What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-15 compared with 2022-02-14 · 477 added, 455 removed, 1176 unchanged (44% of the section changed)

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company changed the manner in which it accounts for inventories in 2022.

Basis for Opinions

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Assessments - Goodwill and Indefinite-Lived Intangible Assets

Interim and Annual Impairment Assessments - Goodwill and Certain Indefinite-Lived Intangible Assets

As described in Notes 1 and 7 to the consolidated financial statements, the Company’s goodwill and indefinite-lived intangible assets balances were $3.3 billion and $1.7 billion, respectively, as of December 31, 2022.

These assets are tested and reviewed for impairment annually on December 1, or more frequently if facts and circumstances warrant.

In 2021, management used a quantitative approach, which involves comparing the fair value of these assets to their carrying value.

For goodwill, if the carrying value of a reporting unit exceeds its fair value, an impairment loss is calculated as the difference between these amounts.

In 2022, management used a quantitative approach, which involves comparing the fair value of these assets to their carrying values.

For goodwill, if the carrying value of a reporting unit exceeds its fair value, an impairment loss is calculated as the difference between these amounts, limited to the amount of goodwill allocated to the reporting unit.

An indefinite-lived intangible asset is impaired by the amount its carrying value exceeds its estimated fair value.

Fair value is estimated by management using the income approach for goodwill and either the relief from royalty method or the excess earnings method for indefinite-lived intangible assets.

Management’s cash flow projections require significant use of judgment and assumptions such as (i) the estimation of future cash flows, business growth rates, terminal values, discount rates, and total enterprise value for goodwill, and (ii) the estimation of future cash flows, royalty rates, terminal values, discount rates, residual (or excess) cash flows and contributory asset charges for indefinite-lived intangible assets.

During the fourth quarter of 2021, in conjunction with its annual impairment testing, management recorded an impairment charge of $60 million associated with indefinite-lived intangible assets in the Learning and Development and Commercial Solutions segments.

The principal considerations for our determination that performing procedures relating to the impairment assessments of goodwill and indefinite-lived intangible assets is a critical audit matter are (i) the significant judgment by management when developing the fair values of the reporting units and indefinite-lived intangible assets;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the estimation of future cash flows, business growth rates, terminal values, discount rates, and total enterprise value for goodwill and the estimation of future cash flows, royalty rates, terminal values, discount rates, residual (or excess) cash flows, and contributory asset charges for indefinite-lived intangible assets;

During the third quarter of 2022, a triggering event occurred for the Home Fragrance reporting unit and certain indefinite-lived tradenames, resulting in the Company recording non-cash impairment charges of $108 million and $40 million to goodwill and indefinite-lived intangible assets, respectively.

During the fourth quarter of 2022, in conjunction with management’s annual impairment testing, the Company recorded non-cash impairment charges of $56 million to goodwill in the Home Fragrance reporting unit and $270 million to certain indefinite-lived tradenames.

Fair value is estimated by management using the discounted cash flow method for goodwill and either the relief from royalty method or the excess earnings method for indefinite-lived intangible assets.

Management’s impairment assessments require significant use of judgment and assumptions such as (i) the estimation of future cash flows, business growth rates and discount rates for goodwill, (ii) the cash flow projections, royalty rates and discount rates under the relief from royalty method for indefinite-lived intangible assets, and (iii) the cash flow projections, discount rates, and contributory asset charges under the excess earnings method for indefinite-lived intangible assets.

The principal considerations for our determination that performing procedures relating to the interim and annual impairment assessments of goodwill and certain indefinite-lived intangible assets is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the reporting units and indefinite-lived intangible assets;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) the estimation of future cash flows, business growth rates, and discount rates for goodwill, (b) the cash flow projections, royalty rates, and discount rates under the relief from royalty method for certain indefinite-lived intangible assets, and (c) the cash flow projections, discount rates, and contributory asset charges under the excess earnings method for certain indefinite-lived intangible assets;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s impairment assessments of goodwill and indefinite-lived intangible assets, including controls over the valuation of the Company’s reporting units and indefinite-lived intangible assets.

These procedures also included, among others, (i) testing management’s process for developing the fair value of the reporting units and indefinite-lived intangible assets;

(ii) evaluating the appropriateness of the income approach, relief from royalty method, and excess earnings method;

(iii) testing the completeness and accuracy of underlying data used in the estimates;

and (iv) evaluating the significant assumptions used by management related to the estimation of future cash flows, business growth rates, terminal values, discount rates, and total enterprise value for goodwill and the estimation of future cash flows, royalty rates, terminal values, discount rates, residual (or excess) cash flows, and contributory asset charges for indefinite-lived intangible assets.

Evaluating management’s assumptions related to the estimation of future cash flows, business growth rates, terminal values, and total enterprise value for goodwill and the estimation of future cash flows, terminal values, and residual (or excess cash flows) for indefinite-lived intangible assets involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units and indefinite-lived intangible assets;

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of the reporting units and certain indefinite-lived intangible assets;

(ii) evaluating the appropriateness of the discounted cash flow method, relief from royalty method, and excess earnings method;

(iii) testing the completeness and accuracy of underlying data used in the methods;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to the (a) estimation of future cash flows, business growth rates, and discount rates for goodwill, (b) the cash flow projections, royalty rates, and discount rates under the relief from royalty method for certain indefinite-lived intangible assets, and (c) the cash flow projections, discount rates, and contributory asset charges under the excess earnings method for certain indefinite-lived intangible assets.

Evaluating management’s assumptions related to the estimation of future cash flows and business growth rates for goodwill and the cash flow projections for certain indefinite-lived intangible assets involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units and indefinite-lived intangible assets;

(ii) the consistency with external and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the Company’s income approach, relief from royalty method, and excess earnings method and (ii) the discount rates for goodwill and the discount rates, royalty rates, and contributory asset charges for indefinite-lived intangible assets.

Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the Company’s discounted cash flow method, relief from royalty method, and excess earnings method and (ii) the discount rates for goodwill and the discount rates, royalty rates, and contributory asset charges for certain indefinite-lived intangible assets.

/s/ PricewaterhouseCoopers LLP

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Income tax provision (benefit) ( 40 ) 138 ( 235 )

Income (loss) from continuing operations 572 ( 770 ) 186

Loss from discontinued operations, net of tax — — ( 79 )

Net income (loss) $ 197 $ 622 $ ( 766 )

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Earnings (loss) per share:

Income (loss) from continuing operations $ 1.34 $ ( 1.82 ) $ 0.44

Loss from discontinued operations — — ( 0.19 )

Net income (loss) $ 1.34 $ ( 1.82 ) $ 0.25

Income (loss) from continuing operations $ 1.34 $ ( 1.82 ) $ 0.44

Loss from discontinued operations — — ( 0.19 )

Net income (loss) $ 1.34 $ ( 1.82 ) $ 0.25

Basic $ 0.47 $ 1.46 $ ( 1.81 )

Diluted $ 0.47 $ 1.45 $ ( 1.81 )

See Notes to Consolidated Financial Statements.

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Accumulated other comprehensive loss ( 1,011 ) ( 882 )

Stockholders' equity attributable to parent 4,091 3,874

Stockholders' equity attributable to noncontrolling interests — 26

Total stockholders' equity 3,519 4,158

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Net income (loss) $ 197 $ 622 $ ( 766 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 296 325 357

Impairment of goodwill, intangibles and other assets 474 60 1,503

(Gain) loss from sale of businesses, net ( 136 ) ( 4 ) 9

Deferred income taxes 97 ( 24 ) ( 260 )

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Accrued liabilities and other ( 533 ) 6 ( 75 )

Net cash provided by operating activities 884 1,432 1,044

Net cash provided by (used in) operating activities ( 272 ) 884 1,432

Cash flows from investing activities:

Capital expenditures ( 289 ) ( 259 ) ( 265 )

Proceeds from sale of divested businesses 617 — 16

Capital expenditures ( 312 ) ( 289 ) ( 259 )

Other investing activities 38 21 15

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Cash flows from financing activities:

Net payments of short-term debt — ( 26 ) ( 26 )

Proceeds from (payments of) short-term debt, net 619 — ( 26 )

Net proceeds from issuance of debt 989 — 491

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Debt extinguishment costs — ( 5 ) ( 18 )

Repurchase of shares of common stock ( 325 ) — —

Cash dividends ( 385 ) ( 394 ) ( 392 )

Payments to dissenting shareholders — — ( 171 )

Acquisition of noncontrolling interests — ( 28 ) —

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Cash paid for interest 244 271 281

Net cash used in discontinued operating activities — — ( 46 )

Net cash provided by discontinued investing activities — — 978

Capital expenditures for discontinued operations — — 17

See Notes to Consolidated Financial Statements.

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Balance at December 31, 2019 $ 447 $ ( 590 ) $ 8,430 $ ( 2,404 ) $ ( 920 ) $ 4,963 $ 33 $ 4,996

Impact of change in inventory accounting method — — — 13 — 13 — 13

Balance at January 1, 2020 $ 447 $ ( 590 ) $ 8,430 $ ( 2,391 ) $ ( 920 ) $ 4,976 $ 33 $ 5,009

Comprehensive income (loss) — — — ( 766 ) 45 ( 721 ) ( 5 ) ( 726 )

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Equity compensation, net of tax 1 ( 8 ) 40 — — 33 — 33

Portion of net income attributable to noncontrolling interests — — — — ( 1 ) ( 1 ) 2 1

Portion of net loss attributable to noncontrolling interests — — — — ( 5 ) ( 5 ) 1 ( 4 )

Distributions to noncontrolling interests — — — — — — ( 3 ) ( 3 )

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Equity compensation, net of tax 2 ( 11 ) 53 — — 44 — 44

Portion of net loss attributable to noncontrolling interests — — — — ( 5 ) ( 5 ) 1 ( 4 )

Distributions to noncontrolling interests — — — — — — ( 3 ) ( 3 )

Acquisition of noncontrolling interests — — — — — — ( 28 ) ( 28 )

Portion of net income attributable to noncontrolling interests — — — — — — 2 2

Balance at December 31, 2021 $ 450 $ ( 609 ) $ 7,734 $ ( 2,535 ) $ ( 882 ) $ 4,158 $ — $ 4,158

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Equity compensation, net of tax 2 ( 14 ) 11 — — ( 1 ) — ( 1 )

Acquisition of noncontrolling interests — — — — — — ( 28 ) ( 28 )

Portion of net income attributable to noncontrolling interests — — — — — — 2 2

Common stock purchased and retired ( 13 ) — ( 312 ) — — ( 325 ) — ( 325 )

Other — — ( 1 ) — — ( 1 ) — ( 1 )

Balance at December 31, 2022 $ 439 $ ( 623 ) $ 7,052 $ ( 2,338 ) $ ( 1,011 ) $ 3,519 $ — $ 3,519

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Description of Business

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Rubbermaid Commercial Products, First Alert, Spontex, Coleman, Campingaz, Oster, Sunbeam and Mr.

Newell Brands is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Rubbermaid Commercial Products, Spontex, Coleman, Campingaz, Contigo, Oster, Sunbeam and Mr.

Newell Brands' beloved brands enhance and brighten consumers lives at home and outside by creating moments of joy, building confidence and providing peace of mind.

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Actual results could differ from those estimates.

On February 6, 2022, the Company signed a definitive agreement to sell its Connected Home & Security (“CH&S”) business unit to Resideo Technologies, Inc.

for a purchase price of $ 593 million, subject to customary working capital and transaction adjustments.

The transaction is expected to be completed by the end of the first quarter of 2022, subject to customary closing conditions, including regulatory approval.

Beginning January 1, 2021, the Company reported the operating results of its cookware product lines as part of the Food reporting unit within the Home Solutions segment, and no longer as part of the former Appliances and Cookware segment.

This change was the result of an assessment by the chief operating decision maker (“CODM”) to better align the cookware product lines with other similar product lines in various food categories.

In connection with this change, the Chief Executive Officer (“CEO”) for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines.

The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments.

In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment.

Prior period comparable results for both of these segments have been reclassified to conform to this product line change.

The Company also revised the calculation of operating income (loss) by segment to include restructuring charges.

Prior period comparable results have been reclassified to conform to the change in calculation.

See Footnote 17.

Certain prior year amounts have been reclassified to conform to the current presentation.

Out-of-Period Adjustments

During 2019, the Company recorded an aggregate after-tax adjustment benefit of $ 10 million ($ 6 million in continuing operations and $ 4 million in discontinued operations) in its Consolidated Statement of Operations reflecting the cumulative impact of prior period errors identified and corrected during the period.

The prior period errors were primarily associated with income tax accounting matters more specifically related to reserves for uncertain tax positions and the reconciliation of state income tax payables/receivables that resulted in a net after-tax benefit of $ 21 million ($ 10 million in continuing operations and $ 11 million in discontinued operations, respectively) recorded in the Consolidated Statement of Operations.

In addition, as a result of certain of those income tax prior period adjustments, certain of the Company's previously recorded goodwill and intangible asset impairment charges and gain/loss on disposal calculations were incorrect, which resulted in a net after-tax charge of $ 8 million ($ 2 million in continuing operations and $ 6 million in discontinued operations,

respectively) recorded in the Consolidated Statement of Operations.

The Company also recorded a net after-tax charge of $ 3 million in continuing operations in its Consolidated Statement of Operations related to other out-of-period adjustments.

Based on an analysis of qualitative and quantitative factors, the Company concluded that the cumulative impact of these errors was not material to any of the Company's previously issued financial statements.

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

Since early 2020, the COVID-19 pandemic has resulted in various federal, state and local governments, as well as private entities, mandating restrictions on travel and public gatherings, closure of non-essential commerce, stay at home orders and quarantining of people to limit exposure to the virus.

The Company's global operations, similar to those of many large, multi-national corporations, were adversely impacted by the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic to the Company's future sales, operating results, cash flows, liquidity and financial condition will continue to be driven by numerous evolving factors that the Company cannot reasonably predict and which will vary by jurisdiction and market, including the severity and duration of the pandemic, the emergence of new strains and variants of the coronavirus, the likelihood of a resurgence of positive cases, the development and availability of effective treatments and vaccines, especially in areas where conditions have recently worsened and work restrictions, operational or travel bans have been reinstituted, the rate at which vaccines are administered to the general public, the timing and amount of fiscal stimulus and relief programs packages that are available to the general public, the availability and prices of supply chain resources, including materials, products and transportation;

and changes in consumer demand patterns for the Company's products as the impact of the global pandemic lessens.

These primary drivers are beyond the Company's knowledge and control, and as a result, at this time it is difficult to reasonably predict the cumulative impact, both in terms of severity and duration, COVID-19 will have on its future sales, operating results, cash flows and financial condition.

Certain prior year amounts have been reclassified to conform to the current year presentation.

During the first quarter of 2022, the Company sold its Connected Home & Security (“CH&S”) business unit to Resideo Technologies, Inc.

See Footnotes 2 and 17 for more information.

During the fourth quarter of 2022, the Company elected to change its method of accounting for certain inventory in the U.S.

from the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method.

All prior periods presented have been retrospectively adjusted to apply the new method of accounting.

See Footnotes 5 and 19 for more information.

Use of Estimates and Risks

Management’s application of U.S.

GAAP in preparing the Company's consolidated financial statements requires the pervasive use of estimates and assumptions.

As discussed above, the world continues to be impacted by the COVID-19 pandemic which has required greater use of estimates and assumptions in the preparation of the consolidated financial statements, more specifically, those estimates and assumptions utilized in the Company’s forecasted cash flows that form the basis in developing the fair values utilized in its impairment assessments as well as its annual effective tax rate.

These estimates also include assumptions as to the duration and severity of the pandemic, timing and amount of demand shifts amongst sales channels, workforce availability and supply chain continuity.

Although management has made its best estimates based upon current information, actual results could materially differ from those estimates and may require future changes to such estimates and assumptions.

If so, the Company may be subject to future incremental impairment charges as well as changes to recorded reserves and valuations.

At December 31, 2021, the Company held a 23.4 % investment in FireAngel Safety Technology Group PLC (formerly known as Sprue Aegis PLC) (“FireAngel”), which the Company accounts for under the equity method of accounting.

During 2019, the Company recorded an other-than-temporary impairment of approximately $ 12 million for this investment.

The Company's carrying value of its investment in FireAngel was $ 4 million and $ 3 million at December 31, 2021 and 2020, respectively.

During 2021, a noncontrolling interest holder in an international subsidiary, exercised its redemption rights, requiring the purchase of such interest by the Company.

The Company completed the transaction for approximately $ 22 million.

The difference between the consideration paid and noncontrolling interest was not material to the Company.

For 2021, 2020 and 2019, the income attributable to non-controlling interests was $ 2 million, $ 1 million and $ 2 million, respectively.

The Company, which has been impacted in recent years by inflationary and supply chain pressures, labor shortages, and logistical challenges across its businesses, and more recently by the indirect macroeconomic impact of the Russia-Ukraine conflict, is also experiencing additional headwinds due to softening global demand and an increased focus by retailers to rebalance inventory levels in light of continued inflationary pressures on consumers.

While all of the Company's segments have been negatively impacted to varying degrees by the softening global demand, the Home Appliances and Home Solutions segments have been the most impacted.

These collective macroeconomic trends, the duration or severity of which are highly uncertain, are rapidly changing the retail landscape and negatively impacted the Company’s operating results, cash flows and financial condition in 2022 and are expected to persist into 2023.

The high level of uncertainty of these factors has resulted in estimates and assumptions that have the potential for more variability and are more subjective.

In addition, some of the other inherent estimates and assumptions used in the Company’s forecasted results of operations and cash flows that form the basis of the determination of the fair value of the reporting units for goodwill and indefinite-lived intangible asset impairment testing are outside the control of management, including interest rates, cost of capital, tax rates, industry growth, credit ratings, foreign exchange rates and labor inflation.

Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future expense or impairment charges.

During the fourth quarter of 2022, in conjunction with the Company's annual impairment testing, the Company recorded a non-cash impairment charge to write-off the remaining $ 56 million of goodwill for its Home Fragrance reporting unit, in the Home Solutions segment, as the carrying value exceeded its fair value.

The Company also recorded an aggregate impairment charge of $ 270 million related to certain tradenames in the Home Solutions and Learning and Development segments, as the carrying values exceeded their fair values.

A quantitative impairment test was also performed for the Company's long-lived assets resulting in no impairment.

During the third quarter of 2022, the Company concluded that a triggering event had occurred for its Home Fragrance reporting unit, an indefinite-lived tradename in the Home Solutions segment, an indefinite-lived tradename in the Home Appliances segment, and two indefinite-lived tradenames in the Learning and Development segment.

The Company performed a quantitative impairment test and determined that the Home Fragrance reporting unit goodwill, and the indefinite-lived tradenames in the Home Appliances and Learning and Development segments noted above were impaired, which resulted in the Company recording an aggregate non-cash impairment charge of $ 148 million during the quarter, as the carrying values exceeded their fair values.

A quantitative impairment test was also performed for the indefinite-lived tradename and long-lived assets in the Home Fragrance reporting unit resulting in no impairment.

See Footnote 7 for further information.

Significant Accounting Policies

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Revenue Recognition

The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied and are recognized at a point in time, which generally occurs either on shipment or on delivery based on contractual terms, which is also when control is transferred.

The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied or at a point in time, which generally occurs either on shipment or on delivery based on contractual terms, which is also when control is transferred.

The Company’s primary performance obligation is the distribution and sales of its consumer and commercial products to its customers.

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Reporting units are determined based upon the Company’s organizational structure in place at the date of the goodwill impairment testing and generally one level below the operating segment level.

The Company’s operations are comprised of eight reporting units, within its five primary operating segments.

The Company’s operations are comprised of seven reporting units, within its five primary operating segments.

The Company may use a qualitative approach, and when appropriate, has bypassed the qualitative and used a quantitative approach, which involves comparing the fair value of each of the reporting units to the carrying value of those reporting units.

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See Footnote 12 for further information.

Sales of Accounts Receivables

Factored receivables at the end of 2021 associated with the existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 500 million, an increase of approximately $ 150 million from December 31, 2020.

Sales of Accounts Receivable

Factored receivables at December 31, 2022 associated with the Company's existing factoring agreement (the “Customer Receivables Purchase Agreement”) were approximately $ 420 million, a decrease of approximately $ 80 million from December 31, 2021.

During the second quarter of 2022, the Company amended the Customer Receivables Purchase Agreement to (i) increase the amount of certain customer receivables that may be sold under the agreement, (ii) add new customers to the agreement and (iii) change the reference rate from London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”).

Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Consolidated Balance Sheet at the time of the sales transaction.

The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow and collections of accounts receivables not yet submitted to the financial institution as a financing cash flow in the Consolidated Statement of Cash Flows.

The Company records the discount as other (income) expense, net in the Consolidated Statement of Operations.

The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the Consolidated Statement of Cash Flows.

The Company records the discount as other (income) expense, net in the Consolidated Statement of Operations and collections of accounts receivable not yet submitted to the financial institution as a financing cash flow.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash on hand and highly liquid investments that have a maturity of three months or less when purchased.

Restricted cash reflects cash received on previously sold customer receivables in connection with the factoring program

that are required to be remitted to a financial institution.

Restricted cash reflects cash received on previously sold customer receivables in connection with the factoring program that are required to be remitted to a financial institution.

Restricted cash is reported as prepaid expenses and other current assets on the Consolidated Balance Sheets.

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Other significant accounting policies are disclosed as follows:

• Discontinued Operations - Footnote 2

• Restructuring – Footnote 4

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The Company considers the applicability and impact of all ASUs.

In October 2022, the FASB issued ASU 2022-04, “ Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

” This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to better consider the effect of the programs on an entity’s working capital, liquidity and cash flows.

This ASU is effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023.

The Company does not expect the adoption of ASU 2022-04 to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848):

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” In January 2021, the FASB clarified the scope of this guidance with the issuance of ASU 2021-01, Reference Rate Reform:

ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met.

ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met.

This ASU was further

updated with the issuance of ASU 2022-06, Reference Rate Reform:

Deferral of the Sunset Date of Topic 848, which extends the sunset date of the guidance.

ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2024.

The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.

The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

Adoption of New Accounting Guidance

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The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “ Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

” ASU 2018-15 clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.

ASU 2018-15 is effective for public business entities for years, and interim periods within those years, beginning after December 15, 2019.

The Company adopted ASU 2018-15 prospectively to all implementation costs incurred after January 1, 2020, the date of adoption.

The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 modifies disclosure requirements for defined benefit pension and other postretirement plans.

ASU 2018-14 is effective for fiscal years ending after December 15, 2020.

As ASU 2018-14 only impacts the disclosure requirements related to defined benefit pension and other postretirement plans, the adoption of ASU 2018-14 did not have a material impact on the Company’s consolidated financial statements.

Footnote 2 — Discontinued Operations and Divestitures

Discontinued Operations

In July 2019, the Company announced its decision to no longer pursue the sale of the majority of the Rubbermaid Outdoor, Closet, Refuse, Garage and Cleaning businesses (“Commercial Products”).

The decision to keep Commercial Products was based on the strength of the brand, its competitive position in a large and growing category, and track record of cash flow generation, revenue growth and margin expansion.

Management believes that retaining this business will further enhance the value creation opportunity for the Company.

In October 2019, the Company decided to no longer pursue the sale of the Mapa/Spontex and Quickie businesses.

The decision to keep these businesses was based on their financial profile, relative to expected sales proceeds.

At December 31, 2019, the Rubbermaid Outdoor, Closet, Refuse, Garage and Cleaning businesses and the Mapa/Spontex and Quickie businesses (collectively referred to as the “Commercial Business”) were no longer classified as held for sale in the Company's Consolidated Balance Sheets nor as discontinued operations in the Company's Consolidated Statement of Operations.

These businesses are reported in the Commercial Solutions segment for all periods presented.

The following table provides a summary of amounts included in discontinued operations for the year ended December 31, 2019 (in millions):

Net sales $ 368

Cost of products sold 266

Gross profit 102

Selling, general and administrative expenses 48

Impairment of goodwill, intangibles and other assets 112

Operating loss ( 58 )

Non-operating income, net (1)

Loss before income taxes ( 48 )

Income tax provision 31

Net loss $ ( 79 )

(1) Includes gains on sale of discontinued operations of $ 7 million.

Footnote 2 — Divestiture Activity

On March 31, 2022, the Company sold its CH&S business unit to Resideo Technologies, Inc., for approximately $ 593 million, subject to customary working capital and other post-closing adjustments.

As a result, during the year ended December 31, 2022, the Company recorded a pre-tax gain of $ 136 million, which was included in other (income) expense, net in Consolidated Statements of Operations.

On August 31, 2020, the Company divested the foam board product line in its Learning and Development segment.

As a result, the Company recorded a pre-tax loss of $ 8 million, which is included in other (income) expense, net in the Consolidated Statements of Operations.

On May 1, 2019, the Company sold its Rexair business to investment funds affiliated with Rhône Capital for approximately $ 235 million, subject to customary working capital and other post-closing adjustments.

As a result, during 2019, the Company recorded a pre-tax gain of $ 2 million, which is included in the loss from discontinued operations.

On May 1, 2019, the Company sold its Process Solutions business to an affiliate of One Rock Capital Partners, LLC, for approximately $ 500 million , subject to customary working capital and other post-closing adjustments.

As a result, during 2019, the Company recorded a pre-tax loss of $ 7 million, which is included in the loss from discontinued operations.

On December 31, 2019, the Company sold The United States Playing Card Company and certain other subsidiaries engaged in the playing cards business to Cartamundi Inc.

and Cartamundi España S.L.

for $ 220 million, subject to customary working capital and other post-closing adjustments.

As a result, during 2019, the Company recorded a pre-tax loss of $ 5 million, which is included in the loss from discontinued operations.

During 2019 the Company recorded impairment charges of $ 112 million, which is included in the loss from discontinued operations related to the write-down of the carrying value of certain held for sale businesses based on their estimated fair value.

Footnote 3 — Accumulated Other Comprehensive Income (Loss)

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2022 2021 2020

Cumulative translation adjustment (1)

Pension and postretirement benefit plans (2)

$ 23 $ 72 $ 9

Derivative financial instruments for effective cash flow hedges (2)

Derivative financial instruments (3)

( 21 ) 23 ( 6 )

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(2) See Footnote 11 for further information.

(3) See Footnote 10 for further information.

The income tax provision (benefit) allocated to the components of AOCL for the years ended December 31, are as follows (in millions):

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When employees are receiving incentives to stay beyond the legally required notification period, we record the cost of their severance over the remaining service period.

Restructuring costs incurred by reportable business segment for all restructuring activities in continuing operations for the years ended December 31, are as follows (in millions):

Restructuring costs incurred by reportable business segment for all restructuring activities for the years ended December 31, are as follows (in millions):

2022 2021 2020

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Accrued restructuring costs activity for the year ended December 31, 2022 are as follows (in millions):

Balance at December 31, 2020 Restructuring Costs, Net Payments Foreign Currency and Other Balance at December 31, 2021

Balance at December 31, 2021 Restructuring Costs, Net Payments Balance at December 31, 2022

Severance and termination costs $ 8 $ 13 $ ( 14 ) $ 7

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2020 Restructuring Plan

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

The restructuring costs, which impact all segments, include employee-related costs, including severance and other termination benefits.

In connection with the program, the Company incurred cumulative charges of $ 29 million since inception, $ 10 million and $ 19 million for the years ended December 31, 2021 and 2020, respectively.

This restructuring program is substantially complete at the end of 2021 and all cash payments are expected to be paid within one year of charges incurred.

Accelerated Transformation Plan

The Company’s Accelerated Transformation Plan (“ATP”), which was completed at the end of 2019, was designed in part, to divest the Company’s non-core consumer businesses and focus on the realignment of the Company’s management structure and overall cost structure as a result of the completed divestitures.

Restructuring costs associated with the ATP included employee-related costs, including severance, retirement and other termination benefits, as well as contract termination costs and other costs.

The Company recorded charges of $ 2 million related to the ATP during 2020.

Restructuring charges incurred during 2019 are primarily related to the ATP.

Other Restructuring-Related Costs

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, including certain costs associated with Project Ovid.

The Company’s 2020 restructuring program, which was substantially complete at the end of 2021, was designed to reduce overhead costs, streamline certain underperforming operations and improve future profitability.

The restructuring costs, which impacted all segments, include employee-related costs, including severance and other termination benefits.

In connection with the 2020 restructuring program, the Company incurred cumulative charges of $ 29 million since inception, $ 10 million and $ 19 million for the years ended December 31, 2021 and 2020, respectively.

Other Restructuring and Restructuring-Related Costs

The Company regularly incurs other restructuring and restructuring-related costs in connection with various discrete initiatives, including certain costs associated with Project Ovid, the multi-year, customer centric supply chain initiative to transform the Company’s go-to-market capabilities in the U.S., improve customer service levels and drive operational efficiencies.

Restructuring-related costs are recorded in cost of products sold and SG&A in the Consolidated Statements of Operations based on the nature of the underlying costs incurred.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded other restructuring charges of $ 15 million, $ 6 million and $ 2 million, respectively.

Project Phoenix

In January 2023, the Company announced a restructuring and savings initiative (“Project Phoenix”) that is intended to strengthen the Company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies.

Project Phoenix is expected to be substantially implemented by the end of 2023 and incorporates a variety of initiatives designed to simplify the organizational structure, streamline the Company’s real estate portfolio, centralize the Company’s supply chain functions, which include manufacturing, distribution, transportation and customer service, transition to a unified One Newell go-to-market model in key international geographies, and otherwise reduce overhead costs.

The Company commenced reducing headcount in the first quarter 2023, with most of these actions expected to be completed by the end of 2023, subject to local law and consultation requirements.

The Company estimates that it will incur approximately $ 100 million to $ 130 million in restructuring and restructuring-related charges in connection with Project Phoenix, substantially all of which are expected to be incurred by the end of fiscal 2023.

These charges consist primarily of $ 80 million to $ 105 million in charges related to severance payments and other termination benefits;

$ 15 million to $ 20 million in charges associated with office space reductions;

and approximately $ 5 million of other charges, including those associated with employee transition and legal costs.

The Company expects approximately $ 95 million to $ 120 million of the total aggregate charges will be cash expenditures.

No charges associated with Project Phoenix were recorded in 2022.

Footnote 5 — Inventories

Inventories are stated at the lower of cost or net realizable value using the last-in, first-out (“LIFO”) or first-in, first-out (“FIFO”) methods.

Inventories are stated at the lower of cost or net realizable value.

The Company reduces its inventory value for estimated obsolete and slow-moving inventory in an amount equal to the difference between the cost of inventory and the net realizable value based upon assumptions about future demand and market conditions.

If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Inventory costs include direct materials, direct labor and manufacturing overhead, or when finished goods are sourced, the cost is the amount paid to the third party.

The components of inventories were as follows at December 31, (in millions):

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$ 2,203 $ 2,087

Inventory costs include direct materials, direct labor and manufacturing overhead, or when finished goods are sourced, the cost is the amount paid to the third party.

Approximately 22.5 % and 24.9 % of gross inventory costs at December 31, 2021 and 2020, respectively, were determined by the LIFO method;

for the balance, cost was determined using the FIFO method.

Inventory accounted for under the LIFO method would increase by $ 90 million and $ 23 million at December 31, 2021 and 2020, respectively, if the LIFO inventory were valued under the FIFO method.

The pre-tax expense from continuing operations recognized by the Company related to the liquidation of LIFO-based inventories were immaterial in 2021 and 2020, and $ 3 million in 2019.

During the fourth quarter of 2022, the Company elected to change its method of accounting for certain inventory in the U.S.

from LIFO to FIFO.

The change to FIFO is preferable because it conforms the Company's entire inventory to a single method of accounting and improves comparability with the Company's peers.

The Company applied this change in inventory costing method by retrospectively adjusting its historical financial statements.

The following historical financial statement line items within the accompanying financial statements were adjusted as a result of the retrospective application of the change in inventory costing method (in millions, except per share data):

For the year ended December 31, 2022 For the year ended December 31, 2021 For the year ended December 31, 2020

As Computed Impact of As Reported Impact of As Reported Impact of

Under LIFO Change to FIFO As Reported Under LIFO Change to FIFO As Adjusted Under LIFO Change to FIFO As Adjusted

Consolidated Statement of Operations

Net sales $ 9,459 $ — $ 9,459 $ 10,589 $ — $ 10,589 $ 9,385 $ — $ 9,385

Cost of sales 6,637 ( 12 ) 6,625 7,293 ( 67 ) 7,226 6,306 ( 5 ) 6,301

Operating income (loss) 300 12 312 946 67 1,013 ( 634 ) 5 ( 629 )

Income (loss) before income taxes 145 12 157 693 67 760 ( 1,006 ) 5 ( 1,001 )

Income tax expense (benefit) ( 43 ) 3 ( 40 ) 121 17 138 ( 236 ) 1 ( 235 )

Net income (loss) $ 188 $ 9 $ 197 $ 572 $ 50 $ 622 $ ( 770 ) $ 4 $ ( 766 )

Weighted average common shares outstanding:

Basic 415.7 415.7 425.3 425.3 424.1 424.1

Diluted 417.4 417.4 428.0 428.0 424.1 424.1

Earnings (loss) per share:

Basic $ 0.45 $ 0.02 $ 0.47 $ 1.34 $ 0.12 $ 1.46 $ ( 1.82 ) $ 0.01 $ ( 1.81 )

Diluted $ 0.45 $ 0.02 $ 0.47 $ 1.34 $ 0.11 $ 1.45 $ ( 1.82 ) $ 0.01 $ ( 1.81 )

Consolidated Statement of Comprehensive Income (Loss)

Net income (loss) $ 188 $ 9 $ 197 $ 572 $ 50 $ 622 $ ( 770 ) $ 4 $ ( 766 )

Total other comprehensive income (loss), net of tax ( 129 ) — ( 129 ) ( 2 ) — ( 2 ) 40 — 40

Comprehensive income (loss) including noncontrolling interests 59 9 68 570 50 620 ( 730 ) 4 ( 726 )

Less:Total comprehensive income (loss) attributable to noncontrolling interests — — — 2 — 2 ( 4 ) — ( 4 )

Total comprehensive income (loss) attributable to parent $ 59 $ 9 $ 68 $ 568 $ 50 $ 618 $ ( 726 ) $ 4 $ ( 722 )

Consolidated Statement of Cash Flows

Net income (loss) $ 188 $ 9 $ 197 $ 572 $ 50 $ 622 $ ( 770 ) $ 4 $ ( 766 )

Deferred income taxes 94 3 97 ( 41 ) 17 ( 24 ) ( 261 ) 1 ( 260 )

Inventories ( 264 ) ( 12 ) ( 276 ) ( 396 ) ( 67 ) ( 463 ) ( 29 ) ( 5 ) ( 34 )

December 31, 2022 December 31, 2021

As Computed Impact of As Reported Impact of

Under LIFO Change to FIFO As Reported Under LIFO Change to FIFO As Adjusted

Consolidated Balance Sheets

Inventories $ 2,101 $ 102 $ 2,203 $ 1,997 $ 90 $ 2,087

Deferred income taxes, net 316 ( 26 ) 290 409 ( 23 ) 386

Retained deficit* ( 2,414 ) 76 ( 2,338 ) ( 2,602 ) 67 ( 2,535 )

* The impact to the opening retained deficit balance at January 1, 2020 was a reduction to retained deficit of $ 13 million.

See Footnote 19 for the retrospective application of the change in inventory costing method to the unaudited quarterly reporting periods in 2022 and 2021.

Footnote 6 — Property, Plant and Equipment, Net

10 unchanged sentences

$ 1,184 $ 1,204

Depreciation expense for continuing operations was $ 205 million, $ 200 million and $ 254 million in 2021, 2020 and 2019, respectively.

There was no depreciation expense for discontinued operations in 2019.

During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its asset groups as a result of the COVID-19 pandemic.

Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets (the lowest level for which identifiable cash flows are available) to their respective carrying amount and recorded a non-cash impairment charge of approximately $ 1 million during the year ended December 31, 2020, in the Home Solutions segment associated with its Yankee Candle retail store business.

The impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value.

See Footnote 1 for further information.

During 2019, the Company decided not to sell the Commercial Business and reclassified the business from held for sale to held and used.

The Company measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the Commercial Business been continuously classified as held and used, or (ii) fair value at the date the decision not to sell was made.

The Company recorded a charge of $ 50 million in 2019 relating to the amount of depreciation expense that would have been recorded in prior periods had the Commercial Business been continuously classified as held and used.

Depreciation expense was $ 196 million, $ 205 million and $ 200 million in 2022, 2021 and 2020, respectively.

Footnote 7 — Goodwill and Other Intangible Assets, Net

1 unchanged sentence

December 31, 2022

Net Book Value at December 31, 2020 Foreign

Net Book Value at December 31, 2021 Impairment

Charges Foreign

Exchange Gross

7 unchanged sentences

$ 3,504 $ ( 164 ) $ ( 42 ) $ 8,237 $ ( 4,939 ) $ 3,298

During the fourth quarter of 2022, in conjunction with its annual impairment testing, the Company recorded a non-cash impairment charge to write-off the remaining $ 56 million of goodwill for its Home Fragrance reporting unit, in the Home Solutions segment as the carrying value exceeded its fair value.

This impairment reflected a further downward revision to the forecasted cash flows used in connection with the third quarter triggering event assessment, driven by inflationary pressures which continue to impact discretionary spending behavior of consumers at higher rates than previously expected.

The Baby reporting unit in the Learning and Development segment had a fair value within 10% of its associated carrying value.

A hypothetical 10% reduction in forecasted earnings before interest, taxes and amortization used in the discounted cash flows to estimate the fair value to this reporting unit would have resulted in an impairment charge of approximately $ 120 million against its goodwill carrying value of $ 653 million.

During the third quarter of 2022, the Company concluded that a triggering event had occurred for its Home Fragrance reporting unit, in the Home Solutions segment, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory, and rising interest rates.

The decline in global demand is driven primarily by inflationary pressures which are impacting the discretionary spending behavior of consumers.

The Company performed a quantitative impairment test and determined that the Home Fragrance reporting unit goodwill was impaired.

During the third quarter of 2022 the Company recorded a non-cash impairment charge of $ 108 million, as the carrying value of the reporting unit exceeded its fair value.

December 31, 2021

Net Book Value at December 31, 2019 Other

(1) Impairment

Net Book Value at December 31, 2020 Foreign

Exchange Gross

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$ 3,553 $ ( 49 ) $ 8,604 $ ( 5,100 ) $ 3,504

(1) During the third quarter of 2020, the Company divested a product line in its Learning and Development segment and allocated $ 3 million of reporting unit goodwill to the calculation of loss on disposal of business.

See Footnote 2 for further information.

(2) During the first quarter of 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of the COVID-19 global pandemic.

Pursuant to the authoritative literature, the Company performed an impairment test and determined that goodwill associated with its Home Appliances and Food reporting units were fully impaired and recorded a non-cash charge of $ 212 million to reduce the reporting units' goodwill to zero .

See Footnote 1 for further information.

The impairment charges for the acquired intangible assets were recorded in the Company’s reporting segments as follows for the years ended December 31, (in millions):

2021 (1) 2020 (2) 2019 (3)

Impairment of acquired intangible assets

The impairment charges for indefinite-lived tradenames were recorded in the Company’s reporting segments as follows for the years ended December 31, (in millions):

Impairment of indefinite-lived tradenames

Commercial Solutions $ — $ 29 $ 320

4 unchanged sentences

$ 310 $ 60 $ 1,279

(1) During the fourth quarter of 2021, in conjunction with its annual impairment testing, the Company recorded non-cash impairment charges of $ 60 million associated with tradenames in the Commercial Solution and Learning and Development segments, as the carrying values exceeded the fair values, reflecting a downward revision of future expected cash flows, which include the impact of the COVID-19 global pandemic.

Further impairments may occur if future expected cash flows are not achieved.

(1) During the fourth quarter of 2022, in conjunction with its annual impairment testing, the Company recorded aggregate non-cash impairment charges of $ 270 million associated with two tradenames in the Home Solutions segment and one tradename in the Learning and Development segment, as the carrying values exceeded their fair values.

The decline in fair values for one tradename in the Home Solutions segment and the tradename in the Learning and Development segment reflected a further downward revision to the forecasted cash flows used in connection with the third quarter triggering event assessment, driven by inflationary pressures which are impacting discretionary spending behavior of consumers at higher rates than previously expected, including higher than expected overhead costs.

The decline in fair value for the remaining tradename in the Home Solutions segment reflected a change in management's assumptions, including the timing of a labor shortage recovery in a certain international market, which negatively impacted the long-term profitability estimates used to develop the forecasted cash flow projections for the annual impairment test.

During the third quarter of 2022, the Company concluded that a triggering event had occurred for one indefinite-lived tradename in each of the Home Appliances and Home Solutions segments, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory and rising interest rates.

The decline in global demand is driven primarily by inflationary pressures which are impacting the discretionary spending behavior of consumers.

The Company also concluded that a triggering event had occurred for two indefinite-lived tradenames in the Learning and Development segment, as a result of rising interest rates and inflationary pressures.

The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Home Appliances segment and two indefinite-lived tradenames in the Learning and Development segment were impaired.

During the third quarter of 2022, the Company recorded an aggregate non-cash impairment charge of $ 40 million, as the carrying values of these tradenames exceeded their fair values.

(2) During the fourth quarter of 2021, in conjunction with its annual impairment testing, the Company recorded non-cash impairment charges of $ 60 million associated with tradenames in the Commercial Solution and Learning and Development segments, as the carrying values exceeded their fair values, reflecting a downward revision of future expected cash flows, which include the impact of the COVID-19 global pandemic.

(3) During the fourth quarter of 2020, in conjunction with its annual impairment testing, the Company recorded a non-cash impairment charge of $ 20 million associated with a tradename in the Learning and Development segment, as its carrying value exceeded its fair value.

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During the first quarter of 2020, as a result of the impairment testing performed in connection with COVID-19 pandemic triggering event, the Company determined that certain of its indefinite-lived intangible assets in all of its operating segments were impaired and recorded non-cash impairment charges of $ 1.3 billion to reflect the impairment of these indefinite-lived tradenames because their carrying values exceeded their fair values.

(3) The carrying value of certain Home Appliances tradenames exceeded their fair value primarily due to the announced tariffs on Chinese imports, as well as a decline in sales volume due to a loss in market share for certain appliance categories driven by the success of newly launched competitive products.

Both of these factors resulted in downward revisions to forecasted results.

In 2019, the Company recorded impairment charges in the Commercial Solution segment to reflect a decrease in the carrying values of Mapa/Spontex and Quickie while these businesses were classified as held for sale.

In the Home Solutions segment, the impairment charges relate to certain Home Fragrance trademarks/tradenames.

The Home Fragrance business has experienced a shift in product mix, which resulted in a downward revision to forecasted results for one of its tradenames.

In the Learning and Development segment, the impairment charge related to certain Writing trademarks/tradenames.

The Writing business experienced softening trends in sales of slime-related adhesive products.

Related sales of such products during the fourth quarter of 2019 deteriorated at a faster rate than expected, which resulted in a downward revision to forecasted results for one of its tradenames.

The carrying value of certain Outdoor and Recreation tradenames exceeded their fair value primarily due to decline in demand for certain products, which resulted in a downward revision of forecasted results.

One tradename in the Home Solutions segment had a fair value within 10% of its associated carrying values of $ 25 million.

A hypothetical 10% reduction in forecasted earnings before interest, taxes and amortization used in the discounted cash flows to estimate the fair value of this tradename would have resulted in an additional impairment charge of $ 2 million.

In addition, one tradename in the Home Solutions segment, one tradename in the Learning and Development segment, and one tradename in the Outdoor and Recreation Segment had fair values within 10% of their associated carrying values of $ 68 million, $ 36 million, and $ 58 million, respectively.

A hypothetical increase of 100 basis points in the discount rate used in the discounted cash flows to estimate fair values of these tradenames would have resulted in additional impairment charges of $ 7 million, $ 5 million, and $ 3 million, respectively.

The table below summarizes the balance of other intangible assets, net and the related amortization periods using the straight-line method and attribution method at December 31, 2022 and 2021 (in millions):

11 unchanged sentences

$ 3,545 $ ( 896 ) $ 2,649 $ 4,247 $ ( 877 ) $ 3,370

Amortization expense for intangible assets for continuing operations was $ 120 million, $ 157 million and $ 192 million in 2021, 2020 and 2019, respectively.

During 2019, the Company decided not to sell the Commercial Business and reclassified the business from held for sale to held and used.

Accordingly, the Company recorded a charge of $ 7 million in 2019 relating to the amount of amortization expense that would have been recorded in prior periods had the Commercial Business been continuously classified as held and used.

Amortization expense for intangible assets was $ 100 million, $ 120 million and $ 157 million in 2022, 2021 and 2020, respectively.

At December 31, 2022, the aggregate estimated intangible amortization amounts for the succeeding five years are as follows (in millions):

4 unchanged sentences

Customer accruals $ 636 $ 715

Accrued self-insurance liabilities, contingencies and warranty 125 108

Operating lease liabilities 121 122

Accrued self-insurance liabilities, contingencies and warranty 99 125

Accrued marketing and freight expenses 73 59

17 unchanged sentences

5.50 % senior notes due 2046

Revolving credit facility 225 —

Commercial paper 359 —

Receivables facility 35 —

Other debt 2 6

2 unchanged sentences

Long-term debt $ 4,756 $ 4,883

On November 22, 2021, the Company redeemed its 4.00 % senior notes due June 2022 (the “June 2022 Notes”) at a redemption price equal to 102 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the date of the redemption.

The total consideration was approximately $ 259 million, and the Company recorded a debt extinguishment loss of $ 5 million.

On September 28, 2021, the Company redeemed its 3.75 % senior notes due October 2021 (the “October 2021 Notes”) at a redemption price equal to 100 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the redemption date.

On March 1, 2021, the Company redeemed its 3.15 % senior notes due April 2021 (the “April 2021 Notes”) at a redemption price equal to 100 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the redemption date.

During the first quarter of 2021, the Company repurchased $ 5 million of the 3.85 % senior notes due 2023 at approximately 5 % above par value.

The total consideration, excluding accrued interests was approximately $ 5 million.

As a result of the partial debt repurchase, the Company recorded an immaterial loss.

As a result of the debt rating downgrades by S&P Global Inc.

(“S&P”) and Moody’s Corporation (“Moody’s”) in 2019 and 2020, respectively, certain of the Company’s outstanding senior notes aggregating to approximately $ 4.2 billion were subject to an interest rate adjustment of 25 basis points for each downgrade, for a total of 50 basis points.

This increase to the interest rates of each series of the Company's senior notes subject to adjustment, increased the Company’s annualized interest expense by approximately $ 21 million.

On February 11, 2022, S&P upgraded the Company’s debt rating to “BBB-” from “BB+” as S&P believed the Company has been able to achieve S&P’s target debt level.

As a result of this upgrade, the Company will again be in a position to access the commercial paper market, up to a maximum of $ 800 million provided there is a sufficient amount available for borrowing under the Credit Revolver.

In addition, the interest rate on the relevant senior notes will decrease by 25 basis points, reducing the Company’s interest expense by approximately $ 10 million on an annualized basis (approximately $ 8 million in 2022).

In connection with the expected sale of CH&S business in the first quarter of 2022, the Company anticipates using after-tax proceeds from the transaction towards the pay down of debt and share repurchases.

On October 19, 2022, the Company redeemed its 3.85 % senior notes due April 2023 (the “April 2023 Notes”) at a redemption price equal to 100.002 % of the outstanding aggregate principal amount of the notes, plus accrued and unpaid interest to the date of the redemption.

The total consideration was approximately $ 1.09 billion, and the Company recorded a debt extinguishment loss of $ 1 million.

On September 14, 2022, the Company completed a registered public offering of $ 500 million principal amount of 6.375 % senior notes that mature in September 2027 (the “September 2027 Notes”) and $ 500 million principal amount of 6.625 % senior notes that mature in September 2029 (the “September 2029 Notes”).

The Company received proceeds of approximately $ 989 million, net of fees and expenses paid.

The September 2027 Notes and the September 2029 Notes are subject to similar restrictive and financial covenants as the Company's existing senior notes, however, they are not subject to the interest rate adjustment or coupon step up provisions of certain other notes described below.

The September 2027 Notes and the September 2029 Notes are redeemable in whole or in part, at the option of the Company (i) at any time prior to three months before the stated maturity dates at a redemption price equal to or greater of (a) the principal amount of the notes being redeemed or (b) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, discounted to the redemption date on a semi-annual basis, plus the applicable make-whole amount of 50 basis points, plus in each case, accrued and unpaid interest on the notes being redeemed to, but not including, the redemption date;

or (ii) at any time on or after three months prior to respective maturity dates, at a redemption price equal to 100 % of the principal amount of the notes being redeemed plus accrued and unpaid interest to the redemption dates.

The Company used the net proceeds from the September 2027 and September 2029 Notes, together with available cash, to redeem the April 2023 Notes during the fourth quarter of 2022.

As a result of the debt ratings downgrades by S&P Global Inc.

(“S&P”) and Moody’s Corporation (“Moody’s”) in 2019 and 2020, respectively, certain of the Company’s outstanding senior notes currently aggregating to approximately $ 3.1 billion were subject to an interest rate adjustment of 25 basis points for each downgrade, totaling 50 basis points.

In addition, the Company’s ability to borrow from the commercial paper market on terms it deemed acceptable or favorable was eliminated and its cost of borrowing increased.

The Company’s ability to borrow under the Credit Revolver was not affected by the downgrades.

On February 11, 2022, S&P upgraded the Company’s debt rating to “BBB-” from “BB+”.

Since the S&P upgrade, the Company has been in a position to access the commercial paper market.

The Company can currently issue commercial paper up to a maximum of $ 1.5 billion, provided there is a sufficient amount available for borrowing under the Credit Revolver (defined hereafter).

In addition, the interest rate on the relevant senior notes decreased by 25 basis points, reducing the Company’s interest expense by approximately $ 8 million on an annualized basis (approximately $ 7 million impact in 2022).

However, certain of the Company’s outstanding senior notes aggregating to approximately $ 3.1 billion are still subject to an interest rate adjustment of 25 basis points in connection with the Moody’s downgrade of the Company's debt rating in 2020.

On February 14, 2023, Fitch Ratings downgraded the Company’s debt rating to “BB”.

This downgrade does not impact the interest rates on any of the Company's senior notes.

Receivables Facility

The Company maintains an Accounts Receivable Securitization Facility (the “Securitization Facility”).

The aggregate commitment under the Securitization Facility is $ 600 million.

The Securitization Facility matures in October 2022 and bears interest at a margin over a variable interest rate.

During the second quarter of 2022, the Company amended the Securitization Facility.

This amendment (i) reduced the aggregate commitment under the Securitization Facility to $ 375 million from $ 600 million, (ii) extended its maturity by one year to October 2023 and (iii) changed the reference rate under the Securitization Facility from LIBOR to SOFR.

The Securitization Facility bears interest at a margin over a variable interest rate.

The maximum availability under the Securitization Facility fluctuates based on eligible accounts receivable balances.

At December 31, 2021, the Company did not have any amounts outstanding under the Securitization Facility.

At December 31, 2022, the Company had $ 35 million outstanding under the Securitization Facility.

Revolving Credit Facility

The Company has a $ 1.25 billion revolving credit facility that matures in December 2023 (the “Credit Revolver”).

At December 31, 2021, the Company did not have any amounts outstanding under the Credit Revolver.

In addition, there were approximately $ 22 million of outstanding standby letters of credit issued against the Credit Revolver.

On August 31, 2022, the Company entered into a $ 1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) that matures in August 2027.

The Credit Revolver refinanced the Company’s previous $ 1.25 billion senior unsecured revolving credit facility that was scheduled to mature in December 2023.

Under the Credit Revolver, the Company may borrow funds on a variety of interest rate terms.

The Credit Revolver provides committed back-up liquidity for the issuance of commercial paper, in each case, to the extent there is sufficient availability for borrowing under the Credit Revolver.

At December 31, 2022, the Company has $ 225 million of outstanding borrowings under the Credit Revolver and $ 359 million in commercial paper borrowings.

The Credit Revolver provides for the issuance of up to $ 150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver.

At December 31, 2022, the Company had approximately $ 22 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $ 1.25 billion.

The Company was in compliance with all of its debt covenants at December 31, 2022.

Future Debt Maturities

4 unchanged sentences

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

The weighted average interest rates for total debt in 2022 and 2021 were approximately 4.3 % and 4.7 %, respectively.

The weighted average interest rate for short term debt in 2022 was approximately 4.0 %.

At December 31, 2022 and 2021, unamortized deferred debt issue costs were $ 30 million and $ 24 million, respectively.

21 unchanged sentences

Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs.

The cash paid and received from the settlement of interest rate swaps is included in interest expense.

The settlement of interest rate swaps is included in interest expense.

Fair Value Hedges

At December 31, 2021, the Company had approximately $ 100 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread.

These floating rate swaps are designated as fair value hedges against $ 100 million of principal on the 4.00 % senior notes due 2024 for the remaining life of the note.

At December 31, 2022, the Company had approximately $ 1.1 billion notional amount of interest rate swaps that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread.

These floating rate swaps are designated as fair value hedges against $ 500 million of principal on the 6.375 % senior notes due 2027, $ 500 million of principal on the 6.625 % senior notes due 2029 and $ 100 million of principal on the 4.00 % senior notes due 2024 for the remaining life of the notes.

The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.

1 unchanged sentence

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements.

The Company previously entered into two cross-currency swaps, maturing in January and February 2025, respectively, with an aggregate notional amount of $ 900 million.

During the third quarter of 2021, the Company entered into another cross-currency swap with a notional amount of $ 358 million, maturing in September 2027.

The Company previously entered into three cross-currency swaps, maturing in January 2025, February 2025 and September 2027, respectively, with an aggregate notional amount of $ 1.26 billion.

Each of these cross-currency swaps were designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro- denominated net assets, and the Company pays a fixed rate of Euro-based interest and receives a fixed rate of U.S.

dollar interest.

During the third quarter of 2022, the Company entered into two cross-currency swaps with notional amounts of $ 500 million each, one maturing in September 2027 and the other in September 2029.

These swaps were also designated as net investment hedges of the Company's foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a floating rate of Euro-based interest and receives a floating rate of U.S.

dollar interest.

The Company has elected the spot method for assessing the effectiveness of these contracts.

During the years ended December 31, 2021 and 2020, the Company recognized income of $ 16 million and $ 14 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

During the years ended December 31, 2022, 2021 and 2020, the Company recognized income of $ 31 million, $ 16 million and $ 14 million, respectively, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through December 2022.

The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges.

The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL and is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item.

The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item.

At December 31, 2022, the Company had approximately $ 379 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency

exposure of certain other foreign currency transactions.

At December 31, 2021, the Company had approximately $ 1.6 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through December 2022.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions.

At December 31, 2022, the Company had approximately $ 926 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through August 2023.

Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company's Consolidated Statement of Operations.

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Interest rate swaps Other assets — 3

Interest rate swaps Other accrued liabilities ( 14 ) —

Interest rate swaps Other noncurrent liabilities ( 16 ) —

Net Investment Hedges:

Cross-currency swaps Prepaid expenses and other current assets 28 18

Cross-currency swaps Other assets 45 —

Cross-currency swaps Other noncurrent liabilities ( 75 ) ( 41 )

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The other components of net benefit cost are presented separately from service cost within other (income) expense, net in the Consolidated Income Statement.

The amount of AOCL expected to be recognized in pension and postretirement benefit expense for 2022 is $ 14 million and is substantially comprised of net unrecognized actuarial losses.

In 2023, the amount of AOCL expected to be recognized in pension and postretirement benefit (income) expense is an expense of $ 6 million and an income of $ 6 million, respectively.

(Gains)/losses and prior service costs/(credits) are recognized as a component of OCL in the Consolidated Statements of Comprehensive Income (Loss) as they arise.

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These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates.

During the fourth quarter of 2020, the Company entered into an agreement with an insurance company to purchase a group annuity contract to settle approximately $ 157 million of projected benefit obligations for approximately 44 % of the retirees in one of its U.S.

defined benefit pension plans.

The irrevocable transaction for the transfer of pension liability to the insurance company was funded with the plan’s existing assets.

Payments from the insurance company to the beneficiaries commenced on January 1, 2021.

In 2020, in connection with this transaction, the Company recorded a pre-tax settlement loss to reclassify approximately $ 49 million into earnings from AOCL.

The Company has a Supplemental Executive Retirement Plan (“SERP”), which is a nonqualified defined benefit and defined contribution plan pursuant to which the Company will pay supplemental benefits to certain key employees upon retirement based upon the employees’ years of service and compensation.

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At December 31, 2022 and 2021, the life insurance contracts were accounted for using the investment method and had a cash surrender value of $ 141 million and $ 142 million, respectively, and are included in other assets in the Consolidated Balance Sheets.

All premiums paid and proceeds received associated with the life insurance policies are included as investing activities in the Consolidated Statements of Cash Flows.

premiums paid and proceeds received associated with the life insurance policies are included as investing activities in the Consolidated Statements of Cash Flows.

The projected benefit obligation was $ 81 million and $ 109 million at December 31, 2022 and 2021, respectively.

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The Company’s matching contributions to the Company's contributory 401(k) plans were $ 37 million, $ 36 million and $ 35 million for 2022, 2021 and 2020, respectively.

Defined Benefit Plan

In February 2022, the Company entered into an agreement with an insurance company for a bulk annuity purchase or “buy-in” for one of its U.K.

defined benefit pension plans, resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations to covered participants.

The Company anticipates the “buy-out” for the plan to be completed in 2023.

The non-cash settlement charge associated with the transaction is expected to be approximately £ 50 million to £ 70 million.

Defined Benefit Plan Partial Buyout

defined benefit pension plans.

The irrevocable transaction for the transfer of pension liability to the insurance company was funded with the plan’s existing assets.

Payments from the insurance company to the beneficiaries commenced on January 1, 2021.

In 2020, in connection with this transaction, the Company recorded a pre-tax settlement loss to reclassify approximately $ 49 million into earnings from AOCL.

Defined Benefit Pension Plans

The following provides a reconciliation of benefit obligations, plan assets and funded status of the Company’s noncontributory defined benefit pension plans, including the SERP, at December 31, (dollars in millions):

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Fair value of plan assets at beginning of year 1,133 1,161 595 627 — —

Actual return (loss) on plan assets 48 178 ( 7 ) 47 — —

Actual return on plan assets ( 220 ) 48 ( 166 ) ( 7 ) — —

Contributions 10 10 7 10 4 4

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Curtailment, settlement and termination costs — — 52 — — 1

Total expense $ ( 9 ) $ 51 $ 6 $ 11 $ 12 $ 9

Total (income) expense $ ( 6 ) $ ( 9 ) $ 51 $ 9 $ 11 $ 12

Weighted average assumption used to calculate net periodic cost:

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Balance December 31, 2020 $ 10

Unrealized gains 1

Unrealized losses ( 1 )

Balance December 31, 2021 9

Unrealized losses ( 101 )

Purchases, sales, settlements and other, net 286

Balance December 31, 2022 $ 194

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Postretirement benefits 4 4 4 4 3 11

Defined Benefit Plan Buy-in

In February of 2022, the Company entered into an agreement with an insurance company for a bulk annuity purchase or “buy-in” for one of its U.K.

defined benefit pension plans, resulting in an exchange of plan assets for an annuity that matches the plan’s future projected benefit obligations to covered participants.

The Company anticipates the “buy-out” for the plan to be completed by the end of 2022 or early 2023.

Footnote 12 — Income Taxes

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Federal $ ( 245 ) $ 48 $ ( 50 )

State 17 1 11

Foreign 102 97 74

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Total income tax provision (benefit) $ ( 40 ) $ 138 $ ( 235 )

Total income tax provision - discontinued operations — — 31

Total income tax provision (benefit) - continuing operations $ 121 $ ( 236 ) $ ( 1,038 )

A reconciliation of the U.S.

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Impairments 20.7 — ( 4.4 )

Sale of businesses ( 21.2 ) — —

Capital loss — ( 2.1 ) 3.0

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income inclusions on asset transfers 50.3 11.1 ( 6.9 )

Outbound transfer of U.S.

Foreign exchange 2.0 — —

Other ( 3.7 ) ( 1.7 ) 1.8

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(1) The Company accounts for tax on global intangible low-taxed income (“GILTI”) as a period cost and the effects are included herein.

(2) In connection with the Company's execution to rationalize its legal entities along with centralizing the ownership of certain intellectual property rights for its comprehensive management and protection, the Company transferred these intellectual property rights to a wholly-owned subsidiary, which resulted in the creation of deferred tax assets and a corresponding income tax benefit of $ 522 million for the year ended December 31, 2019.

At December 31, 2022, the Company has accumulated unremitted earnings generated by our foreign subsidiaries of approximately $ 6.0 billion.

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federal taxation with the one-time toll charge.

The Company does not assert indefinite reinvestment on a portion of its unremitted earnings of certain foreign subsidiaries as of December 31, 2021 and is recognizing deferred income taxes of approximately $ 9 million, primarily related to the future withholding tax effects of those

unremitted foreign earnings.

The Company does not assert indefinite reinvestment on a portion of its unremitted earnings of certain foreign subsidiaries as of December 31, 2022 and is recognizing deferred income taxes of approximately $ 8 million, primarily related to the future withholding tax effects of those unremitted foreign earnings.

With respect to unremitted earnings of $ 6.0 billion and any other additional outside basis differences where the Company is continuing to assert indefinite reinvestment, any future reversals could be subject to additional foreign withholding taxes, U.S.

state taxes and certain tax impacts relating to foreign currency exchange effects on any future repatriations of the unremitted earnings.

state taxes and certain tax impacts relating to foreign currency exchange effects on any future repatriations

of the unremitted earnings.

The determination of any unrecognized deferred tax liabilities on the amount of unremitted earnings and other outside basis differences where the Company is asserting indefinite reinvestment is not practicable.

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At December 31, 2022, the Company has net operating losses (“NOLs”) of approximately $ 1.1 billion, comprised of $ 162 million in the U.S.

and $ 1.1 billion outside of the U.S.

and $ 941 million outside of the U.S.

Approximately $ 886 million of these NOLs do not expire and approximately $ 217 million expire between 2023 and 2042.

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Additionally, approximately $ 2 million of post-apportioned state NOLs are subject to varying limitations on their use under Section 382 of the Internal Revenue Code of 1986, as amended.

Of these post-apportioned state NOLs, approximately $ 14 million are not reflected in the consolidated financial statements and approximately $ 18 million were utilized in the current year.

Of these post-apportioned state NOLs, approximately $ 2 million are not reflected in the consolidated financial statements.

The majority of the U.S.

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The Company has approximately $ 101 million of U.S.

capital loss carryforwards of which approximately $ 313 million were generated at December 31, 2018, $ 427 million were generated at December 31, 2020, and $ 88 million were generated at December 31, 2021 and can be carried back three years and carried forward five years.

The Company has approximately $ 291 million of post-apportioned state capital loss of which $ 110 million was generated at December 31, 2018, and $ 181 million was generated at December 31, 2020.

Of these post-apportioned

state capital loss carryforwards, $ 136 million can be carried back three years and carried forward five years, and $ 155 million can be carried forward five years.

capital loss carryforwards of which approximately $ 16 million were generated at December 31, 2020, $ 85 million were generated at December 31, 2021, and can be carried back three years and carried forward five years.

The Company has approximately $ 273 million of post-apportioned state capital loss of which $ 128 million was generated at December 31, 2018, $ 139 million was generated at December 31, 2020 and $ 6 million was generated at December 31, 2021.

Of these post-apportioned state capital loss carryforwards, $ 100 million can be carried back three years and carried forward five years, and $ 172 million can be carried forward five years.

During the year ended December 31, 2022, the Company amended its 2017 U.S.

federal income tax return to carryback foreign tax credits generated in 2018 and capital losses generated in 2018 and 2020.

The Company also paid $ 10 million of tax for the one-time toll charge incurred in 2017 related to the Tax Credits and Jobs Act due to the IRS (defined below) not yet processing the amended 2017 tax return.

This resulted in an increase in noncurrent income tax receivable of approximately $ 271 million, a decrease in income taxes payable of approximately $ 95 million, and an increase in deferred tax liabilities of approximately $ 356 million.

The Company routinely reviews valuation allowances recorded against deferred tax assets on a more likely than not basis as to whether the Company will realize the deferred tax assets.

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A valuation allowance of $ 148 million and $ 186 million was recorded against certain deferred tax asset balances at December 31, 2022 and 2021, respectively.

For 2022, the Company recorded a net valuation allowance decrease of $ 38 million, primarily related to NOLs in Brazil, China and Luxembourg, and other miscellaneous changes in the U.S., state and non-U.S.

valuation allowances related to ongoing operations.

For 2021, the Company recorded a net valuation allowance decrease of $ 27 million, primarily related to NOLs in the U.K.

and Luxembourg and other miscellaneous changes in the U.S., state and non-U.S.

valuation allowances related to ongoing operations.

For 2020, the Company recorded a net valuation allowance decrease of $ 58 million, primarily related to U.S.

NOLs and other deferred tax assets related to a subsidiary previously excluded from the Company’s U.S.

consolidated income tax return and other miscellaneous changes in U.S., state and non-U.S.

valuation allowances related to ongoing operations.

valuation allowance related to ongoing operations.

The following table summarizes the changes in gross unrecognized tax benefits periods indicated are as follows (in millions):

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Increase in tax positions for the current period 44 23 40

Purchase accounting adjustments (See Footnote 1 )

Settlements with taxing authorities ( 13 ) ( 2 ) —

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Unrecognized tax benefits, December 31, $ 476 $ 457 $ 452

If recognized, $ 387 million, $ 387 million and $ 437 million of unrecognized tax benefits at December 31, 2021, 2020, and 2019 respectively, would affect the effective tax rate.

If recognized, $ 412 million of unrecognized tax benefits at December 31, 2022, and $ 387 million at December 31, 2021, and 2020 would affect the effective tax rate.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense.

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federal income tax returns has expired for years prior to 2011 and for 2016.

The Company’s Canadian tax returns are subject to examination for years after 2014.

With few exceptions, the Company is no longer subject to other income tax examinations for years before 2016.

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The Company intends to vigorously defend its position.

On April 4, 2022, in a case not involving the Company, the United States District Court for the District of Colorado granted the taxpayer's motion for summary judgment that the Temporary Regulations were not validly issued on the basis of improper promulgation.

The Company is monitoring the impact of this decision and intends to continue to vigorously defend its position.

Footnote 13 — Leases

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Total lease liabilities $ 635 $ 627

(1) During 2020, the Company concluded that a triggering event had occurred for all of its reporting units as a result of overall macroeconomic conditions and developments in the equity and credit markets primarily driven by the COVID-19 pandemic.

Pursuant to the authoritative accounting literature, the Company compared the sum of the undiscounted future cash flows attributable to the asset or group of assets at the lowest level for which identifiable cash flows are available to their respective carrying amount.

As a result of the impairment testing performed in connection with the triggering event, the Company recorded a non-cash impairment charge of $ 8 million in the Home Solutions segment related to the operating leases of its Yankee Candle retail

store business.

In addition, the Company recorded an impairment charge of $ 2 million in the Corporate segment to reflect a reduction in the carrying values of certain operating lease assets.

The impairment charges were calculated by subtracting the estimated fair value of the asset group from its carrying value.

(1) Net of accumulated depreciation of $ 18 million and $ 16 million, respectively.

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Present value of lease liabilities $ 633 $ 2

The Company has entered into agreements for certain right of use operating leases that it has not yet taken possession of and are not reflected in the Consolidated Balance Sheet at December 31, 2021.

The total future obligations of these right of use operating leases have been excluded from the preceding table and are approximately $ 130 million.

Footnote 14 — Earnings Per Share

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2022 2021 2020

Weighted-average shares outstanding 425.3 424.1 423.2

Share-based payment awards classified as participating securities — — 0.1

Basic weighted-average shares outstanding 415.7 425.3 424.1

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(1) For 2020, 1.1 million potentially dilutive share-based awards were excluded as their effect would be anti-dilutive.

At December 31, 2019 there were 0.5 million potentially dilutive restricted share awards with performance-based vesting targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

At December 31, 2022, there were 0.1 million potentially dilutive restricted stock awards with performance-based targets that were not met and as such, have been excluded from the computation of diluted earnings per share.

At December 31, 2021 and 2020, there were no potentially dilutive restricted stock awards with performance-based targets that were not met.

For 2022, 2021 and 2020 dividends and equivalents for share-based awards expected to be forfeited did not have a material impact on net income for basic and diluted earnings per share.

Share Repurchase Program

On February 6, 2022, the Company's Board of Directors authorized a $ 375 million Share Repurchase Program (“SRP”), effective immediately through the end of 2022.

Under the SRP, the Company may purchase its common shares in the open market, in negotiated transactions or in other manners, as permitted by federal securities laws and other legal requirements.

On February 25, 2022, the Company repurchased $ 275 million of its shares of common stock beneficially owned by Carl C.

Icahn and certain of his affiliates (collectively, “Icahn Enterprises”), at a purchase price of $ 25.86 per share, the closing price of the Company's common shares on February 18, 2022.

During the three months ended June 30, 2022, the Company repurchased approximately $ 50 million of its shares of common stock at an average purchase price of $ 22.01 per share.

Footnote 15 — Share-Based Compensation

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The Company estimates future forfeiture rates based on its historical experience.

The Company maintains a 2013 Incentive Plan (the “2013 Plan”), which allows for grants of stock-based awards.

At December 31, 2021, there were approximately 21 million share-based awards collectively available for grant under the 2013 Plan.

The 2013 Plan generally provides for awards to vest over a minimum of three years , although some awards entitle the recipient to shares of common stock if specified market or performance conditions are achieved and vest no earlier than one year from the date of grant.

The Company maintains a 2013 Incentive Plan and a 2022 Incentive Plan (collectively, the “Incentive Plans”), which allow for grants of stock-based awards.

At December 31, 2022, there were approximately 51 million share-based awards collectively available for grant under the Incentive Plans.

The 2013 Incentive Plan generally provides for stock-based awards to employees to vest over a minimum of three years , although some awards may vest earlier if granted to a new employee or if tied to the achievement of specified market or performance conditions, in which case such awards vest no earlier than one year from the date of grant.

The 2022 Incentive Plan generally provides for stock-based awards to employees to vest no earlier than one year from the date of grant, subject to a de minimis exception.

The stock-based awards granted to employees include stock options and time-based and performance-based restricted stock units, as follows:

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Stock options issued by the Company generally vest and are expensed ratably over three years .

Stock option grants are generally subject to forfeiture if employment terminates prior to vesting, except upon retirement, in which case the options may remain outstanding and exercisable for a specified period not to exceed the remaining contractual term of the option.

Stock option grants are generally subject to forfeiture if employment terminates prior to vesting, except upon retirement, death or disability, in which case the options may remain outstanding and exercisable for a specified period not to exceed the remaining contractual term of the option.

The following table summarizes the changes in the number of shares of common stock for 2022 (shares and aggregate intrinsic value in millions):

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Options exercisable, end of year 2.7 $ 20 7.1 0

During 2021, the Company awarded 2.4 million time-based stock options with an aggregate grant fair value of $ 14 million.

During 2022, the Company awarded 2.2 million time-based stock options with an aggregate grant date fair value of $ 14 million.

These stock options entitle recipients to purchase shares of the Company's common stock at an exercise price equal to the fair market value of the underlying shares as of the grant date and vest in equal installments over a three-year period.

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Expected dividend yield 5.1 % 5.1 %

The total intrinsic value of options exercised was $ 2 million in 2021 and immaterial in 2020 and 2019.

During 2019, as inducement to join the Company and in connection with his appointment as President and Chief Executive Officer, the Company awarded Mr.

Ravichandra K.

Saligram 1.3 million performance-based non-qualified stock options which entitle Mr.

Saligram to purchase shares of the Company’s common stock at a price equal to the closing price of a share of the Company’s common stock on the date of grant.

For stock option awards with performance conditions that are based on stock price (“Stock-Price Based Stock Options”), the grant date fair value of certain Stock-Price Based Stock Options is estimated using a Monte Carlo simulation, with the primary input into such valuation being the expected future volatility of the Company’s common stock, the expected life, risk-free interest rate and expected dividend yield.

The Stock-Price Based Stock Options awarded to Mr.

Saligram had an aggregate grant date fair value of $ 5 million.

The vesting of the awarded stock options will occur ratably upon the 18-month , two-year and three-year anniversaries of the grant date, subject to the attainment of a performance condition that, during any 30-day period between the date that is 18 calendar months following the grant date and the third anniversary of the grant date, the average of the Company’s closing stock price must exceed 125 % of the closing stock price on July 29, 2019, which condition has already been achieved.

The award also provides for vesting in the event of a termination of Mr.

Saligram’s employment by the Company without Good Cause, or by Mr.

Saligram for Good Reason, as such terms are defined in the Company’s 2013 Incentive Plan, in each case subject to attainment of the applicable performance condition (with the performance condition, for this purpose only, measured as of any 30-day period falling between the grant date and the third anniversary of the grant date).

The total intrinsic value of options exercised was immaterial in 2022, $ 2 million in 2021 and immaterial in 2020.

Time-Based and Performance-Based Restricted Stock Units

Awards of time-based restricted stock units are independent of stock option grants and are generally subject to forfeiture if employment terminates prior to vesting.

The awards generally cliff-vest in three years or vest ratably over three years from the date of grant.

In the case of retirement (as defined in the award agreement), awards vest depending on the employee’s age and years of service.

The time-based restricted stock units have rights to dividend equivalents payable in cash.

Time-based restricted stock units issued in 2016 and prior receive dividend payments at the same time as the shareholders of the Company’s stock.

Time-based restricted stock units issued subsequent to 2016 have dividend equivalents credited to the recipient and are paid only to the extent the applicable service criteria is met and the time-based restricted stock units vest and the related stock is issued.

Performance-based restricted stock unit awards (“Performance-Based RSUs”) represent the right to receive unrestricted shares of stock based on the achievement of Company performance objectives and/or individual performance goals established by the Compensation and Human Capital Committee and the Board of Directors.

Time-based restricted stock unit awards (“Time-Based RSUs”) represent the right to receive unrestricted shares of stock based on continued employment and are generally subject to forfeiture if employment terminates prior to vesting, except a termination for death, disability or retirement.

Time-based RSU awards to employees generally cliff-vest in three years or vest ratably over three years from the date of grant.

In the case of retirement (as defined in the award agreement), awards vest in part depending on the employee’s age and years of service.

Time-based RSUs have dividend equivalents credited to the recipient and are paid only to the extent the applicable service criteria is met and the time-based restricted stock units vest and the related stock is issued.

Performance-based restricted stock unit awards (“Performance-Based RSUs”) represent the right to receive unrestricted shares of stock based on continuous employment plus the achievement of Company performance objectives and/or individual performance goals established by the Compensation and Human Capital Committee of the Board of Directors.

Such awards are generally subject to forfeiture if employment terminates prior to vesting, except a termination for death, disability or retirement.

The Performance-Based RSUs generally entitle recipients to shares of common stock if performance objectives are achieved, and typically vest no earlier than one year from the date of grant and primarily, no later than three years from the date of grant.

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For restricted stock units with performance conditions that are based on stock price (“Stock-Price Based RSUs”), the grant date fair value of certain Stock-Price based RSUs is estimated using a Monte Carlo simulation, with the primary input into such valuation being the expected future volatility of the Company’s common stock, and if applicable, the volatilities of the common stocks of the companies in the Company’s peer group, upon which the relative total shareholder return performance is measured.

In the case of retirement (as defined in the award agreement), awards vest depending on the employee’s age and years of service, subject to the satisfaction of the applicable performance criteria.

Performance-based RSUs are generally subject to forfeiture if employment terminates prior to vesting.

In the case of retirement (as defined in the award agreement), awards vest in part depending on the employee’s age and years of service, subject to the satisfaction of the applicable performance criteria.

The Company accounts for stock-based compensation pursuant to relevant authoritative guidance, which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of estimated forfeitures, over the longer of the derived service period or explicit requisite service period for awards expected to vest.

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The fair values of awards that vested were $ 39 million, $ 32 million and $ 23 million in 2022, 2021 and 2020, respectively.

During 2021, the Company awarded 0.8 million time-based RSUs, which had an aggregate grant date fair value of $ 18 million, that generally vest in equal annual installments over a three-year period.

During 2021, the Company also awarded 1.1 million performance-based RSUs with an aggregate grant date fair value of $ 29 million, that entitle the recipients to shares of the Company’s common stock at the end of a three-year vesting period.

During 2022, the Company awarded 0.8 million Time-Based RSUs, which had an aggregate grant date fair value of $ 21 million, that generally cliff-vest in three years or vest in equal annual installments over a three-year period.

During 2022, the Company also awarded 1.1 million Performance-Based RSUs with an aggregate grant date fair value of $ 30 million, that generally entitle the recipients to shares of the Company’s common stock at the end of a three-year vesting period.

The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions.

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define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).

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At December 31, 2022, the fair value of the equity investment was $ 12 million.

For equity investments with readily determinable fair values, the Company recorded unrealized gain of $ 2 million for 2021, and immaterial and $ 9 million of unrealized losses for 2020 and 2019, respectively, within other (income) expense, net in the Consolidated Statement of Operations.

For equity investments with readily determinable fair values, the Company recorded unrealized gain of $ 1 million for 2022 and $ 2 million for 2021 and immaterial unrealized loss in 2020, within other (income) expense, net in the Consolidated Statement of Operations.

The Company adjusts its pension asset values to fair value on an annual basis (See Footnote 11 ).

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

The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows and market multiple methods.

The Company’s goodwill and indefinite-lived intangibles are fair valued using discounted cash flows.

Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units;

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The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use of judgment and assumptions, such as the estimation of cash flow projections, terminal values, royalty rates, contributory cross charges, where applicable, and discount rates.

Accordingly, these fair value measurements fall in Level 3 of the fair value hierarchy.

These assets and certain liabilities are measured at fair value on a nonrecurring basis as part of the Company’s annual impairment testing and as circumstances require.

The following table summarizes the assets that are measured at fair value on a nonrecurring basis at December 1, (in millions):

Indefinite-lived intangibles 129 47

At December 31, 2021 and 2020, goodwill of certain reporting units and certain intangible assets are recorded at fair value based upon the Company’s impairment testing.

At December 31, 2022 and 2021, goodwill and intangible assets of certain reporting units are recorded at fair value based upon the Company’s impairment testing.

The most significant unobservable inputs (Level 3) used to estimate the fair values of the Company's reporting unit goodwill and indefinite-lived intangible assets are discount rates, which range from 8.0 % to 10.0 % for reporting unit goodwill and 8.0 % to 11.5 % for indefinite-lived intangible assets.

During the fourth quarter of 2022, two tradenames in the Home Solutions segment and one tradename in the Learning and Development segment were measured at fair values of $ 25 million, $ 68 million and $ 36 million, respectively.

During the fourth quarter of 2021, a tradename within the Learning and Development segment was measured at fair value of $ 47 million.

See Footnote 7 for further information.

During the first quarter 2020, as a result of uncertainty related to the COVID-19 pandemic, certain indefinite-lived intangible assets within Home Appliances, Home Solutions, Learning and Development and Outdoor and Recreation segments were written down to its then fair value of $ 796 million as of March 31, 2020.

During the fourth quarter 2020, a trade name within the Learning and Development segment was measured at its fair value of $ 135 million.

The Company reviews property, plant and equipment for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows.

See Footnotes 1 and 7 for further information.

The Company reviews long-lived assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows.

If the Company concludes that impairment exists, the carrying amount is reduced to fair value.

Footnote 17 — Segment Information

This change was the result of an assessment by the CODM to better align the cookware product lines with other similar product lines in various food categories.

In connection with this change, the CEO for the Food business unit assumed full responsibility for the overall brand strategy, business modeling, marketing and innovation of these product lines.

This structure reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources.

The Company determined this product line change did not result in a change to either of its Home Solutions or former Appliances and Cookware reportable segments.

In connection with this change, the Appliances and Cookware segment was renamed as the Home Appliances segment.

Prior period comparable results for both of these segments have been reclassified to conform to this product line change.

The Company also revised the calculation of operating income (loss) by segment to include restructuring charges.

Prior period comparable results have been reclassified to conform to the change in calculation.

On March 31, 2022, the Company sold its CH&S business unit to Resideo Technologies, Inc.

The results of operations for CH&S continued to be reported in the Consolidated Statements of Operations as part of the Commercial Solutions segment through March 31, 2022.

The Company’s five primary operating segments are as follows:

Segment Key Brands Description of Primary Products

Commercial Solutions BRK, First Alert, Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, and Spontex Commercial cleaning and maintenance solutions;

Commercial Solutions Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, and Spontex Commercial cleaning and maintenance solutions;

closet and garage organization;

hygiene systems and material handling solutions

connected home and security and smoke and carbon monoxide alarms

Home Appliances Calphalon, Crockpot, Mr.

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(1) and Ball®, TM of Ball Corporation, used under license.

This structure reflects the manner in which the chief operating decision maker (“CODM”) regularly assesses information for decision-making purposes, including the allocation of resources.

The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate.

The Company’s segment and geographic results are as follows at and for the years ended December 31, (in millions):

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Commercial Solutions (3)

$ 1,691 $ 1,953 $ 1,859

Home Appliances 1,390 1,738 1,539

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Commercial Solutions (3)

$ 143 $ 159 $ ( 89 )

Home Appliances ( 47 ) 70 ( 238 )

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Commercial Solutions (3)

$ 43 $ 57 $ 57

Home Appliances 18 24 20

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Commercial Solutions (3)

$ 50 $ 67 $ 72

Home Appliances 12 18 12

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Commercial Solutions (3)

$ 1,902 $ 2,589

Home Appliances 811 1,055

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(1) All intercompany transactions have been eliminated.

(2) Operating income (loss) by segment is net sales less cost of products sold, SG&A, restructuring and impairment of goodwill, intangibles and other assets for continuing operations.

(2) Operating income (loss) by segment is net sales less cost of products sold, SG&A, restructuring and impairment of goodwill, intangibles and other assets.

Certain headquarters expenses of an operational nature are allocated to business segments primarily on a net sales basis.

Corporate depreciation and amortization is allocated to the segments on a percentage of sales basis, and the allocated depreciation and amortization are included in segment operating income.

Corporate depreciation and amortization is allocated to the segments on a percentage of sales basis, and the allocated depreciation and amortization are included in segment operating income (loss).

(3) Commercial Solutions net sales, operating income, depreciation and amortization, capital expenditures and segment assets exclude the CH&S business as a result of the sale of this business starting from the end of the first quarter of 2022.

(4) Geographic sales information is based on the region from which the products are shipped and invoiced.

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The Company’s largest customer, Walmart Inc.

and subsidiaries (“Walmart”), accounted for approximately 15 % of net sales in 2021, 2020 and 2019.

Amazon, the Company's second largest customer, accounted for approximately 13 %, 12 %, and 9 % of net sales in 2021, 2020 and 2019, respectively.

and subsidiaries (“Walmart”), accounted for approximately 14 % of net sales in 2022 and 15 % of net sales in each of 2021 and 2020.

Amazon, the Company's second largest customer, accounted for approximately 13 % of net sales in each of 2022 and 2021 and 12 % of net sales in 2020.

The following table disaggregates revenue by major product grouping source and geography for the years ended December 31, (in millions):

Commercial Solutions Home

Appliances Home

Solutions Learning and Development Outdoor and Recreation Total

2022 2021 2020

Commercial $ 1,582 $ 1,558 $ 1,502

Connected Home Security 395 — — — — 395

Connected Home and Security 109 395 357

Commercial Solutions 1,691 1,953 1,859

Home Appliances 1,390 1,738 1,539

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Home Fragrance 885 1,091 918

Home Solutions 2,113 2,386 2,138

Baby 1,197 1,265 1,112

Writing 1,753 1,763 1,445

Learning and Development 2,950 3,028 2,557

Outdoor and Recreation 1,315 1,484 1,292

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North America

International 501 762 495 856 610 3,224

Total $ 1,953 $ 1,738 $ 2,386 $ 3,028 $ 1,484 $ 10,589

Commercial Solutions Home

Appliances Home

Solutions Learning and Development Outdoor and Recreation Total

Commercial $ 1,502 $ — $ — $ — $ — $ 1,502

Connected Home Security 357 — — — — 357

Commercial Solutions $ 1,232 $ 1,452 $ 1,387

Home Appliances 678 976 901

Food — — 1,220 — — 1,220

Home Fragrance — — 918 — — 918

Baby — — — 1,112 — 1,112

Writing — — — 1,445 — 1,445

Home Solutions 1,715 1,891 1,735

Learning and Development 2,156 2,172 1,845

Outdoor and Recreation 738 874 805

Total $ 1,859 $ 1,539 $ 2,138 $ 2,557 $ 1,292 $ 9,385

North America $ 1,387 $ 901 $ 1,735 $ 1,845 $ 805 $ 6,673

$ 6,519 $ 7,365 $ 6,673

International

Total $ 1,859 $ 1,539 $ 2,138 $ 2,557 $ 1,292 $ 9,385

Commercial Solutions Home

Appliances Home

Solutions Learning and Development Outdoor and Recreation Total

Commercial $ 1,402 $ — $ — $ — $ — $ 1,402

Connected Home Security 377 — — — — 377

Commercial Solutions $ 459 $ 501 $ 472

Home Appliances 712 762 638

Food — — 1,034 — — 1,034

Home Fragrance — — 1,033 — — 1,033

Baby — — — 1,111 — 1,111

Writing — — — 1,845 — 1,845

Home Solutions 398 495 403

Learning and Development 794 856 712

Outdoor and Recreation 577 610 487

Total $ 1,779 $ 1,500 $ 2,067 $ 2,956 $ 1,413 $ 9,715

North America $ 1,345 $ 909 $ 1,661 $ 2,091 $ 914 $ 6,920

International 434 591 406 865 499 2,795

Total $ 1,779 $ 1,500 $ 2,067 $ 2,956 $ 1,413 $ 9,715

On February 6, 2022, the Company signed a definitive agreement to sell its CH&S business unit to Resideo Technologies, Inc., for a purchase price of $ 593 million, subject to customary working capital and transaction adjustments.

The transaction, which is expected to be completed by the end of the first quarter of 2022, does not result in a change to the Commercial Solutions reportable segment for all periods presented in this Annual Report on Form 10-K.

$ 2,940 $ 3,224 $ 2,712

Commercial Solutions $ 1,691 $ 1,953 $ 1,859

Home Appliances 1,390 1,738 1,539

Home Solutions 2,113 2,386 2,138

Learning and Development 2,950 3,028 2,557

Outdoor and Recreation 1,315 1,484 1,292

$ 9,459 $ 10,589 $ 9,385

Beginning in January 2023, the Company will combine its previously reported Commercial Solutions, Home Appliances and Home Solutions operating segments into one operating segment, Home and Commercial Solutions.

This change by the CODM was driven by the implementation of a new operating model which is intended to drive further simplification and unlock additional efficiencies and synergies within the Company.

The Learning and Development and Outdoor and Recreation operating segments will remain as the Company’s other two operating segments.

The Company will recast prior period comparable results in its first quarter 2023 reporting to conform to this operating segment change.

Footnote 18 — Litigation and Contingencies

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In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony and information in connection with various aspects of its activities.

The Company previously disclosed that it had received a subpoena and related informal document requests from the U.S.

Securities and Exchange Commission (the “SEC”) primarily relating to its sales practices and certain accounting matters for the time period beginning from January 1, 2016.

The Company has cooperated with the SEC in connection with its investigation and ongoing requests for documents, testimony and information and intends to continue to do so.

The Company cannot predict the timing or outcome of this investigation.

The Company previously disclosed that it had received a subpoena and related informal document requests from the SEC, primarily relating to its sales practices and certain accounting matters for the time period beginning from January 1, 2016.

The Company cooperated with the SEC in connection with its investigation and requests for documen ts, testimony and information.

In late January 2023, the Company began discussing with the SEC the possibility of reaching a settlement to resolve the investigation, which now focuses on the time period from the third quarter of 2016 through second quarter of 2017.

Although the Company cannot predict the ultimate outcome of the SEC investigation with certainty, it believes that the resolution of the SEC investigation will not have a material effect on the Company’s Consolidated Financial Statements.

Further, on June 30, 2021, the Company received a subpoena from the SEC requesting the production of documents related to its disclosure of the potential impact of the U.S.

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Securities Litigation

Certain of the Company’s current and former officers and directors have been named in shareholder derivative lawsuits.

On October 29, 2018, a shareholder filed a putative derivative complaint, Streicher v.

Polk, et al., in the United States District Court for the District of Delaware (the “Streicher Derivative Action”), purportedly on behalf of the Company against certain of the Company's current and former officers and directors.

On October 30, 2018, another shareholder filed a putative derivative complaint, Martindale v.

Polk, et al., in the United States District Court for the District of Delaware (the “Martindale Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against the same defendants.

Certain of the Company’s current and former officers and directors have been named in shareholder derivative lawsuits filed in October 2018.

The complaints allege, among other things, violations of the federal securities laws, breaches of fiduciary duties, unjust enrichment, and waste of corporate assets.

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That matter was dismissed by the District Court on January 10, 2020, and the dismissal was affirmed by the United States District Court of Appeals for the Third Circuit on December 1, 2020.

The complaints seek damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.

The Streicher Derivative Action and the Martindale Derivative Action have been consolidated and the case is now known as In re Newell Brands Inc.

The October 2018 complaints seek damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.

These actions have been consolidated and the case is known as In re Newell Brands Inc.

Derivative Litigation (the “Newell Brands Derivative Action”), which is pending in the United States District Court for the District of Delaware.

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On December 30, 2020, two shareholders filed a putative derivative complaint, Weber, et al.

Polk, et al., in the United States District Court for the District of Delaware (the “Weber Derivative Action”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.

, in the United States District Court for the District of Delaware (the “Weber Derivative Action”), purportedly on behalf of the Company against certain of the Company’s current and former officers and directors.

The complaint in the Weber Derivative Action alleges, among other things, breaches of fiduciary duty and waste of corporate assets.

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(described below).

The Company and certain of its current and former officers and directors have been named as defendants in a putative securities class action lawsuit filed in the Superior Court of New Jersey, Hudson County, on behalf of all persons who acquired Company common stock pursuant or traceable to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden (the “Registration Statement”).

The Company and certain of its current and former officers and directors have been named as defendants in a securities class action lawsuit filed in the Superior Court of New Jersey, Hudson County, on behalf of all persons who acquired Company common stock pursuant to the S-4 registration statement and prospectus issued in connection with the April 2016 acquisition of Jarden Corporation (the “Registration Statement”).

The action was filed on September 6, 2018 and is captioned Oklahoma Firefighters Pension and Retirement System v.

Newell Brands Inc., et al., Civil Action No.

Newell Brands Inc., et al.

, Civil Action No.

HUD-L-003492-18.

The operative complaint alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions in the Registration Statement regarding the Company’s financial results, trends, and metrics.

The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief.

The Company is currently unable to predict the ultimate timing or outcome of this litigation or reasonably estimate the range of possible losses.

The Company maintains insurance intended to cover losses arising out of this litigation up to specified limits (subject to deductibles, coverage limits and other terms and conditions), but any losses may exceed our current coverage levels, which could have an adverse impact on our financial results.

Jarden Acquisition

Under the Delaware General Corporation Law (“DGCL”), any Jarden stockholder who did not vote in favor of adoption of the Agreement and Plan of Merger for the Jarden acquisition, and who otherwise complies with the provisions of Section 262 of the

DGCL, was entitled to seek an appraisal of his or her shares of Jarden common stock by the Court of Chancery of the State of Delaware as provided under Section 262 of the DGCL.

Two separate appraisal petitions, styled as Dunham Monthly Distribution Fund v.

Jarden Corporation , Case No.

12454-VCS (Court of Chancery of the State of Delaware), and Merion Capital LP v.

Jarden Corporation , Case No.

12456-VCS (Court of Chancery of the State of Delaware), respectively, were filed on June 14, 2016 by a total of ten purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL.

A third appraisal petition, Fir Tree Value Master Fund, LP v.

Jarden Corporation , Case No.

12546-VCS (Court of Chancery of the State of Delaware), was filed on July 8, 2016 by two purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL.

A fourth appraisal petition, Veritian Partners Master Fund LTP v.

Jarden Corporation , Case No.

12650-VCS (Court of Chancery of the State of Delaware), was filed on August 12, 2016 by two purported Jarden stockholders seeking an appraisal of the fair value of their shares of Jarden common stock pursuant to Section 262 of the DGCL.

On or about October 3, 2016, the foregoing petitions were consolidated for joint prosecution under Case No.

The holders of a total of approximately 10.6 million former Jarden shares were represented in these actions initially.

On July 5, 2017 and July 6, 2017, Jarden and 11 of the dissenting stockholders (collectively, the “Settling Petitioners”), entered into settlement agreements with respect to approximately 7.7 million former Jarden shares (collectively, the “Settlement Agreements”).

Pursuant to the Settlement Agreements, in exchange for withdrawing their respective demands for appraisal of their shares of Jarden common stock and a full and final release of all claims, among other things, the Settling Petitioners received the original merger consideration provided for under the Merger Agreement, specifically (1) 0.862 of a share of Newell common stock, and (2) $ 21.00 in cash, per share of Jarden common stock (collectively, the “Merger Consideration”), excluding any and all other benefits, including, without limitation, the right to accrued interest, dividends, and/or distributions.

Accordingly, pursuant to the terms of the Settlement Agreements, Newell issued 6.6 million shares of Newell common stock to the Settling Petitioners (representing the stock component of the Merger Consideration), and authorized payment to the Settling Petitioners of approximately $ 162 million (representing the cash component of the Merger Consideration).

On July 19, 2019, the Court issued an order in which it determined that the fair value of the remaining Jarden shares at the date of the Merger was $ 48.31 per share, reflecting approximately $ 140 million in value to be paid in cash to the remaining dissenting shareholders.

The Court also ordered the payment of accrued interest, compounded quarterly, and accruing from the date of closing to the date of payment.

Following an unsuccessful motion for re-argument by the remaining dissenting shareholders, the Court entered judgment on its valuation on October 2, 2019.

On October 4, 2019, the Company paid the judgment in the amount of approximately $ 177 million, which terminated the accumulation of interest on the judgment amount.

On July 9, 2020, following an appeal by the dissenting shareholders, the Supreme Court of Delaware affirmed the judgment.

The Company reflected the amounts of $ 171 million and $ 6 million, respectively, as a financing cash outflow and operating cash outflow in the Company’s Consolidated Statement of Cash Flows for the year ended December 31, 2019.

In October 2022, the Company entered into a settlement agreement to resolve the claims asserted in this lawsuit.

Under the settlement, the Company agreed to create a settlement fund of approximately $ 103 million for the benefit of the class, subject to certain exclusions, which is predominantly funded by insurance proceeds.

Both the settlement and the insurance receivable were recorded during the third quarter of 2022.

The amount not funded by available insurance proceeds, which is not material to the Company, was expensed during the third quarter of 2022.

In the fourth quarter of 2022, the Court granted the plaintiff's motion for preliminary approval of

the settlement, and the Company and its insurers paid the required amount into the settlement fund.

On February 10, 2023, the Court granted the plaintiff's motion for final approval of the settlement.

Environmental Matters

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and the extent to which the Company’s, and other parties’ status as PRPs is disputed.

The Company’s estimate of environmental remediation costs associated with these matters at December 31, 2021 was $ 36 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Company’s estimate of environmental remediation costs associated with these matters at December 31, 2022 was $ 34 million which is included in other accrued liabilities and other noncurrent liabilities in the Consolidated Balance Sheet.

No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters.

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Lower Passaic River Matter

EPA has issued General Notice Letters (“GNLs”) to over 100 entities, including the Company and Berol Corporation, a subsidiary of the Company (“Berol”), alleging that they are PRPs at the Diamond Alkali Superfund Site, which includes a 17 -mile stretch of the Lower Passaic River and its tributaries.

The site is also subject to a Natural Resource Damage Assessment.

Seventy-two of the GNL recipients, including the Company on behalf of itself and Berol (the “Company Parties”), have taken over the performance of the remedial investigation (“RI”) and feasibility study (“FS”) for the Lower Passaic River.

On April 11, 2014, while work on the RI/FS remained underway, U.S.

EPA issued a Source Control Early Action Focused Feasibility Study (“FFS”), which proposed four alternatives for remediation of the lower 8.3 miles of the Lower Passaic River.

EPA’s cost estimates for its cleanup alternatives ranged from approximately $ 315 million to approximately $ 3.2 billion in capital costs plus from approximately $ 1 million to $ 2 million in annual maintenance costs for 30 years, with its preferred alternative carrying an estimated cost of approximately $ 1.7 billion plus an additional approximately $ 2 million in annual maintenance costs for 30 years.

In February 2015, the participating parties submitted to the U.S.

EPA a draft RI, followed by submission of a draft FS in April 2015.

The draft FS sets forth various alternatives for remediating the lower 17 miles of the Passaic River, ranging from a no action alternative, to targeted remediation of locations along the entire lower 17 mile stretch of the river, to remedial actions consistent with U.S.

EPA’s preferred alternative as set forth in the FFS for the lower 8.3 miles coupled with monitored natural recovery and targeted remediation in the upper nine miles.

The cost estimates for these alternatives ranged from approximately $ 28 million to $ 2.7 billion, including related operation, maintenance and monitoring costs.

EPA issued a conditional approval of the RI report in June 2019.

EPA issued a Record of Decision for the lower 8.3 miles of the Lower Passaic River in March 2016 (the “2016 ROD”).

The 2016 ROD finalizes as the selected remedy the preferred alternative set forth in the FFS, which U.S.

EPA estimates will cost $ 1.4 billion.

Subsequent to the release of the 2016 ROD, U.S.

EPA issued GNLs for the lower 8.3 miles of the Lower Passaic River (the “2016 GNL”) to numerous entities, apparently including all previous recipients of the initial GNL, including Company Parties, as well as several additional entities.

The 2016 GNL states that U.S.

EPA would like to determine whether one entity, Occidental Chemical Corporation (“OCC”), will voluntarily perform the remedial design for the selected remedy for the lower 8.3 miles, and that following execution of an agreement for the remedial design, U.S.

EPA plans to begin negotiation of a remedial action consent decree under which OCC and the other major PRPs will implement and/or pay for U.S.

EPA’s selected remedy for the lower 8.3 miles of the Lower Passaic River and reimburse U.S.

EPA’s costs incurred for the Lower Passaic River.

In September 2016, OCC and U.S.

EPA entered into an Administrative Order on Consent for performance of the remedial design.

On March 30, 2017, U.S.

EPA sent a letter offering a cash settlement in the amount of $ 0.3 million to 20 PRPs, not including the Company Parties, for CERCLA Liability (with reservations, such as for Natural Resource Damages) in the lower 8.3 miles of the Lower Passaic River.

EPA further indicated in related correspondence that a cash-out settlement might be appropriate for additional parties that are not associated with the release of dioxins, furans, or PCBs to the Lower Passaic River.

In September 2017, U.S.

EPA announced an allocation process involving all GNL recipients except those participating in the first-round cash-out settlement, and five public entities, with the intent of eventually offering cash-out settlements to a number of parties, and the expectation that the private PRPs responsible for release of dioxin, furans, and/or PCBs will perform the lower 8.3 mile remedial action.

The allocation process has concluded.

EPA and certain parties to the allocation process, including the Company (for itself and Berol), have reached an agreement in principle concerning a cash-out settlement for the entire 17 -mile stretch of the Lower Passaic River and its tributaries (i.e., including both the lower 8.3 miles and the upper 9 mile sections), which is subject to the negotiation and court entry of a consent decree.

Following discussion with U.S.

EPA regarding the 2015 draft FS, and U.S.

EPA’s issuance of the 2016 ROD, the participating parties refocused the FS on the upper 9 miles of the Lower Passaic River.

The parties submitted most portions of a final Interim Remedy FS (the “IR FS”) on August 7, 2020, setting forth remedial alternatives ranging from no further action to targeted dredging and capping with different targets for post-remedy surface weighted average concentration of contamination.

The parties subsequently completed their submittal of the IR FS, and on September 7, 2021, U.S.

EPA approved the IR FS.

On October 4, 2021, U.S.

EPA issued an interim ROD selecting a combination of dredging and capping as the remedial alternative to this portion of the river, at a total cost of $ 441 million (the “2021 ROD”).

A cash-out settlement for the upper 9 miles is part of the agreement in principle noted above among the parties and U.S.

OCC has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) for its liability in connection with the Diamond Alkali Superfund Site.

OCC has also asserted that Maxus’s parent company, YPF, S.A., and certain other affiliates (the “YPF Entities”) similarly must indemnify OCC, including on an “alter ego” theory.

On June 17, 2016, Maxus and certain of its affiliates commenced a chapter 11 bankruptcy case in the U.S.

Bankruptcy Court for the District of Delaware.

In connection with that proceeding, the YPF Entities are attempting to resolve any liability they may have to Maxus and the other Maxus entities undergoing the chapter 11 bankruptcy.

An amended Chapter 11 plan of liquidation became effective in July 2017.

In conjunction with that plan, Maxus and certain other parties, including the Company, entered into a mutual contribution release agreement (“Passaic Release”) pertaining to certain costs, but not costs associated with ultimate remedy.

On June 30, 2018, OCC sued 120 parties, including the Company and Berol, in the U.S.

District Court in New Jersey (“OCC Lawsuit”).

OCC subsequently filed a separate, related complaint against five additional defendants.

The OCC Lawsuit includes claims, counterclaims and cross-claims for cost recovery, contribution, and declaratory judgement under CERCLA.

The current, primary focus of the claims, counterclaims and cross-claims against the defendants is on certain past and future costs for investigation, design and remediation of the 17 -mile stretch of the Lower Passaic River and its tributaries, other than those subject to the Passaic Release.

The complaint notes, however, that OCC may broaden its claims in the future if and when EPA selects remedial actions for other portions of the Site or completes a Natural Resource Damage Assessment.

Given the uncertainties pertaining to this matter, including that U.S.

EPA is still reviewing the FS, that no framework for or agreement on allocation for the investigation and ultimate remediation has been established, and that there exists the potential for further litigation regarding costs and cost sharing, the extent to which the Company Parties may be held liable or responsible is not yet known.

OCC stated in a subsequent filing that it anticipates asserting additional claims against the defendants regarding Newark Bay, which is also part of the Diamond Alkali Superfund Site, after U.S.

EPA has decided the Newark Bay remedy.

In a Motion for Stay of Proceedings filed January 14, 2022, certain defendants and all third-party defendants in the OCC litigation moved the court to stay the case for a six-month period to allow the final stage of the United States’ parallel allocation proceedings and resulting settlement negotiations to conclude.

EPA provided a letter to the moving parties describing the status of these settlement discussions, which was filed as an exhibit to the Brief in Support of the Motion for Stay of Proceedings.

District Court of New Jersey is currently considering whether to rule on the Motion for Stay of Proceedings.

As of the date of filing of this Annual Report, based on the agreement in principle noted above, the Company does not expect that its allocation for response actions contemplated in the 2016 ROD and 2021 ROD described above will be material to the Company.

For the remainder of this matter, the Company is currently unable to reasonably estimate the range of possible losses.

Based on currently known facts and circumstances, the Company does not believe that this matter is reasonably likely to have a material impact on the Company’s results of operations.

However, in the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

EPA has issued General Notice Letters to over 100 entities, including the Company and its subsidiary, Berol Corporation (together, the “Company Parties”), alleging that they are PRPs at the Diamond Alkali Superfund Site (the “Site”) pursuant to CERCLA.

The Site is the subject of investigation and remedial activities (the “CERCLA Administrative Actions”) and related settlement negotiations with the U.S.

In addition, the Company Parties are defendants in related litigation, and the Site is also subject to a Natural Resource Damage Assessment.

CERCLA Administrative Actions

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

Unit 2 is geographically subsumed within Unit 4.

Unit 4 Investigation

The Company received its first general notice letter pertaining to Unit 4 in 2003.

Beginning in 2004, the Company Parties, together with numerous other PRPs, entered into several administrative agreements with the U.S.

EPA to fund and perform various investigation and clean-up activities in Unit 4.

Pursuant to a 2007 Administrative Order on Consent, over 70 PRPs, including the Company Parties, have been performing or funding the remedial investigation and feasibility study for Unit 4.

Activity under the 2007 Administrative Order on Consent remains underway.

The parties performing the remedial investigation and feasibility study submitted the results of their remedial investigation to the U.S.

EPA in July 2019 and submitted a final remedial investigation report to the U.S.

EPA in January 2023.

They also submitted an interim remedy feasibility study focused on the upper 9 miles of Unit 4 in September 2021.

In October 2021, the U.S.

EPA issued a Record of Decision for an interim remedy for the upper 9 miles of Unit 4, selecting a combination of dredging and capping as the remedial alternative, which the U.S.

EPA estimates will cost $ 441 million in the aggregate.

Unit 2 Investigation

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

EPA performed a Source Control Early Action Focused Feasibility Study for Unit 2, which culminated in a Record of Decision in 2016.

EPA estimates that the selected remedy for Unit 2 set forth in its Record of Decision will cost $ 1.4 billion in the aggregate.

EPA then issued a General Notice Letter for Unit 2 to the Company Parties and over 100 other entities, including those that received a General Notice Letter in connection with Unit 4.

The Unit 2 General Notice Letter requested that Occidental Chemical Corporation (“OCC”) perform the remedial design for Unit 2, which OCC subsequently agreed to perform.

The General Notice Letter indicated that, following execution of a remedial design consent decree, the U.S.

EPA would begin negotiating a remedial action consent decree for Unit 2 with OCC and other major PRPs.

2016 Record of Decision and 2021 Record of Decision Remedy Performance

In March 2022, U.S.

EPA issued a Notice of Potential Liability and Notice of Consent Decree Negotiations to OCC and several other entities, excluding the Company Parties, encouraging those parties to finance and perform the remedies selected in the 2016 and 2021 Records of Decision.

EPA specifically identified OCC and four other companies as “work parties” in connection with Units 2 and 4.

The Company Parties were not recipients of this notice and were not identified as work parties.

EPA Settlement

In September 2017, the U.S.

EPA announced an allocation process involving roughly 80 Unit 2 General Notice Letter recipients, with the intent of offering cash-out settlements to a number of parties (the “U.S.

EPA Settlement”).

The allocation process has concluded, and the Company Parties were placed in the lowest tier of relative responsibility among allocation parties.

On December 16, 2022, the U.S.

EPA simultaneously filed a complaint and lodged a Consent Decree to resolve the liability of the Company Parties and other settlement parties for past and future CERCLA response costs at Unit 2 and Unit 4.

The proposed Consent Decree is undergoing public notice and comment, and it remains subject to court entry.

The OCC Litigation

In June 2018, OCC sued over 100 parties, including the Company Parties, in the U.S.

District Court in New Jersey pursuant to CERCLA, requesting cost recovery, contribution, and a declaratory judgement.

The defendants, in turn, filed claims against 42 third-party defendants, and filed counterclaims against OCC (collectively, the “OCC Litigation”).

The primary focus of the OCC Litigation has been certain past and future costs for investigation, design and remediation of Units 2 and 4.

However, OCC has stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the Site, after the U.S.

EPA has selected the Newark Bay remedy.

OCC has also stated that it may broaden its claims in the future after completion of the Natural Resource Damage Assessment described below.

In a Motion for Stay of Proceedings filed in December 2022, certain defendants and all third-party defendants in the OCC Litigation moved to stay the case for a six-month period to allow the final stage of the U.S.

EPA settlement to conclude.

OCC did not oppose the motion to stay.

There has been no ruling on the motion yet.

The Company Parties continue to vigorously defend the OCC Litigation.

At this time, the Company cannot predict the eventual outcome.

The Natural Resource Damage Assessment

In 2007, the National Oceanic and Atmospheric Administration (“NOAA”), acting as the lead administrative trustee on behalf of itself and the U.S.

Department of the Interior, issued a Notice of Intent to Perform a Natural Resource Damage Assessment to the Company Parties, along with numerous other entities, identifying the recipients as PRPs.

The federal trustees (who now include the United States Department of Commerce, represented by NOAA, and the Department of the Interior, represented by the United States Fish and Wildlife Service) are presently undertaking the Natural Resource Damage Assessment.

As of the date of this filing, based on the agreement in principle noted above, the Company does not expect that its allocation in the U.S.

EPA Settlement relating to Unit 2 and Unit 4, if the settlement is finalized, will be material to the Company.

With respect to the OCC Litigation and Natural Resource Damage Assessment, the Company is currently unable to reasonably estimate the range of possible losses.

Based on currently known facts and circumstances, the Company does not believe that the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of operations.

However, in the event of one or more adverse

determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

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

6 unchanged sentences

The Buyer generally alleged that the Company fraudulently breached certain representations in the Equity Purchase Agreement between the Company and Buyer, dated May 2, 2018, resulting in an inflated purchase price for The Waddington Group.

In 2021, the Company recorded an immaterial reserve to continuing operations in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter.

In the year ended December 31, 2021, the Company recorded an immaterial reserve in its Consolidated Financial Statements based on its best estimate of probable loss associated with this matter.

Further, in connection with the Company’s sale of The United States Playing Card Company (“USPC”), Cartamundi, Inc.

and Cartamundi España, S.L., (the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was recently filed against USPC.

Although management of the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 18 .

During the fourth quarter of 2022, the Company recorded an immaterial reserve based on the outcome of a judicial ruling relating to indirect taxes in an international entity.

Although the Company cannot predict the ultimate outcome of this contingency with certainty, it believes that any amounts it may be required to pay in excess of the amounts already reserved will not have a material effect on the Company’s Consolidated Financial Statements.

Although the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Consolidated Financial Statements, except as otherwise described in this Footnote 18 .

At December 31, 2022, the Company had approximately $ 44 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

Footnote 19 — Supplementary Quarterly Financial Data (Unaudited)

Revisions of Previously Issued Financial Statements

During the fourth quarter of 2022, the Company identified that it changed the designation to a new functional currency incorrectly for one of its legal entities at the beginning of 2022.

Consequently, the Company should have recorded mark to market adjustments for certain account balances in other (income) expense, net in the Condensed Consolidated Statement of Operations.

The impact of this change resulted in additional expense of $ 6 million, $ 13 million and $ 16 million for the three months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively.

This change also resulted in reclassifications between Accumulated Other Comprehensive Loss and Retained Deficit in the Condensed Consolidated Balance Sheets of $ 6 million, $ 19 million and $ 35 million at March 31, 2022, June 30, 2022 and September 30, 2022, respectively.

The Company concluded the above referenced effects were not material to its previously issued Condensed Consolidated Statements of Operations for the three months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively, and the Condensed Consolidated Balance Sheets at March 31, 2022, June 30, 2022 and September 30, 2022, respectively, included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC on April 29, 2022, July 29, 2022 and October 28, 2022.

The adjustments did not result in a change to net cash provided by operating activities in the Company’s Condensed Consolidated Statement of Cash Flows for the three, six and nine months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively.

The following table presents the unaudited Condensed Consolidated Statements of Operations for each quarter of 2022 and 2021 to reflect the impact of the change from LIFO to FIFO (see Footnote 5 ) and for each quarter of 2022 the recast associated with the functional currency revisions (in millions, except per share data):

For the three months ended (Unaudited)

March 31, 2022 June 30, 2022

Impact Impact Impact Impact

As of of Change As As of of Change As

Reported Revision to FIFO Adjusted Reported Revision to FIFO Adjusted

Net sales $ 2,388 $ — $ — $ 2,388 $ 2,534 $ — $ — $ 2,534

Cost of products sold 1,648 — — 1,648 1,709 — ( 11 ) 1,698

Operating income 217 — — 217 317 — 11 328

Other (income) expense, net ( 124 ) 6 — ( 118 ) 8 13 — 21

Income (loss) before income taxes 282 ( 6 ) — 276 254 ( 13 ) 11 252

Income tax provision 48 — — 48 50 — 3 53

Net income (loss) $ 234 $ ( 6 ) $ — $ 228 $ 204 $ ( 13 ) $ 8 $ 199

Weighted average common shares outstanding:

Basic 421.9 421.9 413.8 413.8

Diluted 424.7 424.7 415.7 415.7

Earnings per share:

Basic $ 0.55 $ 0.54 $ 0.49 $ 0.48

Diluted $ 0.55 $ 0.54 $ 0.49 $ 0.48

For the three months ended (Unaudited)

September 30, 2022 December 31, 2022

Impact Impact As Computed Impact Impact

As of of Change As Under of of Change As

Reported Revision to FIFO Adjusted LIFO Revision to FIFO Reported

Net sales $ 2,252 $ — $ — $ 2,252 $ 2,285 $ — $ — $ 2,285

Cost of products sold 1,599 — ( 5 ) 1,594 1,681 — 4 1,685

Operating income (loss) 35 — 5 40 ( 269 ) — ( 4 ) ( 273 )

Other (income) expense, net 8 16 — 24 ( 8 ) — — ( 8 )

Income (loss) before income taxes ( 30 ) ( 16 ) 5 ( 41 ) ( 326 ) — ( 4 ) ( 330 )

Income tax provision (benefit) ( 61 ) — 1 ( 60 ) ( 80 ) — ( 1 ) ( 81 )

Net income (loss) $ 31 $ ( 16 ) $ 4 $ 19 $ ( 246 ) $ — $ ( 3 ) $ ( 249 )

Weighted average common shares outstanding:

Basic 413.6 413.6 413.6 413.6

Diluted 414.6 414.6 413.6 413.6

Earnings (loss) per share:

Basic $ 0.07 $ 0.05 $ ( 0.59 ) $ ( 0.60 )

Diluted $ 0.07 $ 0.05 $ ( 0.59 ) $ ( 0.60 )

Three Months Ended (Unaudited)

March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021

As Reported Impact of As Reported Impact of As Reported Impact of As Reported Impact of

Under LIFO Change to FIFO As Adjusted Under LIFO Change to FIFO As Adjusted Under LIFO Change to FIFO As Adjusted Under LIFO Change to FIFO As Adjusted

Consolidated Statement of Operations

Net sales $ 2,288 $ — $ 2,288 $ 2,709 $ — $ 2,709 $ 2,787 $ — $ 2,787 $ 2,805 $ — $ 2,805

Cost of products sold 1,557 ( 6 ) 1,551 1,827 ( 24 ) 1,803 1,939 ( 35 ) 1,904 1,970 ( 2 ) 1,968

Operating income 192 6 198 305 24 329 281 35 316 168 2 170

Income before income taxes 126 6 132 243 24 267 215 35 250 109 2 111

Income tax provision 37 2 39 46 5 51 25 10 35 13 — 13

Net income $ 89 $ 4 $ 93 $ 197 $ 19 $ 216 $ 190 $ 25 $ 215 $ 96 $ 2 $ 98

Weighted average common shares outstanding:

Basic 424.9 424.9 425.4 425.4 425.4 425.4 425.5 425.5

Diluted 427.6 427.6 427.8 427.8 428.5 428.5 428.3 428.3

Earnings per share:

Basic $ 0.21 $ 0.22 $ 0.46 $ 0.51 $ 0.45 $ 0.51 $ 0.23 $ 0.23

Diluted $ 0.21 $ 0.22 $ 0.46 $ 0.50 $ 0.44 $ 0.50 $ 0.22 $ 0.23

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data