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 twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of ~~October~~July 27, ~~2021,~~2022, there were ~~244,148,366~~242,909,366 shares of Common Stock outstanding.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,			September 30,			September 30,			September 30,			June 30,			June 30,			June 30,			June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Net Sales	$	1,311.4		$	1,241.0		$	3,821.4		$	3,600.5		$	1,325.1		$	1,271.1		$	2,622.3		$	2,510.0
Cost of sales		732.2			675.8			2,139.1			1,943.7			779.8			718.9			1,524.5			1,406.9
Gross Profit		579.2			565.2			1,682.3			1,656.8			545.3			552.2			1,097.8			1,103.1
Marketing expenses		160.9			170.9			376.6			389.6			102.9			117.0			204.8			215.7
Selling, general and administrative expenses		116.9			120.5			403.0			428.1			180.8			136.5			350.7			286.1
Income from Operations		301.4			273.8			902.7			839.1			261.6			298.7			542.3			601.3
Equity in earnings of affiliates		2.0			1.9			7.4			5.5			3.9			2.8			6.3			5.4
Investment earnings, net		0.0			0.0			0.1			0.4			0.3			0.2			0.3			0.1
Other income (expense), net		(0.7	)		(0.3	)		(1.1	)		(1.1	)		0.0			(0.3	)		(0.3	)		(0.4	)
Interest expense		(13.4	)		(13.9	)		(41.5	)		(47.0	)		(19.3	)		(14.1	)		(35.9	)		(28.1	)
Income before Income Taxes		289.3			261.5			867.6			796.9			246.5			287.3			512.7			578.3
Income taxes		58.9			45.3			198.2			161.2			59.4			69.0			121.2			139.3
Net Income	$	230.4		$	216.2		$	669.4		$	635.7		$	187.1		$	218.3		$	391.5		$	439.0

Weighted average shares outstanding - Basic		245.3			247.7			245.2			246.5			242.6			245.2			242.6			245.2
Weighted average shares outstanding - Diluted		249.8			253.3			249.9			252.0			246.4			250.0			246.5			249.9
Net income per share - Basic	$	0.94		$	0.87		$	2.73		$	2.58		$	0.77		$	0.89		$	1.61		$	1.79
Net income per share - Diluted	$	0.92		$	0.85		$	2.68		$	2.52		$	0.76		$	0.87		$	1.59		$	1.76
Cash dividends per share	$	0.25		$	0.24		$	0.76		$	0.72		$	0.26		$	0.25		$	0.53		$	0.50


	September 30,			December 31,			June 30,			December 31,
	2021			2020			2022			2021
Assets
Current Assets
Cash and cash equivalents	$	180.0		$	183.1		$	639.7		$	240.6
Accounts receivable, less allowances of $3.1 and $3.7		407.0			398.8
Accounts receivable, less allowances of $4.1 and $5.5								405.8			405.5
Inventories		552.7			495.4			663.0			535.4
Other current assets		37.1			35.1			42.2			51.9
Total Current Assets		1,176.8			1,112.4			1,750.7			1,233.4

Property, Plant and Equipment, Net		615.8		��	612.8			660.6			652.7
Equity Investment in Affiliates		9.0			9.1			12.2			9.1
Trade Names and Other Intangibles, Net		3,018.8			3,110.2			3,434.6			3,494.3
Goodwill		2,230.6			2,229.6			2,270.7			2,274.5
Other Assets		331.0			340.4			316.0			332.5
Total Assets	$	7,382.0		$	7,414.5		$	8,444.8		$	7,996.5

Liabilities and Stockholders' Equity
Current Liabilities
Short-term borrowings	$	279.7		$	351.4		$	3.3		$	252.8
Current portion of long-term debt		299.6			0.0			699.9			699.4
Accounts payable and accrued expenses		997.7			1,024.5			1,016.4			1,119.7
Income taxes payable		7.4			12.7			7.2			3.3
Total Current Liabilities		1,584.4			1,388.6			1,726.8			2,075.2

Long-term Debt		1,214.8			1,812.5			2,103.9			1,610.7
Deferred Income Taxes		747.7			707.3			746.9			745.1
Deferred and Other Long-term Liabilities		301.5			367.7			278.8			298.3
Business Acquisition Liabilities		20.0			118.0			34.0			34.0
Total Liabilities		3,868.4			4,394.1			4,890.4			4,763.3

Commitments and Contingencies
Stockholders' Equity
Preferred Stock, $1.00 par value, Authorized 2,500,000 shares; NaN issued		0.0			0.0
Common Stock, $1.00 par value, Authorized 600,000,000 shares and 292,855,100 shares issued as of September 30, 2021 and December 31, 2020		292.8			292.8
Preferred Stock, $1.00 par value, Authorized 2,500,000 shares; NaN issued								0.0			0.0
Common Stock, $1.00 par value, Authorized 600,000,000 shares and 292,855,100 shares issued as of June 30, 2022 and December 31, 2021								292.8			292.8
Additional paid-in capital		327.9			274.4			350.1			310.3
Retained earnings		5,269.6			4,786.0			5,630.1			5,366.0
Accumulated other comprehensive loss		(60.9	)		(77.6	)		(47.1	)		(68.2	)
Common stock in treasury, at cost: 47,857,411 shares as of September 30, 2021 and 47,494,982 shares as of December 31, 2020		(2,315.8	)		(2,255.2	)
Common stock in treasury, at cost: 49,992,986 shares as of June 30, 2022 and 50,309,124 shares as of December 31, 2021								(2,671.5	)		(2,667.7	)
Total Stockholders' Equity		3,513.6			3,020.4			3,554.4			3,233.2
Total Liabilities and Stockholders' Equity	$	7,382.0		$	7,414.5		$	8,444.8		$	7,996.5


	Nine Months Ended						Six Months Ended
	September 30,			September 30,			June 30,			June 30,
	2021			2020			2022			2021
Cash Flow From Operating Activities
Net Income	$	669.4		$	635.7		$	391.5		$	439.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		51.3			48.4			33.4			34.1
Amortization expense		113.6			90.5			73.9			76.2
Change in fair value of business acquisition liabilities		(98.0	)		(71.7	)	0.0				(57.0	)
Deferred income taxes		32.8			28.0			2.4			20.9
Equity in net earnings of affiliates		(7.4	)		(5.5	)		(6.3	)		(5.4	)
Distributions from unconsolidated affiliates		7.5			5.8			3.2			4.5
Non-cash compensation expense		20.3			18.7			17.9			16.8
Gain on sale of assets		0.0			(3.0	)
Other		5.8			1.4			(3.3	)		3.8
Change in assets and liabilities:
Accounts receivable		(12.0	)		(18.1	)		(7.5	)		12.5
Inventories		(59.9	)		(82.3	)		(133.0	)		(60.3	)
Other current assets		6.1			(4.1	)		10.0			2.6
Accounts payable and accrued expenses		(50.8	)		140.1			(62.1	)		(134.5	)
Income taxes payable		(10.3	)		13.1			2.0			0.1
Other operating assets and liabilities, net		(14.8	)		1.2			(11.7	)		(9.0	)
Net Cash Provided By Operating Activities		653.6			798.2			310.4			344.3
Cash Flow From Investing Activities
Additions to property, plant and equipment		(64.1	)		(54.6	)		(38.8	)		(43.3	)
Proceeds from sale of assets		0.0			7.0
Other		(5.6	)		(3.6	)		(1.0	)		(4.3	)
Net Cash Used In Investing Activities		(69.7	)		(51.2	)		(39.8	)		(47.6	)
Cash Flow From Financing Activities
Long-term debt borrowings								499.8		0.0
Long-term debt (repayments)		(300.0	)		0.0			0.0			(100.0	)
Short-term debt (repayments), net of borrowings		(71.6	)		(250.4	)		(249.5	)		(118.4	)
Proceeds from stock options exercised		26.9			89.1			16.9			12.5
Payment of cash dividends		(185.8	)		(177.7	)		(127.4	)		(123.8	)
Purchase of treasury stock		(54.9	)		0.0
Payment of business acquisition liabilities		0.0			(14.5	)
Deferred financing and other		0.0			(0.2	)		(7.6	)		(0.1	)
Net Cash Used In Financing Activities		(585.4	)		(353.7	)
Net Cash Provided By (Used In) Financing Activities								132.2			(329.8	)
Effect of exchange rate changes on cash and cash equivalents		(1.6	)		0.1			(3.7	)		(0.2	)
Net Change In Cash and Cash Equivalents		(3.1	)		393.4			399.1			(33.3	)
Cash and Cash Equivalents at Beginning of Period		183.1			155.7			240.6			183.1
Cash and Cash Equivalents at End of Period	$	180.0		$	549.1		$	639.7		$	149.8

Number of Shares

Amounts

Common
Stock

Treasury
Stock

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Total
Stockholders'
Equity

December 31, 2019

292.8

(47.4
)

$
292.8

$
295.5

$
4,237.4

$
(66.7
)

$
(2,091.2
)

$
2,667.8

Net income

0.0

0.0

0.0

0.0

229.8

0.0

0.0

229.8

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

(32.7
)

0.0

(32.7
)
Cash dividends

0.0

0.0

0.0

0.0

(59.0
)

0.0

0.0

(59.0
)
Stock based compensation expense and
   stock option plan transactions

0.0

0.3

0.0

0.2

0.0

0.0

11.7

11.9

March 31, 2020

292.8

(47.1
)

$
292.8

$
295.7

$
4,408.2

$
(99.4
)

$
(2,079.5
)

$
2,817.8

Net income

0.0

0.0

0.0

0.0

189.7

0.0

0.0

189.7

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

1.1

0.0

1.1

Cash dividends

0.0

0.0

0.0

0.0

(59.1
)

0.0

0.0

(59.1
)
Stock based compensation expense and
   stock option plan transactions

0.0

1.2

0.0

7.1

0.0

0.0

42.2

49.3

June 30, 2020

292.8

(45.9
)

$
292.8

$
302.8

$
4,538.8

$
(98.3
)

$
(2,037.3
)

$
2,998.8

Net income

0.0

0.0

0.0

0.0

216.2

0.0

0.0

216.2

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

7.5

0.0

7.5

Cash dividends

0.0

0.0

0.0

0.0

(59.6
)

0.0

0.0

(59.6
)
Stock based compensation
   expense and stock option plan
   transactions

0.0

1.4

0.0

(0.8
)

0.0

0.0

48.2

47.4

September 30, 2020

292.8

(44.5
)

$
292.8

$
302.0

$
4,695.4

$
(90.8
)

$
(1,989.1
)

$
3,210.3

Number of Shares

Amounts

Common
Stock

Treasury
Stock

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Total
Stockholders'
Equity

December 31, 2020

292.8

(47.4
)

$
292.8

$
274.4

$
4,786.0

$
(77.6
)

$
(2,255.2
)

$
3,020.4

Net income

0.0

0.0

0.0

0.0

220.7

0.0

0.0

220.7

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

23.0

0.0

23.0

Cash dividends

0.0

0.0

0.0

0.0

(61.9
)

0.0

0.0

(61.9
)
Stock purchases

0.0

(0.4
)

0.0

30.0

0.0

0.0

(30.0
)

0.0

Stock based compensation expense and
    stock option plan transactions

0.0

0.1

0.0

1.8

0.0

0.0

7.2

9.0

March 31, 2021

292.8

(47.7
)

$
292.8

$
306.2

$
4,944.8

$
(54.6
)

$
(2,278.0
)

$
3,211.2

Net income

0.0

0.0

0.0

0.0

218.3

0.0

0.0

218.3

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

(11.2
)

0.0

(11.2
)
Cash dividends

0.0

0.0

0.0

0.0

(61.9
)

0.0

0.0

(61.9
)
Stock based compensation expense and
    stock option plan transactions

0.0

0.2

0.0

14.3

0.0

0.0

6.5

20.8

June 30, 2021

292.8

(47.5
)

$
292.8

$
320.5

$
5,101.2

$
(65.8
)

$
(2,271.5
)

$
3,377.2

Net income

0.0

0.0

0.0

0.0

230.4

0.0

0.0

230.4

Other comprehensive
   income (loss)

0.0

0.0

0.0

0.0

0.0

4.9

0.0

4.9

Cash dividends

0.0

0.0

0.0

0.0

(62.0
)

0.0

0.0

(62.0
)
Stock purchases

0.0

(0.7
)

0.0

0.0

0.0

0.0

(54.9
)

(54.9
)
Stock based compensation expense and
    stock option plan transactions

0.0

0.3

0.0

7.4

0.0

0.0

10.6

18.0

September 30, 2021

292.8

(47.9
)

$
292.8

$
327.9

$
5,269.6

$
(60.9
)

$
(2,315.8
)

$
3,513.6

These condensed consolidated financial statements have been prepared by Church & Dwight Co., Inc. (the “Company”). In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations and cash flows for all periods presented have been made. Results of operations for interim periods may not be representative of results to be expected for the full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the “Form 10-K”).

The Company incurred research and development expenses in the ~~third~~second quarter of 2022 and 2021 of $27.2and ~~2020 of $27.7 and $27.0,~~$25.4, respectively. The Company incurred research and development expenses in the first ~~nine~~six months of 2022 and 2021 of $51.7and ~~2020 of $77.2 and $73.3,~~$49.5, respectively. These expenses are included in selling, general and administrative (“SG&A”) expenses.

New Accounting Pronouncements

2.	~~New Accounting Pronouncements~~

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued new accounting guidance intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance was effective beginning on March 12, 2020, and the Company may apply the amendments prospectively to contract modifications made or relationships entered into or evaluated through December 31, 2022. The adoption of this guidance did not have an impact on the Company’s consolidated financial position, results of operations or cash flows in the current period. The Company will continue to evaluate the impacts of this guidance on future ~~contract modifications~~contracts through December 31, 2022.

There have been no other accounting pronouncements issued but not yet adopted by the Company which are expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Inventories

~~Inventories~~

September 30,

December 31,

2021

2020

Raw materials and supplies
$
117.1

$
112.9

Work in process

41.1

33.0

Finished goods

394.5

349.5

Total
$
552.7

$
495.4

Property, Plant and Equipment, Net (“PP&E”)

4.	~~Property, Plant and Equipment, Net (“PP&E”)~~

PP&E consists of the following:


	June 30,		December 31,
	2022		2021
Land	$	28.2	$	28.3
Buildings and improvements		291.8		290.8
Machinery and equipment		839.2		828.9
Software		110.7		107.8
Office equipment and other assets		93.1		92.7
Construction in progress		124.6		104.3
Gross PP&E		1,487.6		1,452.8
Less accumulated depreciation and amortization		827.0		800.1
Net PP&E	$	660.6	$	652.7


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Depreciation expense on PP&E	$	16.8	$	17.3	$	33.4	$	34.1

September 30,

December 31,

2021

2020

Land
$
28.3

$
28.3

Buildings and improvements

277.3

265.3

Machinery and equipment

823.5

793.4

Software

108.3

103.0

Office equipment and other assets

85.8

85.1

Construction in progress

84.0

86.8

Gross PP&E

1,407.2

1,361.9

Less accumulated depreciation and amortization

791.4

749.1

Net PP&E
$
615.8

$
612.8

Earnings Per Share (“EPS”)

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2021

2020

2021

2020

Depreciation expense on PP&E
$
17.2

$
16.4

$
51.3

$
48.4

5.	~~Earnings Per Share (“EPS”)~~

Basic EPS is calculated based on income available to holders of the Company’s common stock (“Common Stock”) and the weighted average number of shares outstanding during the reported period. Diluted EPS includes additional dilution from potential Common Stock issuable pursuant to the exercise of outstanding stock options.

The following table sets forth a reconciliation of the weighted average number of shares of Common Stock outstanding to the weighted average number of shares outstanding on a diluted basis:


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,		September 30,		September 30,		September 30,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Weighted average common shares outstanding - basic		245.3		247.7		245.2		246.5		242.6		245.2		242.6		245.2
Dilutive effect of stock options		4.5		5.6		4.7		5.5		3.8		4.8		3.9		4.7
Weighted average common shares outstanding - diluted		249.8		253.3		249.9		252.0		246.4		250.0		246.5		249.9
Antidilutive stock options outstanding		1.6		0.0		1.6		1.5		3.0		1.5		2.9		1.5

The following table provides information regarding the intrinsic value of stock options exercised and stock compensation expense related to stock option awards:

The following table provides a summary of the assumptions used in the valuation of issued stock options:


	Three Months Ended		Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,	September 30,	September 30,			September 30,			June 30,			June 30,			June 30,			June 30,
	2021	2020	2021			2020			2022			2021			2022			2021
Risk-free interest rate	-	-		1.3	%		0.5	%		2.9	%		1.4	%		2.9	%		1.3	%
Expected life in years	-	-		7.2			7.3			7.1			7.2			7.1			7.2
Expected volatility	-	-		20.7	%		19.8	%		21.7	%		20.7	%		21.7	%		20.7	%
Dividend yield	-	-		1.2	%		1.3	%		1.2	%		1.2	%		1.2	%		1.2	%

Share Repurchases

On ~~November 1, 2017,~~October 28, 2021, the Board authorized a new share repurchase program, under which the Company may repurchase up to ~~$500.0~~$1,000.0 in shares of Common Stock (the ~~“2017~~“2021 Share Repurchase Program”). The ~~2017~~2021 Share Repurchase Program does not have an ~~expiration.~~ expiration and replaced the 2017 Share Repurchase Program. All remaining dollars authorized for repurchase under the 2017 Share Repurchase Plan have been cancelled. The ~~Company also continued its~~2021 Share Repurchase Program did not modify the Company’s evergreen share repurchase program, authorized by the Board on January 29, 2014, under which the Company may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under ~~the Company’s~~its incentive ~~plans~~plans..

In December ~~2020,~~2021, the Company executed open market purchases of 1.8 million shares for $170.3, inclusive of fees, of which $100.0 was purchased under the evergreen share repurchase program and $70.3 was purchased under the 2021 Share Repurchase Program. In December 2021, the Company also entered into an accelerated share repurchase ~~(“ASR”~~contract ("ASR") ~~contract~~ with a commercial bank to purchase Common Stock. The Company paid ~~$300.0~~$200.0 to the bank, inclusive of fees, and received an initial delivery of shares equal to ~~$270.0,~~$180.0, or ~~3.1~~1.8 million shares. The Company used cash on hand and short-term borrowings to fund the initial purchase price. Upon the completion of the ASR, which ended in February ~~2021,~~2022, the bank delivered an additional ~~0.4~~0.2 million shares to the Company. The final shares delivered to the Company were determined by the average price per share paid by the bank during the purchase period. All ~~3.5~~2.0 million shares were purchased under the 2021 Share Repurchase Program.

recent stock repurchases, there remains $~~In August 2021, the Company executed an agreement to purchase up to $200.0~~729.7 of ~~its Common Stock through October 31, 2021. During the quarter the Company purchased 0.7 million shares for approximately $55.0, inclusive of fees, all of which was purchased~~share repurchase availability under the ~~2017~~ ~~Share Repurchase Program. In October~~ 2021 ~~as ofthe filing date of this Quarterly Report on Form 10-Q, the Company purchased an additional 0.9 million shares for approximately $75.0. The 2017~~ Share Repurchase Program ~~was replaced in the fourth quarter~~as of ~~2021. See Note 19 for further details.~~ June 30, 2022.

The following table ~~presents~~provides the carrying amounts and estimated fair values of the Company’s ~~other~~ financial instruments at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
	Input	Carrying		Fair		Carrying		Fair		Input	Carrying		Fair		Carrying		Fair
	Level	Amount		Value		Amount		Value		Level	Amount		Value		Amount		Value
Financial Assets:
Cash equivalents	Level 1	$	15.8	$	15.8	$	73.7	$	73.7	Level 1	$	322.4	$	322.4	$	17.1	$	17.1
Financial Liabilities:
Short-term borrowings	Level 2		279.7		279.7		351.4		351.4	Level 2		3.3		3.3		252.8		252.8
Term loan due May 1, 2022	Level 2		0.0		0.0		300.0		300.0
2.45% Senior notes due August 1, 2022	Level 2		299.9		305.2		299.9		310.1
2.875% Senior notes due October 1, 2022	Level 2		400.0		410.1		399.9		416.6
3.15% Senior notes due August 1, 2027	Level 2		424.7		470.4		424.7		472.4
3.95% Senior notes due August 1, 2047	Level 2		397.5		468.2		397.4		502.2
2.45% Senior notes due August 1, 2022										Level 2		300.0		300.0		300.0		302.9
2.875% Senior notes due October 1, 2022										Level 2		400.0		399.9		399.9		406.4
Term loan due December 22, 2024										Level 2		400.0		400.0		400.0		400.0
3.15% Senior notes due August 1, 2027										Level 2		424.8		407.4		424.7		450.1
2.3% Senior notes due December 15, 2031										Level 2		399.2		337.4		399.2		403.5
3.95% Senior notes due August 1, 2047										Level 2		397.5		351.0		397.5		471.6
5.00% Senior notes due June 15, 2052										Level 2		499.8		512.3	0.0		0.0
Interest Rate Swap Lock Agreement liability	Level 2		39.8		39.8		57.0		57.0	Level 2	0.0		0.0			41.6		41.6
Business Acquisition Liabilities	Level 3		20.0		20.0		118.0		118.0	Level 3		34.0		34.0		34.0		34.0

The Company recognizes transfers between input levels as of the actual date of the event. There were no transfers between input levels during the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Refer to Note 2 in the Form 10-K for a description of the methods and assumptions used to estimate the fair value of each class of financial instruments reflected in the condensed consolidated balance sheets.

The business acquisition liabilities represent the estimated fair value of additional future contingent consideration payable for acquisitions of businesses that included contingent consideration clauses. The fair value of ~~the~~ business acquisition liabilities is evaluated on an ongoing basis and is based on management estimates and entity-specific assumptions which are considered Level 3 inputs. ~~In the nine months ended September~~As of both June 30, 2021, the Company recorded a reduction in fair value of $98.0 for the Flawless business acquisition liability (as defined in Note 10) based on the revised valuation due to updated sales forecasts. The $98.0 reduction of the business acquisition liability was recorded as a reduction in SG&A expense within the Consumer Domestic and Consumer International segments. At both September 30, 20212022 and December 31, ~~2020,~~2021, the Company had a business acquisition liability of ~~$20.0~~$20.0 in connection with the Zicam Acquisition ~~(as~~and a $14.0 business acquisition liability in connection with the TheraBreath Acquisition (both of which are defined in Note 10). Any amount that may be due for the Zicam business acquisition liability is payable five years from the ~~closing.~~ closing date. Any amount that may be due for the TheraBreath business acquisition liability is payable in installments between two and four years from the closing.

The ~~Company has entered into~~ interest rate swap lock agreements ~~(“Interest Rate Swap Lock Agreements”) which are~~were used to hedge the risk of changes in the interest payments ~~attributable to changes~~associated with the 5.0% Senior notes due June 15, 2052. These agreements were settled in the benchmark U.S. Dollar LIBOR interest rate associated with anticipated issuances of debt in 2022. The liability decreased by $17.2 during the first nine months of 2021 primarily due to higher current and projected interest rates with the offset in Accumulated Other Comprehensive Loss and Deferred Taxes. The liability was reclassified to Accounts Payable and Accrued Expenses during the thirdsecond quarter of ~~2021.~~2022 for a loss of $4.2, which will be amortized into interest expense over ten years.

The carrying amounts of Accounts Receivable, and Accounts Payable and Accrued Expenses, approximated estimated fair values as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Derivative Instruments and Risk Management

9.	~~Derivative Instruments and Risk Management~~

Changes in interest rates, foreign exchange rates, the price of the Common Stock and commodity prices expose the Company to market risk. The Company manages these risks by the use of derivative instruments, such as cash flow and fair value hedges, diesel and commodity hedge contracts, equity derivatives and foreign exchange forward contracts. The Company does not use derivatives for trading or speculative purposes. Refer to Note 3 in the Form 10-K for a discussion of each of the Company’s derivative instruments in effect as of December 31, ~~2020.~~ 2021.

The notional amount of a derivative instrument is the nominal or face amount used to calculate payments made on that instrument. Notional amounts are presented in the following table:


	Notional		Notional		Notional		Notional
	Amount		Amount		Amount		Amount
	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Derivatives designated as hedging instruments
Foreign exchange contracts	$	212.0	$	252.7	$	216.5	$	216.3
Interest rate swap lock	$	300.0	$	300.0	$	0.0	$	300.0
Diesel fuel contracts	1.7 gallons		6.7 gallons		3.1 gallons		0.0 gallons
Commodities contracts	49.1 pounds		84.0 pounds		38.1 pounds		72.1 pounds
Derivatives not designated as hedging instruments
Foreign exchange contracts	$	5.9	$	8.0	$	5.9	$	5.9
Equity derivatives	$	27.2	$	23.3	$	27.6	$	28.9

~~Excluding the Interest Rate Swap Lock Agreements disclosed in Note 8, the~~The fair values and amount of gain (loss) recognized in income and Other Comprehensive Income (“OCI”) associated with the derivative instruments disclosed above did not have a material impact on the Company’s condensed consolidated financial statements during the ~~three~~second quarter of 2022. The interest rate swap lock agreements were settled in the second quarter of 2022 for a loss of $4.2, which will be amortized into interest expense over ten years.

10.

Acquisitions

On December 24, 2021, the Company acquired all of the outstanding equity of Dr. Harold Katz, LLC and ~~nine months~~HK-IP International, Inc., the owners of the THERABREATH® brand of oral care products business (the “TheraBreath Acquisition”). The Company paid $556.0, net of cash acquired, at closing and deferred an additional cash payment of $14.0 related to certain indemnity obligations provided by the seller. The deferred amount is recorded in Business Acquisition Liabilities on the consolidated balance sheet and the additional amount, to the extent not used in satisfaction of such indemnity obligations, is payable in installments between two and four years from the closing. THERABREATH’s annual net sales for the year ended ~~September 30,~~December 31, 2021 were approximately $100.0. The acquisition was financed by the proceeds from a $400.0three-year term loan and the Company’s underwritten public offering of $400.0 aggregate principal 2.30% Senior Notes due on December 15, 2031 completed on December 10, 2021. The THERABREATH business is managed in the Consumer Domestic and Consumer International segments.

The preliminary fair values of the net assets at acquisition are set forth as follows:


Accounts receivable	$	11.3
Inventory		12.9
Trade name (indefinite lived)		487.0
Other intangible assets		30.1
Goodwill		39.9
Accounts payable and accrued expenses		(11.2	)
Business acquisition liabilities - long-term		(14.0	)
Cash purchase price (net of cash acquired)	$	556.0

The trade names and other intangible assets were valued using a discounted cash flow model. The life of the amortizable intangible assets recognized from the TheraBreath Acquisition have a useful life which ranges from 10 - 20 years. The goodwill is a result of expected synergies from combined operations of the acquired business and the Company. Pro forma results are not presented because the impact of the acquisition is not material to the Company’s consolidated financial results. The goodwill and other intangible assets associated with the TheraBreath Acquisition are deductible for U.S. tax purposes.

~~10.~~

~~Acquisitions~~

On December 1, 2020, the Company acquired all of the outstanding equity of Consumer Health Holdco LLC, the owner of the ZICAM® brand and cold remedy products business (the “Zicam Acquisition”). The Company paid ~~$512.7,~~$512.7, net of cash acquired, at closing and deferred an additional cash payment of ~~$20.0~~$20.0 related to certain indemnifications provided by the seller. The deferred amount is recorded in Business Acquisition Liabilities on the ~~condensed~~ consolidatedbalance sheet and any amount that may be due for the business acquisition liability is payable five years from the closing. Zicam’s annual net sales for the year ended December 31, 2020

were approximately ~~$107.0.~~$107.0. The acquisition was financed by the Company with a combination of cash on hand and short-term borrowings. The ZICAM business is managed in the Consumer Domestic ~~segment~~segment..

The fair values of the net assets at acquisition are set forth as follows:


Inventory and other working capital	$	40.2
Property, plant and equipment		0.5
Trade name		367.8
Other intangible assets		93.8
Goodwill		152.2
Current liabilities		(13.1	)
Deferred income taxes		(108.0	)
Long-term liabilities		(20.7	)
Cash purchase price (net of cash acquired)	$	512.7

The trade names and other intangible assets were valued using a discounted cash flow model. All of the intangible assets recognized from the Zicam Acquisition have a useful life which ranges from 10 - 20 years. The goodwill is a result of expected synergies from combined operations of the acquired business and the Company. Pro forma results are not presented because the impact of the acquisition is not material to the Company’s consolidated financial results. The goodwill and other intangible assets associated with the Zicam Acquisition are not deductible for U.S. tax ~~purposes~~.

On May 1, 2019, the Company closed on its previously announced acquisition of the FLAWLESS® business (the “Flawless Acquisition”) from Ideavillage Products Corporation (“Ideavillage”). The Company paid $475.0 at closing and agreed to make an additional business acquisition liability payment based on a trailing ~~twelve-month~~ ~~net sales target ending no later than December 31, 2021. At September 30, 2021 the business acquisition liability value was $0.0. The Company does not expect to make a payment for~~

~~the Flawless business acquisition liability. The transaction was funded with a~~ ~~three-year~~ term loan and commercial paper borrowings. There was a six-month integration transition period in which the net cash received from Ideavillage was accounted for as other revenue as a component of net sales. The Company purchased the inventory as part of the acquisition following the transition period, and at such time the Company became the principal party to the sales transactions and began recording revenue on a gross basis. The FLAWLESS business is managed in the Consumer Domestic and Consumer International segments and represents an addition to the Company’s specialty haircare portfolio which includes BATISTE® dry shampoo, VIVISCAL hair thinning supplements, and TOPPIK® hair fibers.purposes.

~~The fair values of the net assets at acquisition are set forth as follows:~~

Trade name
$
447.3

Other intangible assets

121.8

Goodwill

87.9

Contingent consideration

(182.0
)
Cash purchase price
$
475.0

~~As a result of the Company purchasing assets,~~

~~the goodwill~~11.

Goodwill and other intangible assets associated with the Flawless Acquisition are deductible for U.S. tax purposes. The trade names and other intangible assets were valued using a discounted cash flow model. All of the intangible assets recognized from the Flawless Acquisition have a useful life which ranges from 15 - 20 years. The goodwill is a result of expected synergies from combined operations of the acquired business and the Company. Pro forma results are not presented because the impact of the acquisition was not material to the Company’s consolidated financial results.~~Ideavillage will continue to help support the business through a separate transition services agreement which expires on December 31, 2021.~~

Other Intangibles, Net

~~11.~~

~~Goodwill and Other Intangibles, Net~~

The following table provides information related to the carrying value of all intangible assets, other than goodwill:


	September 30, 2021								December 31, 2020							June 30, 2022							December 31, 2021
	Gross							Amortization	Gross							Gross							Gross
	Carrying		Accumulated					Period	Carrying		Accumulated					Carrying		Accumulated					Carrying		Accumulated
	Amount		Amortization			Net		(Years)	Amount		Amortization			Net		Amount		Amortization			Net		Amount		Amortization			Net
Amortizable intangible assets:
Trade Names	$	1,388.9	$	(320.3	)	$	1,068.6	3-20	$	1,389.6	$	(269.6	)	$	1,120.0	$	1,385.7	$	(368.8	)	$	1,016.9	$	1,386.7	$	(336.2	)	$	1,050.5
Customer Relationships		659.5		(320.2	)		339.3	15-20		659.5		(291.2	)		368.3		664.0		(340.3	)		323.7		664.0		(322.4	)		341.6
Patents/Formulas		230.5		(95.9	)		134.6	4-20		230.5		(85.3	)		145.2		239.1		(106.8	)		132.3		239.1		(99.4	)		139.7
Total	$	2,278.9	$	(736.4	)	$	1,542.5		$	2,279.6	$	(646.1	)	$	1,633.5	$	2,288.8	$	(815.9	)	$	1,472.9	$	2,289.8	$	(758.0	)	$	1,531.8

Indefinite Lived Intangible Assets - Gross Carrying Amount

September 30,

December 31,

2021

2020

Trade Names
$
1,476.3

$
1,476.7


	June 30,		December 31,
	2022		2021
Trade Names	$	1,961.7	$	1,962.5

Intangible amortization expense was ~~$29.9~~$29.3 and ~~$24.4~~$30.5 for the ~~third~~second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively. Intangible amortization expense amounted to ~~$90.9~~$58.8 and ~~$73.4~~$61.0 for the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, respectively. The Company estimates that intangible amortization expense will be approximately ~~$120.0~~$117.0 in ~~2021~~2022 and approximately ~~$116.0~~$115.0 to ~~$107.0~~$107.0 annually overthe next five years.

Fair value for indefinite lived intangible assets was estimated based on a “relief from royalty” or “excess earnings” discounted cash flow method, which contains numerous variables that are subject to change as business conditions change, and therefore could impact fair values in the future. The key assumptions used in determining fair value are sales growth, profitability margins, tax rates, discount rates and ~~discount~~royalty rates. The Company determined that the fair value of all indefinite lived intangible assets for each of the years in the three-year period ended December 31, ~~2020~~2021 exceeded their respective carrying values based upon the forecasted cash flows and profitability. The Company’s indefinite lived intangible impairment review is completed in the fourth quarter of each ~~year.~~ year.

In recent years the Company’s TROJAN® business, specifically the condom category, has not grown and competition has increased. Social distancing requirements due to the COVID-19 pandemic ~~have~~had further negatively impacted the business. As a result, the TROJAN business ~~has~~had experienced stagnant sales and profits resulting in a reduction in expected future cash flows which ~~has~~ eroded a portion of the excess between the fair and carrying value of the tradename. This indefinite-lived intangible asset ismay be susceptible to impairment risk and a continued decline in fair value could trigger a future impairment charge of the TROJAN tradename. The carrying value of the TROJAN

tradename is ~~$176.4~~$176.4 and fair value exceeded carrying value by ~~53%~~70% as of ~~December 31, 2020.~~October 1, 2021. The key assumptions used in the projections from the Company’s October 1, ~~2020~~2021 impairment analysis include discount rates of ~~7.0%~~7.0% in the U.S. and ~~9.0%~~8.5% internationally, ~~growth~~revenue assumptions ~~commensurate with its outlook for the brand and the category~~ based on recent trends, and an average royalty rate of approximately ~~10%~~10%. ~~These discount rates were reduced by 250 basis points from the October 1, 2019 impairment analysis to reflect the inherent reduction in the risk profile of the Company.~~

While management ~~can and~~ has implemented strategies to address the risk, including lowering ~~the Company’s~~ production costs, investing in new product ideas, and developing new creative advertising, significant changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair value. More recently, ~~the category is experiencing~~TROJAN has experienced a recovery ~~benefiting~~in sales and profits as it has benefited from an easing of COVID-19 social restrictions ~~leading~~which led to an increase in sexual activity. The Company expects this trend will continue ~~into next year~~ with the ~~continued~~ adoption of vaccines, ~~and~~the reduction of social distancing ~~restrictions.~~ restrictions and the benefit of management strategies to improve sales and profitability.

~~In addition, the~~The Company’s Passport Food Safety business ~~under pressure as a result of the COVID-19 pandemic and new competitive activities, is experiencing~~has experienced sales and profit declines due to decreased demand driven by the COVID-19 pandemic and pressures from new competitive activities resulting from the loss of exclusivity on a key product line. In the fourth quarter of 2021, management’s review of the outlook for ~~its products~~the Passport business indicated an assessment of the recoverability of the long-lived assets associated with the business was necessary. That review determined that ~~could result~~the estimated future cash flows would not be sufficient to recover the carrying value of the assets resulting in an impairment of the associated tradename and other intangible ~~assets.~~assets of $11.3. The charge was recorded in selling, general and administrative expenses. The assets have a current net book value of approximately ~~$21.0~~$8.8 and are being amortized over their remaining weighted average life ~~of 11~~ which was reduced to 7 years. The Company is implementing strategies to address the ~~decline.~~decline in profitability. However, if unsuccessful, this decline could trigger aan additional future impairment ~~charge.~~ charge.

The carrying amount of goodwill is as follows:

Consumer

Consumer

Specialty

Domestic

International

Products

Total

Balance at December 31, 2020
$
1,859.3

$
234.3

$
136.0

$
2,229.6

Zicam adjustment

1.0

0.0

0.0

1.0

Balance at September 30, 2021
$
1,860.3

$
234.3

$
136.0

$
2,230.6


	Consumer		Consumer			Specialty
	Domestic		International			Products		Total
Balance at December 31, 2021	$	1,899.8	$	238.7		$	136.0	$	2,274.5
TheraBreath adjustment		0.5		(4.3	)		0.0		(3.8	)
Balance at June 30, 2022	$	1,900.3	$	234.4		$	136.0	$	2,270.7

The result of the Company’s annual goodwill impairment test, performed in the beginning of the second quarter of ~~2021,~~2022, determined that the estimated fair value substantially exceeded the carrying values of all reporting units. The determination of fair value contains numerous variables that are subject to change as business conditions change and therefore could impact fair value in the future. The Company has never incurred a goodwill impairment charge.

12.

Leases

~~12.~~

~~Leases~~

The Company leases certain manufacturing facilities, warehouses, office space, railcars and equipment. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. All recorded leases are classified as operating leases and lease expense is recognized on a straight-line basis over the lease term. For leases beginning in 2019, lease components (base rental costs) are accounted for separately from the nonlease components (e.g., common-area maintenance costs). For leases that do not provide an implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

A summary of the Company’s lease information is as follows:


		September 30,			December 31,				June 30,			December 31,
	Classification	2021			2020			Classification	2022			2021
Assets
Right of use assets	Other Assets	$	166.7		$	181.6		Other Assets	$	163.8		$	159.4

Liabilities
Current lease liabilities	Accounts Payable and Accrued Expenses	$	24.9		$	25.0		Accounts Payable and Accrued Expenses	$	22.4		$	24.4
Long-term lease liabilities	Deferred and Other Long-term Liabilities		153.5			168.3		Deferred and Other Long-term Liabilities		153.1			146.6
Total lease liabilities		$	178.4		$	193.3			$	175.5		$	171.0

Other information
Weighted-average remaining lease term (years)			9.2			9.7				9.4			9.1
Weighted-average discount rate			4.3	%		4.3	%			4.4	%		4.3	%


	Three Months		Three Months		Nine Months		Nine Months		Three Months		Three Months			Six Months		Six Months
	Ended		Ended		Ended		Ended		Ended		Ended			Ended		Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		June 30, 2022		June 30, 2021			June 30, 2022		June 30, 2021
Statement of Income
Lease cost⁽¹⁾	$	8.1	$	6.6	$	24.6	$	20.0	$	7.5	$	8.2		$	15.4	$	16.5

Other information
Leased assets obtained in exchange for new lease liabilities net of modifications⁽²⁾	$	0.4	$	2.2	$	4.5	$	18.7	$	15.8	$	(0.3	)	$	17.3	$	4.1
Cash paid for amounts included in the measurement of lease liabilities	$	8.0	$	6.3	$	24.5	$	18.9	$	8.0	$	8.3		$	15.5	$	16.5

(1)

Lease expense is included in cost of sales or SG&A expenses based on the nature of the leased item. Short-term lease expense is excluded from this amount and is not material. The Company also has certain variable leases which are not material. The non-cash component of lease expense for the first six months of 2022 and 2021 was $12.1 and $12.8, respectively, and is included in the Amortization caption in the condensed consolidated statement of cash flows.

(2)

In June 2022, the Company amended its contract at one of its leased manufacturing facilities. This resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $15.2 recorded in the second quarter of 2022. In June 2021, the Company determined that a renewal option was no longer likely to be exercised. This resulted in a decrease to the Company’s right of use assets and corresponding lease liabilities of approximately $0.8 recorded in the second quarter of 2021.

⁽¹⁾

Lease expense is included in cost of sales or SG&A expenses based on the nature of the leased item. Short-term lease expense is excluded from this amount and is not material. The Company also has certain variable leases which are not material. The non-cash component of lease expense for the first nine months of 2021 and 2020 was $19.1 and $14.4, respectively, and is included in the Amortization caption in the condensed consolidated statement of cash flows.

⁽²⁾

In March 2020, the Company approved a capital project to purchase additional machinery and equipment at one of its leased manufacturing facilities. This led to a lease modification to include a renewal option that would extend the lease for an additional five years through 2029. The modification resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $7.3 recorded in the first quarter of 2020.

The Company’s minimum annual rentals including reasonably assured renewal options under lease agreements are as follows:


	Operating
	Leases
2022	$	15.4
2023		26.6
2024		25.2
2025		24.1
2026		16.7
2027 and thereafter		110.6
Total future minimum lease commitments		218.6
Less: Imputed interest		(43.1	)
Present value of lease liabilities	$	175.5

Operating

Leases

2021

$
8.1

2022

31.0

2023

26.8

2024

24.4

2025

23.0

2026 and thereafter

106.6

Total future minimum lease commitments

219.9

Less: Imputed interest

(41.5
)
Present value of lease liabilities

$
178.4

13.

Accounts Payable and Accrued Expenses

~~13.~~

~~Accounts Payable and Accrued Expenses~~

Accounts payable and accrued expenses consist of the following:


	September 30,		December 31,		June 30,		December 31,
	2021		2020		2022		2021
Trade accounts payable	$	617.5	$	588.1	$	667.2	$	663.8
Accrued marketing and promotion costs		170.6		177.8		174.4		201.6
Accrued wages and related benefit costs		56.3		124.2		56.9		87.7
Other accrued current liabilities		153.3		134.4		117.9		166.6
Total	$	997.7	$	1,024.5	$	1,016.4	$	1,119.7

14.

Short-Term Borrowings and Long-Term Debt

~~14.~~

~~Short-Term Borrowings and Long-Term Debt~~

On June 16, 2022, the Company entered into a credit agreement (the “Credit Agreement”) that provides for a $1,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”) that matures on June 16, 2027, unless extended. The Credit Agreement replaced the Company’s prior $1,000.0 unsecured revolving credit facility maturing on March 29, 2024 that was entered into on March 29, 2018. The Company continues to have the ability to increase its borrowing up to an additional $750.0, subject to lender commitments and certain conditions as described in the Credit Agreement. Borrowings under the Credit Agreement are available for general corporate purposes and are used to support the Company's $1,000.0 commercial paper program.

On June 2, 2022, the Company issued $500.0 aggregate principal amount of 5.00% Senior Notes due 2052 (the “2052 Notes”). The 2052 Notes were issued under the second supplemental indenture (the “Second Supplemental Indenture”), dated June 2, 2022, to the indenture dated December 10, 2021 (the “Indenture”). In July 2022 a portion of the proceeds from the sale of the Notes were used to repay all of the Company's outstanding $300.02.45% Senior Notes due August 1, 2022. The remaining proceeds will be used to pay a portion of the Company's $400.0 outstanding 2.875% Senior Notes due October 1, 2022. The 2052 Notes will mature on June 15, 2052, unless earlier retired or redeemed pursuant to the terms of the Second Supplemental Indenture.

15.

Accumulated Other Comprehensive Income (Loss)

⁽¹⁾

In June 2021, the Company repaid $100.0 principal of the $300.0 term loan due May 1, 2022, with the remaining $200.0 principal repaid in early July 2021. The term loan was repaid with proceeds from commercial paper borrowings and cash on hand.

The components of changes in accumulated other comprehensive income (loss) are as follows:

~~(b)~~

~~The Company reclassified a gain of $2.5 and a loss of $2.2 to the condensed consolidated statements of income during the three months ended September 30, 2021 and 2020, respectively~~.

a. The Company has a partnership with a supplier of raw materials that mines and processes sodium-based mineral deposits. The Company purchases the majority of its sodium-based raw material requirements from the partnership. The partnership agreement terminates upon two years’ written notice by either partner. Under the partnership agreement, the Company has an annual commitment to purchase 240,000 tons of sodium-based raw materials at the prevailing market price. The Company is not engaged in any other material transactions with the partnership or the partner supplier.

b. As of ~~September~~June 30, ~~2021,~~2022, the Company had commitments of approximately $~~261.5~~354.8. These commitments include the purchase of raw materials, packaging supplies and services from its vendors at market prices to enable the Company to respond quickly to changes in customer orders or requirements, as well as costs associated with licensing and promotion agreements.

c. As of ~~September~~June 30, ~~2021,~~2022, the Company had various guarantees and letters of credit totaling ~~$5.0.~~ $5.2.

d. In connection with the Flawless Acquisition, the Company iswas obligated to pay an additional amount of up to $425.0based on sales performance through ~~2021.~~2021. The initial fair value of this business acquisition liability, ~~was $182.0. That amount was~~ established ~~based on initial projections~~ in the purchase price ~~allocation. Since~~allocation, was $182.0. During the ~~initial fair value was established,~~years ended December 31, 2021 and 2020, the Company ~~has recorded a reduction in~~decreased the fair value of the ~~entire $182.0~~ business acquisition liability ~~of which $41.0~~by $98.0 and ~~$98.0 was recorded in the three and nine months ended September 30, 2021,~~by $94.0, respectively, based on ~~the revised valuation due to~~ updated sales forecasts. As a result of these adjustments, the fair value of this business acquisition liability was $0.0 as of December 31, 2021, which was the end of the earn-out period. The ~~reduction~~changes in fair value ~~was~~were recorded ~~as a reduction~~ in SG&A ~~expense~~ within the Consumer Domestic and Consumer International ~~segments. At September 30, 2021 the business acquisition liability value was $0.0. The Company does not expect to make a payment for the Flawless business acquisition liability.~~ segments.

In connection with the Zicam Acquisition, the Company deferred an additional cash payment of ~~$20.0~~$20.0 related to certain indemnifications provided by the seller. Any amount that may be due is payable five years from the closing.

In connection with the TheraBreath Acquisition, the Company deferred an additional cash payment of $14.0 related to certain indemnity obligations provided by the seller. The additional amount, to the extent not used in satisfaction of such indemnity obligations, is payable in installments between two and four years from the closing.

e. In ~~addition, in~~ conjunction with the Company’s acquisition and divestiture activities, the Company entered into select guarantees and indemnifications of performance with respect to the fulfillment of the Company’s commitments under applicable purchase and sale agreements. The arrangements generally indemnify the buyer or seller for damages associated with breach of contract, inaccuracies in representations and warranties surviving the closing date and satisfaction of liabilities and commitments retained under the applicable contract. Representations and warranties that survive the closing date generally survive for periods up to five years or the expiration of the applicable statutes of limitations. Potential losses under the indemnifications are generally limited to a portion of the original transaction price, or to other lesser specific dollar amounts for select provisions. With respect to sale transactions, the Company also routinely enters into non-competition agreements for varying periods of time. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on the Company’s financial condition, results of operations and cash flows.

f. In addition to the matters described above, from time to time in the ordinary course of its business the Company is the subject of, or party to, various pending or threatened legal, regulatory or governmental actions or other proceedings, including, without limitation, those relating to, intellectual property, commercial transactions, product liability, purported consumer class actions, employment matters, antitrust, environmental, health, safety and other compliance related matters. Such proceedings are generally subject to considerable uncertainty and their outcomes, and any related damages, may not be reasonably predictable or estimable. Any such proceedings could result in a material adverse outcome negatively impacting the Company’s business, financial condition, results of operations or cash flows.

17.

Related Party Transactions

The following summarizes the balances and transactions between the Company and Armand Products Company (“Armand”) and The ArmaKleen Company (“ArmaKleen”), in each of which the Company holds a ~~50%~~50% ownership interest:


	Armand				ArmaKleen
	Six Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Purchases by Company	$	6.7	$	6.0	$	0.0	$	0.0
Sales by Company	$	0.0	$	0.0	$	0.3	$	0.6
Outstanding Accounts Receivable	$	0.6	$	0.4	$	1.0	$	0.6
Outstanding Accounts Payable	$	1.9	$	1.0	$	0.0	$	0.0
Administration & Management Oversight Services (1)	$	1.1	$	1.1	$	1.0	$	1.0

(1)

Billed by the Company and recorded as a reduction of SG&A expenses.

Armand

ArmaKleen

Nine Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2021

2020

2021

2020

Purchases by Company
$
9.8

$
10.7

$
0.0

$
0.0

Sales by Company
$
0.0

$
0.0

$
0.8

$
0.7

Outstanding Accounts Receivable
$
0.4

$
0.3

$
0.5

$
0.7

Outstanding Accounts Payable
$
1.4

$
1.4

$
0.0

$
0.0

Administration & Management Oversight Services ⁽¹⁾
$
1.6

$
1.6

$
1.5

$
1.6

18.

Segments

⁽¹⁾	~~Billed by the Company and recorded as a reduction of SG&A expenses.~~

~~18.~~

~~Segments~~

Segment Information

The Company operates 3 reportable segments: Consumer Domestic, Consumer International and Specialty Products Division. These segments are determined based on differences in the nature of products and organizational ~~and ownership structures.~~structure. The Company also has a Corporate segment.

Segment revenues are derived from the sale of the following products:


Segment			Products
Consumer Domestic			Household and personal care products
Consumer International			Primarily personal care products
SPD			Specialty chemical products

The Corporate segment income consists of equity in earnings of affiliates. As of ~~September~~June 30, ~~2021,~~2022, the Company held ~~50%~~50% ownership interests in each of Armand and ArmaKleen, respectively. The Company’s equity in earnings of Armand and ArmaKleen, totaling ~~$2.0~~$3.9 and ~~$1.9~~$2.8 for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$7.4~~$6.3 and ~~$5.5~~$5.4 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, are included in the Corporate segment.

Certain subsidiaries that are included in the Consumer International segment manufacture and sell personal care products to the Consumer Domestic segment. These sales are eliminated from the Consumer International segment results set forth in the table below.

Segment net sales and income before income taxes are as follows:


	Consumer		Consumer
	Domestic		International		SPD		Corporate(3)		Total
Net Sales(1)
Second Quarter 2022	$	1,004.7	$	230.5	$	89.9	$	0.0	$	1,325.1
Second Quarter 2021		959.7		226.8		84.6		0.0		1,271.1
First Six Months of 2022	$	1,999.8	$	445.1	$	177.4	$	0.0	$	2,622.3
First Six Months of 2021		1,902.1		443.2		164.7		0.0		2,510.0

Income before Income Taxes(2)
Second Quarter 2022	$	201.7	$	28.5	$	12.4	$	3.9	$	246.5
Second Quarter 2021(4)		234.2		38.2		12.1		2.8		287.3
First Six Months of 2022	$	424.4	$	58.1	$	23.9	$	6.3	$	512.7
First Six Months of 2021(4)		475.1		76.4		21.4		5.4		578.3

(1)

Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table, were $3.8 and $2.6 for the three months ended June 30, 2022 and June 30, 2021, respectively, and were $8.6 and $5.2 for the six months ended June 30, 2022 and June 30, 2021, respectively.

(2)

In determining income before income taxes, interest expense, investment earnings and certain aspects of other income and expense were allocated among segments based upon each segment’s relative income from operations.

(3)

The Corporate segment consists of equity in earnings of affiliates from Armand and ArmaKleen for the three and six months ended June 30, 2022 and June 30, 2021.

(4)

Results for the three months ended June 30, 2021 include a $38.0 reduction of SG&A expenses to adjust the Flawless business acquisition liability, of which $32.3 was recorded to Consumer Domestic and $5.7 was recorded to Consumer International. Results for the six months ended June 30, 2021 include a $57.0 reduction of SG&A expenses to adjust the Flawless business acquisition liability, of which $48.4 was recorded to Consumer Domestic and $8.6 was recorded to Consumer International.

Consumer

Consumer

Domestic

International

SPD

Corporate⁽³⁾

Total

Net Sales⁽¹⁾

Third Quarter 2021
$
998.1

$
227.0

$
86.3

$
0.0

$
1,311.4

Third Quarter 2020

954.6

213.6

72.8

0.0

1,241.0

First Nine Months of 2021
$
2,900.2

$
670.2

$
251.0

$
0.0

$
3,821.4

First Nine Months of 2020

2,776.7

599.7

224.1

0.0

3,600.5

Income before Income Taxes⁽²⁾

Third Quarter 2021⁽⁴⁾
$
238.6

$
34.5

$
14.2

$
2.0

$
289.3

Third Quarter 2020⁽⁵⁾

220.6

32.4

6.6

1.9

261.5

First Nine Months of 2021⁽⁴⁾
$
713.7

$
110.9

$
35.6

$
7.4

$
867.6

First Nine Months of 2020⁽⁵⁾

671.8

94.0

25.6

5.5

796.9

⁽¹⁾

Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table, were $2.6 and $3.3 for the three months ended September 30, 2021 and September 30, 2020, respectively~~, and were $7.8 and $9.1 for the nine months ended September 30, 2021 and September 30, 2020, respectively.~~

⁽²⁾	In determining income before income taxes, interest expense, investment earnings and certain aspects of other income and expense were allocated among segments based upon each segment’s relative income from operations.

⁽³⁾	~~Corporate segment consists of equity in earnings of affiliates from Armand and ArmaKleen for the three and nine months ended September 30, 2021 and September 30, 2020.~~

⁽⁴⁾

Results for the three months ended September 30, 2021 include a $41.0 reduction in SG&A expenses to adjust the Flawless business acquisition liability, of which $34.8 was recorded to Consumer Domestic and $6.2 was recorded to Consumer International. Results for the nine months ended September 30, 2021 include a $98.0 reduction in SG&A expenses to adjust the Flawless business acquisition liability, of which $83.2 was recorded to Consumer Domestic and $14.8 was recorded to Consumer International.

⁽⁵⁾

Results for the three months ended September 30, 2020 include a $51.0 reduction in SG&A expenses to adjust the Flawless business acquisition liability, of which $43.3 was recorded to Consumer Domestic and $7.7 was recorded to Consumer International. Results for the nine months ended September 30, 2020 include a $72.0 reduction in SG&A expenses to adjust the Flawless business acquisition liability, of which $61.2 was recorded to Consumer Domestic and $10.8 was recorded to Consumer International. In the first quarter of 2020, the Company sold its PERL WEISS® toothpaste brand in Germany resulting in a reduction in SG&A expenses of $3.0 recorded in Consumer International.

Product line revenues from external customers are as follows:


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,		September 30,		September 30,		September 30,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Household Products	$	535.5	$	501.4	$	1,553.7	$	1,540.4	$	572.8	$	523.0	$	1,093.3	$	1,018.2
Personal Care Products		462.6		453.2		1,346.5		1,236.3		431.9		436.7		906.5		883.9
Total Consumer Domestic		998.1		954.6		2,900.2		2,776.7		1,004.7		959.7		1,999.8		1,902.1
Total Consumer International		227.0		213.6		670.2		599.7		230.5		226.8		445.1		443.2
Total SPD		86.3		72.8		251.0		224.1		89.9		84.6		177.4		164.7
Total Consolidated Net Sales	$	1,311.4	$	1,241.0	$	3,821.4	$	3,600.5	$	1,325.1	$	1,271.1	$	2,622.3	$	2,510.0

Household Products include laundry, deodorizing and cleaning products. Personal Care Products include condoms, pregnancy kits, oral care products, skin care and hair care products, cold and remedy products, and gummy dietary supplements.

On October 28, 2021, the Board authorized a new share repurchase program, under which the Company may repurchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and replaces the 2017 Share Repurchase Program. All remaining dollars authorized for repurchase under the 2017 Share Repurchase Plan have been cancelled. The 2021 Share Repurchase Program does not modify the Company’s evergreen share repurchase program, authorized by the Board on January 29, 2014, under which the Company may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under its incentive plans.

~~COVID-19~~Supply Chain, Inflation, Labor, and ~~Other Recent Developments~~Customer Demand

Since the beginning of the COVID-19 pandemic, ~~continues~~the impacts to ~~impact certain of~~ our ~~businesses. Since the second quarter ended June 30, 2021, when certain government restrictions were reduced or removed, we~~business have ~~experienced increased demand for certain product categories, mainly~~been primarily supply chain related, including labor shortages and challenges with distribution and transportation, resulting in ~~the United States, including ARM & HAMMER® cat litter, VITAFUSION® and L’IL CRITTERS® gummy vitamins, and~~ ~~Batiste®~~ dry shampoo, in particular, that had been negatively impacted by the temporary and permanent closures of certain retailers, reduced consumer foot traffic at retailers, and COVID-19 related precautionary measures. Overall, we have continued to experience increased online sales.

~~We continue to experience challenges to meet~~difficulty meeting customer demand and significant ~~inflation~~broad-based cost inflation. In addition, government restrictions in China have further exacerbated global supply chain challenges and may have had a negative impact on Chinese consumer demand for certain of ~~manufacturing and distribution costs (including fuel) due to shortages~~our products. As restrictions in ~~supplier labor and many key raw and packaging materials as well as transportation challenges experienced by our suppliers and third-party manufacturers due primarily to the pandemic and exacerbated by~~China ease, we expect the impact ~~of Hurricane Ida. We~~to our business in the future to be less severe. While it is difficult to predict with certainty when conditions may improve, we expect ~~this~~shortages and input cost inflation to continue ~~for the remainder of 2021 and into~~at least throughout 2022.

To ~~attempt to offset some of these cost pressures, we have recently enacted and continue to evaluate price increases. In addition, to~~ address challenges meeting customer demand, we have taken steps to increase our short-term manufacturing capacity for many of our products (including laundry detergent, baking soda, ~~cleaners~~ and ~~vitamins),~~cleaners) as well as our raw material and packaging capacity, and continue to work closely with our suppliers, contract manufacturers and retail partners to increase capacity and ensure sustained supply to keep pace with increased demand. We have also made investments in the expansion of long-term, in-house and third-party manufacturing capacity and are working to enlist additional suppliers that meet our quality specifications. ~~In addition, due to challenges meeting customer demand we have reduced marketing and promotional spending.~~ While ~~we expect supply availability issues to start improving in the first half of 2022 for most of our brands,~~ there is no assurance that these challenges will abate in the ~~near~~foreseeable future, ~~or that our customers will accept all or a portion of these price increases~~ or that the other measures we have or may implement will mitigate the impact of supply disruptions or rising ~~costs.~~costs, we did start to see an improvement in fill rates in the second quarter, particularly in the household category, and we expect those improvements to continue through the second half of 2022 across most product categories.

To attempt to offset some of ~~COVID-19’s~~the cost pressures we are experiencing, we have recently enacted and ~~other recent developments’ effect~~continue to evaluate price increases in certain categories. However, we have started to experience a shift in customer demand to lower cost options due primarily to inflationary and recessionary pressures. This demand shift is impacting us primarily through a reduction in customer demand for discretionary brands, such as Waterpik and Flawless, as well as a shift to more value-branded products. To address this shifting demand, we are taking steps to better manage production schedules and inventory levels for those brands along with increasing promotional activities and marketing spend. We believe the Company is well-positioned for a potential recessionary environment given that 40% of our portfolio is comprised of value products and the Company has low exposure to private label. We expect second half market share gains as we continue to invest in our brands and supply chain fill levels continue to improve.

Looking forward, the impact that these challenges will continue to have on our operational and financial performance ~~in the future~~ will depend on future developments, including the ~~duration, spread and intensity of the pandemic, the~~ spread and severity of new COVID-19 variants, the long-term impact of vaccines, inflationary impacts, customer’s acceptance of all or a portion of any price increases, and our continued ability to obtain an adequate supply of products and materials. Additionally, we may be impacted by our ability to recruit and retain a workforce and engage third-parties to manufacture and distribute our products, as well as any future government actions affecting employers and employees, consumers and the economy ~~generally, all~~in general. The impact of ~~which~~any of these potential future developments are uncertain and difficult to predict considering the rapidly evolving landscape. ~~Our priorities during~~

We are monitoring the ~~COVID-19 pandemic~~impact of both inflation and recessionary indicators including the effect of corresponding government actions, such as raising interest rates to counteract inflation, that may negatively impact consumer spending, and how these factors will potentially influence future cash flows for the short and long term. While we expect that many of these effects will be transitory and that our value focused portfolio positions us well in inflationary and slowing economic environments, it is impossible to predict their impact.

The global economy continues to be negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the U.S., United Kingdom, and European Union have each imposed export controls on certain products as well as financial and economic sanctions on certain industry sectors and parties in Russia and Belarus. We have experienced shortages in materials and increased costs for transportation, energy, and raw material 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 or restrictions on global trade, could result in, among other things, cyber attacks, 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.

We have no operations in Russia or Ukraine. Sales into Russia and Belarus, which have been suspended indefinitely, are not material to the Company’s consolidated net sales and earnings.

On June 16, 2022, we entered into a credit agreement (the “Credit Agreement”) that provides for our $1,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”) that matures on June 16, 2027, unless extended. The Credit Agreement replaced our prior $1,000.0 unsecured revolving credit facility maturing on March 29, 2024 that was entered into on March 29, 2018. We continue to ~~be protecting~~have the ~~health~~ability to increase our borrowing up to an additional $750.0, subject to lender commitments and ~~safety~~certain conditions as described in the Credit Agreement. Borrowings under the Credit Agreement are available for general corporate purposes and are used to support our $1,000.0 commercial paper program.

On June 2, 2022, we issued $500.0 aggregate principal amount of 5.00% Senior Notes due 2052 (the “2052 Notes”). The 2052 Notes were issued under the second supplemental indenture (the “Second Supplemental Indenture”), dated June 2, 2022, to the indenture dated December 10, 2021 (the “Indenture”). In July 2022 a portion of the proceeds from the sale of the Notes were used to repay all of our ~~employees; maximizing~~outstanding $300.0 2.45% Senior Notes due August 1, 2022. The remaining proceeds will be used to pay a portion of the availability of products that help consumers with their health, hygiene and cleaning needs; and using our employees’ talents and our resources to help society meet and overcome the current challenges.

~~For additional information~~$400.0 outstanding 2.875% Senior Notes due October 1, 2022. The 2052 Notes will mature on ~~the impacts and our response~~June 15, 2052, unless earlier retired or redeemed pursuant to the ~~COVID-19 pandemic and other recent developments and~~terms of the risks that could impact our results, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Second Supplemental Indenture.

Diluted Net Income per share was ~~$0.92~~$0.76 in the ~~third~~second quarter of ~~2021~~2022 as compared to ~~$0.85~~$0.87 in the ~~third~~second quarter of ~~2020.~~2021. Diluted Net Income per share was ~~$2.68~~$1.59 in the first ~~nine~~six months of ~~2021~~2022 as compared to ~~$2.52~~$1.76 in the same period in ~~2020.~~ 2021.

During the ~~third~~second quarter of 2021 we decreased the fair value of our business acquisition liability associated with the 2019 acquisition of the ~~FLAWLESS®~~FLAWLESS hair removal business (the “Flawless Acquisition”) by ~~$41.0~~$38.0 ($~~30.8~~28.5 after tax or $0.12 diluted per share), and a total reduction of $98.0 ($73.5 after tax or $0.29 diluted per share) for the nine months ended September 30, 2021, based on updated sales forecasts. After giving effect to the third quarter decrease, the value of the business acquisition liability has been reduced to $0.0. The business acquisition liability adjustments are recorded as a reduction in SG&A expense.

During the third quarter of 2020 we decreased the fair value of our contingent liability associated with the 2019 acquisition of the FLAWLESS hair removal business (the “Flawless Acquisition”) from Ideavillage Products Corporation by $51.0 ($38.2 after tax or $0.15$0.11 diluted per share), for a total net reduction of ~~$72.0~~$57.0 ($~~54.0~~42.8 after tax or ~~$0.21~~$0.16 diluted per share) for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, based on updated sales ~~forecasts and the passage of time.~~forecasts. The business acquisition liability adjustments ~~are~~were recorded as a reduction in SG&A expense.

During the first quarter of 2020, we completed the sale of the PERL WEISS® toothpaste brand in Germany which resulted in a gain of $3.0 ($2.2 after tax or $0.01 diluted per share) recorded in SG&A expense.

Net sales for the quarter ended ~~September~~June 30, ~~2021~~2022 were ~~$1,311.4,~~$1,325.1, an increase of ~~$70.4~~$54.0 or ~~5.7%~~4.2% as compared to the same period in ~~2020.~~ 2021. Net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were ~~$3,821.4,~~$2,622.3, an increase of ~~$220.9~~$112.3 or ~~6.1%~~4.5% over the comparable ~~nine~~six month period of ~~2020.~~ 2021. The components of the net sales increase are as follows:

For both the three and six months ended ~~September~~June 30, ~~2021,~~2022, the volume change reflects decreased product unit sales in the Consumer Domestic ~~segment, partially~~and Specialty Products (“SPD”) segments, offset by increased product unit sales in the Consumer International segment. For both the three and ~~Specialty Products (“SPD”) segments. For the nine~~six months ended ~~September~~June 30, ~~2021, the volume change reflects increased product unit sales in all three segments. For the three months ended September 30, 2021,~~2022, price/mix was favorable in all three segments. ~~For the nine months ended September 30, 2021, price/mix was favorable in the Consumer Domestic and S~~PD ~~segments, but was partially offset by unfavorable price/mix in the Consumer International segment.~~

Our gross profit was ~~$579.2~~$545.3 for the three months ended ~~September~~June 30, ~~2021,~~2022, a ~~$14.0 increase~~$6.9 decrease as compared to the same period in ~~2020.~~2021. Gross margin decreased ~~130~~220 basis points (“bps”) in the ~~third~~second quarter of ~~2021~~2022 compared to the same period in ~~2020,~~2021, due to the impact of higher manufacturing costs including labor and commodities of ~~440~~460 bps, higher transportation costs of 80 bps, higher inventory reserves of 60 bps and ~~higher costs~~unfavorable foreign exchange of 4010 bps ~~as a result of incremental tariffs, partially~~, offset by favorable price/volume/mix of ~~250~~270 bps, the impact of productivity programs of ~~120~~100 bps, and business acquisition benefits of 4020 bps. Gross profit was ~~$1,682.3~~$1,097.8 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, a ~~$25.5 increase~~$5.3 decrease compared to the same period in ~~2020.~~2021. Gross margin decreased ~~200~~210 bps in the first ~~nine~~six months of ~~2021~~2022 compared to the same period in ~~2020,~~2021, due to the impact of higher manufacturing costs including labor and commodities of ~~410~~460 bps, higher transportation costs of 7090 bps, higher inventory reserves of 30 bps and ~~higher costs~~unfavorable foreign exchange of 4010 bps ~~as a result of incremental tariffs, partially~~, offset by ~~the impact of~~ favorable price/volume/mix of ~~180~~270 bps, ~~and~~the impact of productivity programs of ~~140~~90 bps, and business acquisition benefits of 20 bps.

Marketing expenses for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~$160.9,~~$102.9, a decrease of ~~$10.0~~$14.1 or ~~5.9%~~12.1% as compared to the same period in ~~2020.~~2021. Marketing expenses as a percentage of net sales in the ~~third~~second quarter of ~~2021~~ 2022 decreased by ~~150~~140 bps to ~~12.3%~~7.8% as compared to ~~13.8%~~9.2% in the same period in ~~2020~~2021 due to 80100 bps on lower expenses, primarily related to our personal care products due to low fill rates, and 7040 bps of leverage on higher net sales. ~~We reduced marketing spending in the quarter, mainly in household products, as supply shortages impacted our ability to meet customer demand.~~ Marketing expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were ~~$376.6,~~$204.8, a decrease of ~~$13.0~~$10.9 or ~~3.3%~~5.1% as compared to the same period in ~~2020.~~2021. Marketing expenses as a percentage of net sales for the first ~~nine~~six months of ~~2021~~2022 decreased by 9080 bps to ~~9.9%~~7.8% as compared to ~~10.8%~~8.6% in the same period in ~~2020~~2021 due to 6040 bps of leverage on higher net sales and 3040 bps on lower expenses.

SG&A expenses were ~~$116.9~~$180.8 in the ~~third~~second quarter of ~~2021, a decrease~~2022, an increase of ~~$3.6~~$44.3 or ~~3.0%~~32.5% as compared to the same period in ~~2020.~~2021. SG&A as a percentage of net sales ~~decreased 80~~increased 290 bps to ~~8.9%~~13.6% in the ~~third~~second quarter of ~~2021~~2022 as compared to ~~9.7%~~10.7% in the same period in ~~2020.~~2021. The ~~decrease~~increase is due to 50330 bps on higher expenses, offset by 40 bps of leverage associated with higher ~~sales and 30 bps on lower expenses.~~sales. The ~~lower~~higher expenses for the three-month period ended ~~September~~June 30, ~~2021~~2022 are primarily due to ~~lower incentive compensation and litigation costs, partially offset by higher expense related to~~ the ~~Zicam Acquisition (including amortization) and a lower year-over-year favorable adjustment to~~prior year reduction in the fair value of the Flawless business acquisition liability of ~~$10.0.~~$38.0 which reduced SG&A expenses in 2021. SG&A expenses for the first ~~nine~~six months of ~~2021~~2022 were ~~$403.0, a decrease~~$350.7, an increase of ~~$25.1~~$64.6 or ~~5.9%~~22.6% as compared to the same period in ~~2020.~~2021. SG&A as a percentage of net sales ~~decreased 140~~increased 200 bps to ~~10.5%~~13.4% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~11.9%~~11.4% in ~~2020~~2021 due to 70250 bps on ~~lower~~higher expenses, ~~and 70~~offset by 50 bps of leverage associated with higher sales. The ~~lower~~higher expenses for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2021 included a higher year-over-year favorable adjustment~~2022 are primarily due to the prior year reduction in the fair value of the Flawless business acquisition liability of $26.0 and lower incentive compensation and litigation costs, partially offset by higher expense related to the Zicam Acquisition (including amortization) and the prior year gain on the sale of PERL WEISS.$57.0 which reduced SG&A expenses in 2021.

Other (income) expense, net was nominal for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

Interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021 decreased $0.5~~2022 increased $5.2 and ~~$5.5~~$7.8 to ~~$13.4~~$19.3 and ~~$41.5~~$35.9, respectively, as compared to the same ~~period~~periods in ~~2020,~~2021, primarily due to ~~lower interest rates.~~higher average debt outstanding.

The effective tax rate for the three ~~and nine~~ months ended ~~September~~June 30, ~~2021~~2022 was ~~20.4% and 22.8% respectively,~~24.1%, compared to ~~17.3% and 20.2%~~24.0% in the same ~~periods~~period in ~~2020.~~ 2021.

The ~~increase~~effective tax rate for the six months ended June 30, 2022 was 23.6%, compared to 24.1% in the same period in 2021. The decrease in the tax rate ~~for both periods~~ is primarily due to ~~lower~~higher stock option ~~exercises, offset by the partial reduction of a valuation allowance related to foreign tax credits.~~exercises.

We operate three reportable segments: Consumer Domestic, Consumer International and SPD. These segments are determined based on differences in the nature of products and organizational ~~and ownership structures.~~structure. We also have a Corporate segment.

The Corporate segment income consists of equity in earnings of affiliates. As of ~~September~~June 30, ~~2021,~~2022, we held 50% ownership interests in each of Armand Products Company (“Armand”) and The ArmaKleen Company (“ArmaKleen”), respectively. Our equity in earnings of Armand and ArmaKleen, totaling ~~$2.0~~$3.9 and ~~$1.9~~$2.8 for the three months ended ~~September~~June 30, 2022 and 2021, respectively, and ~~2020, respectively,~~ $6.3 and ~~$7.4 and $5.5~~$5.4 for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively, are included in the Corporate segment. Certain subsidiaries that are included in the Consumer International segment manufacture and sell personal care products to the Consumer Domestic segment. These sales are eliminated from the Consumer International segment results set forth below.

Segment net sales and income before income taxes for the three and ~~nine~~six months ended ~~September~~June 30, 2022 and June 30, 2021 ~~and September 30, 2020~~ are as follows:

Household Products include laundry, deodorizing, and cleaning products. Personal Care Products include condoms, pregnancy kits, oral care products, skin care and hair care products, cold and remedy products, and gummy dietary supplements.

Consumer Domestic net sales in the ~~third~~second quarter of ~~2021~~2022 were ~~$998.1,~~$1,004.7, an increase of ~~$43.5~~$45.0 or ~~4.6%~~4.7% as compared to the same period in ~~2020.~~ 2021. Consumer Domestic net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 were ~~$2,900.2,~~$1,999.8, an increase of ~~$123.5~~$97.7 or ~~4.4%~~5.1% as compared to the same period in ~~2020.~~2021. The components of the net sales change are the following:

The increase in net sales for the three months ended ~~September~~June 30, ~~2021,~~2022, reflects the impact of the ~~Zicam~~TheraBreath® Acquisition, and higher net sales in ARM & ~~HAMMER clumping cat litter,~~HAMMER® Liquid Detergent, ARM & ~~HAMMER liquid detergent, VITAFUSION~~HAMMER® Cat Litter, BATISTE® dry shampoo, OXICLEAN® Versatile Stain Remover, and ZICAM™ zinc supplements, offset by declines in VITAFUSION® and L’IL CRITTERS® gummy vitamins, ~~BATISTE dry shampoo~~FLAWLESS® Hair Removal Products and ~~OXICLEAN®~~ ~~powder. T~~heWATERPIK® Shower Heads. The increase in net sales for the ~~nine-month~~six-month period ending ~~September~~June 30, ~~2021,~~ 2022, reflects the impact of the ~~Zicam~~TheraBreath® Acquisition, and higher net sales in ARM & ~~HAMMER clumping cat litter,~~HAMMER® Liquid Detergent, ARM & HAMMER® Cat Litter, OXICLEAN® Powder, and BATISTE® dry shampoo, offset by declines in FLAWLESS® Hair Removal Products, WATERPIK® ~~oral care products, VITAFUSION~~Shower Heads, and VITAFUSION® and L’IL ~~CRITTERS~~CRITTERS® gummy ~~vitamins, BATISTE dry shampoo, ARM & HAMMER scent booster, and~~vitamins. ~~OXICLEAN®~~ ~~powder.~~

In recent years our ~~TROJAN®~~TROJAN business, specifically the condom category, ~~has~~had not grown and competition has increased. Social distancing requirements due to the COVID-19 pandemic ~~have~~had further negatively impacted the business. As a result, the TROJAN business ~~has~~had experienced stagnant sales and profits resulting in a reduction in expected future cash flows which ~~has~~ eroded a portion of the excess between the fair and carrying value of the tradename. This indefinite-lived intangible asset ismay be susceptible to impairment risk and a continued decline in fair value could trigger a future impairment charge of the TROJAN tradename.

While management ~~can and~~ has implemented strategies to address the risk, including lowering our production costs, investing in new product ideas, and developing new creative advertising, significant changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair value. More recently, ~~the category is experiencing~~TROJAN has experienced a recovery in sales and profits as it ~~is benefiting~~has benefited from an easing of COVID-19 social restrictions ~~leading~~which led to an increase in sexual activity. We expect this trend will continue ~~into next year~~ with the ~~continued~~ adoption of vaccines, ~~and~~the reduction of social distancing ~~restrictions.~~ restrictionsand the benefit of management strategies to improve sales and profitability.

~~The carrying value of the TROJAN tradename is $176.4 and fair value exceeded carrying value by 53% as of December 31, 2020.~~

Consumer Domestic income before income taxes for the ~~third~~second quarter of ~~2021~~2022 was ~~$238.6, an $18.0 increase~~$201.7, a $32.5 decrease as compared to the ~~third~~second quarter of ~~2020.~~2021. The ~~increase~~decrease is due primarily to ~~favorable price/mix of $52.0, lower marketing~~higher manufacturing and distribution expenses of ~~$11.7, and lower~~$39.4, higher SG&A expenses of ~~$7.1 (which was impacted by a lower year-over-year favorable adjustment~~$36.5 (primarily due tothe prior year reduction in the fair value of the Flawless business acquisition liability of ~~$8.5)~~$32.3), ~~partially~~the impact of lower sales volumes of $12.0, and higher interest and other expenses of $4.5, offset by ~~unfavorable~~a favorable price/mix of $46.9 and lower marketing expenses of $13.0. For the six-month period ended June 30, 2022, income before income taxes was $424.4, a $50.7 decrease as compared to the first six months of 2021. The decrease is due primarily to higher manufacturing and distribution expenses of ~~$48.8~~$91.9, higher SG&A expenses of $52.3 (primarily due to the prior year reduction in the fair value of the Flawless business acquisition liability of $48.4), the impact of lower sales volumes of $28.6, and ~~$4.0~~higher interest and other expenses of $6.8, offset by a favorable price/mix of $120.8 and lower marketing expenses of $8.1.

Consumer International net sales were $230.5 in the second quarter of 2022, an increase of $3.7 or 1.6% as compared to the same period in 2021. Consumer International net sales in the first six months of 2022 were $445.1, an increase of $1.9 or 0.4% as compared to the same period in 2021. The components of the net sales change are the following:

Excluding the impact ~~from lower volumes.~~ ~~For~~of foreign exchange rates, sales were higher in the ~~nine-month~~second quarter ended June 30, 2022 for BATISTE in Europe, VITAFUSION and L’IL CRITTERS gummy vitamins and BATISTE in Canada, CURASH and BATISTE in Australia, and growth across the Global Markets Group (��GMG”) business. The increase in net sales for the six-month period ~~ended September~~ending June 30, ~~2021,~~2022 is driven by BATISTE and STERIMAR in Europe, VMS, STERIMAR, BATISTE, and OXICLEAN in GMG, CAT LITTER, GRAVOL, and VMS in Canada, and CURASH in Australia.

Consumer International income before income taxes was ~~$713.7,~~$28.5 in the second quarter of 2022, a ~~$41.9 increase~~$9.7 decrease as compared to the ~~first nine months~~second quarter of ~~2020. The increase is~~2021. Higher manufacturing and commodity costs of $8.1, higher SG&A expenses of $7.2 (primarily due ~~primarily~~ to the prior year reduction in fair value of the Flawless business acquisition liability of $5.7), unfavorable foreign exchange rates of $3.0, higher marketing expenses of $0.5 and higher interest and other expenses of $0.1, were offset by the impact of higher sales volumes of $5.7 and a favorable price/mix of ~~$65.7,~~ a ~~$38.6 benefit from~~$3.5. For the first six months of 2022, income before income taxes was $58.1, an $18.3 decrease as compared to the same period in 2021. Higher manufacturing and commodity costs of $14.2, higher ~~volumes, lower~~ SG&A expenses of ~~$29.8 (including a $22.0 favorable year-over-year~~$9.5 (primarily due to the prior year reduction in fair value ~~adjustment to~~of the Flawless business acquisition ~~liability)~~liability of $8.6), ~~lower~~ unfavorable foreign exchange rates of $4.5, higher marketing expenses of ~~$24.8,~~ $0.4 and ~~lower~~higher interest and other expenses of ~~$5.1,~~$0.3, were partially offset by ~~unfavorable manufacturing~~a favorable price/mix of $8.3 and ~~distribution expenses~~the impact of ~~$121.9.~~

SPD net sales were ~~$227.0~~$89.9 in the ~~third~~second quarter of ~~2021,~~2022, an increase of ~~$13.4~~$5.3 or 6.3% as compared to the same period in ~~2020. Consumer International~~2021. SPD net sales inwere $177.4 for the first ~~nine~~six months of ~~2021 were $670.2,~~2022, an increase of ~~$70.5~~$12.7, or ~~11.8%~~7.7% as compared to the same period in ~~2020.~~2021. The components of the net sales change are the following:

~~Excluding the impact of foreign exchange rates, higher~~Net sales increased in the ~~third quarter ended September 30, 2021 were driven primarily by WATERPIK, STERIMAR®, ANUSOL,~~three and ~~BATISTE in Europe, STERIMAR, FEMFRESH®, VITAFUSION and L’IL CRITTERS gummy vitamins, ARM & HAMMER Dental Care, BATISTE, and ANUSOL in the Global Markets Group (“GMG”) business. For the nine~~six months ended ~~September~~June 30, ~~2021~~2022 primarily due to higher ~~sales were driven primarily by WATERPIK, ARM & HAMMER liquid laundry detergent,~~pricing in our dairy and ~~ARM & HAMMER Dental Care~~specialty chemicals segments in ~~GMG, WATERPIK~~response to rising costs and ~~ANUSOL in Europe, FIRST RESPONSE® pregnancy kits in Australia, and TROJAN in Mexico.~~higher volumes for our non-dairy segment.

~~Consumer International~~SPD income before income taxes was ~~$34.5~~$12.4 in the ~~third~~second quarter of ~~2021, a $2.1~~2022, an increase ~~as compared to the third quarter~~ of 2020. Favorable price mix of $3.2, a $2.6 benefit from higher sales volumes, and favorable foreign exchange rates of $1.3, were partially offset by unfavorable manufacturing and commodity costs of $5.2. For the first nine months of 2021, income before income taxes was $110.9, a $16.9 increase$0.3 as compared to the same period in ~~2020,~~2021 due to ~~a $20.6 benefit from higher sales volumes,~~ favorable ~~foreign exchange rates~~price/product mix of ~~$9.0, and lower SG&A~~$7.6, offset by unfavorable manufacturing costs of ~~$1.2 (including a $4.0 favorable year-over-year fair value adjustment to the~~ ~~Flawless business acquisition liability), favorable price mix of $0.9,~~ $5.8, higher SG&A and ~~lower~~higher other expenses of $0.7,~~offset by~~ lower volumes of $0.4 and higher marketing ~~expenses of $5.8, and unfavorable manufacturing and commodity~~ costs of ~~$9.6.~~

$0.4. SPD ~~net sales were $86.3~~income before income taxes was $23.9 in the ~~third quarter~~first six months of ~~2021,~~2022, an increase of ~~$13.5 or 18.5%~~$2.5 as compared to the same period in ~~2020. SPD net sales were $251.0 for the first nine months of~~ 2021 ~~an increase of $26.9, or 12.0% as compared to the same period in 2020. The components of the net sales change are the following:~~

Net sales increased in the third quarter and the nine months of 2021 due to higher volumes across all categories, higher pricing for our dairy segment products and reduced competitive imports due to a constrained transportation market.

SPD income before income taxes was $14.2 in the third quarter of 2021, an increase of $7.6 as compared to the same period in 2020, due to favorable price/product mix of $5.6, a $3.6 benefit from higher volumes, and lower SG&A costs of $3.5, offset by unfavorable manufacturing costs of $4.7, higher other expenses of $0.3 and higher marketing expenses of $0.1. SPD income before income taxes was $35.6 in the first nine months of 2021, an increase of $10.0 as compared to the same period in 2020 due primarily to favorable price/product mix of ~~$15.5, lower SG&A costs of $5.7, and a $3.4 benefit from higher sales volumes, partially~~$18.3, offset by unfavorable manufacturing costs of ~~$13.9,~~$14.1, higher SG&A costs of $0.8, higher other expenses of $0.6, and higher marketing expenses of ~~$0.4 and higher other expenses of $0.2.~~ $0.3.

The Corporate segment includes equity in earnings of affiliates from Armand and ArmaKleen in the three and ~~nine~~six months of ~~2021~~2022 and ~~2020.~~2021. The Corporate segment income before income taxes was ~~$2.0~~$3.9 in the ~~third~~second quarter of ~~2021,~~2022, as compared to ~~$1.9~~$2.8 in the same period in ~~2020.~~2021. The Corporate segment income before income taxes was ~~$7.4~~$6.3 for the first ~~nine~~six months of ~~2021,~~2022, as compared to ~~$5.5~~$5.4 in the same period in ~~2020.~~ 2021.

On ~~May 1, 2019,~~June 16, 2022, we ~~amended the~~entered into a credit agreement (the “Credit Agreement”) that provides for our ~~$1,000.0~~$1,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”) ~~to extend~~that matures on June 16, 2027, unless extended. The Credit Agreement replaced the ~~term of the Revolving Credit Facility from~~our prior $1,000.0 unsecured revolving credit facility maturing on March 29, ~~2023 to~~2024 that was entered into on March 29, ~~2024.~~2018. We continue to have the ability to increase our borrowing up to an additional ~~$600.0,~~$750.0, subject to lender commitments and certain conditions as described in the Credit Agreement. Borrowings under the Credit Agreement are available for general corporate ~~purposes.~~ purposes and are used to support our $1,000.0 commercial paper program.

As of ~~September~~June 30, ~~2021,~~2022, we had ~~$180.0~~$639.7 in cash and cash equivalents, and approximately ~~$716.0~~$1,496.0 available through the Revolving Credit Facility and our commercial paper program. To preserve our liquidity, we invest cash primarily in government money market funds, prime money market funds, short-term commercial paper and short-term bank deposits.

On June 2, 2022, we issued $500.0 aggregate principal amount of 5.00% Senior Notes due 2052 (the “2052 Notes”). The 2052 Notes were issued under the second supplemental indenture (the “Second Supplemental Indenture”), dated June 2, 2022, to the indenture dated December 10, 2021 (the “Indenture”). In July 2022 a portion of the proceeds from the sale of the Notes were used to repay all of our outstanding $300.0 2.45% Senior Notes due August 1, 2022. The remaining proceeds will be used to pay a portion of the $400.0 outstanding 2.875% Senior Notes due October 1, 2022. The 2052 Notes will mature on June 15, 2052, unless earlier retired or redeemed pursuant to the terms of the Second Supplemental Indenture.

The current economic environment presents risks that could have adverse consequences for our liquidity. See “Unfavorable economic conditions could adversely affect demand for our products” under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the “Form 10-K”). Although there is uncertainty related to the impact of the COVID-19 pandemic and other recent developments on our future results, we believe our efficient business model and strong balance sheet position us to manage our business through this crisis. We continue to manage all aspects of our business including, but not limited to, monitoring the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. We do not anticipate that current economic conditions will adversely affect our ability to comply with the financial covenant in the Credit Agreement because we currently are, and anticipate that we will continue to be, in compliance with the maximum leverage ratio requirement under the Credit Agreement.

In June 2021, we repaid $100.0 principal of the $300.0 term loan due May 1, 2022, with the remaining $200.0 principal repaid in early July 2021. The term loan was repaid with proceeds from commercial paper borrowings and cash on hand.

On January 29, 2021, the Board declared a 5.2% increase in the regular quarterly dividend from $0.24 to $0.2525 per share, equivalent to an annual dividend of $1.01 per share payable to stockholders of record as of February 16, 2021. The increase raises the annual dividend payout from $237.0 to approximately $250.0.

In December 2020, we entered into an accelerated share repurchase (“ASR”) contract with a commercial bank to purchase Common Stock. We paid $300.0 to the bank, inclusive of fees, and received an initial delivery of shares equal to $270.0, or 3.1 million shares. We used cash on hand and short-term borrowings to fund the initial purchase price. Upon the completion of the ASR, which ended in February 2021, the bank delivered to us an additional 0.4 million shares. The final shares delivered to us were determined by the average price per share paid by the bank during the purchase period. All 3.5 million shares were purchased under our evergreen stock repurchase program.

In August 2021, we executed an agreement to purchase up to $200.0 of our Common Stock through October 31, 2021. During the quarter we purchased 0.7 million shares for approximately $55.0, inclusive of fees, all of which was purchased under the 2017 ~~Share Repurchase Program. In October 2021,as of the filing date of this Quarterly Report on Form 10-Q, we purchased an additional 0.9 million shares for approximately $75.0.~~

On October 28, 2021, the Board authorized a new share repurchase program, under which we may ~~purchase~~repurchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and ~~replaces~~replaced the ~~Company’s~~ 2017 Share Repurchase Program. All remaining dollars authorized for repurchase under the 2017 Share Repurchase Plan have been cancelled. The 2021 Share Repurchase Program ~~does~~did not modify our evergreen share repurchase program, authorized by the Board on January 29, 2014, under which we may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under ~~our~~its incentive plans.

In December 2021, we executed open market purchases of 1.8 million shares for $170.3, inclusive of fees, of which $100.0 was purchased under the evergreen share repurchase program and $70.3 was purchased under the 2021 Share Repurchase Program. In December 2021, we also entered into an accelerated share repurchase ("ASR") contract with a commercial bank to purchase Common Stock. We paid $200.0 to the bank, inclusive of fees, and received an initial delivery of shares equal to $180.0, or 1.8 million. We used cash on hand and short-term borrowings to fund the initial purchase price. Upon the completion of the ASR, which ended in February 2022, the bank delivered an additional 0.2 million shares. The final shares delivered to us were determined by the average price per share paid by the bank during the purchase period. All 2.0 million shares were purchased under the 2021 Share Repurchase Program.

As a result of our recent stock repurchases, there remains $729.7 of share repurchase availability under the 2021 Share Repurchase Program as of June 30, 2022.

On January 28, 2022, the Board declared a 4% increase in the regular quarterly dividend from $0.2525 to $0.2625 per share, equivalent to an annual dividend of $1.05 per share. The increase raises the annual dividend payout from $248.0 to approximately $255.0. For the three and six months ended June 30, 2022, we paid dividends of $63.7 and $127.4, respectively.

We anticipate that our cash from operations, together with our current borrowing capacity, will be sufficient to fund our share repurchase programs to the extent implemented by management, pay debt and interest as it comes due and pay dividends at the latest approved rate, and meet our capital expenditure program costs, which are expected to be approximately $~~120.0~~$180.0 in ~~2021~~2022 primarily for manufacturing capacity investments in laundry ~~litter~~ and ~~vitamins~~litter to support expected future sales growth. ~~We do not have any mandatory fixed rate debt principal payments due in 2021.~~ Cash, together with our current borrowing capacity, may be used for acquisitions that would complement our existing product lines or geographic ~~markets.~~markets.

Net Cash Provided by Operating Activities – Our primary source of liquidity is the cash flow provided by operating activities, which is dependent on net income and changes in working capital. Our net cash provided by operating activities in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 decreased by ~~$144.6~~$33.9 to ~~$653.6~~$310.4 as compared to ~~$798.2~~$344.3 in the same period in ~~2020~~2021 due to an increase in working capital ~~partially offset by higher~~and lower cash earnings (net income adjusted for non-cash ~~items such as depreciation, amortization, non-cash compensation and changes in business acquisition liabilities and deferred taxes)~~items). The increase in working capital is primarily related to ~~lower obligations~~higher inventory levels for Waterpik and VMS as well as raw materials to ensure adequate supply, partially offset by the change in accruals related to incentive compensation and marketing ~~as well as higher~~and accounts payable related to inventory ~~levels.~~purchases. We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:

Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is calculated using a two-period average method, ~~increased 7~~decreased 3 days from the prior year ~~due to~~as changes in accrual balances and payment term extensions offset higher inventory ~~to support expected sales growth and improvement in service levels, as well as higher accounts receivable primarily related to the timing of sales.~~levels. We continue to focus on reducing our working capital requirements.

Net Cash Used in Investing Activities – Net cash used in investing activities during the first ~~nine~~six months of ~~2021~~2022 was ~~$69.7,~~$39.8, primarily reflecting ~~$64.1~~$38.8 for property, plant and equipment additions. Net cash used in investing activities during the first ~~nine~~six months of ~~2020~~2021 was ~~$51.2,~~$47.6, primarily reflecting ~~$54.6~~$43.3 for property, plant and equipment ~~additions, partially offset by cash proceeds of $7.0 from the sale of the PERL WEISS toothpaste brand in Germany.~~additions.

Net Cash Used in Financing Activities – Net cash provided by financing activities during the first six months of 2022 was $132.2 reflecting $250.3 of net debt borrowings, and $16.9 of proceeds from stock option exercises, less $127.4 of cash dividend payments and $7.6 of deferred financing costs. Net cash used in financing activities during the first ~~nine~~six months of 2021 was ~~$585.4,~~$329.8, reflecting ~~$371.6~~$218.4 of net debt payments ~~$185.8~~and $123.8 of cash dividend payments, ~~and $54.9 of treasury stock purchases, partially offset by $26.9~~less $12.5 of proceeds from stock option exercises. Net cash used in financing activities during the first nine months of 2020 was $353.7, reflecting $250.4 of net debt payments, $177.7 of cash dividend payments, and $14.5 for the Agro business acquisition liability settlement, partially offset by $89.1 of proceeds from stock option exercises.

For quantitative and qualitative disclosures about market risk affecting the Company, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II in the Form 10-K.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) at the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures,

as of the end of the period covered by this report, are effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission (the “Commission”), and

(ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the disclosure.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurring during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

This report contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; the impact of the COVID-19 pandemic and the Company’s response; gross margin changes; trade and marketing spending; marketing expense as a percentage of net sales; sufficiency of cash flows from operations; earnings per share; the impact of new accounting pronouncements; cost savings programs; recessionary conditions, consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the decline of condom usage; the Company’s hedge programs; the impact of foreign exchange, tariffs, and commodity price fluctuations; impairments and other charges; the Company’s investments in joint ventures; the impact of acquisitions and divestitures; capital expenditures; the Company’s effective tax rate; the impact of tax audits; tax changes and the lapse of applicable statutes of limitations; the effect of the credit environment on the Company’s liquidity and capital resources; the Company’s fixed rate debt; compliance with covenants under the Company’s debt instruments; the Company’s commercial paper program; the Company’s current and anticipated future borrowing capacity to meet capital expenditure program costs; and the Company’s share repurchase programs; payment of dividends; environmental and regulatory matters; the availability and adequacy of raw materials, including trona reserves and the conversion of such reserves; and the customers and consumer acceptance of certain ingredients in our products. Other forward-looking statements in this report are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events), including those relating to the outbreak of contagious diseases; other impacts of the COVID-19 pandemic and its impact on the Company’s operations, customers, suppliers, employees, and other constituents, and market volatility and impact on the economy (including causing recessionary conditions), resulting from global, nationwide or local or regional outbreaks or increases in infections, new variants, and the risk that the Company will not be able to successfully execute its response plans with respect to the pandemic or localized outbreaks and the corresponding uncertainty; the impact of regulatory changes or policies associated with the COVID-19 pandemic, including continuing or renewed shutdowns of retail and other businesses in various jurisdictions; the impact of the CARES Act and other governmental actions; the impact on the global economy of the military conflict between Russia and Ukraine, including the impact of export controls and other economic sanctions; the impact of continued shifts in consumer behavior, including accelerating shifts to on-line shopping; unanticipated increases in raw material and energy ~~prices;~~prices, including as a result of the military conflict between Russia and Ukraine; delays and increased costs in manufacturing and distribution; increases in transportation costs; labor shortages; the impact of price increases for our products; the impact of supply chain disruptions; the impact of inclement weather on raw material and transportation costs; adverse developments affecting the financial condition of major customers and suppliers; competition; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space or on-line share of private label and retailer-branded products or other changes in the retail environment; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; foreign currency exchange rate fluctuations; implications of the United Kingdom’s withdrawal from the European Union; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs, including the actual and potential effect of tariffs on Chinese goods imposed by the United States; increased or changing regulation regarding the Company’s products in the United States and other countries where it or its suppliers operate; market volatility; issues relating to the Company’s information technology and controls; the impact of natural disasters, including those related to climate change, on the Company and its customers and suppliers, including third party information technology service

providers; integrations of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment.

The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the United States federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission (the “Commission”).

The Company, in the ordinary course of its business, is subject of, or party to, various pending or threatened legal actions, government investigations and proceedings from time to time, including, without limitation, those relating to commercial transactions, product liability, purported consumer class actions, employment matters, antitrust, environmental, health, safety and other compliance related matters. Such proceedings are subject to many uncertainties and the outcome of certain pending or threatened legal actions may not be reasonably predictable and any related damages may not be estimable. Certain legal actions could result in an adverse outcome for us, and any such adverse outcome could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A, “Risk Factors” in the Form 10-K, which could materially affect the Company’s business, financial condition or future results.

The Company repurchases shares of its Common Stock from time to time pursuant to its publicly announced share repurchase programs.

~~In August 2021,~~During the second quarter of 2022 the Company ~~executed an agreement to purchase up to $200.0~~did not repurchase any shares of ~~its~~ Common Stock ~~through October 31, 2021. During~~pursuant to its share repurchase programs. The following table contains information for shares repurchased during the second quarter of 2022, which was solely due to shares of Common Stock withheld by the Company ~~purchased 0.7 million shares for approximately $55.0, inclusive~~to satisfy tax withholding obligations in connection with the vesting of ~~fees, all of which was purchased under the 2017~~ ~~Share Repurchase Program. In October 2021, as of the filing date of this Quarterly Report on Form 10-Q, the Company purchased an additional 0.9 million shares for approximately $75.0.~~ restricted stock.

OnOn October 28, 2021, the Board authorized a new share repurchase program under which the Company may purchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and replaces the Company’s 2017 Share Repurchase Program. All remaining dollars authorized for repurchase under the 2017 Share Repurchase Plan have been cancelled. The 2021 Share Repurchase Program does not modify the Company’s evergreen share repurchase program, authorized by the Board on January 29, 2014, under which the Company may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under its incentive plans.

In December 2021, the Company executed open market purchases of 1.8 million shares for $170.3, inclusive of fees, of which $100.0 was purchased under the evergreen share repurchase program and $70.3 was purchased under the 2021 Share Repurchase Program. In December 2021, the Company also entered into an accelerated share repurchase ("ASR") contract with a commercial bank to purchase Common Stock. The Company paid $200.0 to the bank, inclusive of fees, and received an initial delivery of shares equal to $180.0, or 1.8 million shares. The Company used cash on hand and short-term borrowings to fund the initial purchase price. Upon the completion of the ASR, which ended in February 2022, the bank delivered an additional 0.2 million shares to the Company. The final shares delivered to the Company were determined by the average price per share paid by the bank during the purchase period. All 2.0 million shares were purchased under the 2021 Share Repurchase Program.

As a result of the Company’s recent stock repurchases, there remains $729.7 of share repurchase availability under the 2021 Share Repurchase Program as of June 30, 2022.


						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(in Years)		Value
Outstanding at December 31, 2021		11.3		$	58.83
Granted		1.5			85.16
Exercised		(0.5	)		38.41
Cancelled		(0.2	)		78.54
Outstanding at June 30, 2022		12.1		$	62.45		6.2	$	366.7
Exercisable at June 30, 2022		7.4		$	50.75		4.5	$	311.2

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(in Years)		Value
Outstanding at December 31, 2020		12.7		$	50.72
Granted		1.5			84.75
Exercised		(0.6	)		40.03
Cancelled		(0.1	)		72.65
Outstanding at September 30, 2021		13.5		$	54.95		5.7	$	374.9
Exercisable at September 30, 2021		8.6		$	41.99		4.0	$	350.0


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


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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


Item		Page
1.	Financial Statements	3

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

3.	Quantitative and Qualitative Disclosures about Market Risk	29

4.	Controls and Procedures	29


1.	Legal Proceedings	31

1A.	Risk Factors	31

2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

6.	Exhibits	33

	Number of Shares					Amounts
	Common Stock		Treasury Stock			Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Stockholders' Equity
December 31, 2019		292.8		(47.4	)	$	292.8	$	295.5		$	4,237.4		$	(66.7	)	$	(2,091.2	)	$	2,667.8
Net income		0.0		0.0			0.0		0.0			229.8			0.0			0.0			229.8
Other comprehensive income (loss)		0.0		0.0			0.0		0.0			0.0			(32.7	)		0.0			(32.7	)
Cash dividends		0.0		0.0			0.0		0.0			(59.0	)		0.0			0.0			(59.0	)
Stock based compensation expense and stock option plan transactions		0.0		0.3			0.0		0.2			0.0			0.0			11.7			11.9
March 31, 2020		292.8		(47.1	)	$	292.8	$	295.7		$	4,408.2		$	(99.4	)	$	(2,079.5	)	$	2,817.8
Net income		0.0		0.0			0.0		0.0			189.7			0.0			0.0			189.7
Other comprehensive income (loss)		0.0		0.0			0.0		0.0			0.0			1.1			0.0			1.1
Cash dividends		0.0		0.0			0.0		0.0			(59.1	)		0.0			0.0			(59.1	)
Stock based compensation expense and stock option plan transactions		0.0		1.2			0.0		7.1			0.0			0.0			42.2			49.3
June 30, 2020		292.8		(45.9	)	$	292.8	$	302.8		$	4,538.8		$	(98.3	)	$	(2,037.3	)	$	2,998.8
Net income		0.0		0.0			0.0		0.0			216.2			0.0			0.0			216.2
Other comprehensive income (loss)		0.0		0.0			0.0		0.0			0.0			7.5			0.0			7.5
Cash dividends		0.0		0.0			0.0		0.0			(59.6	)		0.0			0.0			(59.6	)
Stock based compensation expense and stock option plan transactions		0.0		1.4			0.0		(0.8	)		0.0			0.0			48.2			47.4
September 30, 2020		292.8		(44.5	)	$	292.8	$	302.0		$	4,695.4		$	(90.8	)	$	(1,989.1	)	$	3,210.3

Trade name	$	447.3
Other intangible assets		121.8
Goodwill		87.9
Contingent consideration		(182.0	)
Cash purchase price	$	475.0


										Accumulated
	Foreign			Defined						Other
	Currency			Benefit			Derivative			Comprehensive
	Adjustments			Plans			Agreements			Income (Loss)
Balance at December 31, 2020	$	(26.4	)	$	0.0		$	(51.2	)	$	(77.6	)
Other comprehensive income (loss) before reclassifications		0.4			(0.9	)		17.0			16.5
Amounts reclassified to consolidated statement of income (a) (b)		0.0			0.0			(0.4	)		(0.4	)
Tax benefit (expense)		0.0			0.2			(4.5	)		(4.3	)
Other comprehensive income (loss)		0.4			(0.7	)		12.1			11.8
Balance at June 30, 2021	$	(26.0	)	$	(0.7	)	$	(39.1	)	$	(65.8	)

Balance at December 31, 2021	$	(30.2	)	$	(0.6	)	$	(37.4	)	$	(68.2	)
Other comprehensive income (loss) before reclassifications		(14.5	)		2.5			46.2			34.2
Amounts reclassified to consolidated statement of income (a) (b)		0.0			0.0			(0.3	)		(0.3	)
Tax benefit (expense)		0.0			(0.6	)		(12.2	)		(12.8	)
Other comprehensive income (loss)		(14.5	)		1.9			33.7			21.1
Balance at June 30, 2022	$	(44.7	)	$	1.3		$	(3.7	)	$	(47.1	)

	Three Months Ended			Change vs.	Three Months Ended
	September 30, 2021			Prior Year	September 30, 2020
Net Sales	$	1,311.4		5.7%	$	1,241.0
Gross Profit	$	579.2		2.5%	$	565.2
Gross Margin		44.2	%	-130 basis points		45.5	%
Marketing Expenses	$	160.9		-5.9%	$	170.9
Percent of Net Sales		12.3	%	-150 basis points		13.8	%
Selling, General & Administrative Expenses	$	116.9		-3.0%	$	120.5
Percent of Net Sales		8.9	%	-80 basis points		9.7	%
Income from Operations	$	301.4		10.1%	$	273.8
Operating Margin		23.0	%	+100 basis points		22.0	%
Net income per share - Diluted	$	0.92		8.2%	$	0.85

	Nine Months Ended			Change vs.	Nine Months Ended
	September 30, 2021			Prior Year	September 30, 2020
Net Sales	$	3,821.4		6.1%	$	3,600.5
Gross Profit	$	1,682.3		1.5%	$	1,656.8
Gross Margin		44.0	%	-200 basis points		46.0	%
Marketing Expenses	$	376.6		-3.3%	$	389.6
Percent of Net Sales		9.9	%	-90 basis points		10.8	%
Selling, General & Administrative Expenses	$	403.0		-5.9%	$	428.1
Percent of Net Sales		10.5	%	-140 basis points		11.9	%
Income from Operations	$	902.7		7.6%	$	839.1
Operating Margin		23.6	%	+30 basis points		23.3	%
Net income per share - Diluted	$	2.68		6.3%	$	2.52


	As of						As of
	September 30, 2021		September 30, 2020		Change		June 30, 2022		June 30, 2021		Change
Days of sales outstanding in accounts receivable ("DSO")		28		26		2		27		28		(1	)
Days of inventory outstanding ("DIO")		68		64		4		73		69		4
Days of accounts payable outstanding ("DPO")		73		74		1		76		70		(6	)
Cash conversion cycle		23		16		7		24		27		(3	)

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under All Programs
7/1/2021 to 7/31/2021		-	$	-		-	$	210,000,000
8/1/2021 to 8/31/2021		170,499		82.63		170,499	$	195,911,271
9/1/2021 to 9/30/2021		492,772		82.85		492,772	$	155,086,041
Total		663,271	$	82.79		663,271


	~~(3.1)~~
	(3.1)		Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q filed on June 30, 2020.

	(3.2)
	~~(3.2)~~		Amendment to the Company’s Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on April 30, 2021.

	(3.3)
	~~(3.3)~~		By-laws of the Company, amended and restated as of May 1, 2020, incorporated by reference to Exhibit 3.2 to the Company’s current report on Form 8-K filed on May 1, ~~2020.~~2020.

•
	(4.1)		~~(31.1)~~Second Supplemental Indenture, dated June 2, 2022, between Church & Dwight Co., Inc. and Deutsche Bank Trust Company Americas, as trustee, relating to the 5.00% Senior Notes due 2052, incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K filed on June 2, 2022.

	(10.1)		Church & Dwight Co., Inc. Amended and Restated Omnibus Equity Compensation Plan, incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on April 29, 2022.

	(10.2)		Form of Non-Qualified Stock Option Grant Agreement Under the Church & Dwight Co., Inc. Amended and Restated Omnibus Equity Compensation Plan, incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on June 3, 2022.

	(10.3)		Credit Agreement, dated June 16, 2022, among Church & Dwight Co., Inc., the initial lenders named therein, Bank of America, N.A., as lead administrative agent, swing line lender, and L/C issuer, Wells Fargo Bank, National Association, as co-administrative agent and syndication agent, and Truist Bank, as syndication agent, incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on June 21, 2022.

	(10.4)		First Amendment to Credit Agreement dated June 16, 2022, among Church & Dwight Co., Inc., the lenders named therein, and Bank of America, N.A., as administrative agent, incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on June 21, 2022.

	(31.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.

•	(31.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.

•	(32.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

•	(32.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.

	(101.INS)
	~~(101.INS)~~		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

		~~(101.SCH)~~
		(101.SCH)	Inline XBRL Taxonomy Extension Schema Document.
		(101.CAL)	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

		(101.DEF)	Inline XBRL Taxonomy Extension Definition Linkbase Document.
		(101.LAB)	Inline XBRL Taxonomy Extension Label Linkbase Document.

		(101.PRE)	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

		(104)	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


		CHURCH & DWIGHT CO., INC.
		(REGISTRANT)

DATE:	~~October~~July 29, ~~2021~~2022	/s/ Richard A. Dierker
		RICHARD A. DIERKER
		Executive Vice President
		and Chief Financial Officer
		(Principal Financial Officer)

DATE:	~~October~~July 29, ~~2021~~2022	/s/ Joseph J. Longo
		JOSEPH J. LONGO
		VICE PRESIDENT AND
		CONTROLLER
		(PRINCIPAL ACCOUNTING OFFICER)