Inventories

12 Months Ended

Dec. 31, 2022

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):


	2022		2021
Raw materials and supplies	$	285	$	310
Work-in-process	218		167
Finished products	1,700		1,610
	$	2,203	$	2,087

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.

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