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 March 31, ~~2021~~2022

Commission File Number 1-9608

NEWELL BRANDS INC.

(Exact name of registrant as specified in its charter)


Delaware						36-3514169
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6655 Peachtree Dunwoody Road,

Atlanta, Georgia 30328

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (770) 418-7000

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

TITLE OF EACH CLASS

TRADING SYMBOL

NAME OF EXCHANGE ON WHICH REGISTERED

Common stock, $1 par value per share

NWL

Nasdaq Stock Market LLC

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

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post 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 Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding (net of treasury shares) as of April ~~26, 2021: 425.3~~25, 2022: 413.5 million.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in millions, except per share data)

Three Months Ended
March 31,
2021 2020
Net sales $ 2,288 $ 1,886
Cost of products sold 1,557 1,269
Gross profit 731 617
Selling, general and administrative expenses 534 548
Restructuring costs, net 5 2
Impairment of goodwill, intangibles and other assets 0 1,475
Operating income (loss) 192 (1,408)
Non-operating expenses:
Interest expense, net 67 63
Other (income) expense, net (1) 12
Income (loss) before income taxes 126 (1,483)
Income tax provision (benefit) 37 (204)
Net income (loss) $ 89 $ (1,279)
Weighted average common shares outstanding:
Basic 424.9 423.8
Diluted 427.6 423.8
Earnings (loss) per share:
Basic $ 0.21 $ (3.02)
Diluted $ 0.21 $ (3.02)


	Three Months Ended March 31,
		2022		2021
Net sales		$	2,388	$	2,288
Cost of products sold		1,648		1,557
Gross profit		740		731
Selling, general and administrative expenses		518		534
Restructuring costs, net		5		5

Operating income		217		192
Non-operating expenses:
Interest expense, net		59		67

Other income, net		(124)		(1)
Income before income taxes		282		126
Income tax provision		48		37
Net income		$	234	$	89

Weighted average common shares outstanding:
Basic		421.9		424.9
Diluted		424.7		427.6

Earnings per share:
Basic		$	0.55	$	0.21
Diluted		$	0.55	$	0.21

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Amounts in millions)

Three Months Ended
March 31,
2021 2020
Comprehensive income (loss):
Net income (loss) $ 89 $ (1,279)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments (44) (156)
Pension and postretirement costs 5 (5)
Derivative financial instruments 5 26
Total other comprehensive loss, net of tax (34) (135)
Comprehensive income (loss) 55 (1,414)
Total comprehensive loss attributable to noncontrolling interests (1) (5)
Total comprehensive income (loss) attributable to parent $ 56 $ (1,409)


	Three Months Ended March 31,
		2022		2021
Comprehensive income (loss):
Net income		$	234	$	89
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		23		(44)
Pension and postretirement costs		5		5
Derivative financial instruments		—		5
Total other comprehensive income (loss), net of tax		28		(34)
Comprehensive income		262		55


Total comprehensive loss attributable to noncontrolling interests		—		(1)
Total comprehensive income attributable to parent		$	262	$	56

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in millions, except par values)

March 31,
2021 December 31,
2020
Assets:
Cash and cash equivalents $ 682 $ 981
Accounts receivable, net 1,530 1,678
Inventories 1,901 1,638
Prepaid expenses and other current assets 272 331
Total current assets 4,385 4,628
Property, plant and equipment, net 1,151 1,176
Operating lease assets 513 530
Goodwill 3,525 3,553
Other intangible assets, net 3,506 3,564
Deferred income taxes 843 838
Other assets 417 411
Total assets $ 14,340 $ 14,700
Liabilities:
Accounts payable $ 1,501 $ 1,526
Accrued compensation 165 236
Other accrued liabilities 1,340 1,393
Short-term debt and current portion of long-term debt 357 466
Total current liabilities 3,363 3,621
Long-term debt 5,135 5,141
Deferred income taxes 438 414
Operating lease liabilities 458 472
Other noncurrent liabilities 1,085 1,152
Total liabilities 10,479 10,800
Commitments and contingencies (Footnote 16) 0 0
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, 0 shares issued at March 31, 2021 and December 31, 2020) 0 0
Common stock (800.0 authorized shares, $1.00 par value, 449.8 shares and 448.4 shares issued at March 31, 2021 and December 31, 2020, respectively) 450 448
Treasury stock, at cost (24.4 shares and 24.0 shares at March 31, 2021 and December 31, 2020, respectively) (608) (598)
Additional paid-in capital 7,993 8,078
Retained deficit (3,085) (3,174)
Accumulated other comprehensive loss (914) (880)
Stockholders’ equity attributable to parent 3,836 3,874
Stockholders’ equity attributable to noncontrolling interests 25 26
Total stockholders’ equity 3,861 3,900
Total liabilities and stockholders’ equity $ 14,340 $ 14,700


	March 31, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	344	$	440
Accounts receivable, net	1,421		1,500
Inventories	2,297		1,997
Prepaid expenses and other current assets	349		325
Total current assets	4,411		4,262
Property, plant and equipment, net	1,144		1,204
Operating lease assets	595		558
Goodwill	3,486		3,504
Other intangible assets, net	3,046		3,370
Deferred income taxes	797		814
Other assets	725		467
Total assets	$	14,204	$	14,179
Liabilities:
Accounts payable	$	1,651	$	1,680
Accrued compensation	154		270
Other accrued liabilities	1,375		1,364
Short-term debt and current portion of long-term debt	3		3
Total current liabilities	3,183		3,317
Long-term debt	4,880		4,883
Deferred income taxes	720		405
Operating lease liabilities	531		500
Other noncurrent liabilities	910		983
Total liabilities	10,224		10,088
Commitments and contingencies (Footnote 17)	0		0
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, no shares issued at March 31, 2022 and December 31, 2021)	—		—
Common stock (800.0 authorized shares, $1.00 par value, 440.8 shares and 450.0 shares issued at March 31, 2022 and December 31, 2021, respectively)	441		450
Treasury stock, at cost (25.0 shares and 24.5 shares at March 31, 2022 and December 31, 2021, respectively)	(623)		(609)
Additional paid-in capital	7,384		7,734
Retained deficit	(2,368)		(2,602)
Accumulated other comprehensive loss	(854)		(882)


Total stockholders’ equity	3,980		4,091
Total liabilities and stockholders’ equity	$	14,204	$	14,179

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in millions)


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)		$	89	$	(1,279)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income						Net income	$	234	$	89
Adjustments to reconcile net income to net cash used in operating activities:						Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	86		91		Depreciation and amortization	76		86
Impairment of goodwill, intangibles and other assets		0		1,475

Gain from sale of business						Gain from sale of business	(130)		—
Deferred income taxes	Deferred income taxes	1		(234)		Deferred income taxes	326		1
Stock based compensation expense	Stock based compensation expense	14		8		Stock based compensation expense	14		14
Loss on change in fair value of investments		0		3

Changes in operating accounts:
Other, net						Other, net	(2)		—
Changes in operating accounts excluding the effects of divestiture:						Changes in operating accounts excluding the effects of divestiture:
Accounts receivable	Accounts receivable	122		369		Accounts receivable	14		122
Inventories	Inventories	(283)		(142)		Inventories	(403)		(283)
Accounts payable	Accounts payable	(18)		(49)		Accounts payable	25		(18)
Accrued liabilities and other	Accrued liabilities and other	(36)		(219)		Accrued liabilities and other	(426)		(36)
Net cash provided by (used in) operating activities		(25)		23
Net cash used in operating activities						Net cash used in operating activities	(272)		(25)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Proceeds from sale of divested business						Proceeds from sale of divested business	620		—
Capital expenditures						Capital expenditures	(70)		(54)

Other investing activities, net						Other investing activities, net	9		—
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	559		(54)
Cash flows from financing activities:						Cash flows from financing activities:

Capital expenditures		(54)		(58)
Other investing activities, net		0		2
Net cash used in investing activities		(54)		(56)
Cash flows from financing activities:
Net proceeds from short-term debt		0		305

Payments on current portion of long-term debt	Payments on current portion of long-term debt	(94)		0		Payments on current portion of long-term debt	(1)		(94)
Payments on long-term debt	Payments on long-term debt	(6)		(16)		Payments on long-term debt	—		(6)

Repurchase of shares of common stock						Repurchase of shares of common stock	(275)		—
Cash dividends	Cash dividends	(100)		(99)		Cash dividends	(100)		(100)

Equity compensation activity and other, net	Equity compensation activity and other, net	(39)		(17)		Equity compensation activity and other, net	(17)		(39)
Net cash provided by (used in) financing activities		(239)		173
Net cash used in financing activities						Net cash used in financing activities	(393)		(239)
Exchange rate effect on cash, cash equivalents and restricted cash	Exchange rate effect on cash, cash equivalents and restricted cash	(14)		(24)		Exchange rate effect on cash, cash equivalents and restricted cash	8		(14)
Increase (decrease) in cash, cash equivalents and restricted cash		(332)		116
Decrease in cash, cash equivalents and restricted cash						Decrease in cash, cash equivalents and restricted cash	(98)		(332)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,021		371		Cash, cash equivalents and restricted cash at beginning of period	477		1,021
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	689	$	487	Cash, cash equivalents and restricted cash at end of period	$	379	$	689
Supplemental disclosures:	Supplemental disclosures:					Supplemental disclosures:
Restricted cash at beginning of period	Restricted cash at beginning of period	$	40	$	22	Restricted cash at beginning of period	$	37	$	40
Restricted cash at end of period	Restricted cash at end of period	7		11		Restricted cash at end of period	35		7

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(Amounts in millions)

Common
Stock Treasury
Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Stockholders' Equity Attributable to Parent Noncontrolling Interest Total Stockholders' Equity
Balance at December 31, 2020 $ 448 $ (598) $ 8,078 $ (3,174) $ (880) $ 3,874 $ 26 $ 3,900
Comprehensive income (loss) — — — 89 (32) 57 (2) 55
Dividends declared on common stock - $0.23 per share — — (101) — — (101) — (101)
Equity compensation, net of tax 2 (10) 16 — — 8 — 8
Other changes attributable to noncontrolling interests — — — — (2) (2) 1 (1)
Balance at March 31, 2021 $ 450 $ (608) $ 7,993 $ (3,085) $ (914) $ 3,836 $ 25 $ 3,861


	Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity











Balance at December 31, 2021	$	450	$	(609)	$	7,734	$	(2,602)	$	(882)	$	4,091
Comprehensive income	—		—		—		234		28		262
Dividends declared on common stock - $0.23 per share	—		—		(97)		—		—		(97)
Equity compensation, net of tax	2		(14)		12		—		—		—
Common stock purchased and retired	(11)		—		(264)		—		—		(275)



Other	—		—		(1)		—		—		(1)
Balance at March 31, 2022	$	441	$	(623)	$	7,384	$	(2,368)	$	(854)	$	3,980

Common
Stock Treasury
Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Loss Stockholders' Equity Attributable to Parent Noncontrolling Interest Total Stockholders' Equity
Balance at December 31, 2019 $ 447 $ (590) $ 8,430 $ (2,404) $ (920) $ 4,963 $ 33 $ 4,996
Comprehensive loss — — — (1,279) (130) (1,409) (5) (1,414)
Dividends declared on common stock - $0.23 per share — — (97) — — (97) — (97)
Equity compensation, net of tax 1 (6) 7 — — 2 — 2
Other changes attributable to noncontrolling interests — — — — (5) (5) — (5)
Distributions to noncontrolling interests — — — — — — (3) (3)
Balance at March 31, 2020 $ 448 $ (596) $ 8,340 $ (3,683) $ (1,055) $ 3,454 $ 25 $ 3,479


	Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Stockholders' Equity Attributable to Parent		Noncontrolling Interests		Total Stockholders' Equity








Balance at December 31, 2020	$	448	$	(598)	$	8,078	$	(3,174)	$	(880)	$	3,874	$	26	$	3,900
Comprehensive income (loss)	—		—		—		89		(32)		57		(2)		55
Dividends declared on common stock - $0.23 per share	—		—		(101)		—		—		(101)		—		(101)
Equity compensation, net of tax	2		(10)		16		—		—		8		—		8
Other changes attributable to noncontrolling interests	—		—		—		—		(2)		(2)		1		(1)

Balance at March 31, 2021	$	450	$	(608)	$	7,993	$	(3,085)	$	(914)	$	3,836	$	25	$	3,861

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Footnote 1 — Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Newell Brands Inc. (collectively with its subsidiaries, the “Company”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (including normal recurring accruals) considered necessary for a fair statement of the financial position and the results of operations of the Company. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, and the footnotes thereto, included in the Company’s most recent Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet at December 31, ~~2020,~~2021 has been derived from the audited financial statements as of that date, but it does not include all the information and footnotes required by U.S. GAAP for a complete financial statement. ~~Certain reclassifications have been made in the Company’s financial statements of the prior year to conform to the current year presentation.~~

~~Beginning January 1, 2021,~~On March 31, 2022, the Company ~~reported the operating results of~~sold its ~~cookware product lines as part of the Food reporting unit within the~~Connected Home ~~Solutions segment, and no longer as part of the former Appliances and Cookware segment. This change was the result of an assessment by the chief operating decision maker~~& Security (“~~CODM”~~CH&S”) ~~to better align the cookware product lines with other similar product lines in various food categories. In connection with this change, the Chief Executive Officer (“CEO”) for the Food~~ business unit ~~assumed full responsibility~~to Resideo Technologies, Inc. See Footnotes 2 and 16 for the overall brand strategy, business modeling, marketing and innovation of these product lines. The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments. In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment. Prior period comparable results for both of these segments have been reclassified to conform to this product line change. The Company also revised the calculation of operating income (loss) by segment to include restructuring charges. Prior period comparable results have been reclassified to conform to the change in calculation (See ~~Footnote 15~~).further information.

Use of Estimates and Risks and Uncertainty of Coronavirus (COVID-19)

Since early 2020, the COVID-19 pandemic ~~has~~ resulted in various federal, state and local governments, as well as private entities, mandating restrictions on travel and public gatherings, closure of non-essential commerce, stay at home orders and quarantining of people to limit exposure to the virus. ~~The~~Although restrictions have eased since the first quarter of 2021 in certain areas, the Company's global operations, similar to those of many large, multi-national corporations, were adversely impacted by the COVID-19 pandemic.

During the first quarter of 2020, the Company concluded that an impairment triggering event had occurred as it had experienced significant COVID-19 related disruption for all of its reporting units and performed an impairment test for its goodwill and indefinite-lived intangible assets and a recoverability test for its long-lived assets, which primarily include finite-lived intangible assets, property plant and equipment and right of use lease assets. As a result of the impairment and recoverability testing performed in connection with the triggering event, the Company determined that certain of its goodwill, indefinite-lived intangible assets, property plant and equipment and right of use operating leases assets were impaired. During the first quarter of 2020, the Company recorded an aggregate non-cash charge of approximately $1.5 billion in connection with these impairments. See ~~Footnotes 5~~ ~~and~~ 6 ~~for further information.~~

While the negative effects from the COVID-19 global pandemic in the first half of 2020 were material to the Company's operating results, the Company saw sales growth during the second half of 2020 and first quarter of 2021. The ~~Company believes, however, the~~ extent of the impact of the COVID-19 pandemic to ~~its businesses,~~the Company's future sales, operating results, cash flows, liquidity and financial condition ~~will~~continues to be ~~primarily~~ driven by numerous evolving factors that the Company cannot reasonably predict and which will vary by jurisdiction and market, including the severity and duration of the pandemic, the ~~impact~~emergence of new strains and variants of the coronavirus, the ~~pandemic’s impact on~~likelihood of a resurgence of positive cases, the ~~U.S.~~development and ~~global economies, the timing, scope~~availability of effective treatments and ~~effectiveness of federal, state and local governmental plans to administer~~ vaccines, ~~to the general public,~~ especially in areas where conditions have recently worsened and ~~lockdowns~~work restrictions, operational or travel bans have been reinstituted, ~~as well as~~the rate at which vaccines are administered to the general public, the timing and amount of fiscal stimulus and relief programs packages that are available to the general ~~public.~~public, the availability and prices of supply chain resources, including materials, products and transportation; and changes in consumer demand patterns for the Company's products as the impact of the global pandemic lessens. These primary drivers are beyond the Company's knowledge and control, and as a result, at this time it is difficult to reasonably predict the cumulative impact, both in terms of severity and duration, COVID-19 will have on its future sales, operating results, cash flows and financial condition. Furthermore, the impact to the Company's businesses, operating results, cash flows, liquidity and financial condition may be adversely impacted if the COVID-19 global pandemic continues to exist or worsens for a prolonged period of time, new variants of the coronavirus emerge, or if plans to administer vaccines are delayed.

~~Table of Contents~~

Management’s application of U.S. GAAP in preparing the Company's consolidated financial statements requires the pervasive use of estimates and assumptions. As discussed above, the world continues to be impacted by the ~~global~~ COVID-19 pandemic which has required greater use of estimates and assumptions in the preparation of the consolidated financial statements, more specifically, those estimates and assumptions utilized in the Company’s forecasted cash flows that form the basis in developing the fair values utilized in its impairment assessments as well as its annual effective tax rate. These estimates also include assumptions as to the duration and severity of the pandemic, timing and amount of demand shifts amongst sales channels, workforce availability and supply chain ~~continuity, and timing as to a return to normalcy.~~continuity. Although ~~the Company~~management has made its best estimates based upon current information, the effects of the COVID-19 pandemic on its business may result in future changes to management’s estimates and assumptions, especially if the severity of the pandemic continues to exist or worsens for a prolonged period of time, new variants of the coronavirus emerge, or if plans to administer the vaccines are delayed. Actualactual results could materially differ from ~~the~~those estimates and ~~assumptions developed by management.~~may require future changes to such estimates and assumptions. If so, the Company may be subject to future incremental impairment charges as well as changes to recorded reserves and valuations.

Seasonal Variations

Sales of the Company’s products tend to be seasonal, with sales, operating income and operating cash flow in the first quarter generally lower than any other quarter during the year, driven principally by reduced volume and the mix of products sold in the first quarter. The seasonality of the Company’s sales volume combined with the accounting for fixed costs, such as depreciation, amortization, rent, personnel costs and interest expense, impacts the Company’s results on a quarterly basis. In addition, the Company typically tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers. Accordingly, the Company’s results of

Table of Contents

operations for the three months ended March 31, ~~2021~~2022 may not necessarily be indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022.

~~In 2020, the~~The Company's sales and operating results, ~~were~~previously disrupted by the COVID-19 pandemic, negatively impacting the Company's performance during the first half of the year, partially offset by positive performance during the second half of the year and into the first quarter of 2021. The Company believes the seasonality of its businesses will revertreverted back to historical patterns asin 2021, however, uncertainty still remains over the ~~impact~~volatility and direction of ~~the global pandemic lessens.~~future consumer demand patterns.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In January 2021, the FASB clarified the scope of this guidance with the issuance of ASU 2021-01, Reference Rate Reform: Scope. ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met. ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.

~~Adoption of New Accounting Guidance~~

The Company’s accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our 2020 Annual Report on Form 10-K. Such significant accounting policies are applicable for periods prior to the adoption of the following new accounting standards and updated accounting policies.

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~“Simplifying the Accounting for Income Taxes” (Topic 740)~~. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for years, and interim periods within those years, beginning after December 15, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

~~Table of Contents~~

Sales of Accounts Receivables

Factored receivables at ~~the end of the first quarter of 2021~~March 31, 2022 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately ~~$400~~$535 million, an increase of approximately ~~$50~~$35 million from December 31, ~~2020.~~2021. Transactions under this agreement ~~continue to be~~are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction. The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the ~~unaudited~~ Condensed Consolidated Statement of Cash Flows. The Company records the discount as other ~~(income) expense,~~income, net in the Condensed Consolidated Statement of Operations and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow.

Footnote 2 — Divestiture Activity

On March 31, 2022, the Company sold its CH&S business unit to Resideo Technologies, Inc., for approximately $593 million, subject to customary working capital and other post-closing adjustments. As a result, the Company recorded a pretax gain of $130 million, which was included in other income, net in its Condensed Consolidated Statements of Operations.

Footnote 3 — Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the three months ended March 31, ~~2021~~2022 (in millions):

Cumulative
Translation
Adjustment
Pension and
Postretirement
Costs
Derivative
Financial
Instruments AOCL
Balance at December 31, 2020 $ (481) $ (356) $ (43) $ (880)
Other comprehensive income (loss) before reclassifications (44) 1 2 (41)
Amounts reclassified to earnings 0 4 3 7
Net current period other comprehensive income (loss) (44) 5 5 (34)
Balance at March 31, 2021 $ (525) $ (351) $ (38) $ (914)


	Cumulative Translation Adjustment		Pension and Postretirement Costs		Derivative Financial Instruments		AOCL
Balance at December 31, 2021	$	(575)	$	(292)	$	(15)	$	(882)
Other comprehensive income (loss) before reclassifications	17		1		(1)		17
Amounts reclassified to earnings	6		4		1		11
Net current period other comprehensive income	23		5		—		28
Balance at March 31, 2022	$	(552)	$	(287)	$	(15)	$	(854)

Table of Contents

Reclassifications from AOCL to the results of operations for the three months ended March 31, 2022 and 2021 ~~and 2020~~ were ~~pre-tax~~pretax expense of (in millions):

Three Months Ended
March 31,
2021 2020
Pension and postretirement benefit plans (1) $ 5 $ 6
Derivative financial instruments for effective cash flow hedges (2) 4 1


	Three Months Ended March 31,
		2022		2021
Cumulative translation adjustment (1)		$	6	$	—
Pension and postretirement benefit plans (2)		4		5
Derivative financial instruments (3)		1		4

(1)Primarily represents the amortization of net actuarial losses and plan settlements recorded in cost of products sold, selling, general and administrative expenses (“SG&A”) and other (income) expense, net in the Consolidated Statements of Operations. See Footnote 102 for further information.

(2)See Footnote 911 for further information.

(3)See Footnote 10 for further information.

The income tax provision (benefit) allocated to the components of AOCL for the periods indicated are as follows (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2021		2020				2022		2021
Foreign currency translation adjustments	Foreign currency translation adjustments		$	12	$	7	Foreign currency translation adjustments		$	1	$	12
Pension and postretirement benefit costs	Pension and postretirement benefit costs		1		(3)		Pension and postretirement benefit costs		—		1
Derivative financial instruments	Derivative financial instruments		2		9		Derivative financial instruments		(1)		2
Income tax provision related to AOCL	Income tax provision related to AOCL		$	15	$	13	Income tax provision related to AOCL		$	—	$	15

~~Table of Contents~~

Footnote 34 — Restructuring Costs

Restructuring provisions were determined based on estimates prepared at the time the restructuring actions were approved by management and are periodically updated for changes. Restructuring amounts also include amounts recognized as incurred.

Restructuring costs, net incurred by reportable business segments for all restructuring activities for the periods indicated are as follows (in millions):

Three Months Ended
March 31,
2021 2020
Home Appliances $ 1 $ 0
Home Solutions 2 1
Learning and Development 1 1
Outdoor and Recreation 1 0
$ 5 $ 2


	Three Months Ended March 31,
		2022		2021
Commercial Solutions		$	1	$	—
Home Appliances		1		1
Home Solutions		1		2
Learning and Development		2		1
Outdoor and Recreation		—		1

		$	5	$	5

Accrued restructuring costs activity for the three months ended March 31, ~~2021~~2022 are as follows (in millions):


		Balance at December 31, 2020		Restructuring Costs, Net		Payments		Balance at March 31, 2021			Balance at December 31, 2021		Restructuring Costs, Net		Payments		Balance at March 31, 2022
Severance and termination costs	Severance and termination costs	$	7	$	4	$	(4)	$	7	Severance and termination costs	$	8	$	4	$	(5)	$	7
Contract termination and other costs	Contract termination and other costs	4		1		(1)		4		Contract termination and other costs	2		1		(2)		1
		$	11	$	5	$	(5)	$	11		$	10	$	5	$	(7)	$	8

2020 Restructuring Plan

The Company’s 2020 restructuring program, which was ~~initiated during~~substantially complete at the ~~second quarter~~end of ~~2020 largely in response to the impact of the COVID-19 pandemic,~~ 2021, was designed to reduce overhead costs, streamline certain underperforming operations and improve future profitability. The restructuring costs, which ~~impact~~

Table of Contents

impacted all segments, include employee-related costs ~~including~~such as severance and other termination benefits. During the three months ended March 31, 2021, the Company recorded restructuring charges of $5 ~~million in connection with the program and has incurred cumulative charges of $24 million since inception. The Company currently estimates aggregate restructuring charges of approximately $30 million~~ ~~to $35 million~~ ~~to be incurred for projects launched in connection with the program. All~~million. Any remaining cash payments are expected to be paid within one year of charges incurred.

~~Accelerated Transformation Plan~~

During the three months ended March 31, 2020 the company recorded restructuring charges of $2 million in connection with the Company's completed Accelerated Transformation Plan (“ATP”). The Company's ATP was designed in part, to divest the Company's non-core consumer businessesOther Restructuring and ~~focus on the realignment of the Company's management structure and overall costs structure as a result of the completed divestitures.~~

~~Other~~ Restructuring-Related Costs

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, ~~which~~including certain costs associated with Project Ovid. Restructuring-related costs are recorded in cost of products sold and selling, general and administrative expenses (“SG&A&A”) in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred. During the three months ended March 31, 2022, the Company recorded restructuring charges of $5 million.

~~Table of Contents~~

Footnote 45 — Inventories

Inventories are comprised of the following at the dates indicated (in millions):


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Raw materials and supplies	Raw materials and supplies	$	269	$	252	Raw materials and supplies	$	321	$	310
Work-in-process	Work-in-process	163		157		Work-in-process	205		167
Finished products	Finished products	1,469		1,229		Finished products	1,771		1,520
		$	1,901	$	1,638		$	2,297	$	1,997

Footnote 56 — Property, Plant and Equipment, Net

Property, plant and equipment, net, is comprised of the following at the dates indicated (in millions):


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Land	Land	$	83	$	86	Land	$	80	$	82
Buildings and improvements	Buildings and improvements	662		664		Buildings and improvements	636		678
Machinery and equipment	Machinery and equipment	2,309		2,314		Machinery and equipment	2,314		2,387
		3,054		3,064			3,030		3,147
Less: Accumulated depreciation	Less: Accumulated depreciation	(1,903)		(1,888)		Less: Accumulated depreciation	(1,886)		(1,943)
		$	1,151	$	1,176		$	1,144	$	1,204

Depreciation expense was ~~$52~~$49 million and ~~$48~~$52 million for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively.

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 pandemic. Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets (the lowest level for which identifiable cash flows are available) to their respective carrying amount and recorded a non-cash impairment charge of approximately $1 million during the three months ended March 31, 2020, in the Home Solutions segment associated with its Yankee Candle retail store business. The impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value. See ~~Footnote 1~~ ~~for further information.~~

During the ~~first~~ quarter ~~of 2020,~~ended March 31, 2022, the Company ~~also recorded~~took possession of a ~~non-cash impairment charge~~right of ~~$5 million to reflect a reduction in the carrying values of~~use operating lease ~~assets, mostly related to its Yankee Candle retail store business.~~

asset with future obligations of approximately $64 million.

1110

Table of Contents

Footnote 67 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the three months ended March 31, ~~2021~~2022 is as follows (in millions):

Segments Net Book Value at December 31, 2020
Foreign
Exchange and Other
Gross
Carrying
Amount
Accumulated
Impairment
Charges
Net Book Value at
March 31, 2021
Home Appliances $ 0 $ 0 $ 569 $ (569) $ 0
Commercial Solutions 747 0 1,241 (494) 747
Home Solutions 164 0 2,567 (2,403) 164
Learning and Development 2,642 (28) 3,460 (846) 2,614
Outdoor and Recreation 0 0 788 (788) 0
$ 3,553 $ (28) $ 8,625 $ (5,100) $ 3,525

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 global pandemic. Pursuant to the authoritative literature, the Company performed an impairment test and determined that its goodwill associated with its Home Appliances and Food reporting units were impaired. During the three months ended March 31, 2020, the Company recorded an aggregate non-cash charge of $212 million to reflect the impairments of goodwill as the reporting unit carrying values exceeded their fair values. ~~See Footnote 1~~ ~~for further information.~~


Segments	Net Book Value at December 31, 2021		Foreign Exchange		Gross Carrying Amount		Accumulated Impairment Charges		Net Book Value at March 31, 2022
Commercial Solutions	$	747	$	—	$	916	$	(169)	$	747
Home Appliances	—		—		569		(569)		—
Home Solutions	164		—		2,567		(2,403)		164
Learning and Development	2,593		(18)		3,421		(846)		2,575
Outdoor and Recreation	—		—		788		(788)		—
	$	3,504	$	(18)	$	8,261	$	(4,775)	$	3,486

Other intangible assets, net, are comprised of the following at the dates indicated (in millions):


		March 31, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value			Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Trade names — indefinite life	Trade names — indefinite life	$	2,305	$	—	$	2,305	$	2,331	$	—	$	2,331	Trade names — indefinite life	$	2,028	$	—	$	2,028	$	2,219	$	—	$	2,219
Trade names — other	Trade names — other	154		(56)		98		157		(55)		102		Trade names — other	165		(72)		93		159		(65)		94
Capitalized software	Capitalized software	632		(498)		134		625		(486)		139		Capitalized software	581		(461)		120		631		(495)		136
Patents and intellectual property	Patents and intellectual property	67		(55)		12		67		(52)		15		Patents and intellectual property	22		(15)		7		22		(14)		8
Customer relationships and distributor channels	Customer relationships and distributor channels	1,253		(296)		957		1,259		(282)		977		Customer relationships and distributor channels	1,082		(284)		798		1,216		(303)		913

		$	4,411	$	(905)	$	3,506	$	4,439	$	(875)	$	3,564		$	3,878	$	(832)	$	3,046	$	4,247	$	(877)	$	3,370

Amortization expense for intangible assets ~~were $34~~was $27 million and ~~$43~~$34 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

As a result of the impairment testing performed in connection with the COVID-19 pandemic triggering event during the first quarter of 2020, the Company determined that certain of its indefinite-lived intangible assets in all of its operating segments were impaired. ~~During the three months ended March 31, 2020, the Company recorded impairment charges of $1.3 billion~~ ~~to reflect impairment of these indefinite-lived trade names because their carrying values exceeded their fair values.~~

~~The impairment charges for the three months ended March 31, 2020 were allocated to the Company’s reporting segments as follows (in millions):~~

~~Impairment of indefinite-lived intangibles assets:~~

~~Home Appliances~~

~~Commercial Solutions~~

~~320~~

~~Home Solutions~~

~~290~~

~~Learning and Development~~

~~Outdoor and Recreation~~

~~482~~

~~1,257~~

~~Table of Contents~~

The Company believes the circumstances and global disruption caused by COVID-19 will continue to affect its businesses, operating results, cash flows and financial condition and that the scope and duration of the pandemic is highly uncertain. In addition, some of the other inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates, and labor inflation. Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy, there can be no assurance that the Company's estimates and assumptions will prove to be accurate predictions of the future. See ~~Footnote 1~~ ~~for further information.~~

Footnote 78 — Other Accrued Liabilities

Other accrued liabilities are comprised of the following at the dates indicated (in millions):


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Customer accruals	Customer accruals	$	638	$	683	Customer accruals	$	652	$	715
Accrued interest expense		125		60
Operating lease liabilities	Operating lease liabilities	125		129		Operating lease liabilities	125		122
Accrued self-insurance liabilities, contingencies and warranty	Accrued self-insurance liabilities, contingencies and warranty	105		108		Accrued self-insurance liabilities, contingencies and warranty	121		125
Accrued interest expense						Accrued interest expense	115		56
Accrued marketing and freight expenses						Accrued marketing and freight expenses	66		59
Accrued income taxes	Accrued income taxes	81		66		Accrued income taxes	54		43
Accruals for marketing and freight expenses		56		57
Other	Other	210		290		Other	242		244
		$	1,340	$	1,393		$	1,375	$	1,364

Table of Contents

Footnote 89 — Debt

Debt is comprised of the following at the dates indicated (in millions):

March 31, 2021 December 31, 2020
3.15% senior notes due 2021 $ 0 $ 94
3.75% senior notes due 2021 354 369
4.00% senior notes due 2022 250 250
3.85% senior notes due 2023 1,085 1,090
4.00% senior notes due 2024 200 200
4.875% senior notes due 2025 493 492
3.90% senior notes due 2025 47 47
4.20% senior notes due 2026 1,974 1,973
5.375% senior notes due 2036 416 416
5.50% senior notes due 2046 657 657
Other debt 16 19
Total debt 5,492 5,607
Short-term debt and current portion of long-term debt (357) (466)
Long-term debt $ 5,135 $ 5,141


	March 31, 2022		December 31, 2021
3.85% senior notes due 2023	$	1,087	$	1,086
4.00% senior notes due 2024	200		200
4.875% senior notes due 2025	495		494
3.90% senior notes due 2025	47		47
4.20% senior notes due 2026	1,976		1,975
5.375% senior notes due 2036	417		417
5.50% senior notes due 2046	658		658


Other debt	3		9
Total debt	4,883		4,886
Short-term debt and current portion of long-term debt	(3)		(3)
Long-term debt	$	4,880	$	4,883

Senior Notes

On ~~March 1, 2021 (the “Redemption Date”~~February 11, 2022, S&P Global Inc. (“S&P”), upgraded the Company’s debt rating to “BBB-” from “BB+” as S&P believed the Company ~~redeemed its 3.15% senior notes that were scheduled~~has been able to mature in April 2021 (the “April 2021 Notes”) at a redemption price equal to 100% of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.

~~Table of Contents~~

During the first quarter of 2021, the Company repurchased $5 million of the 3.85% senior notes due 2023 at approximately 5% above par value. The total consideration, excluding accrued interest, was approximately $5 million.achieve S&P’s target debt level. As a result of ~~the partial debt repurchase~~this upgrade, the Company ~~recorded~~is now in a position to access the commercial paper market, up to a maximum of $800 million, provided there is a sufficient amount available for borrowing under the Credit Revolver (defined hereafter). In addition, the interest rate on the relevant senior notes decreased by 25 basis points due to the upgrade, reducing the Company’s interest expense by approximately $10 million on an ~~immaterial loss.~~annualized basis (approximately $8 million in 2022). However, certain of the Company’s outstanding senior notes aggregating to approximately $4.2 billion are still subject to an interest rate adjustment of 25 basis points in connection with the Moody’s Corporation (“Moody’s”) downgraded debt rating in 2020.

Receivables Facility

The Company maintains an Accounts Receivable Securitization Facility (the “Securitization Facility”). The aggregate commitment under the Securitization Facility is $600 million. The Securitization Facility matures in October 2022 and bears interest at a margin over a variable interest rate. The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances. At March 31, ~~2021,~~2022, the Company did 0tnot have any amounts outstanding under the Securitization Facility.

Revolving Credit Facility

The Company has a $1.25 billion revolving credit facility that matures in December 2023 (the “Credit Revolver”). At March 31, ~~2021,~~2022, the Company did 0tnot have any amounts outstanding under the Credit Revolver.

Other

The fair value of the Company’s senior notes are based upon prices of similar instruments in the marketplace and are as follows (in millions):

March 31, 2021 December 31, 2020
Fair Value Book Value Fair Value Book Value
Senior notes $ 6,123 $ 5,476 $ 6,277 $ 5,588


	March 31, 2022				December 31, 2021
	Fair Value		Book Value		Fair Value		Book Value
Senior notes	$	5,010	$	4,880	$	5,477	$	4,877

The carrying amounts of all other significant debt approximates fair value.

~~Net Investment Hedge~~

Table of Contents

The Company has designated the €300 million principal balance of the 3.75% senior notes due October 2021 as a net investment hedge of the foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets. At March 31, 2021, $11 million of deferred losses have been recorded in AOCL. See ~~Footnote 9~~ ~~for disclosures regarding the Company’s derivative financial instruments.~~

Footnote 910 —Derivatives

From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.

Interest Rate Contracts

The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. The cash paid and received from the settlement of interest rate swaps is included in interest expense.

Fair Value Hedges

At March 31, ~~2021,~~2022, the Company had approximately $100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against $100 million of principal on the 4.00% senior notes due 2024 for the remaining life of the note. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.

Cross-Currency Contracts

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements. The Company previously entered into 23 cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of ~~$900 million, which~~$1.3 billion. Each of these cross-currency swaps were designated as

~~Table of Contents~~

net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net ~~assets. With these cross-currency swaps, which mature in January~~assets, and ~~February 2025, respectively,~~ the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended March 31, 2022 and 2021, the Company recognized income of $5 million and $4 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through December ~~2021.~~2022. The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges. The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item. At March 31, ~~2021,~~2022, the Company had approximately ~~$397~~$467 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions. At March 31, ~~2021,~~2022, the Company had approximately ~~$879 million~~$1.2 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through December ~~2021.~~2022. Fair market value gains or losses are included in the results of operations and are classified in other ~~(income) expense, net.~~income, net in the Company's Condensed Consolidated Statement of Operations.

Table of Contents

The following table presents the fair value of derivative financial instruments at the dates indicated (in millions):

Fair Value of Derivatives

Assets (Liabilities)

Balance Sheet Location

March 31, 2021

December 31, 2020

Balance Sheet Location

March 31, 2022

December 31, 2021

Derivatives designated as effective hedges:

Cash Flow Hedges

Foreign currency contracts

Prepaid expenses and other current assets

Foreign currency contracts

Prepaid expenses and other current assets

Foreign currency contracts

Other accrued liabilities

(11)

(19)

Foreign currency contracts

Other accrued liabilities

(6)

(2)

Fair Value Hedges

Interest rate swaps

Other assets

Interest rate swaps

Other assets

—

Interest rate swaps

Other accrued liabilities

(1)

—

Net Investment Hedges

Cross-currency swaps

Prepaid expenses and other current assets

Cross-currency swaps

Prepaid expenses and other current assets

Cross-currency swaps

Other noncurrent liabilities

(63)

(102)

Cross-currency swaps

Other noncurrent liabilities

(34)

(41)

Derivatives not designated as effective hedges:

Foreign currency contracts

Prepaid expenses and other current assets

Foreign currency contracts

Prepaid expenses and other current assets

Foreign currency contracts

Other accrued liabilities

(5)

(17)

Foreign currency contracts

Other accrued liabilities

(21)

(14)

Total

(51)

(110)

Total

(21)

(17)

~~Table of Contents~~

The following table presents gain and (loss) activity (on a ~~pre-tax~~pretax basis) related to derivative financial instruments designated or previously designated, as effective hedges (in millions):


			Three Months Ended March 31, 2021				Three Months Ended March 31, 2020						Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
			Gain/(Loss)				Gain/(Loss)						Gain/(Loss)				Gain/(Loss)
		Location of gain/(loss) recognized in income	Recognized in OCI (effective portion)		Reclassified from AOCL to Income		Recognized in OCI (effective portion)		Reclassified from AOCL to Income			Location of gain/(loss) recognized in income	Recognized in OCI (effective portion)		Reclassified from AOCL to Income		Recognized in OCI (effective portion)		Reclassified from AOCL to Income
Interest rate swaps	Interest rate swaps	Interest expense, net	$	0	$	(2)	$	0	$	(2)	Interest rate swaps	Interest expense, net	$	—	$	(2)	$	—	$	(2)
Foreign currency contracts	Foreign currency contracts	Net sales and cost of products sold	3		(2)		35		1		Foreign currency contracts	Net sales and cost of products sold	(1)		1		3		(2)

Cross-currency swaps	Cross-currency swaps	Other (income) expense, net	36		0		21		0		Cross-currency swaps	Other income, net	4		—		36		—
Total	Total		$	39	$	(4)	$	56	$	(1)	Total		$	3	$	(1)	$	39	$	(4)

At March 31, ~~2021,~~2022, net deferred ~~losses~~gains of approximately ~~$14~~$10 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recognized expense of $3 million and income of $7 million, ~~and $12 million,~~ respectively, in other ~~(income) expense,~~income, net, related to derivatives that are not designated as hedging instruments. Gains and losses on these derivatives are mostly offset by foreign currency movement in the underlying exposure.

The Company is not a party to any derivatives that require collateral to be posted prior to settlement.

Table of Contents

Footnote 1011 — Employee Benefit and Retirement Plans

The components of pension and postretirement benefit (income) expense for the periods indicated, are as follows (in millions):

Pension Benefits
Three Months Ended March 31,
U.S. International
2021 2020 2021 2020
Service cost $ 0 $ 0 $ 1 $ 1
Interest cost 5 9 2 2
Expected return on plan assets (12) (15) (1) (2)
Amortization 5 6 1 1
Settlements 0 1 0 0
Total (income) expense $ (2) $ 1 $ 3 $ 2


			Pension Benefits
		U.S.	International
	Three Months Ended March 31,
			2022		2021		2022		2021
Service cost			$	—	$	—	$	1	$	1
Interest cost			6		5		2		2
Expected return on plan assets			(12)		(12)		(2)		(1)
Amortization			4		5		1		1

Total (income) expense			$	(2)	$	(2)	$	2	$	3


		Postretirement Benefits
	Three Months Ended March 31,
		2022		2021


Amortization		$	(1)	$	(1)
Total income		$	(1)	$	(1)

Postretirement Benefits
Three Months Ended
March 31,
2021 2020
Amortization $ (1) $ (1)
Total income $ (1) $ (1)
U.K. Defined Benefit Plan Buy-in

In February 2022, the Company entered into an agreement with an insurance company for a bulk annuity purchase or “buy-in” for one of its U.K. defined benefit pension plans, resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations to covered participants. The ~~components~~Company anticipates the “buy-out” for the plan to be completed by the end of ~~net periodic pension and postretirement costs other than~~2022 or early 2023. The non-cash settlement charge associated with the ~~service cost component are included in other (income) expense, net in~~transaction is expected to be material to the ~~Condensed Consolidated Statements~~Company's results of ~~Operations.~~operations.

~~Table of Contents~~

Footnote 1112 — Income Taxes

The Company’s effective income tax rate for the three months ended March 31, 2022 and 2021 were 17.0% and ~~2020 was~~ 29.4%, respectively, reflecting an increase in discrete tax benefits and ~~13.8%, respectively. The Company’s~~a lower effective income tax rate ~~fluctuates based on, among other factors,~~associated with the ~~geographic mix~~divestiture of ~~income.~~the CH&S business.

The difference between the U.S. federal statutory income tax rate of 21.0% and the Company’s effective income tax rate for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned as well as certain taxable income inclusion items in the U.S. based on foreign earnings.

The three months ended March 31, 2022 were also impacted by certain discrete items. Income tax expense for the three months ended March 31, 2022 included a discrete benefit of $4 million associated with the approval of certain state tax credits, offset by $14 million of income tax expense related to the divestiture of the CH&S business unit. The three months ended March 31, 2021 were also impacted by $1 million of discrete tax items. ~~The~~

During the three months ended March 31, ~~2020 were also impacted by~~2022, the Company amended its 2017 U.S. federal income tax return to carryback foreign tax credits generated in 2018 and capital losses generated in 2018 and 2020. This resulted in an increase in noncurrent income taxes receivable of approximately $261 million, a decrease in income taxes payable of approximately $95 million, and an increase in deferred tax liabilities of approximately $356 million.

The Company’s U.S. federal income tax returns for 2011 to 2015 and 2017 to 2019, as well as certain ~~discrete~~state and non-U.S. income tax ~~items. Income tax expense~~returns for three months ended March 31, 2020 included a discrete tax benefit of $15 million related to statute of limitations expirations and $8 million of prior period adjustments offset by tax expense of $27 million related to a change in the tax status of certain entities upon Internal Revenue Service approval during the first quarter, $7 million of excess book deductions related to equity-based compensation, and $5 million for effects of adopting the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Company concluded the effects of such prior period adjustments were not material to the current period or previously issued financial statements.various years, are under examination.

On June 18, 2019, the U.S. Treasury and the Internal Revenue Service (“IRS”) released temporary regulations under IRC Section 245A (“Section 245A”) as enacted by the 2017 U.S. Tax Reform Legislation (“2017 Tax Reform”) and IRC Section 954(c)(6) (the “Temporary Regulations”) to apply retroactively to the date the 2017 Tax Reform was enacted. On August 21, 2020, the U.S.

Table of Contents

Treasury and IRS released finalized versions of the Temporary Regulations (collectively with the Temporary Regulations, the “Regulations”). The Regulations seek to limit the 100% dividends received deduction permitted by Section 245A for certain dividends received from controlled foreign corporations and to limit the applicability of the look-through exception to foreign personal holding company income for certain dividends received from controlled foreign corporations. Before the retroactive application of the Regulations, the Company benefited in 2018 from both the 100% dividends received deduction and the look-through exception to foreign personal holding company income. The Company analyzed the Regulations and concluded the relevant Regulations were not validly issued. Therefore, the Company has not accounted for the effects of the Regulations in its Condensed Consolidated Financial Statements for the period ending March 31, ~~2021.~~2022. The Company believes it has strong arguments in favor of its position and believes it has met the more likely than not recognition threshold that its position will be sustained. However, due to the inherent uncertainty involved in challenging the validity of regulations, as well as a potential litigation process, there can be no assurances that the relevant Regulations will be invalidated or that a court of law will rule in favor of the Company. If the Company’s position on the Regulations is not sustained, the Company would be required to recognize an income tax expense of approximately $180 million to $220 million related to an income tax benefit from fiscal year 2018 that was recorded based on regulations in existence at the time. In addition, the Company may be required to pay any applicable interest and penalties. On April 4, 2022, in a case not involving the Company, the United States District Court for the District of Colorado granted the taxpayer's motion for summary judgment that the Temporary Regulations were not validly issued on the basis of improper promulgation. The Company is monitoring the impact of this decision and intends to continue to vigorously defend its position.

Footnote 1213 — Earnings Per Share

The computations of the weighted average shares outstanding for the periods indicated are as follows (in millions):


		Three Months Ended March 31,				Three Months Ended March 31,
			2021	2020			2022	2021
Weighted average shares outstanding			424.9	423.8
Share-based payment awards classified as participating securities (1)			0	0

Basic weighted average shares outstanding	Basic weighted average shares outstanding		424.9	423.8	Basic weighted average shares outstanding		421.9	424.9
Dilutive securities ~~(2)~~	Dilutive securities ~~(2)~~		2.7	0	Dilutive securities ~~(2)~~		2.8	2.7
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding		427.6	423.8	Diluted weighted average shares outstanding		424.7	427.6

~~(1)For the three months ended~~At March 31, ~~2021~~2022 and ~~2020,~~2021 dividends and equivalents for share-based awards ~~that are~~ expected to be forfeited dodid not have a material ~~effect~~impact on net income for basic and diluted earnings per share.

~~(2)The three months ended March 31, 2020 excludes 1.1 million of potentially dilutive share-based awards as their effect would be anti-dilutive.~~

At March 31, 2021 there were 0 potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share. At March 31, 2020, there were 0.7 million potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

~~Table of Contents~~

Footnote 1314 — Stockholders' Equity and Share-Based Compensation

During the three months ended March 31, ~~2021,~~2022, the Company awarded ~~1.1~~1.0 million performance-based restricted stock units ~~(RSUs)~~(“RSUs”), which had an aggregate grant date fair value of ~~$27~~$28 million and entitle the recipients to shares of the Company’s common stock primarily at the end of a three-year vesting period. The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions.

During the three months ended March 31, ~~2021,~~2022, the Company also awarded 0.6 million time-based RSUs with an aggregate grant date fair value of ~~$15~~$16 million. These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest either at the end of a three-year period or in equal installments over a three-year period.

During the three months ended March 31, ~~2021,~~2022, the Company also awarded ~~2.3~~2.2 million time-based stock options with an aggregate grant date fair value of $14 million. These stock options entitle recipients to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of the underlying shares as of the grant date and ~~primarily~~ vest in equal installments over a three-year period.

Table of Contents

The weighted average assumptions used to determine the fair value of stock options granted for the three months ended March 31, ~~2021,~~2022, is as follows:


Risk-free interest rates	~~0.8~~1.9	%
Expected volatility	~~44.2~~42.0	%
Expected dividend yield	5.1	%
Expected life (in years)	6
Exercise price	$~~23.79~~25.86

Share Repurchase Program

On February 6, 2022, the Company's Board of Directors authorized a $375 million Share Repurchase Program (“SRP”), effective immediately through the end of 2022. The Company’s common shares may be purchased by the Company in the open market, in negotiated transactions or in other manners, as permitted by federal securities laws and other legal requirements. On February 25, 2022, the Company repurchased $275 million of its shares of common stock beneficially owned by Carl C. Icahn and certain of his affiliates (collectively, “Icahn Enterprises”), at a purchase price of $25.86 per share, the closing price of the Company's common shares on February 18, 2022. At March 31, 2022, the Company has remaining authority to repurchase approximately $100 million of shares of common stock under the SRP.

Footnote 1415 — Fair Value Disclosures

Recurring Fair Value Measurements

The following table presents the Company’s non-pension financial assets and liabilities, which are measured at fair value on a recurring basis (in millions):


		March 31, 2021								December 31, 2020									March 31, 2022								December 31, 2021
		Fair value Asset (Liability)								Fair value Asset (Liability)									Fair value Asset (Liability)								Fair value Asset (Liability)
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Derivatives:	Derivatives:																	Derivatives:
Assets	Assets	$	0	$	28	$	0	$	28	$	0	$	28	$	0	$	28	Assets	$	—	$	41	$	—	$	41	$	—	$	40	$	—	$	40
Liabilities	Liabilities	0		(79)		0		(79)		0		(138)		0		(138)		Liabilities	—		(62)		—		(62)		—		(57)		—		(57)
Investment securities, including mutual funds	Investment securities, including mutual funds	9		0		0		9		10		0		0		10		Investment securities, including mutual funds	13		—		—		13		13		—		—		13

For publicly traded investment securities, including mutual funds, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1. ~~Other investment securities are primarily comprised of money market accounts that are classified as Level 2.~~ The Company determines the fair value of its derivative instruments using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. Accordingly, the Company’s derivative instruments are classified as Level 2.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, derivative instruments, notes payable and short and long-term debt. The carrying values for current financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate fair value due to the short maturity of such instruments. The fair values of the Company’s debt and derivative instruments are disclosed in Footnote 89 and Footnote 910, respectively.

~~Table of Contents~~

Nonrecurring Fair Value Measurements

The Company’s nonfinancial assets, which are measured at fair value on a nonrecurring basis, include property, plant and equipment, goodwill, intangible assets and certain other assets.

The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows. Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business growth rates, terminal values and discount rates. The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use of judgment and assumptions, such as the estimation of cash flow projections, terminal values, royalty rates, contributory cross charges, where applicable, and discount rates. Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy. These assets and certain liabilities are measured at fair value on a nonrecurring basis as part of the Company’s annual impairment testing and as circumstances require. In connection with the Company's annual impairment testing at December 1, ~~2020, an intangible asset~~2021, a tradename within the Learning and Development segment was fair valued at ~~$135~~$47 million on a non-recurring basis.

~~The Company reviews property, plant and equipmen~~Table of Contents

~~t and operating lease assets for~~ impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows. If the Company concludes that impairment exists, the carrying amount is reduced to fair value. ~~See Footnote 5~~ ~~for further information.~~

Footnote 1516 — Segment Information

~~Beginning January 1, 2021,~~On March 31, 2022, the Company ~~reported the operating~~sold its CH&S business unit to Resideo Technologies, Inc. The results of ~~its cookware product lines~~operations for CH&S continued to be reported in the Condensed Consolidated Statements of Operations as part of the ~~Food reporting unit within the Home~~Commercial Solutions segment and no longer as part of the former Appliances and Cookware segment. This change was the result of an assessment by the CODM to better align the cookware product lines with other similar product lines in various food categories. In connection with this change, the CEO for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines. The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments. In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment. Prior period comparable results for both of these segments have been reclassified to conform to this product line change. The Company also revised the calculation of operating income (loss) by segment to include restructuring charges. Prior period comparable results have been reclassified to conform to the change in calculation.through March 31, 2022.

The Company's 5 primary reportable segments are:

Segment

Key Brands

Description of Primary Products

~~Home Appliances~~

~~Calphalon®, Crock-Pot®, Mr. Coffee®, Oster® and Sunbeam®~~

~~Household products, including kitchen appliances~~

Commercial Solutions

~~BRK®, First Alert®, Mapa®, Quickie®,~~Mapa, Quickie, Rubbermaid Commercial ~~Products®,~~Products and ~~Spontex®~~Spontex

Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling ~~solutions; connected home~~solutions

Home Appliances

Calphalon, Crockpot, Mr. Coffee, Oster and ~~security and smoke and carbon monoxide alarms~~Sunbeam

Household products, including kitchen appliances

Home
Solutions

~~Ball®~~ Ball(1), ~~Calphalon®,~~Calphalon, Chesapeake Bay ~~Candle®, FoodSaver®, Rubbermaid®, Sistema®, WoodWick®~~Candle, FoodSaver, Rubbermaid, Sistema, WoodWick and Yankee ~~Candle®~~Candle

Food and home storage products; fresh preserving ~~products,~~products; vacuum sealing ~~products,~~products; gourmet cookware, bakeware and cutlery and home fragrance products

Learning and
Development

~~Aprica®,~~Aprica, Baby ~~Jogger®, Dymo®, Elmer’s®, EXPO®, Graco®,~~Jogger, Dymo, Elmer’s, EXPO, Graco, Mr. ~~Sketch®, NUK®,~~Sketch, NUK, Paper ~~Mate®, Parker®, Prismacolor®, Sharpie®, Tigex® Waterman®~~Mate, Parker, Prismacolor, Sharpie, Tigex, Waterman and ~~X-Acto®~~X-Acto

Baby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based adhesive and cutting products and labeling solutions

Outdoor and Recreation

~~Coleman®, Contigo®, ExOfficio®, Marmot®~~Coleman, Contigo, ExOfficio and Marmot

Products for outdoor and outdoor-related activities

(1)

and Ball® TM of Ball Corporation, used under license.

~~Table of Contents~~

This structure reflects the manner in which the ~~CODM~~chief operating decision maker (“CODM”) regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. ~~As a result~~

Table of the aforementioned changes, net sales, operating income (loss) and impairment of goodwill and indefinite-lived intangible assets for the three months ended March 31, 2020 and segment assets as of December 31, 2020 have been recast. Contents

Selected information by segment is presented in the following tables (in millions):

Three Months Ended
March 31,
2021 2020
Net sales (1)
Home Appliances $ 360 $ 261
Commercial Solutions 471 413
Home Solutions 504 377
Learning and Development 617 528
Outdoor and Recreation 336 307
$ 2,288 $ 1,886
Operating income (loss) (2)
Home Appliances $ 3 $ (299)
Commercial Solutions 50 (272)
Home Solutions 61 (301)
Learning and Development 110 4
Outdoor and Recreation 15 (474)
Corporate (47) (66)
$ 192 $ (1,408)
March 31, 2021 December 31, 2020
Segment assets
Home Appliances $ 902 $ 970
Commercial Solutions 2,530 2,529
Home Solutions 3,032 3,087
Learning and Development 4,568 4,663
Outdoor and Recreation 991 988
Corporate 2,317 2,463
$ 14,340 $ 14,700
Three Months
Ended
March 31, 2020
Impairment of goodwill and indefinite-lived intangibles assets (3)
Home Appliances $ 287
Commercial Solutions 320
Home Solutions 302
Learning and Development 78
Outdoor and Recreation 482
$ 1,469


	Three Months Ended March 31,
		2022		2021
Net sales (1)
Commercial Solutions		$	510	$	471
Home Appliances		340		360
Home Solutions		500		504
Learning and Development		650		617
Outdoor and Recreation		388		336
		$	2,388	$	2,288

Operating income (loss) (2)
Commercial Solutions		$	55	$	50
Home Appliances		(18)		3
Home Solutions		61		61
Learning and Development		130		110
Outdoor and Recreation		45		15
Corporate		(56)		(47)
		$	217	$	192

		March 31, 2022		December 31, 2021
Segment assets
Commercial Solutions (3)		$	1,973	$	2,522
Home Appliances		1,081		1,055
Home Solutions		3,130		3,109
Learning and Development		4,454		4,401
Outdoor and Recreation		1,029		907
Corporate		2,537		2,185
		$	14,204	$	14,179

(1)All intercompany transactions have been eliminated.

~~Table of Contents~~

(2)Operating income (loss) by segment is net sales less cost of products sold, SG&A, restructuring and impairment of goodwill, intangibles and other assets. Certain Corporate expenses of an operational nature are allocated to business segments primarily on a net sales basis. Corporate depreciation and amortization is allocated to the segments on a percentage of net sales basis and included in segment operating income.

(3)The ~~Company did 0t record any impairment charges during~~reduction in the ~~three months ended March 31, 2021. During~~Commercial Solutions segment assets is primarily due to the ~~three months ended~~ ~~March 31, 2020, the Company recorded impairment charges to reflect impairment of intangible assets related to certain~~sale of the ~~Company’s indefinite-lived trade names and goodwill. See~~ ~~Footnote 6~~ ~~for further information.~~CH&S business.

Table of Contents

The following tables disaggregates revenue by major product grouping source and geography for the periods indicated (in millions):


		Three Months Ended March 31, 2021
		Home Appliances		Commercial Solutions		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Home Appliances		$	360	$	0	$	0	$	0	$	0	$	360

															Three Months Ended March 31, 2022
															Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Commercial	Commercial	0		380		0		0		0		380		Commercial	$	401	$	—	$	—	$	—	$	—	$	401
Connected Home Security	Connected Home Security	0		91		0		0		0		91		Connected Home Security	109		—		—		—		—		109
Home Appliances														Home Appliances	—		340		—		—		—		340
Food	Food	0		0		274		0		0		274		Food	—		—		302		—		—		302
Home Fragrance	Home Fragrance	0		0		230		0		0		230		Home Fragrance	—		—		198		—		—		198
Baby and Parenting		0		0		0		281		0		281
Baby														Baby	—		—		—		291		—		291
Writing	Writing	0		0		0		336		0		336		Writing	—		—		—		359		—		359
Outdoor and Recreation	Outdoor and Recreation	0		0		0		0		336		336		Outdoor and Recreation	—		—		—		—		388		388

Total	Total	$	360	$	471	$	504	$	617	$	336	$	2,288	Total	$	510	$	340	$	500	$	650	$	388	$	2,388

North America	North America	$	195	$	344	$	401	$	426	$	177	$	1,543	North America	$	396	$	178	$	401	$	468	$	210	$	1,653
International	International	165		127		103		191		159		745		International	114		162		99		182		178		735
Total	Total	$	360	$	471	$	504	$	617	$	336	$	2,288	Total	$	510	$	340	$	500	$	650	$	388	$	2,388

		Three Months Ended March 31, 2020													Three Months Ended March 31, 2021
		Home Appliances		Commercial Solutions		Home Solutions		Learning and Development		Outdoor and Recreation		Total			Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Home Appliances		$	261	$	0	$	0	$	0	$	0	$	261
Commercial	Commercial	0		336		0		0		0		336		Commercial	$	380	$	—	$	—	$	—	$	—	$	380
Connected Home Security	Connected Home Security	0		77		0		0		0		77		Connected Home Security	91		—		—		—		—		91
Home Appliances														Home Appliances	—		360		—		—		—		360
Food	Food	0		0		214		0		0		214		Food	—		—		274		—		—		274
Home Fragrance	Home Fragrance	0		0		163		0		0		163		Home Fragrance	—		—		230		—		—		230
Baby and Parenting		0		0		0		244		0		244
Baby														Baby	—		—		—		281		—		281
Writing	Writing	0		0		0		284		0		284		Writing	—		—		—		336		—		336
Outdoor and Recreation	Outdoor and Recreation	0		0		0		0		307		307		Outdoor and Recreation	—		—		—		—		336		336

Total	Total	$	261	$	413	$	377	$	528	$	307	$	1,886	Total	$	471	$	360	$	504	$	617	$	336	$	2,288

North America	North America	$	154	$	302	$	297	$	374	$	192	$	1,319	North America	$	344	$	195	$	401	$	426	$	177	$	1,543
International	International	107		111		80		154		115		567		International	127		165		103		191		159		745
Total	Total	$	261	$	413	$	377	$	528	$	307	$	1,886	Total	$	471	$	360	$	504	$	617	$	336	$	2,288

~~Table of Contents~~

Footnote 1617 — Litigation and Contingencies

The Company is subject to various claims and lawsuits in the ordinary course of business, including from time to time, contractual disputes, employment and environmental matters, product and general liability claims, claims that the Company has infringed on the intellectual property rights of others, and consumer and employment class actions. Some of the legal proceedings include claims for punitive as well as compensatory damages. In the ordinary course of business, the Company is also subject to legislative requests, regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony and information in connection with various aspects of its activities. The Company previously disclosed that it had received a subpoena and related informal document requests from the SEC primarily relating to its sales practices and certain accounting matters for the time period beginning from January 1, 2016. The Company

Table of Contents

has cooperated with the SEC in connection with its investigation and ongoing requests for documents, testimony and information and intends to continue to do so. The Company cannot predict the timing or outcome of this investigation. Further, on June 30, 2021, the Company received a subpoena from the SEC requesting the production of documents related to its disclosure of the potential impact of the U.S. Treasury regulations described inFootnote 12 - Income Taxes.

Securities Litigation

Certain of the Company’s current and former officers and directors have been named in shareholder derivative lawsuits. On October 29, 2018, a shareholder filed a putative derivative complaint, Streicher v. Polk, et al., in the United States District Court for the District of Delaware (the “Streicher Derivative Action”), purportedly on behalf of the Company against certain of the Company's current and former officers and directors. On October 30, 2018, another shareholder filed a putative derivative complaint, Martindale v. Polk, et al., in the United States District Court for the District of Delaware (the “Martindale Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against the same defendants. The complaints allege, among other things, violations of the federal securities laws, breaches of fiduciary duties, unjust enrichment, and waste of corporate assets. The factual allegations underlying these claims are similar to the factual allegations made in the In re Newell Brands, Inc. Securities Litigation that was previously pending in the United States District Court for the District of New ~~Jersey, further described below.~~Jersey. That matter was dismissed by the District Court on January 10, 2020, and the dismissal was affirmed by the United States District Court of Appeals for the Third Circuit on December 1, 2020. The complaints seek ~~unspecified~~ damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures. The Streicher Derivative Action and the Martindale Derivative Action have been consolidated and the case is now known as In re Newell Brands Inc. Derivative Litigation (the “Newell Brands Derivative Action”), which is pending in the United States District Court for the District of Delaware. On March 22, 2021, the United States District Court for the District of Delaware stayed the Newell Brands Derivative Action pending the resolution of any motions for summary judgment filed in Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al. (described below). On December 30, 2020, ~~two~~2 shareholders filed a putative derivative complaint, Weber, et al. v. Polk, et al., in the United States District Court for the District of Delaware (the “Weber Derivative Action”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors. The complaint in the Weber Derivative Action alleges, among other things, breaches of fiduciary duty and waste of corporate assets. The factual allegations underlying these claims are similar to the factual allegations made in the Newell Brands Derivative Action. On March 19, 2021, the United States District Court for the District of Delaware stayed the Weber Derivative Action pending final disposition of Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al. (described below).

The Company and certain of its current and former officers and directors have been named as defendants in a putative securities class action lawsuit filed in the Superior Court of New Jersey, Hudson County, on behalf of all persons who acquired Company common stock pursuant or traceable to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden (the “Registration Statement”). The action was filed on September 6, 2018 and is captioned Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al., Civil Action No. HUD-L-003492-18. The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions in the Registration Statement regarding the Company’s financial results, trends, and metrics. The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other ~~relief, but has not specified the amount of damages being sought.~~relief. The Company ~~intends~~is currently unable to ~~defend~~predict the ultimate timing or outcome of this litigation ~~vigorously.~~

or reasonably estimate the range of possible losses. The Company maintains insurance intended to cover losses arising out of this litigation up to specified limits (subject to deductibles, coverage limits and ~~certain of its officers~~other terms and conditions), but any losses may exceed our current coverage levels, which could have ~~been named as defendants in 2 putative securities class action lawsuits, each filed in the United States District Court for the District of New Jersey,~~an adverse impact on behalf of all persons who purchased or otherwise acquired the Company's common stock between February 6, 2017 and January 24, 2018. The first lawsuit was filed on June 21, 2018 and is captioned Bucks County Employees Retirement Fund, Individually and on behalf of All Others Similarly Situated v. Newell Brands Inc., Michael B. Polk, Ralph J. Nicoletti, and James L. Cunningham, III, Civil Action No. 2:18-cv-10878 (United States District Court for the District of New Jersey). The second lawsuit was filed on June 27, 2018 and is captioned Matthew Barnett, Individually and on Behalf of All Others Similarly Situated v. Newell Brands Inc., Michael B. Polk, Ralph J. Nicoletti, and James L. Cunningham, III, Civil Action No. 2:18-cv-11132 (United States District Court for the District of New Jersey). On

~~Table of Contents~~

September 27, 2018, the court consolidated these 2 cases under Civil Action No. 18-cv-10878 (JMV)(JBC) bearing the caption In re Newell Brands, Inc. Securities Litigation. The court also named Hampshire County Council Pension Fund as the lead plaintiff in the consolidated case. The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations, and prospects between February 6, 2017 and January 24, 2018. The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but have not specified the amount of damages being sought. The Company intends to defend the litigation vigorously. On January 10, 2020, the court in In re Newell Brands Inc. Securities Litigation entered a dismissal with prejudice after granting the Company’s motion to dismiss. On February 7, 2020, the plaintiffs filed an appeal to the United States Court of Appeals for the Third Circuit. On December 1, 2020, the Court of Appeals affirmed the dismissal.our financial results.

Environmental Matters

The Company is involved in various matters concerning federal and state environmental laws and regulations, including matters in which the Company has been identified by the U.S. Environmental Protection Agency (“U.S. EPA”) and certain state environmental agencies as a potentially responsible party (“PRP”) at contaminated sites under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and equivalent state laws. In assessing its environmental response costs, the Company has considered several factors, including the extent of the Company’s volumetric contribution at each site relative to that of other PRPs; the kind of waste; the terms of existing cost sharing and other applicable agreements; the financial ability of other PRPs to share in the payment of requisite costs; the Company’s prior experience with similar sites; environmental studies and cost estimates available to the Company; the effects of inflation on cost estimates; and the extent to which the Company’s, and other parties’, status as PRPs is disputed.

Table of Contents

The Company’s estimate of environmental remediation costs associated with these matters at March 31, ~~2021~~2022 was ~~$41~~$37 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets. No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters. Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

Lower Passaic River Matter

Background

The U.S. EPA has issued General Notice Letters ~~(“GNLs”)~~ to over 100 entities, including the Company and its subsidiary, Berol Corporation ~~a subsidiary of~~(together, the ~~Company (“Berol”~~“Company Parties”), alleging that they are PRPs at the Diamond Alkali Superfund Site ~~which includes a 17-mile stretch~~(“Site”) pursuant to the CERCLA. The Site is the subject of ~~the Lower Passaic River~~investigation and ~~its tributaries. NaN of the GNL recipients, including the Company on behalf of itself and Berol~~remedial activities (the ~~“Company Parties”), have taken over the performance of the remedial investigation (“RI”~~“CERCLA Administrative Actions”) and feasibility study (“FS”) for the Lower Passaic River. On April 11, 2014, while work on the RI/FS remained underway, U.S. EPA issued a Source Control Early Action Focused Feasibility Study (“FFS”), which proposed 4 alternatives for remediation of the lower 8.3 miles of the Lower Passaic River. U.S. EPA’s cost estimates for its cleanup alternatives ranged from approximately $315 million to approximately $3.2 billion in capital costs plus from approximately $1 million to $2 million in annual maintenance costs for 30 years,related settlement negotiations with its preferred alternative carrying an estimated cost of approximately $1.7 billion plus an additional approximately $2 million in annual maintenance costs for 30 years. In February 2015, the participating parties submitted to the U.S. EPA a draft RI, followed by submission of a draft FS in April 2015. The draft FS sets forth various alternatives for remediating the lower 17 miles of the Passaic River, ranging from a “no action” alternative, to targeted remediation of locations along the entire lower 17 mile stretch of the river, to remedial actions consistent with U.S. EPA’s preferred alternative as set forth in the FFS for the lower 8.3 miles coupled with monitored natural recovery and targeted remediation in the upper 9 miles. The cost estimates for these alternatives ranged from approximately $28 million to $2.7 billion, including related operation, maintenance and monitoring costs. U.S. EPA issued a conditional approval of the RI report in June 2019.

U.S. EPA issued a Record of Decision for the lower 8.3 miles of the Lower Passaic River in March 2016 (the “2016 ROD”). The 2016 ROD finalizes as the selected remedy the preferred alternative set forth in the FFS, which U.S. EPA estimates will cost $1.4 billion. Subsequent to the release of the 2016 ROD, U.S. EPA issued GNLs for the lower 8.3 miles of the Lower Passaic River (the “2016 GNL”) to numerous entities, apparently including all previous recipients of the initial GNL, including Company Parties, as well as several additional entities. The 2016 GNL states that U.S. EPA would like to determine whether one entity, Occidental Chemical Corporation (“OCC”), will voluntarily perform the remedial design for the selected remedy for the lower 8.3 miles, and that following execution of an agreement for the remedial design, U.S. EPA plans to begin negotiation of a remedial

~~Table of Contents~~

action consent decree “under which OCC and the other major PRPs will implement and/or pay for U.S. EPA’s selected remedy for the lower 8.3 miles of the Lower Passaic River and reimburse U.S. EPA’s costs incurred for the Lower Passaic River.”

EPA. In September 2016, OCC and EPA entered into an Administrative Order on Consent for performance of the remedial design. On March 30, 2017, U.S. EPA sent a letter offering a cash settlement in the amount of $0.3 million to 20 PRPs, not includingaddition, the Company Parties ~~for CERCLA Liability (with reservations, such as for Natural Resource Damages) in the lower 8.3 miles of the Lower Passaic River. U.S. EPA further indicated~~are defendants in related ~~correspondence that a cash-out settlement might be appropriate for additional parties that are “not associated with~~litigation, and the release of dioxins, furans, or PCBs to the Lower Passaic River.” Then, by letter dated September 18, 2017, U.S. EPA announced an allocation process involving all GNL recipients except those participating in the first-round cash-out settlement, and 5 public entities. The letter affirms that U.S. EPA anticipates eventually offering cash-out settlements to a number of parties, and that it expects “that the private PRPs responsible for release of dioxin, furans, and/or PCBs will perform the OU2 lower 8.3 mile remedial action.” At this time, it is unclear how the cost of any cleanup would be allocated among any of the parties, including the Company Parties or any other entities. The siteSite is also subject to a Natural Resource Damage Assessment.

~~Following discussion~~CERCLA Administrative Actions

The Site is divided into 4 “operable units,” and the Company Parties have received General Notice Letters in connection with operable unit 2, which comprises the lower 8.3 miles of the Lower Passaic River and its tributaries (“Unit 2”), and operable unit 4, which comprises a 17-mile stretch of the Lower Passaic River and its tributaries (“Unit 4”). Unit 2 is geographically subsumed within Unit 4.

Unit 4 Investigation

The Company received its first general notice letter pertaining to Unit 4 in 2003. Beginning in 2004, the Company Parties, together with numerous other PRPs, entered into several administrative agreements with the U.S. EPA ~~regarding~~to fund and perform various investigation and clean-up activities in Unit 4. Pursuant to a 2007 Administrative Order on Consent, over 70 PRPs, including the ~~2015 draft FS,~~Company Parties, have been performing or funding the remedial investigation and feasibility study for Unit 4. The parties performing the remedial investigation and feasibility study submitted the results of their remedial investigation to the U.S. ~~EPA’s issuance of the 2016 ROD, the participating parties refocused the FS~~EPA in July 2019. They also submitted an interim remedy feasibility study focused on the upper 9 miles of Unit 4 in September 2021. Activity under the ~~Lower Passaic River. The parties submitted most portions of a final Interim Remedy FS (the “Draft IR FS”) on August 7, 2020, setting forth~~ remedial ~~alternatives ranging from “no further action” to targeted dredging~~investigation and ~~capping with different targets~~feasibility study for ~~post-remedy surface weighted average concentration of contamination. The cost estimates for these active alternatives range from approximately $321 million to $468 million.~~Unit 4 is not yet complete and remains underway.

In October 2021, the U.S. EPA ~~has indicated it aims to have the IR FS finalized and to issue~~issued a Record of Decision for an interim remedy for the upper 9 miles of Unit 4, selecting a combination of dredging and capping as the remedial alternative, which the U.S. EPA estimates will cost $441 million in ~~early 2021.~~the aggregate.

~~OCC has asserted~~Unit 2 Investigation

Concurrent with activities under the remedial investigation and feasibility study for Unit 4, the U.S. EPA performed a Source Control Early Action Focused Feasibility Study for Unit 2, which culminated in a Record of Decision in 2016. The U.S. EPA estimates that ~~it is entitled~~the selected remedy for Unit 2 set forth in its Record of Decision will cost $1.4 billion in the aggregate. The U.S. EPA then issued a General Notice Letter for Unit 2 to ~~indemnification by Maxus Energy Corporation (“Maxus”) for its liability~~the Company Parties and over 100 other entities, including those that received a General Notice Letter in connection with Unit 4. The Unit 2 General Notice Letter requested that Occidental Chemical Corporation (“OCC”) perform the ~~Diamond Alkali Superfund Site.~~remedial design for Unit 2, which OCC subsequently agreed to perform. The General Notice Letter indicated that, following execution of a remedial design consent decree, the U.S. EPA would begin negotiating a remedial action consent decree for Unit 2 with OCC and other major PRPs.

2016 Record of Decision and 2021 Record of Decision Remedy Performance

In March 2022, U.S. EPA issued a Notice of Potential Liability and Notice of Consent Decree Negotiations to OCC and several other entities, excluding the Company Parties, encouraging those parties to finance and perform the remedies selected in the 2016 and 2021 Records of Decision. The U.S. EPA specifically identified OCC and four other companies as “work parties” in connection with Units 2 and 4. The Company Parties were not recipients of this notice and were not identified as work parties.

Table of Contents

The U.S. EPA Settlement

In September 2017, the U.S. EPA announced an allocation process involving roughly 80 Unit 2 General Notice Letter recipients, with the intent of offering cash-out settlements to a number of parties (the “U.S. EPA Settlement”). The PRPs responsible for release of dioxin, furans, and/or polychlorinated biphenyls would be expected to perform the remedial action for Unit 2 and would be excluded from the U.S. EPA Settlement. The allocation process has ~~also asserted that Maxus’s parent company, YPF, S.A.,~~concluded. In February 2022, the U.S. EPA and certain ~~other affiliates (the “YPF Entities”) similarly must indemnify OCC,~~parties to the allocation, including onthe Company Parties, reached an ~~“alter ego” theory. On June 17, 2016, Maxus~~agreement in principle concerning a cash-out settlement for both Unit 2 and ~~certain~~Unit 4. The agreement in principle remains subject to the negotiation and court entry of ~~its affiliates commenced~~ a ~~chapter 11 bankruptcy case in~~consent decree finalizing the U.S. ~~Bankruptcy Court for the District of Delaware.~~ EPA Settlement.

The OCC Litigation

In connection with that proceeding, the YPF Entities are attempting to resolve any liability they may have to Maxus and the other Maxus entities undergoing the chapter 11 bankruptcy. An amended Chapter 11 plan of liquidation became effective in July 2017. In conjunction with that plan, Maxus and certain otherJune 2018, OCC sued over 100 parties, including the Company ~~entered into a mutual contribution release agreement (“Passaic Release”) pertaining to certain costs, but not costs associated with ultimate remedy.~~

~~On June 30, 2018, OCC sued 120 parties, including the Company and Berol,~~Parties, in the U.S. District Court in New Jersey ~~(“OCC Lawsuit”). OCC subsequently filed a separate, related complaint against five additional defendants. The OCC Lawsuit includes claims, counterclaims and cross-claims for~~pursuant to CERCLA, requesting cost recovery, contribution, and a declaratory ~~judgement under CERCLA.~~judgement. The ~~current,~~defendants, in turn, filed claims against 42 third-party defendants, and filed counterclaims against OCC (collectively, the “OCC Litigation”). The primary focus of the ~~claims, counterclaims and cross-claims against the defendants is on~~OCC Litigation has been certain past and future costs for investigation, design and remediation of ~~the 17-mile stretch~~Units 2 and 4. However, OCC has stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the ~~Lower Passaic River and its tributaries, other than those subject to~~Site, after the ~~Passaic Release. The complaint notes, however,~~U.S. EPA has selected the Newark Bay remedy. OCC has also stated that ~~OCC~~it may broaden its claims in the future ~~if and when EPA selects remedial actions for other portions~~after completion of the ~~Site or completes~~Natural Resource Damage Assessment described below.

In a Motion for Stay of Proceedings filed in January 2022, certain defendants and all third-party defendants in the OCC Litigation moved to stay the case for a six-month period to allow the final stage of the parallel allocation proceedings and resulting settlement negotiations in the U.S. EPA Settlement to conclude. The U.S. District Court denied the motion in March 2022.

The Company Parties continue to vigorously defend the OCC Litigation. At this time, the Company cannot predict the eventual outcome.

The Natural Resource Damage Assessment

In 2007, the National Oceanic and Atmospheric Administration (“NOAA”), acting as the lead administrative trustee on behalf of itself and the U.S. Department of the Interior, issued a Notice of Intent to Perform a Natural Resource Damage ~~Assessment. Given the uncertainties pertaining~~Assessment to this matter, including that U.S. EPA is still reviewing the FS, that no framework for or agreement on allocation for the investigation and ultimate remediation has been developed, and that there exists the potential for further litigation regarding costs and cost sharing, the extent to which the Company Parties, ~~may be held liable or responsible is not yet known. OCC stated in a subsequent filing that it “anticipates” asserting additional claims against~~along with numerous other entities, identifying the ~~defendants “regarding Newark Bay,” which is also part~~recipients as PRPs. The federal trustees (who now include the United States Department of Commerce, represented by NOAA, and the Department of the ~~Diamond Alkali Superfund Site, after~~Interior, represented by the United States Fish and Wildlife Service) are presently undertaking the Natural Resource Damage Assessment.

As of the date of filing of this Quarterly Report, based on the agreement in principle noted above, the Company does not expect that its allocation in the U.S. EPA ~~has decided~~Settlement relating to Unit 2 and Unit 4, if the ~~Newark Bay remedy.~~settlement is finalized, will be material to the Company. With respect to the OCC Litigation and Natural Resource Damage Assessment, the Company is currently unable to reasonably estimate the range of possible losses.

Based on currently known facts and circumstances, the Company does not believe that ~~this~~the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of ~~operations, including, among other factors, because there are numerous other parties who will likely share in any costs of remediation and/or damages.~~operations. However, in the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

~~Table of Contents~~

Other Matters

Although management of the Company cannot predict the ultimate outcome of these proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Consolidated Financial Statements, except as otherwise described above.

In the normal course of business and as part of its acquisition and divestiture strategy, the Company may provide certain representations and indemnifications related to legal, environmental, product liability, tax or other types of issues. Based on the nature of these representations and indemnifications, it is not possible to predict the maximum potential payments under all of these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements did not have a material effect on the Company’s business, financial condition or results of operations. In connection with the 2018 sale of The Waddington Group,

Table of Contents

Novolex Holdings, Inc. (the “Buyer”) filed suit against the Company in October 2019 in the Superior Court of Delaware. The Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group. In the year ended December 31, 2021 the Company recorded an immaterial reserve to continuing operations in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter. Further, in connection with the Company’s sale of The United States Playing Card Company ~~intends~~(“USPC”), Cartamundi, Inc. and Cartamundi España, S.L., (the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to ~~defend~~ the ~~litigation vigorously.~~extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was recently filed against USPC.

Although management of the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 17.

At March 31, ~~2021,~~2022, the Company had approximately ~~$53~~$48 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

2524

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Newell Brands Inc.’s (“Newell Brands,” the “Company,” “we,” “us” or “our”) consolidated financial condition and results of operations. The discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto.

Forward-Looking Statements

Forward-looking statements in this Report are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements generally can be identified by the use of words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” ~~"setting~~“setting up,~~" "beginning~~” “beginning to,"” “will,” “should,” “would,” ~~"resume," "are~~“could,” “resume,” “are confident that,~~" "remain~~” “remain optimistic ~~that"~~that,” “seek to,” or similar statements. The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to:

•the Company's ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 ~~pandemic;~~pandemic, including as a result of any additional variants of the virus or the efficacy and distribution of vaccines;

•the Company’s dependence on the strength of retail and consumer demand, commercial and industrial sectors of the economy in various ~~parts of~~countries around the world;

•competition with other manufacturers and distributors of consumer products;

•major retailers’ strong bargaining power and consolidation of the Company’s customers;

•changes in the prices and availability of labor, transportation, raw materials and sourced products, including significant inflation, and the Company's ability to obtain them in a timely manner and to offset cost increases through pricing and productivity;

•the Company’s ability to improve productivity, reduce complexity and streamline operations;

•the cost and outcomes of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties, including but not limited to those described in Footnote 17 of the Notes to the Unaudited Condensed Consolidated Financial Statements, the potential outcomes of which could exceed policy limits, to the extent insured;

•the Company’s ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;

•the Company's ability to ~~successfully remediate its material weakness in internal control over financial reporting and to~~consistently maintain effective internal control over financial reporting;

•risks related to the Company’s substantial indebtedness, potential increases in interest rates or changes in the Company’s credit ratings;

•future events that could adversely affect the value of the Company’s assets and/or stock price and require additional impairment charges;

•the ~~impact of cost~~Company's ability to complete planned divestitures, and other unexpected costs or expenses associated with ~~acquisition and divestitures;~~dispositions;

•our ability to effectively execute our turnaround plan;

•~~changes in the prices of raw materials and sourced products, including inflation, and the Company's ability to obtain raw materials and sourced products in a timely manner;~~

•~~the impact of governmental investigation, inspections, lawsuits, legislation requests or other actions or other activities by third parties;~~

•the risks inherent to the Company’s foreign operations, including currency fluctuations, exchange controls and pricing restrictions;

•a failure or breach of one of the Company’s key information technology systems, networks, processes or related controls or those of the Company’s ~~services~~service providers;

•the impact of United States orand foreign regulations on the Company’s operations, including the impact of tariffs and environmental remediation ~~costs;~~costs and legislation and regulatory actions related to climate change;

•the potential inability to attract, retain and motivate key employees;

•changes in tax laws and the resolution of tax contingencies resulting in additional tax liabilities;

•product liability, product recalls or related regulatory actions;

•the Company’s ability to protect its intellectual property rights;

•significant increases in the funding obligations related to the Company’s pension ~~plans~~plans; and

•other factors listed from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

The information contained in this Report is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this Report as a result of new information or future events or developments. In addition, there can be no assurance that the Company has correctly identified and assessed all of the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct.

2625

Table of Contents

Overview

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including ~~Rubbermaid®,~~Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper ~~Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr.Coffee®,~~Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Rubbermaid Commercial ~~Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Contigo®, First Alert®, Mapa®, Spontex®~~Products, Spontex, Coleman, Campingaz, Contigo, Oster, Sunbeam and ~~Yankee Candle®.~~Mr. Coffee. Newell ~~Brands is committed to enhancing the~~Brands' beloved brands enhance and brighten consumers lives ~~of consumers around the world with planet friendly, innovative~~at home and ~~attractive products that create~~outside by creating moments of joy, building confidence and ~~provide~~providing peace of mind. The Company sells its products in nearly 200 countries around the world and has operations on the ground in over 40 of these countries, excluding third-party distributors.

Business Strategy

The Company is continuing to execute on its turnaround strategy of building a global, next generation consumer products company that can unleash the full potential of its brands in a ~~fast moving~~fast-moving omni-channel environment. The strategy, developed in 2019, is designed ~~to drive~~to:

•Drive sustainable top line growth ~~improve~~by focusing on innovation, sharpening brand positioning, strengthening the international businesses, enhancing digital marketing and omni-channel capabilities, and building customer relationships;

•Improve operating margins ~~accelerate~~by driving productivity and overhead savings, while reinvesting in the business;

•Accelerate cash conversion cycle by focusing on cash efficiency and ~~strengthen~~improving key working capital metrics;

•Strengthen the portfolio by investing in attractive categories that are aligned with its capabilities and strategy and optimizing product mix; and

•Strengthen organizational capabilities and employee engagement by building a winning team and focusing the best people on the right things.

The Company is implementing this strategy while addressing key challenges ~~facing the Company. These challenges include:~~such as shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail ~~landscape, including the growth in e-commerce;~~landscape; continued macroeconomic and ~~political volatility~~geopolitical volatility; significant inflationary and supply chain pressures, and an evolving regulatory landscape. The ~~COVID-19~~coronavirus (COVID-19) pandemic and its impact to the Company’s business resulted in the acceleration of ~~these~~the turnaround initiatives in many respects.

~~The Company has made significant progress on the following imperatives it previously identified as part of its turnaround strategy:~~

•~~Strengthening the portfolio by investing in attractive categories aligned with its capabilities and strategy;~~

•~~Driving sustainable profitable growth by focusing on innovation, as well as growth in digital marketing, e-commerce and its international businesses;~~

•~~Improving margins by driving productivity and overhead savings, while reinvesting into the business;~~

•~~Enhancing cash efficiency by improving key working capital metrics, resulting in a lower cash conversion cycle; and~~

•~~Building a winning team through engagement and focusing the best people on the right things.~~

Continued execution of these strategic imperatives, in combination with new initiatives aimed to build operational excellence, will better position the Company for long-term sustainable growth. One such initiative that was announced in the third quarter of 2021 is Project Ovid, a multi-year, customer centric supply chain initiative to transform the Company's go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies. This initiative is expected to leverage technology to further simplify the organization by harmonizing and automating processes. Project Ovid is designed to optimize the Company’s distribution network by creating a single integrated supply chain from 23 business-unit-centric supply chains. The initiative is intended to reduce administrative complexity, improve inventory and invoicing workflow for our customers and enhance product availability for consumers through omni-channel enablement. This new operating model is also expected to drive efficiencies by better utilizing the Company's transportation and distribution network.

2726

Table of Contents

Organizational Structure

On March 31, 2022, the Company sold its Connected Home & Security (“CH&S”) business unit to Resideo Technologies, Inc. The results of operations for CH&S continued to be reported in the Condensed Consolidated Statements of Operations as part of the Commercial Solutions segment through March 31, 2022.

The Company's five primary reportable segments are the following:

Segment

Key Brands

Description of Primary Products

~~Home Appliances~~

~~Calphalon®, Crock-Pot®, Mr. Coffee®, Oster® and Sunbeam®~~

~~Household products, including kitchen appliances~~

Commercial Solutions

~~BRK®, First Alert®, Mapa®, Quickie®,~~Mapa, Quickie, Rubbermaid Commercial ~~Products®,~~Products and ~~Spontex®~~Spontex

Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling ~~solutions; connected home~~solutions

Home Appliances

Calphalon, Crockpot, Mr. Coffee, Oster and ~~security and smoke and carbon monoxide alarms~~Sunbeam

Household products, including kitchen appliances

Home
Solutions

Food and home storage products; fresh preserving ~~products,~~products; vacuum sealing ~~products,~~products; gourmet cookware, bakeware and cutlery and home fragrance products

Learning and
Development

Baby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based adhesive and cutting products and labeling solutions

Outdoor and Recreation

~~Coleman®, Contigo®, ExOfficio®, Marmot®~~Coleman, Contigo, ExOfficio and Marmot

Products for outdoor and outdoor-related activities

(1)

and Ball® TM of Ball Corporation, used under license.

This structure reflects the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate. See Footnote 1516 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Recent Developments

~~Coronavirus (COVID-19)~~

The COVID-19 pandemic, which began in late 2019, has continued to disrupt the Company’s global operations, similar to those of many large, multi-national corporations in three primary areas:

Supply chain. Of the Company's 135 manufacturing and distribution facilities, approximately 20 were temporarily closed at the end of the first quarter of 2020, the most significant of which were its South Deerfield, MA, Home Fragrance plant, its Mexicali, Mexico and India Writing facilities and its Juarez, Mexico Connected Home and Security facility, all of which were closed in accordance with government guidelines. The majority of the Company’s manufacturing and distribution facilities reopened during the second and third quarter of 2020, and have since been operating at or near capacity with inventory levels replenished. The Company ~~does, however, continue~~continues to face ~~intermittent~~significant product, supply and labor shortages, capacity constraints ~~transportation~~ and logistical challenges across its businesses, including port congestion, constrained shipping container availability and delays in carrier pickup, which have negatively impacted the Company's ability to satisfy demand for its products, creating order backlog in a number of categories. The Company also continues to face significantly higher than expected inflation infor commodities, including resin and metals, sourced finished goods, transportation and ~~components, freight and fuel.~~labor, which had a negative high-single-digit-percentage impact to costs of products sold in the first quarter of 2022. These various disruptions are expected to persist, ~~until~~at least in the ~~current economic~~near-term. To help mitigate the negative impact of inflation to the operating performance of its businesses, the Company has secured selective pricing increases, accelerated productivity initiatives and ~~public health conditions improve globally.~~deployed overhead cost containment efforts.

~~Retail~~Retail.. While the Company’s largest retail customers experienced a surge in sales as their stores remained open, a number of secondary customers, primarily in the specialty and department store channels, temporarily closed their ~~brick and mortar~~brick-and-mortar doors in March 2020, and began to reopen in certain regions where conditions improved towards the end of the second quarter of 2020. These dynamics, in combination with some retailers’ prioritization of essential items, have had a meaningful impact on the Company's traditional order patterns. In addition, the Company temporarily closed its Yankee Candle retail stores in North America inas of mid-March of ~~2020.~~2020 due to COVID-19. These stores reopened by the end of the third quarter inof 2020 and have remained open since.

Table of Contents

Consumer demand patterns. During the quarantine phase of the pandemic in 2020, consumer purchasing behavior strongly shifted to certain focused categories. ~~Certain~~At that time, certain of the Company’s product categories ~~have continued to benefit~~benefited from this shift, primarily in Food, Commercial and Home Appliances. Some of the Company’s other businesses ~~have seen positive momentum with~~were negatively impacted but experienced a ~~rebound~~surge in demand post lockdowns, in particular Writing, Baby and ~~Parenting~~Home Fragrance. While the seasonality of the Company's businesses reverted back to historical trends in 2021, uncertainty still remains over the volatility and ~~Home Fragrance.~~direction of future consumer demand patterns as certain of its businesses are lapping the prior-year surge in demand.

~~Table of Contents~~

The Company believes the extent of the impact of the COVID-19 pandemic ~~to its businesses,~~on the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be ~~primarily~~ driven by numerous evolving factors that the Company cannot accurately predict and which will vary by jurisdiction and market, including severity and duration of the pandemic, the ~~impact~~emergence of new strains and variants of the coronavirus, the ~~pandemic’s impact on~~likelihood of a resurgence of positive cases or hospitalizations, the ~~U.S.~~development and ~~global economies~~availability of effective treatments and ~~the timing, scope and effectiveness of federal, state and local governmental administration of~~ vaccines, ~~to the general public,~~ especially in areas where conditions have recently worsened and ~~lockdowns~~work restrictions, operational or travel bans have been ~~reinstituted. Those primary drivers~~reinstituted, the rate at which vaccines are ~~beyond~~administered to the general public, the timing and amount of fiscal stimulus and relief programs packages that may become available to the general public in the future, and any changes in consumer demand patterns for the Company's ~~knowledge and control, and~~products as a result, at this time it is difficult to predict the cumulative impact, both in terms of severity and duration, COVID-19 pandemic will have on its future sales, operating results, cash flows and financial condition. Furthermore, the impact toof the ~~Company's businesses, operating results, cash flows, liquidity~~global pandemic lessens.

With the spread of new strains and ~~financial condition may be further adversely impacted if the COVID-19 pandemic continues to exist or worsens for a prolonged period of time, new~~ variants of the coronavirus, ~~emerge,~~ the Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level on whether to reinstate and/or ~~if plans~~extend certain initiatives previously implemented to ~~administer vaccines are delayed.~~help contain the spread of COVID-19, and the Company has mandated vaccinations for its U.S. professional and office-based employees.

~~Redemption~~Sale of ~~Senior Notes~~Connected Home & Security

On March ~~1, 2021 (the “Redemption Date”),~~31, 2022, the Company ~~redeemed~~sold its ~~3.15% senior notes that were scheduled~~CH&S business unit to ~~mature~~Resideo Technologies, Inc., for approximately $593 million, subject to customary working capital and other post-closing adjustments. As a result, the Company recorded a pretax gain of $130 million, which was included in ~~April 2021 (the “April 2021 Notes”) at a redemption price equal to 100%~~other income, net in its Condensed Consolidated Statements of ~~the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the Redemption Date.~~Operations.

~~During~~Share Repurchase Program

On February 6, 2022, the ~~first quarter~~Company's Board of ~~2021,~~Directors authorized a $375 million Share Repurchase Program (“SRP”), effective immediately through the end of 2022. The Company’s common shares may be purchased by the Company in the open market, in negotiated transactions or in other manners, as permitted by federal securities laws and other legal requirements. On February 25, 2022, the Company repurchased $5$275 million of its shares of common stock beneficially owned by Carl C. Icahn and certain of his affiliates (collectively, “Icahn Enterprises”), at a purchase price of $25.86 per share, the ~~3.85% senior notes due 2023 at~~closing price of the Company's common shares on February 18, 2022. At March 31, 2022, the Company has remaining authority to repurchase approximately ~~5% above par value. The total consideration, excluding accrued interest, was approximately $5 million.~~$100 million of shares of common stock under the SRP.

Debt Ratings

On February 11, 2022, S&P Global Inc. (“S&P”) upgraded the Company’s debt rating to “BBB-” from “BB+” as S&P believed the Company has been able to achieve S&P’s target debt level. As a result of ~~the partial debt repurchase~~this upgrade, the Company ~~recorded~~is now in a position to access the commercial paper market, up to a maximum of $800 million provided there is a sufficient amount available for borrowing under the Company's $1.25 billion revolving credit facility maturing in December 2023 (the “Credit Revolver”). In addition, the interest rate on the relevant senior notes decreased by 25 basis points due to the upgrade, reducing the Company’s interest expense by approximately $10 million on an ~~immaterial loss.~~annualized basis (approximately $8 million in 2022). However, certain of the Company’s outstanding senior notes aggregating to approximately $4.2 billion are still subject to an interest rate adjustment of 25 basis points in connection with the Moody’s Corporation (“Moody’s”) downgraded debt rating in 2020.

~~See~~ ~~Footnote 8of the Notes to the Unaudited Condensed Consolidated Financial Statements~~ ~~for further information.~~

~~Results~~

Table of ~~Operations~~Contents

Three Months Ended March 31, ~~2021~~2022 vs. Three Months Ended March 31, ~~2020~~2021

Consolidated Operating Results


		Three Months Ended March 31,										Three Months Ended March 31,
(in millions)	(in millions)	2021			2020			$ Change		% Change	(in millions)	2022			2021			$ Change		% Change
Net sales	Net sales	$	2,288		$	1,886		$	402	21.3%	Net sales	$	2,388		$	2,288		$	100	4.4%
Gross profit	Gross profit	731			617			114		18.5%	Gross profit	740			731			9		1.2%
Gross margin	Gross margin	31.9		%	32.7		%				Gross margin	31.0		%	31.9		%

Operating income (loss)		192			(1,408)			1,600		NM
Operating income											Operating income	217			192			25		13.0%
Operating margin	Operating margin	8.4		%	(74.7)		%				Operating margin	9.1		%	8.4		%

Interest expense, net	Interest expense, net	67			63			4		6.3%	Interest expense, net	59			67			(8)		(11.9)%

Other (income) expense, net		(1)			12			(13)		NM
Income (loss) before income taxes		126			(1,483)			1,609		NM
Income tax provision (benefit)		37			(204)			241		NM
Other income, net											Other income, net	(124)			(1)			(123)		NM
Income before income taxes											Income before income taxes	282			126			156		NM
Income tax provision											Income tax provision	48			37			11		29.7%
Income tax rate	Income tax rate	29.4		%	13.8		%				Income tax rate	17.0		%	29.4		%

Diluted earnings (loss) per share attributable to common shareholders		$	0.21		$	(3.02)
NM - NOT MEANINGFUL
Net income											Net income	$	234		$	89		$	145	NM

Diluted earnings per share attributable to common shareholders											Diluted earnings per share attributable to common shareholders	$	0.55		$	0.21

NM - NOT MEANINGFUL

Net sales increased ~~21%~~4%, ~~with all~~driven by growth in the Commercial Solutions, Learning and Development and Outdoor and Recreation segments, partially offset by declines in the Home Appliances and ~~major geographic regions showing growth.~~Home Solutions segments, which lapped the prior year impact of a surge in consumer demand. This growth primarily reflects strong demand from e-commerce channels and large retail store customers for stay at home, food preservation, baby care, cleaning and sanitation products, pens, markers, fine writing and labeling categories,pricing actions by the Company as well as ~~scented candles.~~customer inventory replenishment, partially offset by softening consumption in certain categories in the U.S. and certain category exits in the Outdoor and Recreation and Home Appliances segments. As result of the ongoing supply chain constraints, the first quarter results benefited from a shift in customer orders normally placed in the second quarter of the year. Changes in foreign currency ~~favorably~~unfavorably impacted net sales by ~~$32~~$41 million, or 2%.

Gross profit increased ~~18% and gross~~slightly compared to prior year. Gross profit margin declined to ~~31.9%~~31.0% as compared with ~~32.7%~~31.9% in the prior year period. The decrease in gross margin was driven by significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor, which had a negative high-single-digit-percentage impact to costs of products sold. The gross margin decline was ~~driven~~partially offset by ~~input~~favorable net pricing and gross productivity. Changes in foreign currency exchange rates unfavorably impacted gross profit by $16 million, or 2%.

In addition to the change in gross profit noted above, notable items impacting operating income for the three months ended March 31, 2022 and 2021 are as follows:


	Three Months Ended March 31,
	2022		2021		$ Change

Restructuring (See Footnote 4) and restructuring-related costs (a)	$	11	$	13	$	(2)
Transactions and other costs (b)	8		4		4

(a)Restructuring-related costs reported in cost ~~inflation,~~of goods sold and selling, general and administrative expenses (“SG&A”) for the three months ended March 31, 2022 were $5 million and $1 million, respectively, and primarily relate to facility closures. For the three months ended March 31, 2021, restructuring-related costs reported in cost of sales and SG&A were $5 million and $3 million, respectively, and primarily relate to facility closures. Restructuring costs were $5 million for ~~resin, transportation~~both the three months ended March 31, 2022 and ~~logistics~~2021.

(b)Transactions and other costs for the three months ended March 31, 2022 and ~~labor, partially offset~~2021 primarily relate to completed divestitures and fees for certain legal proceedings.

Operating income increased to $217 million as compared to $192 million in the prior year period. The improvement in the operating results reflects lower overhead spending.

Table of Contents

~~by gross productivity and net pricing. Changes in foreign currency exchange rates favorably impacted gross profit by $12 million, or 2%.~~

~~In addition to the increase in net sales and gross profit noted above, notable items impacting operating income (loss) for the three months ended March 31, 2021 and 2020 are as follows:~~

Three Months Ended
March 31,
2021 2020 $ Change
Impairment of goodwill and intangible assets (See Footnote 6) $ — $ 1,469 $ (1,469)
Restructuring (See Footnote 3) and restructuring-related costs 13 6 7

Operating income increased to $192 million as compared to an operating loss of $1.4 billion in the prior year period. The operating results in the prior year period included $1.5 billion of non-cash impairment charges of goodwill, certain indefinite-lived intangible and other assets. The current period performance reflected the higher gross profit noted above, lower overhead costs, which include savings from Yankee Candle retail store closures as well as the exiting of its fundraising business in the prior year, and lower discretionary spending, partially offset by higher restructuring and restructuring-related charges and incentive compensation expense.

Interest expense, net ~~increased~~decreased primarily due to lower long-term debt levels and higher interest ~~rates.~~income. The weighted average interest rates for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 were approximately ~~4.8%~~4.5% and ~~4.3%~~4.8%, respectively. See Footnote 89 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Other ~~(income) expense,~~income, net for three months ended March 31, ~~2021~~2022 and ~~2020~~2021 includes the following items:

Three Months Ended
March 31,
2021 2020
Foreign exchange losses, net $ — $ 11
Fair value equity adjustments (See Footnote 14) — 3
Other gains, net (1) (2)
$ (1) $ 12


	Three Months Ended March 31,
	2022		2021
Foreign exchange losses, net	$	6	$	—

Gain on disposition of business (See Footnote 2)	(130)		—
Other (gains) losses, net	—		(1)
	$	(124)	$	(1)

~~Income~~The income tax provision for the three months ended March 31, 2022 was $48 million as compared to an income tax provision for the three months ended March 31, 2021 ~~was~~of $37 ~~million as compared to income tax benefit for the three months ended March 31, 2020 of $204~~ million. The effective tax rate for the three months ended March 31, ~~2021~~2022 was ~~29.4%~~17.0% as compared to ~~benefit of 13.8%~~29.4% for the three months ended March 31, ~~2020.~~2021. The ~~change in effective~~income tax provision ~~is driven primarily~~for the three months ended March 31, 2022 included a discrete benefit of $4 million associated with the approval of certain state tax credits, offset by $14 million of income tax expense related to the ~~impact~~divestiture of ~~goodwill impairment charges in~~ the ~~prior year period.~~CH&S business unit. The three months ended March 31, 2021 were also impacted by $1 million of discrete tax items.

See Footnote 1112 of the Notes to the Unaudited Condensed Consolidated Financial Statementsfor information regarding income taxes, including the inherent uncertainty associated with the Company's position on recently enacted U.S. Treasury Regulations.

~~Table of Contents~~

Business Segment Operating Results

~~Three Months Ended March 31, 2021 vs. Three Months Ended March 31, 2020~~

~~Home Appliances~~

Three Months Ended
March 31,
(in millions) 2021 2020 $ Change % Change
Net sales $ 360 $ 261 $ 99 37.9%
Operating income (loss) 3 (299) 302 NM
Operating margin 0.8 % NM
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6) $ — $ 287
NM - NOT MEANINGFUL

~~Home Appliances net sales for the three months ended March 31, 2021 increased 38%, which reflects sales growth driven by strong demand for stay at home usage products across~~ ~~all major geographic regions.~~ ~~Changes in foreign currency unfavorably impacted net sales by $3 million, or 1%.~~

Operating income for the three months ended March 31, 2021 was $3 million as compared to operating loss of $299 million in the prior year period. The improvement in operating result is primarily due to the lapping of prior year non-cash impairment charges of goodwill and certain indefinite-lived intangible assets, as well as gross profit leverage, gross productivity and pricing, partially offset by input cost inflation associated with transportation and logistics costs.

Commercial Solutions

Three Months Ended
March 31,
(in millions) 2021 2020 $ Change % Change
Net sales $ 471 $ 413 $ 58 14.0%
Operating income (loss) 50 (272) 322 NM
Operating margin 10.6 % (65.9) %
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6) $ — $ 320
NM - NOT MEANINGFUL


	Three Months Ended March 31,
(in millions)	2022			2021			$ Change		% Change
Net sales	$	510		$	471		$	39	8.3%

Operating income	55			50			5		10.0%
Operating margin	10.8		%	10.6		%

Commercial Solutions net sales for the three months ended March 31, ~~2021~~2022 increased ~~14%~~8%, which reflected sales growth in both the Commercial and Connected Home and Security business ~~units, primarily in the U.S.~~units. The Commercial business unit performance primarily reflected ~~increased demand in hand protection, closet, garage and outdoor organization categories.~~the impact of pricing actions. The increase in net sales in the Connected Home and Security business unit was primarily due to ~~higher~~increased demand from ~~retail~~the contractor channel and contractor channels, and higher sales in certain areas impacted by inclement weather in certain parts of the U.S. The increase in net sales in the Connected Home and Security business also reflected the lapping of the prior-year impact of lower demand and store closures resulting from the COVID-19 pandemic.improved product availability. Changes in foreign currency ~~favorably~~unfavorably impacted net sales by $6$8 million, or 2%.

Operating income for the three months ended March 31, 2022 was $55 million as compared to $50 million in the prior year. The increase in operating income is due to gross profit leverage, gross productivity and lower advertising and promotion costs and overhead spending, partially offset by input cost inflation, particularly for resin, transportation, labor and sourced finished goods.

Table of Contents

Home Appliances


	Three Months Ended March 31,
(in millions)	2022			2021			$ Change		% Change
Net sales	$	340		$	360		$	(20)	(5.6)%

Operating income (loss)	(18)			3			(21)		NM
Operating margin	(5.3)		%	0.8		%



NM - NOT MEANINGFUL

Home Appliances net sales for the three months ended March 31, 2022 decreased approximately 6%, which reflects softening demand in the U.S., as the business lapped the prior-year surge in consumer demand due to the COVID-19 pandemic, and certain category exits, partially offset by pricing actions and strong demand in Latin America. Changes in foreign currency unfavorably impacted net sales by $5 million, or 1%.

Operating loss for the three months ended March 31, 2022 was $18 million as compared to an operating income of $3 million in the prior year period. The decline in operating result is primarily due to lower gross profit leverage, higher advertising and promotional costs, and input cost inflation, particularly for sourced finished goods and transportation.

Home Solutions


	Three Months Ended March 31,
(in millions)	2022			2021			$ Change		% Change
Net sales	$	500		$	504		$	(4)	(0.8)%

Operating income	61			61			—		—%
Operating margin	12.2		%	12.1		%

Home Solutions net sales for the three months ended March 31, 2022 decreased 1%. Strong sales performance in the Food business unit was more than offset by the decline in the Home Fragrance business unit. The increase in Food business unit sales primarily reflected pricing actions. The decline in Home Fragrance business unit sales reflected softening demand, primarily in the U.S. as the business lapped the prior year surge in consumer demand due to the COVID-19 pandemic, as well as the exit of approximately 38 underperforming Yankee Candle retail stores during the first quarter of 2022. Changes in foreign currency unfavorably impacted net sales by $4 million, or 1%.

Operating income for the three months ended March 31, ~~2021~~2022 was ~~$50 million~~flat as compared to ~~operating loss of $272 million in~~ the prior year. The improvement in operating result is primarily due to the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets, as well as gross profit leverage,prior-year period. This performance reflected gross productivity and lower ~~discretionary spending. The increase in operating income was partially~~compensation expense, offset by significant input cost inflation ~~particularly~~ for ~~resin,~~commodities, primarily metals and wax, transportation, labor and sourced finished goods, as well as higher advertising and ~~increased transportation and logistics costs.~~

~~Table of Contents~~

~~Home Solutions~~

Three Months Ended
March 31,
(in millions) 2021 2020 $ Change % Change
Net sales $ 504 $ 377 $ 127 33.7%
Operating income (loss) 61 (301) 362 NM
Operating margin 12.1 % (79.8) %
Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6) $ — $ 302
NM - NOT MEANINGFUL

Home Solutions net sales for the three months ended March 31, 2021 increased 34%, due to strong sales performance in the Food and Home Fragrance business units. The increase in Food business unit sales reflected increased demand across the vacuum sealing, fresh preserving, Rubbermaid Food Storage and cookware and bakeware categories. The increase in Home Fragrance sales was primarily due to increases in the wholesale and direct-to-consumer markets, primarily in the U.S., and an increase in international markets, partially offset by permanent Yankee Candle retail store closures in the prior year. The increase in net sales in the Home Fragrance business also reflected the lapping of the prior-year impact of temporary retail store closures resulting from the COVID-19 pandemic. Changes in foreign currency favorably impacted net sales by $10 million, or 3%.

Operating income for the three months ended March 31, 2021 increased to $61 million as compared to $301 million operating loss in the prior year period. The increase in operating income is primarily due to the lapping of prior year non-cash impairment charges of goodwill, certain indefinite-lived intangible assets and other assets, gross profit leverage, pricing, lower overhead costs and lower discretionary spending. The increase in operating income also reflected savings from Yankee Candle retail store closures in the prior year and the exiting of its fundraising business in the prior year, partially offset by input cost inflation, particularly for resin, and increased transportation and logisticspromotional costs.

Learning and Development


		Three Months Ended March 31,										Three Months Ended March 31,
(in millions)	(in millions)	2021			2020			$ Change		% Change	(in millions)	2022			2021			$ Change		% Change
Net sales	Net sales	$	617		$	528		$	89	16.9%	Net sales	$	650		$	617		$	33	5.3%

Operating income	Operating income	110			4			106		NM	Operating income	130			110			20		18.2%
Operating margin	Operating margin	17.8		%	0.8		%				Operating margin	20.0		%	17.8		%

Notable items impacting operating income comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)		$	—		$	78
NM - NOT MEANINGFUL

Learning and Development net sales for the three months ended March 31, ~~2021~~2022 increased ~~17%~~5% due to strong sales performance in the Baby and ~~Parenting and~~ Writing business ~~units as they lap the negative prior-year impact of shifting consumer demand and store closures resulting from the COVID-19 pandemic.~~units. The Baby ~~and Parenting~~ business unit performance reflected ~~increased demand in the baby gear~~pricing actions and ~~infant care categories.~~improved product availability. The Writing unit performance reflected strong ~~demand in pens, markers, fine writing~~ sales driven by pricing actions, improved return to in-person learning

Table of Contents

and ~~labeling categories,~~gradual reopening of more offices and earlier back to school sales to certain retailers, partially offset by ~~previous divestitures~~supply chain shortages, particularly in labeling, and ~~product line exits.~~logistical constraints. Changes in foreign currency ~~favorably~~unfavorably impacted net sales by ~~$12~~$11 million, or 2%.

Operating income for the three months ended March 31, ~~2021~~2022 increased to ~~$110~~$130 million as compared to $4$110 million in the prior-year period. The increase in operating income is primarily due to ~~the lapping of prior year non-cash impairment charges of certain~~

~~Table of Contents~~

~~indefinite-lived intangible assets~~gross profit leverage, gross productivity, and ~~gross productivity,~~lower compensation and advertising and promotional costs, partially offset by ~~higher tariff costs,~~significant input cost inflation ~~particularly~~ for ~~resin, and increased~~sourced finished goods, transportation and ~~logistics costs.~~labor.

Outdoor and Recreation


		Three Months Ended March 31,									Three Months Ended March 31,
(in millions)	(in millions)	2021			2020		$ Change		% Change	(in millions)	2022			2021			$ Change		% Change
Net sales	Net sales	$	336		$	307	$	29	9.4%	Net sales	$	388		$	336		$	52	15.5%

Operating income (loss)		15			(474)		489		NM
Operating income										Operating income	45			15			30		NM
Operating margin	Operating margin	4.5		%	NM					Operating margin	11.6		%	4.5		%

Notable items impacting operating income (loss) comparability:
Impairment of goodwill and other intangible assets (See Footnote 6)		$	—		$	482

NM - NOT MEANINGFUL	NM - NOT MEANINGFUL									NM - NOT MEANINGFUL

Outdoor and Recreation net sales for the three months ended March 31, ~~2021~~2022 increased 9%15% primarily due to ~~improvement in consumer purchasing patterns for outdoor related products as well as heating~~pricing actions, customer inventory replenishment and ~~lighting products, partially offset by decreased demand in apparel and beverage products. The increase in net sales also reflected the lapping~~order timing ahead of the ~~negative prior-year impact of lower demand~~outdoor season and ~~store closures resulting from the COVID-19 pandemic.~~improved product availability. Changes in foreign currency ~~favorably~~unfavorably impacted net sales by $7$13 million or 2%4%.

Operating income for the three months ended March 31, ~~2021~~2022 was ~~$15~~$45 million as compared to ~~operating loss of $474 million.~~$15 million in the prior-year period. This improvement was primarily due to ~~the lapping of prior year non-cash impairment charges of certain indefinite-lived intangible assets,~~ gross ~~productivity~~profit leverage and lower ~~discretionary~~overhead spending, ~~including~~partially offset by input cost inflation for commodities, primarily resin, sourced finished goods and transportation, and higher advertising and promotional ~~costs, partially offset by increased transportation and logistics costs and input cost inflation, particularly for resin.~~costs.

Table of Contents

Liquidity and Capital Resources

Liquidity

The Company ~~has the ability to borrow under~~believes that its ~~existing Accounts Receivable Securitization Facility (the “Securitization Facility”)~~cash generating capability, together with its borrowing capacity and Revolving Credit Facility (the "Credit Revolver"). At March 31, 2021, the Company had no outstanding drawings against the Securitization Facility and Credit Revolver. The Company currently believes its capital structure and cash resources can continue to support the funding of future dividends and will continue to evaluate all actions to strengthen its financial position and balance sheet, and to maintain its financial liquidity, flexibility and capital allocation strategy.

At March 31, 2021, the Company had cash and cash equivalents of approximately $682 million, of which approximately $544 million was held by the Company’s non-U.S. subsidiaries. Overall, the Company believes that available cash and cash equivalents, ~~cash flows generated from future operating activities and borrowing capacity~~ provide ~~the Company with~~ continued financial viability and adequate liquidity to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and ~~complete~~execute its ongoing ~~turnaround~~business initiatives. The ~~Company’s~~Company regularly assesses its cash requirements ~~are subject~~and the available sources to ~~change as business conditions warrant. Although~~fund these needs. At March 31, 2022, the Company ~~continued~~had cash and cash equivalents of approximately $344 million, of which approximately $233 million was held by the Company’s non-U.S. subsidiaries.

The Company believes the extent of the impact of the COVID-19 pandemic to ~~see improved~~its future sales, ~~performance during the first quarter of 2021,~~operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company is ~~still unable~~not able to accurately predict ~~the duration~~ and ~~severity of this pandemic,~~ which ~~could have a material adverse impact on the Company’s future sales, results of operations, financial position~~will vary by jurisdiction and cash flows, particularly if the global pandemic continues to exist or worsens for a prolonged period of time, new variants of the coronavirus emerge, or if plans to administer vaccines are delayed. Any such material adverse impacts could result in the Company's inability to satisfy financial maintenance covenants and could limit the ability to make future borrowings under existing debt instruments.market. For further information regarding the impact of COVID-19 on the Company, refer to Risk Factors in Part I - Item 1A and Recent Developments in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationsof the Company's most recent Annual Report on Form 10-K, filed on February ~~18, 2021.~~14, 2022.

~~Table of Contents~~

Cash, cash equivalents and restricted cash increased (decreased) as follows for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 (in millions):

2021 2020 Increase (Decrease)
Cash provided by (used in) operating activities $ (25) $ 23 $ (48)
Cash used in investing activities (54) (56) 2
Cash provided by (used in) financing activities (239) 173 (412)
Exchange rate effect on cash, cash equivalents and restricted cash (14) (24) 10
Increase (decrease) in cash, cash equivalents and restricted cash $ (332) $ 116 $ (448)


	2022		2021		Increase (Decrease)








Cash used in operating activities	$	(272)	$	(25)	$	(247)
Cash provided by (used in) investing activities	559		(54)		613
Cash used in financing activities	(393)		(239)		(154)
Exchange rate effect on cash, cash equivalents and restricted cash	8		(14)		22
Decrease in cash, cash equivalents and restricted cash	$	(98)	$	(332)	$	234

The Company tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers.

~~Factors Affecting Liquidity~~

On November 1, 2019, S&P Global Inc. (“S&P”) downgraded the Company’s debt rating to “BB+” as S&P believed the Company would fail to meet S&P’s target debt level for 2019. In addition, on March 9, 2020, Moody’s Corporation ("Moody’s") downgraded the Company’s debt rating to “Ba1” based on a view that the Company would fail to meet Moody's target debt level for 2020. Subsequently on April 15, 2020, Fitch Ratings ("Fitch") downgraded the Company’s debt rating to "BB" as they believed the Company would fail to meet Fitch's target debt level for 2020. As a result of the S&P and Moody's downgrades, the Company could no longer borrow from the commercial paper market on terms it deems acceptable or favorable. Previously, the Company was able to issue commercial paper up to a maximum of $800 million provided there was a sufficient amount available for borrowing under the Company’s $1.25 billion revolving credit facility that matures in December 2023 (“the Credit Revolver”). The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades. The interest rate for borrowings under the Credit Revolver is the borrowing period referenced the London Interbank Offered Rate (“LIBOR”) rate plus 127.5 basis points. At March 31, 2021, the Company did not have any amounts outstanding under the Credit Revolver.

In addition, certain of the Company’s outstanding senior notes aggregating to approximately $4.2 billion are subject to an interest rate adjustment of 25 basis points as a result of the Moody's and S&P downgrades, for a total of 50 basis points. ~~The Fitch downgrade did not impact the interest rates on any of the Company's senior notes.~~

~~Furthermore, the Company may be required to pay a higher interest rate in future financings, and its potential pool of investors and funding sources could decrease as a result of the downgrades.~~

Cash Flows from Operating Activities

The change in net cash used in operating activities reflects inventory build to support forecasted demand and higher annual incentive compensation payments, partially offset by benefits from ~~extension of payment terms for goods and services with vendors and~~ higher accounts receivable sold under the Customer Receivables Purchase Agreement in the current year. ~~In addition, this performance reflects the impact of the COVID-19 pandemic in the prior year, which included lower operating results and favorable working capital performance.~~ See Capital Resources for further information.

Cash Flows from Investing Activities

The change in cash ~~used in~~provided by investing activities was primarily due to ~~lower~~proceeds from divestiture of CH&S and sale of property, plant and equipment, partially offset byhigher capital ~~expenditures~~.expenditures.

Cash Flows from Financing Activities

The change in net cash used in financing activities was primarily due to ~~proceeds from borrowings on short-term debt~~repurchase of shares of the Company's common stock in the ~~prior year and payments of long-term~~current-year period, partially offset by debt repayments in the ~~current year.~~prior-year period. See ~~Footnote 8~~Footnotes 1, 9 and 14 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

~~Table of Contents~~

Capital Resources

~~On March 1, 2021,~~The Company has the ~~Company redeemed~~ability to borrow under its ~~3.15% senior notes that were scheduled to mature in April 2021 at a redemption price equal to 100% of the outstanding aggregate principal amount of the notes, plus accrued~~existing Credit Revolver and ~~unpaid interest to the Redemption Date.~~

its Accounts Receivable Securitization Facility (the “Securitization Facility”). Under the Company's ~~$1.25 billion~~ Credit Revolver, ~~that matures in December 2023,~~ the ~~Company may borrow funds on a variety of~~ interest rate ~~terms. Prior~~is London Interbank Offered Rate (“LIBOR”) rate plus 105.0 basis points. The Credit Revolver provides for the issuance of up to ~~the Moody’s and S&P downgrades discussed above,~~$100 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Credit ~~Revolver provided the committed backup liquidity required to issue commercial paper.~~Revolver. At March 31, ~~2021, there were no commercial paper balance borrowings. In addition,~~2022 there were approximately ~~$21~~$22 million of outstanding standby letters of credit issued against the Credit Revolver, ~~and there~~with a net availability of approximately $1.23 billion. There were no borrowings outstanding under the Credit ~~Revolver. At~~Revolver or commercial paper borrowings at March 31, ~~2021, the net availability under the Credit Revolver was approximately $1.23 billion.~~2022.

Table of Contents

The Credit Revolver requires the maintenance of certain financial covenants. A failure to maintain our financial covenants would impair our ability to borrow under the Credit Revolver. In addition, if economic conditions caused by the COVID-19 pandemic do not improve or otherwise worsen, our earnings and operating cash flows could be negatively impacted, which could impact our ability to maintain compliance with our financial covenants and require us to seek amendments to the Credit Revolver. The Company ~~maintains an Accounts Receivable Securitization Facility.~~ was in compliance with all of its debt covenants at March 31, 2022.

The aggregate commitment under the Securitization Facility is $600 million. The Securitization Facility matures in October 2022 and bears interest at a margin over a variable interest rate. The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances. At March 31, ~~2021,~~2022, the Company did not have any amounts outstanding under the Securitization Facility.

Factored receivables at the end of the first quarter of ~~2021~~2022 associated with the existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately ~~$400~~$535 million, an increase of approximately ~~$50~~$35 million from December 31, ~~2020.~~2021. Transactions under this agreement ~~continue to be~~are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction. The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the ~~unaudited~~ Condensed Consolidated Statement of Cash Flows. The Company records the discount as other ~~(income) expense,~~income, net in the Condensed Consolidated Statement of Operations and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow.

~~The Company was in compliance with all of its debt covenants under these instruments at March 31, 2021.~~

Risk Management

Interest Rate Contracts

Fair Value Hedges

Cross-Currency Contracts

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements. The Company previously entered into ~~two~~three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of ~~$900 million, which~~$1.3 billion. Each of these cross-currency swaps were designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency

~~Table of Contents~~

subsidiaries with Euro-denominated net ~~assets. With these cross-currency swaps, which mature in January~~assets, and ~~February 2025, respectively,~~ the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended March 31, 2022 and 2021, the Company recognized income of $5 million and $4 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

Table of Contents

underlying hedged item. At March 31, ~~2021,~~2022, the Company had approximately ~~$397~~$467 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The following table presents the net fair value of derivative financial instruments (in millions):


	March 31, ~~2021~~2022
	Asset (Liability)
Derivatives designated as effective hedges:
Cash flow hedges:
Foreign currency contracts	$	~~(8)~~4
Fair value hedges:
Interest rate swaps	5 (1)
Net investment hedges:
Cross-currency swaps	~~(56)~~(19)
Derivatives not designated as effective hedges:
Foreign currency contracts	8 (5)
Total	$	~~(51)~~(21)

Significant Accounting Policies and Critical Estimates

Goodwill and Indefinite-Lived Intangibles

Goodwill and indefinite-lived intangibles are tested and reviewed for impairment annually during the fourth quarter (on December 1), or more frequently if facts and circumstances warrant.

Goodwill

Goodwill is tested for impairment at a reporting unit level, and all of the Company’s goodwill is assigned to its reporting units. Reporting units are determined based upon the Company’s organizational structure in place at the date of the goodwill impairment testing and generally one level below the operating segment level. The Company’s operations are comprised of ~~eight~~seven reporting units, within its five primary operating segments.

~~During the first quarter of 2020, the Company concluded that an impairment-triggering event had occurred for all of its reporting~~

units as the Company has experienced significant COVID-19 related disruption to its business in three primary areas: supply chain, as certain manufacturing and distribution facilities were temporarily closed in line with government guidelines; the temporary closure of secondary customer retail stores as well as the Company's Yankee Candle retail stores in North America; and changes in consumer demand patterns to certain focused categories. The Company used a quantitative approach, which involves comparing the fair value of each of the reporting units to the carrying value of those reporting units. If the carrying value

~~Table of Contents~~

of a reporting unit exceeds its fair value, an impairment loss would be calculated as the differences between these amounts, limited to the amount of reporting unit goodwill allocated to the reporting unit.

The quantitative goodwill impairment testing requires significant use of judgment and assumptions, such as the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business growth rates, terminal values, discount rates and total enterprise value. The income approach used is the discounted cash flow methodology and is based on five-year cash flow projections. The cash flows projected are analyzed on a ~~“debt-free”~~debt-free basis (before cash payments to equity and interest-bearing debt investors) in order to develop an enterprise value from operations for the reporting unit. A provision is made, based on these projections, for the value of the reporting unit at the end of the forecast period, or terminal value. The present value of the finite-period cash flows and the terminal value are determined using a selected discount rate. The Company estimated the fair values of its reporting units based on discounted cash flow methodology reflecting its latest projections which included, among other things, the impact of significant input cost inflation for commodities, primarily resin, sourced finished goods, transportation and labor on its operations at the time the Company performed its impairment testing.

~~As a result~~ See Footnotes 1 and 7 of the impairment testing performed in connection with the COVID-19 global pandemic triggering event, the Company determined that its goodwill associated with its Home Appliances and Home Solutions segments were impaired. During first quarter of 2020, the Company recorded an aggregate non-cash charge of $212 millionNotes to ~~reflect the impairments of goodwill as the reporting unit carrying values exceeded their fair values.~~Unaudited Condensed Consolidated Financial Statementsfor further information.

Table of Contents

Indefinite-lived intangibles

The testing of indefinite-lived intangibles (primarily trademarks and tradenames) under established guidelines for impairment also requires significant use of judgment and assumptions (such as cash flow projections, royalty rates, terminal values and discount rates). An indefinite-lived intangible asset is impaired by the amount its carrying value exceeds its estimated fair value. For impairment testing purposes, the fair value of indefinite-lived intangibles is determined using either the relief from royalty method or the excess earnings method. The relief from royalty method estimates the value of a tradename by discounting the hypothetical avoided royalty payments to their present value over the economic life of the asset. The excess earnings method estimates the value of the intangible asset by quantifying the residual (or excess) cash flows generated by the asset and discounts those cash flows to the present. The excess earnings methodology requires the application of contributory asset charges. Contributory asset charges typically include assumed payments for the use of working capital, tangible assets and other intangible assets. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

The Company believes the circumstances and global disruption caused by COVID-19 may continue to affect its businesses, future

operating results, cash flows and financial condition and that the scope and duration of the pandemic is highly uncertain. In addition, some of the other inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings and foreign exchange ~~rates, and inflation.~~rates. Given the uncertainty of these factors, as well as the inherent difficulty in predicting the severity and duration of the COVID-19 global pandemic and associated recovery and the uncertainties regarding the potential financial impact on the Company's business and the overall economy as discussed further in Footnote 1, there can be no assurance that the Company's estimates and assumptions ~~made for purposes of the goodwill and indefinite-lived intangible asset impairment testing performed during the fourth quarter of 2020~~ will prove to be accurate predictions of the future.

Although ~~the Company~~management has made its best estimates based upon current information, the effects of the COVID-19 pandemic on its business may result in future changes to management’s estimates and assumptions, especially if the severity of the pandemic continues to exist or worsens for a prolonged period of time, new variants of the coronavirus emerge, or if plans to administer the vaccines are delayed. Actualactual results could materially differ from ~~the~~those estimates and ~~assumptions developed by management.~~may require future changes to such estimates and assumptions. If so, the Company may be subject to future incremental impairment charges as well as changes to recorded reserves and valuations.

See Footnotes 1 and 67 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the information previously reported under Part II, Item 7A. in the Company’s Annual Report on Form 10-K for the fiscal year ended.

~~Table of Contents~~

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating such controls and procedures, the Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by Rule 13a-15(b) of the Exchange Act, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures ~~are not~~were effective ~~at March 31, 2021, due to the material weakness in internal control over financial reporting described below.~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

~~Continuing Material Weakness~~

~~We continue to have a material weakness in our internal control over financial reporting~~ as disclosed in the 2019 and 2020 Forms 10-K, in that the Company did not design and maintain effective controls over the accounting for certain aspects of income taxes. Specifically, the Company did not design and maintain controls related to the completeness and accuracy of accounting for state income tax and over the accuracy of determining uncertain tax positions, including but not limited to verifying the accrued interest associated with uncertain tax positions was properly determined and recorded. Additionally, management identified that the Company did not design and maintain effective controls to ensure the accuracy of accounting for non-recurring tax planning transactions. These deficiencies resulted in errors recorded as of and for the quarter ended December 31, 2020 impacting the current tax benefit for the quarter ended December 31, 2020; and deferred tax liabilities and other non-current liabilities as of December 31, 2020 and errors previously recorded as of and for the quarter ended December 31, 2019 impacting the current tax benefit for the quarter ended December 31, 2019; and goodwill, other assets, deferred tax liabilities, other non-current liabilities and accumulated other comprehensive loss as of December 31, 2019.

These control deficiencies, in aggregate, could result in a misstatement of the Company’s aforementioned accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that these control deficiencies, in aggregate, constitute a material weakness.

~~Remediation Plan~~

As of March 31, 2021, management designed and implemented the following measures to remediate the deficiencies related to the completeness and accuracy of accounting for state income tax and the accuracy of determining uncertain tax positions, including but not limited to verifying that the accrued interest associated with uncertain tax positions was properly determined and recorded:

•~~Hired experienced resources with substantive backgrounds in accounting for income taxes as well as U.S. multinational public company experience;~~

•~~Engaged a third party to review the Company’s tax provision processes, identify inefficiencies, and recommend process enhancements;~~

•~~Implemented a tax reporting software solution that has enhanced our visibility of uncertain tax positions as well as a software solution that has enhanced our state income tax reporting capabilities;~~

•~~Implemented enhancements and process improvements to the quarterly and annual provision with respect to the accuracy of uncertain tax positions and completeness and accuracy of state income taxes; and~~

•~~Undertook extensive training for key personnel in each reporting jurisdiction on tax reporting requirements and our redesigned processes.~~

~~Table of Contents~~

~~In addition, management has developed its remediation plan and~~ ~~has begun enhancing certain controls to include refinements and improvements to the controls with respect to the deficiencies related to~~ ~~the accuracy of accounting for non-recurring tax planning transactions, including enhancing the precision of the control over the calculation and analysis of non-recurring tax planning transactions.~~

While management believes that the measures already designed and implemented in both the state tax income and uncertain tax positions processes are effective, the material weakness, in the aggregate, will not be considered fully remediated until all affected aspects of the associated income tax controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The Company will monitor the effectiveness of its remediation plan and will refine its remediation plan as appropriate.2022.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, ~~2021,~~2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information required under this Item is contained above in Part I. Financial Information, Item 1 and is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information about the Company’s purchases of equity securities during the three months ended March 31, ~~2021:~~2022:


Calendar Month	Calendar Month	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs		Calendar Month	Total Number of Shares Purchased (2)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January	January	16,045	$	21.23	—	$	—	January	—	$	—	—	$	375,000,000
February	February	411,893	24.14		—	—		February	11,151,364	25.86		10,634,184	$	100,000,001
March	March	—	—		—	—		March	—	—		—	$	100,000,001
Total	Total	427,938	$	24.03	—	$	—	Total	11,151,364	$	25.86	10,634,184

(1)~~All~~On February 6, 2022, the Company's Board of Directors authorized a $375 million Share Repurchase Program (“SRP”), effective immediately through the end of 2022. The Company’s common shares may be purchased by the Company in the open market, in negotiated transactions or in other manners, as permitted by federal securities laws and other legal requirements. See Footnote 14 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information on shares repurchased during the three months ended March 31, 2022.

(2)Shares purchased during the three months ended March 31, ~~2021, were~~2022, includes both the number of shares purchased as part of the publicly announced SRP as well as shares acquired to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock units ~~which~~and were purchased by the Company based on their fair market value on the vesting date.

3937

Table of Contents

Item 6. Exhibits


Exhibit Number						Description of Exhibit
~~10.1†~~
10.1*						~~202~~1 2022 Long Term Incentive Plan Terms and Conditions ~~(incorporated~~(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated February 17 ~~, 202~~1 )11, 2022).
~~10.2†~~10.2*						~~Amended~~Letter Agreement, dated February 9, 2022, between the Company and ~~Restated Newell Brands Inc. Management Bonus~~Christopher H. Peterson regarding Participation in the Executive Severance Plan ~~effective January 1, 2021(incorporated~~(incorporated by reference to Exhibit ~~10.~~2 10.2 to the Company's Current Report on Form 8-K dated February ~~17, 2021)~~11, 2022).
10.3*						10.3*Purchase Agreement dated February 21, 2022 by and between the Company and the Icahn Parties (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 22, 2022).
10.4*†						Form of ~~2021~~2022 Restricted Stock Unit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan (as amended February 14, 2018, and July 26, 2019) for Awards to the Chief Executive Officer.
10.410.5†						Form of ~~2021~~2022 Restricted Stock Unit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to Employees ~~(Director Level)~~(Vice President Level and above).
10.510.6†						Form of ~~2021~~2022 Restricted Stock Unit Award Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to Employees ~~(Vice President Level and above)~~(Director Level).
10.610.7†						Form of ~~2021~~2022 Non-Qualified Stock Option Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to the Chief Executive Officer.
10.710.8†						Form of ~~2021~~2022 Non-Qualified Stock Option Agreement under the Newell Rubbermaid Inc. 2013 Incentive Plan, as amended, for Awards to ~~Employees~~Employees..
10.810.9†						~~Form of Kristine K. Malkoski Restricted Stock Unit Award Agreement for August 6, 2020 Award.~~Amendment No. 2 dated December 30, 2021, to the Newell Brands Employee Savings Plan (as amended and restated effective January 1, 2018 and amended by the First Amendment effective January 1, 2019).
10.10*†						Offer Letter, dated March 4, 2021, between the Company and Michal Geller.
~~10.9*†~~						~~Form of David M. Hammer Separation Agreement and General Release dated July 19, 2020.~~
31.1*31.1†						Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*31.2†						Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*32.1†						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*32.2†						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase

† Filed herewith.

†* Represents management contracts and compensatory plans and arrangements.

4038

Table of Contents

SIGNATURES

Pursuant to the requirements 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.


		NEWELL BRANDS INC. Registrant

Date:	April ~~30, 2021~~29, 2022	/s/ Christopher H. Peterson
		Christopher H. Peterson
		Chief Financial Officer and President, Business Operations


Date:	April ~~30, 2021~~29, 2022	/s/ Jeffrey M. Sesplankis
		Jeffrey M. Sesplankis
		Chief Accounting Officer

4139


	March 31, 2021		December 31, 2020
Assets:
Cash and cash equivalents	$	682	$	981
Accounts receivable, net	1,530		1,678
Inventories	1,901		1,638
Prepaid expenses and other current assets	272		331
Total current assets	4,385		4,628
Property, plant and equipment, net	1,151		1,176
Operating lease assets	513		530
Goodwill	3,525		3,553
Other intangible assets, net	3,506		3,564
Deferred income taxes	843		838
Other assets	417		411
Total assets	$	14,340	$	14,700
Liabilities:
Accounts payable	$	1,501	$	1,526
Accrued compensation	165		236
Other accrued liabilities	1,340		1,393
Short-term debt and current portion of long-term debt	357		466
Total current liabilities	3,363		3,621
Long-term debt	5,135		5,141
Deferred income taxes	438		414
Operating lease liabilities	458		472
Other noncurrent liabilities	1,085		1,152
Total liabilities	10,479		10,800
Commitments and contingencies (Footnote 16)	0		0
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, 0 shares issued at March 31, 2021 and December 31, 2020)	0		0
Common stock (800.0 authorized shares, $1.00 par value, 449.8 shares and 448.4 shares issued at March 31, 2021 and December 31, 2020, respectively)	450		448
Treasury stock, at cost (24.4 shares and 24.0 shares at March 31, 2021 and December 31, 2020, respectively)	(608)		(598)
Additional paid-in capital	7,993		8,078
Retained deficit	(3,085)		(3,174)
Accumulated other comprehensive loss	(914)		(880)
Stockholders’ equity attributable to parent	3,836		3,874
Stockholders’ equity attributable to noncontrolling interests	25		26
Total stockholders’ equity	3,861		3,900
Total liabilities and stockholders’ equity	$	14,340	$	14,700


Segments	Net Book Value at December 31, 2020		Foreign Exchange and Other		Gross Carrying Amount		Accumulated Impairment Charges		Net Book Value at March 31, 2021
Home Appliances	$	0	$	0	$	569	$	(569)	$	0
Commercial Solutions	747		0		1,241		(494)		747
Home Solutions	164		0		2,567		(2,403)		164
Learning and Development	2,642		(28)		3,460		(846)		2,614
Outdoor and Recreation	0		0		788		(788)		0
	$	3,553	$	(28)	$	8,625	$	(5,100)	$	3,525


	March 31, 2021		December 31, 2020

3.15% senior notes due 2021	$	0	$	94
3.75% senior notes due 2021	354		369
4.00% senior notes due 2022	250		250
3.85% senior notes due 2023	1,085		1,090
4.00% senior notes due 2024	200		200
4.875% senior notes due 2025	493		492
3.90% senior notes due 2025	47		47
4.20% senior notes due 2026	1,974		1,973

5.375% senior notes due 2036	416		416
5.50% senior notes due 2046	657		657


Other debt	16		19
Total debt	5,492		5,607
Short-term debt and current portion of long-term debt	(357)		(466)
Long-term debt	$	5,135	$	5,141