NEWELL BRANDS INC.NWL
NEWELL BRANDS INC. Income Taxes Disclosure
Income Taxes
The components of income (loss) before income taxes for the years ended December 31, (in millions):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Domestic | $ | (746) | $ | (708) | $ | (995) | ||||||||||||||
| Foreign | 445 | 448 | 452 | |||||||||||||||||
| Total | $ | (301) | $ | (260) | $ | (543) | ||||||||||||||
The provision for income taxes consists of the following for the years ended December 31, (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (28) | $ | (52) | $ | 56 | |||||||||||
| State | 8 | 10 | 1 | ||||||||||||||
| Foreign | 70 | 112 | 71 | ||||||||||||||
| Total current | 50 | 70 | 128 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (32) | (101) | (232) | ||||||||||||||
| State | (3) | (15) | (40) | ||||||||||||||
| Foreign | (31) | 2 | (11) | ||||||||||||||
| Total deferred | (66) | (114) | (283) | ||||||||||||||
| Total income tax benefit | $ | (16) | $ | (44) | $ | (155) | |||||||||||
A reconciliation of the U.S. statutory rate to the effective income tax rate on a continuing basis is as follows for the year ended December 31, 2025, in accordance with ASU 2023-09 (See Footnote 1) which was adopted prospectively (in millions):
| Tax Effect | Rate Impact | ||||||||||||||||
| U.S. Federal Statutory Rate Provision (Benefit) | $ | (63) | 21.0 | % | |||||||||||||
| Foreign Tax Effects: | |||||||||||||||||
| France | Statutory tax rate difference between France and the U.S. | (8) | 2.7 | ||||||||||||||
| Other | 9 | (3.0) | |||||||||||||||
| Germany | Effect of changes in tax laws or rate | 8 | (2.7) | ||||||||||||||
| Ireland | Statutory tax rate difference between Ireland and the U.S. | (40) | 13.3 | ||||||||||||||
| Qualified domestic top-up tax | 9 | (3.0) | |||||||||||||||
| Other | (4) | 1.3 | |||||||||||||||
| Luxembourg | Changes in valuation allowance | (14) | 4.7 | ||||||||||||||
| Other | 5 | (1.7) | |||||||||||||||
| Switzerland | Changes in valuation allowance | (16) | 5.3 | ||||||||||||||
| Impairment of investment in subsidiaries | (12) | 4.0 | |||||||||||||||
| Other | (3) | 1.0 | |||||||||||||||
| Other foreign jurisdictions | Effect of rates different than statutory | 9 | (3.0) | ||||||||||||||
Cross-Border Tax Laws:(a) | U.S. income inclusion on asset transfers | 74 | (24.6) | ||||||||||||||
| Current taxation of foreign earnings (Subpart F) | 27 | (9.0) | |||||||||||||||
| Foreign tax credit | (14) | 4.7 | |||||||||||||||
| Other | 8 | (2.7) | |||||||||||||||
| Tax Credits: | Research and development credits | (7) | 2.3 | ||||||||||||||
| Non-taxable/deductible Item: | Officer compensation | 14 | (4.7) | ||||||||||||||
| Changes in unrecognized benefits | 6 | (2.0) | |||||||||||||||
| Other Adjustments: | Capital loss | (24) | 8.0 | ||||||||||||||
| Return to provision | (8) | 2.7 | |||||||||||||||
| Surrender of Company-owned life insurance policies | 18 | (6.0) | |||||||||||||||
Other (b) | 10 | (3.3) | |||||||||||||||
| Effective Rate | $ | (16) | 5.3 | % | |||||||||||||
(a)The Company accounts for tax on global intangible low-taxed income (“GILTI”) as a period cost and the effects are included herein.
(b)In 2025, state and local tax expense, net of federal income tax effect, was not material in aggregate or on an individual state basis.
A reconciliation of the U.S. statutory rate to the effective income tax rate on a continuing basis prior to the adoption of ASU 2023-09 (See Footnote 1) is as follows for the years ended December 31:
| 2024 | 2023 | ||||||||||
| Statutory rate | 21.0 | % | 21.0 | % | |||||||
| Add (deduct) effect of: | |||||||||||
| State income taxes, net of federal income tax effect | 1.4 | 5.7 | |||||||||
| U.S. foreign inclusions and foreign tax credit | (6.3) | (2.4) | |||||||||
| Foreign rate differential | 9.5 | 12.3 | |||||||||
Change in uncertain tax positions (a) | 34.6 | — | |||||||||
| Change in valuation allowance reserve | (1.5) | (9.2) | |||||||||
| Impairments | — | 1.0 | |||||||||
| Sale of businesses | — | (0.9) | |||||||||
| Capital loss | 1.0 | 1.4 | |||||||||
| Reversal of outside basis difference | (0.3) | 11.2 | |||||||||
| Non-deductible compensation | (5.4) | (1.1) | |||||||||
| Return to provision | 0.6 | 1.5 | |||||||||
| Other taxes | (7.4) | (1.8) | |||||||||
| U.S. income inclusions on asset transfers | (28.4) | (10.1) | |||||||||
| Foreign exchange | 0.2 | — | |||||||||
| Other tax credits | 2.9 | 1.8 | |||||||||
| Other | (5.0) | (1.9) | |||||||||
| Effective rate | 16.9 | % | 28.5 | % | |||||||
(a)Includes $64 million, or 24.6%, income tax benefit as a result of the completion of tax authorities’ examination in the U.S. for the years 2011 to 2015 and Brazil for years 2015 to 2017.
At December 31, 2025, the Company has accumulated unremitted earnings generated by our foreign subsidiaries of approximately $4.40 billion. A portion of these earnings were previously subject to U.S. federal taxation via various U.S. foreign inclusion provisions. The Company does not assert indefinite reinvestment on a portion of its unremitted earnings of certain foreign subsidiaries as of December 31, 2025 and recognized deferred income taxes of approximately $9 million, primarily related to the future withholding tax effects of those unremitted foreign earnings. With respect to unremitted earnings of $4.40 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. 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.
Income taxes paid, net of refunds by jurisdiction for the year ended December 31, 2025 are as follows (in millions):
Federal (a) | $ | 34 | ||||||
State (b) | 11 | |||||||
| Foreign: | ||||||||
Switzerland (c) | 26 | |||||||
| Ireland | 13 | |||||||
| United Kingdom | 12 | |||||||
Other foreign jurisdictions (d) | 41 | |||||||
| Total | $ | 137 | ||||||
(a)Primarily related to the final payment of $31 million for the one-time toll charge incurred in 2017 related to the Tax Credits and Jobs Act.
(b)Comprised of tax payments of $4 million to Wisconsin and various other U.S. states, none of which individually exceeded $2 million.
(c)Final tax payments for settlement with tax authorities related to a prior disposition transaction.
(d)Comprised of tax payments paid to various other foreign jurisdictions, none of which individually exceed $6 million.
Deferred tax assets (liabilities) consist of the following at December 31, (in millions):
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accruals | $ | 168 | $ | 180 | |||||||
| Inventory | 58 | 73 | |||||||||
| Pension and postretirement benefits | 24 | 34 | |||||||||
| Net operating losses | 326 | 302 | |||||||||
| Foreign tax credits | 25 | 16 | |||||||||
| Capital loss carryforward | 32 | 36 | |||||||||
| Operating lease liabilities | 139 | 139 | |||||||||
| Capitalized research and development expenses | 102 | 79 | |||||||||
| Interest expense carryforward | 133 | 134 | |||||||||
| Amortizable intangibles | 65 | 16 | |||||||||
| Financial instruments | 57 | — | |||||||||
| Other | 73 | 82 | |||||||||
| Total gross deferred tax assets | 1,202 | 1,091 | |||||||||
| Less valuation allowance | (152) | (171) | |||||||||
| Net deferred tax assets after valuation allowance | 1,050 | 920 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Accelerated depreciation | (97) | (110) | |||||||||
| Operating lease assets | (115) | (122) | |||||||||
| Financial instruments | — | (10) | |||||||||
| Other | (63) | (50) | |||||||||
| Total gross deferred tax liabilities | (275) | (292) | |||||||||
| Net deferred tax assets | $ | 775 | $ | 628 | |||||||
The net deferred tax amounts have been classified in the balance sheet at December 31, (in millions):
| 2025 | 2024 | |||||||||||||
| Noncurrent deferred tax assets | $ | 825 | $ | 806 | ||||||||||
| Noncurrent deferred tax liabilities | (50) | (178) | ||||||||||||
| Net deferred tax assets | $ | 775 | $ | 628 | ||||||||||
At December 31, 2025, the Company has net operating losses (“NOLs”) of approximately $1.31 billion, which comprise of $149 million in the U.S. and $1.16 billion outside of the U.S. Approximately $848 million of these NOLs do not expire and approximately $465 million expire between 2026 and 2045. At December 31, 2025, the Company has approximately $1.90 billion of post-apportioned state NOLs of which $277 million do not expire and $1.60 billion expire between 2026 and 2045.
The Company has U.S. foreign tax credits of $25 million which expire between 2028 and 2035. The Company has approximately $103 million of U.S. capital loss carryforwards of which approximately $10 million were generated at December 31, 2024 and $93 million were generated at December 31, 2025. These U.S. capital loss carryforwards can be carried back three years and carried forward five years. The Company has approximately $103 million of post-apportioned state capital loss carryforwards of which $25 million was generated at December 31, 2018, $38 million was generated at December 31, 2020, $14 million was generated at December 31, 2021, $4 million was generated at December 31, 2022, $3 million was generated at December 31, 2024 and $19 million was generated at December 31, 2025. Of these post-apportioned state capital loss carryforwards, $26 million can be carried back three years and carried forward five years, and $77 million can be carried forward five years.
The Company had a noncurrent income tax receivable (see subsequent discussion) of $352 million and $311 million as of December 31, 2025 and 2024, respectively and a noncurrent income tax payable of $13 million as of December 31, 2025.
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. In making such a determination, the Company takes into consideration all available and appropriate positive and negative evidence, including projected future taxable income, future reversals of existing taxable temporary differences, the ability to carryback net operating losses, and available tax planning strategies. Although realization is not assured, based on this existing evidence, the Company believes it is more likely than not that the Company will realize the benefit of existing deferred tax assets, net of the valuation allowances.
At December 31, 2025, the Company has a valuation allowance recorded against certain deferred tax assets, primarily state and foreign NOLs, foreign capital losses and U.S. foreign tax credits, which the Company believes do not meet the more likely than not threshold to be realized due to uncertainty of future taxable income within the applicable tax jurisdictions. A valuation allowance of $152 million and $171 million was recorded against certain deferred tax asset balances at December 31, 2025 and 2024, respectively. For 2025, the Company recorded a net valuation allowance decrease of $19 million, primarily related to profitability and expected utilization of NOLs in Luxembourg, Switzerland, and China, the write-off of NOLs and corresponding valuation allowances due to liquidation of various subsidiaries in Canada, Netherlands and Russia, netted with recording additional valuation allowances related to other miscellaneous changes in the U.S., state and non-U.S. related to ongoing operations. For 2024, the Company recorded a net valuation allowance decrease of $13 million, primarily related to the utilization of NOLs in Argentina due to improved ongoing operations, the write-off of NOLs, capital losses and corresponding valuation allowances due to liquidation of various subsidiaries in Canada, Luxembourg and Hong Kong, netted with recording additional valuation allowances due to excess interest expense in Luxembourg, as well as other miscellaneous changes in the U.S., state and non-U.S. valuation allowances related to ongoing operations.
The following table summarizes the changes in gross unrecognized tax benefits periods indicated are as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, January 1, | $ | 355 | $ | 463 | $ | 476 | |||||||||||
| Increases (decreases): | |||||||||||||||||
| Increases in tax positions for prior years | 9 | 5 | — | ||||||||||||||
| Decreases in tax positions for prior years | (4) | (90) | (19) | ||||||||||||||
| Increase in tax positions for the current period | 2 | 5 | 12 | ||||||||||||||
| Settlements with taxing authorities | — | (24) | — | ||||||||||||||
| Lapse of statute of limitations | (2) | (4) | (6) | ||||||||||||||
| Unrecognized tax benefits, December 31, | $ | 360 | $ | 355 | $ | 463 | |||||||||||
If recognized, $325 million, $316 million and $387 million of unrecognized tax benefits at December 31, 2025, 2024 and 2023, respectively, 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. During 2025 and 2023, the Company recognized an income tax benefit on interest and penalties of $8 million and $9 million, respectively, due to the accrual of current year interest on existing positions and offset by the resolution of certain tax contingencies. During 2024, the Company recognized income tax benefit on interest and penalties of $12 million due to the effective settlement of various tax positions under examination by the Internal Revenue Service (“IRS”) and offset by the accrual of current year interest on existing positions.
The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The statute of limitations for the Company’s U.S. federal income tax returns has expired for years prior to 2011 and for 2016. With few exceptions, the Company is no longer subject to other income tax examinations for years before 2016. In the normal course of business, the Company is subject to audits by worldwide taxing authorities regarding various tax liabilities. The Company’s U.S. federal income tax returns for 2017 to 2020, as well as certain state and non-U.S. income tax returns for various years, are under examination.
Other
In April 2025, the Company paid $31 million of tax for the one-time toll charge incurred in 2017 related to the Tax Credits and Jobs Act, due to the IRS having not yet processed the amended 2017 return, which the Company filed during the year ended December 31, 2022. This resulted in an increase to the Company’s noncurrent income tax receivable.
In June 2025, the Company filed its amended 2019 U.S. federal income tax return to carry back capital losses generated in 2020. This resulted in an increase in income tax expense of $3 million and an aggregate increase in noncurrent income taxes receivable of $10 million, and an increase in deferred tax liabilities of approximately $13 million.
In May 2024, the Company received a Statutory Notice of Deficiency (“Notice”) from the IRS for the tax years 2011 to 2015. The Company agreed to certain adjustments raised by the IRS in the Notice. Accordingly, the Company has concluded that various income tax positions taken by the Company have been effectively settled, with the exception of the matter the Company intends to dispute as further described hereafter.
On July 19, 2024, the Company filed a petition in the U.S. Tax Court disputing the proposed assessment of $80 million in additional taxes plus $34 million in penalties plus the additional interest calculated upon final settlement related to the transfer pricing of services performed by certain of the Company’s foreign affiliates for the tax years 2011 to 2015. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result. If the IRS prevails in the assessment of additional tax, interest and penalties in excess of the Company’s current reserves, such outcome could have a material adverse effect on the Company’s financial position and results.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 14, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 4, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.