UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

for the Quarterly Period Ended June 30, ~~2022~~2023

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 July ~~25, 2022: 413.6~~24, 2023: 414.2 million.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NEWELL BRANDS INC. AND SUBSIDIARIES

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

(Amounts in millions, except per share ~~data)~~amounts)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net sales	Net sales	$	2,534	$	2,709	$	4,922	$	4,997	Net sales	$	2,204	$	2,534	$	4,009	$	4,922
Cost of products sold	Cost of products sold	1,709		1,827		3,357		3,384		Cost of products sold	1,575		1,698		2,898		3,346
Gross profit	Gross profit	825		882		1,565		1,613		Gross profit	629		836		1,111		1,576
Selling, general and administrative expenses	Selling, general and administrative expenses	504		572		1,022		1,106		Selling, general and administrative expenses	476		504		956		1,022
Restructuring costs, net	Restructuring costs, net	4		5		9		10		Restructuring costs, net	22		4		60		9

Impairment of goodwill, intangibles and other assets										Impairment of goodwill, intangibles and other assets	11		—		11		—
Operating income	Operating income	317		305		534		497		Operating income	120		328		84		545
Non-operating expenses:	Non-operating expenses:									Non-operating expenses:
Interest expense, net	Interest expense, net	55		65		114		132		Interest expense, net	76		55		144		114

Other (income) expense, net	Other (income) expense, net	8		(3)		(116)		(4)		Other (income) expense, net	9		21		21		(97)
Income before income taxes		254		243		536		369
Income (loss) before income taxes										Income (loss) before income taxes	35		252		(81)		528
Income tax provision	Income tax provision	50		46		98		83		Income tax provision	17		53		3		101
Net income		$	204	$	197	$	438	$	286
Net income (loss)										Net income (loss)	$	18	$	199	$	(84)	$	427

Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	413.8		425.4		417.9		425.1		Basic	414.2		413.8		414.0		417.9
Diluted	Diluted	415.7		427.8		420.2		427.7		Diluted	415.3		415.7		414.0		420.2

Earnings per share:
Earnings (loss) per share:										Earnings (loss) per share:
Basic	Basic	$	0.49	$	0.46	$	1.05	$	0.67	Basic	$	0.04	$	0.48	$	(0.20)	$	1.02
Diluted	Diluted	$	0.49	$	0.46	$	1.04	$	0.67	Diluted	$	0.04	$	0.48	$	(0.20)	$	1.02




Comprehensive income (loss):
Net income (loss)	$	18	$	199	$	(84)	$	427
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(10)		(107)		8		(78)
Pension and postretirement costs	—		7		(1)		12
Derivative financial instruments	(7)		11		(17)		11
Total other comprehensive loss, net of tax	(17)		(89)		(10)		(55)




Total comprehensive income (loss)	$	1	$	110	$	(94)	$	372

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENTS OF COMPREHENSIVE INCOME (LOSS)~~BALANCE SHEETS (Unaudited)

(Amounts in ~~millions)~~millions, except par values)
Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Comprehensive income (loss):
Net income $ 204 $ 197 $ 438 $ 286
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments (120) 34 (97) (10)
Pension and postretirement costs 7 4 12 9
Derivative financial instruments 11 3 11 8
Total other comprehensive income (loss), net of tax (102) 41 (74) 7
Comprehensive income 102 238 364 293
Total comprehensive income attributable to noncontrolling interests — 3 — 2
Total comprehensive income attributable to parent $ 102 $ 235 $ 364 $ 291


	June 30, 2023		December 31, 2022
Assets:
Cash and cash equivalents	$	317	$	287
Accounts receivable, net	1,285		1,250
Inventories	1,937		2,203
Prepaid expenses and other current assets	300		312
Total current assets	3,839		4,052
Property, plant and equipment, net	1,207		1,184
Operating lease assets	550		578
Goodwill	3,310		3,298
Other intangible assets, net	2,612		2,649
Deferred income taxes	794		810
Other assets	708		691
Total assets	$	13,020	$	13,262
Liabilities:
Accounts payable	$	1,013	$	1,062
Accrued compensation	128		123
Other accrued liabilities	1,322		1,272
Short-term debt and current portion of long-term debt	597		621
Total current liabilities	3,060		3,078
Long-term debt	4,753		4,756
Deferred income taxes	479		520
Operating lease liabilities	482		512
Other noncurrent liabilities	931		877
Total liabilities	9,705		9,743
Commitments and contingencies (Footnote 17)
Stockholders’ equity:
Preferred stock (10.0 authorized shares, $1.00 par value, no shares issued at June 30, 2023 and December 31, 2022)	—		—
Common stock (800.0 authorized shares, $1.00 par value, 439.5 shares and 438.6 shares issued at June 30, 2023 and December 31, 2022, respectively)	440		439
Treasury stock, at cost (25.3 shares and 25.0 shares at June 30, 2023 and December 31, 2022, respectively)	(627)		(623)
Additional paid-in capital	6,945		7,052
Retained deficit	(2,422)		(2,338)
Accumulated other comprehensive loss	(1,021)		(1,011)


Total stockholders’ equity	3,315		3,519
Total liabilities and stockholders’ equity	$	13,020	$	13,262

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in ~~millions, except par values)~~
June 30,
2022 December 31,
2021
Assets:
Cash and cash equivalents $ 323 $ 440
Accounts receivable, net 1,562 1,500
Inventories 2,522 1,997
Prepaid expenses and other current assets 350 325
Total current assets 4,757 4,262
Property, plant and equipment, net 1,138 1,204
Operating lease assets 563 558
Goodwill 3,450 3,504
Other intangible assets, net 2,977 3,370
Deferred income taxes 786 814
Other assets 777 467
Total assets $ 14,448 $ 14,179
Liabilities:
Accounts payable $ 1,700 $ 1,680
Accrued compensation 160 270
Other accrued liabilities 1,309 1,364
Short-term debt and current portion of long-term debt 1,461 3
Total current liabilities 4,630 3,317
Long-term debt 3,793 4,883
Deferred income taxes 714 405
Operating lease liabilities 500 500
Other noncurrent liabilities 864 983
Total liabilities 10,501 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 June 30, 2022 and December 31, 2021) — —
Common stock (800.0 authorized shares, $1.00 par value, 438.6 shares and 450.0 shares issued at June 30, 2022 and December 31, 2021, respectively) 439 450
Treasury stock, at cost (25.0 shares and 24.5 shares at June 30, 2022 and December 31, 2021, respectively) (623) (609)
Additional paid-in capital 7,251 7,734
Retained deficit (2,164) (2,602)
Accumulated other comprehensive loss (956) (882)
Total stockholders’ equity 3,947 4,091
Total liabilities and stockholders’ equity $ 14,448 $ 14,179
millions)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	(84)	$	427
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	159		147
Impairment of goodwill, intangibles and other assets	11		—
Gain from sale of business	—		(133)
Deferred income taxes	4		312
Stock based compensation expense	20		23
Pension settlement charge	5		—

Other, net	(7)		(1)
Changes in operating accounts excluding the effects of divestiture:
Accounts receivable	(14)		(177)
Inventories	282		(692)
Accounts payable	(54)		106
Accrued liabilities and other	(45)		(462)
Net cash provided by (used in) operating activities	277		(450)
Cash flows from investing activities:
Proceeds from sale of divested business	—		620
Capital expenditures	(142)		(140)

Other investing activities, net	48		19
Net cash provided by (used in) investing activities	(94)		499
Cash flows from financing activities:
Short-term debt, net	(23)		372

Payments on current portion of long-term debt	(1)		(2)


Repurchase of shares of common stock	—		(325)
Cash dividends	(126)		(195)


Equity compensation activity and other, net	(8)		(35)
Net cash used in financing activities	(158)		(185)
Exchange rate effect on cash, cash equivalents and restricted cash	2		(3)
Increase (decrease) in cash, cash equivalents and restricted cash	27		(139)
Cash, cash equivalents and restricted cash at beginning of period	303		477
Cash, cash equivalents and restricted cash at end of period	$	330	$	338

Supplemental disclosures:
Restricted cash at beginning of period	$	16	$	37
Restricted cash at end of period	13		15

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NEWELL BRANDS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENTS~~STATEMENT OF ~~CASH FLOWS~~STOCKHOLDERS’ EQUITY (Unaudited)

(Amounts in ~~millions)~~millions, except per share amounts)

Six Months Ended
June 30,
2022 2021
Cash flows from operating activities:
Net income $ 438 $ 286
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 147 166
(Gain) loss from sale of businesses (133) 2
Deferred income taxes 309 (12)
Stock based compensation expense 23 26
Other, net (1) (3)
Changes in operating accounts excluding the effects of divestitures:
Accounts receivable (177) (50)
Inventories (681) (386)
Accounts payable 106 54
Accrued liabilities and other (481) (7)
Net cash provided by (used in) operating activities (450) 76
Cash flows from investing activities:
Proceeds from sale of divested business 620 —
Capital expenditures (140) (114)
Other investing activities, net 19 9
Net cash provided by (used in) investing activities 499 (105)
Cash flows from financing activities:
Short-term debt, net 372 (1)
Payments on current portion of long-term debt (2) (94)
Payments on long-term debt — (6)
Repurchase of shares of common stock (325) —
Cash dividends (195) (198)
Acquisition of noncontrolling interest — (4)
Equity compensation activity and other, net (35) (35)
Net cash used in financing activities (185) (338)
Exchange rate effect on cash, cash equivalents and restricted cash (3) (6)
Decrease in cash, cash equivalents and restricted cash (139) (373)
Cash, cash equivalents and restricted cash at beginning of period 477 1,021
Cash, cash equivalents and restricted cash at end of period $ 338 $ 648
Supplemental disclosures:
Restricted cash at beginning of period $ 37 $ 40
Restricted cash at end of period 15 11


	Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at March 31, 2023	$	439	$	(627)	$	6,965	$	(2,440)	$	(1,004)	$	3,333
Comprehensive income (loss)	—		—		—		18		(17)		1
Dividends declared on common stock - $0.07 per share	—		—		(30)		—		—		(30)
Equity compensation, net of tax	1		—		10		—		—		11





Balance at June 30, 2023	$	440	$	(627)	$	6,945	$	(2,422)	$	(1,021)	$	3,315

Balance at December 31, 2022	$	439	$	(623)	$	7,052	$	(2,338)	$	(1,011)	$	3,519
Comprehensive loss	—		—		—		(84)		(10)		(94)
Dividends declared on common stock - $0.30 per share	—		—		(126)		—		—		(126)
Equity compensation, net of tax	1		(4)		19		—		—		16





Balance at June 30, 2023	$	440	$	(627)	$	6,945	$	(2,422)	$	(1,021)	$	3,315


	Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at March 31, 2022	$	441	$	(623)	$	7,384	$	(2,307)	$	(848)	$	4,047
Comprehensive income (loss)	—		—		—		199		(89)		110
Dividends declared on common stock - $0.23 per share	—		—		(95)		—		—		(95)
Equity compensation, net of tax	—		—		10		—		—		10
Common stock purchased and retired	(2)		—		(48)		—		—		(50)


Balance at June 30, 2022	$	439	$	(623)	$	7,251	$	(2,108)	$	(937)	$	4,022

Balance at December 31, 2021	$	450	$	(609)	$	7,734	$	(2,535)	$	(882)	$	4,158
Comprehensive income (loss)	—		—		—		427		(55)		372
Dividends declared on common stock - $0.46 per share	—		—		(192)		—		—		(192)
Equity compensation, net of tax	2		(14)		22		—		—		10
Common stock purchased and retired	(13)		—		(312)		—		—		(325)



Other	—		—		(1)		—		—		(1)
Balance at June 30, 2022	$	439	$	(623)	$	7,251	$	(2,108)	$	(937)	$	4,022

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 Total Stockholders' Equity
Balance at March 31, 2022 $ 441 $ (623) $ 7,384 $ (2,368) $ (854) $ 3,980
Comprehensive income (loss) — — — 204 (102) 102
Dividends declared on common stock - $0.23 per share — — (95) — — (95)
Equity compensation, net of tax — — 10 — — 10
Common stock purchased and retired (2) — (48) — — (50)
Balance at June 30, 2022 $ 439 $ (623) $ 7,251 $ (2,164) $ (956) $ 3,947
Balance at December 31, 2021 $ 450 $ (609) $ 7,734 $ (2,602) $ (882) $ 4,091
Comprehensive income (loss) — — — 438 (74) 364
Dividends declared on common stock - $0.46 per share — — (192) — — (192)
Equity compensation, net of tax 2 (14) 22 — — 10
Common stock purchased and retired (13) — (312) — — (325)
Other — — (1) — — (1)
Balance at June 30, 2022 $ 439 $ (623) $ 7,251 $ (2,164) $ (956) $ 3,947

Common
Stock Treasury
Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Stockholders' Equity Attributable to Parent Noncontrolling Interests Total Stockholders' Equity
Balance at March 31, 2021 $ 450 $ (608) $ 7,993 $ (3,085) $ (914) $ 3,836 $ 25 $ 3,861
Comprehensive income — — — 197 38 235 3 238
Dividends declared on common stock - $0.23 per share — — (99) — — (99) — (99)
Equity compensation, net of tax — (1) 12 — — 11 — 11
Acquisition of noncontrolling interests — — — — — — (3) (3)
Other changes attributable to noncontrolling interests — — — — 3 3 — 3
Balance at June 30, 2021 $ 450 $ (609) $ 7,906 $ (2,888) $ (873) $ 3,986 $ 25 $ 4,011
Balance at December 31, 2020 $ 448 $ (598) $ 8,078 $ (3,174) $ (880) $ 3,874 $ 26 $ 3,900
Comprehensive income — — — 286 6 292 1 293
Dividends declared on common stock - $0.46 per share — — (200) — — (200) — (200)
Equity compensation, net of tax 2 (11) 28 — — 19 — 19
Acquisition of noncontrolling interests — — — — — — (3) (3)
Other changes attributable to noncontrolling interests — — — — 1 1 1 2
Balance at June 30, 2021 $ 450 $ (609) $ 7,906 $ (2,888) $ (873) $ 3,986 $ 25 $ 4,011

~~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, ~~2021~~2022 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~~

The condensed consolidated financial statements for all comparable prior periods presented have been ~~made~~retrospectively adjusted to reflect the following:

•Effective January 1, 2023, as a result of the implementation of a new operating model intended to drive further simplification and unlock additional efficiencies and synergies within the Company, the chief operating decision maker (“CODM”) now reviews the businesses as three operating segments: Home and Commercial Solutions, Learning and Development and Outdoor and Recreation. The Home and Commercial Solutions operating segment represents the combination of the previously reported Commercial Solutions, Home Appliances and Home Solutions operating segments. See Footnote 16 for further information;

•A prior-year change in method of accounting for certain inventory in the U.S. from the last-in, first-out method to the first-in, first-out method resulted in an $11 million reduction of cost of products sold and increase to income before income taxes, additional income tax provision of $3 million and increase of $8 million to net income in the Company's ~~financial statements~~previously issued unaudited Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2022;

•A revision associated with an incorrect change in functional currency designation in the prior year resulted in additional expense to ~~conform~~record mark to ~~current year presentation.~~market adjustments of $13 million and $19 million in other (income) expense, net in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2022, respectively and a reclassification between Accumulated Other Comprehensive Loss and Retained Deficit in the Condensed Consolidated Statement of Stockholder’s Equity of $19 million at June 30, 2022. Refer to Footnote 19 of the Company's most recent Annual Report on Form 10-K, filed on February 15, 2023.

On March 31, 2022, the Company sold its Connected Home & Security (“CH&S”) business ~~unit~~ to Resideo Technologies, Inc. See Footnotes 2 and 16 for further information.

Use of Estimates and Risks

Management’s application of U.S. GAAP in preparing the Company's condensed consolidated financial statements requires the pervasive use of estimates and assumptions. The Company continues to be impacted by inflationary pressures, softening global demand, focus by major retailers on the ~~COVID-19 pandemic, inflationary~~rebalancing of inventory levels, rising interest rates and ~~supply chain pressures, and the~~ indirect macroeconomic ~~impact of~~impacts from the Russia-Ukraine ~~conflict,~~conflict. These collective macroeconomic trends, the duration or severity of which are highly uncertain, are rapidly changing the retail and consumer landscape and are expected to continue to negatively impact the Company’s operating results, cash flows and financial condition during the current year. As consumers continue to face widespread increases in prices and interest rates, their discretionary spending and purchase patterns may continue to be unfavorably impacted. The high level of uncertainty of these factors has ~~required greater use of~~resulted in estimates and assumptions inthat have the ~~preparation~~potential for more variability and are more subjective. In addition, some of the ~~consolidated financial statements, more specifically, those~~other inherent estimates and assumptions ~~utilized~~used in the Company’s forecasted results of operations and cash flows that form the basis ~~in developing~~of the determination of the fair ~~values utilized in its~~value of the reporting units for goodwill and indefinite-lived intangible asset impairment ~~assessments, its annual effective~~testing are outside the control of management, including interest rates, cost of capital, tax ~~rate~~rates, industry growth, credit ratings, foreign exchange rates and ~~other related reserves. These estimates also include assumptions as to the timing and amount of demand shifts amongst sales channels, workforce availability and supply chain continuity.~~labor inflation. Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future ~~expense.~~expense or impairment charges.

Table of Contents

During the second quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Home Fragrance reporting unit in the Home and Commercial Solutions segment and for the goodwill associated with the Baby reporting unit in the Learning and Development segment, as a result of a downward revision of forecasted cash flows due to softening global demand, primarily caused by continued inflationary pressure that is impacting discretionary spending behavior of consumers, as well as rising interest rates. The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Home and Commercial Solutions segment was impaired. During the three and six months ended June 30, 2023, the Company recorded an aggregate non-cash impairment charge of $8 million, as the carrying value of the tradename exceeded its fair value. The Company concluded that the Baby reporting unit goodwill was not impaired during the second quarter of 2023. See Footnote 7 for further information.

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,~~Also, 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. In addition, uncertainty still remains over the volatility and direction of future consumer and customer demand patterns, as well as inflationary and supply chain pressures. Accordingly, the Company’s results of operations and cash flows for the three and six months ended June 30, ~~2022 and cash flows for the six months ended June 30, 2022,~~2023 may not necessarily be indicative of the results that may be expected for the year ending December 31, ~~2022.~~

The Company's sales and operating results, previously disrupted by the COVID-19 pandemic, reverted back to historical patterns in 2021, however, uncertainty still remains due to the inflationary and supply chain pressures and the volatility and direction of future consumer demand patterns.2023.

~~Recent~~Adoption of New Accounting ~~Pronouncements~~Guidance

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.

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In March 2020, the FASB issued ASU 2020-04,“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on FinancialReporting.” 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. This ASU was further updated with the issuance of ASU 2022-06, Reference Rate Reform: Deferral of the Sunset Date of Topic 848, which extends the sunset date of the guidance. ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, ~~2022.~~2024. The Company ~~is currently evaluating~~adopted ASU 2020-04 and it did not have a material impact on its Consolidated Financial Statements.

In October 2022, the ~~potential effects~~FASB issued ASU 2022-04, “Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to better consider the effect of the ~~adoption of~~programs on an entity’s working capital, liquidity, and cash flows. This ASU ~~2020-04.~~is effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023. See disclosures hereafter for further information.

Sales of Accounts Receivables

Factored receivables at June 30, ~~2022~~2023 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately ~~$545~~$465 million, an increase of approximately $45 million from December 31, 2021. During the second quarter of 2022, the Company amended the Customer Receivables Purchase Agreement to (1) increase the amount of certain customer receivables that may be sold under the agreement, (2) add new customers to the agreement and (3) change the reference rate from LIBOR to Secured Overnight Financing Rate (“SOFR”).2022. Transactions under this agreement 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 and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow in the Condensed Consolidated Statement of Cash Flows. The Company records the discount as other (income) expense, net in the Condensed Consolidated Statement of ~~Operations~~Operations.

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Supplier Finance Program Obligations

The Company has worked with its suppliers of goods and ~~collections~~services over the past several years to revisit terms and conditions, including the extension of ~~accounts~~payment terms. Additionally, a global financial institution offers a voluntary supply chain finance program (the “SCF Program”) which enables suppliers, at their sole discretion, to sell their receivables ~~not yet submitted~~from the Company to the financial institution on a non-recourse basis.

The Company and its suppliers agree on contractual terms for the goods and services procured, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF Program. Payments terms average approximately 125 days. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Suppliers that participate in the SCF Program, at their sole discretion, determine which invoices, if any, they want to sell to the financial institution. The suppliers’ voluntary inclusion of invoices in the SCF Program does not change the Company’s existing contractual terms with its suppliers. The Company does not provide any guarantees under the SCF Program, nor does it have any economic interest in a ~~financing~~supplier’s decision to participate in the SCF Program.

Amounts due under the SCF Program are included in accounts payable in the Condensed Consolidated Balance Sheets and as operating cash ~~flow.~~flows in the Condensed Consolidated Statement of Cash Flows. At June 30, 2023 and December 31, 2022, outstanding payment obligations under the SCF Program were approximately $92 million and $100 million, respectively.

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, during the six months ended June 30, 2022, the Company recorded a pretax gain of $133 million, which was included in other (income) expense, 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 six months ended June 30, ~~2022~~2023 (in millions):


		Cumulative Translation Adjustment		Pension and Postretirement Costs		Derivative Financial Instruments		AOCL			Cumulative Translation Adjustment		Pension and Postretirement Costs		Derivative Financial Instruments		AOCL
Balance at December 31, 2021		$	(575)	$	(292)	$	(15)	$	(882)
Balance at December 31, 2022										Balance at December 31, 2022	$	(688)	$	(309)	$	(14)	$	(1,011)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(103)		6		13		(84)		Other comprehensive income (loss) before reclassifications	8		(6)		(11)		(9)
Amounts reclassified to earnings	Amounts reclassified to earnings	6		6		(2)		10		Amounts reclassified to earnings	—		5		(6)		(1)
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	(97)		12		11		(74)		Net current period other comprehensive income (loss)	8		(1)		(17)		(10)
Balance at June 30, 2022		$	(672)	$	(280)	$	(4)	$	(956)
Balance at June 30, 2023										Balance at June 30, 2023	$	(680)	$	(310)	$	(31)	$	(1,021)

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Reclassifications from AOCL to the results of operations for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were pretax (income) expense of (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Cumulative translation adjustment (1)	Cumulative translation adjustment (1)	$	—	$	—	$	6	$	—	Cumulative translation adjustment (1)	$	—	$	—	$	—	$	6
Pension and postretirement benefit plans (2)	Pension and postretirement benefit plans (2)	3		6		7		11		Pension and postretirement benefit plans (2)	5		3		5		7
Derivative financial instruments (3)	Derivative financial instruments (3)	(4)		7		(3)		11		Derivative financial instruments (3)	1		(4)		(8)		(3)

(1)See Footnote 2 for further information.

(2)See Footnote 11 for further information.

(3)See Footnote 10 for further information.

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

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Foreign currency translation adjustments $ 19 $ (3) $ 20 $ 9
Pension and postretirement benefit costs 1 1 1 2
Derivative financial instruments 4 1 3 3
Income tax provision (benefit) related to AOCL $ 24 $ (1) $ 24 $ 14


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Foreign currency translation adjustments	$	(12)	$	19	$	(18)	$	20
Pension and postretirement benefit costs	1		1		1		1
Derivative financial instruments	(2)		4		(5)		3
Income tax provision (benefit) related to AOCL	$	(13)	$	24	$	(22)	$	24

Footnote 4 — Restructuring ~~Costs~~

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Commercial Solutions		$	—	$	—	$	1	$	—
Home Appliances		—		3		1		4
Home Solutions		—		1		1		3
Home and Commercial Solutions										Home and Commercial Solutions	$	11	$	—	$	27	$	3
Learning and Development	Learning and Development	—		—		2		1		Learning and Development	6		—		11		2
Outdoor and Recreation	Outdoor and Recreation	2		—		2		1		Outdoor and Recreation	2		2		8		2
Corporate	Corporate	2		1		2		1		Corporate	3		2		14		2
		$	4	$	5	$	9	$	10		$	22	$	4	$	60	$	9

Accrued restructuring costs activity for the six months ended June 30, ~~2022 are~~2023 was as follows (in millions):


		Balance at December 31, 2021		Restructuring Costs, Net		Payments		Balance at June 30, 2022			Balance at December 31, 2022		Restructuring Costs, Net		Payments		Foreign Currency and Other		Balance at June 30, 2023
Severance and termination costs	Severance and termination costs	$	8	$	8	$	(9)	$	7	Severance and termination costs	$	7	$	57	$	(48)	$	—	$	16
Contract termination and other costs	Contract termination and other costs	2		1		(2)		1		Contract termination and other costs	—		3		(1)		(1)		1
		$	10	$	9	$	(11)	$	8		$	7	$	60	$	(49)	$	(1)	$	17

Project Phoenix

In January 2023, the Company announced a restructuring and savings initiative (“Project Phoenix”) that is intended to strengthen the Company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies. Project Phoenix is expected to be substantially implemented by the end of 2023 and incorporates a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize the Company’s supply chain functions, which include manufacturing, distribution, transportation and customer service, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs. The Company commenced reducing headcount in the first quarter of 2023, with most of these actions expected to be completed by the end of 2023, subject to local law and consultation requirements. The Company currently estimates that it will incur approximately $100 million to $130 million in restructuring and restructuring-related charges in connection with Project Phoenix, substantially all of which are expected to be incurred by the end of 2023. These charges consist primarily of $80 million to $105 million in charges related to severance payments and other termination benefits; $15 million to $20 million in charges associated with office space reductions; and approximately $5 million of other charges, including those associated with employee transition and legal costs. The Company expects approximately $95 million to $120 million of the total aggregate charges will be cash expenditures. All cash payments are expected to be paid within one year of charges incurred.

During the three and six months ended June 30, 2023, the Company recorded restructuring charges of $17 million and $53 million, respectively, in connection with Project Phoenix.

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~~2020 Restructuring Plan~~Network Optimization Project

In May 2023, the Company announced a restructuring and savings initiative that is intended to simplify and streamline its North American distribution network (the “Network Optimization Project”) in order to improve the Company’s cost structure and operating margins while maintaining focus on customer and consumer fulfillment. The ~~Company’s 2020 restructuring program, which was~~ Company initiated implementation of the Network Optimization Project during the second quarter of 2023 and expects it to be substantially ~~complete at~~implemented by the end of ~~2021,~~ ~~was designed~~fiscal year 2024. The Network Optimization Project incorporates a variety of initiatives, including a reduction in the overall number of distribution centers, an optimization of distribution by location, and completion of select automation investments intended to ~~reduce overhead~~further streamline the Company’s cost structure and to maximize operating performance. The Company currently estimates that it will incur approximately $37 million to $49 million in restructuring and restructuring-related charges associated with execution of the Network Optimization Project and expects that the costs ~~streamline certain underperforming operations and improve future profitability. The restructuring costs, which impacted all segments, include employee-related costs such as~~incurred will be substantially complete by the end of 2024. This estimate of charges consists primarily of $8 million to $11 million related to cash severance payments and other termination ~~benefits.~~ benefits and approximately $29 million to $38 million associated with industrial site reductions. The Company expects approximately $35 million to $44 million of the total aggregate charges will be cash expenditures.

During the three and six months ~~ended~~ June 30, ~~2021,~~2023, the Company recorded restructuring charges of $4$2 million ~~and $9 million, respectively. Any remaining cash payments are expected to be paid within one year of charges incurred.~~in connection with the project.

Other Restructuring and Restructuring-Related ~~Costs~~Charges

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, including certain costs associated with Project Ovid, the multi-year, customer centric supply chain initiative to transform the ~~Company's~~Company’s go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies. Restructuring-related costs are recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) in the Condensed Consolidated Statements of Operations based on the nature of the underlying costs incurred.

During the three months ended June 30, 2023 and 2022, the Company recorded other restructuring charges of $3 million and $4 million, respectively and $5 million and $9 million for the six months ended June 30, ~~2022, the Company recorded restructuring charges of $4 million~~2023 and ~~$9 million,~~2022, respectively.

Footnote 5 — Inventories

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Raw materials and supplies	Raw materials and supplies	$	327	$	310	Raw materials and supplies	$	254	$	285
Work-in-process	Work-in-process	203		167		Work-in-process	195		218
Finished products	Finished products	1,992		1,520		Finished products	1,488		1,700
		$	2,522	$	1,997		$	1,937	$	2,203

Footnote 6 — Property, Plant and Equipment, Net

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Land	Land	$	76	$	82	Land	$	74	$	76
Buildings and improvements	Buildings and improvements	632		678		Buildings and improvements	659		648
Machinery and equipment	Machinery and equipment	2,325		2,387		Machinery and equipment	2,437		2,349
		3,033		3,147			3,170		3,073
Less: Accumulated depreciation	Less: Accumulated depreciation	(1,895)		(1,943)		Less: Accumulated depreciation	(1,963)		(1,889)
		$	1,138	$	1,204		$	1,207	$	1,184

Depreciation expense was ~~$47~~$51 million and ~~$51~~$47 million for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$96~~$105 million and ~~$103~~$96 million for the six months ended June 30, 2023 and 2022, ~~and 2021,~~ respectively.

~~During the three months ended March 31, 2022, the Company took possession of a right of use operating lease asset with future obligations of approximately $64 million.~~

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Footnote 7 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the six months ended June 30, ~~2022~~2023 is as follows (in millions):


Segments	Segments	Net Book Value at December 31, 2021		Foreign Exchange		Gross Carrying Amount		Accumulated Impairment Charges		Net Book Value at June 30, 2022		Segments	Net Book Value at December 31, 2022		Foreign Exchange		Gross Carrying Amount		Accumulated Impairment Charges		Net Book Value at June 30, 2023
Commercial Solutions		$	747	$	—	$	916	$	(169)	$	747
Home Appliances		—		—		569		(569)		—
Home Solutions		164		—		2,567		(2,403)		164
Home and Commercial Solutions												Home and Commercial Solutions	$	747	$	—	$	4,052	$	(3,305)	$	747
Learning and Development	Learning and Development	2,593		(54)		3,385		(846)		2,539		Learning and Development	2,551		12		3,409		(846)		2,563
Outdoor and Recreation	Outdoor and Recreation	—		—		788		(788)		—		Outdoor and Recreation	—		—		788		(788)		—
		$	3,504	$	(54)	$	8,225	$	(4,775)	$	3,450		$	3,298	$	12	$	8,249	$	(4,939)	$	3,310

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


		June 30, 2022						December 31, 2021							June 30, 2023						December 31, 2022
		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		$	1,985	$	—	$	1,985	$	2,219	$	—	$	2,219
Trade names — other		160		(73)		87		159		(65)		94
Tradenames — indefinite life (1)														Tradenames — indefinite life (1)	$	1,620	$	—	$	1,620	$	1,689	$	—	$	1,689
Tradenames — other (1)														Tradenames — other (1)	232		(93)		139		160		(79)		81
Capitalized software	Capitalized software	586		(466)		120		631		(495)		136		Capitalized software	614		(497)		117		602		(481)		121
Patents and intellectual property	Patents and intellectual property	22		(15)		7		22		(14)		8		Patents and intellectual property	22		(18)		4		22		(17)		5
Customer relationships and distributor channels	Customer relationships and distributor channels	1,071		(293)		778		1,216		(303)		913		Customer relationships and distributor channels	1,077		(345)		732		1,072		(319)		753

		$	3,824	$	(847)	$	2,977	$	4,247	$	(877)	$	3,370		$	3,565	$	(953)	$	2,612	$	3,545	$	(896)	$	2,649

(1)In connection with the operating model changes associated with Project Phoenix, the Company determined that six tradenames with aggregate carrying values of $70 million no longer met indefinite-lived criteria and were reclassified during the first quarter as finite-lived tradenames, with useful lives ranging from five to ten years.

Amortization expense for intangible assets was $27 million and $24 million for the three months ended June 30, 2023 and 2022, respectively and ~~2021 was $24~~$54 million and ~~$29 million, respectively and~~ $51 ~~million and $63~~ million for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

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Footnote 8 — Other Accrued Liabilities

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Customer accruals	Customer accruals	$	678	$	715	Customer accruals	$	695	$	636
Operating lease liabilities	Operating lease liabilities	122		122		Operating lease liabilities	125		121
Accrued self-insurance liabilities, contingencies and warranty	Accrued self-insurance liabilities, contingencies and warranty	117		125		Accrued self-insurance liabilities, contingencies and warranty	105		99
Accrued marketing and freight expenses	Accrued marketing and freight expenses	74		59		Accrued marketing and freight expenses	72		73
Accrued interest expense	Accrued interest expense	53		56		Accrued interest expense	70		63
Accrued income taxes	Accrued income taxes	52		43		Accrued income taxes	14		53
Other	Other	213		244		Other	241		227
		$	1,309	$	1,364		$	1,322	$	1,272

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Footnote 9 — Debt

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
3.85% senior notes due 2023		$	1,087	$	1,086
4.00% senior notes due 2024	4.00% senior notes due 2024	200		200		4.00% senior notes due 2024	$	196	$	196
4.875% senior notes due 2025	4.875% senior notes due 2025	495		494		4.875% senior notes due 2025	497		496
3.90% senior notes due 2025	3.90% senior notes due 2025	47		47		3.90% senior notes due 2025	47		47
4.20% senior notes due 2026	4.20% senior notes due 2026	1,976		1,975		4.20% senior notes due 2026	1,979		1,978
6.375% senior notes due 2027						6.375% senior notes due 2027	479		483
6.625% senior notes due 2029						6.625% senior notes due 2029	479		481
5.375% senior notes due 2036	5.375% senior notes due 2036	417		417		5.375% senior notes due 2036	417		417
5.50% senior notes due 2046	5.50% senior notes due 2046	658		658		5.50% senior notes due 2046	658		658
Revolving credit facility						Revolving credit facility	530		225
Commercial paper	Commercial paper	112		—		Commercial paper	—		359
Receivables facility	Receivables facility	260		—		Receivables facility	66		35
Other debt	Other debt	2		9		Other debt	2		2
Total debt	Total debt	5,254		4,886		Total debt	5,350		5,377
Short-term debt and current portion of long-term debt	Short-term debt and current portion of long-term debt	(1,461)		(3)		Short-term debt and current portion of long-term debt	(597)		(621)
Long-term debt	Long-term debt	$	3,793	$	4,883	Long-term debt	$	4,753	$	4,756

Senior Notes

On ~~February 11, 2022,~~March 20, 2023, S&P Global Inc. (“S&P”) ~~upgraded~~downgraded 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. Since~~. As a result of the S&P upgrade, the Company has been 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 annualized basis (approximately $8 million in 2022). However,downgrade, certain of the Company’s outstanding senior notes currently aggregating to approximately ~~$4.2~~$3.1 billion are subject to an interest rate adjustment of 25 basis points. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million on an annualized basis (approximately $6 million in 2023). In addition, the Company is still subject to anthe interest rate adjustment of 25 basis points in connection with the Moody’s Corporation (“Moody’s”) downgrade of the Company's debt rating in 2020. Furthermore, as a result of the S&P downgrade, the Company's ability to borrow from the commercial paper market on terms it deems acceptable or favorable was eliminated.

On February 14, 2023, Fitch Ratings downgraded the Company's debt rating to “BB”. This downgrade did not impact the interest rates on any of the Company's senior notes.

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Receivables Facility

The Company maintains an Accounts Receivable Securitization Facility (the “Securitization Facility”). ~~During the second quarter of 2022, the Company amended the Securitization Facility. This amendment (1) reduced the~~The aggregate commitment under the Securitization Facility tois $375 ~~million from $600 million, (2) extended its maturity by one year to~~million. The Securitization Facility matures in October 2023 and ~~(3) changed the reference rate under the Securitization Facility from LIBOR to SOFR. The Securitization Facility~~ 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 June 30, ~~2022,~~2023, the Company ~~has $260~~had $66 million outstanding under the Securitization Facility.

Revolving Credit Facility and Commercial Paper

The Company ~~maintains~~has a ~~$1.25~~$1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) that matures in ~~December~~August 2027. On March 27, 2023, ~~(the “Credit Revolver”). Under~~ the Company entered into an amendment to its Credit Revolver (the “Amendment”) to (i) include non-cash expenses resulting from grants of stock awards among the ~~Company~~items that may ~~borrow funds~~be added to Consolidated Net Income when calculating Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined in the Amendment, and (ii) lower the Interest Coverage Ratio, as defined in the Amendment, for the fiscal quarters ending on a variety of interest rate terms. Since the Credit Revolver provides the committed backup liquidity required to issue commercial paper, the Company may issue commercial paper up to a maximum of $800 million provided there is a sufficient amount available for borrowing under the Credit Revolver. At June 30, ~~2022, the Company did not have any amounts outstanding under the Credit Revolver, with a net availability of approximately $1.1 billion~~2023, September 30, 2023, December 31, 2023 and ~~approximately $112 million outstanding under its commercial paper program.~~March 31, 2024.

The Credit Revolver ~~also~~ provides for the issuance of up to ~~$100~~$150 million of letters of credit, so long as there is sufficient ~~amount available~~availability for borrowing under the Credit Revolver. At June 30, ~~2022,~~2023, the Company ~~has~~had $530 million of outstanding borrowings under the Credit Revolver and approximately $22 million of outstanding standby letters of credit issued against the Credit ~~Revolver.~~Revolver, with a net availability of approximately $950 million.

Other

12The indentures governing the Company’s senior notes contain usual and customary nonfinancial covenants. The Company’s borrowing arrangements other than the senior notes contain usual and customary nonfinancial covenants and certain financial covenants, including minimum interest coverage and maximum debt-to-total-capitalization ratios.

~~Table of Contents~~

Weighted average interest rates are as follows:

~~Other~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total debt	5.3	%	4.2	%	5.1	%	4.3	%
Short-term debt	6.8	%	2.9	%	6.5	%	2.6	%

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):

June 30, 2022 December 31, 2021
Fair Value Book Value Fair Value Book Value
Senior notes $ 4,619 $ 4,880 $ 5,477 $ 4,877


	June 30, 2023				December 31, 2022
	Fair Value		Book Value		Fair Value		Book Value
Senior notes	$	4,437	$	4,752	$	4,511	$	4,756

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

Footnote 10 —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.

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Fair Value Hedges

At June 30, ~~2022,~~2023, the Company had approximately ~~$100 million~~$1.1 billion notional amount of interest rate swaps that exchange a fixed rate of interest for a variable rate ~~(LIBOR)~~ of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against $500 million of principal on the 6.375% senior notes due 2027, $500 million of principal on the 6.625% senior notes due 2029 and $100 million of principal on the 4.00% senior notes due 2024 for the remaining life of the ~~note.~~notes. The benchmark interest rate for the $100 million floating swap and associated fair value hedge was amended for a change in benchmark interest rate from LIBOR to Secured Overnight Funding Rate (“SOFR”), effective June 1, 2023, in accordance with ASC 848 (see Footnote 1 for further information). 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 3three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of $1.3 billion. Each of these cross-currency swaps ~~were~~was designated as a net investment ~~hedges~~hedge of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S. dollar interest. During the third quarter of 2022, the Company entered into additional cross-currency swaps with notional amounts of $500 million, with one maturing in September 2027 and one in September 2029. These swaps were also designated as 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, and the Company pays a floating rate of Euro-based interest and receives a floating 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 June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recognized income of $6$10 million and $3$6 million, respectively, and income of ~~$11~~$21 million and $7$11 million for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, 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 with maturity dates through ~~March 2023.~~June 2024. 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 June 30, ~~2022,~~2023, the Company had approximately ~~$375~~$388 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 June 30, ~~2022,~~2023, the Company had approximately ~~$1.5~~$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 May ~~2023.~~2024. Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company's Condensed Consolidated Statement of Operations.

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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

June 30, 2022

December 31, 2021

Balance Sheet Location

June 30, 2023

December 31, 2022

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

(2)

Foreign currency contracts

Other accrued liabilities

(16)

(9)

Fair Value Hedges

Interest rate swaps

Other assets

—

Interest rate swaps

Other accrued liabilities

(18)

(14)

Interest rate swaps

Other accrued liabilities

(2)

—

Interest rate swaps

Other noncurrent liabilities

(18)

(16)

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 assets

—

Cross-currency swaps

Other assets

Cross-currency swaps

Other noncurrent liabilities

—

(41)

Cross-currency swaps

Other noncurrent liabilities

(121)

(75)

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

(26)

(14)

Foreign currency contracts

Other accrued liabilities

(9)

(10)

Total

(17)

Total

(124)

(27)

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

Three Months
Ended
June 30, 2022 Three Months
Ended
June 30, 2021
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
Interest rate swaps Interest expense, net $ — $ (1) $ — $ (1)
Foreign currency contracts Net sales and cost of products sold 20 5 (3) (6)
Cross-currency swaps Other (income) expense, net 78 — (8) —
Total $ 98 $ 4 $ (11) $ (7)
Six Months
Ended
June 30, 2022 Six Months
Ended
June 30, 2021
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
Interest rate swaps Interest expense, net $ — $ (3) $ — $ (3)
Foreign currency contracts Net sales and cost of products sold 19 6 — (8)
Cross-currency swaps Other (income) expense, net 82 — 28 —
Total $ 101 $ 3 $ 28 $ (11)


		Three Months Ended June 30, 2023				Three Months Ended June 30, 2022
		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
Interest rate swaps	Interest expense, net	$	—	$	(1)	$	—	$	(1)
Foreign currency contracts	Net sales and cost of products sold	(9)		—		20		5

Cross-currency swaps	Other (income) expense, net	(49)		—		78		—
Total		$	(58)	$	(1)	$	98	$	4

		Six Months Ended June 30, 2023				Six Months Ended June 30, 2022
		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
Interest rate swaps	Interest expense, net	$	—	$	(2)	$	—	$	(3)
Foreign currency contracts	Net sales and cost of products sold	(14)		10		19		6

Cross-currency swaps	Other (income) expense, net	(70)		—		82		—
Total		$	(84)	$	8	$	101	$	3

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At June 30, ~~2022,~~2023, net deferred ~~gains~~losses of approximately ~~$23~~$17 million within AOCL are expected to be reclassified to earnings over the next twelve months.

During the three months ended June 30, 2023 and 2022, the Company recognized in other (income) expense, net, expense of $8 million and income of $2 million, respectively, and expense of $18 million and $1 million during the six months ended June 30, 2023 and 2022, ~~the Company recognized income of $2 million and expense of $1 million~~ respectively, ~~and expense of $3 million and income of $4 million, during the three and six months ended June 30, 2021, respectively, in other (income) expense, 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.

Footnote 11 — 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																	Pension Benefits
		U.S.				International				U.S.				International					U.S.				International				U.S.				International
		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended June 30,								Six Months Ended June 30,
		2022		2021		2022		2021		2022		2021		2022		2021			2023		2022		2023		2022		2023		2022		2023		2022
Service cost	Service cost	$	—	$	—	$	1	$	1	$	—	$	—	$	2	$	2	Service cost	$	—	$	—	$	1	$	1	$	—	$	—	$	2	$	2
Interest cost	Interest cost	7		5		3		1		13		10		5		3		Interest cost	12		7		4		3		23		13		8		5
Expected return on plan assets	Expected return on plan assets	(12)		(13)		(1)		(1)		(24)		(25)		(3)		(2)		Expected return on plan assets	(14)		(12)		(3)		(1)		(28)		(24)		(6)		(3)
Amortization	Amortization	4		6		—		1		8		11		1		2		Amortization	1		4		—		—		2		8		1		1

Settlements																		Settlements	—		—		5		—		—		—		5		—
Total (income) expense	Total (income) expense	$	(1)	$	(2)	$	3	$	2	$	(3)	$	(4)	$	5	$	5	Total (income) expense	$	(1)	$	(1)	$	7	$	3	$	(3)	$	(3)	$	10	$	5


		Postretirement Benefits									Postretirement Benefits
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Amortization	Amortization	$	(1)	$	(1)	$	(2)	$	(2)	Amortization	$	(1)	$	(1)	$	(3)	$	(2)
Total income	Total income	$	(1)	$	(1)	$	(2)	$	(2)	Total income	$	(1)	$	(1)	$	(3)	$	(2)

U.K. Defined Benefit Plan

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 (“U.K. Plan”), resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations (“PBO”) to covered participants.

In April 2023, the Company also completed a “buy-out” of approximately 7% of the U.K. Plan's PBO. The “buy-out” was completed by the execution of a Deed Poll Agreement and a Deed of Assignment with an insurance company. In connection with this transaction, during the second quarter, the Company recorded a pretax loss of $5 million in other (income) expense, net, in the Company's Condensed Consolidated Statement of Operations, related to the prorated recognition of previously unrecognized actuarial losses reclassified from AOCL to earnings.

The Company anticipates the “buy-out” for the remaining PBO of the U.K. plan to be completed ~~by the end of 2022 or early~~in 2023. The non-cash settlement charge associated with ~~the~~this transaction is expected to be approximately £50 million to £70 million.

Footnote 12 — Income Taxes

The Company’s effective income tax rates for the three months ended June 30, 2023 and 2022 ~~and 2021 were 19.7% and 18.9%~~was a provision of 48.6% as compared to 21.0%, respectively, resulting from increased discrete tax expense, and ~~18.3%~~provision of 3.7% and ~~22.5%~~of 19.1% for the six months ended June 30, 2023 and 2022, ~~and 2021~~ respectively, ~~reflecting a low effective income~~resulting from more discrete tax ~~rate associated~~expense combined with ~~the sale of the CH&S business.~~year to date pretax losses.

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The differences between the U.S. federal statutory income tax rate of 21.0% and the Company’s effective income tax rate for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 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 and six months ended June 30, 2023 were impacted by certain discrete items. Income tax expense for the three months ended June 30, 2023 included a discrete expense of $6 million associated with a tax basis adjustment on a prior disposition. The six months ended June 30, 2023 also included certain discrete items totaling $4 million of additional income tax expense.

The three and six months ended June 30, 2022 were also impacted by certain discrete items. Income tax expense for the three months ended June 30, 2022 included a discrete benefit of $11 million associated with the reduction in valuation allowance related to the integration of certain Brazilian ~~operations~~. operations. The six months ended June 30, 2022 also included a discrete benefit of $4 million associated with the approval of certain state tax credits, offset by $15 million of ~~income~~ tax expense related to the divestiture of the CH&S ~~business unit~~.

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The three and six months ended June 30, 2021 were also impacted by certain discrete items. Income tax expense for the three and six months ended June 30, 2021 included a discrete benefit of $13 million associated with a reduction in valuation allowance related to the integration of certain U.K. operations and $9 million related to a statute of limitation expiration in France.

During the six months ended June 30, 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.business.

The Company’s U.S. federal income tax returns for 2011 to 2015 and 2017 to ~~2019,~~2020, as well as certain state and non-U.S. income tax returns for 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. 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 June 30, 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 13 — ~~Earnings Per Share~~Weighted Average Shares Outstanding

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


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended June 30,		Six Months Ended June 30,
		2022	2021	2022	2021		2023	2022	2023	2022

Basic weighted average shares outstanding	Basic weighted average shares outstanding	413.8	425.4	417.9	425.1	Basic weighted average shares outstanding	414.2	413.8	414.0	417.9
Dilutive securities(1)	Dilutive securities(1)	1.9	2.4	2.3	2.6	Dilutive securities(1)	1.1	1.9	—	2.3
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	415.7	427.8	420.2	427.7	Diluted weighted average shares outstanding	415.3	415.7	414.0	420.2

(1)The six months ended June 30, 2023 excludes 1.2 million of potentially dilutive share-based awards as their effect would be anti-dilutive.

Footnote 14 — Stockholders' Equity and Share-Based Compensation

During the six months ended June 30, ~~2022,~~2023, the Company granted ~~1.1~~1.6 million performance-based restricted stock units (“RSUs”), which had an aggregate grant date fair value of ~~$29~~$23 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 six months ended June 30, ~~2022,~~2023, the Company also granted ~~0.8~~2.9 million time-based RSUs with an aggregate grant date fair value of ~~$20~~$41 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.

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During the six months ended June 30, ~~2022,~~2023, the Company also granted ~~2.2~~0.5 million time-based stock options with an aggregate grant date fair value of ~~$14~~$2 million. These stock options entitle the 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~~dates and vest ~~in equal installments over a three-year period.~~on the specified anniversaries of the grant dates.

The weighted average assumptions used to determine the fair value of stock options granted for the six months ended June 30, ~~2022, is~~2023, were as follows:


Risk-free interest rates	~~1.9~~3.6	%
Expected volatility	~~42.0~~42.1	%
Expected dividend yield	~~5.1~~4.4	%
Expected life (in years)	66.9
Exercise price	$~~25.66~~12.86

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Special Incentive Program

As disclosed in our Current Report on Form 8-K filed with the SEC on May 19, 2023, the Company adopted the 2023 Special Incentive Program Terms and Conditions (the “SIP”) to incentivize performance against multi-year financial goals and to aid in the retention of certain Company executives.

On July 5, 2023, pursuant to the SIP, the Company granted 2.6 million performance-based RSUs, which had an aggregate grant date fair value of $22 million, to the Company’s President and Chief Executive Officer (“CEO”) and the Company’s Chief Financial Officer (“CFO”). These performance-based RSUs granted pursuant to the SIP, entitle the recipients to shares of the Company’s common stock and vest on February 27, 2026, subject to the achievement of the applicable performance goals.

The Company granted on July 5, 2023 an additional 1.9 million performance-based RSUs, which had an aggregate grant date fair value of $16 million, to certain key executives other than the CEO and CFO. These performance-based RSUs granted pursuant to the SIP entitle the recipients to shares of the Company’s common stock and vest as follows: 70% of the total grant will vest on the two-year anniversary of the grant date, and the remaining 30% of the total grant will vest on the three-year anniversary of the grant date, subject to the achievement of applicable performance measures.

The Company granted on July 5, 2023 an additional 1.3 million time-based RSUs, which had an aggregate grant date fair value of $11 million, to certain key executives other than the CEO and CFO. These time-based RSUs granted pursuant to the SIP entitle the recipients to shares of the Company’s common stock and will fully vest on the one-year anniversary of the date of grant.

The vesting of all grants pursuant to the SIP are subject to continued employment with the Company.

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~~its expiration date of December 31, 2022. Under the SRP, the Company ~~may~~was permitted to purchase its common shares 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. During the three months ended June 30, 2022, the Company repurchased approximately $50 million of its shares of common stock at an average ~~purchase~~ price of $22.01 per share. ~~At June 30, 2022, the Company has remaining authority to repurchase approximately $50 million of its shares of common stock under the SRP.~~

Footnote 15 — 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):


		June 30, 2022								December 31, 2021									June 30, 2023								December 31, 2022
		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	$	—	$	94	$	—	$	94	$	—	$	40	$	—	$	40	Assets	$	—	$	58	$	—	$	58	$	—	$	97	$	—	$	97
Liabilities	Liabilities	—		(30)		—		(30)		—		(57)		—		(57)		Liabilities	—		(182)		—		(182)		—		(124)		—		(124)
Investment securities, including mutual funds	Investment securities, including mutual funds	14		—		—		14		13		—		—		13		Investment securities, including mutual funds	16		—		—		16		14		—		—		14

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. 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.

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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 9 and Footnote 10, respectively.

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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.

~~In connection with~~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 ~~Company's~~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 ~~at December 1, 2021, a tradename within the Learning~~ and ~~Development segment was fair valued at $47 million on a non-recurring basis.~~as circumstances require.

During the second quarter of 2023, one tradename in the Home and Commercial Solutions segment was measured at fair value of $60 million. See Footnote 7 for further information.

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Footnote 16 — Segment Information

Effective January 1, 2023, as a result of the implementation of a new operating model intended to drive further simplification and unlock additional efficiencies and synergies within the Company, the CODM now reviews the businesses as three operating segments: Home and Commercial Solutions, Learning and Development and Outdoor and Recreation. The Home and Commercial Solutions operating segment represents the combination of the previously reported Commercial Solutions, Home Appliances and Home Solutions operating segments. Prior period comparable results have been reclassified to conform to the operating segment change.

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

The Company's 5three primary reportable segments are:

Segment

Key Brands

Description of Primary Products

Home and Commercial Solutions

Ball(1), Calphalon, Chesapeake Bay Candle, Crockpot, FoodSaver, Mapa, Mr. Coffee, Oster, Quickie, Rubbermaid, Rubbermaid Commercial Products, Sistema, Spontex, Sunbeam, WoodWick and ~~Spontex~~Yankee Candle

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

~~Home Appliances~~

~~Calphalon, Crockpot, Mr. Coffee, Oster and Sunbeam~~

~~Household~~solutions; household products, including kitchen ~~appliances~~

Home
Solutions

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

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

Learning and
Development

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

Campingaz, 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 (“CODM”)~~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.

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net sales (1)	Net sales (1)									Net sales (1)
Commercial Solutions (3)		$	429	$	493	$	939	$	964
Home Appliances		346		394		686		754
Home Solutions		467		525		967		1,029
Home and Commercial Solutions (3)										Home and Commercial Solutions (3)	$	1,058	$	1,242	$	2,029	$	2,592
Learning and Development	Learning and Development	865		844		1,515		1,461		Learning and Development	813		865		1,377		1,515
Outdoor and Recreation	Outdoor and Recreation	427		453		815		789		Outdoor and Recreation	333		427		603		815
		$	2,534	$	2,709	$	4,922	$	4,997		$	2,204	$	2,534	$	4,009	$	4,922

Operating income (loss) (2)	Operating income (loss) (2)									Operating income (loss) (2)
Commercial Solutions (3)		$	43	$	43	$	98	$	93
Home Appliances		15		13		(3)		16
Home Solutions		5		53		66		114
Home and Commercial Solutions (3)										Home and Commercial Solutions (3)	$	(21)	$	74	$	(58)	$	163
Learning and Development	Learning and Development	247		217		377		327		Learning and Development	188		245		260		383
Outdoor and Recreation	Outdoor and Recreation	46		48		91		63		Outdoor and Recreation	5		48		4		94
Corporate	Corporate	(39)		(69)		(95)		(116)		Corporate	(52)		(39)		(122)		(95)
		$	317	$	305	$	534	$	497		$	120	$	328	$	84	$	545

						June 30, 2022		December 31, 2021							June 30, 2023		December 31, 2022
Segment assets	Segment assets									Segment assets
Commercial Solutions (3)						$	1,961	$	2,522
Home Appliances						1,085		1,055
Home Solutions						3,140		3,109
Home and Commercial Solutions										Home and Commercial Solutions					$	5,045	$	5,243
Learning and Development	Learning and Development					4,608		4,401		Learning and Development					4,465		4,494
Outdoor and Recreation	Outdoor and Recreation					1,079		907		Outdoor and Recreation					881		920
Corporate	Corporate					2,575		2,185		Corporate					2,629		2,605
						$	14,448	$	14,179						$	13,020	$	13,262

(1)All intercompany transactions have been eliminated.

(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.~~income (loss).

(3)~~The change in the~~Home and Commercial Solutions net sales and operating income ~~and segment assets is primarily due to~~for the ~~sale~~first quarter of 2022 include the CH&S business ~~at the end of the first quarter of 2022.~~prior to its sale.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Commercial	$	378	$	429	$	726	$	830
Kitchen	549		650		1,008		1,292
Home Fragrance	131		163		295		361
Connected Home and Security	—		—		—		109
Home and Commercial Solutions	1,058		1,242		2,029		2,592

Baby	251		313		468		604
Writing	562		552		909		911
Learning and Development	813		865		1,377		1,515

Outdoor and Recreation	333		427		603		815

TOTAL	$	2,204	$	2,534	$	4,009	$	4,922

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


	Three months ended June 30,
	2023						2022
	North America		International		TOTAL		North America		International		TOTAL
Home and Commercial Solutions	$	698	$	360	$	1,058	$	863	$	379	$	1,242
Learning and Development	609		204		813		656		209		865
Outdoor and Recreation	188		145		333		237		190		427
	$	1,495	$	709	$	2,204	$	1,756	$	778	$	2,534

	Six months ended June 30,
	2023						2022
	North America		International		TOTAL		North America		International		TOTAL
Home and Commercial Solutions	$	1,341	$	688	$	2,029	$	1,838	$	754	$	2,592
Learning and Development	1,004		373		1,377		1,124		391		1,515
Outdoor and Recreation	334		269		603		447		368		815
	$	2,679	$	1,330	$	4,009	$	3,409	$	1,513	$	4,922

Three Months Ended June 30, 2022
Commercial Solutions Home
Appliances Home
Solutions Learning and Development Outdoor and Recreation Total
Commercial $ 429 $ — $ — $ — $ — $ 429
Home Appliances — 346 — — — 346
Food — — 304 — — 304
Home Fragrance — — 163 — — 163
Baby — — — 313 — 313
Writing — — — 552 — 552
Outdoor and Recreation — — — — 427 427
Total $ 429 $ 346 $ 467 $ 865 $ 427 $ 2,534
North America $ 314 $ 156 $ 393 $ 656 $ 237 $ 1,756
International 115 190 74 209 190 778
Total $ 429 $ 346 $ 467 $ 865 $ 427 $ 2,534
Three Months Ended June 30, 2021
Commercial Solutions Home
Appliances Home
Solutions Learning and Development Outdoor and Recreation Total
Commercial $ 401 $ — $ — $ — $ — $ 401
Connected Home Security 92 — — — — 92
Home Appliances — 394 — — — 394
Food — — 323 — — 323
Home Fragrance — — 202 — — 202
Baby — — — 319 — 319
Writing — — — 525 — 525
Outdoor and Recreation — — — — 453 453
Total $ 493 $ 394 $ 525 $ 844 $ 453 $ 2,709
North America $ 364 $ 206 $ 425 $ 626 $ 256 $ 1,877
International 129 188 100 218 197 832
Total $ 493 $ 394 $ 525 $ 844 $ 453 $ 2,709

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Six Months Ended June 30, 2022
Commercial Solutions Home
Appliances Home
Solutions Learning and Development Outdoor and Recreation Total
Commercial $ 830 $ — $ — $ — $ — $ 830
Connected Home Security 109 — — — — 109
Home Appliances — 686 — — — 686
Food — — 606 — — 606
Home Fragrance — — 361 — — 361
Baby — — — 604 — 604
Writing — — — 911 — 911
Outdoor and Recreation — — — — 815 815
Total $ 939 $ 686 $ 967 $ 1,515 $ 815 $ 4,922
North America $ 710 $ 334 $ 794 $ 1,124 $ 447 $ 3,409
International 229 352 173 391 368 1,513
Total $ 939 $ 686 $ 967 $ 1,515 $ 815 $ 4,922
Six Months Ended June 30, 2021
Commercial Solutions Home
Appliances Home
Solutions Learning and Development Outdoor and Recreation Total
Commercial $ 781 $ — $ — $ — $ — $ 781
Connected Home Security 183 — — — — 183
Home Appliances — 754 — — — 754
Food — — 597 — — 597
Home Fragrance — — 432 — — 432
Baby — — — 600 — 600
Writing — — — 861 — 861
Outdoor and Recreation — — — — 789 789
Total $ 964 $ 754 $ 1,029 $ 1,461 $ 789 $ 4,997
North America $ 708 $ 401 $ 826 $ 1,052 $ 433 $ 3,420
International 256 353 203 409 356 1,577
Total $ 964 $ 754 $ 1,029 $ 1,461 $ 789 $ 4,997

Footnote 17 — 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 ~~has~~ cooperated with the SEC in connection with its investigation and ~~ongoing~~ requests for documents, testimony and ~~information~~information. Since January 2023, the Company has been discussing with the SEC the possibility of reaching a settlement to resolve the investigation, which now relates to certain time periods within the Company's 2016 and ~~intends to continue to do so. The~~2017 fiscal years. Although the Company cannot predict the ~~timing or~~ultimate outcome of ~~this investigation.~~the SEC investigation with certainty, it believes that the resolution of the SEC investigation will not have a material effect on the Company’s Condensed Consolidated Financial Statements. Further, on June 30,

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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 in Footnote 12 - Income ~~Taxes~~Ta.xes in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 15, 2023.

Securities Litigation

The Company and certain of its current and former officers and directors were named as defendants in a 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 to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden Corporation (the “Registration Statement”). The action was filed on September 6, 2018 and was captioned Oklahoma Firefighters Pension and Retirement System v. Newell Brands Inc., et al., Civil Action No. HUD-L-003492-18 (“Oklahoma Firefighters”). In October 2022, the Company entered into a settlement agreement to resolve the claims asserted in this lawsuit. Under the settlement, the Company agreed to create a settlement fund of approximately $103 million for the benefit of the class, subject to certain exclusions, which was predominantly funded by insurance proceeds. Both the settlement and the insurance receivable were recorded during the third quarter of 2022. The amount not funded by available insurance proceeds, which is not material to the Company, was expensed during the third quarter of 2022. In the fourth quarter of 2022, the Court granted the plaintiff's motion for preliminary approval of the settlement, and the Company and its insurers paid the required amount into the settlement fund. On February 10, 2023, the Court granted the plaintiff's motion for final approval of settlement. The deadline to appeal the order granting final approval of the settlement has expired and the settlement is final.

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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.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. 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 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, 2two 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. OnThese derivative complaints seek 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.

In March ~~19,~~ 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, referenced above, and stayed the Weber Derivative Action pending final disposition of Oklahoma ~~Firefighters Pension and Retirement System v.~~Firefighters. On January 31, 2023, Plaintiff Streicher voluntarily dismissed herself from the Newell Brands ~~Inc.,~~ ~~et al.~~ ~~(described below).~~Derivative Action without prejudice. On May 30, 2023, the United States District Court for the District of Delaware continued the stays of the Newell Brands Derivative Action and the Weber Derivative Action for an additional ninety days.

~~The Company and certain of its current and former officers and directors have been named as defendants in~~On May 26, 2023, Plaintiff Streicher filed a new putative ~~securities class action lawsuit filed~~derivative complaint, Streicher v. Polk, et al., in the Superior Court of New Jersey, Law Division: Hudson County (the “New Jersey Derivative Action” and, collectively with the Newell Brands Derivative Action and the Weber Derivative Action, the “Derivative Actions”), purportedly on behalf of ~~all persons who acquired~~the Company ~~common stock pursuant or traceable~~against certain of the Company’s current and former officers and directors. The complaint in the New Jersey Derivative Action alleges breaches of fiduciary duty. The factual allegations underlying these claims are similar to the ~~S-4 registration statement and prospectus issued~~factual allegations made in ~~connection with~~ the ~~April 2016 acquisition of Jarden Corporation (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~~Derivative Action ~~No. HUD-L-003492-18.~~and the Weber Derivative Action. On June 7, 2023, Plaintiff Streicher filed a Stipulation of Settlement (the “Stipulation”) and Motion for Preliminary Approval of Settlement in the New Jersey Derivative Action. The ~~operative complaint alleges certain violations of~~proposed settlement as set forth in the ~~securities laws, including,~~Stipulation provides for, among other things, a full release of the claims that the ~~defendants made certain materially false and misleading statements and omissions~~plaintiffs or any other Company stockholder asserted or could have asserted in the ~~Registration Statement regarding~~Derivative Actions against any of the defendants named in those actions, in exchange for the Company’s ~~financial results, trends,~~agreement to implement and/or maintain certain corporate governance measures, as more fully described in the Stipulation and ~~metrics.~~Notice of Proposed Derivative Settlement as filed by the Company with the SEC on a Current Report on Form 8-K dated June 29, 2023 (the “Settlement”). On June 27, 2023, the Superior Court of Hudson County, New Jersey issued an order preliminarily approving the proposed Settlement as set forth in the Stipulation. The ~~plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief.~~Settlement is subject to final consideration at a hearing to be held on August 25, 2023. The ~~Company is currently unable to predict~~Settlement, if finally approved, will cause the ~~ultimate timing or outcome~~dismissal with prejudice of ~~this litigation or reasonably estimate~~each of 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 other terms and conditions), but any losses may exceed our current coverage levels, which could have an adverse impact on our financial results.Derivative Actions.

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.

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The Company’s estimate of environmental remediation costs associated with these matters at June 30, ~~2022~~2023 was ~~$36~~$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

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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 to over 100 entities, including the Company and its subsidiary, Berol Corporation (together, the “Company Parties”), alleging that they are PRPs at the Diamond Alkali Superfund Site (the “Site”) pursuant to CERCLA. The Site is the subject of investigation and remedial activities ~~(the “CERCLA Administrative Actions”)~~ and related settlement negotiations with the U.S. EPA. ~~In addition, the Company Parties are defendants in related litigation, and the Site is also subject to a Natural Resource Damage Assessment.~~

~~CERCLA Administrative Actions~~

The Site is divided into 4four “operable units,” and the Company Parties have received General Notice Letters in connection with operable ~~unit~~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 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 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 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 remedial investigation and feasibility study for Unit 4 is not yet complete and remains underway.

In October 2021, the U.S. EPA 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 the aggregate.

~~Unit 2 Investigation~~

~~Concurrent with activities under the remedial investigation and feasibility study for Unit 4, the~~The U.S. EPA also 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 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 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 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.

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~~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 ~~concluded. In February~~concluded, and the Company Parties were placed in the lowest tier of relative responsibility among allocation parties. On December 16, 2022, the U.S. EPA simultaneously filed a complaint and ~~certain parties~~lodged a Consent Decree to resolve the ~~allocation, including~~liability of the Company Parties ~~reached an agreement in principle concerning a cash-out~~and other settlement parties for ~~both~~past and future CERCLA response costs at Unit 2 and Unit 4. The ~~agreement in principle~~proposed Consent Decree is undergoing public notice and comment, and it remains subject to court entry. As of the ~~negotiation and court entry~~date of ~~a consent decree finalizing~~this filing, the Company does not expect that its allocation in the U.S. EPA ~~Settlement.~~

~~The OCC Litigation~~Settlement relating to Unit 2 and Unit 4, if the settlement is finalized, will be material to the Company.

In June 2018, ~~OCC~~Occidental Chemical Corporation (“OCC”) sued over 100 parties, including the Company Parties, in the U.S. District Court in New Jersey pursuant to CERCLA, requesting cost recovery, contribution, and a declaratory judgement. The defendants, in turn, filed claims against 42 third-party defendants, and filed counterclaims against OCC (collectively, the “OCC Litigation”). The primary focus of the OCC Litigation has been certain past and future costs for investigation, design and remediation of Units 2 and 4. However, OCC has stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the Site, after the U.S. EPA has selected the Newark Bay remedy. OCC has also stated that it may broaden its claims in the future after completion of the 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~~March 2023, the ~~OCC Litigation moved~~Court granted an unopposed motion 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 to the Company Parties, along with numerous other entities, identifying the recipients as PRPs. The federal trustees (who now include the United States Department of Commerce, represented by NOAA, and the Department of the 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 Settlement relating to Unit 2 and Unit 4, if the settlement is finalized, will be material to the Company. WithAssessment with respect to the ~~OCC Litigation and Natural Resource Damage Assessment, the Company is currently unable to reasonably estimate the range of possible losses.~~Site.

Based on currently known facts and circumstances, the Company does not believe that the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of operations. However, in the event of one or more adverse determinations related to this matter, including the OCC Litigation and Natural Resource Damage Assessment noted above (for which the Company cannot currently estimate the range of possible losses), 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.

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Other Matters

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,

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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 (“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 the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was recently filed against USPC.

During the fourth quarter of 2022, the Company recorded an immaterial reserve based on the outcome of a judicial ruling relating to indirect taxes in an international entity. During the three months ended March 31, 2023, the Company paid the estimated liability to the relevant taxing authorities. Although the Company cannot predict the ultimate outcome of this contingency with certainty, it believes that any additional amounts it may be required to pay will not have a material effect on the Company’s future Condensed Consolidated Financial Statements.

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 June 30, ~~2022,~~2023, the Company had approximately ~~$45~~$40 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

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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 up,” “beginning to,” “will,” “should,” “would,” “could,” “resume,” “are confident that,” “remain optimistic 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 optimize costs and cash flow and mitigate the impact of retailer inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjustments and actions to improve working capital;

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

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

•the Company's ability to manage ~~the~~any actual or perceived ongoing effects of the COVID-19 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 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;

•supply chain and operational disruptions in the markets in which we operate, whether as a result of the actual or perceived effects of the COVID-19 pandemic or broader geopolitical and macroeconomic conditions, including the military conflict between Russia and Ukraine;

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

•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 effectively execute its turnaround plan, including Project Ovid, Project Phoenix and the Network Optimization Project;

•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 consistently maintain effective internal control over financial reporting;

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

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

•unexpected costs or expenses associated with dispositions;

•~~our ability to effectively execute our turnaround plan, including Project Ovid;~~

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

•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 service providers;

•the impact of United States and foreign regulations on the Company’s operations, including the impact of tariffs, product regulation and legislation and environmental remediation costs and legislation and regulatory actions related to data privacy and 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; and

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•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 and other filings.

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.

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Overview

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, ~~FoodSaver, Calphalon, Sistema,~~ Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, ~~Yankee Candle, Graco,~~Oster, NUK, ~~Rubbermaid Commercial Products,~~ Spontex ~~Coleman, Campingaz, Contigo, Oster, Sunbeam~~ and ~~Mr. Coffee.~~Campingaz. Newell ~~Brands' beloved brands enhance and brighten~~Brands is focused on delighting consumers ~~lives at home and outside~~ by ~~creating moments of joy, building confidence and providing peace of mind.~~lighting up everyday moments. 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.

New Business Strategy

~~The~~Following a comprehensive assessment of key capabilities, effective the second quarter of 2023, the leadership team began implementing an integrated set of new “where to play” and “how to win” strategies designed to enable the Company ~~continues~~ to ~~execute on~~leverage the scale of the portfolio, while further building upon its ~~turnaround strategy of building a global, next generation consumer products company that can unleash the full potential~~operational foundation and strengthening its front-end capabilities.

As part of its ~~brands in a fast-moving omni-channel environment. The~~ strategy, ~~developed in 2019,~~the Company is ~~designed to:~~focused on:

•~~Drive sustainable top line growth by focusing on~~Driving meaningful improvement in front-end capabilities, including consumer understanding, brand management, brand communications, innovation ~~sharpening brand positioning, strengthening the international businesses, enhancing digital marketing~~ and ~~omni-channel capabilities, and building customer relationships;~~go-to-market execution;

•~~Improve operating margins by driving productivity and overhead savings, while reinvesting~~Disproportionately investing in the ~~business;~~Company's largest and most profitable brands, fastest-growing channels, major retailers and key geographies;

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

•~~Strengthen~~Turning the ~~portfolio by investing in attractive categories~~Company's scale into a competitive advantage, enabling cost savings that ~~are aligned with its capabilities and strategy and optimizing product mix;~~provide fuel for reinvestment; and

•~~Strengthen organizational capabilities and employee engagement by building~~Transitioning to a ~~winning team and focusing~~high-performance organization as the ~~best people on the right things.~~Company transforms its culture.

The Company is implementing this strategy while ~~addressing~~continuing to address key challenges such as shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail and consumer landscape; continued macroeconomic and geopolitical volatility; a softening macro backdrop; significant inflationary ~~and supply chain~~ pressures, and an evolving regulatory landscape.

~~Continued execution~~Execution of these strategic imperatives, in combination with ~~new~~other 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, which completed its first phase go-live during the third quarter of 2022 and its second phase go-live during the first quarter of 2023, 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.~~network and consolidating the number of overall distribution sites.

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efficiencies. Project Phoenix is expected to be substantially implemented by the end of 2023 and incorporates a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize the Company’s supply chain functions, which include manufacturing, distribution, transportation and customer service, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs. The Company commenced reducing headcount during the first quarter of 2023, with most of these actions expected to be completed by the end of 2023, subject to local law and consultation requirements.

In addition, the Company's ongoing review of its operating footprint and non-core brands will result in future restructuring charges.

Organizational Structure

Effective January 1, 2023, as a result of the implementation of a new operating model intended to drive further simplification and unlock additional efficiencies and synergies within the Company, the chief operating decision maker (“CODM”) now reviews the businesses as three operating segments: Home and Commercial Solutions, Learning and Development and Outdoor and Recreation. The Home and Commercial Solutions operating segment represents the combination of the previously reported Commercial Solutions, Home Appliances and Home Solutions operating segments. Prior period comparable results have been reclassified to conform to the operating segment change.

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 Home and Commercial Solutions segment through March 31, 2022.

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

Segment

Key Brands

Description of Primary Products

Home and Commercial Solutions

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

~~Home Appliances~~

~~Calphalon, Crockpot, Mr. Coffee, Oster and Sunbeam~~

~~Household~~solutions; household products, including kitchen ~~appliances~~

Home
Solutions

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

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

Learning and
Development

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

Campingaz, 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~~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. See Footnote 16 of the Notes to ~~the~~ Unaudited Condensed Consolidated Financial Statements for further information.

Recent Developments

~~COVID-19 Pandemic~~Current Macroeconomic Conditions

The ~~COVID-19 pandemic,~~Company continues to be impacted by inflationary pressures, softening global demand, focus by major retailers on the rebalancing of inventory levels, rising interest rates and indirect macroeconomic impacts from the Russia-Ukraine conflict. These collective macroeconomic trends, the duration or severity of which ~~began in late 2019, has continued~~are highly uncertain, are rapidly changing the retail and consumer landscape and are expected to ~~disrupt~~continue to negatively impact the Company’s ~~global operations, similar to those of many large, multi-national corporations in two primary areas:~~operating results, cash flows and financial condition during the current year.

~~Supply chain.~~ The Company continues to face product, supply and labor shortages, capacity constraints 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 certain categories. The Company also continues to face significant inflation for commodities, including resin and metals, sourced finished goods, transportation and labor, which had a negative high-single-digit-percentage impact to costsTable of ~~products sold in the first half of 2022. These various disruptions are expected to persist, at least in the near-term.~~ Contents

To help mitigate the negative impact of ~~inflation~~these conditions to the operating performance of its businesses, the Company has secured selective pricing increases, accelerated productivity initiatives, optimized advertising and promotion expenses, deployed overhead cost containment ~~efforts.~~efforts, adjusted demand forecasts and supply plans, and taken actions designed to improve working capital. The Company will continue to evaluate other opportunities to improve its financial performance both in the short and long term, including the strategic initiatives described in the preceding section.

~~Consumer demand patterns.~~Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future expense or impairment charges. See Footnote 1 of the ~~During the quarantine phase~~Notes to Unaudited Condensed Consolidated Financial Statements for further information on use of the pandemic in 2020, consumer purchasing behavior strongly shifted to certain focused categories. At that time, certain of the Company’s product categories benefited from this shift, primarily in Food, Commercialestimates and Home Appliances. Some of the Company’s other businesses were negatively impacted but experienced a surge in demand post lockdowns, in particular Writing, Baby and Home Fragrance. While the seasonality of the Company's businesses reverted back to historical trends in 2021, uncertainty still remains over the volatility and direction of future consumer demand patterns as certain of its businesses are lapping a prior-year surge in demand.risks.

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The Company believes the extent of the impact of the COVID-19 pandemic on the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company cannot accurately predict and which will vary by jurisdiction and market. The Company continues to monitor for any future developments regarding COVID-19, including government requirements and recommendations at the national, state, and local level on whether to reinstate and/or extend certain initiatives previously implemented to help contain the spread of the virus. The Company has mandated vaccinations for its U.S. professional and office-based employees.

Russia-Ukraine Conflict

The global economy has been negatively impacted by the military conflict between Russia and Ukraine. While the Company does not expect the conflict to have a material impact on its results of operations, it has experienced shortages in raw materials and increased costs for transportation, energy, and commodities due in part to the negative impact of the Russia-Ukraine military conflict on the global economy. Further escalation of geopolitical tensions related to the conflict, including increased trade barriers and restrictions on global trade, could result in, among other things, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain. Additionally, if the military conflict escalates beyond its current scope, the Company could be negatively impacted by economic recessions in certain neighboring European countries or globally. See Footnote 1 of theNotes to Unaudited Condensed Consolidated Financial Statements for further information on use of estimates and risks.

~~Share Repurchase Program~~Network Optimization Project

The Company initiated implementation of the Network Optimization Project during the second quarter of 2023 and expects it to be substantially implemented by the end of fiscal year 2024. During the three and six months ended June 30, 2023, the Company recorded restructuring charges of $2 million in connection with the project. See Footnote 4 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. During the three and six months ended June 30, 2023, the Company recorded restructuring-related charges of $7 million in connection with the project.

Project Phoenix

During the three and six months ended June 30, 2023, the Company recorded restructuring charges of $17 million and $53 million, respectively, in connection with the Project Phoenix. See Footnote 4 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information. During the three and six months ended June 30, 2023, the Company recorded restructuring-related charges of $4 million and $10 million, respectively, in connection with the project.

Goodwill and Other Indefinite-Lived Intangible Asset Impairment

Debt Rating Downgrade

On ~~February 6, 2022,~~March 20, 2023, S&P Global Inc. (“S&P”) downgraded the ~~Company's Board~~Company’s debt rating to “BB+”. As a result of ~~Directors authorized a $375~~the S&P downgrade, certain of the Company’s outstanding senior notes currently aggregating to approximately $3.1 billion are subject to an interest rate adjustment of 25 basis points. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million ~~Share Repurchase Program (“SRP”), effective immediately through the end of 2022. Under the SRP,~~on an annualized basis (approximately $6 million in 2023). In addition, the Company ~~may purchase its common shares~~is still subject to the interest rate adjustment of 25 basis points in connection with 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”Moody’s Corporation (“Moody’s”)~~, at a purchase price of $25.86 per share, the closing price~~ downgrade of the Company's ~~common shares on February 18, 2022. During~~debt rating in 2020. Furthermore, as a result of the ~~three months ended June 30, 2022,~~S&P downgrade, the Company repurchased approximately $50 million of its shares of common stock at an average purchase price of $22.01 per share. At June 30, 2022, the Company has remaining authority to repurchase approximately $50 million of its shares of common stock under the SRP.

Company's

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ability to borrow from the commercial paper market on terms it deems acceptable or favorable was eliminated. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

On February 14, 2023, Fitch Ratings downgraded the Company's debt rating to “BB”. This downgrade did not impact the interest rates on any of the Company's senior notes.

Amendment to Credit Revolver

The Company has a $1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) that matures in August 2027. On March 27, 2023, the Company entered into an amendment to its Credit Revolver (the “Amendment”) to (i) include non-cash expenses resulting from grants of stock awards among the items that may be added to Consolidated Net Income when calculating Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined in the Amendment, and (ii) lower the Interest Coverage Ratio, as defined in the Amendment, for the fiscal quarters ending on June 30, 2023, September 30, 2023, December 31, 2023 and March 31, 2024. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Results of Operations

Three Months Ended June 30, ~~2022~~2023 vs. Three Months Ended June 30, ~~2021~~2022

Consolidated Operating Results


		Three Months Ended June 30,										Three Months Ended June 30,
(in millions)	(in millions)	2022			2021			$ Change		% Change	(in millions)	2023			2022			$ Change		% Change
Net sales	Net sales	$	2,534		$	2,709		$	(175)	(6.5)%	Net sales	$	2,204		$	2,534		$	(330)	(13.0)%
Gross profit	Gross profit	825			882			(57)		(6.5)%	Gross profit	629			836			(207)		(24.8)%
Gross margin	Gross margin	32.6		%	32.6		%				Gross margin	28.5		%	33.0		%

Operating income	Operating income	317			305			12		3.9%	Operating income	120			328			(208)		(63.4)%
Operating margin	Operating margin	12.5		%	11.3		%				Operating margin	5.4		%	12.9		%

Interest expense, net	Interest expense, net	55			65			(10)		(15.4)%	Interest expense, net	76			55			21		38.2%

Other (income) expense, net		8			(3)			11		NM
Other expense, net											Other expense, net	9			21			(12)		(57.1)%
Income before income taxes	Income before income taxes	254			243			11		4.5%	Income before income taxes	35			252			(217)		(86.1)%
Income tax provision	Income tax provision	50			46			4		8.7%	Income tax provision	17			53			(36)		(67.9)%
Income tax rate	Income tax rate	19.7		%	18.9		%				Income tax rate	48.6		%	21.0		%

Net income	Net income	$	204		$	197		$	7	3.6%	Net income	$	18		$	199		$	(181)	(91.0)%

Diluted earnings per share attributable to common shareholders	Diluted earnings per share attributable to common shareholders	$	0.49		$	0.46					Diluted earnings per share attributable to common shareholders	$	0.04		$	0.48

~~NM - NOT MEANINGFUL~~

Net sales for the three months ended June 30, ~~2022~~2023 decreased ~~6%,~~13%. Net sales were unfavorably impacted by softening global demand, as major retailers significantly pulled back on orders to rebalance inventory levels and the impact of inflation continued to pressure consumer spending, partially offset by early order timing ahead of a price increase taking effect in the third quarter of 2023 for certain product lines and ahead of the back to school season, as well as pricing actions by the Company were more than offset by a negative impact on sales of approximately 3% due to the sale of the CH&S business at the end of the first quarter of 2022, softening demand in certain categories in the U.S., primarily in the Home Appliances and Home Solutions segments, which lapped elevated levels of demand, and certain category exits in Home Appliances and Outdoor and Recreation segments. In addition, net sales for the Outdoor and Recreation segment reflected a shift in customer orders placed during the first quarter of the year as a result of supply chain constraints.Company. Changes in foreign currency unfavorably impacted net sales by ~~$80~~$17 million, or 3%1%.

Gross profit decreased 6%25% and gross margin ~~remained flat at 32.6%. Gross~~decreased to 28.5% as compared with 33.0% in the prior year period. The decrease in gross margin ~~performance reflected~~was driven by lower gross profit leverage, higher restructuring-related charges and input cost inflation, partially offset by favorable ~~net~~ pricing and gross productivity, offset by significant input cost inflation for commodities, primarily metals, sourced finished goods, transportation and labor, which had a negative high-single-digit-percentage impact to costs of products sold. The gross profit decline also reflected the sale of the CH&S business.productivity. Changes in foreign currency exchange rates unfavorably impacted gross profit by ~~$29~~$9 million or 3%1%.

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~~In addition to the change in gross profit noted above, notable~~Notable items impacting operating income for the three months ended June 30, ~~2022~~2023 and ~~2021~~2022 are as follows:


	Three Months Ended June 30,							Three Months Ended June 30,
	2022		2021		$ Change			2023		2022		$ Change
Impairment of intangible and other assets (See Footnotes 1 and 7)							Impairment of intangible and other assets (See Footnotes 1 and 7)	$	11	$	—	$	11
Restructuring (See Footnote 4) and restructuring-related costs (a)							Restructuring (See Footnote 4) and restructuring-related costs (a)	39		6		33
Transactions costs and other (b)							Transactions costs and other (b)	12		4		8

Restructuring (See Footnote 4) and restructuring-related costs (a)	$	6	$	8	$	(2)
Transactions and other costs (b)	4		9		(5)

(a)Restructuring-related costs reported in cost of goods sold and selling, general and administrative expenses (“SG&A”) for the three months ended June 30, ~~2022~~2023 were $2$26 million and net recovery of $9 million, respectively, and primarily ~~related~~relate to facility closures. For the three months ended June 30, ~~2021,~~2022, restructuring-related costs reported in cost of sales and SG&A were $2 million, ~~and $1 million, respectively,~~net and primarily relate to facility closures. Restructuring costs were $4

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$22 million and $5$4 million for the three months ended June 30, 2023 and 2022, ~~and 2021,~~ respectively.

(b)Transactions and other costs for the three months ended June 30, 2023 and 2022 ~~and 2021~~ primarily ~~relate~~related to ~~completed divestitures and fees~~costs for certain legal ~~proceedings.~~proceedings and completed divestitures.

Operating income ~~increased~~decreased to ~~$317~~$120 million as compared to ~~$305~~$328 million in the prior year period. The ~~increase~~decrease in operating income reflects ~~lower incentive compensation expense and lower overhead spending, partially offset by the~~ impact of lower gross ~~profit. Operating income was also negatively impacted~~profit, higher restructuring and restructuring-related charges, primarily in connection with Project Phoenix and the Network Optimization Project, and non-cash impairment charges primarily related to an indefinite-lived tradename, partially offset by ~~the sale of the CH&S business.~~lower advertising and promotion costs and savings from restructuring actions.

Interest expense, net ~~decreased~~increased primarily due to ~~lower~~higher interest rates and debt ~~levels.~~levels, partially offset by higher interest income. The weighted average interest rates for the three months ended June 30, ~~2022~~2023 and ~~2021~~2022 were approximately ~~4.2%~~5.3% and ~~4.7%~~4.2%, respectively. See Footnote 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Other ~~(income)~~ expense, net for three months ended June 30, ~~2022~~2023 and ~~2021~~2022 includes the following items:

Three Months Ended
June 30,
2022 2021
Foreign exchange losses, net $ 10 $ 2
Fair value equity adjustments (See Footnote 15)
(1) —
(Gain) loss on disposition of businesses (See Footnote 2)
(3) 2
Other (gains) losses, net 2 (7)
$ 8 $ (3)


	Three Months Ended June 30,
	2023		2022
Foreign exchange losses, net	$	3	$	23

Gain on disposition of businesses (See Footnote 2)	—		(3)
Pension settlement costs (See Footnote 11)	5		—
Other losses, net	1		1
	$	9	$	21

Income tax provision for the three months ended June 30, ~~2022~~2023 was ~~$50~~$17 million as compared to ~~$46~~$53 million for the three months ended June 30, ~~2021.~~2022. The effective tax rate for the three months ended June 30, ~~2022~~2023 was ~~19.7%~~48.6%, resulting from increased discrete tax expense, as compared to ~~18.9%~~21.0% for the three months ended June 30, 2021. The change in effective tax provision was impacted by a variety of factors, primarily resulting from certain discrete items. The income tax provision for the three months ended June 30, 2022 included a discrete benefit of $11 million associated with the reduction in valuation allowance related to the integration of certain Brazilian operationsThe income tax provision for the three months ended June 30, 2021 included a discrete benefit of $13 million associated with a reduction in valuation allowance related to the integration of certain U.K. operations and $9 million related to a statute of limitation expiration in France.2022.

See Footnote 12 of the Notes to the Unaudited Condensed Consolidated Financial Statements for ~~information regarding income taxes, including the inherent uncertainty associated with the Company's position on recently enacted U.S. Treasury Regulations.~~further information.

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Business Segment Operating Results

Home and Commercial Solutions


		Three Months Ended June 30,										Three Months Ended June 30,
(in millions)	(in millions)	2022			2021			$ Change		% Change	(in millions)	2023			2022			$ Change		% Change
Net sales	Net sales	$	429		$	493		$	(64)	(13.0)%	Net sales	$	1,058		$	1,242		$	(184)	(14.8)%

Operating income		43			43			—		—%
Operating income (loss)											Operating income (loss)	(21)			74			(95)		NM
Operating margin	Operating margin	10.0		%	8.7		%				Operating margin	(2.0)		%	6.0		%

Notable items impacting operating income (loss) comparability:											Notable items impacting operating income (loss) comparability:
Impairment of intangible and other assets (See Footnotes 1 and 7)											Impairment of intangible and other assets (See Footnotes 1 and 7)	$	10		$	—

NM - NOT MEANINGFUL											NM - NOT MEANINGFUL

Home and Commercial Solutions net sales for the three months ended June 30, ~~2022~~2023 decreased ~~13%~~15%, which reflected softening global demand across all businesses, slightly offset by early order timing ahead of a price increase taking effect in the third quarter of 2023 for certain product lines and by pricing actions. Changes in foreign currency unfavorably impacted net sales by $10 million, or 1%.

Operating loss for the three months ended June 30, 2023 was $21 million as compared to operating income of $74 million in the prior year period. This decrease in operating results is primarily due to lower gross profit leverage, product mix and input cost inflation, higher restructuring and restructuring-related charges in connection with Project Phoenix and non-cash impairment charges primarily related to an indefinite-lived tradename, partially offset by gross productivity, lower advertising and promotion costs and savings from restructuring actions.

Learning and Development


	Three Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	813		$	865		$	(52)	(6.0)%

Operating income	188			245			(57)		(23.3)%
Operating margin	23.1		%	28.3		%

Learning and Development net sales for the three months ended June 30, 2023 decreased 6%. Growth in the Writing business was offset by a decline in the Baby business. The Writing business performance reflected pricing actions, innovation and early order timing ahead of the back to school season, partially offset by softening demand in certain categories. The Baby business reflects softening demand in certain categories and lower sales to a customer that recently declared bankruptcy, partially offset by pricing actions. Changes in foreign currency unfavorably impacted net sales by $3 million.

Operating income for the three months ended June 30, 2023 decreased to $188 million as compared to $245 million in the prior-year period. The decrease in operating income is primarily due to lower gross profit leverage and input cost inflation, as well as higher restructuring and restructuring-related charges primarily related to Project Phoenix, partially offset by gross productivity and savings from restructuring actions.

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Outdoor and Recreation


	Three Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	333		$	427		$	(94)	(22.0)%

Operating income	5			48			(43)		(89.6)%
Operating margin	1.5		%	11.2		%

Outdoor and Recreation net sales for the three months ended June 30, 2023 decreased 22%, reflecting softening global demand and distribution losses, partially offset by pricing actions. Changes in foreign currency unfavorably impacted net sales by $4 million or 1%.

Operating income for the three months ended June 30, 2023 was $5 million as compared to $48 million in the prior-year period. The decline was due to lower gross profit leverage, product mix and higher restructuring-related charges, partially offset by gross productivity and savings from restructuring actions.

Six Months Ended June 30, 2023 vs. Six Months Ended June 30, 2022

Consolidated Operating Results


	Six Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	4,009		$	4,922		$	(913)	(18.5)%
Gross profit	1,111			1,576			(465)		(29.5)%
Gross margin	27.7		%	32.0		%

Operating income	84			545			(461)		(84.6)%
Operating margin	2.1		%	11.1		%

Interest expense, net	144			114			30		26.3%

Other (income) expense, net	21			(97)			118		NM
Income (loss) before income taxes	(81)			528			(609)		NM
Income tax provision	3			101			(98)		(97.0)%
Income tax rate	(3.7)		%	19.1		%

Net income (loss)	$	(84)		$	427		$	(511)	NM

Diluted earnings (loss) per share attributable to common shareholders	$	(0.20)		$	1.02

NM - NOT MEANINGFUL

Net sales for the six months ended June 30, 2023 decreased 19%. Net sales were unfavorably impacted by softening global demand, as major retailers significantly pulled back on orders to rebalance inventory levels and the impact of inflation continued to pressure consumer spending, and category exits, primarily in the Home and Commercial Solutions segment, partially offset by early order timing ahead of a price increase taking effect in the third quarter of 2023 for certain product lines and ahead of the back to school season, as well as pricing actions by the Company. The sale of the CH&S business at the end of the first quarter of 2022, negatively impacted net sales by approximately 2%. Changes in foreign currency unfavorably impacted net sales by $66 million, or 1%.

Gross profit decreased 30% compared to prior year. Gross margin declined to 27.7% as compared with 32.0% in the prior year period. The decrease in gross margin was driven by lower gross profit leverage, higher restructuring-related charges and input

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cost inflation. The gross margin decline was partially offset by favorable pricing and gross productivity. The gross profit decline also reflected the unfavorable impact of the sale of the CH&S business in the prior year. Changes in foreign currency exchange rates unfavorably impacted gross profit by $34 million, or 2%.

Notable items impacting operating income for the six months ended June 30, 2023 and 2022 were as follows:


	Six Months Ended June 30,
	2023		2022		$ Change
Impairment of intangible and other assets (See Footnotes 1 and 7)	$	11	$	—	$	11
Restructuring (See Footnote 4) and restructuring-related costs (a)	90		17		73
Transactions costs and other (b)	21		12		9

(a)Restructuring-related costs reported in cost of goods sold and SG&A for the six months ended June 30, 2023 was $31 million and recovery of $1 million, respectively, and primarily relate to facility closures. For the six months ended June 30, 2022, restructuring-related costs reported in cost of sales was $8 million, and primarily relate to facility closures. Restructuring costs were $60 million and $9 million for the six months ended June 30, 2023 and 2022, respectively.

(b)Transaction and other costs for the six months ended June 30, 2023 and 2022 primarily relate to expenses associated with certain legal proceedings. and completed divestitures.

Operating income was $84 million as compared to $545 million in the prior year period. The decline reflects lower gross profit, higher restructuring and restructuring-related charges, primarily in connection with Project Phoenix and the Network Optimization Project, and non-cash impairment charges primarily related to an indefinite-lived tradename, partially offset by lower advertising and promotion costs, savings from restructuring actions and an employee retention credit in connection with the CARES Act.

Interest expense, net increased primarily due to higher interest rates and debt levels, partially offset by higher interest income. The weighted average interest rates for the six months ended June 30, 2023 and 2022 were approximately 5.1% and 4.3%, respectively. See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Other (income) expense, net for six months ended June 30, 2023 and 2022 includes the following items:


	Six Months Ended June 30,
	2023		2022
Foreign exchange losses, net	$	5	$	35

Gain on disposition of business (See Footnote 2)	—		(133)
Pension settlement costs (See Footnote 11)	5		—
Other losses, net	11		1
	$	21	$	(97)

The income tax provision for the six months ended June 30, 2023 was $3 million as compared to $101 million for the six months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 was 3.7%, resulting from more discrete tax expense combined with year to date pretax losses, as compared to 19.1% for the six months ended June 30, 2022.

See Footnote 12 of the Notes to Consolidated Financial Statements in the Company’s 2022 Annual Report on Form 10-K for information regarding the inherent uncertainty associated with the Company's position on certain U.S. Treasury Regulations.

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Business Segment Operating Results

Home and Commercial Solutions


	Six Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	2,029		$	2,592		$	(563)	(21.7)%

Operating income (loss)	(58)			163			(221)		NM
Operating margin	(2.9)		%	6.3		%

Notable items impacting operating income (loss) comparability:
Impairment of intangible and other assets (See Footnotes 1 and 7)	$	10		$	—

NM - NOT MEANINGFUL

Home and Commercial Solutions net sales for the six months ended June 30, 2023 decreased 22%, which reflected softening demand across all businesses, the sale of the CH&S business at the end of the first quarter of 2022, which unfavorably impacted net sales by approximately ~~19%~~4%, and certain category exits in the Kitchen business. The net sales decline was partially offset ~~by growth in the Commercial business unit driven primarily~~ by pricing actions and ~~increased demand~~early order timing ahead of a price increase taking effect in the third quarter of 2023 for certain ~~categories.~~product lines. Changes in foreign currency unfavorably impacted net sales by ~~$13~~$33 million, or 3%1%.

Operating loss for the six months ended June 30, 2023 was $58 million as compared to operating income of $163 million in the prior year. The decrease in operating results is primarily due to lower gross profit leverage, product mix and input cost inflation, higher restructuring and restructuring-related charges in connection with Project Phoenix, non-cash impairment charges primarily related to an indefinite-lived tradename, as well as the unfavorable impact from the sale of the CH&S business in the prior year, partially offset by gross productivity, lower advertising and promotion costs and savings from restructuring actions.

Learning and Development


	Six Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	1,377		$	1,515		$	(138)	(9.1)%

Operating income	260			383			(123)		(32.1)%
Operating margin	18.9		%	25.3		%

Learning and Development net sales for the six months ended June 30, 2023 decreased 9%, reflecting declines, mostly in the Baby business. The Writing business performance reflected pricing actions, innovation and early order timing ahead of the back to school season, partially offset by softening demand in certain categories. Pricing actions in the Baby business were more than offset by softening demand in certain categories and lower sales to a customer that recently declared bankruptcy. Changes in foreign currency unfavorably impacted net sales by $17 million, or 1%.

Operating income for the ~~three~~six months ended June 30, ~~2022 was flat~~2023 decreased to $260 million as compared to $383 million in the ~~prior year~~prior-year period. ~~This performance reflected~~The decrease in operating income is primarily due to lower gross profit leverage, ~~and gross productivity, offset by significant~~ input cost inflation, ~~for sourced finished goods, transportation~~as well as higher restructuring and ~~labor. Operating income was also negatively impacted~~restructuring-related charges primarily related to Project Phoenix, partially offset by ~~the CH&S sale.~~gross productivity and savings from restructuring actions.

3135

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Outdoor and Recreation

~~Home Appliances~~


	Six Months Ended June 30,
(in millions)	2023			2022			$ Change		% Change
Net sales	$	603		$	815		$	(212)	(26.0)%

Operating income	4			94			(90)		(95.7)%
Operating margin	0.7		%	11.5		%

Three Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 346 $ 394 $ (48) (12.2)%
Operating income 15 13 2 15.4%
Operating margin 4.3 % 3.3 %

~~Home Appliances~~Outdoor and Recreation net sales for the ~~three~~six months ended June 30, ~~2022~~2023 decreased ~~12%, which reflects certain category exits~~26% primarily reflecting softening global demand and ~~softening demand in the U.S. due to higher customer inventory levels and the lapping of elevated levels of demand,~~distribution losses, partially offset by pricing actions. Changes in foreign currency unfavorably impacted net sales by ~~$6 million, or 2%.~~

Operating income for the three months ended June 30, 2022 was $15 million as compared to $13 million in the prior year period. The increase in operating income was due to favorable net pricing, gross productivity and lower incentive compensation expense, partially offset by significant input cost inflation associated with transportation costs and sourced finished goods.

~~Home Solutions~~

Three Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 467 $ 525 $ (58) (11.0)%
Operating income 5 53 (48) (90.6)%
Operating margin 1.1 % 10.1 %

Home Solutions net sales for the three months ended June 30, 2022 decreased 11%, reflecting decreases in both the Food and Home Fragrance business units. The Food business unit decline reflects the softening demand in certain categories in the U.S., as the business lapped elevated levels of demand, partially offset by pricing actions. The decline in Home Fragrance business unit sales reflects softening global demand, as the business lapped elevated levels of demand, as well as the exit of approximately 42 underperforming Yankee Candle retail stores during the year. Changes in foreign currency unfavorably impacted net sales by $10 million, or 2%.

Operating income for the three months ended June 30, 2022 decreased to $5 million as compared to $53 million in the prior year period. The decrease in operating income is primarily due to lower gross profit leverage and significant input cost inflation for commodities, primarily metals and wax, transportation, labor and sourced finished goods. This decrease was partially offset by gross productivity and lower incentive compensation expense.

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~~Learning and Development~~

Three Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 865 $ 844 $ 21 2.5%
Operating income 247 217 30 13.8%
Operating margin 28.6 % 25.7 %

Learning and Development net sales for the three months ended June 30, 2022 increased 2% due to growth in the Writing business unit, partially offset by a slight decline in the Baby business unit. The Writing business unit performance reflected pricing actions and improved return to in-person learning and gradual reopening of more offices, partially offset by logistical constraints and supply chain shortages, particularly in labelling. Pricing actions in the Baby business unit were largely offset by softening demand in certain categories in the U.S., as the business lapped elevated levels of demand. Changes in foreign currency unfavorably impacted net sales by $26 million, or 3%.

Operating income for the three months ended June 30, 2022 increased to $247 million as compared to $217 million in the prior-year period. The increase in operating income is due to gross productivity and lower compensation costs, partially offset by input cost inflation for sourced finished goods, transportation and labor.

~~Outdoor and Recreation~~

Three Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 427 $ 453 $ (26) (5.7)%
Operating income 46 48 (2) (4.2)%
Operating margin 10.8 % 10.6 %

Outdoor and Recreation net sales for the three months ended June 30, 2022 decreased 6% primarily due to the impact of prior-quarter order timing ahead of the outdoor season, certain category exits and softening demand in certain categories in the U.S. reflecting higher customer inventory levels, mostly offset by pricing actions. Changes in foreign currency unfavorably impacted net sales by $25 million or 6%.

Operating income for the three months ended June 30, 2022 was $46 million as compared to $48 million in the prior-year period. The decline was due to lower gross profit leverage, significant input cost inflation for sourced finished goods and transportation, and higher advertising and promotion costs, partially offset by gross productivity and lower overhead spend.

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~~Six Months Ended June 30, 2022 vs. Six Months Ended June 30, 2021~~

~~Consolidated Operating Results~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 4,922 $ 4,997 $ (75) (1.5)%
Gross profit 1,565 1,613 (48) (3.0)%
Gross margin 31.8 % 32.3 %
Operating income 534 497 37 7.4%
Operating margin 10.8 % 9.9 %
Interest expense, net 114 132 (18) (13.6)%
Other income, net (116) (4) (112) NM
Income before income taxes 536 369 167 45.3%
Income tax provision 98 83 15 18.1%
Income tax rate 18.3 % 22.5 %
Net income $ 438 $ 286 $ 152 53.1%
Diluted earnings per share attributable to common shareholders $ 1.04 $ 0.67

~~NM - NOT MEANINGFUL~~

Net sales decreased 2%, as pricing actions by the Company were more than offset by the impact of the sale of the CH&S business at the end of the first quarter of 2022, which negatively impacted net sales by approximately 2%, softening demand in certain categories in the U.S., primarily within the Home Appliances and Home Solutions segments, which lapped elevated levels of demand, and certain category exits in the Home Appliances and Outdoor and Recreation segments. In addition, net sales were favorably impacted by early order timing ahead of the back to school season and Project Ovid go-live. Changes in foreign currency unfavorably impacted net sales by $121 million, or 2%.

Gross profit decreased slightly compared to prior year. Gross profit margin declined to 31.8% as compared with 32.3% in the prior year period. The decrease in gross margin was driven by significant input cost inflation for commodities, primarily resin and metals, 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 partially offset by favorable net pricing and gross productivity. The gross profit decline also reflected the impact of the sale of CH&S. Changes in foreign currency exchange rates unfavorably impacted gross profit by $45 million, or 3%.

~~In addition to the change in gross profit noted above, notable items impacting operating income for the six months ended June 30, 2022 and 2021 are as follows:~~

Six Months Ended
June 30,
2022 2021 $ Change
Restructuring (See Footnote 4) and restructuring-related costs (a)
$ 17 $ 21 $ (4)
Transactions and other costs (b)
12 13 (1)

~~(a)~~Restructuring-related costs reported in cost of goods sold for the six months ended June 30, 2022 was $8 million and primarily relate to facility closures. For the six months ended June 30, 2021, restructuring-related costs reported in cost of sales and SG&A were $7 million and $4 million, respectively, and primarily relate to facility closures. Restructuring costs were $9 million and $10 million for the six months ended June 30, 2022 and 2021, respectively.

~~(b)Transactions and other costs for the six months ended June 30, 2022 and 2021 primarily relate to completed divestitures and fees for certain legal proceedings.~~

Operating income increased to $534 million as compared to $497 million in the prior year period. The improvement reflects lower compensation expense, gross productivity and lower overhead spending, partially offset by lower gross profit and the impact of

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~~the CH&S sale.~~

Interest expense, net decreased primarily due to lower long-term debt levels and higher interest income. The weighted average interest rates for the six months ended June 30, 2022 and 2021 were approximately 4.3% and 4.8%, respectively. See ~~Footnote 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements~~ ~~for further information.~~

~~Other income, net for six months ended June 30, 2022 and 2021 includes the following items:~~

Six Months Ended
June 30,
2022 2021
Foreign exchange losses, net $ 16 $ 2
Fair value equity adjustments (See Footnote 15)
(1) —
(Gain) loss on disposition of business (See Footnote 2)
(133) 2
Other (gains) losses, net 2 (8)
$ (116) $ (4)

The income tax provision for the six months ended June 30, 2022 was $98 million as compared to an income tax provision for the six months ended June 30, 2021 of $83 million. The effective tax rate for the six months ended June 30, 2022 was 18.3% as compared to 22.5% for the six months ended June 30, 2021. The income tax provision for the six months ended June 30, 2022 included discrete benefits of $4 million associated with the approval of certain state tax credits and $11 million associated with the reduction in valuation allowance related to the integration of certain Brazilian operations, offset by $15 million of income tax expense related to the divestiture of the CH&S business unit. The six months ended June 30, 2021 included a discrete benefit of $13 million associated with a reduction in valuation allowance related to the integration of certain U.K. operations and $9 million related to a statute of limitation expiration in France.

~~See~~ ~~Footnote 12 of the Notes to the Unaudited Condensed Consolidated Financial Statements~~ ~~for information regarding income taxes, including the inherent uncertainty associated with the Company's position on recently enacted U.S. Treasury Regulations.~~

~~Business Segment Operating Results~~

~~Commercial Solutions~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 939 $ 964 $ (25) (2.6)%
Operating income 98 93 5 5.4%
Operating margin 10.4 % 9.6 %

Commercial Solutions net sales for the six months ended June 30, 2022 decreased 3%, which primarily reflected the sale of the CH&S business at the end of the first quarter of 2022, which unfavorably impacted net sales by approximately 10%, partially offset by growth in the Commercial business unit primarily driven by pricing actions and increased demand in certain categories. Changes in foreign currency unfavorably impacted net sales by $21$16 million or 2%.

Operating income for the six months ended June 30, ~~2022~~2023 was ~~$98~~$4 million as compared to ~~$93~~$94 million in the prior year. The increase in operating income is due to gross productivity and lower advertising and promotion costs and overhead spending, partially offset by significant input cost inflation, primarily resin and metals, sourced finished goods, transportation and labor, as well as the impact of the CH&S sale.

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~~Home Appliances~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 686 $ 754 $ (68) (9.0)%
Operating income (loss) (3) 16 (19) NM
Operating margin (0.4) % 2.1 %
NM - NOT MEANINGFUL

Home Appliances net sales for the six months ended June 30, 2022 decreased approximately 9%, which reflects softening demand in the U.S. due to higher customer inventory levels and the lapping of elevated levels of demand in the prior-year ~~and certain category exits,~~ ~~partially offset by pricing actions and increased demand in Latin America.~~ ~~Changes in foreign currency unfavorably impacted net sales by $11 million, or 1%.~~

~~Operating loss for the six months ended June 30, 2022 was $3 million as compared to an operating income of $16 million in the prior year~~ period. The decline ~~in operating result is~~was primarily due to lower gross profit leverage, product mix and higher ~~advertising~~restructuring and ~~promotional costs, and input cost inflation, particularly for sourced finished goods and transportation.~~

~~Home Solutions~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 967 $ 1,029 $ (62) (6.0)%
Operating income 66 114 (48) (42.1)%
Operating margin 6.8 % 11.1 %

~~Home Solutions net sales for the six months ended June 30, 2022 decreased 6%. An increase~~restructuring-related charges in sales 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, partially offset by softening demand in certain categories in the U.S., as the business lapped elevated levels of demand in the prior-year. The decline in Home Fragrance business unit sales reflected softening global demand, as the business lapped elevated levels of demand in the prior year, as well as the exit of approximately 42 underperforming Yankee Candle retail stores during the first half of 2022. Changes in foreign currency unfavorably impacted net sales by $14 million, or 1%.

Operating income for the six months ended June 30, 2022 was $66 million as compared to $114 million in the prior year period. The decrease in operating income is primarily due to lower gross profit leverage and significant input cost inflation for commodities, primarily metals and wax, transportation, labor and sourced finished goods. This decrease wasconnection with Project Phoenix, partially offset by gross productivity and ~~lower overhead spend.~~savings from restructuring actions.

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~~Learning and Development~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 1,515 $ 1,461 $ 54 3.7%
Operating income 377 327 50 15.3%
Operating margin 24.9 % 22.4 %

Learning and Development net sales for the six months ended June 30, 2022 increased 4% due to sales growth in the Writing and Baby business units. The modest growth in the Baby business unit sales reflected the impact of pricing actions, partially offset by softening demand in certain categories in the U.S. and product availability constraints. The Writing unit performance reflected pricing actions, early order timing ahead of the back to school season, improved return to in-person learning and gradual reopening of more offices, partially offset by supply chain shortages, particularly in labeling, and logistical constraints. Changes in foreign currency unfavorably impacted net sales by $37 million, or 3%.

Operating income for the six months ended June 30, 2022 increased to $377 million as compared to $327 million in the prior-year period. The increase in operating income is primarily due to gross profit leverage, gross productivity, and lower compensation costs, partially offset by significant input cost inflation for sourced finished goods, transportation and labor.

~~Outdoor and Recreation~~

Six Months Ended
June 30,
(in millions) 2022 2021 $ Change % Change
Net sales $ 815 $ 789 $ 26 3.3%
Operating income 91 63 28 44.4%
Operating margin 11.2 % 8.0 %
NM - NOT MEANINGFUL

Outdoor and Recreation net sales for the six months ended June 30, 2022 increased 3% primarily due to pricing actions and improved product availability, partially offset by certain category exits and softening demand in certain categories in the U.S. reflecting higher customer inventory levels and the lapping of elevated levels of demand in the prior year. Changes in foreign currency unfavorably impacted net sales by $38 million or 5%.

Operating income for the six months ended June 30, 2022 was $91 million as compared to $63 million in the prior-year period. This improvement was primarily due to gross profit leverage and lower overhead spending, partially offset by input cost inflation for commodities, primarily resin, sourced finished goods and transportation, and higher advertising and promotional costs.

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Liquidity and Capital Resources

Liquidity

The Company believes ~~that~~the extent of the impact of this rapidly changing retail and consumer landscape, which reflects an increased focus by retailers to rebalance inventory levels, inflationary pressures and uncertainty over the volatility and direction of future demand patterns on the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary. As noted in New Business Strategy and Recent Developments, the Company has taken actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility, including amending certain terms of its Credit Revolver.

The Company believes these actions and its cash generating capability, together with its borrowing capacity and available cash and cash equivalents, provide ~~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 execute its ongoing business initiatives. The Company regularly assesses its cash requirements and the available sources to fund these needs. ~~At June 30, 2022, the Company had cash and cash equivalents of approximately $323 million, of which approximately $285 million was held by the Company’s non-U.S. subsidiaries.~~

The Company believes the extent of the impact of the COVID-19 pandemic and indirect impact of the Russia-Ukraine conflict to its future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company is not able to accurately predict and which will vary. 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 ~~Operations~~Operations of the Company's most recent Annual Report on Form 10-K, filed on February ~~14, 2022.~~15, 2023.

At June 30, 2023, the Company had cash and cash equivalents of approximately $317 million, of which approximately $266 million was held by the Company’s non-U.S. subsidiaries.

Cash, cash equivalents and restricted cash increased (decreased) as follows for the six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (in millions):


		2022		2021		Increase (Decrease)			2023		2022		Increase (Decrease)

Cash provided by (used in) operating activities	Cash provided by (used in) operating activities	$	(450)	$	76	$	(526)	Cash provided by (used in) operating activities	$	277	$	(450)	$	727
Cash provided by (used in) investing activities	Cash provided by (used in) investing activities	499		(105)		604		Cash provided by (used in) investing activities	(94)		499		(593)
Cash used in financing activities	Cash used in financing activities	(185)		(338)		153		Cash used in financing activities	(158)		(185)		27
Exchange rate effect on cash, cash equivalents and restricted cash	Exchange rate effect on cash, cash equivalents and restricted cash	(3)		(6)		3		Exchange rate effect on cash, cash equivalents and restricted cash	2		(3)		5
Decrease in cash, cash equivalents and restricted cash		$	(139)	$	(373)	$	234
Increase (decrease) in cash, cash equivalents and restricted cash								Increase (decrease) in cash, cash equivalents and restricted cash	$	27	$	(139)	$	166

The Company ~~tends to generate~~has historically generated 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.

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Cash Flows from Operating Activities

The change in net cash ~~used in~~provided by operating activities reflects ~~inventory build to support sales~~a reduction of working capital and lower incentive compensation payments in the ~~Project Ovid go-live, the timing of customer collections and vendor payments~~current year, partially offset by lower operating income and higher ~~annual incentive compensation~~restructuring payments. ~~See~~ ~~Capital Resources~~ ~~for further information.~~

Cash Flows from Investing Activities

The change in cash ~~provided by~~used in investing activities was primarily due to proceeds from the sale of the CH&S ~~and sale of property, plant and equipment, partially offset byhigher capital expenditures, primarily associated with Project Ovid.~~business in the prior year.

Cash Flows from Financing Activities

The change in net cash used in financing activities was primarily due to the period-over-period change in short-term debt, ~~offset by~~a reduction of the quarterly dividend payment in the current year, commencing with the second quarter payment, and repurchase of shares of the Company's common stock in the ~~current-year.~~prior year. See Footnotes 1, 9 and 14 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Capital Resources

The Company has ~~the ability to borrow under its existing $1.25~~a $1.5 billion ~~revolving credit facility~~Credit Revolver that matures in December 2023 (the “Credit Revolver”) and its Accounts Receivable Securitization Facility (the “Securitization Facility”). Under the Company's Credit Revolver, the interest rate is London Interbank Offered Rate (“LIBOR”) rate plus 105.0 basis points. The Credit Revolver provides for the issuance of up to $100 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Credit Revolver. At June 30, 2022 there were approximately $22 million of outstanding standby letters of credit issued

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against the Credit Revolver, with a net availability of approximately $1.1 billion. There were no borrowings outstanding under the Credit Revolver and $112 million commercial paper borrowings at June 30, 2022.

August 2027. The Credit Revolver requires ~~the maintenance of~~compliance with certain financial covenants. A failure to maintain our financial covenants and to subsequently remedy a default would impair our ability to borrow under the Credit ~~Revolver. In addition, if economic conditions caused by~~Revolver and potentially subject the ~~COVID-19 pandemic or the indirect macroeconomic impact of the Russia-Ukraine conflict do not improve or otherwise worsen, our earnings~~Company to cross-default 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.~~acceleration provisions in its debt documents. The Company was in compliance with all of its debt covenants at June 30, ~~2022.~~2023.

~~Factored receivables at~~At June 30, 2023, the ~~end~~Company had $530 million of outstanding borrowings under the ~~second quarter~~Credit Revolver and approximately $22 million of ~~2022 associated~~outstanding standby letters of credit issued against the Credit Revolver, with ~~the existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $545 million, an increase~~a net availability of approximately $45 million from December 31, 2021. During the second quarter of 2022, the Company amended the Customer Receivables Purchase Agreement to (1) increase the amount of certain customer receivables that may be sold under the agreement, (2) add new customers to the agreement and (3) change the reference rate from LIBOR to Secured Overnight Financing Rate (“SOFR”). Transactions under this agreement 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 Condensed Consolidated Statement of Cash Flows. The Company records the discount as other (income) expense, 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.$950 million.

~~During the second quarter of 2022, the~~The Company ~~amended the~~maintains an Accounts Receivable Securitization ~~Facility. This amendment (1) reduced the~~Facility (the “Securitization Facility”). The aggregate commitment under the Securitization Facility tois $375 ~~million from $600 million, (2) extended its maturity by one year to~~million. The Securitization Facility matures in October 2023 and ~~(3) changed the reference rate under the Securitization Facility from LIBOR to SOFR. The Securitization Facility~~ 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 June 30, ~~2022,~~2023, the Company ~~has $260~~had $66 million outstanding under the Securitization Facility.

Risk Management

~~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 June 30, 2022,~~See Footnote 10of the ~~Company had approximately $100 million notional amount of interest rate swaps that exchange a fixed rate of interest~~ Notes to Unaudited Condensed Consolidated Financial Statementsfor ~~a 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~~further information 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 three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of $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 subsidiaries with Euro-denominated net assets, and 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 June 30, 2022 and 2021, the Company recognized income of $6 million and $3 million, respectively, and income of $11 million

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~~and $7 million for the six months ended June 30, 2022 and 2021, 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 with maturity dates through March 2023. 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 June 30, 2022, the Company had approximately $375 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 June 30, 2022, the Company had approximately $1.5 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through May 2023. Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company's Condensed Consolidated Statement of Operations.

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


	June 30, 2022instruments.
	Asset (Liability)
~~Derivatives designated as effective hedges:~~
~~Cash flow hedges:~~
~~Foreign currency contracts~~	$	12
~~Fair value hedges:~~
~~Interest rate swaps~~	~~(2)~~
~~Net investment hedges:~~
~~Cross-currency swaps~~	59
~~Derivatives not designated as effective hedges:~~
~~Foreign currency contracts~~	~~(5)~~
~~Total~~	$	64

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 ~~seven~~six reporting units, within its ~~five~~three primary operating segments.

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

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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 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

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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.

During the second quarter of 2023, the Company concluded that a triggering event had occurred for the Baby reporting unit in the Learning and Development segment, as a result of a downward revision of forecasted cash flows due to softening global demand, primarily caused by continued inflationary pressure that is impacting discretionary spending behavior of consumers, as well as rising interest rates. The Company used a quantitative approach, which involves comparing the fair value of the reporting unit to its carrying value. If the carrying value 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 Company performed an impairment test and determined that the Baby reporting unit goodwill was not impaired. A hypothetical 10% reduction in forecasted earnings before interest, taxes and amortization used in the discounted cash flows to estimate the fair value to the Baby reporting unit would have resulted in an impairment charge of approximately $10 million against its goodwill carrying value of $660 million.

The Company has experienced headwinds due to softening global demand and an increased focus by retailers to rebalance inventory levels in light of continued inflationary pressures on consumers that impacted the Baby business within the Learning and Development segment. Further declines in anticipated consumer spending or an inability to achieve expected margin improvements on sales of Baby products could result in declines in the fair value of the business that may result in goodwill impairment charges.

See Footnotes 1 and 7 7of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

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.

During the second quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Home Fragrance reporting unit, in the Home and Commercial Solutions segment. The Company ~~believes~~performed a quantitative impairment test and determined that an indefinite-lived tradename in the ~~circumstances~~Home Fragrance reporting unit noted above was impaired. During the three and six months ended June 30, 2023, the Company recorded an aggregate non-cash impairment charge of $8 million, as the carrying value exceeded its fair value. A hypothetical 10% reduction in the forecasted revenue used in the relief from royalty method to determining the fair value of this indefinite-lived intangible would have resulted in an incremental impairment charge on the Home and Commercial Solutions segment of $6 million.

The Company has experienced headwinds due to softening global ~~disruption caused~~demand and an increased focus by ~~COVID-19~~retailers to rebalance inventory levels in light of continued inflationary pressures on consumers, most notably in the Home and Commercial Solutions and Outdoor and Recreation segments. As a result, the ~~indirect~~Company may identify future triggering events for these segments, other segments or other indefinite-lived tradenames, including an indefinite-lived tradename in the Home and Commercial Solutions segment which has a carrying value of $553 million, and an indefinite-lived tradename in the Outdoor and Recreation segment which has a carrying value of $58 million. Additional impairment testing may be required based on further deterioration of global demand and/or the macroeconomic ~~impact~~environment, continued disruptions to the Company’s business, further declines in operating

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results of the ~~Russia-Ukraine conflict may continue to affect its businesses, future operating results, cash flows and financial condition. In addition, some~~Company’s reporting units and/or tradenames, further sustained deterioration of the Company’s market capitalization, and other ~~inherent~~factors, which may necessitate changes to estimates ~~and~~or valuation assumptions used in ~~determining~~the fair value of the reporting units ~~are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings~~for goodwill and ~~foreign exchange rates. Given the uncertainty of these factors as discussed further in~~ ~~Footnote 1~~ ~~of the Notes to the Unaudited Condensed Consolidated Financial Statements and~~ ~~Recent Developments, there can be no assurance that the Company's estimates and assumptions will prove to be accurate predictions of the future.~~

indefinite-lived intangible tradenames. Although management ~~has made its best estimates based upon~~cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending continue to decline significantly in the future or if commercial and industrial economic activity experiences a sustained deterioration from current ~~information, actual results could materially differ and may require future changes to such estimates and assumptions. If so,~~levels, the Company may be ~~subject~~required to ~~future incremental~~record further impairment charges ~~as well as changes to recorded reserves and valuations.~~in the future.

See Footnotes 1 and 7 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.~~ended December 31, 2022.

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 were effective as of June 30, ~~2022.~~2023.

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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 June 30, ~~2022,~~2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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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, ~~2021.~~2022.

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 June 30, ~~2022:~~2023:


Calendar Month	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)		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
April	April	2,273,600	$	22.01	2,273,600	$	50,000,231	April	4,326	$	12.15	—	$	—
May	May	3,790	22.79		—	$	50,000,231	May	3,099	9.69		—	—
June	June	3,706	22.48		—	$	50,000,231	June	28,947	8.34		—	—
Total	Total	2,281,096	$	22.01	2,273,600			Total	36,372	$	8.90	—

(1)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 and six months ended June 30, 2022.~~

~~(2)~~Shares purchased during the three months ended June 30, ~~2022, includes both~~2023 were acquired by the ~~number of shares purchased as part of~~Company based on their fair market value on the ~~publicly announced SRP as well as shares acquired~~vesting date in order to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock ~~units~~units.

Item 5. Other Information

None of the Company's directors and ~~were purchased by~~officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the ~~Company based on their fair market value on the vesting date.~~

Company's fiscal quarter ended June 30, 2023.

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Item 6. Exhibits


Exhibit Number						Description of Exhibit
10.1*3.1						~~Ninth Omnibus Amendment, dated~~By-Laws of Newell Brands Inc., as ofamended on May ~~26, 2022~~15, 2023 (incorporated by reference to Exhibit ~~10.1~~3.1 to the Company’s Current Report on Form 8-K dated ~~June 2, 2022,~~May 19, 2023, File No. 001-09608).
10.210.1						Newell Brands Inc. ~~202~~2 2023 Special Incentive ~~Plan,~~Program Terms and Conditions (incorporated by reference to ~~Appendix B to the Company's Proxy Statement dated~~ ~~March 23, 2022, File No. 001-09608~~).
~~10.3*†~~						~~Amendment No. 2, dated June 7, 2022, to the Newell Brands Supplemental Employee Savings Plan, (effective January 1, 2018, and amended by the First Amendment effective January 1, 2020).~~
~~10.4*†~~						~~Amendment No. 3, dated June 7, 2022, to the Newell Brands Employee Savings Plan, (effective January 1, 2018, and most recently amended by the Second Amendment effective January 1, 2022).~~
10.5*						~~2022 Restricted Stock Unit Award Agreement under the 2022 Incentive Plan (incorporated by reference to~~Exhibit 10.1 of the Company’s Current Report on Form 8-K dated May ~~6, 2022,~~19, 2023, File No. 001-09608).
10.610.2†						Form of 2023 Newell Brands Special Incentive Program RSU Award for President and CEO under the Newell Brands Inc. 2022 ~~Non-Qualified~~Incentive Plan.
10.3*†						Form of 2023 Newell Brands Special Incentive Program RSU Award for CFO under the Newell Brands Inc. 2022 Incentive Plan.
10.4*†						Form of 2023 Newell Brands Special Incentive Program RSU Award for Executives under the Newell Brands Inc. 2022 Incentive Plan.
10.5*†						Form of 2023 Non-Employee Director Stock Option Agreement under the Newell Brands Inc. 2022 Incentive ~~Plan (incorporated by reference to 10.2 of the Company’s Current Report on Form 8-K dated May 6, 2022, File No. 001-09609).~~Plan.
10.710.6†						Form of ~~2022~~2023 Non-Employee Director Restricted Stock Unit Award Agreement under the Newell Brands Inc. 2022 Incentive Plan ~~for Non-Employee Director.~~.
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†						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†						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†						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
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

† Filed herewith.

* Represents management contracts and compensatory plans and arrangements.

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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:	July ~~29, 2022~~28, 2023	/s/ ~~Christopher H. Peterson~~Mark J. Erceg
		~~Christopher H. Peterson~~Mark J. Erceg
		~~President and~~ Chief Financial Officer


Date:	July ~~29, 2022~~28, 2023	/s/ Jeffrey M. Sesplankis
		Jeffrey M. Sesplankis
		Chief Accounting Officer

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	June 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	323	$	440
Accounts receivable, net	1,562		1,500
Inventories	2,522		1,997
Prepaid expenses and other current assets	350		325
Total current assets	4,757		4,262
Property, plant and equipment, net	1,138		1,204
Operating lease assets	563		558
Goodwill	3,450		3,504
Other intangible assets, net	2,977		3,370
Deferred income taxes	786		814
Other assets	777		467
Total assets	$	14,448	$	14,179
Liabilities:
Accounts payable	$	1,700	$	1,680
Accrued compensation	160		270
Other accrued liabilities	1,309		1,364
Short-term debt and current portion of long-term debt	1,461		3
Total current liabilities	4,630		3,317
Long-term debt	3,793		4,883
Deferred income taxes	714		405
Operating lease liabilities	500		500
Other noncurrent liabilities	864		983
Total liabilities	10,501		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 June 30, 2022 and December 31, 2021)	—		—
Common stock (800.0 authorized shares, $1.00 par value, 438.6 shares and 450.0 shares issued at June 30, 2022 and December 31, 2021, respectively)	439		450
Treasury stock, at cost (25.0 shares and 24.5 shares at June 30, 2022 and December 31, 2021, respectively)	(623)		(609)
Additional paid-in capital	7,251		7,734
Retained deficit	(2,164)		(2,602)
Accumulated other comprehensive loss	(956)		(882)


Total stockholders’ equity	3,947		4,091
Total liabilities and stockholders’ equity	$	14,448	$	14,179


		Three Months Ended June 30, 2022				Three Months Ended June 30, 2021
		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
Interest rate swaps	Interest expense, net	$	—	$	(1)	$	—	$	(1)
Foreign currency contracts	Net sales and cost of products sold	20		5		(3)		(6)

Cross-currency swaps	Other (income) expense, net	78		—		(8)		—
Total		$	98	$	4	$	(11)	$	(7)

		Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
		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
Interest rate swaps	Interest expense, net	$	—	$	(3)	$	—	$	(3)
Foreign currency contracts	Net sales and cost of products sold	19		6		—		(8)

Cross-currency swaps	Other (income) expense, net	82		—		28		—
Total		$	101	$	3	$	28	$	(11)


	Three Months Ended June 30, 2022
	Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Commercial	$	429	$	—	$	—	$	—	$	—	$	429

Home Appliances	—		346		—		—		—		346
Food	—		—		304		—		—		304
Home Fragrance	—		—		163		—		—		163
Baby	—		—		—		313		—		313
Writing	—		—		—		552		—		552
Outdoor and Recreation	—		—		—		—		427		427

Total	$	429	$	346	$	467	$	865	$	427	$	2,534

North America	$	314	$	156	$	393	$	656	$	237	$	1,756
International	115		190		74		209		190		778
Total	$	429	$	346	$	467	$	865	$	427	$	2,534

	Three Months Ended June 30, 2021
	Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Commercial	$	401	$	—	$	—	$	—	$	—	$	401
Connected Home Security	92		—		—		—		—		92
Home Appliances	—		394		—		—		—		394
Food	—		—		323		—		—		323
Home Fragrance	—		—		202		—		—		202
Baby	—		—		—		319		—		319
Writing	—		—		—		525		—		525
Outdoor and Recreation	—		—		—		—		453		453

Total	$	493	$	394	$	525	$	844	$	453	$	2,709

North America	$	364	$	206	$	425	$	626	$	256	$	1,877
International	129		188		100		218		197		832
Total	$	493	$	394	$	525	$	844	$	453	$	2,709



	Six Months Ended June 30, 2022
	Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Commercial	$	830	$	—	$	—	$	—	$	—	$	830
Connected Home Security	109		—		—		—		—		109
Home Appliances	—		686		—		—		—		686
Food	—		—		606		—		—		606
Home Fragrance	—		—		361		—		—		361
Baby	—		—		—		604		—		604
Writing	—		—		—		911		—		911
Outdoor and Recreation	—		—		—		—		815		815

Total	$	939	$	686	$	967	$	1,515	$	815	$	4,922

North America	$	710	$	334	$	794	$	1,124	$	447	$	3,409
International	229		352		173		391		368		1,513
Total	$	939	$	686	$	967	$	1,515	$	815	$	4,922

	Six Months Ended June 30, 2021
	Commercial Solutions		Home Appliances		Home Solutions		Learning and Development		Outdoor and Recreation		Total
Commercial	$	781	$	—	$	—	$	—	$	—	$	781
Connected Home Security	183		—		—		—		—		183
Home Appliances	—		754		—		—		—		754
Food	—		—		597		—		—		597
Home Fragrance	—		—		432		—		—		432
Baby	—		—		—		600		—		600
Writing	—		—		—		861		—		861
Outdoor and Recreation	—		—		—		—		789		789

Total	$	964	$	754	$	1,029	$	1,461	$	789	$	4,997

North America	$	708	$	401	$	826	$	1,052	$	433	$	3,420
International	256		353		203		409		356		1,577
Total	$	964	$	754	$	1,029	$	1,461	$	789	$	4,997