Equity Method Investment and Note Receivable

3 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment and Note Receivable

EQUITY METHOD INVESTMENT AND NOTE RECEIVABLE

As discussed in Note 5, the Company completed the divestiture of a majority stake in Copeland on May 31, 2023, and received upfront, pre-tax cash proceeds of approximately $9.7 billion and a note receivable with a face value of $2.25 billion, while retaining a 40 percent non-controlling common equity interest in Copeland.

The Company records its share of Copeland's income or loss using the equity method of accounting. For the three months ended December 31, 2023 the Company recorded a loss of $36 in Other deductions to reflect its share of Copeland's losses and a tax benefit of $9 in Income taxes related to Copeland's U.S. business, which is taxed as a partnership (in total, a loss of $0.04 per share). The Company recognized non-cash interest income on the note receivable of $31, which is reported in Interest income from related party and capitalized to the carrying value of the note.

As of December 31, 2023, the carrying values of the retained equity investment and note receivable were $1,129 and $2,124, respectively.

Summarized financial information for Copeland for the three months ended December 31, 2023 is as follows.

	Three Months Ended December 31,
	2023
Net sales	$	1,024
Gross profit	$	345
Income (loss) from continuing operations	$	(93)
Net income (loss)	$	(93)
Net income (loss) attributable to shareholders	$	(90)