Newell Brands Announces Fourth Quarter and Full Year 2020 Results
Q4 Net Sales Growth 2.5%; Core Sales Growth 4.9%
Q4 Diluted EPS
Full Year Operating Cash Flow Exceeds
Provides Initial Outlook for 2021
"We gained considerable momentum on our turnaround in 2020 and laid a solid foundation to deliver sustainable, profitable growth in the future,” said
Fourth Quarter 2020 Executive Summary
- Net sales were
$2.7 billion , an increase of 2.5 percent compared with the prior year period. - Core sales grew 4.9 percent compared with the prior year period. Six of eight business units and every major region increased core sales compared with the prior year period.
- Reported operating margin was 9.2 percent compared with 5.0 percent in the prior year period. Normalized operating margin was 11.4 percent compared with 11.3 percent in the prior year period.
- Reported diluted earnings per share were
$0.30 compared with$1.87 per share in the prior year period. - Normalized diluted earnings per share were
$0.56 compared with$0.42 per share in the prior year period. - Full year 2020 operating cash flow was
$1.4 billion compared with$1.0 billion in the prior year period, reflecting strong progress on working capital initiatives. - The company's leverage ratio came down to 3.5x at the end of the fourth quarter from 4.0x at the end of the prior year period.
- The company completed a tender offer for
$300 million of its 3.85 percent senior notes due 2023 in the fourth quarter. - The company initiated its full year 2021 outlook, with expected normalized earnings per share of
$1.55 to$1.65 and operating cash flow of approximately$1.0 billion .
Fourth Quarter 2020 Operating Results
Net sales were
Reported gross margin was 32.9 percent compared with 32.5 percent in the prior year period, reflecting the benefit from FUEL productivity savings, as well as the headwind from business unit mix, COVID-related expenses and inflation. Normalized gross margin was 32.9 percent compared with 33.5 percent in the prior year period.
Reported operating income was
Interest expense was
The company reported a tax benefit of
The company reported net income of
Normalized net income was
An explanation of non-GAAP measures disclosed in this release and a reconciliation of these non-GAAP results to comparable GAAP measures are included in the tables attached to this release.
Balance Sheet and Cash Flow
During full year 2020, the company generated operating cash flow of
During the fourth quarter, the company completed a tender offer for
Leverage ratio is defined as the ratio of net debt to normalized EBITDA from continuing operations. An explanation of how the leverage ratio is calculated and a related reconciliation, as well as a reconciliation of reported results to normalized results, are included in the tables attached to this release.
Fourth Quarter 2020 Operating Segment Results
The Appliances & Cookware segment generated net sales of
The Commercial Solutions segment generated net sales of
The Home Solutions segment generated net sales of
The Learning & Development segment generated net sales of
Full Year 2020 Operating Results
Net sales for the full year ended
Reported gross margin was 32.8 percent compared with 33.1 percent in the prior year, as pressure from unfavorable business unit mix, COVID-related expenses, higher absorption costs, and inflation more than offset the benefit from FUEL productivity savings. Reported gross margin for the prior year period includes cumulative depreciation expense recorded as a result of the decision to retain the Commercial business. Normalized gross margin was 32.9 percent compared with 33.8 percent in the prior year.
The company reported an operating loss of
Interest expense was
Reported net loss was
Update to Reporting Segments
The company has realigned the management of its Cookware business, with the Business Unit CEO of Food assuming full responsibility for Cookware. As a result of this change, effective first quarter 2021, the company will report the financial and operating information for Cookware as part of its Food business unit within the Home Solutions segment. Previously, Cookware was included in the Appliances & Cookware segment. With this change in the organizational structure, the Appliances & Cookware segment will be renamed Home Appliances. The company will continue to report its five existing reportable segments.
Outlook for Full Year and First Quarter 2021
The company initiated its full year and first quarter outlook for 2021 as follows:
|
Full Year 2021 Outlook |
|
|
|
|
Core Sales |
Low single digit growth |
|
Normalized Operating Margin |
30 to 60 bps improvement to 11.4% to 11.7% |
|
Normalized EPS |
|
|
Operating Cash Flow |
Approximately |
|
|
Q1 2021 Outlook |
|
|
|
|
Core Sales |
High single digit growth |
|
Normalized Operating Margin |
90 to 130 bps improvement to 6.9% to 7.3% |
|
Normalized EPS |
|
The company has presented forward-looking statements regarding core sales, normalized operating margin, and normalized earnings per share. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgement and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of forward-looking core sales, normalized operating margin, or normalized earnings per share to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measures without unreasonable effort of expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the company's full-year and first quarter 2021 financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the company's actual results and preliminary financial data set forth above may be material.
Conference Call
Newell Brands’ fourth quarter and full year 2020 earnings conference call will be held today,
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the
The company uses certain non-GAAP financial measures that are included in this press release and the additional financial information both to explain its results to stockholders and the investment community and in the internal evaluation and management of its businesses. The company’s management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the company’s performance and liquidity using the same tools that management uses to evaluate the company’s past performance, reportable business segments, prospects for future performance and liquidity, and (b) determine certain elements of management incentive compensation.
The company’s management believes that core sales provides a more complete understanding of underlying sales trends by providing sales on a consistent basis as it excludes the impacts of acquisitions, planned and completed divestitures, retail store openings and closings, certain market exits, impact of customer returns related to a product recall in
The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the company utilizes a “with” and “without” approach to determine normalized income tax benefit or expense. The company will also exclude one-time tax expenses related to a change in tax status of certain entities and the loss of GILTI tax credits as a result of utilizing the 50% IRC Section 163(j) limit resulting from the CARES Act to determine normalized income tax benefit.
While the company believes these non-GAAP financial measures are useful in evaluating the company’s performance and liquidity, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
About
This press release and additional information about
Caution Concerning Forward-Looking Statements
Some of the statements in this press release and its exhibits, particularly those anticipating future financial performance, business prospects, growth, operating strategies, the impact of the COVID-19 pandemic and similar matters, are forward-looking statements within the meaning of the
- our ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 pandemic;
- our dependence on the strength of retail, commercial and industrial sectors of the economy in various countries around the world;
- competition with other manufacturers and distributors of consumer products;
- major retailers’ strong bargaining power and consolidation of our customers;
- our ability to improve productivity, reduce complexity and streamline operations;
- our ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;
- our ability to remediate the material weakness in internal control over financial reporting and consistently maintain effective internal control over financial reporting;
- risks related to our substantial indebtedness, a potential increase in interest rates or changes in our credit ratings;
- future events that could adversely affect the value of our assets and/or stock price and require additional impairment charges;
- unexpected costs or expenses associated with divestitures;
- our ability to effectively execute our turnaround plan;
- changes in the prices and availability of labor, transportation, raw materials and sourced products and our ability to obtain them in a timely manner;
- the impact of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties;
- the risks inherent to our foreign operations, including currency fluctuations, exchange controls and pricing restrictions;
- a failure of one of our key information technology systems, networks, processes or related controls or those of our service providers;
- the impact of
U.S. and foreign regulations on our operations, including the impact of tariffs and environmental remediation costs; - the potential inability to attract, retain and motivate key employees;
- the resolution of tax contingencies resulting in additional tax liabilities;
- product liability, product recalls or related regulatory actions;
- our ability to protect intellectual property rights;
- significant increases in funding obligations related to our pension plans; and
- other factors listed from time to time in our filings with the
SEC , including, but not limited to, our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
The consolidated condensed financial statements are prepared in conformity with accounting principles generally accepted in
The information contained in this press release and the tables is as of the date indicated. The company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments.
|
||||||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||||||
|
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
||||||||
Net sales |
$ |
2,689 |
|
|
$ |
2,624 |
|
|
2.5% |
|
$ |
9,385 |
|
|
$ |
9,715 |
|
|
(3.4)% |
|
Cost of products sold |
1,805 |
|
|
1,772 |
|
|
|
|
6,306 |
|
|
6,496 |
|
|
|
|||||
Gross profit |
884 |
|
|
852 |
|
|
3.8% |
|
3,079 |
|
|
3,219 |
|
|
(4.3)% |
|||||
Selling, general and administrative expenses |
608 |
|
|
640 |
|
|
(5.0)% |
|
2,189 |
|
|
2,451 |
|
|
(10.7)% |
|||||
Restructuring costs, net |
7 |
|
|
5 |
|
|
|
|
21 |
|
|
27 |
|
|
|
|||||
Impairment of goodwill, intangibles and other assets |
21 |
|
|
75 |
|
|
|
|
1,503 |
|
|
1,223 |
|
|
|
|||||
Operating income (loss) |
248 |
|
|
132 |
|
|
87.9% |
|
(634) |
|
|
(482) |
|
|
(31.5)% |
|||||
Non-operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net |
69 |
|
|
70 |
|
|
|
|
274 |
|
|
303 |
|
|
|
|||||
(Gain) loss on extinguishment of debt |
20 |
|
|
(1) |
|
|
|
|
20 |
|
|
28 |
|
|
|
|||||
Other expense, net |
58 |
|
|
6 |
|
|
|
|
78 |
|
|
39 |
|
|
|
|||||
Income (loss) before income taxes |
101 |
|
|
57 |
|
|
77.2% |
|
(1,006) |
|
|
(852) |
|
|
(18.1)% |
|||||
Income tax benefit |
(26) |
|
|
(721) |
|
|
|
|
(236) |
|
|
(1,038) |
|
|
|
|||||
Income (loss) from continuing operations |
127 |
|
|
778 |
|
|
(83.7)% |
|
(770) |
|
|
186 |
|
|
NM |
|||||
Income (loss) from discontinued operations, net of tax |
— |
|
|
16 |
|
|
|
|
— |
|
|
(79) |
|
|
|
|||||
Net income (loss) |
$ |
127 |
|
|
$ |
794 |
|
|
(84.0)% |
|
$ |
(770) |
|
|
$ |
107 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
424.3 |
|
|
423.4 |
|
|
|
|
424.1 |
|
|
423.3 |
|
|
|
|||||
Diluted |
426.2 |
|
|
424.9 |
|
|
|
|
424.1 |
|
|
423.9 |
|
|
|
|||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from continuing operations |
$ |
0.30 |
|
|
$ |
1.84 |
|
|
|
|
$ |
(1.82) |
|
|
$ |
0.44 |
|
|
|
|
Income (loss) from discontinued operations |
— |
|
|
0.04 |
|
|
|
|
— |
|
|
(0.19) |
|
|
|
|||||
Net income (loss) |
$ |
0.30 |
|
|
$ |
1.88 |
|
|
(84.0)% |
|
$ |
(1.82) |
|
|
$ |
0.25 |
|
|
NM |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from continuing operations |
$ |
0.30 |
|
|
$ |
1.83 |
|
|
|
|
$ |
(1.82) |
|
|
$ |
0.44 |
|
|
|
|
Income (loss) from discontinued operations |
— |
|
|
0.04 |
|
|
|
|
— |
|
|
(0.19) |
|
|
|
|||||
Net income (loss) |
$ |
0.30 |
|
|
$ |
1.87 |
|
|
(84.0)% |
|
$ |
(1.82) |
|
|
$ |
0.25 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends per share |
$ |
0.23 |
|
|
$ |
0.23 |
|
|
|
|
$ |
0.92 |
|
|
$ |
0.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
* NM - NOT MEANINGFUL |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|||
Assets |
|
|
|
|||
Current assets |
|
|
|
|||
Cash and cash equivalents |
$ |
981 |
|
$ |
349 |
|
Accounts receivable, net |
|
1,678 |
|
|
1,842 |
|
Inventories |
|
1,638 |
|
|
1,606 |
|
Prepaid expenses and other current assets |
|
331 |
|
|
313 |
|
Total current assets |
|
4,628 |
|
|
4,110 |
|
Property, plant and equipment, net |
|
1,176 |
|
|
1,155 |
|
Operating lease assets |
|
530 |
|
|
615 |
|
|
|
3,553 |
|
|
3,709 |
|
Other intangible assets, net |
|
3,564 |
|
|
4,916 |
|
Deferred income taxes |
|
838 |
|
|
776 |
|
Other assets |
|
411 |
|
|
361 |
|
TOTAL ASSETS |
$ |
14,700 |
|
$ |
15,642 |
|
Liabilities and stockholders' equity |
|
|
|
|||
Current liabilities |
|
|
|
|||
Accounts payable |
$ |
1,526 |
|
$ |
1,102 |
|
Accrued compensation |
|
236 |
|
|
204 |
|
Other accrued liabilities |
|
1,393 |
|
|
1,340 |
|
Short-term debt and current portion of long-term debt |
|
466 |
|
|
332 |
|
Total current liabilities |
|
3,621 |
|
|
2,978 |
|
Long-term debt |
|
5,141 |
|
|
5,391 |
|
Deferred income taxes |
|
414 |
|
|
625 |
|
Operating lease liabilities |
|
472 |
|
|
541 |
|
Other noncurrent liabilities |
|
1,152 |
|
|
1,111 |
|
Total liabilities |
|
10,800 |
|
|
10,646 |
|
|
|
|
|
|||
Stockholders' equity |
|
|
|
|||
Total stockholders' equity attributable to parent |
|
3,874 |
|
|
4,963 |
|
Total stockholders' equity attributable to non-controlling interests |
|
26 |
|
|
33 |
|
Total stockholders' equity |
|
3,900 |
|
|
4,996 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
14,700 |
|
$ |
15,642 |
|
||||||||
|
Twelve Months Ended |
|||||||
|
|
2020 |
|
2019 |
||||
Cash flows from operating activities: |
|
|
|
|||||
Net income (loss) |
$ |
(770 |
) |
|
$ |
107 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
357 |
|
|
|
446 |
|
|
Impairment of goodwill, intangibles and other assets |
|
1,503 |
|
|
|
1,335 |
|
|
(Gain) loss from sale of businesses, net |
|
9 |
|
|
|
(7 |
) |
|
Deferred income taxes |
|
(277 |
) |
|
|
(1,068 |
) |
|
Stock based compensation expense |
|
41 |
|
|
|
42 |
|
|
Pension settlement charge |
|
53 |
|
|
|
1 |
|
|
Loss on extinguishment of debt |
|
20 |
|
|
|
28 |
|
|
Loss on change in fair value of investments |
|
— |
|
|
|
21 |
|
|
Other, net |
|
1 |
|
|
|
4 |
|
|
Changes in operating accounts excluding the effects of divestitures: |
|
|
|
|||||
Accounts receivable |
|
168 |
|
|
|
311 |
|
|
Inventories |
|
(29 |
) |
|
|
131 |
|
|
Accounts payable |
|
415 |
|
|
|
(109 |
) |
|
Accrued liabilities and other |
|
(59 |
) |
|
|
(198 |
) |
|
Net cash provided by operating activities |
|
1,432 |
|
|
|
1,044 |
|
|
Cash flows from investing activities: |
|
|
|
|||||
Proceeds from sale of divested businesses |
|
16 |
|
|
|
996 |
|
|
Capital expenditures |
|
(259 |
) |
|
|
(265 |
) |
|
Other investing activities |
|
15 |
|
|
|
5 |
|
|
Net cash provided by (used in) investing activities |
|
(228 |
) |
|
|
736 |
|
|
Cash flows from financing activities: |
|
|
|
|||||
Net short term debt |
|
(26 |
) |
|
|
(26 |
) |
|
Net proceeds from issuance of debt |
|
491 |
|
|
|
— |
|
|
Payments on current portion of long-term debt |
|
(305 |
) |
|
|
(268 |
) |
|
Payments on long-term debt |
|
(320 |
) |
|
|
(1,004 |
) |
|
Debt extinguishment and issuance costs |
|
(18 |
) |
|
|
(39 |
) |
|
Cash dividends |
|
(392 |
) |
|
|
(391 |
) |
|
Payments to dissenting shareholders |
|
— |
|
|
|
(171 |
) |
|
Equity compensation activity and other, net |
|
11 |
|
|
|
(5 |
) |
|
Net cash used in financing activities |
|
(559 |
) |
|
|
(1,904 |
) |
|
Exchange rate effect on cash, cash equivalents and restricted cash |
|
5 |
|
|
|
(1 |
) |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
650 |
|
|
|
(125 |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
371 |
|
|
|
496 |
|
|
Cash, cash equivalents and restricted cash at end of period |
$ |
1,021 |
|
|
$ |
371 |
|
|
Supplemental disclosures: |
|
|
|
|||||
Restricted cash at beginning of period |
$ |
22 |
|
|
$ |
— |
|
|
Restricted cash at end of period |
|
40 |
|
|
|
22 |
|
|
||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP |
||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and |
|
Other |
|
Measure |
||||||||||||
|
|
Reported |
|
related costs [1] |
|
impairment [2] |
|
related costs [3] |
|
items [4] |
|
Normalized* |
||||||||||||
Net sales |
|
$ |
2,689 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,689 |
|
Cost of products sold |
|
1,805 |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(1) |
|
|
1,803 |
|
||||||
Gross profit |
|
884 |
|
|
1 |
|
|
— |
|
|
— |
|
|
1 |
|
|
886 |
|
||||||
|
|
32.9 |
% |
|
|
|
|
|
|
|
|
|
32.9 |
% |
||||||||||
Selling, general and administrative expenses |
|
608 |
|
|
(4) |
|
|
(20) |
|
|
(1) |
|
|
(4) |
|
|
579 |
|
||||||
|
|
22.6 |
% |
|
|
|
|
|
|
|
|
|
21.5 |
% |
||||||||||
Restructuring costs, net |
|
7 |
|
|
(7) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment of goodwill, intangibles and other assets |
|
21 |
|
|
— |
|
|
(21) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Operating income |
|
248 |
|
|
12 |
|
|
41 |
|
|
1 |
|
|
5 |
|
|
307 |
|
||||||
|
|
9.2 |
% |
|
|
|
|
|
|
|
|
|
11.4 |
% |
||||||||||
Non-operating (income) expense |
|
147 |
|
|
— |
|
|
— |
|
|
— |
|
|
(72) |
|
|
75 |
|
||||||
Income before income taxes |
|
101 |
|
|
12 |
|
|
41 |
|
|
1 |
|
|
77 |
|
|
232 |
|
||||||
Income tax provision (benefit) [5] |
|
(26) |
|
|
— |
|
|
7 |
|
|
— |
|
|
13 |
|
|
(6) |
|
||||||
Net income |
|
$ |
127 |
|
|
$ |
12 |
|
|
$ |
34 |
|
|
$ |
1 |
|
|
$ |
64 |
|
|
$ |
238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share ** |
|
$ |
0.30 |
|
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
— |
|
|
$ |
0.15 |
|
|
$ |
0.56 |
|
* |
Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
|
** |
Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 426.2 million shares for the three months ended |
|
Totals may not add due to rounding. |
||
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Pension settlement charge of |
|
[5] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP |
||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and related |
|
Other |
|
Measure |
||||||||||||
|
|
Reported |
|
related costs [1] |
|
impairment [2] |
|
costs [3] |
|
items [4] |
|
Normalized* |
||||||||||||
Net sales |
|
$ |
2,624 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,624 |
|
Cost of products sold |
|
1,772 |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(27) |
|
|
1,744 |
|
||||||
Gross profit |
|
852 |
|
|
1 |
|
|
— |
|
|
— |
|
|
27 |
|
|
880 |
|
||||||
|
|
32.5 |
% |
|
|
|
|
|
|
|
|
|
33.5 |
% |
||||||||||
Selling, general and administrative expenses |
|
640 |
|
|
(14) |
|
|
(34) |
|
|
(5) |
|
|
(3) |
|
|
584 |
|
||||||
|
|
24.4 |
% |
|
|
|
|
|
|
|
|
|
22.3 |
% |
||||||||||
Restructuring costs, net |
|
5 |
|
|
(5) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment of goodwill, intangibles and other assets |
|
75 |
|
|
— |
|
|
(75) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Operating income |
|
132 |
|
|
20 |
|
|
109 |
|
|
5 |
|
|
30 |
|
|
296 |
|
||||||
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
11.3 |
% |
||||||||||
Non-operating (income) expense |
|
75 |
|
|
— |
|
|
— |
|
|
— |
|
|
(2) |
|
|
73 |
|
||||||
Income before income taxes |
|
57 |
|
|
20 |
|
|
109 |
|
|
5 |
|
|
32 |
|
|
223 |
|
||||||
Income tax provision (benefit) [5] |
|
(721) |
|
|
4 |
|
|
22 |
|
|
1 |
|
|
745 |
|
|
51 |
|
||||||
Income (loss) from continuing operations |
|
778 |
|
|
16 |
|
|
87 |
|
|
4 |
|
|
(713) |
|
|
172 |
|
||||||
Income (loss) from discontinued operations, net of tax |
|
16 |
|
|
— |
|
|
— |
|
|
(1) |
|
|
(7) |
|
|
8 |
|
||||||
Net income (loss) |
|
$ |
794 |
|
|
$ |
16 |
|
|
$ |
87 |
|
|
$ |
3 |
|
|
$ |
(720) |
|
|
$ |
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
1.87 |
|
|
$ |
0.04 |
|
|
$ |
0.20 |
|
|
$ |
0.01 |
|
|
$ |
(1.69) |
|
|
$ |
0.42 |
|
* |
Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
|
** |
Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 424.9 million shares for the three months ended |
|
|
Totals may not add due to rounding. |
|
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Cumulative depreciation and amortization catch-up of |
|
[5] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
||||||||||||||||||||||||
|
|
Twelve Months Ended |
||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP |
||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and |
|
Other |
|
Measure |
||||||||||||
|
|
Reported |
|
related costs [1] |
|
impairment [2] |
|
related costs [3] |
|
items [4] |
|
Normalized* |
||||||||||||
Net sales |
|
$ |
9,385 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,385 |
|
Cost of products sold |
|
6,306 |
|
|
(4) |
|
|
— |
|
|
— |
|
|
(6) |
|
|
6,296 |
|
||||||
Gross profit |
|
3,079 |
|
|
4 |
|
|
— |
|
|
— |
|
|
6 |
|
|
3,089 |
|
||||||
|
|
32.8 |
% |
|
|
|
|
|
|
|
|
|
32.9 |
% |
||||||||||
Selling, general and administrative expenses |
|
2,189 |
|
|
(19) |
|
|
(99) |
|
|
(4) |
|
|
(16) |
|
|
2,051 |
|
||||||
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
21.9 |
% |
||||||||||
Restructuring costs, net |
|
21 |
|
|
(21) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment of goodwill, intangibles and other assets |
|
1,503 |
|
|
— |
|
|
(1,503) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Operating income (loss) |
|
(634) |
|
|
44 |
|
|
1,602 |
|
|
4 |
|
|
22 |
|
|
1,038 |
|
||||||
|
|
(6.8) |
% |
|
|
|
|
|
|
|
|
|
11.1 |
% |
||||||||||
Non-operating (income) expense |
|
372 |
|
|
1 |
|
|
— |
|
|
(9) |
|
|
(76) |
|
|
288 |
|
||||||
Income (loss) before income taxes |
|
(1,006) |
|
|
43 |
|
|
1,602 |
|
|
13 |
|
|
98 |
|
|
750 |
|
||||||
Income tax provision (benefit) [5] |
|
(236) |
|
|
(1) |
|
|
232 |
|
|
1 |
|
|
(6) |
|
|
(10) |
|
||||||
Net income (loss) |
|
$ |
(770) |
|
|
$ |
44 |
|
|
$ |
1,370 |
|
|
$ |
12 |
|
|
$ |
104 |
|
|
$ |
760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
(1.82) |
|
|
$ |
0.10 |
|
|
$ |
3.22 |
|
|
$ |
0.03 |
|
|
$ |
0.24 |
|
|
$ |
1.79 |
|
* |
Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
|
** |
Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 425.2 million shares for the twelve months ended |
|
Totals may not add due to rounding. |
||
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Pension settlement charge of |
|
[5] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
|||||||||||||||||||||||||||||||
|
|
Twelve Months Ended |
|||||||||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP Measure |
|||||||||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and related |
|
Other |
|
|
|
Proforma |
|
||||||||||||||||
|
|
Reported |
|
related costs [1] |
|
impairment [2] |
|
costs [3] |
|
items [4] |
|
Normalized* |
|
Adjustments [5] |
Proforma |
||||||||||||||||
Net sales |
|
$ |
9,715 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,715 |
|
|
$ |
— |
|
$ |
9,715 |
|
Cost of products sold |
|
6,496 |
|
|
(16) |
|
|
— |
|
|
— |
|
|
(73) |
|
|
6,407 |
|
|
21 |
|
6,428 |
|
||||||||
Gross profit |
|
3,219 |
|
|
16 |
|
|
— |
|
|
— |
|
|
73 |
|
|
3,308 |
|
|
(21) |
|
3,287 |
|
||||||||
|
|
33.1 |
% |
|
|
|
|
|
|
|
|
|
34.1 |
% |
|
|
33.8 |
% |
|||||||||||||
Selling, general and administrative expenses |
|
2,451 |
|
|
(39) |
|
|
(131) |
|
|
(30) |
|
|
(15) |
|
|
2,236 |
|
|
2 |
|
2,238 |
|
||||||||
|
|
25.2 |
% |
|
|
|
|
|
|
|
|
|
23.0 |
% |
|
|
23.0 |
% |
|||||||||||||
Restructuring costs, net |
|
27 |
|
|
(27) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Impairment of goodwill, intangibles and other assets |
|
1,223 |
|
|
— |
|
|
(1,223) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Operating income (loss) |
|
(482) |
|
|
82 |
|
|
1,354 |
|
|
30 |
|
|
88 |
|
|
1,072 |
|
|
(23) |
|
1,049 |
|
||||||||
|
|
(5.0) |
% |
|
|
|
|
|
|
|
|
|
11.0 |
% |
|
|
10.8 |
% |
|||||||||||||
Non-operating (income) expense |
|
370 |
|
|
— |
|
|
— |
|
|
— |
|
|
(57) |
|
|
313 |
|
|
— |
|
313 |
|
||||||||
Income (loss) before income taxes |
|
(852) |
|
|
82 |
|
|
1,354 |
|
|
30 |
|
|
145 |
|
|
759 |
|
|
(23) |
|
736 |
|
||||||||
Income tax provision (benefit) [6] |
|
(1,038) |
|
|
19 |
|
|
293 |
|
|
7 |
|
|
784 |
|
|
65 |
|
|
(6) |
|
59 |
|
||||||||
Income (loss) from continuing operations |
|
186 |
|
|
63 |
|
|
1,061 |
|
|
23 |
|
|
(639) |
|
|
694 |
|
|
(17) |
|
677 |
|
||||||||
Income (loss) from discontinued operations, net of tax |
|
(79) |
|
|
— |
|
|
84 |
|
|
47 |
|
|
(7) |
|
|
45 |
|
|
— |
|
45 |
|
||||||||
Net income (loss) |
|
$ |
107 |
|
|
$ |
63 |
|
|
$ |
1,145 |
|
|
$ |
70 |
|
|
$ |
(646) |
|
|
$ |
739 |
|
|
$ |
(17) |
|
$ |
722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
0.25 |
|
|
$ |
0.15 |
|
|
$ |
2.70 |
|
|
$ |
0.17 |
|
|
$ |
(1.52) |
|
|
$ |
1.74 |
|
|
$ |
(0.04) |
|
$ |
1.70 |
|
* |
Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
|
** |
Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 423.9 million shares for the twelve months ended |
|
Totals may not add due to rounding. |
||
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Cumulative depreciation and amortization catch-up of |
|
[5] |
Depreciation and amortization expense related to the Commercial Business that would have been recorded had the businesses been continuously classified as held and used. |
|
[6] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|
Year over year changes |
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Reported |
Reported |
|
Normalized |
Normalized |
|
|
Reported |
Reported |
|
Normalized |
Normalized |
|
|
|
Normalized |
|||||||||||||||||||||||||||||||||||||||
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
|
Operating Income |
|||||||||||||||||||||||||||||||||||||||
|
Income |
Margin |
Items [1] |
Income |
Margin |
|
|
Income |
Margin |
Items [2] |
Income |
Margin |
|
$ |
% |
|
$ |
% |
|||||||||||||||||||||||||||||||||||||
APPLIANCES AND COOKWARE |
$ |
577 |
$ |
49 |
|
8.5 |
% |
$ |
2 |
$ |
51 |
|
8.8 |
% |
|
$ |
570 |
$ |
58 |
|
10.2 |
% |
$ |
(4 |
) |
$ |
54 |
|
9.5 |
% |
|
$ |
7 |
|
1.2 |
% |
|
$ |
(3 |
) |
(5.6 |
)% |
|||||||||||||
COMMERCIAL SOLUTIONS |
|
498 |
|
63 |
|
12.7 |
% |
|
3 |
|
66 |
|
13.3 |
% |
|
|
436 |
|
35 |
|
8.0 |
% |
|
16 |
|
|
51 |
|
11.7 |
% |
|
|
62 |
|
14.2 |
% |
|
|
15 |
|
29.4 |
% |
|||||||||||||
HOME SOLUTIONS |
|
695 |
|
138 |
|
19.9 |
% |
|
14 |
|
152 |
|
21.9 |
% |
|
|
648 |
|
96 |
|
14.8 |
% |
|
16 |
|
|
112 |
|
17.3 |
% |
|
|
47 |
|
7.3 |
% |
|
|
40 |
|
35.7 |
% |
|||||||||||||
LEARNING AND DEVELOPMENT |
|
670 |
|
72 |
|
10.7 |
% |
|
22 |
|
94 |
|
14.0 |
% |
|
|
702 |
|
100 |
|
14.2 |
% |
|
28 |
|
|
128 |
|
18.2 |
% |
|
|
(32 |
) |
(4.6 |
)% |
|
|
(34 |
) |
(26.6 |
)% |
|||||||||||||
OUTDOOR AND RECREATION |
|
249 |
|
(9 |
) |
(3.6 |
)% |
|
4 |
|
(5 |
) |
(2.0 |
)% |
|
|
268 |
|
(75 |
) |
(28.0 |
)% |
|
73 |
|
|
(2 |
) |
(0.7 |
)% |
|
|
(19 |
) |
(7.1 |
)% |
|
|
(3 |
) |
NM |
|
|||||||||||||
CORPORATE |
|
— |
|
(58 |
) |
— |
% |
|
7 |
|
(51 |
) |
— |
% |
|
|
— |
|
(77 |
) |
— |
% |
|
30 |
|
|
(47 |
) |
— |
% |
|
|
— |
|
— |
% |
|
|
(4 |
) |
(8.5 |
)% |
|||||||||||||
RESTRUCTURING |
|
— |
|
(7 |
) |
— |
% |
|
7 |
|
— |
|
— |
% |
|
|
— |
|
(5 |
) |
— |
% |
|
5 |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|||||||||||||
|
$ |
2,689 |
$ |
248 |
|
9.2 |
% |
$ |
59 |
$ |
307 |
|
11.4 |
% |
|
$ |
2,624 |
$ |
132 |
|
5.0 |
% |
$ |
164 |
|
$ |
296 |
|
11.3 |
% |
|
$ |
65 |
|
2.5 |
% |
|
$ |
11 |
|
3.7 |
% |
[1] |
The three months ended |
|
[2] |
The three months ended |
|
*NM - NOT MEANINGFUL |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Twelve Months Ended |
Twelve Months Ended |
Year over year changes |
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
Reported |
Reported |
|
Normalized |
Normalized |
|
Reported |
Reported |
|
Proforma |
Proforma |
|
|
Proforma Operating |
||||||||||||||||||||||||||||||||||||||||
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
Income (Loss) |
|||||||||||||||||||||||||||||||||||||||||
|
Income |
Margin |
Items [1] |
Income |
Margin |
|
Income |
Margin |
Items [2] [3] |
Income |
Margin [3] |
$ |
% |
$ |
% |
|||||||||||||||||||||||||||||||||||||||
APPLIANCES AND COOKWARE |
|
$ |
1,706 |
|
$ |
(217 |
) |
|
(12.7 |
)% |
|
$ |
309 |
|
$ |
92 |
|
|
5.4 |
% |
|
$ |
1,692 |
|
$ |
(535 |
) |
|
(31.6 |
)% |
|
$ |
614 |
|
$ |
79 |
|
|
4.7 |
% |
|
$ |
14 |
|
|
0.8 |
% |
|
$ |
13 |
|
|
16.5 |
% |
COMMERCIAL SOLUTIONS |
|
|
1,859 |
|
|
(85 |
) |
|
(4.6 |
)% |
|
|
335 |
|
|
250 |
|
|
13.4 |
% |
|
|
1,779 |
|
|
(136 |
) |
|
(7.6 |
)% |
|
|
365 |
|
|
229 |
|
|
12.9 |
% |
|
|
80 |
|
|
4.5 |
% |
|
|
21 |
|
|
9.2 |
% |
HOME SOLUTIONS |
|
|
1,971 |
|
|
(12 |
) |
|
(0.6 |
)% |
|
|
348 |
|
|
336 |
|
|
17.0 |
% |
|
|
1,875 |
|
|
(17 |
) |
|
(0.9 |
)% |
|
|
213 |
|
|
196 |
|
|
10.5 |
% |
|
|
96 |
|
|
5.1 |
% |
|
|
140 |
|
|
71.4 |
% |
LEARNING AND DEVELOPMENT |
|
|
2,557 |
|
|
362 |
|
|
14.2 |
% |
|
|
111 |
|
|
473 |
|
|
18.5 |
% |
|
|
2,956 |
|
|
588 |
|
|
19.9 |
% |
|
|
45 |
|
|
633 |
|
|
21.4 |
% |
|
|
(399 |
) |
|
(13.5 |
)% |
|
|
(160 |
) |
|
(25.3 |
)% |
OUTDOOR AND RECREATION |
|
|
1,292 |
|
|
(418 |
) |
|
(32.4 |
)% |
|
|
507 |
|
|
89 |
|
|
6.9 |
% |
|
|
1,413 |
|
|
(64 |
) |
|
(4.5 |
)% |
|
|
171 |
|
|
107 |
|
|
7.6 |
% |
|
|
(121 |
) |
|
(8.6 |
)% |
|
|
(18 |
) |
|
(16.8 |
)% |
CORPORATE |
|
|
— |
|
|
(243 |
) |
|
— |
% |
|
|
41 |
|
|
(202 |
) |
|
— |
% |
|
|
— |
|
|
(291 |
) |
|
— |
% |
|
|
96 |
|
|
(195 |
) |
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
(7 |
) |
|
(3.6 |
)% |
RESTRUCTURING |
|
|
— |
|
|
(21 |
) |
|
— |
% |
|
|
21 |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
(27 |
) |
|
— |
% |
|
|
27 |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
$ |
9,385 |
|
$ |
(634 |
) |
|
(6.8 |
)% |
|
$ |
1,672 |
|
$ |
1,038 |
|
|
11.1 |
% |
|
$ |
9,715 |
|
$ |
(482 |
) |
|
(5.0 |
)% |
|
$ |
1,531 |
|
$ |
1,049 |
|
|
10.8 |
% |
|
$ |
(330 |
) |
|
(3.4 |
)% |
|
$ |
(11 |
) |
|
(1.0 |
)% |
[1] |
The twelve months ended |
|
[2] |
The twelve months ended |
|
[3] |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CORE SALES ANALYSIS BY SEGMENT (Amounts in millions) |
||||||||||||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
2019 |
Divestitures and |
2019 |
$ |
% |
||||||||||||||||||||||||
APPLIANCES AND COOKWARE |
$ |
577 |
|
$ |
— |
|
|
$ |
577 |
|
$ |
17 |
|
|
$ |
594 |
|
$ |
570 |
|
$ |
— |
|
|
$ |
570 |
|
$ |
24 |
|
|
4.2 |
% |
|
COMMERCIAL SOLUTIONS |
|
|
498 |
|
|
— |
|
|
|
498 |
|
|
(2 |
) |
|
|
496 |
|
|
436 |
|
|
— |
|
|
|
436 |
|
|
60 |
|
|
13.8 |
% |
HOME SOLUTIONS |
|
|
695 |
|
|
(1 |
) |
|
|
694 |
|
|
(6 |
) |
|
|
688 |
|
|
648 |
|
|
(36 |
) |
|
|
612 |
|
|
76 |
|
|
12.4 |
% |
LEARNING AND DEVELOPMENT |
|
|
670 |
|
|
(1 |
) |
|
|
669 |
|
|
(7 |
) |
|
|
662 |
|
|
702 |
|
|
(25 |
) |
|
|
677 |
|
|
(15 |
) |
|
(2.2 |
)% |
OUTDOOR AND RECREATION |
|
|
249 |
|
|
— |
|
|
|
249 |
|
|
2 |
|
|
|
251 |
|
|
268 |
|
|
3 |
|
|
|
271 |
|
|
(20 |
) |
|
(7.4 |
)% |
|
|
$ |
2,689 |
|
$ |
(2 |
) |
|
$ |
2,687 |
|
$ |
4 |
|
|
$ |
2,691 |
|
$ |
2,624 |
|
$ |
(58 |
) |
|
$ |
2,566 |
|
$ |
125 |
|
|
4.9 |
% |
CORE SALES ANALYSIS BY GEOGRAPHY |
|||||||||||||||||||||||||||||||||
|
Three Months Ended |
Three Months Ended |
Increase (Decrease) |
||||||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
2019 |
Divestitures and |
2019 |
$ |
% |
|||||||||||||||||||||||
|
$ |
1,892 |
$ |
(2 |
) |
$ |
1,890 |
$ |
(1 |
) |
$ |
1,889 |
$ |
1,862 |
$ |
(58 |
) |
$ |
1,804 |
$ |
85 |
4.7 |
% |
||||||||||
|
|
405 |
|
— |
|
|
405 |
|
(20 |
) |
|
385 |
|
377 |
|
— |
|
|
377 |
|
8 |
2.1 |
% |
||||||||||
|
|
215 |
|
— |
|
|
215 |
|
34 |
|
|
249 |
|
221 |
|
— |
|
|
221 |
|
28 |
12.7 |
% |
||||||||||
|
|
177 |
|
— |
|
|
177 |
|
(9 |
) |
|
168 |
|
164 |
|
— |
|
|
164 |
|
4 |
2.4 |
% |
||||||||||
|
$ |
2,689 |
$ |
(2 |
) |
$ |
2,687 |
$ |
4 |
|
$ |
2,691 |
$ |
2,624 |
$ |
(58 |
) |
$ |
2,566 |
$ |
125 |
4.9 |
% |
[1] |
"Core Sales” provides a consistent basis for year-over-year comparisons in sales as it excludes the impacts of acquisitions, completed divestitures, retail store openings and closings, changes in foreign currency. |
|
[2] |
Divestitures include the exit of the North American distributorship of Uniball® Products, current and prior period net sales from retail store closures (consistent with standard retail practice), disposition of the foamboards business and exit from Home Fragrance fundraising business. |
|
[3] |
“Currency Impact” represents the effect of foreign currency on 2020 reported sales and is calculated by applying the 2019 average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures) and comparing to 2020 reported sales. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CORE SALES ANALYSIS BY SEGMENT (Amounts in millions) |
||||||||||||||||||||||||||||||||||
|
Twelve Months Ended |
Twelve Months Ended |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
2019 |
Divestitures and |
2019 |
$ |
% |
||||||||||||||||||||||||
APPLIANCES AND COOKWARE |
$ |
1,706 |
$ |
— |
|
$ |
1,706 |
$ |
77 |
|
$ |
1,783 |
$ |
1,692 |
$ |
— |
|
$ |
1,692 |
$ |
91 |
|
5.4 |
% |
||||||||||
COMMERCIAL SOLUTIONS |
|
1,859 |
|
— |
|
|
1,859 |
|
18 |
|
|
1,877 |
|
1,779 |
|
(1 |
) |
|
1,778 |
|
99 |
|
5.6 |
% |
||||||||||
HOME SOLUTIONS |
|
1,971 |
|
(3 |
) |
|
1,968 |
|
(4 |
) |
|
1,964 |
|
1,875 |
|
(57 |
) |
|
1,818 |
|
146 |
|
8.0 |
% |
||||||||||
LEARNING AND DEVELOPMENT |
|
2,557 |
|
(10 |
) |
|
2,547 |
|
5 |
|
|
2,552 |
|
2,956 |
|
(86 |
) |
|
2,870 |
|
(318 |
) |
(11.1 |
)% |
||||||||||
OUTDOOR AND RECREATION |
|
1,292 |
|
1 |
|
|
1,293 |
|
12 |
|
|
1,305 |
|
1,413 |
|
16 |
|
|
1,429 |
|
(124 |
) |
(8.7 |
)% |
||||||||||
|
$ |
9,385 |
$ |
(12 |
) |
$ |
9,373 |
$ |
108 |
|
$ |
9,481 |
$ |
9,715 |
$ |
(128 |
) |
$ |
9,587 |
$ |
(106 |
) |
(1.1 |
)% |
CORE SALES ANALYSIS BY GEOGRAPHY |
||||||||||||||||||||||||||||||||||
|
Twelve Months Ended |
Twelve Months Ended |
Increase (Decrease) |
|||||||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
2019 |
Divestitures and |
2019 |
$ |
% |
||||||||||||||||||||||||
|
$ |
6,673 |
$ |
(12 |
) |
$ |
6,661 |
$ |
4 |
|
$ |
6,665 |
$ |
6,920 |
$ |
(124 |
) |
$ |
6,796 |
$ |
(131 |
) |
(1.9 |
)% |
||||||||||
|
|
1,394 |
|
— |
|
|
1,394 |
|
(22 |
) |
|
1,372 |
|
1,398 |
|
(1 |
) |
|
1,397 |
|
(25 |
) |
(1.8 |
)% |
||||||||||
|
|
657 |
|
— |
|
|
657 |
|
134 |
|
|
791 |
|
702 |
|
(3 |
) |
|
699 |
|
92 |
|
13.2 |
% |
||||||||||
|
|
661 |
|
— |
|
|
661 |
|
(8 |
) |
|
653 |
|
695 |
|
— |
|
|
695 |
|
(42 |
) |
(6.0 |
)% |
||||||||||
|
$ |
9,385 |
$ |
(12 |
) |
$ |
9,373 |
$ |
108 |
|
$ |
9,481 |
$ |
9,715 |
$ |
(128 |
) |
$ |
9,587 |
$ |
(106 |
) |
(1.1 |
)% |
[1] |
"Core Sales” provides a consistent basis for year-over-year comparisons in sales as it excludes the impacts of acquisitions, completed divestitures, retail store openings and closings, changes in foreign currency. |
|
[2] |
Divestitures include the exit of the North American distributorship of Uniball® Products, current and prior period net sales from retail store closures (consistent with standard retail practice), disposition of the foamboards business, exit from Home Fragrance fundraising business and impact of customer returns related to a product recall in the |
|
[3] |
“Currency Impact” represents the effect of foreign currency on 2020 reported sales and is calculated by applying the 2019 average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures) and comparing to 2020 reported sales. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) NET DEBT AND FREE CASH FLOW RECONCILIATION (Amounts in millions) |
||||||||||||
|
|
|
|
|
||||||||
|
|
2020 |
|
2019 |
|
$ Change |
||||||
FREE CASH FLOW RECONCILIATION: |
|
|
|
|
|
|
||||||
Net cash provided by operating activities |
|
$ |
1,432 |
|
|
$ |
1,044 |
|
|
|
||
Capital expenditures |
|
(259) |
|
|
(265) |
|
|
|
||||
|
|
|
|
|
|
|
||||||
FREE CASH FLOW [1] |
|
$ |
1,173 |
|
|
$ |
779 |
|
|
$ |
394 |
|
|
|
|
|
|
|
|
||||||
FREE CASH FLOW PRODUCTIVITY [2] |
|
154 |
% |
|
108 |
% |
|
|
[1] |
Free cash flow is defined as net cash provided by operating activities, less capital expenditures. |
|
[2] |
Free cash flow productivity is defined as the ratio of free cash flow to normalized net income. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) NET DEBT TO NORMALIZED EBITDA FROM CONTINUING OPERATIONS RECONCILIATION (Amounts in millions) |
||||||||
|
|
|
|
|
||||
NET DEBT RECONCILIATION: |
|
|
|
|
||||
Short-term debt and current portion of long-term debt |
|
$ |
466 |
|
|
$ |
332 |
|
Long-term debt |
|
5,141 |
|
|
5,391 |
|
||
Gross debt |
|
5,607 |
|
|
5,723 |
|
||
Less: Cash and cash equivalents |
|
981 |
|
|
349 |
|
||
NET DEBT [1] |
|
$ |
4,626 |
|
|
$ |
5,374 |
|
|
|
|
|
|
||||
Income (loss) from continuing operations |
|
$ |
(770) |
|
|
$ |
186 |
|
Normalized items [2] |
|
1,530 |
|
|
491 |
|
||
PROFORMA NORMALIZED INCOME FROM CONTINUING OPERATIONS |
|
760 |
|
|
677 |
|
||
|
|
|
|
|
||||
Proforma normalized income tax [3] |
|
(10) |
|
|
59 |
|
||
Interest expense, net |
|
274 |
|
|
303 |
|
||
Proforma normalized depreciation and amortization [4] |
|
245 |
|
|
251 |
|
||
Stock-based compensation [5] |
|
41 |
|
|
42 |
|
||
NORMALIZED EBITDA FROM CONTINUING OPERATIONS |
|
$ |
1,310 |
|
|
$ |
1,332 |
|
|
|
|
|
|
||||
NET DEBT TO NORMALIZED EBITDA FROM CONTINUING OPERATIONS LEVERAGE RATIO [6] |
|
3.5 |
x |
|
4.0 |
x |
[1] |
The Company defines net debt as gross debt less the total of cash and cash equivalents. The Company believes net debt is meaningful to investors as it considers net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. |
|
[2] |
Refer to "Reconciliation of GAAP and Non-GAAP Information (Unaudited) - Certain Line Items" for the twelve months ended |
|
[3] |
Refer to "Reconciliation of GAAP and Non-GAAP Information (Unaudited) - Certain Line Items" for the twelve months ended |
|
[4] |
Proforma Normalized Depreciation and Amortization excludes from GAAP depreciation and amortization for the twelve months ended |
|
[5] |
Represents non-cash expense associated with stock-based compensation from continuing operations. |
|
[6] |
The Net Debt to Normalized EBITDA from continuing operations leverage ratio is defined as Net Debt divided by Normalized EBITDA from continuing operations. The Company's debt has certain financial covenants such as debt to equity ratio and interest coverage ratio; however the Net Debt to Normalized EBITDA from continuing operations leverage ratio is used by management as a liquidity measure and is not prescribed in the Company's debt covenants. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||
|
Net |
Reported |
Reported |
Excluded |
Normalized |
Normalized |
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
HOME APPLIANCES |
$ |
261 |
$ |
(299 |
) |
(114.6 |
)% |
$ |
290 |
$ |
(9 |
) |
(3.4 |
)% |
||||||
COMMERCIAL SOLUTIONS |
|
413 |
|
(272 |
) |
(65.9 |
)% |
|
323 |
|
51 |
|
12.3 |
% |
||||||
HOME SOLUTIONS |
|
377 |
|
(301 |
) |
(79.8 |
)% |
|
317 |
|
16 |
|
4.2 |
% |
||||||
LEARNING AND DEVELOPMENT |
|
528 |
|
4 |
|
0.8 |
% |
|
82 |
|
86 |
|
16.3 |
% |
||||||
OUTDOOR AND RECREATION |
|
307 |
|
(474 |
) |
(154.4 |
)% |
|
489 |
|
15 |
|
4.9 |
% |
||||||
CORPORATE |
|
— |
|
(66 |
) |
— |
% |
|
20 |
|
(46 |
) |
— |
% |
||||||
|
$ |
1,886 |
$ |
(1,408 |
) |
(74.7 |
)% |
$ |
1,521 |
$ |
113 |
|
6.0 |
% |
[1] |
Excluded items consist of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||
|
Net |
Reported |
Reported |
Excluded |
Normalized |
Normalized |
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
HOME APPLIANCES |
$ |
330 |
$ |
6 |
|
1.8 |
% |
$ |
3 |
$ |
9 |
|
2.7 |
% |
||||||
COMMERCIAL SOLUTIONS |
|
413 |
|
38 |
|
9.2 |
% |
|
7 |
|
45 |
|
10.9 |
% |
||||||
HOME SOLUTIONS |
|
384 |
|
29 |
|
7.6 |
% |
|
21 |
|
50 |
|
13.0 |
% |
||||||
LEARNING AND DEVELOPMENT |
|
631 |
|
126 |
|
20.0 |
% |
|
3 |
|
129 |
|
20.4 |
% |
||||||
OUTDOOR AND RECREATION |
|
353 |
|
24 |
|
6.8 |
% |
|
9 |
|
33 |
|
9.3 |
% |
||||||
CORPORATE |
|
— |
|
(60 |
) |
— |
% |
|
9 |
|
(51 |
) |
— |
% |
||||||
|
$ |
2,111 |
$ |
163 |
|
7.7 |
% |
$ |
52 |
$ |
215 |
|
10.2 |
% |
[2] |
Excluded items consists of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||
|
||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||
|
Net |
Reported |
Reported |
Excluded |
Normalized |
Normalized |
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
HOME APPLIANCES |
$ |
430 |
$ |
19 |
|
4.4 |
% |
$ |
3 |
$ |
22 |
|
5.1 |
% |
||||||
COMMERCIAL SOLUTIONS |
|
535 |
|
84 |
|
15.7 |
% |
|
4 |
|
88 |
|
16.4 |
% |
||||||
HOME SOLUTIONS |
|
623 |
|
123 |
|
19.7 |
% |
|
14 |
|
137 |
|
22.0 |
% |
||||||
LEARNING AND DEVELOPMENT |
|
728 |
|
158 |
|
21.7 |
% |
|
6 |
|
164 |
|
22.5 |
% |
||||||
OUTDOOR AND RECREATION |
|
383 |
|
39 |
|
10.2 |
% |
|
7 |
|
46 |
|
12.0 |
% |
||||||
CORPORATE |
|
— |
|
(60 |
) |
— |
% |
|
6 |
|
(54 |
) |
— |
% |
||||||
|
$ |
2,699 |
$ |
363 |
|
13.4 |
% |
$ |
40 |
$ |
403 |
|
14.9 |
% |
[3] |
Excluded items consists of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||
|
Net |
Reported |
Reported |
Excluded |
Normalized |
Normalized |
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
HOME APPLIANCES |
$ |
518 |
$ |
36 |
|
6.9 |
% |
$ |
2 |
$ |
38 |
|
7.3 |
% |
||||||
COMMERCIAL SOLUTIONS |
|
498 |
|
61 |
|
12.2 |
% |
|
5 |
|
66 |
|
13.3 |
% |
||||||
HOME SOLUTIONS |
|
754 |
|
147 |
|
19.5 |
% |
|
18 |
|
165 |
|
21.9 |
% |
||||||
LEARNING AND DEVELOPMENT |
|
670 |
|
71 |
|
10.6 |
% |
|
23 |
|
94 |
|
14.0 |
% |
||||||
OUTDOOR AND RECREATION |
|
249 |
|
(9 |
) |
(3.6 |
)% |
|
4 |
|
(5 |
) |
(2.0 |
)% |
||||||
CORPORATE |
|
— |
|
(58 |
) |
— |
% |
|
7 |
|
(51 |
) |
— |
% |
||||||
|
$ |
2,689 |
$ |
248 |
|
9.2 |
% |
$ |
59 |
$ |
307 |
|
11.4 |
% |
[4] |
Excluded items consists of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||
|
Twelve Months Ended |
|||||||||||||||||||
|
Net |
Reported |
Reported |
Excluded |
Normalized |
Normalized |
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
HOME APPLIANCES |
$ |
1,539 |
$ |
(238 |
) |
(15.5 |
)% |
$ |
298 |
$ |
60 |
|
3.9 |
% |
||||||
COMMERCIAL SOLUTIONS |
|
1,859 |
|
(89 |
) |
(4.8 |
)% |
|
339 |
|
250 |
|
13.4 |
% |
||||||
HOME SOLUTIONS |
|
2,138 |
|
(2 |
) |
(0.1 |
)% |
|
370 |
|
368 |
|
17.2 |
% |
||||||
LEARNING AND DEVELOPMENT |
|
2,557 |
|
359 |
|
14.0 |
% |
|
114 |
|
473 |
|
18.5 |
% |
||||||
OUTDOOR AND RECREATION |
|
1,292 |
|
(420 |
) |
(32.5 |
)% |
|
509 |
|
89 |
|
6.9 |
% |
||||||
CORPORATE |
|
— |
|
(244 |
) |
— |
% |
|
42 |
|
(202 |
) |
— |
% |
||||||
|
$ |
9,385 |
$ |
(634 |
) |
(6.8 |
)% |
$ |
1,672 |
$ |
1,038 |
|
11.1 |
% |
[5] |
Excluded items consists of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210212005127/en/
Investor Contact:
VP, Investor Relations
+1 (201) 610-6901
sofya.tsinis@newellco.com
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+1 (470) 580-1086
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Source: