10-Q 1 www-20220402.htm FORM 10-Q www-20220402
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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 April 2, 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: 001-06024
 __________________________________________________________ 
WOLVERINE WORLD WIDE, INC.
(Exact Name of Registrant as Specified in its Charter)
 __________________________________________________________ 
Delaware38-1185150
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
9341 Courtland Drive N.E.,Rockford,Michigan49351
(Address of principal executive offices)(Zip Code)
(616) 866-5500
(Registrant’s telephone number, including area code)
________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading symbolName of each exchange on which registered
Common Stock, $1 Par ValueWWWNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
There were 80,734,007 shares of common stock, $1 par value, outstanding as of April 25, 2022.

Table of Contents
2

FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements,” which are statements relating to future, not past, events. In this context, forward-looking statements often address management’s current beliefs, assumptions, expectations, estimates and projections about future business and financial performance, national, regional or global political, economic and market conditions, and the Company itself. Such statements often contain words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “should,” “will,” variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Uncertainties that could cause the Company’s performance to differ materially from what is expressed in forward-looking statements include, but are not limited to, the following:
the potential effects of the COVID-19 pandemic on the Company’s business, operations, financial results and liquidity;
changes in general economic conditions, employment rates, business conditions, interest rates, tax policies and other factors affecting consumer spending in the markets and regions in which the Company’s products are sold;
the inability for any reason to effectively compete in global footwear, apparel and consumer-direct markets;
the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences;
the inability to effectively manage inventory levels;
increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export;
foreign currency exchange rate fluctuations;
currency restrictions;
supply chain and capacity constraints, production disruptions, including reduction in operating hours, labor shortages, and facility closures resulting in production delays at the Company’s manufacturers due to disruption from the effects of the COVID-19 pandemic, quality issues, price increases or other risks associated with foreign sourcing;
the cost, including the effect of inflationary pressures and availability of raw materials, inventories, services and labor for contract manufacturers;
labor disruptions;
changes in relationships with, including the loss of, significant wholesale customers;
risks related to the significant investment in, and performance of, the Company’s consumer-direct operations;
risks related to expansion into new markets and complementary product categories as well as consumer-direct operations;
the impact of seasonality and unpredictable weather conditions;
the impact of changes in general economic conditions and/or the credit markets on the Company’s manufacturers, distributors, suppliers, joint venture partners and wholesale customers;
changes in the Company’s effective tax rates;
failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company;
the risks of doing business in developing countries and politically or economically volatile areas;
the ability to secure and protect owned intellectual property or use licensed intellectual property;
the impact of regulation, regulatory and legal proceedings and legal compliance risks, including compliance with federal, state and local laws and regulations relating to the protection of the environment, environmental remediation and other related costs, and litigation or other legal proceedings relating to the protection of the environment or environmental effects on human health;
risks of breach of the Company’s databases or other systems, or those of its vendors, which contain certain personal information, payment card data or proprietary information, due to cyberattack or other similar events;
problems affecting the Company’s supply chain and distribution system, including service interruptions at shipping and receiving ports;
strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company’s success in integrating acquired businesses, including Sweaty Betty®, and implementing new initiatives and ventures;
the risk of impairment to goodwill and other intangibles;
the success of the Company’s restructuring and realignment initiatives undertaken from time to time; and
changes in future pension funding requirements and pension expenses.
These or other uncertainties could cause a material difference between an actual outcome and a forward-looking statement. The uncertainties included here are not exhaustive and are described in more detail in Part I, Item 1A: “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (the “2021 Form 10-K”). Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company does not undertake an obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
3

PART I.     FINANCIAL INFORMATION
ITEM 1.    Financial Statements

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations and Comprehensive Income
(Unaudited)
 Quarter Ended
(In millions, except per share data)April 2,
2022
April 3,
2021
Revenue
$614.8 $510.7 
Cost of goods sold
353.5 288.4 
Gross profit
261.3 222.3 
Selling, general and administrative expenses
211.3 174.4 
Environmental and other related costs, net of recoveries30.4 (10.2)
Operating profit
19.6 58.1 
Other expenses:
Interest expense, net
8.7 9.6 
Other expense (income), net(1.1)2.8 
Total other expenses
7.6 12.4 
Earnings before income taxes12.0 45.7 
Income tax expense3.6 7.3 
Net earnings$8.4 $38.4 
Less: net loss attributable to noncontrolling interests(1.3)(0.1)
Net earnings attributable to Wolverine World Wide, Inc.$9.7 $38.5 
Net earnings per share (see Note 3):
Basic
$0.12 $0.46 
Diluted
$0.12 $0.45 
Comprehensive income$5.3 $44.6 
Less: comprehensive loss attributable to noncontrolling interests(1.1)(0.4)
Comprehensive income attributable to Wolverine World Wide, Inc.$6.4 $45.0 
Cash dividends declared per share
$0.10 $0.10 
See accompanying notes to consolidated condensed financial statements.
4

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
(In millions, except share data)April 2,
2022
January 1,
2022
April 3,
2021
ASSETS
Current assets:
Cash and cash equivalents$149.6 $161.7 $364.8 
Accounts receivable, less allowances of $25.4, $28.3 and $25.0
370.6 319.6 323.6 
Finished products, net470.6 354.1 311.2 
Raw materials and work-in-process, net12.7 11.4 9.7 
Total inventories483.3 365.5 320.9 
Prepaid expenses and other current assets74.4 56.9 37.9 
Total current assets1,077.9 903.7 1,047.2 
Property, plant and equipment, net of accumulated depreciation of $222.0, $219.1 and $202.6
128.4 129.0 120.8 
Lease right-of-use assets, net137.7 138.2 136.7 
Goodwill552.4 556.6 442.7 
Indefinite-lived intangibles707.4 718.1 382.3 
Amortizable intangibles, net72.6 74.6 71.2 
Deferred income taxes1.6 1.8 2.2 
Other assets68.0 64.4 64.2 
Total assets$2,746.0 $2,586.4 $2,267.3 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$293.8 $222.1 $279.3 
Accrued salaries and wages18.9 41.7 17.8 
Other accrued liabilities254.5 222.5 157.0 
Lease liabilities35.2 38.3 33.7 
Current maturities of long-term debt10.0 10.0 10.0 
Borrowings under revolving credit agreements355.0 225.0  
Total current liabilities967.4 759.6 497.8 
Long-term debt, less current maturities729.6 731.8 710.4 
Accrued pension liabilities106.2 107.4 146.5 
Deferred income taxes110.8 118.9 37.0 
Lease liabilities, noncurrent119.3 118.2 122.8 
Other liabilities97.4 106.1 127.7 
Stockholders’ equity:
Common stock – par value $1, authorized 320,000,000 shares; 112,092,848, 111,632,094, and 111,243,844 shares issued
112.1 111.6 111.2 
Additional paid-in capital302.3 298.9 265.7 
Retained earnings1,129.6 1,128.2 1,123.1 
Accumulated other comprehensive loss(102.2)(98.9)(124.1)
Cost of shares in treasury; 31,035,541, 29,604,013, and 28,359,799 shares
(845.1)(810.2)(766.8)
Total Wolverine World Wide, Inc. stockholders’ equity596.7 629.6 609.1 
Noncontrolling interest18.6 14.8 16.0 
Total stockholders’ equity615.3 644.4 625.1 
Total liabilities and stockholders’ equity$2,746.0 $2,586.4 $2,267.3 
See accompanying notes to consolidated condensed financial statements.
5

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
Quarter Ended
(In millions)April 2,
2022
April 3,
2021
OPERATING ACTIVITIES
Net earnings$8.4 $38.4 
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization
8.5 7.2 
Deferred income taxes
(6.8)1.0 
Stock-based compensation expense
10.3 10.0 
Pension and SERP expense
2.3 3.5 
Environmental and other related costs, net of cash payments and recoveries received
14.1 (0.2)
Other
2.2 0.6 
Changes in operating assets and liabilities:
Accounts receivable
(52.2)(56.2)
Inventories
(122.8)(79.0)
Other operating assets
(8.1)8.9 
Accounts payable
74.4 95.8 
Income taxes payable
8.2 (0.2)
Other operating liabilities
(31.0)(3.5)
Net cash provided by (used in) operating activities(92.5)26.3 
INVESTING ACTIVITIES
Additions to property, plant and equipment
(7.5)(2.2)
Other
3.7 (0.5)
Net cash used in investing activities(3.8)(2.7)
FINANCING ACTIVITIES
Payments under revolving credit agreements(37.0) 
Borrowings under revolving credit agreements167.0  
Payments on long-term debt
(2.5)(2.5)
Cash dividends paid
(8.4)(8.5)
Purchases of common stock for treasury
(33.8) 
Employee taxes paid under stock-based compensation plans(7.1)(9.2)
Proceeds from the exercise of stock options
0.8 10.5 
Contributions from noncontrolling interests
7.0 4.8 
Net cash provided by (used in) financing activities86.0 (4.9)
Effect of foreign exchange rate changes
(1.8)(1.3)
Increase (decrease) in cash and cash equivalents(12.1)17.4 
Cash and cash equivalents at beginning of the year
161.7 347.4 
Cash and cash equivalents at end of the quarter
$149.6 $364.8 
See accompanying notes to consolidated condensed financial statements.
6

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Stockholders' Equity
(Unaudited)
Wolverine World Wide, Inc. Stockholders' Equity
(In millions, except share and per share data)Common StockAdditional Paid-In CapitalRetained EarningsAccumulated
Other
Comprehensive
Loss
Treasury StockNon-controlling InterestTotal
Balance at January 2, 2021$110.4 $252.6 $1,093.3 $(130.6)$(764.3)$11.6 $573.0 
Net earnings (loss)38.5 (0.1)38.4 
Other comprehensive income (loss)6.5 (0.3)6.2 
Shares issued, net of shares forfeited under stock incentive plans (336,783 shares)
0.3 (7.0)(6.7)
Shares issued for stock options exercised, net (480,292 shares)
0.5 10.1 10.6 
Stock-based compensation expense10.0 10.0 
Cash dividends declared ($0.10 per share)
(8.7)(8.7)
Purchases of shares under stock-based compensation plans (75,690 shares)
(2.5)(2.5)
Capital contribution from noncontrolling interest4.8 4.8 
Balance at April 3, 2021$111.2 $265.7 $1,123.1 $(124.1)$(766.8)$16.0 $625.1 
Balance at January 1, 2022$111.6 $298.9 $1,128.2 $(98.9)$(810.2)$14.8 $644.4 
Net earnings (loss)9.7 (1.3)8.4 
Other comprehensive income (loss)(3.3)0.2 (3.1)
Shares issued, net of shares forfeited under stock incentive plans (420,226 shares)
0.4 (7.6)(7.2)
Shares issued for stock options exercised, net (40,528 shares)
0.1 0.7 0.8 
Stock-based compensation expense10.3 10.3 
Cash dividends declared ($0.10 per share)
(8.3)(8.3)
Purchase of common stock for treasury (1,432,813 shares)
(34.9)(34.9)
Capital contribution from noncontrolling interest7.0 7.0 
Other(2.1)(2.1)
Balance at April 2, 2022$112.1 $302.3 $1,129.6 $(102.2)$(845.1)$18.6 $615.3 

See accompanying notes to consolidated condensed financial statements.
7

WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
 
1.BASIS OF PRESENTATION
Nature of Operations
Wolverine World Wide, Inc. (the “Company”) is a leading designer, marketer and licensor of a broad range of quality casual footwear and apparel; performance outdoor and athletic footwear and apparel; kids’ footwear; industrial work shoes, boots and apparel; and uniform shoes and boots. The Company’s portfolio of owned and licensed brands includes: Bates®, Cat®, Chaco®, Harley-Davidson®, Hush Puppies®, Hytest®, Keds®, Merrell®, Saucony®, Sperry®, Stride Rite®, Sweaty Betty® and Wolverine®. The Company’s products are marketed worldwide through owned operations, through licensing and distribution arrangements with third parties, and joint ventures. The Company also operates retail stores and eCommerce sites to market both its own brands and branded footwear and apparel from other manufacturers, as well as a leathers division that markets Wolverine Performance Leathers™.
On August 2, 2021, the Company completed the acquisition of Lady Leisure InvestCo Limited (the “Acquired Company”) for $417.4 million, which is net of acquired cash of $7.4 million. The Acquired Company owns the Sweaty Betty® brand and activewear business, a premium women’s activewear brand. See Note 16 for further discussion.
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for a complete presentation of the financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included in the accompanying financial statements. For further information, refer to the consolidated financial statements and notes included in the Company’s 2021 Form 10-K.
The COVID-19 pandemic, the duration and severity of which is subject to uncertainty, has had and continues to have, an impact on the Company's business. Management's estimates and assumptions used in the preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP take into account both current and expected potential future impacts of the COVID-19 pandemic on the Company’s business based on available information. Actual results may differ materially from management’s estimates.
Fiscal Year
The Company’s fiscal year is the 52 or 53-week period that ends on the Saturday nearest to December 31. Fiscal years 2022 and 2021 each have 52 weeks. The Company reports its quarterly results of operations on the basis of 13-week quarters for each of the first three fiscal quarters and a 13 or 14-week period for the fiscal fourth quarter. References to particular years or quarters refer to the Company’s fiscal years ended on the Saturday nearest to December 31 or the fiscal quarters within those years.
Seasonality
The Company experiences moderate fluctuations in sales volume during the year, as reflected in quarterly revenue. The Company expects current seasonal sales patterns to continue in future years. The Company also experiences some fluctuation in its levels of working capital, typically reflecting an increase in net working capital requirements near the end of the first and third fiscal quarters. The Company meets its working capital requirements through internal operating cash flows and, as needed, under its revolving credit facility, as discussed in more detail under the caption "Liquidity and Capital Resources" in Item 2: "Management's Discussion and Analysis of Financial Condition and Results of Operations". The Company's working capital could also be impacted by other events, including pandemics such as COVID-19.



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2.NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board (“FASB”) has issued the following Accounting Standards Update (“ASU”) that the Company has not yet adopted. The following is a summary of the new standard.
StandardDescriptionEffect on the Financial Statements or Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting (as amended by ASU 2021-01)
Provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for the Company’s borrowing instruments under the amended senior credit facility, which use LIBOR as a reference rate, and is available for adoption effective immediately but is only available through December 31, 2022.
The Company is evaluating the impact of the new standard on its consolidated financial statements.
3.EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share.
Quarter Ended
(In millions, except per share data)April 2,
2022
April 3,
2021
Numerator:
Net earnings attributable to Wolverine World Wide, Inc.$9.7 $38.5 
Adjustment for earnings allocated to non-vested restricted common stock
(0.2)(0.7)
 Net earnings used in calculating basic and diluted earnings per share$9.5 $37.8 
Denominator:
Weighted average shares outstanding
81.582.5
Adjustment for non-vested restricted common stock
(0.4)
Shares used in calculating basic earnings per share
81.582.1
Effect of dilutive stock options
0.41.1
Shares used in calculating diluted earnings per share
81.983.2
Net earnings per share:
Basic$0.12 $0.46 
Diluted$0.12 $0.45 
For the quarters ended April 2, 2022 and April 3, 2021, 984,771 and 58,260 outstanding stock options, respectively, have not been included in the denominator for the computation of diluted earnings per share because they were anti-dilutive.
4.GOODWILL AND INDEFINITE-LIVED INTANGIBLES
The changes in the carrying amount of goodwill are as follows:
Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Goodwill balance at beginning of the year
$556.6 $442.4 
Foreign currency translation effects(4.2)0.3 
Goodwill balance at end of the quarter
$552.4 $442.7 
The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $707.4 million, $718.1 million, and $382.3 million as of April 2, 2022, January 1, 2022, and April 3, 2021, respectively. The carrying value of the Company’s Sperry® trade name was $296.0 million as of April 2, 2022. Based on the interim impairment assessment as of April 2, 2022, it was determined that there were no triggering events indicating impairment of the Company’s goodwill and indefinite-lived intangible assets. The risk of future non-cash impairment for the Sperry® trade name is dependent on key assumptions used in the determination of the trade name's fair value, such as revenue growth, earnings before interest, taxes,
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depreciation and amortization ("EBITDA") margin, discount rate, and assumed tax rate, or if macroeconomic conditions deteriorate due to the COVID-19 pandemic and adversely affect the value of the Company's Sperry® trade name.
5.REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue Recognition and Performance Obligations
The Company provides disaggregated revenue by sales channel, including the wholesale and consumer-direct sales channels, reconciled to the Company’s reportable segments. The wholesale channel includes royalty revenues due to the similarity in the Company’s oversight and management, customer base, the performance obligation (footwear and apparel goods) and point in time completion of the performance obligation.
 Quarter Ended April 2, 2022Quarter Ended April 3, 2021
(In millions)WholesaleConsumer-DirectTotalWholesaleConsumer-DirectTotal
Wolverine Michigan Group$275.6 $53.7 $329.3 $234.4 $63.3 $297.7 
Wolverine Boston Group169.0 43.3 212.3 150.8 50.1 200.9 
Other28.8 44.4 73.2 11.2 0.9 12.1 
Total$473.4 $141.4 $614.8 $396.4 $114.3 $510.7 
The Company has agreements to license symbolic intellectual property with minimum guarantees or fixed consideration. The Company is due $17.3 million of remaining fixed transaction price under its license agreements as of April 2, 2022, which it expects to recognize per the terms of its contracts over the course of time through December 2026. The Company has elected to omit the remaining variable consideration under its license agreements given the Company recognizes revenue equal to what it has the right to invoice and that amount corresponds directly with the value to the customer of the Company’s performance to date.
Reserves for Variable Consideration
Revenue is recorded at the net sales price (“transaction price”), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, customer markdowns, customer rebates and other sales incentives relating to the sale of the Company’s products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales. These estimates take into consideration a range of possible outcomes, which are probability-weighted in accordance with the expected value method for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Revenue recognized during the fiscal periods presented related to the Company’s contract liabilities was nominal.
The Company’s contract balances are as follows:
(In millions)April 2,
2022
January 1,
2022
April 3,
2021
Product returns reserve$13.2 $16.6 $9.9 
Customer markdowns reserve2.9 2.3 2.2 
Other sales incentives reserve3.4 3.4 4.9 
Customer rebates liability16.7 17.0 13.9 
Customer advances liability7.9 6.8 4.0 
The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from initial estimates. If actual results in the future vary from initial estimates, the Company subsequently adjusts these estimates, which affects net revenue and earnings in the period such variances become known.
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6.DEBT
Total debt consists of the following obligations:
(In millions)April 2,
2022
January 1,
2022
April 3,
2021
Term Facility, due October 21, 2026$197.5 $200.0 $ 
Term Loan A, due December 6, 2023  177.5 
Senior Notes, 5.000% interest, due September 1, 2026  250.0 
Senior Notes, 6.375% interest, due May 15, 2025  300.0 
Senior Notes, 4.000% interest, due August 15, 2029550.0 550.0  
Borrowings under revolving credit agreements355.0 225.0  
Unamortized deferred financing costs(7.9)(8.2)(7.1)
Total debt$1,094.6 $966.8 $720.4 
On October 21, 2021, the Company entered into a 2021 Replacement Facility Amendment and Reaffirmation Agreement (the “Amendment”) to its credit facility (as amended and restated, the "Credit Agreement"). The Amendment amended and restated the prior credit agreement to, among other things: (i) provide for a term loan A facility (the “Term Facility”) in an aggregate principal amount of $200.0 million, which replaced the existing term loan A; (ii) provide for an increased revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”) with total commitments of $1.0 billion, an increase of $200.0 million from the existing Revolving Facility; and (iii) set the LIBOR floor to 0.000%, a decrease of 0.750% from the existing Senior Credit Facilities. The maturity date of the loans under the Senior Credit Facilities was extended to October 21, 2026. The Amendment provides for a debt capacity of up to an aggregate debt amount (including outstanding term loan principal and revolver commitment amounts in addition to permitted incremental debt) not to exceed $2.0 billion unless certain specified conditions set forth in the Credit Agreement are met.
The Term Facility requires quarterly principal payments with a balloon payment due on October 21, 2026. The scheduled principal payments due under the Term Facility over the next 12 months total $10.0 million as of April 2, 2022 and are recorded as current maturities of long-term debt on the consolidated condensed balance sheets.
The Revolving Facility allows the Company to borrow up to an aggregate amount of $1.0 billion. The Revolving Facility also includes a $100.0 million swingline subfacility and a $50.0 million letter of credit subfacility. The Company had outstanding letters of credit under the Revolving Facility of $6.0 million, $5.8 million and $6.1 million as of April 2, 2022, January 1, 2022 and April 3, 2021, respectively. These outstanding letters of credit reduce the borrowing capacity under the Revolving Facility.
The interest rates applicable to amounts outstanding under Term Facility and to U.S. dollar denominated amounts outstanding under the Revolving Facility are, at the Company’s option, either (1) the Alternate Base Rate plus an Applicable Margin as determined by the Company’s Consolidated Leverage Ratio, within a range of 0.125% to 1.000%, or (2) the Eurocurrency Rate plus an Applicable Margin as determined by the Company’s Consolidated Leverage Ratio, within a range of 1.125% to 2.000% (all capitalized terms used in this sentence are as defined in the Credit Agreement). At April 2, 2022, the Term Facility and the Revolving Facility had a weighted-average interest rate of 1.68%.
The obligations of the Company pursuant to the Credit Agreement are guaranteed by substantially all of the Company’s material domestic subsidiaries and secured by substantially all of the personal and real property of the Company and its material domestic subsidiaries, subject to certain exceptions.
The Senior Credit Facilities also contain certain affirmative and negative covenants, including covenants that limit the ability of the Company and its Restricted Subsidiaries to, among other things: incur or guarantee indebtedness; incur liens; pay dividends or repurchase stock; enter into transactions with affiliates; consummate asset sales, acquisitions or mergers; prepay certain other indebtedness; or make investments, as well as covenants restricting the activities of certain foreign subsidiaries of the Company that hold intellectual property related assets. Further, the Senior Credit Facilities require compliance with the following financial covenants: a maximum Consolidated Leverage Ratio and a minimum Consolidated Interest Coverage Ratio (all capitalized terms used in this paragraph are as defined in the Senior Credit Facilities). As of April 2, 2022, the Company was in compliance with all covenants and performance ratios under the Amended Senior Credit Facility.
On August 26, 2021, the Company issued $550.0 million aggregate principal debt amount of 4.000% senior notes due on August 15, 2029. Related interest payments are due semi-annually beginning February 15, 2022. The senior notes are guaranteed by substantially all of the Company’s domestic subsidiaries. The proceeds from the senior notes were used to extinguish the Company’s $250.0 million senior notes due on September 1, 2026 and $300.0 million senior notes due on May 15, 2025.
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The Company has a foreign revolving credit facility with aggregate available borrowings of $4.0 million that are uncommitted and, therefore, each borrowing against the facility is subject to approval by the lender. There were no borrowings against this facility as of April 2, 2022, January 1, 2022 and April 3, 2021.
The Company included in interest expense the amortization of deferred financing costs of $0.5 million and $0.7 million for the quarters ended April 2, 2022 and April 3, 2021, respectively.
7. LEASES
The following is a summary of the Company’s lease cost.
Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Operating lease cost$9.0 $8.1 
Variable lease cost3.6 3.2 
Short-term lease cost1.0 0.3 
Sublease income(2.1)(1.8)
Total lease cost$11.5 $9.8 
The following is a summary of the Company’s supplemental cash flow information related to leases.
Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Cash paid for operating lease liabilities$11.2 $9.1 
Operating lease assets obtained in exchange for lease liabilities8.4 0.2 
The Company did not enter into any real estate leases with commencement dates subsequent to April 2, 2022.
8.DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes foreign currency forward exchange contracts designated as cash flow hedges to manage the volatility associated primarily with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. These foreign currency forward exchange hedge contracts extended out to a maximum of 538 days, 538 days, and 538 days as of April 2, 2022, January 1, 2022 and April 3, 2021, respectively. If, in the future, the foreign exchange contracts are determined not to be highly effective or are terminated before their contractual termination dates, the Company would remove the hedge designation from those contracts and reclassify into earnings the unrealized gains or losses that would otherwise be included in accumulated other comprehensive income (loss) within stockholders’ equity.
The Company also utilizes foreign currency forward exchange contracts that are not designated as hedging instruments to manage foreign currency transaction exposure. Foreign currency derivatives not designated as hedging instruments are offset by foreign exchange gains or losses resulting from the underlying exposures of foreign currency denominated assets and liabilities.
The Company has an interest rate swap arrangement, which unless otherwise terminated, will mature on May 30, 2025. This agreement, which exchanges floating rate interest payments for fixed rate interest payments over the life of the agreement without the exchange of the underlying notional amounts, has been designated as a cash flow hedge of the underlying debt. The notional amount of the interest rate swap arrangement is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap arrangement is recognized as interest expense, net. In accordance with FASB ASC Topic 815, Derivatives and Hedging, the Company has formally documented the relationship between the interest rate swap and the variable rate borrowing, as well as its risk management objective and strategy for undertaking the hedge transactions. This process included linking the derivative to the specific liability or asset on the balance sheet. The Company also assessed at the inception of the hedge, and continues to assess on an ongoing basis, whether the derivative used in the hedging transaction is highly effective in offsetting changes in the cash flows of the hedged item.
The Company had a cross currency swap to minimize the impact of exchange rate fluctuations which matured on September 1, 2021. Changes in fair value related to movements in the foreign currency exchange spot rate were recorded in accumulated other comprehensive income (loss), offsetting the currency translation adjustment related to the underlying net investment that
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was also recorded in accumulated other comprehensive income (loss). All other changes in fair value were recorded in interest expense.
The notional amounts of the Company’s derivative instruments are as follows:
(Dollars in millions)April 2,
2022
January 1,
2022
April 3,
2021
Foreign exchange hedge contracts$331.7 $296.7 $231.3 
Interest rate swap311.3 311.3  
Cross currency swap  79.8 
The recorded fair values of the Company’s derivative instruments are as follows:
(In millions)April 2,
2022
January 1,
2022
April 3,
2021
Financial assets:
Foreign exchange hedge contracts$9.1 $5.9 $1.4 
Interest rate swap5.0   
Financial liabilities:
Foreign exchange hedge contracts$(1.0)$(1.0)$(4.6)
Interest rate swap (0.1) 
Cross currency swap  (7.9)
9.STOCK-BASED COMPENSATION
The Company recognized compensation expense of $10.3 million and $10.0 million, and related income tax benefits of $2.0 million and $2.0 million, for grants under the Company’s stock-based compensation plans for the quarters ended April 2, 2022 and April 3, 2021, respectively.
The Company grants restricted stock or units (“restricted awards”), performance-based restricted stock or units (“performance awards”) and stock options under its stock-based compensation plans.
The Company granted restricted awards and performance awards as follows:
Quarter Ended April 2, 2022Quarter Ended April 3, 2021
(In millions)Company Shares IssuedWeighted-Average Grant Date Fair ValueCompany Shares IssuedWeighted-Average Grant Date Fair Value
Restricted Awards811,712$27.02 552,439$34.22 
Performance Awards382,291$30.06 620,771$35.74 
10.RETIREMENT PLANS
The following is a summary of net pension and Supplemental Executive Retirement Plan (“SERP”) expense recognized by the Company.
 Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Service cost pertaining to benefits earned during the period
$1.3 $1.8 
Interest cost on projected benefit obligations
3.3 3.2 
Expected return on pension assets
(5.1)(4.9)
Net amortization loss
2.8 3.4 
Net pension expense
$2.3 $3.5 
The non-service cost components of net pension expense is recorded in the Other expense (income), net line item on the consolidated condensed statements of operations and comprehensive income.
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11.INCOME TAXES
The Company maintains management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are different than the U.S. federal statutory income tax rate. A significant amount of the Company’s earnings are generated by its Canadian, European and Asian subsidiaries and, to a lesser extent, in jurisdictions that are not subject to income tax.
The Company intends to permanently reinvest all non-cash undistributed earnings outside of the U.S. and has therefore not established a deferred tax liability on that amount of foreign unremitted earnings. However, if these non-cash undistributed earnings were repatriated, the Company would be required to accrue and pay applicable U.S. taxes and withholding taxes payable to various countries. It is not practicable to estimate the amount of the deferred tax liability associated with these non-cash unremitted earnings due to the complexity of the hypothetical calculation.
The Company’s effective tax rates for the quarters ended April 2, 2022 and April 3, 2021 were 30.4% and 16.0%, respectively. The change in the effective tax rates between the periods is due to lower pre-tax earnings in the current year causing discrete adjustments recorded in the current year to have a larger effect on the effective rate. The Company recognized discrete tax expenses in 2022 which increased tax expense. In 2021, the Company recognized discrete tax benefits which reduced tax expense, resulting in a lower effective tax rate.
The Company is subject to periodic audits by U.S. federal, state, local and non-U.S. tax authorities. Currently, the Company is undergoing routine periodic audits in both U.S. federal, state, local and non-U.S. tax jurisdictions. It is reasonably possible that the amounts of unrecognized tax benefits could change in the next 12 months as a result of the audits; however, any payment of tax is not expected to be significant to the consolidated condensed financial statements. The Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2017 in the majority of tax jurisdictions.
12.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) represents net earnings and any revenue, expenses, gains and losses that, under U.S. GAAP, are excluded from net earnings and recognized directly as a component of stockholders’ equity.
The change in accumulated other comprehensive income (loss) during the quarters ended April 2, 2022 and April 3, 2021 is as follows:
(In millions)Foreign
currency
translation
DerivativesPensionTotal
Balance at January 2, 2021$(36.8)$(20.3)$(73.5)$(130.6)
Other comprehensive income (loss) before reclassifications (1)
(1.6)5.0  3.4 
Amounts reclassified from accumulated other comprehensive income (loss) 0.6 
(2)
3.4 
(3)
4.0 
Income tax expense (benefit) (0.2)(0.7)(0.9)
Net reclassifications 0.4 2.7 3.1 
Net current-period other comprehensive income (loss) (1)
(1.6)5.4 2.7 6.5 
Balance at April 3, 2021$(38.4)$(14.9)$(70.8)$(124.1)
Balance at January 1, 2022$(56.8)$(8.9)$(33.2)$(98.9)
Other comprehensive income (loss) before reclassifications (1)
(13.7)8.5  (5.2)
Amounts reclassified from accumulated other comprehensive income (loss) (0.4)
(2)
2.8 
(3)
2.4 
Income tax expense (benefit) 0.1 (0.6)(0.5)
Net reclassifications (0.3)2.2 1.9 
Net current-period other comprehensive income (loss) (1)
(13.7)8.2 2.2 (3.3)
Balance at April 2, 2022$(70.5)$(0.7)$(31.0)$(102.2)
(1)Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
(2)Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to foreign currency derivatives that are no longer deemed to be highly effective are included in other income. Amounts related to the interest rate swap and the cross-currency swap are included in interest expense.
(3)Amounts reclassified are included in the computation of net pension expense.
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13.FAIR VALUE MEASUREMENTS
The Company measures certain financial assets and liabilities at fair value on a recurring basis. For additional information regarding the Company’s fair value policies, refer to Note 1 in the Company’s 2021 Form 10-K.
Recurring Fair Value Measurements
The following table sets forth financial assets and liabilities measured at fair value in the consolidated condensed balance sheets and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy.
 Fair Value Measurements
Quoted Prices With Other Observable Inputs (Level 2)
(In millions)April 2,
2022
January 1,
2022
April 3,
2021
Financial assets:
Derivatives$14.1 $5.9 $1.4 
Financial liabilities:
Derivatives$(1.0)$(1.1)$(12.5)
The fair value of foreign currency forward exchange contracts represents the estimated receipts or payments necessary to terminate the contracts. The interest rate swap was valued based on the current forward rates of the future cash flows. The fair value of the cross-currency swap was determined using the current forward rates and changes in the spot rate.
Fair Value Disclosures
The Company’s financial instruments that are not recorded at fair value consist of cash and cash equivalents, accounts and notes receivable, accounts payable, borrowings under revolving credit agreements and other short-term and long-term debt. The carrying amount of these financial instruments is historical cost, which approximates fair value, except for the debt. The carrying value and the fair value of the Company’s debt are as follows:
(In millions)April 2,
2022
January 1,
2022
April 3,
2021
Carrying value$1,094.6 $966.8 $720.4 
Fair value1,033.0 960.6 759.0 
The fair value of the fixed rate debt was based on third-party quotes (Level 2). The fair value of the variable rate debt was calculated by discounting the future cash flows to its present value using a discount rate based on the risk-free rate of the same maturity (Level 3).
14.LITIGATION AND CONTINGENCIES
Litigation
The Company operated a leather tannery in Rockford, Michigan from the early 1900s through 2009 (the “Tannery”). The Company also owns a parcel on House Street in Plainfield Township that the Company used for the disposal of Tannery byproducts until about 1970 (the "House Street" site). Beginning in the late 1950s, the Company used 3M Company’s Scotchgard™ in its processing of certain leathers at the Tannery. Until 2002 when 3M Company changed its Scotchgard™ formula, Tannery byproducts disposed of by the Company at the House Street site and other locations may have contained PFOA and/or PFOS, two chemicals in the family of compounds known as per- and polyfluoroalkyl substances (together, “PFAS”). PFOA and PFOS help provide non-stick, stain-resistant, and water-resistant qualities, and were used for many decades in commercial products like firefighting foams and metal plating, and in common consumer items like food wrappers, microwave popcorn bags, pizza boxes, Teflon™, carpets and Scotchgard™.
In May 2016, the Environmental Protection Agency (“EPA”) announced a lifetime health advisory level of 70 parts per trillion (“ppt”) combined for PFOA and PFOS. In January 2018, the Michigan Department of Environmental Quality (“MDEQ”, now known as the Michigan Department of Environment, Great Lakes, and Energy (“EGLE”)) enacted a drinking water criterion of 70 ppt combined for PFOA and PFOS, which set an official state standard for acceptable concentrations of these contaminants in groundwater used for drinking water purposes. On August 3, 2020, Michigan changed the standards for PFOA and PFOS in drinking water to 8 and 16 ppt, respectively, and set standards for four other PFAS substances.
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Civil and Regulatory Actions of EGLE and EPA
On January 10, 2018, EGLE filed a civil action against the Company in the U.S. District Court for the Western District of Michigan under the federal Resource Conservation and Recovery Act of 1976 (“RCRA”) and Parts 201 and 31 of the Michigan Natural Resources and Environmental Protection Act (“NREPA”) alleging that the Company’s past and present handling, storage, treatment, transportation and/or disposal of solid waste at the Company’s properties has resulted in releases of PFAS at levels exceeding applicable Michigan cleanup criteria for PFOA and PFOS (the "EGLE Action"). Plainfield and Algoma Townships intervened in the EGLE Action alleging claims under RCRA, NREPA, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and common law nuisance.
On February 3, 2020, the parties entered into a consent decree resolving the EGLE Action, which was approved by U.S. District Judge Janet T. Neff on February 19, 2020 (the “Consent Decree”). Under the Consent Decree, the Company agreed to pay for an extension of Plainfield Township’s municipal water system to more than 1,000 properties in Plainfield and Algoma Townships, subject to an aggregate cap of $69.5 million. The Company also agreed to continue maintaining water filters for certain homeowners, resample certain residential wells for PFAS, continue remediation at the Company’s Tannery property and House Street site, and conduct further investigations and monitoring to assess the presence of PFAS in area groundwater. The Company’s activities under the Consent Decree are not materially impacted by the drinking water standards that became effective on August 3, 2020.
On December 19, 2018, the Company filed a third-party complaint against 3M Company seeking, among other things, recovery of the Company’s remediation and other costs incurred in defense of the EGLE Action ("the 3M Action"). On June 20, 2019, the 3M Company filed a counterclaim against the Company in response to the 3M Action, seeking, among other things, contractual and common law indemnity and contribution under CERCLA and Part 201 of NREPA. On February 20, 2020, the Company and 3M Company entered into a settlement agreement resolving the 3M Action, under which 3M Company paid the Company a lump sum amount of $55.0 million during the first quarter of 2020.
On January 10, 2018, the EPA entered a Unilateral Administrative Order (the “Order”) under Section 106(a) of CERCLA, 42 U.S.C. § 9606(a) with an effective date of February 1, 2018. The Order pertained to specified removal actions at the Company's Tannery and House Street sites, including certain time critical removal actions subsequently identified in an April 29, 2019 letter from the EPA, to abate the actual or threatened release of hazardous substances at or from the sites. On October 28, 2019, the EPA and the Company entered into an Administrative Settlement and Order on Consent (“AOC”) that supersedes the Order and addresses the agreed-upon removal actions outlined in the Order. The Company has completed the activities required by the AOC, and is awaiting the final review and determination from the EPA
The Company discusses its reserve for remediation costs in the environmental liabilities section below.
Individual and Class Action Litigation
Beginning in late 2017, individual lawsuits and three putative class action lawsuits were filed against the Company that raise a variety of claims, including claims related to property, remediation, and human health effects. The three putative class action lawsuits were subsequently refiled in the U.S. District Court for the Western District of Michigan as a single consolidated putative class action lawsuit. 3M Company has been named as a co-defendant in the individual lawsuits and consolidated putative class action lawsuit. In addition, the current owner of a former landfill and gravel mining operation sued the Company seeking damages and cost recovery for property damage allegedly caused by the Company’s disposal of tannery waste containing PFAS (this suit collectively with the individual lawsuits and putative class action, the “Litigation Matters”).
On September 27, 2021, the Company and 3M Company entered into a non-binding term sheet outlining proposed settlement terms with the law firm representing certain of the plaintiffs in the individual lawsuits included in the Litigation Matters, and on January 11, 2022, the parties entered into the Master Settlement Agreement related to this proposed settlement. Each of these plaintiffs subsequently agreed to participate in the settlement. These plaintiffs’ lawsuits have been dismissed with prejudice.
On December 9, 2021, the Company and 3M Company reached a settlement in principle to resolve certain of the remaining individual lawsuits included in the Litigation Matters, and the parties entered into definitive settlement agreements in March 2022. These plaintiffs’ lawsuits have been dismissed with prejudice. Only one private individual action remains pending in Michigan state court.
In addition, the parties to the putative class action have engaged in productive mediation sessions, and remain in ongoing settlement discussions.
For certain of the Litigation Matters described above and as a result of developments in March 2022, the Company increased its accrual by $37.8 million since January 1, 2022 and made related payments of $1.5 million. As of April 2, 2022, the Company had recorded liabilities of $86.4 million for certain of the Litigation Matters described above and are recorded as other accrued
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liabilities. At this time, assessing potential liability with respect to the Litigation Matters that are still pending is difficult. Other than the individual lawsuits subject to the settlements described above, the Litigation Matters are in various stages of discovery and related motions. In addition, there is minimal direct and relevant precedent for these types of claims related to PFAS, and the science regarding the human health effects of PFAS exposure in the environment remains inconclusive and inconsistent, thereby creating additional uncertainties.
In December 2018, the Company filed a lawsuit against certain of its historic liability insurers, seeking to compel them to provide a defense against the Litigation Matters on the Company's behalf and coverage for remediation efforts undertaken by, and indemnity provided by, the Company. The Company recognized certain recoveries from legacy insurance policies in 2022 and 2021, and continues pursing additional recoveries through the lawsuit.
Other Litigation
The Company is also involved in litigation incidental to its business and is a party to legal actions and claims, including, but not limited to, those related to employment, intellectual property, and other environmental matters. Some of the legal proceedings include claims for compensatory as well as punitive damages. While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the meritorious legal defenses available to the Company and reserves for liabilities that the Company has recorded, along with applicable insurance, it is management’s opinion that the outcome of these items are not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Environmental Liabilities
The following is a summary of the activity with respect to the environmental remediation reserve established by the Company:
Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Remediation liability at beginning of the year
$85.7 $101.8 
Amounts paid
(10.5)(1.0)
Remediation liability at the end of the quarter
$75.2 $100.8 
The reserve balance as of April 2, 2022 includes $21.6 million that is expected to be paid within the next twelve months and is recorded as a current obligation in other accrued liabilities, with the remaining $53.6 million expected to be paid over the course of up to 25 years, recorded in other liabilities.
The Company's remediation activity at the Tannery property, House Street site and other relevant disposal sites is ongoing. Although the Consent Decree has made near-term costs more clear, it is difficult to estimate the long-term cost of environmental compliance and remediation given the uncertainties regarding the interpretation and enforcement of applicable environmental laws and regulations, the extent of environmental contamination and the existence of alternative cleanup methods. Future developments may occur that could materially change the Company’s current cost estimates, including, but not limited to: (i) changes in the information available regarding the environmental impact of the Company’s operations and products; (ii) changes in environmental regulations, changes in permissible levels of specific compounds in drinking water sources, or changes in enforcement theories and policies, including efforts to recover natural resource damages; (iii) new and evolving analytical and remediation techniques; (iv) changes to the form of remediation; (v) success in allocating liability to other potentially responsible parties; and (vi) the financial viability of other potentially responsible parties and third-party indemnitors. For locations at which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the associated established reserves for the reasons described above. The Company adjusts recorded liabilities as further information develops or circumstances change.
Minimum Royalties and Advertising Commitments
The Company has future minimum royalty and advertising obligations due under the terms of certain licenses held by the Company. These minimum future obligations for the fiscal periods subsequent to April 2, 2022 are as follows:
(In millions)20222023202420252026Thereafter
Minimum royalties$1.2 $ $ $ $ $ 
Minimum advertising$1.2 $3.9 $3.9 $4.2 $4.3 $ 
Minimum royalties are based on both fixed obligations and assumptions regarding the Consumer Price Index. Royalty obligations in excess of minimum requirements are based upon future sales levels. In accordance with these agreements, the
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Company incurred royalty expense of $0.5 million and $0.4 million for the quarters ended April 2, 2022 and April 3, 2021, respectively.
The terms of certain license agreements also require the Company to make advertising expenditures based on the level of sales of the licensed products. In accordance with these agreements, the Company incurred advertising expense of $1.3 million and $1.0 million for the quarters ended April 2, 2022 and April 3, 2021, respectively.
15.BUSINESS SEGMENTS
The Company’s brands are organized into the following two operating segments, which the Company has determined to be reportable segments.
Wolverine Michigan Group, consisting of Merrell® footwear and apparel, Cat® footwear, Wolverine® footwear and apparel, Chaco® footwear, Hush Puppies® footwear and apparel, Bates® uniform footwear, Harley-Davidson® footwear and Hytest® safety footwear; and
Wolverine Boston Group, consisting of Sperry® footwear, Saucony® footwear and apparel, Keds® footwear, and the Kids’ footwear business, which includes the Stride Rite® licensed business, as well as Kids' footwear offerings from Saucony®, Sperry®, Keds®, Merrell®, Hush Puppies® and Cat®.
The Company also reports “Other” and “Corporate” categories. The Other category consists of the Sweaty Betty® activewear business, the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, such as corporate employee costs, costs related to the COVID-19 pandemic and environmental and other related costs.
The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. Revenue for the reportable segments includes revenue from the sale of branded footwear, apparel and accessories to third-party customers; revenue from third-party licensees and distributors; and revenue from the Company’s consumer-direct businesses. The Company’s reportable segments are determined based on how the Company internally reports and evaluates financial information used to make operating decisions.
Company management uses various financial measures to evaluate the performance of the reportable segments. The following is a summary of certain key financial measures for each reportable segment.
 Quarter Ended
(In millions)April 2,
2022
April 3,
2021
Revenue:
Wolverine Michigan Group$329.3 $297.7 
Wolverine Boston Group212.3 200.9 
Other73.2 12.1 
Total$614.8 $510.7 
Segment operating profit (loss):
Wolverine Michigan Group$65.1 $59.2 
Wolverine Boston Group29.2 34.1 
Other0.1 0.3