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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 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 001-38366
Gates Industrial Corporation plc
(Exact Name of Registrant as Specified in its Charter)
England and Wales98-1395184
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1144 Fifteenth Street, Denver, Colorado 80202
(Address of principal executive offices)(Zip Code)
(303) 744-1911
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, $0.01 par value per shareGTESNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒ No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒ No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐ No  
As of November 5, 2021, there were 291,935,207 ordinary shares of $0.01 par value outstanding.





Forward-looking Statements
This Quarterly Report on Form 10-Q (this “quarterly report” or “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those expressed in or implied by our forward-looking statements, including but not limited to the factors described in Item 1A. “Risk Factors” in Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021 (the “annual report”), as filed with the Securities and Exchange Commission (the “SEC”), which include the following: conditions in the global and regional economy and the major end markets we serve; severe disruptions in the global economy due to the coronavirus (“COVID-19”) pandemic and uncertainty regarding recovery from the pandemic; economic, political and other risks associated with international operations; availability of raw materials at favorable prices and in sufficient quantities; changes in our relationships with, or the financial condition, performance, purchasing power or inventory levels of, key channel partners; exchange rate fluctuations in the international markets; terrorist acts, conflicts and wars; competition in all areas of our business; pricing pressures from our customers; continued operation of our manufacturing facilities; our ability to forecast demand or meet significant increases in demand; our ability to maintain and enhance our strong brand; market acceptance of new product introductions and product innovations; our cost-reduction actions; longer lives of products used in our end markets may affect demand for some of our replacement markets; development of the replacement market in emerging markets may limit our ability to grow; our ability to successfully integrate acquired businesses or assets; our investments in joint ventures; liabilities with respect to businesses that we have divested in the past; insurance coverage of future losses we may incur; losses to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events; loss or financial instability of any significant customer; litigation, legal or regulatory proceedings brought against us; infringement on the intellectual property of others; failure to adequately protect or enforce of our intellectual property rights against counterfeiting activities; failure to develop, obtain, enforce and protect our intellectual property rights in all jurisdictions throughout the world; recalls, product liability claims or product warranties claims; failure to comply with anti-corruption laws and other laws governing our international operations; existing or new laws and regulations that may prohibit, restrict or burden the sale of aftermarket products; environmental, health and safety laws and regulations that may impact the sale of our products; cyber-security vulnerabilities, threats, and more sophisticated and targeted computer crime; highly complex and rapidly evolving global privacy, data protection and data security requirements may increase our costs; failure of information systems; loss of senior management or key personnel; work stoppages and other labor matters; we may be required to make additional cash contributions to our defined benefit pension plans; change in our effective tax rates or additional tax liabilities; change in tax laws; tax authorities may no longer treat us as being exclusively a resident of the U.K. for tax purposes; our substantial leverage; and the significant influence of our majority shareholders, affiliates of Blackstone Inc., over us, as such factors may be updated from time to time in the Company’s periodic filings with the SEC. Investors are urged to consider carefully the disclosure in this report and our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. Gates undertakes no obligation to update or supplement any forward-looking statements as a result of new information, future events or otherwise, except as required by law.
ABOUT THIS QUARTERLY REPORT
Financial Statement Presentation
Gates Industrial Corporation plc is a public limited company that was incorporated under the Companies Act 2006 on September 25, 2017 and is registered in England and Wales.
Certain monetary amounts, percentages and other figures included elsewhere in this quarterly report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
All amounts in this quarterly report are expressed in United States of America (the “U.S.”) dollars, unless indicated otherwise.


Certain Definitions
As used in this quarterly report, unless otherwise noted or the context requires otherwise:
“Gates,” the “Company,” “we,” “us” and “our” refer, to Gates Industrial Corporation plc and its consolidated subsidiaries; and
“Blackstone” or “our Sponsor” refer to investment funds affiliated with Blackstone Inc., which, although no individual fund owns a controlling interest in us, together represent our current majority owners.


PART I — FINANCIAL INFORMATION
Item 1: Financial Statements (unaudited)
Gates Industrial Corporation plc
Unaudited Condensed Consolidated Statements of Operations
Three months endedNine months ended
(dollars in millions, except per share amounts)
October 2,
2021
September 26,
2020
October 2,
2021
September 26,
2020
Net sales$862.4 $712.2 $2,658.8 $1,998.8 
Cost of sales521.7 438.6 1,605.9 1,265.9 
Gross profit340.7 273.6 1,052.9 732.9 
Selling, general and administrative expenses217.4 195.4 643.2 571.7 
Transaction-related expenses0.2 5.4 2.8 5.2 
Asset impairments 1.4  5.1 
Restructuring expenses1.9 7.3 8.5 26.4 
Other operating (income) expenses(9.3)0.2 (9.8)(1.2)
Operating income from continuing operations130.5 63.9 408.2 125.7 
Interest expense33.1 38.3 100.8 109.3 
Other expenses (income)1.9 (4.1)(0.5)(9.9)
Income from continuing operations before taxes95.5 29.7 307.9 26.3 
Income tax expense (benefit)17.3 (16.0)47.8 (31.5)
Net income from continuing operations78.2 45.7 260.1 57.8 
Loss (gain) on disposal of discontinued operations, net of tax, respectively, of $0, $0, $0 and $0
0.2 0.1 (0.1)0.3 
Net income78.0 45.6 260.2 57.5 
Less: non-controlling interests7.8 3.7 25.8 2.4 
Net income attributable to shareholders$70.2 $41.9 $234.4 $55.1 
Earnings per share
Basic
Earnings per share from continuing operations$0.24 $0.14 $0.80 $0.19 
Earnings per share from discontinued operations    
Earnings per share$0.24 $0.14 $0.80 $0.19 
Diluted
Earnings per share from continuing operations$0.23 $0.14 $0.79 $0.19 
Loss per share from discontinued operations    
Earnings per share$0.23 $0.14 $0.79 $0.19 
The accompanying notes form an integral part of these condensed consolidated financial statements.
1

Gates Industrial Corporation plc
Unaudited Condensed Consolidated Statements of Comprehensive Income
Three months endedNine months ended
(dollars in millions)
October 2,
2021
September 26,
2020
October 2,
2021
September 26,
2020
Net income$78.0 $45.6 $260.2 $57.5 
Other comprehensive (loss) income
Foreign currency translation:
—Net translation (loss) gain on foreign operations, net of tax expense, respectively, of $0, $0.1, $0 and $0.1
(57.5)80.5 (92.9)(80.3)
—Gain (loss) on net investment hedges, net of tax expense, respectively, of $0, $0, $0 and $0
9.7 (15.7)25.2 (17.5)
Total foreign currency translation movements(47.8)64.8 (67.7)(97.8)
Cash flow hedges (Interest rate derivatives):
—(Loss) gain arising in the period, net of tax benefit (expense), respectively, of $0, $0.5, $(1.5) and $4.2
(0.2)(3.3)4.4 (26.1)
—Reclassification to net income, net of tax expense, respectively, of $(1.3), $0, $(4.0) and $0
4.1 4.5 12.1 8.1 
Total cash flow hedges movements3.9 1.2 16.5 (18.0)
Post-retirement benefits:
—Reclassification of prior year actuarial movements to net income, net of tax benefit, respectively, of $0, $0, $0 and $0.1
   (0.1)
Total post-retirement benefits movements   (0.1)
Other comprehensive (loss) income (43.9)66.0 (51.2)(115.9)
Comprehensive income (loss) for the period$34.1 $111.6 $209.0 $(58.4)
Comprehensive income (loss) attributable to shareholders:
—Income (loss) arising from continuing operations$26.9 $95.9 $190.3 $(68.5)
—(Loss) income arising from discontinued operations(0.2)(0.1)0.1 (0.3)
26.7 95.8 190.4 (68.8)
Comprehensive income attributable to non-controlling interests7.4 15.8 18.6 10.4 
$34.1 $111.6 $209.0 $(58.4)
The accompanying notes form an integral part of these condensed consolidated financial statements.

2

Gates Industrial Corporation plc
Unaudited Condensed Consolidated Balance Sheets
(dollars in millions, except share numbers and per share amounts)
As of
October 2, 2021
As of
January 2, 2021
Assets
Current assets
Cash and cash equivalents$540.6 $521.4 
Trade accounts receivable, net 809.3 695.0 
Inventories650.5 508.2 
Taxes receivable39.4 28.6 
Prepaid expenses and other assets183.2 153.4 
Total current assets2,223.0 1,906.6 
Non-current assets
Property, plant and equipment, net678.6 705.0 
Goodwill2,073.8 2,120.2 
Pension surplus70.9 69.3 
Intangible assets, net1,676.1 1,788.6 
Right-of-use assets126.6 120.9 
Taxes receivable14.8 26.5 
Deferred income taxes624.0 672.6 
Other non-current assets18.2 16.6 
Total assets$7,506.0 $7,426.3 
Liabilities and equity
Current liabilities
Debt, current portion$29.8 $42.7 
Trade accounts payable459.5 417.4 
Taxes payable51.4 14.0 
Accrued expenses and other current liabilities301.7 252.2 
Total current liabilities842.4 726.3 
Non-current liabilities
Debt, less current portion2,542.0 2,666.0 
Post-retirement benefit obligations131.2 142.5 
Lease liabilities118.2 113.6 
Taxes payable105.1 111.5 
Deferred income taxes302.8 360.4 
Other non-current liabilities62.8 121.0 
Total liabilities4,104.5 4,241.3 
Commitments and contingencies (note 18)
Shareholders’ equity
—Shares, par value of $0.01 each - authorized shares: 3,000,000,000; outstanding shares: 291,906,736 (January 2, 2021: authorized shares: 3,000,000,000; outstanding shares: 290,853,067)
2.9 2.9 
—Additional paid-in capital2,477.7 2,456.8 
—Accumulated other comprehensive loss(849.4)(805.4)
—Retained earnings1,385.8 1,151.4 
Total shareholders’ equity3,017.0 2,805.7 
Non-controlling interests384.5 379.3 
Total equity3,401.5 3,185.0 
Total liabilities and equity$7,506.0 $7,426.3 
The accompanying notes form an integral part of these condensed consolidated financial statements.
3

Gates Industrial Corporation plc
Unaudited Condensed Consolidated Statements of Cash Flows
Nine months ended
(dollars in millions)
October 2,
2021
September 26,
2020
Cash flows from operating activities
Net income$260.2 $57.5 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
167.4 163.2 
Foreign exchange and other non-cash financing expenses23.7 8.7 
Share-based compensation expense
18.5 13.5 
Decrease in post-employment benefit obligations, net
(11.9)(8.1)
Deferred income taxes
(46.0)(40.3)
Asset impairments
0.1 6.5 
Other operating activities
5.6 6.9 
Changes in operating assets and liabilities, net of effects of acquisitions:
—Increase in accounts receivable(123.9)(24.5)
—Increase in inventories(154.8)(19.0)
—Increase (decrease) in accounts payable49.8 (33.4)
—(Increase) decrease in prepaid expenses and other assets(18.3)2.7 
—Increase (decrease) in taxes payable35.1 (44.4)
—Increase in other liabilities8.0 38.2 
Net cash provided by operating activities213.5 127.5 
Cash flows from investing activities
Purchases of property, plant and equipment(56.4)(39.0)
Purchases of intangible assets(7.6)(6.6)
Cash paid under corporate-owned life insurance policies(11.2)(9.8)
Cash received under corporate-owned life insurance policies2.4 1.5 
Other investing activities2.2 0.3 
Net cash used in investing activities(70.6)(53.6)
Cash flows from financing activities
Issuance of shares 4.3 2.8 
Payments of long-term debt(85.7)(18.6)
Debt issuance costs paid(8.6)(0.3)
Dividends paid to non-controlling interests(13.5)(13.5)
Other financing activities(10.5)(2.1)
Net cash used in financing activities(114.0)(31.7)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(9.7)(4.1)
Net increase in cash and cash equivalents and restricted cash19.2 38.1 
Cash and cash equivalents and restricted cash at the beginning of the period524.1 636.6 
Cash and cash equivalents and restricted cash at the end of the period$543.3 $674.7 
Supplemental schedule of cash flow information
Interest paid$100.7 $96.8 
Income taxes paid$58.7 $37.3 
Accrued capital expenditures$0.5 $1.1 
The accompanying notes form an integral part of these condensed consolidated financial statements.
4

Gates Industrial Corporation plc
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
Three months ended October 2, 2021
(dollars in millions)
Share
capital
Additional
paid-in capital
Accumulated
other
comprehensive
loss
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interests
Total
equity 
As of July 3, 2021$2.9 $2,471.2 $(805.9)$1,315.6 $2,983.8 $380.2 $3,364.0 
Net income— — — 70.2 70.2 7.8 78.0 
Other comprehensive loss— — (43.5)— (43.5)(0.4)(43.9)
Total comprehensive (loss) income— — (43.5)70.2 26.7 7.4 34.1 
Other changes in equity:
—Issuance of shares
— 0.6 — — 0.6 — 0.6 
—Share-based compensation
— 5.9 — — 5.9 0.1 6.0 
—Dividends paid to non-controlling
interests
— — — — — (3.2)(3.2)
As of October 2, 2021$2.9 $2,477.7 $(849.4)$1,385.8 $3,017.0 $384.5 $3,401.5 
Three months ended September 26, 2020
(dollars in millions)
Share
capital
Additional
paid-in capital
Accumulated
other
comprehensive
loss
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interests
Total
equity 
As of June 27, 2020$2.9 $2,445.4 $(1,036.2)$1,085.2 $2,497.3 $344.4 $2,841.7 
Net loss— — — 41.9 41.9 3.7 45.6 
Other comprehensive income— — 53.9 — 53.9 12.1 66.0 
Total comprehensive income— — 53.9 41.9 95.8 15.8 111.6 
Other changes in equity:
—Issuance of shares
— 0.1 — — 0.1 — 0.1 
—Share-based compensation
— 5.3 — — 5.3 0.1 5.4 
—Dividends paid to non-controlling
interests
— — — — — (3.6)(3.6)
As of September 26, 2020$2.9 $2,450.8 $(982.3)$1,127.1 $2,598.5 $356.7 $2,955.2 
5

Gates Industrial Corporation plc
Unaudited Condensed Consolidated Statements of Shareholders’ Equity (Continued)
Nine months ended October 2, 2021
(dollars in millions)
Share
capital
Additional
paid-in capital
Accumulated
other
comprehensive
loss
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interests
Total
equity 
As of January 2, 2021$2.9 $2,456.8 $(805.4)$1,151.4 $2,805.7 $379.3 $3,185.0 
Net income— — — 234.4 234.4 25.8 260.2 
Other comprehensive loss— — (44.0)— (44.0)(7.2)(51.2)
Total comprehensive (loss) income
— — (44.0)234.4 190.4 18.6 209.0 
Other changes in equity:
—Issuance of shares
— 3.6 — — 3.6 — 3.6 
—Share-based compensation
— 17.3 — — 17.3 0.1 17.4 
—Dividends paid to non-controlling
interests
— — — — — (13.5)(13.5)
As of October 2, 2021$2.9 $2,477.7 $(849.4)$1,385.8 $3,017.0 $384.5 $3,401.5 
Nine months ended September 26, 2020
(dollars in millions)
Share
capital
Additional
paid-in capital
Accumulated
other
comprehensive
loss
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interests
Total
equity
As of December 28, 2019$2.9$2,434.5$(858.4)$1,072.0 $2,651.0 $359.7$3,010.7 
Net income55.1 55.1 2.457.5 
Other comprehensive (loss) income(123.9)(123.9)8.0(115.9)
Total comprehensive (loss) income(123.9)55.1(68.8)10.4(58.4)
Other changes in equity:
—Issuance of shares
2.62.62.6
—Share-based compensation
13.7 13.70.113.8 
—Dividends paid to non-controlling
interests
— — — — — (13.5)(13.5)
As of September 26, 2020$2.9 $2,450.8 $(982.3)$1,127.1 $2,598.5 $356.7 $2,955.2 
The accompanying notes form an integral part of these condensed consolidated financial statements.
6

Gates Industrial Corporation plc
Notes to the Unaudited Condensed Consolidated Financial Statements
1. Introduction
A. Background
Gates Industrial Corporation plc (the “Company”) is a public limited company that was registered in England and Wales on September 25, 2017.
In these condensed consolidated financial statements and related notes, all references to “Gates,” “we,” “us,” and “our” refer, unless the context requires otherwise, to Gates Industrial Corporation plc and its consolidated subsidiaries.
B. Accounting periods
The Company prepares its annual consolidated financial statements for the period ending on the Saturday nearest December 31. Accordingly, the condensed consolidated balance sheet is presented as of October 2, 2021 and January 2, 2021 and the related condensed consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity are presented, where relevant, for the 91 day period from July 4, 2021 to October 2, 2021, with comparative information for the 91 day period from June 28, 2020 to September 26, 2020 and for the 273 day period from January 3, 2021 to October 2, 2021, with comparative information for the 273 day period from December 29, 2019 to September 26, 2020.
C. Basis of preparation
The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars unless otherwise indicated. The condensed consolidated financial statements and related notes contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of October 2, 2021 and the results of its operations and cash flows for the periods ended October 2, 2021 and September 26, 2020. Interim period results are not necessarily indicative of the results to be expected for the full fiscal year.
The first quarter of 2020 marked the beginning of an unprecedented environment for the global economy, as governments, companies and communities implemented strict measures to minimize the spread of the novel coronavirus (“COVID-19”) pandemic. While we have generally seen a rebound in demand from the pandemic-induced declines of 2020, the evolving impact of the pandemic, including the emergence of variants, and continuing measures being taken around the world to combat its spread, may create ongoing implications for our business which may vary from time to time, and some of these impacts may be material but cannot be reasonably estimated at this time.
The preparation of consolidated financial statements under U.S. GAAP requires us to make assumptions and estimates concerning the future that affect the reported amounts of assets, liabilities, revenue and expenses. Estimates and assumptions are particularly important in accounting for items such as revenue, rebates, impairment of long-lived assets, intangible assets and goodwill, inventory valuation, financial instruments, expected credit losses, product warranties, income taxes and post-retirement benefits. Estimates and assumptions used are based on factors such as historical experience, observance of trends in the industries in which we operate and information available from our customers and other outside sources.
Due to the inherent uncertainty involved in making assumptions and estimates, events and changes in circumstances arising after October 2, 2021, including those resulting from the impacts of the COVID-19 pandemic, may result in actual outcomes that differ from those contemplated by our assumptions and estimates.
These condensed consolidated financial statements are unaudited and, except as noted below, have been prepared on substantially the same basis as Gates’ audited annual consolidated financial statements and related notes for the year ended January 2, 2021. The condensed consolidated balance sheet as of January 2, 2021 has been derived from those audited financial statements.
7

During 2021, the Company implemented a program with an unrelated third party under which we may periodically sell trade accounts receivable from one of our aftermarket customers with whom we have extended payment terms as part of a commercial agreement. The purpose of using this program is to offset the working capital impact resulting from this terms extension. All eligible accounts receivable from this customer are covered by the program, and any factoring is solely at our option. Following the factoring of a qualifying receivable, because we maintain no continuing involvement in the underlying receivable, and collectability risk is fully transferred to the unrelated third party, we account for these transactions as a sale of a financial asset and derecognize the asset. Cash received under the program is classified as operating cash inflows in the consolidated statement of cash flows. As of October 2, 2021, collection of $66.7 million of our trade accounts receivable had been accelerated under this program. During the three and nine months ended October 2, 2021, we incurred costs in respect of this program of $0.4 million and $0.6 million, respectively, which are recorded under other expenses (income).
These condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes for the year ended January 2, 2021 included in the Company’s Annual Report on Form 10-K.
The accounting policies used in preparing these condensed consolidated financial statements are the same as those applied in the prior year, except for the adoption on the first day of the 2021 fiscal year of the following new Accounting Standard Update (“ASU”):
ASU 2019-12 “Simplifying the Accounting for Income Taxes” (Topic 740): Income Taxes
In December 2019, the FASB issued an ASU to simplify and reduce the complexity of general principles in Topic 740: Income Taxes. Such simplifications include the elimination of certain exceptions to: 1) the incremental approach for intraperiod tax allocation, 2) the requirement to recognize a deferred income tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) the ability not to recognize a deferred income tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary, and 4) the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.
The amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of this ASU did not have any significant impact on our consolidated financial statements.
2. Recent accounting pronouncements not yet adopted
None.
3. Segment information
A. Background
The segment information provided in these condensed consolidated financial statements reflects the information that is used by the chief operating decision maker for the purposes of making decisions about allocating resources and in assessing the performance of each segment. The chief executive officer (“CEO”) of Gates serves as the chief operating decision maker. These decisions are based on net sales and Adjusted EBITDA (defined below).
B. Operating segments and segment assets
Gates manufactures a wide range of power transmission and fluid power products and components for a large variety of industrial and automotive applications, both in the aftermarket and first-fit channels, throughout the world.
Our reportable segments are identified on the basis of our primary product lines, as this is the basis on which information is provided to the CEO for the purposes of allocating resources and assessing the performance of Gates’ businesses. Our operating and reporting segments are therefore Power Transmission and Fluid Power.
Segment asset information is not provided to the chief operating decision maker and therefore segment asset information has not been presented. Due to the nature of Gates’ operations, cash generation and profitability are viewed as the key measures rather than an asset base measure.
8

C. Segment net sales and disaggregated net sales
Sales between reporting segments and the impact of such sales on Adjusted EBITDA for each segment are not included in internal reports presented to the CEO and have therefore not been included below.
Three months endedNine months ended
(dollars in millions)
October 2, 2021September 26, 2020October 2, 2021September 26, 2020
Power Transmission$549.4 $469.2 $1,697.5 $1,280.4 
Fluid Power313.0 243.0 961.3 718.4 
Continuing operations$862.4 $712.2 $2,658.8 $1,998.8 
Our commercial function is organized by region and therefore, in addition to reviewing net sales by our reporting segments, the CEO also reviews net sales information disaggregated by region, including between emerging and developed markets.
The following table summarizes our net sales by key geographic region of origin:
Three months ended
October 2, 2021September 26, 2020
(dollars in millions)
Power Transmission
Fluid Power
Power Transmission
Fluid Power
U.S.$157.3 $157.1 $138.1 $126.1 
North America, excluding U.S.
44.7 49.1 40.3 37.0 
United Kingdom (“U.K.”)12.4 13.4 12.3 7.6 
EMEA(1), excluding U.K.
157.0 50.2 130.4 35.3 
East Asia and India75.4 22.2 60.3