CHURCH & DWIGHT CO INC /DE/ MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

RECENT DEVELOPMENTS

Supply chain, inflation, labor and customer demand

Since the beginning of the COVID-19 pandemic, the impacts to our business have
been primarily supply chain related, including labor shortages and challenges
with distribution and transportation, resulting in difficulty meeting customer
demand and significant broad-based cost inflation. In addition, government
restrictions in China have further exacerbated global supply chain challenges
and may have had a negative impact on Chinese consumer demand for certain of our
products. As restrictions in China ease, we expect the impact to our business in
the future to be less severe. While it is difficult to predict with certainty
when conditions may improve, we expect shortages and input cost inflation to
continue at least throughout 2022.

To address challenges meeting customer demand, we have taken steps to increase
our short-term manufacturing capacity for many of our products (including
laundry detergent, baking soda, and cleaners) as well as our raw material and
packaging capacity, and continue to work closely with our suppliers, contract
manufacturers and retail partners to increase capacity and ensure sustained
supply to keep pace with increased demand. We have also made investments in the
expansion of long-term, in-house and third-party manufacturing capacity and are
working to enlist additional suppliers that meet our quality specifications.
While there is no assurance that these challenges will abate in the foreseeable
future, or that the other measures we have or may implement will mitigate the
impact of supply disruptions or rising costs, we did start to see an improvement
in fill rates in the second quarter, particularly in the household category, and
we expect those improvements to continue through the second half of 2022 across
most product categories.

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

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

We monitor the impact of inflation and recession indicators, including the effect of corresponding government measures, such as raising interest rates to counter inflation, which may negatively impact spending on consumption, and how these factors will potentially influence future cash flows in the short and long term. term. While we expect many of these effects to be transitory and our value-oriented portfolio positions us well in inflationary and economic downturn environments, it is impossible to predict their impact.

Russia – Ukrainian War

The global economy continues to be negatively impacted by the military conflict
between Russia and Ukraine. Furthermore, governments in the U.S., United
Kingdom, and European Union have each imposed export controls on certain
products as well as financial and economic sanctions on certain industry sectors
and parties in Russia and Belarus. We have experienced shortages in materials
and increased costs for transportation, energy, and raw material due in part to
the negative impact of the Russia-Ukraine military conflict on the global
economy. Further escalation of geopolitical tensions related to the conflict,
including increased trade

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barriers or restrictions on global trade, could result in, among other things,
cyber attacks, supply disruptions, lower consumer demand, and changes to foreign
exchange rates and financial markets, any of which may adversely affect our
business and supply chain.

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

New Credit Agreement

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

5.00% Senior Notes Due June 15, 2052

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


Results of Operations

                              Consolidated results



                                     Three Months Ended         Change vs.        Three Months Ended
                                       June 30, 2022            Prior Year          June 30, 2021
Net Sales                           $            1,325.1           4.2%          $            1,271.1
Gross Profit                        $              545.3           -1.2%         $              552.2
Gross Margin                                        41.2 %   -220 basis points                   43.4 %
Marketing Expenses                  $              102.9          -12.1%         $              117.0
Percent of Net Sales                                 7.8 %   -140 basis points                    9.2 %
Selling, General & Administrative   $              180.8           32.5%         $              136.5

Expenses

Percent of Net Sales                                13.6 %   290 basis points                    10.7 %
Income from Operations              $              261.6          -12.4%         $              298.7
Operating Margin                                    19.8 %   -370 basis points                   23.5 %
Net income per share - Diluted      $               0.76          -12.6%         $               0.87

                                      Six Months Ended          Change vs.         Six Months Ended
                                       June 30, 2022            Prior Year          June 30, 2021
Net Sales                           $            2,622.3           4.5%          $            2,510.0
Gross Profit                        $            1,097.8           -0.5%         $            1,103.1
Gross Margin                                        41.9 %   -210 basis points                   44.0 %
Marketing Expenses                  $              204.8           -5.1%         $              215.7
Percent of Net Sales                                 7.8 %   -80 basis points                     8.6 %
Selling, General & Administrative   $              350.7           22.6%         $              286.1

Expenses

Percent of Net Sales                                13.4 %   200 basis points                    11.4 %
Income from Operations              $              542.3           -9.8%         $              601.3
Operating Margin                                    20.7 %   -330 basis points                   24.0 %
Net income per share - Diluted      $               1.59           -9.7%         $               1.76




Diluted Net Income per share was $0.76 in the second quarter of 2022 as compared
to $0.87 in the second quarter of 2021. Diluted Net Income per share was $1.59
in the first six months of 2022 as compared to $1.76 in the same period in 2021.

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During the second quarter of 2021 we decreased the fair value of our business
acquisition liability associated with the 2019 acquisition of the FLAWLESS hair
removal business (the "Flawless Acquisition") by $38.0 ($28.5 after tax or $0.11
diluted per share), for a total net reduction of $57.0 ($42.8 after tax or $0.16
diluted per share) for the six months ended June 30, 2021, based on updated
sales forecasts. The business acquisition liability adjustments were recorded as
a reduction in SG&A expense.

Net sales

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

                                    Three Months Ended        Six Months Ended
                                         June 30,                 June 30,
Net Sales - Consolidated                   2022                     2022
Product volumes sold                               (2.9 %)                 (4.1 %)
Pricing/Product mix                                 6.3 %                   7.2 %
Foreign exchange rate fluctuations                 (1.0 %)                 (0.7 %)
Acquired product lines (1)                          1.8 %                   2.1 %
Net Sales increase                                  4.2 %                   4.5 %



(1)
On December 24, 2021, we acquired all of the outstanding equity of Dr. Harold
Katz, LLC and HK-IP International, Inc., the owners of the THERABREATH brand of
oral care products (the "TheraBreath Acquisition"). The results of this
acquisition are included in our results since the date of acquisition.

For both the three and six months ended June 30, 2022, the volume change
reflects decreased product unit sales in the Consumer Domestic and Specialty
Products ("SPD") segments, offset by increased product unit sales in the
Consumer International segment. For both the three and six months ended June 30,
2022, price/mix was favorable in all three segments.

Gross Profit / Gross Margin

Our gross profit was $545.3 for the three months ended June 30, 2022, a $6.9
decrease as compared to the same period in 2021. Gross margin decreased 220
basis points ("bps") in the second quarter of 2022 compared to the same period
in 2021, due to the impact of higher manufacturing costs including labor and
commodities of 460 bps, higher transportation costs of 80 bps, higher inventory
reserves of 60 bps and unfavorable foreign exchange of 10 bps, offset by
favorable price/volume/mix of 270 bps, the impact of productivity programs of
100 bps, and business acquisition benefits of 20 bps. Gross profit was $1,097.8
for the six months ended June 30, 2022, a $5.3 decrease compared to the same
period in 2021. Gross margin decreased 210 bps in the first six months of 2022
compared to the same period in 2021, due to the impact of higher manufacturing
costs including labor and commodities of 460 bps, higher transportation costs of
90 bps, higher inventory reserves of 30 bps and unfavorable foreign exchange of
10 bps, offset by favorable price/volume/mix of 270 bps, the impact of
productivity programs of 90 bps, and business acquisition benefits of 20 bps.

Functionnary costs

Marketing expenses for the three months ended June 30, 2022 were $102.9, a
decrease of $14.1 or 12.1% as compared to the same period in 2021. Marketing
expenses as a percentage of net sales in the second quarter of 2022 decreased by
140 bps to 7.8% as compared to 9.2% in the same period in 2021 due to 100 bps on
lower expenses, primarily related to our personal care products due to low fill
rates, and 40 bps of leverage on higher net sales. Marketing expenses for the
six months ended June 30, 2022 were $204.8, a decrease of $10.9 or 5.1% as
compared to the same period in 2021. Marketing expenses as a percentage of net
sales for the first six months of 2022 decreased by 80 bps to 7.8% as compared
to 8.6% in the same period in 2021 due to 40 bps of leverage on higher net sales
and 40 bps on lower expenses.

SG&A expenses were $180.8 in the second quarter of 2022, an increase of $44.3 or
32.5% as compared to the same period in 2021. SG&A as a percentage of net sales
increased 290 bps to 13.6% in the second quarter of 2022 as compared to 10.7% in
the same period in 2021. The increase is due to 330 bps on higher expenses,
offset by 40 bps of leverage associated with higher sales. The higher expenses
for the three-month period ended June 30, 2022 are primarily due to the prior
year reduction in the fair value of the Flawless business acquisition liability
of $38.0 which reduced SG&A expenses in 2021. SG&A expenses for the first six
months of 2022 were $350.7, an increase of $64.6 or 22.6% as compared to the
same period in 2021. SG&A as a percentage of net sales increased 200 bps to
13.4% in the first six months of 2022 compared to 11.4% in 2021 due to 250 bps
on higher expenses, offset by 50 bps of leverage associated with higher sales.
The higher expenses for the six-month period ended June 30, 2022 are primarily
due to the prior year reduction in the fair value of the Flawless business
acquisition liability of $57.0 which reduced SG&A expenses in 2021.

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Other (income) expenses, net, were nominal for the quarters and six months ended June 30, 2022 and 2021.

Interest expense for the three and six months ended June 30, 2022 increased $5.2
and $7.8 to $19.3 and $35.9, respectively, as compared to the same periods in
2021, primarily due to higher average debt outstanding.

Income taxes

The effective tax rate for the three months ended June 30, 2022 was 24.1%, compared to 24.0% in the same period in 2021.

The effective tax rate for the six months ended June 30, 2022 was 23.6%, compared to 24.1% in the same period in 2021. The decrease in the tax rate is mainly due to the increase in the exercise of stock options.

Sector results

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

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





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

Segment net sales and profit before income taxes for the three and six months ended June 30, 2022 and June 30, 2021 are the following:



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

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




(1)
Intersegment sales from Consumer International to Consumer Domestic, which are
not reflected in the table, were $3.8 and $2.6 for the three months ended June
30, 2022 and June 30, 2021, respectively, and were $8.6 and $5.2 for the six
months ended June 30, 2022 and June 30, 2021, respectively.

(2)

To determine earnings before income taxes, interest expense, investment income and certain aspects of other income and expenses have been allocated to the segments based on the relative operating income of each segment.

(3)

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

(4)

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

Product line revenues from external customers are as follows:

                               Three Months Ended           Six Months Ended
                             June 30,      June 30,      June 30,      June 30,
                               2022          2021          2022          2021
Household Products           $   572.8     $   523.0     $ 1,093.3     $ 1,018.2
Personal Care Products           431.9         436.7         906.5         883.9
Total Consumer Domestic        1,004.7         959.7       1,999.8       1,902.1
Total Consumer International     230.5         226.8         445.1         443.2
Total SPD                         89.9          84.6         177.4         

164.7

Consolidated total Net sales $1,325.1 $1,271.1 $2,622.3 $2,510.0




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


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Domestic Consumer

Domestic net sales in the second quarter of 2022 were $1,004.7an augmentation of $45.0 or 4.7% compared to the same period in 2021. Domestic consumer net sales for the six months ended June 30, 2022 were $1,999.8an augmentation of $97.7 i.e. 5.1% compared to the same period in 2021. The components of the change in revenue are as follows:

                               Three Months Ended        Six Months Ended
                                    June 30,                 June 30,
Net Sales - Consumer Domestic         2022                     2022
Product volumes sold                          (4.4 %)                 (5.2 %)
Pricing/Product mix                            6.8 %                   7.7 %
Acquired product lines (1)                     2.3 %                   2.6 %
Net Sales increase                             4.7 %                   5.1 %




(1)

Includes the acquisition of TheraBreath from the date of acquisition.

The increase in net sales for the three months ended June 30, 2022, reflects the
impact of the TheraBreath® Acquisition, and higher net sales in ARM & HAMMER®
Liquid Detergent, ARM & HAMMER® Cat Litter, BATISTE® dry shampoo, OXICLEAN®
Versatile Stain Remover, and ZICAM™ zinc supplements, offset by declines in
VITAFUSION® and L'IL CRITTERS® gummy vitamins, FLAWLESS® Hair Removal Products
and WATERPIK® Shower Heads. The increase in net sales for the six-month period
ending June 30, 2022, reflects the impact of the TheraBreath® Acquisition, and
higher net sales in ARM & HAMMER® Liquid Detergent, ARM & HAMMER® Cat Litter,
OXICLEAN® Powder, and BATISTE® dry shampoo, offset by declines in FLAWLESS® Hair
Removal Products, WATERPIK® Shower Heads, and VITAFUSION® and L'IL CRITTERS®
gummy vitamins.

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

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

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

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International Consumer

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

                                    Three Months Ended        Six Months 

Ended

                                         June 30,                 June 30,
Net Sales - Consumer International         2022                     2022
Product volumes sold                                3.6 %                   0.1 %
Pricing/Product mix                                 2.9 %                   3.4 %
Foreign exchange rate fluctuations                 (5.6 %)                 (3.9 %)
Acquired product lines (1)                          0.7 %                   0.8 %
Net Sales increase                                  1.6 %                   0.4 %





(1)

Includes the acquisition of TheraBreath from the date of acquisition.

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

Consumer International income before income taxes was $28.5 in the second
quarter of 2022, a $9.7 decrease as compared to the second quarter of 2021.
Higher manufacturing and commodity costs of $8.1, higher SG&A expenses of $7.2
(primarily due to the prior year reduction in fair value of the Flawless
business acquisition liability of $5.7), unfavorable foreign exchange rates of
$3.0, higher marketing expenses of $0.5 and higher interest and other expenses
of $0.1, were offset by the impact of higher sales volumes of $5.7 and a
favorable price/mix of $3.5. For the first six months of 2022, income before
income taxes was $58.1, an $18.3 decrease as compared to the same period in
2021. Higher manufacturing and commodity costs of $14.2, higher SG&A expenses of
$9.5 (primarily due to the prior year reduction in fair value of the Flawless
business acquisition liability of $8.6), unfavorable foreign exchange rates of
$4.5, higher marketing expenses of $0.4 and higher interest and other expenses
of $0.3, were partially offset by a favorable price/mix of $8.3 and the impact
of higher sales volumes of $2.6.

Specialty Products (“SPD”)

SPD net sales were $89.9 in the second quarter of 2022, an increase of $5.3 or
6.3% as compared to the same period in 2021. SPD net sales were $177.4 for the
first six months of 2022, an increase of $12.7, or 7.7% as compared to the same
period in 2021. The components of the net sales change are the following:


                      Three Months Ended        Six Months Ended
                           June 30,                 June 30,
Net Sales - SPD              2022                     2022
Product volumes sold                 (4.1 %)                 (3.2 %)
Pricing/Product mix                  10.4 %                  10.9 %
Net Sales increase                    6.3 %                   7.7 %




Net sales increased in the three and six months ended June 30, 2022 primarily
due to higher pricing in our dairy and specialty chemicals segments in response
to rising costs and higher volumes for our non-dairy segment.

SPD income before income taxes was $12.4 in the second quarter of 2022, an
increase of $0.3 as compared to the same period in 2021 due to favorable
price/product mix of $7.6, offset by unfavorable manufacturing costs of $5.8,
higher SG&A and higher other expenses of $0.7, lower volumes of $0.4 and higher
marketing costs of $0.4. SPD income before income taxes was $23.9 in the first
six months of 2022, an increase of $2.5 as compared to the same period in 2021
due primarily to favorable price/product mix of $18.3, offset by unfavorable
manufacturing costs of $14.1, higher SG&A costs of $0.8, higher other expenses
of $0.6, and higher marketing expenses of $0.3.

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Company

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

Cash and capital resources

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

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

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

The current economic environment presents risks that could have adverse
consequences for our liquidity. See "Unfavorable economic conditions could
adversely affect demand for our products" under "Risk Factors" in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the
"Form 10-K"). We continue to manage all aspects of our business including, but
not limited to, monitoring the financial health of our customers, suppliers and
other third-party relationships, implementing gross margin enhancement
strategies and developing new opportunities for growth. We do not anticipate
that current economic conditions will adversely affect our ability to comply
with the financial covenant in the Credit Agreement because we currently are,
and anticipate that we will continue to be, in compliance with the maximum
leverage ratio requirement under the Credit Agreement.

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

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

Following our recent share buybacks, there remains $729.7 the availability of share buybacks under the 2021 Share Buyback Program at June 30, 2022.

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


                                       28
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We anticipate that our cash from operations, together with our current borrowing
capacity, will be sufficient to fund our share repurchase programs to the extent
implemented by management, pay debt and interest as it comes due and pay
dividends at the latest approved rate, and meet our capital expenditure program
costs, which are expected to be approximately $180.0 in 2022 primarily for
manufacturing capacity investments in laundry and litter to support expected
future sales growth. Cash, together with our current borrowing capacity, may be
used for acquisitions that would complement our existing product lines or
geographic markets.


Cash Flow Analysis

                                             Six Months Ended
                                          June 30,      June 30,
                                            2022          2021

Net cash flow generated by operating activities $310.4 $344.3
Net cash used in investing activities $(39.8) $(47.6)
Net cash used in financing activities $132.2 $(329.8)




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

                                                             As of
                                               June 30, 2022       June 30, 2021        Change
Days of sales outstanding in accounts
receivable ("DSO")                                         27                   28            (1 )
Days of inventory outstanding ("DIO")                      73                   69             4
Days of accounts payable outstanding ("DPO")               76                   70            (6 )
Cash conversion cycle                                      24                   27            (3 )



Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is
calculated using a two-period average method, decreased 3 days from the prior
year as changes in accrual balances and payment term extensions offset higher
inventory levels. We continue to focus on reducing our working capital
requirements.

Net Cash Used in Investing Activities - Net cash used in investing activities
during the first six months of 2022 was $39.8, primarily reflecting $38.8 for
property, plant and equipment additions. Net cash used in investing activities
during the first six months of 2021 was $47.6, primarily reflecting $43.3 for
property, plant and equipment additions.

Net Cash Used in Financing Activities - Net cash provided by financing
activities during the first six months of 2022 was $132.2 reflecting $250.3 of
net debt borrowings, and $16.9 of proceeds from stock option exercises, less
$127.4 of cash dividend payments and $7.6 of deferred financing costs. Net cash
used in financing activities during the first six months of 2021 was $329.8,
reflecting $218.4 of net debt payments and $123.8 of cash dividend payments,
less $12.5 of proceeds from stock option exercises.

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