XML 26 R8.htm IDEA: XBRL DOCUMENT
v3.19.1

Basis of Presentation and Significant Accounting Policies | 3 Months Ended
--- | ---
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Description of Business and Significant Accounting Policies | Footnote 1 — Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of Newell Brands Inc. (formerly, Newell Rubbermaid Inc., and collectively with its subsidiaries, the “Company”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the financial position and the results of operations of the Company. It is recommended that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements, and the footnotes thereto, included in the Company’s most recent Annual Report on Form 10-K. The condensed consolidated balance sheet as of December 31, 2018, has been derived from the audited financial statements as of that date, but it does not include all the information and footnotes required by U.S. GAAP for complete financial statements. Certain reclassifications have been made in the Company’s financial statements of the prior year to conform to the current year presentation. Discontinued Operations During 2018, the Company implemented the Accelerated Transformation Plan, which was designed in part, to rationalize the organization and its portfolio of products. Pursuant to the Accelerated Transformation Plan, a number of the Company’s businesses were designated for disposal. These businesses have been classified as discontinued operations as these businesses together represent a strategic shift that has a major effect on the Company’s operations and financial results (see Footnote 2). Prior periods have been reclassified to conform with the current presentation. Seasonal Variations Sales of the Company’s products tend to be seasonal, with sales, operating income and operating cash flow in the first quarter generally lower than any other quarter during the year, driven principally by reduced volume and the mix of products sold in the first quarter. The seasonality of the Company’s sales volume combined with the accounting for fixed costs, such as depreciation, amortization, rent, personnel costs and interest expense, impacts the Company’s results on a quarterly basis. In addition, the Company tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers. Accordingly, the Company’s results of operations for the three months ended March 31, 2019 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2019. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. ASU 2018-15 may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently assessing the impact that adoption of ASU 2018-15 will have on the consolidated financial statements . In August 2018, the FASB issued ASU 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU 2018-14 modifies disclosure requirements for defined benefit pension and other postretirement plans. ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and early adoption is permitted. Since ASU 2018-14 only impacts the disclosure requirements related to defined benefit pension and other postretirement plans, the adoption of ASU 2018-14 will not have a material impact on the Company’s consolidated financial statements. Adoption of New Accounting Guidance The Company’s accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our 2018 Annual Report on Form 10-K. Such significant accounting policies are applicable for periods prior to the adoption of the following new accounting standards. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ,” which requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The Company adopted ASU 2016-02 prospectively starting on January 1, 2019. As part of the adoption, the Company elected the package of practical expedients permitted under the transaction guidance that includes not to reassess historical lease classification, not to recognize short-term leases on our balance sheet, nor separate lease and non-lease components for all its leases. In addition, the Company used hindsight to determine the lease term and applied its incremental borrowing rate based on the remaining term of the lease as of the adoption date. The impact upon adoption, as of January 1, 2019, related to operating leases in continuing operations resulted in the recognition of right-of-use assets of approximately $ 629 million, lease liabilities of approximately $ 687 million and a cumulative-effect adjustment on retained deficit of approximately $ 0.5 million on its condensed consolidated balance sheet. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 amends existing guidance to better align an entity’s risk management activities and financial reporting for hedging relationships. ASU 2017-12 also expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. The adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements. Revisions of Previously Issued Financial Statements During the first quarter of 2019, the Company identified that it did not utilize an accurate estimate of fair value and expected form of sale in its fourth quarter 2018 impairment assessment for one of its five disposal groups classified as held for sale. The Company did not appropriately account for the disposal group as a stock sale. Consequently, certain income tax account balances (primarily related to deferred tax liabilities) were not classified as assets and liabilities held for sale in the Company’s Consolidated Balance Sheet as of December 31, 2018. As a result, the Company determined its book-over-tax outside basis differences and measured the tax effects of such difference, which resulted in an income tax expense of approximately $12.6 million. In addition, the Company did not use an accurate estimate of fair value in its 2018 impairment assessment. Collectively, the estimate of fair value and expected form of sale resulted in adjustments to the estimated fair value and carrying value of the held for sale business utilized in the Company’s 2018 impairment assessment. These changes resulted in an additional impairment charge of approximately $12.0 million to write-down the carrying value of the net assets of the held for sale business to its estimated fair value at December 31, 2018. In addition, as part of the presentation of discontinued operations, the Company periodically has to reclassify the prior period presentation to conform to the current year presentation. These adjustments are reflected in the Reclassification column below. The following table presents the effect to the Company’s previously reported Consolidated Balance Sheet at December 31, 2018 and Consolidated Statement of Operations for the year ended December 31, 2018:
|  | As of December 31, 2018 |
|  | As Previously Reported |  |  | Revision |  |  | Reclassification |  |  | As Revised |
Prepaid expenses and other |  | $ | 278.0 |  |  | $ | (2.4 | ) |  | $ | — |  |  | $ | 275.6 |
Current assets held for sale |  |  | 3,541.3 |  |  |  | (6.1 | ) |  |  | — |  |  |  | 3,535.2 |
Total current assets |  |  | 7,748.8 |  |  |  | (8.5 | ) |  |  | — |  |  |  | 7,740.3 |
Deferred income taxes (noncurrent assets) |  |  | 165.2 |  |  |  | 14.5 |  |  |  | — |  |  |  | 179.7 |
Total assets |  |  | 17,716.4 |  |  |  | 6.0 |  |  |  | — |  |  |  | 17,722.4 |
Other accrued liabilities |  |  | 1,182.3 |  |  |  | (0.8 | ) |  |  | (0.9 | ) |  |  | 1,180.6 |
Current liabilities held for sale |  |  | 650.4 |  |  |  | 100.4 |  |  |  | (16.7 | ) |  |  | 734.1 |
Total current liabilities |  |  | 3,330.0 |  |  |  | 99.6 |  |  |  | (17.6 | ) |  |  | 3,412.0 |
Deferred income taxes (liabilities) |  |  | 1,041.8 |  |  |  | (66.7 | ) |  |  | 17.6 |  |  |  | 992.7 |
Other noncurrent liabilities |  |  | 1,370.5 |  |  |  | (2.3 | ) |  |  | — |  |  |  | 1,368.2 |
Total liabilities |  |  | 12,438.6 |  |  |  | 30.6 |  |  |  | — |  |  |  | 12,469.2 |
Retained deficit |  |  | (2,486.7 | ) |  |  | (24.6 | ) |  |  | — |  |  |  | (2,511.3 | )
Stockholders’ equity attributable to parent |  |  | 5,243.0 |  |  |  | (24.6 | ) |  |  | — |  |  |  | 5,218.4 |
Total stockholders’ equity |  |  | 5,277.8 |  |  |  | (24.6 | ) |  |  | — |  |  |  | 5,253.2 |
Total liabilities and stockholders’ equity |  |  | 17,716.4 |  |  |  | 6.0 |  |  |  | — |  |  |  | 17,722.4 |
|  | For the year ended December 31, 2018 |
Income Statement Classification |  | As Previously Reported |  |  | Revision |  |  | As Revised |
Income (loss) from discontinued operations, net of tax |  | $ | (128.3 | ) |  | $ | (24.6 | ) |  | $ | (152.9 | )
Net income (loss) |  |  | (6,917.9 | ) |  |  | (24.6 | ) |  |  | (6,942.5 | )
Earnings per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations |  | $ | (14.33 | ) |  | $ | — |  |  | $ | (14.33 | )
Income (loss) from discontinued operations |  |  | (0.27 | ) |  |  | (0.05 | ) |  |  | (0.32 | )
Net income (loss) |  | $ | (14.60 | ) |  | $ | (0.05 | ) |  | $ | (14.65 | )
Diluted: |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations |  | $ | (14.33 | ) |  | $ | — |  |  | $ | (14.33 | )
Income (loss) from discontinued operations |  |  | (0.27 | ) |  |  | (0.05 | ) |  |  | (0.32 | )
Net income (loss) |  | $ | (14.60 | ) |  | $ | (0.05 | ) |  | $ | (14.65 | )
The Company concluded the above referenced effects were not material to its previously issued Consolidated Statement of Operations for the year ended December 31, 2018 and Consolidated Balance Sheet as of December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2019. As such, the Company will revise its Consolidated Statement of Operations, Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Cash Flows and Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2018 and Consolidated Balance Sheet at December 31, 2018 in the Company’s 2019 Annual Report on Form 10-K. The adjustments will not result in a change to net cash provided by operating activities in the Company’s Consolidated Statement of Cash Flows for the year ending December 31, 2018. In addition, the Company has revised the Condensed Consolidated Balance Sheet at December 31, 2018 for the above adjustments including the effects to the Company’s retained deficit and total stockholders’ equity within this Quarterly Report on Form 10-Q. Other Items At March 31, 2019, the Company held a 23.4% investment in FireAngel Safety Technology Group PLC (formerly known as Sprue Aegis PLC) (“FireAngel”), which the Company accounts for under the equity method of accounting. During the three months ended March 31, 2019, the Company recorded an other-than-temporary-impairment of approximately $11.7 million which reduced the carrying value of its investment in FireAngel to $2.9 million. FireAngel has experienced a decline in its share price. In addition, during March of 2019, FireAngel publicly disclosed its intentions to raise capital through a public offering at a price per share below our investment’s basis. The Company concluded these facts were indicative of an other-than-temporary-impairment and recorded the charge within other expense (income), net in the Condensed Consolidated Statement of Operations for the three-months ending March 31, 2019. During the three months ended March 31, 2018, the Company’s related party sales to FireAngel were $7.5 million. On March 31, 2018, the Company terminated its distribution agreement with FireAngel.

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration