Segments of Business (Tables)

6 Months Ended

Jul. 02, 2023

Segment Reporting [Abstract]

Schedule of Reportable Business Segments

The Company operates the business through the following three reportable business segments:

Reportable Segments	Product Categories
Self Care	Cough, Cold and Allergy
	Pain Care
	Other Self Care (Digestive Health, Smoking Cessation, and Other)
Skin Health and Beauty	Face and Body Care
	Hair, Sun and Other
Essential Health	Oral Care
	Baby Care
	Other Essential Health (Women’s Health and Wound Care)

Schedule of Product Categories as a Percent of Net Sales

The Company’s product categories as a percentage of Net sales for the fiscal three and six months ended July 2, 2023 and July 3, 2022 were as follows:

	Fiscal Three Months Ended				Fiscal Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Cough, Cold and Allergy	13	%	13	%	14	%	12	%
Pain Care	12		11		13		13
Other Self Care	16		15		15		15
Face and Body Care	19		20		19		20
Hair, Sun and Other	10		10		10		9
Oral Care	10		10		10		10
Baby Care	9		10		9		10
Other Essential Health	11		11		10		11
Total	100	%	100	%	100	%	100	%

Schedule of Segment Net Sales and Adjusted Operating Income

Segment Net sales and Adjusted operating income for the fiscal three and six months ended July 2, 2023 and July 3, 2022 were as follows:

	Net Sales				Net Sales
	Fiscal Three Months Ended				Fiscal Six Months Ended
(Dollars in Millions)	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Self Care	$	1,661	$	1,481	$	3,301	$	2,946
Skin Health and Beauty	1,147		1,126		2,258		2,138
Essential Health	1,203		1,197		2,304		2,310
Total	$	4,011	$	3,804	$	7,863	$	7,394

	Adjusted Operating Income				Adjusted Operating Income
	Fiscal Three Months Ended				Fiscal Six Months Ended
(Dollars in Millions)	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Self Care	$	576	$	524	$	1,158	$	998
Skin Health and Beauty	201		243		350		370
Essential Health	250		314		461		560
Total Adjusted operating income(1)(2)	$	1,027	$	1,081	$	1,969	$	1,928
Reconciliation to Income before taxes:
Depreciation and amortization	148		161		300		326
Separation-related costs	102		49		200		59
Restructuring(3)	—		24		—		38
Other operating expense (income), net	1		13		(16)		8
General corporate/unallocated expenses	74		64		143		116
Total operating income	$	702	$	770	$	1,342	$	1,381
Other expense (income), net	10		(5)		40		(6)
Interest expense, net	53		—		54		—
Income before taxes	$	639	$	775	$	1,248	$	1,387

(1) For the first quarter of 2023, the Company adjusted the allocation for certain intangible asset amortization costs within Cost of Sales to align with segment financial results as measured by the Company, including the CODM. Accordingly, the Company has updated its segment disclosures to reflect the updated presentation in all prior periods. Total Adjusted operating income did not change as a result of this update.

(2) We define Adjusted operating income as U.S. GAAP Operating income excluding depreciation and amortization, Separation-related costs, restructuring expense, Other operating expense (income), net, and general corporate unallocated expenses that are not part of our measurement of segment performance. Management uses Adjusted operating income to assess segment financial performance.

(3) Exclusive of the restructuring expense included in Other operating expense (income), net on the Company’s Condensed Consolidated Statements of Operations.