10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2021

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: 0-26640

POOL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware		36-3943363
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
109 Northpark Boulevard,
Covington,	Louisiana	70433-5001
(Address of principal executive offices)		(Zip Code)

(985) 892-5521

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	POOL	Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  x    No  ¨ 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.           

Yes  x    No  ¨

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	x	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.    ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  x

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant based on the closing sales price of the registrant’s common stock as of June 30, 2021 was $17,838,608,341.

As of February 18, 2022, there were 40,168,103 shares of common stock outstanding.

Documents Incorporated by Reference

Portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.

	POOL CORPORATION
	TABLE OF CONTENTS
		Page
PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	21
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosures	23
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	[Reserved]	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	46
Item 8.	Financial Statements and Supplementary Data	48
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	84
Item 9A.	Controls and Procedures	84
Item 9B.	Other Information	87
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	87
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	87
Item 11.	Executive Compensation	87
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	87
Item 13.	Certain Relationships and Related Transactions, and Director Independence	87
Item 14.	Principal Accountant Fees and Services	87
PART IV.
Item 15.	Exhibits, Financial Statement Schedules	88
Item 16.	Form 10-K Summary	88
Index to Exhibits and Signatures

PART I.

Item 1.  Business

General

Pool Corporation (the Company, which may be referred to as we, us or our), a member of the S&P 500 Index, is the world’s largest wholesale distributor of swimming pool supplies, equipment and related leisure products and is one of the leading distributors of irrigation and landscape products in the United States.

Our industry is highly fragmented, and as such, we add considerable value to the industry by purchasing products from a large number of manufacturers and then distributing the products to our customer base on conditions that are more favorable than our customers could obtain on their own.

As of December 31, 2021, we operated 410 sales centers in North America, Europe and Australia through our five distribution networks:

•SCP Distributors (SCP);

•Superior Pool Products (Superior);

•Horizon Distributors (Horizon);

•National Pool Tile (NPT); and

•Sun Wholesale Supply, Inc. (Sun Wholesale).

Our Industry

We believe that the swimming pool industry has room for continued growth from the increased penetration of new pools. Significant growth opportunities also reside with pool remodel and pool equipment replacement activities due to the aging of the installed base of swimming pools, technological advancements and the development of environmentally sustainable, energy-efficient and more aesthetically attractive products. Additionally, the desire for consumers to enhance their outdoor living spaces with hardscapes, lighting and outdoor kitchens also promotes growth in this area.

Favorable demographic and socioeconomic trends have positively impacted our industry, and we believe these trends will continue to do so in the long term.  These favorable trends include the following:

•long-term growth in housing units in warmer markets due to the population migration toward the southern United States, where use of the outdoor home environment is more prevalent and extends longer throughout the year;

•increased homeowner spending on outdoor living spaces for relaxation and entertainment;

•consumers bundling the purchase of a swimming pool and other products, with new irrigation systems, landscaping and improvements to outdoor living spaces often being key components to both pool installations and remodels;

•consumers using more automation and control products, higher quality materials and other pool features that add to our sales opportunities over time;

•consumers increasing focus on environmentally sustainable, energy-efficient products; and

•increased consumer spending driven by stay-at-home and remote work trends as homeowners seek to create attractive areas in their backyards as an extension of their home space.

Almost 60% of consumer spending in the pool industry is for maintenance and minor repair of existing swimming pools.  Maintaining a proper sanitization balance and the related upkeep and repair of swimming pool equipment, such as pumps, heaters, filters and safety equipment, creates a non-discretionary demand for pool chemicals, equipment and other related parts and supplies.  We also believe cosmetic considerations such as a pool’s appearance and the overall look of backyard environments create an ongoing demand for other maintenance-related goods and certain discretionary products.

We believe that the recurring nature of the maintenance and repair market has historically helped maintain a relatively consistent rate of industry growth.  This characteristic has helped cushion the negative impact on revenues in periods when unfavorable economic conditions and softness in the housing market adversely impacted consumer discretionary spending including pool construction and major replacement and refurbishment activities.

1

The following table reflects growth in the domestic installed base of in-ground swimming pools over the past 11 years (based on Company estimates and information from 2020 P.K. Data, Inc. reports):

The replacement and refurbishment market currently accounts for 20% to 25% of consumer spending in the pool industry.  The activity in this market, which includes major swimming pool remodeling, is driven by the aging of the installed base of pools. The timing of these types of expenditures is more sensitive to economic factors including home values, single-family home sales and consumer confidence that impact consumer spending compared to the maintenance and minor repair market.

New swimming pool construction comprises 15% to 20% of consumer spending in the pool industry.  The demand for new pools is driven by the perceived benefits of pool ownership including relaxation, entertainment, family activity, exercise and convenience.  The industry competes for new pool sales against other discretionary consumer purchases such as kitchen and bathroom remodeling, boats, motorcycles, recreational vehicles and vacations.  The industry is also affected by other factors including, but not limited to, consumer preferences or attitudes toward pool and related outdoor living products for aesthetic, environmental, safety or other reasons.

The irrigation and landscape industry shares many characteristics with the pool industry, and we believe that it will realize similar long-term growth rates. Irrigation system installations often occur in tandem with new single-family home construction making it more susceptible to economic variables that drive new home sales. However, the landscape industry offers similar maintenance-related growth opportunities as the swimming pool industry. Product offerings such as chemicals and fertilizers, power equipment and related repair and maintenance services offer recurring revenue streams in an industry otherwise closely tied to the housing market. The irrigation and landscape distribution business serves both residential and commercial markets, with the majority of sales related to the residential market.  Within the United States market, we believe that irrigation accounts for approximately 35% of total spending in the industry, with the remaining 65% of spending related to landscape maintenance products, power equipment, hardscapes and specialty outdoor products and accessories.

2

Our NPT network primarily serves the swimming pool market but does provide some overlap with the irrigation and landscape industries as we offer our market-leading brand of pool tile, composite pool finish products and hardscapes. As more consumers create and enhance outdoor living areas and continue to invest in their outdoor environment, we believe we can focus our resources to address such demand, while leveraging our existing pool and irrigation and landscape customer base. We feel the development of our NPT network is a natural extension of our distribution model. In addition to our 20 standalone NPT sales centers, we currently have over 100 SCP and Superior sales centers that feature consumer showrooms where landscape and swimming pool contractors, as well as homeowners, can view and select pool components including pool tile, decking materials and interior pool finishes in various styles and grades, and serve as stocking locations for our NPT branded products. We also offer virtual tools for homeowners to select and design their pool and outdoor environments, working with their chosen contractors to install these products. Our NPT Backyard app allows our customers to virtually design, customize and view a pool in their own backyard within seconds. We believe our showrooms, local stocking of products and virtual support provide us with a competitive advantage in these categories. Given the more discretionary nature of these products, this business is more sensitive to external market factors compared to our business overall.

Economic Environment

Certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP) affect our industry, particularly new pool and irrigation system starts as well as the timing and extent of pool refurbishments, equipment replacement, landscaping projects and outdoor living space renovations. Consumers typically spend more on new pools, refurbishment and replacement when general economic conditions are strong.

We believe that over the long term, single-family housing turnover and home value appreciation may correlate with demand for new pool construction, with higher rates of home turnover and appreciation having a positive impact on new pool starts over time.  We also believe that homeowners’ good economic standing and access to consumer credit are critical factors enabling the purchase of new swimming pools and irrigation systems.  Similar to other discretionary purchases, replacement and refurbishment activities are more heavily impacted by economic factors such as consumer confidence, GDP and employment levels. Contractor labor availability has also become an issue in recent years, limiting our customers’ ability to fully meet consumer construction and renovation demand. Labor supply constraints have intensified during the COVID-19 pandemic, which has limited our customers’ ability to meet increased demand for new pool construction and renovation.

Over the past decade, homeowners investing in their homes, including backyard renovations, have flourished. Steady increases in home values and lack of affordable new homes have prompted homeowners to stay in their homes longer and upgrade their home environments, including their backyards. In response to the COVID-19 pandemic over the past couple of years, many families spent more time at home and sought out opportunities to create or expand home-based outdoor living and entertainment spaces, which resulted in an increase in new pool construction and greater expenditures for maintenance and remodeling products. We estimate that new pool construction increased to approximately 120,000 units in 2021 from 96,000 units in 2020, representing a 25% increase in new pool construction. We expect that new pool and irrigation construction levels will continue to grow incrementally (subject to labor availability), but we believe that consumer investments in outdoor living spaces will generate greater growth over the next several years as backyards more increasingly become an extension of consumers’ home space.

Although some constraints exist around residential construction activities, we believe that we are well positioned to take advantage of both the market expansion and the inherent long-term growth opportunities in our industry. Additionally, regulation passed by the U.S. Department of Energy, which became effective in July 2021, mandates all new motors and pumps for swimming pools must meet certain compliance regulations. We believe that this mandate, coupled with additional product developments and technological advancements as consumers focus on more environmentally sustainable and energy-efficient products, offers further growth opportunities over the next few years.

We estimate that price inflation has averaged 1% to 2% annually in our industry over the past ten years.  We generally pass industry price increases through our supply chain and may make strategic volume inventory purchases ahead of vendor price increases in order to obtain favorable pricing. Recently, supply chain interruptions, production shutdowns and weather-related events have resulted in increased inflation as higher costs to develop finished products are being passed down to consumers. Our results in 2021 benefited from above-average inflationary product cost increases of approximately 7% to 8%. We expect this trend to continue into 2022. We expect sales growth in 2022 to be higher due to impacts from inflationary product cost increases of approximately 9% to 10%.

3

Business Strategy and Growth

Our mission is to provide exceptional value to our customers and suppliers, creating exceptional return to our shareholders, while providing exceptional opportunities to our employees.  Our core strategies are as follows:

•to promote the growth of our industry;

•to promote the growth of our customers’ businesses; and

•to continuously strive to operate more effectively.

We promote the growth of our industry through various advertising and promotional programs intended to raise consumer awareness of the benefits and affordability of pool ownership, the ease of pool maintenance and the many ways in which a pool and the surrounding spaces may be enjoyed beyond swimming.  These programs include digital and media advertising, industry-oriented website development such as www.swimmingpool.com®, www.hottubs.com® and www.nptpool.com®, social media platforms and other digital marketing initiatives, including our NPT® Backyard mobile app.  We use these programs as tools to educate consumers and lead prospective pool owners to our customers.

We promote the growth of our customers’ businesses by offering comprehensive support programs that include promotional tools and marketing support to help our customers generate increased sales.  Our uniquely tailored programs include such features as customer lead generation, personalized websites, brochures, direct mail, marketing campaigns and business development training.  As a customer service, we also provide certain retail store customers assistance with all aspects of their business, including site selection, store layout and design, product merchandising, business management system implementation, comprehensive product offering selections and efficient ordering and inventory management processes. In addition to these programs, we feature consumer showrooms in over 100 of our sales centers and host our annual Retail Summit to educate our customers about product offerings and the overall industry, although we did not host our annual Retail Summit over the past two years due to the COVID-19 pandemic. We also act as a day-to-day resource by offering product and market expertise to serve our customers’ unique needs.

In addition to our efforts aimed at industry and customer growth, we strive to operate more effectively by continuously focusing on improvements in our operations, which we define as capacity creation. We aim to create capacity with business to business development tools and execution to ensure best-in-class service and value creation for our customers and suppliers. In particular, we have developed the Pool360 and Horizon 24/7 platforms that help our customers be more productive by allowing them to get pricing, check availability, enter orders and make payments online while leveraging our customer service staff resources, particularly during peak business periods. These tools not only offer real-time integration into our enterprise resource planning system, creating efficiencies in our business processes as well, but they also provide our customers graphical catalog presentation in the same platform. Our BlueStreak mobile ordering platform enables our sales associates to process orders faster, often eliminating the need for customers to get out of their vehicles. We are also actively making improvements to our sales centers and warehouses, including improved showroom layouts, sales center merchandising, bin replenishment and velocity slotting. Velocity slotting uses technology to identify fast moving, high velocity items, which are then color-coded and placed in an easily accessible location to create efficiencies for both our employees and customers. In addition to these initiatives, we strive to expand our Pool Corporation-branded products and exclusive brand offerings.

We have grown our distribution networks through new sales center openings, acquisitions and the expansion of existing sales centers depending on our market presence and capacity. In 2021, we have grown our distribution network through the acquisition of the Sun Wholesale distribution network. Sun Wholesale distributes swimming pool supplies, equipment and related leisure products domestically, primarily servicing Pinch A Penny, Inc. franchisees. Pinch A Penny, Inc. is a franchisor of pool and outdoor living-related specialty retail stores in the United States with approximately 260 independently owned and operated franchised stores in Florida, Texas, Louisiana, Alabama and Georgia. Sun Wholesale also owns and operates a specialty chemical packaging operation. For additional information regarding our new sales center openings, acquisitions and closures/consolidations, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, Note 2 of “Notes to Consolidated Financial Statements,” included in this Form 10-K.

We plan to continue to make strategic acquisitions and open new sales centers to further penetrate existing markets and expand into both new geographic markets and new product categories. We believe that our high customer service levels and expanded product offerings have enabled us to gain market share historically. Going forward, we expect to realize sales growth through market share gains and continued expansion of our product offerings.

4

Customers and Products

We serve roughly 120,000 customers. No single customer accounted for 10% or more of our sales in 2021. Most of our customers are small, family-owned businesses with relatively limited capital resources. Most of these businesses provide labor and technical services to the end consumer and operate as independent contractors and specialty retailers employing no more than ten employees (in many cases, working alone or with a limited crew).  These customers also buy from other distributors, mass merchants, home stores and certain specialty and internet retailers.

We provide extended payment terms to qualified customers for sales under early buy programs. The extended terms usually require payments in equal installments during the second quarter of each year. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Allowance for Doubtful Accounts” for additional information.

We sell our products primarily to the following types of customers:

•swimming pool remodelers and builders;

•specialty retailers that sell swimming pool supplies;

•swimming pool repair and service businesses;

•irrigation construction and landscape maintenance contractors; and

•commercial customers who service large commercial installations such as hotels, universities and community recreational facilities.

We conduct our operations through 410 sales centers in North America, Europe and Australia. Our primary markets, with the highest concentration of swimming pools, are California, Texas, Florida and Arizona, collectively representing approximately 53% of our 2021 net sales.  In 2021, we generated approximately 94% of our sales in North America (including Canada and Mexico), 5% in Europe and 1% in Australia. While we continue to expand both domestically and internationally, we expect this geographic mix to be similar over the next few years. References to product line and product category data throughout this Form 10-K generally reflect data related to the North American swimming pool market, as it is more readily available for analysis and represents the largest component of our operations.

We use a combination of local and international sales and marketing personnel to promote the growth of our business and develop and strengthen our customers’ businesses.  Our sales and marketing personnel focus on developing customer programs and promotional activities, creating and enhancing sales management tools and providing product and market expertise.  Our local sales personnel work from our sales centers and are charged with understanding and meeting our customers’ specific needs.

We offer our customers more than 200,000 manufacturer and Pool Corporation-branded products.  We believe that our selection of pool equipment, supplies, chemicals, replacement parts, irrigation and related products and other pool construction and recreational products is the most comprehensive in the industry. We sell the following types of products:

•maintenance products, such as chemicals, supplies and pool accessories;

•repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps and lights;

•fiberglass pools and hot tubs and packaged pool kits including walls, liners, braces and coping for in-ground and above-ground pools;

•pool equipment and components for new pool construction and the remodeling of existing pools;

•irrigation and related products, including irrigation system components and professional lawn care equipment and supplies;

•building materials, such as concrete, plumbing and electrical components, both functional and decorative pool surfaces, decking materials, tile, hardscapes and natural stone, used for pool installations and remodeling;

•commercial products, including American Society of Material Engineers heaters, safety equipment and commercial pumps and filters; and

•other pool construction and recreational products, which consist of a number of product categories and include discretionary recreational and related outdoor living products, such as grills and components for outdoor kitchens.

We currently have over 600 product lines and approximately 50 product categories. Based on our 2021 product classifications, sales for our pool and hot tub chemicals product category represented approximately 9% of total net sales for 2021, 10% of total net sales in 2020 and 12% of total net sales in 2019. No other product categories accounted for 10% or more of total net sales in any of the last three fiscal years.

5

We continue to identify new related product categories, and we typically introduce new categories each year in select markets.  We then evaluate the performance in these markets and focus on those product categories that we believe exhibit the best long-term growth potential. We expect to realize continued sales growth for these types of product offerings by expanding the number of locations that offer these products, increasing the number of products offered at certain locations and continuing a modest broadening of these product offerings on a company-wide basis.

New product technology provides opportunities not only for improved energy-efficiency but also new enticements for leisure activities. Smart controls provide growth opportunities as most existing swimming pools run on mechanical time clocks. Major equipment manufacturers have developed and will continue to develop more retrofit kits that allow homeowners to interact with their pools or hot tubs through their smartphones. Robotic cleaners offer consumers a more efficient option for maintaining their swimming pools. We see each of these developments as significant growth opportunities. We offer a growing selection of energy-efficient and environmentally preferred products, which supports sustainability and helps our customers save energy, water and money. Our green technology products include variable speed pumps, LED pool and hot tub lights and high-efficiency heat pumps. Our Horizon sales centers offer organic fertilizers, organic pesticides, and irrigation products that reduce water usage, allowing our customers to have less of an impact on freshwater reserves. Regulation passed by the U.S. Department of Energy, which became effective in July 2021, mandates all new motors and pumps sold for swimming pools must meet certain compliance regulations. As the regulation has only recently become effective, the impact from this change through the end of 2021 season was not significant.

Over the last several years, we have increased our product offerings and service abilities related to commercial swimming pools. We consider the commercial market to be a key growth opportunity as we focus more attention on providing products to customers who service large commercial installations such as hotels, condominiums, apartment complexes, universities and community recreational facilities. We continue to leverage our existing networks and relationships to grow this market. Sales to commercial customers declined in 2020 due to COVID-19 related closures and the decline in both business and leisure travel. In 2021, commercial sales have accelerated as business and leisure travel has increased and public facilities reopened following COVID-19 related closures in the prior year.

In 2021, the sale of maintenance and minor repair products (non-discretionary) accounted for almost 60% of our sales and gross profits, while just over 40% of our sales and gross profits were derived from the refurbishment, replacement, construction and installation (equipment, materials, plumbing, electrical, etc.) of swimming pools (partially discretionary). During the economic downturn, which spanned from late 2006 to early 2010 and reached its low point in 2009, sales of maintenance and minor repair products had increased to approximately 70% of our sales and gross profits due to the significant declines in new pool construction and deferred remodeling and replacement activity. The current trend reflects a partial shift back toward a greater percentage of our sales coming from major refurbishment and replacement products due to the recovery of these activities since levels reached their historic low point in 2009.

Since 2009, we have experienced product and customer mix changes, including a shift in consumer spending to some higher value, lower margin products such as variable speed pumps and high efficiency heaters. We expect continued demand for these products, but believe our efforts in various pricing and sourcing initiatives, including growth in our higher margin private label and exclusive products (PLEX) and our expansion of building materials product offerings, have helped offset these gross margin declines.

Operating Strategy

We distribute swimming pool supplies, equipment and related leisure products domestically through our SCP and Superior networks and internationally through our SCP network. We adopted the strategy of operating two distinct distribution networks within the U.S. swimming pool market primarily to offer our customers a choice of distinctive product selections, locations and service personnel. We distribute irrigation and related products through our Horizon network and tile, decking materials and interior pool finish products through our NPT network, as well as through SCP and Superior networks. In December 2021, we acquired Sun Wholesale., which distributes swimming pool supplies, equipment and related leisure products domestically, primarily servicing independently owned and operated Pinch A Penny, Inc. franchise locations. Going forward, we expect to expand our franchise operations through additional locations of Pinch A Penny franchised stores. Sun Wholesale Supply, Inc. also owns and operates a specialty chemical packaging operation.

We evaluate our sales centers based on their performance relative to predetermined standards that include both financial and operational measures.  Our corporate support groups provide our field operations with various services, such as developing and coordinating customer and vendor related programs, human resources support, information systems support and expert resources to help them achieve their goals.  We believe our incentive programs and feedback tools, along with the competitive nature of our internal networks, stimulate and enhance employee performance.

6

Distribution

Our sales centers are located within population centers near customer concentrations, typically in industrial, commercial or mixed-use zones.  Customers may pick up products at any sales center location, or we may deliver products to their premises or job sites via our trucks or third-party carriers.

Our sales centers maintain well-stocked inventories to meet our customers’ immediate needs.  We utilize warehouse management technology to optimize receiving, inventory control, picking, packing and shipping functions. For additional information regarding our inventory management, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Inventory Obsolescence,” of this Form 10-K.

We also operate four centralized shipping locations (CSLs) in the United States that redistribute products we purchase in bulk quantities to our sales centers or, in some cases, directly to customers.  Our CSLs are regional locations that carry a wide range of traditional swimming pool, irrigation and landscape products and related construction products.  

Purchasing and Suppliers

We enjoy good relationships with our suppliers, who generally offer competitive pricing, return policies and promotional allowances.  It is customary in our industry for certain manufacturers to manage their shipments by offering seasonal terms to qualifying purchasers such as Pool Corporation, which are referred to as early buy purchases.  These early buy purchases typically allow us to place orders in the fall at a modest discount, take delivery of product during the off-season months and pay for these purchases in the spring or early summer. Due to vendor backlogs, these early buy opportunities were generally not available in 2021 or 2020.

Our preferred vendor program encourages our distribution networks to stock and sell products from a smaller number of vendors offering the best overall terms and service to optimize profitability and shareholder return.  We also work closely with our vendors to develop programs and services to better meet the needs of our customers and to concentrate our inventory investments.  These practices, together with a more comprehensive service offering, have positively impacted our selling margins and our returns on inventory investments. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Vendor Programs,” for additional information.

We regularly evaluate supplier relationships and consider alternate sourcing to ensure competitive cost, service and quality standards.  Our largest suppliers include Pentair plc, Hayward Pool Products, Inc. and Zodiac Pool Systems, Inc., which accounted for approximately 20%, 10% and 10%, respectively, of the cost of products we sold in 2021.

Competition

We are the largest wholesale distributor of swimming pool and related backyard products (based on industry knowledge and available data) and the only truly national wholesale distributor focused on the swimming pool industry in the United States.  We are also one of the leading distributors of irrigation and landscape products in the United States.  We face intense competition from many regional and local distributors in our markets and from one national wholesale distributor of landscape supplies.  We also face competition, both directly and indirectly, from mass market retailers (both store-based and internet) and large pool supply retailers who primarily buy directly from manufacturers.

Some geographic markets we serve, particularly the four largest and higher pool density markets of California, Texas, Florida and Arizona, have a greater concentration of competition than others.  Barriers to entry in our industry are relatively low.  We believe that the principal competitive factors in swimming pool and irrigation and landscape supply distribution are:

•the breadth and availability of products offered;

•the quality and level of customer service, including ease of ordering and product delivery;

•the breadth and depth of sales and marketing programs;

•consistency and stability of business relationships with customers and suppliers;

•competitive product pricing; and

•geographic proximity to the customer.

7

Environmental, Social and Governance (ESG)

Environmental

We are committed to sustainable business practices, which includes offering eco-friendly products to our customers, closely monitoring our sourcing activities, and being good stewards within the communities we serve. Currently, we are taking steps to trim our carbon footprint and to improve product choices that allow our customers to reduce their environmental impact. Further, we are installing more energy-efficient systems throughout our network. We are continually striving to ensure success in our business while protecting resources for future generations. Our sustainability goals include the reduction of greenhouse gases and other harmful air emissions, water conservation, energy conservation and carbon footprint minimization. We continue to improve the ways in which we handle, distribute, transport and dispose of all products, particularly the chemicals and fertilizers that we sell.

Among other initiatives in 2021, we believe our recent endeavors described further below will continue to create value for our customers, shareholders, employees, suppliers and communities.

•We partnered with the YMCA to provide swimming lessons and the opportunity to learn basic water safety skills to 1,500 children. To reduce any barriers to participation, we also donated new swimsuits and towels.

•In celebration of World Water Day, we made a donation to DigDeep, a human rights nonprofit organization working to bring clean, hot and cold running water into American homes.

•In honor of Earth Day, we donated 5,000 trees through the National Forest Foundation in an effort to restore and expand the national forest ecosystems.

•Through our partnership with LightStream, we helped contribute to the reforestation of more than 50 acres of trees by American Forests.

Social - Human Capital Management

We employed approximately 5,500 people at December 31, 2021. Given the seasonal nature of our business, our peak employment period is the summer and, depending on expected sales levels, we add 200 to 300 employees to our work force to meet seasonal demand. Approximately 90% of our employees are located in the U.S. We believe that we have good relations with our employees. None of our employees are currently covered under any collective bargaining agreements.

We believe that our success is a direct result of the contributions and commitment of our employees. We provide competitive pay and benefits, as well as training and other resources to our employees. Our goal is to be an Employer of Choice through focusing on the engagement, development, retention, and health and well‑being of our employees. We have established a set of standard operating procedures to optimize our human capital management function, including hiring and human resource policies, training practices and operational instruction manuals. We focus on the following factors in implementing and developing our human capital strategy:

•employee health, safety and wellness;

•diversity, equity and inclusion;

•employee growth and development; and

•employee compensation and benefits.

Employee Health, Safety and Wellness

Our commitment to the health, safety and wellness of our employees ranks at the top of our core fundamental values. Our ultimate goal is to send every employee home each night in the same condition in which they came to work that morning. We aim to achieve zero serious injuries through continued investment in, and focus on, our core safety programs and injury-reduction initiatives. This effort begins immediately with new employees and is reinforced each day through a focus on safety awareness, risk identification and other essential safety protocols. We closely monitor overall workers’ compensation and auto claims, OSHA recordable incidents, Department of Transportation compliance and other internally established safety prevention elements in an effort to make every workday safe.

Throughout the COVID-19 pandemic, we have taken a number of actions to protect the health and well-being of our employees and to reward our employees for their contributions to our success. These actions include providing personal protective equipment, expanding healthcare benefits and re-configuring working spaces and arrangements. In 2020 and 2021, we made efforts to reward our employees by extending paid leave and paying additional discretionary bonuses to our employees for their contributions.

8

Diversity, Equity and Inclusion (DEI)

We are committed to fostering a diverse, equitable and inclusive workplace that represents the communities in which we work and live. We believe that diversity drives innovation and delivers the best solutions to complex problems, and our culture is one where differences are welcomed, valued and respected.

We are committed to expanding the diversity of our workforce through the hiring, retention and advancement of underrepresented populations. To achieve this, our approach to DEI is as follows:

•Diversity: Recruit, develop and retain a diverse workforce and provide developmental opportunities for career advancement for all employees;

•Equity: Review current policies, practices and procedures to remove possible impediments to equal employment opportunity for all prospective candidates and employees; and

•Inclusion: Communicate that we, as an Employer of Choice, are committed to DEI with action-oriented programs that produce results and employee engagement.

Most recently, we established a DEI team, expanding existing content in core employee development programs and focused on improving our efforts to recruit and hire first-class diverse talent. In 2021, we held our inaugural Women in Leadership Forum, which was devoted to discussing what it means to be a female leader in wholesale distribution. In addition to our recent initiatives, we continue to support our existing employees with training and development aimed at creating and sustaining a more inclusive environment.

Employee Growth and Development

We strive to be an Employer of Choice by investing in our employees. Our goal is to attract, develop and retain a talented team of people inspired by our mission to provide exceptional value to our customers and suppliers and create exceptional return to our shareholders, while providing exceptional opportunities for our employees. Our success depends on our employees understanding how their work contributes to the company’s overall strategy. We use a variety of channels to facilitate open and direct communication with our employees, including open forums with executives and employee experience surveys.

When our employees succeed, the company succeeds. To help our employees achieve success in their roles, we emphasize continuous training and development opportunities. These include annual performance assessments, safety and security protocols, updates on new products and service offerings and deployment of technologies. We also provide managerial training to mid-level managers and departmental leaders. This coursework covers topics such as talent review, development of underperforming employees, handling employee misconduct and coaching and success workshops. Our employees are also involved in a multitude of volunteer efforts that positively impact our communities through support of charitable organizations.

We also provide an entry level program to prepare Manager Trainees (MITs) for sales and operations management opportunities. Our MITs are hosted at either our state-of-the-art EDGEucation Center, located in Plano, Texas or in a virtual classroom. Our program includes lectures, projects and role play to provide MITs with industry knowledge, leadership skills and the tools necessary to succeed within our organization.

Employee Compensation and Benefits

We strive to provide market-competitive compensation, benefits and services to our employees. Our performance-based compensation philosophy is based on rewarding each employee’s individual contributions regardless of gender, race or ethnicity. Our total compensation package includes cash compensation (base salary and incentive or bonus payments), company contributions toward additional benefits (such as health and disability plans), retirement plans with a company match and paid time off. We also offer the opportunity to become a shareholder through equity grants for management and our employee stock purchase plan. Our employees can take advantage of a range of benefits, including healthcare and wellness programs, tuition reimbursement for eligible employees and multi-year scholarships to their dependents, and financial wellness programs to help provide education and tools to assist in improving, maintaining and capitalizing on our employees’ financial future. We closely monitor employee turnover and conduct exit interviews to gain relevant information and adapt our engagement and retention strategy as appropriate.

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Governance

Our employees, managers and officers conduct our business under the direction of our CEO and the oversight of our Board of Directors (our Board) to enhance our long-term value for our stockholders. The core responsibility of our Board is to exercise its fiduciary duty to act in the best interests of our company and our stockholders. In exercising this obligation, our Board and committees perform a number of specific functions, including risk assessment, review and oversight. While management is responsible for the day-to-day management of risk, our Board is responsible for oversight of our risk management programs, ensuring that an appropriate culture of risk management exists within the company, and assisting management in addressing specific risks, such as strategic risks, financial risks, cybersecurity risks, regulatory risks and operational risks.

Seasonality and Weather

Our business is seasonal. In general, sales and operating income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters. In 2021, we generated approximately 60% of our net sales and 69% of our operating income in the second and third quarters of the year.

We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season.  Excluding borrowings to finance acquisitions and share repurchases, our peak borrowing usually occurs during the late spring and summer, primarily because extended terms offered by our suppliers are typically payable during the second quarter of each year, while our peak accounts receivable collections typically occur in June, July and August.

We expect that our quarterly results of operations will continue to fluctuate depending on the timing and amount of revenue contributed by new and acquired sales centers.  Based on our peak summer selling season, we generally open new sales centers and close or consolidate sales centers, when warranted, either in the first quarter before the peak selling season begins or in the fourth quarter after the peak selling season ends.

Weather is one of the principal external factors affecting our business. The table below presents some of the possible effects resulting from various weather conditions.

Weather		Possible Effects
Hot and dry	•	Increased purchases of chemicals and supplies
		for existing swimming pools
	•	Increased purchases of above-ground pools and
		irrigation and lawn care products
Unseasonably cool weather or extraordinary amounts	•	Fewer pool and irrigation and landscaping
of rain		installations
	•	Decreased purchases of chemicals and supplies
	•	Decreased purchases of impulse items such as
		above-ground pools and accessories
Unseasonably early warming trends in spring/late cooling	•	A longer pool and landscape season, thus positively
trends in fall		impacting our sales
(primarily in the northern half of the U.S. and Canada)
Unseasonably late warming trends in spring/early cooling	•	A shorter pool and landscape season, thus negatively
trends in fall		impacting our sales
(primarily in the northern half of the U.S. and Canada)

For discussion regarding the effects seasonality and weather had on our results of operations in 2021 and 2020, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Quarterly Fluctuations,” of this Form 10-K.

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Government Regulations

Our business is subject to regulation under local fire codes and international, federal, state and local environmental and health and safety requirements, including regulation by the Environmental Protection Agency, the Consumer Product Safety Commission, the Department of Transportation, the Occupational Safety and Health Administration, the National Fire Protection Agency and the International Maritime Organization. Most of these requirements govern the packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers. We store certain types of chemicals and/or fertilizers at each of our sales centers and the storage of these items is strictly regulated by local fire codes. In addition, we sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws. These laws primarily relate to labeling, annual registration and licensing.

Intellectual Property

We maintain both domestic and foreign registered trademarks and patents, primarily for our Pool Corporation and affiliate branded products that are important to our current and future business operations. We also own rights to numerous internet domain names.

Geographic Areas

The table below presents net sales by geographic region, with international sales translated into U.S. dollars at prevailing exchange rates, for the past three fiscal years (in thousands):

	Year Ended December 31,
	2021		2020		2019
United States	$	4,749,459	$	3,579,990	$	2,911,772
International	546,125		356,633		287,745
	$	5,295,584	$	3,936,623	$	3,199,517

The table below presents net property and equipment by geographic region, with international property and equipment balances translated into U.S. dollars at prevailing exchange rates, for the past three fiscal year ends (in thousands):

	December 31,
	2021		2020		2019
United States	$	171,408	$	100,857	$	105,170
International	7,600		7,384		7,076
	$	179,008	$	108,241	$	112,246

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Website Access and Available Information

Our website is www.poolcorp.com. Our website and other websites mentioned in this Form 10-K are for information only and the contents of such websites are not incorporated in, or otherwise to be regarded as part of, this Form 10-K.

Our periodic reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on our website at www.poolcorp.com as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the Securities and Exchange Commission (SEC).

We regularly evaluate the possibility of acquiring additional companies, and at any given time may be engaged in discussions or negotiations regarding these transactions. We generally do not announce our acquisitions until they are completed, unless it is required by regulatory or other rules to announce when a definitive agreement is reached.

Investors should also be aware that while we may answer questions raised by securities analysts, it is against our policy to disclose any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by an analyst with respect to our past or projected performance. To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

Unless otherwise indicated, information contained in this report and other documents filed by us under the federal securities laws concerning our views and expectations regarding the industries in which we operate are based on estimates made by us using data from industry sources and making assumptions based on our industry knowledge and experience. We have not independently verified data from industry or other third-party sources and cannot guarantee its accuracy or completeness.

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Item 1A.  Risk Factors

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of earnings and other financial performance measures, statements of management’s expectations regarding our plans and objectives and industry, general economic and other forecasts of trends, future dividend payments, share repurchases and other matters. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to publicly update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “intend,” “believe,” “will likely result,” “outlook,” “project,” “may,” “can,” “plan,” “target,” “potential,” “should” and other words and expressions of similar meaning.

No assurance can be given that the expected results in any forward-looking statement will be achieved, and actual results may differ materially due to one or more factors. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.

Risk Factors

Certain factors that may affect our business and could cause actual results to differ materially from those expressed in any forward-looking statement are described below. Investors should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K. The risks discussed below are not the only risks we face. Other risks or uncertainties not presently known to us, or that we currently believe are immaterial, may materially affect our business if they occur. Moreover, new risks emerge from time to time. Further, our business may also be affected by additional factors that generally apply to all companies operating in the U.S. and globally, which have not been included.

Risks Relating to Macroeconomic Conditions

The demand for our swimming pool, irrigation, landscape and related outdoor living products may be adversely affected by changes in consumer discretionary spending or unfavorable economic conditions.

Consumer discretionary spending significantly affects our sales and is impacted by factors outside of our control, including general economic conditions, the residential housing market, unemployment rates, wage levels, interest rate fluctuations, inflation, disposable income levels, consumer confidence and access to credit. In economic downturns, the demand for swimming pool, irrigation, landscape and related outdoor living products may decline, often corresponding with declines in discretionary consumer spending, the growth rate of pool eligible households and swimming pool construction. Maintenance and repair products and certain replacement and refurbishment products are required to maintain existing swimming pools, and each currently accounts for approximately 60% and 20% to 25% of net sales related to our swimming pool business; however, the growth in this portion of our business depends on the expansion of the installed pool base and could also be adversely affected by decreases in construction activities, similar to the trends between late 2006 and early 2010. A weak economy may also cause consumers to defer discretionary replacement and refurbishment activity. Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance. Such downturns expose us to certain additional risks, including but not limited to the risk of customer closures or bankruptcies, which could shrink our potential customer base and inhibit our ability to collect on those customers’ receivables.

We believe that homeowners’ access to consumer credit at attractive interest rates is a critical factor enabling the purchase of new pools, irrigation systems and outdoor living products. Between late 2006 and early 2010, the unfavorable economic conditions and downturn in the housing market resulted in significant tightening of credit markets, which limited the ability of consumers to access financing for new swimming pools and irrigation systems. Any similar tightening of consumer credit or any increase in interest rates in the future could prevent consumers from obtaining financing for pool, irrigation and related outdoor projects, which could negatively impact our sales of construction-related products.

Discretionary spending is often adversely affected during times of economic, social or political uncertainty. The potential for natural or man-made disasters or extreme weather, geopolitical events and security issues, labor or trade disputes and similar events could create these types of uncertainties and negatively impact our business in ways that we cannot presently predict.

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The COVID-19 pandemic, other pandemics or epidemics in the future, and associated responses could adversely impact our business and results of operations.

The COVID-19 pandemic has significantly impacted economic activity and markets throughout the world since early 2020. In response, various governmental authorities have imposed stay-at-home orders, shelter-in-place orders, quarantines, executive orders and similar government orders and restrictions to control the spread of COVID-19. Such orders or restrictions have resulted in temporary store closures, limitation of store hours, limitations on the number of people in stores or in warehouses, enhanced requirements on sanitation, social distancing practices and travel restrictions, among other effects. In almost all of our markets, we are designated as an essential business under the relevant state and local regulations; however, if this changes, it could adversely impact our financial condition and operating results. Variants of the virus that cause COVID-19 continue to be identified in the U.S. and elsewhere, which has led to uncertainty over the scope and duration of the pandemic. Accordingly, COVID-19, or any other future pandemic or other major public health crisis, may have negative impacts on our business in the future, and any future adverse impacts on our business may be worse than we anticipate.

Impacts from the COVID-19 pandemic, coupled with heightened demand, could also adversely impact our supply chain, making it difficult to source and receive products needed to keep our customers adequately supplied. The ultimate impact will depend on the severity and duration of the COVID-19 pandemic, any future resurgences and actions taken by governmental authorities and other third parties in response, including the distribution and acceptance of vaccines, each of which is uncertain, rapidly changing and difficult to predict. Our recent growth rates driven by home-centric trends influenced by the COVID-19 pandemic may not be sustainable and may not be indicative of future growth rates.

Risks Relating to Our Business and Industry

We are susceptible to adverse weather conditions, which could intensify as a result of climate change.

Given the nature of our business, weather is one of the principal external factors affecting our business and the effect of seasonality has a significant impact on our results. In 2021, we generated approximately 60% of our net sales and 69% of our operating income in the second and third quarters of the year. These quarters represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Unseasonably late warming trends in the spring or early cooling trends in the fall can shorten the length of the pool season. Also, unseasonably cool weather or extraordinary rainfall during the peak season can have an adverse impact on demand due to decreased swimming pool use, installation and maintenance, as well as decreased irrigation installations. While warmer weather conditions favorably impact our sales, global warming trends and other significant climate changes can create more variability in the short term or lead to other unfavorable weather conditions that could adversely impact our sales or operations. Drought conditions or water management initiatives may lead to government-imposed water use restrictions. Such restrictions could result in decreased pool and irrigation system installations which could negatively impact our sales.

Certain extreme weather events, such as hurricanes, tornadoes, earthquakes, tropical storms, floods, drought and wildfires, may adversely impact us in several ways, including interfering with our ability to deliver our products and services, interfering with our receipt of supplies from our vendors, reducing demand for our products and services, and damaging our facilities. Climate change may increase the frequency or severity of natural disasters and other extreme weather events in the future, which would increase our exposure to these risks. Concern over climate change may also result in new or increased legal and regulatory requirements designed to reduce or mitigate the effects of climate change, which could increase our operating or capital expenses.

For additional discussion regarding seasonality and weather, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Quarterly Fluctuations,” of this Form 10-K.

Our distribution business is highly dependent on our ability to maintain favorable relationships with suppliers.

As a distribution company, maintaining favorable relationships with our suppliers is critical to our success. We believe that we add considerable value to the swimming pool and irrigation supply chains by purchasing products from a large number of manufacturers and distributing the products to a highly fragmented customer base on conditions that are more favorable than these customers could obtain on their own. We believe that we currently enjoy good relationships with our suppliers, who generally offer us competitive pricing, return policies and promotional allowances. However, any failure to maintain favorable relationships with our suppliers could have an adverse effect on our business.

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Our largest suppliers are Pentair plc, Hayward Pool Products, Inc. and Zodiac Pool Systems, Inc., which accounted for approximately 20%, 10% and 10%, respectively, of the costs of products we sold in 2021. A decision by our largest suppliers, acting individually or in concert, to sell their products directly to retailers or other end users of their products, bypassing distribution companies like ours, would have an adverse effect on our business. Additionally, if our suppliers experience difficulties or disruptions in their operations, if there is any material interruption in our supply chain or if we lose a single significant supplier due to financial failure or a decision to sell exclusively to retailers or end-use consumers, we may experience increased supply costs or delays in establishing replacement supply sources that meet our quality and control standards, which may affect our profitability. Thus far, the COVID-19 pandemic has not materially impacted our supply chain, and we do not expect it to materially impact our supply chain in 2022, although we can provide no assurances to this effect.

We depend on a global network of suppliers to source our products, including our own branded products and products we have exclusive distribution rights to. Failure to achieve and maintain a high level of product and service quality and safety could damage our reputation, expose us to litigation and negatively impact our financial performance.

We rely on manufacturers and other suppliers to provide us with the products we distribute. To succeed, we must continue to maintain effective business relationships with qualified suppliers who can timely and efficiently supply us with high quality products. As we increase the number of Pool Corporation and affiliate branded products we distribute, our exposure to potential liability claims may increase. Product and service quality issues could negatively impact customer confidence in our brands and our business. If our product and service offerings do not meet applicable safety standards or our customers’ expectations regarding safety or quality, we could experience lost sales and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions. Actual, potential or perceived product safety concerns, including health-related concerns, could damage our reputation with current or prospective customers, vendors and employees. Product quality or safety issues could also expose us to litigation, as well as government enforcement actions, and result in costly product recalls and other liabilities. Similar concerns impacting our competitors could damage the reputation of our industry and indirectly have an unfavorable impact on our operations.

We face intense competition both from within our industry and from other leisure product alternatives.

Within our industry, we directly compete against various regional and local distributors for the business of pool owners and other end-use customers. We indirectly compete against mass market retailers and large pool or irrigation supply retailers as they purchase the great majority of their needs directly from manufacturers. We compete to a lesser extent with internet retailers, as they purchase the majority of their needs from distributors. Outside of our industry, we compete indirectly with alternative suppliers of big-ticket consumer discretionary products, such as boat and motor home distributors, and with other companies who rely on discretionary homeowner expenditures, such as home remodelers.

New competitors may emerge as there are low barriers to entry in our industry, which has led to highly competitive markets consisting of various-sized entities, ranging from small or local operators to large regional businesses. If our customers are attracted by the alternatives afforded by any of our competitors, they may be less inclined to purchase products or services from us, impacting our results of operations. Given the density and demand for pool products, some geographic markets that we serve also tend to have a higher concentration of competitors than others, particularly California, Texas, Florida and Arizona. These states encompass our four largest markets and represented approximately 53% of our net sales in 2021. The entry of significant new competitors into these markets could negatively impact our sales.

More aggressive competition by store- and internet-based mass merchants and large pool or irrigation supply retailers could adversely affect our sales.

Mass market retailers today carry a limited range of, and devote a limited amount of shelf space to, merchandise and products targeted to our industry. Historically, mass market retailers have generally expanded by adding new stores and product breadth, but their product offering of pool and irrigation related products has remained relatively constant. Should store‑ and internet-based mass market retailers increase their focus on the pool or irrigation industries, or increase the breadth of their pool and irrigation and related product offerings, they may become a more significant competitor for our direct customers and end-use consumers, which could have an adverse impact on our business. Additionally, because the internet facilitates competitive entry, price transparency and comparison shopping, increased internet sales by us or our competitors could increase the level of competition we face or reduce our margin. Further, we may face additional competitive pressures if large pool or irrigation supply retailers look to expand their customer base to compete more directly within the distribution channel.

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We depend on our ability to attract, develop and retain highly qualified personnel.

We consider our employees to be the foundation for our growth and success. As such, our future success depends in large part on our ability to attract, retain and motivate qualified personnel. This includes succession planning related to our executive officers and key management personnel. If we are unable to attract and retain key personnel, our operating results could be adversely affected.

Given the seasonal nature of our business, we may hire additional employees during the summer months, including seasonal and part-time employees, who generally are not employed during the off-season. If we are unable to attract and hire additional personnel during the peak season, our operating results could be negatively impacted. Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees.

The pandemic and other events over the past couple of years have increased employees’ expectations regarding compensation, workplace flexibility and work-home balance. These developments have made it more difficult for us to attract and retain top talent. We do not expect these developments to have a material adverse impact on us, but we can provide no assurances to this effect.

Past growth may not be indicative of future growth.

Historically, we have experienced substantial sales growth through organic market share gains, new sales center openings and acquisitions that have increased our size, scope and geographic distribution. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. While we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to:

•penetrate new markets;

•generate sufficient cash flows to support expansion plans and general operating activities;

•obtain financing;

•identify appropriate acquisition candidates and successfully integrate acquired businesses;

•identify appropriate locations for new sales centers and successfully integrate them into our network;

•maintain favorable supplier arrangements and relationships; and

•identify and divest assets which do not continue to create value consistent with our objectives.

If we do not manage these potential difficulties successfully, our operating results could be adversely affected.

Our results in 2020 and 2021 were positively impacted by home-centric trends resulting from the COVID-19 pandemic. These trends may not continue, or may reverse, which could adversely impact our results of operations. In addition, in recent years our customers have had difficulty employing a sufficient number of qualified individuals to keep up with the demand for pool installation, maintenance and refurbishment. If this trend continues or accelerates, our results of operations could be negatively impacted.

We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.

We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence due to changing customer or consumer requirements and fluctuating commodity prices. In order to successfully manage our inventories, we must estimate demand from our customers and purchase products that substantially correspond to consumer demand. If we overestimate demand and purchase too much of a particular product, we face a risk that the price of that product will fall, leaving us with inventory that we cannot sell at normal profit margins. In addition, we may have to write down such inventory if we are unable to sell it for its recorded value. If we underestimate demand and purchase insufficient quantities of products, inventory shortages could result in delayed revenue or loss of sales opportunities altogether as potential customers turn to competitors’ products that are readily available. If we maintain insufficient inventory levels and prices rise for these products, we could be forced to purchase products at higher prices and forego profitability in order to meet customer demand. While always present, these challenges have been heightened over the past couple years, as the pandemic has altered consumer spending trends. Our business, financial condition and results of operations could be negatively impacted if either or both of these situations occur frequently or in large volumes.

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Risks Relating to Technology, Cybersecurity and Data Privacy

We rely on information technology systems to support our business operations. A significant disturbance, breach or cybersecurity attack of our technological infrastructure could adversely affect our financial condition and results of operations.

Information technology supports several aspects of our business, including among others, product sourcing, pricing, customer service, transaction processing, inventory management, financial reporting, collections and cost management.  Our ability to operate effectively on a day-to-day basis, communicate with our customers and accurately report our results depends on a reliable technological infrastructure, which is inherently susceptible to internal and external threats. We are vulnerable to interruption by fire, natural disaster, power loss, telecommunication failures, internet failures, security breaches and other catastrophic events. Exposure to various types of cyber-attacks such as malware, computer viruses, worms, ransomware or other malicious acts, as well as human error, could also potentially disrupt our operations, result in a significant interruption in the delivery of our goods and services or result in the loss of sensitive data.

We are making, and expect to continue to make, investments in technology to maintain and update our computer systems and to expand our ability to engage in e-commerce with our customers. We may not implement these changes as quickly or successfully as our customers expect. In addition, implementing significant system changes increases the risk of computer system disruption. The potential problems and interruptions associated with implementing technology initiatives or conversions (including those contemplated under our currently pending multi-year systems upgrade project further described elsewhere herein), as well as providing training and support for those initiatives, could disrupt or reduce our operational efficiency. Advances in computer and software capabilities, encryption technology and other discoveries increase the complexity of our technological environment, including how each interact with our various software platforms. Such advances could delay or hinder our ability to process transactions or could compromise the integrity of our data, resulting in a material adverse impact on our financial condition and results of operations. We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties or the failure of software of services provided by third parties that we do not control. A lack of sophistication or reliability of our information systems could adversely impact our operations and customer service and could require major repairs or replacements, resulting in significant costs and foregone revenue.

Like other companies our size, we devote significant resources to protect our systems and data from cyber-attacks. Despite our substantial efforts to defend against these attacks, we have faced various attempted cyber-attacks that did not result in a material adverse effect on our operations, operating results or financial condition. The risk of breaches is likely to continue to increase due to several factors, including the increasing sophistication of cyber-attacks and the wider accessibility of cyber-attack tools. Known and newly discovered software and hardware vulnerabilities are constantly evolving, which increases the difficulty of detecting and successfully defending against them. Consequently, we may not be able to implement security barriers or other preventative measures that repel all future cyber-attacks or detect such attacks in a timely manner to minimize the potential business disruption and unfavorable financial impacts.

Although we maintain insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.

Failure to maintain the security of confidential information could damage our reputation and expose us to litigation. Additionally, changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.

We collect and store data that is sensitive to us and our employees, customers and vendors. The failure to maintain security over and prevent unauthorized access to our data, our customers’ personal information, including credit card information, or data belonging to our suppliers, could put us at a competitive disadvantage. Such a breach could result in damage to our reputation and subject us to potential litigation, liability, fines and penalties and require us to incur significant expense to address and remediate or otherwise resolve these issues, resulting in a possible material adverse impact on our financial condition and results of operations.

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A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data. The European Union and other international regulators, as well as state governments, have recently enacted or enhanced data privacy regulations, such as the California Consumer Privacy Act, and other governments are considering establishing similar or stronger protections. These regulations impose certain obligations for handling specified personal information in our systems and for apprising individuals of the information we have collected about them. Many of these laws are complex and change frequently and often conflict with the laws in other jurisdictions. Despite our best efforts to comply, any noncompliance could result in incurring potential substantial penalties and reputational damage.

Risks Relating to Legal, Regulatory and Compliance Matters

The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety and other governmental regulations. Our costs of doing business could increase as a result of changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations.

We are subject to regulation under federal, state, local and international employment, environmental, health, transportation and safety requirements, which govern such things as packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers. These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations governing minimum wage or living wage requirements, the classification of exempt and non-exempt employees or other wage, labor or workplace regulations could increase our costs of doing business and adversely impact our results of operations.

We sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws. These laws primarily relate to labeling, annual registration and licensing. Management has processes in place to facilitate and support our compliance with these requirements. However, failure to comply with these laws and regulations may result in investigations, the assessment of administrative, civil and criminal fines, damages, seizures, disgorgements, penalties or the imposition of injunctive relief. Moreover, compliance with such laws and regulations in the future could prove to be costly. Although we presently do not expect to incur any capital or other expenditures relating to regulatory matters in amounts that may be material to us, we may be required to make such expenditures in the future. These laws and regulations have changed substantially and rapidly over the last 25 years and we anticipate that there will be continuing changes.

The clear trend in environmental, health, transportation and safety regulations is to place more restrictions and limitations on activities that impact the environment, such as the use and handling of chemicals and the discharge of greenhouse gases. Increasingly, strict restrictions and limitations have resulted in higher operating costs for us and it is possible that the costs of compliance with such laws and regulations will continue to increase. Our attempts to anticipate future regulatory requirements that might be imposed and our plans to remain in compliance with changing regulations and to minimize the costs of such compliance may not be as effective as we anticipate.

Our business could be impacted by our public statements regarding various corporate environmental social and governance (“ESG”) initiatives or changes in consumers’ view of our products. As part of our strategy regarding ESG matters, we may set targets aimed at reducing our impact on the environment and climate change or targets relating to other sustainability matters. It is possible that we may not be able to achieve such targets or our desired impact, which may cause us to suffer from reputational damage or our business or financial condition could be adversely affected. Actions we take to achieve our strategy or targets could result in increased costs to our operations and changes in customers’ attitudes towards the environmental impact of our pool chemical products could reduce our sales. In addition, investors and stakeholders are increasingly focused on ESG matters, and positions we take or refrain from taking on ESG issues could negatively impact our reputation or relations with investors, customers, vendors, employees and others.

We store chemicals, fertilizers and other combustible materials that involve fire, safety and casualty risks.

We store chemicals and fertilizers, including certain combustibles and oxidizing compounds, at our sales centers. A fire, explosion or flood affecting one of our facilities could give rise to fire, safety and casualty losses and related liability claims. We maintain what we believe is prudent insurance protection. However, we cannot guarantee that our insurance coverage will be adequate to cover future claims that may arise or that we will be able to maintain adequate insurance in the future at rates we consider reasonable. Successful claims for which we are not fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally led to higher insurance costs and decreased availability of coverage.

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We conduct business internationally, which exposes us to additional risks.

Our ability to successfully conduct operations in, and source products and materials from, international markets is affected by many of the same risks we face in our U.S. operations, as well as unique costs and difficulties of managing international operations. Our international operations, including Canada and Mexico, which accounted for 10% of our total net sales in 2021, expose us to certain additional risks, including:

•difficulty in staffing international subsidiary operations;

•different political, economic and regulatory conditions;

•local laws and customs;

•currency fluctuations, exchange controls and repatriation restrictions;

•adverse tax consequences; and

•adverse consequences for violating anti-corruption, anti-competition, economic sanctions, immigration and other laws governing international commerce.

For foreign-sourced products, we may be subject to certain trade restrictions that would prevent us from obtaining products. There is also a greater risk that we may not be able to access products in a timely and efficient manner. Fluctuations in other factors relating to international trade, such as tariffs, transportation costs and inflation are additional risks for our international operations. 

Excess tax benefits or deficiencies recognized from our accounting for share-based awards impact our reported earnings.

In 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. Our projections of financial statement impacts related to ASU 2016-09 are subject to several assumptions which can vary significantly, including our estimated share price and the period that our employees will exercise vested stock options. Excess tax benefits or deficiencies recognized under ASU 2016-09 vary from quarter to quarter and past results may not be indicative of future results.

General Risks

Changes in tax laws and accounting standards related to tax matters have caused, and may in the future cause, fluctuations in our effective tax rate.

Taxation and tax policy changes, tax rate changes, new tax laws, revised tax law interpretations and changes in accounting standards and guidance related to tax matters may cause fluctuations in or adversely affect our effective tax rate. Our effective tax rate may also be impacted by changes in the geographic mix of our earnings.

We cannot assure you we will continue paying dividends at the current rates, or at all.

We cannot assure you we will continue periodic dividends on our capital stock at the current rates, or at all. Any quarterly dividends on our common stock will be paid from funds legally available for such purpose when, and if, declared by our Board of Directors. Decisions on whether, when and in which amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right to change or terminate our dividend practices at any time and for any reason without prior notice. Holders of our common stock should be aware they have no contractual or other legal right to receive dividends.

Similarly, holders of our common stock should be aware that repurchases of our common stock under any repurchase plan then in effect are completely discretionary and may be suspended or discontinued at any time for any reason regardless of our financial position.

Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us.

We maintain disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our SEC reports and internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance with U.S. generally accepted accounting principles (“GAAP”) of our financial statements. We cannot assure you these measures will be effective.

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We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined.

Borrowings under our unsecured syndicated senior credit facility, term facility, accounts receivable securitization facility and our derivatives instruments are indexed to the London Inter-bank Offering Rate (“LIBOR”). In July 2017, the Financial Conduct Authority (the regulatory authority over LIBOR) stated they will plan for a phase out of regulatory oversight of LIBOR after 2021 to allow for an orderly transition to an alternative reference rate. On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD Libor tenors. While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021. Although the Alternative Reference Rates Committee has endorsed the Secured Overnight Financing Rate (“SOFR”) as its preferred replacement for LIBOR, the market transition away from LIBOR towards SOFR may be complicated, and there is no guarantee that SOFR will become a widely accepted benchmark in place of LIBOR. The full impact of the transition away from LIBOR, including the discontinuance of LIBOR publication and the transition to a replacement rate may have an adverse impact on our financing costs and any floating rate indebtedness we may incur.

Item 1B.  Unresolved Staff Comments

None.

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Item 2.  Properties

We lease the Pool Corporation corporate offices, which consist of approximately 60,000 square feet of office space in Covington, Louisiana, from an entity in which we have a 50% ownership interest. We own five sales center facilities in Florida, three in Texas, one in Alabama, one in California, one in Georgia and one in Tennessee. As part of our acquisition of Porpoise Pool & Patio, Inc. in December 2021, we own the corporate headquarters and the Sun Wholesale Supply, Inc. facilities located in Florida. We lease all of our other properties and the majority of our leases have three to seven year terms. As of December 31, 2021, we had twenty-one leases with remaining terms longer than seven years that expire between 2029 and 2036.

Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance.

Our sales centers range in size from approximately 2,000 square feet to 70,000 square feet and generally consist of warehouse, counter, display and office space.  Our centralized shipping locations (CSLs) range in size from approximately 115,000 square feet to 185,000 square feet.

We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability and may relocate a sales center or consolidate two locations if a sales center is redundant in a market, underperforming or otherwise deemed unsuitable. We do not believe that any single lease is material to our operations.

The table below summarizes the changes in our sales centers during the year ended December 31, 2021:

Network	12/31/20	New Locations	Closed/Consolidated Locations (1)	Acquired Locations	12/31/21
SCP (2)	186	5	—	2	193
Superior	73	—	(1)	1	73
Horizon	76	4	—	1	81
NPT (3)	21	—	(1)	—	20
Total Domestic	356	9	(2)	4	367
SCP International	42	1	—	—	43
Total	398	10	(2)	4	410

(1)Consolidated sales centers are those locations where we expect to transfer the majority of the existing business to our nearby sales center locations.

(2)Acquired locations includes one distribution location for Sun Wholesale Supply, Inc., which we acquired in December 2021. As part of the acquisition, we also acquired non-sales center properties including a chemical packaging plant and three Pinch A Penny, Inc. retail stores in Florida.

(3)In addition to the stand-alone NPT sales centers, there are over 100 SCP and Superior locations that have consumer showrooms and serve as stocking locations that feature NPT brand tile and composite finish products.

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The table below identifies the number of sales centers in each state, territory or country by distribution network as of December 31, 2021:

Location	SCP	Superior	Horizon	NPT	Total
United States
California	28	24	18	6	76
Florida	39	5	17	1	62
Texas	26	5	16	7	54
Arizona	7	8	9	2	26
Georgia	7	2	1	1	11
Tennessee	6	4	—	—	10
Nevada	2	3	3	1	9
New York	9	—	—	—	9
Washington	3	—	6	—	9
New Jersey	5	2	—	—	7
North Carolina	4	2	1	—	7
Pennsylvania	5	1	—	1	7
Virginia	3	1	3	—	7
Alabama	4	2	—	—	6
Illinois	4	1	—	—	5
Indiana	2	3	—	—	5
Louisiana	5	—	—	—	5
Oregon	1	—	4	—	5
South Carolina	4	1	—	—	5
Missouri	3	1	—	—	4
Ohio	2	2	—	—	4
Oklahoma	2	1	—	1	4
Arkansas	3	—	—	—	3
Colorado	—	2	1	—	3
Idaho	1	—	2	—	3
Connecticut	2	—	—	—	2
Kansas	2	—	—	—	2
Massachusetts	2	—	—	—	2
Michigan	2	—	—	—	2
Minnesota	1	1	—	—	2
Mississippi	2	—	—	—	2
Hawaii	1	—	—	—	1
Iowa	1	—	—	—	1
Kentucky	—	1	—	—	1
Maryland	1	—	—	—	1
Nebraska	1	—	—	—	1
New Mexico	1	—	—	—	1
Puerto Rico	1	—	—	—	1
Utah	1	—	—	—	1
Wisconsin	—	1	—	—	1
Total United States	193	73	81	20	367
International
Canada	17	—	—	—	17
France	7	—	—	—	7
Australia	6	—	—	—	6
Mexico	4	—	—	—	4
Portugal	2	—	—	—	2
Spain	2	—	—	—	2
Belgium	1	—	—	—	1
Croatia	1	—	—	—	1
Germany	1	—	—	—	1
Italy	1	—	—	—	1
United Kingdom	1	—	—	—	1
Total International	43	—	—	—	43
Total	236	73	81	20	410

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Item 3.  Legal Proceedings

From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. While the outcome of any litigation is inherently unpredictable, based on currently available facts, we do not believe that the ultimate resolution of any of these matters will have a material adverse impact on our financial condition, results of operations or cash flows.

Item 4.  Mine Safety Disclosures

Not applicable.

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PART II.

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the Nasdaq Global Select Market under the trading symbol “POOL.”  On February 18, 2022, there were approximately 531 holders of record of our common stock.  

We initiated quarterly dividend payments to our shareholders in the second quarter of 2004 and we have continued payments in each subsequent quarter. Our Board has increased the dividend amount sixteen times, including in the fourth quarter of 2004, annually in the second quarters of 2005 through 2008 and in the second quarters of 2011 through 2021.  Our Board may declare future dividends at their discretion, after considering various factors, including our earnings, capital requirements, financial position, contractual restrictions and other relevant business considerations. For a description of restrictions on dividends in our Credit Facility, Term Facility and Receivables Facility, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. We cannot assure shareholders or potential investors that dividends will be declared or paid any time in the future if our Board determines that there is a better use of our funds.

Stock Performance Graph

The information included under the caption “Stock Performance Graph” in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 (the 1934 Act) or to the liabilities of Section 18 of the 1934 Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the 1934 Act, except to the extent we specifically incorporate it by reference into such a filing.

The following graph compares the cumulative total shareholder return on our common stock for the last five fiscal years with the total return on the S&P 500 Index, of which we have been a member since 2020, and the Nasdaq Index for the same period, in each case assuming the investment of $100 on December 31, 2016 and the reinvestment of all dividends. We believe the S&P 500 Index is comprised of similar-sized public companies that represent the most likely alternative investments for investors. Additionally, we chose the S&P 500 Index for comparison, as opposed to an industry index, because we do not believe that we can reasonably identify a peer group or a published industry or line-of-business index that contains companies in a similar line of business.

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	Base Period		Indexed Returns Years Ending
Company / Index	12/31/16		12/31/17		12/31/18		12/31/19		12/31/20		12/31/21
Pool Corporation	$	100.00	$	125.78	$	145.87	$	210.78	$	372.99	$	570.59
S&P 500 Index	100.00		121.83		116.49		153.17		181.35		233.41
Nasdaq Index	100.00		129.64		125.96		172.18		249.51		304.85

Purchases of Equity Securities

The table below summarizes the repurchases of our common stock in the fourth quarter of 2021:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan (2)	Maximum Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan (3)
October 1 – October 31, 2021	125	$	515.16	—	$	494,723,778
November 1 – November 30, 2021	—	$	—	—	$	494,723,778
December 1 – December 31, 2021	—	$	—	—	$	494,723,778
Total	125	$	515.16	—

(1)These shares may include shares of our common stock surrendered to us by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. There were 125 shares surrendered for this purpose in the fourth quarter of 2021.

(2)In May 2021, our Board authorized an additional $450.0 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices or in privately negotiated transactions.

(3)As of February 18, 2022, our total authorization remaining was $482.4 million.

Item 6.  [RESERVED]

Not applicable.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

For a discussion of our base business calculations, see the RESULTS OF OPERATIONS section below.

2021 FINANCIAL OVERVIEW

Financial Results

Net sales increased 35% to $5.3 billion for the year ended December 31, 2021 compared to $3.9 billion in 2020, while base business sales increased 29%. Our sales were driven by strong customer demand for outdoor living products throughout the year and benefited from inflation and warmer weather trends across most of the United States.

Gross profit reached $1.6 billion for the year ended December 31, 2021, a 43% increase over gross profit of $1.1 billion in 2020. Gross margin improved 180 basis points to 30.5% in 2021 compared to 28.7% in 2020, reflecting benefits from our actions to address inflation and manage supply chain disruptions, along with favorable impacts realized from increased purchase volumes.

Selling and administrative expenses (operating expenses), including a $2.5 million note recovery in 2021 and $6.9 million of impairment charges in 2020, increased 18%, or $117.4 million, to $784.3 million in 2021, with base business operating expenses up 12% over 2020. Our operating expenses have increased as we reward our employees through performance-based compensation, in addition to increases in growth-driven labor, facility and freight costs, and investments in technology. As a percentage of net sales, operating expenses declined 210 basis points to 14.8% in 2021 compared to 16.9% in 2020.

Operating income for the year increased 79% to $832.8 million, up from $464.0 million in 2020. Operating margin increased 390 basis points to 15.7% in 2021 compared to 11.8% in 2020.

We recorded a $30.0 million, or $0.74 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, for the year ended December 31, 2021 compared to a tax benefit of $28.6 million, or $0.70 per diluted share, realized in 2020.

Net income increased 77% to $650.6 million in 2021 compared to $366.7 million in 2020. Adjusted net income, without the note recovery in 2021 and the prior year impact of impairments, both net of tax, increased 74% to $648.8 million. Earnings per share increased 78% to a record $15.97 per diluted share compared to $8.97 per diluted share in 2020. See RESULTS OF OPERATIONS below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.

COVID-19 Pandemic

We continue to monitor the ongoing impact of the COVID-19 pandemic, including the effects of recent notable variants of the virus. The health, safety and security of our employees and the communities in which we operate remains our highest priority. We have adapted our operations and implemented a number of measures to facilitate a safer sales center environment for both our customers and employees, which includes following best practices and guidelines from the Centers for Disease Control and Prevention (CDC). We implemented enhanced hygiene and sanitation practices at our sales centers and at our corporate offices in 2020, and we continue to evaluate and maintain them.

We are designated as an essential business in almost all of our markets. Our products are used to maintain and protect outdoor commercial, residential and municipal environments through chemically-balanced, virus and bacteria-free swimming pool water. We also supply products used in the prevention of runoff, flood, fire and other natural disasters. These products are essential to the health and safety of the general public. In limited instances, we have had to close facilities as a result of government regulations, as well as COVID-19 cases. The direct impact of any closures to date have not had a material impact on our operations or results.

Beginning in the second quarter of 2020 and through the end of 2021, we experienced unprecedented demand as families spent more time at home and sought out opportunities to create or expand home-based outdoor living and entertainment spaces. While this trend has had a positive impact on our financial performance over the past couple of years, it is unclear what the long-term impact will be.

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Our industry experienced constrained supply chain dynamics in 2021. In response, we have been proactive in making significant investments in inventory to enable us to continue to meet strong customer demand and position ourselves to provide exceptional customer service into the 2022 season. These trends, caused in large part from global disruptions related to the COVID-19 pandemic, may persist in the near-term.

We expect the impact of the pandemic on our business and financial results in 2022 will continue to vary by location and depend on numerous evolving factors that we are not able to accurately predict. These factors include the duration and scope of the pandemic, global economic conditions during and after the pandemic, the re-institution of governmental actions that could restrict the activities of our customers, vendors or employees, the possibility of additional subsequent outbreaks, the sustainability of current home-centric trends and other changes in customer and supplier behavior in response to the pandemic.

Financial Position and Liquidity

Cash provided by operations was $313.5 million in 2021. Cash provided by operations throughout the year helped fund the following initiatives:

•net working capital outflows of $392.3 million;

•share repurchases, totaling $138.0 million for the year;

•quarterly cash dividend payments to shareholders, totaling $119.6 million for the year; and

•net capital expenditures of $37.7 million.

Total net receivables, including pledged receivables, increased 30% compared to December 31, 2020, primarily driven by our sales growth and 2021 acquisitions. Our allowance for doubtful accounts was $5.9 million at December 31, 2021 and $4.8 million at December 31, 2020. Our days sales outstanding ratio, as calculated on a trailing four quarters basis, was 25.6 days at December 31, 2021 and 26.5 days at December 31, 2020.

Inventory levels grew 71% to $1.3 billion at December 31, 2021 compared to $781.0 million at December 31, 2020, reflecting significant investments in inventory throughout the year to support increased demand and help manage supply chain pressures, in addition to impacts from inflation and acquisitions. Our reserve for inventory obsolescence was $15.2 million at December 31, 2021 compared to $11.4 million at December 31, 2020. Our inventory turns, as calculated on a trailing four quarters basis, were 3.4 times at December 31, 2021 and 3.8 times at December 31, 2020. Our inventory turns at December 31, 2021 are consistent with average inventory turns over the past five years.

Accrued expenses and other current liabilities increased $121.2 million to $264.9 million in 2021, primarily reflecting an increase in deferred income tax payments of $79.5 million and a $16.4 million increase in accrued performance-based compensation. As allowed for companies impacted by Hurricane Ida, we deferred our 2021 third and fourth quarter estimated federal tax payments, which were paid in February 2022.

Total debt outstanding of $1.2 billion at December 31, 2021 increased $767.3 million compared to December 31, 2020. We utilized debt proceeds to fund our 2021 acquisitions, including Porpoise Pool & Patio, Inc., which we purchased on December 16, 2021 for $788.7 million, net of cash acquired.

Current Trends and Outlook

Over the past two years, in response to the COVID-19 pandemic, families spent more time at home and sought out opportunities to create or expand home-based outdoor living and entertainment spaces, which resulted in an increase in new pool construction and greater expenditures for maintenance and remodeling products. We believe that increased consumer spending on homes, including outdoor living spaces, will have longer term benefits as work-from-home trends persist or increase.

Over the past decade, homeowners investing in their homes, including backyard renovations, have flourished. Steady increases in home values and lack of affordable new homes have prompted homeowners to stay in their homes longer and upgrade their home environments, including their backyards. We expect that new pool and irrigation system construction levels will continue to grow incrementally, constrained by availability of construction labor. However, we believe that consumer investments in outdoor living spaces will generate continued growth over the next several years. Although some constraints exist around residential construction activities, we believe that we are well positioned to take advantage of both the near term market expansion and the inherent long term growth opportunities in our industry.

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We have benefited from strong pool construction trends as robust demand fueled by the COVID-19 pandemic led to increased home investment trends. We estimate that new pool construction increased to approximately 120,000 units in 2021 from 96,000 units in 2020, representing a 25% increase in new pool construction. Favorable weather positively impacts industry growth by accelerating growth in any given year, expanding the number of available construction days, extending the pool season and pool usage and positively impacting demand for discretionary products. Conversely, unfavorable weather impedes growth. In establishing our outlook each year, we base our growth assumptions on normal weather conditions and do not incorporate alternative weather predictions into our guidance. 

We established our initial outlook for 2022 based on reasonable expectations of organic industry and market share growth, ongoing leverage of existing investments in our business and continuous process improvements. Impacts from the COVID-19 pandemic, coupled with heightened demand, could continue to adversely impact our supply chain, making it difficult to source and receive products needed to keep our customers adequately supplied. Although supply constraints did not have a material impact on our business in 2021, it is difficult to predict the extent to which this could impact our business in 2022.

We expect to continue to gain market share through our comprehensive service and product offerings, which we continually diversify through internal sourcing initiatives and expansion into new markets. We also plan to broaden our geographic presence by opening 8 to 10 new sales centers in 2022 and by making selective acquisitions when appropriate opportunities arise.

The following summarizes our outlook for 2022:

•We expect sales growth of 17% to 19%, impacted by the following factors and assumptions:

◦normal weather patterns for 2022;

◦continued elevated demand for residential pool products, driven by home-centric trends;

◦a benefit from construction backlogs depending on our customers’ building capacity, including the availability of labor, and weather;

◦inflationary product cost increases, which generally pass through to customers, of approximately 9% to 10% (compared to 7% to 8% in 2021);

◦estimated 5% growth from acquisitions completed throughout 2021; and

◦market share gains.

•We expect relatively neutral gross margin trends for the full year of 2022 compared to the full year of 2021 with modest improvements in the first half of 2022 and declines in the latter half of the year. However, our gross margin trends are dependent on amounts and timing of inflationary price increases, sales growth expectations and product mix.

•We believe that tight labor and real estate markets will present challenges in managing expenses in 2022. However, we project that operating expense growth in 2022 will be less than our gross profit growth. We expect that our operating expense growth will reflect inflationary increases and incremental costs to support our investment initiatives, including increased investments in technology and expansion of our sales center network.

In 2022, we expect our effective tax rate will approximate 25.5%, without the impact of ASU 2016-09. Our effective tax rate is dependent upon our results of operations and may change if actual results are different from our current expectations. Due to ASU 2016-09 requirements, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We estimate that we have approximately $7.6 million in unrealized excess tax benefits related to stock options that expire and restricted awards that vest in the first quarter of 2022. We may recognize additional tax benefits related to stock option exercises in 2022 from grants that expire in years after 2022, for which we have not included any expected benefits in our guidance. The estimated impact related to ASU 2016-09 is subject to several assumptions which can vary significantly, including our estimated share price and the period that our employees will exercise vested stock options. We recorded a $30.0 million benefit in our provision for income taxes for the year ended December 31, 2021 related to ASU 2016-09.

We project that 2022 earnings will be in the range of $17.19 to $17.94 per diluted share, including an estimated $0.19 benefit from ASU 2016-09 during the first quarter of 2022. We expect to continue to use cash to fund opportunistic share repurchases over the next year and to use cash for the payment of cash dividends as and when declared by our Board of Directors.

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The forward-looking statements in this Current Trends and Outlook section are subject to significant risks and uncertainties, including the effects of the evolving COVID-19 pandemic, and the extent to which home-centric trends will continue, accelerate or reverse, the sensitivity of our business to weather conditions, changes in the economy, consumer discretionary spending or the housing market, our ability to maintain favorable relationships with suppliers and manufacturers, competition from other leisure product alternatives or mass merchants and other risks detailed in Item 1A of this Form 10-K. Also see “Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” prior to the heading “Risk Factors” in Item 1A.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates are those estimates made in accordance with U.S. generally accepted accounting principles that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. Our critical accounting estimates are discussed below, including, to the extent material and reasonably available, the impact such estimates have had, or are reasonably likely to have, on our financial condition or results of operations.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts based on an estimate of the losses we will incur if our customers do not make required payments. We perform periodic credit evaluations of our customers and typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. The extended terms usually require payments in equal installments in April, May and June or May and June, depending on geographic location. Credit losses have generally been within or better than our expectations.

Similar to our business, our customers’ businesses are seasonal. Sales are lowest in the winter months and our past due accounts receivable balance as a percentage of total receivables generally increases during this time. We provide reserves for uncollectible accounts based on our accounts receivable aging. These reserves range from 0.05% for amounts currently due to up to 100% for specific accounts more than 60 days past due.

At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 and more than 60 days past due. Additionally, we perform a separate reserve analysis on the balance of our accounts receivables with emphasis on past due accounts. We estimate future losses based upon historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current and forecasted economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family home prices.

During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. In the past five years, write-offs have averaged approximately 0.08% of net sales annually.  Write-offs as a percentage of net sales approximated 0.06% in 2021, 0.09% in 2020 and 0.12% in 2019. We expect that write-offs will range from 0.05% to 0.10% of net sales in 2022.

At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end allowance for doubtful accounts balance to (i) current year write-offs and (ii) any significantly aged outstanding receivable balances. Based on our hindsight analysis, we concluded that the prior year allowance was within a range of acceptable estimates and that our estimation methodology is appropriate.

If the balance of the accounts receivable reserve increased or decreased by 20% at December 31, 2021, pretax income would change by approximately $1.2 million and earnings per share would change by approximately $0.02 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2021).

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Inventory Obsolescence

Product inventories represent the largest asset on our balance sheet. Our goal is to manage our inventory such that we minimize stock-outs to provide the highest level of service to our customers. To do this, we maintain at each sales center an adequate inventory of stock keeping units (SKUs) with the highest sales volumes. At the same time, we continuously strive to better manage our slower moving classes of inventory, which are not as critical to our customers and thus, inherently turn at slower rates.

We classify products at the sales center level based on sales at each location over the expected sellable period, which is the previous 12 months for most products, except for special order non-stock items that lack a SKU in our system and products with less than 12 months of usage. Below is a description of these inventory classifications:

•new products with less than 12 months usage;

•highest sales velocity items, which represent approximately 80% of net sales at the sales center;

•lower sales velocity items, which we keep in stock to provide a high level of customer service;

•products with no sales for the past 12 months at the local sales center level, excluding special order products not yet delivered to the customer; and

•non-stock special order items.

There is little risk of obsolescence for our highest sales velocity items, which represent approximately 80% of net sales at the sales center, because these products generally turn quickly. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence, with particular emphasis on SKUs with the least sales over the previous 12 months. The reserve is intended to reflect the value of inventory at net realizable value. We provide a reserve of 5% for inventory with lower sales velocity, inventory with no sales for the past 12 months and non-stock inventory as determined at the sales center level. We also provide an additional 5% reserve for excess lower sales velocity inventory and an additional 45% reserve for excess inventory with no sales for the past 12 months. We determine excess inventory, which is defined as the amount of inventory on hand in excess of the previous 12 months’ usage, on a company-wide basis. We also evaluate whether the calculated reserve provides sufficient coverage of total inventory with no sales for the past 12 months. We have not changed our methodology from prior years.

In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors, including:

•the level of inventory in relation to historical sales by product, including inventory usage by class based on product sales at both the sales center level and on a company-wide basis;

•changes in customer preferences or regulatory requirements;

•seasonal fluctuations in inventory levels;

•geographic location; and

•superseded products and new product offerings.

We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end obsolescence reserve balance to (i) current year inventory write-offs and (ii) the value of products with no sales for the past 12 months that remain in inventory. Based on our hindsight analysis, we concluded that our prior year reserve was within a range of acceptable estimates and that our estimation methodology is appropriate.

If the balance of our inventory reserve increased or decreased by 20% at December 31, 2021, pretax income would change by approximately $3.0 million and earnings per share would change by approximately $0.06 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2021).

Vendor Programs

Many of our vendor arrangements provide for us to receive specified amounts of consideration when we achieve any of a number of measures.  These measures generally relate to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements.  We account for vendor programs as a reduction of the prices of the vendor’s products and therefore a reduction of inventory until we sell the product, at which time we recognize such consideration as a reduction of cost of sales in our income statement.

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Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward the attainment of various levels within certain vendor programs. We accrue vendor program benefits on a monthly basis using these estimates provided that we determine they are probable and reasonably estimable. Our estimates for annual purchases, future inventory levels and sales of qualifying products are driven by our sales projections, which can be significantly impacted by a number of external factors including changes in economic conditions and weather.  Changes in our purchasing mix also impact our estimates, as certain program rates can vary depending on our volume of purchases from specific vendors.

We continually revise these estimates throughout the year to reflect actual purchase levels and identifiable trends. As a result, our estimated quarterly vendor program benefits accrual may include cumulative catch-up adjustments to reflect any changes in our estimates between reporting periods. These adjustments tend to have a greater impact on gross margin in the fourth quarter since it is our seasonally slowest quarter and because the majority of our vendor arrangements are based on calendar year periods. We update our estimates for these arrangements at year end to reflect actual annual purchase or sales levels. In the first quarter of the subsequent year, we prepare a hindsight analysis by comparing actual vendor credits received to the prior year vendor receivable balances. Based on our hindsight analysis, we concluded that our vendor program estimates were within a range of acceptable estimates and that our estimation methodology is appropriate.

If market conditions were to change, vendors may change the terms of some or all of these programs. Although such changes would not affect the amounts we have recorded related to products already purchased, they may lower or raise our cost for products purchased and sold in future periods.

Income Taxes

We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse.  Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future.

We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred, although we have not realized any impacts since the December 2017 enactment of U.S. tax reform.

As of December 31, 2021, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We determined not to change our indefinite reinvestment assertion in light of U.S. tax reform.

We operate in 39 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities.  We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters.  However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire.  These adjustments may include changes in valuation allowances that we have established.  As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis.

Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on this hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to changes in valuation allowances recorded for certain of our international subsidiaries with tax losses and excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards.

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Performance-Based Compensation Accrual

The Compensation Committee of our Board (Compensation Committee) and our management have designed compensation programs intended to create a performance culture. The primary objectives of our compensation programs are to attract, motivate, reward and retain our employees without leading to unnecessary risk taking. Our compensation packages include bonus plans that are specific to groups of eligible participants and their levels and areas of responsibility. The majority of our bonus plans consist of annual cash payments that are based primarily on objective performance criteria. We calculate bonuses based on the achievement of certain key measurable financial and operational results, including operating income.

We use an annual cash performance award (annual bonus) to focus corporate behavior on short-term goals for growth, financial performance and other specific financial and business improvement metrics. Management sets the company’s annual bonus objectives at the beginning of the bonus plan year using both historical information and forecasted results of operations for the current plan year. Management also establishes specific business improvement objectives for both our operating units and corporate employees. The Compensation Committee approves objectives for annual bonus plans involving executive management.

We also utilize our medium-term (three-year) Strategic Plan Incentive Program (SPIP) to provide senior management with an additional cash-based, pay-for-performance award based on the achievement of specified earnings growth objectives. Payouts through the SPIP are based on three-year compound annual growth rates (CAGRs) of our diluted EPS.

We record annual performance-based compensation accruals based on operating income achieved in a quarter as a percentage of total expected operating income for the year. We estimate total expected operating income for the current plan year using management’s estimate of the total overall incentives earned per the stated bonus plan objectives. Starting in June, and continuing each quarter through our fiscal year end, we adjust our estimated performance-based compensation accrual based on our detailed analysis of each bonus plan, the participants’ progress toward achievement of their specific objectives and management’s estimates related to the discretionary components of the bonus plans, if any.

We record SPIP accruals based on our total expected EPS for the current fiscal year and earnings growth estimates for the succeeding two years. We base our current fiscal year estimates on the same assumptions used for our annual bonus calculation and we base our forward-looking estimates on historical growth trends and our projections for the remainder of the three-year performance periods.

Our quarterly performance-based compensation expense and accrual balances may vary relative to actual annual bonus expense and payouts due to the following:

•differences between estimated and actual performance;

•our projections related to achievement of multiple-year performance objectives for our SPIP; and

•the discretionary components of the bonus plans.

We generally make bonus payments at the end of February following the most recently completed fiscal year. Each year, we compare the actual bonus payouts to amounts accrued at the previous year’s end to determine the accuracy of our performance-based compensation estimates. Based on our hindsight analysis, we concluded that our performance-based compensation accrual balances were within a reasonable range of acceptable estimates and that our estimation methodologies are appropriate.

Business Combinations - Goodwill and Intangible Asset Valuation

In December 2021, we acquired Porpoise Pool & Patio, Inc. (“Porpoise”) for $788.7 million, net of cash acquired. Based on our preliminary purchase price allocation, we recognized tangible assets of $84.2 million, identifiable intangible assets of $301.0 million and resulting goodwill of $403.5 million.

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We used the acquisition method of accounting for this business combination. Our financial statements reflect the operations of an acquired business starting from the closing date of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of market participants. Significant assumptions include expected revenue growth rates, earnings metrics and discount rates. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the underlying estimates and assumptions. We ran sensitivity analyses on the significant assumptions to evaluate our valuations and determined each to be within a range of acceptable estimates.

Determining the useful lives of intangible assets also requires judgment. Our Pinch A Penny brand name is expected to have an indefinite life as it corresponds with the period of expected future cash flows of the intangible asset. We considered the competitive market position, historical results, macroeconomic environment, our operating plans and expected future use of the brand in our network expansion. Our estimates of the useful lives of definite-lived intangible assets are based on the same criteria and correspond with the expected future cash flows. The costs of definite-lived intangibles are amortized to expense over their estimated life. We review the carrying value of goodwill and non-amortizable intangible assets and conduct tests of impairment on an annual basis as described below. We also test for impairment if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is below its carrying amount. We test indefinite-lived intangible assets for impairment if events or changes in circumstances indicate that the asset might be impaired.

Determining the fair value of a reporting unit or an indefinite-lived purchased intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. For additional details, see Note 3 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. While we believe those estimates and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

Impairment of Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill is our largest intangible asset. At December 31, 2021, our goodwill balance was $688.4 million, representing approximately 21% of total assets. Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed.

We perform a goodwill impairment test in the fourth quarter of each year or on a more frequent basis if events or changes in circumstances occur that indicate potential impairment.  To the extent the carrying value of a reporting unit is greater than its estimated fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, we define a reporting unit as an individual sales center.  As of October 1, 2021, we had 247 reporting units with allocated goodwill balances. The most significant goodwill balance for a reporting unit was $12.1 million and the average goodwill balance was $1.1 million. As of December 31, 2021, our most significant goodwill balance for a reporting unit was related to our acquisition of Porpoise as discussed above.

In October 2021, 2020 and 2019, we performed our annual goodwill impairment test and did not recognize any goodwill impairment at the reporting unit level. In the first quarter of 2020, we recorded impairment equal to the total goodwill and intangibles carrying amounts of our five Australian reporting units, which included goodwill impairment of $3.5 million and intangibles impairment, related to the Pool Systems tradename and trademark, of $0.9 million.

To estimate the fair value of our reporting units, we project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and earnings multiples. These estimates can significantly affect the outcome of our impairment test.  We also review for potential impairment indicators at the reporting unit level based on an evaluation of recent historical operating trends, current and projected local market conditions and other relevant factors as appropriate.

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To test the reasonableness of our fair value estimates, we compared our aggregate estimated fair values to our market capitalization as of the date of our annual impairment test. We expect that a reasonable fair value estimate would reflect a moderate acquisition premium. Our aggregate estimated fair values fell in line with our market capitalization, which we consider to be reasonable for the purpose of our goodwill impairment test. To facilitate a sensitivity analysis, we reduced our consolidated fair value estimate to reflect more conservative discounted cash flow assumptions, the sensitivity of a 50 basis point increase in our estimated weighted average cost of capital or a 50 basis point decrease in the estimated perpetuity growth rate. Our sensitivity analysis generated a fair value estimate below our market capitalization and did not result in the identification of additional at-risk locations.

If our assumptions or estimates in our fair value calculations change or if operating results are less than forecasted, we could incur impairment charges in future periods.  Impairment charges would decrease operating income, negatively impact diluted EPS and result in lower asset values on our balance sheet.  

Recent Accounting Pronouncements

See Note 1 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for details.

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RESULTS OF OPERATIONS

The table below summarizes information derived from our Consolidated Statements of Income expressed as a percentage of net sales for the past three fiscal years:

	Year Ended December 31,
	2021		2020		2019
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	69.5		71.3		71.1
Gross profit	30.5		28.7		28.9
Operating expenses	14.8		16.9		18.2
Operating income	15.7		11.8		10.7
Interest and other non-operating expenses, net	0.2		0.3		0.7
Income before income taxes and equity in earnings	15.6	%	11.5	%	9.9	%

Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings.

Our discussion of consolidated operating results includes the operating results from acquisitions in 2021, 2020 and 2019.  We have included the results of operations in our consolidated results since the respective acquisition dates.

Fiscal Year 2021 compared to Fiscal Year 2020

The following table breaks out our consolidated results into the base business component and the excluded components (sales centers excluded from base business):

(Unaudited)	Base Business						Excluded						Total
(in thousands)	Year Ended						Year Ended						Year Ended
	December 31,						December 31,						December 31,
	2021			2020			2021			2020			2021			2020
Net sales	$	5,038,256		$	3,900,973		$	257,328		$	35,650		$	5,295,584		$	3,936,623
Gross profit	1,547,820			1,122,843			69,272			8,059			1,617,092			1,130,902
Gross margin	30.7		%	28.8		%	26.9		%	22.6		%	30.5		%	28.7		%
Operating expenses (1)	736,707			656,968			47,601			9,907			784,308			666,875
Expenses as a % of net sales	14.6		%	16.8		%	18.5		%	27.8		%	14.8		%	16.9		%
Operating income (loss) (1)	811,113			465,875			21,671			(1,848)			832,784			464,027
Operating margin	16.1		%	11.9		%	8.4		%	(5.2)		%	15.7		%	11.8		%

(1)Base business and total reflect a $2.5 million note recovery in 2021 and $6.9 million of impairment from goodwill and other assets recorded in 2020.

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We have excluded the following acquisitions from base business for the periods identified:

Acquired	Acquisition Date	Net Sales Centers Acquired	Periods Excluded
Porpoise Pool & Patio, Inc.	December 2021	1	December 2021
Wingate Supply, Inc.	December 2021	1	December 2021
Vak Pak Builders Supply, Inc.	June 2021	1	June - December 2021
Pool Source, LLC	April 2021	1	April - December 2021
TWC Distributors, Inc.	December 2020	10	January - December 2021 and December 2020
Jet Line Products, Inc.	October 2020	9	January - December 2021 and October - December 2020
Northeastern Swimming Pool Distributors, Inc.	September 2020	2	January - November 2021 and September - November 2020
Master Tile Network LLC	February 2020	4	January - May 2021 and February - May 2020

When calculating our base business results, we exclude sales centers that are acquired, closed or opened in new markets for a period of 15 months. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that are consolidated with acquired sales centers.

We generally allocate corporate overhead expenses to excluded sales centers on the basis of their net sales as a percentage of total net sales.  After 15 months of operations, we include acquired, consolidated and new market sales centers in the base business calculation including the comparative prior year period.

The table below summarizes the changes in our sales centers during 2021:

December 31, 2020	398
Acquired locations	4
New locations	10
Closed/consolidated locations	(2)
December 31, 2021	410

For information about our recent acquisitions, see Note 2 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

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Net Sales

(in millions)	Year Ended December 31,
	2021		2020		Change
Net sales	$	5,295.6	$	3,936.6	$	1,359.0	35%

Net sales increased 35% compared to 2020, with 29% of this increase resulting from base business sales growth. Maintenance, refurbishment and construction activity remained strong in 2021 as households continued to create and expand home-based outdoor living spaces. Our sales were driven by robust customer demand for outdoor living products throughout the year and were aided by inflationary benefits and warmer weather trends across most of the United States.

The following factors benefited our sales growth (listed in order of estimated magnitude):

•strong demand for discretionary products, as evidenced by improvements in sales growth rates for product offerings such as equipment and building materials (see discussion below);

•increased demand for residential swimming pool maintenance supplies due to earlier pool openings and increased usage, as evidenced by improvements in sales growth rates to retail customers (see discussion below);

•market share gains, including those in building materials (see discussion below);

•inflationary product cost increases of approximately 7% to 8% (compared to our historical average of 1% to 2%); and

•6% sales growth from recent acquisitions.

We believe that sales growth rates for certain product offerings, such as equipment and building materials evidence increased spending in traditionally discretionary areas, such as pool construction, pool remodeling and equipment upgrades. In 2021, sales for equipment, such as swimming pool heaters, pumps, lights and filters, increased 35% compared to 2020, and collectively represented approximately 29% of net sales. This increase reflects both the growth of replacement activity and continued demand for higher-priced, more energy-efficient products. Sales of building materials grew 28% compared to 2020 and represented approximately 12% of net sales in 2021.

Sales to customers who service large commercial installations and specialty retailers that sell swimming pool supplies are included in the appropriate existing product categories, and growth in these areas is reflected in the numbers in the paragraph above. Sales to retail customers increased 20% compared to 2020 and represented approximately 12% of our net sales in 2021. Sales to commercial customers increased 24% in 2021, as business and leisure travel improved in 2021 following COVID-19 related closures in 2020 and demand from commercial customers began to return to normalized pre-pandemic levels. Sales to commercial customers represented approximately 3% of our net sales in 2021.

2021 Quarterly Sales Performance Compared to 2020 Quarterly Sales Performance

In each quarter of 2021, sales benefited from continued elevated demand for swimming pool and outdoor living products, driven by home-centric and work-from-home trends. Households continued to invest in their backyards and outdoor living spaces, resulting in broad sales gains across many product categories and geographies.

	Quarter
	2021
	First	Second	Third	Fourth
Net Sales Growth	57%	40%	24%	23%
Base Business Net Sales Growth	51%	32%	19%	22%

In addition to the sales discussion above, see further details of significant weather impacts under the subheading Seasonality and Quarterly Fluctuations below.

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Gross Profit

(in millions)	Year Ended December 31,
	2021			2020			Change
Gross profit	$	1,617.1		$	1,130.9		$	486.2	43%
Gross margin	30.5		%	28.7		%

Gross margin improved 180 basis points to 30.5% in 2021 compared to 28.7% in 2020, reflecting benefits from our actions to address inflation and manage supply chain disruptions, along with favorable impacts from incentives realized from increased purchase volumes.

Operating Expenses

(in millions)	Year Ended December 31,
	2021			2020			Change
Selling and administrative expenses	$	786.8		$	659.9		$	126.9	19%
(Recovery) impairment of goodwill and other assets	(2.5)			6.9			(9.4)		(136)%
Operating expenses as a percentage of net sales	14.8		%	16.9		%

Operating expenses, including a note recovery in 2021 and impairment charges in 2020, increased 18%, or $117.4 million, to $784.3 million in 2021, up from $666.9 million in 2020. The majority of the increase in our operating expenses is due to higher compensation costs as we reward our employees through performance-based compensation and increase wages to support stronger demand. Other incremental operating expense increases relate to increases in growth-driven facility and freight costs, in addition to investments in technology.

In the first quarter of 2020, we recorded impairment charges of $6.9 million, which included $2.5 million from a note and a goodwill and intangibles impairment charge of $4.4 million. In 2021, we recovered the $2.5 million from the previously impaired note.

Operating expenses as a percentage of net sales declined 210 basis points, contributing to the 390 basis point expansion in our operating margin for the year driven by a combination of higher year-over-year sales and improved operating leverage as we utilize our existing network to manage incremental costs for new sales center openings and acquisitions.

Interest and Other Non-operating Expenses, net

Interest and other non-operating expenses, net decreased $3.7 million compared to 2020, primarily due to the impact of foreign currency losses, with a loss of $0.3 million recognized in 2021 compared to a loss of $1.7 million recognized in 2020, in addition to interest income from a note of $1.5 million in 2021. Interest expense related to borrowings increased approximately $1.2 million, primarily due to higher average interest rates between periods. Our weighted average effective interest rate increased to 2.5% in 2021 from 2.1% in 2020 on consistent average outstanding debt balances.

Income Taxes

Our effective income tax rate was 21.1% at December 31, 2021 and 18.9% at December 31, 2020. We recorded a $30.0 million, or $0.74 per diluted share, benefit from ASU 2016-09 for the year ended December 31, 2021 compared to a benefit of $28.6 million, or $0.70 per diluted share, realized in the same period in 2020. Without the benefits from ASU 2016-09, our effective tax rate was 24.7% and 25.2% for the years ended 2021 and 2020, respectively.

Net Income and Earnings Per Share

Net income increased 77% to $650.6 million in 2021 compared to $366.7 million in 2020. Earnings per share increased 78% to $15.97 per diluted share compared to $8.97 per diluted share in 2020.

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Reconciliation of Non-GAAP Financial Measures

The non-GAAP measures described below should be considered in the context of all of our other disclosures in this Form 10-K.

Adjusted Income Statement Information

We have included adjusted net income and adjusted diluted EPS, which are non-GAAP financial measures, as supplemental disclosures, because we believe these measures are useful to investors and others in assessing our year-over-year operating performance.

Adjusted net income and adjusted diluted EPS are key measures used by management to eliminate the impact of our non-cash and non-recurring charges and to provide investors and others with additional information about our potential future operating performance to supplement GAAP measures.

We believe these measures should be considered in addition to, not as a substitute for, net income and diluted EPS presented in accordance with GAAP. Other companies may calculate these non-GAAP financial measures differently than we do, which may limit their usefulness as comparative measures.

The table below presents a reconciliation of net income to adjusted net income.

(Unaudited)	Year Ended
(in thousands)	December 31,
	2021		2020
Net income	$	650,624	$	366,738
(Recovery) impairment of goodwill and other assets	(2,500)		6,944
Tax impact on note (1)	630		(654)
Adjusted net income	$	648,754	$	373,028

(1)Our effective tax rate at March 31, 2020 was a 0.1% benefit. Without impairment from goodwill and intangibles and tax benefits from ASU 2016-09 recorded in the first quarter of 2020, our effective tax rate for the first quarter of 2020 was 25.4%, which we used to calculate the tax impact related to the $2.5 million note impairment.

The table below presents a reconciliation of diluted EPS to adjusted diluted EPS.

(Unaudited)	Year Ended
	December 31,
	2021		2020
Diluted EPS	$	15.97	$	8.97
ASU 2016-09 tax benefit	(0.74)		(0.70)
Adjusted diluted EPS without ASU 2016-09 tax benefit	15.23		8.27
After-tax (recovery) impairment charges	(0.05)		0.15
Adjusted diluted EPS without ASU 2016-19 tax benefit and after-tax (recovery) impairment charges	$	15.18	$	8.42

Fiscal Year 2020 compared to Fiscal Year 2019

For a detailed discussion of the Results of Operations in Fiscal Year 2020 compared to Fiscal Year 2019, see the Results of Operations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2020 Annual Report on Form 10-K.  

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Seasonality and Quarterly Fluctuations

For discussion regarding the effects seasonality and weather have on our business, see Item 1, “Business,” of this Form 10-K.

The following table presents certain unaudited quarterly data for 2021 and 2020. We have included income statement and balance sheet data for the most recent eight quarters to allow for a meaningful comparison of the seasonal fluctuations in these amounts. In our opinion, this information reflects all normal and recurring adjustments considered necessary for a fair presentation of this data. Due to the seasonal nature of our industry, the results of any one or more quarters are not necessarily a good indication of results for an entire fiscal year or of continuing trends.

(Unaudited)	QUARTER
(in thousands)	2021												2020
	First			Second			Third			Fourth			First			Second			Third			Fourth
Statement of Income Data
Net sales	$	1,060,745		$	1,787,833		$	1,411,448		$	1,035,557		$	677,288		$	1,280,846		$	1,139,229		$	839,261
Gross profit	301,131			551,685			441,899			322,376			189,629			373,481			328,698			239,095
Operating income	129,031			338,586			237,276			127,891			35,588			205,857			148,233			74,351
Net income	98,655			259,695			184,665			107,609			30,912			157,555			119,098			59,174
Net sales as a % of annual net sales	20		%	34		%	27		%	20		%	17		%	33		%	29		%	21		%
Gross profit as a % of annual gross profit	19		%	34		%	27		%	20		%	17		%	33		%	29		%	21		%
Operating income as a % of annual operating income	15		%	41		%	28		%	15		%	8		%	44		%	32		%	16		%
Balance Sheet Data
Total receivables, net	$	487,602		$	585,566		$	476,150		$	376,571		$	345,915		$	453,405		$	366,412		$	289,200
Product inventories, net	977,228			894,654			1,043,407			1,339,100			858,190			628,418			612,824			780,989
Accounts payable	634,998			439,453			414,156			398,697			517,620			346,272			268,412			266,753
Total debt	433,171			423,116			362,819			1,183,350			586,050			438,804			339,934			416,018

 

Note: Due to rounding, the sum of quarterly percentage amounts may not equal 100%.

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Weather Impacts on Fiscal Year 2021 to Fiscal Year 2020 Comparisons

Sales in the first quarter of 2021 benefited from generally mild weather conditions throughout the contiguous United States. In February 2021, Texas experienced the most costly winter storm event on record for the United States, which damaged many swimming pools and added to the existing, strong replacement opportunity in that market. In contrast, sales in the first quarter of 2020 benefited from much above-average temperatures throughout the United States, particularly in the southern United States.

Overall, varied weather conditions in the second quarter of 2021 favorably impacted our sales growth. While the southern states saw mild temperatures and above-average precipitation, the western states, particularly California, experienced severely high temperatures and drought. The average U.S. temperature in June was the hottest on record in 127 years. Comparatively, in the second quarter of 2020, we observed generally mild weather conditions with warmer weather throughout the western United States.

Generally favorable weather conditions benefited sales in the third quarter of 2021. Temperatures ranged from above-average to substantially above-average throughout most of the contiguous United States with September being the fifth warmest on record. Precipitation was below-average in most of the western half of the United States and normal to above-average in the eastern half. Likewise, results in the third quarter of 2020 were favorably impacted by above-average temperatures and below-average precipitation.

In the fourth quarter of 2021, sales benefited from above-average temperatures throughout much of the contiguous United States, particularly in the month of December, which was the fifth warmest on record in a 127-year period. Precipitation levels varied, with the southern states experiencing levels much below average and the northern states seeing above-average levels. Similarly, sales in the fourth quarter of 2020 benefited from above-average temperatures and below-average precipitation.

Weather Impacts on Fiscal Year 2020 to Fiscal Year 2019 Comparisons

For a detailed discussion of Weather Impacts on Fiscal Year 2020 compared to Fiscal Year 2019, see the Seasonality and Quarterly Fluctuations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2020 Annual Report on Form 10-K.  

Geographic Areas

Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. For additional details, see Note 1 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

For a breakdown of net sales and property, plant and equipment between our United States and international operations, see Item 1, “Business,” of this Form 10-K.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity is defined as the ability to generate adequate amounts of cash to meet short-term and long-term cash needs. We assess our liquidity in terms of our ability to generate cash to fund our operating activities, taking into consideration the seasonal nature of our business. Significant factors which could affect our liquidity include the following:

•cash flows generated from operating activities;

•the adequacy of available bank lines of credit;

•the quality of our receivables;

•acquisitions;

•dividend payments;

•capital expenditures;

•changes in income tax laws and regulations;

•the timing and extent of share repurchases; and

•the ability to attract long-term capital with satisfactory terms.

Our primary capital needs are seasonal working capital obligations, debt repayment obligations and other general corporate initiatives, including acquisitions, opening new sales centers, dividend payments and share repurchases. Our primary working capital obligations are for the purchase of inventory, payroll, rent, other facility costs and selling and administrative expenses. Our working capital obligations fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases. Our primary sources of working capital are cash from operations supplemented by bank borrowings, which have historically been sufficient to support our growth and finance acquisitions. We have funded our capital expenditures and share repurchases in substantially the same manner.

We prioritize our use of cash based on investing in our business, maintaining a prudent capital structure, including a modest amount of debt, and returning cash to our shareholders through dividends and share repurchases. Our specific priorities for the use of cash are as follows:

•capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and fleet vehicles;

•inventory and other operating expenses;

•strategic acquisitions executed opportunistically;

•payment of cash dividends as and when declared by our Board;

•repayment of debt to maintain an average total target leverage ratio (as defined below) between 1.5 and 2.0; and

•repurchases of our common stock under our Board authorized share repurchase program.

Our capital spending primarily relates to leasehold improvements, delivery and service vehicles and information technology. We focus our capital expenditure plans on the needs of our sales centers. Capital expenditures were 0.7% of net sales in 2021, 0.6% of net sales in 2020 and 1.0% of net sales in 2019. Although our capital spending increased by $16.0 million in 2021, capital expenditures as a percentage of net sales were lower than our historical average of 1.0% of net sales due to our significant sales growth. Capital expenditures in 2020 were lower than our historical average due to cost-saving measures implemented at the beginning of the COVID-19 pandemic.

Based on management’s current plans, we project capital expenditures for 2022 will continue to approximate the historical average of 1% of net sales. We also plan to increase our investment in technology and automation enabling us to operate more efficiently. We have initiated a multiyear project to transform our legacy enterprise systems and capabilities to improve customer and team member experiences.

We believe we have adequate availability of capital to fund present operations and the current capacity to finance any working capital needs that may arise.  We continually evaluate potential acquisitions and hold discussions with acquisition candidates. If suitable acquisition opportunities arise that would require financing, we believe that we have the ability to finance any such transactions.

As of February 18, 2022, $482.4 million of the current Board authorized amount under our authorized share repurchase plan remained available. We expect to repurchase additional shares in the open market from time to time depending on market conditions. We plan to fund these repurchases with cash provided by operations and borrowings under the credit and receivables facilities.

42

Sources and Uses of Cash

The following table summarizes our cash flows (in thousands):

	Year Ended December 31,
	2021		2020
Operating activities	$	313,490	$	397,581
Investing activities	(849,614)		(146,289)
Financing activities	526,131		(244,371)

Cash provided by operations of $313.5 million for 2021 decreased $84.1 million compared to 2020. The decrease in cash provided by operations is driven by an incremental cash outflow of $371.3 million stemming from changes to our net working capital, primarily reflecting an increase in inventory, partially offset by increases in accounts payable and net income.

Cash used in investing activities increased $703.3 million in 2021 due to an increase of $687.4 million in payments for acquisitions compared to 2020 and a $16.0 million increase in net capital expenditures between years.

Cash provided by financing activities increased $770.5 million to $526.1 million in 2021, compared to cash used in financing activities of $244.4 million in 2020. The increase in cash provided by financing activities primarily reflects a $865.3 million increase in net debt proceeds, offset by additional share repurchases of $61.8 million and an increase in dividends paid of $27.7 million.

For a discussion of our sources and uses of cash in 2019, see the Liquidity and Capital Resources – Sources and Uses of Cash section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2020 Annual Report on Form 10-K.

Future Sources and Uses of Cash

To supplement cash from operations as our primary source of working capital, we will continue to utilize our three major credit facilities, which are the Amended and Restated Revolving Credit Facility (the Credit Facility), the Term Facility (the Term Facility) and the Receivables Securitization Facility (the Receivables Facility). For additional details regarding these facilities, see the summary descriptions below and more complete descriptions in Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

Credit Facility

Our Credit Facility, as amended through December 30, 2021, provides for $1.25 billion in borrowing capacity consisting of a $750.0 million five-year unsecured revolving credit facility and a $500.0 million term loan facility, which includes a $250.0 million delayed-draw term loan facility and an additional $250.0 million incremental term loan facility. We drew the $250.0 million delayed-draw term loan on December 15, 2021 and used the proceeds to fund our acquisition of Porpoise Pool & Patio, Inc. Subsequent to December 31, 2021, we drew the $250.0 million incremental term loan on January 4, 2022 and used the same amount to reduce our revolving borrowings. The term loans require quarterly amortization payments aggregating to 20% of the original principal amount of the loan during the third, fourth and fifth years of the loan, with all remaining principal due on the Credit Facility maturity date of September 25, 2026.

The credit facility continues to include a $750.0 million revolving credit facility and sublimits for the issuance of swingline loans and standby letters of credit. We intend to continue to use the Credit Facility for general corporate purposes, for future share repurchases and to fund future growth initiatives.

At December 31, 2021, there was $822.9 million outstanding, a $4.8 million standby letter of credit outstanding and $422.3 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of December 31, 2021 was approximately 1.2%, excluding commitment fees.

43

Term Facility

Our Term Facility provides for $185.0 million in borrowing capacity and matures on December 30, 2026. Proceeds from the Term Facility were used to pay down the Credit Facility in December 2019, adding borrowing capacity for future share repurchases, acquisitions and growth-oriented working capital expansion. The Term Facility is repaid in quarterly installments of 1.250% of the Term Facility on the last business day of each quarter beginning in the first quarter of 2020. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. The total of the quarterly payments will be equal to 33.75% of the Term Facility with the final principal repayment, equal to 66.25% of the Term Facility, due on the maturity date. We may prepay amounts outstanding under the Term Facility without penalty other than interest breakage costs.

At December 31, 2021, the Term Facility had an outstanding balance of $166.5 million at a weighted average effective interest rate of 2.9%.

Financial Covenants

Financial covenants of the Credit Facility and the Term Facility include maintenance of a maximum average total leverage ratio and a minimum fixed charge coverage ratio, which are our most restrictive financial covenants.  As of December 31, 2021, the calculations of these two covenants are detailed below:

•Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00.  Average Total Leverage Ratio is the ratio of the trailing twelve months (TTM) Average Total Funded Indebtedness plus the TTM Average Accounts Securitization Proceeds divided by the TTM EBITDA (as those terms are defined in the Credit Facility).  As of December 31, 2021, our average total leverage ratio equaled 0.77 (compared to 0.86 as of December 31, 2020) and the TTM average total indebtedness amount used in this calculation was $680.3 million.

•Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility).  As of December 31, 2021, our fixed charge ratio equaled 11.76 (compared to 7.81 as of December 31, 2020) and TTM Rental Expense was $80.8 million.

The Credit Facility and Term Facility limit the declaration and payment of dividends on our common stock to a manner consistent with past practice, provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. We may declare and pay quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount dividends per share and (ii) our Average Total Leverage Ratio is less than 3.25 to 1.00 both immediately before and after giving pro forma effect to such dividends. Under the Credit Facility and Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 3.25 to 1.00.

Other covenants include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of the Credit Facility and the Term Facility could result in higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.

Receivables Securitization Facility

Our two-year accounts receivable securitization facility (the Receivables Facility) offers us a lower-cost form of financing. Under this facility, we can borrow up to $350.0 million between April through June and from $175.0 million to $315.0 million during the remaining months of the year. The Receivables Facility matures on November 1, 2023. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis.

44

The Receivables Facility provides for the sale of certain of our receivables to a wholly-owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due.

At December 31, 2021, there was $185.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 0.9%, excluding commitment fees.

Interest Rate Swaps

We utilize interest rate swap contracts and forward-starting interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our variable rate borrowings. Interest expense related to the notional amounts under all swap contracts is based on the fixed rates plus the applicable margin on the respective borrowings.

As of December 31, 2021, we had three interest rate swap contracts in place and two forward-starting interest rate swap contracts, each of which has the effect of converting our exposure to variable interest rates on our variable rate borrowings to fixed interest rates. For more information, see Note 5 of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K.

Compliance and Future Availability

As of December 31, 2021, we were in compliance with all covenants and financial ratio requirements under our Credit Facility, our Term Facility and our Receivables Facility.  We believe we will remain in compliance with all covenants and financial ratio requirements throughout 2022.  For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

Future Obligations

We have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, fluctuating interest rates and other factors may result in actual payments differing from our estimates. We cannot provide certainty regarding the timing and amounts of these payments. The following table summarizes our obligations as of December 31, 2021 that are expected to impact liquidity and cash flow in future periods. We believe we will be able to fund these obligations through our existing cash, cash expected to be generated from operations and borrowings on our facilities.

			Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-term debt	$	1,186,198	$	21,022	$	222,250	$	942,926	$	—
Operating leases	257,753		64,337		102,843		57,603		32,970
Purchase obligations	57,150		43,068		11,039		3,043		—
	$	1,501,101	$	128,427	$	336,132	$	1,003,572	$	32,970

The significant assumptions used in our determination of amounts presented in the above table are as follows:

•Long-term debt amounts represent the future principal payments on our debt as of December 31, 2021. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

•Operating lease amounts include future rental payments for our operating leases. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.

•Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider purchase orders to be firm inventory commitments; therefore, they are excluded from the table above.

45

For certain of our future obligations, such as unrecognized tax benefits, uncertainties exist regarding the timing of future payments and the amount by which these potential obligations will increase or decrease over time. As such, we have excluded unrecognized tax benefits from the table above. See Note 7 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for additional discussion related to our unrecognized tax benefits. The table also excludes various other liabilities that are not contractual in nature, including contingent liabilities, litigation accruals, and contract termination fees.

The table below contains estimated interest payments (in thousands) related to our long-term debt obligations presented in the table above.  We calculated estimates of future interest payments based on the December 31, 2021 outstanding debt balances, using the fixed rates under our interest rate swap agreements for the applicable notional amounts and the weighted average effective interest rates as of December 31, 2021 for the remaining outstanding balances not covered by our swap contracts.  To project the estimated interest expense to coincide with the time periods used in the table above, we projected the estimated debt balances for future years based on the scheduled maturity dates of the Credit Facility, the Term Facility and the Receivables Facility. Our actual interest payments could vary substantially from the amounts projected.

			Estimated Interest Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Interest	$	66,731	$	16,153	$	27,419	$	22,771	$	388

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks, including interest rate risk and foreign currency risk. The adverse effects of potential changes in these market risks are discussed below. The following discussion does not consider the effects of the reduced level of overall economic activity that could exist following such changes. Further, in the event of changes of such magnitude, we would likely take actions to mitigate our exposure to such changes.

Interest Rate Risk

Our earnings are exposed to changes in short-term interest rates because of the variable interest rates on our debt. However, we have entered into interest rate swap contracts to reduce our exposure to market fluctuations. For information about our debt arrangements and interest rate swaps, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10‑K.

In 2021, there was no interest rate risk related to the notional amounts under our interest rate swap contracts. The portions of our outstanding balances under the Credit Facility, Term Facility and the Receivables Facility that were not covered by our interest rate swap contracts were subject to variable interest rates. To calculate the potential impact in 2021 related to interest rate risk, we performed a sensitivity analysis assuming that we borrowed the monthly maximum available amount under the Credit Facility and the maximum amount available under the Receivables Facility. Our Term Facility, entered into on December 30, 2019, was fully drawn as of that date. In this analysis, we assumed that the variable interest rates for the Credit Facility and the Receivables Facility increased by 1.0%. Based on this calculation, our pretax income would have decreased by approximately $12.2 million and earnings per share would have decreased by approximately $0.22 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2021). The maximum amount available under the Credit Facility is $1.25 billion and the maximum amount available under the Receivables Facility is $350.0 million.

Failure of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements. Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

46

Currency Risk

Changes in the exchange rates for the functional currencies of our international subsidiaries, as shown in the table below, may positively or negatively impact our sales, operating expenses and earnings. Historically, we have not hedged our currency exposure and fluctuations in exchange rates have not materially affected our operating results. While our international operations, including Canada and Mexico, accounted for only 10% of total net sales in 2021, our exposure to currency rate fluctuations could be material in 2022 and future years to the extent that either currency rate changes are significant or that our international operations comprise a larger percentage of our consolidated results.

Functional Currencies
Canada	Canadian Dollar
United Kingdom	British Pound
Belgium	Euro
Croatia	Kuna
France	Euro
Germany	Euro
Italy	Euro
Portugal	Euro
Spain	Euro
Mexico	Mexican Peso
Australia	Australian Dollar

47

Item 8.  Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	49
Consolidated Statements of Income	52
Consolidated Statements of Comprehensive Income	53
Consolidated Balance Sheets	54
Consolidated Statements of Cash Flows	55
Consolidated Statements of Changes in Stockholders’ Equity	56
Notes to Consolidated Financial Statements	57

48

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

of Pool Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Pool Corporation (the Company) as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

49

Valuation of Goodwill

Description of the Matter

At December 31, 2021, the Company’s goodwill was $688.4 million. As discussed in Note 3 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level. The Company’s goodwill is assigned to reporting units as of the acquisition date. Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the estimation required to determine the fair value of the reporting units. In particular, the fair value estimate is sensitive to certain assumptions, such as changes in the weighted average cost of capital, revenue growth rate, operating margin, and terminal growth rate which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.
To test the estimated fair value of the Company’s reporting units, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to current industry and economic trends and other relevant factors, such as historical results. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. We also involved a specialist to assist in our evaluation of the valuation methodology applied by the Company and the significant assumptions used in estimating the fair value of the Company. In addition, we reviewed the allocation of the Company’s fair value to its reporting units and the comparison of the Company’s fair value to its market capitalization.

Valuation of Intangible Assets Resulting from the Acquisition of Porpoise Pool & Patio

Description of the Matter

As discussed in Note 2 of the consolidated financial statements, the Company completed its acquisition of Porpoise Pool & Patio, Inc. (Porpoise) on December 16, 2021, for a total purchase price of approximately $788.7 million, net of cash acquired. The Company accounted for this transaction under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated, on a preliminary basis, to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets of $301.0 million and resulting goodwill of $403.5 million. Auditing the Company’s accounting for the acquisition of Porpoise was complex due to the significant estimation required by management in determining the fair value of identified intangible assets, both definite and indefinite-lived, which primarily consisted of $109.0 million of customer relationships and $169.0 million of a brand name. The significant estimation was primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of these intangible assets, as well as the sensitivity of the respective fair values to the underlying significant assumptions. The Company used the relief from royalty method to measure the fair value of the brand name and an excess earnings method to measure the fair value of the customer relationships. The significant assumptions used to estimate the fair value of the intangible assets included revenue growth rates, earnings metrics, and discount rates. These significant assumptions are forward-looking and could be affected by future economic and market conditions.

50

How We Addressed the Matter in Our Audit We obtained an understanding of the Company’s process to account for acquisitions, including management’s process to develop the valuation models and assumptions underlying the recognition and valuation of the identified intangible assets.
To test the estimated fair value of the identified intangible assets, our audit procedures included, among others, involvement of a specialist to assist us in the evaluation of the Company’s valuation methodology and testing of the significant assumptions. For example, we compared the revenue growth rates to historical results and certain peer companies. Additionally, we tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1994.

New Orleans, Louisiana

February 25, 2022

51

POOL CORPORATION

Consolidated Statements of Income

(In thousands, except per share data)

	Year Ended December 31,
	2021		2020		2019
Net sales	$	5,295,584	$	3,936,623	$	3,199,517
Cost of sales	3,678,492		2,805,721		2,274,592
Gross profit	1,617,092		1,130,902		924,925
Selling and administrative expenses	786,808		659,931		583,679
(Recovery) impairment of goodwill and other assets	(2,500)		6,944		—
Operating income	832,784		464,027		341,246
Interest and other non-operating expenses, net	8,639		12,353		23,772
Income before income taxes and equity in earnings	824,145		451,674		317,474
Provision for income taxes	173,812		85,231		56,161
Equity in earnings in unconsolidated investments, net	291		295		262
Net income	$	650,624	$	366,738	$	261,575
Earnings per share attributable to common stockholders:
Basic	$	16.21	$	9.14	$	6.57
Diluted	$	15.97	$	8.97	$	6.40
Weighted average common shares outstanding:
Basic	39,876		40,106		39,833
Diluted	40,480		40,865		40,865
Cash dividends declared per common share	$	2.98	$	2.29	$	2.10

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

52

POOL CORPORATION

Consolidated Statements of Comprehensive Income

(In thousands)

	Year Ended December 31,
	2021		2020		2019
Net income	$	650,624	$	366,738	$	261,575
Other comprehensive income (loss):
Foreign currency translation adjustments	(4,663)		5,210		2,295
Change in unrealized gains (losses) on interest rate swaps, net of the change in taxes of $(3,733), $2,957 and $552	11,198		(8,870)		(1,657)
Total other comprehensive income (loss)	6,535		(3,660)		638
Comprehensive income	$	657,159	$	363,078	$	262,213

The accompanying Notes are an integral part of the Consolidated Financial Statements.

53

POOL CORPORATION

Consolidated Balance Sheets

(In thousands, except share data)

	December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	24,321	$	34,128
Receivables, net	155,259		122,252
Receivables pledged under receivables facility	221,312		166,948
Product inventories, net	1,339,100		780,989
Prepaid expenses and other current assets	29,093		17,610
Total current assets	1,769,085		1,121,927
Property and equipment, net	179,008		108,241
Goodwill	688,364		268,167
Other intangible assets, net	312,814		12,181
Equity interest investments	1,231		1,292
Operating lease assets	241,662		205,875
Other assets	37,967		21,987
Total assets	$	3,230,131	$	1,739,670
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	398,697	$	266,753
Accrued expenses and other current liabilities	264,877		143,694
Short-term borrowings and current portion of long-term debt	11,772		11,869
Current operating lease liabilities	69,070		60,933
Total current liabilities	744,416		483,249
Deferred income taxes	35,840		27,653
Long-term debt, net	1,171,578		404,149
Other long-term liabilities	31,545		38,261
Non-current operating lease liabilities	175,359		146,888
Total liabilities	2,158,738		1,100,200
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 40,192,901 shares issued and outstanding at December 31, 2021 and 40,232,210 shares issued and outstanding at December 31, 2020	40		40
Additional paid-in capital	551,963		519,579
Retained earnings	526,874		133,870
Accumulated other comprehensive loss	(7,484)		(14,019)
Total stockholders’ equity	1,071,393		639,470
Total liabilities and stockholders’ equity	$	3,230,131	$	1,739,670

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

54

POOL CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2021		2020		2019
Operating activities
Net income	$	650,624	$	366,738	$	261,575
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	28,287		27,967		27,885
Amortization	1,739		1,431		1,389
Share-based compensation	15,187		14,516		13,472
Provision for doubtful accounts receivable, net of write-offs	1,134		(664)		(710)
Provision for inventory obsolescence, net of write-offs	3,798		2,362		1,310
Provision (benefit) for deferred income taxes	4,650		(2,542)		3,723
(Gains) losses on sales of property and equipment	(93)		38		(85)
Equity in earnings in unconsolidated investments, net	(291)		(295)		(262)
Net losses on foreign currency transactions	325		1,748		1,347
Impairment of goodwill and other assets	—		6,944		—
Other	473		410		3,313
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables	(79,940)		(38,688)		(15,691)
Product inventories	(525,207)		(42,447)		(14,165)
Prepaid expenses and other assets	(51,199)		(13,744)		(4,218)
Accounts payable	114,893		(9,212)		16,860
Accrued expenses and other current liabilities	149,110		83,019		3,033
Net cash provided by operating activities	313,490		397,581		298,776
Investing activities
Acquisition of businesses, net of cash acquired	(811,956)		(124,587)		(8,901)
Purchases of property and equipment, net of sale proceeds	(37,658)		(21,702)		(33,362)
Net cash used in investing activities	(849,614)		(146,289)		(42,263)
Financing activities
Proceeds from revolving line of credit	1,438,408		1,053,968		1,066,529
Payments on revolving line of credit	(974,506)		(1,145,616)		(1,415,988)
Proceeds from term loan under credit facility	250,000		—		—
Proceeds from asset-backed financing	495,000		326,700		189,000
Payments on asset-backed financing	(430,000)		(321,700)		(182,500)
Proceeds from term facility	—		—		185,000
Payments on term facility	(9,250)		(9,250)		—
Proceeds from short-term borrowings and current portion of long-term debt	9,279		13,822		30,863
Payments on short-term borrowings and current portion of long-term debt	(9,377)		(13,698)		(28,286)
Payments of deferred financing costs	(2,638)		(12)		(406)
Payments on deferred and contingent acquisition consideration	(362)		(281)		(312)
Proceeds from stock issued under share-based compensation plans	17,197		19,824		18,574
Payments of cash dividends	(119,581)		(91,929)		(83,772)
Purchases of treasury stock	(138,039)		(76,199)		(23,188)
Net cash provided by (used in) financing activities	526,131		(244,371)		(244,486)
Effect of exchange rate changes on cash and cash equivalents	186		(1,376)		198
Change in cash and cash equivalents	(9,807)		5,545		12,225
Cash and cash equivalents at beginning of year	34,128		28,583		16,358
Cash and cash equivalents at end of year	$	24,321	$	34,128	$	28,583

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

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POOL CORPORATION

Consolidated Statements of Changes in Stockholders’ Equity

(In thousands)

	Common Stock			Additional Paid-In		Retained Earnings		Accumulated Other Comprehensive
	Shares	Amount		Capital		(Deficit)		Loss		Total
Balance at December 31, 2018	39,506	$	40	$	453,193	$	(218,646)	$	(10,997)	$	223,590
Net income	—	—		—		261,575		—		261,575
Foreign currency translation	—	—		—		—		2,295		2,295
Interest rate swaps, net of the change in taxes of $552	—	—		—		—		(1,657)		(1,657)
Repurchases of common stock, net of retirements	(155)	—		—		(23,188)		—		(23,188)
Share-based compensation	—	—		13,472		—		—		13,472
Adoption of ASU 2016-02	—	—		—		(709)		—		(709)
Issuance of stock under share-based compensation plans	723	—		18,574		—		—		18,574
Declaration of cash dividends	—	—		—		(83,772)		—		(83,772)
Balance at December 31, 2019	40,074	40		485,239		(64,740)		(10,359)		410,180
Net income	—	—		—		366,738		—		366,738
Foreign currency translation	—	—		—		—		5,210		5,210
Interest rate swaps, net of the change in taxes of $2,957	—	—		—		—		(8,870)		(8,870)
Repurchases of common stock, net of retirements	(401)	—		—		(76,199)		—		(76,199)
Share-based compensation	—	—		14,516		—		—		14,516
Issuance of stock under share-based compensation plans	559	—		19,824		—		—		19,824
Declaration of cash dividends	—	—		—		(91,929)		—		(91,929)
Balance at December 31, 2020	40,232	40		519,579		133,870		(14,019)		639,470
Net income	—	—		—		650,624		—		650,624
Foreign currency translation	—	—		—		—		(4,663)		(4,663)
Interest rate swaps, net of the change in taxes of $(3,733)	—	—		—		—		11,198		11,198
Repurchases of common stock, net of retirements	(360)	—		—		(138,039)		—		(138,039)
Share-based compensation	—	—		15,187		—		—		15,187
Issuance of stock under share-based compensation plans	321	—		17,197		—		—		17,197
Declaration of cash dividends	—	—		—		(119,581)		—		(119,581)
Balance at December 31, 2021	40,193	$	40	$	551,963	$	526,874	$	(7,484)	$	1,071,393

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

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POOL CORPORATION

Notes to Consolidated Financial Statements

Note 1 - Organization and Summary of Significant Accounting Policies

Description of Business

As of December 31, 2021, Pool Corporation and our subsidiaries (the Company, which may be referred to as we, us or our) operated 410 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape products and hardscape, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Tile (NPT) and Sun Wholesale Supply (Sun Wholesale).

Basis of Presentation and Principles of Consolidation

We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated.

Use of Estimates

To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals, goodwill impairment evaluations and the valuation of intangible assets from our recent acquisition of Porpoise Pool & Patio, Inc. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates.

Newly Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This new standard simplified the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Most amendments were required to be applied on a prospective basis, while certain amendments were required to be applied on a retrospective or modified retrospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect a material impact in future periods.

On January 1, 2020, we adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and all related amendments, which are codified into Accounting Standards Codification (ASC) 326, using the cumulative-effect transition method related to our trade receivables. This new standard changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The adoption of this standard did not have a material impact on our financial position or results of operations, and we do not expect the adoption of this guidance to have a material effect on our results of operations in future periods. As the impact from adoption was not material, we did not recognize an adjustment to the beginning balance of retained earnings.

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We adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, for our interim impairment tests performed in the period ended March 31, 2020. This new standard eliminated the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the previous guidance). Rather, the measurement of a goodwill impairment charge is based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the previous guidance). The impact of the new standard is dependent on the specific facts and circumstances of individual impairments, if any. The adoption of this guidance did not impact our results of operations, statement of financial position or cash flows.

On January 1, 2020, we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, on a prospective basis. This new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The adoption of this guidance did not materially impact our results of operations, statement of financial position or cash flows.

Segment Reporting

Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. These similarities include (i) the nature of our products and services, (ii) the types of customers we sell to and (iii) the distribution methods we use. Our chief operating decision maker (CODM) evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income growth and accounts receivable and inventory management criteria. Each sales center manager and eligible field employee earns performance-based compensation based on these measures developed at the sales center level.

A bottom-up approach is used to develop the operating budget for each individual sales center. The CODM approves the budget and routinely monitors budget to actual results for each sales center. Additionally, our CODM makes resource allocation decisions primarily on a sales center-by-sales center basis. No single sales center meets any of the quantitative thresholds (10% of revenues, profit or assets) for separately reporting information about an operating segment. We do not track sales by product lines and product categories on a consolidated basis. We lack readily available financial information due to the number of our product lines and product categories and the fact that we make ongoing changes to product classifications within these groups, thus making it impracticable to report our sales by product category.

Seasonality and Weather

Our business is seasonal and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters.

Revenue Recognition

We recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period.

We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales.

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We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists under ASC 606. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments.

The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in selling and administrative expenses.

We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes.

Vendor Programs

Many of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.

Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements.

Shipping and Handling Costs

We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands):

2021		2020		2019
$	75,411	$	59,224	$	51,580

Share-Based Compensation

We record share-based compensation for stock options and other share-based awards based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. For additional discussion of share-based compensation, see Note 6.

Advertising Costs

We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands):

2021		2020		2019
$	9,409	$	6,755	$	7,842

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Income Taxes

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense in the income statement in the period in which stock options are exercised or restrictions on stock awards lapse.

We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred, although we have not realized any impacts since the December 2017 enactment of U.S. tax reform.

For additional information regarding income taxes, see Note 7.

Equity Method Investments

We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment.

Earnings Per Share

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders.

Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8.

Foreign Currency

The functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized net foreign currency transaction losses of $0.3 million in 2021, $1.7 million in 2020 and $1.3 million in 2019. Our net foreign currency transaction loss in 2019 included a $0.9 million reclassification from Accumulated other comprehensive loss related to the closing of our sales center in Colombia.

Fair Value Measurements

Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and contingent consideration related to recent acquisitions. The three levels of the fair value hierarchy under the accounting guidance are described below:

Level 1    Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2    Inputs to the valuation methodology include:

•quoted prices for similar assets or liabilities in active markets;

•quoted prices for identical or similar assets or liabilities in inactive markets;

•inputs other than quoted prices that are observable for the asset or liability; or

•inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3    Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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Recurring Fair Value Measurements

The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands):

	Fair Value at December 31,
	2021		2020
Level 2
Unrealized gains on interest rate swaps	$	6,054	$	223
Unrealized losses on interest rate swaps	3,215		12,314
Level 3
Contingent consideration liabilities	$	985	$	1,343

We include unrealized gains in Prepaid expenses and other current assets and unrealized losses in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. As of December 31, 2021, our Consolidated Balance Sheets reflect $0.4 million in Accrued expenses and other current liabilities and $0.6 million in Other long-term liabilities related to our estimates for contingent consideration payouts.

For determining the fair value of our interest rate swaps and forward-starting interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.  Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves.

The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments. The carrying value of long-term debt approximates fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs).

Nonrecurring Fair Value Measurements

In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Generally, our assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or business combinations.

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. Based on our preliminary purchase price allocation, we recognized tangible assets of $84.2 million, identifiable intangible assets of $301.0 million and resulting goodwill of $403.5 million. For additional discussion of goodwill and other intangible assets, see Note 3.

In the first quarter of 2020, we recorded impairment charges of $6.9 million, which included non-cash goodwill and intangibles impairment charges of $4.4 million, equal to the total goodwill and intangibles carrying amounts of our Australian reporting units, and $2.5 million from a long-term note, as collectability was impacted by the COVID-19 pandemic. For additional discussion of goodwill and intangibles impairment, see Note 3.

Derivatives and Hedging Activities

At inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

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Our interest rate swap contracts and forward-starting interest rate swap contracts are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts.

We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps.

For our interest rate swap contracts currently in effect, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive income (loss) to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5.

Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Credit Risk and Allowance for Doubtful Accounts

We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.

Management estimates future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current and forecasted economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts.

The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	4,808	$	5,472	$	6,182
Bad debt expense	3,377		1,900		2,768
Write-offs, net of recoveries	(2,243)		(2,564)		(3,478)
Balance at end of year	$	5,942	$	4,808	$	5,472

Product Inventories and Reserve for Inventory Obsolescence

Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory turns by class with particular emphasis on stock keeping units with the weakest sales over the expected sellable period, which is the previous 12 months for most products. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.

In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:

•the level of inventory in relation to historical sales by product, including inventory usage by classification based on product sales at both the sales center and on a company-wide basis;

•changes in customer preferences or regulatory requirements;

•seasonal fluctuations in inventory levels;

•geographic location; and

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•superseded products and new product offerings.

We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.

The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	11,398	$	9,036	$	7,726
Provision for inventory write-downs	7,781		6,181		3,656
Deduction for inventory write-offs	(3,983)		(3,819)		(2,346)
Balance at end of year	$	15,196	$	11,398	$	9,036

Property and Equipment

Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives:

Buildings	40 years
Leasehold improvements (1)	1 - 10 years
Autos and trucks	3 - 6 years
Machinery and equipment	3 - 15 years
Computer equipment	3 - 7 years
Furniture and fixtures	5 - 10 years

(1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.

The table below presents depreciation expense for the past three years (in thousands):

2021		2020		2019
$	28,287	$	27,967	$	27,885

Acquisitions

We use the acquisition method of accounting and recognize assets acquired and liabilities assumed at fair value as of the acquisition date. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if we can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). We re-measure any contingent liabilities at fair value in each subsequent reporting period. We expense all acquisition-related costs as incurred, including any restructuring costs associated with a business combination.

Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. Our fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of market participants. Significant assumptions related to the acquisition of Porpoise Pool & Patio, Inc. include expected revenue growth rates, earnings metrics and discount rates. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the underlying estimates and assumptions.

If our initial acquisition accounting is incomplete by the end of the reporting period in which a business combination occurs, we report provisional amounts for incomplete items. Once we obtain information required to finalize the accounting for incomplete items, we adjust the provisional amounts recognized. We make adjustments to these provisional amounts during the measurement period.

For all acquisitions, we include the results of operations in our Consolidated Financial Statements as of the acquisition date. For additional discussion of acquisitions, see Note 2.

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Goodwill and Other Intangible Assets

Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. We test goodwill and other indefinite-lived intangible assets for impairment annually as of October 1st and at any other time when impairment indicators exist.

To estimate the fair value of our reporting units, we project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and earnings multiples. These assumptions are considered unobservable inputs (Level 3 inputs as defined in the accounting guidance). To the extent the carrying value of a reporting unit is greater than its estimated fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, our reporting unit is an individual sales center. For additional discussion of goodwill and other intangible assets, see Note 3.

Receivables Securitization Facility

Our accounts receivable securitization facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities.

We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third-party financial institutions. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets. For additional discussion of the Receivables Facility, see Note 5.

Self-Insurance

We are self-insured for employee health benefits, workers’ compensation coverage, property and casualty, and automobile insurance. To limit our exposure, we also maintain excess and aggregate liability coverage. We establish self-insurance reserves based on estimates of claims incurred but not reported and information that we obtain from third-party service providers regarding known claims. Our management reviews these reserves based on consideration of various factors, including but not limited to the age of existing claims, estimated settlement amounts and other historical claims data.

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Accumulated Other Comprehensive Loss

The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):

	December 31,
	2021		2020
Foreign currency translation adjustments	$	(9,580)	$	(4,917)
Unrealized gain (loss) on interest rate swaps, net of tax	2,096		(9,102)
Accumulated other comprehensive loss	$	(7,484)	$	(14,019)

Retained Earnings

We account for the retirement of treasury share repurchases as a decrease to our Retained earnings on our Consolidated Balance Sheets.  As of December 31, 2021, the retained earnings reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $1.7 billion and cumulative dividends of $790.4 million.

Supplemental Cash Flow Information

The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Cash paid during the year for:
Interest	$	10,023	$	8,257	$	20,960
Income taxes, net of refunds	83,953		81,792		51,076

Recent Accounting Pronouncements Pending Adoption

The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods:

Standard	Description	Effective Date	Effect on Financial Statements and Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting	Provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The amendments in this ASU refine the scope of ASC 848 and clarify some of its guidance as it relates to recent rate reform activities.	The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.	We do not expect that there will be a material impact to the financial statements as a result of adopting this ASU.

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Note 2 - Acquisitions

2021 Acquisitions

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. (“Porpoise”) for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. We preliminarily recognized goodwill of $403.5 million, other intangible assets of $301.0 million and tangible assets of $84.2 million, which included $57.4 million of acquired land and buildings. For additional discussion of goodwill and other intangible assets, see Note 3. The acquisition was funded with borrowings on our Credit Facility.

Porpoise’s primary operations consist of Sun Wholesale Supply, Inc., a wholesale distributor of swimming pool and outdoor-living products, adding one distribution location in Florida. It also services Pinch A Penny, Inc., a franchisor of independently owned and operated pool and outdoor living-related specialty retail stores.

The final allocation of the fair value of the Porpoise acquisition, including the allocation of goodwill and intangible assets, is not complete, but will be finalized within the allowable measurement period. We do not expect the future results of this acquisition to have a material impact on our financial position or results of operations.

In December 2021, we acquired the distribution assets of Wingate Supply, Inc., a wholesale distributor of irrigation and landscape maintenance products, adding one location in Florida.

In June 2021, we acquired the distribution assets of Vak Pak Builders Supply, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding one location in Florida.

In April 2021, we acquired Pool Source, LLC, a wholesale distributor of swimming pool equipment, chemicals and supplies, adding one location in Tennessee.

Other than Porpoise Pool & Patio, Inc., we have completed our acquisition accounting for these acquisitions, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material.

2020 Acquisitions

In February 2020, we acquired the distribution assets of Master Tile Network LLC, a wholesale distributor of swimming pool tile and hardscape products, adding two locations in Texas, one location in Nevada and one location in Oklahoma.

In September 2020, we acquired the distribution assets of Northeastern Swimming Pool Distributors, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding two locations in Ontario, Canada.

In October 2020, we acquired Jet Line Products, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding three locations in New Jersey, three locations in New York, two locations in Texas and one location in Florida.

In December 2020, we acquired TWC Distributors, Inc., a wholesale distributor of irrigation and landscape maintenance products, adding nine locations in Florida and one in Georgia.

We have completed our acquisition accounting for these acquisitions.

2019 Acquisitions

In January 2019, we acquired the distribution assets of W.W. Adcock, Inc., a wholesale distributor of swimming pool products, equipment, parts and supplies adding two locations in Pennsylvania, one location in North Carolina and one location in Virginia. We have completed our acquisition accounting for this acquisition.

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Note 3 - Goodwill and Other Intangible Assets

The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands):

Goodwill (gross) at December 31, 2019	$	198,475
Acquired goodwill	82,497
Foreign currency translation and other adjustments	584
Goodwill (gross) at December 31, 2020	281,556
Accumulated impairment losses at December 31, 2019	(9,879)
Goodwill impairment	(3,510)
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill (net) at December 31, 2020	$	268,167
Goodwill (gross) at December 31, 2020	$	281,556
Acquired goodwill (1)	422,126
Foreign currency translation and other adjustments	(1,929)
Goodwill (gross) at December 31, 2021	701,753
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill impairment	—
Accumulated impairment losses at December 31, 2021	(13,389)
Goodwill (net) at December 31, 2021	$	688,364

(1)Primarily includes the acquisition of Porpoise Pool & Patio, Inc.

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. (“Porpoise”) for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. The purchase price of Porpoise was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Tangible assets acquired were $84.2 million, which included $57.4 million of acquired land and buildings. As a result of the acquisition, we recognized goodwill of $403.5 million, which represents anticipated cost synergies from combined operations. Other intangible assets of $301.0 million acquired as part of our acquisition of Porpoise included the following:

•$169.0 million for the Pinch A Penny brand name, which was determined to be indefinite-lived;

•$109.0 million for customer relationships and $22.0 million for franchise agreements, both of which were determined to have useful lives of 20 years; and

•$1.0 million for a non-compete agreement.

We determined the Pinch A Penny brand name to be indefinite-lived based on our plan of continued franchise expansion using the brand name and Pinch A Penny’s well-established reputation and recognized brand name within the swimming pool industry, including their competitive market position, and history of successful performance by branded stores.

The fair value of intangible assets was determined using income methodologies. We valued the acquired brand name and franchise agreements using the relief from royalty method. For customer relationships, we used the multi-period excess earnings method. Significant assumptions (Level 3 inputs) used in developing these valuations included the estimated annual net cash flows for each intangible asset, royalty rates, the discount rate that appropriately reflects the risk inherent in each future cash flow stream and the assessment of each asset’s life cycle, among other factors. We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions. The final allocation of the fair value of the Porpoise acquisition, including the allocation of goodwill and intangible assets, is not complete, but will be finalized within the allowable measurement period.

In October 2021 and October 2020, we performed our annual goodwill impairment test and did not record any goodwill impairment at the reporting unit level. As of October 1, 2021, we had 247 reporting units with allocated goodwill balances.  The most significant goodwill balance for a reporting unit was $12.1 million and the average goodwill balance per reporting unit was $1.1 million.

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In the period ended March 31, 2020, we recorded impairment equal to the total goodwill and intangibles carrying amounts of our five Australian reporting units, which included goodwill impairment of $3.5 million and intangibles impairment, related to the Pool Systems tradename and trademark, of $0.9 million. We recorded these amounts in Impairment of goodwill and other assets on our Consolidated Statements of Income. We determined certain impairment triggers had occurred due to the impact of the COVID-19 pandemic on expected future operating cash flows, and performed interim goodwill impairment analyses, which included discounted cash flow analyses, and determined that the estimated fair values of our Australian reporting units no longer exceeded their carrying values.

The determination of our reporting units’ goodwill and intangibles fair values includes numerous assumptions that are subject to various risks and uncertainties. The principal assumptions, all of which are considered Level 3 inputs, used in our cash flow analyses consisted of changes in market conditions, forecasted future operating results (including sales growth rates and operating margins) and discount rates (including our weighted-average cost of capital).

Other intangible assets consisted of the following (in thousands):

	December 31,												Weighted Average Useful Life
	2021						2020
	Intangibles Gross		Accumulated Amortization		Intangibles Net		Intangibles Gross		Accumulated Amortization		Intangibles Net
Horizon tradename	$	8,400	$	—	$	8,400	$	8,400	$	—	$	8,400	Indefinite
Pinch A Penny brand name	169,000		—		169,000		—		—		—		Indefinite
National Pool Tile (NPT) tradename	1,500		(1,037)		463		1,500		(962)		538		20
Non-compete agreements	8,096		(3,891)		4,205		6,917		(3,674)		3,243		4.58
Customer relationships	109,000		(214)		108,786		—		—		—		20
Franchise agreements	22,000		(40)		21,960		—		—		—		20
Total other intangibles	$	317,996	$	(5,182)	$	312,814	$	16,817	$	(4,636)	$	12,181

The Horizon tradename and Pinch A Penny brand name each have an indefinite useful life and are not subject to amortization.  However, we evaluate the useful life of these intangible assets and test for impairment annually.  The NPT tradename, our non-compete agreements, customer relationships and franchise agreements have finite useful lives, and we amortize the estimated fair value of these agreements using the straight-line method over their respective useful lives. We have not identified any indicators of impairment related to these assets. The useful lives for our non-compete agreements are based on their contractual terms.

Other intangible amortization expense was $1.3 million in 2021 and $1.0 million in both 2020 and 2019.

The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands):

2022	$	7,854
2023	7,802
2024	7,426
2025	7,335
2026	6,932

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Note 4 - Details of Certain Balance Sheet Accounts

The table below presents additional information regarding certain balance sheet accounts (in thousands):

 

	December 31,
	2021		2020
Receivables, net:
Trade accounts	$	27,724	$	33,553
Vendor programs	129,072		90,988
Other, net	4,405		2,519
Total receivables	161,201		127,060
Less: Allowance for doubtful accounts	(5,942)		(4,808)
Receivables, net	$	155,259	$	122,252
Prepaid expenses and other current assets:
Prepaid expenses	$	21,889	$	16,401
Other current assets	7,204		1,209
Prepaid expenses and other current assets	$	29,093	$	17,610
Property and equipment, net:
Land	$	19,863	$	3,608
Buildings	54,503		7,348
Leasehold improvements	62,684		54,300
Autos and trucks	102,330		95,667
Machinery and equipment	82,897		73,353
Computer equipment	32,200		29,935
Furniture and fixtures	9,598		9,448
Fixed assets in progress	6,176		4,608
Total property and equipment	370,251		278,267
Less: Accumulated depreciation	(191,243)		(170,026)
Property and equipment, net	$	179,008	$	108,241
Accrued expenses and other current liabilities:
Salaries and payroll deductions	$	25,882	$	24,930
Performance-based compensation	76,255		59,897
Taxes payable	106,894		20,676
Unrealized losses on interest rate swaps	3,215		12,314
Other current liabilities	52,631		25,877
Accrued expenses and other current liabilities	$	264,877	$	143,694

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Note 5 - Debt

The table below presents the components of our debt (in thousands):

	December 31,
	2021		2020
Variable rate debt
Short-term borrowings	$	953	$	—
Current portion of long-term debt:
Australian credit facility	10,819		11,869
Short-term borrowings and current portion of long-term debt	11,772		11,869
Long-term portion:
Revolving credit facility	572,926		109,024
Term loan under credit facility	250,000		—
Term facility	166,500		175,750
Receivables securitization facility	185,000		120,000
Less: financing costs, net	2,848		625
Long-term debt, net	1,171,578		404,149
Total debt	$	1,183,350	$	416,018

Credit Facility

On December 30, 2021, we entered into the First Amendment to the Second Amended and Restated Credit Agreement Credit Agreement, which increased the total borrowing capacity of our Credit Facility to $1.25 billion from $1.0 billion through the addition of an incremental delayed-draw term loan facility of $250.0 million. Subsequent to December 31, 2021, we drew the $250.0 million incremental term loan amount on January 4, 2022 and used the same amount to reduce our revolving borrowings. At that time, $413.4 million remained available for borrowing under the Credit Facility.

Previously, on September 27, 2021, we entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”) among us, as U.S. Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP International, Inc., as Euro Borrower, Wells Fargo Bank, National Association, as Administrative Agent (the “Agent”), and certain other lenders party thereto. The Credit Agreement amended and restated the predecessor senior credit facility (as amended, the “Credit Facility”) principally by increasing the total borrowing capacity from $750.0 million to $1.0 billion through the addition of a delayed-draw term loan facility of $250.0 million. We drew the entire $250.0 million delayed-draw term loan on December 15, 2021 and used the proceeds to fund our acquisition of Porpoise Pool & Patio, Inc.

In addition, the Credit Agreement further amended and restated the Credit Facility in the following ways:

•extending the maturity of the Credit Facility from September 29, 2022 to September 25, 2026;

•making available lower interest rates;

•increasing the amount of incremental facility commitments that we can request from $75.0 million to $250.0 million; and

•providing additional capacity under certain negative covenants related to indebtedness, liens, investments, acquisitions, share repurchases and dividends.

Term loans under the credit facility require quarterly amortization payments aggregating to 20% of the original principal amount of the loan during the third, fourth and fifth years of the loan, with all remaining principal due on September 25, 2026. All other terms of any such term loans would be substantially similar to those governing revolving credit loans under the Credit Agreement. The Credit Agreement continues to include a $750.0 million revolving credit facility and sublimits for the issuance of swingline loans and standby letters of credit.

All obligations under the Credit Agreement continue to be guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries.  The Credit Agreement also continues to contain various customary affirmative and negative covenants and events of default.  The occurrence of any of these events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Credit Agreement.

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At December 31, 2021, there was $822.9 million outstanding, a $4.8 million standby letter of credit outstanding and $422.3 million available for borrowing under the Credit Facility.  The weighted average effective interest rate for the Credit Facility as of December 31, 2021 was approximately 1.2%, excluding commitment fees.

Revolving and term borrowings under the Credit Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the highest of (i) the Agent’s prime rate, (ii) the Federal Funds Rate plus 0.500% and (iii) (a) prior to the USD LIBOR Transition Date, the Adjusted Eurocurrency Rate for Dollars for a one-month term in effect on such day plus 1.000% and (b) on and after the USD LIBOR Transition Date, Daily Simple RFR for Dollars in effect on such day plus 1.000%; or

b.(i) prior to the USD LIBOR Transition Date, the Eurocurrency Rate and (ii) on or after the USD LIBOR Transition Date or a Benchmark Transition Event, the applicable Benchmark Replacement.

Borrowings by the Canadian Borrower bear interest, at the Canadian Borrower’s option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the greatest of (i) the Canadian Reference Bank prime rate and (ii) the Canadian Dealer Offered Rate (“CDOR”) plus 1.000%; or

b.CDOR.

Borrowings by the Euro Borrower bear interest at the Eurocurrency rate plus an applicable margin.

Borrowings under any swingline loans under the Credit Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.the LIBOR Market Index Rate; or

b.a base rate, which is the highest of (i) the Agent’s prime rate, (ii) the Federal Funds Rate plus 0.500% and (iii) (a) prior to the USD LIBOR Transition Date, the Adjusted Eurocurrency Rate for Dollars for a one-month term in effect on such day plus 1.000% and (b) on and after the USD LIBOR Transition Date, Daily Simple RFR for Dollars in effect on such day plus 1.000%

The interest rate margins on the borrowings and letters of credit issued under the Credit Agreement are based on our leverage ratio and will range from 0.000% to 0.425% on Base Rate and Canadian Base Rate loans and from 0.910% to 1.425% on CDOR, LIBOR and swingline loans (with all such rates being calculated in accordance with the terms and by reference to the definitions specified in the Credit Agreement). We are also required to pay an annual facility fee with respect to the lenders’ aggregate revolving credit agreement, the amount of which is based on our leverage ratio.

Term Facility

On December 30, 2019, we along with certain of our subsidiaries entered into a $185.0 million term facility (the “Term Facility”) with Bank of America, N.A. pursuant to a credit agreement subsequently amended on October 12, 2021, (as amended, the “Term Facility Agreement”) among us, as Borrower and Bank of America, N.A., as the Lender. Among other items, the amendment provided additional capacity under certain negative covenants related to indebtedness, liens, investments, acquisitions, share repurchases and dividends. The Term Facility matures on December 30, 2026.

Under the Term Facility, we are required to make quarterly amortization payments in installments of 1.250% of the Term Facility on the last business day of each quarter beginning in the first quarter of 2020. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. The total of the quarterly payments will be equal to 33.75% of the Term Facility with the final principal repayment, equal to 66.25% of the Term Facility, due on the maturity date.

Our obligations under the Term Facility are guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries. The Term Facility Agreement contains various customary affirmative and negative covenants and events of default. The occurrence of any of these events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Term Facility Agreement.

At December 31, 2021, the Term Facility had an outstanding balance of $166.5 million at a weighted average effective interest rate of 2.9%.

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Borrowings under the Term Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the greatest of (i) the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus 0.50%, (ii) Bank of America’s “prime rate,” or (iii) the Eurodollar Rate (defined below) plus 1.00%; or

b.the Eurodollar Rate, which is the greater of (i) the rate per annum equal to the USD LIBOR as administered by the ICE Benchmark Administration, or a comparable or successor administrator approved by the Lender or (ii) a floor rate specified in the Term Facility Agreement.

The interest rate margins on the borrowings under the Term Facility are based on our leverage ratio and will range from 0.000% to 0.625% on Base Rate borrowings and 1.000% to 1.625% on Eurodollar Rate borrowings (with all such rates being calculated in accordance with the terms and by reference to the definitions specified in the Term Facility Agreement).

Receivables Securitization Facility

On November 1, 2021, we and certain of our subsidiaries entered into an agreement (the “Amended Receivables Purchase Agreement”) amending our two-year receivable securitization facility. Among other items, the amendment removed seasonal facility limits and increased the maximum facility limit to $350.0 million in the months of April through June and from $175.0 million to $315.0 million during the remaining months of the year. We also extended the maturity date to November 1, 2023. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis.

The Receivables Facility provides for the sale of certain of our receivables to a wholly owned subsidiary (the “Securitization Subsidiary”). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due to the financial institutions.

The Receivables Facility is subject to terms and conditions (including representations, covenants and conditions precedent) customary for transactions of this type. Additionally, an amortization event will occur if we fail to meet certain covenants, including maintaining a maximum average total leverage ratio (average total funded debt/EBITDA) of 3.25 to 1.00 and a minimum fixed charge coverage ratio (EBITDAR/cash interest expense plus rental expense) of 2.25 to 1.00.

At December 31, 2021, there was $185.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 0.9%, excluding commitment fees.

Depending on the funding source used by the financial institutions to purchase the receivables, amounts outstanding under the Receivables Facility bear interest at one of the following and, in each case, plus an applicable margin of 0.75%:

a.for financial institutions using the commercial paper market, commercial paper rates based on the applicable variable rates in the commercial paper market at the time of issuance; or

b.for financial institutions not using the commercial paper market, LMIR.

We also pay an unused fee of 0.35% on the excess of the facility limit over the average daily capital outstanding. We pay this fee monthly in arrears.

Australian Seasonal Credit Facility

In the second quarter of 2017, Pool Systems Pty. Ltd. (PSL) entered into a credit facility to fund expansion and supplement working capital needs. The credit facility provides a borrowing capacity of AU$20.0 million.

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Cash Pooling Arrangement

Certain of our foreign subsidiaries entered into a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows the participating subsidiaries to withdraw cash from the financial institution to the extent that aggregate cash deposits held by these subsidiaries are available at the financial institution. To the extent the participating subsidiaries are in an overdraft position, such overdrafts are recorded as short-term borrowings under a committed cash overdraft facility. These borrowings bear interest at a variable rate based on 3-month Euro Interbank Offered Rate (EURIBOR), plus a fixed margin. We also pay a commitment fee on the average outstanding balance. This fee is paid annually in advance. Our borrowing capacity is €14.0 million.

Maturities of Long-Term Debt

The table below presents maturities of long-term debt, excluding unamortized deferred financing costs, for the next five years (in thousands):

2022	$	21,022
2023	200,500
2024	21,750
2025	28,000
2026	914,926

Interest Rate Swaps

We currently have three interest rate swap contracts in place, two of which became effective on November 20, 2020 and terminate on September 29, 2022, and a third that became effective on February 26, 2021, and terminates on February 28, 2025. These swap contracts were previously forward-starting and convert the variable interest rate to a fixed interest rate on our variable rate borrowings. Interest expense related to the notional amounts under these swap contracts is based on the fixed rate plus the applicable margin on our variable rate borrowings. Changes in the estimated fair value of these interest rate swap contracts are recorded to Accumulated other comprehensive loss on the Consolidated Balance Sheets.

The following table provides additional details related to these swap contracts:

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Interest rate swap 1	May 7, 2019	November 20, 2020	September 29, 2022	$75.0	2.0925%
Interest rate swap 2	July 25, 2019	November 20, 2020	September 29, 2022	$75.0	1.5500%
Interest rate swap 3	February 5, 2020	February 26, 2021	February 28, 2025	$150.0	1.3800%

We have entered into additional forward-starting interest rate swap contracts to extend the hedged period for future interest payments on our variable rate borrowings. These swap contracts will convert the variable interest rate to a fixed interest rate on our variable rate borrowings.

The following table provides details related to each of our forward-starting interest rate swap contracts:

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Forward-starting interest rate swap 1	March 9, 2020	September 29, 2022	February 26, 2027	$150.0	0.7400%
Forward-starting interest rate swap 2	March 9, 2020	February 28, 2025	February 26, 2027	$150.0	0.8130%

The net difference between interest paid and interest received related to our swap agreements resulted in an incremental interest expense of $4.3 million in 2021 and $0.9 million in 2020 and a benefit of $0.3 million in 2019.

Failure of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements.  Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

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Financial and Other Covenants

The Credit Facility and Term Facility limit the declaration and payment of dividends on our common stock to a manner consistent with past practice, provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. We may declare and pay quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount dividends per share and (ii) our Average Total Leverage Ratio is less than 3.25 to 1.00 both immediately before and after giving pro forma effect to such dividends. Under the Credit Facility and Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 3.25 to 1.00.

Other covenants include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of the Credit Facility and the Term Facility could result in higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.

As of December 31, 2021, we were in compliance with all covenants and financial ratio requirements related to the Credit Facility, the Term Facility and the Receivables Facility.

Deferred Financing Costs

We capitalize financing costs we incur related to implementing and amending our debt arrangements. We record these costs as a reduction of Long-term debt, net on our Consolidated Balance Sheets and amortize them over the contractual life of the related debt arrangements. The table below summarizes changes in deferred financing costs for the past two years (in thousands):

	December 31,
	2021		2020
Deferred financing costs:
Balance at beginning of year	$	5,130	$	5,118
Financing costs deferred	2,638		12
Write-off of fully amortized deferred financing costs	(3,726)		—
Balance at end of year	4,042		5,130
Less: Accumulated amortization	(1,194)		(4,505)
Deferred financing costs, net of accumulated amortization	$	2,848	$	625

Note 6 - Share-Based Compensation

Share-Based Plans

Current Plan

In May 2007, our shareholders approved the 2007 Long-Term Incentive Plan (the 2007 LTIP), which authorizes the Compensation Committee of our Board of Directors (the Board) to grant non-qualified stock options and restricted stock awards to employees, directors, consultants or advisors.  In May 2016, our shareholders approved an amendment and restatement of the 2007 Long-Term Incentive Plan (the Amended 2007 LTIP) and increased the number of shares that may be issued to a total of 9,315,000 shares.  As of December 31, 2021, we had 4,109,524 shares available for future issuance including 933,872 shares that may be issued as restricted stock.

Stock options granted under the Amended 2007 LTIP have an exercise price equal to our stock’s closing market price on the grant date and expire ten years from the grant date. Restricted stock awards granted under the Amended 2007 LTIP are issued at no cost to the grantee.  Both stock options and restricted stock awards vest over time depending on an employee’s length of service with the company.  Share-based awards to our employees generally vest either five years from the grant date or on a three/five year split vest schedule, where half of the awards vest three years from the grant date and the remainder of the awards vest five years from the grant date. Share-based awards to our non-employee directors vest one year from the grant date.

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Restricted stock awards to our employees contain performance-based criteria in addition to the service-based vesting criteria described above. The awards provide for a three-year performance period for the metric to be achieved. If the performance metric fails to be met, it may be extended by one or two years; however, if it is not met by the end of the extended performance period, then all shares of performance-based restricted stock will be immediately forfeited and canceled. For each of the performance-based grants from 2016 through 2019, we achieved the performance condition in the initial three-year performance period. For the performance-based grants in 2020 and 2021, we have concluded that the performance condition is probable to be attained in the initial three-year performance period.

Stock Option Awards

The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at December 31, 2020	884,059	$	91.49
Granted	44,750	332.91
Less: Exercised	274,253	52.64
Forfeited	2,939	207.30
Balance at December 31, 2021	651,617	$	123.98	4.93	$	288,028,501
Exercisable at December 31, 2021	376,780	$	76.06	3.31	$	184,599,877

The following table presents information about stock options outstanding and exercisable at December 31, 2021:

	Outstanding Stock Options				Exercisable Stock Options
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Term (Years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$ 37.13 to $ 69.85	218,817	2.29	$	59.66	218,817	$	59.66
$ 69.86 to $ 138.03	257,995	5.05	108.93		156,309	97.51
$ 138.04 to $ 515.41	174,805	8.05	226.70		1,654	217.71
	651,617	4.93	$	123.98	376,780	$	76.06

The following table summarizes the cash proceeds and tax benefits realized from the exercise of stock options:

	Year Ended December 31,
(in thousands, except share amounts)	2021		2020		2019
Options exercised	274,253		482,361		640,475
Cash proceeds	$	14,435	$	17,657	$	16,839
Intrinsic value of options exercised	$	118,305	$	116,794	$	97,007
Tax benefits realized	$	29,576	$	29,199	$	24,252

We estimated the fair value of employee stock option awards at the grant date based on the assumptions summarized in the following table:

 

	Year Ended December 31,
(Weighted average)	2021				2020				2019
Expected volatility	27.0		%		20.7		%		21.4		%
Expected term	6.9			years	6.8			years	7.0			years
Risk-free interest rate	1.00		%		1.22		%		2.52		%
Expected dividend yield	1.15		%		1.30		%		1.30		%
Grant date fair value	$	83.05			$	42.52			$	37.75

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We calculated expected volatility over the expected term of the awards based on the historical volatility of our common stock.  We use weekly price observations for our historical volatility calculation because we believe this provides the most appropriate measurement of volatility given the trading patterns of our common stock.  We estimated the expected term based on the vesting period of the awards and our historical exercise activity for awards with similar characteristics. The risk-free interest rate is based on the U.S. Treasury zero-coupon issues with a remaining term approximating the expected term of the option. We determined the expected dividend yield based on the dividends we anticipate paying over the expected term.

For purposes of recognizing share-based compensation expense, we ratably expense the estimated fair value of employee stock options over the options’ requisite service period. The requisite service period for our share-based awards is either the vesting period, or if shorter, the period from the grant date to the date the employee becomes eligible to retire under our share-based award agreements. We recognize compensation cost for awards with graded vesting using the graded vesting recognition method. We estimate a forfeiture rate to calculate our share-based compensation expense for our share-based awards based on an analysis of actual forfeitures. We continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover, and other factors.

The following table presents the total share-based compensation expense for stock option awards for the past three years (in thousands):

	2021		2020		2019
Option grants share-based compensation expense	$	2,846	$	2,842	$	3,021
Option grants share-based compensation tax benefits	712		710		755

At December 31, 2021, the unamortized compensation expense related to stock option awards totaled $3.6 million.  We anticipate recognizing this expense over a weighted average period of 2.8 years.

Restricted Stock Awards

The table below presents restricted stock award activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Grant Date Fair Value
Balance unvested at December 31, 2020	291,704	$	153.12
Granted (at market price) (1)	40,597	335.80
Less: Vested	69,069	115.88
Forfeited	2,494	295.73
Balance unvested at December 31, 2021	260,738	$	190.26

(1)The majority of these shares contain performance-based vesting conditions.

At December 31, 2021, the unamortized compensation expense related to the restricted stock awards totaled $14.5 million.  We anticipate recognizing this expense over a weighted average period of 3.0 years.

The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts):

	2021		2020		2019
Restricted stock awards - shares vested	69,069		77,294		75,143
Fair value of restricted stock awards vested	$	24,005	$	16,813	$	12,316

The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands):

	2021		2020		2019
Restricted stock awards share-based compensation expense	$	11,543	$	10,965	$	10,026

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Employee Stock Purchase Plan

We maintain the Pool Corporation Amended and Restated Employee Stock Purchase Plan (the ESPP), which was last approved by the Board and our stockholders in 2016. Under the ESPP, employees who meet minimum age and length of service requirements may purchase stock at 85% of the lower of:

a.the closing price of our common stock at the end of a six month plan period ending either July 31 or January 31; or

b.the average of the beginning and ending closing prices of our common stock for such six month period.

No more than 956,250 shares of our common stock may be issued under the ESPP. For the two six month offering periods in each of the last three years, our employees purchased the following aggregate number of shares:

2021	2020	2019
8,649	10,929	12,716

The grant date fair value for the most recent ESPP purchase period ended July 31, 2021 was $121.82 per share.  Share-based compensation expense related to our ESPP was $0.8 million in 2021, $0.7 million in 2020 and $0.4 million in 2019.

Note 7 - Income Taxes

Income before income taxes and equity in earnings is attributable to the following jurisdictions (in thousands):

	Year Ended December 31,
	2021		2020		2019
United States	$	752,957	$	428,857	$	304,259
Foreign	71,188		22,817		13,215
Total	$	824,145	$	451,674	$	317,474

The provision for income taxes consisted of the following (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	124,379	$	67,093	$	35,270
State and other	44,783		20,680		17,168
Total current provision for income taxes	169,162		87,773		52,438
Deferred:
Federal	2,970		(1,298)		4,154
State and other	1,680		(1,244)		(431)
Total deferred provision for income taxes	4,650		(2,542)		3,723
Provision for income taxes	$	173,812	$	85,231	$	56,161

A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity in earnings is as follows:

	Year Ended December 31,
	2021		2020		2019
Federal statutory rate	21.00	%	21.00	%	21.00	%
Change in valuation allowance	(0.11)		(0.22)		0.10
Stock-based compensation	(3.67)		(6.34)		(7.40)
Other, primarily state income tax rate	3.87		4.43		3.99
Total effective tax rate	21.09	%	18.87	%	17.69	%

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We reduce federal and state income taxes payable by the tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. We recorded excess tax benefits of $30.0 million to our income tax provision in 2021, $28.6 million in 2020 and $23.5 million in 2019.

The table below presents the components of our deferred tax assets and liabilities (in thousands):

	December 31,
	2021		2020
Deferred tax assets:
Product inventories	$	8,597	$	6,110
Accrued expenses	3,105		4,101
Leases	59,457		50,301
Share-based compensation	8,981		8,730
Uncertain tax positions	2,792		3,266
Net operating losses	2,524		3,829
Interest rate swaps	—		3,023
Other	3,839		3,628
Total non-current	89,295		82,988
Less: Valuation allowance	(2,086)		(3,166)
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	1,096		1,280
Total deferred tax assets	1,096		1,280
Deferred tax liabilities:
Trade discounts on purchases	2,566		2,218
Prepaid expenses	4,226		3,379
Leases	58,146		49,004
Intangible assets, primarily goodwill	36,936		34,244
Depreciation	19,369		17,350
Interest rate swaps	710		—
Total non-current	121,953		106,195
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	35,840		27,653
Total deferred tax liabilities	35,840		27,653
Net deferred tax liability	$	34,744	$	26,373

At December 31, 2021, certain of our international subsidiaries had tax loss carryforwards totaling approximately $8.6 million, which expire in various years after 2022.  Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $2.5 million as of December 31, 2021 and $3.8 million as of December 31, 2020.  We have recorded a corresponding valuation allowance of $1.8 million and $2.9 million in the respective years.

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As of December 31, 2021, United States income taxes were not provided on earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform enacted in December 2017. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation.

The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	15,553	$	13,582	$	12,179
Increases for tax positions taken during a prior period	—		1,363		771
Increases for tax positions taken during the current period	3,518		2,721		2,354
Decreases resulting from the expiration of the statute of limitations	3,185		2,113		1,390
Decreases relating to settlements	2,589		—		332
Balance at end of year	$	13,297	$	15,553	$	13,582

The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $10.5 million at December 31, 2021 and $12.3 million at December 31, 2020.

We record interest expense related to unrecognized tax benefits in Interest and other non-operating expenses, net, while we record related penalties in Selling and administrative expenses on our Consolidated Statements of Income.  For unrecognized tax benefits, we had interest income of $0.6 million in 2021 and interest expense of $1.0 million in 2020 and $0.6 million in 2019.  Accrued interest related to unrecognized tax benefits was approximately $1.6 million at December 31, 2021 and $2.7 million at December 31, 2020.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.  With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2018.

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Note 8 - Earnings Per Share

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by the earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders. Participating securities excluded from weighted average common shares outstanding were 268,000 for the year ended December 31, 2021.

The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):

	Year Ended December 31,
	2021		2020		2019
Net income	$	650,624	$	366,738	$	261,575
Amounts allocated to participating securities	(4,321)		—		—
Net income attributable to common stockholders	$	646,303	$	366,738	$	261,575
Weighted average common shares outstanding:
Basic	39,876		40,106		39,833
Effect of dilutive securities:
Stock options and employee stock purchase plan	604		759		1,032
Diluted	40,480		40,865		40,865
Earnings per share attributable to common stockholders:
Basic	$	16.21	$	9.14	$	6.57
Diluted	$	15.97	$	8.97	$	6.40
Anti-dilutive stock options excluded from diluted earnings per share computations (1)	1		—		—

(1)Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.

Note 9 - Commitments and Contingencies

Commitments

We lease facilities for our corporate and administrative offices, sales centers and centralized shipping locations under operating leases that expire in various years through 2036. Most of our leases contain five-year terms with renewal options that allow us to extend the lease term beyond the initial period, subject to terms agreed upon at lease inception. Based on our leasing practices and contract negotiations, we determined that we are not reasonably certain to exercise the renewal options and, as such, we have not included optional renewal periods in our measurement of operating lease assets, liabilities and expected lease terms.

With our adoption of ASC 842, Leases, we elected to retain our existing assessment of whether an arrangement is or contains a lease, is classified as an operating or financing lease and contains initial direct costs. We also elected the practical expedients that allow us to exclude short-term leases from our Consolidated Balance Sheets and to combine lease and non-lease components.

For leases with step rent provisions whereby the rental payments increase incrementally over the life of the lease, we recognize expense on a straight-line basis determined by the total lease payments over the lease term. To the extent we determine that future obligations related to real estate taxes, insurance and other lease components are variable, we exclude them from the measurement of our operating lease assets and liabilities.

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Some of our real estate agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands):

Lease Cost	Classification	2021		2020		2019
Operating lease cost (1)	Selling and administrative expenses	$	71,255	$	63,141	$	60,104
Variable lease cost	Selling and administrative expenses	$	18,755	$	16,700	$	13,778

(1)Includes short-term lease cost, which is not material.

Based on our lease portfolio as of December 31, 2021, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands):

2022	$	64,337
2023	57,806
2024	45,037
2025	34,803
2026	22,800
Thereafter	32,970
Total lease payments	257,753
Less: interest	13,324
Present value of lease liabilities	$	244,429

To calculate the present value of our lease liabilities, we determined our incremental borrowing rate based on the effective interest rate on our Credit Facility adjusted for a collateral feature similar to that of our leased properties, as we are unable to derive implicit rates from our existing leases. The table below presents the weighted-average remaining lease term (years) of our operating leases and the weighted-average discount rate used in the above calculation:

	December 31,
Lease Term and Discount Rate for Operating Leases	2021		2020		2019
Weighted-average remaining lease term (years)	5.27		5.10		4.57
Weighted-average discount rate	2.57	%	2.99	%	3.41	%

The table below presents the amount of cash paid for amounts included in the measurement of lease liabilities (in thousands):

	Year Ended
	December 31,
	2021		2020		2019
Operating cash flows for lease liabilities	$	67,197	$	60,723	$	56,617

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Contingencies

From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. Each quarter, we evaluate developments related to claims and litigation and record a liability if we deem a loss to be probable and estimable. When evaluating these matters for accrual and disclosure, we consider factors such as historical experience, specific facts and claims asserted, the likelihood we will prevail and the magnitude of any potential loss. The outcome of any litigation is inherently unpredictable. Based on currently available facts, we do not believe that the ultimate resolution of any of these claims and litigation matters will have a material adverse impact on our financial condition, results of operations or cash flows. We do not believe our exposure for any of these matters is material for disclosure, either individually or in the aggregate.

Note 10 - Related Party Transactions

Policy

Our policy for related party transactions is included in our written Audit Committee Charter.  This policy requires that our Audit Committee review and approve all related party transactions required to be disclosed in our Annual Proxy Statement or required to be approved based on Nasdaq rules.

Transactions

We lease corporate and administrative offices from NCC, an entity we have held a 50% ownership interest in since 2005.  NCC owns and operates an office building in Covington, Louisiana.  We lease corporate and administrative offices from NCC, occupying approximately 60,000 square feet of office space, and we pay rent of $0.1 million per month. Our lease term ends May 2025.

The table below presents rent expense associated with this lease for the past three years (in thousands):

	2021		2020		2019
NCC	$	1,222	$	1,222	$	1,222

Note 11 - Employee Benefit Plans

We offer a 401(k) savings and retirement plan, which is a defined contribution plan that provides benefits for substantially all employees who meet length of service requirements. Eligible employees are able to contribute up to 75% of their compensation, subject to the federal dollar limit. For plan participants, we provide a matching contribution. We contribute a total maximum match on employee contributions of up to 4% of their compensation, with a 100% match on the first 3% of compensation deferred and a 50% match on deferrals between 3% and 5% of compensation. We also offer retirement plans for certain of our international entities. The plan funding is calculated as a percentage of the employee’s earnings and in compliance with local laws and practices. The related expense is not material and is included in the table below.

We have a nonqualified deferred compensation plan that allows certain employees who occupy key management positions to defer salary and bonus amounts.  This plan also provides a matching contribution similar to that provided under our 401(k) plan to the extent that a participant’s contributions to the 401(k) plan are limited by IRS deferral and compensation limitations. The total combined company matching contribution provided to a participant under the 401(k) plan and the nonqualified deferred compensation plan for any one year may not exceed 4% of a participant’s salary and bonus.  The employee and company matching contributions are invested in certain equity and fixed income securities based on individual employee elections.

The table below sets forth our contributions for the past three years (in thousands):

	2021		2020		2019
Defined contribution and international retirement plans	$	9,308	$	8,259	$	7,373
Deferred compensation plan	239		160		195

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Note 12 - Quarterly Financial Data (Unaudited)

The table below summarizes the unaudited quarterly results of operations for the past two years (in thousands, except per share data):

	Quarter
	2021								2020
	First		Second		Third		Fourth		First		Second		Third		Fourth
Net sales	$	1,060,745	$	1,787,833	$	1,411,448	$	1,035,557	$	677,288	$	1,280,846	$	1,139,229	$	839,261
Gross profit	301,131		551,685		441,899		322,376		189,629		373,481		328,698		239,095
Net income	98,655		259,695		184,665		107,609		30,912		157,555		119,098		59,174
Earnings per share:
Basic	$	2.45	$	6.47	$	4.60	$	2.68	$	0.77	$	3.94	$	2.97	$	1.47
Diluted	$	2.42	$	6.37	$	4.54	$	2.65	$	0.75	$	3.87	$	2.92	$	1.45

The sum of basic and diluted earnings per share for each of the quarters may not equal the total basic and diluted earnings per share for the annual periods because of rounding differences and a difference in the way that in-the-money stock options are considered from quarter to quarter. 

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Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.  Controls and Procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Act). The rules refer to the controls and other procedures designed to ensure that information required to be disclosed in reports that we file or submit under the Act is (1) recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.  As of December 31, 2021, management, including the CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, management, including the CEO and CFO, concluded that as of December 31, 2021, our disclosure controls and procedures were effective.

We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Based on the most recent evaluation, we have concluded that no change in our internal control over financial reporting occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Management’s Report on Internal Control Over Financial Reporting

Pool Corporation’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.  Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of published financial statements.  All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Any evaluation or projection of effectiveness to future periods is also subject to risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Pool Corporation’s management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework (2013 Framework). Based on this assessment, management has concluded that, as of December 31, 2021, Pool Corporation’s internal control over financial reporting was effective.

The independent registered public accounting firm that audited the Consolidated Financial Statements included in Item 8 of this Form 10-K has issued a report on Pool Corporation’s internal control over financial reporting. This report appears below.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Pool Corporation

Opinion on Internal Control over Financial Reporting

We have audited Pool Corporation’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Pool Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 /s/ Ernst & Young LLP

New Orleans, Louisiana

February 25, 2022

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Item 9B.  Other Information

Not applicable.

Item 9C.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III.

Item 10.  Directors, Executive Officers and Corporate Governance

Incorporated by reference to Pool Corporation’s 2022 Proxy Statement to be filed with the SEC.

We have a Code of Business Conduct and Ethics (the Code) that applies to all of our employees, officers and directors, and is available on our website at www.poolcorp.com. Any substantive amendments to the Code, or any waivers granted to any directors or executive officers, including our principal executive officer, principal financial officer or principal accounting officer and controller, will be disclosed on our website and remain there for at least 12 months.

Item 11.  Executive Compensation

Incorporated by reference to Pool Corporation’s 2022 Proxy Statement to be filed with the SEC.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated by reference to Pool Corporation’s 2022 Proxy Statement to be filed with the SEC.

Item 13.  Certain Relationships and Related Transactions, and Director Independence

Incorporated by reference to Pool Corporation’s 2022 Proxy Statement to be filed with the SEC.

Item 14.  Principal Accountant Fees and Services

Incorporated by reference to Pool Corporation’s 2022 Proxy Statement to be filed with the SEC.

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PART IV.

Item 15.  Exhibits, Financial Statement Schedules

(a)The following documents are filed as part of this report:

(1)	Consolidated Financial Statements:
		Page
	Report of Independent Registered Public Accounting Firm	49
	Consolidated Statements of Income	52
	Consolidated Statements of Comprehensive Income	53
	Consolidated Balance Sheets	54
	Consolidated Statements of Cash Flows	55
	Consolidated Statements of Changes in Stockholders’ Equity	56
	Notes to Consolidated Financial Statements	57
(2)	Financial Statement Schedules.
	All schedules are omitted because they are not applicable or are not required or because the required information is provided in our Consolidated Financial Statements or accompanying Notes included in Item 8 of this Form 10-K.
(3)	The exhibits listed in the Index to Exhibits.

Item 16.  Form 10-K Summary

None.

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INDEX TO EXHIBITS

				Incorporated by Reference
No.		Description	Filed/ Furnished with this Form 10-K	Form	File No.	Date Filed
3.1		Restated Certificate of Incorporation of the Company.		10-Q	000-26640	08/09/2006
3.2		Amended and Restated By-laws of the Company.		8-K	000-26640	02/08/2019
4.1		Form of certificate representing shares of common stock of the Company.		8-K	000-26640	05/19/2006
4.2		Description of the Securities of Pool Corporation Registered Under Section 12 of the Securities and Exchange Act of 1934.		10-K	000-26640	02/27/2020
10.1	*	Pool Corporation Amended and Restated Employee Stock Purchase Plan.		8-K	000-26640	05/06/2016
10.2	*	Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan.		8-K	000-26640	05/06/2016
10.3	*	Form of Stock Option Agreement for Employees under the Amended and Restated 2007 Long-Term Incentive Plan.	X
10.4	*	Form of Performance-Based Restricted Stock Agreement under the Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan.	X
10.5	*	Form of Stock Option Agreement for Directors under the Amended and Restated 2007 Long‑Term Incentive Plan.		8-K	000-26640	05/06/2009
10.6	*	Form of Restricted Stock Agreement for Directors under the Amended and Restated 2007 Long-Term Incentive Plan.		8-K	000-26640	05/06/2009
10.7	*	Form of Employment Agreement.		10-K	000-26640	03/18/2003
10.8	*	Employment Agreement, dated January 17, 2003, between SCP Distributors, LLC and A. David Cook.		10-K	000-26640	03/01/2005
10.9	*	Employment Agreement, dated December 20, 2016, between SCP Distributors, LLC and Peter D. Arvan.		10-K	000-26640	02/24/2017
10.10	*	Nonqualified Deferred Compensation Plan Basic Plan Document, dated March 1, 2005.		10-Q	000-26640	04/29/2005
10.11	*	Nonqualified Deferred Compensation Plan Adoption Agreement by and among SCP Distributors, L.L.C., Superior Pool Products, L.L.C. and Cypress, Inc., dated March 1, 2005.		10-Q	000-26640	04/29/2005
10.12		Trust Agreement by and among SCP Distributors, L.L.C., Superior Pool Products, L.L.C. and Cypress, Inc. and T. Rowe Price Trust Company, dated March 1, 2005.		10-Q	000-26640	04/29/2005
10.13	*	Pool Corporation Executive Officer Annual Incentive Plan.		10-K	000-26640	02/27/2019
10.14	*	Pool Corporation Strategic Plan Incentive Program.	X
10.15		Second Amended and Restated Credit Agreement dated as of September 27, 2021, by and among Pool Corporation, as U.S. Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP International, Inc., as Euro Borrower, Wells Fargo Bank, National Association, as Administrative Agent, and certain other lenders party thereto.		8-K	000-26640	9/29/2021
10.16		as amended by First Amendment to Second Amended and Restated Credit Agreement	X

			Incorporated by Reference
No.	Description	Filed/ Furnished with this Form 10-K	Form	File No.	Date Filed
10.17	Receivables Sale and Contribution Agreement, dated as of October 11, 2013, between SCP Distributors LLC, Horizon Distributors, Inc., Superior Pool Products LLC and Poolfx Supply LLC, as Originators and Superior Commerce LLC, as Buyer.		8-K	000-26640	10/17/2013
10.18	Receivables Purchase Agreement, dated as of October 11, 2013, among Superior Commerce LLC as Seller, SCP Distributors LLC, as the Servicer, the Purchasers from time to time thereto, The Bank of Tokyo‑Mitsubishi UFJ, Ltd., New York Branch, as the Victory Group Co-Agent and Wells Fargo Bank, National Association, as the Wells Group Co-Agent and as Administrative Agent.		8-K	000-26640	10/17/2013
10.19	as amended by Second Amendment to the Receivables Purchase Agreement dated as of June 25, 2014.		10-Q	000-26640	07/30/2014
10.20	as amended by Third Amendment to the Receivables Purchase Agreement dated as of October 24, 2014.		8-K	000-26640	10/28/2014
10.21	as amended by Fourth Amendment to the Receivables Purchase Agreement dated as of October 1, 2015.		8-K	000-26640	10/20/2015
10.22	as amended by Fifth Amendment to the Receivables Purchase Agreement dated as of October 15, 2015.		8-K	000-26640	10/20/2015
10.23	as amended by Sixth Amendment to the Receivables Purchase Agreement dated as of October 28, 2016.		8-K	000-26640	10/31/2016
10.24	as amended by Seventh Amendment to the Receivables Purchase Agreement dated as of August 31, 2017.		8-K	000-26640	09/01/2017
10.25	as amended by Eighth Amendment to the Receivables Purchase Agreement dated as of November 28, 2017.		8-K	000-26640	11/29/2017
10.26	as amended by Ninth Amendment to the Receivables Purchase Agreement dated as of October 31. 2018.		8-K	000-26640	11/02/2018
10.27	as amended by Tenth Amendment to the Receivables Purchase Agreement dated as of November 1, 2019.		8-K	000-26640	11/04/2019
10.28	Omnibus Amendment No. 1, dated November 1, 2021, among Superior Commerce LLC, as Seller, SCP Distributors LLC, as the Servicer, Pool Corporation as the Performance Guarantor, the Purchasers from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent.		8-K	000-26640	11/01/2021
10.29	Performance Undertaking, dated as of October 11, 2013, by and between Pool Corporation and Superior Commerce LLC.		8-K	000-26640	10/17/2013
10.30	Credit Agreement, dated as of December 30, 2019, among Pool Corporation as the Borrower, Certain Subsidiaries of the Borrower Party Hereto, as the Guarantors, and Bank of America, N.A., as the Lender.		8-K	000-26640	01/02/2020
10.31	First Amendment to Credit Agreement, dated October 12, 2021 by and among Pool Corporation as Borrower, the Guarantors and BANK OF AMERICA, N.A as Lender.		10-Q	000-26640	10/28/2021
21.1	Subsidiaries of the registrant.	X
23.1	Consent of Ernst & Young LLP.	X
31.1	Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
31.2	Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X

				Incorporated by Reference
No.		Description	Filed/ Furnished with this Form 10-K	Form	File No.	Date Filed
32.1		Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
101.INS	+	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	X
101.SCH	+	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	+	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	+	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	+	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	+	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	+	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)	X

*    Indicates a management contract or compensatory plan or arrangement

+    Attached as Exhibit 101 to this report are the following items formatted in iXBRL (Inline Extensible Business Reporting Language):

1.Consolidated Statements of Income for the years ended December 31, 2021, December 31, 2020 and December 31, 2019;

2.Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, December 31, 2020 and December 31, 2019;

3.Consolidated Balance Sheets at December 31, 2021 and December 31, 2020;

4.Consolidated Statements of Cash Flows for the years ended December 31, 2021, December 31, 2020 and December 31, 2019;

5.Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021, December 31, 2020 and December 31, 2019; and

6.Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 25, 2022.

	POOL CORPORATION
By:	/s/ JOHN E. STOKELY
	John E. Stokely, Chairman of the Board
	and Lead Independent Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated on February 25, 2022.

Signature:	Title:
/s/ JOHN E. STOKELY
John E. Stokely	Chairman of the Board and Lead Independent Director
/s/ PETER D. ARVAN
Peter D. Arvan	President, Chief Executive Officer and Director (principal executive officer)
/s/ MELANIE M. HOUSEY HART
Melanie M. Housey Hart	Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)
/s/ MARTHA S. GERVASI
Martha S. Gervasi	Director
/s/ TIMOTHY M. GRAVEN
Timothy M. Graven	Director
/s/ DEBRA S. OLER
Debra S. Oler	Director
/s/ MANUEL J. PEREZ DE LA MESA
Manuel J. Perez de la Mesa	Director
/s/ HARLAN F. SEYMOUR
Harlan F. Seymour	Director
/s/ ROBERT C. SLEDD
Robert C. Sledd	Director
/s/ DAVID G. WHALEN
David G. Whalen	Director

EX-10.3

Exhibit 10.3

STOCK OPTION AGREEMENT

FOR THE GRANT OF

NON-QUALIFIED STOCK OPTIONS UNDER THE

POOL CORPORATION

AMENDED AND RESTATED 2007 LONG-TERM INCENTIVE PLAN

THIS AGREEMENT is entered into and effective as of _DATE_by and between Pool Corporation, a Delaware corporation (the “Company”), and First Name Last Name (the “Optionee”).

WHEREAS Optionee is a key employee of the Company and the Company considers it desirable and in its best interest that Optionee be given an inducement to acquire a proprietary interest in the Company and an incentive to advance the interests of the Company by possessing an option to purchase shares of the common stock of the Company, $.001 par value per share (the “Common Stock”) in accordance with the Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan (the “Plan”).

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

I
Grant of Option

In consideration of future services and other covenants contained herein, the Company hereby grants to Optionee effective as of the date hereof (the “Date of Grant”) the right, privilege and option to purchase #shares of Common Stock (the “Option”) at an exercise price of $$$$per share (the “Exercise Price”). The Option shall be exercisable at the time specified in Section II below. The Option is a non-qualified stock option and shall not be treated as an incentive stock option under Section 422 of the Internal Revenue Code. Any capitalized term used herein, but not defined herein, shall have the meaning provided in the Plan.

II
Time of Exercise

2.1Subject to the provisions of the Plan and the other provisions of this Section II, the Option shall become vested and exercisable beginning on the dates set forth below, provided Optionee continues to be an employee or to perform services for the Company on such dates:

[50% of the Option will vest on Vesting Date 1 and the other 50% of the Option will vest on Vesting Date 2]

[the Option will vest on Vesting Date1]

2.2During Optionee's lifetime, the Option may be exercised only by him, his guardian if he has been declared incompetent or by a permitted transferee under Article VI hereof. In the event of death, the Option may be exercised as provided herein by the Optionee’s estate or by the person to whom such right devolves as a result of the Optionee’s death.

2.3If the Optionee ceases to be an employee of, or to perform other services for, the Company or a Subsidiary of the Company:

1

(a)due to death or Disability, the Option shall become fully vested and exercisable and shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option;

(b)as a result of termination by the Company or a Subsidiary for Cause, the Option shall be forfeited immediately upon such cessation, whether or not then exercisable;

(c)unless Section 2.3(e) applies, due to Retirement, provided that the Optionee does not engage in Competition directly or indirectly with the Company, as determined by the Compensation Committee (“the Committee”) or the President of the Company (i) the Option, to the extent vested and exercisable on the date of Retirement, shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option; and (ii) the portion of the Option that was not vested and exercisable on the date of Retirement shall continue to vest in accordance with the original vesting schedule and shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option; and

(d)unless Section 2.3(e) applies, for any reason other than death, Disability, Retirement or Cause, provided that the Optionee does not engage in Competition directly or indirectly with the Company, as determined by the Committee or the President of the Company (i) the portion of the Option that was vested and exercisable on the date of such cessation shall remain exercisable for, and shall otherwise terminate (x) 90 days from the date of such cessation of employment or if earlier, the original expiration date of such Option or (y) if so determined by the Committee upon the recommendation of the President of the Company, for a period not to exceed the original expiration date of such Option and (ii) the portion of the Option that was not vested and exercisable on the date of such cessation shall immediately terminate, except that such unvested portion of the Option may continue to vest in accordance with the original vesting schedule and remain exercisable for, and otherwise terminate on the original expiration date of such Option, if so determined by the Committee upon the recommendation of the President of the Company.

(e)as a result of the Optionee’s termination by the Company or a Subsidiary without Cause or by the Optionee for Good Reason, in either case within 2 years following a Change of Control, the Option shall become fully vested and exercisable and shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option.

provided, however, that under no circumstances may the Option be exercised later than ten years after the Date of Grant.

2.4For purposes of this Agreement:

(a)“Cause” shall mean (i) conviction of a felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; (ii) conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise; (iii) willful refusal to perform or substantial disregard of duties properly assigned, as determined by the Board of Directors (“the Board”); or (iv) breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or dishonesty with respect to the Company or a Subsidiary. The determination as to whether the Optionee was terminated for Cause shall be made by the President and/or the Board in his/her/its sole discretion.

2

(b)“Competition” is deemed to occur if an Optionee, who ceases to be employed by the Company or its Subsidiaries or who ceases to provide services to the Company or its Subsidiaries, engages in activity that is competitive with any business conducted by the Company. The following non-exclusive activities are deemed to be “competitive with” the Company:

(i) Optionee obtains a position as a full-time or part-time employee of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

(ii) Optionee obtains a position as a full-time or part-time employee of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(iii) Optionee serves as a member of the board of directors of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

(iv) Optionee serves as a member of the board of directors of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(v) Optionee serves as a consultant or advisor to a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

(vi) Optionee serves as a consultant or advisor to a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(vii) Optionee acquires an ownership interest in the lesser of 5% or $1 million of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary; or

(viii) Optionee acquires an ownership interest in the lesser of 5% or $1 million of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary.

(c)“Disability” shall mean a disability that would entitle Optionee to payment of disability payments under the Company’s or a Subsidiary’s long-term disability plan or as otherwise determined by the Committee.

(d)“Good Reason” shall mean either of the following (without Optionee’s express written consent): (i) a diminution in Optionee’s base salary as of the day immediately preceding the Change of Control, (ii) a diminution in the Optionee’s authority, duty or responsibilities as they existed immediately preceding the Change of Control, or (iii) the Company’s requiring Optionee to be based at any office or location more than 50 miles from Optionee’s principal office or location as of the day immediately preceding the Change of Control. Notwithstanding the foregoing, Optionee shall not have the right to terminate Optionee’s employment hereunder for Good Reason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right Optionee provides written notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure

3

Period”). If any such condition is not remedied within the Cure Period, Optionee must terminate Optionee’s employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period.

(e)“Retirement” shall mean termination of the Optionee’s employment if the Optionee has been employed by the Company or a Subsidiary on a continuous basis for a period of at least ten years the Optionee has attained the age of 55 years and if Retirement shall occur within one year of the date of this grant [2 years in the case of the CEO], the Optionee has provided the Company with a minimum of one year advance written notice of Optionee’s intention to retire.

(f) “Subsidiary” shall mean any corporation or other entity of which the Company owns securities having a majority of the ordinary voting power in electing the board of directors or similar governing body, either directly or through one or more Subsidiaries.

2.5The Option shall expire and may not be exercised later than ten years following the Date of Grant.

III
Method of Exercise of Option

3.1(a)    Optionee may exercise all or a portion of the Option by delivering to the Company a signed written notice of his intention to exercise the Option, specifying therein the number of shares to be purchased. Upon receiving such notice, and after the Company has received full payment of the Exercise Price, the appropriate officer of the Company shall cause the transfer of title of the shares purchased to Optionee on the Company's stock records and cause to be issued to Optionee a stock certificate for the number of shares being acquired. Optionee shall not have any rights as a shareholder until the stock certificate is issued to him.

(b)    Optionee acknowledges and understands that the Company prohibits the exercise of any options on or within five (5) business days of any record date set by the Company and Optionee agrees that it will not exercise all or a portion of the Option on or within five (5) business days of any record date set by the Company. If the Option shall expire within such period, Optionee further understands and agrees that the Option must be exercised prior to such period.

3.2The Option may be exercised, as provided in the Plan, by the payment of the Exercise Price in cash, in shares of Common Stock held for six months or in a combination of cash and shares of Common Stock held for six months. The Optionee may also pay the Exercise Price by delivering a properly executed exercise notice together with irrevocable instructions to a broker approved by the Company (with a copy to the Company) to promptly deliver to the Company the amount of sale or loan proceeds to pay the Exercise Price or by a Net Share Exercise.

4

IV
No Contract of Employment Intended

Nothing in this Agreement shall confer upon Optionee any right to continue in the employment of the Company or any of its subsidiaries, or to interfere in any way with the right of the Company or any of its subsidiaries to terminate Optionee's employment relationship with the Company or any of its subsidiaries at any time.

V
Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.

VI
Non-Transferability

The Option granted hereby may not be transferred, assigned, pledged or hypothecated in any manner, by operation of law or otherwise, other than by will, by the laws of descent and distribution or pursuant to a domestic relations order, as defined in the Code, or (i) to Family Members, (ii) to a partnership in which the participant and/or Family Members, or entities in which the participant and/or Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which the participant and/or Family Members, or entities in which the participant and/or Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, (iv) to a trust for the sole benefit of the participant and/or Family Members or (v) to a charitable organization. Any attempted assignment, transfer, pledge, hypothecation or other disposition of Incentives, or levy of attachment or similar process upon Incentives not specifically permitted herein, shall be null and void and without effect.

VII

Electronic Delivery and Signatures

    Optionee hereby consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents. If the Company establishes procedures for an electronic signatures system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the plan), Optionee hereby consents to such procedures and agrees that his or her electronic signatures is the same as, and shall have the same force and effect as, his or her manual signature. Optionee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan.

5

VIII

Inconsistent Provisions

The Option granted hereby is subject to the provisions of the Plan as in effect on the date hereof and as it may be amended. In the event any provision of this Agreement conflicts with such a provision of the Plan, the Plan provision shall control.

IX

Governing Law

This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws, to the extent federal law does not supersede and preempt Delaware law. The parties acknowledge and agree that Delaware has a material relationship to this Agreement because, among other reasons, the Company is organized and existing under the laws of the State of Delaware.

X

Severability

    In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Agreement and this Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

6

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.

    POOL CORPORATION

    By:

    Name:

     Title:

    Optionee

[Optionee acknowledges and agrees that by clicking the "ACCEPT" button on the E*TRADE on-line Grant Acceptance page, it will act as Optionee's electronic signature to this Agreement and will constitute Optionee's acknowledgement and agreement that the Optionee has read the Stock Option Agreement and the Plan Documents and agrees to their terms and conditions.]

7

EX-10.4

Exhibit 10.4

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT

(PURSUANT TO THE TERMS OF THE

POOL CORPORATION

AMENDED AND RESTATED 2007 LONG-TERM INCENTIVE PLAN)

This PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT (this “Agreement”) is between Pool Corporation, a Delaware corporation (“Company”), and _____________(“Recipient”), and is dated as of the date set forth immediately above the signatures below.

1.    Grant of Performance-Based Restricted Stock. The Company hereby grants to Recipient all rights, title and interest in the record and beneficial ownership of ________ shares (the “Performance-Based Restricted Stock” or the “Incentive”) of common stock, $.001 par value per share, of Company (“Common Stock”) subject to the conditions described in Paragraphs 4 and 5 as well as the other provisions of this Agreement. The Performance-Based Restricted Stock is granted pursuant to and to implement in part Pool Corporation’s Amended and Restated 2007 Long-Term Incentive Plan (as amended and in effect from time to time, the “Plan”) and is subject to the provisions of the Plan, which is hereby incorporated herein and is made a part hereof, as well as the provisions of this Agreement. Recipient agrees to be bound by all of the terms, provisions, conditions and limitations of the Plan and this Agreement and in the event of any inconsistency, the provisions of the Plan shall control. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided. All references to specified paragraphs pertain to paragraphs of this Agreement unless otherwise specifically provided.

2.    Custody of Performance-Based Restricted Stock. Upon satisfaction of the vesting conditions set forth in Paragraph 4 or as otherwise set forth in Paragraph 5(b) or 5(c), Company shall issue and deliver to Recipient a certificate or certificates for such number of shares of Common Stock as are required to be issued and delivered under this Agreement. Prior to the satisfaction of such vesting conditions or the occurrence of such events, the Performance-Based Restricted Stock is not transferable and shall be held in trust.

3.    Risk of Forfeiture. Subject to Paragraph 5, should Recipient's employment (defined below) with Company and each Subsidiary (defined below) terminate prior to the vesting dates set forth in Paragraph 4, Recipient shall forfeit the Performance-Based Restricted Stock that would otherwise have vested on such dates.

4.    Vesting Dates.

a.    Subject to Paragraph 5, if the Performance Goal set forth in Section 4(b) has been met as of the end of the Initial Performance Period or, if applicable, the end of the Extended Performance Period ending December 31, 20[ ] (as such terms are defined below), the shares of Performance-Based Restricted Stock subject to this Agreement shall vest as follows: [in full on the 5th anniversary of the date of grant OR 50% on the anniversary of the grant date immediately

following the end of performance period in which the Performance Goal is met and 50% on the 5th anniversary of the date of grant]. If the Performance Goal set forth in Section 4(b) has been met as of the end of an Extended Performance Period ending December 31, 20[ ] or after, the shares of Performance-Based Restricted Stock subject to this Agreement shall vest in full on the anniversary of the grant date immediately following the end of such performance period. Notwithstanding the above, no shares shall vest unless and until the Compensation Committee (the “Committee”) has made the certification required by Paragraph 4(d).

b.    Except as otherwise provided in this Agreement, the Performance-Based Restricted Stock shall not vest as of the vesting dates set forth in Paragraph 4(a) unless the Company’s return on invested capital for the three-year period beginning January 1, 20[ ] through December 31, 20[ ] (the “Initial Performance Period”) equals or exceeds [10%] (the “Performance Goal”). If the Performance Goal is not met as of the end of the Initial Performance Period, the Initial Performance Period will be extended for additional one-year periods (each, an “Extended Performance Period”), until the earlier of (i) the end of the Extended Performance Period during which the Performance Goal has been met, or (ii) December 31, 20[ ]. If the Performance Goal is not met as of the end of the Extended Performance Period ending December 31, 20[ ], then all shares of Performance-Based Restricted Stock will be immediately forfeited and canceled.

c.    For purposes of this Agreement, “return on invested capital” shall be defined as net income before interest and other non-operating expenses, net of taxes divided by total long-term debt plus stockholders equity at the end of the calendar year, subject to any adjustments pursuant to Section 8.2 of the Plan.

d.    Following the end of the Initial Performance Period, and any Extended Performance Period, if applicable, the Committee shall determine whether the Performance Goal has been achieved as of the end of such period.

5.    Termination of Employment; Change of Control. Voluntary or involuntary termination of employment, retirement, death or Disability of Recipient, or termination of employment for Cause or with Good Reason following a Change of Control, shall affect Recipient's rights under this Agreement as follows:

a.    Voluntary or Involuntary Termination. If, other than as specified below or as otherwise determined by the Committee, Recipient voluntarily terminates employment (defined below) or if Recipient's employment is terminated involuntarily, then Recipient shall forfeit the right to receive all shares of Performance-Based Restricted Stock that have not theretofore vested pursuant to Paragraph 4.

b.    Change of Control. If a Change of Control shall occur, then the performance condition in Paragraph 4(b) shall be waived, but the conditions set forth in Paragraph 4(a) shall continue to apply, except as set forth below. If the Recipient’s employment is terminated by the Company or a Subsidiary without Cause or by the Recipient for Good Reason within two yearsfollowing the Change of Control, then all non-vested Incentives granted under this Agreement shall fully vest as of such termination date, all restrictions (other than those described in Paragraph 9) applicable to such Incentives shall terminate and Company shall release from escrow or trust and shall transfer to Recipient via book entry the shares of Common Stock represented by such vested Incentives and, upon Recipient’s request, the Company shall cause a stock certificate or certificates to be issued in the name of Recipient.

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c.    Death or Disability. If Recipient's employment is terminated by death or Disability, then immediately all nonvested Performance-Based Restricted Stock shall fully vest, all restrictions (other than described in Paragraph 9) applicable to Performance-Based Restricted Stock shall terminate and Company shall release from escrow or trust and transfer to Recipient, or in the case of death, to the person or persons to whom Recipient's rights under this Agreement shall pass by will or by the applicable laws of descent and distribution, or in the case of Disability, to Recipient's personal representative, via book entry the shares of Common Stock represented by such vested Performance-Based Restricted Stock and, upon request, the Company shall cause a stock certificate or certificates to be issued in the name of such person or persons.

d.    Retirement. If Recipient’s employment is terminated by Retirement, provided that the Recipient does not engage in Competition directly or indirectly with the Company, as determined by the Committee or the President of the Company, the Performance-Based Restricted Stock not vested on the date of Retirement shall not be forfeited but shall continue to vest subject to the vesting schedule and attainment of the performance condition set forth in Paragraph 4, and provided the other conditions of Paragraph 4 are met, all restrictions (other than described in Paragraph 9) applicable to Performance-Based Restricted Stock shall terminate and Company shall release from escrow or trust and shall transfer to Recipient, via book entry the shares of Common Stock represented by such vested Performance-Based Restricted Stock and, upon request, the Company shall cause a stock certificate or certificates to be issued in the name of Recipient.

e.    Definition of Employment. For purposes of this Agreement, “employment” means employment by Company or a Subsidiary. In this regard, neither the transfer of Recipient from employment by Company to employment by a Subsidiary nor the transfer of Recipient from employment by a Subsidiary to employment by Company shall be deemed to be a termination of employment of Recipient. Moreover, the employment of Recipient shall not be deemed to have been terminated because of absence from active employment on account of temporary illness or during authorized vacation or during temporary leaves of absence from active employment granted by Company or a Subsidiary for reasons of professional advancement, education, health, or government service, or during military leave for any period if Recipient returns to active employment within 90 days after the termination of military leave, or during any period required to be treated as a leave of absence by virtue of any valid law or agreement. The Committee’s determination in good faith regarding whether a termination of employment of any type or Disability has occurred shall be conclusive and determinative.

f.    Definition of Competition. For purposes of this Agreement, “Competition” is deemed to occur if a Recipient, who ceases to be employed by the Company or its Subsidiaries or who ceases to provide services to the Company or its Subsidiaries, engages in activity that is competitive with any business conducted by the Company. The following non-exclusive activities are deemed to be “competitive with” the Company:

(i) Optionee obtains a position as a full-time or part-time employee of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

3

(ii) Optionee obtains a position as a full-time or part-time employee of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(iii) Optionee serves as a member of the board of directors of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

(iv) Optionee serves as a member of the board of directors of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(v) Optionee serves as a consultant or advisor to a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary;

(vi) Optionee serves as a consultant or advisor to a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary;

(vii) Optionee acquires an ownership interest in the lesser of 5% or $1 million of a corporation, partnership, firm or other entity that engages in any of the businesses of the Company or any Subsidiary; or

(viii) Optionee acquires an ownership interest in the lesser of 5% or $1 million of a corporation, partnership, firm or other entity doing or seeking to do business with the Company or any Subsidiary.

g.    Definition of Retirement. For purposes of this Agreement, “Retirement” shall mean termination of the Recipient’s employment if the Recipient has been employed by the Company or a Subsidiary on a continuous basis for a period of at least ten years, the Recipient has attained the age of 55 years, and if Retirement shall occur within one year of the date of this grant [2 years in the case of the CEO], the Recipient has provided the Company with a minimum of one year advance written notice of Recipient’s intention to retire.

h.    Definition of Disability.    For purposes of this Agreement, “Disability” shall mean a disability that would entitle the Recipient to the payment of disability payments under the Company’s or Subsidiary’s long-term disability plan or as otherwise determined by the Committee.

i.    Definition of Subsidiary.    For purposes of this Agreement, “Subsidiary” shall mean any corporation or other entity of which the Company owns securities having a majority of the ordinary voting power in electing the board of directors or similar governing body, either directly or through one or more Subsidiaries.

j.    Definition of Cause.    For purposes of this Agreement, “Cause” shall mean (i) conviction of a felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; (ii) conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise; (iii) willful refusal to perform or substantial disregard of duties properly assigned, as determined by the Board of Directors (“the Board”); or (iv) breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or

4

dishonesty with respect to the Company or a Subsidiary. The determination as to whether the Recipient was terminated for Cause shall be made by the President and/or the Board in its sole discretion.

k.    Definition of Good Reason.    For purposes of this Agreement, “Good Reason” shall mean either of the following (without Recipient’s express written consent): (i) a material diminution in Recipient’s base salary as of the day immediately preceding the Change of Control, (ii) a material diminution in the Recipient’s authority, duty or responsibilities as they existed the day immediately preceding the Change of Control, or (iii) the Company’s requiring Recipient to be based at any office or location more than 50 miles from Recipient’s principal office or location as of the day immediately preceding the Change of Control. Notwithstanding the foregoing, Recipient shall not have the right to terminate Recipient’s employment hereunder for Good Reason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right Recipient provides written notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, Recipient must terminate Recipient’s employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period.

6.    Ownership Rights. Subject to the restrictions set forth herein and subject to Paragraph 9, Recipient is entitled to all voting and ownership rights applicable to the Performance-Based Restricted Stock, including the right to receive any dividends that may be paid on Performance-Based Restricted Stock, whether or not vested.

7.    Reorganization of Company and Subsidiaries. The existence of this Agreement shall not affect in any way the right or power of Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in Company's capital structure or its business, or any merger or consolidation of Company or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Performance-Based Restricted Stock or the rights thereof, or the dissolution or liquidation of Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

8.    Adjustment of Shares. Except in the case of a Change of Control as otherwise provided in the Plan or herein, in the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to Performance-Based Restricted Stock shall mean and include all securities or other property that holders of Common Stock of Company are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property shall be treated in the same manner and shall be subject to the same restrictions as the underlying Performance-Based Restricted Stock.

9.     Certain Restrictions. By accepting the Performance-Based Restricted Stock, Recipient agrees that if at the time of delivery of certificates for shares of Performance-

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Based Restricted Stock issued hereunder any sale of such shares is not covered by an effective registration statement filed under the Securities Act of 1933 (the “Act”), Recipient will acquire the Performance-Based Restricted Stock for Recipient's own account and without a view to resale or distribution in violation of the Act or any other securities law, and upon any such acquisition Recipient will enter into such written representations, warranties and agreements as Company may reasonably request in order to comply with the Act or any other securities law or with this Performance-Based Restricted Stock Agreement.

10.     Nontransferability of Incentive.This Incentive is not transferable other than by will, the laws of descent and distribution or by domestic relations order, as defined in the Code. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of Recipient.

11.     Amendment and Termination. No amendment or termination of this Agreement which would impair the rights of Recipient shall be made by the Committee at any time without the written consent of Recipient. No amendment or termination of the Plan will adversely affect the right, title and interest of Recipient under this Agreement or to Performance-Based Restricted Stock granted hereunder without the written consent of Recipient. If the Performance-Based Restricted Stock is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code (“the Code”), the Committee may not use its discretion to increase the compensation payable to Recipient hereunder in violation of the “performance-based compensation” requirements of Section 162(m) of the Code.

12.     No Guarantee of Employment. This Agreement shall not confer upon Recipient any right with respect to continuance of employment or other service with Company or any Subsidiary, nor shall it interfere in any way with any right Company or any Subsidiary would otherwise have to terminate such Recipient's employment or other service at any time.

13.     Withholding of Taxes. Company shall have the right to (i) make deductions from the number of shares of Common Stock otherwise deliverable upon satisfaction of the conditions precedent under this Agreement (and other amounts payable under this Agreement) in an amount sufficient to satisfy required withholding of any federal, state or local taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such tax withholding obligations.

14.     No Guarantee of Tax Consequences. Neither Company nor any Subsidiary nor the Committee makes any commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Agreement.

15.     Severability. In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Agreement and this Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

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16.     Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws, to the extent federal law does not supersede and preempt Delaware law. The parties acknowledge and agree that Delaware has a material relationship to this Agreement because, among other reasons, the Company is organized and existing under the laws of the State of Delaware.

17.     Section 83(b) Election. Recipient has reviewed with Recipient’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Recipient is relying solely on such advisors and not on any statements or representations of Company or any of its agents. Recipient understands that Recipient (and not Company) shall be responsible for Recipient’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. Recipient understands that Recipient may elect to be taxed at the time the shares are granted by filing an election under Section 83(b) of the Code with the IRS within thirty days from the date of grant. Recipient acknowledges that it is Recipient’s sole responsibility and not Company’s to file timely the election under Section 83(b), even if Recipient requests Company or its representatives, to make this filing on Recipient’s behalf.

18.    Clawback Policy.    This Agreement and the Performance-Based Restricted Stock granted hereunder shall be subject to the clawback policy included in Company’s Corporate Governance Guidelines, to the extent such policy is applicable to Recipient.

19.     Miscellaneous Provisions.

(a)     Not a Contract of Employment; No Acquired Rights. The adoption and maintenance of the Plan or this Agreement shall not be deemed to be a contract of employment between Company or any of its Subsidiaries and any person. Receipt of an Incentive under the Plan at any given time shall not be deemed to create the right to receive in the future an Incentive under the Plan, or any other incentive awards granted to an employee of Company or any of its Subsidiaries, and shall not constitute an acquired labor right for purposes of any foreign law. The Plan shall not afford any recipient of an Incentive any additional right to severance payments or other termination awards or compensation under any foreign law as a result of the termination of such recipient's employment for any reason whatsoever.

(b)     Not a Part of Salary. The value of the Performance-Based Restricted Stock granted pursuant to this Agreement shall not be included as compensation, earnings, salaries or other similar terms used when calculating Recipient’s benefits under any employee benefit plan sponsored by Company except as such plan otherwise expressly provides.

(c)     Electronic Delivery and Signatures. Recipient hereby consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents. If Company establishes procedures for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan), Recipient hereby consents to such procedures and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. Recipient consents and agrees that any such procedures and delivery may be

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effected by a third party engaged by Company to provide administrative services related to the Plan, including any program adopted under the Plan. 

IN WITNESS WHEREOF, the parties have entered into this Performance-Based Restricted Stock Agreement as of the [ ] day of [ ], 20___.

“COMPANY”

POOL CORPORATION

By:__________________________________

Name:

Title:

“Recipient”

_____________________________________

Name: 

[Recipient acknowledges and agrees that by clicking the "ACCEPT" button on the E*TRADE on-line Grant Acceptance page, it will act as Recipient 's electronic signature to this Agreement and will constitute Recipient 's acknowledgement and agreement that the Recipient has read the Performance-Based Restricted Stock Agreement and the Plan Documents and agrees to their terms and conditions.]

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EX-10.14

Exhibit 10.14

POOL CORPORATION

STRATEGIC PLAN INCENTIVE PROGRAM

ARTICLE I

PURPOSE OF PROGRAM

Section 1.1     The purpose of the Strategic Plan Incentive Program (the “Program”) is to provide senior management with an additional incentive opportunity to be earned upon the achievement of specified earnings objectives related to the strategic plan for the growth of Pool Corporation (the “Company”). The Program is a cash-based, pay-for-performance program that effectively links the Company’s long-term financial performance with the total cash compensation paid to senior management. The Program serves to complement the Company’s annual bonus program and the longer-term value creation provided by stock option or other equity-based awards. Under the terms of the Program, discussed below, each senior manager is eligible to earn an award either in an amount equal to up to (i) 200% of his or her base salary (“Group I”), (ii) 100% of his or her base salary (“Group II”) or (iii) 50% of his or her base salary (“Group III”) based on the Company’s diluted earnings per share (“EPS”) growth over a three-year period.

Section 1.2    This updated version of the Program is effective for performance periods beginning on or after January 1, 2021.

ARTICLE II

ADMINISTRATION OF THE PROGRAM

Section 2.1     The Program shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Company. The Committee shall have the sole discretion and authority to administer and interpret the Program.

Section 2.2     Subject to the express provisions and limitations set forth in the Program, the Committee shall be authorized and empowered to do all things necessary or desirable, in its sole discretion, in connection with the administration of the Program, including, without limitation, the following:

(a)    To prescribe, amend and rescind rules and regulations relating to the Program and to define terms not otherwise defined herein;

(b)    To determine which persons are eligible to be paid awards and to which of such participants, if any, awards hereunder are actually paid;

(c)    To verify the Company’s EPS, as defined herein, and the extent to which the Company has satisfied any other performance goals or other conditions applicable to the payment of awards under the Program;

(d)    To prescribe and amend the terms of any agreements or other documents under the Program (which need not be identical);

(e)    To determine whether, and the extent to which, adjustments are required pursuant to Article V;

(f)    To interpret and construe the Program, any rules and regulations under the Program, and the terms and conditions of any award opportunities provided hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; and

(g)    To make all other determinations deemed necessary or advisable for the administration of the Program.

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Exhibit 10.14

ARTICLE III

ELIGIBILITY FOR PARTICIPATION

Section 3.1     The Committee shall, on an annual basis, designate the senior management of the Company who shall participate in the Program for the performance period beginning in that year and identify them as either Group I, Group II, or Group III.

ARTICLE IV

PERFORMANCE CRITERIA

Section 4.1     Program participants shall be entitled to earn an award based upon the Company’s EPS growth at a compounded annual growth rate (“CAGR”) of at least 5% during the performance period. Thus, for example, the performance period for awards to be paid in 2024 shall be from January 1, 2021 through December 31, 2023 and the baseline EPS shall be 2020 EPS, adjusted as provided herein. The maximum payout amounts for Group I shall be 200% of base salary as of the end of the performance period, for Group II shall be 100% of base salary as of the end of the performance period, and for Group III shall be 50% of base salary as of the end of the performance period.

No award shall be earned or paid unless the CAGR of the threshold EPS baseline established by the Committee is at least 5%.

Section 4.2     A CAGR of EPS of between 5% to 20% of the baseline established by the Committee shall result in a pro rata increase in the award based on the following criteria: (1) Group I: 5% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 100% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 200% of the participant’s base salary; (2) Group II: 5% EPS growth rate will result in an award to a participant equal to 25% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 100% of the participant’s base salary; and (3) Group III: 5% EPS growth rate will result in an award to a participant equal to 12.5% of the participant’s base salary; 10% EPS growth rate will result in an award to a participant equal to 25% of the participant’s base salary; and a 20% EPS growth rate will result in an award to a participant equal to 50% of the participant’s base salary.

The following table presents the award opportunities, expressed as a percentage of a participant’s salary, to be earned in the performance period beginning 2021 through 2023, assuming baseline EPS of $8.42, which excludes the $0.15 per diluted share impact of non-cash impairment charges recorded in the first quarter of 2020 and the $0.70 per diluted share benefit of ASU 2016-09 from GAAP diluted EPS of $8.97 at December 31, 2020. This table is for illustration purposes, and the award opportunities for future performance periods will be based on the applicable baseline EPS.

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Exhibit 10.14

Award Opportunities
CAGR	Ending EPS	Salary % - Group I			Salary % - Group II	Salary % - Group III
5%	$9.75			50.0%	25.0%	12.5%
6%	$10.03		60.0%		30.0%	15.0%
7%	$10.31		70.0%		35.0%	17.5%
8%	$10.61		80.0%		40.0%	20.0%
9%	$10.90		90.0%		45.0%	22.5%
10%	$11.21.		100.0%		50.0%	25.0%
12%	$11.83		120.0%		60.0%	30.0%
14%	$12.47		140.0%		70.0%	35.0%
16%	$13.14		160.0%		80.0%	40.0%
18%	$13.83		180.0%		90.0%	45.0%
20%	$14.55		200.0%		100.0%	50.0%

Section 4.3     Within the first 90 days of each performance period, the Committee shall establish in writing the EPS baseline for the performance period, as such baseline may be adjusted pursuant to Section 4.4 below.

Section 4.4     The term “performance period” shall mean the period for which the award is payable. For calculation of the award, the term “EPS” shall mean the net income per weighted average common share outstanding, assuming dilution, for the performance period. EPS may be adjusted as necessary to reflect the following: acquisition-related charges and/or impact on results; the effects of changes in tax law, changes in accounting principles or other such laws or provisions affecting reported results; major capital restructuring; goodwill and other non-cash impairment charges; and any extraordinary items, including those defined in the Financial Accounting Standards Board Accounting Standards Codification 225-20, Extraordinary and Unusual Items, and/or described in management’s discussion and analysis of financial condition and results of operations appearing in the annual report to stockholders for the applicable year. EPS shall also be adjusted to reflect any other events or changes specified in writing by the Committee, which adjustments will generally be made within the first 90 days of the performance period.

Section 4.5     An award shall be paid to a participant in cash no later than February 28 following the end of the performance period. Notwithstanding any other provision of the Program to the contrary, no participant shall be entitled to any payment with respect to any award unless the members of the Committee referred to in Section 2.1 hereof shall have certified the payout amount of the awards calculated as provided in this Article IV.

ARTICLE V

AMOUNT OF AWARD

Section 5.1     The maximum award for any Program participant per year shall be $1,500,000. In its sole discretion, the Committee may also reduce an individual’s award calculated under the formula set forth under this Program. In determining the amount of any reduced award, the Committee reserves the right to apply subjective, discretionary criteria to determine a revised amount.

ARTICLE VI

PAYMENT OF AWARD

Section 6.1     The payment of an award for a given performance period requires that the Program participant be on the Company payroll as of the last day of the performance period. The

3

Exhibit 10.14

Committee may make exceptions to this requirement in the case of retirement, death or disability, as determined by the Committee in its sole discretion.

ARTICLE VII

AMENDMENT AND TERMINATION

Section 7.1     The Board of Directors or the Committee may amend or terminate this Program at any time with respect to future services of participants, and such amendments may include amendments to the EPS targets from those provided herein.

ARTICLE VIII

TAX WITHHOLDING

Section 8.1     The Company shall have the right to make all payments or distributions pursuant to the Program to a participant, net of any applicable federal, state and local taxes required to be paid or withheld. The Company shall have the right to withhold from wages or other amounts otherwise payable to such participant such withholding taxes as may be required by law, or to otherwise require the participant to pay such withholding taxes. If the participant shall fail to make such tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such participant or to take such other action as may be necessary to satisfy such withholding obligations.

ARTICLE IX

NON-ASSIGNABILITY

Section 9.1     Unless the Committee expressly states otherwise, no participant in the Program may sell, assign, convey, gift, pledge or otherwise hypothecate or alienate any award opportunity or amounts determined by the Committee to be payable under the Program, until such amounts (if any) are actually paid.

ARTICLE X

NON-EXCLUSIVITY OF PROGRAM

Section 10.1     The adoption of the Program by the Committee shall not be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other compensation arrangements as either may deem desirable, including, without limitation, cash or equity-based compensation arrangements, either tied to performance or otherwise, and any such other arrangements as may be either generally applicable or applicable only in specific cases.

ARTICLE XI

EMPLOYMENT AT WILL

Section 11.1     Neither the Program, selection of a person as a participant in the Program nor the payment of any award to any participant under the Program nor any action by the Board of Directors or the Committee shall be held or construed to confer upon any person any right to be continued in the employ of the Company. The Company expressly reserves the right to discharge any participant whenever in the sole discretion of the Company its interest may so require.

ARTICLE XII

RIGHTS OF PARTICIPANTS

Section 12.1     At no time before the actual payout of an award to any participant under the Program shall any participant accrue any vested interest or right whatsoever under the Program, and the Company has no obligation to treat participants identically under the Program.

Section 12.2     The Program constitutes a mere promise by the Company to make benefit payments in the future and the rights of participants to benefits under this Program shall be solely those of general unsecured creditors of the Company. No participant shall have any interest in any fund or any specific asset of the Company.

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Exhibit 10.14

ARTICLE XIII

GOVERNING LAW

Section 13.1     The Program and any agreements and documents hereunder shall be interpreted and construed in accordance with the laws of the State of Louisiana and applicable federal law. The Committee may provide that any dispute concerning the Program shall be presented and determined in such forum as the Committee may specify, including through binding arbitration.

ARTICLE XIV

DEFERRAL OF AWARDS

Section 14.1     The awards payable hereunder are designed to constitute short-term deferrals that are not subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations thereunder (“Section 409A”).

Section 14.2     The Company has in effect a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) under which certain employees are eligible to defer compensation, including awards granted under this Program. The requirements applicable to such deferrals, including the timing of deferral elections for any award, shall be made in compliance with the terms of the Deferred Compensation Plan and Section 409A.

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EX-10.16

Exhibit 10.16

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of December 30, 2021, by and among POOL CORPORATION, a Delaware corporation (the “US Borrower”), SCP DISTRIBUTORS CANADA INC., a company organized under the laws of Ontario (the “Canadian Borrower”), SCP INTERNATIONAL, INC., a Delaware corporation (the “Euro Borrower” and, collectively with the US Borrower and the Canadian Borrower, the “Borrowers”), the Subsidiary Guarantors party hereto, each Lender (as defined below) party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the “Administrative Agent”).

Statement of Purpose

The Borrowers, each of the lenders party thereto (collectively, the “Lenders” and, each individually, a “Lender”) and the Administrative Agent are party to that certain Second Amended and Restated Credit Agreement dated as of September 27, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

The US Borrower has requested a delayed draw Incremental Term Loan in an aggregate principal amount of $250,000,000, in accordance with Section 2.9(a) of the Credit Agreement, which will be added to the outstanding principal amount of the Initial Term Loan (such Incremental Term Loan, the “Second Draw Initial Term Loan”); provided that the Second Draw Initial Term Loan shall not be deemed usage of the Incremental Facilities Limit.

The Second Draw Initial Term Loan will be used by the US Borrower to (a) finance ongoing working capital requirements and other general corporate purposes and (b) pay fees, commissions and expenses in connection with the making of the Second Draw Initial Term Loan, and the payment of fees, commissions and expenses in connection with the arrangement, structuring, negotiation, execution, delivery and syndication of the Second Draw Initial Term Loan.

Wells Fargo Securities, LLC, BofA Securities, Inc., Capital One, National Association, Regions Capital Markets, a division of Regions Bank, and Truist securities, Inc. will act as joint lead arrangers and joint bookrunners for this Amendment.

Subject to the terms and conditions set forth herein, (i) certain of the Term Loan Lenders (such Lenders, the “Second Draw Initial Term Loan Lenders”) party hereto have severally committed to make the Second Draw Initial Term Loan in the principal amounts set forth opposite such Second Draw Initial Term Loan Lender’s name on Annex B attached hereto (each such commitment, a “Second Draw Initial Term Loan Commitment”) and (ii) each of the Lenders party hereto agreed to amend the Credit Agreement in each case as specifically set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.Capitalized Terms. All capitalized undefined terms used in this Amendment (including, without limitation, in the Statement of Purpose hereto) shall have the meanings assigned thereto in the Credit Agreement. This Amendment shall constitute a “Loan Document” and an “Incremental Amendment” for all purposes of the Credit Agreement and the other Loan Documents.

2.Amendments. Effective as of the Amendment Effective Date (as defined below) and subject to the terms and conditions set forth herein and in reliance upon representations and warranties set forth herein, the Credit Agreement (other than the signature pages and the Exhibits and Schedules attached thereto), is hereby amended to read in its entirety as set forth on Annex A attached hereto.

3.Effectiveness. This Amendment shall become effective on the date when the following conditions shall have been satisfied or waived (such date, the “Amendment Effective Date”):

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153505025_2

(a)The Administrative Agent shall have received each of the following (in form and substance reasonably satisfactory to the Administrative Agent):

(i)counterparts of this Amendment executed by the Borrowers, the Subsidiary Guarantors, the Administrative Agent, the Second Draw Initial Term Loan Lenders and the Lenders constituting Required Lenders (which may include the Second Draw Initial Term Loan Lenders);

(ii)a Term Loan Note, executed by the Borrowers in favor of each Second Draw Initial Term Loan Lender that has requested such a Note prior to the Amendment Effective Date;

(iii)a certificate of a Responsible Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing Loan Documents to which it is a party and certifying that (A) the articles or certificate of incorporation or formation (or equivalent), as applicable, of such Credit Party have not been amended since the date of the last delivered certificate of such Credit Party, or if they have been amended, attached thereto are true, correct and complete copies of the same, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation, organization or formation (or equivalent), as applicable; provided that with respect the US Borrower, the articles or certificate of incorporation or formation (or equivalent) so certified shall be attached (whether or not amended), (B) the bylaws or other governing document of such Credit Party have not been amended since the date of the last delivered certificate of such Credit Party, or if they have been amended, attached thereto are true, correct and complete copies of the same, (C) attached thereto is a true, correct and complete copy of resolutions duly adopted by the board of directors (or other governing body) of such Credit Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Amendment and the Credit Agreement (as amended by the Amendment) and (D) attached thereto is a true, correct and complete copy of such certificates of good standing from the applicable secretary of state of the state of incorporation, organization or formation (or equivalent), as applicable, of each Credit Party;

(iv)an Officer’s Compliance Certificate from a Responsible Officer of the US Borrower demonstrating in form and substance reasonably satisfactory to the Administrative Agent, that the Borrowers are in compliance with the financial covenants set forth in Section 10.1 and Section 10.2 of the Credit Agreement, in each case based on the financial statements most recently delivered pursuant to Section 8.1(a) or 8.1(b), as applicable, both before and after giving effect (on a Pro Forma Basis) to the Second Draw Initial Term Loan (with the Second Draw Initial Term Loan being deemed to be fully funded on the Amendment Effective Date);

(v)favorable opinions of counsel to the Credit Parties, addressed to the Administrative Agent and the Lenders with respect to the Credit Parties, the Amendment and such other matters as the Administrative Agent shall request, which such opinions shall (unless otherwise agreed to by the Administrative Agent) expressly permit reliance by successors and permitted assigns of the Administrative Agent and the Lenders (it being agreed that the opinion of Canadian counsel with respect to the Canadian Borrower is waived for purposes of this Amendment);

(vi)payment of all fees and expenses of the Administrative Agent, Wells Fargo Securities, LLC and their counsel required to be paid on the Amendment Effective Date;

(vii)payment to the Administrative Agent, for the account of each of the Second Draw Initial Term Loan Lenders, upfront fees in an aggregate amount equal to 12.0 basis points times the principal amount of such Second Draw Initial Term Loan Lender’s Second Draw Initial Term Loan Commitment on the Amendment Effective Date; and

(viii)such other instruments, documents and certificates as the Administrative Agent shall reasonably request in connection with the execution of this Amendment.

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153505025_2

(b)Each representation and warranty contained in the Credit Agreement and the other Loan Documents is true, correct and complete in all material respects (except to the extent such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) as of the Amendment Effective Date as if fully set forth herein, other than any such representations or warranties that, by their express terms, refer to an earlier date, in which case they shall have been true and correct as of such earlier date.

(c)No Default or Event of Default shall exist on the Amendment Effective Date immediately prior to or after giving effect to the Second Draw Initial Term Loan.

(d)The Borrowers and each of the other Credit Parties shall have provided to the Administrative Agent and the Lenders, at least three (3) Business Days prior to the Amendment Effective Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and a Beneficial Ownership Certification for any Credit Party that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, in each case to the extent requested of the Borrowers at least seven (7) Business Days prior to the Amendment Effective Date.

4.Limited Effect. Except as expressly provided herein, the Credit Agreement and the other Loan Documents shall remain unmodified and in full force and effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document, (b) to prejudice any right or rights which the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or modified from time to time, or (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrowers, any of their respective Subsidiaries or any other Person with respect to any waiver, amendment, modification or any other change to the Credit Agreement or the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any such documents. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, “hereof” or other words of like import) and in any Loan Document to the “Credit Agreement” shall be deemed to be references to the Credit Agreement as modified hereby.

5.Representations and Warranties. By its execution hereof, each Credit Party hereby represents and warrants as follows:

(a)such Credit Party has the right, power and authority and has taken all necessary corporate, limited liability and other action to authorize the execution, delivery and performance of this Amendment and each other document executed in connection herewith to which it is a party in accordance with their respective terms; and

(b)this Amendment and each other document executed in connection herewith has been duly executed and delivered by its duly authorized officers, and each such document constitutes the legal, valid and binding obligation of such Credit Party, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

6.Initial Interest Periods. In connection with the funding of the Second Draw it is the intention of the US Borrower to align the Interest Periods of the Draws and in connection therewith, each of the Lenders party hereto consents to any early termination of any Interest Periods in respect of the Draws and agrees to waive any amounts to which it might otherwise be entitled under Section 5.9 of the Credit Agreement in connection therewith prior to the date that is one month after the funding of the Second Draw.

7.Acknowledgement and Reaffirmation. By their execution hereof, each Credit Party hereby expressly (a) consents to this Amendment and (b) acknowledges that such Credit Party’s

3

153505025_2

covenants, representations, warranties and other obligations set forth in the Credit Agreement, the Notes, the Letter of Credit Applications, the Subsidiary Guaranty Agreement and the other Loan Documents to which such Credit Party is a party remains in full force and effect.

8.Costs and Expenses.    The Borrowers agree to pay in accordance with Section 15.3 of the Credit Agreement all reasonable and documented out-of-pocket expenses (including, without limitation, all costs of electronic or internet distribution of any information hereunder) of the Administrative Agent in connection with the preparation, execution, delivery, administration and enforcement of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, all out-of-pocket syndication and due diligence expenses and reasonable and documented fees, disbursements and other charges of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities hereunder and thereunder.

9.Execution in Counterparts. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

10.Governing Law. This Amendment and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

11.Jurisdiction and Venue; Waiver of Jury Trial.  Sections 15.6 and 15.7 of the Credit Agreement are hereby incorporated by this reference as if fully stated herein mutatis mutandis.

12.Entire Agreement. This Amendment is the entire agreement, and supersedes any prior agreements and contemporaneous oral agreements, of the parties concerning its subject matter.

13.Successors and Assigns. This Amendment shall be binding on and insure to the benefit of the parties and their heirs, beneficiaries, successors and permitted assigns.

[Signature Pages Follow]

4

153505025_2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed under seal by their duly authorized officers, all as of the day and year first written above.

BORROWERS:
		POOL CORPORATION, as US Borrower
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Vice President, Chief Financial Officer & Assistant Secretary
		SCP DISTRIBUTORS CANADA INC., as Canadian Borrower
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Treasurer
		SCP INTERNATIONAL, INC., as Euro Borrower
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Chief Financial Officer & Assistant Secretary

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

SUBSIDIARY GUARANTORS:
		SCP DISTRIBUTORS LLC, as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Vice President, Chief Financial Officer and Assistant Secretary
		SPLASH HOLDINGS, INC., as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Chief Financial Officer and Assistant Secretary
		ALLIANCE TRADING, INC., as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	President and Secretary
		CYPRESS, INC., as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	President and Secretary
		SUPERIOR POOL PRODUCTS LLC, as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Vice President, Chief Financial Officer and Assistant Secretary
		SCP INTERNATIONAL, INC., as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Chief Financial Officer and Assistant Secretary
		POOL DEVELOPMENT LLC, as Subsidiary Guarantor
	By:	/s/ Melanie Housey Hart
	Name:	Melanie Housey Hart
	Title:	Chief Financial Officer and Assistant Secretary

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	HORIZON DISTRIBUTORS, INC., as Subsidiary Guarantor
By:	/s/ Melanie Housey Hart
Name:	Melanie Housey Hart
Title:	Vice President, Chief Financial Officer and Assistant Secretary
	POOLFX SUPPLY LLC, as Subsidiary Guarantor
By:	/s/ Melanie Housey Hart
Name:	Melanie Housey Hart
Title:	Secretary and Treasurer

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

ADMINISTRATIVE AGENT AND LENDERS:
		WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline Lender, an Issuing Lender, the Canadian Dollar Lender, the Euro Lender, and a Lender
	By:	/s/ Joseph Gricco
	Name:	Joseph Gricco
	Title:	Director

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	BANK OF AMERICA, N.A., as a Lender
By:	/s/ Adam Rose
Name:	Adam Rose
Title:	SVP

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Benjamin Lucas
Name:	Benjamin Lucas
Title:	Vice President

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	REGIONS BANK, as a Lender
By:	/s/ Tyler Nissen
Name:	Tyler Nissen
Title:	Vice President

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	TRUIST BANK, as a Lender
By:	/s/ Katherine Bass
Name:	Katherine Bass
Title:	Director

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, NEW YORK BRANCH, as a Lender
By:	/s/ Yuanyuan Peng
Name:	Yuanyuan Peng
Title:	Executive Director
By:	/s/ Lindsay Du
Name:	Lindsay Du
Title:	Director

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	THE BANK OF EAST ASIA, LIMITED, NEW YORK BRANCH, as a Lender
By:	/s/ Chong Tan
Name:	Chong Tan
Title:	SVP
By:	/s/ Manny Kwok
Name:	Manny Kwok
Title:	SVP

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Margaret Dowling
Name:	Margaret Dowling
Title:	Authorized Officer

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

	CITIBANK, N.A., as a Lender
By:	/s/ Brad Peters
Name:	Brad Peters
Title:	Director

First Amendment to Second Amended and Restated Credit Agreement

Pool Corporation

Signature Page

Annex A

Amended Credit Agreement

ANNEX A TO FIRST AMENDMENT

Published CUSIP Number: 73278DAE3

Revolving Credit CUSIP Number: 73278DAF0

Initial Term Loan CUSIP Number: 73278DAG8

$1,250,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of September 27, 2021
(as amended by the First Amendment

to Second Amended and Restated Credit Agreement dated as of December 30, 2021)

by and among

POOL CORPORATION,
as US Borrower,

SCP DISTRIBUTORS CANADA INC.,
as Canadian Borrower,

SCP INTERNATIONAL, INC.,
as Euro Borrower,

the Lenders referred to herein,

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
Swingline Lender and an Issuing Lender,

BANK OF AMERICA, N.A.,

CAPITAL ONE, NATIONAL ASSOCIATION,

REGIONS BANK

and

TRUIST BANK,

each as a Syndication Agent,

WELLS FARGO SECURITIES, LLC,

BOFA SECURITIES, INC.,

CAPITAL ONE, NATIONAL ASSOCIATION,

REGIONS CAPITAL MARKETS, a division of REGIONS BANK,

and

TRUIST SECURITIES, INC.,

as Joint Lead Arrangers

and Joint Bookrunners

153501368_6

TABLE OF CONTENTS

				Page
ARTICLE I		DEFINITIONS		1
	SECTION 1.1		Definitions	1
	SECTION 1.2		Other Definitions and Provisions	40
	SECTION 1.3		Accounting Terms	40
	SECTION 1.4		Divisions	41
	SECTION 1.5		UCC Terms	41
	SECTION 1.6		Rounding	41
	SECTION 1.7		References to Agreement and Laws	41
	SECTION 1.8		Times of Day	41
	SECTION 1.9		Letter of Credit Amounts	41
	SECTION 1.10		Covenant Compliance Generally	41
	SECTION 1.11		Rates	42
	SECTION 1.12		Exchange Rates; Currency Equivalents	43
ARTICLE II		REVOLVING CREDIT FACILITY		43
	SECTION 2.1		Revolving Credit Loans	43
	SECTION 2.2		Alternative Currency Loans	43
	SECTION 2.3		Swingline Loans	47
	SECTION 2.4		Procedure for Advances of Revolving Credit Loans, Canadian Dollar Loans, Euro Loans and Swingline Loans	48
	SECTION 2.5		Repayment of Loans	50
	SECTION 2.6		Permanent Reduction of the Revolving Credit Commitment	53
	SECTION 2.7		Termination of Revolving Credit Facility	54
	SECTION 2.8		Nature of Obligations	54
	SECTION 2.9		Incremental Loans	54
	SECTION 2.10		Extension of Revolving Credit Maturity Date	58
ARTICLE III		LETTER OF CREDIT FACILITY		60
	SECTION 3.1		L/C Commitment	60
	SECTION 3.2		Procedure for Issuance of Letters of Credit	60
	SECTION 3.3		Commissions and Other Charges	61
	SECTION 3.4		L/C Participations	61
	SECTION 3.5		Reimbursement Obligation of the US Borrower	62
	SECTION 3.6		Obligations Absolute	62
	SECTION 3.7		Effect of Letter of Credit Application	63
	SECTION 3.8		Resignation of Issuing Lenders	63
	SECTION 3.9		Reporting of Letter of Credit Information	63
ARTICLE IV		TERM LOAN FACILITY		64
	SECTION 4.1		Term Loan	64
	SECTION 4.2		Procedure for Advance of Term Loans	64
	SECTION 4.3		Repayment of Term Loan	65

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	SECTION 4.4		Prepayments of Term Loan	65
ARTICLE V		GENERAL LOAN PROVISIONS		66
	SECTION 5.1		Interest	66
	SECTION 5.2		Notice and Manner of Conversion or Continuation of Loans	69
	SECTION 5.3		Fees	70
	SECTION 5.4		Manner of Payment	71
	SECTION 5.5		Evidence of Indebtedness	72
	SECTION 5.6		Adjustments	73
	SECTION 5.7		Obligations of Lenders	73
	SECTION 5.8		Changed Circumstances	74
	SECTION 5.9		Indemnity	80
	SECTION 5.10		Increased Costs	80
	SECTION 5.11		Taxes	81
	SECTION 5.12		Mitigation Obligations; Replacement of Lenders	84
	SECTION 5.13		Redenomination of Alternative Currency Loans	85
	SECTION 5.14		US Borrower as Agent for Subsidiary Borrowers	85
	SECTION 5.15		Cash Collateral	85
	SECTION 5.16		Defaulting Lenders	86
ARTICLE VI		CLOSING; CONDITIONS OF CLOSING AND BORROWING		89
	SECTION 6.1		Conditions to Closing and Initial Extensions of Credit	89
	SECTION 6.2		Conditions to All Extensions of Credit	92
ARTICLE VII		REPRESENTATIONS AND WARRANTIES OF THE BORROWERS		92
	SECTION 7.1		Representations and Warranties	92
	SECTION 7.2		Survival of Representations and Warranties, Etc	100
ARTICLE VIII		FINANCIAL INFORMATION AND NOTICES		100
	SECTION 8.1		Financial Statements and Projections	101
	SECTION 8.2		Officer’s Compliance Certificate	101
	SECTION 8.3		Accountants’ Certificate	101
	SECTION 8.4		Other Reports	102
	SECTION 8.5		Notice of Litigation and Other Matters	103
	SECTION 8.6		Accuracy of Information	104
ARTICLE IX		AFFIRMATIVE COVENANTS		104
	SECTION 9.1		Preservation of Corporate Existence and Related Matters	104
	SECTION 9.2		Maintenance of Property	104
	SECTION 9.3		Insurance	104
	SECTION 9.4		Accounting Methods and Financial Records	104
	SECTION 9.5		Payment and Performance of Obligations	104
	SECTION 9.6		Compliance With Laws and Approvals	105
	SECTION 9.7		Environmental Laws	105
	SECTION 9.8		Compliance with ERISA	105

153501368_6

	SECTION 9.9		Compliance With Agreements	105
	SECTION 9.10		Visits and Inspections	106
	SECTION 9.11		Additional Subsidiaries	106
	SECTION 9.12		Use of Proceeds	106
	SECTION 9.13		Further Assurances	107
	SECTION 9.14		Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions	107
ARTICLE X		FINANCIAL COVENANTS		107
	SECTION 10.1		Average Total Leverage Ratio	107
	SECTION 10.2		Fixed Charge Coverage Ratio	108
ARTICLE XI		NEGATIVE COVENANTS		108
	SECTION 11.1		Limitations on Indebtedness	108
	SECTION 11.2		Limitations on Liens	110
	SECTION 11.3		Limitations on Loans, Advances, Investments and Acquisitions	111
	SECTION 11.4		Limitations on Mergers and Liquidation	114
	SECTION 11.5		Limitations on Sale of Assets	114
	SECTION 11.6		Limitations on Dividends and Distributions	115
	SECTION 11.7		Canadian Defined Benefit Plans	116
	SECTION 11.8		Transactions with Affiliates	116
	SECTION 11.9		Certain Accounting Changes; Organizational Documents	116
	SECTION 11.10		Amendments; Payments and Prepayments of Certain Indebtedness	116
	SECTION 11.11		Restrictive Agreements	117
	SECTION 11.12		Nature of Business	117
ARTICLE XII		UNCONDITIONAL GUARANTY		117
	SECTION 12.1		Guaranty of Obligations	117
	SECTION 12.2		Nature of Guaranty	118
	SECTION 12.3		Demand by the Administrative Agent	119
	SECTION 12.4		Waivers	119
	SECTION 12.5		Modification of Loan Documents etc	119
	SECTION 12.6		Reinstatement	120
	SECTION 12.7		No Subrogation	120
ARTICLE XIII		DEFAULT AND REMEDIES		120
	SECTION 13.1		Events of Default	120
	SECTION 13.2		Remedies	123
	SECTION 13.3		Rights and Remedies Cumulative; Non-Waiver; etc	124
	SECTION 13.4		Crediting of Payments and Proceeds	124
	SECTION 13.5		Administrative Agent May File Proofs of Claim	125
	SECTION 13.6		Judgment Currency	126

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ARTICLE XIV		THE ADMINISTRATIVE AGENT		126
	SECTION 14.1		Appointment and Authority	126
	SECTION 14.2		Rights as a Lender	127
	SECTION 14.3		Exculpatory Provisions	127
	SECTION 14.4		Reliance by the Administrative Agent	128
	SECTION 14.5		Delegation of Duties	128
	SECTION 14.6		Resignation of Administrative Agent	128
	SECTION 14.7		Non-Reliance on Administrative Agent and Other Lenders	130
	SECTION 14.8		No Other Duties, etc	130
	SECTION 14.9		Guaranty Matters	130
	SECTION 14.10		Hedging Agreements and Cash Management Agreements	131
	SECTION 14.11		Certain ERISA Matters	131
	SECTION 14.12		Erroneous Payments	132
ARTICLE XV		MISCELLANEOUS		134
	SECTION 15.1		Notices	134
	SECTION 15.2		Amendments, Waivers and Consents	136
	SECTION 15.3		Expenses; Indemnity	137
	SECTION 15.4		Set-off	139
	SECTION 15.5		Governing Law	139
	SECTION 15.6		Jurisdiction and Venue	139
	SECTION 15.7		Waiver of Jury Trial	140
	SECTION 15.8		Reversal of Payments	140
	SECTION 15.9		Injunctive Relief; Punitive Damages	140
	SECTION 15.10		Accounting Matters	141
	SECTION 15.11		Successors and Assigns; Participations	142
	SECTION 15.12		Confidentiality	145
	SECTION 15.13		Performance of Duties	146
	SECTION 15.14		All Powers Coupled with Interest	146
	SECTION 15.15		Survival of Indemnities	146
	SECTION 15.16		Titles and Captions	147
	SECTION 15.17		Severability of Provisions	147
	SECTION 15.18		Counterparts; Integration; Effectiveness; Electronic Execution	147
	SECTION 15.19		Electronic Execution	147
	SECTION 15.20		Term of Agreement	148
	SECTION 15.21		Advice of Counsel, No Strict Construction	148
	SECTION 15.22		Inconsistencies with Other Documents; Independent Effect of Covenants	148
	SECTION 15.23		[Intentionally Omitted]	148
	SECTION 15.24		USA PATRIOT Act	148
	SECTION 15.25		No Advisory or Fiduciary Responsibility	149
	SECTION 15.26		Acknowledgement and Consent to Bail-In of Affected Financial Institutions	149
	SECTION 15.27		Amendment and Restatement; No Novation	150
	SECTION 15.28		Acknowledgement Regarding Any Supported QFCs	150

153501368_6

EXHIBITS

Exhibit A-1    -    Form of Revolving Credit Note

Exhibit A-2    -    Form of Swingline Note

Exhibit A-3    -    Form of Canadian Note

Exhibit A-4    -    Form of Euro Note

Exhibit A-5    -    Form of Term Loan Note

Exhibit B-1    -    Form of Notice of Revolving Borrowing

Exhibit B-2    -    Form of Notice of Term Borrowing

Exhibit C    -    Form of Notice of Account Designation

Exhibit D-1    -    Form of Notice of Revolving Repayment

Exhibit D-2    -    Form of Notice of Term Repayment

Exhibit E    -    Form of Notice of Conversion/Continuation

Exhibit F    -    Form of Officer’s Compliance Certificate

Exhibit G    -    Form of Assignment and Assumption

SCHEDULES

Schedule 1.1(a)    -    Existing Letters of Credit

Schedule 1.1(b)    -    Lenders and Commitments

Schedule 7.1(a)    -    Jurisdictions of Organization and Qualification

Schedule 7.1(b)    -    Subsidiaries and Capitalization     

Schedule 7.1(i)    -    ERISA Plans

Schedule 7.1(m)    -    Labor and Collective Bargaining Agreements

Schedule 7.1(t)    -    Certain Indebtedness

Schedule 7.1(u)    -    Litigation

Schedule 11.1        Existing Indebtedness

Schedule 11.2    -    Existing Liens

Schedule 11.3    -    Existing Loans, Advances and Investments

153501368_6

SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 27, 2021, by and among POOL CORPORATION, a Delaware corporation (the “US Borrower”), SCP DISTRIBUTORS CANADA INC., a company organized under the laws of Ontario (the “Canadian Borrower”), SCP INTERNATIONAL, INC., a Delaware corporation (the “Euro Borrower” and, collectively with the US Borrower and the Canadian Borrower, the “Borrowers”), the lenders who are or may become a party to this Agreement (collectively, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders.

STATEMENT OF PURPOSE

The Borrowers, certain financial institutions party thereto (the “Existing Lenders”) and the Administrative Agent are parties to that certain Amended and Restated Credit Agreement dated as of September 29, 2017 (as amended by the First Amendment to Amended and Restated Credit Agreement dated as of September 21, 2018 and the Second Amendment to Amended and Restated Credit Agreement and First Amendment to Amended and Restated Subsidiary Guaranty Agreement dated as of November 7, 2019 and the Third Amendment to the Amended and Restated Credit Agreement dated as of December 30, 2019, the “Existing Credit Agreement”), pursuant to which the Existing Lenders extended a senior credit facility to the Borrowers.

The Borrowers have requested, and subject to the terms and conditions set forth in this Agreement, the Administrative Agent and the Lenders have agreed, upon the terms and subject to the conditions set forth herein, to amend and restate the Existing Credit Agreement as set forth herein and extend a credit facility to the Borrowers as set forth herein.

It is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Existing Credit Agreement and that this Agreement amend and restate the Existing Credit Agreement in its entirety.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1Definitions. The following terms when used in this Agreement shall have the meanings assigned to them below:

“Accounts Securitization” means, with respect to the US Borrower and its Subsidiaries (other than a Special Purpose Subsidiary), any pledge, sale, transfer, contribution, conveyance or other disposition of (a) “accounts”, “chattel paper”, “instruments” or “general intangibles” (each as defined in the UCC) arising in connection with the sale of goods or the rendering of services by such Person, including, without limitation, the related rights to any finance, interest, late payment or similar charges (such items, the “Receivables”), (b) such Person’s interest in the inventory or goods the sale of which by such Person gave rise to such Receivable (but only to the extent such inventory or goods consists of returned or repossessed inventory or goods, if any), (c) all other guaranties, letters of credit, insurance and security interests or liens purporting to secure or support payment of such Receivable, (d) all insurance contracts, service contracts, books and records associated with such Receivable, (e) any lockbox, post office box or similar deposit account related solely to the accounts being transferred, (f) cash collections and cash proceeds of such Receivable and (g) any proceeds of the foregoing (all such items referenced in clauses (a) through (g), the “Transferred Assets”) which such sale, transfer, contribution, conveyance or other disposition is funded by the recipient of such Transferred Assets in whole or in part by borrowings or the issuance of instruments or securities that are paid principally from the cash derived from such Transferred Assets; provided that the aggregate amount of gross proceeds available to the US Borrower or any Subsidiary in connection with all such transactions shall not at any time exceed $350,000,000; and providedfurther that such sale, transfer, contribution, conveyance or other disposition and any Indebtedness arising from such sale, transfer, contribution, conveyance or other disposition shall be on terms and conditions and pursuant to documentation in form and substance satisfactory to the

1

153501368_6

Administrative Agent, in its reasonable discretion, and without recourse to the US Borrower or any of its Subsidiaries (other than a Special Purpose Subsidiary) except with respect to (i) reductions in the balance of such Receivable as a result of any defective or rejected goods or set off by the obligor of such Receivable transferred by such Person, (ii) breaches of representations or warranties by such Person in any applicable receivables sale agreements which contain representations and warranties which are no broader in scope and obligation than the representations and warranties that are customary for transactions of this type and (iii) indemnification of the applicable Special Purpose Subsidiary to the extent provided in such receivables sale agreements which contain indemnification terms and provisions which are no broader in scope and obligation than the indemnification terms and provisions that are customary for transactions of this type.

“Adjusted Eurocurrency Rate” means, as to any Loan (other than a Swingline Loan) not bearing interest based on an RFR, CDOR or the Base Rate (which, as of the Closing Date, means a Loan denominated in Dollars or Euros), for any Interest Period, a rate per annum determined by the Administrative Agent pursuant to the following formula:

Adjusted Eurocurrency Rate =	Eurocurrency Rate for such Currency for such Interest Period
	1.00-Eurocurrency Reserve Percentage

“Administrative Agent” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 14.6.

“Administrative Agent’s Office” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 15.1(c).

“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Affiliate” means, with respect to any Person, any other Person (other than a Subsidiary of a Borrower) which, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person or any of its Subsidiaries. The term “control” means (a) solely for purposes of Section 11.8, the power to vote ten percent (10%) or more of the securities or other equity interests of a Person having ordinary voting power, or (b) the possession, directly or indirectly, of any other power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. The terms “controlling” and “controlled” have meanings correlative thereto.

“Agreement” means this Second Amended and Restated Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time.

“Alternative Currency” means (a) with respect to the Canadian Borrower, the Canadian Dollar and (b) with respect to the Euro Borrower, the Euro.

“Alternative Currency Amount” means with respect to any amount expressed in Dollars, the equivalent amount thereof so expressed in the applicable Alternative Currency determined by the Administrative Agent by reference to the most recent Spot Rate (as determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.

“Announcements” has the meaning assigned thereto in Section 1.11.

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“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrowers or their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.

“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules applicable to a Credit Party, its Subsidiaries or Affiliates related to terrorism financing or money laundering, including any applicable provision of the PATRIOT Act, The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12U.S.C. §§ 1818(s), 1820(b) and 1951-1959) and the Canadian Anti-Money Laundering & Anti-Terrorism Legislation.

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

“Applicable Margin” means

(a) with respect to the Revolving Credit Facility, the corresponding percentages per annum as set forth below based on the Average Total Leverage Ratio:

Pricing Level	Average Total Leverage Ratio	Facility Fee	CDOR Rate + Eurocurrency Rate + LIBOR Swingline Loan+ and  RFR Loan+	Base Rate + Canadian Base Rate+ and Base Rate Swingline Loan +
I	Greater than or equal to 3.00 to 1.00	0.200%	1.425%	0.425%
II	Greater than or equal to 2.25 to 1.00 but less than 3.00 to 1.00	0.175%	1.200%	0.200%
III	Greater than or equal to 1.50 to 1.00 but less than 2.25 to 1.00	0.125%	1.125%	0.125%
IV	Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00	0.100%	1.025%	0.025%
V	Less than 1.00 to 1.00	0.090%	0.910%	0.000%

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(b)     with respect to the Initial Term Loans, the corresponding percentages per annum as set forth below based on the Average Total Leverage Ratio:

Pricing Level	Average Total Leverage Ratio	Eurocurrency Rate +	Base Rate +
I	Greater than or equal to 3.00 to 1.00	1.625%	0.625%
II	Greater than or equal to 2.25 to 1.00 but less than 3.00 to 1.00	1.375%	0.375%
III	Greater than or equal to 1.50 to 1.00 but less than 2.25 to 1.00	1.250%	0.250%
IV	Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00	1.125%	0.125%
V	Less than 1.00 to 1.00	1.000%	0.000%

In each case of clause (a) and clause (b) above, the Applicable Margin shall be determined and adjusted quarterly on the date (each a “Calculation Date”) ten (10) Business Days after the day by which the Borrowers are required to provide an Officer’s Compliance Certificate pursuant to Section 8.2 for the most recently ended fiscal quarter of the US Borrower; provided, however, that:

(i)    the Applicable Margin shall be based on Pricing Level V in each table above until the first Calculation Date occurring after the first fiscal quarter ending after the Closing Date and thereafter the Applicable Margin shall be determined by reference to the Average Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the US Borrower preceding the applicable Calculation Date; and

(ii)    if the Borrowers fail to provide the Officer’s Compliance Certificate as required by Section 8.2 for the most recently ended fiscal quarter of the US Borrower preceding the applicable Calculation Date, the Applicable Margin from such Calculation Date shall be based on Pricing Level I in each table above until such time as an appropriate Officer’s Compliance Certificate is provided, at which time the applicable Pricing Level in each table above shall be determined by reference to the Average Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the US Borrower preceding such Calculation Date. The Applicable Margin shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Applicable Margin shall be applicable to all Extensions of Credit then existing or subsequently made or issued.

Notwithstanding the foregoing, in the event that any financial statement or Officer’s Compliance Certificate delivered pursuant to Section 8.1 or 8.2 is shown to be inaccurate (regardless of whether (i) this Agreement is in effect, (ii) any of the Commitments are in effect, or (iii) any Extension of Credit is outstanding when such inaccuracy is discovered or such financial statement or Officer’s Compliance Certificate was delivered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (x) the US Borrower shall immediately deliver to the Administrative Agent a corrected Officer’s Compliance Certificate for such Applicable Period, (y) the Applicable Margin for such Applicable Period shall be determined as if the Average Total Leverage Ratio in the corrected Officer’s Compliance Certificate were applicable for such Applicable Period, and (z) the Borrowers shall

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immediately and retroactively be obligated to pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 5.4. Nothing in this paragraph shall limit the rights of the Administrative Agent and the Lenders with respect to Sections 5.1(c) and Article XIII. The Borrowers’ obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arrangers” means Wells Fargo Securities, LLC, BofA Securities, Inc., Capital One, National Association, Regions Capital Markets, a division of Regions Bank and Truist Securities, Inc., in their respective capacities as joint lead arrangers and joint bookrunners, and their respective successors.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 15.11), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form approved by the Administrative Agent.

“Assuming Lender” has the meaning assigned thereto in Section 2.10(c).

“Attributable Indebtedness” means, on any date of determination, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“Available Tenor” means, as of any date of determination and with respect to any then-current Benchmark for any Currency, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an Interest Period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 5.8(c)(iv).

“Average Accounts Securitization Proceeds” means, for any period, as determined on a Consolidated basis, without duplication, for the US Borrower and its Subsidiaries, the average for such period of the total amount of borrowings or issuances of instruments or securities in connection with any Accounts Securitization as of each calendar month end during such period.

“Average Total Leverage Ratio” means, for any date, the ratio of (a) the sum, without duplication, of (i) Total Non-Revolving Funded Indebtedness as of such date, plus (ii) the Average Total Revolving Funded Indebtedness for the period of twelve (12) consecutive months ending on or immediately prior to such date plus (iii) the Average Accounts Securitization Proceeds for the period of twelve (12) consecutive months ending on or immediately prior to such date to (b) EBITDAfor the period of twelve (12) consecutive months ending on or immediately prior to such date.

“Average Total Revolving Funded Indebtedness” means, for any period, as determined on a Consolidated basis, without duplication, for the US Borrower and its Subsidiaries in accordance with GAAP, the average for such period of the Total Revolving Funded Indebtedness as of each calendar month end during such period.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

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“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bank of America Term Loan Facility” means the term loan facility established pursuant to that certain Credit Agreement dated as of December 30, 2019 by and among the US Borrower, as the borrower, certain subsidiaries of the US Borrower party thereto, as guarantors and Bank of America, N.A., as the Lender.

“Bankruptcy Event of Default” means any Event of Default pursuant to Sections 13.1(j) or (k).

“Base Rate” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c)(i) prior to the USD LIBOR Transition Date, the Adjusted Eurocurrency Rate for Dollars for a one-month term in effect on such day plus 1.00%and (ii) on and after the USD LIBOR Transition Date, Daily Simple RFR for Dollars in effect on such day plus 1.00% each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, Federal Funds Rate, Adjusted Eurocurrency Rate for Dollars or Daily Simple RFR for Dollars, as the case may be (provided that clause (c) shall not be applicable during any period in which the Adjusted Eurocurrency Rate or Daily Simple RFR, as applicable, is unavailable or unascertainable).

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 5.1(a). All Base Rate Loans shall be denominated in Dollars.

“Base Rate Swingline Loan” means any Swingline Loan bearing interest at a rate based upon the Base Rate as provided in Section 5.1(a).

“Benchmark” means, initially, with respect to any (a) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, the Adjusted Eurocurrency Rate for Dollars; provided that if (i) the USD LIBOR Transition Date has occurred or (ii) a Benchmark Transition Event, ora Term RFR Transition Event, as applicable, has occurred with respect to the then-current Benchmark for Dollars, then “Benchmark” means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 5.8(c)(i), (b) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Euros, the Adjusted Eurocurrency Rate applicable for Euros; and (c) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Canadian Dollars, the CDOR Rate; providedfurther that if a Benchmark Transition Event or a Term RFR Transition Event, as applicable, has occurred with respect to such Adjusted Eurocurrency Rate, the CDOR Rate or the then-current Benchmark for any such Currency, then “Benchmark” means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 5.8(c)(i).

    “Benchmark Replacement” means,

(a) with respect to any Benchmark Transition Event for the then-current Benchmark, the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent and the US Borrower as the replacement for such Benchmark giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for such Benchmark for syndicated credit facilities denominated in the applicable Currency at such time and (ii) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark

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Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents;

(b) with respect to the USD LIBOR Transition Date, for any Available Tenor of the Adjusted Eurocurrency Rate for Dollars, the first alternative set forth in the order below that can be determined by the Administrative Agent for the USD LIBOR Transition Date:

(1)the Term RFR; provided, that, if the US Borrower has provided a notification to the Administrative Agent in writing on or prior to the USD LIBOR Transition Date that the US Borrower or any of its Subsidiaries has a Hedging Agreement in place with respect to any of the Loans as of the date of such notice (which such notification the Administrative Agent shall be entitled to rely upon and shall have no duty or obligation to ascertain the correctness or completeness of), then the Administrative Agent, in its sole discretion, may decide not to determine the Benchmark Replacement pursuant to this clause (b)(1) for the USD LIBOR Transition Date;

(2)the Daily Simple RFR; or

(3)the sum of: (A) the alternate benchmark rate that has been selected by the Administrative Agent and the US Borrower as the replacement for the Adjusted Eurocurrency Rate for Dollars giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the Adjusted Eurocurrency Rate for Dollars for syndicated credit facilities denominated in Dollars at such time and (B) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents; or

(c) with respect to any Term RFR Transition Event, the Term RFR;

provided that, in the case of clause (b)(1), if the Administrative Agent decides that Term RFR is not administratively feasible for the Administrative Agent, then Term RFR will be deemed unable to be determined for purposes of this definition.

“Benchmark Replacement Adjustment” means, for purposes of clauses (a) and (b)(3) of the definition of “Benchmark Replacement”, with respect to any replacement of any then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the US Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate” (if applicable), the definition of “Canadian Base Rate” (if applicable), the definition of “Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), the definition of “Eurocurrency Banking Day”, the definition of “Canadian Business Day”, the definition of “RFR Business Day”, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the

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Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark for any Currency:

(a)    in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

(b)    in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date; or

(c)    in the case of a Term RFR Transition Event, the Term RFR Transition Date applicable thereto.

For the avoidance of doubt, (A) if the Reference Time for the applicable Benchmark refers to a specific time of day and the event giving rise to the Benchmark Replacement Date for any Benchmark occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such Benchmark and for such determination and (B) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to the then-current Benchmark for any Currency (other than Adjusted Eurocurrency Rate for Dollars), the occurrence of one or more of the following events with respect to such Benchmark:

(a)    a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(b)    a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the FRB, the Federal Reserve Bank of New York, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

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(c)    a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Start Date” means, with respect to any Benchmark,in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

“Benchmark Unavailability Period” means, with respect to (a) the Adjusted Eurocurrency Rate for Dollars, the period (if any) (i) beginning at the time that the USD LIBOR Transition Date has occurred pursuant to clause (a) of that definition if, at such time, no Benchmark Replacement has replaced the Adjusted Eurocurrency Rate for Dollars for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c)(i) and (ii) ending at the time that a Benchmark Replacement has replaced the Adjusted Eurocurrency Rate for Dollars for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c)(i) and (b) any then-current Benchmark for any Currency other than the Adjusted Eurocurrency Rate for Dollars, the period (if any) (i) beginning at the time that a Benchmark Replacement Date with respect to such Benchmark pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c)(i) and (ii) ending at the time that a Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c)(i).

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 CFR § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“Borrower Guaranteed Obligations” means, collectively, the US Borrower Guaranteed Obligations, and the Euro Borrower Guaranteed Obligations, and each individually, as the context requires.

“Borrower Guarantor” means (a) with respect to the US Borrower Guaranteed Obligations, the US Borrower and (b) with respect to the Euro Borrower Guaranteed Obligations, the Euro Borrower.

“Borrower Guaranty” means the unconditional guaranty of the payment of (a) the US Borrower Guaranteed Obligations by the US Borrower and (b) the Euro Borrower Guaranteed Obligations by the Euro Borrower, in each case, under Article XII hereof.

“Borrower Materials” has the meaning assigned thereto in Section 8.4.

“Borrowers” has the meaning assigned thereto in the introductory paragraph hereto.

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“Business Day” means any day that (a) is not a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is closed and (b) is not a day on which commercial banks in Charlotte, North Carolinaare closed.

“Calculation Date” has the meaning assigned thereto in the definition of Applicable Margin.

“Canadian Anti-Money Laundering & Anti-Terrorism Legislation” means Part II.1 of the Criminal Code, R.S.C. 1985, c. C-46, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17, the Corruption of Foreign Public Officials Act, S.C. 1998, c.34, the Freezing Assets of Corrupt Foreign Officials Act, S.C. 2011, c.10, the Special Economic Measures Act, S.C. 1992, c.17 and the United Nations Act, R.S.C. 1985, c. U-2 or any similar Canadian legislation, together with all rules and regulations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act, R.S.C. 1985, c. U-2.

“Canadian Base Rate” means at any time, the greater of (a) the Canadian Prime Rate and (b) except during any period of time during which a notice delivered to the Borrowers under Section 5.8 with respect to the CDOR Rate shall remain in effect, the annual rate of interest equal to the sum of (i) the CDOR Rate at such time plus (ii) one percent (1%) per annum; each change in the Canadian Base Rate shall take effect simultaneously with the corresponding change or changes in the Canadian Prime Rate or the CDOR Rate, as applicable.

“Canadian Base Rate Loan” means any Canadian Dollar Loan bearing interest at a rate determined by reference to the Canadian Base Rate as provided in Section 5.1.

“Canadian Borrower” has the meaning assigned thereto in the introductory paragraph hereto.

“Canadian Business Day” means for Obligations, interest, fees, commissions or other amounts denominated in Canadian Dollars, any day (other than a Saturday or Sunday) on which banks are open for business in Toronto, Ontario and with respect to a CDOR Rate Loan is also a day for trading by and between banks in Canadian Dollar deposits in the London and Canadian interbank market; provided, that for purposes of notice requirements in Sections 2.4(a), 2.5(c), 4.2(a), 4.4(a) and 5.2, in each case, such day is also a Business Day.

“Canadian Defined Benefit Plan” means any Canadian Pension Plan which contains a “defined benefit provision” as defined in subsection 147.1(1) of the ITA.

“Canadian Dollar” or “C$” means, at any time of determination, the then official currency of Canada.

“Canadian Dollar Commitment” means the lesser of (a) $30,000,000 and (b) the Revolving Credit Commitment.

“Canadian Dollar Lender” means Wells Fargo or any Affiliate or designee thereof, in its capacity as Canadian Dollar Lender hereunder, and any successor thereto appointed pursuant to Section 14.6(d).

“Canadian Dollar Loan” means any revolving credit loan denominated in Canadian Dollars made to the Canadian Borrower by the Canadian Dollar Lender pursuant to Section 2.2(a) and all such revolving credit loans collectively as the context requires.

“Canadian Note” means the promissory note made by the Canadian Borrower in favor of the Canadian Dollar Lender, substantially in the form attached as Exhibit A-3 hereto, evidencing the Canadian Dollar Loans, and any amendments, supplements and modifications thereto, any substitutes therefor and any replacements, restatements, renewals or extensions thereof, in whole or in part.

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“Canadian Pension Plan” means any plan or arrangement that is or is intended to be a “registered pension plan” as such term is defined in subsection 248(1) of the ITA.

“Canadian Prime Rate” means the rate of interest publicly announced from time to time by the Canadian Reference Bank as its prime rate in effect for determining interest rates on Canadian Dollar denominated commercial loans in Canada (which such rate is not necessarily the most favored rate of the Canadian Reference Bank and the Canadian Reference Bank may lend to its customers at rates that are at, above or below such rate) or, if the Canadian Reference Bank ceases to announce a rate so designated, any similar successor rate designated by the Canadian Reference Bank.

“Canadian Reference Bank” means Bank of Montreal, or its successor and assigns, or such other bank as the Canadian Dollar Lender may from time to time designate.

“Capital Lease” means any lease of any property by the US Borrower or any of its Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and accounted for as a finance lease or capital lease on a Consolidated balance sheet of the US Borrower and its Subsidiaries.

“Capital Stock” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) in the case of a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), shares (aandelen) or depository receipts (certificaten van aandelen), (f) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (g) any and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateralize” means, to pledge and deposit with or deliver to the Administrative Agent, or directly to the applicable Issuing Lender (with notice thereof to the Administrative Agent), for the benefit of one or more of the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or the Revolving Credit Lenders, as collateral for L/C Obligations or obligations of such Lenders to fund participations in respect of L/C Obligations, Swingline Loans, Canadian Dollar Loans, Euro Loans, cash or deposit account balances or, if the Administrative Agent, the applicable Issuing Lender, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender shall agree, each in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (i) the Administrative Agent and (ii) the applicable Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender, as applicable. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such Cash Collateral and other credit support.

“Cash Equivalents” means any investments permitted pursuant to Section 11.3(b).

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electric payables and purchasing cards), electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Credit Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent, or (b) at the time it (or its Affiliate) becomes a Lender or the Administrative Agent (including on the Closing Date), is a party to a Cash Management Agreement with a Credit Party, in each case in its capacity as a party to such Cash Management Agreement.

“Cash Management Obligations” means all existing or future payment and other obligations owing by any Credit Party under any Cash Management Agreement with any Cash Management Bank.

“CDOR Rate” means,

(a)    for any interest rate calculation with respect to a Canadian Base Rate Loan, the rate of interest per annum determined on the basis of an average thirty (30) day rate applicable to Canadian Dollar bankers’ acceptances displayed and identified as such on the “CDOR Page” of Refinitiv

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Benchmark Services (UK) Limited, or a comparable or successor page or administrator approved by the Administrative Agent, as of 10:00 a.m. on such date (or if such day is not a Canadian Business Day, then on the immediately preceding Canadian Business Day); or

(b)    for any interest rate calculation with respect to a CDOR Rate Loan, the rate of interest per annum determined on the basis of the average rate applicable to Canadian Dollar bankers’ acceptances having a maturity comparable to the applicable Interest Period displayed and identified as such on the “CDOR Page” of Refinitiv Benchmark Services (UK) Limited, or a comparable or successor page or administrator approved by the Administrative Agent, as of 10:00 a.m. on the first day of the applicable Interest Period (or if such day is not a Canadian Business Day, then on the immediately preceding Canadian Business Day).

If, for any reason, such rate does not appear on the CDOR Page, then the “CDOR Rate” shall be determined by the Canadian Dollar Lender to be the arithmetic average of the rate per annum at which deposits in Canadian Dollars would be offered by first class banks in Canada to the Canadian Dollar Lender. Each calculation by the Canadian Dollar Lender of the CDOR Rate shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding the foregoing, if the CDOR Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“CDOR Rate Loan” means a Canadian Dollar Loan bearing interest at a rate determined by reference to the CDOR Rate pursuant to Section 5.1(a)(ii)(B), but shall not include any Canadian Base Rate Loan as to which interest is determined by reference to the CDOR Rate.

“Change in Control” means (a) any event or series of events in which any person or group of persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) acting in concert obtain beneficial ownership or control in one or more series of transactions of more than thirty percent (30%) of the Capital Stock or thirty percent (30%) of the voting power of the US Borrower entitled to vote in the election of members of the board of directors of the US Borrower, (b) any event or series of events in which the Canadian Borrower or the Euro Borrower ceases to be a Wholly-Owned Subsidiary of the US Borrower, (c) during any period of twelve (12) consecutive months, a majority of the members of the board of directors of the US Borrower cease to be composed of individuals (i) who were members of the board of directors on the first day of such period, (ii) whose election or nomination to the board of directors was approved or recommended by individuals who comprised a majority of the board of directors on the first day of such period or (iii) whose election or nomination to the board of directors was approved or recommended by (A) individuals who were members of the board of directors on the first day of such period or (B) individuals whose election or nomination to the board of directors was approved or recommended by a majority of the board of directors on the first day of such period; provided that in each case such individuals constituted a majority of the board of directors at the time of such election or nomination, or (d) there shall have occurred under any indenture or other evidence of Indebtedness in excess of $50,000,000 any “change in control” (as defined in such indenture or other evidence of Indebtedness) obligating the US Borrower or any of its Subsidiaries to repurchase, redeem or repay all or any part of the Indebtedness or Capital Stock provided for therein.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in implementation thereof and (ii) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued.

“Class” means, when used in reference to any Loan, whether such Loan is a Revolving Credit Loan, a Swingline Loan, a Canadian Dollar Loan, a Euro Loan, an Initial Term Loan or an Incremental

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Term Loan and, when used in reference to any Commitment, whether such Commitment is a Revolving Credit Commitment, a Swingline Commitment, a Canadian Dollar Commitment, a Euro Commitment, an Initial Term Loan Commitment or an Incremental Term Loan Commitment.

“Closing Date” means the first date all the conditions precedent in Section 6.1 are satisfied or waived in accordance with Section 15.2.

“Code” means the Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder, each as amended or modified from time to time.

“Commitment” means, as to any Lender, on a collective basis, such Lender’s Canadian Dollar Commitment, if any, Euro Commitment, if any, Swingline Commitment, if any, Revolving Credit Commitment and Term Loan Commitment, in each case as set forth in the Register, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof.

“Commitment Percentage” means, as to any Lender at any time, such Lender’s Revolving Credit Commitment Percentage or Initial Term Loan Commitment Percentage, as applicable.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Consolidated” means, when used with reference to financial statements or financial statement items of the US Borrower and its Subsidiaries, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“Consolidated Total Assets” means, at any time, the total assets of the US Borrower and its Subsidiaries, as determined in accordance with GAAP on a Consolidated basis.

“Covered Party” has the meaning assigned thereto in Section 15.28.

“Credit Facility” means, collectively, the Revolving Credit Facility, each Term Loan Facility, the Swingline Facility and the L/C Facility.

“Credit Parties” means, collectively, the US Borrower, the Subsidiary Borrowers and the Subsidiary Guarantors.

“Currencies” means Dollars and each Alternative Currency, and “Currency” means any of such Currencies.

“Daily Simple RFR”means, for any day (an “RFR Rate Day”), a rate per annum equal to, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, on and after the USD LIBOR Transition Date, the greater of (a) Spread Adjusted SOFR for the day (such day, an “RFR Determination Day”) that is five (5) RFR Business Days prior to (i) if such RFR Rate Day is an RFR Business Day, such RFR Rate Day or (ii) if such RFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Rate Day, in each case, utilizing the SOFR component of such Spread Adjusted SOFR that is published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) the Floor. If by 5:00 pm (Eastern time) on the second (2nd) RFR Business Day immediately following any RFR Determination Day, the RFR in respect of such RFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date with respect to the applicable Daily Simple RFR has not occurred, then the RFR for such RFR Determination Day will be the RFR as published in respect of the first preceding RFR Business Day for which such RFR was published on the SOFR Administrator’s Website; provided that any RFR determined pursuant to this sentence shall be utilized for purposes of calculation of Daily Simple RFR for no more than three (3) consecutive RFR Rate Days. Any change in Daily Simple RFR due to a change in the applicable RFR shall be effective from and including the effective date of such change in the RFR without notice to the US Borrower.

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“Daily Simple RFR Loan” means a Loan that bears interest at a rate based on Daily Simple RFR other than pursuant to clause (c) of the definition of “Base Rate”.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, Canada or other applicable jurisdictions from time to time in effect.

“Default” means any of the events specified in Section 13.1 which with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 5.16(b), any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans or Term Loans required to be funded by it hereunder within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the US Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit, Swingline Loans, Canadian Dollar Loans or Euro Loans) within two (2) Business Days of the date when due, (b) has notified the US Borrower, the Administrative Agent, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the US Borrower, to confirm in writing to the Administrative Agent and the US Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the US Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 5.16(b)) upon delivery of written notice of such determination to the US Borrower, each Issuing Lender, the Swingline Lender, Canadian Dollar Lender, Euro Lender and each Lender.

“Disqualified Capital Stock” means any Capital Stock that, by their terms (or by the terms of any security or other Capital Stock into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and

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all other Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is 91 days after the later to occur of the Revolving Credit Maturity Date and the Term Loan Maturity Date; provided that if such Capital Stock is issued pursuant to a plan for the benefit of the US Borrower or its Subsidiaries or by any such plan to such officers or employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the US Borrower or its Subsidiaries in order to satisfy applicable or regulatory obligations.

“Dollar Amount” means, for any amount, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in a currency other Dollars, the equivalent of such amount in Dollars determined by the Administrative Agent at such time on the basis of the Spot Rate for such currency determined in respect of the most recent Revaluation Date for the purchase of Dollars with such currency.

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

“Domestic Subsidiary” means any Subsidiary organized under the laws of any political subdivision of the United States.

“Draws” means, collectively, the Initial Draw and the Second Draw. For the avoidance of doubt each Draw shall constitute the Initial Term Loan.

“Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

“Early Opt-in Election” means the occurrence of: (a) a notification by the Administrative Agent to (or the request by the US Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding Dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and (b) the joint election by the Administrative Agent and the US Borrower to trigger a fallback from the Adjusted Eurocurrency Rate for Dollars and the provision by the Administrative Agent of written notice of such election to the Lenders.

“EBITDA” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the US Borrower and its Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b) the sum of the following to the extent deducted in determining Net Income for such period: (i) income and franchise taxes, (ii) Interest Expense, (iii) amortization, (iv) depreciation, (v) other non-cash charges (including non-cash share-based compensation expense and non-cash impairments of goodwill, other intangible assets or fixed assets) and other non-recurring non-cash expenses or losses (except, in each case of this clause (v), to the extent that such non-cash items are reserved for cash items to be taken in the future) and (vi) extraordinary losses incurred other than in the ordinary course of business less (c) the sum of the following, without duplication: (i) non-cash gains, (ii) non-recurring non-cash income and (iii) any extraordinary gains realized during such period other than in the ordinary course of business.

“EBITDAR” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the US Borrower and its Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b) the sum of the following to the extent deducted in determining Net Income for such period: (i) income and franchise taxes, (ii) Interest Expense, (iii) amortization, (iv) depreciation, (v) Rental Expense, (vi) other non-cash charges (including non-cash share-based compensation expense and non-cash impairments of goodwill, other intangible assets or fixed assets) and other non-recurring non-

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cash expenses or losses (except, in each case of this clause (vi), to the extent that such non-cash items are reserved for cash items to be taken in the future) and (vii) extraordinary losses incurred other than in the ordinary course of business less (c) the sum of the following, without duplication: (i) non-cash gains, (ii) non-recurring non-cash income and (iii) any extraordinary gains realized during such period other than in the ordinary course of business.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any credit institution or investment firm established in any EEA Member Country.

“Electronic Record” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.

“Electronic Signature” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 15.11(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 15.11(b)(iii)).

“Employee Benefit Plan” means (a) any employee benefit plan within the meaning of Section 3(3) of ERISA that is maintained for employees of the US Borrower or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding six (6) years been maintained, funded or administered for the employees of the US Borrower or any current or former ERISA Affiliate.

“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to human health or the environment.

“Environmental Laws” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

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“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, each as amended or modified from time to time.

“ERISA Affiliate” means any Person who together with any Credit Party or any of its Subsidiaries is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

“Erroneous Payment” has the meaning assigned thereto in Section 14.12(a).

“Erroneous Payment Deficiency Assignment” has the meaning assigned thereto in Section 14.12(d).

“Erroneous Payment Impacted Class” has the meaning assigned thereto in Section 14.12(d).

“Erroneous Payment Return Deficiency” has the meaning assigned thereto in Section 14.12(d).

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor thereto), as in effect from time to time.

“EURIBOR” has the meaning assigned thereto in the definition of “Eurocurrency Rate”.

“EURIBOR Rate” has the meaning assigned thereto in the definition of “Eurocurrency Rate”.

“Euro” and “EUR” mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

“Euro Borrower” has the meaning assigned thereto in the introductory paragraph hereto.

“Euro Borrower Guaranteed Obligations” has the meaning assigned thereto in Section 12.1(c).

“Euro Commitment” means the lesser of (a) $30,000,000 and (b) the Revolving Credit Commitment.

“Euro Lender” means Wells Fargo or any Affiliate or designee thereof, in its capacity as Euro Lender hereunder, and any successor thereto appointed pursuant to Section 14.6(e).

“Euro Loan” means any revolving credit loan denominated in Euros made to the Euro Borrower by the Euro Lender pursuant to Section 2.2(b) and all such revolving credit loans collectively as the context requires.

“Euro Note” means the promissory note made by the Euro Borrower in favor of the Euro Lender, substantially in the form attached as Exhibit A-4 hereto, evidencing the Euro Loans, and any amendments, supplements and modifications thereto, any substitutes therefor and any replacements, restatements, renewals or extensions thereof, in whole or in part.

“Eurocurrency Banking Day” means, (i) for Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market and (ii) for Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Euros, a TARGET Day; provided, that for purposes of notice requirements in Sections 2.4(a), 2.5(c), 4.2(a), 4.4(a) and 5.2, in each case, such day is also a Business Day.

“Eurocurrency Rate” means,

(a)    for any Eurocurrency Rate Loan for any Interest Period:

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(i)    denominated in Dollars, the greater of (A) the rate of interest per annum equal to the London interbank offered rate for deposits in Dollars (“USD LIBOR”) as administered by the IBA, or a comparable or successor administrator approved by the Administrative Agent, for a period equal to the applicable Interest Period (in each case, the “USD LIBOR Rate”), at the Reference Time; and (B) the Floor; and

(ii)    denominated in Euros, the greater of (A) the rate of interest per annum equal to the Euro Interbank Offered Rate (“EURIBOR”) as administered by the European Money Markets Institute, or a comparable or successor adminitrator approved by the Administrative Agent (in each case, the “EURIBOR Rate”), at the Reference Time and (B) the Floor; and

(b)    for any rate calculation with respect to a Base Rate Loan on any date, the greater of (A) the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period of approximately one month as published by the IBA, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) two (2) Eurocurrency Banking Days prior to the date of such calculation and (B) the Floor.

“Eurocurrency Rate Loan” means any Loan bearing interest at a rate based on the Adjusted Eurocurrency Rate other than pursuant to clause (c) of the definition of “Base Rate”.

“Eurocurrency Reserve Percentage” means, for any day, the percentage which is in effect for such day as prescribed by the FRB for determining the maximum reserve requirement (including any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City or any other reserve ratio or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Loans. The Adjusted Eurocurrency Rate for each outstanding Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

“Event of Default” means any of the events specified in Section 13.1; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

“Excluded Swap Obligation” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party, including under Section 2.12 of the Subsidiary Guaranty Agreement). If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 5.12(b)), United States withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result

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of a Change in Law) to comply with Section 5.11(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the applicable Borrower with respect to such withholding tax pursuant to Section 5.11(a), (d) Canadian federal withholding taxes imposed as a result of the Administrative Agent or a Foreign Lender (i) not dealing at “arm’s length” (within the meaning of the ITA) with the Canadian Borrower or (ii) being a “specified shareholder” (as that term is defined in subsection 18(5) of the ITA) of the Canadian Borrower or being a Person not dealing at “arm’s length” (within the meaning of the ITA) with such a “specified shareholder”, except where such non-arm’s length relationship arises, or the Administrative Agent or a Foreign Lender is or does not deal at “arm’s length” (within the meaning of the ITA) with such a “specified shareholder”, as a consequence of the Administrative Agent or such Foreign Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under or enforced this Agreement or any other Loan Document and (e) any United States withholding Taxes imposed under FATCA. Notwithstanding anything to the contrary contained in this definition, “Excluded Taxes” shall not include any withholding tax imposed at any time on payments made by or on behalf of any Subsidiary Borrower (including, without limitation, any payment made to any Lender under Sections2.2(a)(ii)(C) or 2.2(b)(ii)(C)) or any other Foreign Subsidiary to any Lender hereunder or under any other Loan Document, provided that such Lender shall have complied with the last paragraph of Section 5.11(e).

“Existing Credit Agreement” has the meaning assigned thereto in the statement of purpose hereto.

“Existing Facility” means that certain credit facility established pursuant to the Existing Credit Agreement.

“Existing Lenders” has the meaning assigned thereto in the statement of purpose hereto.

“Existing Letters of Credit” means those letters of credit existing on the Closing Date and described on Schedule 1.1(a).

“Extending Lender” has the meaning assigned thereto in Section 2.10(b).

“Extension Date” has the meaning assigned thereto in Section 2.10(b).

“Extension Notice” has the meaning assigned thereto in Section 2.10(a).

“Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans of such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding, (iv) such Lender’s Revolving Credit Commitment Percentage of the Canadian Dollar Loans then outstanding, (v) such Lender’s Revolving Credit Commitment Percentage of the Euro Loans then outstanding and (vi) the aggregate principal amount of the Term Loans of such Lender then outstanding or (b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

“Facility Fee” has the meaning assigned thereto in Section 5.3(a).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version) and any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“FCA” has the meaning assigned thereto in Section 1.11.

“FDIC” means the Federal Deposit Insurance Corporation, or any successor thereto.

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“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that if such rate is not so published for any day which is a Business Day, the Federal Funds Rate for such day shall be the average of the quotation for such day on such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by the Administrative Agent. Notwithstanding the foregoing, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Fee Letters” means (a) the separate fee letter agreement executed by the US Borrower, the Administrative Agent and Wells Fargo Securities, LLC dated as of September 1, 2021 and (b) any fee letter agreement between the US Borrower and any Issuing Lender relating to certain fees payable to such Issuing Lender in its capacity as such, each as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“First Amendment” means that certain First Amendment to Second Amended and Restated Credit Agreement dated as of the First Amendment Effective Date, by and among the Borrowers, the Lenders party thereto, the Subsidiary Guarantors party thereto and the Administrative Agent.

“First Amendment Effective Date” means December 30, 2021.

“Fiscal Year” means the fiscal year of the US Borrower and its Subsidiaries ending on December 31.

“Floor” means a rate of interest equal to 0% per annum.

“Foreign Lender” means, with respect to any Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender, other than such L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders, (c) with respect to the Canadian Dollar Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of Canadian Dollar Loans other than Canadian Dollar Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders and (d) with respect to the Euro Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of Euro Loans other than Euro Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles, as recognized by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, consistently applied and maintained on a consistent basis for the US Borrower and its Subsidiaries throughout the period indicated and (subject to Section 15.10) consistent with the prior financial practice of the US Borrower and its Subsidiaries.

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“Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

“Governmental Authority” means the government of the United States, Canada or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guaranteed Parties” means, collectively, the Administrative Agent, the Lenders, the Issuing Lenders, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 14.5, any other holder of the Obligations, and, in each case, their respective successors and assigns.

“Guaranty Obligation” means, with respect to the US Borrower and its Subsidiaries, without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which such Person has directly or indirectly guaranteed any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Guaranty Obligation shall not include endorsements for collection or deposit in the ordinary course of business.

“Hazardous Materials” means any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

“Hedge Bank” means any Person that, (a) at the time it enters into a Hedging Agreement with a Credit Party permitted under Article XI, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent or (b) at the time it (or its Affiliate) becomes a Lender or the Administrative Agent (including on the Closing Date), is a party to a Hedging Agreement with a Credit Party, in each case in its capacity as a party to such Hedging Agreement.

“Hedging Agreement” means any agreement with respect to any Interest Rate Contract, forward rate agreement, commodity swap, forward foreign exchange agreement, currency swap agreement, cross-currency rate swap agreement, currency option agreement or other agreement or arrangement designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices, all as amended, restated, supplemented or otherwise modified from time to time.

“Hedging Obligations” means all existing or future payment and other obligations owing by any Credit Party under any Hedging Agreement permitted hereunder (other than Excluded Swap Obligations) with any Hedge Bank.

“IBA” has the meaning assigned thereto in Section 1.11.

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“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.

“Incremental Amendment” means an amendment in form and substance reasonably satisfactory to the Administrative Agent delivered in connection with Section 2.9.

“Incremental Effective Date” has the meaning assigned thereto in Section 2.9(a).

“Incremental Facilities Limit” means $250,000,000.

“Incremental Increase” has the meaning assigned thereto in Section 2.9(a).

“Incremental Lender” has the meaning assigned thereto in Section 2.9(a).

“Incremental Revolving Credit Facility Increase” has the meaning assigned thereto in Section 2.9(a).

“Incremental Term Loan” has the meaning assigned thereto in Section 2.9(a).

“Incremental Term Loan Commitment” has the meaning assigned thereto in Section 2.9(a).

“Indebtedness” means, with respect to the US Borrower and its Subsidiaries at any date and without duplication, the sum of the following:

(a)    all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b)    all obligations to pay the deferred purchase price of property or services of any such Person (including, without limitation, all obligations under non-competition, earn-out or similar agreements), except trade payables arising in the ordinary course of business not more than ninety (90) days past due;

(c)    the Attributable Indebtedness of such Person with respect to such Person’s obligations in respect of Capital Leases and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d)    all indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(e)    all Guaranty Obligations of any such Person;

(f)    all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including, without limitation, any Reimbursement Obligation, and banker’s acceptances issued for the account of any such Person;

(g)    all obligations of any such Person in respect of Disqualified Capital Stock;

(h)    all net obligations incurred by any such Person pursuant to Hedging Agreements;

(i)    the outstanding attributed principal amount under any asset securitization program; and

(j)    all outstanding payment obligations with respect to Synthetic Leases.

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For all purposes hereof, the indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Termination Value thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on, or with respect to, any payment made by, or on account of, any obligation of the Credit Parties under any Loan Document and (b) to the extent not otherwise described in clause (a) above, Other Taxes.

“Initial Term Loan” means the term loan made, or to be made, to the Borrowers by the Term Loan Lenders pursuant to Section 4.1.

“Initial Term Loan Commitment” means (a) as to any Term Loan Lender, the obligation of such Term Loan Lender to make a portion of the Second Draw of the Initial Term Loan to the account of the U.S. Borrower hereunder from the First Amendment Effective Date to the Second Delayed Draw Funding Deadline in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on the Register, as such amount may be increased, reduced or otherwise modified at any time or from time to time pursuant to the terms hereof and (b) as to all Term Loan Lenders, the aggregate commitment of all Term Loan Lenders to make such Second Draw. The aggregate Initial Term Loan Commitment shall be $250,000,000. The Initial Term Loan Commitment of each Term Loan Lender as of the First Amendment Effective Date is set forth opposite the name of such Term Loan Lender on Annex B attached to the First Amendment.

“Initial Term Loan Commitment Percentage” means,

(a)    with respect to the funding of the Second Draw, with respect to any Term Loan Lender at any time, the percentage of the total Initial Term Loan Commitments of all the Term Loan Lenders represented by such Term Loan Lender’s Initial Term Loan Commitment; and

(b)    for all other purposes, with respect to any Term Loan Lender at any time, (i) the sum of the unfunded Initial Term Loan Commitments of such Lender plus the outstanding amount of the Initial Term Loans of such Lender dividedby (ii) the sum of the unfunded Initial Term Loan Commitments of all Lenders plus the outstanding amount of all Initial Term Loans of all Lenders.

The Initial Term Loan Commitment Percentage of each Term Loan Lender in respect of the Second Draw as of the First Amendment Effective Date is set forth opposite the name of such Lender on Annex B attached to the First Amendment.

“Interest Expense” means, with respect to the US Borrower and its Subsidiaries for any period, the gross interest expense (including, without limitation, interest expense attributable to Capital Leases and all net payment obligations pursuant to Hedging Agreements) of the US Borrower and its Subsidiaries, all determined for such period on a Consolidated basis, without duplication, in accordance with GAAP.

“Interest Period” has the meaning assigned thereto in Section 5.1(b).

“Interest Rate Contract” means any interest rate swap agreement, interest rate cap agreement, interest rate floor agreement, interest rate collar agreement, interest rate option or any other agreement regarding the hedging of interest rate risk exposure executed in connection with hedging the interest rate exposure of any Person and any confirming letter executed pursuant to such agreement, all as amended, restated, supplemented or otherwise modified from time to time.

“IRS” means the United States Internal Revenue Service, or any successor thereto.

“ISP98” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce Publication No. 590.

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“Issuing Lender” means (a) with respect to Letters of Credit issued hereunder on or after the Closing Date, (i) Wells Fargo (or any successor thereto) and (ii) any other Lender that is an Affiliate of an Arranger to the extent it has agreed in its sole discretion to act as an “Issuing Lender” hereunder and that has been approved in writing by the US Borrower and the Administrative Agent (such approval by the Administrative Agent not to be unreasonably delayed or withheld) as an “Issuing Lender” hereunder, in each case in its capacity as issuer of any Letter of Credit and (b) with respect to the Existing Letters of Credit, the applicable Lender, in its capacity as issuer thereof.

“ITA” means the Income Tax Act (Canada), as amended, and any successor thereto and any regulations promulgated thereunder.

“L/C Commitment” means the lesser of (a) $20,000,000 and (b) the aggregate Revolving Credit Commitment.

“L/C Facility” means the letter of credit facility established pursuant to Article III.

“L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5.

“L/C Participants” means, with respect to any Letter of Credit, the collective reference to all the Revolving Credit Lenders (other than the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender (in such capacities)).

“Lender” has the meaning assigned thereto in the introductory paragraph hereto.

“Lending Office” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

“Letter of Credit Application” means an application, in the form specified by the applicable Issuing Lender from time to time, requesting such Issuing Lender to issue a Letter of Credit.

“Letters of Credit” means the collective reference to the letters of credit issued pursuant to Section 3.1 and the Existing Letters of Credit. Notwithstanding anything to the contrary contained herein, a letter of credit issued by any Issuing Lender (other than Wells Fargo at any time it is also acting as Administrative Agent) shall not be a “Letter of Credit” for purposes of the Loan Documents until such time as the Administrative Agent has been notified in writing of the issuance thereof by the applicable Issuing Lender.

“LIBOR Market Index Rate” means,

(a)prior to the USD LIBOR Transition Date, for any day, the greater of (i) USD LIBOR for a period equal to one (1) month (commencing on the date of determination of such interest rate) and (ii) the Floor; and

(b)on and after the USD LIBOR Transition Date, for any day, the greater of (i) the applicable Benchmark Replacement of the Adjusted Eurocurrency Rate for Dollars as of such day, which if such Benchmark Replacement has multiple Available Tenors, shall be the Available Tenor equal to one (1) month commencing on the date of determination of such interest rate or if a one month period is not an Available Tenor, the Available Tenor selected by the Swingline Lender (with notice to the Administrative Agent and the US Borrower) in its sole discretion and (ii) the Floor.

Each calculation by the Administrative Agent of the LIBOR Market Index Rate shall be conclusive and binding for all purposes, absent manifest error. Each change in the LIBOR Market Index Rate shall be effective as of the opening of business on the day such change occurs.

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“LIBOR Swingline Loan” means any Swingline Loan bearing interest at a rate based upon the LIBOR Market Index Rate as provided in Section 5.1(a).

“Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

“Loan Documents” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Subsidiary Guaranty Agreement, the Fee Letters and each other document, instrument, certificate and agreement executed and delivered by each Borrower or any Subsidiary thereof in connection with this Agreement or otherwise referred to herein or contemplated hereby (excluding any Hedging Agreement and any Cash Management Agreement), all as may be amended, restated, supplemented or otherwise modified from time to time.

“Loans” means the collective reference to the Revolving Credit Loans, the Term Loans, the Canadian Dollar Loans, the Euro Loans and the Swingline Loans and “Loan” means any of such Loans.

“Material Acquisition” means any Permitted Acquisition of any Person, assets, business or line of business that involves the payment of consideration by the US Borrower and its Subsidiaries in excess of $200,000,000.

“Material Adverse Effect” means, with respect to the US Borrower or any of its Subsidiaries, a material adverse effect on (a) the properties, business, operations, assets, liabilities (actual or contingent) or condition (financial or otherwise) of the US Borrower and its Subsidiaries, taken as a whole, (b) the ability of any Credit Party to perform its obligations under the Loan Documents to which it is a party, (c) the legality, validity, binding effect or enforceability against the US Borrower or any Subsidiary thereof of any Loan Document to which it is a party or (d) the rights and remedies of the Administrative Agent or any Lender under the Loan Documents.

“Material Contract” means any contract or other agreement, written or oral, of the US Borrower or any of its Subsidiaries the failure to comply with which could reasonably be expected to have a Material Adverse Effect.

“Material Disposition” means any sale, transfer or other disposition of any Person, assets, business or line of business that yields gross proceeds to the US Borrower or any of its Subsidiaries in excess of $200,000,000.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time and (b) otherwise, an amount determined by the Administrative Agent, each applicable Issuing Lender that is entitled to Cash Collateral hereunder, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender, each in its sole discretion.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the US Borrower or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding six (6) years.

“Net Income” means, with respect to the US Borrower and its Subsidiaries, for any period of determination, the net income (or loss) of the US Borrower and its Subsidiaries for such period, determined on a Consolidated basis in accordance with GAAP; provided that there shall be excluded from Net Income (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the US Borrower or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid to the US Borrower or any of its Subsidiaries

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by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of such Person or is merged into or consolidated with such Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a), (c) the net income (if positive) of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the US Borrower or any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable on such dividends or distributions.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 15.2 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Extending Lender” has the meaning assigned thereto in Section 2.10(b).

“Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States, by any Credit Party or any Subsidiary, or contributed to or required to be contributed to by any Credit Party or any Subsidiary, or under which any Credit Party or any Subsidiary has any liability or contingent liability, primarily for the benefit of current or former employees, directors or officers, shareholders or independent contractors of any Credit Party or any Subsidiary residing or located outside the United States, which plan, fund or similar program provides, or results in, pension, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment or retirement, and (b) is not subject to ERISA or the Code.

“Note” means a Revolving Credit Note, a Term Loan Note, a Canadian Note, Euro Note or a Swingline Note.

“Notice of Account Designation” has the meaning assigned thereto in Section 2.4(b).

“Notice of Borrowing” means a Notice of Revolving Borrowing or Notice of Term Borrowing, as applicable.

“Notice of Conversion/Continuation” has the meaning assigned thereto in Section 5.2.

“Notice of Revolving Borrowing” has the meaning assigned thereto in Section 2.4(a).

“Notice of Revolving Repayment” has the meaning assigned thereto in Section 2.5(c).

“Notice of Term Borrowing” has the meaning assigned thereto in Section 4.2(a).

“Notice of Term Repayment” has the meaning assigned thereto in Section 4.4(a).

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all Hedging Obligations, (d) all Cash Management Obligations and (e) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the US Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent, in each case under any Loan Document or otherwise, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof of any proceeding under any federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign,

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relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Officer’s Compliance Certificate” means a certificate of the chief financial officer, chief accounting officer or the treasurer of the US Borrower substantially in the form attached as Exhibit F.

“Operating Lease” means, as to any Person as determined in accordance with GAAP, any lease of property (whether real, personal or mixed) by such Person as lessee which is not a Capital Lease.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Participant” has the meaning assigned thereto in Section 15.11(d).

“Participant Register” has the meaning assigned thereto in Section 15.11(d).

“Participating Member State” means each state so described in any EMU Legislation.

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended.

“Payment Event of Default” means any Event of Default pursuant to Sections 13.1(a) or (b).

“Payment Recipient” has the meaning assigned thereto in Section 14.12(a).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained for the employees of the US Borrower or any ERISA Affiliates or (b) has at any time within the preceding six (6) years been maintained for the employees of the US Borrower or any of its current or former ERISA Affiliates.

“Permitted Acquisition” means any Permitted Domestic Acquisition or any Permitted Foreign Acquisition.

“Permitted Acquisition Consideration” means the aggregate amount of the purchase price (including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Capital Stock of the US Borrower, net of the applicable acquired company’s cash (including Cash Equivalents) balance as shown on its most recent financial statements delivered in connection with the applicable Permitted Acquisition) to be paid on a singular basis in connection with any applicable Permitted Acquisition as set forth in the applicable acquisition documents executed by the US Borrower or any of its Subsidiaries in order to consummate the applicable Permitted Acquisition.

“Permitted Currency” means Dollars or any Alternative Currency, or each such currency, as the context requires.

“Permitted Domestic Acquisition” has the meaning assigned thereto in Section 11.3(c).

“Permitted Foreign Acquisition” has the meaning assigned thereto in Section 11.3(d).

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“Permitted Liens” means the Liens permitted pursuant to Section 11.2.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Prime Rate” means, at any time, the rate of interest per annum publicly announced from time to time by Wells Fargo as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by Wells Fargo as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

“Pro Forma Basis” means, except for purposes of determining the Applicable Margin:

(a)for purposes of calculating EBITDA or EBITDAR for any period during which one or more Material Acquisitions or Material Dispositions occurs, that (i) such Material Acquisitions or Material Dispositions shall be deemed to have occurred as of the first day of the applicable period of measurement, (ii) there shall be included in determining EBITDA or EBITDAR for such period, without duplication, the EBITDA or EBITDAR (in each case, determined for this purpose as if references therein to the US Borrower and its Subsidiaries were to the Person(s) or business(es) or properties or assets acquired), as applicable, of any Person or business, or attributable to any property or asset, acquired bythe US Borroweror any of its Subsidiaries during such period (but not that of any related Person or business or that is attributable to any assets or property, in each case to the extent not so acquired) in connection with a Permitted Acquisition to the extent not subsequently sold, transferred, abandoned or otherwise disposed of by US Borroweror any of its Subsidiaries during such period, based on the actual EBITDA or EBITDAR (in each case, determined for this purpose as if references therein to the US Borrower and its Subsidiaries were to the Person(s) or business(es) or properties or assets acquired) of such acquired entity or business for such period (including the portion thereof occurring prior to such acquisition) and (iii) there shall be excluded in determining EBITDA and EBITDAR for such period, without duplication, the EBITDA and EBITDAR of any Person or business, or attributable to any property or asset, disposed of by the US Borrower or any of its Subsidiaries during such period in connection with a Material Disposition or discontinuation of operations, based on the EBITDA or EBITDAR, as applicable, attributable to such disposed entity or business or discontinued operations for such period (including the portion thereof occurring prior to such disposition or discontinuation); provided that the foregoing amounts shall be without duplication of any adjustments that are already included in the calculation of EBITDA or EBITDAR, as applicable; provided that, in the case of a Material Acquisition, the Borrower may, at its option, by written notice delivered to the Administrative Agent at or prior to the closing of such Material Acquisition, elect not to utilize this clause (a) with respect to such Material Acquisition; and

(b)in the event that the US Borrower or any Subsidiary thereof incurs (including by assumption, increase or guarantees) or repays (including by redemption, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness included in the calculations of any financial ratio or test (in each case, other than Indebtedness incurred or repaid under the Revolving Credit Facility (including any Incremental Revolving Credit Facility Increase) or in connection with an Accounts Securitization), (i) during the applicable measurement period or (ii) subsequent to the end of the applicable measurement period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving proformaeffect to such incurrence or repayment of Indebtedness, to the extent required, as if the same had occurred on the first day of the applicable measurement period and any such Indebtedness that is incurred (including by assumption or guarantee) (A) shall be deemed to have been outstanding for the entirety of shall measurement period and (B) that has a floating or formula rate of interest shall have an implied rate of interest for the applicable period determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as of the relevant date of determination.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

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“Qualified Unsecured Issuances” means one or more issuances by the US Borrower of unsecured Indebtedness (which may include unsecured term debt, unsecured private placements or unsecured 144A offerings and Indebtedness which becomes secured solely by a Lien that is permitted pursuant to Section 11.2(l)); provided that such Indebtedness shall be subject to each of the following conditions:

(a) the terms and conditions of such Indebtedness (and terms and conditions of the documents governing such Indebtedness) shall be market terms and conditions that are no more restrictive than the corresponding terms and conditions of this Agreement and the other Loan Documents and, in any event, such terms and conditions shall include, without limitation, such Indebtedness having no restrictions, limitations or encumbrances on the ability of any Borrower or any its Subsidiaries to incur Liens to secure the Obligations (other than customary equal and ratable provisions that would permit the Obligations to be secured on at least a pari passu basis with such Indebtedness);

(b) the Administrative Agent shall have received an Officer’s Compliance Certificate (in form and substance satisfactory to the Administrative Agent) evidencing that immediately before and after giving effect to the incurrence of the Indebtedness in such Qualified Unsecured Issuance on a Pro Forma Basis, (i) no Default or Event of Default shall exist and (ii) the Average Total Leverage Ratio shall be less than 3.25 to 1.00;

(c) such Indebtedness shall not be guaranteed by any person or entity that has not also guaranteed all of the Obligations; and

(d) the Obligations shall rank at least paripassu with the Indebtedness incurred pursuant to such Qualified Unsecured Issuance.

“Recipient” means (a) the Administrative Agent, (b) any Lender, (c) any Issuing Lender, (d) the Canadian Dollar Lender and (e) the Euro Lender, as applicable.

“Reference Time” with respect to any setting of the then-current Benchmark for any Currency means (a) if such Benchmark is a Daily Simple RFR, then four (4) RFR Business Days prior to (i) if the date of such setting is an RFR Business Day, such date or (ii) if the date of such setting is not an RFR Business Day, the RFR Business Day immediately preceding such date, (b) if such Benchmark is an Adjusted Eurocurrency Rate, then (i) in the case of Dollars, 11:00 a.m. (London time) on the day that is two (2) Eurocurrency Banking Days preceding the date of such setting, and (ii) in the case of Euros, 11:00 a.m. (Brussels time) on the day that is two (2) Eurocurrency Banking Days preceding the date of such setting, (c) if such Benchmark is the CDOR Rate then 11:00 a.m. (Toronto, Ontario time) on the day that is two (2) Canadian Business Days preceding the date of such setting and (d) otherwise, then the time determined by the Administrative Agent, including in accordance with the Benchmark Replacement Conforming Changes.

“Register” has the meaning assigned thereto in Section 15.11(c).

“Reimbursement Obligation” means the obligation of the US Borrower to reimburse any Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Relevant Governmental Body” means (a) with respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, the FRB or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the FRB or the Federal Reserve Bank of New York, or any successor thereto and (b) with respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, any Alternative Currency, (1) the central bank for the Currency in which such Obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, or any central bank or other supervisor which is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement or (2)

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any working group or committee officially endorsed or convened by (A) the central bank for the Alternative Currency in which such Obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, (B) any central bank or other supervisor that is responsible for supervising either (i) such Benchmark Replacement or (ii) the administrator of such Benchmark Replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof.

“Rental Expense” means, with respect to the US Borrower and its Subsidiaries for any period, the aggregate fixed amounts payable with respect to Operating Leases of the US Borrower and its Subsidiaries for such period, determined on a Consolidated basis in accordance with GAAP.

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Credit Party or any other officer of a Credit Party reasonably acceptable to the Administrative Agent. Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.

“Revaluation Date” means each of the following: (a) each date of a borrowing of a Loan denominated in an Alternative Currency, as applicable, but only as to the amounts so borrowed on such date, (b) each date of a continuation of a Loan denominated in an Alternative Currency pursuant to the terms of this Agreement, but only as to the amounts so continued on such date, and (c) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require.

“Revolving Credit Commitment” means (a) as to any Revolving Credit Lender, the obligation of such Lender to make Revolving Credit Loans to the account of any Borrower hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving Credit Lender’s name on the Register, as the same may be increased, reduced or modified at any time or from time to time pursuant to the terms hereof, including, without limitation, Section 2.9, and (b) as to all Revolving Credit Lenders, the aggregate commitment of all Revolving Credit Lenders to make Revolving Credit Loans, as such amount may be increased, reduced or modified at any time or from time to time pursuant to the terms hereof, including, without limitation, Section 2.9. The Revolving Credit Commitment of all Revolving Credit Lenders on the Closing Date shall be $750,000,000. The Revolving Credit Commitment of each Revolving Credit Lender on the Closing Date is set forth opposite the name of such Lender on Schedule 1.1(b).

“Revolving Credit Commitment Percentage” means, as to any Revolving Credit Lender at any time, the ratio of (a) the amount of the Revolving Credit Commitment of such Revolving Credit Lender to (b) the Revolving Credit Commitment of all Revolving Credit Lenders. The Revolving Credit Commitment Percentage of each Revolving Credit Lender on the Closing Date is set forth opposite the name of such Lender on Schedule 1.1(b).

“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations, Swingline Loans, Canadian Dollar Loans and Euro Loans at such time.

“Revolving Credit Facility” means the revolving credit facility established pursuant to Article II (including any increase in such revolving credit facility established pursuant to Section 2.9).

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“Revolving Credit Lender” means any Lender with a Revolving Credit Commitment.

“Revolving Credit Loans” means any revolving credit loan denominated in Dollars made to the US Borrower pursuant to Section 2.1, and all such revolving credit loans collectively as the context requires.

“Revolving Credit Maturity Date” means the earliest to occur of (a) September 25, 2026 subject to the extension thereof pursuant to Section 2.10, (b) the date of termination of all of the Revolving Credit Commitments by the Borrowers pursuant to Section 2.6, or (c) the date of termination of all of the Revolving Credit Commitments pursuant to Section 13.2(a); provided, however, that the Revolving Credit Maturity Date of any Lender that is a Non-Extending Lender to any requested extension pursuant to Section 2.10 shall be the Revolving Credit Maturity Date in effect immediately prior to the applicable Extension Date for all purposes of this Agreement.

“Revolving Credit Note” means a promissory note made by the US Borrower in favor of a Revolving Credit Lender evidencing the Revolving Credit Loans made by such Revolving Credit Lender, substantially in the form attached as Exhibit A-1 hereto, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“RFR” means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, on and after the USD LIBOR Transition Date, SOFR.

“RFR Business Day” means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, on and after the USD LIBOR Transition Date, any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities; provided, that for purposes of notice requirements in Sections 2.4(a), 2.5(c), 4.2(a), 4.4(a) and 5.2, in each case, such day is also a Business Day.

“RFR Loan” means a Daily Simple RFR Loan or a Term RFR Loan, as the context may require.

“RFR Rate Day” has the meaning assigned thereto in the definition of “Daily Simple RFR”.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.

“Sanctioned Country” means at any time, a country or territory which is itself the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Sudan, Syria and Crimea).

“Sanctioned Person” means (a) a Person (i) named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time or (ii) officially named as a sanctioned Person by the government of Canada, or (b) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by the OFAC.

“Sanctions” means any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the government of Canada or the United States (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority with jurisdiction over any Lender, a Borrower or any of its Subsidiaries or Affiliates.

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“Screen Rate” means, for any Eurocurrency Rate Loan denominated in Dollars, the USD LIBOR Rate, for any Eurocurrency Rate Loan denominated in Euros, the EURIBOR Rate and for any CDOR Rate Loan, the CDOR Rate.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Second Delayed Draw Funding Deadline” means the earlier of (a) the date on which the Initial Term Loan Commitment is fully funded and (b) January 10, 2022.

“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“Solvent” means, as to the US Borrower and its Subsidiaries on a particular date, that any such Person (a) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to pay its debts as they mature, (b) has assets having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (c) does not believe that it will incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature.

“Special Purpose Subsidiary” means Superior Commerce and any other Subsidiary that is formed to facilitate an Accounts Securitization, but only so long such Person (a) owns no assets (other than the Transferred Assets in connection with an Accounts Securitization), (b) conducts no business and has no operations other than those reasonably necessary to facilitate an Accounts Securitization, (c) has no Indebtedness other than in connection with an Accounts Securitization and (d) is not a guarantor of, and does not provide any credit support, for any Indebtedness (other than in connection with an Accounts Securitization).

“Spot Rate” means, for a Currency, the rate determined for such Currency by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such Currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business Days prior to the date as of which the foreign exchange computation is made; providedthat the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such Currency.

“Spread Adjusted SOFR” means with respect to any RFR Business Day, a rate per annum equal to the sum of (a) the secured overnight financing rate for such RFR Business Day plus (b) 0.26161% (26.161 basis points).

“Spread Adjusted Term SOFR” means, for any Available Tenor and Interest Period, a rate per annum equal to the sum of (a) the forward-looking term rate for a period comparable to such Available Tenor based on the SOFR that is published by an authorized benchmark administrator and is displayed on a screen or other information service, each as identified or selected by the Administrative Agent in its reasonable discretion at approximately a time and as of a date prior to the commencement of such Interest Period determined by the Administrative Agent in its reasonable discretion in a manner substantially consistent with market practice and (b) (i) 0.11448% (11.448 basis points) for an Available Tenor of one-month’s duration, (ii) 0.26161% (26.161 basis points) for an Available Tenor of three-months’ duration, and (iii) 0.42826% (42.826 basis points) for an Available Tenor of six-months’ duration.

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“Subordinated Indebtedness” means the collective reference to any Indebtedness of the US Borrower or any Subsidiary subordinated in right and time of payment to the Obligations and containing such other terms and conditions, in each case as are satisfactory to the Administrative Agent.

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the US Borrower.

“Subsidiary Borrowers” means, collectively, the Canadian Borrower and the Euro Borrower.

“Subsidiary Guarantors” means, collectively, all direct or indirect Domestic Subsidiaries of the US Borrower (other than a Special Purpose Subsidiary) in existence on the Closing Date or which becomes a party to the Subsidiary Guaranty Agreement pursuant to Section 9.11.

“Subsidiary Guaranty Agreement” means the unconditional guaranty agreement of even date herewith executed by the Subsidiary Guarantors in favor of the Administrative Agent for the ratable benefit of itself and the Lenders, as amended, restated, supplemented or otherwise modified from time to time.

“Superior Commerce” means Superior Commerce LLC, a Delaware limited liability company, and its successors and assigns.

“Swap Obligation” means, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” means the lesser of (a) $40,000,000and (b) the Revolving Credit Commitment.

“Swingline Facility” means the swingline facility established pursuant to Section 2.3.

“Swingline Lender” means Wells Fargo in its capacity as swingline lender hereunder or any successor thereto.

“Swingline Loan” means any swingline loan made by the Swingline Lender to the US Borrower pursuant to Section 2.3, and all such swingline loans collectively as the context requires.

“Swingline Note” means a promissory note made by the US Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-2 hereto, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“Swingline Termination Date” means the first to occur of (a) the resignation of Wells Fargo as Administrative Agent in accordance with Section 14.6 and (b) the Revolving Credit Maturity Date.

“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

“TARGET Day” means any day on which TARGET2 is open for the settlement of payments in Euros.

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“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

“Term Loan Commitment” means either an Initial Term Loan Commitment or an Incremental Term Loan Commitment, as applicable.

“Term Loan Facility” means the term loan facility established pursuant to Article IV (including any new term loan facility established pursuant to Section 2.9).

“Term Loan Lender” means any Lender with a Term Loan Commitment and/or outstanding Term Loans.

“Term Loan Maturity Date” means the first to occur of (a) September 25, 2026 and (b) the date of acceleration of the Initial Term Loans pursuant to Section 13.2(a).

“Term Loan Note” means a promissory note made by the Borrowers in favor of a Term Loan Lender evidencing the portion of the Initial Term Loans made by such Term Loan Lender, substantially in the form attached as Exhibit A-5, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“Term Loans” means the Initial Term Loan and, if applicable, the Incremental Term Loans, and “Term Loan” means any of such Term Loans.

“Term RFR” means, with respect to Dollars, for any Interest Period, a rate per annum equal to the greater of (a) Spread Adjusted Term SOFR and (b) the Floor.

“Term RFR Loan” means a Loan that bears interest at a rate based on Term RFR other than pursuant to clause (c) of the definition of “Base Rate”.

“Term RFR Notice” means a notification by the Administrative Agent to the Lenders and the US Borrower of the occurrence of a Term RFR Transition Event.

“Term RFR Transition Date” means, in the case of a Term RFR Transition Event, the date that is thirty (30) calendar days after the Administrative Agent has provided the related Term RFR Notice to the Lenders and the US Borrower pursuant to Section 5.8(c)(i)(C).

“Term RFR Transition Event” means, with respect to any Currency for any Interest Period, the determination by the Administrative Agent that (a) the applicable Term RFR for such Currency has been recommended for use by the Relevant Governmental Body and (b) the administration of such Term RFR is administratively feasible for the Administrative Agent.

“Termination Event” means the occurrence of any of the following, except for any such event or condition that could not reasonably be expected to have a Material Adverse Effect: (a) a “reportable event” described in Section 4043 of ERISA for which the thirty (30) day notice requirement has not been waived by the PBGC, or (b) the withdrawal of the US Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the

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appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien pursuant to Section 430(k) of the Code or Section 303(k) of ERISA, or (g) the determination that any Pension Plan or Multiemployer Plan is considered an at risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 or 432 of the Code or Sections 303, 304 or 305 of ERISA or (h) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA or (j) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party or any ERISA Affiliate.

“Termination Value” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate of a Lender).

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure and the outstanding portion of the Initial Term Loans made by such Lender at such time.

“Total Funded Indebtedness” means, with respect to the US Borrower and its Subsidiaries at any date and without duplication, the sum of the following:

(a)    all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b)    all obligations to pay the deferred purchase price of property or services of any such Person (including, without limitation, all obligations under non-competition, earn-out or similar agreements), except trade payables arising in the ordinary course of business not more than ninety (90) days past due;

(c)    the Attributable Indebtedness of such Person with respect to such Person’s obligations in respect of Capital Leases and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d)    all indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(e)    all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including, without limitation, any Reimbursement Obligation, and banker’s acceptances issued for the account of any such Person; and

(f)    all Guaranty Obligations of any such Person with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above.

For all purposes hereof, the Total Funded Indebtedness of any Person shall include the indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

“Total Non-Revolving Funded Indebtedness” means, Total Funded Indebtedness other than Total Revolving Funded Indebtedness.

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“Total Revolving Funded Indebtedness” means, Indebtedness incurred under the Revolving Credit Facility (including Indebtedness incurred pursuant to an Incremental Revolving Credit Facility Increase).

“Transferred Assets” has the meaning assigned thereto in the definition of “Accounts Securitization”.

“UCC” means the Uniform Commercial Code as in effect in the State of New York, as amended or modified from time to time.

“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 430 of the Code for the applicable plan year.

“Uniform Customs” means the Uniform Customs and Practice for Documentary Credits (2007 Revision), effective July 2007 International Chamber of Commerce Publication No. 600.

“United States” means the United States of America.

“US Borrower” has the meaning assigned thereto in the introductory paragraph hereto.

“US Borrower Guaranteed Obligations” has the meaning assigned thereto in Section 12.1(a).

“USD LIBOR” has the meaning assigned thereto in the definition of “Eurocurrency Rate”.

“USD LIBOR Rate” has the meaning assigned thereto in the definition of “Eurocurrency Rate”.

“USD LIBOR Transition Date” means, the earlier of (a) the date that all Available Tenors of USD LIBOR have either (i) permanently or indefinitely ceased to be provided by IBA; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of USD LIBOR or (ii) been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (b) the Early Opt-in Effective Date.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness, in each case of clauses (a) and (b), without giving effect to the application of any prior prepayment to such installment, sinking fund, serial maturity or other required payment of principal.

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“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association, and its successors.

“Wholly-Owned” means, with respect to a Subsidiary, that all of the shares of Capital Stock of such Subsidiary are, directly or indirectly, owned or controlled by the US Borrower and/or one or more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the US Borrower).

“Write-Down and Conversion Powers” means (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.2Other Definitions and Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (j) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”, and (k) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

SECTION 1.3Accounting Terms.

All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 8.1(b), except as otherwise specifically prescribed herein (including, without limitation, as prescribed by Section 15.10). Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the US Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

SECTION 1.4Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to

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the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Capital Stock at such time.

SECTION 1.5UCC Terms. Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

SECTION 1.6Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

SECTION 1.7References to Agreement and Laws. Unless otherwise expressly provided herein, (a) references to formation documents, governing documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

SECTION 1.8Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

SECTION 1.9Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time.

SECTION 1.10Covenant Compliance Generally. For purposes of determining compliance under Sections 11.1, 11.2, 11.3, 11.5 and 11.6, any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating Net Income in the most recent annual financial statements of the US Borrower and its Subsidiaries delivered pursuant to Section 8.1(b). Notwithstanding the foregoing, for purposes of determining compliance with Sections 11.1, 11.2 and 11.3, with respect to any amount of Indebtedness or investment in a currency other than Dollars, no breach of any basket contained in such sections shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or investment is incurred; provided that for the avoidance of doubt, the foregoing provisions of this Section 1.10 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or investment may be incurred at any time under such Sections.

SECTION 1.11Rates. The interest rate on Loans denominated in Dollars or an Alternative Currency may be determined by reference to a benchmark rate that is, or may in the future become, the subject of regulatory reform or cessation. Regulators have signaled the need to use alternative reference rates for some of these benchmark rates and, as a result, such benchmark rates may cease to comply with applicable laws and regulations, may be permanently discontinued or the basis on which they are calculated may change. The London interbank offered rate, which may be one of the benchmark rates with reference to which the interest rate on Loans may be determined, is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. On March 5, 2021, the ICE Benchmark Administration (“IBA”), the administrator of the London interbank offered rate, and the Financial Conduct Authority (the “FCA”), the regulatory supervisor of IBA, announced in public statements (the “Announcements”) that the final publication or representativeness date for the London interbank offered rate for: (a) Euros will be December 31, 2021, (b) Dollars for 1-week and 2-month tenor settings will be December 31, 2021 and (c) Dollars for overnight, 1-month, 3-month, 6-month and 12-month tenor settings will be June 30, 2023. No successor administrator for IBA was identified in such Announcements. As a result, it is possible that commencing immediately after such dates, the London interbank offered rate for such currencies and tenors may no

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longer be available or may no longer be deemed a representative reference rate upon which to determine the interest rate on applicable Loans. There is no assurance that the dates set forth in the Announcements will not change or that IBA or the FCA will not take further action that could impact the availability, composition or characteristics of any London interbank offered rate. Public and private sector industry initiatives have been and continue, as of the date hereof, to be underway to implement new or alternative reference rates to be used in place of London interbank offered rates. In the event that the London interbank offered rate or any other then-current Benchmark is no longer available or in certain other circumstances set forth in Section 5.8(c), such Section 5.8(c) provides a mechanism for determining an alternative rate of interest. The Administrative Agent will notify the US Borrower, pursuant to Section 5.8(c), of any change to the reference rate upon which the interest rate on Loans is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, (i) the continuation of, administration of, submission of, calculation of or any other matter related to the London interbank offered rate, the rates in the definition of “Eurocurrency Rate,” “LIBOR Market Index Rate” or any Benchmark, any component definition thereof or rates referenced in the definition thereof or with respect to any alternative, successor or replacement rate thereto (including any then-current Benchmark or any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to Section 5.8(c), will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, such Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (ii) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. The Administrative Agent and its Affiliates or other related entities may engage in transactions that affect the calculation of a Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the US Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any Benchmark, any component definition thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the US Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation, the effect of any of the foregoing, or of any Benchmark Replacement Conforming Changes.

SECTION 1.12 Exchange Rates; Currency Equivalents.

(a)The Administrative Agent shall determine the Dollar Amount of Extensions of Credit denominated in Alternative Currencies. Such Dollar Amount shall become effective as of such Revaluation Date and shall be the Dollar Amount of such amounts until the next Revaluation Date to occur.

(b)Wherever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of a Loan, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such borrowing or Loan is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Amount of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent.

ARTICLE II

REVOLVING CREDIT FACILITY

SECTION 2.1Revolving Credit Loans. Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties set forth herein, each Revolving Credit Lender severally agrees to make Revolving Credit Loans to the US Borrower in Dollars from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date as requested by the US Borrower in accordance with the terms of Section 2.4; provided that, based upon the Dollar Amount of all outstanding Loans (other than Term Loans) and L/C Obligations, (a) the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to any amount requested) shall not exceed the Revolving Credit Commitment less the sum of (i) all outstanding Canadian Dollar Loans, (ii) all

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outstanding Euro Loans, (iii) all outstanding Swingline Loans and (iv) all outstanding L/C Obligations and (b) the aggregate principal amount of all outstanding Revolving Credit Loans from any Revolving Credit Lender to the US Borrower shall not at any time exceed such Revolving Credit Lender’s Revolving Credit Commitment less such Revolving Credit Lender’s Revolving Credit Commitment Percentage of (i) all outstanding Canadian Dollar Loans, (ii) all outstanding Euro Loans, (iii) all outstanding Swingline Loans and (iv) all outstanding L/C Obligations. Each Revolving Credit Loan by a Revolving Credit Lender shall be in a principal amount equal to such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion. Subject to the terms and conditions hereof, the US Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.

SECTION 2.2Alternative Currency Loans.

(a)Canadian Dollar Loans.

(i)Availability. Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties set forth herein, the Canadian Dollar Lender may in its sole discretion make Canadian Dollar Loans to the Canadian Borrower in Canadian Dollars from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date as requested by the US Borrower, on behalf of the Canadian Borrower, in accordance with the terms of Section 2.4; provided that, based upon the Dollar Amount of all outstanding Loans (other than Term Loans) and L/C Obligations, the aggregate principal amount of all outstanding Canadian Dollar Loans (after giving effect to any amount requested) shall not exceed the lesser of (A) the Revolving Credit Commitment less the sum of (1) all outstanding Revolving Credit Loans, (2) all outstanding Euro Loans, (3) all outstanding Swingline Loans and (4) all outstanding L/C Obligations and (B) the Canadian Dollar Commitment. Subject to the terms and conditions hereof, the Canadian Borrower may borrow, repay and reborrow Canadian Dollar Loans hereunder until the Revolving Credit Maturity Date.

(ii)Refunding of Canadian Dollar Loans.

(A)Upon demand of the Canadian Dollar Lender or upon the occurrence and during the continuance of an Event of Default (including, without limitation, a Payment Event of Default with respect to a Canadian Dollar Loan), each Canadian Dollar Loan may, at the discretion of the Canadian Dollar Lender, be converted immediately to a Base Rate Loan funded in Dollars by the Revolving Credit Lenders in an amount equal to the Dollar Amount of such Canadian Dollar Loan; provided that the Borrowers shall pay to the Canadian Dollar Lender any and all costs, fees and other expenses incurred by the Canadian Dollar Lender in effecting such conversion. Such Base Rate Loan shall thereafter be reflected as a Revolving Credit Loan of the Revolving Credit Lenders to the US Borrower on the books and records of the Administrative Agent and the US Borrower shall lend the proceeds of such Base Rate Loan to the Canadian Borrower to repay the applicable Canadian Dollar Loans. Each Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of such Revolving Credit Loan as required to repay Canadian Dollar Loans outstanding to the Canadian Dollar Lender upon such demand by the Canadian Dollar Lender in no event later than 1:00 p.m. on the next succeeding Business Day after such demand is made. No Revolving Credit Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of any Revolving Credit Loan required to repay such Canadian Dollar Loan shall be affected by any other Revolving Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of such Revolving Credit Loan, nor shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased (other than as provided in Section 5.16(a)(iv)) as a result of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment Percentage of such Revolving Credit Loan.

(B)The Canadian Borrower shall pay to the Canadian Dollar Lender on demand the amount of such Canadian Dollar Loans to the extent that the Revolving Credit Lenders fail to refund in full the outstanding Canadian Dollar Loans requested or

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required to be refunded. In addition, the Canadian Borrower hereby authorizes the Administrative Agent to charge any account maintained by the Canadian Borrower with the Canadian Dollar Lender or any Affiliate thereof (up to the amount available therein) in order to immediately pay the Canadian Dollar Lender the amount of such Canadian Dollar Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Canadian Dollar Loans requested or required to be refunded.

(C)If any portion of any such amount paid to the Canadian Dollar Lender (including any amount paid from a Base Rate Loan funded in Dollars pursuant to clause (A) above) shall be recovered by or on behalf of the Canadian Borrower or US Borrower from the Canadian Dollar Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages.

(D)Each Revolving Credit Lender acknowledges and agrees that its obligation to refund Canadian Dollar Loans in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article VI. Further, each Revolving Credit Lender acknowledges and agrees that if prior to the refunding of any outstanding Canadian Dollar Loans pursuant to this Section, a Bankruptcy Event of Default shall have occurred, each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been made to refund such Canadian Dollar Loans, purchase an undivided participating interest in such Canadian Dollar Loans in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Canadian Dollar Loans. Each Revolving Credit Lender will immediately transfer to the Administrative Agent, for the account of the Canadian Dollar Lender, in immediately available funds in Canadian Dollars, the amount of its participation. Whenever, at any time after the Canadian Dollar Lender has received from any Revolving Credit Lender such Revolving Credit Lender’s participating interest in the refunded Canadian Dollar Loans, the Canadian Dollar Lender receives any payment on account thereof, the Canadian Dollar Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded).

(E)In the event that any Revolving Credit Lender fails to make payment to the Canadian Dollar Lender of any amount due under this Section, the Administrative Agent, on behalf of the Canadian Dollar Lender, shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Revolving Credit Lender hereunder until the Canadian Dollar Lender receives such payment from such Lender or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Revolving Credit Lender fails to make payment to the Canadian Dollar Lender of any amount due under this Section, such Revolving Credit Lender shall be deemed, at the option of the Administrative Agent, to have unconditionally and irrevocably purchased from the Canadian Dollar Lender, without recourse or warranty, an undivided interest and participation in the applicable Canadian Dollar Loan, and such interest and participation may be recovered from such Revolving Credit Lender together with interest thereon at the Federal Funds Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.

(b)Euro Loans.

(i)Availability. Subject to the terms and conditions of this Agreement, and in reliance upon the representations and warranties set forth herein, the Euro Lender may in its sole discretion make Euro Loans to the Euro Borrower in Euros from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date as requested by the US

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Borrower, on behalf of the Euro Borrower, in accordance with the terms of Section 2.4; provided that, based upon the applicable Dollar Amount of all outstanding Loans (other than Term Loans) and L/C Obligations, the aggregate principal amount of all outstanding Euro Loans (after giving effect to any amount requested) shall not exceed the lesser of (A) the Revolving Credit Commitment less the sum of (1) all outstanding Revolving Credit Loans, (2) all outstanding Canadian Dollar Loans, (3) all outstanding Swingline Loans and (4) all outstanding L/C Obligations and (B) the Euro Commitment. Subject to the terms and conditions hereof, the Euro Borrower may borrow, repay and reborrow Euro Loans hereunder until the Revolving Credit Maturity Date.

(ii)Refunding of Euro Loans.

(A)Upon demand of the Euro Lender or upon the occurrence and during the continuance of an Event of Default (including, without limitation, a Payment Event of Default with respect to Euro Loans), each Euro Loan may, at the discretion of the Euro Lender, be converted immediately to a Base Rate Loan funded in Dollars by the Revolving Credit Lenders in an amount equal to the Dollar Amount of such Euro Loan; provided that the Borrowers shall pay to the Euro Lender any and all costs, fees and other expenses incurred by the Euro Lender in effecting such conversion. Such Base Rate Loan shall thereafter be reflected as a Revolving Credit Loan of the Revolving Credit Lenders to the US Borrower on the books and records of the Administrative Agent and the US Borrower shall lend the proceeds of such Base Rate Loan to the Euro Borrower to repay the applicable Euro Loans. Each Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of such Revolving Credit Loan as required to repay Euro Loans outstanding to the Euro Lender upon such demand by the Euro Lender in no event later than 1:00 p.m. on the next succeeding Business Day after such demand is made. No Revolving Credit Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of any Revolving Credit Loan required to repay such Euro Loan shall be affected by any other Revolving Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of such Revolving Credit Loan, nor shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased (other than as provided in Section 5.16(a)(iv)) as a result of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment Percentage of such Revolving Credit Loan.

(B)The Euro Borrower shall pay to the Euro Lender on demand the amount of such Euro Loans to the extent that the Revolving Credit Lenders fail to refund in full the outstanding Euro Loans requested or required to be refunded. In addition, the Euro Borrower hereby authorizes the Administrative Agent to charge any account maintained by the Euro Borrower with the Euro Lender or any Affiliate thereof(up to the amount available therein) in order to immediately pay the Euro Lender the amount of such Euro Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Euro Loans requested or required to be refunded.

(C)If any portion of any such amount paid to the Euro Lender shall be recovered by or on behalf of the Euro Borrower or US Borrower from the Euro Lender (including any amount paid from a Base Rate Loan funded in Dollars pursuant to clause (A) above) in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages.

(D)Each Revolving Credit Lender acknowledges and agrees that its obligation to refund Euro Loans in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article VI. Further, each Revolving Credit Lender acknowledges and agrees that if prior to the refunding of any outstanding Euro Loans pursuant to this Section, a Bankruptcy Event of Default shall

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have occurred, each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been made to refund such Euro Loans, purchase an undivided participating interest in such Euro Loans in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Euro Loans. Each Revolving Credit Lender will immediately transfer to the Administrative Agent, for the account of the Euro Lender, in immediately available funds in Euros, the amount of its participation. Whenever, at any time after the Euro Lender has received from any Revolving Credit Lender such Revolving Credit Lender’s participating interest in the refunded Euro Loans, the Euro Lender receives any payment on account thereof, the Euro Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded).

(E)In the event that any Revolving Credit Lender fails to make payment to the Euro Lender of any amount due under this Section, the Administrative Agent, on behalf of the Euro Lender, shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Revolving Credit Lender hereunder until the Euro Lender receives such payment from such Lender or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Revolving Credit Lender fails to make payment to the Euro Lender of any amount due under this Section, such Revolving Credit Lender shall be deemed, at the option of the Administrative Agent, to have unconditionally and irrevocably purchased from the Euro Lender, without recourse or warranty, an undivided interest and participation in the applicable Euro Loan, and such interest and participation may be recovered from such Revolving Credit Lender together with interest thereon at the Federal Funds Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.

SECTION 2.3Swingline Loans.

(a)Availability. Subject to the terms and conditions of this Agreement, the Swingline Lender may in its sole discretion make Swingline Loans to the US Borrower from time to time from the Closing Date through, but not including, the Swingline Termination Date; provided, that (i) all Swingline Loans shall be denominated in Dollars and (ii) based upon the Dollar Amount of all outstanding Loans (other than Term Loans) and L/C Obligations, the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested), shall not exceed the lesser of (A) the Revolving Credit Commitment less the sum of (1) all outstanding Revolving Credit Loans, (2) all outstanding Canadian Dollar Loans, (3) all outstanding Euro Loans and (4) all outstanding L/C Obligations and (B) the Swingline Commitment. Subject to the terms and conditions hereof, the US Borrower may borrow, repay and reborrow Swingline Loans hereunder until the Swingline Termination Date.

(b)Refunding.

(i)Swingline Loans shall be refunded by the Revolving Credit Lenders on demand by the Swingline Lender. Such refundings shall be made by the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Revolving Credit Lenders on the books and records of the Administrative Agent. Each Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than 1:00 p.m. on the next succeeding Business Day after such demand is made. No Revolving Credit Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by any other Revolving Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased (other than as provided in Section 5.16(a)(iv)) as a result of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment Percentage of a Swingline Loan.

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(ii)The US Borrower shall pay to the Swingline Lender on demand the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, the US Borrower hereby authorizes the Administrative Agent to charge any account maintained by the US Borrower with the Swingline Lender or any Affiliate thereof (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded.

(iii)If any portion of any such amount paid to the Swingline Lender (including any amount paid from a Base Rate Loan funded in Dollars pursuant to clause (i) above) shall be recovered by or on behalf of the US Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages.

(iv)Each Revolving Credit Lender acknowledges and agrees that its obligation to refund Swingline Loans in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article VI. Further, each Revolving Credit Lender acknowledges and agrees that if prior to the refunding of any outstanding Swingline Loans pursuant to this Section, a Bankruptcy Event of Default shall have occurred, each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been made, purchase an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Swingline Loan. Each Revolving Credit Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Revolving Credit Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount. Whenever, at any time after the Swingline Lender has received from any Revolving Credit Lender such Revolving Credit Lender’s participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s participating interest was outstanding and funded).

(v)In the event that any Revolving Credit Lender fails to make payment to the Swingline Lender of any amount due under this Section, the Administrative Agent, on behalf of the Swingline Lender, shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Revolving Credit Lender hereunder until the Swingline Lender receives such payment from such Revolving Credit Lender or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Revolving Credit Lender fails to make payment to the Swingline Lender of any amount due under this Section, such Revolving Credit Lender shall be deemed, at the option of the Administrative Agent, to have unconditionally and irrevocably purchased from the Swingline Lender, without recourse or warranty, an undivided interest and participation in the applicable Swingline Loan, and such interest and participation may be recovered from such Lender together with interest thereon at the Federal Funds Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.

SECTION 2.4Procedure for Advances of Revolving Credit Loans, Canadian Dollar Loans, Euro Loans and Swingline Loans.

(a)Requests for Borrowing. The US Borrower, on behalf of itself and the Subsidiary Borrowers, shall give the Administrative Agent irrevocable prior written notice substantially in the form attached hereto as Exhibit B-1 (a “Notice of Revolving Borrowing”) not later than (i) 12:00 noon on the same Business Day as each Base Rate Loan and each Swingline Loan, (ii) 12:00 noon at least three (3) Eurocurrency Banking Days before each Eurocurrency Rate Loan denominated in Dollars, (iii) 12:00 noon at least one (1) Canadian Business Day before each Canadian Dollar Loan, (iv) 12:00 noon at least

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four (4) Eurocurrency Banking Days before each Eurocurrency Rate Loan denominated in Euros, (v) 12:00 noon at least five (5) RFR Business Days before each Daily Simple RFR Loan and (vi) 12:00 noon at least three (3) RFR Business Days before any RFR Loan (other than a Daily Simple RFR Loan) of its intention to borrow, specifying:

(A)if the applicable Borrower is the US Borrower, the Canadian Borrower or the Euro Borrower;

(B)the date of such borrowing, which shall be a Business Day;

(C)whether such Loan is to be a Revolving Credit Loan, Swingline Loan, Canadian Dollar Loan or Euro Loan;

(D)in the case of a Revolving Credit Loan, whether such Revolving Credit Loan shall be a Eurocurrency Rate Loan, an RFR Loan or a Base Rate Loan;

(E)in the case of a Canadian Dollar Loan, whether such Canadian Dollar Loan shall be a CDOR Rate Loan or Canadian Base Rate Loan;

(F)if such Loan is a Eurocurrency Rate Loan, a Term RFR Loan or a CDOR Rate Loan, the duration of the Interest Period applicable thereto;

(G)the amount of such borrowing, which shall be, (1) with respect to Base Rate Loans, in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof, (2) with respect to Eurocurrency Rate Loans denominated in Dollars or RFR Loans, in an aggregate principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof, (3) with respect to Swingline Loans, in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess thereof, (4) with respect to Canadian Base Rate Loans, in an aggregate principal amount of C$500,000 or a whole multiple of C$100,000 in excess thereof, (5) with respect to CDOR Rate Loans, in an aggregate principal amount of C$1,000,000 or a whole multiple of C$1,000,000 in excess thereof and (6) with respect to Euro Loans, in an aggregate principal amount of 1,000,000 EUR or a whole multiple of 500,000 EUR in excess thereof; and

(H)in the case of a Swingline Loan, whether such Swingline Loan shall be a LIBOR Swingline Loan or a Base Rate Swingline Loan.

A Notice of Revolving Borrowing received after the times set forth above shall be deemed received on the next Business Day, RFR Business Day, Canadian Business Day or Eurocurrency Banking Day, as applicable. The Administrative Agent shall promptly notify the Revolving Credit Lenders of each Notice of Revolving Borrowing.

(b)Disbursement of Revolving Credit Loans, Canadian Dollar Loans, Euro Loans and Swingline Loans.

(i)Not later than 1:00 p.m. on the proposed borrowing date for any Revolving Credit Loan, each Revolving Credit Lender will make available to the Administrative Agent, for the account of the US Borrower, at the office of the Administrative Agent in Dollars in funds immediately available to the Administrative Agent, such Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date.

(ii)Not later than 12:00 noon on the proposed borrowing date for any Canadian Dollar Loan, the Canadian Dollar Lender will make available to the Administrative Agent, for the account of the Canadian Borrower, at the office of the Administrative Agent in Canadian Dollars in funds immediately available to the Administrative Agent, the Canadian Dollar Loan to be made on such borrowing date.

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(iii)Not later than 12:00 noon on the proposed borrowing date for any Euro Loan, the Euro Lender will make available to the Administrative Agent, for the account of the Euro Borrower, at the office of the Administrative Agent in Euros in funds immediately available to the Administrative Agent, the Euro Loan to be made on such borrowing date.

(iv)Not later than 1:00 p.m. on the proposed borrowing date for any Swingline Loan, as applicable, the Swingline Lender will make available to the Administrative Agent, for the account of the US Borrower, at the office of the Administrative Agent in Dollars in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date.

(v)The Borrowers hereby irrevocably authorize the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section in immediately available funds by crediting or wiring such proceeds to the deposit account of the applicable Borrower identified in the most recent notice substantially in the form attached as Exhibit C hereto (a “Notice of Account Designation”) delivered by the US Borrower, on behalf of itself and the Subsidiary Borrowers, to the Administrative Agent or as may be otherwise agreed upon by the US Borrower, on behalf of itself and the Subsidiary Borrowers, and the Administrative Agent from time to time. Subject to Section 5.7 hereof, the Administrative Agent shall not be obligated to disburse any amount with respect to any Revolving Credit Loan, Canadian Dollar Loan, Euro Loan or Swingline Loan requested pursuant to this Section to the extent that such amount has not been made available by the applicable Lenders to the Administrative Agent.

(vi)Revolving Credit Loans to be made for the purpose of (A) refunding Swingline Loans shall be made by the Revolving Credit Lenders as provided in Section 2.3(b), (B) refunding Canadian Dollar Loans shall be made by the Revolving Credit Lenders as provided in Section 2.2(a)(ii), and (C) refunding Euro Loans shall be made by the Revolving Credit Lenders as provided in Section 2.2(b)(ii).

SECTION 2.5Repayment of Loans.

(a)Repayment on Revolving Credit Maturity Dateor Swingline Termination Date. The Borrowers agree to repay the outstanding principal amount of (i) all Revolving Credit Loans in full in Dollars on the Revolving Credit Maturity Date, (ii) all Canadian Dollar Loans in accordance with Section 2.2(a)(ii), and in any event, in full in Canadian Dollars on the Revolving Credit Maturity Date, (iii) all Euro Loans in accordance with Section 2.2(b)(ii), and in any event, in full in Euros on the Revolving Credit Maturity Date and (iv) all Swingline Loans in accordance with Section 2.3(b) or, if earlier, in full in Dollars on the Swingline Termination Date, together, in each case, with all accrued but unpaid interest thereon.

(b)Mandatory Repayment of Revolving Credit Loans.

(i)Aggregate Commitment. If at any time (as determined by the Administrative Agent under Section 2.5(b)(vi)), based upon the Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, (A) solely because of currency fluctuation, the outstanding principal amount of all Revolving Credit Loans plus the sum of all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations exceeds one hundred and five percent (105%) of the Revolving Credit Commitment or (B) for any other reason, the outstanding principal amount of all Revolving Credit Loans plus the sum of all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations exceeds the Revolving Credit Commitment, then, in each such case, the Borrowers shall (1) first, if (and to the extent) necessary to eliminate such excess, immediately repay outstanding Swingline Loans (and/or reduce any pending request for a borrowing of such Loans submitted in respect of such Loans on such day) by the Dollar Amount of such excess, (2) second, if (and to the extent) necessary to eliminate such excess, immediately repay outstanding Revolving Credit Loans which are Base Rate Loans or Daily Simple RFR Loans (and/or reduce any pending requests for a

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borrowing or continuation or conversion of such Loans submitted in respect of such Loans on such day) by the Dollar Amount of such excess, (3) third, if (and to the extent) necessary to eliminate such excess, immediately repay outstanding Canadian Dollar Loans which are Canadian Base Rate Loans (and/or reduce any pending requests for a borrowing or continuation or conversion of such Loans submitted in respect of such Loans on such day) by the Dollar Amount of such excess, (4) fourth, if (and to the extent) necessary to eliminate such excess, immediately repay outstanding Eurocurrency Rate Loans, Term RFR Loans or CDOR Rate Loans (and/or reduce any pending requests for a borrowing or continuation or conversion of such Loans submitted in respect of such Loans on such day) by the Dollar Amount of such excess and (5) fifth, with respect to any Letters of Credit then outstanding, make a payment of Cash Collateral into a cash collateral account opened by the Administrative Agent for the benefit of the Revolving Credit Lenders in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit (such cash collateral to be applied in accordance with Section 13.2(b)).

(ii)Canadian Dollar Commitment. If at any time (as determined by the Administrative Agent under Section 2.5(b)(vi)), based upon the Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, (A) solely because of currency fluctuation, the outstanding principal amount of all Canadian Dollar Loans exceeds one hundred five percent (105%) of the Canadian Dollar Commitment or (B) for any other reason, the outstanding principal amount of all Canadian Dollar Loans exceeds the Canadian Dollar Commitment, then, in each such case, such excess shall be immediately repaid, in Canadian Dollars, by the Canadian Borrower to the Administrative Agent for the account of the Canadian Dollar Lender.

(iii)Euro Commitment. If at any time (as determined by the Administrative Agent under Section 2.5(b)(vi)), based upon the Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, (A) solely because of currency fluctuation, the outstanding principal amount of all Euro Loans exceeds one hundred five percent (105%) of the Euro Commitment or (B) for any other reason, the outstanding principal amount of all Euro Loans exceeds the Euro Commitment, then, in each such case, such excess shall be immediately repaid, in Euros, by the Euro Borrower to the Administrative Agent for the account of the Euro Lender.

(iv)Swingline Commitment. If at any time (as determined by the Administrative Agent under Section 2.5(b)(vi)), based upon the Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, and for any reason, the outstanding principal amount of all Swingline Loans exceeds the Swingline Commitment, then, in each such case, such excess shall be immediately repaid, in Dollars, by the US Borrower to the Administrative Agent for the account of the Swingline Lender.

(v)Excess L/C Obligations. If at any time (as determined by the Administrative Agent under Section 2.5(b)(vi)), based upon the Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, and for any reason, the outstanding amount of all L/C Obligations exceeds the L/C Commitment, then, in each such case, the US Borrower shall make a payment of Cash Collateral into a cash collateral account opened by the Administrative Agent, for the benefit of itself and the Revolving Credit Lenders, in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit (such cash collateral to be applied in accordance with Section 13.2(b)).

(vi)Compliance and Payments. The Borrowers’ compliance with this Section 2.5(b) shall be tested from time to time by the Administrative Agent at its sole discretion, but in any event shall be tested on each Revaluation Date. Each such repayment pursuant to this Section 2.5(b) shall be accompanied by any amount required to be paid pursuant to Section 5.9.

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(c)Optional Repayments. The Borrowers may at any time and from time to time repay the Revolving Credit Loans, Canadian Dollar Loans, Euro Loans or Swingline Loans, in whole or in part, (i) upon at least three (3) Eurocurrency Banking Days’ irrevocable notice to the Administrative Agent with respect to Eurocurrency Rate Loans (other than Euro Loans), (ii) upon at least four (4) Eurocurrency Banking Days’ irrevocable notice to the Administrative Agent with respect to Euro Loans, (iii) upon at least one (1) Canadian Business Day’s notice to the Administrative Agent with respect to Canadian Dollar Loans, (iv) upon irrevocable notice to the Administrative Agent on the same Business Day with respect to Base Rate Loans and Swingline Loans, (v) upon three (3) RFR Business Days’ irrevocable notice to the Administrative Agent with respect to a RFR Loan (other than a Daily Simple RFR Loan) and (vi) upon five (5) RFR Business Days’ irrevocable notice to the Administrative Agent with respect to Daily Simple RFR Loans, in each case substantially in the form attached hereto as Exhibit D-1 (a “Notice of Revolving Repayment”), specifying (A) the date of repayment, (B) the amount of repayment, (C) whether the repayment is of Revolving Credit Loans, Canadian Dollar Loans, Euro Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each, (D) with respect to Revolving Credit Loans, whether the repayment is of Eurocurrency Rate Loans, RFR Loans, Base Rate Loans, or a combination thereof, and, if of a combination thereof, the amount allocable to each and (E) with respect to Canadian Dollar Loans, whether the repayment is of CDOR Rate Loans, Canadian Base Rate Loans, or a combination thereof, and if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Revolving Credit Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial repayments shall be in an aggregate amount of (i) $500,000 or a whole multiple of $100,000 in excess thereof with respect to Base Rate Loans, (ii) $1,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Eurocurrency Rate Loans denominated in Dollars or RFR Loans, (iii) C$500,000 or a whole multiple of C$100,000 in excess thereof with respect to Canadian Base Rate Loans, (iv) C$1,000,000 or a whole multiple of C$1,000,000 in excess thereof with respect to CDOR Rate Loans, (v) 1,000,000 EUR or a whole multiple of 500,000 EUR in excess thereof with respect to Euro Loans and (vi) $100,000 or a whole multiple of $100,000 in excess thereof with respect to Swingline Loans. A Notice of Revolving Repayment received after 12:00 noon on the applicable day set forth above shall be deemed received on the next Business Day, RFR Business Day, Canadian Business Day or Eurocurrency Banking Day, as applicable. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9. Notwithstanding the foregoing, any Notice of Revolving Repayment delivered in connection with any refinancing of all of the Revolving Credit Facility with the proceeds of such refinancing or of any incurrence of Indebtedness or the occurrence of some other identifiable event or condition, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or incurrence or occurrence of such other identifiable event or condition and may be revoked by the US Borrower in the event such contingency is not met (provided that the failure of such contingency shall not relieve the Borrowers from their obligations in respect thereof under Section 5.9).

(d)Limitation on Repayment of Eurocurrency Rate Loans, RFR Loans and CDOR Rate Loans. The Borrowers may not repay any Eurocurrency Rate Loan, any Term RFR Loan or any CDOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto or any Daily Simple RFR Loan on any day other than the date specified in Section 5.1(d), unless, in each case, such repayment is accompanied by any amount required to be paid pursuant to Section 5.9 hereof.

(e)Payment of Interest. Each repayment pursuant to this Section shall be accompanied by accrued interest on the amount repaid.

(f)Hedging Agreements. No repayment pursuant to this Section shall affect any Borrower’s obligations under any Hedging Agreement.

SECTION 2.6Permanent Reduction of the Revolving Credit Commitment.

(a)Voluntary Reduction. The Borrowers shall have the right at any time and from time to time, upon at least five (5) Business Days prior written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment, from time to time, in an aggregate principal amount not less than $5,000,000 or any whole multiple of $1,000,000 in excess thereof. Any reduction of the

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Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Revolving Credit Commitment Percentage. All fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination. Notwithstanding the foregoing, any notice to reduce the Revolving Credit Commitment delivered in connection with any refinancing of all of the Revolving Credit Facility with the proceeds of such refinancing or of any incurrence of Indebtedness or the occurrence of some other identifiable event or condition, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or incurrence or occurrence of such identifiable event or condition and may be revoked by the US Borrower in the event such contingency is not met (provided that the failure of such contingency shall not relieve the Borrowers from their obligations in respect thereof under Section 5.9).

(b)Corresponding Payment. Each permanent reduction permitted pursuant to this Section shall be accompanied by a payment of principal sufficient to reduce (i) the aggregate Dollar Amount of all outstanding Revolving Credit Loans, all outstanding Canadian Dollar Loans, all outstanding Euro Loans, all outstanding Swingline Loans and all outstanding L/C Obligations, as applicable, after such reduction to the Revolving Credit Commitment as so reduced, (ii) to the extent that the Canadian Dollar Commitment is reduced, the aggregate Dollar Amount of all outstanding Canadian Dollar Loans to the Canadian Dollar Commitment as so reduced, (iii) to the extent that the Euro Commitment is reduced, the aggregate Dollar Amount of all outstanding Euro Loans to the Euro Commitment as so reduced and (iv) to the extent that the Swingline Commitment is reduced, the aggregate Dollar Amount of all outstanding Swingline Loans to the Swingline Commitment as so reduced. If the Revolving Credit Commitment as so reduced is less than the aggregate amount of all outstanding Letters of Credit, the Borrowers shall be required to deposit Cash Collateral in a Cash Collateral account opened by the Administrative Agent in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Such Cash Collateral shall be applied in accordance with Section 13.2(b). Any reduction of the Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans, all outstanding Swingline Loans, all outstanding Canadian Dollar Loans and all outstanding Euro Loans (and furnishing of Cash Collateral satisfactory to the Administrative Agent for all L/C Obligations) and shall result in the termination of the Revolving Credit Commitment, the Swingline Commitment, the Canadian Dollar Commitment, the Euro Commitment and the Revolving Credit Facility. Such Cash Collateral shall be applied in accordance with Section 13.2(b). If the reduction of the Revolving Credit Commitment requires the repayment of any Eurocurrency Rate Loan, RFR Loans or any CDOR Rate Loan, such repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9 hereof.

SECTION 2.7Termination of Revolving Credit Facility. The Revolving Credit Facility and the Revolving Credit Commitments shall terminate on the Revolving Credit Maturity Date.

SECTION 2.8Nature of Obligations. The obligations of the US Borrower hereunder and under the other Loan Documents shall be joint and several with the Obligations of the Subsidiary Borrowers. The obligations of the Canadian Borrower hereunder and under the other Loan Documents shall be several in nature. The obligations of the Euro Borrower hereunder and under the other Loan Documents shall be joint and several with the Obligations of the Canadian Borrower. Notwithstanding anything herein or in any Loan Document to the contrary, the obligations of any Subsidiary Borrower shall not be joint and several with the Obligations of the US Borrower and each other Subsidiary Borrower to the extent such joint and several liability would result in adverse tax consequences to the US Borrower.

SECTION 2.9Incremental Loans.

(a)At any time following the Closing Date, the US Borrower, on behalf of the Borrowers, may by written notice to the Administrative Agent elect to request the establishment of:

(i)one or more incremental term loan commitments (any such incremental term loan commitment, an “Incremental Term Loan Commitment”) to make one or more additional term loans, including a borrowing of an additional term loan the principal amount of which will be added to the outstanding principal amount of the existing tranche of Term Loans with the latest maturity date (any such additional term loan, an “Incremental Term Loan”); or

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(ii)one or more increases in the Revolving Credit Commitments (any such increase, an “Incremental Revolving Credit Facility Increase” and, together with the Incremental Term Loan Commitments and the Incremental Term Loans, the “Incremental Increases”);

provided that (1) the total aggregate initial principal amount (as of the date of incurrence thereof) of such requested Incremental Increases shall not exceed the Incremental Facilities Limit and (2) unless otherwise agreed by the Administrative Agent, the total aggregate amount for each Incremental Increase (and the Loans made thereunder) shall not be less than a minimum principal amount of $10,000,000 or, if less, the remaining amount permitted pursuant to the foregoing clause (1). Each such notice shall specify the date (each, an “Incremental Effective Date”) on which the Borrowers propose that any Incremental Increase shall be effective, which shall be a date not less than ten (10) Business Days after the date on which such notice is delivered to Administrative Agent (or such later date as may be approved by the Administrative Agent). The US Borrower may invite any Lender, any Affiliate of any Lender and/or any Approved Fund, and/or any other Person reasonably satisfactory to the Administrative Agent, to provide an Incremental Increase (any such Person, an “Incremental Lender”). Any proposed Incremental Lender offered or approached to provide all or a portion of any Incremental Increase may elect or decline, in its sole discretion, to provide all or a portion of any Incremental Increase or any portion thereof. Any Incremental Increase shall become effective as of such Incremental Effective Date; provided that each of the following conditions has been satisfied or waived as of such Incremental Effective Date:

(A)no Default or Event of Default shall exist on such Incremental Effective Date immediately prior to or after giving effect to (1) any Incremental Increase, (2) the making of any Loans pursuant thereto and (3) any Permitted Acquisitions consummated in connection therewith;

(B)the Administrative Agent and the Lenders shall have received from the US Borrower an Officer’s Compliance Certificate demonstrating in form and substance reasonably satisfactory to the Administrative Agent, that (1) the Borrowers are in compliance with the financial covenants set forth in Section 10.1 and Section 10.2, in each case based on the financial statements most recently delivered pursuant to Section 8.1(a) or 8.1(b), as applicable, both before and after giving effect (on a Pro Forma Basis) to (x) any Incremental Increase, (y) the making of any Loans pursuant thereto (with any Incremental Increase being deemed to be fully funded) and (z) any Permitted Acquisition consummated in connection therewith;

(C)each of the representations and warranties contained in Article VII shall be true and correct in all material respects, except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true, correct and complete in all respects, on such Incremental Effective Date with the same effect as if made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date);

(D)the proceeds of any Loans made pursuant to an Incremental Increase shall be used for general corporate purposes of the Borrowers and their respective Subsidiaries (including Permitted Acquisitions);

(E)each Incremental Increase (and the Loans made thereunder) shall constitute Obligations of the Borrowers and shall be guaranteed with the other Extensions of Credit on a pari passu basis;

(F)(1)    in the case of each Incremental Term Loan (the terms of which shall be set forth in the relevant Incremental Amendment):

(a)such Incremental Term Loan will mature and amortize in a manner reasonably acceptable to the Administrative Agent, the Incremental Lenders making such Incremental Term Loan and the US

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Borrower, but will not in any event have a shorter Weighted Average Life to Maturity than the remaining Weighted Average Life to Maturity of the Initial Term Loan or a maturity date earlier than the Term Loan Maturity Date;

(b)the Applicable Margin and pricing grid, if applicable, for such Incremental Term Loan shall be determined by the Administrative Agent, the applicable Incremental Lenders and the US Borrower on the applicable Incremental Effective Date; and

(c)except as provided above, all other terms and conditions applicable to such Incremental Term Loan shall be reasonably satisfactory to the Administrative Agent and the US Borrower, except to the extent otherwise provided in this Section 2.9;

(2)in the case of each Incremental Revolving Credit Facility Increase (the terms of which shall be set forth in the relevant Incremental Amendment):

(a)such Incremental Revolving Credit Facility Increase shall mature on the Revolving Credit Maturity Date, shall bear interest and be entitled to fees, at a rate determined by the Administrative Agent, the applicable Incremental Lenders and the US Borrower, and shall otherwise be subject to the same terms and conditions as the Revolving Credit Loans; it being acknowledged and agreed that interest rate margins and/or unused fees with respect to any Incremental Revolving Credit Facility Increase may be higher than the interest rate margins and/or facility fees applicable to the then existing Revolving Credit Commitments so long as the interest rate margins and/or facility fees, as applicable, for the initial Revolving Credit Facility shall be increased so that the interest rate margins and/or facility fees, as applicable, are equal to the interest rate margins and/or facility fees for such Incremental Revolving Credit Facility Increase; provided that, in determining the interest rate margins and facility fees applicable to the Incremental Revolving Credit Facility Increase and the then existing Revolving Credit Commitments, (AA) any upfront fees payable by the Borrowers to the Lenders under the then existing Revolving Credit Commitments or any Incremental Revolving Credit Facility Increase, in each case in the initial primary syndication thereof and the effects of any and all interest rate floors (including the Floor), shall be included (with such upfront fees being equated to interest based on an assumed four-year life to maturity), (BB) customary arrangement or commitment fees payable to any Arranger (or its affiliates) in connection with the then existing Revolving Credit Commitments or to one or more arrangers (or their affiliates) of any Incremental Revolving Credit Facility Increase shall be excluded and (CC) in the event that, at the time of determination, the Applicable Margin is determined based on a pricing grid, the interest rate margins and facility fees shall be measured for purposes of this clause (F) by reference to each level of the pricing grid; and

(b)the outstanding Revolving Credit Loans and Revolving Credit Commitment Percentages of Swingline Loans, Canadian Dollar Loans, Euro Loans and L/C Obligations will be reallocated by the Administrative Agent on the applicable Incremental Effective Date among the Revolving Credit Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Facility Increase) in accordance with their revised Revolving Credit Commitment Percentages (and the Revolving Credit Lenders (including the Incremental Lenders

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providing such Incremental Revolving Credit Facility Increase) agree to make all payments and adjustments necessary to effect such reallocation and the Borrowers shall pay any and all costs required pursuant to Section 5.9 in connection with such reallocation as if such reallocation were a repayment);

(G)(1)    any Incremental Lender making any Incremental Term Loan shall be entitled to the same voting rights as the existing Term Loan Lenders under the Term Loan Facility; and

(2)any Incremental Lender with an Incremental Revolving Credit Facility Increase shall be entitled to the same voting rights as the existing Revolving Credit Lenders under the Revolving Credit Facility and any Extensions of Credit made in connection with each Incremental Revolving Credit Facility Increase shall receive proceeds of prepayments on the same basis as the other Revolving Credit Loans made hereunder;

(H)such Incremental Increases shall be effected pursuant to one or more Incremental Amendments executed and delivered by the US Borrower, the Administrative Agent and the applicable Incremental Lenders (which Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.9); and

(I)the Borrowers shall deliver or cause to be delivered any customary legal opinions or other documents (including a resolution duly adopted by the board of directors (or equivalent governing body) of each Credit Party authorizing such Incremental Increase and the Loans made thereunder), and other instruments and documents of the type required by Section 9.11 in each case as may be reasonably requested by the Administrative Agent in connection with any such transaction.

(b)(i)    The Incremental Term Loans shall be deemed to be Term Loans; provided that any such Incremental Term Loan that is not added to the outstanding principal balance of a pre-existing Term Loan shall be designated as a separate tranche of Term Loans for all purposes of this Agreement.

(ii)The Incremental Lenders shall be included in any determination of the Required Lenders, and, unless otherwise agreed, the Incremental Lenders will not constitute a separate voting class for any purposes under this Agreement.

(c)(i)    On any Incremental Effective Date on which any Incremental Term Loan Commitment becomes effective, subject to the foregoing terms and conditions, each Incremental Lender with an Incremental Term Loan Commitment shall make, or be obligated to make, an Incremental Term Loan to the applicable Borrower in accordance with, and at the times specified in the applicable Incremental Amendment and the request for such Incremental Term Loan in an amount equal to its Incremental Term Loan Commitment and shall become a Term Loan Lender hereunder with respect to its allocated portion of such Incremental Term Loan Commitment and the Incremental Term Loan made pursuant thereto.

(ii)On any Incremental Effective Date on which any Incremental Revolving Credit Facility Increase becomes effective, subject to the foregoing terms and conditions, each Incremental Lender party to the applicable Incremental Amendment and committing to provide a portion of such Incremental Revolving Credit Facility Increase shall become a Revolving Credit Lender hereunder with respect to its allocated portion of such Incremental Revolving Credit Facility Increase.

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SECTION 2.10Extension of Revolving Credit Maturity Date.

(a)At least 45 days but not more than 60 days prior to any anniversary of the Closing Date, the US Borrower, by written notice (each, an “Extension Notice”) to the Administrative Agent, may request an extension of the Revolving Credit Maturity Date in effect at such time by one year from its then scheduled expiration; provided that in no event shall (i) the US Borrower make more than two (2) such requests during the term of this Agreement, (ii) there be more than three (3) separate Revolving Credit Maturity Dates at any time; (iii) the Revolving Credit Maturity Date be extended beyond September 25, 2028; and (iv) the US Borrower make more than one such request in any year. The Administrative Agent shall promptly notify each Revolving Credit Lender of such request, and each Revolving Credit Lender shall in turn, in its sole discretion, not later than 20 days following the date of such Extension Notice, notify the US Borrower and the Administrative Agent in writing as to whether such Revolving Credit Lender will consent to such extension. If any Revolving Credit Lender shall fail to notify the Administrative Agent and the US Borrower in writing of its consent to any such request for extension of the Revolving Credit Maturity Date within 20 days following the date of such Extension Notice, such Revolving Credit Lender shall be deemed to be a Non-Extending Lender with respect to such request. The Administrative Agent shall notify the US Borrower not later than 15 days prior to the applicable anniversary date (or such later time as agreed between the US Borrower and the Administrative Agent) of the decision of the Revolving Credit Lenders regarding the US Borrower’s request for an extension of the Revolving Credit Maturity Date.

(b)If all the Revolving Credit Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.10, the Revolving Credit Maturity Date in effect at such time shall, effective as at the applicable anniversary date (each, an “Extension Date”), be extended for one year; provided that on each Extension Date, the conditions set forth in Section 6.2 shall be satisfied. If fewer than all of the Revolving Credit Lenders consent in writing to any such request in accordance with subsection (a) of this Section 2.10, the Revolving Credit Maturity Date in effect at such time shall, effective as at the applicable Extension Date and subject to subsection (d) of this Section 2.10, be extended as to those Revolving Credit Lenders that so consented (each an “Extending Lender”) but shall not be extended as to any other Revolving Credit Lender (each a “Non-Extending Lender”). To the extent that the Revolving Credit Maturity Date is not extended as to any Non-Extending Lender pursuant to this Section 2.10 and the Revolving Credit Commitment of such Non-Extending Lender is not assumed in accordance with subsection (c) of this Section 2.10 on or prior to the applicable Extension Date, each Revolving Credit Commitment of such Non-Extending Lender shall automatically terminate in whole on such unextended Revolving Credit Maturity Date without any further notice or other action by the US Borrower, such Non-Extending Lender or any other Person. It is understood and agreed that no Revolving Credit Lender shall have any obligation whatsoever to agree to any request made by the US Borrower for any requested extension of the Revolving Credit Maturity Date. The failure of a Revolving Credit Lender to respond to a notice of such an increase will be deemed an election by such Revolving Credit Lender not to participate therein.

(c)If fewer than all of the Revolving Credit Lenders consent to any such request pursuant to subsection (a) of this Section 2.10, the Administrative Agent shall promptly so notify the Extending Lenders, and each Extending Lender may, in its sole discretion, give written notice to the Administrative Agent not later than 10 days prior to the Extension Date (or such later time as agreed between the US Borrower and the Administrative Agent) of the amount of the Non-Extending Lenders’ Revolving Credit Commitments for which it is willing to accept an assignment. If the Extending Lenders notify the Administrative Agent that they are willing to accept assignments of Revolving Credit Commitments in an aggregate amount that exceeds the amount of the Revolving Credit Commitments of the Non-Extending Lenders, such Revolving Credit Commitments shall be allocated among the Extending Lenders willing to accept such assignments in such amounts as are agreed between the US Borrower and the Administrative Agent. If after giving effect to the assignments of Revolving Credit Commitments described above there remain any Revolving Credit Commitments of Non-Extending Lenders, the US Borrower may arrange for one or more Extending Lenders or other Eligible Assignees (each, an “Assuming Lender”) to assume, effective as of the Extension Date, any Non-Extending Lender’s Revolving Credit Commitment and all of the obligations of such Non-Extending Lender under this Agreement thereafter arising, without recourse to or warranty by, or expense to, such Non-Extending Lender; provided, however, that the amount of the Revolving Credit Commitment of any such Assuming Lender as a result of such substitution shall in no

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event be less than $10,000,000 unless the amount of the Revolving Credit Commitment of such Non-Extending Lender is less than $10,000,000, in which case such Assuming Lender shall assume all of such lesser amount; and providedfurther that:

(i)such assignment or substitution shall (A) be in accordance with and subject to the restrictions contained in, and consents required by, Section 15.11 and (B) not conflict with Applicable Law; and

(ii)such Non-Extending Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 5.9) from the Assuming Lender (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts).

At least five (5) Business Days prior to any Extension Date (or such later time as agreed between the US Borrower and the Administrative Agent), (A) each such Assuming Lender, if any, shall have delivered to the US Borrower and the Administrative Agent an Assignment and Assumption, duly executed by such Assuming Lender, such Non-Extending Lender, the US Borrower and the Administrative Agent, (B) any such Extending Lender shall have delivered confirmation in writing satisfactory to the US Borrower and the Administrative Agent as to the increase in the amount of its Revolving Credit Commitment and (C) each Non-Extending Lender being replaced pursuant to this Section 2.10 shall have delivered to the Administrative Agent any Note or Notes held by such Non-Extending Lender. Upon receipt of the executed Assignment and Assumption referenced in clause (A) above and the payment or prepayment of all amounts referred to in clauses (i) and (ii) above, each such Extending Lender or Assuming Lender, as of the Extension Date, will be substituted for such Non-Extending Lender under this Agreement and shall be a Revolving Credit Lender for all purposes of this Agreement, without any further acknowledgment by or the consent of the other Lenders, and the obligations of each such Non-Extending Lender hereunder shall, by the provisions hereof, be released and discharged.

(d)If (after giving effect to any assignments or assumptions pursuant to subsection (c) of this Section 2.10) Revolving Credit Lenders having Revolving Credit Commitments equal to at least 50% of the Revolving Credit Commitments in effect immediately prior to the Extension Date consent in writing to a requested extension (whether by execution or delivery of an Assignment and Assumption or otherwise) not later than three (3) Business Days prior to such Extension Date (or such later time as agreed between the US Borrower and the Administrative Agent), the Administrative Agent shall so notify the US Borrower, and, subject to (i) the satisfaction of the conditions in Section 6.2 and (ii) the written consent of the US Borrower, the Revolving Credit Maturity Date then in effect shall be extended for the additional one-year period as described in subsection (a) of this Section 2.10, and all references in this Agreement, and in the Notes, if any, to the “Revolving Credit Maturity Date” shall, with respect to each Extending Lender and each Assuming Lender for such Extension Date, refer to the Revolving Credit Maturity Date as so extended. Promptly following each Extension Date, the Administrative Agent shall notify the Lenders (including, without limitation, each Assuming Lender) of the extension of the scheduled Revolving Credit Maturity Date in effect immediately prior thereto and shall thereupon record in the Register the relevant information with respect to each such Extending Lender and each such Assuming Lender.

(e)Conflicting Provisions. This Section shall supersede any provisions in Section 5.4 or 15.2 to the contrary.

ARTICLE III

LETTER OF CREDIT FACILITY

SECTION 3.1L/C Commitment. Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue Letters of Credit for the account of the US Borrower on any Business Day from the

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Closing Date to but not including the fifth (5th) Business Day prior to the Revolving Credit Maturity Date in such form as may be approved from time to time by the applicable Issuing Lender; provided, that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, based upon the Dollar Amount of all outstanding Loans (other than Term Loans) and L/C Obligations, the aggregate amount of all outstanding L/C Obligations would exceed the lesser of (a) the L/C Commitment or (b) the Revolving Credit Commitment less the sum of the aggregate principal amount of all outstanding Loans (other than Term Loans). Each Letter of Credit (other than the Existing Letters of Credit) shall (i) be denominated in Dollars in a minimum amount of $30,000 or a lesser amount acceptable to the applicable Issuing Lender and the Administrative Agent, (ii) be a standby letter of credit or a trade letter of credit issued to support obligations of the US Borrower or any of its Subsidiaries, contingent or otherwise, incurred in the ordinary course of business, (iii) expire on a date no later than the earlier of (A) five (5) Business Days prior to the Revolving Credit Maturity Date and (B) one year after its date of issuance, and (iv) be subject to the Uniform Customs and/or ISP98, as set forth in the Letter of Credit Application or as determined by the applicable Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of New York. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issued and outstanding hereunder. No Issuing Lender shall at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any Applicable Law. References herein to “issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any existing Letters of Credit, unless the context otherwise requires.

SECTION 3.2Procedure for Issuance of Letters of Credit. The US Borrower may from time to time request that any Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its applicable office (with a copy to the Administrative Agent’s Office) a Letter of Credit Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender or the Administrative Agent may request. Upon receipt of any Letter of Credit Application, the applicable Issuing Lender shall process such Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to Section 3.1 and Article VI, promptly issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Letter of Credit Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by such Issuing Lender and the US Borrower. The applicable Issuing Lender shall promptly furnish to the US Borrower and the Administrative Agent a copy of such Letter of Credit and promptly notify each Revolving Credit Lender of the issuance and upon request by any Revolving Credit Lender, furnish to such Revolving Credit Lender a copy of such Letter of Credit and the amount of such Revolving Credit Lender’s participation therein.

SECTION 3.3Commissions and Other Charges.

(a)Letter of Credit Commissions. Subject to Section 5.16(a)(iii), the US Borrower shall pay to the Administrative Agent, for the account of the applicable Issuing Lender and the L/C Participants, a letter of credit commission with respect to each Letter of Credit in an amount equal to the face amount of such Letter of Credit multiplied by the Applicable Margin with respect to Revolving Credit Loans that are Eurocurrency Rate Loans or RFR Loans, as applicable (determined on a per annum basis). Such commission shall be payable quarterly in arrears on the last Business Day of each calendar quarter (commencing December 31, 2021), on the Revolving Credit Maturity Date and thereafter on demand of the Administrative Agent. The Administrative Agent shall, promptly following its receipt thereof, distribute to the applicable Issuing Lender and the L/C Participants all commissions received pursuant to this Section in accordance with their respective Revolving Credit Commitment Percentages.

(b)Issuance Fee. In addition to the foregoing commission, the US Borrower shall pay directly to the applicable Issuing Lender, for its own account, an issuance fee with respect to each Letter of Credit issued by such Issuing Lender as set forth in the applicable Fee Letter executed by such Issuing Lender and the US Borrower. Unless otherwise provided in the applicable Fee Letter, such issuance fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter commencing with

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the first such date to occur after the issuance of such Letter of Credit (but in no event earlier than December 31, 2021), on the Revolving Credit Maturity Date and thereafter on demand of the applicable Issuing Lender (through the Administrative Agent).

(c)Other Costs. In addition to the foregoing fees and commissions, the US Borrower shall pay or reimburse each Issuing Lender for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit issued by it.

SECTION 3.4L/C Participations.

(a)Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from each Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Credit Commitment Percentage in such Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by it hereunder and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit for which such Issuing Lender is not reimbursed in full by the US Borrower through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

(b)Upon becoming aware of any amount required to be paid by any L/C Participant to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit issued by it, such Issuing Lender shall notify the Administrative Agent of such unreimbursed amount and the Administrative Agent shall notify each L/C Participant (with a copy to the applicable Issuing Lender) of the amount and due date of such required payment and such L/C Participant shall pay to the Administrative Agent (which, in turn, shall pay such Issuing Lender) the amount specified on the applicable due date. If any such amount is paid to such Issuing Lender after the date such payment is due, such L/C Participant shall pay to such Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to such Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of such Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to such Issuing Lender of the unreimbursed amounts described in this Section, if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be due on the following Business Day.

(c)Whenever, at any time after any Issuing Lender has made payment under any Letter of Credit issued by it and has received from any L/C Participant its Revolving Credit Commitment Percentage of such payment in accordance with this Section, such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the US Borrower or otherwise), or any payment of interest on account thereof, such Issuing Lender will distribute to such L/C Participant its prorata share thereof; provided, that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

SECTION 1.5Reimbursement Obligation of the US Borrower. In the event of any drawing under any Letter of Credit, the US Borrower agrees to reimburse (either with the proceeds of a Revolving Credit Loan as provided for in this Section or with funds from other sources), in same day funds, the applicable Issuing Lender on each date on which such Issuing Lender notifies the US Borrower of the date and amount of a draft paid by it under any Letter of Credit for the amount of (a) such draft so paid

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and (b) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment. Unless the US Borrower shall immediately notify such Issuing Lender that the US Borrower intends to reimburse such Issuing Lender for such drawing from other sources or funds, the US Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting that the Revolving Credit Lenders make a Revolving Credit Loan bearing interest at the Base Rate on such date in the amount of (i) such draft so paid and (ii) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment, and the Revolving Credit Lenders shall make a Revolving Credit Loan bearing interest at the Base Rate in such amount, the proceeds of which shall be applied to reimburse such Issuing Lender for the amount of the related drawing and costs and expenses. Each Revolving Credit Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section to reimburse such Issuing Lender for any draft paid under a Letter of Credit issued by it is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Section 2.4(a) or Article VI. If the US Borrower has elected to pay the amount of such drawing with funds from other sources and shall fail to reimburse such Issuing Lender as provided above, the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then overdue from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full.

SECTION 1.6Obligations Absolute. The US Borrower’s obligations under this Article III (including, without limitation, the Reimbursement Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the US Borrower may have or have had against the applicable Issuing Lender or any beneficiary of a Letter of Credit or any other Person. The US Borrower also agrees that the applicable Issuing Lender and the L/C Participants shall not be responsible for, and the US Borrower’s Reimbursement Obligation under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the US Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the US Borrower against any beneficiary of such Letter of Credit or any such transferee. No Issuing Lender shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit issued by it, except for errors or omissions caused by such Issuing Lender’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final nonappealable judgment. The US Borrower agrees that any action taken or omitted by any Issuing Lender under or in connection with any Letter of Credit issued by it or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the US Borrower and shall not result in any liability of such Issuing Lender or any L/C Participant to the US Borrower. The responsibility of any Issuing Lender to the US Borrower in connection with any draft presented for payment under any Letter of Credit issued by it shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

SECTION 1.7Effect of Letter of Credit Application. To the extent that any provision of any Letter of Credit Application related to any Letter of Credit is inconsistent with the provisions of this Article III, the provisions of this Article III shall apply.

SECTION 1.8Resignation of Issuing Lenders. Without limiting the generality of Section 14.6(c):

(a)any Lender may at any time resign from its role as an Issuing Lender hereunder upon not less than thirty (30) days prior notice to the US Borrower and the Administrative Agent (or such shorter period of time as may be acceptable to the US Borrower and the Administrative Agent); and

(b)any resigning Issuing Lender shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit issued by it that are outstanding as of the effective date of its resignation as an Issuing Lender and all L/C Obligations with respect thereto (including, without limitation, the right to require the L/C Participants to take such actions as are required

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under Section 3.4). Without limiting the foregoing, upon the resignation of a Lender as an Issuing Lender hereunder, the US Borrower may, or at the request of such resigned Issuing Lender, the US Borrower shall use commercially reasonable efforts to, arrange for one or more of the other Issuing Lenders to issue Letters of Credit hereunder in substitution for the Letters of Credit, if any, issued by such resigned Issuing Lender and outstanding at the time of such resignation, or make other arrangements satisfactory to the resigned Issuing Lender to effectively cause another Issuing Lender to assume the obligations of the resigned Issuing Lender with respect to any such Letters of Credit.

SECTION 1.9Reporting of Letter of Credit Information. At any time that there is an Issuing Lender that is not also the financial institution acting as the Administrative Agent, then (a) on the last Business Day of each calendar quarter (commencing December 31, 2021), (b) on each date that a Letter of Credit is amended, terminated or otherwise expires, (c) on each date that a Letter of Credit is issued or the expiry date of a Letter of Credit is extended, (d) each date a Letter of Credit is drawn upon or reimbursed and (e) upon the request of the Administrative Agent, each Issuing Lender (or, in the case of clauses (b), (c), (d) or (e) of this Section 3.9, the applicable Issuing Lender) shall deliver to the Administrative Agent a report setting forth in form and detail reasonably satisfactory to the Administrative Agent information (including, without limitation, any reimbursement, Cash Collateral, or termination in respect of Letters of Credit issued by such Issuing Lender) with respect to each Letter of Credit issued by such Issuing Lender that is outstanding hereunder. No failure on the part of any Issuing Lender to provide such information pursuant to this Section 3.9 shall limit the obligations of the Borrowers or any L/C Participant hereunder with respect to its reimbursement and participation obligations hereunder.

ARTICLE IV

TERM LOAN FACILITY

SECTION 4.1Term Loan. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, (i) the US Borrower requested an initial draw of the Initial Term Loan and each Term Loan Lender made an Initial Term Loan on December 30, 2021, in a principal amount equal to $250,000,000 (the “Initial Draw”) and (ii) the US Borrower may request a single subsequent draw of the Initial Term Loan on or prior to the Second Delayed Draw Funding Deadline (the “Second Draw”) and each Term Loan Lender severally agrees to make the Initial Term Loan in Dollars from time to time from the First Amendment Effective Date to the Second Delayed Draw Funding Deadline to the US Borrower, in accordance with the terms of Section 4.2 in a principal amount equal to such Term Loan Lender’s Initial Term Loan Commitment Percentage of the aggregate principal amount of the Second Draw. Notwithstanding the foregoing, if the total Initial Term Loan Commitment is not drawn prior to the Second Delayed Draw Funding Deadline the undrawn portion of the Initial Term Loan Commitment shall automatically be cancelled on the Second Delayed Draw Funding Deadline.

SECTION 4.2Procedure for Advance of Term Loans.

(a)Initial Term Loan. After the First Amendment Effective Date, the US Borrower shall give the Administrative Agent an irrevocable prior written notice substantially in the form attached hereto as Exhibit B-2 (a “Notice of Term Borrowing”) prior to 12:00 noon on the date of the Second Draw requesting that the Term Loan Lenders make the Second Draw of the Initial Term Loan as a Base Rate Loan on such date (provided that the US Borrower may request, (i) no later than three (3) Eurocurrency Banking Days prior to the Second Draw in the case of a Eurocurrency Rate Loan, that the applicable Lenders make the Second Draw of the Initial Term Loan as a Eurocurrency Rate Loan, (ii) no later than three (3) RFR Business Days prior to the Second Draw of the Initial Term Loan in the case of a RFR Loan (other than a Daily Simple RFR Loan) and (iii) no later than five (5) RFR Business Days prior to the Second Draw of the Initial Term Loan in the case of a Daily Simple RFR Loan, that the Lenders make such Second Draw of the Initial Term Loan as an RFR Loan; providedfurther that, if the Second Draw is requested to be made as Eurocurrency Rate Loan prior to the date that is three (3) Eurocurrency Banking Days after the First Amendment Effective Date, a RFR Loan (other than a Daily Simple RFR Loan) prior to the date that is three (3) RFR Business Days after the First Amendment Effective Date or as a Daily Simple RFR Loan prior to the date that is five (5) RFR Business Days after the First Amendment

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Effective Date, the US Borrower shall have delivered to the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 5.9 of this Agreement) and specifying:

(A)the date of such borrowing, which shall be a Business Day;

(B)whether such Loan is to be a Eurocurrency Rate Loan, an RFR Loan or a Base Rate Loan;

(C)if such Loan is a Eurocurrency Rate Loan or a Term RFR Loan, the duration of the Interest Period applicable thereto; and

(D)the amount of such borrowing, which shall be, (1) with respect to Base Rate Loans, in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof and (2) with respect to Eurocurrency Rate Loans or RFR Loans, in an aggregate principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof.

Upon receipt of such Notice of Term Borrowing from the US Borrower, the Administrative Agent shall promptly notify each applicable Term Loan Lender thereof. Not later than 1:00 p.m. on the date of such requested draw, each such Term Loan Lender will make available to the Administrative Agent for the account of the US Borrower, at the Administrative Agent’s Office in immediately available funds, its applicable Initial Term Loan Commitment Percentage of the amount of the Second Draw of the Initial Term Loan to be made by such Term Loan Lender on such date. A Notice of Term Borrowing received after the times set forth above shall be deemed received on the next Business Day, RFR Business Day or Eurocurrency Banking Day, as applicable. The US Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each such draw in immediately available funds by wire transfer to the account specified in the most recent Notice of Account Designation provided by the US Borrower to the Administrative Agent or as otherwise directed pursuant to a funds flow statement executed by the US Borrower.

(b)Incremental Term Loans. Any Incremental Term Loans shall be borrowed pursuant to, and in accordance with Section 2.9.

SECTION 4.3Repayment of Term Loan.

(a)Initial Term Loan. The Borrowers shall repay the aggregate outstanding principal amount of the Initial Term Loan in consecutive quarterly installments on the last Business Day of each of

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each fiscal quarter commencing September 30, 2023 as set forth below, except as the amounts of individual installments may be adjusted pursuant to Section 4.4 hereof.

PAYMENT DATE	PERCENTAGE OF ORIGINAL PRINCIPAL AMOUNT OF EACH DRAW OF INITIAL TERM LOAN
September 30, 2023	1.25%
December 31, 2023	1.25%
March 31, 2024	1.25%
June 30, 2024	1.25%
September 30, 2024	1.25%
December 31, 2024	1.25%
March 31, 2025	1.25%
June 30, 2025	1.25%
September 30, 2025	2.50%
December 31, 2025	2.50%
March 31, 2026	2.50%
June 30, 2026	2.50%
Term Loan Maturity Date	Remaining principal balance

If not sooner paid, the Initial Term Loan shall be paid in full, together with accrued interest thereon, on the Term Loan Maturity Date.

(b)Incremental Term Loans. Any Incremental Term Loans shall be borrowed, and the Borrowers shall repay the aggregate outstanding principal amount of each Incremental Term Loan (if any) as determined, pursuant to, and in accordance with Section 2.9.

SECTION 4.4Prepayments of Term Loan.

(a)Initial Term Loans. After the Second Delayed Draw Funding Deadline, the US Borrower shall have the right at any time and from time to time, without premium or penalty, to prepay the Initial Term Loans in whole or in part, upon delivery to the Administrative Agent of an irrevocable notice, substantially in the form attached hereto as Exhibit D-2 (a “Notice of Term Repayment”) not later than 12:00 noon (i) on the same Business Day as such prepayment with respect to Base Rate Loans, (ii) at least three (3) Eurocurrency Banking Days prior to such prepayment with respect to Eurocurrency Rate Loans, (iii) at least three (3) RFR Business Days prior to such prepayment with respect to an RFR Loan (other than a Daily Simple RFR Loan) and (iv) at least five (5) RFR Business Days prior to such prepayment with respect to Daily Simple RFR Loans, specifying the date and amount of repayment, whether the repayment is of Eurocurrency Rate Loans, RFR Loans or Base Rate Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Each optional prepayment pursuant to this Section 4.4 shall be in an aggregate principal amount of at least $1,000,000 or any whole multiple of $1,000,000 in excess thereof and shall be applied to reduce, on a prorata basis, the outstanding scheduled principal installments of the Initial Term Loans. Each repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9. A Notice of Term Repayment received after the times set forth above shall be deemed received on the next Business Day, RFR Business Day or Eurocurrency Banking Day, as applicable, the Administrative Agent shall promptly notify the Term Loan Lenders of each such Notice of Term Repayment. Notwithstanding the foregoing, any Notice of Term Repayment delivered in connection with any refinancing of all of a Term Loan Facility with the proceeds of such refinancing or of any other incurrence of Indebtedness or the occurrence of some other identifiable event or condition, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or incurrence or occurrence of such other identifiable event or condition and may be revoked by the US Borrower in the event such contingency is not met; provided that the delay or failure of such contingency shall not relieve the US Borrower from its obligations in respect thereof under Section 5.9.

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(b)Incremental Term Loans. Any Incremental Term Loan may be prepaid in accordance with the terms and provisions of the Incremental Amendment.

ARTICLE V

GENERAL LOAN PROVISIONS

SECTION 5.1Interest.

(a)Interest Rate Options. Subject to the provisions of this Section and to Section 5.8(c), at the election of the US Borrower, on behalf of itself and the Subsidiary Borrowers:

(i)Revolving Credit Loans and Term Loans shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) (1) prior to the USD LIBOR Transition Date, the Eurocurrency Rate plus the Applicable Margin (provided that the Eurocurrency Rate shall not be available with respect to Revolving Credit Loans or Term Loans until three (3) Eurocurrency Banking Days after the First Amendment Effective Date unless the US Borrower has delivered to the Administrative Agent, at least three (3) Eurocurrency Banking Days prior to the First Amendment Effective Date, a letter in form and substance satisfactory to the Administrative Agent indemnifying the applicable Lenders in the manner set forth in Section 5.9 of this Agreement) and (2) on or after the USD LIBOR Transition Date, the applicable Benchmark plus the Applicable Margin (provided that no RFR shall be available with respect to Revolving Credit Loans or Term Loans until five (5) RFR Business Days after the Closing Date unless the US Borrower has delivered to the Administrative Agent, at least five (5) RFR Business Days prior to the Closing Date, a letter in form and substance satisfactory to the Administrative Agent indemnifying the applicable Lenders in the manner set forth in Section 5.9 of this Agreement);

(ii)Canadian Dollar Loans shall bear interest at (A) the Canadian Base Rate plus the Applicable Margin or (B) the CDOR Rate plus the Applicable Margin;

(iii)Euro Loans shall bear interest at the Eurocurrency Rate plus the Applicable Margin (provided that the Eurocurrency Rate shall not be available with respect to Euro Loans until four (4) Business Days after the Closing Date unless the US Borrower and the Euro Borrower have delivered to the Administrative Agent, at least four (4) Business Days prior to the Closing Date, a letter in form and substance satisfactory to the Administrative Agent indemnifying the Euro Lender in the manner set forth in Section 5.9 of this Agreement); and

(iv)Swingline Loans shall bear interest at either (A) the LIBOR Market Index Rate plus the Applicable Margin or (B) the Base Rate plus the Applicable Margin.

The US Borrower, on behalf of itself and the Subsidiary Borrowers, shall select the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of Borrowing is given pursuant to Section 2.4 or 4.2, as applicable, or at the time a Notice of Conversion/Continuation is given pursuant to Section 5.2. Any Revolving Credit Loan or Term Loan or any portion thereof as to which the US Borrower has not duly specified an interest rate as provided herein shall be deemed a Base Rate Loan. Any Canadian Dollar Loan or any portion thereof as to which the US Borrower has not duly specified an interest rate as provided herein shall be deemed a Canadian Base Rate Loan. Any Eurocurrency Rate Loan, Term RFR Loan, CDOR Rate Loan or any portion thereof as to which the US Borrower has not duly specified an Interest Period as provided herein shall be deemed a Eurocurrency Rate Loan, Term RFR Loan or a CDOR Rate Loan, as applicable, with an Interest Period of one (1) month.

(b)Interest Periods. In connection with each Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan, as applicable, the US Borrower, on behalf of itself and the Subsidiary Borrowers, by giving notice at the times described in Section 2.4, 4.2 or 5.2, as applicable, shall elect an interest period (each, an “Interest Period”) to be applicable to such Eurocurrency Rate Loan or Term RFR Loan, as applicable, which Interest Period shall be a period of one (1), three (3), or six (6) months, or such CDOR Rate Loan, which Interest Period shall be a period of one (1) or three (3) months; provided that:

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(i)the Interest Period shall commence on the date of advance of or conversion to any Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan, as applicable, and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires;

(ii)if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, that if any Interest Period with respect to a Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan, as applicable, would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

(iii)any Interest Period with respect to a Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan, as applicable, that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period;

(iv)no Interest Period shall extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable, and Interest Periods shall be selected by the US Borrower so as to permit the Borrowers to make the quarterly principal installment payments pursuant to Section 4.3 without payment of any amounts pursuant to Section 5.9;

(v)there shall be no more than twenty (20) Interest Periods in effect at any time; and

(vi)no tenor that has been removed from this definition pursuant to Section 5.8(c)(iv) shall be available for specification in any Notice of Borrowing or Notice of Conversion/Continuation.

(c)Default Rate. Subject to Section 13.3, upon the occurrence and during the continuance of a Payment Event of Default or a Bankruptcy Event of Default or, at the discretion of the Administrative Agent or as directed by the Required Lenders, upon the occurrence and during the continuance of an Event of Default other than a Payment Event of Default or Bankruptcy Event of Default, (i) the Borrowers shall no longer have the option to request Eurocurrency Rate Loans, RFR Loans, Swingline Loans, Canadian Dollar Loans or Letters of Credit, (ii) all outstanding Eurocurrency Rate Loans denominated in Dollars or Term RFR Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate then applicable to such Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans, (iii) all outstanding CDOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate then applicable to CDOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate then applicable to Canadian Base Rate Loans, (iv) all outstanding Canadian Base Rate Loans shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Canadian Base Rate Loans, (v) all outstanding Euro Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate then applicable to Euro Loans, (vi) all Daily Simple RFR Loans shall automatically be converted to a Base Rate Loan immediately and shall, as of such conversion, bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans and (vii) all outstanding Base Rate Loans, Swingline Loans and other Obligations arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans. Interest shall continue to accrue on the Obligations after the filing by or against any Borrower of any petition seeking any relief in bankruptcy or under any Debtor Relief Law. The interest accrued pursuant to this Section 5.1(c) shall be payable by the applicable Borrower on demand of the Administrative Agent.

(d)Interest Payment and Computation.

(i)Interest on each Base Rate Loan, each Daily Simple RFR Loan, each Canadian Base Rate Loan and each Swingline Loan shall be due and payable in arrears on the last Business

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Day of each calendar quarter commencing December 31, 2021; and interest on each Eurocurrency Rate Loan, Term RFR Loan and each CDOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end of each three (3) month interval during such Interest Period. All computations of interest for Base Rate Loans when the Base Rate is determined by the Prime Rate and Canadian Dollar Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and assessed for the actual days elapsed. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).

(ii)For greater certainty, whenever any amount is payable under this Agreement or any other Loan Document by the Canadian Borrower as interest or as a fee which requires the calculation of an amount using a percentage per annum, each party to this Agreement acknowledges and agrees that such amount shall be calculated as of the date payment is due without application of the “deemed reinvestment principle” or the “effective yield method” (e.g., when interest is calculated and payable monthly, the rate of interest payable per month is 1/12 of the stated rate of interest per annum).

(iii)For the purposes of the Interest Act (Canada) and disclosure under such Act, whenever interest to be paid under this Agreement is to be calculated on the basis of a year of 365 or 366 days or any other period of time that is less than a calendar year, the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by either 365 or 366 or such other period of time, as the case may be.

(e)Maximum Rate.

(i)In no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative Agent’s option (A) promptly refund to the Borrowers any interest received by the Lenders in excess of the maximum lawful rate or (B) apply such excess to the principal balance of the Obligations on a pro rata basis. It is the intent hereof that the Borrowers not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the Borrowers under Applicable Law.

(ii)Notwithstanding the provisions of this Section 5.1 or any other provision of this Agreement, in no event shall the aggregate “interest” (as such term is defined in Section 347 of the Criminal Code (Canada)) exceed the effective annual rate of interest on the “credit advanced” (as such term is defined in Section 347 of the Criminal Code (Canada)) lawfully permitted under Section 347 of the Criminal Code (Canada). The effective annual rate of interest shall be determined in accordance with generally accepted actuarial practices and principles over the term of the applicable Loan, and in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries qualified for a period of ten (10) years and appointed by the Canadian Dollar Lender will be conclusive for the purposes of such determination. A certificate of an authorized signing officer of the Canadian Dollar Lender as to each amount and/or each rate of interest payable hereunder from time to time shall be conclusive evidence of such amount and of such rate, absent manifest error.

SECTION 5.2Notice and Manner of Conversion or Continuation of Loans. Provided that no Default or Event of Default has occurred and is then continuing, the US Borrower, on behalf of itself and the Canadian Borrower, shall have the option to (a) convert all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount equal to $1,000,000 or any whole multiple

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of $1,000,000 in excess thereof into one or more Eurocurrency Rate Loans denominated in Dollars or, after the USD LIBOR Transition Date, RFR Loans (provided however that no Revolving Credit Loan may be so converted into (x) a Eurocurrency Rate Loan until the third (3rd) Eurocurrency Banking Day after the Closing Date or (y) a RFR Loan until the fifth (5th) RFR Business Day after the Closing Date unless, in each case, the US Borrower has delivered to the Administrative Agent a letter in form and substance satisfactory to the Administrative Agent indemnifying the Revolving Credit Lenders in the manner set forth in Section 5.9 of this Agreement), (b) convert all or any portion of any outstanding Canadian Base Rate Loan in a principal amount equal to C$1,000,000 or any whole multiple of C$1,000,000 in excess thereof into one or more CDOR Rate Loans, (c) upon any date of payment of interest with respect to a Daily Simple RFR Loan, either convert all or any portion of any outstanding Daily Simple RFR Loans in a principal amount equal to $500,000 or a whole multiple of $100,000 in excess thereof into Base Rate Loans or continue such Daily Simple RFR Loan as a Daily Simple RFR Loan or (d) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding Eurocurrency Rate Loans denominated in Dollars or Term RFR Loans in a principal amount equal to $500,000 or a whole multiple of $100,000 in excess thereof into Base Rate Loans, (ii) convert all or any part of its outstanding CDOR Rate Loans in a principal amount of C$500,000 or a whole multiple of C$100,000 in excess thereof into Canadian Base Rate Loans or (iii) continue such Eurocurrency Rate Loans, Term RFR Loans or CDOR Rate Loans, as applicable, as Eurocurrency Rate Loans, Term RFR Loans or CDOR Rate Loans, as applicable. Provided that no Default or Event of Default has occurred and is then continuing, the US Borrower, on behalf of the Euro Borrower, may, upon the expiration of any Interest Period with respect to a Euro Loan, continue such Euro Loan for additional Interest Periods. Whenever the US Borrower desires to convert or continue Loans as provided above, the US Borrower shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a “Notice of Conversion/Continuation”) not later than 12:00 noon three (3) Eurocurrency Banking Days (or (w) four (4) Eurocurrency Banking Days in the case of the Euro Loans, (x) one (1) Canadian Business Day for Canadian Dollar Loans, (y) three (3) RFR Business Days in the case of RFR Loans (other than Daily Simple RFR Loans) or (z) five (5) RFR Business Days in the case of Daily Simple RFR Loans) before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any Eurocurrency Rate Loan, Term RFR Loans or any CDOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan. If the US Borrower fails to timely deliver a Notice of Conversion/Continuation with respect to (w) a Daily Simple RFR Loan prior to the date of payment of interest therefor as specified in Section 5.1(d), the US Borrower shall be deemed to have converted such Loan to a Base Rate Loan as of such date, (x) a Eurocurrency Rate Loan denominated in Dollars or Term RFR Loan prior to the end of the applicable Interest Period therefor, then such Loan shall be automatically converted to a Base Rate Loan at end of such Interest Period, (y) a Eurocurrency Rate Loan denominated in Euros prior to the end of the applicable Interest Period therefor, then such Loan shall, at end of such Interest Period, be automatically continued as a Eurocurrency Rate Loan with an Interest Period of one month and (z) a CDOR Rate Loan prior to the end of the applicable Interest Period therefor, then such Loan shall be automatically converted to a Canadian Base Rate Loan at end of such Interest Period. The Administrative Agent shall promptly notify the applicable Lenders of such Notice of Conversion/Continuation.

SECTION 5.3Fees.

(a)Facility Fee. Commencing on the Closing Date, the Borrowers shall pay to the Administrative Agent, for the account of the Revolving Credit Lenders, a non-refundable facility fee (the “Facility Fee”) at a rate per annum equal to the Applicable Margin on the Revolving Credit Commitment (regardless of usage), subject to adjustment as provided in Section 5.16(a)(iii). The Facility Fee shall be payable in arrears on the last Business Day of each calendar quarter during the term of this Agreement commencing December 31, 2021 and ending on the date upon which all Obligations (other than contingent indemnification obligations not then due) arising under the Revolving Credit Facility shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements satisfactory to the Administrative Agent and the applicable Issuing Lender have been made) and the Revolving Credit Commitments have been terminated. Such facility fee shall be distributed by the Administrative Agent to

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the Revolving Credit Lenders prorata in accordance with the Revolving Credit Lenders’ respective Revolving Credit Commitment Percentages.

(b)[Reserved].

(c)Administrative Agent’s and Other Fees. In order to compensate the Administrative Agent and its Affiliates for structuring and syndicating the Loans and for its obligations hereunder, the Borrowers agree to pay to the Administrative Agent and its Affiliates, for their own account, the fees set forth in the applicable Fee Letter. The Borrowers shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.

SECTION 5.4Manner of Payment.

(a)Loans Denominated in Dollars. Each payment by the US Borrower on account of the principal of or interest on any Loan or Letter of Credit denominated in Dollars or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement or any Note (except as set forth in Section 5.4(b) or (c)) shall be made in Dollars not later than 2:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent’s Office for the account of the applicable Lenders (other than as set forth below) prorata in accordance with their respective applicable Commitment Percentages (except as specified below) in immediately available funds and shall be made without any set-off, counterclaim or deduction whatsoever. Any payment received after such time but before 3:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 13.1, but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 3:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes.

(b)Canadian Dollar Loans. Each payment by the Borrowers on account of the principal of or interest on the Canadian Dollar Loans shall be made in Canadian Dollars not later than 2:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent’s account with the Canadian Dollar Lender for the account of the Canadian Dollar Lender (other than as set forth below) in immediately available funds, and shall be made without any set-off, counterclaim or deduction whatsoever. Any payment received after such time but before 3:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 13.1, but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 3:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes.

(c)Euro Loans. Each payment by the Borrowers on account of the principal of or interest on the Euro Loans shall be made in Euros not later than 2:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent’s account with the Euro Lender for the account of the Euro Lender (other than as set forth below) in immediately available funds, and shall be made without any set-off, counterclaim or deduction whatsoever. Any payment received after such time but before 3:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 13.1, but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 3:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes.

(d)General Payment Provisions. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each applicable Lender at its address for notices set forth herein its prorata share of such payment in accordance with such Lender’s applicable Commitment Percentage (except as specified below) and shall wire advice of the amount of such credit to each Lender. Each payment to the Administrative Agent of any Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of such Issuing Lender or the L/C Participants, as the case may be. Each payment to the Administrative Agent of Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 5.9, 5.10, 5.11 or 15.2 shall be paid to the Administrative Agent for the account of the applicable Lender. Each payment to the Administrative Agent with respect to Swingline Loans (including, without limitation, the Swingline Lender’s fees or expenses) shall be made for the account of the Swingline Lender. Each payment to the Administrative Agent with respect to the Canadian Dollar Loans (including,

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without limitation, the Canadian Dollar Lender’s fees or expenses) shall be made for the account of the Canadian Dollar Lender. Each payment to the Administrative Agent with respect to the Euro Loans (including, without limitation, the Euro Lender’s fees or expenses) shall be made for the account of the Euro Lender. Subject to Section 5.1(b)(ii) if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day and such extension of time shall in such case be included in computing any interest if payable along with such payment.

(e)Defaulting Lenders. Notwithstanding the foregoing clauses (a), (b), (c) and (d) if there exists a Defaulting Lender, each payment by a Borrower to such Defaulting Lender hereunder shall be applied in accordance with Section 5.16(a)(ii).

SECTION 5.5Evidence of Indebtedness.

(a)Extensions of Credit. The Extensions of Credit made by each Lender and each Issuing Lender shall be evidenced by one or more accounts or records maintained by such Lender or such Issuing Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender or the applicable Issuing Lender shall be conclusive absent manifest error of the amount of the Extensions of Credit made by the Lenders or such Issuing Lender to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender or any Issuing Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the applicable Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Credit Note, a Term Loan Note, a Canadian Note, a Euro Note and/or a Swingline Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans, Term Loans, Canadian Dollar Loans, Euro Loans and/or Swingline Loans, as applicable, in addition to such accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

(b)Participations. In addition to the accounts and records referred to in subsection (a), each Revolving Credit Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Canadian Dollar Loans, Euro Loans, Swingline Loans and Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Revolving Credit Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

SECTION 5.6Adjustments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations (other than pursuant to Sections 5.9, 5.10, 5.11 or 15.3 hereof) greater than its prorata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i)if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

(ii)the provisions of this Section shall not be construed to apply to (x) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the

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application of Cash Collateral provided for in Section 5.15 or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Canadian Dollar Loans, Euro Loans, Swingline Loans and Letters of Credit to any assignee or participant, other than to a Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

SECTION 5.7Obligations of Lenders.

(a)Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.4(b) or Section 4.2, as applicable, and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent in the applicable Permitted Currency, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at:

(i)in the case of a payment to be made by such Lender, (A) with respect to any Loan denominated in Dollars, the greater of (1) the daily average Federal Funds Rate and (2) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) with respect to any Loan denominated in an Alternative Currency, the greater of (1) a rate equal to the Administrative Agent’s aggregate marginal cost (including the cost of maintaining any required reserves or deposit insurance and of any fees, penalties, overdraft charges or other costs or expenses incurred by the Administrative Agent as a result of the failure to deliver funds hereunder) of carrying such amount and (2) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation; and

(ii)in the case of a payment to be made by such Borrower, (A) with respect to any Loan denominated in Dollars, the interest rate applicable to Base Rate Loans and (B) with respect to any Loan denominated in an Alternative Currency, a rate equal to the Administrative Agent’s aggregate marginal cost (including the cost of maintaining any required reserves or deposit insurance and of any fees, penalties, overdraft charges or other costs or expenses incurred by the Administrative Agent as a result of the failure to deliver funds hereunder) of carrying such amount.

If such Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period. If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment by a Borrower shall be without prejudice to any claim a Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(b)Nature of Obligations of Lenders Regarding Extensions of Credit. The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. The failure of any Lender to make available its Commitment Percentage of any Loan requested by the Borrowers shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan available on the borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its Commitment Percentage of such Loan available on the borrowing date.

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SECTION 5.8Changed Circumstances.

(a)Circumstances Affecting Eurocurrency Rate, CDOR Rate, Daily Simple RFR and Term RFR Availability.

(i)Subject to clause (c) below, in connection with any RFR Loan or, on and after the USD LIBOR Transition Date, any Base Rate Loan or LIBOR Swingline Loan, a request therefor, a conversion to or a continuation thereof or otherwise, if for any reason (A) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that (x) if Daily Simple RFR is utilized in any calculations hereunder or under any other Loan Document with respect to any Obligations, interest, fees, commissions or other amounts, “Daily Simple RFR” cannot be determined pursuant to the definition thereof or (y) if Term RFR is utilized in any calculations hereunder or under any other Loan Document with respect to any Obligations, interest, fees, commissions or other amounts, “Term RFR” cannot be determined pursuant to the definition thereof on or prior to the first day of any Interest Period or (B) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that a fundamental change has occurred in the foreign exchange markets with respect to an applicable Alternative Currency (including changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls), then the Administrative Agent shall promptly give notice thereof to the US Borrower. Upon notice thereof by the Administrative Agent to the US Borrower, (A) any obligation of the Lenders to make RFR Loans, and any right of the Borrowers to convert any Loan or continue any Loan as an RFR Loan, shall be suspended (to the extent of the affected RFR Loans or, in the case of Term RFR Loans, the affected Interest Periods) until the Administrative Agent revokes such notice and (B) if such determination affects the calculation of Base Rate or the LIBOR Market Index Rate, (1) the Administrative Agent shall during the period of such suspension compute Base Rate without reference to clause (c) of the definition of “Base Rate” and (2) any obligation of the Swingline Lender to make LIBOR Swingline Loans shall be suspended, in each case until the Administrative Agent revokes such notice until the Administrative Agent revokes such notice. Upon receipt of such notice, (A) the US Borrower may revoke any pending request for a borrowing of, conversion to or continuation of RFR Loans (to the extent of the affected RFR Loans or, in the case of a Term RFR Loans, the affected Interest Periods) and, if applicable, LIBOR Swingline Loans or, failing that the US Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans, or Base Rate Swingline Loans, as applicable, in the amount specified therein and (B) any outstanding affected RFR Loans and LIBOR Swingline Loans will be deemed to have been converted into Base Rate Loans or Base Rate Swingline Loans, as applicable, immediately or, in the case of Term RFR Loans, at the end of the applicable Interest Period. Upon any such conversion, the US Borrower shall also pay any additional amounts required pursuant to Section 5.9.

(ii)Subject to clause (c) below, if, for any reason (x) on or prior to the first day of any Interest Period with respect to a Eurocurrency Rate Loan, Term RFR Loan or CDOR Rate Loan, (y) on any day with respect to a Canadian Base Rate Loan or (y) prior to the USD LIBOR Transition Date, on any day with respect to a Base Rate Loan or LIBOR Swingline Loan, in connection with a request therefor, a conversion to or a continuation thereof or otherwise, (A) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that deposits are not being offered to banks in the London or other applicable offshore interbank market for the applicable Currency, amount and Interest Period of such Loan (or, with respect to any Base Rate Loan, LIBOR Swingline Loan or Canadian Base Rate, for a one month term), (B) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that a fundamental change has occurred in the foreign exchange or interbank markets with respect to the applicable Alternative Currency (including changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls), (C) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for the ascertaining the Adjusted Eurocurrency Rate for such Currency, the LIBOR Market Index Rate or the CDOR Rate and Interest Period, including because the Screen Rate for the applicable Currency is not available or published on a current basis, (D) the Required Lenders shall determine (which determination shall be conclusive and binding absent manifest error) that the Adjusted Eurocurrency Rate does not adequately and fairly reflect the cost to such Lenders of making or maintaining such Loans during such Interest Period and shall have provided notice of such determination to the Administrative Agent, (E) the Canadian Dollar Lender shall determine (which determination shall

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be conclusive and binding absent manifest error) that the CDOR Rate does not adequately and fairly reflect the cost to the Canadian Dollar Lender of making or maintaining Canadian Dollar Loans at the CDOR Rate during such Interest Period and shall have provided notice of such determination to the Administrative Agent, (F) the Euro Lender shall determine (which determination shall be conclusive and binding absent manifest error) that the Adjusted Eurocurrency Rate with respect to Euros does not adequately and fairly reflect the cost to the Euro Lender of making or maintaining Euro Loans during such Interest Period and shall have provided notice of such determination to the Administrative Agent or (G) the Swingline Lender shall determine that the LIBOR Market Index Rate with does not adequately and fairly reflect the cost to the Swingline Lender of making or maintaining LIBOR Swingline Loans and shall have provided notice of such determination to the Administrative Agent, then in each case, the Administrative Agent shall promptly give notice thereof to the US Borrower. Thereafter, until the Administrative Agent notifies the US Borrower that such circumstances no longer exist,(x)any obligation of the Lenders to make Eurocurrency Rate Loans or CDOR Rate Loans, as applicable, in each such Currency, and any right of the Borrowers to convert any Loan in each such Currency (if applicable) or continue any Loan as a Eurocurrency Rate Loan or CDOR Rate Loan, as applicable, in each such Currency (in each case, to the extent of the affected Eurocurrency Rate Loans, CDOR Rate Loans or Interest Periods), shall be suspended and (I) any outstanding affected Eurocurrency Rate Loans denominated in Dollars will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period, (II) any outstanding CDOR Rate Loans will be deemed to have been converted to Canadian Base Rate Loans at the end of the applicable Interest Period and (III) any outstanding affected Eurocurrency Rate Loans denominated in an Alternative Currency, at the US Borrower’s election, shall either be converted into Base Rate Loans denominated in Dollars (in an amount equal to the Dollar Amount of such Loans) at the end of the applicable Interest Period or be prepaid in full, together with accrued interest thereon (subject to Section 5.1(e)), at the end of the applicable Interest Period; provided that if no election is made by the US Borrower by the date that is three (3) Business Days after receipt by the US Borrower of such notice or the last day of the current Interest Period for the applicable Eurocurrency Rate Loan, if earlier, the US Borrower shall be deemed to have elected clause (1) above, and (y) if such determination pursuant to Section 5.8(a)(ii) affects the calculation of Base Rate, LIBOR Market Index Rate or Canadian Base Rate, the Administrative Agent shall during the period of such suspension (1) compute Base Rate or Canadian Base Rate, as applicable, without reference to clause (c) of the definition of “Base Rate” or clause of the definition of “Canadian Base Rate”, as applicable and (2) automatically convert each LIBOR Swingline Loan into a Base Rate Swingline Loan (with the Base Rate calculated in accordance with clause above). Upon any such prepayment or conversion, the Borrowers shall also pay any additional amounts required pursuant to Section 5.9.

(b)    Laws Affecting Adjusted Eurocurrency Rate, CDOR Rate, Daily Simple RFR, LIBOR Market Index Rate and Term RFR Availability. If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any Daily Simple RFR Loan, Term RFR Loan, CDOR Rate Loan, Eurocurrency Rate Loan or LIBOR Swingline Loan, or to determine or charge interest based upon any applicable RFR, Daily Simple RFR, Term RFR, CDOR Rate, Eurocurrency Rate, Adjusted Eurocurrency Rate or LIBOR Market Index Rate, such Lender shall promptly give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to the US Borrower and the other Lenders. Thereafter, until the Administrative Agent notifies the US Borrower that such circumstances no longer exist, (i) any obligation of the Lenders to make RFR Loans, CDOR Rate Loans, Eurocurrency Rate Loans or LIBOR Swingline Loans, as applicable, in the affected Currency or Currencies, and any right of the Borrowers to convert any Loan denominated in Dollars to an RFR Loan or a Eurocurrency Rate Loan, convert any CDOR Rate Loan to a Canadian Base Rate Loan or continue any Loan as an RFR Loan, CDOR Rate Loan or a Eurocurrency Rate Loan, as applicable, in the affected Currency or Currencies shall be suspended and (ii) if necessary to avoid such illegality, the Administrative Agent shall compute the Base Rate or Canadian Base Rate, as applicable, without reference to clause (c) of the definition of “Base Rate” or clause (b) of the definition of “Canadian Base Rate”, as applicable, in each case until each such affected Lender notifies the Administrative Agent and the US Borrower that the circumstances giving rise to such

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determination no longer exist. Upon receipt of such notice, (A) the US Borrower shall, if necessary to avoid such illegality, upon demand from any Lender (with a copy to the Administrative Agent), prepay or, if applicable, (I) convert all RFR Loans or Eurocurrency Rate Loans denominated in Dollars to Base Rate Loans, (II) convert all CDOR Rate Loans to Canadian Base Rate Loans or (III) convert all RFR Loans or Eurocurrency Rate Loans denominated in an affected Alternative Currency to Base Rate Loans denominated in Dollars (in an amount equal to the Dollar Amount of such Loans) (in each case, if necessary to avoid such illegality, the Administrative Agent shall compute the Base Rate without reference to clause (c) of the definition of “Base Rate” and the Canadian Base Rate without reference to clause (b) of the definition of “Canadian Base Rate”), (1) with respect to Daily Simple RFR Loans, on the date specified for payment of interest in Section 5.1(d) therefor, if all affected Lenders may lawfully continue to maintain such Daily Simple RFR Loans to such day, or immediately, if any Lender may not lawfully continue to maintain such Daily Simple RFR Loans to such day or (2) with respect to Eurocurrency Rate Loans, CDOR Rate Loans or Term RFR Loans, on the last day of the Interest Period therefor, if all affected Lenders may lawfully continue to maintain such Eurocurrency Rate Loans, CDOR Rate Loans or Term RFR Loans, as applicable, to such day, or immediately, if any Lender may not lawfully continue to maintain such Eurocurrency Rate Loans, CDOR Rate Loans or Term RFR Loans, as applicable, to such day, (B) if necessary to avoid such illegality, the Administrative Agent shall during the period of such suspension compute the Base Rate without reference to clause (c) of the definition of “Base Rate” and compute the Canadian Base Rate without reference to clause (b) of the definition of “Canadian Base Rate” and (C) the US Borrower shall, if necessary to avoid such illegality, upon demand from the Swingline Lender (with a copy to the Administrative Agent), prepay or, if applicable, (I) convert all LIBOR Swingline Loans to Base Rate Swingline Loans (with the Base Rate calculated in accordance with clause (B) above), in each case until the Administrative Agent is advised in writing by each affected Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon Daily Simple RFR, Term RFR, the CDOR Rate, the Eurocurrency Rate, Adjusted Eurocurrency Rate or LIBOR Market Index Rate, as applicable. Upon any such prepayment or conversion, the Borrowers shall also pay any additional amounts required pursuant to Section 5.9.

(c)Benchmark Replacement Setting.

(i)Benchmark Replacement.

(A)Notwithstanding anything to the contrary herein or in any other Loan Document, if the USD LIBOR Transition Date has occurred prior to the Reference Time in respect of any setting of the Adjusted Eurocurrency Rate for Dollars then (x) if a Benchmark Replacement is determined in accordance with clause (b)(1) or (b)(2) of the definition of “Benchmark Replacement” for the USD LIBOR Transition Date, such Benchmark Replacement will replace the then-current Benchmark with respect to Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b)(3) of the definition of “Benchmark Replacement” for the USD LIBOR Transition Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(B)Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event with respect to any Benchmark, the Administrative Agent and the US Borrower may amend this Agreement to replace such Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth

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(5th) Business Day after the Administrative Agent has posted such proposed amendment to all affected Lenders and the US Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 5.8(c)(i)(B) will occur prior to the applicable Benchmark Transition Start Date.

(C)Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term RFR Transition Date has occurred prior to the Reference Time in respect of any setting of the then-current Benchmark consisting of a Daily Simple RFR (including a Daily Simple RFR implemented as a Benchmark Replacement pursuant to Section 5.8(c)(i)(A) or Section 5.8(c)(i)(B)) for the applicable Currency, then the applicable Benchmark Replacement will replace such Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark for the applicable Currency setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that this clause (C) shall not be effective unless the Administrative Agent has delivered to the Lenders and the US Borrower a Term RFR Notice with respect to the applicable Term RFR Transition Event. For the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term RFR Notice after a Term RFR Transition Event and may elect or not elect to do so in its sole discretion.

(ii)Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(iii)Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the US Borrower and the Lenders of (A) the implementation of any Benchmark Replacement and (B) the effectiveness of any Benchmark Replacement Conforming Changes. The Administrative Agent will promptly notify the US Borrower of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 5.8(c)(iv). Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 5.8(c), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 5.8(c).

(iv)Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (A) if any then-current Benchmark is a term rate (including any Term RFR or Adjusted Eurocurrency Rate) and either (I) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (II) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above either (I) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (II) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest

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Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(v)Benchmark Unavailability Period. Upon the US Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a given Benchmark, the US Borrower may revoke any pending request for a borrowing of, conversion to or continuation of CDOR Rate Loans, RFR Loans or Eurocurrency Rate Loans, in each case, to be made, converted or continued during any Benchmark Unavailability Period denominated in the applicable Currency and, failing that, (A)(I) in the case of any request for any affected RFR Loans or a Eurocurrency Rate Loans, in each case, denominated in Dollars, if applicable, the US Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans in the amount specified therein, (II) in the case of any request for any CDOR Rate Loans, the US Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Canadian Base Rate Loans in the amount specified therein or (III) in the case of any request for any Eurocurrency Rate Loan in an Alternative Currency then such request shall be ineffective and (B)(I) any outstanding affected RFR Loans or Eurocurrency Rate Loans, in each case, denominated in Dollars, if applicable, will be deemed to have been converted into Base Rate Loans immediately or, in the case of Term RFR Loans or Eurocurrency Rate Loans, at the end of the applicable Interest Period, (II) any outstanding affected CDOR Rate Loans, at the US Borrower’s election, shall either be converted into Canadian Base Rate Loans at the end of the applicable Interest Period or be prepaid in full at the end of the applicable Interest Period; provided,further that, with respect to any CDOR Rate Loan, if no election is made by the US Borrower by the earlier of (x) the date that is three (3) Business Days after receipt by the US Borrower of such notice and (y) the last day of the current Interest Period for the applicable CDOR Rate Loan, the US Borrower shall be deemed to have elected clause (1) above and (III) any outstanding affected Eurocurrency Rate Loans denominated in an Alternative Currency, at the US Borrower’s election, shall either (1) be converted into Base Rate Loans denominated in Dollars (in an amount equal to the Dollar Amount of such Loan) immediately or, in the case of Eurocurrency Rate Loans, at the end of the applicable Interest Period or (2) be prepaid in full immediately or, in the case of Term RFR Loans or Eurocurrency Rate Loans, at the end of the applicable Interest Period; provided,further that, with respect to any Eurocurrency Rate Loan, if no election is made by the US Borrower by the earlier of (x) the date that is three (3) Business Days after receipt by the US Borrower of such notice and (y) the last day of the current Interest Period for the applicable Eurocurrency Rate Loan, the US Borrower shall be deemed to have elected clause (1) above. Upon any such prepayment or conversion, the US Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 5.9. During a Benchmark Unavailability Period with respect to any Benchmark or at any time that a tenor for any then-current Benchmark is not an Available Tenor, the component of Base Rate or Canadian Base Rate, as applicable, based upon the then-current Benchmark that is the subject of such Benchmark Unavailability Period or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate or Canadian Base Rate, as applicable.

SECTION 5.9Indemnity. Each Borrower hereby indemnifies each of the Lenders against any loss or expense which may arise or be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by such Borrower to make any payment when due of any amount due hereunder in connection with a Eurocurrency Rate Loan, an RFR Loan or a CDOR Rate Loan, as applicable, (b) due to any failure of such Borrower to borrow, continue or convert on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation, (c) due to any payment, prepayment or conversion of any Eurocurrency Rate Loan, RFR Loan or CDOR Rate Loan, as applicable, on a date other than the last day of the Interest Period therefor, (d) due to any payment, prepayment or conversion of any Daily Simple RFR Loan on a date other than the date an interest payment is due in respect thereof as provided in Section 5.1(d) (including as a result of an Event of Default) and (e) the assignment of any Daily Simple RFR Loan other than on the date an interest payment is due in respect thereof as provided in Section 5.1(d) or any Eurocurrency Rate Loan, RFR Loan or CDOR Rate Loan, as applicable, on a date other than the last day of the Interest Period therefor as a result of a request of a Borrower pursuant to Section 5.12(b). The amount of such loss or expense shall be determined, (i) with respect to Eurocurrency Rate

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Loans, in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its Commitment Percentage of the Eurocurrency Rate Loans in the London or other applicable offshore interbank market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical and (ii) with respect to CDOR Rate Loans, in the Canadian Dollar Lender’s sole discretion, based upon the assumption that the Canadian Dollar Lender funded such CDOR Rate Loans in the applicable interbank markets and using any reasonable attribution or averaging methods which the Canadian Dollar Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to the US Borrower through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

SECTION 5.10Increased Costs.

(a)Increased Costs Generally. If any Change in Law shall:

(i)impose, modify or deem applicable any reserve (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the FRB, as amended and in effect from time to time), special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted Eurocurrency Rate) or any Issuing Lender (or any of their respective Lending Offices);

(ii)subject any Recipient to any Taxes of any kind whatsoever with respect to this Agreement, any Canadian Dollar Loan, any Euro Loan, any Letter of Credit, any participation in a Canadian Dollar Loan, a Euro Loan or a Letter of Credit or any Eurocurrency Rate Loan made by it, or change the basis of taxation of payments to such Recipient in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 5.11 and the imposition of, or any change in the rate of any Excluded Tax payable by such Recipient); or

(iii)impose on any Lender, any Issuing Lender (or any of their respective Lending Offices), any other Recipient or the London or other applicable offshore interbank market any other condition, cost or expense affecting this Agreement, any Canadian Dollar Loan, any Euro Loan, any Letter of Credit, any participation in a Canadian Dollar Loan, a Euro Loan or a Letter of Credit or any Eurocurrency Rate Loan made by it;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Canadian Dollar Loan, Euro Loan or Letter of Credit (or of maintaining its obligation to participate in or to issue any Canadian Dollar Loan, Euro Loan or Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, such Issuing Lender or such other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, such Issuing Lender or such other Recipient, the Borrowers shall promptly pay to any such Lender, such Issuing Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)Capital Requirements. If any Lender or any Issuing Lender determines that any Change in Law affecting such Lender or such Issuing Lender or any Lending Office of such Lender or such Lender’s or such Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Lender’s capital or on the capital of such Lender’s or such Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or such Issuing Lender or the Loans made by, or participations in Canadian Dollar Loans, Euro Loans, Letters of Credit or Swingline Loans held by, such Lender or such Issuing Lender or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s

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holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Lender’s policies and the policies of such Lender’s or such Issuing Lender’s holding company with respect to capital adequacy and liquidity), then from time to time upon written request of such Lender or such Issuing Lender the Borrowers shall promptly pay to such Lender or such Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company for any such reduction suffered.

(c)Certificates for Reimbursement. A certificate of a Lender, an Issuing Lender or such other Recipient setting forth the amount or amounts necessary to compensate such Lender, such Issuing Lender, such other Recipient or any of their respective holding companies, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay such Lender, such Issuing Lender or such other Recipient, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)Delay in Requests. Failure or delay on the part of any Lender, any Issuing Lender or such other Recipient to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s, such Issuing Lender’s or such other Recipient’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender, an Issuing Lender or any other Recipient pursuant to this Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender, such Issuing Lender or any other Recipient, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s, such Issuing Lender’s or such other Recipient’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 5.11Taxes.

(a)Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if any Borrower shall be required by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent and each Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)Payment of Other Taxes by the Borrowers. Without limiting the provisions of subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)Indemnification by the Borrowers. The Borrowers shall indemnify the Administrative Agent and each Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the US Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority

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evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Applicable Law of the jurisdiction in which a Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the applicable Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the applicable Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the applicable Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the applicable Borrower or the Administrative Agent as will enable the applicable Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Without limiting the generality of the foregoing, in the event that the applicable Borrower is a resident for tax purposes in the United States, any Foreign Lender shall deliver to the applicable Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the applicable Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(i)duly completed copies of IRS Form W-8BEN-E (or W-8BEN if applicable) claiming eligibility for benefits of an income tax treaty to which the United States is a party,

(ii)duly completed copies of IRS Form W-8ECI,

(iii)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the applicable Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of IRS Form W-8BEN-E (or W-8BEN if applicable), or

(iv)any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by Applicable Law to permit applicable Borrower to determine the withholding or deduction required to be made.

Without limiting the obligations of the Lenders set forth above regarding delivery of certain forms and documents to establish each Lender’s status for U.S. withholding tax purposes, each Lender agrees promptly to deliver to the Administrative Agent or the US Borrower, on behalf of itself and the Subsidiary Borrowers, as the Administrative Agent or the US Borrower, on behalf of itself and the Subsidiary Borrowers, shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such other documents and forms required by any relevant taxing authorities under Applicable Law of any other jurisdiction, duly executed and completed by such Lender, as are required under such Applicable Law to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender outside of the United States by the Borrowers pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such other jurisdiction. Each Lender shall promptly (i) notify the Administrative Agent of any change in circumstances which would modify or render invalid any such claimed exemption or reduction, and (ii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of Applicable Law of any such jurisdiction that any Borrower make any deduction or withholding for taxes from amounts payable to such Lender. Additionally, each Borrower shall promptly deliver to the Administrative Agent or any Lender, as the Administrative Agent or such Lender shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the

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Applicable Law of any jurisdiction, duly executed and completed by such Borrower, as are required to be furnished by such Lender or the Administrative Agent under such Applicable Law in connection with any payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in connection with the Loan Documents, with respect to such jurisdiction.

(f)Without limiting the generality of the provisions of Section 5.11(e), if a payment made to a Lender pursuant to this Agreement would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the US Borrower and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the US Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the US Borrower or the Administrative Agent as may be necessary for the US Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the US Borrower and the Administrative Agent in writing of its legal inability to do so.

(g)Treatment of Certain Refunds. If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section, it shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrowers, upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.

(h)Survival. Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section shall survive the payment in full of the Obligations and the termination of the Commitments.

SECTION 5.12Mitigation Obligations; Replacement of Lenders.

(a)Designation of a Different Lending Office. If any Lender requests compensation under Section 5.10, or requires the Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.11, then such Lender, at the request of the Borrowers, shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.10 or Section 5.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)Replacement of Lenders. (i) If any Lender requests compensation under Section 5.10, (ii) if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.11, and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 5.12(a), or (ii) if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at their sole expense and

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effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 15.11), all of its interests, rights (other than its existing rights to payments pursuant to Section 5.10 and Section 5.11) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(A)    the Borrowers shall have paid to the Administrative Agent the assignment fee specified in Section 15.11;

(B)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 5.9) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

(C)    in the case of any such assignment resulting from a claim for compensation under Section 5.10 or payments required to be made pursuant to Section 5.11, such assignment will result in a reduction in such compensation or payments thereafter;

(D)    such assignment does not conflict with Applicable Law; and

(E)    in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

SECTION 5.13Redenomination of Alternative Currency Loans.

(a)If any Canadian Dollar Loan is required to bear interest based at the Base Rate or any component thereof rather than the Canadian Base Rate or the CDOR Rate pursuant to any applicable provision hereof, such Loan shall be funded in Dollars in an amount equal to the Dollar Amount of such Canadian Dollar Loan, all subject to the provisions of Section 2.4(b). The US Borrower and the Canadian Borrower shall reimburse the Lenders upon any such conversion for any amounts required to be paid under Section 5.9.

(b)If any Euro Loan is required to bear interest based at the Base Rate or any component thereof rather than the Eurocurrency Rate pursuant to any applicable provision hereof, such Loan shall be funded in Dollars in an amount equal to the Dollar Amount of such Euro Loan, all subject to the provisions of Section 2.4(b). The US Borrower and the Euro Borrower shall reimburse the Lenders upon any such conversion for any amounts required to be paid under Section 5.9.

SECTION 5.14US Borrower as Agent for Subsidiary Borrowers. Each of the Subsidiary Borrowers hereby irrevocably appoints and authorizes the US Borrower (a) to provide the Administrative Agent with all notices with respect to Extensions of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement, (b) to take such action on behalf of the Borrowers as the US Borrower deems appropriate on its behalf to obtain Extensions of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement and (c) to act as its agent for service of process and notices required to be delivered under this Agreement or the other Loan Documents, it being understood and agreed that receipt by the US Borrower of any summons, notice or other similar item shall be deemed effective receipt by the Borrowers and their respective Subsidiaries.

SECTION 5.15Cash Collateral.

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(a)General. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, any Issuing Lender (with a copy to the Administrative Agent), or any Revolving Credit Lender (with a copy to the Administrative Agent), the Borrowers shall Cash Collateralize the Fronting Exposure of the Canadian Dollar Lender, the Euro Lender, such Issuing Lender and/or the Swingline Lender, as applicable, with respect to such Defaulting Lender (determined after giving effect to Section 5.16(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(b)Grant of Security Interest. The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grant to the Administrative Agent, for the benefit of the Canadian Dollar Lender, the Euro Lender, each Issuing Lender and the Swingline Lender, and agree to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of, Canadian Dollar Loans, Euro Loans, L/C Obligations and Swingline Loans, to be applied pursuant to subsection (c) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, each Issuing Lender and the Revolving Credit Lenders as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(c)Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 5.15 or Section 5.16 in respect of Canadian Dollar Loans, Euro Loans, Letters of Credit and Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Canadian Dollar Loans, Euro Loans, L/C Obligations and Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(d)Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Canadian Dollar Lender, the Euro Lender, any Issuing Lender and/or the Swingline Lender, as applicable, shall no longer be required to be held as Cash Collateral pursuant to this Section 5.15 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Revolving Credit Lender), or (ii) the determination by the Administrative Agent, the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders and the Swingline Lender that there exists excess Cash Collateral; provided that, subject to Section 5.16, the Person providing Cash Collateral, the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders and the Swingline Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

SECTION 5.16Defaulting Lenders.

(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article XIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 15.4 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a prorata basis of any amounts owing by such Defaulting Lender to the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders or the Swingline

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Lender hereunder; third, to Cash Collateralize the Fronting Exposure of the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders and the Swingline Lender with respect to such Defaulting Lender in accordance with Section 5.15; fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan or funded participation in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrowers, to be held in a deposit account and released prorata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (B) Cash Collateralize future Fronting Exposure with respect to such Defaulting Lender with respect to future Canadian Dollar Loans, Euro Loans, Letters of Credit and Swingline Loans issued or made under this Agreement, in accordance with Section 5.15; sixth, to the payment of any amounts owing to the Lenders, the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Canadian Dollar Lender, the Euro Lender, any Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or funded participations in Canadian Dollar Loans, Euro Loans, Letters of Credit or Swingline Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit or Swingline Loans were issued at a time when the conditions set forth in Section 6.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and funded participations in Canadian Dollar Loans, Euro Loans, Letters of Credit or Swingline Loans owed to, all Non-Defaulting Lenders on a prorata basis prior to being applied to the payment of any Loans of, or funded participations in Canadian Dollar Loans, Euro Loans, Letters of Credit or Swingline Loans owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Canadian Dollar Loans, Euro Loans, L/C Obligations and Swingline Loans are held by the Lenders prorata in accordance with the Revolving Credit Commitments under the applicable Revolving Credit Facility without giving effect to Section 5.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 5.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees.

(A)No Defaulting Lender shall be entitled to receive any ticking fee pursuant to Section (b) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)Each Defaulting Lender shall be entitled to receive a Facility Fee for any period during which such Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Credit Loans funded by it, and (2) its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit and Swingline Loans for which it has provided Cash Collateral pursuant to Section 5.15.

(C)Each Defaulting Lender shall be entitled to receive letter of credit commissions pursuant to Section 3.3 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 5.15.

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(D)With respect to any Facility Fee, ticking fee or letter of credit commission not required to be paid to any Defaulting Lender pursuant to clause (A), (B) or (C) above, the Borrowers shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Canadian Dollar Loans, Euro Loans, L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to the Canadian Dollar Lender, the Euro Lender, each Issuing Lender and the Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Canadian Dollar Lender’s, the Euro Lender’s, such Issuing Lender’s or the Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.

(iv)Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in Canadian Dollar Loans, Euro Loans, L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Credit Commitment Percentages (calculated without regard to such Defaulting Lender’s Revolving Credit Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. Subject to Section 15.25, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)Cash Collateral, Repayment of Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, repay Canadian Dollar Loans, Euro Loans and Swingline Loans on a prorata basis in an amount equal to such Lenders’ Fronting Exposure and (y) second, Cash Collateralize the Issuing Lenders’ respective Fronting Exposures in accordance with the procedures set forth in Section 5.15.

(b)Defaulting Lender Cure. If the Borrowers, the Administrative Agent, the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders and the Swingline Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Credit Loans and funded and unfunded participations in Canadian Dollar Loans, Euro Loans, Letters of Credit and Swingline Loans to be held prorata by the Lenders in accordance with the Revolving Credit Commitments (without giving effect to Section 5.16(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)New Canadian Dollar Loans/Euro Loans/Swingline Loans/Letters of Credit. So long as any Revolving Credit Lender is a Defaulting Lender, (i) the Canadian Dollar Lender the shall not be required to fund any Canadian Dollar Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Canadian Dollar Loan, (ii) the Euro Lender the shall not be required to fund any Euro Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Euro Loan, (iii) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (iv) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

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ARTICLE VI

CLOSING; CONDITIONS OF CLOSING AND BORROWING

SECTION 6.1Conditions to Closing and Initial Extensions of Credit. The obligation of the Lenders to close this Agreement and to make the initial Loans, if any, or issue or participate in the initial Letters of Credit, if any, is subject to the satisfaction of each of the following conditions:

(a)Executed Loan Documents. This Agreement, a Revolving Credit Note in favor of each Revolving Credit Lender requesting a Revolving Credit Note, a Term Loan Note in favor of each Term Loan Lender requesting a Term Loan Note, a Canadian Note in favor of the Canadian Dollar Lender (if requested thereby), a Euro Note in favor of the Euro Lender (if requested thereby), a Swingline Note in favor of the Swingline Lender (if requested thereby), the Subsidiary Guaranty Agreement, together with any other applicable Loan Documents, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in full force and effect and no Default or Event of Default shall exist hereunder or thereunder.

(b)Closing Certificates; Etc. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

(i)Officer’s Certificate of the US Borrower. A certificate from a Responsible Officer of the US Borrower to the effect that (A) all representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects as of the Closing Date (except (x) any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date and (y) to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case such representation and warranty shall be true, correct and complete in all respects as of the Closing Date), (B) none of the Credit Parties is in violation of any of the covenants contained in this Agreement and the other Loan Documents, (C) after giving effect to the transactions contemplated by this Agreement, no Default or Event of Default has occurred and is continuing and (D) each of the Credit Parties, as applicable, has satisfied each of the conditions set forth in Section 6.1 and Section 6.2.

(ii)Certificate of Responsible Officer of each Credit Party. A certificate of a Responsible Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing Loan Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (A) the articles of incorporation (or equivalent documentation) of such Credit Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority (other than in the case of the Canadian Borrower) in its jurisdiction of incorporation or formation, (B) the bylaws (or equivalent documentation) of such Credit Party as in effect on the Closing Date (or in lieu of attaching, certifying that there has been no change since the last bylaws (or equivalent documentation) delivered to the Administrative Agent under the Existing Credit Agreement), (C) resolutions duly adopted by the board of directors (or equivalent governing body) of such Credit Party authorizing the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party, and (D) each certificate required to be delivered pursuant to Section 6.1(b)(iii).

(iii)Certificates of Good Standing. Certificates as of a recent date of the good standing or status of each Credit Party under the laws of its jurisdiction of incorporation, organization or formation (or equivalent), as applicable.

(iv)Opinions of Counsel. Favorable opinions of counsel to the Credit Parties addressed to the Administrative Agent and the Lenders with respect to the Credit Parties, the Loan Documents and such other matters as the Administrative Agent shall request (including, without limitation, opinions of foreign counsel to the Credit Parties), which such opinions shall (unless otherwise agreed to by the Administrative Agent) expressly permit reliance by successors and permitted assigns of the Administrative Agent and the Lenders.

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(v)Liability Insurance. The Administrative Agent shall have received certificates evidencing the insurance required to be maintained pursuant to Section 9.3, evidence of payment of all insurance premiums for the current policy year of each insurance policy and, if requested by the Administrative Agent, copies (certified by a Responsible Officer) of each insurance policy in form and substance reasonably satisfactory to the Administrative Agent.

(c)Consents; Defaults.

(i)Governmental and Third Party Approvals. The Credit Parties shall have received all material governmental, shareholder and third party consents and approvals necessary (or any other material consents as determined in the reasonable discretion of the Administrative Agent) in connection with the transactions contemplated by this Agreement and the other Loan Documents and all applicable waiting periods shall have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on any of the Credit Parties or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could reasonably be expected to have such effect.

(ii)No Injunction, Etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby, or which, in the Administrative Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby or could reasonably be expected to have a Material Adverse Effect.

(iii)No Material Adverse Effect. Since December 31, 2020, no event has occurred or condition arisen, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(d)Financial Matters.

(i)Financial Projections. The Administrative Agent shall have received financial projections with respect to the US Borrower and its Subsidiaries prepared by a Responsible Officer of the US Borrower, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on an annual basis for the term of the Credit Facility.

(ii)Financial Condition Certificate. The US Borrower shall have delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by the chief financial officer of the US Borrower, that after giving effect to the transactions contemplated hereby and under the other Loan Documents (A) the US Borrower and each of its Subsidiaries are each Solvent, (B) the payables of each Borrower and each of its Subsidiaries are current and not past due (except to the extent consistent with the past practice of the Borrowers and their respective Subsidiaries), (C) attached thereto are calculations evidencing compliance on a Pro Forma Basis with the covenants contained in Article X hereof and (D) the financial projections previously delivered to the Administrative Agent represent the good faith estimates (utilizing reasonable assumptions) of the financial condition and operations of the Borrowers and their respective Subsidiaries.

(iii)Payment at Closing. The Borrowers shall have paid to the Administrative Agent and the Lenders the fees set forth or referenced in Section 5.3 and any other accrued and unpaid fees or commissions due hereunder (including, without limitation, legal fees and expenses) and to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby, including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents.

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(e)Miscellaneous.

(i)Notice of Borrowing. With respect to any amounts to be borrowed on the Closing Date, the Administrative Agent shall have received a Notice of Borrowing from the US Borrower in accordance with Section 2.4(a) or Section 4.2, as applicable, and a Notice of Account Designation from the US Borrower specifying the account or accounts to which the proceeds of any Loans made on or after the Closing Date are to be disbursed.

(ii)Existing Facility. All indebtedness (including, without limitation, all accrued interest and fees) under the Existing Facility (other than indebtedness with respect to Existing Letters of Credit) shall be refinanced and replaced by the Revolving Credit Facility and the Administrative Agent shall make such transfers of funds as are necessary in order that the outstanding balance of such Loans, together with any Loans funded on the Closing Date, reflect the respective Revolving Credit Commitment of the Lenders hereunder.

(iii)PATRIOT Act. The Borrowers and each of the Subsidiary Guarantors shall have provided at least five (5) Business Days prior to the Closing Date (or such shorter period as may be agreed to by the Administrative Agent) to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act and any other Anti-Money Laundering Laws.

(iv)Other Documents. All opinions, certificates and other instruments and all proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall have received copies of all other documents, certificates and instruments reasonably requested thereby, with respect to the transactions contemplated by this Agreement.

Without limiting the generality of the provisions of Section 14.3(c), for purposes of determining compliance with the conditions specified in this Section 6.1, the Administrative Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

SECTION 6.2Conditions to All Extensions of Credit. The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit), convert or continue any Loan, any Issuing Lender to issue or extend any Letter of Credit and/or each extension of the Revolving Credit Commitments pursuant to Section 2.10 are subject to the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date:

(a)Continuation of Representations and Warranties. The representations and warranties contained in Article VII shall be true and correct in all material respects (except to the extent such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) on and as of such borrowing, continuation, conversion, issuance or extension date with the same effect as if made on and as of such date, except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date.

(b)No Existing Default. No Default or Event of Default shall have occurred and be continuing (i) on the borrowing, continuation or conversion date with respect to such Loan or after giving effect to the Loans to be made, continued or converted on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance or extension of such Letter of Credit on such date.

(c)Notices. The Administrative Agent shall have received a Notice of Borrowing or Notice of Conversion/Continuation, as applicable, from the US Borrower in accordance with Section 2.4(a), Section 4.2 or Section 5.2, as applicable.

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(d)Additional Documents. The Administrative Agent shall have received each additional document, instrument, legal opinion or other item reasonably requested by it.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE BORROWERS

SECTION 7.1Representations and Warranties. To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, each Borrower hereby represents and warrants to the Administrative Agent and Lenders both before and after giving effect to the transactions contemplated hereunder that:

(a)Organization; Power; Qualification. Each of the US Borrower and its Subsidiaries is (i) duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and (iii) is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except where the failure to be qualified or authorized, individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. The jurisdictions in which the US Borrower and its Subsidiaries are organized and qualified to do business as of the Closing Date are described on Schedule 7.1(a). No Credit Party nor any Subsidiary thereof is an Affected Financial Institution or a Covered Party. As of the Closing Date, the US Borrower is subject to an express exclusion to the definition of “legal entity customer” under the Beneficial Ownership Regulation.

(b)Ownership. Each Subsidiary of the US Borrower as of the Closing Date is listed on Schedule 7.1(b). As of the Closing Date, the capitalization of the US Borrower and its Subsidiaries consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 7.1(b). All outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable, with no personal liability attaching to the ownership thereof, and not subject to any preemptive or similar rights. The shareholders or other owners, as applicable, of the Subsidiaries of the US Borrower and the number of shares owned by each as of the Closing Date are described on Schedule 7.1(b). As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or permit the issuance of Capital Stock of the US Borrower or its Subsidiaries, except as described on Schedule 7.1(b).

(c)Authorization of Agreement, Loan Documents and Borrowing. Each of the US Borrower and its Subsidiaries has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms. This Agreement and each of the other Loan Documents has been duly executed and delivered by the duly authorized officers of the US Borrower and each of its Subsidiaries party thereto, and each such document constitutes the legal, valid and binding obligation of the US Borrower or its Subsidiary party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

(d)Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The execution, delivery and performance by the US Borrower and its Subsidiaries of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the Extensions of Credit hereunder and the transactions contemplated hereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval or violate any Applicable Law relating to the US Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of the US Borrower or any of its Subsidiaries or any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, (iii) result in or require the creation or imposition of any Lien upon or with respect to any

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property now owned or hereafter acquired by such Person other than Liens arising under the Loan Documents or (iv) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement.

(e)Compliance with Law; Governmental Approvals. Each of the US Borrower and its Subsidiaries (i) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, is final and not subject to review on appeal and is not the subject of any pending or, to the best of its knowledge, threatened attack by direct or collateral proceeding, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (ii) is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Law relating to it or any of its respective properties, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect and (iii) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Law with any Governmental Authority and has retained all material records and documents required to be retained by it under Applicable Law, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(f)Tax Returns and Payments. Each of the US Borrower and its Subsidiaries has duly filed or caused to be filed all federal, state, provincial, local and other material tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all federal, state, provincial, local and other material taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided for on the books of the US Borrower and its Subsidiaries and no Lien exists). Such returns accurately reflect in all material respects all liability for taxes of the US Borrower and its Subsidiaries for the periods covered thereby. There is no ongoing audit or examination or other investigation by any Governmental Authority of the tax liability of the US Borrower and its Subsidiaries in each case, except as could not reasonably be expected to have a liability in excess of $5,000,000. No Governmental Authority has asserted any Lien or other claim against the US Borrower or any Subsidiary thereof with respect to unpaid taxes which has not been discharged, resolved or adequately reserved for on the books of the US Borrower and its Subsidiaries. The charges, accruals and reserves on the books of the US Borrower and any of its Subsidiaries in respect of federal, state, provincial, local and other taxes for all Fiscal Years and portions thereof since the organization of the US Borrower and any of its Subsidiaries are in the judgment of the Borrowers adequate, and the Borrowers do not anticipate any additional taxes or assessments for any of such years beyond those for which such reserves have been made.

(g)Intellectual Property Matters. Each of the US Borrower and its Subsidiaries owns or possesses rights to use all franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights and other rights with respect to the foregoing which are required to conduct its business, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and neither the US Borrower nor any Subsidiary thereof is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations, except any such revocation, termination or liability as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(h)Environmental Matters.

(i)The properties owned, leased or operated by the US Borrower and its Subsidiaries now or in the past do not contain, and to their knowledge have not previously contained, any Hazardous Materials in amounts or concentrations which (A) constitute or constituted a violation of applicable Environmental Laws or (B) could give rise to liability under applicable Environmental Laws, except where such violation or liability could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

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(ii)The US Borrower, each Subsidiary and such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, with all applicable Environmental Laws, and there is no contamination at, under or about such properties or such operations which could interfere with the continued operation of such properties or impair the fair saleable value thereof, except for any such noncompliance or contamination, that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(iii)Neither the US Borrower nor any Subsidiary thereof has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters, Hazardous Materials, or compliance with Environmental Laws, nor does the US Borrower or any Subsidiary thereof have knowledge or reason to believe that any such notice will be received or is being threatened, except where such violation, alleged violation, noncompliance, liability or potential liability which is the subject of such notice could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(iv)Hazardous Materials have not been transported or disposed of to or from the properties owned, leased or operated by the US Borrower and its Subsidiaries in violation of, or in a manner or to a location which could give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws, except where such violation or liability could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(v)No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of the Borrowers, threatened, under any Environmental Law to which the US Borrower or any Subsidiary thereof is or will be named as a potentially responsible party with respect to such properties or operations conducted in connection therewith, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to US Borrower, any Subsidiary or such properties or such operations; except where such proceeding, action, degree, order or other requirement could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(vi)There has been no release, or to the best of the Borrowers’ knowledge, threat of release, of Hazardous Materials at or from properties owned, leased or operated by the US Borrower or any Subsidiary, now or in the past, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws, except where such violation or liability could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(i)ERISA and Related Matters.

(i)As of the Closing Date, neither the US Borrower nor any ERISA Affiliate maintains or contributes to, or has any obligation under, any Employee Benefit Plans other than those identified on Schedule 7.1(i).

(ii)The US Borrower and each ERISA Affiliate is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the Code except for such plans that have not yet received determination letters but for which the remedial amendment period for submitting a determination letter has not yet expired. No liability has been incurred by the US Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan or any Multiemployer Plan or any obligation in connection with the termination of

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or withdrawal from any Non-U.S. Plan, except in each case for a liability that could not reasonably be expected to have a Material Adverse Effect.

(iii)As of the Closing Date, no Pension Plan has been terminated, nor has any Pension Plan become subject to funding based benefit restrictions under Section 436 of the Code, nor has there been a determination that any Pension Plan is considered an at-risk plan or a Multiemployer Plan is in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA, nor has any funding waiver from the IRS been received or requested with respect to any Pension Plan, nor has the US Borrower or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Sections 412 or 430 of the Code, Sections 302 or 303 of ERISA or the terms of any Pension Plan prior to the due dates of such contributions under Sections 412 or 430 of the Code or Sections 302 or 303 of ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan.

(iv)Except where the failure of any of the following representations to be correct in all material respects could not reasonably be expected to have a Material Adverse Effect, neither the US Borrower nor any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which remains outstanding other than the payment of premiums and there are no premium payments which are due and unpaid, (C) failed to make a required contribution or payment to a Multiemployer Plan, or (D) failed to make a required installment or other required payment under Sections 412 or 430 of the Code.

(v)No Termination Event has occurred or is reasonably expected to occur.

(vi)Except where the failure of any of the following representations to be correct in all material respects could not reasonably be expected to have a Material Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or investigation is existing or, to the best knowledge of the Borrowers after due inquiry, threatened concerning or involving any (A) employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed to by the US Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.

(vii)Each Borrower represents and warrants as of the Closing Date that such Borrower is not and will not be (1) an employee benefit plan subject to Title I of ERISA, (2) a plan or account subject to Section 4975 of the Code; (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or the Code; or (4) a “governmental plan” within the meaning of ERISA.

(viii)The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the US Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by more than $2,000,000. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

(ix)All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all Applicable Laws, except where failure to so comply, individually or in the aggregate, could not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and other payments required by applicable Non-U.S. Plan documents or Applicable Laws have been made or remitted or accrued to or in respect of the Non-U.S. Plans in accordance with such Non-U.S. Plan documents and Applicable Laws, except where failure to do so, individually or in the aggregate, could not be reasonably expected to have a Material Adverse Effect. The Non-U.S. Plans, to the extent required for the Tax status intended for such plans, are duly registered under Tax legislation and any other Applicable Laws which require registration and no event has occurred which could cause the loss of such registered status except where

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failure to register or the loss of registered status, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. There are no outstanding disputes concerning the Non-U.S. Plans or the assets thereof which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(x)None of the Credit Parties or any Subsidiary has established, is bound by, is subject to, or has any liability or contingent liability under, a Canadian Defined Benefit Plan. None of the Credit Parties nor any Subsidiary has at any time been an employer in, or has participated in, or has contributed to or has been required to contribute to, a Canadian Defined Benefit Plan in respect of which it currently has any liability or contingent liability.

(j)Margin Stock. Neither the US Borrower nor any Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System). No part of the proceeds of any of the Loans or Letters of Credit will be used for purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors. Following the application of the proceeds of each Extension of Credit, not more than twenty-five percent (25%) of the value of the assets (either of the US Borrower only or of the US Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 11.2 or Section 11.5 or subject to any restriction contained in any agreement or instrument between any Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness referred to in Section 13.1(g) will be “margin stock”. If requested by any Lender (through the Administrative Agent) or the Administrative Agent, the US Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U 1 referred to in Regulation U.

(k)Government Regulation. Neither the US Borrower nor any Subsidiary thereof is an “investment company” or a company “controlled” by an “investment company” (as each such term is defined or used in the Investment Company Act of 1940, as amended) and neither the US Borrower nor any Subsidiary thereof is, or after giving effect to any Extension of Credit will be, subject to regulation under the Interstate Commerce Act, as amended, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

(l)Material Contracts. Neither the US Borrower nor any Subsidiary (nor, to the knowledge of the Borrowers, any other party thereto) is in breach of or in default under any Material Contract in any material respect.

(m)Employee Relations. Each of the US Borrower and its Subsidiaries has a stable work force in place and is not, as of the Closing Date, party to any collective bargaining agreement nor has any labor union been recognized as the representative of its employees except as set forth on Schedule 7.1(m). The Borrowers know of no pending, threatened or contemplated strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries.

(n)Burdensome Provisions. Neither the US Borrower nor any Subsidiary thereof is a party to any indenture, agreement, lease or other instrument, or subject to any corporate or partnership restriction, Governmental Approval or Applicable Law which is so unusual or burdensome as in the foreseeable future could be reasonably expected to have a Material Adverse Effect. The US Borrower and its Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect. No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Capital Stock to the US Borrower or any Subsidiary or to transfer any of its assets or properties to the US Borrower or any other Subsidiary in each case other than existing under or by reason of the Loan Documents or Applicable Law or as expressly permitted pursuant to Section 11.11.

(o)Financial Statements. The (i) audited Consolidated balance sheet of the US Borrower and its Subsidiaries as of December 31, 2020 and the related audited statements of income and retained

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earnings and cash flows for the Fiscal Year then ended and (ii) unaudited Consolidated balance sheet of the US Borrower and its Subsidiaries as of June 30, 2021 and related unaudited interim statements of income and retained earnings, copies of which have been furnished to the Administrative Agent and each Lender, are complete and correct and fairly present on a Consolidated basis the assets, liabilities and financial position of the US Borrower and its Subsidiaries as at such dates, and the results of the operations and changes of financial position for the periods then ended (other than customary year-end adjustments and the absence of footnotes for unaudited financial statements). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP. The US Borrower and its Subsidiaries have no Indebtedness, obligation or other unusual forward or long-term commitment which is not fairly reflected in the foregoing financial statements or in the notes thereto.

(p)No Material Adverse Change. Since December 31, 2020, there has been no material adverse change in the properties, business, operations, or condition (financial or otherwise) of the US Borrower and its Subsidiaries, taken as a whole, and no event has occurred or condition arisen that could reasonably be expected to have a Material Adverse Effect.

(q)Solvency. As of the Closing Date and after giving effect to each Extension of Credit made hereunder, the US Borrower and each of its Subsidiaries will be Solvent.

(r)Titles to Properties. Each of the US Borrower and its Subsidiaries has such title to the real property owned or leased by it as is necessary or desirable to the conduct of its business and valid and legal title to all of its personal property and assets, including, but not limited to, those reflected on the balance sheets of the US Borrower and its Subsidiaries referenced in Section 7.1(o), except those which have been disposed of by the US Borrower or its Subsidiaries subsequent to the date of such balance sheets pursuant to dispositions in the ordinary course of business or as otherwise expressly permitted hereunder.

(s)Liens. None of the properties and assets of the US Borrower or any Subsidiary thereof is subject to any Lien, except Permitted Liens. No financing statement under the Uniform Commercial Code of any state or comparable legislation in other jurisdictions which names the US Borrower or any Subsidiary thereof or any of their respective trade names or divisions as debtor and which has not been terminated, has been filed in any state or other jurisdiction and neither the US Borrower nor any Subsidiary thereof has signed any such financing statement or any security agreement authorizing any secured party thereunder to file any such financing statement, except to perfect those Permitted Liens.

(t)Indebtedness and Guaranty Obligations. The US Borrower and its Subsidiaries have performed and are in compliance in all material respects with all of the terms of any Indebtedness and Guaranty Obligations which are in an outstanding amount in excess of $50,000,000, and all instruments and agreements relating thereto, and no default or event of default, or event or condition which with notice or lapse of time or both would constitute such a default or event of default on the part of the US Borrower or any of its Subsidiaries exists with respect to any such Indebtedness or Guaranty Obligation.

(u)Litigation. Except for matters existing on the Closing Date and set forth on Schedule 7.1(u), there are no actions, suits or proceedings pending nor, to the knowledge of the Borrowers, threatened against or in any other way relating adversely to or affecting the US Borrower or any Subsidiary thereof or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that (i) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions provided for herein or therein, or (ii) either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

(v)Absence of Defaults. No event has occurred or is continuing which constitutes a Default or an Event of Default, or which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by the US Borrower or any Subsidiary thereof under any Material Contract or judgment, decree or order to which the US Borrower or its Subsidiaries is a party or by which the US Borrower or its Subsidiaries or any of their respective properties may be bound or which

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would require the US Borrower or its Subsidiaries to make any payment thereunder prior to the scheduled maturity date therefor.

(w)Senior Indebtedness Status. The Obligations of the US Borrower and each of its Subsidiaries under this Agreement and each of the other Loan Documents ranks and shall continue to rank at least senior in priority of payment to all Subordinated Indebtedness and at least equal to all senior unsecured Indebtedness of each such Person and is designated as “Senior Indebtedness” (or the equivalent term) under all instruments and documents, now or in the future, relating to all Subordinated Indebtedness and all senior unsecured Indebtedness of such Person.

(x)Accuracy and Completeness of Information. All written information, reports and other papers and data produced by or on behalf of the US Borrower or any Subsidiary thereof (other than financial projections, which shall be subject to the standard set forth in Section 8.1(c)) and furnished to the Lenders were, at the time the same were so furnished, complete and correct in all respects to the extent necessary to give the recipient a true and accurate knowledge of the subject matter.

(y)Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.

(i)(A) No Borrower, nor any Subsidiary, nor any of their respective directors, officers, or, to the knowledge of any Borrower or such Subsidiary, any of their respective employees or Affiliates, or (B) to the knowledge of any Borrower, no agent or representative of any Borrower nor any Subsidiary that will act in any capacity in connection with or benefit from the Credit Facility, (1) is a Sanctioned Person or currently the subject or target of any Sanctions, (2) is controlled by or is acting on behalf of a Sanctioned Person, (3) has its assets located in a Sanctioned Country, (4) is under administrative, civil or criminal investigation for an alleged violation of, or received notice from or made a voluntary disclosure to any governmental entity regarding a possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions by a governmental authority that enforces Sanctions or any Anti-Corruption Laws or Anti-Money Laundering Laws, or (5) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons.

(ii)Each Borrower and each of its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by such Borrower and such Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions.

(iii)Each Borrower and each of its Subsidiaries, each director, officer, and to the knowledge of the Borrowers, employee, agent and Affiliate of any Borrower and any such Subsidiary, is in compliance with all Anti-Corruption Laws, Anti-Money Laundering Laws in all material respects and applicable Sanctions.

(iv)No proceeds of any Extension of Credit have been used, directly or indirectly, by any Borrower, any of its Subsidiaries or any of its or their respective directors, officers, employees and agents in violation of Section 9.12.

(z)Disclosure. The Borrowers have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which any of the Credit Parties are subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statement, material report, material certificate or other material information furnished (whether in writing or orally) by or on behalf of any of the Credit Parties to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, proforma financial information, estimated financial information and other projected or estimated information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

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(aa)Insurance. The properties of the US Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies against such risks and in such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law (including, without limitation, hazard and business interruption insurance).

SECTION 7.2Survival of Representations and Warranties, Etc. All representations and warranties set forth in this Article VII and all representations and warranties contained in any certificate, or any of the Loan Documents (including, but not limited to, any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties made under this Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are expressly made as of a specific date), shall survive the Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any borrowing hereunder.

ARTICLE VIII

FINANCIAL INFORMATION AND NOTICES

Until all the Obligations have been paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 15.2, the Borrowers will furnish or cause to be furnished to the Administrative Agent at the Administrative Agent’s Office at the address set forth in Section 15.1 and to the Lenders at their respective addresses as set forth on the Register, or such other office as may be designated by the Administrative Agent and Lenders from time to time:

SECTION 8.1Financial Statements and Projections.

(a)Quarterly Financial Statements. As soon as practicable and in any event within forty-five (45) days (or, if earlier, on the date of any required public filing thereof) after the end of each fiscal quarter of each Fiscal Year, an unaudited Consolidated balance sheet of the US Borrower and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income, retained earnings and cash flows for the fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the US Borrower in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the US Borrower to present fairly in all material respects the financial condition of the US Borrower and its Subsidiaries on a Consolidated basis as of their respective dates and the results of operations of the US Borrower and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

(b)Annual Financial Statements. As soon as practicable and in any event within ninety (90) days (or, if earlier, on the date of any required public filing thereof) after the end of each Fiscal Year, an audited Consolidated balance sheet of the US Borrower and its Subsidiaries as of the close of such Fiscal Year and audited Consolidated statements of income, retained earnings and cash flows for the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing acceptable to the Administrative Agent and accompanied by a report thereon by such certified public accountants that is not qualified with respect to scope limitations imposed by the US Borrower or any of its Subsidiaries or with respect to accounting principles followed by the US Borrower or any of its Subsidiaries not in accordance with GAAP.

(c)Annual Business Plan and Financial Projections. As soon as practicable and in any event within forty-five (45) days prior to the beginning of each Fiscal Year (commencing with the delivery for the Fiscal Year beginning January 1, 2023), a business plan of the US Borrower and its Subsidiaries for

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the ensuing four (4) fiscal quarters, such plan to be prepared in accordance with GAAP and to include, on a quarterly basis, the following: a quarterly operating and capital budget, a projected income statement, statement of cash flows and balance sheet and a report containing management’s discussion and analysis of such projections, accompanied by a certificate from the chief financial officer of the US Borrower to the effect that, to the best of such officer’s knowledge, such projections are good faith estimates (utilizing reasonable assumptions) of the financial condition and operations of the US Borrower and its Subsidiaries for such four (4) quarter period.

SECTION 8.2Officer’s Compliance Certificate. At each time financial statements are delivered pursuant to Sections 8.1(a) or (b) and at such other times as the Administrative Agent shall reasonably request, an Officer’s Compliance Certificate.

SECTION 8.3Accountants’ Certificate. At each time financial statements are delivered pursuant to Section 8.1(b), a certificate of the independent public accountants certifying such financial statements that in connection with their audit, nothing came to their attention that caused them to believe that the Borrowers failed to comply with the terms, covenants, provisions or conditions of Articles X and XI, insofar as they relate to financial and accounting matters or, if such is not the case, specifying such non-compliance and its nature and period of existence.

SECTION 8.4Other Reports.

(a)Promptly after becoming available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the US Borrower generally, and copies of all annual, regular, periodic and special reports and registration statements which the US Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto.

(b)Promptly upon receipt thereof, copies of all reports, if any, submitted to the US Borrower or its board of directors by its independent public accountants in connection with their auditing function, including, without limitation, any management report and any management responses thereto.

(c)Promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable Anti-Money Laundering Laws (including, without limitation, any applicable “know your customer” rules and regulations and the PATRIOT Act and the Canadian Anti-Money Laundering & Anti-Terrorism Legislation), as from time to time reasonably requested by the Administrative Agent or any Lender.

(d)Such other information regarding the operations, business affairs and financial condition of the US Borrower or any of its Subsidiaries as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to Section 8.1(a) or (b) or Section 8.4(a) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the US Borrower posts such documents, or provides a link thereto on the US Borrower’s website on the Internet at the website address listed in Section 15.1; or (ii) on which such documents are posted on the US Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the US Borrower shall notify the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions of such documents. Notwithstanding anything contained herein, Officer’s Compliance Certificates required by Section 8.2 may be delivered to the Administrative Agent by electronic delivery at the email addresses listed in Section 15.1; provided that the US Borrower shall promptly provide a paper copy of any such Officer’s Compliance Certificate upon the Administrative Agent’s request. Except for such Officer’s Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the

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US Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the Issuing Lenders materials and/or information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on SyndTrak Online or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrowers or their securities) (each, a “Public Lender”). The Borrowers hereby agree that they will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (i) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (ii) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Lenders and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrowers or their securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 15.12); (iii) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (iv) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

SECTION 8.5Notice of Litigation and Other Matters. Prompt telephonic and written notice of:

(a)the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving the US Borrower or any Subsidiary thereof or any of their respective properties, assets or businesses which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect;

(b)any notice of any violation received by the US Borrower or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws which in any such case could reasonably be expected to have a Material Adverse Effect;

(c)any labor controversy that (i) has resulted in a strike or other work stoppage or slow down against the US Borrower or any Subsidiary thereof, or (ii) threatens to result in, a strike or other work stoppage or slow down against the US Borrower or any Subsidiary thereof which could reasonably be expected to, individually or in the aggregate with any other labor controversy, work stoppage or slow down, have a Material Adverse Effect;

(d)any attachment, judgment, lien, levy or order exceeding $35,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) that may be assessed against or threatened against the US Borrower or any Subsidiary thereof;

(e)(i) any Default or Event of Default or (ii) any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Material Contract to which the US Borrower or any of its Subsidiaries is a party or by which the US Borrower or any Subsidiary thereof or any of their respective properties may be bound;

(f)(i) any unfavorable determination letter from the IRS regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by the US Borrower or any ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or Multiemployer Plan or to have a trustee appointed to administer any Pension Plan or Multiemployer Plan, (iii) all notices received by the US Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA, (iv) the Borrowers obtaining knowledge or reason to know that the US Borrower or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination

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within the meaning of Section 4041(c) of ERISA, (v) any documents or correspondence with any Governmental Authority resulting from the occurrence of a “reportable event” (as defined by Section 4043(c) of ERISA) and (vi) receipt of notice of the imposition of a material financial penalty (which for this purpose shall mean any material Tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans; and

(g)any event which makes any of the representations set forth in Section 7.1 inaccurate in any respect.

Each notice pursuant to this Section 8.5 shall be accompanied by a statement of a Responsible Officer of the US Borrower setting forth details of the occurrence referred to therein and stating what action the US Borrower or any Subsidiary thereof, as applicable, has taken and proposes to take with respect thereto. Each notice pursuant to Section 8.5(e)(i) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached; provided that, delivery of the foregoing notices shall be deemed to have been made if made available on EDGAR Online or the website of the US Borrower and the US Borrower shall have given notice thereof to Administrative Agent.

SECTION 8.1Accuracy of Information. All written information, reports, statements and other papers and data furnished by or on behalf of the Borrowers to the Administrative Agent or any Lender whether pursuant to this Article VIII or any other provision of this Agreement, shall, at the time the same is so furnished, comply with the representations and warranties set forth in Section 7.1(x).

ARTICLE IX

AFFIRMATIVE COVENANTS

Until all of the Obligations have been paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner provided for in Section 15.2, the Borrowers will, and will cause each of their respective Subsidiaries to:

SECTION 9.1Preservation of Corporate Existence and Related Matters. Except as permitted by Section 11.4, preserve and maintain its separate corporate existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation or other entity and authorized to do business in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

SECTION 9.2Maintenance of Property. Protect and preserve all properties useful in and material to its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such property necessary for the conduct of its business, so that the business carried on in connection therewith may be conducted in a commercially reasonable manner.

SECTION 9.3Insurance. Maintain insurance with financially sound and reputable insurance companies against such risks and in such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law (including, without limitation, hazard and business interruption insurance), and on the Closing Date and from time to time thereafter deliver to the Administrative Agent upon its request a detailed list of the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby.

SECTION 9.4Accounting Methods and Financial Records. Maintain a system of accounting, and keep such books, records and accounts (which shall be true and complete in all material respects) as may be required or as may be necessary to permit the preparation of financial statements in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction over it or any of its properties.

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SECTION 9.5Payment and Performance of Obligations. Pay and perform all Obligations under this Agreement and the other Loan Documents, and pay or perform (a) all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its property, and (b) all other indebtedness, obligations and liabilities in accordance with customary trade practices; provided, that the US Borrower or such Subsidiary may contest any item described in clauses (a) or (b) of this Section in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

SECTION 9.6Compliance With Laws and Approvals. Observe and remain in compliance in all material respects with all Applicable Law and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business, except where the failure to so comply or maintain such Governmental Approval could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

SECTION 9.7Environmental Laws. In addition to and without limiting the generality of Section 9.6, (a) comply with, and ensure such compliance by all tenants and subtenants with all applicable Environmental Laws and obtain and comply with and maintain, and ensure that all tenants and subtenants, if any, obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except where the failure to do so could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws, except where the failure to conduct or complete such actions, or comply with such orders or directions, could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and (c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the presence of Hazardous Materials, or the violation of, noncompliance with or liability under any Environmental Laws applicable to the operations of the US Borrower or any such Subsidiary, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor, as determined by a court of competent jurisdiction by final nonappealable judgment.

SECTION 9.8Compliance with ERISA. In addition to and without limiting the generality of Section 9.6, (a) except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (ii) not take any action or fail to take action the result of which could be a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and (iv) operate each Employee Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code and (b) furnish to the Administrative Agent upon the Administrative Agent’s request such additional information about any Employee Benefit Plan as may be reasonably requested by the Administrative Agent.

SECTION 9.9Compliance With Agreements. Comply in all respects with each term, condition and provision of all leases, agreements and other instruments entered into in the conduct of its business including, without limitation, any Material Contract; provided, that the Borrowers or any Subsidiary thereof may contest any such lease, agreement or other instrument in good faith through applicable proceedings so long as adequate reserves are maintained in accordance with GAAP.

SECTION 9.10Visits and Inspections. Permit representatives of the Administrative Agent or any Lender, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial

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condition, results of operations and business prospects; provided that so long as no Default or Event of Default has occurred and is continuing, the Administrative Agent or applicable Lender shall give reasonable prior to notice to the US Borrower of its intention to visit and inspect the properties and records pursuant to this Section and shall be limited to one such visit and inspection per year at the Borrower’s expense; provided further that upon the occurrence and during the continuance of a Default or Event of Default, the Administrative Agent or applicable Lender may do any of the foregoing at the expense of the Borrowers at any time during normal business hours without advance notice.

SECTION 9.11Additional Subsidiaries.

(a)Notify the Administrative Agent of the creation or acquisition (including by division) of any Domestic Subsidiary and, except in the case of any Domestic Subsidiary that is a Special Purpose Subsidiary, promptly thereafter (and in any event within thirty (30) days), cause such Person to (i) become a Subsidiary Guarantor by delivering to the Administrative Agent a duly executed supplement to the Subsidiary Guaranty Agreement or such other document as the Administrative Agent shall deem appropriate for such purpose, (ii) deliver to the Administrative Agent such documents and certificates referred to in Section 6.1 as may be reasonably requested by the Administrative Agent, (iii) deliver to the Administrative Agent such updated Schedules to the Loan Documents as requested by the Administrative Agent with respect to such Person, and (iv) deliver to the Administrative Agent such other documents as may be reasonably requested by the Administrative Agent, all in form, content and scope reasonably satisfactory to the Administrative Agent.

(b)Notify the Administrative Agent at any time that any Person that is not a Subsidiary Guarantor becomes a guarantor of or otherwise provides credit support for any Indebtedness created or incurred pursuant to a Qualified Unsecured Issuance or Section 11.1(p) and concurrently with such Person becoming a guarantor thereunder or providing credit support therefor, cause such Person to take all of the actions required pursuant to clauses (i) through (iv) of subsection (a) of this Section.

(c)Notify the Administrative Agent at any time that any Person that was a Special Purpose Subsidiary ceases to be a Special Purpose Subsidiary and promptly (and in any event within thirty (30) days) cause such Person to take all of the actions required pursuant to clauses (i) through (iv) of subsection (a) of this Section.

SECTION 9.12Use of Proceeds.

(a)The Borrowers shall use the proceeds of the Extensions of Credit under the Revolving Credit Facility (i) to refinance the existing indebtedness of the Borrowers and their respective Subsidiaries under the Existing Facility (other than the Existing Letters of Credit), (ii) for general corporate purposes of the Borrowers and their respective Subsidiaries (including, without limitation, working capital, capital expenditures in the ordinary course of business, Permitted Acquisitions, permitted dividends and permitted stock repurchases) and (iii) to pay fees and expenses related to the Credit Facility.

(b)The US Borrower shall use the proceeds of the Initial Term Loans for general corporate purposes of the Borrowers and their respective Subsidiaries (including, without limitation, working capital, capital expenditures in the ordinary course of business, Permitted Acquisitions, permitted dividends and permitted stock repurchases).

(c)The Borrowers will not request any Extension of Credit, and the Borrowers shall not use, and shall ensure that their respective Subsidiaries and any of their respective directors, officers, employees and agents shall not use, the proceeds of any Extension of Credit, directly or indirectly, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 9.13Further Assurances. Make, execute and deliver all such additional and further acts, things, deeds and instruments as the Administrative Agent or the Required Lenders (through the

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Administrative Agent) may reasonably require to document and consummate the transactions contemplated hereby and to vest completely in and insure the Administrative Agent and the Lenders their respective rights under this Agreement, the Letters of Credit and the other Loan Documents.

SECTION 9.14Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions. The Borrowers will (a) maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the Borrowers, their respective Subsidiaries and their respective directors, officers, employees and agents with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions, (b) promptly notify (i) the Administrative Agent and the Lenders of any change in the US Borrower’s status as exempt from the reporting requirements of the Beneficial Ownership Regulation and provide a new Beneficial Ownership Certification and (ii) the Administrative Agent and each Lender that previously received a Beneficial Ownership Certification of any change to the list of beneficial owners identified therein and (c) promptly upon the reasonable request of the Administrative Agent or any Lender, provide the Administrative Agent or directly to such Lender, as the case may be, any information or documentation reasonably requested by it for purposes of complying with the Beneficial Ownership Regulation.

ARTICLE X

FINANCIAL COVENANTS

Until all of the Obligations have been paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 15.2, the US Borrower and its Subsidiaries on a Consolidated basis will not:

SECTION 10.1Average Total Leverage Ratio. As of any fiscal quarter end, permit the Average Total Leverage Ratio to be greater than or equal to 3.25 to 1.00.

Notwithstanding the foregoing, in connection with any Permitted Acquisition having aggregate cash consideration (including cash, Cash Equivalents and other deferred payment obligations) equal to or in excess of $200,000,000, the US Borrower may, at its election, in connection with such Permitted Acquisition and upon prior written notice to the Administrative Agent, increase the required Average Total Leverage Ratio pursuant to this Section 10.1 to 3.50 to 1.00, which such increase shall be applicable the fiscal quarter in which such Permitted Acquisition is consummated and the three (3) consecutive quarterly test periods thereafter (each, a “Leverage Ratio Increase”); provided that (x) such Leverage Ratio Increase shall apply solely with respect to compliance with this Section 10.1 and any incurrence test with respect to any Indebtedness used to finance a Permitted Acquisition and shall not apply to any other incurrence test set forth in this Agreement, (y) there shall be at least two (2) full fiscal quarters following the cessation of each such Leverage Ratio Increase during which no Leverage Ratio Increase shall then be in effect and (z) there shall be no more than two (2) Leverage Ratio Increases during the term of this Agreement.

SECTION 10.2Fixed Charge Coverage Ratio. As of any fiscal quarter end, permit the ratio of (a) EBITDAR for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date to (b) the sum of (i) Interest Expense paid or payable in cash for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date plus (ii) Rental Expense for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date to be less than 2.25 to 1.00.

ARTICLE XI

NEGATIVE COVENANTS

Until all of the Obligations have been paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 15.2, the Borrowers have not and will not and will not permit any of their respective Subsidiaries to:

SECTION 11.1Limitations on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness except:

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(a)the Obligations (excluding Hedging Obligations);

(b)Indebtedness incurred in connection with a Hedging Agreement, in each case, incurred in the ordinary course of business and not for speculative purposes;

(c)Indebtedness existing on the Closing Date, as set forth on Schedule 11.1, and the renewal, refinancing, extension and replacement (but not the increase in the aggregate principal amount) thereof;

(d)Indebtedness of the US Borrower and its Subsidiaries incurred in connection with Capital Leases in an aggregate amount not to exceed five percent (5%) of Consolidated Total Assets (determined at the time of incurrence thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(e)purchase money Indebtedness of the US Borrower and its Subsidiaries in an aggregate amount not to exceed five percent (5%) of Consolidated Total Assets (determined at the time of incurrence thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(f)Guaranty Obligations in favor of the Administrative Agent for the benefit of the Administrative Agent and the Lenders (and their Affiliates, as applicable);

(g)Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (b) through (e) or subsections (k), (p) and (q) of this Section; provided that in the case of each of subsections (k), (p) and (q) the Persons obligated with respect to such Guaranty Obligations have also guaranteed the Obligations;

(h)Indebtedness owed (i) by the US Borrower to any Subsidiary Guarantor, (ii) by any Subsidiary Guarantor to the US Borrower, (iii) by any Subsidiary Guarantor to any other Subsidiary Guarantor, or (iv) by any Subsidiary that is not a Subsidiary Guarantor to any other Subsidiary that is not a Subsidiary Guarantor;

(i)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, Indebtedness owed by the US Borrower or any Subsidiary Guarantor to any Foreign Subsidiary or Indebtedness owed by any Foreign Subsidiary to the US Borrower or any Subsidiary Guarantor which, together with the total amount of any (i) investments in connection with the creation of new Foreign Subsidiaries or investments in existing Foreign Subsidiaries under Section 11.3(i) and (ii) sales of assets to Foreign Subsidiaries under Section 11.5(f) does not exceed five percent (5%) of Consolidated Total Assets (such percentage amounts determined at the time of incurrence thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(j)Subordinated Indebtedness; provided that in the case of each issuance of Subordinated Indebtedness, (i) no Default or Event of Default shall have occurred and be continuing or would be caused by the issuance of such Subordinated Indebtedness and (ii) the Administrative Agent shall have received satisfactory written evidence that the US Borrower and its Subsidiaries would be in compliance with all covenants contained in this Agreement on a Pro Forma Basis after giving effect to the issuance of any such Subordinated Indebtedness;

(k)additional Indebtedness of the US Borrower and its Subsidiaries not otherwise permitted pursuant to this Section in an aggregate amount outstanding not to exceed five percent (5%) of Consolidated Total Assets (determined at the time of incurrence thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(l)so long as no Default or Event of Default has occurred and is continuing or would occur as a result therefrom, Indebtedness arising in connection with an Accounts Securitization;

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(m)endorsements of negotiable instruments for deposit or collection in the ordinary course of business;

(n)unsecured Indebtedness in respect of performance bonds, worker’s compensation claims, surety or appeal bonds and payment obligations in connection with self-insurance or similar obligations, in each case to the extent incurred in the ordinary course of business;

(o)[Intentionally Omitted];

(p)Indebtedness under the Bank of America Term Loan Facility so longthe Obligations shall rank at least paripassu with such Indebtedness and any refinancings, refundings, renewals or extensions thereof; provided that (i) such refinancing shall be on terms and conditions that are (A) consistent with the then-current market terms and conditions of such type of Indebtedness (as reasonably determined in good faith by the board of directors of the US Borrower) and (B) no less favorable to the Lenders, when taken as a whole, than the terms of the Bank of America Term Loan Facility, (ii) no Default or Event of Default shall have occurred and be continuing or would be caused by such refinancing, refunding, renewal or extension thereof, (iii) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing; (iv) the final maturity date and weighted average life of such refinancing, refunding, renewal or extension shall not be prior to or shorter than that applicable to the Indebtedness prior to such refinancing, refunding, renewal or extension and (v) such refinancing, refunding, renewal or extension shall (A) be unsecured (other than to the extent of a Lien permitted solely pursuant to Section 11.2(l)), (B) not rank higher than paripassu with the Obligations and (C) not be guaranteed by any Person that has not also guaranteed all of the Obligations;

(q)Indebtedness consisting of Qualified Unsecured Issuances and any refinancings, refundings, renewals or extensions thereof; provided that (i) such refinancing shall be on terms and conditions that are (A) consistent with the then-current market terms and conditions of such type of unsecured debt (as reasonably determined in good faith by the board of directors of the US Borrower) and (B) no less favorable to the Lenders, when taken as a whole, than the terms of the Qualified Unsecured Issuances, (ii) no Default or Event of Default shall have occurred and be continuing or would be caused by such refinancing, refunding, renewal or extension thereof, (iii) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing or (B) if the Administrative Agent shall have received an Officer’s Compliance Certificate (in form and substance satisfactory to the Administrative Agent) evidencing that immediately before and after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (1) no Default or Event of Default shall exist and (2) the Average Total Leverage Ratio shall be less than 3.25 to 1.00, (iv) the final maturity date and weighted average life of such refinancing, refunding, renewal or extension shall not be prior to or shorter than that applicable to the Indebtedness prior to such refinancing, refunding, renewal or extension and (v) such refinancing, refunding, renewal or extension shall (A) be unsecured, (B) not rank higher than paripassu with the Obligations and (C) not be guaranteed by any Person that has not also guaranteed all of the Obligations.

provided, that no agreement or instrument with respect to Indebtedness permitted to be incurred by this Section shall restrict, limit or otherwise encumber (by covenant or otherwise) the ability of any Subsidiary of any Borrower to make any payment to such Borrower or any of its Subsidiaries (in the form of dividends, intercompany advances or otherwise) for the purpose of enabling such Borrower to pay the Obligations.

SECTION 11.2Limitations on Liens. Create, incur, assume or suffer to exist, any Lien on or with respect to any of its assets or properties (including, without limitation, shares of Capital Stock), real or personal, whether now owned or hereafter acquired, except:

(a)Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or which

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are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

(b)the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, (i) which are not overdue for a period of more than thirty (30) days or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

(c)Liens consisting of deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar legislation;

(d)Liens constituting encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property as are of a nature generally existing with respect to properties of a similar character, which in the aggregate are not substantial in amount and which do not, in any case, materially detract from the value of such property or materially impair the use thereof in the ordinary conduct of business;

(e)Liens securing all of the Obligations;

(f)Liens not otherwise permitted hereunder securing obligations, not at any time exceeding in the aggregate $50,000,000;

(g)(i) Liens in existence on the Closing Date and described on Schedule 11.2 and (ii) Liens incurred in connection with any refinancing, refunding, renewal or extension of secured Indebtedness permitted pursuant to Section 11.1(c); provided that such Liens (A) were not created in contemplation of such refinancing, refunding, renewal or extension and (B) do not extend to cover any other property or assets of the Borrowers and their respective Subsidiaries;

(h)Liens securing Indebtedness permitted under Sections 11.1(d) and (e); provided that (i) such Liens shall be created substantially simultaneously with the acquisition or lease of the related asset, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased and (iv) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original purchase price or lease payment amount of such property at the time it was acquired;

(i)Liens incurred in connection with any Accounts Securitization (which Liens shall attach solely to the Transferred Assets sold or transferred in connection with such Accounts Securitization);

(j)Liens securing Indebtedness permitted under Section 11.1(k);

(k)Liens securing vendor floor planning or other similar arrangements for the sale of goods or inventory entered into by the US Borrower or any Subsidiary in the ordinary course of business and provided that (i) such Liens do not at any time encumber any property other than the goods or inventory financed by such vendor floor planning or other similar arrangement and (ii) the aggregate amount of the Indebtedness, liabilities, obligations or other amounts secured thereby does not exceed the lesser of (A) the original purchase price of such goods or inventory and (B) $25,000,000; and

(l)Liens securing Indebtedness permitted under Section 11.1(p) and Section 11.1(q) so long as in each case the Obligations are secured on an equal and ratable basis pursuant to an intercreditor agreement in form and substance satisfactory to the Administrative Agent.

SECTION 11.3Limitations on Loans, Advances, Investments and Acquisitions. Purchase, own, invest in or otherwise acquire, directly or indirectly, any Capital Stock, interests in any partnership or joint venture (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to

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exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any Person except:

(a)(i) investments existing on the Closing Date in Subsidiaries, and (ii) the other loans, advances and investments existing on the Closing Date which are described on Schedule 11.3;

(b)investments in (i) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within one hundred twenty (120) days from the date of acquisition thereof, (ii) commercial paper maturing no more than one hundred twenty (120) days from the date of creation thereof and currently having the highest rating obtainable from either S&P or Moody’s, (iii) certificates of deposit maturing no more than one hundred twenty (120) days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency; provided, that the aggregate amount invested in such certificates of deposit shall not at any time exceed $7,500,000 for any one such certificate of deposit and $15,000,000 for any one such bank, (iv) time deposits maturing no more than thirty (30) days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder, (v) demand deposit accounts maintained in the ordinary course of business or (vi) any Eurodollar deposits maturing no more than seven (7) days from the date of creation thereof issued by a Lender, an Affiliate of a Lender or commercial banks, each having combined capital, surplus and undivided profits of not less than $500,000,000, such Eurodollar deposits in an aggregate amount invested at any one time not to exceed five percent (5%) of Consolidated Total Assets (determined at the time of incurrence thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(c)investments by the US Borrower or any Domestic Subsidiary thereof in the form of acquisitions of all or substantially all of the business or a line of business (whether by the acquisition of Capital Stock, assets or any combination thereof) of any other Person if each such acquisition meets all of the following requirements (such acquisition being referred to herein as a “Permitted Domestic Acquisition”):

(i)the Person to be acquired shall be organized under the laws of the United States of America, or the assets to be acquired shall be located in the continental United States of America, and such Person shall be engaged in a business, or such assets shall be used in a business, permitted pursuant to Section 11.12;

(ii)the US Borrower or any Subsidiary (including any entity being acquired that becomes a Subsidiary) shall be the surviving Person and no Change in Control shall have been effected thereby;

(iii)the Person to be acquired shall not be subject to any material pending litigation which could reasonably be expected to have a Material Adverse Effect;

(iv)prior to the closing of such acquisition, the acquisition is approved by the board of directors (or a majority of the holders of the Capital Stock of such Person) of the Person whose assets or Capital Stock are being acquired pursuant to such acquisition;

(v)no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such proposed acquisition; and

(vi)the US Borrower shall have delivered to the Administrative Agent such documents reasonably requested by the Administrative Agent or the Required Lenders (through the Administrative Agent) pursuant to Section 9.11 to be delivered at the time required pursuant to Section 9.11;

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(d)investments by the US Borrower or any Subsidiary thereof in the form of acquisitions of all or substantially all of the business or a line of business (whether by the acquisition of Capital Stock, assets or any combination thereof) of any other Person if each such acquisition meets all of the following requirements (such acquisition being referred to herein as a “Permitted Foreign Acquisition”):

(i)the Person to be acquired, or the applicable Subsidiary that is the acquiror, shall be organized under the laws of a jurisdiction other than the United States of America, or the assets to be acquired shall be located outside of the continental United States of America, and such Person shall be engaged in a business, or such assets shall be used in a business, permitted pursuant to Section 11.12;

(ii)the US Borrower or any Subsidiary (including any entity being acquired that becomes a Subsidiary) shall be the surviving Person and no Change in Control shall have been effected thereby;

(iii)the Person to be acquired shall not be subject to any material pending litigation which could reasonably be expected to have a Material Adverse Effect;

(iv)prior to the closing of such acquisition, the acquisition is approved by the board of directors (or a majority of the holders of the Capital Stock of such Person) of the Person whose assets or Capital Stock are being acquired pursuant to such acquisition;

(v)no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such proposed acquisition; and

(vi)the aggregate amount of Permitted Acquisition Consideration payable with respect to all Permitted Foreign Acquisitions does not exceed five percent (5%) of Consolidated Total Assets (such percentage amounts determined at the time of such Permitted Foreign Acquisition based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available);

(e)Hedging Agreements permitted pursuant to Section 11.1;

(f)purchases of assets in the ordinary course of business;

(g)investments in the form of loans and advances to employees in the ordinary course of business that do not exceed at any time $5,000,000 in the aggregate;

(h)intercompany Indebtedness permitted pursuant to Section 11.1(h);

(i)the creation of new Foreign Subsidiaries or investments in existing Foreign Subsidiaries, the investment in which, together with the total amount of any (i) Indebtedness owed by the US Borrower or any Subsidiary Guarantor to any Foreign Subsidiary or Indebtedness owed by any Foreign Subsidiary to the US Borrower or any Subsidiary Guarantor under Section 11.1(i) and (ii) sales of assets to Foreign Subsidiaries under Section 11.5(f) does not exceed five percent (5%) of Consolidated Total Assets (such percentage amounts determined at the time of such creation or investment, as applicable, based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available).

(j)the creation of Domestic Subsidiaries after the Closing Date so long as (i) each such Domestic Subsidiary shall comply with Section 9.11 and (ii) the creation of such Domestic Subsidiary is otherwise made in accordance with the terms and conditions of this Agreement (including, without limitation, this Section 11.3);

(k)equity investments (i) by the US Borrower in any Subsidiary Guarantor, (ii) by any Subsidiary in the US Borrower, (iii) by any Subsidiary in any Subsidiary Guarantor or (iv) by any Subsidiary that is not a Subsidiary Guarantor in any other Subsidiary that is not a Subsidiary Guarantor;

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(l)[Intentionally Omitted]; and

(m)other additional domestic investments not otherwise permitted pursuant to this Section not exceeding $50,000,000in the aggregatein any Fiscal Year.

SECTION 11.4Limitations on Mergers and Liquidation. Merge, consolidate, amalgamate or enter into any similar combination (including by division) with any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except:

(a)any Wholly-Owned Subsidiary of a Borrower (other than a Subsidiary that is a Subsidiary Borrower) may be merged, consolidated or amalgamated with or into (i) a Borrower, so long as such Borrower shall be the continuing or surviving Person (provided, that in no event shall a Domestic Subsidiary of the US Borrower be merged, consolidated or amalgamated with or into a Borrower other than the US Borrower) or (ii) any Subsidiary Guarantor, so long as (A) the Subsidiary Guarantor shall be the continuing or surviving Person or (B) the continuing or surviving Person shall become a Subsidiary Guarantor and the US Borrower shall comply with Section 9.11 in connection therewith;

(b)any Wholly-Owned Subsidiary (other than a Subsidiary Borrower) may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation, division or otherwise) to the US Borrower or any other Wholly-Owned Subsidiary; provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the US Borrower or a Subsidiary Guarantor;

(c)any Wholly-Owned Subsidiary of the US Borrower (other than a Subsidiary Borrower) may merge into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with a Permitted Acquisition; and

(d)any Subsidiary of a Borrower (other than a Subsidiary that is a Subsidiary Borrower) may wind-up or dissolve into a Borrower or any Wholly-Owned Subsidiary of a Borrower; provided, that (i) if the Subsidiary subject to such winding up or dissolution is a Subsidiary Guarantor, such Subsidiary shall wind-up or dissolve into the US Borrower or another Subsidiary Guarantor and (ii) in no event shall a Domestic Subsidiary of the US Borrower wind-up or dissolve into any Person other than the US Borrower or another Domestic Subsidiary of the US Borrower.

SECTION 11.5Limitations on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, the sale of any receivables and leasehold interests, any division and any sale-leaseback or similar transaction), whether now owned or hereafter acquired except:

(a)the sale of inventory in the ordinary course of business;

(b)the sale of obsolete assets no longer used or usable in the business of the US Borrower or any of its Subsidiaries;

(c)the transfer of assets pursuant to Section 11.4;

(d)the Borrowers or any of their respective Subsidiaries may write-off, discount, sell or otherwise dispose of defaulted or past due receivables and similar obligations in the ordinary course of business and not as part of an accounts receivable financing transaction;

(e)the disposition of any Hedging Agreement;

(f)sales of assets to Foreign Subsidiaries the fair market value with respect to which, together with the total amount of (i) Indebtedness owed by the US Borrower or any Subsidiary Guarantor to any Foreign Subsidiary or Indebtedness owed by any Foreign Subsidiary to the US Borrower or any Subsidiary Guarantor under Section 11.1(i) and (ii) investments in connection with the creation of new Foreign Subsidiaries or investments in existing Foreign Subsidiaries under Section 11.3(i) does not

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exceed five percent (5%) of Consolidated Total Assets (such percentage amounts determined at the time of such sale based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available) during the period from the Closing Date through and including the later to occur of the Revolving Credit Maturity Date or the Term Loan Maturity Date;

(g)so long as no Default or Event of Default has occurred and is continuing or would occur as a result therefrom, transfers of an interest in the Transferred Assets in connection with an Account Securitization;

(h)sale-leasebacks of assets, the fair market value with respect to which, in the aggregate, does not exceed five percent (5%) of Consolidated Total Assets (determined at the time of consummation thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available); and

(i)additional dispositions of assets not otherwise permitted pursuant to this Section, the fair market value with respect to which does not, in the aggregate, exceed five percent (5%) of Consolidated Total Assets (determined at the time of consummation thereof based on the financial data for the most recently ended Fiscal Year for which audited financial statements of the US Borrower and its Subsidiaries are available).

SECTION 11.6Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that:

(a)the US Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock;

(b)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the US Borrower may declare and pay quarterly dividends in a manner consistent with the past practice of the US Borrower in amounts reasonably determined by the board of directors of the US Borrower; provided that the US Borrower may declare and pay such quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount dividends per share and (ii) the US Borrower and its Subsidiaries shall have demonstrated to the Administrative Agent that, immediately before and after giving effect to such dividends and any Indebtedness incurred in connection therewith on a Pro Forma Basis, the Average Total Leverage Ratio (based on the most recent financial statements delivered to the Administrative Agent pursuant to Section 8.1) is less than 3.25 to 1.00;

(c)any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the US Borrower or any other Wholly-Owned Subsidiary, provided that if the Subsidiary paying the dividend is a Subsidiary Guarantor or Subsidiary Borrower then the recipient of the dividend must be either the US Borrower or another Subsidiary Guarantor; and

(d)the US Borrower may repurchase shares of its Capital Stock, so long as:

(i)no Default or Event of Default has occurred and is continuing at the time of such repurchase or would result therefrom; and

(ii)the US Borrower and its Subsidiaries shall have demonstrated to the Administrative Agent that the Average Total Leverage Ratio (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Administrative Agent pursuant to Section 8.1, and, on a Pro Forma Basis, after giving effect to such share repurchase and any Indebtedness incurred in connection therewith) is less than 3.25 to 1.00.

SECTION 11.7Canadian Defined Benefit Plans. Either (a) establish, participate in, contribute to or be required to contribute to, or have any liability or contingent liability in respect of, a Canadian

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Defined Benefit Plan or (b) acquire any Capital Stock in any Person which will become a Credit Party or a Subsidiary that has established or that participates in, contributes to or is required to contribute to, or has any liability or contingent liability in respect of, a Canadian Defined Benefit Plan.

SECTION 11.8Transactions with Affiliates. Except for transactions permitted by Sections 11.3, 11.6 and 11.7, directly or indirectly (a) make any loan or advance to, or purchase or assume any note or other obligation to or from, any of its officers, directors, shareholders or other Affiliates, or to or from any member of the immediate family of any of its officers, directors, shareholders or other Affiliates, or subcontract any operations to any of its Affiliates or (b) enter into, or be a party to, any other transaction not described in clause (a) above with any of its Affiliates, except pursuant to the reasonable requirements of its business and upon fair and reasonable terms that are no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person not its Affiliate.

SECTION 11.9Certain Accounting Changes; Organizational Documents. (a) Change its Fiscal Year end, or make any change in its accounting treatment and reporting practices except as required by GAAP or (b) amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or amend, modify or change its bylaws (or other similar documents) or any Material Contract in any manner adverse in any respect to the rights or interests of the Lenders.

SECTION 11.10Amendments; Payments and Prepayments of Certain Indebtedness.

(a)Amend or modify (or permit the modification or amendment of) any of the terms or provisions of any Subordinated Indebtedness.

(b)Amend or modify (or permit the modification or amendment of) any of the terms or provisions of any Indebtedness permitted pursuant to Section 11.1(p) of this Agreement in any respect which would materially and adversely affect the rights or interests of the Administrative Agent or any Lender hereunder.

(c)Amend or modify (or permit the modification or amendment of) any of the terms or provisions of any Indebtedness permitted pursuant to Section 11.1(q) of this Agreement in any respect which would materially and adversely affect the rights or interests of the Administrative Agent or any Lender hereunder.

(d)Cancel, forgive, make any payment or prepayment on, or redeem or acquire for value (including, without limitation, (i) by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due and (ii) subject to clause (C) below, at the maturity thereof) any Subordinated Indebtedness or any Indebtedness permitted pursuant to Section 11.1(p) or Section 11.1(q) of this Agreement, except:

(A)refinancings, refundings, renewals, extensions or exchange of any such Indebtedness to the extent permitted by Section 11.1(j) (in the case of Subordinated Indebtedness), Section 11.1(p) (in the case of Indebtedness permitted by Section 11.1(p)) or Section 11.1(q) (in the case of Indebtedness permitted by Section 11.1(q));

(B)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, regularly scheduled payments of interest on Indebtedness issued pursuant to Section 11.1(j), (p) or (q); and

(C)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, optional prepayments, mandatory prepayments and repayments at the stated maturity of Indebtedness permitted by Section 11.1(p) or Section 11.1(q) made in accordance with the terms thereof.

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SECTION 11.11Restrictive Agreements.

(a)Enter into any Indebtedness which contains any negative pledge on assets or any covenants that, taken as a whole, aremore restrictive than the provisions of Articles IX, X and XI hereof, or which restricts, limits or otherwise encumbers its ability to incur Liens on or with respect to any of its assets or properties other than the assets or properties securing such Indebtedness (other than (i) Indebtedness permitted pursuant to Section 11.1(p) or Section 11.1(q) of this Agreement (provided that any such negative pledge, restriction, limitation or encumbrance is no more restrictive than this Agreement and permits the US Borrower and its Subsidiaries to secure the Obligations at least on a pari passu basis with such Indebtedness (including pursuant to a customary “equal and ratable” clause)) and (ii) Indebtedness incurred by a Special Purpose Subsidiary solely in connection with an Accounts Securitization).

(b)Enter into or permit to exist any agreement which impairs or limits the ability of any Subsidiary of a Borrower (other than a Special Purpose Subsidiary solely in connection with an Accounts Securitization) to pay dividends to such Borrower.

SECTION 11.12Nature of Business. Substantively alter in any material respect the character or conduct of the business conducted by the US Borrower and its Subsidiaries as of the Closing Date.

ARTICLE XII

UNCONDITIONAL GUARANTY

SECTION 12.2Guaranty of Obligations.

(a)The US Borrower hereby unconditionally guarantees to the Administrative Agent for the ratable benefit of the Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the prompt payment of (i) all Obligations of each of the Subsidiary Borrowers and (ii) all Cash Management Obligations and Hedging Obligations of any Subsidiary that is not a Subsidiary Borrower, in each case of clause (i) and (ii), whether primary or secondary (whether by way of endorsement or otherwise), whether now existing or hereafter arising, whether or not from time to time reduced or extinguished (except by payment thereof) or hereafter increased or incurred, whether or not recovery may be or hereafter becomes barred by the statute of limitations, whether enforceable or unenforceable as against any Subsidiary Borrower or Subsidiary, whether or not discharged, stayed or otherwise affected by any bankruptcy, insolvency or other similar law or proceeding, whether created directly with the Administrative Agent or any other Guaranteed Party or acquired by the Administrative Agent or any other Guaranteed Party through assignment, endorsement or otherwise, whether matured or unmatured, whether joint or several, as and when the same become due and payable (whether at maturity or earlier, by reason of acceleration, mandatory repayment or otherwise), in accordance with the terms of any such instruments evidencing any such obligations, including all renewals, extensions or modifications thereof (all Obligations of the Subsidiary Borrowers to the Administrative Agent and the other Guaranteed Parties, including all of the foregoing, being hereinafter collectively referred to as the “US Borrower Guaranteed Obligations”).

(b)[Intentionally Omitted].

(c)The Euro Borrower hereby unconditionally guarantees to the Administrative Agent for the ratable benefit of the Administrative Agent and the other Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the prompt payment of all Obligations of the Canadian Borrower, whether primary or secondary (whether by way of endorsement or otherwise), whether now existing or hereafter arising, whether or not from time to time reduced or extinguished (except by payment thereof) or hereafter increased or incurred, whether or not recovery may be or hereafter become barred by the statute of limitations, whether enforceable or unenforceable as against the Canadian Borrower, whether or not discharged, stayed or otherwise affected by any bankruptcy, insolvency or other similar law or proceeding, whether created directly with the Administrative Agent or any other Guaranteed Party or acquired by the Administrative Agent or any other Guaranteed Party through

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assignment, endorsement or otherwise, whether matured or unmatured, whether joint or several, as and when the same become due and payable (whether at maturity or earlier, by reason of acceleration, mandatory repayment or otherwise), in accordance with the terms of any such instruments evidencing any such obligations, including all renewals, extensions or modifications thereof (all Obligations of the Canadian Borrower to the Administrative Agent and the other Guaranteed Parties, including all of the foregoing, being hereinafter collectively referred to as the “Euro Borrower Guaranteed Obligations”).

SECTION 12.2Nature of Guaranty. Subject to Section 12.1 above, each Borrower Guarantor agrees that its Borrower Guaranty is a continuing, unconditional guaranty of payment and not of collection, and that its obligations under such Borrower Guaranty shall be primary, absolute and unconditional, irrespective of, and unaffected by (a) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement or any other Loan Document or any other agreement, document or instrument to which such Borrower is or may become a party, (b) the absence of any action to enforce its Borrower Guaranty, this Agreement or any other Loan Document or the waiver or consent by the Administrative Agent or any other Guaranteed Party with respect to any of the provisions of its Borrower Guaranty, this Agreement or any other Loan Document, (c) the existence, value or condition of, or failure to perfect aLien, if any, against, any security for or other guaranty of its Borrower Guaranteed Obligations or any action, or the absence of any action, by the Administrative Agent or any other Guaranteed Party in respect of such security or guaranty (including, without limitation, the release of any such security or guaranty), (d) any structural change in, restructuring of or other similar change of such Borrower or any of its respective Subsidiaries or (e) any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor; it being agreed by each Borrower Guarantor that its obligations under its Borrower Guaranty shall not be discharged until the final and indefeasible payment, in full, of its Borrower Guaranteed Obligations and the termination of the Commitments. To the extent permitted by law, each Borrower Guarantor expressly waives all rights it may now or in the future have under any statute, or at law or in equity, or otherwise, to compel the Administrative Agent or any other Guaranteed Party to proceed in respect of its Borrower Guaranteed Obligations against any other Credit Party, any other guarantor or any other party or against any security for or other guaranty of the payment of its Borrower Guaranteed Obligations before proceeding against, or as a condition to proceeding against, any other Borrower. To the extent permitted by law, each Borrower Guarantor further expressly waives and agrees not to assert or take advantage of any defense based upon the failure of the Administrative Agent or any other Guaranteed Party to commence an action in respect of its Borrower Guaranteed Obligations against any other Borrower, any other guarantor or any other party or any security for the payment of its Borrower Guaranteed Obligations. Each Borrower Guarantor agrees that any notice or directive given at any time to the Administrative Agent or any other Guaranteed Party that is inconsistent with the waivers in the preceding two sentences shall be null and void and may be ignored by the Administrative Agent or such other Guaranteed Party, and, in addition, may not be pleaded or introduced as evidence in any litigation relating to its Borrower Guaranty for the reason that such pleading or introduction would be at variance with the written terms of its Borrower Guaranty, unless the Administrative Agent and the Required Lenders have specifically agreed otherwise in writing. The foregoing waivers are of the essence of the transaction contemplated by the Loan Documents and, but for each applicable Borrower Guaranty and such waivers, the Administrative Agent and the Lenders would decline to enter into this Agreement.

SECTION 12.3Demand by the Administrative Agent. In addition to the terms set forth in Section 12.2, and in no manner imposing any limitation on such terms, if all or any portion of the then outstanding Borrower Guaranteed Obligations under this Agreement are declared to be immediately due and payable in accordance with the terms of this Agreement, then each applicable Borrower Guarantor that has guaranteed such Borrower Guaranteed Obligations shall, upon demand in writing therefor by the Administrative Agent to the US Borrower, pay (subject to the respective limitations in Section 12.1) all or such portion of the outstanding Borrower Guaranteed Obligations then declared due and payable. Payment by the any Borrower Guarantor shall be made to the Administrative Agent, to be credited and applied upon such Borrower Guaranteed Obligations, in immediately available funds to an account designated by the Administrative Agent or at the Administrative Agent’s Office or at any other address that may be specified in writing from time to time by the Administrative Agent.

SECTION 12.4Waivers. In addition to the waivers contained in Section 12.2, each Borrower Guarantor waives, and agrees that it shall not at any time insist upon, plead or in any manner whatever

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claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshalling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by such Borrower of its respective obligations under, or the enforcement by the Administrative Agent or the other Guaranteed Parties of, its Borrower Guaranty. Each Borrower Guarantor further hereby waives diligence, presentment, demand, protest and notice of whatever kind or nature with respect to any of its Borrower Guaranteed Obligations and waives the benefit of all provisions of law which are or might be in conflict with the terms of its Borrower Guaranty. Each Borrower Guarantor represents, warrants and agrees that its obligations under its Borrower Guaranty are not and shall not be subject to any counterclaims, offsets or defenses of any kind against the Administrative Agent, any other Guaranteed Party, any other Borrower whether now existing or which may arise in the future.

SECTION 12.5Modification of Loan Documents etc. If the Administrative Agent or the Lenders shall at any time or from time to time, with or without the consent of, or notice to, each Borrower Guarantor (a) change or extend the manner, place or terms of payment of, or renew or alter all or any portion of, any Borrower Guaranteed Obligations, (b) take any action under or in respect of the Loan Documents in the exercise of any remedy, power or privilege contained therein or available to it at law, in equity or otherwise, or waive or refrain from exercising any such remedies, powers or privileges, (c) amend or modify, in any manner whatsoever, the Loan Documents, (d) extend or waive the time for performance by any Borrower, any other guarantor or any other Person of, or compliance with, any term, covenant or agreement on its part to be performed or observed under a Loan Document (other than its Borrower Guaranty), or waive such performance or compliance or consent to a failure of, or departure from, such performance or compliance, (e) take and hold security or collateral for the payment of its Borrower Guaranteed Obligations or sell, exchange, release, dispose of, or otherwise deal with, any property pledged, mortgaged or conveyed, or in which the Administrative Agent or any other Guaranteed Party has been granted a Lien, to secure any Indebtedness of any Borrower Guarantor or any other guarantor to the Administrative Agent or any other Guaranteed Party, (f) release anyone who may be liable in any manner for the payment of any amounts owed by any Borrower Guarantor or any other guarantor to the Administrative Agent or any other Guaranteed Party, (g) modify or terminate the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors of such Borrower Guarantor or any other guarantor are subordinated to the claims of the Administrative Agent or any other Guaranteed Party or (h) apply any sums by whomever paid or however realized to any Borrower Guaranteed Obligations owing by any Borrower Guarantor or any other guarantor to the Administrative Agent or any other Guaranteed Party in such manner as the Administrative Agent or any other Guaranteed Party shall determine in its reasonable discretion; then neither the Administrative Agent nor any other Guaranteed Party shall incur any liability to any Borrower Guarantor as a result thereof, and no such action shall impair or release the obligations of any Borrower Guarantor under its Borrower Guaranty.

SECTION 12.6Reinstatement. Each Borrower Guarantor agrees that, if any payment made by any other Borrower Guarantor or any other Person applied to the Obligations is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any collateral are required to be returned by the Administrative Agent or any other Guaranteed Party to any Borrower, its estate, trustee, receiver, liquidator, administrator or any other party, including, without limitation, such Borrower Guarantor, under any Applicable Law or equitable cause, then, to the extent of such payment or repayment (subject to the limitations in Section 12.1), such Borrower’s liability hereunder shall be and remain in full force and effect, as fully as if such payment had never been made, and, if prior thereto, its Borrower Guaranty shall have been canceled or surrendered, its Borrower Guaranty shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any Borrower Guarantor in respect of the amount of such payment.

SECTION 12.7No Subrogation. Notwithstanding any payment or payments by any Borrower Guarantor hereunder, or any set-off or application of funds of any Borrower Guarantor by the Administrative Agent or any other Guaranteed Party, or the receipt of any amounts by the Administrative Agent or any other Guaranteed Party with respect to any of its Borrower Guaranteed Obligations, no Borrower Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Guaranteed Party against any other Borrower Guarantor or any other guarantor or against any collateral security held by the Administrative Agent or any other Guaranteed Party for the payment of its

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Borrower Guaranteed Obligations nor shall any Borrower Guarantor seek any reimbursement from any other Borrower Guarantor or any of the other guarantors in respect of payments made by such Borrower Guarantor in connection with its Borrower Guaranteed Obligations, until all amounts owing to the Administrative Agent and the other Guaranteed Parties on account of its Borrower Guaranteed Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to any Borrower Guarantor on account of such subrogation rights at any time when all of its Borrower Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Borrower Guarantor in trust for the Administrative Agent, segregated from other funds of such Borrower Guarantor, and shall, forthwith upon receipt by such Borrower Guarantor, be turned over to the Administrative Agent in the exact form received by such Borrower Guarantor (duly endorsed by such Borrower Guarantor to the Administrative Agent, if required) to be applied against its Borrower Guaranteed Obligations, whether matured or unmatured, in such order as set forth herein.

ARTICLE XIII

DEFAULT AND REMEDIES

SECTION 13.1Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any Governmental Authority or otherwise:

(a)Default in Payment of Principal of Loans and Reimbursement Obligations. Any Borrower or any other Credit Party shall default in any payment of principal of any Loan when due or in any payment of a Reimbursement Obligation (whether at maturity, by reason of acceleration or otherwise).

(b)Other Payment Default. Any Borrower or any other Credit Party shall default in the payment when and as due (whether at maturity, by reason of acceleration or otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other Obligation (other than Cash Management Obligations), and such default shall continue for a period of five (5) days.

(c)Misrepresentation. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Borrower or any other Credit Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any respect when made or deemed made or any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Borrower or any other Credit Party herein, any other Loan Document, or in any document delivered in connection herewith or therewith that is not subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or deemed made.

(d)Default in Performance of Certain Covenants. The US Borrower or any other Credit Party shall:

(i)default in the performance or observance of any covenant or agreement contained in Sections 8.1(a), 8.1(b), 8.5(e)(i), 9.1 (with respect to the existence of any Borrower) or 9.12 or Articles X or XI of this Agreement; or

(ii)default in the performance or observance of any covenant or agreement contained in Section 8.2 and such default shall continue for a period of five (5) days.

(e)Default in Performance of Other Covenants and Conditions. The US Borrower or any other Credit Party shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for otherwise in this Section) or any other Loan Document and such default shall continue for a period of thirty (30) days after written notice thereof has been given to the US Borrower by the Administrative Agent.

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(f)Hedging Agreement. The US Borrower or any other Credit Party shall default in the performance or observance of any terms, covenant, condition or agreement (after giving effect to any applicable grace or cure period) under any Hedging Agreement and such default causes the termination of such Hedging Agreement and the Termination Value owned by such Credit Party as a result thereof exceeds $50,000,000.

(g)Indebtedness Cross-Default. The US Borrower or any other Credit Party shall (i) default in the payment of (A) any Indebtedness incurred pursuant to a Qualified Unsecured Issuance or Section 11.1(p) or (B) any Indebtedness (other than the Loans or any Reimbursement Obligation or Hedging Agreement) the aggregate outstanding amount of which Indebtedness is in excess of $50,000,000, in either case, beyond the period of grace if any, provided in the instrument or agreement under which such Indebtedness was created, or (ii) default in the observance or performance of any other agreement or condition relating to (A) any Indebtedness incurred pursuant to a Qualified Unsecured Issuance or Section 11.1(p) or (B) any Indebtedness (other than the Loans or any Reimbursement Obligation or Hedging Agreement) the aggregate outstanding amount of which Indebtedness is in excess of $50,000,000 or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, in any such case, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, any such Indebtedness to become due prior to its stated maturity (any applicable grace period having expired).

(h)Other Cross-Defaults. The US Borrower or any other Credit Party shall default in the payment when due, or in the performance or observance, of any obligation or condition of any Material Contract which such default has not been cured or waived in accordance with the terms of such Material Contract, unless, but only as long as, the existence of any such default is being contested by the US Borrower or any such Subsidiary in good faith by appropriate proceedings and adequate reserves in respect thereof have been established on the books of the US Borrower or such Credit Party to the extent required by GAAP.

(i)Change in Control. A Change in Control shall occur.

(j)Voluntary Bankruptcy Proceeding. The US Borrower or any Subsidiary thereof shall (i) commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to take advantage of any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or composition for adjustment of debts, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing any of the foregoing.

(k)Involuntary Bankruptcy Proceeding. A case or other proceeding shall be commenced against the US Borrower or any Subsidiary thereof in any court of competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for the US Borrower or any Subsidiary thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered.

(l)Failure of Agreements. Any provision of this Agreement or any provision of any other Loan Document shall for any reason cease to be valid and binding on the US Borrower or any Subsidiary thereof party thereto or any such Person shall make any assertion of the same.

(m)Termination Event. The occurrence of any of the following events: (i) the US Borrower or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions

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of any Pension Plan or Sections 412 or 430 of the Code, the US Borrower or any ERISA Affiliate is required to pay as contributions thereto, (ii) the sum of (A) Unfunded Pension Liabilities plus (B) the amount (if any) by which the aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the assets of such Non-U.S. Plans allocable to such liabilities, is in excess of $10,000,000, whether or not any such liabilities are waived, with respect to any Pension Plan or Non-U.S. Plans, (iii) a Termination Event, (iv) the US Borrower or any ERISA Affiliate as employers under one or more Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding $10,000,000 in the aggregate or $4,000,000 per annum, (v) any Credit Party or any Subsidiary fails to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all Applicable Laws or any Non-U.S. Plan is terminated or wound up and such event, individually or in the aggregate with any similar event, could reasonably be expected to have a Material Adverse Effect, or (vi) any Credit Party or any Subsidiary becomes subject to the imposition of a financial penalty (which for this purpose shall mean any Tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans and such event or events, either individually or in the aggregate with any similar event, could reasonably be expected to have a Material Adverse Effect.

(n)Judgment. A judgment or order for the payment of money which causes the aggregate amount of all such judgments or orders to exceed $50,000,000 in any Fiscal Year (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), shall be entered against the US Borrower or any Subsidiary thereof by any court and such judgment or order shall continue without having been discharged, vacated or stayed for a period of thirty (30) days after the entry thereof.

(o)Environmental. Any one or more Environmental Claims shall have been asserted against the US Borrower or any Subsidiary thereof; the US Borrower and any Subsidiary thereof would be reasonable likely to incur liability as a result thereof; and such liability would be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect.

SECTION 13.2Remedies. Upon the occurrence and during the continuance of an Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the US Borrower:

(a)Acceleration; Termination of Facilities. Terminate the Commitments and declare the principal of and interest on the Loans and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including, without limitation, all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented or shall be entitled to present the documents required thereunder) and all other Obligations (other than Hedging Obligations and Cash Management Obligations), to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of the Borrowers to request borrowings or Letters of Credit thereunder; provided, that upon the occurrence of an Event of Default specified in Section 13.1(j) or (k), the Credit Facility shall be automatically terminated and all Obligations (other than Hedging Obligations and Cash Management Obligations) shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.

(b)Letters of Credit. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding subsection, the Borrowers shall at such time deposit in a Cash Collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such Cash Collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the other Obligations on a

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pro rata basis. After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such Cash Collateral account shall be returned to the Borrowers.

(c)Rights of Collection. Exercise on behalf of the Lenders all of its other rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Borrowers’ Obligations.

SECTION 13.3Rights and Remedies Cumulative; Non-Waiver; etc.

(a)Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 15.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between the Borrowers, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default. The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise.

(b)Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 13.2 for the benefit of all the Lenders and the Issuing Lenders; provided that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Issuing Lender, the Canadian Dollar Lender, the Euro Lender or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an Issuing Lender, Canadian Dollar Lender, Euro Lender or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 15.4 (subject to the terms of Section 5.4), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 13.2 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 5.4, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

SECTION 13.4Crediting of Payments and Proceeds. In the event that the Borrowers shall fail to pay any of the Obligations when due and the Obligations have been accelerated pursuant to Section 13.2, all payments received by the Lenders upon the Obligations and all net proceeds from the enforcement of the Obligations shall be applied:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender, each in its respective capacity as such, ratably among the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender, in proportion to the respective amounts described in this clause First payable to them;

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Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of any Hedging Obligations (including any termination payments and any accrued and unpaid interest thereon) and that portion of the Obligations constituting accrued and unpaid interest on the Loans and Reimbursement Obligations, ratably among the Lenders and their Affiliates in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of any Cash Management Obligations and that portion of the Obligations constituting unpaid principal of the Loans and Reimbursement Obligations, ratably among the Lenders and their Affiliates and the Issuing Lenders in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the Issuing Lenders, to Cash Collateralize any L/C Obligations then outstanding; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Applicable Law.

Notwithstanding the foregoing, Cash Management Obligations and Hedging Obligations shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article XIV for itself and its Affiliates as if a “Lender” party hereto.

SECTION 13.5Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Sections 3.3, 5.3 and 15.3) allowed in such judicial proceeding; and

(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.3, 5.3 and 15.3.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or

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composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

SECTION 13.6Judgment Currency.

(a)The obligation of the Borrowers to make payments of the principal of and interest on the Notes and the obligation of any such Person to make payments of any other amounts payable hereunder or pursuant to any other Loan Document in the currency specified for such payment shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, which is expressed in or converted into any other currency, except to the extent that such tender or recovery shall result in the actual receipt by each of the Administrative Agent and Lenders of the full amount of the particular currency expressed to be payable pursuant to the applicable Loan Document. The Administrative Agent shall, using all amounts obtained or received from the Borrowers pursuant to any such tender or recovery in payment of principal of and interest on the Obligations, promptly purchase the applicable currency at the most favorable spot exchange rate determined by the Administrative Agent to be available to it. The obligation of the Borrowers to make payments in the applicable currency shall be enforceable as an alternative or additional cause of action solely for the purpose of recovering in the applicable currency the amount, if any, by which such actual receipt shall fall short of the full amount of the currency expressed to be payable pursuant to the applicable Loan Document.

(b)Without limiting Section 13.6(a), the Borrowers shall indemnify and hold harmless the Administrative Agent, the Lenders and the Issuing Lenders, as applicable, against any loss incurred by the Administrative Agent, any Lender or any Issuing Lender as a result of any payment or recovery described in Section 13.6(a) and as a result of any variation having occurred in rates of exchange between the date of any such amount becoming due under this Agreement or any other Loan Document and the date of actual payment thereof. The foregoing indemnity shall constitute a separate and independent obligation of the Borrowers and shall continue in full force and effect notwithstanding any such payment or recovery.

ARTICLE XIV

THE ADMINISTRATIVE AGENT

SECTION 14.1Appointment and Authority. Each of the Lenders and each of the Issuing Lenders hereby irrevocably designates and appoints Wells Fargo to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and no Borrower nor any Subsidiary thereof shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SECTION 14.2Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

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SECTION 14.3Exculpatory Provisions.

(a)The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder and thereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i)shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing;

(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii)shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b)The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 15.2 and Section 13.2) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the US Borrower, a Lender or an Issuing Lender.

(c)The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith (including, without limitation, any report provided to it by an Issuing Lender pursuant to Section 3.9), (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

SECTION 14.4Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other

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experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 14.5Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the Credit Facility as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 14.6Resignation of Administrative Agent.

(a)The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the US Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the US Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b)With effect from the Resignation Effective Date, (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security, if any, held by the Administrative Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security, if any, until such time as a successor Administrative Agent is appointed) and (2) except for any indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent (other than any rights to indemnity payments owed to the retiring Administrative Agent), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 15.3 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

(c)Any resignation by Wells Fargo as Administrative Agent pursuant to this Section shall also constitute its resignation as an Issuing Lender and Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of Wells Fargo as a retiring Issuing Lender and Swingline Lender, (b) Wells Fargo as a retiring Issuing Lender and Swingline Lender shall be discharged from all of its respective duties and obligations hereunder or under the other Loan Documents, and (c) such successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit issued by Wells Fargo as a retiring Issuing Lender, if any, outstanding at the time of such succession or

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make other arrangement satisfactory to Wells Fargo as a retiring Issuing Lender to effectively assume the obligations of Wells Fargo as a retiring Issuing Lender with respect to such Letters of Credit.

(d)Notwithstanding anything to the contrary contained herein, Wells Fargo may, upon thirty (30) days’ notice to the US Borrower and the Revolving Credit Lenders, resign as Canadian Dollar Lender. In the event of any such resignation as Canadian Dollar Lender, the US Borrower shall be entitled to appoint from among the Revolving Credit Lenders or an Eligible Assignee, a successor Canadian Dollar Lender hereunder; provided that (i) no Revolving Credit Lender shall be required to accept such appointment as successor Canadian Dollar Lender, (ii) any successor Canadian Dollar Lender shall be approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed), and (iii) until a Revolving Credit Lender or an Eligible Assignee shall have notified the Administrative Agent and the current Canadian Dollar Lender in writing that it has agreed to act as a successor Canadian Dollar Lender, the current Canadian Dollar Lender shall continue as Canadian Dollar Lender hereunder. If no successor Canadian Dollar Lender shall have been so appointed and accepted such appointment within thirty (30) days after the Canadian Dollar Lender’s giving of notice of resignation, then the Canadian Dollar Lender, with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), may, on behalf of the Lenders, appoint an Eligible Assignee as a successor Canadian Dollar Lender. Upon the acceptance of any appointment as Canadian Dollar Lender hereunder by a successor, such successor Canadian Dollar Lender shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the replaced Canadian Dollar Lender, and the replaced Canadian Dollar Lender shall be discharged from its duties and obligations in its capacity as Canadian Dollar Lender without any other or further act or deed on the part of such replaced Canadian Dollar Lender, the Administrative Agent or any other Lender. If Wells Fargo resigns as Canadian Dollar Lender, it shall retain all the rights of the Canadian Dollar Lender provided for hereunder with respect to Canadian Dollar Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Revolving Credit Lenders to make Revolving Credit Loans or fund risk participations in outstanding Canadian Dollar Loans pursuant to Section 2.2(a)(ii).

(e)Notwithstanding anything to the contrary contained herein, Wells Fargo may, upon thirty (30) days’ notice to the US Borrower and the Revolving Credit Lenders, resign as Euro Lender. In the event of any such resignation as Euro Lender, the US Borrower shall be entitled to appoint from among the Revolving Credit Lenders or an Eligible Assignee, a successor Euro Lender hereunder; provided that (i) no Revolving Credit Lender shall be required to accept such appointment as successor Euro Lender; (ii) any successor Euro Lender shall be approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed); and (iii) until a Revolving Credit Lender or an Eligible Assignee shall have notified the Administrative Agent and the current Euro Lender in writing that it has agreed to act as a successor Euro Lender, the current Euro Lender shall continue as Euro Lender hereunder. If no successor Euro Lender shall have been so appointed and accepted such appointment within thirty (30) days after the Euro Lender’s giving of notice of resignation, then the Euro Lender, with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), may, on behalf of the Lenders, appoint an Eligible Assignee as a successor Euro Lender. Upon the acceptance of any appointment as Euro Lender hereunder by a successor, such successor Euro Lender shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the replaced Euro Lender, and the replaced Euro Lender shall be discharged from its duties and obligations in its capacity as Euro Lender without any other or further act or deed on the part of such replaced Euro Lender, the Administrative Agent or any other Lender. If Wells Fargo resigns as Euro Lender, it shall retain all the rights of the Euro Lender provided for hereunder with respect to Euro Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Revolving Credit Lenders to make Revolving Credit Loans or fund risk participations in outstanding Euro Loans pursuant to Section 2.2(b)(ii).

SECTION 14.7Non-Reliance on Administrative Agent and Other Lenders. Each Lender and each Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to

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make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 14.8No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the syndication agents, documentation agents, co-agents, bookrunners, lead managers, arrangers, lead arrangers or co-arrangers listed on the cover page or signature pages hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.

SECTION 14.9Guaranty Matters. Each of the Lenders (including in its or any of its Affiliate’s capacities as a potential Hedge Bank or Cash Management Bank) irrevocably authorize the Administrative Agent, at its option and in its discretion to release any Subsidiary Guarantor from its obligations under any Loan Documents if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder or otherwise is eligible to be released as a Subsidiary Guarantor hereunder. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement pursuant to this Section 14.9. In each case as specified in this Section 14.9, the Administrative Agent will, at the Borrowers’ expense, execute and deliver to the applicable Credit Party such documents as such Credit Party may reasonably request to release such Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement in accordance with the terms of the Loan Documents and this Section 14.9.

SECTION 14.10Hedging Agreements and Cash Management Agreements. No Cash Management Bank or Hedge Bank that obtains the benefits of Section 13.4 by virtue of the provisions hereof or of any other Loan Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article XIV to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Cash Management Agreements and Hedging Agreements unless the Administrative Agent has received written notice of such Cash Management Agreements and Hedging Agreements, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

SECTION 14.11Certain ERISA Matters.

(a)Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of each Borrower or any other Credit Party, that at least one of the following is and will be true:

(i)such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit or the Commitments or this Agreement;

(ii)the prohibited transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable so as to exempt from the prohibitions of Section 406 of ERISA and Section 4975 of the Code such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement;

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(iii)(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement; or

(iv)such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Credit Party, that none of the Administrative Agent, any Arranger and their respective Affiliates is a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

SECTION 14.12Erroneous Payments.

(a)Each Lender, each Issuing Lender, each other Guaranteed Party and any other party hereto hereby severally agrees that if (i) the Administrative Agent notifies (which such notice shall be conclusive absent manifest error) such Lender or Issuing Lender or any other Guaranteed Party or any other Person that has received funds from the Administrative Agent or any of its Affiliates, either for its own account or on behalf of a Lender, Issuing Lender or other Guaranteed Party (each such recipient, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives any payment from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts specified in clauses (i) or (ii) of this Section 14.12(a), whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise; individually and collectively, an “Erroneous Payment”), then, in each case, such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided that nothing in this Section shall require the Administrative Agent to provide any of the notices specified in clauses (i) or (ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payments, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.

(b)Without limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall promptly notify the Administrative Agent in writing of such occurrence.

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(c)In the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and upon demand from the Administrative Agent such Payment Recipient shall (or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later than one Business Day thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds and in the currency so received, together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(d)In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with immediately preceding clause (c), from any Lender that is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Lender, an “Erroneous Payment Return Deficiency”), then at the sole discretion of the Administrative Agent and upon the Administrative Agent’s written notice to such Lender (i) such Lender shall be deemed to have made a cashless assignment of the full face amount of the portion of its Loans (but not its Commitments) of the relevant Class with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) to the Administrative Agent or, at the option of the Administrative Agent, the Administrative Agent’s applicable lending affiliate in an amount that is equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) plus any accrued and unpaid interest on such assigned amount, without further consent or approval of any party hereto and without any payment by the Administrative Agent or its applicable lending affiliate as the assignee of such Erroneous Payment Deficiency Assignment. The parties hereto acknowledge and agree that (1) any assignment contemplated in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms and conditions of Section 15.11 and (3) the Administrative Agent may reflect such assignments in the Register without further consent or action by any other Person.

(e)Each party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Administrative Agent (1) shall be subrogated to all the rights of such Payment Recipient with respect to such amount and (2) is authorized to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Loan Document, or otherwise payable or distributable by the Administrative Agent to such Payment Recipient from any source, against any amount due to the Administrative Agent under this Section 14.12 or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other satisfaction of any Obligations owed by any Borrower or any other Credit Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from a Borrower or any other Credit Party for the purpose of making a payment on the Obligations and (z) to the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Obligations, the Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received.

(f)Each party’s obligations under this Section 14.12 shall survive the resignation or replacement of the Administrative Agent or any transfer of right or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Loan Document.

(g)Nothing in this Section 14.12 will constitute a waiver or release of any claim of the Administrative Agent arising from any Payment Recipient’s receipt of an Erroneous Payment.

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ARTICLE XV

MISCELLANEOUS

SECTION 15.1Notices.

(a)Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:

If to any Borrower:    Pool Corporation

    109 Northpark Boulevard

    Covington, Louisiana 70433

    Attention: Melanie Housey Hart, Chief Financial Officer

    Telephone No.: (985) 801-5276

    Email:     melanie.houseyhart@poolcorp.com    

With copies to:    Pool Corporation

    109 Northpark Blvd

    Covington, Louisiana 70433

    Attention: Jennifer Neil, General Counsel

    Telephone No.: (985) 801-5269

    Telecopy No.: (985) 801-8269
    Email:     jennifer.neil@poolcorp.com

If to Wells Fargo as

Administrative Agent:    Wells Fargo Bank, National Association

    MAC D1109-019

    1525 West W.T. Harris Blvd.

    Charlotte, North Carolina 28262

    Attention of: Syndication Agency Services

    Telephone No.: (704) 590-2703

    Telecopy No.: (704) 715-0092

    Email: AgencyServices.Requests@wellsfargo.com

With copies to:    Wells Fargo Bank, National Association

    MAC Y1375-086

    101 N. Independence Mall East

    Philadelphia, PA 19106

    Attention: Joe Gricco, Director

    Telephone No.: (267) 321-6636

    Email: Joseph.D.Gricco@wellsfargo.com

If to any Lender

(or any Issuing Lender):        To the address set forth on the Register

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b)Electronic Communications. Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any Issuing Lender pursuant to Article II or

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III if such Lender or such Issuing Lender, as applicable, has notified the Administrative Agent that is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or any Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or other communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c)Administrative Agent’s Office. The Administrative Agent hereby designates its office located at the address set forth above, or any subsequent office which shall have been specified for such purpose by written notice to the Borrowers and Lenders, as the Administrative Agent’s Office referred to herein, to which payments due are to be made and at which Loans will be disbursed and Letters of Credit requested.

(d)Change of Address, Etc. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

(e)Platform. The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the accuracy or completeness of the Borrower Materials or the adequacy of the Platform, and expressly disclaim liability for errors or omissions in the Borrower Materials. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Borrower Materials or the Platform. In no event shall the Administrative Agent, any Arranger or any of their respective Related Parties (collectively, the “Agent Parties”) have any liability to any Credit Party, any Lender or any other Person or entity for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Credit Party’s or an Agent Party’s transmission of communications through the Internet (including, without limitation, the Platform), except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided that in no event shall any Agent Party have any liability to any Credit Party, any Lender, any Issuing Lender or any other Person for indirect, special, incidental, consequential or punitive damages, losses or expenses (as opposed to actual damages, losses or expenses).

SECTION 15.2Amendments, Waivers and Consents. Except as set forth below or as specifically provided in any Loan Document, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrowers; provided, that no amendment, waiver or consent shall:

(a)waive any condition set forth in Section 6.1 without the written consent of each Lender;

(b)[Intentionally Omitted];

(c)extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 13.2) or the amount of Loans of any Lender, in any case, without the written consent of each Lender directly and adversely affected thereby;

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(d)postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory repayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby;

(e)reduce the principal of, or the rate of interest specified herein on, any Loan or Reimbursement Obligation, or (subject to clause (vi) of the second proviso to this Section) any fees or other amounts payable hereunder or under any other Loan Documentwithout the written consent of each Lender directly and adversely affected thereby; provided that only the consent of the Required Lenders shall be necessary (i) to waive any obligation of the Borrowers to pay interest at the rate set forth in Section 5.1(c) during the continuance of an Event of Default, or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Obligation or to reduce any fee payable hereunder;

(f)change Section 5.6 or Section 13.4 in a manner that would alter the prorata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(g)change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or

(h)release all of the Subsidiary Guarantors or release Subsidiary Guarantors comprising substantially all of the credit support for the Obligations, in either case, from the Subsidiary Guaranty Agreement, without the written consent of each Lender;

providedfurther, that (i) no amendment, waiver or consent shall, unless in writing and signed by each affected Issuing Lender in addition to the Lenders required above, affect the rights or duties of such Issuing Lender under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) unless in writing and signed by the Canadian Dollar Lender in addition to the Lenders required above, affect the rights or duties of the Canadian Dollar Lender under this Agreement or any other Loan Document; (v) unless in writing and signed by the Euro Lender in addition to the Lenders required above, affect the rights or duties of the Euro Lender under this Agreement or any other Loan Document; (vi) each Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (vii) each Letter of Credit Application may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; provided that a copy of such amended Letter of Credit Application shall be promptly delivered to the Administrative Agent upon such amendment or waiver, (viii) the Administrative Agent and the US Borrower (on behalf of itself and the other Borrowers) shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the US Borrower shall have jointly identified an obvious error or any error, ambiguity, defect or inconsistency or omission of a technical or immaterial nature in any such provision and (ix) the Administrative Agent (and, if applicable, the US Borrower) may, without the consent of any Lender, enter into amendments or modifications to this Agreement or any of the other Loan Documents in order to implement any Benchmark Replacement or any Benchmark Replacement Conforming Changes or otherwise effectuate the terms of Section 5.8(c) in accordance with the terms of Section 5.8(c). Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (A) the Revolving Credit Commitment of such Lender may not be increased or extended without the consent of such Lender and (B) any amendment, waiver, or consent hereunder which requires the consent of all Lenders or each affected Lender that by its terms disproportionately and adversely affects any such Defaulting Lender relative to other affected Lenders shall require the consent of such Defaulting Lender.

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Notwithstanding anything in this Agreement to the contrary, each Lender hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including, without limitation, amendments to this Section 15.2) or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to effectuate the terms of Section 2.9 (including, without limitation, as applicable, (1) to permit any Incremental Increase pursuant to Section 2.9 to share ratably in the benefits of this Agreement and the other Loan Documents and (2) to include all such Incremental Increases in any determination of Required Lenders); provided that no amendment or modification shall result in any increase in the amount of any Lender’s Commitment or any increase in any Lender’s Revolving Credit Commitment Percentage or applicable Initial Term Loan Commitment Percentage, in each case, without the written consent of such affected Lender.

SECTION 15.3Expenses; Indemnity.

(a)Costs, Expenses and Indemnities. The Borrowers will (i) pay all reasonable and documented out-of-pocket expenses (including, without limitation, all costs of electronic or internet distribution of any information hereunder) of the Administrative Agent in connection with (A) the preparation, execution and delivery of this Agreement and each other Loan Document, whenever the same shall be executed and delivered, including, without limitation, all out-of-pocket syndication and due diligence expenses and reasonable and documented fees, disbursements and other charges of counsel for the Administrative Agent and (B) the preparation, execution and delivery of any waiver, amendment or consent by the Administrative Agent or the Lenders relating to this Agreement or any other Loan Document, including, without limitation, reasonable and documented fees and disbursements of counsel for the Administrative Agent, (ii) pay all reasonable and documented out-of-pocket expenses of the Administrative Agent, each Lender and each Issuing Lender actually incurred in connection with the administration and enforcement of any rights and remedies of the Administrative Agent, the Lenders and the Issuing Lenders under the Credit Facility, including, without limitation, in connection with any workout, restructuring, bankruptcy or other similar proceeding, creating and perfecting Liens in favor of the Administrative Agent on behalf of the Lenders and the Issuing Lenders, enforcing any Obligations of, or collecting any payments due from, the Borrowers or any Subsidiary Guarantor by reason of an Event of Default (including in connection with the sale of, collection from, or other realization upon any collateral or the enforcement of the Subsidiary Guaranty Agreement); consulting with appraisers, accountants, engineers, attorneys and other Persons concerning the nature, scope or value of any right or remedy of the Administrative Agent, any Lender or any Issuing Lender hereunder or under any other Loan Document or any factual matters in connection therewith, which expenses shall include without limitation the reasonable and documented fees and disbursements of counsel for such Persons, and (iii) defend, indemnify and hold harmless the Administrative Agent, each Arranger, the Lenders and the Issuing Lenders, and their respective parents, Subsidiaries, Affiliates, partners, employees, agents, officers, advisors and directors, from and against any losses, penalties, fines, liabilities, settlements, damages, costs and expenses, suffered by any such Person in connection with any claim (including, without limitation, any Environmental Claims), investigation, litigation or other proceeding (whether or not the Administrative Agent, any Arranger, any Lender or any Issuing Lender is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Loan Document, or any documents, reports or other information provided to the Administrative Agent, any Arranger, any Lender or any Issuing Lender or contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including, without limitation, reasonable and documented attorney’s and consultant’s fees, except to the extent that any of the foregoing (x) are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted directly from the gross negligence or willful misconduct of the party seeking indemnification therefor or (y) result from a claim brought by any Credit Party against an indemnitee for breach in bad faith of the obligations under this Agreement or the other Loan Documents of the party seeking indemnification if such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. All amounts due under this Section shall be payable promptly after demand therefor.

(b)Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under clause (a) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any Arranger any Issuing Lender, the Swingline Lender,

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the Canadian Dollar Lender, the Euro Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Arranger, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or such Related Party, as the case may be, such Lender’s prorata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time, or if Total Credit Exposure has been reduced to zero, then based on such Lender’s share of the Total Credit Exposure prior to such reduction) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender solely in its capacity as such, only the Revolving Credit Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Revolving Credit Lenders’ Revolving Credit Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) provided, further, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), such Arranger, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), such Arranger, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender in connection with such capacity. The obligations of the Lenders under this clause (b) are subject to the provisions of Section 5.7.

SECTION 15.4Set-off. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or any such Affiliate to or for the credit or the account of the Borrowers or any other Credit Party against any and all of the obligations of the Borrowers or such Credit Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender or any of their respective Affiliates, irrespective of whether or not such Lender, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Credit Party may be contingent or unmatured or are owed to a branch or office of such Lender, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or such Affiliate different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender or any Affiliate thereof shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 13.4 and, pending such payment, shall be segregated by such Defaulting Lender or Affiliate of a Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender and the other Lenders, and (y) the Defaulting Lender or its Affiliate shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender or any of its Affiliates as to which it exercised such right of setoff. The rights of each Lender, each Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or their respective Affiliates may have. Each Lender, each Issuing Lender, the Swingline Lender, the Canadian Dollar Lender and the Euro Lender agrees to notify the Borrowers and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 15.5Governing Law. This Agreement and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

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SECTION 15.6Jurisdiction and Venue.

(a)Jurisdiction. Each Borrower and each other Credit Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Arranger, any Lender, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Arranger, any Lender, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender or the Euro Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Borrower or any other Credit Party or its properties in the courts of any jurisdiction.

(b)Venue. Each Borrower and each other Credit Party irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (a) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c)Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 15.1. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.

SECTION 15.7Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 15.8Reversal of Payments. To the extent a Borrower makes a payment or payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative Agent receives any payment or proceeds of the collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state, provincial or federal law, common law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent, and each Lender and each Issuing Lender severally agrees to pay to the Administrative Agent upon demand its applicable ratable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent plus interest thereon at a per annum rate equal to the Federal Funds Rate from the date of such demand to the date such payment is made to the Administrative Agent.

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SECTION 15.9Injunctive Relief; Punitive Damages.

(a)The Borrowers recognize that, in the event the Borrowers fail to perform, observe or discharge any of their obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to the Administrative Agent and the Lenders. Therefore, the Borrowers agree that the Administrative Agent and the Lenders, at the Administrative Agent’s or the Required Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

(b)Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, each Borrower and each other Credit Party shall not assert, and hereby waives, any claim against the Administrative Agent, any Arranger, any Lender, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender or any Related Party of the foregoing, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. None of the Administrative Agent, any Arranger, any Lender, any Issuing Lender, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender nor any Related Party of the foregoing shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

SECTION 15.10Accounting Matters.

(a)If at any time any change in GAAP (other than the adoption of IFRS) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrowers shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, (A) all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the effectiveness of FASB ASC 842 shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with FASB ASC 842 (on a prospective or retroactive basis or otherwise) to be treated as Capital Leases in the financial statements, (B) any “right of use” asset included in total assets by virtue of FASB ASC 842 shall be excluded from “Consolidated Total Assets” and (C) all financial statements delivered to the Administrative Agent hereunder shall contain a schedule showing the modifications necessary to reconcile the adjustments made pursuant to clauses (A) and (B) above with such financial statements.

(b)If at any time (x) the Borrowers adopt IFRS with the agreement of its independent public accountants and (y) the SEC requires or permits United States reporting companies to utilize IFRS in lieu of GAAP for reporting purposes, the Borrowers shall promptly notify the Administrative Agent in writing that they have elected to so use IFRS in lieu of GAAP and, upon any such notice, references herein to GAAP shall thereafter be construed to mean IFRS as in effect from time to time; provided that, to the extent that such election would affect any financial ratio set forth in this Agreement or requirement, (i) the Borrowers shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such election and (ii) if the Borrowers, the Administrative Agent or the Required Lenders shall so request, the Administrative Agent, the Required Lenders and the Borrowers shall negotiate in good faith to amend

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such ratio to preserve the original intent thereof in light of such election; provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such election.

SECTION 15.11Successors and Assigns; Participations.

(a)Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) pursuant to assignment under Section 14.12(d), (ii) to an assignee in accordance with the provisions of paragraph (b) of this Section, (iii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iv) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that, in each case, any such assignment shall be subject to the following conditions:

(i)Minimum Amounts.

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Class) or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment, unless each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the US Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided that the US Borrower shall be deemed to have given its consent ten (10) Business Days after the date written notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the US Borrower prior to such tenth (10th) Business Day;

(ii)Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned;

(iii)Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

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(A)the consent of the US Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) a Default or Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided, that the US Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof;

(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for (i) assignments in respect of the Revolving Credit Facility if such assignment is to a Person that is not a Lender with a Revolving Credit Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) assignments in respect of any Term Loan Commitment or Term Loans if such assignment is to a Person that is not a Lender with an Term Loan Commitment or Term Loans, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

(C)the consents of the Canadian Dollar Lender, the Euro Lender, the Issuing Lenders and the Swingline Lender shall be required for any assignment.

(iv)Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 for each assignment; provided that (A) only one such fee will be payable in connection with simultaneous assignments to two or more related Approved Funds by a Lender and (B) the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. No such assignment shall be made to (A) any Borrower or any Subsidiary or Affiliate of any Borrower or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for primary benefit of a natural Person).

(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the US Borrower and the Administrative Agent, the applicable prorata share of Loans previously requested, but not funded by, the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender and each other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full prorata share of all Loans and participations in Letters of Credit, Canadian Dollar Loans, Euro Loans and Swingline Loans in accordance with its Revolving Credit Commitment Percentage and its applicable Initial Term Loan Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 5.8, 5.9, 5.10, 5.11 and 15.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section (other than a purported assignment to a natural Person or any Borrower or any Borrower’s Subsidiaries or Affiliates, which shall be null and void).

(c)Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices in Charlotte, North Carolina, a copy of each Assignment and Assumption and each Incremental Amendment delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of (and stated interest on) the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the US Borrower and any Lender (but only to the extent of entries in the Register that are applicable to such Lender), at any reasonable time and from time to time upon reasonable prior notice.

(d)Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for primary benefit of a natural Person) or a Borrower or any Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Issuing Lenders, the Swingline Lender, the Canadian Dollar Lender, the Euro Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 15.3(b) with respect to any payments made by such Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 15.2 that directly and adversely affects such Participant and could not be affected by a vote of the Required Lenders. The Borrowers agree that each Participant shall be entitled to the benefits of Sections5.8, 5.9, 5.10 and 5.11 (subject to the requirements and limitations therein, including the requirements under Section 5.11(e) (it being understood that the documentation required under Section 5.11(e) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 5.12 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections5.10 or 5.11, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a

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participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 5.12 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 15.4 as though it were a Lender; provided that such Participant agrees to be subject to Sections 5.6 and 15.4 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)[Intentionally Omitted].

(f)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 15.12Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by, or required to be disclosed to, any rating agency, or regulatory or similar authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by Applicable Law or regulations or in any legal, judicial, administrative proceeding or other compulsory process, (d) to any other party hereto, (e) in connection with the exercise of any remedies under this Agreement or under any other Loan Document (or any Hedging Agreement or Cash Management Agreement with a Lender or the Administrative Agent) or any action or proceeding relating to this Agreement or any other Loan Document (or any Hedging Agreement or Cash Management Agreement with a Lender or the Administrative Agent) or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to any Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating any Borrower or its Subsidiaries or the Credit Facility or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Credit Facility, (h) with the consent of the US Borrower, (i) deal terms and other information customarily reported to Thomson Reuters, other bank market data collectors and similar service providers to the lending industry and service providers to the Administrative Agent and the Lenders in connection with the administration of the Loan Documents, (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, any Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers, (k) to governmental regulatory authorities in connection with any regulatory examination of the Administrative Agent or any Lender or in accordance with the Administrative Agent’s or any Lender’s regulatory compliance policy if the Administrative Agent or such Lender deems necessary for the mitigation of claims by those authorities against the Administrative Agent or such Lender or any of its

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subsidiaries or affiliates, or (l) for purposes of establishing a “due diligence” defense. For purposes of this Section, “Information” means all information received from any Credit Party or any Subsidiary thereof relating to any Credit Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any Issuing Lender on a nonconfidential basis prior to disclosure by any Credit Party or any Subsidiary thereof; provided that, in the case of information received from a Credit Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 15.13Performance of Duties. Each of the Credit Party’s obligations under this Agreement and each of the other Loan Documents shall be performed by such Credit Party at its sole cost and expense.

SECTION 15.14All Powers Coupled with Interest. All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent and any Persons designated by the Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated.

SECTION 15.15Survival of Indemnities. Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent, each Arranger, the Lenders and their respective Related Parties are entitled under the provisions of this Article XV and any other provision of this Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent, each Arranger, the Lenders and their respective Related Parties against events arising after such termination as well as before.

SECTION 15.16Titles and Captions. Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.

SECTION 15.17Severability of Provisions. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction. In the event that any provision is held to be so prohibited or unenforceable in any jurisdiction, the Administrative Agent, the Lenders and the US Borrower shall negotiate in good faith to amend such provision to preserve the original intent thereof in such jurisdiction (subject to the approval of the Required Lenders).

SECTION 15.18Counterparts; Integration; Effectiveness; Electronic Execution.

(a)Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, the Arrangers and/or the Issuing Lenders, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 6.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

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SECTION 15.19Electronic Execution. The words “execute,” “execution,” “signed,” “signature,” “delivery” and words of like import in or related to this Agreement, any other Loan Document or any document, amendment, approval, consent, waiver, modification, information, notice, certificate, report, statement, disclosure, or authorization to be signed or delivered in connection with this Agreement or any other Loan Document or the transactions contemplated hereby shall be deemed to include Electronic Signatures or execution in the form of an Electronic Record, and contract formations on electronic platforms approved by the Administrative Agent, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.  Each party hereto agrees that any Electronic Signature or execution in the form of an Electronic Record shall be valid and binding on itself and each of the other parties hereto to the same extent as a manual, original signature.  For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the parties of a manually signed paper which has been converted into electronic form (such as scanned into PDF format), or an electronically signed paper converted into another format, for transmission, delivery and/or retention.  Notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided that without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept such Electronic Signature from any party hereto, the Administrative Agent and the other parties hereto shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of the executing party without further verification and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by an original manually executed counterpart thereof.  Without limiting the generality of the foregoing, each party hereto hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders and any of the Credit Parties, electronic images of this Agreement or any other Loan Document (in each case, including with respect to any signature pages thereto)  shall have the same legal effect, validity and enforceability as any paper original, and (B) waives any argument, defense or right to contest the validity or enforceability of the Loan Documents based solely on the lack of paper original copies of any Loan Documents, including with respect to any signature pages thereto.

SECTION 15.20Term of Agreement. This Agreement shall remain in effect from the Closing Date through and including the date upon which all Obligations arising hereunder or under any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired and all Commitments have been terminated. No termination of this Agreement shall affect the rights and obligations of the parties hereto arising prior to such termination or in respect of any provision of this Agreement which survives such termination.

SECTION 15.21Advice of Counsel, No Strict Construction. Each of the parties represents to each other party hereto that it has discussed this Agreement with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

SECTION 15.22Inconsistencies with Other Documents; Independent Effect of Covenants.

(a)In the event there is a conflict or inconsistency between this Agreement and any other Loan Document, the terms of this Agreement shall control; provided that any provision of the other Loan Documents which imposes additional burdens on any Borrower or its Subsidiaries or further restricts the rights of any Borrower or its Subsidiaries or gives the Administrative Agent or Lenders additional rights shall not be deemed to be in conflict or inconsistent with this Agreement and shall be given full force and effect.

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(b)The Borrowers expressly acknowledge and agree that each covenant contained in Articles IX, X or XI hereof shall be given independent effect. Accordingly, the Borrowers shall not engage in any transaction or other act otherwise permitted under any covenant contained in Articles IX, X or XI if, before or after giving effect to such transaction or act, the Borrowers shall or would be in breach of any other covenant contained in Articles IX, X or XI.

SECTION 15.23[Intentionally Omitted].

SECTION 15.24USA PATRIOT Act. The Administrative Agent and each Lender hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act or any other Anti-Money Laundering Laws, it is required to obtain, verify and record information that identifies the Borrowers and the Subsidiary Guarantors, which information includes the name and address of the Borrowers and each Subsidiary Guarantor and other information that will allow such Lender to identify the Borrowers or such Subsidiary Guarantor in accordance with the PATRIOT Act or such Anti-Money Laundering Laws.

SECTION 15.25No Advisory or Fiduciary Responsibility.

(a)In connection with all aspects of each transaction contemplated hereby, each Credit Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (i) the facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Borrowers are capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof), (ii) in connection with the process leading to such transaction, each of the Administrative Agent, the Arrangers and the Lenders is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person, (iii) none of the Administrative Agent, the Arrangers or the Lenders has assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether any Arranger or Lender has advised or is currently advising any Borrower or any of its Affiliates on other matters) and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to any Borrower or any of its Affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (iv) the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from, and may conflict with, those of a Borrower and its Affiliates, and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate.

(b)Each Credit Party acknowledges and agrees that each Lender, the Arrangers and any Affiliate thereof may lend money to, invest in, and generally engage in any kind of business with, any Borrower, any Affiliate thereof or any other person or entity that may do business with or own securities of any of the foregoing, all as if such Lender, Arranger or Affiliate thereof were not a Lender or Arranger or an Affiliate thereof (or an agent or any other person with any similar role under the Credit Facilities) and without any duty to account therefor to any other Lender, the Arrangers, the Borrowers or any Affiliate of the foregoing.  Each Lender, the Arrangers and any Affiliate thereof may accept fees and other consideration from any Borrower or any Affiliate thereof for services in connection with this Agreement, the Credit Facilities or otherwise without having to account for the same to any other Lender, the Arrangers, any Borrower or any Affiliate of the foregoing.

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SECTION 15.26Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(c)the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(d)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

SECTION 15.27Amendment and Restatement; No Novation. This Agreement constitutes an amendment and restatement of the Existing Credit Agreement, effective from and after the Closing Date. The execution and delivery of this Agreement shall not constitute a novation of any indebtedness or other obligations owing to the Lenders or the Administrative Agent under the Existing Credit Agreement based on facts or events occurring or existing prior to the execution and delivery of this Agreement. On the Closing Date, the credit facility described in the Existing Credit Agreement, shall be amended, supplemented, modified and restated in their entirety by the facilities described herein, and all loans and other obligations of the Borrowers outstanding as of such date under the Existing Credit Agreement, shall be deemed to be loans and obligations outstanding under the corresponding facilities described herein, without any further action by any Person, except that the Administrative Agent shall make such transfers of funds as are necessary in order that the outstanding balance of such Loans, together with any Loans funded on the Closing Date, reflect the respective Commitments of the Lenders hereunder.

SECTION 15.28Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and, each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the FDIC under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may

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be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

As used in this Section 15.28, the following terms have the following meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

(i)a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii)a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii)a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).     

[Signature Pages Intentionally Omitted.]

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EX-21.1

EXHIBIT 21.1

List of Subsidiaries

Subsidiary	State or Jurisdiction of Incorporation or Organization
SCP Distributors LLC	Delaware
Superior Commerce LLC	Delaware
Splash Holdings, Inc.	Delaware
Alliance Trading, Inc.	Delaware
Superior Pool Products LLC	Delaware
SCP International, Inc.	Delaware
Pool Development LLC	Delaware
Horizon Distributors, Inc.	Delaware
Poolfx Supply LLC	Delaware
Pinch A Penny, Inc.	Florida
Porpoise Pool & Patio, Inc.	Florida
The Cepcot Corporation	Florida
Sun Wholesale Supply, Inc.	Florida
Froy, Inc.	Florida
Cypress, Inc.	Nevada
SCP (UK) Holdings Limited	United Kingdom
SCP (UK) Limited	United Kingdom
Garden Leisure Products Limited	United Kingdom
The Swimming Pool Warehouse Limited	United Kingdom
Cascade Swimming Pools Limited	United Kingdom
Norcal Pool Supplies Limited	United Kingdom
SCP Pool Portugal LDA	Portugal
SCP Pool Distributors Spain S.L.U.	Spain
SCP Europe SAS	France
SCP France SAS	France
SCP Italy S.r.l.	Italy
SCP Adriatica, d.o.o.	Croatia
SCP Benelux NV	Belgium
SCP Germany GmbH	Germany
SCP Distributors Canada Inc.	Ontario
SCP Mexico S.A. de C.V.	Mexico
Pool Systems Pty. Ltd.	Australia

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

1.Form S-8 No. 333-58805, pertaining to the SCP Pool Corporation Employee Stock Purchase Plan,

2.Form S-8 No. 333-142706, pertaining to the Pool Corporation 2007 Long-Term Incentive Plan,

3.Form S-8 No. 333-158990, pertaining to the Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan, and

4.Form S-8 No. 333-211205, pertaining to the Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan

of our reports dated February 25, 2022, with respect to the consolidated financial statements of Pool Corporation and the effectiveness of internal control over financial reporting of Pool Corporation included in this Annual Report (Form 10-K) of Pool Corporation for the year ended December 31, 2021.

/s/ Ernst & Young LLP                

New Orleans, Louisiana

February 25, 2022

EX-31.1

EXHIBIT 31.1

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Melanie Housey Hart, certify that:

1.    I have reviewed this annual report on Form 10-K of Pool Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 25, 2022	/s/ MELANIE HOUSEY HART
		Melanie Housey Hart
		Vice President and Chief Financial Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter D. Arvan, certify that:

1.    I have reviewed this annual report on Form 10-K of Pool Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 25, 2022	/s/ PETER D. ARVAN
		Peter D. Arvan
		President and Chief Executive Officer

EX-32.1

EXHIBIT 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 10-K of Pool Corporation (the “Company”) for the period ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Peter D. Arvan, as Chief Executive Officer of the Company, and Melanie Housey Hart, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 25, 2022

/s/ Peter D. Arvan

     Peter D. Arvan

     President and Chief Executive Officer

/s/ Melanie Housey Hart

     Melanie Housey Hart

     Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2021	Feb. 18, 2022	Jun. 30, 2021
Cover [Abstract]
Amendment Flag	false
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0000945841
Document Type	10-K
Document Period End Date	Dec. 31, 2021
Entity File Number	0-26640
Entity Registrant Name	POOL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-3943363
Entity Address, Address Line One	109 Northpark Boulevard,
Entity Address, City or Town	Covington,
Entity Address, State or Province	LA
Entity Address, Postal Zip Code	70433-5001
City Area Code	(985)
Local Phone Number	892-5521
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	POOL
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 17,838,608,341
Entity Common Stock, Shares Outstanding		40,168,103
Documents Incorporated by Reference	Portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.
Document Transition Report	false
Document Annual Report	true
ICFR Auditor Attestation Flag	true

XML

Audit Information	12 Months Ended
	Dec. 31, 2021
Audit Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Location	New Orleans, Louisiana
Auditor Firm ID	42

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net sales	$ 5,295,584	$ 3,936,623	$ 3,199,517
Cost of sales	3,678,492	2,805,721	2,274,592
Gross profit	1,617,092	1,130,902	924,925
Selling and administrative expenses	786,808	659,931	583,679
Note recovery	(2,500)
(Recovery) impairment of goodwill and other assets	0	6,944	0
Operating income	832,784	464,027	341,246
Interest and other non-operating expenses, net	8,639	12,353	23,772
Income before income taxes and equity earnings	824,145	451,674	317,474
Provision for income taxes	173,812	85,231	56,161
Equity earnings in unconsolidated investments, net	291	295	262
Net income	$ 650,624	$ 366,738	$ 261,575
Earnings per share:
Basic (in dollars per share)	$ 16.21	$ 9.14	$ 6.57
Diluted (in dollars per share)	$ 15.97	$ 8.97	$ 6.40
Weighted average shares outstanding:
Basic (in shares)	39,876	40,106	39,833
Diluted (in shares)	40,480	40,865	40,865
Cash dividends declared per common share (in dollars per share)	$ 2.98	$ 2.29	$ 2.10

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 650,624	$ 366,738	$ 261,575
Other comprehensive income (loss), net of tax [Abstract]
Foreign currency translation adjustments	(4,663)	5,210	2,295
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	(3,733)	2,957	552
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	11,198	(8,870)	(1,657)
Total other comprehensive income (loss)	6,535	(3,660)	638
Comprehensive income	$ 657,159	$ 363,078	$ 262,213

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	$ (3,733)	$ 2,957	$ 552
Change in unrealized losses and gains on interest rate swaps, tax amount	$ (3,733)	$ 2,957	$ 552

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 24,321	$ 34,128
Receivables, net	155,259	122,252
Receivables pledged under receivables facility	221,312	166,948
Inventory, net	1,339,100	780,989
Prepaid expenses and other current assets	29,093	17,610
Total current assets	1,769,085	1,121,927
Property and equipment, net	179,008	108,241
Goodwill	688,364	268,167
Other intangible assets, net	312,814	12,181
Equity interest investments	1,231	1,292
Operating lease assets	241,662	205,875
Other assets	37,967	21,987
Total assets	3,230,131	1,739,670
Current liabilities:
Accounts payable	398,697	266,753
Accrued expenses and other current liabilities	264,877	143,694
Short-term borrowings and current portion of long-term debt	11,772	11,869
Operating Lease, Liability, Current	69,070	60,933
Total current liabilities	744,416	483,249
Deferred income taxes	35,840	27,653
Long-term debt, net	1,171,578	404,149
Other long-term liabilities	31,545	38,261
Operating Lease, Liability, Noncurrent	175,359	146,888
Total liabilities	2,158,738	1,100,200
Stockholders' equity:
Common stock	$ 40	$ 40
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, outstanding (in shares)	40,192,901	40,232,210
Additional paid-in capital	$ 551,963	$ 519,579
Retained earnings (deficit)	526,874	133,870
Accumulated other comprehensive loss	(7,484)	(14,019)
Total stockholders' equity	1,071,393	639,470
Total liabilities and stockholders' equity	$ 3,230,131	$ 1,739,670

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Consolidated Statements of Cash Flows $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($) shares
Proceeds from Term Facility	$ 0	$ 0	$ 185,000
Common stock, outstanding (in shares) | shares	40,192,901	40,232,210
Stockholders' Equity Attributable to Parent	$ 1,071,393	$ 639,470	410,180
Net income	650,624	366,738	261,575
Operating activities
Net income	650,624	366,738	261,575
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	28,287	27,967	27,885
Amortization	1,739	1,431	1,389
Share-based compensation	15,187	14,516	13,472
Provision (benefit) for doubtful accounts receivable, net of write-offs	1,134	(664)	(710)
Provision for inventory obsolescence, net of write-offs	3,798	2,362	1,310
(Benefit) provision for deferred income taxes	4,650	(2,542)	3,723
Losses (gains) on sales of property and equipment	(93)	38	(85)
Equity earnings in unconsolidated investments, net	(291)	(295)	(262)
Net losses on foreign currency transactions	325	1,748	1,347
(Recovery) impairment of goodwill and other assets	0	6,944	0
Other	473	410	3,313
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables	(79,940)	(38,688)	(15,691)
Product inventories	(525,207)	(42,447)	(14,165)
Prepaid expenses and other assets	(51,199)	(13,744)	(4,218)
Accounts payable	114,893	(9,212)	16,860
Accrued expenses and other current liabilities	149,110	83,019	3,033
Net cash provided by operating activities	313,490	397,581	298,776
Investing activities
Acquisition of businesses, net of cash acquired	(811,956)	(124,587)	(8,901)
Purchases of property and equipment, net of sale proceeds	(37,658)	(21,702)	(33,362)
Net cash used in investing activities	(849,614)	(146,289)	(42,263)
Financing activities
Proceeds from revolving line of credit	1,438,408	1,053,968	1,066,529
Payments on revolving line of credit	(974,506)	(1,145,616)	(1,415,988)
Proceeds from Long-term Lines of Credit	250,000	0	0
Proceeds from asset-backed financing	495,000	326,700	189,000
Payments on asset-backed financing	(430,000)	(321,700)	(182,500)
Proceeds from Term Facility	0	0	185,000
Payments on Term Facility	(9,250)	(9,250)	0
Proceeds from short-term borrowings and current portion of long-term debt	9,279	13,822	30,863
Payments on short-term borrowings and current portion of long-term debt	(9,377)	(13,698)	(28,286)
Payments on deferred and contingent acquisition consideration	(362)	(281)	(312)
Payments of deferred financing costs	(2,638)	(12)	(406)
Proceeds from stock issued under share-based compensation plans	17,197	19,824	18,574
Payments of cash dividends	(119,581)	(91,929)	(83,772)
Purchases of treasury stock	(138,039)	(76,199)	(23,188)
Net cash provided by (used in) financing activities	526,131	(244,371)	(244,486)
Effect of exchange rate changes on cash and cash equivalents	186	(1,376)	198
Change in cash and cash equivalents	(9,807)	5,545	12,225
Cash and cash equivalents at beginning of year	34,128	28,583	16,358
Cash and cash equivalents at end of year	$ 24,321	$ 34,128	$ 28,583
Common Stock [Member]
Common stock, outstanding (in shares) | shares	40,193,000	40,232,000	40,074,000
Stockholders' Equity Attributable to Parent	$ 40	$ 40	$ 40
Net income	0	0	0
Operating activities
Net income	0	0	0
Additional Paid-in Capital [Member]
Stockholders' Equity Attributable to Parent	551,963	519,579	485,239
Net income	0	0	0
Operating activities
Net income	0	0	0
Retained Deficit [Member]
Stockholders' Equity Attributable to Parent	526,874	133,870	(64,740)
Net income	650,624	366,738	261,575
Operating activities
Net income	650,624	366,738	261,575
Accumulated Other Comprehensive Income (Loss) [Member]
Stockholders' Equity Attributable to Parent	(7,484)	(14,019)	(10,359)
Net income	0	0	0
Operating activities
Net income	$ 0	$ 0	$ 0

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Deficit [Member]	Retained Deficit [Member] Cumulative Effect, Period of Adoption, Adjustment [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance (in shares) at Dec. 31, 2018			39,506,000
Balance at Dec. 31, 2018	$ 223,590		$ 40	$ 453,193	$ (218,646)		$ (10,997)
Net income	261,575		0	0	261,575		0
Foreign currency translation	2,295		0	0	0		2,295
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	552
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	(1,657)		$ 0	0	0		(1,657)
Repurchases of common stock, net of retirements (in shares)			(155,000)
Repurchases of common stock, net of retirements	(23,188)		$ 0	0	(23,188)		0
Share-based compensation	13,472		$ 0	13,472	0		0
Issuance of stock under share-based compensation plans (in shares)			723,000
Issuance of stock under share-based compensation plans	18,574		$ 0	18,574	0		0
Declaration of cash dividends	(83,772)		$ 0	0	(83,772)		0
Balance (in shares) at Dec. 31, 2019			40,074,000
Balance at Dec. 31, 2019	410,180	$ (709)	$ 40	485,239	(64,740)	$ (709)	(10,359)
Net income	366,738		0	0	366,738		0
Foreign currency translation	5,210		0	0	0		5,210
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	2,957
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	(8,870)		$ 0	0	0		(8,870)
Repurchases of common stock, net of retirements (in shares)			(401,000)
Repurchases of common stock, net of retirements	(76,199)		$ 0	0	(76,199)		0
Share-based compensation	14,516		$ 0	14,516	0		0
Issuance of stock under share-based compensation plans (in shares)			559,000
Issuance of stock under share-based compensation plans	19,824		$ 0	19,824	0		0
Declaration of cash dividends	$ (91,929)		$ 0	0	(91,929)		0
Balance (in shares) at Dec. 31, 2020	40,232,210		40,232,000
Balance at Dec. 31, 2020	$ 639,470		$ 40	519,579	133,870		(14,019)
Net income	650,624		0	0	650,624		0
Foreign currency translation	(4,663)		0	0	0		(4,663)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	(3,733)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	11,198		$ 0	0	0		11,198
Repurchases of common stock, net of retirements (in shares)			(360,000)
Repurchases of common stock, net of retirements	(138,039)		$ 0	0	(138,039)		0
Share-based compensation	15,187		$ 0	15,187	0		0
Issuance of stock under share-based compensation plans (in shares)			321,000
Issuance of stock under share-based compensation plans	17,197		$ 0	17,197	0		0
Declaration of cash dividends	$ (119,581)		$ 0	0	(119,581)		0
Balance (in shares) at Dec. 31, 2021	40,192,901		40,193,000
Balance at Dec. 31, 2021	$ 1,071,393		$ 40	$ 551,963	$ 526,874		$ (7,484)

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Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies

Description of Business

As of December 31, 2021, Pool Corporation and our subsidiaries (the Company, which may be referred to as we, us or our) operated 410 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape products and hardscape, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Tile (NPT) and Sun Wholesale Supply (Sun Wholesale).

Basis of Presentation and Principles of Consolidation

We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated.

Use of Estimates

To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals, goodwill impairment evaluations and the valuation of intangible assets from our recent acquisition of Porpoise Pool & Patio, Inc. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates.

Newly Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This new standard simplified the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Most amendments were required to be applied on a prospective basis, while certain amendments were required to be applied on a retrospective or modified retrospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect a material impact in future periods.

On January 1, 2020, we adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and all related amendments, which are codified into Accounting Standards Codification (ASC) 326, using the cumulative-effect transition method related to our trade receivables. This new standard changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The adoption of this standard did not have a material impact on our financial position or results of operations, and we do not expect the adoption of this guidance to have a material effect on our results of operations in future periods. As the impact from adoption was not material, we did not recognize an adjustment to the beginning balance of retained earnings.

We adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, for our interim impairment tests performed in the period ended March 31, 2020. This new standard eliminated the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the previous guidance). Rather, the measurement of a goodwill impairment charge is based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the previous guidance). The impact of the new standard is dependent on the specific facts and circumstances of individual impairments, if any. The adoption of this guidance did not impact our results of operations, statement of financial position or cash flows.

On January 1, 2020, we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, on a prospective basis. This new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The adoption of this guidance did not materially impact our results of operations, statement of financial position or cash flows.

Segment Reporting

Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. These similarities include (i) the nature of our products and services, (ii) the types of customers we sell to and (iii) the distribution methods we use. Our chief operating decision maker (CODM) evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income growth and accounts receivable and inventory management criteria. Each sales center manager and eligible field employee earns performance-based compensation based on these measures developed at the sales center level.

A bottom-up approach is used to develop the operating budget for each individual sales center. The CODM approves the budget and routinely monitors budget to actual results for each sales center. Additionally, our CODM makes resource allocation decisions primarily on a sales center-by-sales center basis. No single sales center meets any of the quantitative thresholds (10% of revenues, profit or assets) for separately reporting information about an operating segment. We do not track sales by product lines and product categories on a consolidated basis. We lack readily available financial information due to the number of our product lines and product categories and the fact that we make ongoing changes to product classifications within these groups, thus making it impracticable to report our sales by product category.

Seasonality and Weather

Our business is seasonal and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters.

Revenue Recognition

We recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period.

We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales.

We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists under ASC 606. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments.

The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in selling and administrative expenses.

We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes.

Vendor Programs

Many of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.

Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements.

Shipping and Handling Costs

We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands):

2021		2020		2019
$	75,411	$	59,224	$	51,580

Share-Based Compensation

We record share-based compensation for stock options and other share-based awards based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. For additional discussion of share-based compensation, see Note 6.

Advertising Costs

We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands):

2021		2020		2019
$	9,409	$	6,755	$	7,842

Income Taxes

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense in the income statement in the period in which stock options are exercised or restrictions on stock awards lapse.

We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred, although we have not realized any impacts since the December 2017 enactment of U.S. tax reform.

For additional information regarding income taxes, see Note 7.

Equity Method Investments

We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment.

Earnings Per Share

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders.

Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8.

Foreign Currency

The functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized net foreign currency transaction losses of $0.3 million in 2021, $1.7 million in 2020 and $1.3 million in 2019. Our net foreign currency transaction loss in 2019 included a $0.9 million reclassification from Accumulated other comprehensive loss related to the closing of our sales center in Colombia.

Fair Value Measurements

Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and contingent consideration related to recent acquisitions. The three levels of the fair value hierarchy under the accounting guidance are described below:

Level 1    Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2    Inputs to the valuation methodology include:

•quoted prices for similar assets or liabilities in active markets;

•quoted prices for identical or similar assets or liabilities in inactive markets;

•inputs other than quoted prices that are observable for the asset or liability; or

•inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3    Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Recurring Fair Value Measurements

The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands):

	Fair Value at December 31,
	2021		2020
Level 2
Unrealized gains on interest rate swaps	$	6,054	$	223
Unrealized losses on interest rate swaps	3,215		12,314
Level 3
Contingent consideration liabilities	$	985	$	1,343

We include unrealized gains in Prepaid expenses and other current assets and unrealized losses in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. As of December 31, 2021, our Consolidated Balance Sheets reflect $0.4 million in Accrued expenses and other current liabilities and $0.6 million in Other long-term liabilities related to our estimates for contingent consideration payouts.

For determining the fair value of our interest rate swaps and forward-starting interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.  Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves.

The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments. The carrying value of long-term debt approximates fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs).

Nonrecurring Fair Value Measurements

In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Generally, our assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or business combinations.

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. Based on our preliminary purchase price allocation, we recognized tangible assets of $84.2 million, identifiable intangible assets of $301.0 million and resulting goodwill of $403.5 million. For additional discussion of goodwill and other intangible assets, see Note 3.

In the first quarter of 2020, we recorded impairment charges of $6.9 million, which included non-cash goodwill and intangibles impairment charges of $4.4 million, equal to the total goodwill and intangibles carrying amounts of our Australian reporting units, and $2.5 million from a long-term note, as collectability was impacted by the COVID-19 pandemic. For additional discussion of goodwill and intangibles impairment, see Note 3.

Derivatives and Hedging Activities

At inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

Our interest rate swap contracts and forward-starting interest rate swap contracts are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts.

We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps.

For our interest rate swap contracts currently in effect, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive income (loss) to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5.

Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Credit Risk and Allowance for Doubtful Accounts

We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.

Management estimates future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current and forecasted economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts.

The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	4,808	$	5,472	$	6,182
Bad debt expense	3,377		1,900		2,768
Write-offs, net of recoveries	(2,243)		(2,564)		(3,478)
Balance at end of year	$	5,942	$	4,808	$	5,472

Product Inventories and Reserve for Inventory Obsolescence

Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory turns by class with particular emphasis on stock keeping units with the weakest sales over the expected sellable period, which is the previous 12 months for most products. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.

In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:

•the level of inventory in relation to historical sales by product, including inventory usage by classification based on product sales at both the sales center and on a company-wide basis;

•changes in customer preferences or regulatory requirements;

•seasonal fluctuations in inventory levels;

•geographic location; and

•superseded products and new product offerings.

We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.

The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	11,398	$	9,036	$	7,726
Provision for inventory write-downs	7,781		6,181		3,656
Deduction for inventory write-offs	(3,983)		(3,819)		(2,346)
Balance at end of year	$	15,196	$	11,398	$	9,036

Property and Equipment

Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives:

Buildings	40 years
Leasehold improvements (1)	1 - 10 years
Autos and trucks	3 - 6 years
Machinery and equipment	3 - 15 years
Computer equipment	3 - 7 years
Furniture and fixtures	5 - 10 years

(1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.

The table below presents depreciation expense for the past three years (in thousands):

2021		2020		2019
$	28,287	$	27,967	$	27,885

Acquisitions

We use the acquisition method of accounting and recognize assets acquired and liabilities assumed at fair value as of the acquisition date. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if we can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). We re-measure any contingent liabilities at fair value in each subsequent reporting period. We expense all acquisition-related costs as incurred, including any restructuring costs associated with a business combination.

Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. Our fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of market participants. Significant assumptions related to the acquisition of Porpoise Pool & Patio, Inc. include expected revenue growth rates, earnings metrics and discount rates. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the underlying estimates and assumptions.

If our initial acquisition accounting is incomplete by the end of the reporting period in which a business combination occurs, we report provisional amounts for incomplete items. Once we obtain information required to finalize the accounting for incomplete items, we adjust the provisional amounts recognized. We make adjustments to these provisional amounts during the measurement period.

For all acquisitions, we include the results of operations in our Consolidated Financial Statements as of the acquisition date. For additional discussion of acquisitions, see Note 2.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. We test goodwill and other indefinite-lived intangible assets for impairment annually as of October 1st and at any other time when impairment indicators exist.

To estimate the fair value of our reporting units, we project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and earnings multiples. These assumptions are considered unobservable inputs (Level 3 inputs as defined in the accounting guidance). To the extent the carrying value of a reporting unit is greater than its estimated fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, our reporting unit is an individual sales center. For additional discussion of goodwill and other intangible assets, see Note 3.

Receivables Securitization Facility

Our accounts receivable securitization facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities.

We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third-party financial institutions. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets. For additional discussion of the Receivables Facility, see Note 5.

Self-Insurance

We are self-insured for employee health benefits, workers’ compensation coverage, property and casualty, and automobile insurance. To limit our exposure, we also maintain excess and aggregate liability coverage. We establish self-insurance reserves based on estimates of claims incurred but not reported and information that we obtain from third-party service providers regarding known claims. Our management reviews these reserves based on consideration of various factors, including but not limited to the age of existing claims, estimated settlement amounts and other historical claims data.

Accumulated Other Comprehensive Loss

The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):

	December 31,
	2021		2020
Foreign currency translation adjustments	$	(9,580)	$	(4,917)
Unrealized gain (loss) on interest rate swaps, net of tax	2,096		(9,102)
Accumulated other comprehensive loss	$	(7,484)	$	(14,019)

Retained Earnings

We account for the retirement of treasury share repurchases as a decrease to our Retained earnings on our Consolidated Balance Sheets.  As of December 31, 2021, the retained earnings reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $1.7 billion and cumulative dividends of $790.4 million.

Supplemental Cash Flow Information

The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Cash paid during the year for:
Interest	$	10,023	$	8,257	$	20,960
Income taxes, net of refunds	83,953		81,792		51,076

Recent Accounting Pronouncements Pending Adoption

The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods:

Standard	Description	Effective Date	Effect on Financial Statements and Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting	Provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The amendments in this ASU refine the scope of ASC 848 and clarify some of its guidance as it relates to recent rate reform activities.	The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.	We do not expect that there will be a material impact to the financial statements as a result of adopting this ASU.

Description of New Accounting Pronouncements Not yet Adopted

Recent Accounting Pronouncements Pending Adoption

The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods:

Standard	Description	Effective Date	Effect on Financial Statements and Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting	Provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The amendments in this ASU refine the scope of ASC 848 and clarify some of its guidance as it relates to recent rate reform activities.	The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.	We do not expect that there will be a material impact to the financial statements as a result of adopting this ASU.

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Acquisitions

12 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Acquisitions

Acquisitions

2021 Acquisitions

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. (“Porpoise”) for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. We preliminarily recognized goodwill of $403.5 million, other intangible assets of $301.0 million and tangible assets of $84.2 million, which included $57.4 million of acquired land and buildings. For additional discussion of goodwill and other intangible assets, see Note 3. The acquisition was funded with borrowings on our Credit Facility.

Porpoise’s primary operations consist of Sun Wholesale Supply, Inc., a wholesale distributor of swimming pool and outdoor-living products, adding one distribution location in Florida. It also services Pinch A Penny, Inc., a franchisor of independently owned and operated pool and outdoor living-related specialty retail stores.

The final allocation of the fair value of the Porpoise acquisition, including the allocation of goodwill and intangible assets, is not complete, but will be finalized within the allowable measurement period. We do not expect the future results of this acquisition to have a material impact on our financial position or results of operations.

In December 2021, we acquired the distribution assets of Wingate Supply, Inc., a wholesale distributor of irrigation and landscape maintenance products, adding one location in Florida.

In June 2021, we acquired the distribution assets of Vak Pak Builders Supply, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding one location in Florida.

In April 2021, we acquired Pool Source, LLC, a wholesale distributor of swimming pool equipment, chemicals and supplies, adding one location in Tennessee.

Other than Porpoise Pool & Patio, Inc., we have completed our acquisition accounting for these acquisitions, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material.

2020 Acquisitions

In February 2020, we acquired the distribution assets of Master Tile Network LLC, a wholesale distributor of swimming pool tile and hardscape products, adding two locations in Texas, one location in Nevada and one location in Oklahoma.

In September 2020, we acquired the distribution assets of Northeastern Swimming Pool Distributors, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding two locations in Ontario, Canada.

In October 2020, we acquired Jet Line Products, Inc., a wholesale distributor of swimming pool equipment, chemicals and supplies, adding three locations in New Jersey, three locations in New York, two locations in Texas and one location in Florida.

In December 2020, we acquired TWC Distributors, Inc., a wholesale distributor of irrigation and landscape maintenance products, adding nine locations in Florida and one in Georgia.

We have completed our acquisition accounting for these acquisitions.

2019 Acquisitions

In January 2019, we acquired the distribution assets of W.W. Adcock, Inc., a wholesale distributor of swimming pool products, equipment, parts and supplies adding two locations in Pennsylvania, one location in North Carolina and one location in Virginia. We have completed our acquisition accounting for this acquisition.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands):

Goodwill (gross) at December 31, 2019	$	198,475
Acquired goodwill	82,497
Foreign currency translation and other adjustments	584
Goodwill (gross) at December 31, 2020	281,556
Accumulated impairment losses at December 31, 2019	(9,879)
Goodwill impairment	(3,510)
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill (net) at December 31, 2020	$	268,167
Goodwill (gross) at December 31, 2020	$	281,556
Acquired goodwill (1)	422,126
Foreign currency translation and other adjustments	(1,929)
Goodwill (gross) at December 31, 2021	701,753
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill impairment	—
Accumulated impairment losses at December 31, 2021	(13,389)
Goodwill (net) at December 31, 2021	$	688,364

(1)Primarily includes the acquisition of Porpoise Pool & Patio, Inc.

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. (“Porpoise”) for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. The purchase price of Porpoise was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Tangible assets acquired were $84.2 million, which included $57.4 million of acquired land and buildings. As a result of the acquisition, we recognized goodwill of $403.5 million, which represents anticipated cost synergies from combined operations. Other intangible assets of $301.0 million acquired as part of our acquisition of Porpoise included the following:

•$169.0 million for the Pinch A Penny brand name, which was determined to be indefinite-lived;

•$109.0 million for customer relationships and $22.0 million for franchise agreements, both of which were determined to have useful lives of 20 years; and

•$1.0 million for a non-compete agreement.

We determined the Pinch A Penny brand name to be indefinite-lived based on our plan of continued franchise expansion using the brand name and Pinch A Penny’s well-established reputation and recognized brand name within the swimming pool industry, including their competitive market position, and history of successful performance by branded stores.

The fair value of intangible assets was determined using income methodologies. We valued the acquired brand name and franchise agreements using the relief from royalty method. For customer relationships, we used the multi-period excess earnings method. Significant assumptions (Level 3 inputs) used in developing these valuations included the estimated annual net cash flows for each intangible asset, royalty rates, the discount rate that appropriately reflects the risk inherent in each future cash flow stream and the assessment of each asset’s life cycle, among other factors. We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions. The final allocation of the fair value of the Porpoise acquisition, including the allocation of goodwill and intangible assets, is not complete, but will be finalized within the allowable measurement period.

In October 2021 and October 2020, we performed our annual goodwill impairment test and did not record any goodwill impairment at the reporting unit level. As of October 1, 2021, we had 247 reporting units with allocated goodwill balances.  The most significant goodwill balance for a reporting unit was $12.1 million and the average goodwill balance per reporting unit was $1.1 million.

In the period ended March 31, 2020, we recorded impairment equal to the total goodwill and intangibles carrying amounts of our five Australian reporting units, which included goodwill impairment of $3.5 million and intangibles impairment, related to the Pool Systems tradename and trademark, of $0.9 million. We recorded these amounts in Impairment of goodwill and other assets on our Consolidated Statements of Income. We determined certain impairment triggers had occurred due to the impact of the COVID-19 pandemic on expected future operating cash flows, and performed interim goodwill impairment analyses, which included discounted cash flow analyses, and determined that the estimated fair values of our Australian reporting units no longer exceeded their carrying values.

The determination of our reporting units’ goodwill and intangibles fair values includes numerous assumptions that are subject to various risks and uncertainties. The principal assumptions, all of which are considered Level 3 inputs, used in our cash flow analyses consisted of changes in market conditions, forecasted future operating results (including sales growth rates and operating margins) and discount rates (including our weighted-average cost of capital).

Other intangible assets consisted of the following (in thousands):

	December 31,												Weighted Average Useful Life
	2021						2020
	Intangibles Gross		Accumulated Amortization		Intangibles Net		Intangibles Gross		Accumulated Amortization		Intangibles Net
Horizon tradename	$	8,400	$	—	$	8,400	$	8,400	$	—	$	8,400	Indefinite
Pinch A Penny brand name	169,000		—		169,000		—		—		—		Indefinite
National Pool Tile (NPT) tradename	1,500		(1,037)		463		1,500		(962)		538		20
Non-compete agreements	8,096		(3,891)		4,205		6,917		(3,674)		3,243		4.58
Customer relationships	109,000		(214)		108,786		—		—		—		20
Franchise agreements	22,000		(40)		21,960		—		—		—		20
Total other intangibles	$	317,996	$	(5,182)	$	312,814	$	16,817	$	(4,636)	$	12,181

The Horizon tradename and Pinch A Penny brand name each have an indefinite useful life and are not subject to amortization.  However, we evaluate the useful life of these intangible assets and test for impairment annually.  The NPT tradename, our non-compete agreements, customer relationships and franchise agreements have finite useful lives, and we amortize the estimated fair value of these agreements using the straight-line method over their respective useful lives. We have not identified any indicators of impairment related to these assets. The useful lives for our non-compete agreements are based on their contractual terms.

Other intangible amortization expense was $1.3 million in 2021 and $1.0 million in both 2020 and 2019.

The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands):

2022	$	7,854
2023	7,802
2024	7,426
2025	7,335
2026	6,932

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Details of Certain Balance Sheet Accounts

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Details of Certain Balance Sheet Accounts

Details of Certain Balance Sheet Accounts

The table below presents additional information regarding certain balance sheet accounts (in thousands):

 

	December 31,
	2021		2020
Receivables, net:
Trade accounts	$	27,724	$	33,553
Vendor programs	129,072		90,988
Other, net	4,405		2,519
Total receivables	161,201		127,060
Less: Allowance for doubtful accounts	(5,942)		(4,808)
Receivables, net	$	155,259	$	122,252
Prepaid expenses and other current assets:
Prepaid expenses	$	21,889	$	16,401
Other current assets	7,204		1,209
Prepaid expenses and other current assets	$	29,093	$	17,610
Property and equipment, net:
Land	$	19,863	$	3,608
Buildings	54,503		7,348
Leasehold improvements	62,684		54,300
Autos and trucks	102,330		95,667
Machinery and equipment	82,897		73,353
Computer equipment	32,200		29,935
Furniture and fixtures	9,598		9,448
Fixed assets in progress	6,176		4,608
Total property and equipment	370,251		278,267
Less: Accumulated depreciation	(191,243)		(170,026)
Property and equipment, net	$	179,008	$	108,241
Accrued expenses and other current liabilities:
Salaries and payroll deductions	$	25,882	$	24,930
Performance-based compensation	76,255		59,897
Taxes payable	106,894		20,676
Unrealized losses on interest rate swaps	3,215		12,314
Other current liabilities	52,631		25,877
Accrued expenses and other current liabilities	$	264,877	$	143,694

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Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

The table below presents the components of our debt (in thousands):

	December 31,
	2021		2020
Variable rate debt
Short-term borrowings	$	953	$	—
Current portion of long-term debt:
Australian credit facility	10,819		11,869
Short-term borrowings and current portion of long-term debt	11,772		11,869
Long-term portion:
Revolving credit facility	572,926		109,024
Term loan under credit facility	250,000		—
Term facility	166,500		175,750
Receivables securitization facility	185,000		120,000
Less: financing costs, net	2,848		625
Long-term debt, net	1,171,578		404,149
Total debt	$	1,183,350	$	416,018

Credit Facility

On December 30, 2021, we entered into the First Amendment to the Second Amended and Restated Credit Agreement Credit Agreement, which increased the total borrowing capacity of our Credit Facility to $1.25 billion from $1.0 billion through the addition of an incremental delayed-draw term loan facility of $250.0 million. Subsequent to December 31, 2021, we drew the $250.0 million incremental term loan amount on January 4, 2022 and used the same amount to reduce our revolving borrowings. At that time, $413.4 million remained available for borrowing under the Credit Facility.

Previously, on September 27, 2021, we entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”) among us, as U.S. Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP International, Inc., as Euro Borrower, Wells Fargo Bank, National Association, as Administrative Agent (the “Agent”), and certain other lenders party thereto. The Credit Agreement amended and restated the predecessor senior credit facility (as amended, the “Credit Facility”) principally by increasing the total borrowing capacity from $750.0 million to $1.0 billion through the addition of a delayed-draw term loan facility of $250.0 million. We drew the entire $250.0 million delayed-draw term loan on December 15, 2021 and used the proceeds to fund our acquisition of Porpoise Pool & Patio, Inc.

In addition, the Credit Agreement further amended and restated the Credit Facility in the following ways:

•extending the maturity of the Credit Facility from September 29, 2022 to September 25, 2026;

•making available lower interest rates;

•increasing the amount of incremental facility commitments that we can request from $75.0 million to $250.0 million; and

•providing additional capacity under certain negative covenants related to indebtedness, liens, investments, acquisitions, share repurchases and dividends.

Term loans under the credit facility require quarterly amortization payments aggregating to 20% of the original principal amount of the loan during the third, fourth and fifth years of the loan, with all remaining principal due on September 25, 2026. All other terms of any such term loans would be substantially similar to those governing revolving credit loans under the Credit Agreement. The Credit Agreement continues to include a $750.0 million revolving credit facility and sublimits for the issuance of swingline loans and standby letters of credit.

All obligations under the Credit Agreement continue to be guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries.  The Credit Agreement also continues to contain various customary affirmative and negative covenants and events of default.  The occurrence of any of these events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Credit Agreement.

At December 31, 2021, there was $822.9 million outstanding, a $4.8 million standby letter of credit outstanding and $422.3 million available for borrowing under the Credit Facility.  The weighted average effective interest rate for the Credit Facility as of December 31, 2021 was approximately 1.2%, excluding commitment fees.

Revolving and term borrowings under the Credit Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the highest of (i) the Agent’s prime rate, (ii) the Federal Funds Rate plus 0.500% and (iii) (a) prior to the USD LIBOR Transition Date, the Adjusted Eurocurrency Rate for Dollars for a one-month term in effect on such day plus 1.000% and (b) on and after the USD LIBOR Transition Date, Daily Simple RFR for Dollars in effect on such day plus 1.000%; or

b.(i) prior to the USD LIBOR Transition Date, the Eurocurrency Rate and (ii) on or after the USD LIBOR Transition Date or a Benchmark Transition Event, the applicable Benchmark Replacement.

Borrowings by the Canadian Borrower bear interest, at the Canadian Borrower’s option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the greatest of (i) the Canadian Reference Bank prime rate and (ii) the Canadian Dealer Offered Rate (“CDOR”) plus 1.000%; or

b.CDOR.

Borrowings by the Euro Borrower bear interest at the Eurocurrency rate plus an applicable margin.

Borrowings under any swingline loans under the Credit Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.the LIBOR Market Index Rate; or

b.a base rate, which is the highest of (i) the Agent’s prime rate, (ii) the Federal Funds Rate plus 0.500% and (iii) (a) prior to the USD LIBOR Transition Date, the Adjusted Eurocurrency Rate for Dollars for a one-month term in effect on such day plus 1.000% and (b) on and after the USD LIBOR Transition Date, Daily Simple RFR for Dollars in effect on such day plus 1.000%

The interest rate margins on the borrowings and letters of credit issued under the Credit Agreement are based on our leverage ratio and will range from 0.000% to 0.425% on Base Rate and Canadian Base Rate loans and from 0.910% to 1.425% on CDOR, LIBOR and swingline loans (with all such rates being calculated in accordance with the terms and by reference to the definitions specified in the Credit Agreement). We are also required to pay an annual facility fee with respect to the lenders’ aggregate revolving credit agreement, the amount of which is based on our leverage ratio.

Term Facility

On December 30, 2019, we along with certain of our subsidiaries entered into a $185.0 million term facility (the “Term Facility”) with Bank of America, N.A. pursuant to a credit agreement subsequently amended on October 12, 2021, (as amended, the “Term Facility Agreement”) among us, as Borrower and Bank of America, N.A., as the Lender. Among other items, the amendment provided additional capacity under certain negative covenants related to indebtedness, liens, investments, acquisitions, share repurchases and dividends. The Term Facility matures on December 30, 2026.

Under the Term Facility, we are required to make quarterly amortization payments in installments of 1.250% of the Term Facility on the last business day of each quarter beginning in the first quarter of 2020. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. The total of the quarterly payments will be equal to 33.75% of the Term Facility with the final principal repayment, equal to 66.25% of the Term Facility, due on the maturity date.

Our obligations under the Term Facility are guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries. The Term Facility Agreement contains various customary affirmative and negative covenants and events of default. The occurrence of any of these events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Term Facility Agreement.

At December 31, 2021, the Term Facility had an outstanding balance of $166.5 million at a weighted average effective interest rate of 2.9%.

Borrowings under the Term Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin:

a.a base rate, which is the greatest of (i) the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus 0.50%, (ii) Bank of America’s “prime rate,” or (iii) the Eurodollar Rate (defined below) plus 1.00%; or

b.the Eurodollar Rate, which is the greater of (i) the rate per annum equal to the USD LIBOR as administered by the ICE Benchmark Administration, or a comparable or successor administrator approved by the Lender or (ii) a floor rate specified in the Term Facility Agreement.

The interest rate margins on the borrowings under the Term Facility are based on our leverage ratio and will range from 0.000% to 0.625% on Base Rate borrowings and 1.000% to 1.625% on Eurodollar Rate borrowings (with all such rates being calculated in accordance with the terms and by reference to the definitions specified in the Term Facility Agreement).

Receivables Securitization Facility

On November 1, 2021, we and certain of our subsidiaries entered into an agreement (the “Amended Receivables Purchase Agreement”) amending our two-year receivable securitization facility. Among other items, the amendment removed seasonal facility limits and increased the maximum facility limit to $350.0 million in the months of April through June and from $175.0 million to $315.0 million during the remaining months of the year. We also extended the maturity date to November 1, 2023. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis.

The Receivables Facility provides for the sale of certain of our receivables to a wholly owned subsidiary (the “Securitization Subsidiary”). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due to the financial institutions.

The Receivables Facility is subject to terms and conditions (including representations, covenants and conditions precedent) customary for transactions of this type. Additionally, an amortization event will occur if we fail to meet certain covenants, including maintaining a maximum average total leverage ratio (average total funded debt/EBITDA) of 3.25 to 1.00 and a minimum fixed charge coverage ratio (EBITDAR/cash interest expense plus rental expense) of 2.25 to 1.00.

At December 31, 2021, there was $185.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 0.9%, excluding commitment fees.

Depending on the funding source used by the financial institutions to purchase the receivables, amounts outstanding under the Receivables Facility bear interest at one of the following and, in each case, plus an applicable margin of 0.75%:

a.for financial institutions using the commercial paper market, commercial paper rates based on the applicable variable rates in the commercial paper market at the time of issuance; or

b.for financial institutions not using the commercial paper market, LMIR.

We also pay an unused fee of 0.35% on the excess of the facility limit over the average daily capital outstanding. We pay this fee monthly in arrears.

Australian Seasonal Credit Facility

In the second quarter of 2017, Pool Systems Pty. Ltd. (PSL) entered into a credit facility to fund expansion and supplement working capital needs. The credit facility provides a borrowing capacity of AU$20.0 million.

Cash Pooling Arrangement

Certain of our foreign subsidiaries entered into a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows the participating subsidiaries to withdraw cash from the financial institution to the extent that aggregate cash deposits held by these subsidiaries are available at the financial institution. To the extent the participating subsidiaries are in an overdraft position, such overdrafts are recorded as short-term borrowings under a committed cash overdraft facility. These borrowings bear interest at a variable rate based on 3-month Euro Interbank Offered Rate (EURIBOR), plus a fixed margin. We also pay a commitment fee on the average outstanding balance. This fee is paid annually in advance. Our borrowing capacity is €14.0 million.

Maturities of Long-Term Debt

The table below presents maturities of long-term debt, excluding unamortized deferred financing costs, for the next five years (in thousands):

2022	$	21,022
2023	200,500
2024	21,750
2025	28,000
2026	914,926

Interest Rate Swaps

We currently have three interest rate swap contracts in place, two of which became effective on November 20, 2020 and terminate on September 29, 2022, and a third that became effective on February 26, 2021, and terminates on February 28, 2025. These swap contracts were previously forward-starting and convert the variable interest rate to a fixed interest rate on our variable rate borrowings. Interest expense related to the notional amounts under these swap contracts is based on the fixed rate plus the applicable margin on our variable rate borrowings. Changes in the estimated fair value of these interest rate swap contracts are recorded to Accumulated other comprehensive loss on the Consolidated Balance Sheets.

The following table provides additional details related to these swap contracts:

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Interest rate swap 1	May 7, 2019	November 20, 2020	September 29, 2022	$75.0	2.0925%
Interest rate swap 2	July 25, 2019	November 20, 2020	September 29, 2022	$75.0	1.5500%
Interest rate swap 3	February 5, 2020	February 26, 2021	February 28, 2025	$150.0	1.3800%

We have entered into additional forward-starting interest rate swap contracts to extend the hedged period for future interest payments on our variable rate borrowings. These swap contracts will convert the variable interest rate to a fixed interest rate on our variable rate borrowings.

The following table provides details related to each of our forward-starting interest rate swap contracts:

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Forward-starting interest rate swap 1	March 9, 2020	September 29, 2022	February 26, 2027	$150.0	0.7400%
Forward-starting interest rate swap 2	March 9, 2020	February 28, 2025	February 26, 2027	$150.0	0.8130%

The net difference between interest paid and interest received related to our swap agreements resulted in an incremental interest expense of $4.3 million in 2021 and $0.9 million in 2020 and a benefit of $0.3 million in 2019.

Failure of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements.  Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

Financial and Other Covenants

The Credit Facility and Term Facility limit the declaration and payment of dividends on our common stock to a manner consistent with past practice, provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. We may declare and pay quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount dividends per share and (ii) our Average Total Leverage Ratio is less than 3.25 to 1.00 both immediately before and after giving pro forma effect to such dividends. Under the Credit Facility and Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 3.25 to 1.00.

Other covenants include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of the Credit Facility and the Term Facility could result in higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.

As of December 31, 2021, we were in compliance with all covenants and financial ratio requirements related to the Credit Facility, the Term Facility and the Receivables Facility.

Deferred Financing Costs

We capitalize financing costs we incur related to implementing and amending our debt arrangements. We record these costs as a reduction of Long-term debt, net on our Consolidated Balance Sheets and amortize them over the contractual life of the related debt arrangements. The table below summarizes changes in deferred financing costs for the past two years (in thousands):

	December 31,
	2021		2020
Deferred financing costs:
Balance at beginning of year	$	5,130	$	5,118
Financing costs deferred	2,638		12
Write-off of fully amortized deferred financing costs	(3,726)		—
Balance at end of year	4,042		5,130
Less: Accumulated amortization	(1,194)		(4,505)
Deferred financing costs, net of accumulated amortization	$	2,848	$	625

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Share-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Share-Based Compensation

Share-Based Compensation

Share-Based Plans

Current Plan

In May 2007, our shareholders approved the 2007 Long-Term Incentive Plan (the 2007 LTIP), which authorizes the Compensation Committee of our Board of Directors (the Board) to grant non-qualified stock options and restricted stock awards to employees, directors, consultants or advisors.  In May 2016, our shareholders approved an amendment and restatement of the 2007 Long-Term Incentive Plan (the Amended 2007 LTIP) and increased the number of shares that may be issued to a total of 9,315,000 shares.  As of December 31, 2021, we had 4,109,524 shares available for future issuance including 933,872 shares that may be issued as restricted stock.

Stock options granted under the Amended 2007 LTIP have an exercise price equal to our stock’s closing market price on the grant date and expire ten years from the grant date. Restricted stock awards granted under the Amended 2007 LTIP are issued at no cost to the grantee.  Both stock options and restricted stock awards vest over time depending on an employee’s length of service with the company.  Share-based awards to our employees generally vest either five years from the grant date or on a three/five year split vest schedule, where half of the awards vest three years from the grant date and the remainder of the awards vest five years from the grant date. Share-based awards to our non-employee directors vest one year from the grant date.

Restricted stock awards to our employees contain performance-based criteria in addition to the service-based vesting criteria described above. The awards provide for a three-year performance period for the metric to be achieved. If the performance metric fails to be met, it may be extended by one or two years; however, if it is not met by the end of the extended performance period, then all shares of performance-based restricted stock will be immediately forfeited and canceled. For each of the performance-based grants from 2016 through 2019, we achieved the performance condition in the initial three-year performance period. For the performance-based grants in 2020 and 2021, we have concluded that the performance condition is probable to be attained in the initial three-year performance period.

Stock Option Awards

The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at December 31, 2020	884,059	$	91.49
Granted	44,750	332.91
Less: Exercised	274,253	52.64
Forfeited	2,939	207.30
Balance at December 31, 2021	651,617	$	123.98	4.93	$	288,028,501
Exercisable at December 31, 2021	376,780	$	76.06	3.31	$	184,599,877

The following table presents information about stock options outstanding and exercisable at December 31, 2021:

	Outstanding Stock Options				Exercisable Stock Options
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Term (Years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$ 37.13 to $ 69.85	218,817	2.29	$	59.66	218,817	$	59.66
$ 69.86 to $ 138.03	257,995	5.05	108.93		156,309	97.51
$ 138.04 to $ 515.41	174,805	8.05	226.70		1,654	217.71
	651,617	4.93	$	123.98	376,780	$	76.06

The following table summarizes the cash proceeds and tax benefits realized from the exercise of stock options:

	Year Ended December 31,
(in thousands, except share amounts)	2021		2020		2019
Options exercised	274,253		482,361		640,475
Cash proceeds	$	14,435	$	17,657	$	16,839
Intrinsic value of options exercised	$	118,305	$	116,794	$	97,007
Tax benefits realized	$	29,576	$	29,199	$	24,252

We estimated the fair value of employee stock option awards at the grant date based on the assumptions summarized in the following table:

 

	Year Ended December 31,
(Weighted average)	2021				2020				2019
Expected volatility	27.0		%		20.7		%		21.4		%
Expected term	6.9			years	6.8			years	7.0			years
Risk-free interest rate	1.00		%		1.22		%		2.52		%
Expected dividend yield	1.15		%		1.30		%		1.30		%
Grant date fair value	$	83.05			$	42.52			$	37.75

We calculated expected volatility over the expected term of the awards based on the historical volatility of our common stock.  We use weekly price observations for our historical volatility calculation because we believe this provides the most appropriate measurement of volatility given the trading patterns of our common stock.  We estimated the expected term based on the vesting period of the awards and our historical exercise activity for awards with similar characteristics. The risk-free interest rate is based on the U.S. Treasury zero-coupon issues with a remaining term approximating the expected term of the option. We determined the expected dividend yield based on the dividends we anticipate paying over the expected term.

For purposes of recognizing share-based compensation expense, we ratably expense the estimated fair value of employee stock options over the options’ requisite service period. The requisite service period for our share-based awards is either the vesting period, or if shorter, the period from the grant date to the date the employee becomes eligible to retire under our share-based award agreements. We recognize compensation cost for awards with graded vesting using the graded vesting recognition method. We estimate a forfeiture rate to calculate our share-based compensation expense for our share-based awards based on an analysis of actual forfeitures. We continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover, and other factors.

The following table presents the total share-based compensation expense for stock option awards for the past three years (in thousands):

	2021		2020		2019
Option grants share-based compensation expense	$	2,846	$	2,842	$	3,021
Option grants share-based compensation tax benefits	712		710		755

At December 31, 2021, the unamortized compensation expense related to stock option awards totaled $3.6 million.  We anticipate recognizing this expense over a weighted average period of 2.8 years.

Restricted Stock Awards

The table below presents restricted stock award activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Grant Date Fair Value
Balance unvested at December 31, 2020	291,704	$	153.12
Granted (at market price) (1)	40,597	335.80
Less: Vested	69,069	115.88
Forfeited	2,494	295.73
Balance unvested at December 31, 2021	260,738	$	190.26

(1)The majority of these shares contain performance-based vesting conditions.

At December 31, 2021, the unamortized compensation expense related to the restricted stock awards totaled $14.5 million.  We anticipate recognizing this expense over a weighted average period of 3.0 years.

The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts):

	2021		2020		2019
Restricted stock awards - shares vested	69,069		77,294		75,143
Fair value of restricted stock awards vested	$	24,005	$	16,813	$	12,316

The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands):

	2021		2020		2019
Restricted stock awards share-based compensation expense	$	11,543	$	10,965	$	10,026

Employee Stock Purchase Plan

We maintain the Pool Corporation Amended and Restated Employee Stock Purchase Plan (the ESPP), which was last approved by the Board and our stockholders in 2016. Under the ESPP, employees who meet minimum age and length of service requirements may purchase stock at 85% of the lower of:

a.the closing price of our common stock at the end of a six month plan period ending either July 31 or January 31; or

b.the average of the beginning and ending closing prices of our common stock for such six month period.

No more than 956,250 shares of our common stock may be issued under the ESPP. For the two six month offering periods in each of the last three years, our employees purchased the following aggregate number of shares:

2021	2020	2019
8,649	10,929	12,716

The grant date fair value for the most recent ESPP purchase period ended July 31, 2021 was $121.82 per share.  Share-based compensation expense related to our ESPP was $0.8 million in 2021, $0.7 million in 2020 and $0.4 million in 2019.

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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income before income taxes and equity in earnings is attributable to the following jurisdictions (in thousands):

	Year Ended December 31,
	2021		2020		2019
United States	$	752,957	$	428,857	$	304,259
Foreign	71,188		22,817		13,215
Total	$	824,145	$	451,674	$	317,474

The provision for income taxes consisted of the following (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	124,379	$	67,093	$	35,270
State and other	44,783		20,680		17,168
Total current provision for income taxes	169,162		87,773		52,438
Deferred:
Federal	2,970		(1,298)		4,154
State and other	1,680		(1,244)		(431)
Total deferred provision for income taxes	4,650		(2,542)		3,723
Provision for income taxes	$	173,812	$	85,231	$	56,161

A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity in earnings is as follows:

	Year Ended December 31,
	2021		2020		2019
Federal statutory rate	21.00	%	21.00	%	21.00	%
Change in valuation allowance	(0.11)		(0.22)		0.10
Stock-based compensation	(3.67)		(6.34)		(7.40)
Other, primarily state income tax rate	3.87		4.43		3.99
Total effective tax rate	21.09	%	18.87	%	17.69	%

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. We recorded excess tax benefits of $30.0 million to our income tax provision in 2021, $28.6 million in 2020 and $23.5 million in 2019.

The table below presents the components of our deferred tax assets and liabilities (in thousands):

	December 31,
	2021		2020
Deferred tax assets:
Product inventories	$	8,597	$	6,110
Accrued expenses	3,105		4,101
Leases	59,457		50,301
Share-based compensation	8,981		8,730
Uncertain tax positions	2,792		3,266
Net operating losses	2,524		3,829
Interest rate swaps	—		3,023
Other	3,839		3,628
Total non-current	89,295		82,988
Less: Valuation allowance	(2,086)		(3,166)
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	1,096		1,280
Total deferred tax assets	1,096		1,280
Deferred tax liabilities:
Trade discounts on purchases	2,566		2,218
Prepaid expenses	4,226		3,379
Leases	58,146		49,004
Intangible assets, primarily goodwill	36,936		34,244
Depreciation	19,369		17,350
Interest rate swaps	710		—
Total non-current	121,953		106,195
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	35,840		27,653
Total deferred tax liabilities	35,840		27,653
Net deferred tax liability	$	34,744	$	26,373

At December 31, 2021, certain of our international subsidiaries had tax loss carryforwards totaling approximately $8.6 million, which expire in various years after 2022.  Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $2.5 million as of December 31, 2021 and $3.8 million as of December 31, 2020.  We have recorded a corresponding valuation allowance of $1.8 million and $2.9 million in the respective years.

As of December 31, 2021, United States income taxes were not provided on earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform enacted in December 2017. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation.

The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	15,553	$	13,582	$	12,179
Increases for tax positions taken during a prior period	—		1,363		771
Increases for tax positions taken during the current period	3,518		2,721		2,354
Decreases resulting from the expiration of the statute of limitations	3,185		2,113		1,390
Decreases relating to settlements	2,589		—		332
Balance at end of year	$	13,297	$	15,553	$	13,582

The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $10.5 million at December 31, 2021 and $12.3 million at December 31, 2020.

We record interest expense related to unrecognized tax benefits in Interest and other non-operating expenses, net, while we record related penalties in Selling and administrative expenses on our Consolidated Statements of Income.  For unrecognized tax benefits, we had interest income of $0.6 million in 2021 and interest expense of $1.0 million in 2020 and $0.6 million in 2019.  Accrued interest related to unrecognized tax benefits was approximately $1.6 million at December 31, 2021 and $2.7 million at December 31, 2020.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.  With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2018.

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Earnings Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by the earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders. Participating securities excluded from weighted average common shares outstanding were 268,000 for the year ended December 31, 2021.

The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):

	Year Ended December 31,
	2021		2020		2019
Net income	$	650,624	$	366,738	$	261,575
Amounts allocated to participating securities	(4,321)		—		—
Net income attributable to common stockholders	$	646,303	$	366,738	$	261,575
Weighted average common shares outstanding:
Basic	39,876		40,106		39,833
Effect of dilutive securities:
Stock options and employee stock purchase plan	604		759		1,032
Diluted	40,480		40,865		40,865
Earnings per share attributable to common stockholders:
Basic	$	16.21	$	9.14	$	6.57
Diluted	$	15.97	$	8.97	$	6.40
Anti-dilutive stock options excluded from diluted earnings per share computations (1)	1		—		—

(1)Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Commitments

We lease facilities for our corporate and administrative offices, sales centers and centralized shipping locations under operating leases that expire in various years through 2036. Most of our leases contain five-year terms with renewal options that allow us to extend the lease term beyond the initial period, subject to terms agreed upon at lease inception. Based on our leasing practices and contract negotiations, we determined that we are not reasonably certain to exercise the renewal options and, as such, we have not included optional renewal periods in our measurement of operating lease assets, liabilities and expected lease terms.

With our adoption of ASC 842, Leases, we elected to retain our existing assessment of whether an arrangement is or contains a lease, is classified as an operating or financing lease and contains initial direct costs. We also elected the practical expedients that allow us to exclude short-term leases from our Consolidated Balance Sheets and to combine lease and non-lease components.

For leases with step rent provisions whereby the rental payments increase incrementally over the life of the lease, we recognize expense on a straight-line basis determined by the total lease payments over the lease term. To the extent we determine that future obligations related to real estate taxes, insurance and other lease components are variable, we exclude them from the measurement of our operating lease assets and liabilities.

Some of our real estate agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands):

Lease Cost	Classification	2021		2020		2019
Operating lease cost (1)	Selling and administrative expenses	$	71,255	$	63,141	$	60,104
Variable lease cost	Selling and administrative expenses	$	18,755	$	16,700	$	13,778

(1)Includes short-term lease cost, which is not material.

Based on our lease portfolio as of December 31, 2021, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands):

2022	$	64,337
2023	57,806
2024	45,037
2025	34,803
2026	22,800
Thereafter	32,970
Total lease payments	257,753
Less: interest	13,324
Present value of lease liabilities	$	244,429

To calculate the present value of our lease liabilities, we determined our incremental borrowing rate based on the effective interest rate on our Credit Facility adjusted for a collateral feature similar to that of our leased properties, as we are unable to derive implicit rates from our existing leases. The table below presents the weighted-average remaining lease term (years) of our operating leases and the weighted-average discount rate used in the above calculation:

	December 31,
Lease Term and Discount Rate for Operating Leases	2021		2020		2019
Weighted-average remaining lease term (years)	5.27		5.10		4.57
Weighted-average discount rate	2.57	%	2.99	%	3.41	%

The table below presents the amount of cash paid for amounts included in the measurement of lease liabilities (in thousands):

	Year Ended
	December 31,
	2021		2020		2019
Operating cash flows for lease liabilities	$	67,197	$	60,723	$	56,617

Contingencies

From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. Each quarter, we evaluate developments related to claims and litigation and record a liability if we deem a loss to be probable and estimable. When evaluating these matters for accrual and disclosure, we consider factors such as historical experience, specific facts and claims asserted, the likelihood we will prevail and the magnitude of any potential loss. The outcome of any litigation is inherently unpredictable. Based on currently available facts, we do not believe that the ultimate resolution of any of these claims and litigation matters will have a material adverse impact on our financial condition, results of operations or cash flows. We do not believe our exposure for any of these matters is material for disclosure, either individually or in the aggregate.

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Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Policy

Our policy for related party transactions is included in our written Audit Committee Charter.  This policy requires that our Audit Committee review and approve all related party transactions required to be disclosed in our Annual Proxy Statement or required to be approved based on Nasdaq rules.

Transactions

We lease corporate and administrative offices from NCC, an entity we have held a 50% ownership interest in since 2005.  NCC owns and operates an office building in Covington, Louisiana.  We lease corporate and administrative offices from NCC, occupying approximately 60,000 square feet of office space, and we pay rent of $0.1 million per month. Our lease term ends May 2025.

The table below presents rent expense associated with this lease for the past three years (in thousands):

	2021		2020		2019
NCC	$	1,222	$	1,222	$	1,222

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

We offer a 401(k) savings and retirement plan, which is a defined contribution plan that provides benefits for substantially all employees who meet length of service requirements. Eligible employees are able to contribute up to 75% of their compensation, subject to the federal dollar limit. For plan participants, we provide a matching contribution. We contribute a total maximum match on employee contributions of up to 4% of their compensation, with a 100% match on the first 3% of compensation deferred and a 50% match on deferrals between 3% and 5% of compensation. We also offer retirement plans for certain of our international entities. The plan funding is calculated as a percentage of the employee’s earnings and in compliance with local laws and practices. The related expense is not material and is included in the table below.

We have a nonqualified deferred compensation plan that allows certain employees who occupy key management positions to defer salary and bonus amounts.  This plan also provides a matching contribution similar to that provided under our 401(k) plan to the extent that a participant’s contributions to the 401(k) plan are limited by IRS deferral and compensation limitations. The total combined company matching contribution provided to a participant under the 401(k) plan and the nonqualified deferred compensation plan for any one year may not exceed 4% of a participant’s salary and bonus.  The employee and company matching contributions are invested in certain equity and fixed income securities based on individual employee elections.

The table below sets forth our contributions for the past three years (in thousands):

	2021		2020		2019
Defined contribution and international retirement plans	$	9,308	$	8,259	$	7,373
Deferred compensation plan	239		160		195

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

The table below summarizes the unaudited quarterly results of operations for the past two years (in thousands, except per share data):

	Quarter
	2021								2020
	First		Second		Third		Fourth		First		Second		Third		Fourth
Net sales	$	1,060,745	$	1,787,833	$	1,411,448	$	1,035,557	$	677,288	$	1,280,846	$	1,139,229	$	839,261
Gross profit	301,131		551,685		441,899		322,376		189,629		373,481		328,698		239,095
Net income	98,655		259,695		184,665		107,609		30,912		157,555		119,098		59,174
Earnings per share:
Basic	$	2.45	$	6.47	$	4.60	$	2.68	$	0.77	$	3.94	$	2.97	$	1.47
Diluted	$	2.42	$	6.37	$	4.54	$	2.65	$	0.75	$	3.87	$	2.92	$	1.45

The sum of basic and diluted earnings per share for each of the quarters may not equal the total basic and diluted earnings per share for the annual periods because of rounding differences and a difference in the way that in-the-money stock options are considered from quarter to quarter.

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Organization and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Basis of presentation and principles of consolidation

Description of Business

As of December 31, 2021, Pool Corporation and our subsidiaries (the Company, which may be referred to as we, us or our) operated 410 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape products and hardscape, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Tile (NPT) and Sun Wholesale Supply (Sun Wholesale).

Basis of Presentation and Principles of Consolidation

We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated.

Use of estimates

Use of Estimates

To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals, goodwill impairment evaluations and the valuation of intangible assets from our recent acquisition of Porpoise Pool & Patio, Inc. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates.

Newly adopted accounting pronouncements and Recent accounting pronouncements pending adoption

Newly Adopted Accounting Pronouncements

On January 1, 2021, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This new standard simplified the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Most amendments were required to be applied on a prospective basis, while certain amendments were required to be applied on a retrospective or modified retrospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect a material impact in future periods.

On January 1, 2020, we adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and all related amendments, which are codified into Accounting Standards Codification (ASC) 326, using the cumulative-effect transition method related to our trade receivables. This new standard changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The adoption of this standard did not have a material impact on our financial position or results of operations, and we do not expect the adoption of this guidance to have a material effect on our results of operations in future periods. As the impact from adoption was not material, we did not recognize an adjustment to the beginning balance of retained earnings.

We adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, for our interim impairment tests performed in the period ended March 31, 2020. This new standard eliminated the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the previous guidance). Rather, the measurement of a goodwill impairment charge is based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the previous guidance). The impact of the new standard is dependent on the specific facts and circumstances of individual impairments, if any. The adoption of this guidance did not impact our results of operations, statement of financial position or cash flows.

On January 1, 2020, we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, on a prospective basis. This new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The adoption of this guidance did not materially impact our results of operations, statement of financial position or cash flows.

Segment reporting

Segment Reporting

Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. These similarities include (i) the nature of our products and services, (ii) the types of customers we sell to and (iii) the distribution methods we use. Our chief operating decision maker (CODM) evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income growth and accounts receivable and inventory management criteria. Each sales center manager and eligible field employee earns performance-based compensation based on these measures developed at the sales center level.

A bottom-up approach is used to develop the operating budget for each individual sales center. The CODM approves the budget and routinely monitors budget to actual results for each sales center. Additionally, our CODM makes resource allocation decisions primarily on a sales center-by-sales center basis. No single sales center meets any of the quantitative thresholds (10% of revenues, profit or assets) for separately reporting information about an operating segment. We do not track sales by product lines and product categories on a consolidated basis. We lack readily available financial information due to the number of our product lines and product categories and the fact that we make ongoing changes to product classifications within these groups, thus making it impracticable to report our sales by product category.

Seasonality and weather

Seasonality and Weather

Our business is seasonal and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters.

Revenue recognition

Revenue Recognition

We recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period.

We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales.

We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists under ASC 606. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments.

The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in selling and administrative expenses.

We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes.

Vendor programs

Vendor Programs

Many of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.

Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements.

Shipping and handling costs

Shipping and Handling Costs

We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands):

2021		2020		2019
$	75,411	$	59,224	$	51,580

Share-based compensation

Share-Based Compensation

We record share-based compensation for stock options and other share-based awards based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. For additional discussion of share-based compensation, see Note 6.

Advertising costs

Advertising Costs

We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands):

2021		2020		2019
$	9,409	$	6,755	$	7,842

Income taxes

Income Taxes

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense in the income statement in the period in which stock options are exercised or restrictions on stock awards lapse.

We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred, although we have not realized any impacts since the December 2017 enactment of U.S. tax reform.

For additional information regarding income taxes, see Note 7.

Equity method investments

Equity Method Investments

We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment.

Earnings per share

Earnings Per Share

We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders.

Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8.

Foreign currency

Foreign CurrencyThe functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized net foreign currency transaction losses of $0.3 million in 2021, $1.7 million in 2020 and $1.3 million in 2019. Our net foreign currency transaction loss in 2019 included a $0.9 million reclassification from Accumulated other comprehensive loss related to the closing of our sales center in Colombia.

Fair value measurements

Fair Value Measurements

Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and contingent consideration related to recent acquisitions. The three levels of the fair value hierarchy under the accounting guidance are described below:

Level 1    Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2    Inputs to the valuation methodology include:

•quoted prices for similar assets or liabilities in active markets;

•quoted prices for identical or similar assets or liabilities in inactive markets;

•inputs other than quoted prices that are observable for the asset or liability; or

•inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3    Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Recurring Fair Value Measurements

The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands):

	Fair Value at December 31,
	2021		2020
Level 2
Unrealized gains on interest rate swaps	$	6,054	$	223
Unrealized losses on interest rate swaps	3,215		12,314
Level 3
Contingent consideration liabilities	$	985	$	1,343

We include unrealized gains in Prepaid expenses and other current assets and unrealized losses in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. As of December 31, 2021, our Consolidated Balance Sheets reflect $0.4 million in Accrued expenses and other current liabilities and $0.6 million in Other long-term liabilities related to our estimates for contingent consideration payouts.

For determining the fair value of our interest rate swaps and forward-starting interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.  Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves.

The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments. The carrying value of long-term debt approximates fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs).

Nonrecurring Fair Value Measurements

In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Generally, our assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or business combinations.

On December 16, 2021, we acquired Porpoise Pool & Patio, Inc. for $788.7 million, net of cash acquired, subject to certain customary closing adjustments. Based on our preliminary purchase price allocation, we recognized tangible assets of $84.2 million, identifiable intangible assets of $301.0 million and resulting goodwill of $403.5 million. For additional discussion of goodwill and other intangible assets, see Note 3.

In the first quarter of 2020, we recorded impairment charges of $6.9 million, which included non-cash goodwill and intangibles impairment charges of $4.4 million, equal to the total goodwill and intangibles carrying amounts of our Australian reporting units, and $2.5 million from a long-term note, as collectability was impacted by the COVID-19 pandemic. For additional discussion of goodwill and intangibles impairment, see Note 3.

Derivatives

Derivatives and Hedging Activities

At inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

Our interest rate swap contracts and forward-starting interest rate swap contracts are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts.

We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps.

For our interest rate swap contracts currently in effect, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive income (loss) to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5.

Cash equivalents

Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Credit risk and allowance for doubtful accounts

Credit Risk and Allowance for Doubtful Accounts

We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.

Management estimates future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current and forecasted economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts.

The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	4,808	$	5,472	$	6,182
Bad debt expense	3,377		1,900		2,768
Write-offs, net of recoveries	(2,243)		(2,564)		(3,478)
Balance at end of year	$	5,942	$	4,808	$	5,472

Product inventories and reserve for inventory obsolescence

Product Inventories and Reserve for Inventory Obsolescence

Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory turns by class with particular emphasis on stock keeping units with the weakest sales over the expected sellable period, which is the previous 12 months for most products. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.

In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:

•the level of inventory in relation to historical sales by product, including inventory usage by classification based on product sales at both the sales center and on a company-wide basis;

•changes in customer preferences or regulatory requirements;

•seasonal fluctuations in inventory levels;

•geographic location; and

•superseded products and new product offerings.

We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.

The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	11,398	$	9,036	$	7,726
Provision for inventory write-downs	7,781		6,181		3,656
Deduction for inventory write-offs	(3,983)		(3,819)		(2,346)
Balance at end of year	$	15,196	$	11,398	$	9,036

Property and equipment

Property and Equipment

Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives:

Buildings	40 years
Leasehold improvements (1)	1 - 10 years
Autos and trucks	3 - 6 years
Machinery and equipment	3 - 15 years
Computer equipment	3 - 7 years
Furniture and fixtures	5 - 10 years

(1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.

The table below presents depreciation expense for the past three years (in thousands):

2021		2020		2019
$	28,287	$	27,967	$	27,885

Acquisitions

Acquisitions

We use the acquisition method of accounting and recognize assets acquired and liabilities assumed at fair value as of the acquisition date. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if we can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). We re-measure any contingent liabilities at fair value in each subsequent reporting period. We expense all acquisition-related costs as incurred, including any restructuring costs associated with a business combination.

Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. Our fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of market participants. Significant assumptions related to the acquisition of Porpoise Pool & Patio, Inc. include expected revenue growth rates, earnings metrics and discount rates. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the underlying estimates and assumptions.

If our initial acquisition accounting is incomplete by the end of the reporting period in which a business combination occurs, we report provisional amounts for incomplete items. Once we obtain information required to finalize the accounting for incomplete items, we adjust the provisional amounts recognized. We make adjustments to these provisional amounts during the measurement period.

For all acquisitions, we include the results of operations in our Consolidated Financial Statements as of the acquisition date. For additional discussion of acquisitions, see Note 2.

Goodwill and other intangible assets

Goodwill and Other Intangible Assets

Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. We test goodwill and other indefinite-lived intangible assets for impairment annually as of October 1st and at any other time when impairment indicators exist.

To estimate the fair value of our reporting units, we project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and earnings multiples. These assumptions are considered unobservable inputs (Level 3 inputs as defined in the accounting guidance). To the extent the carrying value of a reporting unit is greater than its estimated fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, our reporting unit is an individual sales center. For additional discussion of goodwill and other intangible assets, see Note 3.

Receivables securitization facility

Receivables Securitization Facility

Our accounts receivable securitization facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities.

We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third-party financial institutions. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets. For additional discussion of the Receivables Facility, see Note 5.

Self insurance

Self-Insurance

We are self-insured for employee health benefits, workers’ compensation coverage, property and casualty, and automobile insurance. To limit our exposure, we also maintain excess and aggregate liability coverage. We establish self-insurance reserves based on estimates of claims incurred but not reported and information that we obtain from third-party service providers regarding known claims. Our management reviews these reserves based on consideration of various factors, including but not limited to the age of existing claims, estimated settlement amounts and other historical claims data.

Accumulated other comprehensive loss

Accumulated Other Comprehensive Loss

The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):

	December 31,
	2021		2020
Foreign currency translation adjustments	$	(9,580)	$	(4,917)
Unrealized gain (loss) on interest rate swaps, net of tax	2,096		(9,102)
Accumulated other comprehensive loss	$	(7,484)	$	(14,019)

Retained earnings

Retained Earnings

We account for the retirement of treasury share repurchases as a decrease to our Retained earnings on our Consolidated Balance Sheets.  As of December 31, 2021, the retained earnings reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $1.7 billion and cumulative dividends of $790.4 million.

Supplemental cash flow information

Supplemental Cash Flow Information

The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Cash paid during the year for:
Interest	$	10,023	$	8,257	$	20,960
Income taxes, net of refunds	83,953		81,792		51,076

Description of New Accounting Pronouncements Not yet Adopted

Recent Accounting Pronouncements Pending Adoption

The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods:

Standard	Description	Effective Date	Effect on Financial Statements and Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting	Provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The amendments in this ASU refine the scope of ASC 848 and clarify some of its guidance as it relates to recent rate reform activities.	The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.	We do not expect that there will be a material impact to the financial statements as a result of adopting this ASU.

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Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Shipping and handling costs associated with outbound freight

The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands):

2021		2020		2019
$	75,411	$	59,224	$	51,580

Advertising expense

We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands):

2021		2020		2019
$	9,409	$	6,755	$	7,842

Fair value measurements

The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands):

	Fair Value at December 31,
	2021		2020
Level 2
Unrealized gains on interest rate swaps	$	6,054	$	223
Unrealized losses on interest rate swaps	3,215		12,314
Level 3
Contingent consideration liabilities	$	985	$	1,343

Summary of changes in allowance for doubtful accounts

The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	4,808	$	5,472	$	6,182
Bad debt expense	3,377		1,900		2,768
Write-offs, net of recoveries	(2,243)		(2,564)		(3,478)
Balance at end of year	$	5,942	$	4,808	$	5,472

Summary of changes in allowance for inventory obsolescence

The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	11,398	$	9,036	$	7,726
Provision for inventory write-downs	7,781		6,181		3,656
Deduction for inventory write-offs	(3,983)		(3,819)		(2,346)
Balance at end of year	$	15,196	$	11,398	$	9,036

Estimated useful lives of property and equipment

We depreciate property and equipment on a straight-line basis over the following estimated useful lives:

Buildings	40 years
Leasehold improvements (1)	1 - 10 years
Autos and trucks	3 - 6 years
Machinery and equipment	3 - 15 years
Computer equipment	3 - 7 years
Furniture and fixtures	5 - 10 years

(1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.

Depreciation expense

The table below presents depreciation expense for the past three years (in thousands):

2021		2020		2019
$	28,287	$	27,967	$	27,885

Accumulated other comprehensive loss

The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):

	December 31,
	2021		2020
Foreign currency translation adjustments	$	(9,580)	$	(4,917)
Unrealized gain (loss) on interest rate swaps, net of tax	2,096		(9,102)
Accumulated other comprehensive loss	$	(7,484)	$	(14,019)

Supplemental disclosures to Consolidated Statements of Cash Flows

The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Cash paid during the year for:
Interest	$	10,023	$	8,257	$	20,960
Income taxes, net of refunds	83,953		81,792		51,076

Schedule of recent accounting pronouncements pending adoption

The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods:

Standard	Description	Effective Date	Effect on Financial Statements and Other Significant Matters
ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting	Provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. The amendments in this ASU refine the scope of ASC 848 and clarify some of its guidance as it relates to recent rate reform activities.	The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.	We do not expect that there will be a material impact to the financial statements as a result of adopting this ASU.

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands):

Goodwill (gross) at December 31, 2019	$	198,475
Acquired goodwill	82,497
Foreign currency translation and other adjustments	584
Goodwill (gross) at December 31, 2020	281,556
Accumulated impairment losses at December 31, 2019	(9,879)
Goodwill impairment	(3,510)
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill (net) at December 31, 2020	$	268,167
Goodwill (gross) at December 31, 2020	$	281,556
Acquired goodwill (1)	422,126
Foreign currency translation and other adjustments	(1,929)
Goodwill (gross) at December 31, 2021	701,753
Accumulated impairment losses at December 31, 2020	(13,389)
Goodwill impairment	—
Accumulated impairment losses at December 31, 2021	(13,389)
Goodwill (net) at December 31, 2021	$	688,364

(1)Primarily includes the acquisition of Porpoise Pool & Patio, Inc.

Other intangible assets

Other intangible assets consisted of the following (in thousands):

	December 31,												Weighted Average Useful Life
	2021						2020
	Intangibles Gross		Accumulated Amortization		Intangibles Net		Intangibles Gross		Accumulated Amortization		Intangibles Net
Horizon tradename	$	8,400	$	—	$	8,400	$	8,400	$	—	$	8,400	Indefinite
Pinch A Penny brand name	169,000		—		169,000		—		—		—		Indefinite
National Pool Tile (NPT) tradename	1,500		(1,037)		463		1,500		(962)		538		20
Non-compete agreements	8,096		(3,891)		4,205		6,917		(3,674)		3,243		4.58
Customer relationships	109,000		(214)		108,786		—		—		—		20
Franchise agreements	22,000		(40)		21,960		—		—		—		20
Total other intangibles	$	317,996	$	(5,182)	$	312,814	$	16,817	$	(4,636)	$	12,181

Estimated amortization expense for other intangible assets for next five years

The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands):

2022	$	7,854
2023	7,802
2024	7,426
2025	7,335
2026	6,932

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Details of Certain Balance Sheet Accounts (Tables)

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Additional information regarding certain balance sheet accounts

The table below presents additional information regarding certain balance sheet accounts (in thousands):

 

	December 31,
	2021		2020
Receivables, net:
Trade accounts	$	27,724	$	33,553
Vendor programs	129,072		90,988
Other, net	4,405		2,519
Total receivables	161,201		127,060
Less: Allowance for doubtful accounts	(5,942)		(4,808)
Receivables, net	$	155,259	$	122,252
Prepaid expenses and other current assets:
Prepaid expenses	$	21,889	$	16,401
Other current assets	7,204		1,209
Prepaid expenses and other current assets	$	29,093	$	17,610
Property and equipment, net:
Land	$	19,863	$	3,608
Buildings	54,503		7,348
Leasehold improvements	62,684		54,300
Autos and trucks	102,330		95,667
Machinery and equipment	82,897		73,353
Computer equipment	32,200		29,935
Furniture and fixtures	9,598		9,448
Fixed assets in progress	6,176		4,608
Total property and equipment	370,251		278,267
Less: Accumulated depreciation	(191,243)		(170,026)
Property and equipment, net	$	179,008	$	108,241
Accrued expenses and other current liabilities:
Salaries and payroll deductions	$	25,882	$	24,930
Performance-based compensation	76,255		59,897
Taxes payable	106,894		20,676
Unrealized losses on interest rate swaps	3,215		12,314
Other current liabilities	52,631		25,877
Accrued expenses and other current liabilities	$	264,877	$	143,694

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Debt (Tables)

12 Months Ended

Dec. 31, 2021

Derivative

Components of debt

The table below presents the components of our debt (in thousands):

	December 31,
	2021		2020
Variable rate debt
Short-term borrowings	$	953	$	—
Current portion of long-term debt:
Australian credit facility	10,819		11,869
Short-term borrowings and current portion of long-term debt	11,772		11,869
Long-term portion:
Revolving credit facility	572,926		109,024
Term loan under credit facility	250,000		—
Term facility	166,500		175,750
Receivables securitization facility	185,000		120,000
Less: financing costs, net	2,848		625
Long-term debt, net	1,171,578		404,149
Total debt	$	1,183,350	$	416,018

Schedule of Maturities of Long-term Debt

The table below presents maturities of long-term debt, excluding unamortized deferred financing costs, for the next five years (in thousands):

2022	$	21,022
2023	200,500
2024	21,750
2025	28,000
2026	914,926

Changes in deferred financing costs

The table below summarizes changes in deferred financing costs for the past two years (in thousands):

	December 31,
	2021		2020
Deferred financing costs:
Balance at beginning of year	$	5,130	$	5,118
Financing costs deferred	2,638		12
Write-off of fully amortized deferred financing costs	(3,726)		—
Balance at end of year	4,042		5,130
Less: Accumulated amortization	(1,194)		(4,505)
Deferred financing costs, net of accumulated amortization	$	2,848	$	625

Terminated Interest Rate Swaps [Member]

Derivative

Schedule of interest rate swaps

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Interest rate swap 1	May 7, 2019	November 20, 2020	September 29, 2022	$75.0	2.0925%
Interest rate swap 2	July 25, 2019	November 20, 2020	September 29, 2022	$75.0	1.5500%
Interest rate swap 3	February 5, 2020	February 26, 2021	February 28, 2025	$150.0	1.3800%

Forward-starting Interest Rate Swap Agreements [Member]

Derivative

Schedule of interest rate swaps

Derivative	Inception Date	Effective Date	Termination Date	Notional Amount (in millions)	Fixed Interest Rate
Forward-starting interest rate swap 1	March 9, 2020	September 29, 2022	February 26, 2027	$150.0	0.7400%
Forward-starting interest rate swap 2	March 9, 2020	February 28, 2025	February 26, 2027	$150.0	0.8130%

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock Option Activity

The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at December 31, 2020	884,059	$	91.49
Granted	44,750	332.91
Less: Exercised	274,253	52.64
Forfeited	2,939	207.30
Balance at December 31, 2021	651,617	$	123.98	4.93	$	288,028,501
Exercisable at December 31, 2021	376,780	$	76.06	3.31	$	184,599,877

Stock options outstanding and exercisable by exercise price range

The following table presents information about stock options outstanding and exercisable at December 31, 2021:

	Outstanding Stock Options				Exercisable Stock Options
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Term (Years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$ 37.13 to $ 69.85	218,817	2.29	$	59.66	218,817	$	59.66
$ 69.86 to $ 138.03	257,995	5.05	108.93		156,309	97.51
$ 138.04 to $ 515.41	174,805	8.05	226.70		1,654	217.71
	651,617	4.93	$	123.98	376,780	$	76.06

Summary of cash proceeds and tax benefits realized from stock option exercise.

The following table summarizes the cash proceeds and tax benefits realized from the exercise of stock options:

	Year Ended December 31,
(in thousands, except share amounts)	2021		2020		2019
Options exercised	274,253		482,361		640,475
Cash proceeds	$	14,435	$	17,657	$	16,839
Intrinsic value of options exercised	$	118,305	$	116,794	$	97,007
Tax benefits realized	$	29,576	$	29,199	$	24,252

Summary of assumptions for estimated fair value of employee stock option awards at grant date

We estimated the fair value of employee stock option awards at the grant date based on the assumptions summarized in the following table:

 

	Year Ended December 31,
(Weighted average)	2021				2020				2019
Expected volatility	27.0		%		20.7		%		21.4		%
Expected term	6.9			years	6.8			years	7.0			years
Risk-free interest rate	1.00		%		1.22		%		2.52		%
Expected dividend yield	1.15		%		1.30		%		1.30		%
Grant date fair value	$	83.05			$	42.52			$	37.75

Summary of restricted share actvity

The table below presents restricted stock award activity under our share-based plans for the year ended December 31, 2021:

	Shares	Weighted Average Grant Date Fair Value
Balance unvested at December 31, 2020	291,704	$	153.12
Granted (at market price) (1)	40,597	335.80
Less: Vested	69,069	115.88
Forfeited	2,494	295.73
Balance unvested at December 31, 2021	260,738	$	190.26

Total restricted stock awards that vested for the past three years and related fair value

The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts):

	2021		2020		2019
Restricted stock awards - shares vested	69,069		77,294		75,143
Fair value of restricted stock awards vested	$	24,005	$	16,813	$	12,316

Number of shares purchased by employees under the employee stock purchase plan

For the two six month offering periods in each of the last three years, our employees purchased the following aggregate number of shares:

2021	2020	2019
8,649	10,929	12,716

Restricted [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of share-based compensation expense and recognized tax benefits [Table Text Block]

The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands):

	2021		2020		2019
Restricted stock awards share-based compensation expense	$	11,543	$	10,965	$	10,026

Options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of share-based compensation expense and recognized tax benefits [Table Text Block]

The following table presents the total share-based compensation expense for stock option awards for the past three years (in thousands):

	2021		2020		2019
Option grants share-based compensation expense	$	2,846	$	2,842	$	3,021
Option grants share-based compensation tax benefits	712		710		755

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income before income taxes and equity earnings (losses)

Income before income taxes and equity in earnings is attributable to the following jurisdictions (in thousands):

	Year Ended December 31,
	2021		2020		2019
United States	$	752,957	$	428,857	$	304,259
Foreign	71,188		22,817		13,215
Total	$	824,145	$	451,674	$	317,474

Provision for income taxes

The provision for income taxes consisted of the following (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	124,379	$	67,093	$	35,270
State and other	44,783		20,680		17,168
Total current provision for income taxes	169,162		87,773		52,438
Deferred:
Federal	2,970		(1,298)		4,154
State and other	1,680		(1,244)		(431)
Total deferred provision for income taxes	4,650		(2,542)		3,723
Provision for income taxes	$	173,812	$	85,231	$	56,161

Reconciliation of the U.S. federal statutory tax rate to effective tax rate on income before income taxes and equity earnings (losses)

A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity in earnings is as follows:

	Year Ended December 31,
	2021		2020		2019
Federal statutory rate	21.00	%	21.00	%	21.00	%
Change in valuation allowance	(0.11)		(0.22)		0.10
Stock-based compensation	(3.67)		(6.34)		(7.40)
Other, primarily state income tax rate	3.87		4.43		3.99
Total effective tax rate	21.09	%	18.87	%	17.69	%

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. We recorded excess tax benefits of $30.0 million to our income tax provision in 2021, $28.6 million in 2020 and $23.5 million in 2019.

Components of deferred tax assets and liabilities

The table below presents the components of our deferred tax assets and liabilities (in thousands):

	December 31,
	2021		2020
Deferred tax assets:
Product inventories	$	8,597	$	6,110
Accrued expenses	3,105		4,101
Leases	59,457		50,301
Share-based compensation	8,981		8,730
Uncertain tax positions	2,792		3,266
Net operating losses	2,524		3,829
Interest rate swaps	—		3,023
Other	3,839		3,628
Total non-current	89,295		82,988
Less: Valuation allowance	(2,086)		(3,166)
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	1,096		1,280
Total deferred tax assets	1,096		1,280
Deferred tax liabilities:
Trade discounts on purchases	2,566		2,218
Prepaid expenses	4,226		3,379
Leases	58,146		49,004
Intangible assets, primarily goodwill	36,936		34,244
Depreciation	19,369		17,350
Interest rate swaps	710		—
Total non-current	121,953		106,195
Component reclassified for net presentation	(86,113)		(78,542)
Total non-current, net	35,840		27,653
Total deferred tax liabilities	35,840		27,653
Net deferred tax liability	$	34,744	$	26,373

Summary of activity related to uncertain tax positions

The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands):

	2021		2020		2019
Balance at beginning of year	$	15,553	$	13,582	$	12,179
Increases for tax positions taken during a prior period	—		1,363		771
Increases for tax positions taken during the current period	3,518		2,721		2,354
Decreases resulting from the expiration of the statute of limitations	3,185		2,113		1,390
Decreases relating to settlements	2,589		—		332
Balance at end of year	$	13,297	$	15,553	$	13,582

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Computation of earnings per share and reconciliation of basic and diluted weighted average common shares outstanding

The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):

	Year Ended December 31,
	2021		2020		2019
Net income	$	650,624	$	366,738	$	261,575
Amounts allocated to participating securities	(4,321)		—		—
Net income attributable to common stockholders	$	646,303	$	366,738	$	261,575
Weighted average common shares outstanding:
Basic	39,876		40,106		39,833
Effect of dilutive securities:
Stock options and employee stock purchase plan	604		759		1,032
Diluted	40,480		40,865		40,865
Earnings per share attributable to common stockholders:
Basic	$	16.21	$	9.14	$	6.57
Diluted	$	15.97	$	8.97	$	6.40
Anti-dilutive stock options excluded from diluted earnings per share computations (1)	1		—		—

(1)Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Lease cost table text block

Based on our lease portfolio as of December 31, 2021, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands):

2022	$	64,337
2023	57,806
2024	45,037
2025	34,803
2026	22,800
Thereafter	32,970
Total lease payments	257,753
Less: interest	13,324
Present value of lease liabilities	$	244,429

Lease cost table text block

The table below presents the weighted-average remaining lease term (years) of our operating leases and the weighted-average discount rate used in the above calculation:

	December 31,
Lease Term and Discount Rate for Operating Leases	2021		2020		2019
Weighted-average remaining lease term (years)	5.27		5.10		4.57
Weighted-average discount rate	2.57	%	2.99	%	3.41	%

Lease cost table text block

The table below presents the amount of cash paid for amounts included in the measurement of lease liabilities (in thousands):

	Year Ended
	December 31,
	2021		2020		2019
Operating cash flows for lease liabilities	$	67,197	$	60,723	$	56,617

Lease, Cost

The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands):

Lease Cost	Classification	2021		2020		2019
Operating lease cost (1)	Selling and administrative expenses	$	71,255	$	63,141	$	60,104
Variable lease cost	Selling and administrative expenses	$	18,755	$	16,700	$	13,778

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions Rent Expense [Table Text Block]

The table below presents rent expense associated with this lease for the past three years (in thousands):

	2021		2020		2019
NCC	$	1,222	$	1,222	$	1,222

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Matching contributions [Table Text Block]

The table below sets forth our contributions for the past three years (in thousands):

	2021		2020		2019
Defined contribution and international retirement plans	$	9,308	$	8,259	$	7,373
Deferred compensation plan	239		160		195

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Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Information Disclosure [Abstract]

Unaudited quarterly results of operations

The table below summarizes the unaudited quarterly results of operations for the past two years (in thousands, except per share data):

	Quarter
	2021								2020
	First		Second		Third		Fourth		First		Second		Third		Fourth
Net sales	$	1,060,745	$	1,787,833	$	1,411,448	$	1,035,557	$	677,288	$	1,280,846	$	1,139,229	$	839,261
Gross profit	301,131		551,685		441,899		322,376		189,629		373,481		328,698		239,095
Net income	98,655		259,695		184,665		107,609		30,912		157,555		119,098		59,174
Earnings per share:
Basic	$	2.45	$	6.47	$	4.60	$	2.68	$	0.77	$	3.94	$	2.97	$	1.47
Diluted	$	2.42	$	6.37	$	4.54	$	2.65	$	0.75	$	3.87	$	2.92	$	1.45

The sum of basic and diluted earnings per share for each of the quarters may not equal the total basic and diluted earnings per share for the annual periods because of rounding differences and a difference in the way that in-the-money stock options are considered from quarter to quarter.

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Organization and Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) store	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Net losses on foreign currency transactions	$ (325,000)	$ (1,748,000)	$ (1,347,000)
Number of sales centers in North America, Europe and Australia | store	410
Number of distribution networks	5
Advertising expense	$ 9,409,000	6,755,000	7,842,000
Threshold past due account balances for reserve analysis	$ 20,000
Threshold past due days for reserve analysis	60 days
Sales period (in months) for establishing reserve for inventory obsolescence	12 months
Depreciation expense	$ 28,287,000	27,967,000	27,885,000
Cumulative Share Repurchases	1,700,000,000
Cumulative Dividends	790,400,000
Cash paid during the year for [Abstract]
Income taxes, net of refunds	83,953,000	81,792,000	51,076,000
Interest Paid, Excluding Capitalized Interest, Operating Activities	10,023,000	8,257,000	20,960,000
COLOMBIA
Business Acquisition [Line Items]
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent			900,000
Shipping and Handling Costs
Business Acquisition [Line Items]
Shipping and handling costs associated with outbound freight	75,411,000	59,224,000	51,580,000
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Shipping and handling costs associated with outbound freight	$ 75,411,000	$ 59,224,000	$ 51,580,000

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Organization and Summary of Significant Accounting Policies Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-09, Allowance, Credit Loss [Member]
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of year	$ 4,808	$ 5,472	$ 6,182
Bad debt expense	3,377	1,900	2,768
Write-offs, net of recoveries	(2,243)	(2,564)	(3,478)
Balance at end of year	5,942	4,808	5,472
SEC Schedule, 12-09, Reserve, Inventory [Member]
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of year	11,398	9,036	7,726
Provision for inventory write-downs	7,781	6,181	3,656
Deductions for inventory write-offs	(3,983)	(3,819)	(2,346)
Balance at end of year	$ 15,196	$ 11,398	$ 9,036

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Organization and Summary of Significant Accounting Policies Equity Method Investments (Details)	Dec. 31, 2021
NCC [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment (as a percent)	50.00%

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Organization and Summary of Significant Accounting Policies Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Derivatives, Fair Value [Line Items]
Unrealized Losses on Interest Rate Swaps	$ 3,215	$ 12,314
Unrealized Gains on Interest Rate Swaps	6,054	223
Business Combination, Contingent Consideration, Liability	$ 985	$ 1,343

XML

Organization and Summary of Significant Accounting Policies Fair Value Measurement 2 (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent consideration liability, current	$ 400
Contingent consideration liability, noncurrent	$ 600

XML

Organization and Summary of Significant Accounting Policies Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 - 10 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	1 - 10 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 - 6 years
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 - 15 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 - 7 years

XML

Organization and Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive loss	$ (7,484)	$ (14,019)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(7,484)	(14,019)
Accumulated Foreign Currency Adjustment Attributable to Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive loss	(9,580)	(4,917)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(9,580)	(4,917)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive loss	2,096	(9,102)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	2,096	(9,102)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive loss	(7,484)	(14,019)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	$ (7,484)	$ (14,019)

XML

Organization and Summary of Significant Accounting Policies - Nonrecurring Fair Value (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 16, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
(Recovery) impairment of goodwill and other assets		$ 0	$ 6,944	$ 0
Increase (Decrease) in Notes Receivables			2,500
Organization, Consolidation and Presentation [Line Items]
(Recovery) impairment of goodwill and other assets		0	6,944	0
Payments to Acquire Businesses, Net of Cash Acquired		811,956	124,587	$ 8,901
Goodwill		$ 688,364	268,167
Porpoise Pool & Patio, Inc.
Organization, Consolidation and Presentation [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	$ 788,700
Goodwill	403,500
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 301,000
AUSTRALIA
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Goodwill and Intangible Asset Impairment			4,400
Organization, Consolidation and Presentation [Line Items]
Goodwill and Intangible Asset Impairment			$ 4,400

XML

Acquisitions (Details) $ in Thousands		1 Months Ended								12 Months Ended
	Dec. 16, 2021 USD ($) distribution_center	Dec. 31, 2021 USD ($) store distribution_center	Jun. 30, 2021 distribution_center	Apr. 30, 2021 distribution_center	Dec. 31, 2020 USD ($) distribution_center	Oct. 31, 2020 distribution_center	Sep. 30, 2020 distribution_center	Feb. 29, 2020 distribution_center	Jan. 31, 2019 locations	Dec. 31, 2021 USD ($) store	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Number of sales centers | store		410								410
Payments to Acquire Businesses, Net of Cash Acquired | $										$ 811,956	$ 124,587	$ 8,901
Goodwill | $		$ 688,364			$ 268,167					$ 688,364	$ 268,167
Porpoise Pool & Patio, Inc.
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | $	$ 57,400
Payments to Acquire Businesses, Net of Cash Acquired | $	788,700
Goodwill | $	403,500
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $	301,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $	$ 84,200
Virginia | W.W. Adcock, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations | locations									1
North Carolina | W.W. Adcock, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations | locations									1
PENNSYLVANIA | W.W. Adcock, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations | locations									2
TEXAS | Master Tile Network LLC [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations								2
TEXAS | Jet Line Products, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations						2
NEVADA | Master Tile Network LLC [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations								1
OKLAHOMA | Master Tile Network LLC [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations								1
ONTARIO | Northeastern Swimming Pool Distributors, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations							2
NEW JERSEY | Jet Line Products, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations						3
NEW YORK | Jet Line Products, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations						3
FLORIDA | Jet Line Products, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations						1
FLORIDA | TWC Distributors, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations					9
FLORIDA | Vak Pak Builders Supply, Inc.
Business Acquisition [Line Items]
Business Combination, Number of Locations			1
FLORIDA | Wingate Supply, Inc.
Business Acquisition [Line Items]
Business Combination, Number of Locations		1
FLORIDA | Porpoise Pool & Patio, Inc.
Business Acquisition [Line Items]
Business Combination, Number of Locations	1
GEORGIA | TWC Distributors, Inc. [Member]
Business Acquisition [Line Items]
Business Combination, Number of Locations					1
TENNESSEE | Pool Source, LLC
Business Acquisition [Line Items]
Business Combination, Number of Locations				1

XML

Goodwill (Details) $ in Thousands		12 Months Ended
	Dec. 16, 2021 USD ($)	Dec. 31, 2021 USD ($) distribution_center	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Highest goodwill balance among other reporting units					$ 12,100
Average goodwill balance among other reporting units					$ 1,100
Number of reporting units with allocated goodwill balances					247
Goodwill [Roll Forward]
Balance, beginning of period		$ 281,556	$ 198,475
Acquired goodwill		422,126	82,497
Goodwill, Translation Adjustments		(1,929)	584
Balance, end of period		701,753	281,556	$ 198,475
Accumulated goodwill impairment losses		(13,389)	(9,879)
Goodwill impairment		0	(3,510)
Accumulated goodwill impairment losses		(13,389)	(13,389)	(9,879)
Goodwill		688,364	268,167
Intangible Assets [Line Items]
Goodwill, Impairment Loss		0	3,510
Payments to Acquire Businesses, Net of Cash Acquired		811,956	124,587	$ 8,901
Goodwill		$ 688,364	268,167
Porpoise Pool & Patio, Inc.
Goodwill [Roll Forward]
Goodwill	$ 403,500
Intangible Assets [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	788,700
Goodwill	403,500
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	$ 84,200
AUSTRALIA
Goodwill [Roll Forward]
Goodwill impairment			(3,500)
Intangible Assets [Line Items]
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)			900
Goodwill, Impairment Loss			$ 3,500
Number of Reporting Units | distribution_center		5

XML

Goodwill and Other Intangible Assets Other Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 16, 2021
Intangible Assets [Line Items]
Other intangible assets, net	$ 312,814	$ 12,181
Total other intangible assets, gross	317,996	16,817
Amortization of Intangible Assets	1,300	1,000	$ 1,000
Other intangible assets, future amortization expense [Abstract]
2021	7,854
2022	7,802
2023	7,426
2024	7,335
2025	6,932
Porpoise Pool & Patio, Inc.
Other intangible assets, future amortization expense [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment				$ 57,400
National Pool Tile (NPT) tradename
Intangible Assets [Line Items]
Intangibles Gross	1,500	1,500
Accumulated Amortization	(1,037)	(962)
Intangibles Net	$ 463	538
Weighted Average Useful Life	20 years
Non-compete agreements
Intangible Assets [Line Items]
Intangibles Gross	$ 8,096	6,917
Accumulated Amortization	(3,891)	(3,674)
Intangibles Net	$ 4,205	3,243
Weighted Average Useful Life	4 years 6 months 29 days
Non-compete agreements | Porpoise Pool & Patio, Inc.
Intangible Assets [Line Items]
Intangibles Gross	$ 1,000
Total other intangibles
Intangible Assets [Line Items]
Accumulated Amortization	(5,182)	(4,636)
Customer Relationships
Intangible Assets [Line Items]
Intangibles Gross		0
Accumulated Amortization	(214)	0
Intangibles Net	$ 108,786	0
Weighted Average Useful Life	20 years
Customer Relationships | Porpoise Pool & Patio, Inc.
Intangible Assets [Line Items]
Intangibles Gross	$ 109,000
Customer-Related Intangible Assets
Intangible Assets [Line Items]
Intangibles Gross		0
Accumulated Amortization	(40)	0
Intangibles Net	$ 21,960	0
Weighted Average Useful Life	20 years
Customer-Related Intangible Assets | Porpoise Pool & Patio, Inc.
Intangible Assets [Line Items]
Intangibles Gross	$ 22,000
Horizon tradename
Intangible Assets [Line Items]
Acquired Indefinite-lived Intangibles	8,400	8,400
Pinch A Penny brand name
Intangible Assets [Line Items]
Acquired Indefinite-lived Intangibles	169,000	$ 0
Pinch A Penny brand name | Porpoise Pool & Patio, Inc.
Intangible Assets [Line Items]
Acquired Indefinite-lived Intangibles	$ 169,000

XML

Details of Certain Balance Sheet Accounts (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Receivables, net [Abstract]
Trade accounts	$ 27,724	$ 33,553
Vendor programs	129,072	90,988
Other, net	4,405	2,519
Total receivables	161,201	127,060
Less allowance for doubtful accounts	(5,942)	(4,808)
Receivables, net	155,259	122,252
Prepaid expenses and other current assets [Abstract]
Prepaid expenses	21,889	16,401
Other current assets	7,204	1,209
Prepaid expenses and other current assets	29,093	17,610
Property and equipment, net [Abstract]
Land	19,863	3,608
Buildings	54,503	7,348
Leasehold improvements	62,684	54,300
Autos and trucks	102,330	95,667
Machinery and equipment	82,897	73,353
Computer equipment	32,200	29,935
Furniture and fixtures	9,598	9,448
Fixed assets in progress	6,176	4,608
Total property and equipment	370,251	278,267
Less accumulated depreciation	(191,243)	(170,026)
Property and equipment, net	179,008	108,241
Accrued expenses and other current liabilities [Abstract]
Salaries and payroll deductions	25,882	24,930
Performance-based compensation	76,255	59,897
Taxes payable	106,894	20,676
Unrealized Losses on Interest Rate Swaps	3,215	12,314
Other current liabilities	52,631	25,877
Accrued expenses and other current liabilities	$ 264,877	$ 143,694

XML

Debt (Details) € in Thousands, $ in Thousands, $ in Thousands			2 Months Ended	12 Months Ended
	Jan. 04, 2022 USD ($)	Dec. 15, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2021 AUD ($)	Dec. 31, 2021 EUR (€)	Dec. 30, 2021 USD ($)	Sep. 27, 2021 USD ($)	Mar. 09, 2020 USD ($)	Sep. 29, 2017 USD ($)
Current portion [Abstract]
Short-term borrowings			$ 953	$ 953	$ 0
Short-term borrowings and current portion of long-term debt			11,772	11,772	11,869
Long-term portion [Abstract]
Long-term debt, net			1,171,578	1,171,578	404,149
Debt
Standby Letters of Credit			$ 4,800	$ 4,800
Average total leverage ratio, dividend declarations			325.00%	325.00%			325.00%	325.00%
Maximum average total leverage ratio, share repurchases			325.00%	325.00%			325.00%	325.00%
Recognized tax benefits				$ (30,000)	(28,600)	$ (23,500)
Proceeds from Term Facility				0	0	185,000
Deferred financing costs [Abstract]
Balance at beginning of year				5,130	5,118
Financing costs deferred				2,638	12	406
Write-off of fully amortized deferred financing costs				(3,726)	0
Balance at end of year			$ 4,042	4,042	5,130	$ 5,118
Less: Accumulated amortization			(1,194)	(1,194)	(4,505)
Deferred financing costs, net of accumulated amortization			2,848	2,848	625
Debt, Long-term and Short-term, Combined Amount			$ 1,183,350	$ 1,183,350	416,018
Maximum Average Total Leverage Ratio [Member]
Debt
Debt Instrument, Covenant Description			3.25
Minimum Fixed Charge Coverage Ratio
Debt
Debt Instrument, Covenant Description			2.25
London Interbank Offered Rate (LIBOR) [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				1.00%
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum				0.91%
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum				1.425%
Base Rate [Member]
Debt
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum				0.00%
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum				0.425%
Canadian Dealer Offered Rate [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				1.00%
Federal Funds Rate [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				0.50%
Commercial Paper [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				0.75%
Unsecured Syndicated Senior Credit Facility [Member]
Long-term portion [Abstract]
Long-term Line of Credit, Noncurrent			$ 572,926	$ 572,926	109,024
Debt
Line of Credit, maximum borrowing capacity										$ 1,000,000		$ 750,000
Line of Credit, Accordian Feature Increase in borrowing capacity										250,000		75,000
Line of Credit Facility, Amount Outstanding			822,900	822,900
Line of credit facility, remaining borrowing capacity			$ 422,300	$ 422,300
Weighted average effective interest rate (in hundredths)			1.20%	1.20%			1.20%	1.20%
Increase in Borrowing Capacity, Incremental Term Loan Facility									$ 250,000
Proceeds from Term Facility		$ 250,000
Term Facility Total of Quarterly Principal Payments			20.00%	20.00%			20.00%	20.00%
Long-term Line of Credit, Noncurrent			$ 572,926	$ 572,926	109,024
Term Facility Total of Quarterly Principal Payments			20.00%	20.00%			20.00%	20.00%
Increase In Borrowing Capacity										250,000		75,000
Line of Credit, maximum borrowing capacity										$ 1,000,000		$ 750,000
Unsecured Syndicated Senior Credit Facility [Member] | Subsequent Event [Member]
Debt
Line of credit facility, remaining borrowing capacity	$ 413,400
Proceeds from Term Facility	$ 250,000
Term loan under credit facility
Long-term portion [Abstract]
Long-term Line of Credit, Noncurrent			$ 250,000	$ 250,000
Long-term Line of Credit, Noncurrent			250,000	250,000
Term Facility
Long-term portion [Abstract]
Long-term Line of Credit, Noncurrent			$ 166,500	$ 166,500	175,750
Debt
Line of Credit, maximum borrowing capacity					185,000
Weighted average effective interest rate (in hundredths)			2.90%	2.90%			2.90%	2.90%
Term Facility Total of Quarterly Principal Payments			33.75%	33.75%			33.75%	33.75%
Long-term Line of Credit, Noncurrent			$ 166,500	$ 166,500	175,750
Term Facility Quarterly Principal Payment			1.25%	1.25%			1.25%	1.25%
Term Facility Total of Quarterly Principal Payments			33.75%	33.75%			33.75%	33.75%
Term Facility Final Principal Payment			66.25%	66.25%			66.25%	66.25%
Line of Credit, maximum borrowing capacity					185,000
Term Facility | Base Rate [Member]
Debt
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum				0.00%
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum				0.625%
Term Facility | Eurodollar [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				1.00%
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum				1.00%
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum				1.625%
Term Facility | Prime Rate [Member]
Debt
Debt Instrument, Basis Spread on Variable Rate				0.50%
Receivables Securitization Facility [Member]
Long-term portion [Abstract]
Receivable Securitization Facility			$ 185,000	$ 185,000	120,000
Debt
Receivables Facility, Borrowing Capacity Peak Seasonal Maximum			350,000	350,000
Receivables Facility, Borrowing Capacity NonSeasonal Minimum			175,000	175,000
Receivables Facility, Borrowing Capacity NonSeasonal Maximum			315,000	$ 315,000
Receivables Facility, Term (in years)				2 years
Receivable Securitization Facility			$ 185,000	$ 185,000	120,000
Weighted average effective interest rate			0.90%	0.90%			0.90%	0.90%
Receivables facility, unused fee				0.35%
Australian Seasonal Credit Facility [Member]
Current portion [Abstract]
Australian credit facility			$ 10,819	$ 10,819	$ 11,869
Debt
Line of Credit, maximum borrowing capacity							$ 20,000
Line of Credit, maximum borrowing capacity							$ 20,000
Bank Overdrafts [Member]
Debt
Borrowing Capacity, Bank Overdraft Facility (in Euros) | €								€ 14,000
Line of Credit, Including Term Loan
Debt
Line of Credit, maximum borrowing capacity									1,250,000
Line of Credit, maximum borrowing capacity									$ 1,250,000
Forward-starting Interest Rate Swap 1 [Member]
Interest rate swap agreement, fixed interest rate											0.74%
Derivative
Derivative, Notional Amount											$ 150,000
Interest rate swap agreement, fixed interest rate											0.74%
Forward-starting Interest Rate Swap 2 [Member]
Interest rate swap agreement, fixed interest rate											0.813%
Derivative
Derivative, Notional Amount											$ 150,000
Interest rate swap agreement, fixed interest rate											0.813%

XML

Debt - Maturities (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Debt Disclosure [Abstract]
2022	$ 21,022
2023	200,500
2024	21,750
2025	28,000
2026	$ 914,926

XML

Debt - Interest Rate Swaps (Details) - USD ($) $ in Thousands	10 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Feb. 05, 2020	Jul. 25, 2019	May 07, 2019
Derivative
Incremental interest benefit arising from difference between interest paid and interest received related to swap agreements				$ 300
Incremental interest expense arising from difference between interest paid and interest received related to swap agreements		$ 4,300	$ 900
Interest Rate Swap 1
Derivative
Interest rate swap agreement, fixed interest rate							2.0925%
Derivative, Notional Amount							$ 75,000
Derivative effective date		Nov. 20, 2020
Derivative, Maturity Date		Sep. 29, 2022
Interest Rate Swap 2
Derivative
Interest rate swap agreement, fixed interest rate						1.55%
Derivative, Notional Amount						$ 75,000
Derivative effective date		Nov. 20, 2020
Derivative, Maturity Date		Sep. 29, 2022
Interest Rate Swap 3
Derivative
Interest rate swap agreement, fixed interest rate					1.38%
Derivative, Notional Amount					$ 150,000
Derivative effective date	Feb. 26, 2021
Derivative, Maturity Date	Feb. 28, 2025

XML

Debt - Interest Rate Swaps 2 (Details) - USD ($) $ in Millions	10 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Feb. 05, 2020	Jul. 25, 2019
Interest Rate Swap 2
Derivative
Interest rate swap agreement, fixed interest rate				1.55%
Derivative, Notional Amount				$ 75.0
Derivative effective date		Nov. 20, 2020
Derivative, Maturity Date		Sep. 29, 2022
Interest Rate Swap 3
Derivative
Interest rate swap agreement, fixed interest rate			1.38%
Derivative, Notional Amount			$ 150.0
Derivative effective date	Feb. 26, 2021
Derivative, Maturity Date	Feb. 28, 2025

XML

Debt - Interest Rate Swaps 3 (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Mar. 09, 2020
Forward-starting Interest Rate Swap 1 [Member]
Derivative
Derivative, Forward-starting interest rate swap agreement, fixed interest rate		0.74%
Derivative, Notional Amount		$ 150.0
Derivative effective date	Sep. 29, 2022
Derivative, Maturity Date	Feb. 26, 2027
Forward-starting Interest Rate Swap 2 [Member]
Derivative
Derivative, Forward-starting interest rate swap agreement, fixed interest rate		0.813%
Derivative, Notional Amount		$ 150.0
Derivative effective date	Feb. 28, 2025
Derivative, Maturity Date	Feb. 26, 2027

XML

Share-Based Compensation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jul. 31, 2020
Grant Date Fair Value Assumptions [Abstract]
Share-based compensation	$ 15,187,000	$ 14,516,000	$ 13,472,000
Recognized tax benefits	$ (30,000,000)	$ (28,600,000)	$ (23,500,000)
Stock Options [Member]
Stock option activity [Roll Forward]
Beginning balance (in shares)	884,059
Granted (in shares)	44,750
Exercised (in shares)	274,253	482,361	640,475
Forfeited (in shares)	2,939
Ending balance (in shares)	651,617	884,059
Exercisable (In Shares)	376,780
Stock option weighted average exercise price [Abstract]
Beginning balance (in dollars per share)	$ 91.49
Granted (in dollars per share)	332.91
Exercised (in dollars per share)	52.64
Forfeited (in dollars per share)	207.30
Ending balance (in dollars per share)	123.98	$ 91.49
Exercisable at end of period (in dollars per share)	$ 76.06
Weighted Average Remaining Contractual Term [Abstract]
Weighted average remaining contractual term of shares outstanding (in years)	4 years 11 months 4 days
Weighted average remaining contractual term of shares exercisable at end of period (in years)	3 years 3 months 21 days
Aggregate Intrinsic Value [Abstract]
Ending balance	$ 288,028,501
Exercisable at end of period	$ 184,599,877
Cash Proceeds and Tax Benefits [Abstract]
Exercised (in shares)	274,253	482,361	640,475
Cash proceeds	$ 14,435,000	$ 17,657,000	$ 16,839,000
Intrinsic value of options exercised	118,305,000	116,794,000	97,007,000
Tax benefits realized	$ 29,576,000	$ 29,199,000	$ 24,252,000
Grant Date Fair Value Assumptions [Abstract]
Expected volatility (in hundredths)	27.00%	20.70%	21.40%
Expected term (in years)	6 years 10 months 24 days	6 years 9 months 18 days	7 years
Risk-free interest rate (in hundredths)	1.00%	1.22%	2.52%
Expected dividend yield (in hundredths)	1.15%	1.30%	1.30%
Grant date fair value (in dollars per share)	$ 83.05	$ 42.52	$ 37.75
Share-based compensation	$ 2,846,000	$ 2,842,000	$ 3,021,000
Recognized tax benefits	712,000	710,000	755,000
Unamortized compensation expense	$ 3,600,000
Expense recognition over weighted average period (in years)	2 years 9 months 18 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance period	3 years
Shares available for grant	933,872
Grant Date Fair Value Assumptions [Abstract]
Share-based compensation	$ 11,543,000	$ 10,965,000	$ 10,026,000
Unamortized compensation expense	$ 14,500,000
Expense recognition over weighted average period (in years)	3 years
Restricted stock awards [Roll Forward]
Beginning balance (in shares)	291,704
Granted (at market price) (in shares)	40,597
Vested (in shares)	69,069	77,294	75,143
Forfeited (in shares)	2,494
Ending balance (in shares)	260,738	291,704
Restricted stock awards weighted average grant date fair value [Abstract]
Beginning balance (in dollars per share)	$ 153.12
Granted (at market price) (in dollars per share)	335.80
Vested (in dollars per share)	115.88
Forfeited (in dollars per share)	295.73
Ending balance (in dollars per share)	$ 190.26	$ 153.12
Vested (in shares)	69,069	77,294	75,143
Fair value of restricted stock awards vested	$ 24,005,000	$ 16,813,000	$ 12,316,000
ESPP Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares purchased under the ESPP (in shares)	8,649	10,929	12,716
Grant Date Fair Value of most recent ESPP Purchase (per share)				$ 121.82
Grant Date Fair Value Assumptions [Abstract]
Share-based compensation	$ 800,000	$ 700,000	$ 400,000
LTIP 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares allocated for issuance (in shares)	9,315,000
Shares available for grant	4,109,524
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares allocated for issuance (in shares)	956,250
Discounted percentage rate offered under the employee stock purchase plan (in hundredths)	85.00%
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance period, extension period	1 year
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance period, extension period	2 years

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Share-Based Compensation Share-Based Compensation Price Ranges (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Stock Options (in shares) | shares	651,617
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years)	4 years 11 months 4 days
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 123.98
Exercisable Stock Options (in shares) | shares	376,780
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 76.06
Exercise Price Range 24.50 to 58.26 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Stock Options (in shares) | shares	218,817
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years)	2 years 3 months 14 days
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 59.66
Exercisable Stock Options (in shares) | shares	218,817
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 59.66
Exercise Price Range 58.27 to 117.04 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Stock Options (in shares) | shares	257,995
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years)	5 years 18 days
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 108.93
Exercisable Stock Options (in shares) | shares	156,309
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 97.51
Exercise Price Range 117.05 to 220.01 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding Stock Options (in shares) | shares	174,805
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years)	8 years 18 days
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 226.70
Exercisable Stock Options (in shares) | shares	1,654
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 217.71

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Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
United States	$ 752,957	$ 428,857	$ 304,259
Foreign	71,188	22,817	13,215
Total	824,145	451,674	317,474
Current [Abstract]
Federal	124,379	67,093	35,270
State and other	44,783	20,680	17,168
Current tax	169,162	87,773	52,438
Deferred [Abstract]
Federal	2,970	(1,298)	4,154
State and other	1,680	(1,244)	(431)
Deferred tax	4,650	(2,542)	3,723
Total	$ 173,812	$ 85,231	$ 56,161
Reconciliation of U.S. federal statutory tax rate to effective tax rate [Abstract]
Federal statutory rate (in hundredths)	21.00%	21.00%	21.00%
Change in valuation allowance (in hundredths)	(0.11%)	(0.22%)	0.10%
Stock-based compensation (as a percent)	(3.67%)	(6.34%)	(7.40%)
Other, primarily state income tax rate (in hundredths)	3.87%	4.43%	3.99%
Total effective tax rate (in hundredths)	21.09%	18.87%	17.69%
Deferred tax assets [Abstract]
Product inventories	$ 8,597	$ 6,110
Accrued expenses	3,105	4,101
Leases	59,457	50,301
Share-based compensation	8,981	8,730
Uncertain tax positions	2,792	3,266
Net operating losses	2,524	3,829
Deferred Tax Assets, Hedging Transactions	0	3,023
Other	3,839	3,628
Deferred Tax Assets, Gross	89,295	82,988
Total deferred tax assets	1,096	1,280
Deferred tax liabilities [Abstract]
Trade discounts on purchases	2,566	2,218
Prepaid expenses	4,226	3,379
Deferred Tax Liabilities, Leasing Arrangements	58,146	49,004
Intangible assets, primarily goodwill	36,936	34,244
Depreciation	19,369	17,350
Interest rate swaps	710	0
Deferred income taxes	35,840	27,653
Total deferred tax liabilities	121,953	106,195
Net Presentation, Reclass Liability	(86,113)	(78,542)
Net deferred tax liability	34,744	26,373
Loss Carryforwards [Line Items]
Deferred tax asset, valuation allowance	2,086	3,166
Net Presentation, Reclass Asset	(86,113)	(78,542)
Deferred Tax Assets, Net	1,096	1,280
Operating Lease, Cost	71,255	63,141	$ 60,104
Variable Lease, Cost	$ 18,755	$ 16,700	$ 13,778
Operating Lease, Weighted Average Remaining Lease Term	5 years 3 months 7 days	5 years 1 month 6 days	4 years 6 months 25 days
Operating Lease, Weighted Average Discount Rate, Percent	2.57%	2.99%	3.41%
Uncertain tax positions activity [Roll Forward]
Beginning balance	$ 15,553	$ 13,582	$ 12,179
Increases for tax positions taken during a prior period	0	1,363	771
Increases for tax positions taken during the current period	3,518	2,721	2,354
Decreases resulting from the expiration of the statute of limitations	3,185	2,113	1,390
Decreases relating to settlements	2,589	0	332
Ending balance	13,297	15,553	13,582
Unrecognized tax benefits that, if recognized, would decrease the effective tax rate	10,500	12,300
Interest income related to unrecognized tax benefits	(600)
Interest expense related to unrecognized tax benefits		1,000	$ 600
Accrued interest on unrecognized tax benefits	1,600	2,700
International Subsidiaries [Member]
Loss Carryforwards [Line Items]
Tax loss carry-forwards	8,600
Deferred tax asset, valuation allowance	$ 1,800	$ 2,900

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Anti-dilutive stock options whose exercise prices were higher than the common stock's average market price during the period (in shares)									1	0	0
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic									$ (4,321)	$ 0	$ 0
Incremental Common Shares Attributable to Participating Nonvested Shares with Non-forfeitable Dividend Rights									268
Net income	$ 107,609	$ 184,665	$ 259,695	$ 98,655	$ 59,174	$ 119,098	$ 157,555	$ 30,912	$ 650,624	366,738	261,575
Net Income (Loss) Available to Common Stockholders, Basic									$ 646,303	$ 366,738	$ 261,575
Weighted average shares outstanding [Abstract]
Basic (in shares)									39,876	40,106	39,833
Effect of dilutive securities [Abstract]
Stock options and employee stock purchase plan (in shares)									604	759	1,032
Diluted (in shares)									40,480	40,865	40,865
Basic (in dollars per share)	$ 2.68	$ 4.60	$ 6.47	$ 2.45	$ 1.47	$ 2.97	$ 3.94	$ 0.77	$ 16.21	$ 9.14	$ 6.57
Diluted (in dollars per share)	$ 2.65	$ 4.54	$ 6.37	$ 2.42	$ 1.45	$ 2.92	$ 3.87	$ 0.75	$ 15.97	$ 8.97	$ 6.40
Anti-dilutive stock options whose exercise prices were higher than the common stock's average market price during the period (in shares)									1	0	0

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Future minimum lease payments [Abstract]
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months	$ 64,337
Lessee, Operating Lease, Liability, Payments, Due Year Two	57,806
Lessee, Operating Lease, Liability, Payments, Due Year Three	45,037
Lessee, Operating Lease, Liability, Payments, Due Year Four	34,803
Lessee, Operating Lease, Liability, Payments, Due Year Five	22,800
Lessee, Operating Lease, Liability, Payments, Due after Year Five	32,970
Lessee, Operating Lease, Liability, Payments, Due	257,753
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	13,324
Present Value of Lease Liability	$ 244,429
Operating Lease, Weighted Average Remaining Lease Term	5 years 3 months 7 days	5 years 1 month 6 days	4 years 6 months 25 days
Operating Lease, Weighted Average Discount Rate, Percent	2.57%	2.99%	3.41%
Operating Lease, Cost	$ 71,255	$ 63,141	$ 60,104
Variable Lease, Cost	18,755	16,700	13,778
Operating Lease, Payments	$ 67,197	$ 60,723	$ 56,617

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Related Party Transactions (Details) - NCC [Member]	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Related Party Transaction [Line Items]
Equity method investment (as a percent)	50.00%
Office space occupied (in square feet)	60,000
Monthly rent expense (per month)	$ 100,000
Related party rent expense	$ 1,222,000	$ 1,222,000	$ 1,222,000

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Employee Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred Compensation Plan [Line Items]
Percent company total match on employee deferred compensation plan contributions, maximum (in hundredths)	4.00%
Matching contributions - deferred compensation plan	$ 239	$ 160	$ 195
Savings and Retirement 401K [Member]
Defined Contribution Plan Disclosure [Line Items]
Eligible employees' maximum allowable contribution as a percentage of compensation (in hundredths)	75.00%
Percentage company total match on employee contributions, maximum (in hundredths)	4.00%
Company match on the first three percent of compensation deferred (in hundredths)	100.00%
Company match on deferrals between three percent and five percent of compensation (in hundredths)	50.00%
Compensation deferred percentage eligible for one hundred percent match on employees' contributions (in hundredths)	3.00%
Compensation deferred percentage eligible for fifty percent match on employee contributions (in hundredths)	5.00%
Defined contribution and international retirement plans expense	$ 9,308	$ 8,259	$ 7,373

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Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Effect of Fourth Quarter Events [Line Items]
Net sales	$ 1,035,557	$ 1,411,448	$ 1,787,833	$ 1,060,745	$ 839,261	$ 1,139,229	$ 1,280,846	$ 677,288	$ 5,295,584	$ 3,936,623	$ 3,199,517
Cost of sales	713,181	969,549	1,236,148	759,614	600,166	810,531	907,365	487,659	3,678,492	2,805,721	2,274,592
Gross profit	322,376	441,899	551,685	301,131	239,095	328,698	373,481	189,629	1,617,092	1,130,902	924,925
Net income	$ 107,609	$ 184,665	$ 259,695	$ 98,655	$ 59,174	$ 119,098	$ 157,555	$ 30,912	$ 650,624	$ 366,738	$ 261,575
Earnings (loss) per share:
Basic (in dollars per share)	$ 2.68	$ 4.60	$ 6.47	$ 2.45	$ 1.47	$ 2.97	$ 3.94	$ 0.77	$ 16.21	$ 9.14	$ 6.57
Diluted (in dollars per share)	$ 2.65	$ 4.54	$ 6.37	$ 2.42	$ 1.45	$ 2.92	$ 3.87	$ 0.75	$ 15.97	$ 8.97	$ 6.40