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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____
Commission File Number: 001-38000
____________________________
JELD-WEN Holding, Inc.
(Exact name of registrant as specified in its charter)
____________________________
Delaware 93-1273278
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2645 Silver Crescent Drive
Charlotte, North Carolina 28273
(Address of principal executive offices, zip code)
(704) 378-5700
(Registrant’s telephone number, including area code)
____________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock (par value $0.01 per share)JELDNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer 
    
Non-accelerated filer o  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The registrant had 84,258,862 shares of Common Stock, par value $0.01 per share, outstanding as of July 28, 2022.




JELD-WEN HOLDING, Inc.
- Table of Contents –
Page No.
Part I - Financial Information
Item 1.Unaudited Financial Statements
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Balance Sheets
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Unaudited Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4.Controls and Procedures
Part II - Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.Other Information
Item 6.Exhibits
Signature


2


Glossary of Terms

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
10-KAnnual Report on Form 10-K for the fiscal year ended December 31, 2021
ABL FacilityOur $500 million asset-based loan revolving credit facility, dated as of October 15, 2014 and as amended from time to time, with JWI (as hereinafter defined) and JELD-WEN of Canada, Ltd., as borrowers, the guarantors party thereto, a syndicate of lenders, and Wells Fargo Bank, N.A., as administrative agent
Adjusted EBITDAA supplemental non-GAAP financial measure of operating performance not based on any standardized methodology prescribed by GAAP that we define as net income (loss), adjusted for the following items: loss from discontinued operations, net of tax; equity earnings of non-consolidated entities; income tax (benefit) expense; depreciation and amortization; interest expense, net; impairment and restructuring charges; gain on previously held shares of equity investment; (gain) loss on sale of property and equipment; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; other non-cash items; other items; and costs related to debt restructuring and debt refinancing
ASCAccounting Standards Codification
ASUAccounting Standards Update
AUDAustralian Dollar
Australia Senior Secured Credit FacilityOur senior secured credit facility, dated as of October 6, 2015 and as amended from time to time, with certain of our Australian subsidiaries, as borrowers, and Australia and New Zealand Banking Group Limited, as lender
BBSYBank Bill Swap Bid Rate
CAPCleanup Action Plan
CEOChief Executive Officer
CFOChief Financial Officer
CARES ActCoronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020
CharterAmended and Restated Certificate of Incorporation of JELD-WEN Holding, Inc.
CMIJWI d/b/a CraftMaster Manufacturing, Inc.
COAConsent Order and Agreement
CODMChief Operating Decision Maker, which is our Chief Executive Officer
Common StockThe 900,000,000 shares of common stock, par value $0.01 per share, authorized under our Charter
Core RevenuesRevenue excluding the impact of foreign exchange and acquisitions completed in the last twelve months
Corporate Credit FacilitiesCollectively, our ABL Facility and our Term Loan Facility
COVID-19A novel strain of the 2019-nCov coronavirus
Credit FacilitiesCollectively, our Corporate Credit Facilities and our Australia Senior Secured Credit Facility as well as other acquired term loans and revolving credit facilities
DKKDanish Krone
ERPEnterprise Resource Planning
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
GAAPGenerally Accepted Accounting Principles in the United States
GHGsGreenhouse Gases
GILTIGlobal Intangible Low-Taxed Income
JELD-WEN
JELD-WEN Holding, Inc., together with its consolidated subsidiaries where the context requires
JEMJELD-WEN Excellence Model
JWAJELD-WEN of Australia Pty. Ltd.
JWIJELD-WEN, Inc., a Delaware corporation
LIBORLondon Interbank Offered Rate
3


MD&AManagement’s Discussion and Analysis of Financial Condition and Results of Operations
OnexOnex Partners III LP and certain affiliates
PaDEPPennsylvania Department of Environmental Protection
PLPPotential Liability Party
Preferred Stock90,000,000 shares of Preferred Stock, par value $0.01 per share, authorized under our Charter
PSUPerformance Stock Unit
R&RRepair and Remodel
RSURestricted Stock Unit
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Senior Notes$800.0 million of unsecured notes issued in December 2017 in a private placement in two tranches: $400.0 million bearing interest at 4.625% and maturing in December 2025 and $400.0 million bearing interest at 4.875% and maturing in December 2027
Senior Secured Notes$250.0 million of senior secured notes issued in May 2020 in a private placement bearing interest at 6.25% and maturing in May 2025
SG&ASelling, general, and administrative expenses
Tax ActTax Cuts and Jobs Act
Term Loan FacilityOur term loan facility, dated as of October 15, 2014, and as amended from time to time with JWI, as borrower, the guarantors party thereto, a syndicate of lenders, and Bank of America, N.A., as administrative agent
Common Stock900,000,000 shares of common stock, with a par value of $0.01 per share
U.S.United States of America
WADOEWashington State Department of Ecology
Working CapitalAccounts receivable plus inventory less accounts payable
4


CERTAIN TRADEMARKS, TRADE NAMES, AND SERVICE MARKS
    This report includes trademarks, trade names, and service marks owned by us. Our U.S. window and door trademarks include JELD-WEN®, AuraLast®, MiraTEC®, Extira®, LaCANTINA®, MMI Door®, KaronaTM, ImpactGard®, JW®, Aurora®, IWP®, True BLU®, ABSTM, Siteline®, National Door®, Low-Friction Glider®, Hydrolock®, and VPITM. Our trademarks are either registered or have been used as common law trademarks by us. The trademarks we use outside the U.S. include the Stegbar®, Regency®, William Russell Doors®, Airlite®, Trend®, The Perfect FitTM, Aneeta®, Breezway®, KolderTM , Corinthian® and A&L Windows® marks in Australia, and Swedoor®, Dooria®, DANA®, MattioviTM, Zargag® , Alupan®, and Domoferm® marks in Europe. ENERGY STAR® is a registered trademark of the U.S. Environmental Protection Agency. This report contains additional trademarks, trade names, and service marks of others, which are, to our knowledge, the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this report appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
5


PART I - FINANCIAL INFORMATION
Item 1 -Unaudited Financial Statements

JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months EndedSix Months Ended
(amounts in thousands, except share and per share data)June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Net revenues$1,330,968 $1,245,815 $2,501,990 $2,338,198 
Cost of sales1,084,803 953,898 2,052,527 1,810,342 
Gross margin246,165 291,917 449,463 527,856 
Selling, general and administrative180,487 188,691 373,483 380,245 
Impairment and restructuring charges5,296 1,145 5,297 2,072 
Operating income60,382 102,081 70,683 145,539 
Interest expense, net20,222 18,860 38,576 37,315 
Other (income) expense(20,887)152 (28,224)(10,689)
Income before taxes61,047 83,069 60,331 118,913 
Income tax expense15,221 22,359 15,033 32,718 
Net income$45,826 $60,710 $45,298 $86,195 
Weighted average common shares outstanding:
Basic87,219,078 99,514,890 88,466,982 99,991,045 
Diluted87,967,049 101,670,624 89,557,956 102,141,889 
Net income per share
Basic$0.53 $0.61 $0.51 $0.86 
Diluted$0.52 $0.60 $0.51 $0.84 




























The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
6


JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
 Three Months EndedSix Months Ended
(amounts in thousands)June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Net income$45,826 $60,710 $45,298 $86,195 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax expense of $112, $4, $102, and $13, respectively
(62,228)12,379 (66,261)(27,705)
Interest rate hedge adjustments, net of tax expense of $793, $139, $3,097, and $486, respectively
2,337 413 9,123 1,438 
Defined benefit pension plans, net of tax expense of $392, $649, $542, and $1,483, respectively
510 1,524 911 3,525 
Total other comprehensive income (loss), net of tax(59,381)14,316 (56,227)(22,742)
Comprehensive (loss) income$(13,555)$75,026 $(10,929)$63,453 









































The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

7

JELD-WEN HOLDING, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(amounts in thousands, except share and per share data)June 25, 2022December 31, 2021
ASSETS
Current assets
Cash and cash equivalents$272,510 $395,596 
Restricted cash1,405 1,294 
Accounts receivable, net698,893 552,041 
Inventories723,265 615,971 
Other current assets90,455 55,531 
Assets held for sale122,428 119,424 
Total current assets1,908,956 1,739,857 
Property and equipment, net762,768 798,804 
Deferred tax assets198,199 204,232 
Goodwill519,165 545,213 
Intangible assets, net204,351 222,181 
Operating lease assets, net191,160 201,781 
Other assets30,711 26,603 
Total assets$3,815,310 $3,738,671 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$420,885 $418,774 
Accrued payroll and benefits145,265 135,989 
Accrued expenses and other current liabilities290,101 289,676 
Current maturities of long-term debt30,815 38,561 
Liabilities held for sale6,242 5,868 
Total current liabilities893,308 888,868 
Long-term debt1,867,838 1,667,696 
Unfunded pension liability56,143 61,438 
Operating lease liability156,799 166,318 
Deferred credits and other liabilities96,433 102,879 
Deferred tax liabilities8,282 9,254 
Total liabilities3,078,803 2,896,453 
Commitments and contingencies (Note 19)
Shareholders’ equity
Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no shares issued and outstanding
  
Common Stock: 900,000,000 shares authorized, par value $0.01 per share, 85,857,994 shares outstanding as of June 25, 2022; 900,000,000 shares authorized, par value $0.01 per share, 90,193,550 shares outstanding as of December 31, 2021
859 902 
Additional paid-in capital730,290 719,451 
Retained earnings155,331 215,611 
Accumulated other comprehensive loss(149,973)(93,746)
Total shareholders’ equity 736,507 842,218 
Total liabilities and shareholders’ equity$3,815,310 $3,738,671 


The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

8

JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended
June 25, 2022June 26, 2021
(amounts in thousands, except share and per share amounts)SharesAmountSharesAmount
Preferred stock, $0.01 par value per share
 $  $ 
Common stock, $0.01 par value per share
Balance at beginning of period89,136,454 $891 100,146,904 $1,001 
Shares issued for exercise/vesting of share-based compensation awards153,713 2 183,525 2 
Shares repurchased(3,430,006)(34)(1,177,757)(12)
Shares surrendered for tax obligations for employee share-based transactions(2,167) (20,890) 
Balance at period end85,857,994 $859 99,131,782 $991 
Additional paid-in capital
Balance at beginning of period
$728,389 $698,763 
Shares issued for exercise/vesting of share-based compensation awards
1,021 1,060 
Shares surrendered for tax obligations for employee share-based transactions
(45)(562)
Amortization of share-based compensation
1,598 7,526 
Balance at period end
730,963 706,787 
Employee stock notes
Balance at beginning of period
(673)(673)
Net issuances, payments and accrued interest on notes
  
Balance at period end
(673)(673)
Balance at period end
$730,290 $706,114 
Retained earnings
Balance at beginning of period
$173,760 $373,812 
Shares repurchased(64,255)(33,739)
Net income45,826 60,710 
Balance at period end
$155,331 $400,783 
Accumulated other comprehensive income (loss)
Balance at beginning of period
$(90,592)$(95,751)
Foreign currency adjustments
(62,228)12,379 
Unrealized gain on interest rate hedges2,337 413 
Net actuarial pension gain510 1,524 
Balance at period end
$(149,973)$(81,435)
Total shareholders’ equity at period end$736,507 $1,026,453 














The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

9

JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)

Six Months Ended
June 25, 2022June 26, 2021
(amounts in thousands, except share and per share amounts)SharesAmountSharesAmount
Preferred stock, $0.01 par value per share
 $  $ 
Common stock, $0.01 par value per share
Balance at beginning of period90,193,550 $902 100,806,068 $1,008 
Shares issued for exercise/vesting of share-based compensation awards
977,787 10 360,808 4 
Shares repurchased
(5,207,272)(52)(1,987,641)(20)
Shares surrendered for tax obligations for employee share-based transactions
(106,071)(1)(47,453)(1)
Balance at period end85,857,994 $859 99,131,782 $991 
Additional paid-in capital
Balance at beginning of period
$720,124 $691,360 
Shares issued for exercise/vesting of share-based compensation awards
2,000 2,323 
Shares surrendered for tax obligations for employee share-based transactions
(2,423)(1,277)
Amortization of share-based compensation
11,262 14,381 
Balance at period end
730,963 706,787 
Employee stock notes
Balance at beginning of period
(673)(673)
Net issuances, payments and accrued interest on notes
  
Balance at period end
(673)(673)
Balance at period end
$730,290 $706,114 
Retained earnings
Balance at beginning of period
$215,611 $371,462 
Shares repurchased(105,578)(56,874)
Net income 45,298 86,195 
Balance at period end
$155,331 $400,783 
Accumulated other comprehensive income (loss)
Balance at beginning of period
$(93,746)$(58,693)
Foreign currency adjustments(66,261)(27,705)
Unrealized gain on interest rate hedges9,123 1,438 
  Net actuarial pension gain 911 3,525 
Balance at period end
$(149,973)$(81,435)
Total shareholders’ equity at period end$736,507 $1,026,453 












The accompanying notes are an integral part of these unaudited Consolidated Financial Statements

10

JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six Months Ended
(amounts in thousands)June 25, 2022June 26, 2021
OPERATING ACTIVITIES
Net income$45,298 $86,195 
Adjustments to reconcile net income to cash used in operating activities:
Depreciation and amortization65,078 69,675 
Deferred income taxes(2,193)5,313 
Loss on sale or disposal of business units, property, and equipment189 362 
Adjustment to carrying value of assets534 1,175 
Amortization of deferred financing costs1,512 1,455 
Stock-based compensation11,262 14,381 
Amortization of U.S. pension expense700 4,650 
Recovery of cost from interest received on impaired notes(13,412) 
Other items, net27,231 (5,218)
Net change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable(170,071)(144,365)
Inventories(126,932)(50,245)
Other assets(32,229)(14,862)
Accounts payable and accrued expenses37,647 68,867 
Change in short term and long-term tax liabilities(10,325)3,358 
Net cash (used in) provided by operating activities(165,711)40,741 
INVESTING ACTIVITIES
Purchases of property and equipment(31,502)(35,399)
Proceeds from sale of property and equipment172 2,987 
Purchase of intangible assets(3,279)(9,326)
Recovery of cost from interest received on impaired notes
13,412  
Cash received for notes receivable55 262 
Purchase of securities for deferred compensation plan(222) 
Net cash used in investing activities(21,364)(41,476)
FINANCING ACTIVITIES
Change in long-term debt186,628 (54,654)
Common stock issued for exercise of options2,010 2,327 
Common stock repurchased(105,179)(56,894)
Payments to tax authorities for employee share-based compensation(2,378)(1,106)
Net cash provided by (used in) financing activities81,081 (110,327)
Effect of foreign currency exchange rates on cash(16,981)(6,310)
Net decrease in cash and cash equivalents(122,975)(117,372)
Cash, cash equivalents and restricted cash, beginning396,890 736,594 
Cash, cash equivalents and restricted cash, ending$273,915 $619,222 
For further information see Note 20 - Supplemental Cash Flow.







The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

11

JELD-WEN HOLDING, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Description of Company and Summary of Significant Accounting Policies
Nature of Business – JELD-WEN Holding, Inc., along with its subsidiaries, is a vertically integrated global manufacturer and distributor of windows, doors, and other building products that derives substantially all its revenues from the sale of its door and window products. Unless otherwise specified or the context otherwise requires, all references in these notes to “JELD-WEN,” “we,” “us,” “our,” or the “Company” are to JELD-WEN Holding, Inc. and its subsidiaries.
We have facilities located in the U.S., Canada, Europe, Australia, Asia, and Mexico. Our products are marketed primarily under the JELD-WEN brand name in the U.S. and Canada and under JELD-WEN and a variety of acquired brand names in Europe, Australia, and Asia.
Our revenues are affected by the level of new housing starts and remodeling activity in each of our markets. Our sales typically follow seasonal new construction and repair and remodeling industry patterns. The peak season for home construction and remodeling in many of our markets generally corresponds with the second and third calendar quarters, and therefore, sales volume is typically higher during those quarters. Our first and fourth quarter sales volumes are generally lower due to reduced repair and remodeling activity and reduced activity in the building and construction industry as a result of colder and more inclement weather in certain areas of our geographic end markets.
Basis of Presentation – The accompanying unaudited consolidated financial statements as of June 25, 2022 and for the three and six months ended June 25, 2022 and June 26, 2021, respectively, have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s financial position for the periods presented. The results for the three and six months ended June 25, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or any other period. The accompanying consolidated balance sheet as of December 31, 2021 was derived from audited financial statements included in our Annual Report on Form 10-K. The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.
All U.S. dollar and other currency amounts, except per share amounts, are presented in thousands unless otherwise noted.
Fiscal Year – We operate on a fiscal calendar year, and each interim quarter is comprised of two 4-week periods and one 5-week period, with each week ending on a Saturday. Our fiscal year always begins on January 1 and ends on December 31. As a result, our first and fourth quarters may have more or fewer days included than a traditional 91-day fiscal quarter.
Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and allocations that affect amounts reported in the consolidated financial statements and related notes. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets including goodwill and other intangible assets, employee benefit obligations, income tax uncertainties, contingent assets and liabilities, provisions for bad debt, inventory, warranty liabilities, legal claims, valuation of derivatives, environmental remediation, and claims relating to self-insurance. Actual results could differ due to the uncertainty inherent in the nature of these estimates.
COVID-19 – The CARES Act in the U.S. and similar legislation in other jurisdictions includes measures that assisted companies in responding to the COVID-19 pandemic. These measures consisted primarily of cash assistance to support employment levels and deferment of remittance of certain non-income tax expense payments. The most significant impact was from the CARES Act in the U.S., which included a provision that allowed employers to defer the remittance of the employer portion of the social security tax relating to 2020. The deferred employment payment must be paid over two years. Original payment due dates were in 2021 and 2022, however updated guidance provided by the Internal Revenue Service in December 2021 allowed for these payments to be made during 2022 and 2023. The Company deferred $20.9 million of the employer portion of social security tax in 2020, of which $9.9 million was paid in the first quarter of 2022 and the remaining $11.0 million is included in accrued payroll and benefits in the consolidated balance sheet as of June 25, 2022. As of December 31, 2021, the deferral $20.9 million was equally recorded between accrued payroll and benefits and deferred credits and other liabilities in the consolidated balance sheet.
Recent Accounting Standards – In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and

12

exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of LIBOR or by another reference rate expected to be discontinued. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify the scope of ASU No. 2020-04. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. In May 2020, we elected the expedient within ASC 848 which allows us to assume that our hedged interest payments are probable of occurring regardless of any expected modifications in their terms related to reference rate reform. In addition, ASC 848 allows for the option to change the method of assessing effectiveness upon a change in critical terms of the derivative or the hedged transactions and upon the end of relief under ASC 848. At this time, we have elected to continue the method of assessing effectiveness as documented in the original hedge documentation and apply the practical expedients related to probability to assume that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. We plan to evaluate the remaining expedients for adoption, as applicable, when contracts are modified. We currently do not expect this guidance to have a material impact on our consolidated financial statements. Refer to Note 17 - Derivative Financial Instruments for additional disclosure information relating to our hedging activity.
We have considered the applicability and impact of all ASUs. We have assessed ASUs not listed above and have determined that they were either not applicable or were not expected to have a material impact on our financial statements.
Note 2. Accounts Receivable
We sell our manufactured products to a large number of customers, primarily in the residential housing construction and remodel sectors, broadly dispersed across many domestic and foreign geographic regions. We assess the credit risk relating to our accounts receivable based on quantitative and qualitative factors, primarily historical credit collections within each region where we have operations. We perform ongoing credit evaluations of our customers to minimize credit risk. We do not usually require collateral for accounts receivable, but will require advance payment, guarantees, a security interest in the products sold to a customer, and/or letters of credit in certain situations. Customer accounts receivable converted to notes receivable are collateralized by inventory or other collateral.
At June 25, 2022 and December 31, 2021, we had an allowance for doubtful accounts of $16.2 million and $10.2 million, respectively.
Note 3. Inventories
Inventories are stated at the lower of cost or net realizable value. Finished goods and work-in-process inventories include material, labor, and manufacturing overhead costs.
(amounts in thousands)June 25, 2022December 31, 2021
Raw materials
$553,322 $478,566 
Work in process
37,230 36,065 
Finished goods
132,713 101,340 
Total inventories$723,265 $615,971 

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Note 4. Property and Equipment, Net
(amounts in thousands)June 25, 2022December 31, 2021
Property and equipment
$2,107,345 $2,137,861 
Accumulated depreciation
(1,344,577)(1,339,057)
Total property and equipment, net$762,768 $798,804 
We monitor all property and equipment for any indicators of potential impairment. We recorded impairment charges of $0.5 million for the three and six months ended June 25, 2022, respectively, and $0.9 million and $1.2 million for the three and six months ended June 26, 2021.
The effect on our carrying value of property and equipment due to currency translations for foreign property and equipment, net, was a decrease of $20.5 million as of June 25, 2022 compared to December 31, 2021.
Depreciation expense was recorded as follows:
Three Months EndedSix Months Ended
(amounts in thousands)June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Cost of sales
$22,492 $23,707 $45,004 $46,243 
Selling, general and administrative
1,720 2,398 3,428 4,794 
Total depreciation expense$24,212 $26,105 $48,432 $51,037 
Note 5. Goodwill
The following table summarizes the changes in goodwill by reportable segment:
(amounts in thousands)North
America
EuropeAustralasiaTotal
Reportable
Segments
Balance as of December 31, 2021$182,645 $278,668 $83,900 $545,213 
Currency translation
(118)(21,977)(3,953)(26,048)
Balance as of June 25, 2022
$182,527 $256,691 $79,947 $519,165 
Note 6. Intangible Assets, Net
The cost and accumulated amortization values of our intangible assets were as follows:
June 25, 2022
(amounts in thousands)CostAccumulated
Amortization
Net
Book Value
Customer relationships and agreements
$140,056 $(75,279)$64,777 
Software
118,997 (41,120)77,877 
Trademarks and trade names
53,751 (11,480)42,271 
Patents, licenses and rights
44,538 (25,112)19,426 
Total amortizable intangibles$357,342 $(152,991)$204,351 
December 31, 2021
(amounts in thousands)CostAccumulated
Amortization
Net
Book Value
Customer relationships and agreements$145,940 $(73,635)$72,305 
Software118,114 (35,816)82,298 
Trademarks and trade names55,806 (10,771)45,035 
Patents, licenses and rights46,353 (23,810)22,543 
Total amortizable intangibles$366,213 $(144,032)$222,181 

14

The effect on our carrying value of intangible assets due to currency translations for foreign intangible assets was a decrease of $4.7 million as of June 25, 2022 compared to December 31, 2021.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the corresponding asset group may not be recoverable. Intangible assets that become fully amortized are removed from the accounts in the period that they become fully amortized. Amortization expense was recorded as follows:
Three Months EndedSix Months Ended
(amounts in thousands)June 25, 2022June 26, 2021June 25, 2022June 26, 2021
Amortization expense$8,038 $8,307 $16,183 $16,354 
Note 7. Accrued Expenses and Other Current Liabilities
(amounts in thousands)June 25, 2022December 31, 2021
Accrued sales and advertising rebates
$82,633 $90,623 
Current portion of operating lease liability43,403 43,880 
Non-income related taxes
32,981 25,030 
Deferred revenue and customer deposits28,683 25,568 
Current portion of warranty liability (Note 8)
22,030 23,523 
Accrued freight21,316 19,020 
Accrued expenses19,514 18,636 
Current portion of accrued claim costs relating to self-insurance programs
15,427 14,352 
Accrued income taxes payable 10,484 16,237 
Accrued interest payable
4,575 3,633 
Legal claims provision3,579 3,476 
Current portion of restructuring accrual3,319 171 
Current portion of derivative liability (Note 17)
2,157 5,527 
Total accrued expenses and other current liabilities$290,101 $289,676 
The legal claims provision relates primarily to contingencies associated with the ongoing legal matters disclosed in Note 19 - Commitments and Contingencies.
The accrued sales and advertising rebates, accrued interest payable, accrued freight, and non-income related taxes can fluctuate significantly period-over-period due to timing of payments.
Prior period balances in the table above have been reclassified to conform to current period presentation.
Note 8. Warranty Liability
Warranty terms vary from one year to lifetime on certain window and door components. Warranties are normally limited to servicing or replacing defective components for the original customer. Product defects arising within six months of sale are classified as manufacturing defects and are not included in the current period expense below. Some warranties are transferable to subsequent owners and are either limited to 10 years from the date of manufacture or require pro-rata payments from the customer. A provision for estimated warranty costs is recorded at the time of sale based on historical experience and is periodically adjusted to reflect actual experience.

15

An analysis of our warranty liability is as follows:
(amounts in thousands)June 25, 2022June 26, 2021
Balance as of January 1$54,860 $52,296 
Current period charges13,503 13,740 
Experience adjustments
906 2,601 
Payments
(15,032)(14,984)
Currency translation
(743)109 
Balance at period end53,494 53,762 
Current portion
(22,030)(23,082)
Long-term portion
$31,464 $30,680 
The most significant component of our warranty liability is in the North America segment, which totaled $46.2 million at June 25, 2022, after discounting future estimated cash flows at rates between 0.53% and 2.75%. Without discounting, the liability would have been higher by approximately $2.7 million.
Note 9. Long-Term Debt
Our long-term debt, net of original issue discount and unamortized debt issuance costs, consisted of the following:
June 25, 2022June 25, 2022December 31, 2021
(amounts in thousands)Interest Rate
Senior Secured Notes and Senior Notes
4.63% - 6.25%
$1,050,000 $1,050,000 
Term loans
1.30% - 3.31%
546,155 547,598 
Revolving credit facilities
2.27% - 5.00%
202,750  
Finance leases and other financing arrangements
1.25% - 6.17%
90,033 97,874 
Mortgage notes
1.65% - 2.15%
22,885 25,411 
Total Debt
1,911,823 1,720,883 
Unamortized debt issuance costs and original issue discounts(13,170)(14,626)
 Current maturities of long-term debt(30,815)(38,561)
Long-term debt$1,867,838 $1,667,696 
Summaries of our significant changes to outstanding debt agreements as of June 25, 2022 are as follows:
Senior Secured Notes and Senior Notes
In May 2020, we issued $250.0 million of Senior Secured Notes bearing interest at 6.25% and maturing in May 2025 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of fees and expenses associated with debt issuance, including an underwriting fee of 1.25%. Interest is payable semiannually, in arrears, each May and November.
In December 2017, we issued $800.0 million of unsecured Senior Notes in two tranches: $400.0 million bearing interest at 4.63% and maturing in December 2025, and $400.0 million bearing interest at 4.88% and maturing in December 2027 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
Term Loans
U.S. Facility - Initially executed in October 2014, we amended the Term Loan Facility in July 2021 to, among other things, extend the maturity date from December 2024 to July 2028 and provide additional covenant flexibility. Pursuant to the amendment, certain existing and new lenders advanced $550.0 million of replacement term loans, the proceeds of which were used to prepay in full the amount outstanding under the previously existing term loans. The replacement term loans bear interest at LIBOR (subject to a floor of 0.00%) plus a margin of 2.00% to 2.25% depending on JWI’s corporate credit ratings. In addition, the amendment also modifies certain other terms and provisions of the Term Loan Facility. Voluntary prepayments of the replacement term loans are permitted at any time, in certain minimum principal amounts, but wer