977-21-000123.html

@@ -0,0 +1 @@
+MD&A section not found.

AIR PRODUCTS & CHEMICALS INC -DE-_10-Q_2021-08-09 00:00:00_2969-0000002969-21-000043.html

@@ -0,0 +1 @@
+MD&A section not found.

ALLIANT ENERGY CORP_10-Q_2021-08-06 00:00:00_352541-0000352541-21-000076.html

@@ -0,0 +1 @@
+MD&A section not found.

AMERICAN ELECTRIC POWER CO INC_10-Q_2021-07-22 00:00:00_4904-0000004904-21-000052.html

@@ -0,0 +1 @@
+MD&A section not found.

AMERICAN EXPRESS CO_10-Q_2021-07-23 00:00:00_4962-0000004962-21-000042.html

@@ -0,0 +1 @@
+MD&A section not found.

AMERICAN INTERNATIONAL GROUP, INC._10-Q_2021-08-06 00:00:00_5272-0001104659-21-101301.html

@@ -0,0 +1 @@
+MD&A section not found.

AMGEN INC_10-Q_2021-08-04 00:00:00_318154-0000318154-21-000034.html

@@ -0,0 +1 @@
+MD&A section not found.

ANALOG DEVICES INC_10-Q_2021-08-18 00:00:00_6281-0000006281-21-000197.html

@@ -0,0 +1 @@
+MD&A section not found.

APA Corp_10-Q_2021-08-05 00:00:00_1841666-0001871133-21-000007.html

@@ -0,0 +1 @@
+MD&A section not found.

APPLIED MATERIALS INC -DE_10-Q_2021-08-26 00:00:00_6951-0000006951-21-000034.html

@@ -0,0 +1 @@
+MD&A section not found.

Amcor plc_10-K_2021-08-24 00:00:00_1748790-0001748790-21-000031.html

@@ -0,0 +1 @@
+Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Critical Accounting Estimates and Judgments," of this Annual Report on Form 10-K.19Internal Controls — We previously identified material weaknesses in our internal control over financial reporting, and if we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock. As a newly listed NYSE public company in 2019, we elected the transition period for compliance with Section 404 of the Sarbanes-Oxley Act and we were exempt from Section 404 compliance until we filed our second Annual Report on Form 10-K for the fiscal year ended June 30, 2020. We identified two material weaknesses in our internal control over financial reporting during the conversion of our historical Australian Accounting Standards financial statements to U.S. GAAP. A material weakness is defined as a deficiency, or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. The first material weakness was related to our lack of accounting staff and supervisory personnel with the appropriate level of experience in technical accounting in U.S. GAAP and disclosure and filing requirements of a U.S. domestic registrant. We have fully remediated this material weakness as of June 30, 2020. We also identified a second material weakness arising from deficiencies in the design and operating effectiveness of internal controls over the period end financial reporting process. Specifically, we did not design and maintain effective controls to verify that conflicting duties were appropriately segregated within key Information Technology ("IT") systems used in the preparation and reporting of financial information. We fully remediated this material weakness as of June 30, 2021, see "Item 9A, Controls and Procedures," for further information. There can be no assurance that we will not identify new material weaknesses in the future. Any newly identified material weaknesses could limit our ability to prevent or detect a misstatement of our financial results, lead to a loss of investor confidence, and have a negative impact on the trading price of our common stock. Insurance — Our insurance policies, including our use of a captive insurance company, may not provide adequate protection against all of the risks we face. We seek protection from a number of our key operational risk exposures through the purchase of insurance. A significant portion of our insurance is placed in the insurance market with third-party re-insurers. Our policies with such third-party re-insurers cover a variety of risk exposures, including property damage. Although we believe the coverage provided by such policies is consistent with industry practice, they may not adequately cover certain risks and there is no guarantee that any claims made under such policies will ultimately be paid or that we will be able to maintain such insurance at acceptable premium cost levels in the future. Additionally, we retain a portion of our insurable risk through a captive insurance company, Amcor Insurances Pte Ltd, which is located in Singapore. Our captive insurance company collects annual premiums from our business groups, and assumes specific risks relating to various risk exposures, including property damage. The captive insurance company may be required to make payment for insurance claims which exceed the captive's reserves, which could have an adverse effect on our business, cash flow, financial condition, and results of operations. Legal and Compliance RisksLitigation — Litigation, including product liability claims, or regulatory developments could adversely affect our business operations, and financial performance.We are, and in the future will likely become, involved in lawsuits, regulatory inquiries, and governmental and other legal proceedings arising out of the ordinary course of our business. Given our global footprint, we are exposed to more uncertainty regarding the regulatory environment. The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is typically uncertain. Additionally, the possible outcomes of, or resolutions to, these proceedings could include adverse judgments or settlements, either of which could require substantial payments. In addition, actions we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemic, may result in legal claims or litigation against us. Refer to "Item 3. - Legal Proceedings" of this Annual Report on Form 10-K. Increasing scrutiny and changing expectations from investors, customers, and governments with respect to our Environmental, Social and Governance ("ESG") policies may impose additional costs on us or expose us to additional risks.There is an increased scrutiny from shareholders, customers, and governments on corporate ESG practices. Our commitment to sustainability and ESG practices remains at the core of our business. However, our ESG practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes. Many of our large, global 20customers are also committing to long-term targets to reduce greenhouse gas emissions within their supply chains. If we are unable to support customers in achieving these reductions, customers may seek out competitors who are better able to support such reductions. A failure, or perceived failure, to respond to expectations of all parties could cause harm to our business and reputation and have a negative impact on the trading price of our common stock. New government regulations could also result in new or more stringent forms of ESG oversight and disclosures which may result in increased expenditures for environmental controls or new taxes on the products we produce.Environmental, health, and safety regulations — Changing government regulations in environmental, health, and safety matters may adversely affect our company. Numerous legislative and regulatory initiatives have been passed and anticipated in response to concerns about greenhouse gas emissions and climate change. We are a manufacturing entity that utilizes petrochemical-based raw materials to produce many of our products. Increased environmental legislation or regulation, including regulations related to plastic packaging, could result in higher costs for us in the form of higher raw material cost, increased energy and freight costs and new taxes on packaging products. It is possible that certain materials might cease to be permitted to be used in our processes. Government bans of certain materials or packaging formats may close off markets to Amcor's business. Mandates to use certain types of materials, such as post-consumer recycled ("PCR") content, may lead to supply shortages and higher prices for those materials as current recycling rates are insufficient to meet increased demand for PCR within and beyond the packaging industry. We could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits. Additionally, a sizable portion of our business comes from healthcare packaging and food and beverage packaging, both highly regulated markets. If we fail to comply with these regulatory requirements, our results of operations could be adversely impacted.Changes in tax laws or changes in our geographic mix of earnings could have a material impact on our financial condition and results of operation.We are subject to income and other taxes in the many jurisdictions in which we operate. Tax laws and regulations are complex and the determination of our global provision for income taxes and current and deferred tax assets and liabilities requires judgment and estimation. We are subject to routine examinations of our income tax returns, and tax authorities may disagree with our tax positions and assess additional tax. Our future income taxes could also be negatively impacted by our mix of earnings in the jurisdictions in which we operate being different than anticipated given differences in statutory tax rates in the countries in which we operate. In addition, certain tax policy efforts, including the U.S. corporate income tax rate increase proposed by the new U.S. administration and any tax law changes resulting from the Organization for Economic Cooperation and Development ("OECD") and the G20's inclusive framework on Base Erosion and Profit Sharing ("BEPS"), could adversely impact our tax rate and subsequent tax expense.Patents and proprietary technology — Our success is dependent on our ability to develop and successfully introduce new products and to develop, acquire, and retain intellectual property rights. Our success depends in large part on our proprietary technology. We rely on intellectual property rights, including patents, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish our proprietary rights. If we are unable to enforce our intellectual property rights, our competitive position may suffer. Our pending patent applications, and our pending trademark registration applications, may not be allowed or competitors may challenge the validity or scope of our patents or trademarks. In addition, our patents, trademarks, and other intellectual property rights may not provide us a significant competitive advantage. We may need to spend significant resources monitoring our intellectual property rights. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights quickly or at all. Competitors might avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries which could make it easier for competitors to capture market share and could result in lost revenues.Risks Relating to Being a Jersey, Channel Islands Company Listing Ordinary SharesOur ordinary shares are issued under the laws of Jersey, Channel Islands, which may not provide the level of legal certainty and transparency afforded by incorporation in a U.S. jurisdiction and which differ in some respects to the laws applicable to other U.S. corporations.21 We are organized under the laws of Jersey, Channel Islands, a British crown dependency that is an island located off the coast of Normandy, France. Jersey is not a member of the European Union. Jersey, Channel Islands legislation regarding companies is largely based on English corporate law principles. The rights of holders of our ordinary shares are governed by Jersey law, including the Companies (Jersey) Law 1991, as amended, and by the Amcor Articles of Association, as may be amended from time to time. These rights differ in some respects from the rights of other shareholders in corporations incorporated in the United States. Further, there can be no assurance that the laws of Jersey, Channel Islands, will not change in the future or that they will serve to protect investors in a similar fashion afforded under corporate law principles in the U.S., which could adversely affect the rights of investors.U.S. shareholders may not be able to enforce civil liabilities against us. A significant portion of our assets are located outside of the United States and several of our directors and officers are citizens or residents of jurisdictions outside of the United States. As a result, it may be difficult for investors to successfully serve a claim within the United States upon those non-U.S. directors and officers, or to enforce judgments realized in the United States. Judgments of U.S. courts may not be directly enforceable outside of the U.S. and the enforcement of judgments of U.S. courts outside of the U.S., including those in Australia and Jersey, may be subject to limitations. Investors may also have difficulties pursuing an original action brought in a court in a jurisdiction outside the U.S., including Australia and Jersey, for liabilities under the securities laws of the U.S. Additionally, our Articles of Association provide that while the Royal Court of Jersey will have non-exclusive jurisdiction over actions brought against us, the Royal Court of Jersey will be the sole and exclusive forum for derivative shareholder actions, actions for breach of fiduciary duty by our directors and officers, actions arising out of Companies (Jersey) Law 1991, as amended, or actions asserting a claim against our directors or officers governed by the internal affairs doctrine. The exclusive forum provision would not prevent derivative shareholder actions based on claims arising under U.S. federal securities laws from being raised in a U.S. court and would not prevent a U.S. court from asserting jurisdiction over such claims. However, there is uncertainty whether a U.S. or Jersey court would enforce the exclusive forum provision for actions claiming breach of fiduciary duty and other claims.22Item 1B. - Unresolved Staff Comments None.Item 2. - Properties We consider our plants and other physical properties, whether owned or leased, to be suitable, adequate, and of sufficient productive capacity to meet the requirements of our business. The manufacturing plants operate at varying levels of utilization depending on the type of operation and market conditions. The breakdown of our significant manufacturing and support facilities at June 30, 2021 were as follows:Flexibles Segment This segment has 174 significant manufacturing and support facilities located in 39 countries, of which 123 are owned directly by us and 51 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of two to 36 years and have one or more renewal options.Rigid Packaging Segment This segment has 51 significant manufacturing and support facilities located in 11 countries, of which 12 are owned directly by us and 39 are leased from outside parties. Initial building lease terms typically provide for minimum terms in a range of two to 20 years and have one or more renewal options.Corporate and General Our primary executive offices are located in Zurich, Switzerland.Item 3. - Legal Proceedings Refer to Note 19, "Contingencies and Legal Proceedings," of the notes to consolidated financial statements for information about legal proceedings.Item 4. - Mine Safety Disclosures Not applicable.23PART IIItem 5. - Market for Registrant's Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our ordinary shares are traded on the New York Stock Exchange (the "NYSE") under the symbol AMCR and our CHESS Depositary Instruments ("CDIs") are traded on the Australian Securities Exchange (the "ASX") under the symbol AMC. At June 30, 2021, there were 108,928 registered holders of record of our ordinary shares and CDIs.Share Repurchases Share repurchase activity during the three months ended June 30, 2021 were as follows (in millions, except number of shares, which are reflected in thousands, and per share amounts, which are expressed in U.S. dollars): PeriodTotal Number of Shares Purchased (2)Average Price Paid Per Share (2)(3)Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1)April 1 - 30, 2021— $— — $43 May 1 - 31, 20213,473 12.34 3,473 — June 1 - 30, 2021652 12.17 — — Total4,125 $12.31 3,473 (1)On February 2, 2021, our Board of Directors approved a $200 million buyback of ordinary shares and CDIs during the following twelve months. The table above reflects the final purchases under this program which occurred in the fourth fiscal quarter of 2021. In addition, on August 17, 2021, our Board of Directors approved an additional $400 million buyback of ordinary shares and/or CDIs during the next twelve months. The timing, volume, and nature of share repurchases may be amended, suspended, or discontinued at any time.(2)Includes shares purchased on the open market to satisfy the vesting and exercises of share-based compensation awards.(3)Average price paid per share excludes costs associated with the repurchase.24Shareholder Return Performance The information under this caption "Shareholder Return Performance" in this Item 5 of this Annual Report on Form 10-K is not deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C under the Exchange Act, or to the liabilities of Section 18 of the Exchange Act and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate it by reference into such a filing. The line graph below compares the annual percentage change in Amcor plc's cumulative total shareholder return on its ordinary shares with the cumulative total return of its international packaging peer group, the S&P 500 Index, and the ASX 200 Index for the period beginning June 11, 2019. The graph assumes $100 was invested on June 11, 2019, and that all dividends were reinvested.June 11, 2019June 30, 2019June 30, 2020June 30, 2021Amcor plc$100.00 $102.77 $95.68 $111.82 S&P 500$100.00 $107.05 $115.08 $162.03 S&P/ASX 200$100.00 $102.08 $93.59 $131.41 International Packaging Peer Group$100.00 $101.55 $91.28 $135.67 The International Packaging Peer Group consists of AptarGroup, Inc., Ball Corporation, Berry Global Group, Inc, CCL Industries Inc., Crown Holdings, Inc., Graphic Packaging Holding Company, Huhtamaki Oyj, International Paper Company, Mayr-Melnhof Karton AG, O-I Glass, Inc., Sealed Air Corporation, Silgan Holdings Inc., Sonoco Products Company, and WestRock Company.25Item 7. - Management's Discussion and Analysis of Financial Condition and Results of OperationsManagement’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8 of this Annual Report on Form 10-K. Two Year Review of Results(in millions)20212020Net sales$12,861 100.0 %$12,468 100.0 %Cost of sales(10,129)(78.8)(9,932)(79.7)Gross profit2,732 21.2 2,536 20.3 Operating expenses:Selling, general, and administrative expenses(1,292)(10.0)(1,385)(11.1)Research and development expenses(100)(0.8)(97)(0.8)Restructuring and related expenses, net(94)(0.7)(115)(0.9)Other income, net75 0.6 55 0.4 Operating income1,321 10.3 994 8.0 Interest income14 0.1 22 0.2 Interest expense(153)(1.2)(207)(1.7)Other non-operating income, net11 0.1 16 0.1 Income from continuing operations before income taxes and equity in income (loss) of affiliated companies1,193 9.3 825 6.6 Income tax expense(261)(2.0)(187)(1.5)Equity in income (loss) of affiliated companies, net of tax19 0.1 (14)(0.1)Income from continuing operations951 7.4 624 5.0 Income (loss) from discontinued operations, net of tax— — (8)(0.1)Net income$951 7.4 %$616 4.9 %Net income attributable to non-controlling interests(12)(0.1)(4)— Net income attributable to Amcor plc$939 7.3 %$612 4.9 %26Overview Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other products. We work with leading companies around the world to protect their products and the people who rely on them, differentiate brands, and improve supply chains through a range of flexible and rigid packaging, specialty cartons, closures, and services. We are focused on making packaging that is increasingly light-weighted, recyclable and reusable, and made using an increasing amount of recycled content. During fiscal year 2021, approximately 46,000 Amcor employees generated $12.9 billion in sales from operations that spanned approximately 225 locations in over 40 countries. Significant Items Affecting the Periods PresentedImpact of COVID-19 The ongoing 2019 Novel Coronavirus ("COVID-19") pandemic has resulted in a period of historic uncertainty and challenges with the extent and severity of the pandemic continuing to vary among the various regions in which we operate. Our business is almost entirely exposed to end markets which have demonstrated the same resilience experienced through past economic cycles. Our operations have been largely recognized as 'essential' by governments and authorities around the world given the role we play in the supply chains for critical food and healthcare products. Our scale and global footprint has enabled us to collaborate with customers and suppliers to meet volatile changes in demand and continue to service our customers. In dealing with the exceptional challenges posed by COVID-19, we have established three guiding principles focusing on the health and safety of our employees, keeping our operations running, and contributing to relief efforts in our communities.Health and Safety Our commitment to the health and safety of our employees remains our first priority. Our rigorous precautionary measures include global and regional response teams that maintain contact with authorities and experts to actively manage the situation, restrictions on company travel, quarantine protocols for employees who may have had exposure or have symptoms, frequent disinfecting of our locations, and other measures designed to help protect employees, customers, and suppliers. We expect to continue these measures until the COVID-19 pandemic is adequately contained for our business.Operations and Supply Chain To support our business partners, we have instituted business continuity plans in each of our operations and offices globally which address infection prevention measures, incident response, return to work protocols, and supply chain risks. We have experienced minimal disruptions to our operations to date as we have largely been deemed as providing essential services. Our facilities have largely been exempt from government mandated closure orders and while governmental measures may be modified, we expect that our operations will remain operational given the essential products we supply. However, despite our best efforts to contain the impact in our facilities, it remains possible that significant disruptions could occur as a result of the pandemic, including temporary closures of our facilities. We have not experienced any significant disruptions in our supply chain to date attributed to COVID-19. Contributions to Our Communities To support our local communities, we launched a global program to help mitigate the impact of COVID-19 by donating food and healthcare packaging products and by funding local community initiatives to improve access to healthcare, education or food, and other essential products. Looking Ahead We continue to believe we are well-positioned to meet the challenges of the ongoing COVID-19 pandemic. However, we cannot reasonably estimate the duration and severity of this pandemic or its ultimate impact on the global economy and our operations and financial results. Recent outbreaks of variants of the virus have resulted in increased government actions to contain the pandemic. The ultimate near-term impact of the pandemic on our business will depend on the extent and nature of any future disruptions across the supply chain, the duration of social distancing measures and other government imposed restrictions, as well as the nature and pace of macroeconomic recovery in key global economies. 27Raw Material and Supply Chain TrendsWe experienced supply shortages of certain resins and raw materials and increased price volatility of certain raw materials across many of the regions in which we operate for both of our reportable segments in the second half of fiscal 2021 attributed to a variety of global factors, including significant winter storms across the southern United States. We have been able to work closely with our suppliers and customers, leveraging our global capabilities and expertise to work through supply and other resulting issues to date. We expect supplies of certain raw materials will continue to be tight through at least the first half of fiscal 2022 as supply channels recover, barring any future weather or other impacts.The Acquisition of Bemis Company, Inc. On June 11, 2019, we completed the acquisition of 100% of the outstanding shares of Bemis Company, Inc. ("Bemis"), a global manufacturer of flexible packaging products based in the United States, for the purchase price of $5.2 billion in an all-stock transaction. In connection with the Bemis transaction, we assumed $1.4 billion of debt.2019 Bemis Integration Plan In connection with the acquisition of Bemis, we initiated restructuring activities in the fourth quarter of 2019 aimed at integrating and optimizing the combined organization. As previously announced, we continue to target realizing at least $180 million of pre-tax synergies driven by procurement, supply chain, and general and administrative savings by the end of fiscal year 2022. Our total 2019 Bemis Integration Plan pre-tax integration costs are expected to be approximately $230 million to $240 million. The total 2019 Bemis Integration Plan costs include approximately $190 million to $200 million of restructuring and related expenses, net, and $40 million of general integration expenses. We estimate that net cash expenditures including disposal proceeds will be approximately $160 million to $170 million, of which $40 million relates to general integration expense. As of June 30, 2021, we have incurred $135 million in employee related expenses, $38 million in fixed asset related expenses, $26 million in other restructuring and $27 million in restructuring related expenses, partially offset by a gain on disposal of a business of $51 million. The year ended June 30, 2021 resulted in net cash inflows of $1 million, including $78 million of business disposal proceeds, offset by $77 million of cash outflows, of which $69 million were payments related to restructuring and related expenditures. The 2019 Bemis Integration Plan relates to the Flexibles segment and Corporate and is expected to be substantially completed by the end of fiscal year 2022. Restructuring related costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. General integration costs are not linked to restructuring. We believe the disclosure of restructuring related costs provides more information on the total cost of the 2019 Bemis Integration Plan. The restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics, train new employees on relocated equipment, and anticipated losses on sale of closed facilities.2018 Rigid Packaging Restructuring Plan On August 21, 2018, we announced a restructuring plan in Amcor Rigid Packaging ("2018 Rigid Packaging Restructuring Plan") aimed at reducing structural costs and optimizing the footprint. The Plan includes the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimization and productivity improvements, as well as overhead cost reductions. The 2018 Rigid Packaging Restructuring Plan was completed by June 30, 2021 with total pre-tax restructuring costs of $121 million, whereof $78 million resulted in cash expenditures, with the main component being the cost to exit manufacturing facilities and employee related costs.For more information about our restructuring plans, refer to Note 6, "Restructuring Plans" of "Part II, Item 8, Notes to Consolidated Financial Statements."Equity Method Investment - AMVIG Holdings Limited ("AMVIG") We sold our equity method investment in AMVIG on September 30, 2020, realizing a net gain of $15 million, which was recorded in equity in income (loss) of affiliated companies, net of tax in the consolidated statements of income. Prior to the sale and due to impairment indicators being present for the years ended June 30, 2020 and 2019, we performed impairment tests by comparing the carrying value of our investment in AMVIG at the end of each period, including interim periods, to the fair 28value of the investment, which was determined based on AMVIG's quoted share price. We recorded impairment charges in fiscal years 2020 and 2019 of $26 million and $14 million, respectively, as the fair value of the investment was below its carrying value. Refer to Note 7, "Equity Method and Other Investments."Highly Inflationary Accounting We have subsidiaries in Argentina that historically had a functional currency of the Argentine Peso. As of June 30, 2018, the Argentine economy was designated as highly inflationary for accounting purposes. Accordingly, beginning July 1, 2018, we began reporting the financial results of our Argentine subsidiaries with a functional currency of the U.S. dollar. The transition to highly inflationary accounting resulted in a negative impact on monetary balances of $19 million, $28 million, and $30 million that was reflected in the consolidated statements of income for the years ended June 30, 2021, 2020, and 2019, respectively. 29Results of OperationsThe following is a discussion and analysis of changes in the financial condition and results of operations for fiscal year 2021 compared to fiscal year 2020. A discussion and analysis regarding our results of operations for fiscal year 2020 compared to fiscal year 2019 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, filed with the SEC on August 27, 2020. Consolidated Results of Operations(in millions, except per share data)20212020Net sales$12,861 $12,468 Operating income1,321 994 Operating income as a percentage of net sales10.3 %8.0 %Net income attributable to Amcor plc$939 $612 Diluted Earnings Per Share$0.602 $0.382 Net sales increased by $393 million, or 3.2%, to $12,861 million for the fiscal year 2021, from $12,468 million for the fiscal year 2020. Excluding the impact of disposed operations of $66 million, or (0.5%), positive currency impacts of $190 million, or 1.5%, and pass-through of raw material costs of $3 million, or 0.0%, the increase in net sales for the fiscal year 2021 was $273 million or 2.2%, driven by favorable volumes of 1.6% and favorable price/mix of 0.6%. Net income attributable to Amcor plc increased by $327 million, or 53.4%, to $939 million for the fiscal year 2021, from $612 million for the fiscal year 2020 mainly as a result of gross profit margin improvement, Bemis acquisition related synergies, nonrecurrence of Bemis acquisition related costs incurred in fiscal year 2020, and reduced interest expense, partially offset by associated tax charges. Diluted earnings per shares ("Diluted EPS") increased to $0.602, or by 57.5%, for the fiscal year 2021, from $0.382 for the fiscal year 2020, with net income attributable to ordinary shareholders increasing by 53.4% and the diluted weighted-average number of shares outstanding decreasing by 2.9%. The decrease in the diluted weighted-average number of shares outstanding was due to repurchase of shares under announced share buyback programs.Segment Results of Operations Flexibles Segment The Flexibles reportable segment develops and supplies flexible packaging globally.(in millions)20212020Net sales including intersegment sales$10,040 $9,755 Adjusted EBIT from continuing operations1,427 1,296 Adjusted EBIT from continuing operations as a percentage of net sales14.2 %13.3 % Net sales including intersegment sales increased by $285 million, or 2.9%, to $10,040 million for fiscal year 2021, from $9,755 million for fiscal year 2020. Excluding the impact of disposed operations of $66 million, or (0.7%), positive currency impacts of $219 million, or 2.2%, and pass-through of raw material costs of $89 million, or 1.0%, the increase in net sales including intersegment sales for the fiscal year 2021 was $43 million, or 0.4%, driven by favorable volumes of 0.6% and unfavorable price/mix of (0.2%). Adjusted earnings before interest and tax from continuing operations ("Adjusted EBIT") for the fiscal year 2021 increased by $131 million, or 10.1% to $1,427 million from $1,296 million for the fiscal year 2020. Excluding positive currency impacts of $20 million, or 1.6%, the increase in Adjusted EBIT for fiscal year 2021 was $111 million, or 8.5%, driven by plant cost improvements of 7.0%, favorable selling, general, and administrative ("SG&A") and other cost impacts of 4.8%, and favorable volumes of 1.0%, partially offset by unfavorable price/mix of (4.3%).30 Rigid Packaging Segment The Rigid Packaging reportable segment manufactures rigid packaging containers and related products.(in millions)20212020Net sales$2,823 $2,716 Adjusted EBIT from continuing operations299 284 Adjusted EBIT from continuing operations as a percentage of net sales10.6 %10.5 % Net sales increased by $107 million, or 3.9%, to $2,823 million for fiscal year 2021, from $2,716 million for fiscal year 2020. Excluding negative currency impacts of $30 million, or (1.1%), and pass-through of raw material costs of $92 million, or (3.4%), the increase in net sales including intersegment sales for the fiscal year 2021 was $229 million, or 8.4%, driven by favorable volumes of 5.2% and favorable price/mix of 3.2%. Adjusted EBIT for the fiscal year 2021 increased by $15 million, or 5.3%, to $299 million for the fiscal year 2021 from $284 million for the fiscal year 2020. Excluding negative currency impacts of $7 million, or (2.3%), the increase in Adjusted EBIT for fiscal year 2021 was $22 million, or 7.6%, driven by favorable volumes of 7.4%, favorable price/mix of 7.1%, unfavorable plant costs of (5.0%), and unfavorable selling, general, and administrative ("SG&A"), and other cost impacts of (1.9%). Consolidated Gross Profit(in millions)20212020Gross profit$2,732 $2,536 Gross profit as a percentage of net sales21.2 %20.3 % Gross profit increased by $196 million, or 7.7%, to $2,732 million for fiscal year 2021, from $2,536 million for fiscal year 2020. The increase was primarily driven by growth in sales volume and plant cost performance and the non-recurrence of $55 million of amortization of purchase price accounting adjustments for fiscal year 2020.Consolidated Selling, General, and Administrative ("SG&A") Expense(in millions)20212020SG&A expenses$(1,292)$(1,385)SG&A expenses as a percentage of net sales(10.0)%(11.1)% SG&A decreased by $93 million, or 6.7%, to $1,292 million for fiscal year 2021, from $1,385 million for fiscal year 2020. The decrease was primarily due to the nonrecurrence of Bemis related acquisition costs in fiscal year 2020, together with the impact of synergy benefits and other savings. Consolidated Research and Development ("R&D") Expense(in millions)20212020R&D expenses$(100)$(97)R&D expenses as a percentage of net sales(0.8)%(0.8)% Research and development costs increased by $3 million, or 3.1%, to $100 million for fiscal year 2021, from $97 million for fiscal year 2020. Consolidated Restructuring and Related Expense, Net(in millions)20212020Restructuring and related expenses, net$(94)$(115)Restructuring and related expenses, net, as a percentage of net sales(0.7)%(0.9)% Restructuring and related costs decreased by $21 million to $94 million for fiscal year 2021, from $115 million for fiscal year 2020. The decrease was primarily driven by lower costs from the 2018 Rigid Packaging Restructuring Plan than in fiscal 2020.31Consolidated Other Income, Net(in millions)20212020Other income, net$75 $55 Other income, net, as a percentage of net sales0.6 %0.4 % Other income, net increased by $20 million to $75 million for fiscal year 2021, from $55 million for fiscal year 2020. The increase was mainly driven by a favorable Brazil Supreme Court ruling on Brazil indirect tax credits.Consolidated Interest Income(in millions)20212020Interest income$14 $22 Interest income as a percentage of net sales0.1 %0.2 % Interest income decreased by $8 million, or 36.4%, to $14 million for fiscal year 2021, from $22 million for fiscal year 2020, mainly driven by overall decreases in market interest rates.Consolidated Interest Expense(in millions)20212020Interest expense$(153)$(207)Interest expense as a percentage of net sales(1.2)%(1.7)% Interest expense decreased by $54 million, or 26.1%, to $153 million for fiscal year 2021 compared to $207 million for fiscal year 2020, mainly driven by use of commercial paper and lower floating interest rates and repayment of higher cost debt and term loans.Consolidated Other Non-Operating Income, Net (in millions)20212020Other non-operating income, net $11 $16 Other non-operating income, net, as a percentage of net sales0.1 %0.1 % Other non-operating income, net decreased by $5 million to $11 million for fiscal year 2021, from $16 million for fiscal year 2020, mainly driven by lower expected returns on pension assets partially offset by lower pension interest.Consolidated Income Tax Expense(in millions)20212020Income tax expense$(261)$(187)Effective tax rate21.9 %22.6 % Income tax expense increased by $74 million, or 39.6%, to $261 million for fiscal year 2021, from $187 million for fiscal year 2020. The increase was primarily driven by the higher overall profit of the total Company.32Presentation of Non-GAAP Information This Annual Report on Form 10-K refers to financial measures that have not been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"): adjusted earnings before interest and taxes ("Adjusted EBIT") from continuing operations, adjusted net income from continuing operations, and net debt. These non-GAAP financial measures adjust for factors that are unusual or unpredictable. These measures exclude the impact of significant tax reforms, certain amounts related to the effect of changes in currency exchange rates, acquisitions, and restructuring, including employee-related costs, equipment relocation costs, accelerated depreciation, and the write-down of equipment. These measures also exclude gains or losses on sales of significant property and divestitures, certain litigation matters, significant pension settlements, impairments in goodwill and equity method investments, and certain acquisition-related expenses, including transaction expenses, due diligence expenses, professional and legal fees, purchase accounting adjustments for inventory, order backlog, intangible amortization, and changes in the fair value of deferred acquisition payments. This adjusted information should not be construed as an alternative to results determined under U.S. GAAP. We use the non-GAAP measures to evaluate operating performance and believe that these non-GAAP measures are useful to enable investors and other external parties to perform comparisons of our current and historical performance. A reconciliation of reported net income attributable to Amcor plc to Adjusted EBIT from continuing operations and adjusted net income from continuing operations for fiscal years 2021, 2020, and 2019 is as follows:For the years ended June 30, (in millions)202120202019Net income attributable to Amcor plc, as reported$939 $612 $430 Add: Net income attributable to non-controlling interests12 4 7 Add/(Less): (Income) loss from discontinued operations, net of tax— 8 (1)Income from continuing operations951 624 436 Add: Income tax expense261 187 172 Add: Interest expense153 207 208 Less: Interest income(14)(22)(17)EBIT from continuing operations1,351 996 799 Add: Material restructuring programs (1)88 106 64 Add: Impairments in equity method investments (2)— 26 14 Add: Material acquisition costs and other (3)7 145 143 Add: Amortization of acquired intangible assets from business combinations (4)165 191 31 Less: Economic net investment hedging activities not qualifying for hedge accounting (5)— — (1)Add: Impact of hyperinflation (6)19 28 30 Less: Net legal settlements (7)— — (5)Add: Pension settlements (8)— 5 — Less: Net gain on disposals (9)(9)— — Adjusted EBIT from continuing operations1,621 1,497 1,075 Less: Income tax expense(261)(187)(172)Add/(Less): Adjustments to income tax expense (10)(51)(89)23 Less: Interest expense(153)(207)(208)Add: Interest income14 22 17 Less: Material restructuring programs attributable to non-controlling interest— (4)— Less: Net income attributable to non-controlling interests(12)(4)(7)Adjusted net income from continuing operations$1,158 $1,028 $728 (1)Material restructuring programs include restructuring and related expenses for the 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for fiscal years 2021 and 2020, respectively, and the 2018 Rigid Packaging Restructuring Plan for fiscal year 2019. Refer to Note 6, "Restructuring Plans," for more information about our restructuring plans. 33(2)Impairments in equity method investments includes the impairment charges related to other-than-temporary impairments related to the investment in AMVIG. During fiscal year 2021 we sold our interest in AMVIG. Refer to Note 7, "Equity Method and Other Investments" for more information about our equity method investments. (3)Fiscal year 2021 includes a $19 million benefit related to Brazil indirect taxes resulting from a May 2021 Brazil Supreme Court decision. During fiscal year 2020, material acquisition costs and other includes $58 million amortization of Bemis acquisition related inventory fair value step-up and $88 million of Bemis transaction related costs and integration costs not qualifying as exit costs, including certain advisory, legal, audit and audit related fees. During fiscal year 2019, material acquisition costs and other includes $48 million of costs related to the 2019 Bemis Integration Plan, $16 million of Bemis acquisition related inventory fair value step-up, $43 million of long-lived asset impairments, $134 million of Bemis transaction-related costs, partially offset by $97 million of gain related to the U.S. Remedy sale net of related and other costs.(4)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from acquisitions impacting the periods presented, including $26 million and $5 million of sales backlog amortization for the fiscal year 2020 and 2019, respectively, from the Bemis acquisition.(5)Economic net investment hedging activities not qualifying for hedge accounting includes the exchange rate movements on external loans not deemed to be effective net investment hedging instruments resulting from our conversion to U.S. GAAP from Australian Accounting Standards ("AAS") recognized in other non-operating income, net in fiscal 2019.(6)Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.(7)Net legal settlements include the impact of significant legal settlements after associated costs.(8)Impact of pensions settlements includes the amount of actuarial losses recognized in the consolidated income statements related to the settlement of certain defined benefit plans, not including related tax effects. (9)Net gain on disposals includes the gain realized upon the disposal of AMVIG and the loss upon disposal of other non-core businesses not part of material restructuring programs. Refer to Note 7, "Equity Method and Other Investments" for further information the disposal of AMVIG and Note 4, "Acquisitions and Divestitures" for more information about our other disposals.(10)Net tax impact on items (1) through (9) above. Reconciliation of Net Debt A reconciliation of total debt to net debt at June 30, 2021 and 2020 is as follows:(in millions)June 30, 2021June 30, 2020Current portion of long-term debt$5 $11 Short-term debt98 195 Long-term debt, less current portion6,186 6,028 Total debt6,289 6,234 Less cash and cash equivalents850 743 Net debt$5,439 $5,491 34Supplemental Guarantor Information Amcor plc, along with certain wholly owned subsidiary guarantors, guarantee the following senior notes issued by the wholly owned subsidiaries, Amcor Finance (USA), Inc., Amcor Flexibles North America, Inc. (formerly known as Bemis Company, Inc.), and Amcor UK Finance plc.•4.500% Guaranteed Senior Notes due 2021 of Amcor Flexibles North America, Inc.•3.100% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc.•2.630% Guaranteed Senior Notes due 2030 of Amcor Flexibles North America, Inc.•2.690% Guaranteed Senior Notes due 2031 of Amcor Flexibles North America, Inc.•3.625% Guaranteed Senior Notes due 2026 of Amcor Finance (USA), Inc.•4.500% Guaranteed Senior Notes due 2028 of Amcor Finance (USA), Inc.•1.125% Guaranteed Senior Notes due 2027 of Amcor UK Finance plc The four notes issued by Amcor Flexibles North America, Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd (formerly known as Amcor Limited), Amcor Finance (USA), Inc., and Amcor UK Finance plc. The two notes issued by Amcor Finance (USA), Inc. are guaranteed by its parent entity Amcor plc and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., and Amcor UK Finance plc. The note issued by Amcor UK Finance plc is guaranteed by its parent entity, Amcor plc and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., and Amcor Finance (USA), Inc. All guarantors fully, unconditionally, and irrevocably guarantee, on a joint and several basis, to each holder of the notes the due and punctual payment of the principal of, and any premium and interest on, such note and all other amounts payable, when and as the same shall become due and payable, whether at stated maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of the notes and related indenture. The obligations of the applicable guarantors under their guarantees will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, or similar laws) under applicable law. The guarantees will be unsecured and unsubordinated obligations of the guarantors and will rank equally with all existing and future unsecured and unsubordinated debt of each guarantor. None of our other subsidiaries guarantee such notes. The issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc. Amcor Flexibles North America, Inc. is incorporated in Missouri in the United States, Amcor Finance (USA) Inc. is incorporated in Delaware in the United States, Amcor UK Finance plc is incorporated in England and Wales, United Kingdom, and the guarantors are incorporated under the laws of Jersey, Australia, the United States, and England and Wales and, therefore, insolvency proceedings with respect to the issuers and guarantors could proceed under, and be governed by, among others, Jersey, Australian, United States or English insolvency law, as the case may be, if either issuer or any guarantor defaults on its obligations under the applicable Notes or Guarantees, respectively. Set forth below is the summarized financial information of the combined Obligor Group made up of Amcor plc (as parent guarantor), Amcor Flexibles North America, Inc., Amcor Finance (USA), Inc., and Amcor UK Finance plc (as subsidiary issuers of the notes and guarantors of each other’s notes) and Amcor Pty Ltd (as the remaining subsidiary guarantor).35Basis of Preparation We voluntarily adopted amendments to the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered as issued by the SEC [Release No. 33-10762; 34-88307; File No. S7-19-18] in March 2020. The following summarized financial information is presented for the parent, issuer, and guarantor subsidiaries ("Obligor Group") on a combined basis after elimination of intercompany transactions between entities in the combined group and amounts related to investments in any subsidiary that is a non-guarantor. This information is not intended to present the financial position or results of operations of the combined group of companies in accordance with U.S. GAAP.Statement of Income for Obligor Group(in millions)For the year ended June 30, 2021Net sales - external$953 Net sales - to subsidiaries outside the Obligor Group6 Total net sales$959 Gross profit178 Income from continuing operations (1)3,057 Income (loss) from discontinued operations, net of tax— Net income$3,057 Net (income) loss attributable to non-controlling interests— Net income attributable to Obligor Group$3,057 (1)Includes $2,920 million of net income from subsidiaries outside the Obligor Group mainly made up of intercompany dividend and interest income, partially offset by expenses related to legal entity reorganizations executed during the period and other expenses related to transactions with subsidiaries outside the Obligor Group.Balance Sheet for Obligor Group(in millions)As of June 30, 2021AssetsCurrent assets - external$814 Current assets - due from subsidiaries outside the Obligor Group95 Total current assets909 Non-current assets - external1,428 Non-current assets - due from subsidiaries outside the Obligor Group11,838 Total non-current assets13,266 Total assets$14,175 LiabilitiesCurrent liabilities - external$1,183 Current liabilities - due to subsidiaries outside the Obligor Group22 Total current liabilities1,205 Non-current liabilities - external6,321 Non-current liabilities - due to subsidiaries outside the Obligor Group11,563 Total non-current liabilities17,884 Total liabilities$19,089 36Liquidity and Capital Resources We finance our business primarily through cash flows provided by operating activities, borrowings from banks, and proceeds from issuances of debt and equity. We periodically review our capital structure and liquidity position in light of market conditions, expected future cash flows, potential funding requirements for debt refinancing, capital expenditures, and acquisitions, the cost of capital, sensitivity analyses reflecting downside scenarios, the impact on our financial metrics and credit ratings, and our ease of access to funding sources. Despite the existing market uncertainties and volatilities stemming from the COVID-19 pandemic, based on our current and expected cash flow from operating activities and available cash, we believe our cash flows provided by operating activities, together with borrowings available under our credit facilities and access to the commercial paper market back stopped by our bank facilities, will continue to provide sufficient liquidity to fund our operations, capital expenditures, and other commitments, including dividends and purchases of our ordinary shares and CHESS Depositary Instruments under authorized share repurchase programs, into the foreseeable future.OverviewYear Ended June 30,(in millions)20212020Change 2021 vs. 2020Net cash provided by operating activities$1,461 $1,384 $77 Net cash (used in) provided by investing activities(233)38 (271)Net cash used in financing activities(1,179)(1,236)57 Cash Flow Overview Net Cash Provided by Operating Activities Net cash inflows provided by operating activities increased by $77 million, or 6%, to $1,461 million for fiscal year 2021, from $1,384 million for fiscal year 2020. This increase was primarily due to higher cash earnings in fiscal year 2021 partially offset by working capital outflows versus the prior fiscal year. Net Cash (Used in) Provided by Investing Activities Net cash flows from investing activities decreased by $271 million, or 713%, to a $233 million outflow for fiscal year 2021, from a $38 million inflow for fiscal year 2020. This decrease was primarily due to higher disposal proceeds from the divestiture of three Bemis' medical packaging facilities located in the United Kingdom and Ireland ("EC Remedy") in the prior period and higher capital expenditures in the current period. Capital expenditures were $468 million for fiscal year 2021, an increase of $68 million compared to $400 million for fiscal year 2020. The increase in capital expenditures was primarily due to the increased capital spending in the Flexibles segment. Net Cash Used in Financing Activities Net cash flows used in financing activities decreased by $57 million, or 5%, to $1,179 million for fiscal year 2021, from a $1,236 million outflow for fiscal year 2020. This decrease was primarily due to lower share buyback payments and on-market purchases of own shares, partially offset by lower cash net debt drawdowns.Net Debt We borrow from financial institutions and debt investors in the form of bank overdrafts, bank loans, corporate bonds, unsecured notes, and commercial paper. We have a mixture of fixed and floating interest rates and use interest rate swaps to provide further flexibility in managing the interest cost of borrowings. Short-term debt consists of bank debt with a duration of less than 12 months and bank overdrafts which are classified as current due to the short-term nature of the borrowings, except where we have the ability and intent to refinance and as such extend the debt beyond 12 months. The current portion of the long-term debt consists of debt amounts repayable within a year after the balance sheet date. 37 Our primary bank debt facilities and notes are unsecured and subject to negative pledge arrangements limiting the amount of secured indebtedness we can incur to a range between 7.5% to 15.0% of our total tangible assets, subject to some exceptions and variations by facility. In addition, the bank debt facilities and U.S. private placement debt require us to comply with certain financial covenants, including leverage and interest coverage ratios. The negative pledge arrangements and the financial covenants are defined in the related debt agreements. As of June 30, 2021, we are in compliance with all applicable covenants under our bank debt facilities and U.S. private placement debt. Our net debt as of June 30, 2021 and June 30, 2020 was $5.4 billion and $5.5 billion, respectively.Available Financing As of June 30, 2021, we had undrawn credit facilities available in the amount of $2.0 billion. Our senior facilities are available to fund working capital, capital expenditures, and refinancing obligations and are provided to us by three separate bank syndicates. During the quarter ending March 31, 2021, we extended $3.8 billion in aggregate amount of the 3-, 4-, and 5-year revolving credit facilities via a one-year extension option to April 2023, 2024, and 2025, respectively. In addition to extending maturities, we also amended credit terms of the revolving facilities, which, among other changes, modified the debt covenant basis. The amendments removed the financial covenant requiring compliance with a minimum net interest expense coverage ratio, increased maximum permitted leverage ratio, and permit further increases at our election after we consummate certain qualified transactions. We have an option to extend the maturities for 12 months in fiscal year 2022. On May 28, 2021, we canceled a $400 million term loan facility following the issuance of a $800 million 10-year senior unsecured note on May 25, 2021. On July 15, 2021, we redeemed the $400 million U.S dollar notes due in October 2021 at a price equal to the principal plus accrued interest. As of June 30, 2021, the revolving senior bank debt facilities had an aggregate limit of $3.8 billion, of which $1.8 billion had been drawn (inclusive of amounts drawn under commercial paper programs reducing the overall balance of available senior facilities). Dividend Payments In fiscal years 2021, 2020, and 2019, we paid $742 million, $761 million, and $680 million, respectively, in dividends.Credit Rating Our capital structure and financial practices have earned us investment grade credit ratings from two internationally recognized credit rating agencies. These credit ratings are important to our ability to issue debt at favorable rates of interest, for various tenors, and from a diverse range of markets that are highly liquid, including European and U.S. debt capital markets and from global financial institutions.Share Repurchases On November 5, 2020, our Board of Directors approved a $150 million buyback of ordinary shares and Chess Depositary Instruments ("CDIs"). On February 2, 2021, our Board of Directors also approved a separate $200 million buyback of ordinary shares and CDIs in the next twelve months. During the year ended June 30, 2021, we repurchased approximately $350 million, excluding transaction costs, or 31 million shares. The shares repurchased were canceled upon repurchase. Additionally, on August 17, 2021, our Board of Directors approved a further $400 million buyback of ordinary shares and/or CDIs in the next twelve months. We had cash outflows of $8 million, $67 million, and $20 million for the purchase of our shares in the open market during fiscal years 2021, 2020, and 2019, respectively, as treasury shares to satisfy the vesting and exercises of share-based compensation awards and shares purchased for shareholder settlement in the fourth quarter of fiscal year 2020. As of June 30, 2021, 2020, and 2019, we held treasury shares at cost of $29 million, $67 million, and $16 million, representing 2.8 million, 6.7 million, and 1.4 million shares, respectively. 38Contractual Obligations The following table provides a summary of contractual obligations including our debt payment obligations, operating lease obligations, and certain other commitments as of June 30, 2021. These amounts do not reflect all planned spending under the various categories but rather that portion of spending to which we are contractually committed.(in millions)Less than 1 yearWithin 1 to 3 yearsWithin 3 to 5 yearsMore than 5 yearsShort-term debt obligations (1)$98 $— $— $— Long-term debt obligations (1)(2)678 1,035 1,744 2,712 Interest expense on short- and long-term debt, fixed and floating rate (3)114 201 191 237 Operating leases (4)110 180 116 251 Finance leases3 6 4 31 Purchase obligations (5)840 563 273 16 Employee benefit plan obligations89 207 189 488 Total$1,932 $2,192 $2,517 $3,735 (1)All debt obligations are based on their contractual face value, excluding interest rate swap fair value adjustments and unamortized discounts.(2)USD commercial paper and EUR commercial paper are classified as maturing in 2023 and 2025, supported by the 3-year and 5-year syndicated facilities, maturing in 2023 and 2025, respectively.(3)Variable interest rate commitments are based on the current contractual maturity date of the underlying facility, calculated on the existing drawdown at June 30, 2021, after allowing for increases/(decreases) in projected bank reference rates.(4)We lease certain manufacturing sites, office space, warehouses, land, vehicles, and equipment under operating leases. The leases have varying terms, escalation clauses, and renewal rights. Not included in the above commitments are contingent rental payments which may arise as part of the rental increase indexed to the consumer price index or in the event that units produced by certain leased assets exceed a predetermined production capacity.(5)Purchase obligations represent contracts or commitments for the purchase of raw materials, utilities, capital equipment, and various other goods and services.Off-Balance Sheet Arrangements Other than as described under "Contractual Obligations" as of June 30, 2021, we had no significant off-balance sheet contractual obligations or other commitments. Liquidity Risk and Outlook Liquidity risk arises from the possibility that we might encounter difficulty in settling our debts or otherwise meeting our obligations related to financial liabilities. We manage liquidity risk centrally and such management involves maintaining available funding and ensuring that we have access to an adequate amount of committed credit facilities. Due to the dynamic nature of our business, the aim is to maintain flexibility within our funding structure through the use of bank overdrafts, bank loans, corporate bonds, unsecured notes, and commercial paper. The following guidelines are used to manage our liquidity risk:•maintaining minimum undrawn committed liquidity of at least $200 million that can be drawn at short notice; •regularly performing a comprehensive analysis of all cash inflows and outflows in relation to operational, investing, and financing activities; •generally using tradable instruments only in highly liquid markets; •maintaining a senior credit investment grade rating with a reputable independent rating agency; •managing credit risk related to financial assets; •monitoring the duration of long-term debt; •only investing surplus cash with major financial institutions; and•to the extent practicable, spreading the maturity dates of long-term debt facilities.In the third quarter of fiscal year 2021, we extended $3.8 billion in aggregate amount of our 3-, 4-, and 5-year revolving credit facilities via a one-year extension option to April 2023, 2024, and 2025, respectively. At the same time, we entered into amendments to our revolving credit facilities, as described above under “Available Financing.” We have an option to extend the maturities for another 12 months in fiscal year 2022. 39During the fourth quarter of fiscal 2021, we canceled a $400 million term loan facility following the issuance of an $800 million 10-year senior unsecured note on May 25, 2021. On July 15, 2021, we redeemed the $400 million U.S. dollar notes due in October 2021 at a price equal to the principal plus accrued interest. As of June 30, 2021 and 2020, an aggregate principal amount of $1.8 billion and $2.0 billion, respectively, was drawn under commercial paper programs. However, such programs are backstopped by committed bank syndicated loan facilities with maturities in April 2023 ($750 million), April 2024 ($1.5 billion), and April 2025 ($1.5 billion), with an option to extend, under which we had $2.0 billion in unused capacity remaining as of June 30, 2021. We expect long-term future funding needs to primarily relate to refinancing and servicing our outstanding financial liabilities maturing as outlined above and to finance our capital expenditure and payments for acquisitions that may be completed. We expect to continue to fund our long-term business needs on the same basis as in the past, i.e., partially through the cash flow provided by operating activities available to the business and management of the capital of the business, in particular through issuance of commercial paper and debt securities on a regular basis. We decide on discretionary growth capital expenditures and acquisitions individually based on, among other factors, the return on investment after related financing costs and the payback period of required upfront cash investments in light of our mid-term liquidity planning covering a period of four years post the current financial year. Our long-term access to liquidity depends on both our results of operations and on the availability of funding in financial markets.40Critical Accounting Estimates and Judgments Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to retirement benefits, intangible assets, goodwill, equity method investments, and expected future performance of operations. Our estimates and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following are critical accounting estimates used in the preparation of our consolidated financial statements.•the calculation of annual pension costs and related assets and liabilities;•valuation of intangible assets and goodwill; •calculation of deferred taxes and uncertain tax positions;•calculation of equity method investments; and•calculation of acquisition fair values.Considerations Related to the COVID-19 Pandemic The impact that the ongoing COVID-19 pandemic will have on our consolidated operations is uncertain. While the overall impact on our operations to date has not been material, we have experienced volatility in customer order patterns. We have considered the potential impacts of the COVID-19 pandemic in our critical accounting estimates and judgments as of June 30, 2021 and will continue to evaluate the nature and extent of the impact on our business and consolidated results of operations.Pension Costs Approximately 50% of our defined benefits plans are closed to new entrants and future accruals. The accounting for the pension plans requires us to recognize the overfunded or underfunded status of the pension plans on our balance sheet. A substantial portion of our pension amounts relates to our defined benefit plans in the United States, Switzerland, and the United Kingdom. Net periodic pension cost recorded in fiscal year 2021 was $15 million, compared to pension cost of $10 million in fiscal year 2020 and $13 million in fiscal year 2019. We expect pension expense before the effect of income taxes for fiscal year 2022 to be approximately $3 million. For our sponsored plans, the relevant accounting guidance requires that management make certain assumptions relating to the long-term rate of return on plan assets, discount rates used to determine the present value of future obligations and expenses, salary inflation rates, mortality rates, and other assumptions. We believe that the accounting estimates related to our pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets, actuarial valuations, market conditions, and contracted benefit changes. The selection of assumptions is based on historical trends and known economic and market conditions at the time of valuation, as well as independent studies of trends performed by our actuaries. However, actual results may differ substantially from the estimates that were based on the critical assumptions. The amount by which the fair value of plan assets differs from the projected benefit obligation of a pension plan must be recorded on the consolidated balance sheets as an asset, in the case of an overfunded plan, or as a liability, in the case of an underfunded plan. The gains or losses and prior service costs or credits that arise but are not recognized as components of pension cost are recorded as a component of other comprehensive income. Pension plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants. The service costs related to defined benefits are included in operating income. The other components of net benefit cost are presented in the consolidated statements of income separately from the service cost component and outside operating income. We review annually the discount rate used to calculate the present value of pension plan liabilities. The discount rate used at each measurement date is set based on a high-quality corporate bond yield curve, derived based on bond universe 41information sourced from reputable third-party indexes, data providers, and rating agencies. In countries where there is no deep market in corporate bonds, we have used a government bond approach to set the discount rate. For Mexico, Poland, and Turkey, a corporate bond credit spread has been added to the government bond yields. Additionally, the expected long-term rate of return on plan assets is derived for each benefit plan by considering the expected future long-term return assumption for each individual asset class. A single long-term return assumption is then derived for each plan based upon the plan's target asset allocation. Pension Assumptions Sensitivity Analysis The following chart depicts the sensitivity of estimated fiscal year 2022 pension expense to incremental changes in the discount rate and the expected long-term rate of return on assets.Discount RateTotal Increase (Decrease) to Pension Expense from Current AssumptionRate of Return on Plan AssetsTotal Increase (Decrease) to Pension Expense from Current Assumption(in $ millions)(in $ millions)+25 basis points1 +25 basis points(4)2.13 percent (current assumption)— 3.78 percent (current assumption)— -25 basis points(2)-25 basis points4 Intangible Assets and Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired, including intangible assets. Goodwill is not amortized but is instead tested annually or when events and circumstances indicate an impairment may have occurred. Our reporting units each contain goodwill that is assessed for potential impairment. All goodwill is assigned to a reporting unit, which is defined as an operating segment, at the time of each acquisition based on the relative fair value of the reporting unit. We have six reporting units, of which five are included in our Flexibles Segment. The other reporting unit that is also a reportable segment is Rigid Packaging. Goodwill for our reporting units is reviewed for impairment annually in the fourth quarter of each year or whenever events and circumstances indicate an impairment may have occurred during the year. When the carrying value of a reporting unit exceeds its fair value, we recognize an impairment loss equal to the difference between the carrying value and estimated fair value of the reporting unit, adjusted for any tax benefits, limited to the amount of the carrying value of goodwill. In performing our impairment analysis, we may elect to first assess qualitative factors to determine whether a quantitative test is necessary. If we determine that a quantitative test is necessary, or elect to perform a quantitative test instead of the qualitative test, we derive an estimate of fair values for each of our reporting units using income approaches. The most significant assumptions used in the determination of the estimated fair value of the reporting units are revenue growth, projected operating income growth, terminal values, and discount rates. Our estimates associated with the goodwill impairment tests are considered critical due to the amount of goodwill recorded on our consolidated balance sheets and the judgment required in determining fair value amounts, including projected future cash flows. Judgment is used in assessing whether goodwill should be tested more frequently for impairment than annually. Factors such as a significant decrease in expected net earnings, adverse equity market conditions, and other external events, such as the COVID-19 pandemic, may result in the need for more frequent assessments. Intangible assets consist primarily of purchased customer relationships, technology, trademarks, and software and are amortized using the straight-line method over their estimated useful lives, which range from one to 20 years. We review these intangible assets for impairment as changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable. The test for impairment requires us to make estimates about fair value, most of which are based on projected future cash flows and discount rates. These estimates and projections require judgments as to future events, conditions, and amounts of future cash flows. 42Deferred Taxes and Uncertain Tax Positions We deal with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The determination of uncertain tax positions is based on an evaluation of whether the weight of available evidence indicates that it is more likely than not that the position taken or expected to be taken in the tax return will be sustained on tax audit, including resolution of related appeals or litigation processes, if any. The recognized tax benefits are measured as the largest benefit of having a more likely than not likelihood of being sustained upon settlement. Significant estimates are required in determining such uncertain tax positions and related income tax expense and benefit. Additionally, we are also required to assess the likelihood of recovering deferred tax assets against future sources of taxable income which might result in the need for a valuation allowance on deferred tax assets, including operating loss, capital loss, and tax credit carryforwards if we do not reach the more likely than not threshold based on all available evidence. Significant judgments and estimates, including expected future performance of operations and taxable earnings and the feasibility of tax planning strategies, are required in determining the need for and amount of valuation allowances for deferred tax assets. If actual results differ from these estimates or there are future changes to tax laws or statutory tax rates, we may need to adjust valuation allowances or tax liabilities, which could have a material impact on our consolidated financial position and results of operations.Equity Accounted Investments Investments in ordinary shares of companies, in which we believe we exercise significant influence over operating and financial policies, are accounted for using the equity method of accounting. Under this method, the investment is carried at cost and is adjusted to recognize our share of earnings or losses of the investee after the date of acquisition and cash dividends paid. The assessment of whether a decline in fair value below the cost basis is other-than-temporary and the amount of such other-than-temporary decline requires significant estimates. We review our investments in affiliated companies for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Acquisitions We record acquisitions resulting in the consolidation of an enterprise using the purchase method of accounting. We recognize the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquired business at their fair values as of the date of acquisition. Goodwill is measured as the excess of the consideration transferred, also measured at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method of accounting requires us to make significant estimates and assumptions, especially with respect to intangible assets. We use all available information to estimate fair values and typically engage outside appraisal firms to assist in the fair value determination for significant acquisitions. The fair value measurements are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. Critical estimates in valuing intangible assets include, but are not limited to, expected cash flows from customer relationships, acquired developed technology, corporate trade name, and brand names; the period of time we expect to use the acquired intangible asset; and discount rates. In estimating the future cash flows, we consider demand, competition, other economic factors, and actuarial assumptions for defined benefit plans. We utilize common valuation techniques such as discounted cash flows and market approaches, including the relief-from-royalty method to value acquired developed technology, trade names, and brand names. Customer relationships are valued using the cost approach or an income approach such as the excess earnings method. We believe our estimates to be based on assumptions that are reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates, which could result in impairment charges in the future. In connection with a given business acquisition, we may identify pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as part of the fair value estimates acquired and liabilities assumed and, if so, to determine the estimated amounts. In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based on facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period.43 We account for costs to exit or restructure certain activities of an acquired company separately from the business acquisition. A liability for costs associated with an exit or disposal activity is recognized and measured at fair value in the consolidated statements of income in the period in which the liability is incurred. We reflect acquired operations that we intend to dispose of as discontinued operations in our consolidated statements of income and as assets held for sale in our consolidated balance sheets.New Accounting Pronouncements Refer to Note 3, "New Accounting Guidance" of the notes to consolidated financial statements for information about new accounting pronouncements.44Item 7A. - Quantitative and Qualitative Disclosures About Market RiskOverview Our activities expose us to a variety of market risks and financial risks. Our overall risk management program seeks to minimize potential adverse effects of these risks on Amcor's financial performance. From time to time, we enter into various derivative financial instruments such as foreign exchange contracts, commodity fixed price swaps (on behalf of customers), and interest rate swaps to manage these risks. Our hedging activities are conducted on a centralized basis through standard operating procedures and delegated authorities, which provide guidelines for control, counterparty risk, and ongoing reporting. These derivative instruments are designed to reduce the economic risk associated with movements in foreign exchange rates, raw material prices, and to fixed and variable interest rates, but may not have been designated or qualify for hedge accounting under U.S. GAAP and hence may increase income statement volatility. However, we do not trade in derivative financial instruments for speculative purposes. In addition, we may enter into loan agreements in currencies other than the respective legal entity's functional currency to economically hedge foreign exchange risk in net investments in our non-U.S. subsidiaries, which do not qualify for hedge accounting under U.S. GAAP and hence may increase income statement volatility. There have been no material changes in the risks described below, other than increased volatility in connection with the COVID-19 pandemic, for the fiscal years 2021 and 2020 related to interest rate risk, foreign exchange risk, raw material and commodity price risk, and credit risk.Interest Rate Risk Our policy is to manage exposure to interest rate risk by maintaining a mixture of fixed-rate and variable-rate debt, monitoring global interest rates and, where appropriate, hedging floating interest rate exposure or debt at fixed interest rates through the use of various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, and interest rate locks. A hypothetical but reasonably possible increase of 1% in the floating rate on the relevant interest rate yield curve applicable to both derivative and non-derivative instruments denominated in U.S. dollars, the currency with the largest interest rate sensitivity, outstanding as of June 30, 2021, would have resulted in an adverse impact on income before income taxes and equity in income (loss) of affiliated companies of $16 million for the year ended June 30, 2021. Foreign Exchange Risk We operate in over 40 countries across the world and, as a result, we are exposed to movements in foreign currency exchange rates. For the year ended June 30, 2021, a hypothetical but reasonably possible adverse change of 1% in the underlying average foreign currency exchange rate for the Euro would have resulted in an adverse impact on our net sales of $23 million. During fiscal years 2021 and 2020, 48% and 49% of our net sales, respectively, were effectively generated in U.S. dollar functional currency entities. During fiscal years 2021 and 2020, 18% and 18% of net sales, respectively, were generated in Euro functional currency entities with the remaining 34% and 33% of net sales, respectively, being generated in entities with functional currencies other than U.S. dollars and Euros. The impact of translating Euro and other non-U.S. dollar net sales and operating expenses into U.S. dollar for reporting purposes will vary depending on the movement of those currencies from period to period.Raw Material and Commodity Price Risk The primary raw materials for our products are resins, film, aluminum, and liquids. We have market risk primarily in connection with the pricing of our products and are exposed to commodity price risk from a number of commodities and certain other raw materials and energy price risk. Changes in prices of our key raw materials and commodities, including resins, film, aluminum, inks, solvents, adhesives and liquids, and other raw materials, may result in a temporary or permanent reduction in income before income taxes and equity in income (loss) of affiliated companies depending on the level of recovery by material type. The level of recovery depends both on the type of material and the market in which we operate. Across our business, we have a number of contractual provisions that allow for passing on of raw material price fluctuations to customers within predefined periods.45 A hypothetical but reasonably possible 1% increase on average prices for resins, film, aluminum, and liquids, not passed on to the customer by way of a price adjustment, would have resulted in an increase in cost of sales and hence an adverse impact on income from continuing operations before income taxes and equity in income (loss) of affiliated companies for fiscal years 2021 and 2020 of $58 million and $57 million, respectively.Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss. We are exposed to credit risk arising from financing activities including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments, as well as from over-the-counter raw material and commodity related derivative instruments. We manage our credit risk from balances with financial institutions through our counterparty risk policy, which provide guidelines on setting limits to minimize the concentration of risks and therefore mitigating financial loss through potential counterparty failure and on dealing and settlement procedures. The investment of surplus funds is made only with approved counterparties and within credit limits assigned to each specific counterparty. Financial derivative instruments can only be entered into with high credit quality approved financial institutions. As of June 30, 2021 and 2020, we did not have a significant concentration of credit risk in relation to derivatives entered into in accordance with our hedging and risk management activities.46

Aon plc_10-Q_2021-07-30 00:00:00_315293-0001628280-21-015069.html

@@ -0,0 +1 @@
+MD&A section not found.

Apple Inc._10-Q_2021-07-28 00:00:00_320193-0000320193-21-000065.html

@@ -0,0 +1 @@
+MD&A section not found.

Archer-Daniels-Midland Co_10-Q_2021-07-27 00:00:00_7084-0000007084-21-000031.html

@@ -0,0 +1 @@
+MD&A section not found.

BANK OF AMERICA CORP -DE-_10-Q_2021-07-30 00:00:00_70858-0000070858-21-000084.html

@@ -0,0 +1 @@
+MD&A section not found.

CARDINAL HEALTH INC_10-K_2021-08-16 00:00:00_721371-0000721371-21-000080.html

@@ -0,0 +1 @@
+MD&A section not found.

CARRIER GLOBAL Corp_10-Q_2021-07-29 00:00:00_1783180-0001783180-21-000050.html

@@ -0,0 +1 @@
+MD&A section not found.

CATERPILLAR INC_10-Q_2021-08-04 00:00:00_18230-0000018230-21-000221.html

@@ -0,0 +1 @@
+MD&A section not found.

CHURCH & DWIGHT CO INC -DE-_10-Q_2021-07-30 00:00:00_313927-0001564590-21-039389.html

@@ -0,0 +1 @@
+MD&A section not found.

CINCINNATI FINANCIAL CORP_10-Q_2021-07-28 00:00:00_20286-0000020286-21-000050.html

@@ -0,0 +1 @@
+MD&A section not found.

CINTAS CORP_10-K_2021-07-28 00:00:00_723254-0000723254-21-000021.html

@@ -0,0 +1 @@
+Item 7. Management's Discussion andAnalysis of Financial Condition and Results of OperationsBusiness StrategyCintas helps more than one million businesses of all types and sizes, primarily in the U.S., as well as Canada and Latin America, get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. Cintas is also the creator of the Total Clean Program™ — a first-of-its-kind service that includes scheduled delivery of essential cleaning supplies, hygienically clean laundering, and sanitizing and disinfecting projects and services.We are North America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom cleaning services and supplies, first aid and safety services and fire protection products and services.Cintas' principal objective is "to exceed customers' expectations in order to maximize the long-term value of Cintas for shareholders and working partners," and it provides the framework and focus for Cintas' business strategy. This strategy is to achieve revenue growth for all our products and services by increasing our penetration at existing customers and by broadening our customer base to include market segments to which we have not historically served. We will also continue to identify additional product and service opportunities for our current and future customers.To pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional products and services.We pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all its products and services to prospects in all market segments. Our broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion. Finally, we evaluate strategic acquisitions as opportunities arise.17Results of OperationsThis Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on discussion of fiscal 2021 results compared to fiscal 2020 results. For discussion of fiscal 2020 results compared to fiscal 2019 results, see the "Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the fiscal year ended May 31, 2020, filed with the SEC on July 29, 2020.Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for each of these reportable operating segments for the years ended May 31, 2021, 2020 and 2019 are presented in Note 14 entitled Operating Segment Information of "Notes to Consolidated Financial Statements." The Company regularly reviews its operating segments for reporting purposes based on the information its chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance and makes changes when appropriate.In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, and has since spread globally. In March 2020, the World Health Organization characterized COVID-19 as a pandemic. Efforts to contain the spread of COVID-19 intensified during our fiscal 2020 fourth quarter and have remained in effect throughout our fiscal 2021. Most states and municipalities within the U.S., as well as Canada, enacted temporary closures of businesses, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. Many of the business closures, quarantine orders and other restrictive measures remained in place through fiscal 2021. Within the U.S., our business was designated an essential business, which allowed us to continue to serve customers that remained open. During our fiscal 2021 fourth quarter, the roll out of vaccines, lower COVID-19 case counts and lifting of restrictions on businesses had a positive impact on our business. We have operations throughout the U.S. and Canada and participate in a global supply chain. During most of fiscal 2021, the existence of the COVID-19 pandemic, the fear associated with the COVID-19 pandemic and the reactions of governments around the world in response to the COVID-19 pandemic to regulate the flow of labor and products and impede the business of our customers, impacted our ability to conduct normal business operations, which had an adverse effect on our business. Many of Cintas' customers were also impacted by the COVID-19 pandemic, and we saw an impact on some customer's ability to pay timely. While there was minimal disruption to our supply chain, Cintas did increase inventory, primarily personal protective equipment and facility services inventory, in response to the customer needs and demand associated with the safety and cleanliness requirements of COVID-19. The increase in inventory resulted in additional inventory reserves during fiscal 2021 and could result in future inventory reserve increases if demand for personal protective equipment declines. See Note 1 entitled Significant Accounting Policies of "Notes to Consolidated Financial Statements" for additional detail on the additional reserve placed on inventory. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, consolidated results of operations, consolidated financial condition or liquidity will ultimately be impacted. 18The following table sets forth certain consolidated statements of income data as a percent of revenue by reportable operating segment, All Other and in total for the fiscal years ended May 31:202120202019Revenue: Uniform Rental and Facility Services80.0%79.7%80.6%First Aid and Safety Services11.0%10.0%9.0%All Other9.0%10.3%10.4%Total revenue100.0%100.0%100.0%Cost of sales: Uniform Rental and Facility Services52.4%54.1%54.5%First Aid and Safety Services57.6%52.2%52.0%All Other57.0%58.2%57.4%Total cost of sales53.4%54.4%54.6%Gross margin: Uniform Rental and Facility Services47.6%45.9%45.5%First Aid and Safety Services42.4%47.8%48.0%All Other43.0%41.8%42.6%Total gross margin46.6%45.6%45.4%Selling and administrative expenses:Uniform Rental and Facility Services26.0%28.1%27.6%First Aid and Safety Services32.0%32.7%33.4%All Other30.8%34.9%33.3%Total selling and administrative expenses27.1%29.2%28.7%G&K Services, Inc. integration expenses—%—%0.2%Gain on sale of a cost method investment—%—%1.0%Interest expense, net1.4%1.5%1.5%Income from continuing operations before income taxes18.1%14.9%16.0%Fiscal 2021 Compared to Fiscal 2020 Fiscal 2021 total revenue was $7.1 billion, an increase of 0.4% over the prior fiscal year. Revenue increased organically by 0.2% as a result of increased sales volume. Organic growth adjusts for the impact of acquisitions and divestitures, foreign currency exchange rate fluctuations and workday differences. Total revenue was negatively impacted by a net 0.3% due to acquisitions and divestitures, positively impacted by 0.2% due to foreign currency exchange rate fluctuations and positively impacted by 0.3% due to one more workday in fiscal 2021 compared to fiscal 2020. As previously discussed, government enactments of temporary and indefinite closures of certain businesses in response to the COVID-19 pandemic continued to impact our ability to access and service some of our customers impacted by these mandates during fiscal 2021. Due to the constantly changing impact of the COVID-19 pandemic, uncertainty remains about the pace of the economic recovery and about its impact on future Cintas consolidated financial results. 19Organic revenue by quarter for fiscal 2021 is as follows: Organic RevenueFirst quarter ended August 31, 2020(5.0)%Second quarter ended November 30, 2020(4.4)%Third quarter ended February 28, 2021(0.1)%Fourth quarter ended May 31, 202111.5%For the fiscal year ended May 31, 20210.2%Uniform Rental and Facility Services reportable operating segment revenue consists predominantly of revenue derived from the rental of corporate identity uniforms and other garments, including flame resistant clothing and the rental and/or sale of mats, mops, shop towels, restroom supplies and other rental services. Revenue from the Uniform Rental and Facility Services reportable operating segment increased 0.8% compared to fiscal 2020 due to an organic growth increase of 0.7%. Revenue growth was negatively impacted by a net 0.5% due to acquisitions and divestitures, positively impacted by 0.2% due to foreign currency exchange rate fluctuations and positively impacted by 0.4% due to one more workday in fiscal 2021 compared to fiscal 2020. Revenue growth was a result of new business, the penetration of additional products and services into existing customers, partially offset by lost business. New business growth resulted from an increase in the productivity of sales representatives. Generally, sales productivity improvements are due to increased tenure and improved training, which produce a higher number of products and services sold. Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, decreased 1.0% compared to fiscal 2020. Revenue improvement from increases in sales representative productivity and sales of personal protection equipment was more than offset by a decrease in sales related to customers in All Other as a result of the impact from the COVID-19 pandemic. Revenue declined organically by 1.9%. Revenue growth was positively impacted by 0.5% due to revenue growth derived through acquisitions in our First Aid and Safety Services reportable operating segment and our Fire Protection operating segment, which is included in All Other, and by 0.4% due to one more workday in fiscal 2021 compared to fiscal 2020. Cost of uniform rental and facility services decreased 2.3% compared to fiscal 2020. Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. The cost of uniform rental and facility services decreased compared to fiscal 2020 primarily due to certain cost control measures such as reduced labor and supplies that were partially offset by increases in material cost, primarily related to personal protective equipment. Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased 2.8% in fiscal 2021 compared to fiscal 2020. The increase was primarily due to an increase in the proportion of sales in the First Aid and Safety Services reportable operating segment of personal protective equipment, which typically have lower gross margins compared to other First Aid and Safety Services reportable operating segment products.Selling and administrative expenses decreased $141.9 million, to 27.1% as a percent of revenue, compared to 29.2% in fiscal 2020. The improvement as a percent of revenue was primarily due to efficiencies in labor and employee-partner related expenses as well as lower discretionary spending and a one-time benefit from the gain on the sale of certain operating assets. In addition, during the fourth quarter of fiscal 2020, Cintas initiated certain one-time activities to reduce operating costs and better align its workforce with the needs of its ongoing business and recorded $24.5 million in employee termination costs and $9.2 million in long-lived asset impairment costs. Net interest expense (interest expense less interest income) was $97.7 million in fiscal 2021 compared to $104.4 million in fiscal 2020. The decrease in net interest expense was primarily due to the decrease in total debt outstanding during fiscal 2021 compared to fiscal 2020. 20Income before income taxes was $1,287.7 million, an increase of $229.5 million, or 21.7%, compared to fiscal 2020. The increase in income before income taxes was primarily due to both cost of sales and selling and administrative expenses decreasing in total and as a percent of revenue in fiscal 2021. Income before income taxes also benefited from a one-time net gain on the sale of certain operating assets.Cintas' effective tax rate on continuing operations was 13.7% for fiscal 2021 compared to 17.2% in fiscal 2020. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation. In addition, the effective tax rate for fiscal 2021 included a one-time tax benefit on the sale of certain operating assets.Net income from continuing operations for fiscal 2021 of $1,111.0 million was a 26.8% increase compared to fiscal 2020. Diluted earnings per share from continuing operations of $10.24 was a 26.3% increase compared to fiscal 2020 diluted earnings per share from continuing operations of $8.11. Diluted earnings per share from continuing operations increased primarily due to the increase in net income.Uniform Rental and Facility Services Reportable Operating SegmentUniform Rental and Facility Services reportable operating segment revenue increased $46.1 million, or 0.8%, and the cost of uniform rental and facility services decreased $71.6 million, or 2.3%, due to the reasons previously discussed. The reportable operating segment's fiscal 2021 gross margin was 47.6% of revenue compared to 45.9% in fiscal 2020. The increase in gross margin was primarily due to certain cost control measures such as reduced labor and supplies that were partially offset by increases in material cost, including increases related to increased sales of personal protective equipment.Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment decreased $103.5 million in fiscal 2021 compared to fiscal 2020. Selling and administrative expense as a percent of revenue for fiscal 2021 was 26.0% compared to 28.1% in fiscal 2020. The improvement in selling and administrative expenses as a percent of revenue was primarily due to efficiencies in labor and employee-partner related expenses as well as lower discretionary spending and a one-time benefit from the gain on the sale of certain operating assets, which was partially offset by a one-time asset impairment on certain long-lived assets. Also, in the fourth quarter of fiscal 2020, the Uniform Rental and Facility Services reportable operating segment initiated certain one-time activities to reduce operating costs and better align its workforce with the needs of its ongoing business. During the fourth quarter of fiscal 2020, the reportable operating segment recorded $20.2 million in employee termination costs and $9.2 million in long-lived asset impairment costs. Income before income taxes increased $221.3 million to $1,225.8 million for fiscal 2021 compared to fiscal 2020. Income before income taxes as a percent of revenue at 21.5% increased 370 basis points from 17.8% in fiscal 2020. The increase was primarily due to the previously discussed improvement in gross margin and selling and administrative expenses as a percent of revenue.First Aid and Safety Services Reportable Operating SegmentFirst Aid and Safety Services reportable operating segment revenue increased $75.7 million in fiscal 2021, a 10.7% increase compared to fiscal 2020. Revenue increased organically by 10.0% as a result of new business and sales productivity increases, penetration of additional products and services into existing customers and sales of personal protective equipment in response to the COVID-19 pandemic. Revenue growth was positively impacted by 0.2% due to acquisitions, by 0.1% due to foreign currency exchange rate fluctuations and by 0.4% due to one more workday in fiscal 2021 compared to fiscal 2020.Cost of sales for the First Aid and Safety Services reportable operating segment increased $82.0 million, or 22.2%, in fiscal 2021, primarily due to higher sales volume and change in sales mix. Gross margin for the First Aid and Safety Services reportable operating segment is defined as revenue less cost of goods, warehouse expenses, service expenses and training expenses. The gross margin as a percent of revenue was 42.4% for fiscal 2021 compared to 47.8% in fiscal 2020. The decrease was primarily a result of the increase in the proportion of sales related to personal protective equipment, as a result of the impact of the COVID-19 pandemic. Personal protective equipment typically has lower gross margins than other First Aid and Safety Services reportable operating segment products. 21Selling and administrative expenses for the First Aid and Safety Services reportable operating segment increased by $19.4 million, or 8.4%, in fiscal 2021 compared to fiscal 2020, but improved as a percent of revenue to 32.0% in fiscal 2021 compared to 32.7% in fiscal 2020. The improvement as a percent of revenue was primarily due to revenue growing at a faster pace than labor and employee-partner related expenses and lower discretionary spending. Income before income taxes for the First Aid and Safety Services reportable operating segment was $81.2 million in fiscal 2021, a decrease of $25.7 million, or 24.1%, compared to fiscal 2020. Income before income taxes as a percent of revenue at 10.4%, decreased from 15.1% in fiscal 2020 due to the previously discussed decrease in gross margin.Liquidity and Capital ResourcesThe following table summarizes our cash flows and cash and cash equivalents as of and for the fiscal years ended May 31:(In thousands)20212020Net cash provided by operating activities$1,360,740 $1,291,483 Net cash used in investing activities$(137,215)$(285,398)Net cash used in financing activities$(879,868)$(955,207)Cash and cash equivalents at end of year$493,640 $145,402 Cash and cash equivalents as of May 31, 2021 and 2020 include $37.9 million and $30.2 million, respectively, that is located outside of the U.S. Cash flows provided by operating activities have historically supplied us with a significant source of liquidity. We generally use these cash flows to fund most, if not all, of our operations and expansion activities and dividends on our common stock. We may also use cash flows provided by operating activities, as well as proceeds from long-term debt and short-term borrowings, to fund growth and expansion opportunities, as well as other cash requirements such as the repurchase of our common stock and payment of long-term debt. The disruption from the COVID-19 pandemic continued to have an impact on Cintas' fiscal 2021 financial results. However, net cash flow provided by operating activities was not significantly impacted. We expect our cash flows from operating activities to remain sufficient to provide us with adequate levels of short-term liquidity. In addition, we have access to $1.0 billion of short-term debt from our revolving credit facility. Although the impact of the COVID-19 pandemic is fluid and continues to evolve, we believe our long-term liquidity position remains strong. We believe the Company has sufficient liquidity to operate in the current business environment. Acquisitions and dividends remain strategic objectives, but they will be dependent on the economic outlook and liquidity of the Company. Net cash provided by operating activities was $1.36 billion for fiscal 2021, which was an increase of $69.3 million compared to fiscal 2020. The increase was primarily the result of increased net income and favorable changes in accrued compensation and other, partially offset by changes in working capital, specifically income taxes, accounts receivable and accrued liabilities and other.Net cash used in investing activities was $137.2 million in fiscal 2021, compared to $285.4 million in fiscal 2020. Net cash used in investing activities includes capital expenditures, purchases of investments, proceeds from the sale of operating assets and cash paid for acquisitions of businesses. Capital expenditures were $143.5 million and $230.3 million for fiscal 2021 and fiscal 2020, respectively. Capital expenditures for fiscal 2021 included $104.0 million for the Uniform Rental and Facility Services reportable operating segment and $34.4 million for the First Aid and Safety Services reportable operating segment. The decrease in capital expenditures from fiscal 2020 to fiscal 2021 was due to reduced growth capacity needs within the slower growth landscape of the COVID-19 pandemic. Cash paid for acquisitions of businesses, net of cash acquired, was $10.0 million and $53.7 million for fiscal 2021 and fiscal 2020, respectively. The acquisitions in both fiscal 2021 and 2020 occurred in our Uniform Rental and Facility Services reportable operating segment, our First Aid and Safety Services reportable operating segment and our Fire Protection operating segment, which is included in All Other. In fiscal 2021 and fiscal 2020, investing activities included proceeds of $31.7 million and $13.3 million, respectively, from the sale of certain operating assets, net of 22cash disposed. Net cash used in investing activities also included $4.3 million and $10.0 million of purchases of investments during fiscal 2021 and fiscal 2020, respectively. Net cash used in financing activities was $879.9 million for fiscal 2021, compared to $955.2 million in fiscal 2020. The decrease in cash used from financing activities from fiscal 2020 is primarily due to the payment of the $312.5 million of debt in fiscal 2020, partially offset by an increase in cash used to pay dividends and repurchase common stock in fiscal 2021. On October 30, 2018, we announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during fiscal 2021. On October 29, 2019, we announced the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. The following table summarizes the buyback activity by program and fiscal year ended May 31:20212020Buyback Program(In thousands except per share data)SharesAvg. Price per SharePurchase PriceSharesAvg. Price per SharePurchase PriceOctober 30, 2018190 $319.88 $60,877 1,607 $246.19 $395,681 October 29, 20191,196 350.31 418,779 — — — 1,386 $346.13 $479,656 1,607 $246.19 $395,681 In the period subsequent to May 31, 2021 through July 28, 2021, we completed the October 29, 2019 program by purchasing 1.6 million shares of Cintas common stock at an average price of $365.41 for a total purchase price of $581.2 million. From the inception of the October 29, 2019 program through July 28, 2021, Cintas purchased a total of 2.8 million shares of Cintas common stock at an average price of $358.93 per share for a total purchase price of $1.0 billion. In addition, for the fiscal year ended May 31, 2021, Cintas acquired 0.2 million shares of Cintas common stock in satisfaction of employee payroll taxes due on restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $302.52 per share for a total purchase price of $74.4 million. For the fiscal year ended May 31, 2020, Cintas acquired 0.3 million shares of Cintas common stock in satisfaction of employee payroll taxes due on restricted awards that vested during the fiscal year. These shares were acquired at an average price of $260.89 per share for a total purchase price of $68.8 million. On October 27, 2020, Cintas declared an annual cash dividend on outstanding common stock, representing a 10.2% increase over the annual dividend paid in the prior fiscal year. This marked the 38th consecutive year that Cintas has increased its annual dividend, every year since going public in 1983. Also on October 27, 2020, the Cintas Board of Directors approved a change in the dividend policy from an annual dividend to a quarterly dividend and subsequently declared a quarterly dividend on outstanding common stock. Any future dividend declarations, including the amount of any dividends, are at the discretion of the Board of Directors and dependent upon then-existing conditions, including the Company's consolidated operating results and consolidated financial condition, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors may deem relevant. Our Board of Directors declared the following dividends during the fiscal years ended May 31: Declaration Date(In millions except per share data)Record DatePayment DateDividendPer ShareAmountFiscal Year 2021October 27, 2020November 6, 2020December 4, 2020$2.81 $297.7 October 27, 2020November 6, 2020December 4, 20200.70 74.1 January 19, 2021February 15, 2021March 15, 20210.75 79.5 April 13, 2021 (1)May 15, 2021June 15, 20210.75 79.2 Total$5.01 $530.5 Fiscal Year 2020October 29, 2019November 8, 2019December 6, 2019$2.55 $268.0 Fiscal Year 2019October 30, 2018November 9, 2018December 7, 2018$2.05 $220.8 .(1) The dividend declared on April 13, 2021 was included in current accrued liabilities on the consolidated balance sheet at May 31, 2021. 23During the fiscal year ended May 31, 2020, Cintas paid a net total of $112.5 million on commercial paper borrowings and paid off the term loan balance of $200.0 million with cash on hand. There was no commercial paper outstanding during fiscal 2021. The following table summarizes Cintas' outstanding debt at May 31:(In thousands)Interest RateFiscal YearIssuedFiscal YearMaturity20212020Debt due within one yearSenior notes4.30%20122022$250,000 $— Senior notes2.90%20172022650,000 — Debt issuance costs(930)— Total debt due within one year$899,070 $— Debt due after one yearSenior notes4.30%20122022$— $250,000 Senior notes2.90%20172022— 650,000 Senior notes3.25%20132023300,000 300,000 Senior notes (1)2.78%2013202350,815 51,250 Senior notes (2)3.11%2015202551,301 51,637 Senior notes3.70%201720271,000,000 1,000,000 Senior notes6.15%20072037250,000 250,000 Debt issuance costs(9,283)(13,182) Total debt due after one year$1,642,833 $2,539,705 (1) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%. (2) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%. The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is May 23, 2024. As of May 31, 2021 and 2020, there was no commercial paper outstanding and no borrowings on our credit facility. On June 1, 2021, in accordance with the terms of the notes, Cintas paid the $250.0 million aggregate principal amount of its 4.30%, 10-year senior notes that matured on that date with cash on hand. During fiscal 2022, Cintas expects to issue long-term debt to pay the $650.0 million principal amount of its 2.90%, 5-year senior notes that mature in the fourth quarter of fiscal 2022. Cintas has certain covenants related to debt agreements. These covenants limit Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all of the debt covenants for all periods presented. Our access to the commercial paper and long-term debt markets has historically provided us with sources of liquidity. We do not anticipate having difficulty in obtaining financing from those markets in the future in view of our favorable experiences in the debt markets in the recent past, including our ability to refinance the $650.0 million aggregate principal amount of our senior notes that mature in fiscal 2022. Additionally, our ability to continue to access the commercial paper and long-term debt markets on favorable interest rate and other terms will depend, to a significant degree, on the ratings assigned by the credit rating agencies to our indebtedness. 24As of May 31, 2021, our ratings were as follows:Rating AgencyOutlookCommercialPaperLong-termDebtStandard & Poor’sStableA-2A-Moody’s Investors ServiceStableP-2A3In the event that the ratings of our commercial paper or our outstanding long-term debt issues were substantially lowered or withdrawn for any reason, or if the ratings assigned to any new issue of long-term debt securities were significantly lower than those noted above, particularly if we no longer had investment grade ratings, our ability to access the debt markets may be adversely affected. In addition, in such a case, our cost of funds for new issues of commercial paper and long-term debt would be higher than our cost of funds would have been had the ratings of those new issues been at or above the level of the ratings noted above. The rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies. To monitor our credit rating and our capacity for long-term financing, we consider various qualitative and quantitative factors. One such factor is the ratio of our total debt to EBITDA. For the purpose of this calculation, debt is defined as the sum of short-term borrowings, long-term debt due within one year, long-term debt and standby letters of credit. Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas’ Senior NotesCintas Corporation No. 2 (Corp. 2) is the indirectly, wholly owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the $2,550.0 million aggregate principal amount of senior notes outstanding as of May 31, 2021, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly owned, direct and indirect domestic subsidiaries. See Note 7 entitled Debt and Derivatives of "Notes to Consolidated Financial Statements" for more information on Cintas' outstanding debt. Basis of Preparation of the Summarized Financial InformationThe following tables include summarized financial information of Cintas Corporation (Issuer), Corp. 2 and subsidiary guarantors (together, the Obligor Group). Investments in and equity in the earnings of non-guarantors, which are not members of the Obligor Group, have been excluded. Non-guarantor subsidiaries are located outside the U.S., and therefore, excluded from the Obligor Group.The summarized financial information of the Obligor Group is presented on a combined basis with intercompany balances and transactions between entities in the Obligor Group eliminated. The Obligor Group’s amounts due from, amounts due to and transactions with non-guarantors have been presented in separate line items, if they are material. Summarized financial information of the Obligor Group is as follows for the fiscal years ended May 31:Summarized Consolidated Statements of Income(In thousands)20212020Net sales to unrelated parties$6,705,820 $6,642,196 Net sales to non-guarantors$3,460 $4,778 Operating income$1,319,444 $1,140,318 Net income$1,058,837 $860,022 25Summarized Consolidated Balance Sheets(In thousands)20212020AssetsReceivables due from non-obligor subsidiaries$2,292 $3,199 Total other current assets$2,652,810 $2,143,489 Total other noncurrent assets$4,924,550 $4,938,093 Liabilities Amounts due to non-obligor subsidiaries$457 $3,437 Current liabilities$1,893,352 $843,203 Noncurrent liabilities$2,549,911 $3,495,956 Contractual ObligationsPayments Due by Period(In thousands)TotalOne yearor lessTwo tothree yearsFour tofive yearsAfter fiveyearsDebt (1)$2,550,000 $900,000 $350,000 $50,000 $1,250,000 Operating leases (2)185,801 47,564 69,138 39,089 30,010 Interest payments510,653 90,155 115,370 106,690 198,438 Total contractual cash obligations$3,246,454 $1,037,719 $534,508 $195,779 $1,478,448 (1)See Note 7 entitled Debt and Derivatives of "Notes to Consolidated Financial Statements" for a detailed presentation of Cintas' debt.(2)See Note 8 entitled Leases of "Notes to Consolidated financial Statements" for a detailed presentation of Cintas' leases. Cintas also makes payments to defined contribution plans and may make payments to defined benefit plans to satisfy minimum funding requirements. The amount of contributions made to the defined contribution plans are at the discretion of the Board of Directors of Cintas. Future contributions to the defined contribution plans are expected to be $82.6 million in the next year, $177.9 million in the next two to three years and $196.1 million in the next four to five years. Future contributions to the defined benefit plans are expected to be $0.3 million in the next year, $3.0 million in the next two to three years and $3.0 million in the next four to five years. Other CommitmentsAmount of Commitment Expiration per Period(In thousands)TotalOne yearor lessTwo tothree yearsFour tofive yearsAfter fiveyearsLines of credit (1)$999,234 $— $999,234 $— $— Standby letters of credit and surety bonds (2)120,597 120,597 — — — Total other commitments$1,119,831 $120,597 $999,234 $— $— (1)Back-up facility for the commercial paper program (reference Note 7 entitled Debt and Derivatives of "Notes to Consolidated Financial Statements" for further discussion).(2)These standby letters of credit and surety bonds support certain outstanding debt (reference Note 7 entitled Debt and Derivatives of "Notes to Consolidated Financial Statements"), self-insured workers' compensation and general liability insurance programs.Inflation and Changing PricesChanges in wages, benefits and energy costs have the potential to materially impact Cintas' consolidated results of operations. Management believes inflation has not had a material impact on Cintas' consolidated financial condition or a negative impact on the consolidated results of operations.26Litigation and Other ContingenciesCintas is subject to legal proceedings, insurance receipts, legal settlements and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of business actions will not have a material adverse effect on the consolidated financial position, consolidated results of operations or consolidated cash flows of Cintas. The Company, the Board of Directors, Scott Farmer (Executive Chairman) and the Investment Policy Committee are defendants in a purported class action, filed on December 13, 2019, pending in the U.S. District Court for the Southern District of Ohio alleging violations of ERISA. The lawsuit asserts that the defendants improperly managed the costs of the employee retirement plan, breached their fiduciary duties in failing to investigate and select lower cost alternative funds and failed to monitor and control the employee retirement plan’s recordkeeping costs. The defendants deny liability.New Accounting StandardsIn April 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In connection with recognizing credit losses on accounts receivable and other financial instruments, Cintas now uses a forward-looking expected loss model rather than the incurred loss model. Adoption of ASU 2016-13 requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. This standard was adopted by Cintas on June 1, 2020 and did not have a material impact on the Company's consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements.Critical Accounting Policies and EstimatesThe preparation of Cintas' consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that have a significant effect on the amounts reported in the consolidated financial statements and accompanying notes. These critical accounting policies should be read in conjunction with Note 1 entitled Significant Accounting Policies of "Notes to Consolidated Financial Statements." Significant changes, estimates or assumptions related to any of the following critical accounting policies, including those impacted by the COVID-19 pandemic, could possibly have a material impact on the consolidated financial statements.Revenue recognitionRental revenue, which is recorded in the Uniform Rental and Facility Services reportable operating segment, is recognized when services are performed or the obligations under the terms of a contract with a customer are satisfied. Other revenue, which is recorded in the First Aid and Safety Services reportable operating segments and All Other, is recognized when either services are performed or the obligations under the terms of a contract with a customer are satisfied. See Note 2 entitled Revenue Recognition of the "Notes to Consolidated Financial Statements" for more information on Cintas' revenue. Uniforms and other rental items in serviceUniforms and other rental items in service are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory and related cost of uniforms and ancillary products that are presented in the consolidated financial statements.27GoodwillGoodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment test, that includes an assessment of qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as strategies and financial performance. We test for goodwill impairment at the reporting unit level. Cintas has identified four reporting units for purposes of evaluating goodwill impairment: Uniform Rental and Facility Services, First Aid and Safety Services and two reporting units within All Other. Based on the results of the annual impairment tests, Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2021, 2020 or 2019. Cintas will continue to perform impairment tests as of March 1 in future years and when indicators of impairment exist.Insurance reserveThe insurance reserve represents the estimated ultimate cost of all asserted and unasserted claims, primarily related to workers' compensation, auto liability and other general liability exposure through the consolidated balance sheet dates. Our incurred but not reported reserves are estimated through actuarial procedures, with the assistance of third-party actuarial specialists, of the insurance industry and by using industry assumptions, adjusted for specific expectations based on our claims history. Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other environmental factors in the period in which it becomes known. These changes in estimates may be material to the consolidated financial statements.Stock-based compensationCompensation expense is recognized for all share-based payments to employees, including stock options and restricted stock awards, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Generally, measured compensation cost, net of actual forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. See Note 12 entitled Stock-Based Compensation of "Notes to Consolidated Financial Statements" for further information.Litigation and other contingenciesCintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. While a significant change in assumptions and judgments could have a material impact on the amounts recorded for contingent liabilities, Cintas does not believe that they will result in a material adverse effect on the consolidated financial statements.Income taxesDeferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in future periods. Cintas accounts for Global Intangible Low-Taxed Income (GILTI) as a current-period expense when incurred. See Note 9 entitled Income Taxes of "Notes to Consolidated Financial Statements" for the types of items that give rise to significant deferred income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes. Cintas regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Accounting for uncertain tax positions requires the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.28Cintas is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, Cintas records reserves as deemed appropriate. Based on Cintas' evaluation of current tax positions, Cintas believes its tax related accruals are appropriate.Item 7A. Quantitative and Qualitative Disclosures About Market RiskEarnings may be affected by changes in short-term interest rates due to investments, if any, in marketable securities and money market accounts and periodic issuances of commercial paper. If short-term rates changed by one-half percent (or 50 basis points), Cintas' income before income taxes would change by approximately $0.5 million. This estimated exposure considers the effects on investments. This analysis does not consider the effects of a change in economic activity or a change in Cintas' capital structure.Through its foreign operations, Cintas is exposed to foreign currency risk. Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from foreign denominated revenue and profit translated into U.S. dollars. Foreign denominated revenue and profit represents less than 10% of Cintas' consolidated revenue and profit. Cintas periodically uses foreign currency hedges such as average rate options and forward contracts to mitigate the risk of foreign currency exchange rate movements resulting from foreign currency revenue and from international cash flows. The primary foreign currency to which Cintas is exposed is the Canadian dollar.29

COCA COLA CO_10-Q_2021-07-26 00:00:00_21344-0000021344-21-000024.html

@@ -0,0 +1 @@
+MD&A section not found.

COLGATE PALMOLIVE CO_10-Q_2021-07-30 00:00:00_21665-0000021665-21-000025.html

@@ -0,0 +1 @@
+MD&A section not found.

CONAGRA BRANDS INC._10-K_2021-07-23 00:00:00_23217-0001564590-21-037738.html

@@ -0,0 +1 @@
+ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is intended to provide a summary of significant factors relevant to our financial performance and condition. The discussion and analysis should be read together with our consolidated financial statements and related notes in Item 8, Financial Statements and Supplementary Data. Results for the fiscal year ended May 30, 2021 are not necessarily indicative of results that may be attained in the future. FORWARD-LOOKING STATEMENTS The information contained in this report includes forward-looking statements within the meaning of the federal securities laws. Examples of forward-looking statements include statements regarding our expected future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as "may", "will", "anticipate", "expect", "believe", "estimate", "intend", "plan", "should", "seek", or comparable terms. Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include, among other things: the risk that the cost savings and any other synergies from the acquisition of Pinnacle Foods Inc. (the "Pinnacle acquisition") may not be fully realized or may take longer to realize than expected; the risk that the Pinnacle acquisition may not be accretive within the expected timeframe or to the extent anticipated; the risks that the Pinnacle acquisition and related integration will create disruption to the Company and its management and impede the achievement of business plans; risks related to our ability to achieve the intended benefits of other recent acquisitions and divestitures; risks associated with general economic and industry conditions; risks associated with our ability to successfully execute our long-term value creation strategies; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to our ability to execute operating and restructuring plans and achieve targeted operating efficiencies from cost-saving initiatives and to benefit from trade optimization programs; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; risks related to the Company's competitive environment and related market conditions; risks related to our ability to respond to changing consumer preferences and the success of our innovation and marketing investments; risks related to the ultimate impact of any product recalls and litigation, including litigation related to the lead paint and pigment matters, as well as any securities litigation, including securities class action lawsuits; risk associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations; risks related to the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees; risks related to our forecasts of consumer eat-at-home habits as the impacts of the COVID-19 pandemic abate; risks related to the availability and prices of supply chain resources, including raw materials, packaging and transportation, including any negative effects caused by changes in inflation rates, weather conditions, or health pandemics; disruptions or inefficiencies in our supply chain and/or operations, including from the COVID-19 pandemic; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks related to a material failure in or breach of our or our vendors' information technology systems; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; and other risks described in our reports filed from time to time with the SEC. We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law. The discussion that follows should be read together with the consolidated financial statements and related notes contained in this report. Results for fiscal 2021 are not necessarily indicative of results that may be attained in the future. EXECUTIVE OVERVIEW Conagra Brands, headquartered in Chicago, is one of North America's leading branded food companies. Guided by an entrepreneurial spirit, the Company combines a rich heritage of making great food with a sharpened focus on innovation. The Company's portfolio is evolving to satisfy people's changing food preferences. Its iconic brands such as Birds Eye®, Duncan Hines®, Healthy Choice®, Marie Callender's®, Reddi-wip®, and Slim Jim®, as well as emerging brands, including Angie's® BOOMCHICKAPOP®, Duke's®, Earth Balance®, Gardein®, and Frontera®, offer choices for every occasion. 22 Fiscal 2021 Results Fiscal 2021 performance compared to fiscal 2020 reflected an increase in net sales, with organic (excludes the impacts of foreign exchange, divested businesses, as well as the impact of the 53rd week on fiscal 2020) increases in all of our operating segments with the exception of our Foodservice segment, in each case compared to fiscal 2020. Organic net sales for our retail segments (inclusive of Grocery & Snacks, Refrigerated & Frozen, and International) were positively impacted by the increase in at-home food consumption as a result of the COVID-19 pandemic, with sales declines in our Foodservice segment due to lower traffic in away-from-home food outlets. Overall gross margin increased due to increased net sales, supply chain realized productivity, cost synergies associated with the Pinnacle acquisition, favorable margin mix, and fixed cost leverage. These benefits were partially offset by higher input cost inflation, higher transportation costs, lost profits due to divested businesses, COVID-19 related expenses, and the exclusion of the 53rd week in fiscal 2020. Overall segment operating profit increased in all of our operating segments with the exception of our Foodservice segment. Corporate expenses were relatively flat year-over-year, but included various items impacting comparability as discussed below. We experienced an increase in equity method investment earnings, a decrease in interest expense, and a decrease in income tax expense, in each case compared to fiscal 2020. Diluted earnings per share in fiscal 2021 were $2.66. Diluted earnings per share in fiscal 2020 were $1.72. Diluted earnings per share were affected by higher net income as well as several significant items affecting the comparability of year-over-year results of continuing operations (see "Items Impacting Comparability" below). In the fourth quarter fiscal 2021, we experienced higher than expected input cost inflation, including higher transportation and supply chain costs, that negatively impacted gross margins. We expect input cost inflation to be materially higher in fiscal 2022. Supply chain realized productivity and pricing actions will mitigate some of the inflationary pressures, but we do not expect such benefits to occur in time to fully offset the incremental costs in fiscal 2022. As our estimates of inflation for fiscal 2022 continue to change, it is impractical to quantify the impact at this time. Items Impacting Comparability Items of note impacting comparability of results for continuing operations for fiscal 2021 included the following: • a non-cash income tax benefit of $115.6 million associated with a restructuring of our ownership interest in the Ardent Mills joint venture, which primarily relates to a release of a valuation allowance due to the generation of capital gains, • charges totaling $90.9 million ($69.9 million after-tax) related to the impairment of intangible assets, • charges totaling $77.9 million ($58.3 million after-tax) in connection with our restructuring plans, • charges totaling $68.7 million ($51.5 million after-tax) related to the early extinguishment of debt, • a gain of $65.5 million ($34.5 million after-tax) associated with the divestiture of certain businesses, • an income tax benefit of $37.0 million related to a release of valuation allowance associated with the divestiture of certain businesses, • an income tax benefit of $7.6 million related to certain final tax regulations on prior year federal tax matters, • consulting expenses totaling $7.2 million ($5.4 million after-tax) primarily associated with securing tax benefits for a new production facility (the associated tax benefits will be recognized in future periods), • a loss of $7.1 million ($5.3 million after-tax) related to the early exit of an unfavorable contract associated with a recent divestiture, and • charges totaling $5.7 million ($4.3 million after-tax) associated with costs incurred for acquisitions and divestitures. Items of note impacting comparability of results from continuing operations for fiscal 2020 included the following: • charges totaling $165.5 million ($127.0 million after-tax) related to the impairment of intangible assets, 23 • charges totaling $139.5 million ($106.8 million after-tax) in connection with our restructuring plans, • charges totaling $59.0 million ($55.0 million after-tax) related to the impairment of businesses held for sale, • an income tax benefit of $51.2 million associated primarily related to the reorganization of various legacy Pinnacle legal entities and state tax planning strategies, • charges totaling $42.9 million ($32.1 million after-tax) related to pension plan lump-sum settlements and a remeasurement of our hourly and non-qualified pension plan liability, • a gain of $11.9 million ($8.9 million after-tax) related to a contract settlement, • charges totaling $10.1 million ($7.6 million after-tax) related to legal and environmental matters, and • charges totaling $5.3 million ($3.9 million after-tax) associated with costs incurred for acquisitions and divestitures. In addition, fiscal 2020 earnings per share benefited by approximately $0.05 as a result of the fiscal year including 53 weeks. Segment presentation of gains and losses from derivatives used for economic hedging of anticipated commodity input costs and economic hedging of foreign currency exchange rate risks of anticipated transactions are discussed in the segment review below. Divestitures During the fourth quarter of fiscal 2021, we completed the sale of our Egg Beaters® business for net proceeds of $50.6 million, subject to final working capital adjustments. The results of operations of the divested Egg Beaters® business were primarily included in our Refrigerated & Frozen segment, and to a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction. During the third quarter of fiscal 2021, we completed the sale of our Peter Pan® peanut butter business for net proceeds of $101.5 million, including working capital adjustments but subject to final adjustments for certain tax benefits. The results of operations of the divested Peter Pan® peanut butter business were primarily included in our Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction. During the third quarter of fiscal 2020, we completed the sale of our Lender's® bagel business for net proceeds of $33.3 million, including working capital adjustments. The results of operations of the divested Lender’s® bagel business were primarily included in our Refrigerated & Frozen segment, and to a lesser extent within our Foodservice segment, for the periods preceding the completion of the transaction. During the second quarter of fiscal 2020, we completed the sale of our Direct Store Delivery ("DSD") snacks business, for net proceeds of $137.5 million, including working capital adjustments. The results of operations of the divested DSD snacks business were included in our Grocery & Snacks segment for the periods preceding the completion of the transaction. Restructuring Plans In December 2018, our Board approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle, which we acquired in October 2018 (the "Pinnacle Integration Restructuring Plan"), for the purpose of achieving significant cost synergies between the companies, as a result of which we expect to incur material charges for exit and disposal activities under U.S. generally accepted accounting principles ("U.S. GAAP"). We expect to incur approximately $358.0 million of charges ($283.5 million of cash charges and $74.5 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. The Board and/or our senior management have authorized incurrence of these charges. We recognized charges of $31.7 million, $73.8 million, and $168.2 million in connection with the Pinnacle Integration Restructuring Plan in fiscal 2021, 2020, and 2019, respectively. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a multi-year period. In fiscal 2019, senior management initiated a restructuring plan (the "Conagra Restructuring Plan") for costs incurred in connection with actions taken to improve selling, general and administrative ("SG&A") expense effectiveness and efficiencies and to optimize our supply chain network. Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2021, including the estimated amounts or range of amounts for each major type of cost expected to be incurred, and the charges that have resulted or will result in cash outflows. As of May 30, 2021, we had approved the incurrence of $172.2 million ($45.4 million of cash charges and $126.8 million of non- 24 cash charges) for several projects associated with the Conagra Restructuring Plan. We have incurred or expect to incur $157.3 million of charges ($36.9 million of cash charges and $120.4 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan. We recognized charges of $46.2 million, $64.4 million, and $2.2 million in connection with the Conagra Restructuring Plan in fiscal 2021, 2020, and 2019, respectively. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period. COVID-19 Pandemic We have continued to monitor the impact of the COVID-19 pandemic on all aspects of our business. Throughout fiscal 2021, we experienced higher net sales for our products in both of our Grocery & Snacks and Refrigerated & Frozen segments until the fourth quarter of fiscal 2021, as we began to lap the initial surge in demand at the beginning of the pandemic. We have also experienced reduced demand for our foodservice products across all of our major markets as consumer traffic in away-from-home food outlets decreased as a result of the COVID-19 pandemic. However, as states have reopened their economies during 2021, our foodservice net sales have improved compared to the initial months of the pandemic. As we progress through fiscal 2022, we generally expect retail demand levels to remain elevated versus pre-pandemic levels and we expect foodservice demand levels to return to more historical norms. However, there still remains uncertainty with the pandemic and such trends ultimately depend on the length and severity of the pandemic, inclusive of the introduction of new strains of the virus; the federal, state, and local government actions taken in response; continued vaccine availability and effectiveness; and the macroeconomic environment. In fiscal 2022, we also expect to see inflationary headwinds but anticipate that they will be partially mitigated by supply chain realized productivity and price increases that began to be introduced at the end of fiscal 2021. We also expect a decrease in costs related to the COVID-19 pandemic and a decrease in supply chain costs as we continue to recover our supply and service levels. We will continue to evaluate the extent to which the COVID-19 pandemic will impact our business, consolidated results of operations, and financial condition. During fiscal 2021, our operating margins benefitted from fixed cost leverage, reduced travel expenses, and lower trade promotional activity on certain brands. That benefit was partially offset by several factors including higher transportation and warehousing costs, employee safety and sanitation costs, and employee compensation costs, which combined accounted for an estimated $143 million of additional incremental costs in fiscal 2021. Similar incremental costs starting in the fourth quarter of fiscal 2020 were estimated to be approximately $40 million. While we expect these incremental costs to decrease in fiscal 2022, the timing and amount of such decrease is dependent upon the ultimate length and severity of the pandemic as outlined above. Beginning in February 2020 and over the course of the COVID-19 pandemic, we created COVID-19 pandemic, Return to Office, and Vaccine Preparedness teams, in order to review and assess the evolving COVID-19 pandemic, and to recommend risk mitigation actions for the health and safety of our employees. In order to enhance the safety of our employees during the COVID-19 pandemic, these teams have recommended and implemented various measures, including the installation of physical barriers between employees in production facilities, cleaning and sanitation protocols for both production and office spaces, execution of a phased return to office approach to enable in-person work for corporate personnel, implementation of work-from-home initiatives for certain office personnel, and increased access to vaccines for production facilities and corporate locations. The implementation of such safety measures has not resulted in any meaningful change to our financial control environment. All of our production facilities remain open and there has been minimal disruption to our supply chain network to date, including with respect to the supply of our ingredients, packaging, or other sourced materials. However, we cannot predict the ultimate COVID-19 impact on our suppliers, distributors, and manufacturers. SEGMENT REVIEW We reflect our results of operations in four reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. Grocery & Snacks The Grocery & Snacks reporting segment principally includes branded, shelf-stable food products sold in various retail channels in the United States. Refrigerated & Frozen The Refrigerated & Frozen reporting segment principally includes branded, temperature-controlled food products sold in various retail channels in the United States. 25 International The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States. Foodservice The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces, and a variety of custom-manufactured culinary products that are packaged for sale to restaurants and other foodservice establishments primarily in the United States. Presentation of Derivative Gains (Losses) from Economic Hedges of Forecasted Cash Flows in Segment Results Derivatives used to manage commodity price risk and foreign currency risk are not designated for hedge accounting treatment. We believe these derivatives provide economic hedges of certain forecasted transactions. As such, these derivatives are generally recognized at fair market value with realized and unrealized gains and losses recognized in general corporate expenses. The gains and losses are subsequently recognized in the operating results of the reporting segments in the period in which the underlying transaction being economically hedged is included in earnings. In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results, immediately. See Note 20 "Business Segments and Related Information", to the Consolidated Financial Statements contained in this report for further discussion. Presentation of Information Below is a detailed discussion and comparison of our results of operations for the fiscal years ended May 30, 2021 and May 31, 2020. For a discussion of changes from the fiscal year ended May 26, 2019 to the fiscal year ended May 31, 2020, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended May 31, 2020 (filed July 24, 2020). Fiscal 2021 compared to Fiscal 2020 Net Sales ($ in millions) Reporting Segment Fiscal 2021 Net Sales Fiscal 2020 Net Sales % Inc (Dec) Grocery & Snacks $ 4,637.5 $ 4,617.1 0 % Refrigerated & Frozen 4,774.6 4,559.6 5 % International 938.6 925.3 1 % Foodservice 834.0 952.4 (12 )% Total $ 11,184.7 $ 11,054.4 1 % Grocery & Snacks net sales for fiscal 2021 included an increase in volumes of 4%, excluding the impact of divestitures and the 53rd week in fiscal 2020, compared to the prior-year period. This result reflected an increase across multiple categories due to increased at-home eating and some replenishment of customer inventory levels that had been depleted in connection with the COVID-19 pandemic. Price/mix increased 2%, excluding the impact of divestitures, compared to the prior-year period due to favorable product mix, lower promotional trade activity, and the favorable impact of a $7.4 million change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The inclusion of an additional week of results in fiscal 2020 accounted for an incremental 2% of net sales in the prior-year period. Fiscal 2021 and 2020 included $34.7 million and $113.9 million, respectively, of net sales related to our Peter Pan® peanut butter business, which was sold in the third quarter of fiscal 2021. Fiscal 2021 and 2020 included $3.6 million and $8.0 million, respectively, of net sales related to our H.K. Anderson® business, which was sold in the second quarter of fiscal 2021. Fiscal 2020 included $23.1 million of net sales related to our private label peanut butter business, which we exited in the third quarter of fiscal 2020. Fiscal 2020 also included $46.1 million of net sales related to our DSD snacks business, which was sold in the second quarter of fiscal 2020. Refrigerated & Frozen net sales for fiscal 2021 included an increase in volumes of 4%, excluding the impact of divestitures and the 53rd week in fiscal 2020, compared to fiscal 2020. The increase in sales volumes was a result of increased at-home eating 26 and some replenishment of customer inventory levels that had been depleted in connection with the COVID-19 pandemic. Price/mix increased 4% for fiscal 2021, excluding the impact of divestitures, compared to fiscal 2020 due to favorable mix, lower promotional trade activity, favorable pricing, and the favorable impact of a $7.4 million change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The inclusion of an additional week of results in fiscal 2020 accounted for an incremental 2% of net sales in the prior-year period. Fiscal 2021 and 2020 included $40.8 million and $41.0 million, respectively, of net sales related to our Egg Beaters® business, which was sold in the fourth quarter of fiscal 2021. Fiscal 2020 included $23.2 million of net sales related to our Lender's® bagel business, which was sold in the third quarter of fiscal 2020. International net sales for fiscal 2021 included an increase in price/mix of 4% compared to fiscal 2020 due to lower promotional trade activity, inflation-justified pricing, favorable mix, and the favorable impact of a $2.8 million change in estimate associated with our fiscal 2020 fourth quarter trade accrual. Volumes, excluding the impact of divestitures and the 53rd week in fiscal 2020, were flat when compared to the prior-year period. The inclusion of an additional week of results in fiscal 2020 accounted for an incremental 2% of net sales in the prior-year period. Fiscal 2021 and 2020 included $1.4 million and $5.2 million, respectively, of net sales related to our Peter Pan® peanut butter business. Foodservice net sales for fiscal 2021 included a decrease in volumes of 13%, excluding the impact of divestitures and the 53rd week in fiscal 2020, compared to the prior-year period. The decline in volume reflected lower traffic in away-from-home food outlets as a result of the COVID-19 pandemic. Price/mix, excluding the impact of divestitures, increased 3% in fiscal 2021 compared to fiscal 2020, reflecting inflation-related pricing and lower trade activity. The inclusion of an additional week of results in fiscal 2020 accounted for an incremental 1% of net sales in the prior-year period. Fiscal 2021 and 2020 included $1.0 million and $3.4 million, respectively, of net sales related to our Peter Pan® peanut butter business. Fiscal 2021 and 2020 included $0.6 million and $2.4 million, respectively, of net sales related to our H.K. Anderson® business. Fiscal 2020 included $6.6 million and $4.6 million of net sales related to our Lender's® bagel and private label peanut butter businesses, respectively. SG&A Expenses (Includes general corporate expenses) SG&A expenses totaled $1.40 billion for fiscal 2021, a decrease of $219.5 million compared to fiscal 2020. SG&A expenses for fiscal 2021 reflected the following: Items impacting comparability of earnings • expenses of $90.9 million related to the impairment of certain brand intangible assets, • expenses of $68.7 million associated with the early extinguishment of debt, • gains totaling $65.5 million related to divestitures of certain businesses, • expenses of $40.8 million in connection with our restructuring plans, • consulting expenses of $7.2 million primarily associated with securing tax benefits for a new production facility (the associated tax benefits will be recognized in future periods), • a loss of $7.1 million related to the early exit of an unfavorable contract associated with a recent divestiture, • expenses of $5.7 million associated with costs incurred for acquisitions and divestitures, and • a net expense of $2.6 million related to a previous legal matter. Other changes in expenses compared to fiscal 2020 • an increase in advertising and promotion expense of $27.3 million driven by higher eCommerce investments, • a decrease in salary, wage, and fringe benefit expense of $17.3 million, largely due to achieved synergies from the Pinnacle acquisition and lower employer-related 401(k) costs, • a decrease in incentive compensation expense of $15.3 million, due to further exceeding certain performance targets in the prior year period, • a decrease in travel and entertainment expense of $14.4 million, in part due to reduced travel from the COVID-19 pandemic, • an increase in share-based payment and deferred compensation expense of $12.7 million, due to an increase in stock price and exceeding certain performance targets, 27 • an increase of $9.9 million in foreign currency transaction gains, primarily due to the strengthening of the Canadian dollar, • a decrease in depreciation expense of $5.4 million, • a decrease in royalty expense of $5.3 million, in part due to the expiration of a royalty agreement, and • a decrease in lease expense of $4.0 million. SG&A expenses for fiscal 2020 included the following items impacting the comparability of earnings: • expenses of $165.5 million related to the impairment of certain brand intangible assets, • expenses of $105.7 million in connection with our restructuring plans, • expense of $59.0 million related to the impairment of businesses held for sale, • a benefit of $11.9 million related to a contract settlement, • charges totaling $10.1 million related to legal and environmental matters, • expenses of $5.3 million associated with costs incurred for acquisitions and divestitures, and • a net loss of $1.7 million related to divestitures of businesses. Segment Operating Profit (Earnings before general corporate expenses, pension and postretirement non-service income, interest expense, net, income taxes, and equity method investment earnings) ($ in millions) Reporting Segment Fiscal 2021 Operating Profit Fiscal 2020 Operating Profit % Inc (Dec) Grocery & Snacks $ 1,093.8 $ 915.2 20 % Refrigerated & Frozen 836.5 702.2 19 % International 131.8 100.6 31 % Foodservice 78.9 97.6 (19 )% Grocery & Snacks operating profit for fiscal 2021 reflected an increase in gross profits of $34.3 million compared to fiscal 2020. The higher gross profit was driven by the net sales growth discussed above, the benefits of supply chain realized productivity, favorable margin mix, fixed cost leverage, and cost synergies associated with the Pinnacle acquisition, partially offset by the impact of the 53rd week of our prior fiscal year, the impacts of input cost inflation, higher transportation costs, a reduction in profit associated with the divestiture of our HK Anderson® and Peter Pan® peanut butter businesses and the exit of our private label peanut butter business, and pandemic-related costs. Pandemic-related costs included investments in employee safety protocols, bonuses paid to supply chain employees, and costs necessary to meet elevated levels of demand. Operating profit of the Grocery & Snacks segment was impacted by expense of $27.8 million and $58.4 million related to our restructuring plans in fiscal 2021 and 2020, respectively. Fiscal 2021 and 2020 included certain brand intangible impairment charges of $13.0 million and $46.4 million, respectively. Fiscal 2021 included gains totaling $55.1 million related to the divestitures of certain businesses. Fiscal 2020 also included a charge of $31.4 million related to the impairment of a business held for sale, a benefit of $11.9 million related to a contract settlement, and costs of $3.0 million related to divestitures. Refrigerated & Frozen operating profit for fiscal 2021 reflected an increase in gross profits of $61.9 million compared to fiscal 2020 due to the net sales growth discussed above, the benefits of supply chain realized productivity, favorable margin mix, cost synergies associated with the Pinnacle acquisition, and fixed cost leverage, partially offset by the impact of the 53rd week of our prior fiscal year, the impacts of input cost inflation, higher transportation costs, a reduction in profit associated with the divestiture of our Lender's® bagel business, and pandemic-related costs. Operating profit of the Refrigerated & Frozen segment was impacted by charges of $76.9 million and $110.8 million related to the impairment of certain brand intangible assets during fiscal 2021 and 2020, respectively. Fiscal 2021 and 2020 included $26.8 million and $15.8 million, respectively, of charges related to our restructuring plans. Fiscal 2021 also included a gain of $10.4 million related to the divestiture of our Egg Beater's® business, reduced by a loss of $7.1 million related to the early exit of an unfavorable contract associated with the divestiture. In addition, operating profit of the Refrigerated & Frozen segment included $27.6 million related to the impairment of a business held for sale in fiscal 2020. Advertising and promotion expenses for fiscal 2021 increased by $23.8 million compared to fiscal 2020. 28 International operating profit for fiscal 2021 reflected an increase in gross profits of $18.3 million compared to fiscal 2020 due to the net sales growth discussed above, the benefits of supply chain realized productivity, fixed cost leverage, and favorable product mix, partially offset by the impact of the 53rd week of our prior fiscal year, the impacts of input cost inflation, higher transportation costs, and a reduction in profit associated with the divestiture of our Peter Pan® peanut butter business. International gross profits also reflected a decrease of $5.8 million due to foreign exchange rates compared to the prior-year period. Operating profit of the International segment was impacted by charges of $1.0 million and $8.3 million related to the impairment of certain brand intangible assets during fiscal 2021 and 2020, respectively. Foodservice operating profit for fiscal 2021 reflected a decrease in gross profits of $26.0 million compared to fiscal 2020, reflecting lower traffic in away-from-home food outlets due to the COVID-19 pandemic, input cost inflation, the impact of the 53rd week of our prior fiscal year, pandemic-related costs, and a reduction in profit associated with the divestitures of our Lender's® bagel, H.K. Anderson®, and Peter Pan® peanut butter businesses and the exit of our private label peanut butter business, partially offset by supply chain realized productivity and fixed cost leverage. Pension and Postretirement Non-service Income In fiscal 2021, pension and postretirement non-service income was $54.5 million, an increase of $44.6 million compared to fiscal 2020. The increase was driven by a charge of $44.8 million in fiscal 2020 compared to a charge of $0.8 million in fiscal 2021 related to the year-end write-off of actuarial losses in excess of 10% of our pension liability. The increase in losses outside of the 10% corridor in the prior year was driven by a reduction of the discount rate used to remeasure the pension obligations to present value and a reduction in asset values for certain plan assets. Interest Expense, Net In fiscal 2021, net interest expense was $420.4 million, a decrease of $66.7 million, or 14%, from fiscal 2020. The decrease was driven by an overall reduction of our debt balances. See Note 4, "Long-Term Debt", to the Consolidated Financial Statements contained in this report for further discussion. Income Taxes Our income tax expense was $193.8 million and $201.3 million in fiscal 2021 and 2020, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income from continuing operations, inclusive of equity method investment earnings) was approximately 13% and 19% for fiscal 2021 and 2020, respectively. See Note 14, "Pre-Tax Income and Income Taxes", to the Consolidated Financial Statements contained in this report for a discussion on the change in effective tax rates. In fiscal 2021, we completed a restructuring of our ownership interest in Ardent Mills that utilized a portion of our capital loss carryforward prior to its expiration. Also in fiscal 2021, we completed several other transactions related to retained assets in conjunction with the divestitures of the Peter Pan® peanut butter and Egg Beaters® businesses that we believe will utilize a portion of the remaining capital loss carryforward. These transactions are subject to certain elections and are currently under review by the Internal Revenue Service. We believe they may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods. We expect our effective tax rate in fiscal 2022, exclusive of any unusual transactions or tax events, to be approximately 23%-24%. Equity Method Investment Earnings We include our share of the earnings of certain affiliates based on our economic ownership interest in the affiliates. Our most significant affiliate is the Ardent Mills joint venture. Our share of earnings from our equity method investment earnings were $84.4 million and $73.2 million for fiscal 2021 and 2020, respectively. Results for fiscal 2020 included a gain of $4.1 million from the sale of assets by the Ardent Mills joint venture. Ardent Mills earnings for fiscal 2021 reflected favorable market conditions. 29 Earnings Per Share Diluted earnings per share in fiscal 2021 and 2020 were $2.66 and $1.72, respectively. The increase in diluted earnings per share reflected higher net income. In addition, see "Items Impacting Comparability" above as several significant items affected the comparability of year-over-year results of operations. LIQUIDITY AND CAPITAL RESOURCES Sources of Liquidity and Capital The primary objective of our financing strategy is to maintain a prudent capital structure that provides us flexibility to pursue our growth objectives. We use a combination of equity and short and long-term debt. We use short-term debt principally to finance ongoing operations, including our seasonal requirements for working capital (accounts receivable, prepaid expenses and other current assets, and inventories, less accounts payable, accrued payroll, and other accrued liabilities). We are committed to maintaining solid investment grade credit ratings. Management believes that existing cash balances, cash flows from operations, existing credit facilities, our commercial paper program, and access to capital markets will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, and payment of anticipated quarterly dividends for at least the next twelve months. Borrowing Facilities and Long-Term Debt At May 30, 2021, we had a revolving credit facility (the "Revolving Credit Facility") with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $1.6 billion (subject to increase to a maximum aggregate principal amount of $2.1 billion with the consent of the lenders). The Revolving Credit Facility matures on July 11, 2024 and is unsecured. The term of the Revolving Credit Facility may be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of May 30, 2021, there were no outstanding borrowings under the Revolving Credit Facility. We had $705.7 million outstanding under our commercial paper program as of May 30, 2021, and no amounts outstanding as of May 31, 2020. The highest level of borrowings during fiscal 2021 was $1.05 billion. During the fourth quarter of fiscal 2021, we repaid the remaining outstanding $195.9 million aggregate principal amount of our 9.75% subordinated notes on their maturity date of March 1, 2021. The repayment was primarily funded by the issuance of commercial paper. A summary of our long-term debt balances as of May 30, 2021 can be found in Note 4, "Long-Term Debt", to the Consolidated Financial Statements contained in this report. The weighted-average coupon interest rate of the long-term debt obligations outstanding as of May 30, 2021, was approximately 4.6%. We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt upon maturity, from operating cash flows, our commercial paper program, access to the capital markets, and our Revolving Credit Facility. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at all. As of the end of fiscal 2021, our senior long-term debt ratings were all investment grade. A significant downgrade in our credit ratings would not affect our ability to borrow amounts under the Revolving Credit Facility, although borrowing costs would increase. A downgrade of our short-term credit ratings would impact our ability to borrow under our commercial paper program by negatively impacting borrowing costs and causing shorter durations, as well as making access to commercial paper more difficult, or impossible. Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of EBITDA to interest expense not be less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed certain decreasing specified levels, ranging from 4.75 through the first quarter of fiscal 2022 to 3.75 from the second quarter of fiscal 2023 and thereafter. Each ratio is to be calculated on a rolling four-quarter basis. As of May 30, 2021, we were in compliance with all financial covenants. 30 On July 13, 2021, subsequent to our fiscal year end, we entered into an amendment to the Revolving Credit Facility. The amendment modifies the ratio of funded debt to EBITDA financial covenant to require a ratio of not greater than 4.50 on a rolling four-quarter basis. Equity and Dividends We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board. Under the share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. During fiscal 2021, we repurchased 8.8 million shares of our common stock under this authorization for an aggregate of $298.1 million. The Company’s total remaining share repurchase authorization as of May 30, 2021, was $1.12 billion. On April 16, 2021, we announced that our Board had authorized a quarterly dividend payment of $0.275 per share, which was paid on June 2, 2021, to stockholders of record as of the close of business on April 30, 2021. Subsequent to our fiscal year end, our Board approved a 14% increase to our annualized dividend rate. The Board approved a quarterly dividend of $0.3125 per share to be paid on September 2, 2021 to stockholders of record as of the close of business on August 3, 2021. Contractual Obligations As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs. In addition to principal and interest payments on our outstanding long-term debt and notes payable balances, discussed above, our contractual obligations primarily consist of leases payments, income taxes, pension and postretirement benefits, and unconditional purchase obligations. A summary of our operating and finance lease obligations as of May 30, 2021 can be found in Note 15, "Leases", to the Consolidated Financial Statements contained in this report. The liability for gross unrecognized tax benefits related to uncertain tax positions was $33.0 million as of May 30, 2021. See Note 14, "Pre-Tax Income and Income Taxes", to the Consolidated Financial Statements contained in this report for information related to income taxes. As of May 30, 2021, we had an aggregate funded pension asset of $109.6 million and an aggregate unfunded postretirement benefit obligation totaling $78.2 million. We expect to make payments totaling approximately $12.3 million and $9.0 million in fiscal 2022 to fund our pension and postretirement plans, respectively. See Note 18, "Pension and Postretirement Benefits", to the Consolidated Financial Statements and "Critical Accounting Estimates – Employment-Related Benefits" contained in this report for further discussion of our pension obligation and factors that could affect estimates of these obligations. As of May 30, 2021, our unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as "take-or-pay" contracts) totaled approximately $2.51 billion. Approximately $1.82 billion of this balance is due in fiscal 2022. Included in this amount are open purchase orders and other supply agreements totaling approximately $1.53 billion, which are generally settleable in the ordinary course of business in less than one year. Some are not legally binding and/or may be cancellable. Warehousing service agreements totaling approximately $400 million and obligations for leases that have not yet commenced totaling $272.2 million as of May 30, 2021, make up a majority of our remaining unconditional purchase obligations with various terms of up to 20 years. Capital Expenditures We continue to make investments in our business and operating facilities. Our preliminary estimate of capital expenditures for fiscal 2022 is approximately $475 million. Supplier Arrangements In fiscal 2017, we began a program to offer certain suppliers access to a third-party service that allows them to view our scheduled payments online. The third-party service also allows suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party. We have no economic interest in these financing arrangements and no direct 31 relationship with the suppliers, the third party, or any financial institutions concerning this service. All balances remain as obligations to our suppliers as stated in our supplier agreements and are reflected in accounts payable within our Consolidated Balance Sheets. The associated payments are included in net cash flows from operating activities within our Consolidated Statements of Cash Flows. As of May 30, 2021 and May 31, 2020, $279.3 million and $258.7 million, respectively, of our total accounts payable was payable to suppliers who utilize this third-party service. The program commenced at about the same time that we began an initiative to negotiate extended payment terms with our suppliers. Although difficult to predict, we generally expect the incremental cash flow benefits associated with these extended payment terms to increase at a slower rate in the future. A number of factors may impact our future payment terms, including our relative creditworthiness, overall market liquidity, and changes in interest rates and other general economic conditions. Cash Flows In fiscal 2021, we used $474.1 million of cash, which was the net result of $1.47 billion generated from operating activities, $340.3 million used in investing activities, $1.61 billion used in financing activities, and an increase of $7.7 million due to the effects of changes in foreign currency exchange rates. Cash generated from operating activities totaled $1.47 billion in fiscal 2021, as compared to $1.84 billion generated in fiscal 2020. Operating cash flows for fiscal 2021 reflected increased net sales in our retail segments from COVID-19 pandemic-related demand as well as decreased interest payments. This was partially offset by increased tax payments compared to fiscal 2020. Tax payments for fiscal 2021 included approximately $47.0 million of fourth quarter fiscal 2020 tax payments, which were deferred due to the extension of the deadline for certain federal cash tax payments. Comparative changes in working capital balances were most notably impacted by inventory rebuilding in fiscal 2021, as certain brands had previously been on allocation due to high demand through the pandemic. Further, our inventory balances also have experienced recent input cost inflation which is giving rise to larger inventory amounts period over period. Operating cash flows benefited from the continued deferral of employer payroll taxes under the Coronavirus Aid, Relief, and Economic Security Act, which totaled $33.9 million for fiscal 2021. Payment of such amounts will occur in fiscal 2022 and 2023. Cash used in investing activities totaled $340.3 million in fiscal 2021 compared to $153.8 million in fiscal 2020. Investing activities in fiscal 2021 consisted primarily of capital expenditures totaling $506.4 million, partially offset by net proceeds totaling $160.9 million from the sale of our Egg Beaters®, Peter Pan® peanut butter, and H.K. Anderson® businesses. Investing activities in fiscal 2020 consisted mainly of capital expenditures of $369.5 million and the net proceeds from divestitures totaling $194.6 million, including the sales of our DSD snacks and Lender's® bagel businesses. Cash used in financing activities totaled $1.61 billion in fiscal 2021 compared to $1.37 billion in fiscal 2020. Financing activities in fiscal 2021 principally reflect repayments of long-term debt of $2.51 billion, the issuance of long-term debt totaling $988.2 million, net short-term borrowings of $706.3 million, cash dividends paid of $474.6 million, and common stock repurchases of $298.1 million. Financing activities in fiscal 2020 consisted principally of the repayment of long-term debt totaling $947.5 million and cash dividends paid of $413.6 million. Cash Held by International Subsidiaries The Company had cash and cash equivalents of $79.2 million at May 30, 2021, and $553.3 million at May 31, 2020, of which $72.4 million at May 30, 2021, and $80.5 million at May 31, 2020, was held in foreign countries. We believe that our foreign subsidiaries have invested or will invest any undistributed earnings indefinitely, or that any undistributed earnings will be remitted in a tax-neutral transaction, and, therefore, do not provide deferred taxes on the cumulative undistributed earnings of our foreign subsidiaries. CRITICAL ACCOUNTING ESTIMATES The process of preparing financial statements requires the use of estimates on the part of management. The estimates used by management are based on our historical experiences combined with management's understanding of current facts and circumstances. Certain of our accounting estimates are considered critical as they are both important to the portrayal of our financial condition and results and require significant or complex judgment on the part of management. The following is a summary of certain accounting estimates considered critical by management. Our Audit/Finance Committee has reviewed management's development, selection, and disclosure of the critical accounting estimates. 32 Marketing Costs—We offer various forms of trade promotions which are mostly recorded as a reduction in revenue. The methodologies for determining these provisions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and included activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized as a reduction of revenue at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period. We have recognized trade promotion liabilities of $146.8 million as of May 30, 2021. Changes in the assumptions used in estimating the cost of any individual customer marketing program would not result in a material change in our results of operations or cash flows. Income Taxes—Our income tax expense is based on our income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which we operate. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining our income tax expense and in evaluating our tax positions, including evaluating uncertainties. Management reviews tax positions at least quarterly and adjusts the balances as new information becomes available. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the tax bases of assets and liabilities and their carrying amounts in our consolidated balance sheets, as well as from net operating loss and tax credit carryforwards. Management evaluates the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings, and available tax planning strategies. These estimates of future taxable income inherently require significant judgment. Management uses historical experience and short and long-range business forecasts to develop such estimates. Further, we employ various prudent and feasible tax planning strategies to facilitate the recoverability of future deductions. To the extent management does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. Further information on income taxes is provided in Note 14, "Pre-tax Income and Income Taxes", to the Consolidated Financial Statements contained in this report. Environmental Liabilities—Environmental liabilities are accrued when it is probable that obligations have been incurred and the associated amounts can be reasonably estimated. Management works with independent third-party specialists in order to effectively assess our environmental liabilities. Management estimates our environmental liabilities based on evaluation of investigatory studies, extent of required clean-up, our known volumetric contribution, other potentially responsible parties, and our experience in remediating sites. Environmental liability estimates may be affected by changing governmental or other external determinations of what constitutes an environmental liability or an acceptable level of clean-up. Management's estimate as to our potential liability is independent of any potential recovery of insurance proceeds or indemnification arrangements. Insurance companies and other indemnitors are notified of any potential claims and periodically updated as to the general status of known claims. We do not discount our environmental liabilities as the timing of the anticipated cash payments is not fixed or readily determinable. To the extent that there are changes in the evaluation factors identified above, management's estimate of environmental liabilities may also change. We have recognized a reserve of approximately $61.5 million for environmental liabilities as of May 30, 2021. The reserve for each site is determined based on an assessment of the most likely required remedy and a related estimate of the costs required to effect such remedy. Employment-Related Benefits—We incur certain employment-related expenses associated with pensions and postretirement health care benefits. In order to measure the annual expense associated with these employment-related benefits, management must make a variety of estimates including, but not limited to, discount rates used to measure the present value of certain liabilities, assumed rates of return on assets set aside to fund these expenses, compensation increases, employee turnover rates, anticipated mortality rates, and anticipated health care costs. The estimates used by management are based on our historical experience as well as current facts and circumstances. We use third-party specialists to assist management in appropriately measuring the expense associated with these employment-related benefits. Different estimates used by management could result in us recognizing different amounts of expense over different periods of time. 33 The Company uses a split discount rate (the "spot-rate approach") for the U.S. plans and certain foreign plans. The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost. We have recognized a pension liability of $135.4 million and $254.5 million and a postretirement liability of $81.2 million and $89.3 million as of the end of fiscal 2021 and 2020, respectively. We also have recognized a pension asset of $245.0 million and $202.4 million as of the end of fiscal 2021 and 2020, respectively, as certain individual plans of the Company had a positive funded status. We recognize cumulative changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation ("the corridor") in current period expense annually as of our measurement date, which is our fiscal year-end, or when measurement is required otherwise under U.S. GAAP. We recognized pension expense (benefit) from Company plans of $(38.3) million, $5.9 million, and $(22.7) million in fiscal 2021, 2020, and 2019, respectively. Such amounts reflect the year-end write-off of actuarial losses in excess of 10% of our pension liability of $0.8 million, $44.8 million, and $5.1 million in fiscal 2021, 2020, and 2019, respectively. This also reflected expected returns on plan assets of $140.0 million, $170.2 million, and $174.4 million in fiscal 2021, 2020, and 2019, respectively. We contributed $27.6 million, $17.5 million, and $14.7 million to the pension plans of our continuing operations in fiscal 2021, 2020, and 2019, respectively. We anticipate contributing approximately $12.3 million to our pension plans in fiscal 2022. One significant assumption for pension plan accounting is the discount rate. We use a spot-rate approach, discussed above. This approach focuses on measuring the service cost and interest cost components of net periodic benefit cost by using individual spot rates derived from a high-quality corporate bond yield curve and matched with separate cash flows for each future year instead of a single weighted-average discount rate approach. Based on this information, the discount rate selected by us for determination of pension expense was 2.98% for fiscal 2021, 3.88% for fiscal 2020, and 4.15% for fiscal 2019. We selected a weighted-average discount rate of 3.50% and 2.29% for determination of service and interest expense, respectively, for fiscal 2022. A 25-basis point increase in our discount rate assumption as of the end of fiscal 2021 would increase our annual pension expense for our pension plans in fiscal 2022 by $5.2 million. A 25-basis point decrease in our discount rate assumption as of the end of fiscal 2021 would decrease our annual pension expense for our pension plans in fiscal 2022 by $5.7 million. For our year-end pension obligation determination, we selected discount rates of 3.04% and 2.98% for fiscal years 2021 and 2020, respectively. Another significant assumption used to account for our pension plans is the expected long-term rate of return on plan assets. In developing the assumed long-term rate of return on plan assets for determining pension expense, we consider long-term historical returns (arithmetic average) of the plan's investments, the asset allocation among types of investments, estimated long-term returns by investment type from external sources, and the current economic environment. Based on this information, we selected 3.74% for the weighted-average expected long-term rate of return on plan assets for determining our fiscal 2021 pension expense. A 25-basis point increase/decrease in our weighted-average expected long-term rate of return assumption as of the beginning of fiscal 2021 would decrease/increase annual pension expense for our pension plans by $9.3 million. We selected a weighted-average expected rate of return on plan assets of 3.87% to be used to determine our pension expense for fiscal 2022. A 25-basis point increase/decrease in our expected long-term rate of return assumption as of the beginning of fiscal 2022 would decrease/increase annual pension expense for our pension plans by $9.4 million. We also provide certain postretirement health care benefits. We recognized postretirement benefit income of $4.4 million, $4.2 million, and $1.3 million in fiscal 2021, 2020, and 2019, respectively. We anticipate contributing approximately $9.0 million to our postretirement health care plans in fiscal 2022. The postretirement benefit expense and obligation are also dependent on our assumptions used for the actuarially determined amounts. These assumptions include discount rates (discussed above), health care cost trend rates, inflation rates, retirement rates, mortality rates (also discussed above), and other factors. The health care cost trend assumptions are developed based on historical cost data, the near-term outlook, and an assessment of likely long-term trends. Assumed inflation rates are based on an evaluation of external market indicators. Retirement and mortality rates are based primarily on actual plan experience. The discount rate we selected for determination of postretirement expense was 2.39% for fiscal 2021, 3.48% for fiscal 2020, and 3.81% for fiscal 2019. We have selected a weighted-average discount rate of 2.51% for determination of postretirement expense for fiscal 2022. A 25-basis point increase/decrease in our discount rate assumption would not have resulted in a material change to postretirement expense for our plans. We have assumed the initial year increase in cost of health care to be 6.53%, with the trend rate decreasing to 4.44% by 2029. 34 Business Combinations, Impairment of Long-Lived Assets (including property, plant and equipment), Identifiable Intangible Assets, and Goodwill—We use the acquisition method in accounting for acquired businesses. Under the acquisition method, our financial statements reflect the operations of an acquired business starting from the closing of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions we normally obtain the assistance of a third-party valuation specialist in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. We reduce the carrying amounts of long-lived assets (including property, plant and equipment) to their fair values when their carrying amount is determined to not be recoverable. We generally compare undiscounted estimated future cash flows of an asset or asset group to the carrying values of the asset or asset group. If the undiscounted estimated future cash flows exceed the carrying values of the asset or asset group, no impairment is recognized. If the undiscounted estimated future cash flows are less than the carrying values of the asset or asset group, we write-down the asset or assets to their estimated fair values. The estimates of fair value are generally in the form of appraisal, or by discounting estimated future cash flows of the asset or asset group. Determining the useful lives of intangible assets also requires management judgment. Certain brand intangibles are expected to have indefinite lives based on their history and our plans to continue to support and build the acquired brands, while other acquired intangible assets (e.g., customer relationships) are expected to have determinable useful lives. Our estimates of the useful lives of definite-lived intangible assets are primarily based upon historical experience, the competitive and macroeconomic environment, and our operating plans. The costs of definite-lived intangibles are amortized to expense over their estimated life. We reduce the carrying amounts of indefinite-lived intangible assets, and goodwill to their fair values when the fair value of such assets is determined to be less than their carrying amounts (i.e., assets are deemed to be impaired). Fair value is typically estimated using a discounted cash flow analysis, which requires us to estimate the future cash flows anticipated to be generated by the particular asset being tested for impairment as well as to select a discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows could produce different impairment amounts (or none at all) for long-lived assets and identifiable intangible assets. In assessing other intangible assets not subject to amortization for impairment, we have the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If we determine that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then we are not required to perform any additional tests for assessing intangible assets for impairment. However, if we conclude otherwise or elect not to perform the qualitative assessment, then we are required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If we perform a quantitative impairment test in evaluating impairment of our indefinite lived brands/trademarks, we utilize a "relief from royalty" methodology. The methodology determines the fair value of each brand through use of a discounted cash flow model that incorporates an estimated "royalty rate" we would be able to charge a third party for the use of the particular brand. When determining the future cash flow estimates, we estimate future net sales and a fair market royalty rate for each applicable brand and an appropriate discount rate to measure the present value of the anticipated cash flows. Estimating future net sales requires significant judgment by management in such areas as future economic conditions, product pricing, and consumer trends. In determining an appropriate discount rate to apply to the estimated future cash flows, we consider the current interest rate environment and our estimated cost of capital. Goodwill is tested annually for impairment of value and whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, adverse changes in the markets in which an entity operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or 35 declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. Under the qualitative assessment, various events and circumstances that would affect the estimated fair value of a reporting unit are identified (similar to impairment indicators above). Furthermore, management considers the results of the most recent quantitative impairment test completed for a reporting unit and compares the weighted average cost of capital between the current and prior years for each reporting unit. Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. Fair value is typically estimated using a discounted cash flow analysis, which requires us to estimate the future cash flows anticipated to be generated by the reporting unit being tested for impairment as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions. We estimate cash flows for the reporting unit over a discrete period (typically five years) and the terminal period (considering expected long term growth rates and trends). Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows or significant changes in risk-adjusted discount rates due to changes in market conditions could produce substantially different estimates of the fair value of the reporting unit. As of May 30, 2021, we have goodwill of $11.37 billion, indefinite-lived intangibles of $3.30 billion and definite-lived intangibles of $856.4 million. The amount of goodwill and intangibles increased significantly during fiscal 2019 as a result of the Pinnacle acquisition. In the first quarter of fiscal 2020, we reorganized our reporting segments to incorporate the Pinnacle business into our legacy reporting segments, to reflect how the business is now being managed. We tested goodwill for impairment both prior to and subsequent to the reallocation of Pinnacle goodwill and there were no impairments of goodwill. Historically, we have experienced impairments in brand intangibles and goodwill as a result of declining sales and other economic conditions. For instance, in fiscal 2021 and 2020, we recorded total intangibles impairments of $90.9 million and $165.5 million respectively, primarily related to our recently acquired Pinnacle brands. In fiscal 2019, we recorded total intangibles impairments of $89.6 million, primarily related to our Chef Boyardee® brand intangible. With the addition of Pinnacle intangibles that were recorded at fair value in fiscal 2019, we continue to be more susceptible to impairment charges in the future if our long-term sales forecasts, royalty rates, and other assumptions change as a result of lower than expected performance or other economic conditions. We will monitor these assumptions as management continues to achieve expected synergies, gross margin improvement, and long-term sales growth on certain key brands acquired in the acquisition including, but not limited to, Birds Eye®, Duncan Hines®, Gardein® and Vlasic®. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The principal market risks affecting us during fiscal 2021 and 2020 were exposures to price fluctuations of commodity and energy inputs, interest rates, and foreign currencies. Commodity Market Risk We purchase commodity inputs such as wheat, corn, oats, soybean meal, soybean oil, meat, dairy products, nuts, sugar, natural gas, electricity, and packaging materials to be used in our operations. These commodities are subject to price fluctuations that may create price risk. We enter into commodity hedges to manage this price risk using physical forward contracts or derivative instruments. We have policies governing the hedging instruments our businesses may use. These policies include limiting the dollar risk exposure for each of our businesses. We also monitor the amount of associated counter-party credit risk for all non-exchange-traded transactions. 36 Interest Rate Risk We may use interest rate swaps to manage the effect of interest rate changes on the fair value of our existing debt as well as the forecasted interest payments for the anticipated issuance of debt. As of May 30, 2021 and May 31, 2020, the fair value of our long-term debt (including current installments) was estimated at $9.76 billion and $11.35 billion, respectively, based on current market rates. As of May 30, 2021 and May 31, 2020, a 1% increase in interest rates would decrease the fair value of our fixed rate debt by approximately $682.2 million and $704.8 million, respectively, while a 1% decrease in interest rates would increase the fair value of our fixed rate debt by approximately $779.8 million and $809.5 million, respectively. Foreign Currency Risk In order to reduce exposures for our processing activities related to changes in foreign currency exchange rates, we may enter into forward exchange or option contracts for transactions denominated in a currency other than the functional currency for certain of our operations. This activity primarily relates to economically hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign denominated assets and liabilities. Value-at-Risk (VaR) We employ various tools to monitor our derivative risk, including value-at-risk ("VaR") models. We perform simulations using historical data to estimate potential losses in the fair value of current derivative positions. We use price and volatility information for the prior 90 days in the calculation of VaR that is used to monitor our daily risk. The purpose of this measurement is to provide a single view of the potential risk of loss associated with derivative positions at a given point in time based on recent changes in market prices. Our model uses a 95% confidence level. Accordingly, in any given one-day time period, losses greater than the amounts included in the table below are expected to occur only 5% of the time. We include commodity swaps, futures, and options and foreign exchange forwards, swaps, and options in this calculation. The following table provides an overview of our average daily VaR for our energy, agriculture, and foreign exchange positions for fiscal 2021 and 2020. Fair Value Impact In Millions Average During the Fiscal Year Ended May 30, 2021 Average During the Fiscal Year Ended May 31, 2020 Processing Activities Energy commodities $ 0.6 $ 0.4 Agriculture commodities 0.5 0.5 Other commodities — 0.1 Foreign exchange 1.0 0.8 37

COOPER COMPANIES, INC._10-Q_2021-09-03 00:00:00_711404-0000711404-21-000025.html

@@ -0,0 +1 @@
+MD&A section not found.

CORNING INC -NY_10-Q_2021-07-27 00:00:00_24741-0001437749-21-017671.html

@@ -0,0 +1 @@
+MD&A section not found.

CSX CORP_10-Q_2021-07-22 00:00:00_277948-0000277948-21-000041.html

@@ -0,0 +1 @@
+MD&A section not found.

CUMMINS INC_10-Q_2021-08-03 00:00:00_26172-0000026172-21-000043.html

@@ -0,0 +1 @@
+MD&A section not found.

CVS HEALTH Corp_10-Q_2021-08-04 00:00:00_64803-0000064803-21-000028.html

@@ -0,0 +1 @@
+MD&A section not found.

Corteva, Inc._10-Q_2021-08-06 00:00:00_1755672-0001755672-21-000022.html

@@ -0,0 +1 @@
+MD&A section not found.

DANAHER CORP -DE-_10-Q_2021-07-22 00:00:00_313616-0000313616-21-000098.html

@@ -0,0 +1 @@
+MD&A section not found.

DEERE & CO_10-Q_2021-08-26 00:00:00_315189-0001558370-21-012088.html

@@ -0,0 +1 @@
+MD&A section not found.

DELTA AIR LINES, INC._10-Q_2021-07-14 00:00:00_27904-0000027904-21-000009.html

@@ -0,0 +1 @@
+MD&A section not found.

DOLLAR GENERAL CORP_10-Q_2021-08-26 00:00:00_29534-0001558370-21-012076.html

@@ -0,0 +1 @@
+MD&A section not found.

DOMINION ENERGY, INC_10-Q_2021-08-06 00:00:00_715957-0001564590-21-041966.html

@@ -0,0 +1 @@
+MD&A section not found.

DOVER Corp_10-Q_2021-07-20 00:00:00_29905-0000029905-21-000036.html

@@ -0,0 +1 @@
+MD&A section not found.

DoorDash, Inc._10-Q_2021-08-13 00:00:00_1792789-0001628280-21-016985.html

@@ -0,0 +1 @@
+MD&A section not found.

ECOLAB INC._10-Q_2021-08-05 00:00:00_31462-0001558370-21-010420.html

@@ -0,0 +1 @@
+MD&A section not found.

ELECTRONIC ARTS INC._10-Q_2021-08-10 00:00:00_712515-0000712515-21-000118.html

@@ -0,0 +1 @@
+MD&A section not found.

ELI LILLY & Co_10-Q_2021-08-03 00:00:00_59478-0000059478-21-000171.html

@@ -0,0 +1 @@
+MD&A section not found.

EMERSON ELECTRIC CO_10-Q_2021-08-04 00:00:00_32604-0000032604-21-000029.html

@@ -0,0 +1 @@
+MD&A section not found.

ENTERGY CORP -DE-_10-Q_2021-08-06 00:00:00_65984-0000065984-21-000236.html

@@ -0,0 +1 @@
+MD&A section not found.

EQT Corp_10-Q_2021-07-29 00:00:00_33213-0000033213-21-000020.html

@@ -0,0 +1 @@
+MD&A section not found.

EQUIFAX INC_10-Q_2021-07-22 00:00:00_33185-0000033185-21-000044.html

@@ -0,0 +1 @@
+MD&A section not found.