false0000814453 0000814453 2019-11-01 2019-11-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 1, 2019

NEWELL BRANDS INC.

(Exact name of registrant as specified in its charter)

Delaware	1-9608	36-3514169
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

6655 Peachtree Dunwoody Road,

Atlanta, Georgia 30328

(Address of principal executive offices including zip code)

(770) 418-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

TITLE OF EACH CLASS		TRADING SYMBOL		NAME OF EXCHANGE ON WHICH REGISTERED
Common stock, $1 par value per share		NWL		Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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Item 2.02.    Results of Operations and Financial Condition.

On November 1, 2019, Newell Brands Inc. (the “Company”) issued a press release to report the Company’s earnings for the fiscal quarter ended September 30, 2019, which is attached to this report as Exhibit 99.1.

The information in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, regardless of any general incorporation language in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits

Exhibit No.		Exhibit Description
99.1		Press Release, dated November 1, 2019, issued by Newell Brands Inc., and Additional Financial Information.
101		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
104		The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		NEWELL BRANDS INC.
Dated: November 1, 2019	By:	/s/ Christopher H. Peterson
		Christopher H. Peterson
		Executive Vice President and Chief Financial Officer

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Exhibit 99.1

NEWELL BRANDS INC.

Press Release, dated November 1, 2019, issued by Newell Brands Inc., and Additional Financial Information

–	Net sales were $2.5 billion, a decline of 3.8 percent compared with the prior year period.

–	Core sales declined 2.5 percent from the prior year period. Core sales increased at four of seven operating divisions.

–	Reported operating margin was negative 25.9 percent compared with negative 307.4 percent in the prior year period, reflecting the impact of impairment charges recorded in both years. Normalized operating margin was 12.7 percent compared to 13.2 percent in the prior year period reflecting higher advertising spend in the current year period.

–	Reported diluted loss per share for the total company was $1.48 compared with a diluted loss of $15.52 in the prior year period.

–	Normalized diluted earnings per share for the total company were $0.73 compared with $0.77 in the prior year period, with the year over year change largely reflecting foregone contribution from divested businesses.

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–	Year-to-date operating cash flow was $424 million, compared with $182 million in the prior year, reflecting strong working capital progress partially offset by the foregone contribution from divested businesses.

–	The company increased its 2019 full year outlook for normalized earnings per share to $1.63 to $1.68 per share from $1.50 to $1.65, previously, and its full year outlook for operating cash flow to $700 million to $850 million from $600 million to $800 million, previously.

–	The company successfully completed a $700 million debt tender offer, strengthening the balance sheet.

–

The company announced today its decision to end its divestiture program and retain the Mapa/Spontex and Quickie businesses, which were included in discontinued operations through the third quarter of 2019. The addition of these businesses to the continuing operations portfolio beginning in the fourth quarter is expected to be accretive to net sales, operating margin, earnings per share and operating cash flow in 2020 and future years.

–	The company adjusted its segment structure to encompass the move of Rubbermaid Commercial Products to continuing operations. It will now report in four operating segments: Home & Outdoor Living, Learning & Development, Appliances & Cookware and Food & Commercial.

–	On October 25, based on strong operating cash flow results, the company announced plans to redeem $300 million of 5% Senior Notes due 2023.

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Home & Outdoor Living	Outdoor & Recreation, Home Fragrance,

Learning & Development	Writing, Baby

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•	our dependence on the strength of retail, commercial and industrial sectors of the economy in various parts of 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;

•	future events that could adversely affect the value of our assets and/or stock price and require additional impairment charges;

•	our ability to remediate the material weakness in our internal control over financial reporting and maintain effective internal control reporting;

•	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;

•	risks related to our substantial indebtedness, a potential increase in interest rates or changes in our credit ratings;

•	our ability to effectively accelerate our transformation plan and to execute our divestitures of the remaining assets held for sale;

•	our ability to complete planned acquisitions and divestitures, to integrate acquisitions and to offset unexpected costs or expenses associated with acquisitions or dispositions;

•	changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner;

•	the impact of governmental investigations, lawsuits or other actions by parties;

•	the risks inherent to our foreign operations, including foreign exchange 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 United States and foreign regulations on our operations, including the escalation of tariffs on imports into the U.S. and exports to Canada, China and the European Union and environmental remediation costs;

•	the potential inability to attract, retain and motivate key employees;

•	the impact of new Treasury and tax regulations and 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 the funding obligations related to our pension plans; and

•	other factors listed from time to time in our filings with the Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

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*	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 423.8 million shares for the three months ended September 30, 2019.

[1]	Restructuring and restructuring related costs of $27.1 million ($0.6 million of which is reported in discontinued operations).

[2]	Acquisition amortization costs of $32.2 million; impairment charges of $1.1 billion primarily related to tradenames ($976.5 million) and goodwill ($94.8 million); $236.9 million of which was reported in discontinued operations.

[3]	Divestiture costs of $9.2 million ($1.8 million of which is reported in discontinued operations) primarily related to the planned and completed divestitures; acquisition related costs of $0.1 million; net gain on disposition of $2.4 million (reported in discontinued operations).

[4]

Cumulative depreciation and amortization catch-up of $39.7 million related to the inclusion of the Rubbermaid Commercial Products, Rubbermaid Outdoor, Closet, Refuse and Garage businesses ("Commercial Business") in continuing operations; loss of $1.1 million due to changes in the fair value of certain investments; Argentina hyperinflationary adjustment of $4.6 million ($1.2 million of which is reported in discontinued operations); $5.0 million of other charges, primarily related to fees for certain legal proceedings and a product recall; a loss on extinguishment of debt of $29.0 million.

[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.

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*	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 471.3 million shares for the three months ended September 30, 2018.

[1]	Restructuring costs primarily associated with the Accelerated Transformation Plan of $14.2 million ($1.8 million of which is reported in discontinued operations).

[2]	Acquisition amortization costs of $32.6 million; impairment charges of $8.8 billion ($4.5 billion related to goodwill, $4.3 billion to tradenames) of which $628.8 million was reported in discontinued operations primarily related to businesses held for sale.

[3]

Acquisition related costs of $1.7 million; divestiture costs of $10.0 million ($6.1 million of which is reported in discontinued operations) primarily related to the planned and completed divestitures. Reported in discontinued operations is a gain of $20.4 million related to the sale of the Goody business, $5.7 million and $1.4 million net gains primarily due to working capital adjustments related to the sale of the Rawlings and Waddington businesses, respectively.

[4]

Fire-related losses, net of insurance recoveries of $(4.0) million in the Writing business; $0.3 million of pension settlement costs ($0.1 million of which is reported in discontinued operations) and recognition of deferred tax expense related to the difference between the book and tax basis in the Goody, Jostens, Gaming and Fishing businesses divested and held for sale ($27.6 million reported in discontinued operations).

[5]	Depreciation and amortization expense related to the Commercial Business that would have been recorded had the business been continuously classified as held and used.

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[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.

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*	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 423.7 million shares for the nine months ended September 30, 2019.

[1]	Restructuring and restructuring related costs of $62.3 million ($1.7 million of which is reported in discontinued operations).

[2]	Acquisition amortization costs of $97.3 million; impairment charges of $1.3 billion primarily related to tradenames and customer relationships ($1.1 billion) and goodwill ($168.8 million); $422.6 million of which was reported in discontinued operations.

[3]	Divestiture costs of $27.4 million ($10.0 million of which is reported in discontinued operations) primarily related to planned and completed divestitures; acquisition related costs of $1.9 million and net gain on dispositions of $0.5 million reported in discontinued operations.

[4]

Cumulative depreciation and amortization catch-up of $39.7 million related to the inclusion of the Rubbermaid Commercial Products, Rubbermaid Outdoor, Closet, Refuse and Garage businesses ("Commercial Business") in continuing operations; loss of $19.0 million due to changes in the fair value of certain investments; Argentina hyperinflationary adjustment of $9.9 million ($4.5 million of which is reported in discontinued operations); $14.6 million of other charges, primarily related to fees for certain legal proceedings and a product recall; a loss on extinguishment of debt of $29.0 million and net tax adjustment of $5.1 million primarily related to foreign and state tax impacts of offshore earnings and a withholding tax refund from Switzerland.

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[5]	Depreciation and amortization expense related to the Commercial Business that would have been recorded had the business 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.

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*	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 481.7 million shares for the nine months ended September 30, 2018.

[1]	Restructuring costs primarily associated with the Accelerated Transformation Plan of $70.5 million ($6.2 million of which is reported in discontinued operations).

[2]

Acquisition amortization costs of $139.9 million ($40.1 million of which is reported in discontinued operations); impairment charges of $9.3 billion ($4.9 billion related to goodwill, $4.3 billion to tradenames and $39.1 million, primarily related to Home Fragrance fixed assets impairments) of which $1.1 billion was reported in discontinued operations primarily related to goodwill impairment attributable to businesses held for sale.

[3]

Acquisition related costs of $12.9 million; divestiture costs of $31.8 million ($23.8 million of which is reported in discontinued operations) primarily related to the planned and completed divestitures. Reported in continuing operations is a gain of $0.6 million for a working capital adjustment related to the Tools business. Reported in discontinued operations is a gain on disposition of $599.0 million related to the sale of the Waddington® business; gain of $20.4 million related to the sale of Goody® and a loss of $130.7 million related to the sale of the Rawlings® business.

[4]	Fire-related losses, net of insurance recoveries of $(9.2) million in the Writing business; $25.5 million of bad debt related to a customer in the Baby business; $16.7 million of costs related to the proxy contest; $11.3 million gain on legacy Jarden

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[5]	Depreciation and amortization expense related to the Commercial Business that would have been recorded had the business 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.

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[1]

As previously disclosed, the unaudited Consolidated Balance Sheet at December 31, 2018 has been revised for immaterial out-of-period adjustments, the Company identified during the first quarter of 2019. The Company disclosed additional information in its Quarterly Report on Form 10-Q for the three months period ending March 31, 2019 and will disclose a revised Consolidated Statement of Operations for the year ended December 31, 2018 in the 2019 Annual Report on Form 10-K. During the quarter ended June 30, 2019, the Company announced that it will not continue to pursue the sale of the majority of the Rubbermaid Commercial Business. Commencing in the third quarter of 2019, the Rubbermaid Commercial Business to be retained will no longer be classified as held for sale nor be presented as discontinued operations. The Consolidated Balance Sheet at December 31, 2018 reflects the reclassification of the Rubbermaid Commercial Business to continuing operations to conform to current presentation.

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[1]

The three months ended September 30, 2019 excluded items consists of $834.9 million impairment charges, primarily related to tradenames; $39.7 million of cumulative depreciation and amortization catch-up related to the inclusion of the Commercial Business in continuing operations; $32.2 million of acquisition amortization costs; $28.3 million of restructuring and restructuring-related charges; $5.7 million of transaction related costs and $5.6 million related to Argentina hyperinflationary adjustment, legal fees related to certain proceedings and a product recall.

[2]	The three months ended September 30, 2018 excluded items consists of $8.1 billion of impairment charges for goodwill and tradenames; $32.6 million of acquisition amortization costs; $12.4 million of restructuring and restructuring-related charges; $5.6 million of transaction related costs and fire-related losses, net of insurance recovery of $(4.0) million.

[3]	Proforma normalized operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of $8.4 million related to the Commercial Business in the Food and Commercial segment that would have been recorded had the business been continuously classified as held and used for the three months ended September 30, 2018.

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[4]

The nine months ended September 30, 2019 excluded items consists of $837.8 million impairment charges, primarily related to tradenames; $97.3 million of acquisition amortization costs; $62.4 million of restructuring and restructuring-related charges; $39.7 million of cumulative depreciation and amortization catch-up related to the inclusion of the Commercial Business in continuing operations; $17.5 million of transaction related costs and $16.6 million related to Argentina hyperinflationary adjustment, legal fees related to certain proceedings and a product recall.

[5]	The nine months ended September 30, 2018 excluded items consists of $8.2 billion of impairment charges for goodwill and tradenames; $99.8 million of acquisition amortization costs; $64.3 million of restructuring and restructuring-related charges; $42.2 million of other cost and fire-related losses, net of insurance recovery of $(9.2) million and $20.9 million of transaction related costs.

[6]

Proforma normalized operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of $15.9 million and $14.7 million related to the Commercial Business in the Food and Commercial segment that would have been recorded had the business been continuously classified as held and used for the nine months ended September 30, 2019 and 2018, respectively.

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[1]	“Currency Impact” represents the estimated effect of foreign currency on 2019 projected sales and is calculated as the difference between the 2019 reported sales vs 2019 sales when applying the prior year average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures).

[2]

Divestitures include the exit of a distribution agreement with FireAngel (formerly Sprue Aegis) during the first quarter of 2018, the transition of direct sales to a licensing arrangement for Graco® within the European region entered into during the third quarter of 2018, the removal of specialized writing sales associated with the Bond® brand in anticipation of exiting the business, the planned exit of the distributorship of Uniball® products and, consistent with standard retail practice, net sales from retail stores planned to be closed.

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