OREANDA-NEWS. Newell Brands Inc. (NYSE: NWL) announced its first quarter 2016 financial results today.

“We are extremely pleased with our growth and financial results this quarter,” said Newell Brands Chief Executive Officer Michael Polk. “The Newell playbook, which couples increased innovation activity together with increased brand investment, delivered 5.6 percent core sales growth as we continue to win market share, particularly in our fastest growing channels. Simultaneously, we increased operating margins and drove over eleven percent normalized EPS growth. Importantly, our performance was broad-based with core sales growth in all five business segments and in all four regions."

“We delivered these strong results while completing the most transformative transaction in our history. The new Newell Brands more than doubles our size in key strategic retailers, channels and geographies. We expect scale to enable accelerated growth over time through broadened channel cross-sell, accelerated international deployment and strengthened category leadership as we extend the best capabilities from both companies across the full portfolio. Our growth acceleration will be fueled by working to make the new company leaner and more efficient and by focusing our investments on the businesses with the greatest potential. We expect to unlock the financial capacity for growth and margin development through delivery of at least $500 million in cost synergies and $300 million in Project Renewal savings over the next three to four years. We remain fully committed and are on track to reach our target leverage ratio of 3.0 to 3.5 times within two to three years. With the transaction now complete, we have begun our work and are energized by this unique opportunity to create extraordinary value for our shareholders through the creation of Newell Brands.”

First Quarter 2016 Operating Results

Core sales grew 5.6 percent, with growth in all five segments and all four regions.

Net sales grew 4.0 percent to $1.31 billion compared with $1.26 billion in the prior year. Net sales benefited from a 240 basis point net contribution from acquisitions and planned and completed divestitures, but were adversely affected by a 230 basis point negative impact from foreign currency and a 170 basis point negative impact from the deconsolidation of Venezuelan operations as of December 31, 2015.

Normalized gross margin was 38.6 percent, a 20 basis point decline versus prior year, as the negative impact of foreign currency, mix from the deconsolidation of Venezuela, and mix from acquisitions was only partially offset by the benefits of productivity, input cost deflation and pricing.

Reported gross margin was 38.5 percent compared with 38.6 percent in the prior year.

First quarter normalized operating margin increased 100 basis points to 13.1 percent of sales, despite a 40 basis point increase in advertising and promotion investment. Normalized operating income increased 12.6 percent to $171.8 million compared with $152.6 million in the prior year.

Reported operating margin increased 170 basis points to 9.5 percent of sales. Operating income increased 27.7 percent to $125.4 million compared with $98.2 million in the prior year.

The normalized tax rate was 27.2 percent, unchanged from the prior year. The reported tax rate for the quarter was 21.9 percent, compared with 27.9 percent in the prior year.

Normalized net income increased 11.0 percent to $107.7 million compared with $97.0 million in the prior year. Normalized diluted earnings per share increased 11.1 percent to $0.40 compared with $0.36 in the prior year. The improvement in normalized diluted earnings per share was attributable to increased core sales, strong operating margin improvement as a result of reduced overhead expenses and the positive impact of fewer outstanding shares, which more than offset an increase in advertising and promotion support, negative foreign currency impact and the absence of income from Venezuelan operations.

Reported net income decreased 25.1 percent to $40.5 million compared with $54.1 million in the prior year. Reported diluted earnings per share decreased 25.0 percent to $0.15 compared with $0.20 in the prior year. In addition to the factors cited in the explanation of normalized diluted earnings per share, reported diluted earnings per share were negatively impacted by $49.9 million in interest expense and other acquisition-related costs incurred prior to the closing of the Jarden acquisition offset by lower restructuring and other Project Renewal costs.

Operating cash flow was a use of $270.9 million compared with a use of $154.3 million in the prior year period, reflecting a $58.0 million tax payment associated with the gain on the sale of Endicia, a $92.1 million payment associated with pre-issuance interest rate hedge positions taken in advance of the company’s recent $8 billion public debt placement, $12.0 million of payments for acquisition and integration related fees and $31.8 million in higher management incentive payments for strong 2015 performance, which were partially offset by the absence of the prior year voluntary pension contribution of $70 million.

A reconciliation of the “as reported” results to “normalized” results is included in the appendix.

First Quarter 2016 Operating Segment Results

Writing net sales increased 10.8 percent to $378.8 million, with strong core sales growth and the benefit of the Elmer’s acquisition partially offset by the deconsolidation of Venezuelan operations and negative impact of foreign currency. Writing core sales increased 8.8 percent, driven by double-digit core growth in North America and Latin America attributable to strong innovation, including the North American launch of Paper Mate InkJoy Gel Pens, increased advertising and promotion support and pricing. Normalized operating income was $86.2 million compared with $83.0 million in the prior year. Normalized operating margin was 22.8 percent compared with 24.3 percent in the prior year as pricing, productivity and cost management were more than offset by increased advertising and promotion spending and the negative mix impact of both the deconsolidation of Venezuela and the Elmer’s acquisition.

Home Solutions net sales increased 2.1 percent to $372.1 million. Core sales increased 3.6 percent, attributable to continued strong Beverage growth and the introduction of Rubbermaid FreshWorks and Rubbermaid Fasten&Go, partially offset by continued contraction of the lower margin Rubbermaid Consumer Storage business. Normalized operating income was $38.0 million versus $38.6 million in the prior year. Normalized operating margin was 10.2 percent of sales compared to 10.6 percent in the prior year as the positive mix effect of Rubbermaid Food Storage and input cost deflation were more than offset by higher advertising and promotion expenses to support new product launches.

Tools net sales declined 0.4 percent to $179.7 million, driven by a 440 basis point negative impact due to foreign currency. Core sales grew 4.0 percent with strong growth in North America, Europe and Asia Pacific partially offset by continued weakness in Brazil. Normalized operating income was $19.4 million versus $22.2 million in the prior year. Normalized operating margin was 10.8 percent of sales compared with 12.3 percent of sales in the prior year. The normalized operating margin contraction was primarily driven by continuing growth- and negative foreign currency- related challenges in Brazil partially offset by productivity and pricing.

Commercial Products net sales declined 5.8 percent to $174.5 million, driven by the divestiture of the Rubbermaid medical cart business in August 2015 and the negative impact of foreign currency. Core sales increased 0.9 percent due primarily to good growth in EMEA offset by timing-related declines in North America. Normalized operating income was $22.6 million compared to $17.6 million in the prior year. Normalized operating margin was 13.0 percent of sales compared with 9.5 percent of sales in the prior year. The increase in normalized operating margin reflects the benefits of productivity, pricing and input cost deflation.

Baby & Parenting net sales increased 9.2 percent to $209.8 million. Core sales grew 9.3 percent, driven by strong car seat and mobility innovation by Graco, Aprica and Baby Jogger. Normalized operating income was $23.1 million compared to $12.3 million in the prior year. Normalized operating margin was 11.0 percent of sales compared with 6.4 percent of sales in the prior year. The normalized operating margin improvement was due to strong volume growth, the positive product mix effect of Baby Jogger and Aprica growth and the timing of advertising and promotion spending in support of innovation.

Outlook for the Twelve Months Ending December 31, 2016

Newell Brands provided 2016 full year core sales growth and normalized EPS guidance metrics to reflect the Jarden transaction that was completed on April 15, 2016. The company currently projects financial metrics as follows:

         
       

2016 Full Year Guidance
         
Core sales growth       3.0% to 4.0%
         
Normalized EPS       $2.75 to $2.90
         

As of April 15, 2016, Newell Brands core sales will include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015. Core sales excludes the impact of foreign currency, all acquisitions until their first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela), but includes the negative impact of planned product line exits. The company’s core sales growth guidance assumes legacy Newell Rubbermaid core sales growth of 4 to 5 percent and legacy Jarden core sales growth of 2 to 4 percent, which includes the negative impact of planned product line exits. Jarden core sales growth of 2 to 4 percent is roughly in line with Jarden’s pre-transaction long term “organic growth” target of 3 to 5 percent. Newell Brands expects to exit product lines with annual sales of $250 million to $300 million across both legacy businesses over the next two to three years.

For the full year 2016, Newell Brands expects normalized EPS of $2.75 to $2.90 assuming a 2016 weighted average diluted share count of approximately 430 million shares. The company’s normalized EPS guidance range assumes a share count for Newell Brands of approximately 497 million shares from April 15, 2016 onward, which given the transaction completion date will result in Newell Brands 2016 full year weighted average diluted share count of approximately 430 million shares. Beginning with the second quarter of 2016, the company will exclude the amortization of intangible assets associated with acquisitions (including the Jarden acquisition) from its calculation of normalized EPS. The company expects the effective tax rate for 2016 to be 29 to 30 percent.

 

About Newell Brands

Newell Brands (NYSE: NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Jostens®, Marmot®, Rawlings®, Irwin®, Lenox®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert®, Waddington and Yankee Candle®. Driven by a sharp focus on the consumer, leading investment in innovation and brands, and a performance-driven culture, Newell Brands helps consumers achieve more where they live, learn, work and play.

 
Newell Brands Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
 
 
                     
        Three Months Ended March 31,      
                    YOY
        2016     2015     % Change
                     
Net sales       $ 1,314.9       $ 1,264.0       4.0 %
Cost of products sold         809.3         776.5        
                     
GROSS MARGIN         505.6         487.5       3.7 %
% of sales         38.5 %       38.6 %      
                     

Selling, general & administrative expenses

         362.5         362.0       0.1 %
% of sales         27.6 %       28.6 %      
                     
Restructuring costs         17.7         27.3        
                     
OPERATING INCOME         125.4         98.2       27.7 %
% of sales         9.5 %       7.8 %      
                     
Nonoperating expenses:                    
Interest expense, net         29.4         19.2        
Loss on termination of credit facility         45.9         -        
Other (income) expense, net         (1.5 )       0.1        
          73.8         19.3       282.4 %
                     
INCOME BEFORE INCOME TAXES         51.6         78.9       (34.6 )%
% of sales         3.9 %       6.2 %      
                     
Income taxes         11.3         22.0       (48.6 )%
Effective rate         21.9 %       27.9 %      
                     
NET INCOME FROM CONTINUING OPERATIONS         40.3         56.9       (29.2 )%
% of sales         3.1 %       4.5 %      
                     
Income (loss) from discontinued operations, net of tax         0.2         (2.8 )      
                     
NET INCOME       $ 40.5       $ 54.1       (25.1 )%
          3.1 %       4.3 %      
                     
EARNINGS PER SHARE:                    
Basic                    
Income from continuing operations       $ 0.15       $ 0.21        
Income (loss) from discontinued operations       $ -       $ (0.01 )      
Net income       $ 0.15       $ 0.20        
                     
Diluted                    
Income from continuing operations       $ 0.15       $ 0.21        
Income (loss) from discontinued operations       $ -       $ (0.01 )      
Net income       $ 0.15       $ 0.20        
                     
AVERAGE SHARES OUTSTANDING:                    
Basic         268.7         270.5        
Diluted         270.1         272.7        
                             
 
Newell Brands Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
 
        March 31,     March 31,
Assets:       2016     2015
               
Cash and cash equivalents       $ 8,180.9     $ 215.4
Accounts receivable, net         1,187.7       1,053.2
Inventories, net         875.2       852.3
Prepaid expenses and other         146.0       179.2
Assets held for sale         102.8       -
               
Total Current Assets         10,492.6       2,300.1
               
Property, plant and equipment, net         624.5       563.3
Goodwill         2,801.6       2,474.6
Other intangible assets, net         1,085.9       877.2
Other assets         331.9       268.7
               
Total Assets       $ 15,336.5     $ 6,483.9
               
Liabilities and Stockholders' Equity:              
               
Accounts payable       $ 660.8     $ 615.6
Accrued compensation         98.7       99.8
Other accrued liabilities         613.2       586.3
Short-term debt         762.8       733.9
Current portion of long-term debt         5.9       6.5
Liabilities held for sale         44.7       -
               
Total Current Liabilities         2,186.1       2,042.1
               
Long-term debt         10,619.1      

2,078.7
Deferred income taxes         203.9       127.9
Other noncurrent liabilities         548.7       536.2
               
Stockholders' Equity - Parent         1,775.2       1,695.5
Stockholders' Equity - Noncontrolling Interests         3.5       3.5
               
Total Stockholders' Equity         1,778.7       1,699.0
               
Total Liabilities and Stockholders' Equity       $ 15,336.5     $

6,483.9
               
 
Newell Brands Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
 
        Three Months Ended March 31,
        2016     2015
Operating Activities:              
Net income       $ 40.5       $ 54.1  
Adjustments to reconcile net income to net cash used in operating activities:              
Depreciation and amortization         42.8         42.2  
Net gain from sale of discontinued operations, including impairments         (0.9 )       -  
Loss on termination of credit facility         45.9         -  
Non-cash restructuring costs         0.3         -  
Deferred income taxes         7.0         17.9  
Stock-based compensation expense         9.9         6.8  
Other, net         4.8         5.5  
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:              
Accounts receivable         69.7         170.0  
Inventories         (141.5 )       (164.8 )
Accounts payable         11.1         (38.7 )
Accrued liabilities and other         (360.5 )       (247.3 )
Net cash used in operating activities       $ (270.9 )     $ (154.3 )
               
Investing Activities:              
Proceeds from sale of discontinued operations and noncurrent assets       $ 2.6       $ 4.0  
Acquisitions and acquisition-related activity         (21.0 )       (2.0 )
Capital expenditures         (51.6 )       (50.9 )
Other         -         (0.2 )
Net cash used in investing activities       $ (70.0 )     $ (49.1 )
               
Financing Activities:              
Net short-term borrowings       $ 378.7       $ 343.4  
Proceeds from issuance of debt, net of debt issuance costs         7,931.2         -  
Repurchase and retirement of shares of common stock         -         (73.6 )
Cash dividends         (53.3 )       (53.2 )
Excess tax benefits related to stock-based compensation         9.5         15.2  
Equity compensation activity and other         (18.0 )       (13.6 )
Net cash provided by financing activities       $ 8,248.1       $ 218.2  
               
Currency rate effect on cash and cash equivalents       $ (1.1 )     $ 1.2  
               
Increase in cash and cash equivalents       $ 7,906.1       $ 16.0  
Cash and cash equivalents at beginning of period         274.8         199.4  
Cash and cash equivalents at end of period       $ 8,180.9       $ 215.4  
               
 
Newell Brands Inc.
Financial Worksheet - Segment Reporting
(In Millions)
 
        2016     2015      
              Reconciliation (1,2,3)                 Reconciliation (1,2,4,5)           Year-over-year changes
              Reported     Excluded     Normalized     Operating           Reported     Excluded     Normalized     Operating     Net Sales     Normalized OI
        Net Sales     OI     Items     OI     Margin     Net Sales     OI     Items     OI     Margin     $     %     $     %
Q1:                                                                                      
Writing       $ 378.8     $ 83.8       $ 2.4     $ 86.2       22.8 %     $ 341.8     $ 82.4       $ 0.6     $ 83.0       24.3 %     $ 37.0       10.8 %     $ 3.2       3.9 %
Home Solutions         372.1       36.1         1.9       38.0       10.2 %       364.5       38.5         0.1       38.6       10.6 %       7.6       2.1 %       (0.6 )     (1.6 )%
Tools         179.7       18.7         0.7       19.4       10.8 %       180.4       22.2         -       22.2       12.3 %       (0.7 )     (0.4 )%       (2.8 )     (12.6 )%
Commercial Products         174.5       22.4         0.2       22.6       13.0 %       185.2       17.0         0.6       17.6       9.5 %       (10.7 )     (5.8 )%       5.0       28.4 %
Baby & Parenting         209.8       23.1         -       23.1       11.0 %       192.1       0.5         11.8       12.3       6.4 %       17.7       9.2 %       10.8       87.8 %
Restructuring Costs         -       (17.7 )       17.7       -               -       (27.3 )       27.3       -               -               -        
Corporate         -       (41.0 )       23.5       (17.5 )             -       (35.1 )       14.0       (21.1 )             -               3.6       17.1 %
Total       $ 1,314.9     $ 125.4       $ 46.4     $ 171.8       13.1 %     $ 1,264.0     $ 98.2       $ 54.4     $ 152.6       12.1 %     $ 50.9       4.0 %     $ 19.2       12.6 %
                                                                                       

(1) Excluded items include project-related costs and restructuring costs associated with Project Renewal. Project-related costs of $15.0 million and $11.1 million of restructuring costs incurred during 2016 relate to Project Renewal. For 2015, project-related costs of $14.9 million and restructuring costs of $27.3 million relate to Project Renewal.

(2) Normalized operating income for 2016 excludes $6.6 million of integration-related restructuring costs associated with Ignite Holdings, LLC and Elmer's. Normalized operating income also excludes $12.7 million of acquisition and integration costs primarily associated with Jarden. Home Solutions normalized operating income for 2015 excludes $0.1 million of acquisition and integration costs associated with the acquisitions of Ignite Holdings, LLC and bubba brands, and Baby & Parenting normalized operating income for 2015 excludes $1.6 million of costs associated with the acquisition of Baby Jogger.

(3) Home Solutions normalized operating income for 2016 excludes $1.0 million of costs associated with the planned divestiture of D?cor.

(4) Baby & Parenting normalized operating income for 2015 excludes charges of $10.2 million relating to the Graco product recall.

(5) Writing normalized operating income for 2015 excludes charges of $0.3 million associated with Venezuelan inventory resulting from changes in the exchange rate for the Venezuelan Bolivar.

 
Newell Brands Inc.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
CERTAIN LINE ITEMS
(in millions, except per share data)
 
        Three Months Ended March 31, 2016
        GAAP Measure     Project Renewal Costs (1)           Acquisition           Non-GAAP Measure      
              Advisory     Personnel     Other     Restructuring     Divestiture     and integration     Discontinued           Percentage      
        Reported     costs     costs     costs     costs     costs (2)     costs (3)     operations (4)     Normalized*     of Sales      
                                                                     
Cost of products sold       $ 809.3     $ (0.2 )     $ (1.5 )     $ (0.4 )     $ -       $ -       $ -       $ -       $ 807.2       61.4 %      
                                                                     
Gross margin       $ 505.6     $ 0.2       $ 1.5       $ 0.4       $ -       $ -       $ -       $ -       $ 507.7       38.6 %      
                                                                     
Selling, general & administrative expenses       $ 362.5     $ (5.1 )     $ (6.1 )     $ (1.7 )     $ -       $ (1.0 )     $ (12.7 )     $ -       $ 335.9       25.5 %      
                                                                     
Operating income       $ 125.4     $ 5.3       $ 7.6       $ 2.1       $ 11.1       $ 1.0       $ 19.3       $ -       $ 171.8       13.1 %      
                                                                     
Non-operating expenses       $ 73.8     $ -       $ -       $ -       $ -       $ -       $ (49.9 )     $ -       $ 23.9            
                                                                     
Income before income taxes       $ 51.6     $ 5.3       $ 7.6       $ 2.1       $ 11.1       $ 1.0       $ 69.2       $ -       $ 147.9            
                                                                     
Income taxes (7)       $ 11.3     $ 1.5       $ 2.2       $ 0.6       $ 4.2       $ 0.3       $ 20.1       $ -       $ 40.2            
                                                                     
Net income from continuing operations       $ 40.3     $ 3.8       $ 5.4       $ 1.5       $ 6.9       $ 0.7       $ 49.1       $ -       $ 107.7            
                                                                     
Net income       $ 40.5     $ 3.8       $ 5.4       $ 1.5       $ 6.9       $ 0.7       $ 49.1       $ (0.2 )     $ 107.7            
                                                                     
Diluted earnings per share**       $ 0.15     $ 0.01       $ 0.02       $ 0.01       $ 0.03       $ 0.00       $ 0.18       $ (0.00 )     $ 0.40            
                                                                     
                                                                     
        Three Months Ended March 31, 2015
        GAAP Measure           Project Renewal Costs (1)     Inventory charge from     Acquisition           Non-GAAP Measure
              Product     Advisory     Personnel     Other     Restructuring     the devaluation of the     and integration     Discontinued           Percentage
        Reported     recall costs (5)     costs     costs     costs     costs     Venezuelan Bolivar (6)     costs (3)     operations (4)     Normalized*     of Sales
                                                                     
Cost of products sold       $ 776.5     $ -       $ -       $ (0.2 )     $ (1.0 )     $ -       $ (0.3 )     $ (1.5 )     $ -     $ 773.5       61.2 %
                                                                     
Gross margin       $ 487.5     $ -       $ -       $ 0.2       $ 1.0       $ -       $ 0.3       $ 1.5       $ -     $ 490.5       38.8 %
                                                                     
Selling, general & administrative expenses       $ 362.0     $ (10.2 )     $ (10.6 )     $ (2.3 )     $ (0.8 )     $ -       $ -       $ (0.2 )     $ -     $ 337.9       26.7 %
                                                                     
Operating income       $ 98.2     $ 10.2       $ 10.6       $ 2.5       $ 1.8       $ 27.3       $ 0.3       $ 1.7       $ -     $ 152.6       12.1 %
                                                                     
Income before income taxes       $ 78.9     $ 10.2       $ 10.6       $ 2.5       $ 1.8       $ 27.3       $ 0.3       $ 1.7       $ -     $ 133.3        
                                                                     
Income taxes (7)       $ 22.0     $ 3.3       $ 3.4       $ 0.8       $ 0.6       $ 5.5       $ 0.1       $ 0.6       $ -     $ 36.3        
                                                                     
Net income from continuing operations       $ 56.9     $ 6.9       $ 7.2       $ 1.7       $ 1.2       $ 21.8       $ 0.2       $ 1.1       $ -     $ 97.0        
                                                                     
Net income       $ 54.1     $ 6.9       $ 7.2       $ 1.7       $ 1.2       $ 21.8       $ 0.2       $ 1.1       $ 2.8     $ 97.0        
                                                                     
Diluted earnings per share**       $ 0.20     $ 0.03       $ 0.03       $ 0.01       $ 0.00       $ 0.08       $ 0.00       $ 0.00       $ 0.01     $ 0.36        
                .                                                        

* 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.

**Totals may not add due to rounding.

(1) Costs associated with Project Renewal during the three months ended March 31, 2016 include $15.0 million of project-related costs and $11.1 million of restructuring costs. Project-related costs include advisory and consultancy costs, compensation and related costs of personnel dedicated to transformation projects, and other project-related costs. Costs associated with Project Renewal during the three months ended March 31, 2015 include $14.9 million of project-related costs and $27.3 million of restructuring costs.

(2) During the three months ended March 31, 2016, the Company recognized $1.0 million of costs associated with the planned divestiture of D?cor.

(3) During the three months ended March 31, 2016, the Company incurred $19.3 million of costs (including $6.6 million of restructuring costs) associated with the acquisition and integration of Elmer's, Ignite Holdings, LLC, and Jarden. In addition, the Company recognized a $45.9 million loss associated with the termination of the Jarden Bridge Facility and $4.0 million of interest costs associated with borrowing arrangements for the Jarden transaction. During the three months ended March 31, 2015, the Company incurred $1.7 million of acquisition and integration costs associated with the acquisitions of Ignite Holdings, bubba brands and Baby Jogger.

(4) During the three months ended March 31, 2016, the Company recognized net income of $0.2 million in discontinued operations. During the three months ended March 31, 2015, the Company recognized a net loss of $2.8 million in discontinued operations, which primarily relates to the results of operations of Endicia and certain Culinary businesses.

(5) During the three months ended March 31, 2015, the Company recognized costs of $10.2 million associated with the Graco product recall.

(6) During the three months ended March 31, 2015, the Company recognized an increase of $0.3 million in cost of products sold resulting from increased costs of inventory due to changes in the exchange rate for the Venezuelan Bolivar.

(7) 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.

 
Newell Brands Inc.
Three Months Ended March 31, 2016
In Millions
                                                                                                                     
Currency Analysis                                                                                                                    
                                                                                                                     
                                                                                                                     
By Segment                                                                                                                    
         
        Net Sales, As Reported     Core

Sales (1)

          

Year-Over-Year

                        
                                Less                       Less           Constant     Inc. (Dec.) Excl.          

Increase (Decrease)

                        
                    Increase           Planned     Less     2016           Planned     2015     Currency     Planned Divest. &     Currency     Excluding     Including     Currency           Planned     Core Sales
        2016     2015     (Decrease)     2016     Divestitures (2)     Acquisitions     Core Sales     2015     Divestitures (2)     Core Sales     Inc. (Dec.)     Acquisitions     Impact     Currency     Currency     Impact     Acquisitions     Divestitures (2)     Growth (1)
                                                                                                                     
Writing       $ 378.8     $ 341.8     $ 37.0       $ 387.8     $ -     $ 44.9     $ 342.9     $ 336.0     $ 20.9     $ 315.1     $ 51.8       $ 27.8     $ (14.8 )     15.4 %     10.8 %     (4.6 )%     13.4 %     (6.8 )%     8.8 %
Home Solutions         372.1       364.5       7.6         374.6       74.6       -       300.0       363.6       74.1       289.5       11.0         10.5       (3.4 )     3.0 %     2.1 %     (0.9 )%     0.0 %     (0.6 )%     3.6 %
Tools         179.7       180.4       (0.7 )       183.6       -       -       183.6       176.6       -       176.6       7.0         7.0       (7.7 )     4.0 %     (0.4 )%     (4.4 )%     0.0 %     0.0 %     4.0 %
Commercial Products         174.5       185.2       (10.7 )       176.0       -       -       176.0       184.2       9.8       174.4       (8.2 )       1.6       (2.5 )     (4.5 )%     (5.8 )%     (1.3 )%     0.0 %     (5.4 )%     0.9 %
Baby & Parenting         209.8       192.1       17.7         209.2       -       -       209.2       191.4       -       191.4       17.8         17.8       (0.1 )     9.3 %     9.2 %     (0.1 )%     0.0 %     0.0 %     9.3 %
                                                                                                                     
Total Company       $ 1,314.9     $ 1,264.0     $ 50.9       $ 1,331.2     $ 74.6     $ 44.9     $ 1,211.7     $ 1,251.8     $ 104.8     $ 1,147.0     $ 79.4       $ 64.7     $ (28.5 )     6.3 %     4.0 %     (2.3 )%     3.6 %     (2.9 )%     5.6 %
                                                                                                                     
Win Bigger Businesses Core Sales Growth (3)       $ 708.7     $ 700.9     $ 7.8       $ 721.9     $ -     $ -     $ 721.9     $ 692.1     $ 20.2     $ 671.9     $ 29.8       $ 50.0     $ (22.0 )     4.3 %     1.1 %     (3.2 )%     0.0 %     (3.1 )%     7.4 %
                                                                                                                     
                                                                                                                     
By Geography                                                                                                                    
                                                                                                                     
United States       $ 995.9     $ 917.2     $ 78.7       $ 995.9     $ 73.1     $ 41.1     $ 881.7     $ 917.2     $ 81.0     $ 836.2     $ 78.7       $ 45.5     $ -       8.6 %     8.6 %     0.0 %     4.5 %     (1.3 )%     5.4 %
Canada         48.2       46.2       2.0         52.4       1.5       3.8       47.1       44.8       2.9       41.9       7.6         5.2       (5.6 )     17.0 %     4.3 %     (12.7 )%     8.5 %     (3.9 )%     12.4 %
Total North America         1,044.1       963.4       80.7         1,048.3       74.6       44.9       928.8       962.0       83.9       878.1       86.3         50.7       (5.6 )     9.0 %     8.4 %     (0.6 )%     4.7 %     (1.5 )%     5.8 %
                                                                                                                     
Europe, Middle East and Africa         127.6       127.6       -         129.6       -       -       129.6       125.1       -       125.1       4.5         4.5       (4.5 )     3.6 %     0.0 %     (3.6 )%     0.0 %     0.0 %     3.6 %
Latin America         55.8       89.4       (33.6 )       65.3       -       -       65.3       82.8       20.9       61.9       (17.5 )       3.4       (16.1 )     (21.1 )%     (37.6 )%     (16.5 )%     0.0 %     (26.6 )%     5.5 %
Asia Pacific         87.4       83.6       3.8         88.0       -       -       88.0       81.9       -       81.9       6.1         6.1       (2.3 )     7.4 %     4.5 %     (2.9 )%     0.0 %     (0.0 )%     7.4 %
Total International         270.8       300.6       (29.8 )       282.9       -       -       282.9       289.8       20.9       268.9       (6.9 )       14.0       (22.9 )     (2.4 )%     (9.9 )%     (7.5 )%     0.0 %     (7.6 )%     5.2 %
                                                                                                                     
Total Company       $ 1,314.9     $ 1,264.0     $ 50.9       $ 1,331.2     $ 74.6     $ 44.9     $ 1,211.7     $ 1,251.8     $ 104.8     $ 1,147.0     $ 79.4       $ 64.7     $ (28.5 )     6.3 %     4.0 %     (2.3 )%     3.6 %     (2.9 )%     5.6 %
                                                                                                                     

(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2015, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact". Core Sales Growth excludes the impact of currency, acquisitions and planned and actual divestitures from the period the intent to divest is determined through the date of sale.

(2) Actual and planned divestitures represent the Rubbermaid medical cart business, which the Company divested in August 2015; the Levolor and Kirsch window coverings brands ("D?cor"), which the Company plans to divest in 2016; and, the Company's Venezuela operations, which the Company deconsolidated as of December 31, 2015.

(3) Win Bigger businesses include Writing & Creative Expression, which is included in the Writing segment, Tools, Commercial Products (excluding Medical) and Food & Beverage, which is included in the Home Solutions segment.

       
Legacy Newell Rubbermaid      
Twelve Months Ended December 31, 2015
In Millions
                                                                                                                     
                                                                                                                     
        Net Sales, As Reported     Core

Sales (1)

          

Year-Over-Year

                        
                                Less                       Less           Constant     Inc. (Dec.) Excl.          

Increase (Decrease)

                        
                    Increase           Planned     Less     2015           Planned     2014     Currency     Planned Divest. &     Currency     Excluding     Including     Currency           Planned     Core Sales
        2015     2014     (Decrease)     2015     Divestitures (2)     Acquisitions     Core Sales     2014     Divestitures (2)     Core Sales     Inc. (Dec.)     Acquisitions     Impact     Currency     Currency     Impact     Acquisitions     Divestitures (2)     Growth (1)
                                                                                                                     
Total Company       $ 5,915.7     $ 5,727.0     $ 188.7     $ 6,255.8     $ 178.1     $ 272.1     $ 5,805.6     $ 5,736.1     $ 233.1     $ 5,503.0     $ 519.7     $ 302.6     $ (331.0 )     9.1 %     3.3 %     (5.8 )%     4.7 %     (1.1 )%     5.5 %
                                                                                                                     
Total Company excl. Venezuela       $ 5,787.1     $ 5,648.5     $ 138.6     $ 6,082.0     $ 178.1     $ 272.1     $ 5,631.8     $ 5,654.9     $ 233.1     $ 5,421.8     $ 427.1     $ 210.0     $ (288.5 )     7.6 %     2.5 %     (5.1 )%     4.8 %     (1.1 )%     3.9 %
                                                                                                                     

(1) "Core Sales" is determined by applying a fixed exchange rate, calculated as the 12-month average in 2014, to the current and prior year local currency sales amounts, with the difference between the change in "As Reported" sales and the change in "Core Sales" reported in the table as "Currency Impact". Core Sales Growth excludes the impact of currency, acquisitions and planned and actual divestitures from the period the intent to divest is determined through the date of sale.

(2) Actual and planned divestitures represent the Rubbermaid medical cart business on a year-to-date basis and Levolor and Kirsch window coverings brands ("D?cor") for the third quarter and fourth quarter.

 
Newell Brands Inc.
Reconciliation of Normalized EPS Guidance
December 31, 2016
         
        Year Ending
        December 31, 2016
Diluted earnings per share       $ 1.45       to     $ 1.60  
Project Renewal and Project Lean restructuring and other costs       $ 0.35       to     $ 0.45  
Integration costs to drive synergies       $ 0.10       to     $ 0.15  
Estimated gain on sale of D?cor       $ (0.25 )     to     $ (0.35 )
Jarden transaction-related costs       $ 0.20       to     $ 0.30  
Acquisition-related amortization* and inventory step-up       $ 0.75       to     $ 0.95  
Normalized earnings per share       $ 2.75       to     $ 2.90  

* Represents amortization of acquisition-related intangibles beginning in the second quarter of 2016.

 
Newell Brands Inc.
Reconciliation of Core Sales Growth
Year Ending December 31, 2016
 
        Year Ending
        December 31, 2016
Core Sales Growth, pro forma (1)       3.0 %     to     4.0 %
Currency       (1.0 %)     to     (2.0 %)
Acquisitions, net of divestitures (2)       6.0 %     to     7.0 %
Venezuela deconsolidation             (1.0 %)      
Net Sales Growth, pro forma (1)       7.0 %     to     8.0 %
                     

(1) Pro forma as if the Jarden transaction was completed in April 2015.

(2) Acquisitions, net of divestitures represents estimated sales of The Waddington Group, Inc., Jostens, Inc. and Elmer's Products, Inc. until the one year anniversary of their respective dates of acquisition, net of the impacts of the divestiture of the Rubbermaid medical cart business in August 2015 and the planned divestiture of the Levolor and Kirsch window coverings brands ("Decor") in 2016.