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.

In connection with the Company’s decision to retain the Rubbermaid Commercial Products, Rubbermaid Outdoor, Closet, Refuse, Garage and Cleaning businesses (the “Commercial Business”), the Company has realigned its management and segment reporting structure beginning in the third quarter of fiscal 2019. The Company operates and reports financial and operating information in the following four segments: Appliances and Cookware, Food and Commercial, Home and Outdoor Living, and Learning and Development. The Company also provides general corporate services to its segments which will be reported as a non-operating segment, Corporate (see Footnote 17). All prior periods have been reclassified to conform to the current reporting structure.

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 Footnotes 2 and 19). Prior periods have been reclassified to conform with the current presentation.

As part of the Company’s Accelerated Transformation Plan, during 2018, the Company approved a plan to market for sale its Commercial Business. This business had been classified as held for sale in the Company's Condensed Consolidated Balance Sheets and discontinued operations in the Company's Condensed Consolidated Statement of Operations. Due to a change in strategy, management recommended, and the Company’s Board of Directors approved the decision in July 2019 not to continue pursuing the sale of the majority of the Commercial Business. The decision to keep the business was based on the strength of the Rubbermaid Commercial Products brand, its competitive position in a large and growing category, and its track record of cash flow generation, revenue growth and margin expansion. The current management team believes that retaining this business will further enhance the value creation opportunity for the Company. As such, commencing in the third quarter of 2019, the Commercial Business was no longer classified as held for sale in the Company's Condensed Consolidated Balance Sheets nor as discontinued operations in the Company’s Condensed Consolidated Statement of Operations. The Commercial Business is reported in the Food and Commercial segment for all periods presented. At the time of its decision in July 2019, the Company was continuing to explore the possible divestiture of the Quickie® cleaning tools business (“Quickie”), which was formerly part of the same disposal group as the Commercial Business (see Footnote 19).

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 and nine months ended September 30, 2019 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2019.

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.” This new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. 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, including early adoption, that adoption of ASU 2018-15 will have on its consolidated financial statements. The Company is designing processes and the appropriate internal controls to ensure its readiness for adoption. The Company is currently evaluating certain global strategic business decisions within its procurement and sales functions, including engaging software solution implementation partners, which will require the Company to incur costs associated with cloud computing arrangements. At this time, it is too early to determine the amount of costs that would qualify to be capitalized pursuant to ASU 2018-15.

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.

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 transition guidance that includes not to reassess historical lease classification, and 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, related to operating leases in continuing operations, as of January 1, 2019, resulted in the recognition of right of use assets of approximately $655 million, lease liabilities of approximately $716 million and a cumulative-effect adjustment to retained deficit of approximately $0.5 million in the Company's 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.

The Company evaluates goodwill for impairment annually at the reporting unit level. The Company also tests for impairment if events and circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying amount. If the carrying amount of the reporting unit is greater than the fair value, impairment will be present. The Company assesses the fair value of each reporting unit for its goodwill impairment test based on a discounted cash flow model. Estimates critical to the Company’s fair value estimates under the discounted cash flow model include projected financial performance and cash flows of the reporting unit, including the impact of the recently enacted tariffs, the discount rate, projected tax rates, long-term sales growth rate, product and overhead costs and the working capital investment required. The Company measures the amount of any goodwill impairment by comparing the fair value to the carrying value of the reporting unit. An impairment charge is recognized to the extent the carrying value of the reporting unit exceeds the fair value.

The Company also tests indefinite-lived intangible assets (primarily trademarks and trade names) for impairment annually. The Company also tests for impairment if events and circumstances indicate that it is more likely than not that the fair value of an indefinite-lived intangible asset is below its carrying amount. Estimates critical to the Company’s evaluation of indefinite-lived intangible assets for impairment include the discount rate, projected tax rates, royalty rates and assumptions on excess earnings, where applicable, used in its evaluation of trade names, projected average revenue growth and projected long-term growth rates in the determination of terminal values. An impairment charge is recorded if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date.

In June 2019, the Company entered into a new factoring agreement with a financial institution to sell certain customer receivables at a more attractive discount rate than its previous cash discount terms offered to these customers (the “Customer Receivables Purchase Agreement”). The Company received approximately $201 million under the new agreement during the second quarter of 2019. The balance of the factored receivables at September 30, 2019 remained substantially unchanged from the balance at June 30, 2019. Transactions under this agreement are accounted for as sales of accounts receivable, and the accounts receivables are removed from the Condensed Consolidated Balance Sheet at the time of the sales transaction. The Company classifies the proceeds received from the sales of accounts receivable as an operating cash flow in the Condensed Consolidated Statement of Cash Flows. The Company records the discount as other expense (income), net in the Condensed Consolidated Statement of Operations.

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 test 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 test. 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 test. 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, which includes the Commercial Business that the Company decided to retain upon Board of Directors’ approval in July 2019 (see Footnote 2).



	As of December 31, 2018
	As Previously Reported		Revision			As Revised		Reclassification			As Reclassified
Assets:
Cash and cash equivalents	$	495.7	$	—		$	495.7	$	—		$	495.7
Accounts receivable, net	1,850.7		—			1,850.7		204.8			2,055.5
Inventories	1,583.1		—			1,583.1		102.0			1,685.1
Prepaid expenses and other current assets	278.0		(2.4		)	275.6		5.1			280.7
Current assets held for sale	3,541.3		(6.1		)	3,535.2		(1,270.3		)	2,264.9
Total current assets	7,748.8		(8.5		)	7,740.3		(958.4		)	6,781.9
Property, plant and equipment, net	925.6		—			925.6		227.9			1,153.5
Goodwill	2,970.2		—			2,970.2		722.7			3,692.9
Other intangible assets, net	5,579.6		—			5,579.6		7.8			5,587.4
Deferred income taxes	165.2		14.5			179.7		—			179.7
Other assets	327.0		—			327.0		—			327.0
Total assets	$	17,716.4	$	6.0		$	17,722.4	$	—		$	17,722.4

Liabilities and Stockholders' Equity:
Accounts payable	1,019.5		—			1,019.5		110.7			1,130.2
Accrued compensation	159.1		—			159.1		7.9			167.0
Other accrued liabilities	1,182.3		(0.8		)	1,181.5		73.2			1,254.7
Short-term debt and current portion of long-term debt	318.7		—			318.7		—			318.7
Current liabilities held for sale	650.4		100.4			750.8		(208.6		)	542.2
Total current liabilities	3,330.0		99.6			3,429.6		(16.8		)	3,412.8
Long-term debt	6,696.3		—			6,696.3		—			6,696.3
Deferred income taxes	1,041.8		(66.7		)	975.1		15.9			991.0
Other noncurrent liabilities	1,370.5		(2.3		)	1,368.2		0.9			1,369.1
Total liabilities	12,438.6		30.6			12,469.2		—			12,469.2
Total stockholders' equity	5,277.8		(24.6		)	5,253.2		—			5,253.2
Total liabilities and stockholders' equity	$	17,716.4	$	6.0		$	17,722.4	$	—		$	17,722.4



	For the year ended December 31, 2018
	As Previously Reported			Revision			As Revised			Reclassification			As Reclassified
Net sales	$	8,630.9		$	—		$	8,630.9		$	1,017.9		$	9,648.8
Cost of products sold	5,622.1			—			5,622.1			670.8			6,292.9
Gross profit	3,008.8			—			3,008.8			347.1			3,355.9
Selling, general and administrative expenses	2,434.8			—			2,434.8			121.1			2,555.9
Restructuring costs, net	80.5			—			80.5			2.6			83.1
Impairment of goodwill, intangibles and other assets	8,322.0			—			8,322.0			1.3			8,323.3
Operating income (loss)	(7,828.5		)	—			(7,828.5		)	222.1			(7,606.4		)
Non-operating expenses:
Interest expense, net	446.3			—			446.3			—			446.3
Loss on extinguishment of debt	4.1			—			4.1			—			4.1
Other (income) expense, net	(11.2		)	—			(11.2		)	0.2			(11.0		)
Income (loss) before income taxes	(8,267.7		)	—			(8,267.7		)	221.9			(8,045.8		)
Income tax expense (benefit)	(1,478.1		)	—			(1,478.1		)	85.3			(1,392.8		)
Income (loss) from continuing operations	(6,789.6		)	—			(6,789.6		)	136.6			(6,653.0		)
Loss from discontinued operations, net of tax	(128.3		)	(24.6		)	(152.9		)	(136.6		)	(289.5		)
Net loss	$	(6,917.9	)	$	(24.6	)	$	(6,942.5	)	$	—		$	(6,942.5	)

Weighted average common shares outstanding:
Basic	473.7			473.7			473.7			473.7			473.7
Diluted	473.7			473.7			473.7			473.7			473.7

Loss per share:
Basic:
Loss from continuing operations	$	(14.33	)	$	—		$	(14.33	)	$	0.29		$	(14.04	)
Loss from discontinued operations	(0.27		)	(0.05		)	(0.32		)	(0.29		)	(0.61		)
Net loss	$	(14.60	)	$	(0.05	)	$	(14.65	)	$	—		$	(14.65	)

Diluted:
Loss from continuing operations	$	(14.33	)	$	—		$	(14.33	)	$	0.29		$	(14.04	)
Loss from discontinued operations	(0.27		)	(0.05		)	(0.32		)	(0.29		)	(0.61		)
Net loss	$	(14.60	)	$	(0.05	)	$	(14.65	)	$	—		$	(14.65	)

The Company concluded the above referenced revisions 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.

At September 30, 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. Prior to the other-than-temporary impairment, FireAngel 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 the Company's 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 nine months ended September 30, 2019. During the second quarter of 2019, the Company participated in FireAngel’s public offering to maintain its equity interest. The Company’s carrying value of its investment in FireAngel was $3.7 million as of September 30, 2019.