Item 2.05. Costs Associated with Exit or Disposal Activities
On January 17, 2023, Newell Brands Inc. (the "Company") committed to a
restructuring and savings initiative, referred to as Project Phoenix, that is
intended to strengthen the Company by leveraging its scale to further reduce
complexity, streamlining its operating model and driving operational
efficiencies (the "Plan"). The Plan is expected to be substantially implemented
by the end of 2023 and incorporates a variety of initiatives designed to
simplify the organizational structure, streamline the Company's real estate
portfolio, centralize the Company's supply chain functions, which include
manufacturing, distribution, transportation and customer service, transition to
a unified One Newell go-to-market model in key international geographies, and
otherwise reduce overhead costs. As part of the Plan, the Company will be
consolidating five operating segments into three operating segments. The
previously reported Commercial Solutions, Home Appliances and Home Solutions
segments will be consolidated into one operating segment, Home & Commercial
Solutions. Learning & Development and Outdoor & Recreation will remain as the
Company's other two operating segments. The Company will report on this basis
for reporting periods commencing January 1, 2023.
The Plan is expected to result in the elimination of approximately 13% of the
Company's current office positions. The Company expects to realize annual
pre-tax cost savings of $220 to $250 million, including headcount savings, real
estate savings and other bought cost reductions, in connection with the Plan
when it is fully implemented. The Company will begin reducing headcount in the
first quarter 2023, with most of these actions expected to be completed by the
end of 2023. Decisions regarding the elimination of positions as well as the
timing of separations are subject to local law and consultation requirements in
certain countries, as well as the Company's business needs.
The Company estimates that it will incur approximately $100 million to
$130 million in restructuring and restructuring-related charges in connection
with the Plan, substantially all of which are expected to be incurred by the end
of fiscal 2023. These charges consist primarily of $80 million to $105 million
in charges related to cash severance payments and other termination benefits;
$15 million to $20 million in charges associated with office space reductions;
and approximately $5 million of other charges, including those associated with
employee transition and legal costs. Of the aggregate amount of charges that the
Company estimates it will incur in connection with the Plan, the Company expects
that approximately $95 million to $120 million will be in cash expenditures.
The estimates of the charges and expenditures that the Company expects to incur
in connection with the Plan, and the timing thereof, are subject to a number of
assumptions, including local law requirements in various jurisdictions, and
actual amounts may differ materially from estimates.
In addition, the Company may incur other charges or cash expenditures not
currently contemplated due to unanticipated events that may occur, including in
connection with the implementation of the Plan.
The Company issued a press release on January 23, 2023 regarding the Plan, a
copy of which is attached hereto as Exhibit 99.1 and incorporated by reference
herein.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements, including,
but not limited to, statements related to the expected savings and other
benefits of the Plan, the timing of completion of the Plan, and the expected
costs, cash expenditures and charges of the Plan within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based upon the Company's current plans, assumptions, beliefs, and
expectations. Forward-looking statements are subject to the occurrence of many
events outside of the Company's control. Actual results and the timing of events
may differ materially from those contemplated by such forward-looking statements
due to numerous factors that involve substantial known and unknown risks and
uncertainties. These risks and uncertainties include, among other things, the
risks and uncertainties included in the Company's reports on Forms 10-K, 10-Q
and 8-K and in other filings the Company makes with the U.S. Securities and
Exchange Commission from time to time, available at www.sec.gov. Forward-looking
statements should be considered in light of these risks and uncertainties.
Investors and others are cautioned not to place undue reliance on
forward-looking statements. All forward-looking statements contained herein
speak only as of the date hereof. The Company assumes no obligation and does not
intend to update these forward-looking statements, except as required by law.
Item 9.01 Exhibits.
(d) Exhibits
99.1 Press Release, dated January 23, 2023
104 Cover Page Interactive Data File- (formatted as Inline XBRL)
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
NEWELL BRANDS INC. 
