Newell Brands Inc. 2018 Annual Report
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Newell Brands Inc. 2018 Annual Report: Annual Report on Form 10-K and Selected Shareholder Information Unless the context indicates otherwise, the terms “Newell Brands,” “Company,” “we” and “our” in this 2018 Annual Report refer to Newell Brands and its subsidiaries. References to a particular year mean the Company’s year commencing on January 1 and ending on December 31 of that year. Table of Contents ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018 EXECUTIVE OFFICERS 16 PERFORMANCE GRAPH 17 BOARD OF DIRECTORS 84 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER DECEMBER 31, 2018 1-9608 NEWELL BRANDS INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 36-3514169 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 221 River Street Hoboken, New Jersey 07030 (Address of principal executive offices) (Zip Code) 5HJLVWUDQW¶VWHOHSKRQHQXPEHULQFOXGLQJDUHDFRGH -6600 Securities registered pursuant to Section 12(b) of the Act: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED Common Stock, $1 par value per share Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ց No տ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes տ No ց Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ց No տ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedd pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ց No տ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be FRQWDLQHGWRWKHEHVWRI5HJLVWUDQW¶VNQRZOHGJHLQGHILQLWLYHSUR[\or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. տ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth FRPSDQ\6HHWKHGHILQLWLRQVRI³ODUJHDFFHOHUDWHGILOHU´³DFFHOHUDWHGILOHU´³VPDOOHUUHSRUWLQJFRPSDQ\´DQG³HPHUJLQJJURZZWKFRPSDQ\´LQ5XOHE-2 of the Exchange Act. Large Accelerated Filer ց Accelerated Filer տ Non-Accelerated Filer տ Smaller Reporting Company տ Emerging Growth Company տ 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. տ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes տ No ց There were 422.8 million shares oIWKH5HJLVWUDQW¶V&RPPRQ6WRFNRXWVWDQGLQJ QHWRIWUHDVXU\VKDUHV DVRI-DQXDU\ 31, 2019. The aggregate market value of the shares of Common Stock (based upon the share count and closing price on the New York Stock Exchange on June 30, 2018) beneficially owned by non-affiliates of the Registrant was approximately $12.5 billion. For purposes of the foregoing calculation only, which is required by Form 10-K, the Registrant has included in the shares owned by affiliates those shares owned by directors and officers of the Registrant, and such inclusion shall not be construed as an admission that any such person is an affiliate for any purpose. * * * DOCUMENTS INCORPORATED BY REFERENCE 3RUWLRQVRIWKH5HJLVWUDQW¶V'HILQLWLYH3UR[\6WDWHPHQWIRULWV$QQXDO0eeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. TABLE OF CONTENTS PART I 1 ITEM 1. BUSINESS 1 ITEM 1A. RISK FACTORS 4 ITEM 1B. UNRESOLVED STAFF COMMENTS 15 ITEM 2. PROPERTIES 15 ITEM 3. LEGAL PROCEEDINGS 15 ITEM 4. MINE SAFETY DISCLOSURES 16 SUPPLEMENTARY ITEM ² EXECUTIVE OFFICERS OF THE REGISTRANT 16 PART II 17 ,7(00$5.(7)255(*,675$17¶6&20021(48,7<5(/$7('672&.+2/'(5 MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 17 ITEM 6. SELECTED FINANCIAL DATA 18 ,7(00$1$*(0(17¶6',6&866,21$1'$1$/<6,62)),1$1&,$/&21',7,21$1' RESULTS OF OPERATIONS 20 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 38 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 40 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 82 ITEM 9A. CONTROLS AND PROCEDURES 82 ITEM 9B. OTHER INFORMATION 84 PART III 84 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 84 ITEM 11. EXECUTIVE COMPENSATION 84 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 84 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 85 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 85 PART IV 85 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 85 ITEM 16. FORM 10-K SUMMARY 92 SIGNATURES 93 i PART I ITEM 1. BUSINESS ³1HZHOO%UDQGV´RUWKH³&RPSDQ\´UHIHUVWR1HZHOO%UDQGV,QFDORQHRUZLWKLWVZKROO\RZQHGVXEVLGLDULHVDVWKHFRQWH[WUHTuires. :KHQWKLVUHSRUWXVHVWKHZRUGV³ZH´³XV´RU³RXU´LWUHIHUVWRWKH&RPSDQ\DQGLWVVXEVLGLDULHVXQOHVVWKHFRQWH[WRWKHUZise UHTXLUHV7KH&RPSDQ\ZDVIRXQGHGLQ2JGHQVEXUJ1HZ<RUNLQDQGLVLQFRUSRUDWHGLQ'HODZDUH7KH&RPSDQ\¶VSULQFLSDO H[HFXWLYHRIILFHLVORFDWHGDW5LYHU6WUHHW+RERNHQ1HZ-HUVH\DQGWKH&RPSDQ\¶VWHOHSKRQHQXPEHULV-610-6600. Website Access to Securities and Exchange Commission Reports The Company makes available free of charge on or through its website its annual reports on Form 10-K, quarterly reports on Formm 10- Q, current reports on Form 8-K, and amendments to those reports filed or furnished puursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the U.S. Securities and ([FKDQJH&RPPLVVLRQ ³6(&´ 7KH&RPSDQ\¶V,QWHUQHWZHEVLWe can be found at www.newellbrands.com. The information on the &RPSDQ\¶VZHEsite is not incorporated by reference into this annual report on Form 10-K. GENERAL Newell Brands is a global marketer of consumer and commercial products that make life better every day, where they live, learn, work and play. Our products are marketed under a strong portfolio of leading brands, including Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®(OPHU¶V®, Coleman®, Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert® and Yankee Candle®. The Company sells its products in nearly 200 countries around the world and has operations on the ground in nearly 100 of these countries. STRATEGIC INITIATIVES In 2018, Newell Brands announced its Accelerated Transformation Plan, which aims to accelerate value creation and more rapidly WUDQVIRUPWKHSRUWIROLRWRRQH EHVWSRVLWLRQHGWROHYHUDJHWKH&RPSDQ\¶VDGYDQWDJHGFDSDELOLWLHVLQLQQRYDWLRQGHVLJQDQGH- commerce. The Accelerated Transformation Plan is designed to significantly increase shareholder value through both strengthened operational and financial performance and deleveraging the balance sheet, while simultaneously returning capital to shareholders. As parWRIWKH&RPSDQ\¶V$FFHOHUDWHG7UDQVIRUPDWLRQ3ODQGXULQJWKH&RPSDQ\DQQRXQFHGLWZDVH[SORULQJVWUDWHJLFRSWLRQV IRULWVLQGXVWULDODQGFRPPHUFLDOSURGXFWDVVHWVLQFOXGLQJ7KH:DGGLQJWRQ*URXS ³:DGGLQJWRQ´ 3URFHVV6ROXWLRQV5XEEHUPDLd Commercial Products, Rexair and Mapa businesses, as well as non-core consumer businesses, including the Rawlings, Jostens, Pure Fishing, Rubbermaid Outdoor, Closet, Refuse and Garage, Goody Products and U.S. Playing Cards businesses. These businesses are classified as discontinued operations at December 31, 2018. Prior periods have been reclassified to conform with the current SUHVHQWDWLRQ'XULQJWKH&RPSDQ\VROG*RRG\3URGXFWV,QF ³*RRG\´ -RVWHQV,QF ³-RVWHQV´ 3XUH)LVKLQJ,QF ³3ure )LVKLQJ´ WKH5DZOLQJV6SRUWLQJ*RRGV&RPSDQ\,QF ³5DZOLQJV´ DQG:DGGLQJWRQ*URXS,QFDQGYDULRXVUHODWHGVXEVLGLDULHVDV part of the Accelerated Transformation Plan. The Company expects to complete the remaining divestitures by the end of 2019. Organizationalg Structure ,QRUGHUWRDOLJQUHSRUWLQJZLWKWKH&RPSDQ\¶V$FFHOHUDWHG7UDQVIRUPDWLRQ3ODQHIIHFWLYH-XQHWKH&RPSDQ\LVUHSRUting its financial results in four segments as Food and Appliances, Home and Outdoor Living, Learning and Development and Other. This new structure reflects the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of resources. All prior periods have been reclassified to conform to the current reporting structure. 1 7KH&RPSDQ\¶VWKUHHSULPDU\RSHUDWLQJVHJPHQWVDUHDVIROORZV Segment Key Brands Descrippytion of Primary Products Food and Appliances Ball®, Calphalon®, Crock-Pot®, FoodSaver®, Household products, including kitchen appliances, Mr. Coffee®, Oster®, Rubbermaid®, Sistema® and gourmet cookware, bakeware and cutlery, food Sunbeam® storage and home storage products and fresh