|
DELAWARE
|
36-3514169
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
R
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net sales
|
$
|
1,232.2
|
|
|
$
|
1,240.8
|
|
Cost of products sold
|
762.9
|
|
|
767.2
|
|
||
GROSS MARGIN
|
469.3
|
|
|
473.6
|
|
||
Selling, general and administrative expenses
|
352.1
|
|
|
341.4
|
|
||
Restructuring costs
|
12.0
|
|
|
34.4
|
|
||
OPERATING INCOME
|
105.2
|
|
|
97.8
|
|
||
Nonoperating expenses:
|
|
|
|
||||
Interest expense, net
|
14.4
|
|
|
14.6
|
|
||
Other expense, net
|
40.0
|
|
|
13.0
|
|
||
Net nonoperating expenses
|
54.4
|
|
|
27.6
|
|
||
INCOME BEFORE INCOME TAXES
|
50.8
|
|
|
70.2
|
|
||
Income tax (benefit) expense
|
(1.3
|
)
|
|
6.4
|
|
||
INCOME FROM CONTINUING OPERATIONS
|
52.1
|
|
|
63.8
|
|
||
Income (loss) from discontinued operations, net of tax
|
0.8
|
|
|
(9.6
|
)
|
||
NET INCOME
|
$
|
52.9
|
|
|
$
|
54.2
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
280.9
|
|
|
290.0
|
|
||
Diluted
|
283.8
|
|
|
293.1
|
|
||
Earnings per share:
|
|
|
|
||||
Basic:
|
|
|
|
||||
Income from continuing operations
|
$
|
0.19
|
|
|
$
|
0.22
|
|
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
Net income
|
$
|
0.19
|
|
|
$
|
0.19
|
|
Diluted:
|
|
|
|
||||
Income from continuing operations
|
$
|
0.18
|
|
|
$
|
0.22
|
|
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
Net income
|
$
|
0.19
|
|
|
$
|
0.19
|
|
Dividends per share
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
NET INCOME
|
$
|
52.9
|
|
|
$
|
54.2
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
5.9
|
|
|
(35.3
|
)
|
||
Change in unrecognized pension and other postretirement costs
|
2.8
|
|
|
12.6
|
|
||
Derivative hedging gain
|
0.8
|
|
|
0.7
|
|
||
Total other comprehensive income (loss), net of tax
|
9.5
|
|
|
(22.0
|
)
|
||
|
|
|
|
||||
COMPREHENSIVE INCOME
(1)
|
$
|
62.4
|
|
|
$
|
32.2
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
136.8
|
|
|
$
|
226.3
|
|
Accounts receivable, net
|
973.1
|
|
|
1,105.1
|
|
||
Inventories, net
|
801.3
|
|
|
684.4
|
|
||
Deferred income taxes
|
121.3
|
|
|
134.4
|
|
||
Prepaid expenses and other
|
198.8
|
|
|
135.4
|
|
||
TOTAL CURRENT ASSETS
|
2,231.3
|
|
|
2,285.6
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
541.3
|
|
|
539.6
|
|
||
GOODWILL
|
2,362.0
|
|
|
2,361.1
|
|
||
OTHER INTANGIBLE ASSETS, NET
|
606.5
|
|
|
614.5
|
|
||
OTHER ASSETS
|
252.8
|
|
|
268.9
|
|
||
TOTAL ASSETS
|
$
|
5,993.9
|
|
|
$
|
6,069.7
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
542.8
|
|
|
$
|
558.9
|
|
Accrued compensation
|
99.6
|
|
|
167.3
|
|
||
Other accrued liabilities
|
590.9
|
|
|
703.5
|
|
||
Short-term debt
|
318.7
|
|
|
174.0
|
|
||
Current portion of long-term debt
|
0.8
|
|
|
0.8
|
|
||
TOTAL CURRENT LIABILITIES
|
1,552.8
|
|
|
1,604.5
|
|
||
LONG-TERM DEBT
|
1,666.7
|
|
|
1,661.6
|
|
||
OTHER NONCURRENT LIABILITIES
|
700.9
|
|
|
728.6
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Preferred stock, authorized shares, 10.0 at $1.00 par value
|
—
|
|
|
—
|
|
||
None issued and outstanding
|
|
|
|
||||
Common stock, authorized shares, 800.0 at $1.00 par value
|
296.0
|
|
|
297.5
|
|
||
Outstanding shares, before treasury:
|
|
|
|
||||
2014 – 296.0
|
|
|
|
||||
2013 – 297.5
|
|
|
|
||||
Treasury stock, at cost:
|
(489.1
|
)
|
|
(477.2
|
)
|
||
Shares held:
|
|
|
|
||||
2014 – 19.3
|
|
|
|
||||
2013 – 18.9
|
|
|
|
||||
Additional paid-in capital
|
686.0
|
|
|
654.3
|
|
||
Retained earnings
|
2,212.8
|
|
|
2,242.1
|
|
||
Accumulated other comprehensive loss
|
(635.7
|
)
|
|
(645.2
|
)
|
||
STOCKHOLDERS’ EQUITY ATTRIBUTABLE TO PARENT
|
2,070.0
|
|
|
2,071.5
|
|
||
STOCKHOLDERS’ EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
3.5
|
|
|
3.5
|
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
2,073.5
|
|
|
2,075.0
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
5,993.9
|
|
|
$
|
6,069.7
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
52.9
|
|
|
$
|
54.2
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
38.1
|
|
|
39.8
|
|
||
Net (gain) loss from sale of discontinued operations, including impairments
|
(2.2
|
)
|
|
12.4
|
|
||
Deferred income taxes
|
14.6
|
|
|
38.9
|
|
||
Non-cash restructuring costs
|
1.0
|
|
|
—
|
|
||
Stock-based compensation expense
|
7.0
|
|
|
9.4
|
|
||
Other, net
|
45.0
|
|
|
8.9
|
|
||
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:
|
|
|
|
||||
Accounts receivable
|
130.5
|
|
|
80.3
|
|
||
Inventories
|
(115.8
|
)
|
|
(123.4
|
)
|
||
Accounts payable
|
(16.1
|
)
|
|
45.1
|
|
||
Accrued liabilities and other
|
(247.1
|
)
|
|
(288.7
|
)
|
||
NET CASH USED IN OPERATING ACTIVITIES
|
(92.1
|
)
|
|
(123.1
|
)
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(31.9
|
)
|
|
(33.6
|
)
|
||
Other
|
(0.3
|
)
|
|
(0.3
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
(32.2
|
)
|
|
(33.9
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Short-term borrowings, net
|
144.9
|
|
|
200.7
|
|
||
Repurchase and retirement of shares of common stock
|
(44.4
|
)
|
|
(33.8
|
)
|
||
Cash dividends
|
(42.9
|
)
|
|
(44.5
|
)
|
||
Excess tax benefits related to stock-based compensation
|
5.6
|
|
|
9.1
|
|
||
Other stock-based compensation activity, net
|
10.7
|
|
|
16.6
|
|
||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
73.9
|
|
|
148.1
|
|
||
Currency rate effect on cash and cash equivalents
|
(39.1
|
)
|
|
(0.7
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(89.5
|
)
|
|
(9.6
|
)
|
||
Cash and cash equivalents at beginning of period
|
226.3
|
|
|
183.8
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
136.8
|
|
|
$
|
174.2
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net sales
|
$
|
2.1
|
|
|
$
|
69.2
|
|
(Loss) income from discontinued operations before income taxes
|
$
|
(1.1
|
)
|
|
$
|
0.7
|
|
Income tax (benefit) expense
|
(0.4
|
)
|
|
0.3
|
|
||
(Loss) income from discontinued operations
|
(0.7
|
)
|
|
0.4
|
|
||
Net gain (loss) from sales of discontinued operations, including impairments, net of tax
(1)
|
1.5
|
|
|
(10.0
|
)
|
||
Income (loss) from discontinued operations, net of tax
|
$
|
0.8
|
|
|
$
|
(9.6
|
)
|
|
Foreign Currency Translation Loss
(1)
|
|
Unrecognized
Pension & Other
Postretirement
Costs, Net of Tax
|
|
Derivative Hedging (Loss) Gain, Net of Tax
|
|
Accumulated Other
Comprehensive Loss
|
||||||||
Balance at December 31, 2013
|
$
|
(161.5
|
)
|
|
$
|
(483.3
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(645.2
|
)
|
Other comprehensive income (loss) before reclassifications
|
5.9
|
|
|
(1.0
|
)
|
|
1.8
|
|
|
6.7
|
|
||||
Amounts reclassified to earnings
|
—
|
|
|
3.8
|
|
|
(1.0
|
)
|
|
2.8
|
|
||||
Net current period other comprehensive income
|
5.9
|
|
|
2.8
|
|
|
0.8
|
|
|
9.5
|
|
||||
Balance at March 31, 2014
|
$
|
(155.6
|
)
|
|
$
|
(480.5
|
)
|
|
$
|
0.4
|
|
|
$
|
(635.7
|
)
|
|
|
Amount Reclassified to Earnings as Expense (Benefit) in the Statements of Operations
|
|
Affected Line Item in the Condensed Consolidated Statements of Operations
|
||||||
|
|
2014
|
|
2013
|
|
|||||
Unrecognized pension and other postretirement costs:
|
|
|
|
|
|
|
||||
Prior service benefit
|
|
$
|
(1.6
|
)
|
|
$
|
(0.2
|
)
|
|
(1)
|
Actuarial loss
|
|
7.0
|
|
|
8.4
|
|
|
(1)
|
||
Total before tax
|
|
5.4
|
|
|
8.2
|
|
|
|
||
Tax effect
|
|
(1.6
|
)
|
|
(2.7
|
)
|
|
|
||
Net of tax
|
|
$
|
3.8
|
|
|
$
|
5.5
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
||||
Foreign exchange contracts on inventory-related purchases
|
|
$
|
(1.9
|
)
|
|
$
|
(0.5
|
)
|
|
Cost of products sold
|
Forward interest rate swaps
|
|
0.2
|
|
|
0.2
|
|
|
Interest expense, net
|
||
Total before tax
|
|
(1.7
|
)
|
|
(0.3
|
)
|
|
|
||
Tax effect
|
|
0.7
|
|
|
0.1
|
|
|
|
||
Net of tax
|
|
$
|
(1.0
|
)
|
|
$
|
(0.2
|
)
|
|
|
|
Three Months Ended March 31,
|
|
Since Inception Through
|
||||||||
|
2014
|
|
2013
|
|
March 31, 2014
|
||||||
Facility and other exit costs, including impairments
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
14.6
|
|
Employee severance, termination benefits and relocation costs
|
10.9
|
|
|
30.6
|
|
|
151.8
|
|
|||
Exited contractual commitments and other
|
1.4
|
|
|
8.2
|
|
|
29.3
|
|
|||
|
$
|
13.5
|
|
|
$
|
38.8
|
|
|
$
|
195.7
|
|
Restructuring costs-continuing operations
|
$
|
13.5
|
|
|
$
|
38.0
|
|
|
$
|
189.5
|
|
Restructuring costs-discontinued operations
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
6.2
|
|
|
|
December 31, 2013
|
|
|
|
|
|
March 31, 2014
|
||||||||
|
|
Balance
|
|
Provision
|
|
Costs Incurred
|
|
Balance
|
||||||||
Facility and other exit costs, including impairments
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
(1.2
|
)
|
|
$
|
—
|
|
Employee severance, termination benefits and relocation costs
|
|
60.3
|
|
|
10.9
|
|
|
(27.5
|
)
|
|
43.7
|
|
||||
Exited contractual commitments and other
|
|
7.1
|
|
|
1.4
|
|
|
(2.3
|
)
|
|
6.2
|
|
||||
|
|
$
|
67.4
|
|
|
$
|
13.5
|
|
|
$
|
(31.0
|
)
|
|
$
|
49.9
|
|
|
|
December 31, 2013
|
|
|
|
|
|
March 31, 2014
|
||||||||
Segment
|
|
Balance
|
|
Provision
|
|
Costs Incurred
|
|
Balance
|
||||||||
Writing
|
|
$
|
25.8
|
|
|
$
|
0.9
|
|
|
$
|
(4.3
|
)
|
|
$
|
22.4
|
|
Home Solutions
|
|
0.7
|
|
|
0.4
|
|
|
(0.9
|
)
|
|
0.2
|
|
||||
Tools
|
|
0.3
|
|
|
0.9
|
|
|
(1.1
|
)
|
|
0.1
|
|
||||
Commercial Products
|
|
6.8
|
|
|
3.1
|
|
|
(2.1
|
)
|
|
7.8
|
|
||||
Baby & Parenting
|
|
1.4
|
|
|
0.3
|
|
|
(0.9
|
)
|
|
0.8
|
|
||||
Corporate
|
|
32.4
|
|
|
7.9
|
|
|
(21.7
|
)
|
|
18.6
|
|
||||
|
|
$
|
67.4
|
|
|
$
|
13.5
|
|
|
$
|
(31.0
|
)
|
|
$
|
49.9
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Segment
|
|
2014
|
|
2013
|
||||
Writing
|
|
$
|
0.9
|
|
|
$
|
2.6
|
|
Home Solutions
|
|
0.4
|
|
|
2.4
|
|
||
Tools
|
|
0.9
|
|
|
1.4
|
|
||
Commercial Products
|
|
3.1
|
|
|
1.0
|
|
||
Baby & Parenting
|
|
0.3
|
|
|
0.3
|
|
||
Corporate
(1)
|
|
6.4
|
|
|
26.7
|
|
||
|
|
$
|
12.0
|
|
|
$
|
34.4
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Materials and supplies
|
$
|
134.1
|
|
|
$
|
123.5
|
|
Work in process
|
129.0
|
|
|
107.0
|
|
||
Finished products
|
538.2
|
|
|
453.9
|
|
||
|
$
|
801.3
|
|
|
$
|
684.4
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Medium-term notes
|
$
|
1,665.1
|
|
|
$
|
1,659.8
|
|
Commercial paper
|
139.7
|
|
|
95.0
|
|
||
Receivables facility
|
175.0
|
|
|
75.0
|
|
||
Other debt
|
6.4
|
|
|
6.6
|
|
||
Total debt
|
1,986.2
|
|
|
1,836.4
|
|
||
Short-term debt
|
(318.7
|
)
|
|
(174.0
|
)
|
||
Current portion of long-term debt
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Long-term debt
|
$
|
1,666.7
|
|
|
$
|
1,661.6
|
|
|
|
|
|
Assets
|
|
|
|
Liabilities
|
||||||||||||
Derivatives designated as hedging instruments
|
|
Balance Sheet Location
|
|
March 31, 2014
|
|
December 31, 2013
|
|
Balance Sheet Location
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||
Interest rate swaps
|
|
Other assets
|
|
$
|
22.3
|
|
|
$
|
23.1
|
|
|
Other noncurrent liabilities
|
|
$
|
29.4
|
|
|
$
|
35.5
|
|
Foreign exchange contracts on inventory-related purchases
|
|
Prepaid expenses and other
|
|
4.1
|
|
|
2.9
|
|
|
Other accrued liabilities
|
|
1.5
|
|
|
1.2
|
|
||||
Foreign exchange contracts on intercompany borrowings
|
|
Prepaid expenses and other
|
|
0.1
|
|
|
—
|
|
|
Other accrued liabilities
|
|
0.1
|
|
|
0.2
|
|
||||
Total assets
|
|
|
|
$
|
26.5
|
|
|
$
|
26.0
|
|
|
Total liabilities
|
|
$
|
31.0
|
|
|
$
|
36.9
|
|
Derivatives in fair value hedging relationships
|
|
Location of gain (loss)
recognized in income
|
|
Amount of gain (loss) recognized in income
|
||||||
Three Months Ended
|
||||||||||
March 31,
|
||||||||||
2014
|
|
2013
|
||||||||
Interest rate swaps
|
|
Interest expense, net
|
|
$
|
5.3
|
|
|
$
|
(6.6
|
)
|
Fixed-rate debt
|
|
Interest expense, net
|
|
$
|
(5.3
|
)
|
|
$
|
6.6
|
|
Derivatives in cash flow hedging relationships
|
|
Location of gain (loss)
recognized in income
|
|
Amount of gain (loss) reclassified from AOCI into income
|
||||||
Three Months Ended
|
||||||||||
March 31,
|
||||||||||
2014
|
|
2013
|
||||||||
Foreign exchange contracts on inventory-related purchases
|
|
Cost of products sold
|
|
$
|
1.9
|
|
|
$
|
0.5
|
|
Forward interest rate swaps
|
|
Interest expense, net
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||
|
|
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
Derivatives in cash flow hedging relationships
|
|
Amount of gain (loss) recognized in AOCI
|
||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2014
|
|
2013
|
||||||
Foreign exchange contracts on inventory-related purchases
|
|
$
|
2.7
|
|
|
$
|
1.2
|
|
Foreign exchange contracts on intercompany borrowings
|
|
—
|
|
|
2.4
|
|
||
|
|
$
|
2.7
|
|
|
$
|
3.6
|
|
|
U.S.
|
|
International
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Service cost-benefits earned during the period
|
$
|
1.0
|
|
|
$
|
0.7
|
|
|
$
|
1.5
|
|
|
$
|
1.9
|
|
Interest cost on projected benefit obligation
|
11.3
|
|
|
10.0
|
|
|
6.4
|
|
|
6.0
|
|
||||
Expected return on plan assets
|
(14.4
|
)
|
|
(14.7
|
)
|
|
(6.7
|
)
|
|
(5.8
|
)
|
||||
Amortization of prior service cost, actuarial loss and other
|
6.1
|
|
|
7.8
|
|
|
0.8
|
|
|
0.8
|
|
||||
Net periodic pension costs
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
$
|
2.0
|
|
|
$
|
2.9
|
|
|
2014
|
|
2013
|
||||
Service cost-benefits earned during the period
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Interest cost on projected benefit obligation
|
1.2
|
|
|
1.4
|
|
||
Amortization of prior service benefit and actuarial loss, net
|
(1.6
|
)
|
|
(0.4
|
)
|
||
Net other postretirement benefit costs
|
$
|
(0.1
|
)
|
|
$
|
1.3
|
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Numerator for basic and diluted earnings per share:
|
|
|
|
||||
Income from continuing operations
|
$
|
52.1
|
|
|
$
|
63.8
|
|
Income (loss) from discontinued operations
|
0.8
|
|
|
(9.6
|
)
|
||
Net income
|
$
|
52.9
|
|
|
$
|
54.2
|
|
Dividends and equivalents for share-based awards expected to be forfeited
|
—
|
|
|
—
|
|
||
Net income for basic and diluted earnings per share
|
$
|
52.9
|
|
|
$
|
54.2
|
|
Denominator for basic and diluted earnings per share:
|
|
|
|
||||
Weighted-average shares outstanding
|
278.8
|
|
|
287.4
|
|
||
Share-based payment awards classified as participating securities
|
2.1
|
|
|
2.6
|
|
||
Denominator for basic earnings per share
|
280.9
|
|
|
290.0
|
|
||
Dilutive securities
(1)
|
2.9
|
|
|
3.1
|
|
||
Denominator for diluted earnings per share
|
283.8
|
|
|
293.1
|
|
||
Basic earnings per share:
|
|
|
|
||||
Income from continuing operations
|
$
|
0.19
|
|
|
$
|
0.22
|
|
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
Net income
|
$
|
0.19
|
|
|
$
|
0.19
|
|
Diluted earnings per share:
|
|
|
|
||||
Income from continuing operations
|
$
|
0.18
|
|
|
$
|
0.22
|
|
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
Net income
|
$
|
0.19
|
|
|
$
|
0.19
|
|
(1)
|
Dilutive securities include “in the money” options, non-participating restricted stock units and performance stock units. The weighted-average shares outstanding exclude the effect of
0.1 million
and
3.5 million
stock options for the three months ended
March 31,
2014 and 2013, respectively, because such securities were anti-dilutive. The weighted-average shares outstanding for the three months ended
March 31,
2014 and 2013 also exclude the weighted-average effect of
0.6 million
and
0.9 million
performance stock units outstanding, respectively, because the securities were anti-dilutive.
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Exercisable
at Period
End
|
|
Aggregate
Intrinsic
Value
Exercisable
|
||||||
Outstanding at December 31, 2013
|
5.9
|
|
|
$
|
22
|
|
|
5.3
|
|
|
$
|
53.3
|
|
Exercised
|
(0.9
|
)
|
|
22
|
|
|
|
|
|
||||
Forfeited / expired
|
(0.1
|
)
|
|
25
|
|
|
|
|
|
||||
Outstanding at March 31, 2014
|
4.9
|
|
|
$
|
22
|
|
|
4.7
|
|
|
$
|
37.7
|
|
|
Restricted Stock Units
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Outstanding at December 31, 2013
|
4.2
|
|
|
$
|
22
|
|
Granted
|
1.1
|
|
|
33
|
|
|
Vested
|
(0.8
|
)
|
|
21
|
|
|
Forfeited
|
(0.2
|
)
|
|
24
|
|
|
Outstanding at March 31, 2014
|
4.3
|
|
|
$
|
25
|
|
Fair Value as of March 31, 2014
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investment securities, including mutual funds
(1)
|
$
|
11.3
|
|
|
$
|
8.8
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
Interest rate swaps
|
22.3
|
|
|
—
|
|
|
22.3
|
|
|
—
|
|
||||
Foreign currency derivatives
|
4.2
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
||||
Total
|
$
|
37.8
|
|
|
$
|
8.8
|
|
|
$
|
29.0
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
29.4
|
|
|
$
|
—
|
|
|
$
|
29.4
|
|
|
$
|
—
|
|
Foreign currency derivatives
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
||||
Total
|
$
|
31.0
|
|
|
$
|
—
|
|
|
$
|
31.0
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value as of December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investment securities, including mutual funds
(1)
|
$
|
21.3
|
|
|
$
|
8.7
|
|
|
$
|
12.6
|
|
|
$
|
—
|
|
Interest rate swaps
|
23.1
|
|
|
—
|
|
|
23.1
|
|
|
—
|
|
||||
Foreign currency derivatives
|
2.9
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
||||
Total
|
$
|
47.3
|
|
|
$
|
8.7
|
|
|
$
|
38.6
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
35.5
|
|
|
$
|
—
|
|
|
$
|
35.5
|
|
|
$
|
—
|
|
Foreign currency derivatives
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||
Total
|
$
|
36.9
|
|
|
$
|
—
|
|
|
$
|
36.9
|
|
|
$
|
—
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Fair Value
|
|
Book Value
|
|
Fair Value
|
|
Book Value
|
||||||||
Medium-term notes
|
$
|
1,766.0
|
|
|
$
|
1,665.1
|
|
|
$
|
1,753.0
|
|
|
$
|
1,659.8
|
|
Segment
|
|
Key Brands
|
|
Description of Primary Products
|
Writing
|
|
Sharpie
®
, Paper Mate
®
, Expo
®
, Parker
®
, Waterman
®
, Dymo
®
Office, Endicia
®
|
|
Writing instruments, including markers and highlighters, pens and pencils; art products; fine writing instruments; office technology solutions, including labeling and on-line postage solutions
|
Home Solutions
|
|
Rubbermaid
®
, Calphalon
®
, Levolor
®
, Goody
®
|
|
Indoor/outdoor organization, food storage and home storage products; gourmet cookware, bakeware and cutlery; drapery hardware and window treatments; hair care accessories
|
Tools
|
|
Irwin
®
, Lenox
®
, hilmor™, Dymo
®
Industrial,
|
|
Hand tools and power tool accessories; industrial bandsaw blades; tools for pipes and HVAC systems; label makers for industrial use
|
Commercial Products
|
|
Rubbermaid Commercial Products
®
, Rubbermaid
®
Healthcare
|
|
Cleaning and refuse products, hygiene systems, material handling solutions; medical and computer carts and wall-mounted workstations
|
Baby & Parenting
|
|
Graco
®
, Aprica
®
, Teutonia
®
|
|
Infant and juvenile products such as car seats, strollers, highchairs and playards
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net Sales
(1)
|
|
|
|
||||
Writing
|
$
|
361.3
|
|
|
$
|
340.6
|
|
Home Solutions
|
321.2
|
|
|
338.9
|
|
||
Tools
|
187.8
|
|
|
188.6
|
|
||
Commercial Products
|
182.6
|
|
|
183.1
|
|
||
Baby & Parenting
|
179.3
|
|
|
189.6
|
|
||
|
$
|
1,232.2
|
|
|
$
|
1,240.8
|
|
Operating Income (Loss)
(2)
|
|
|
|
||||
Writing
|
$
|
77.1
|
|
|
$
|
63.2
|
|
Home Solutions
|
26.3
|
|
|
34.1
|
|
||
Tools
|
21.4
|
|
|
18.7
|
|
||
Commercial Products
|
13.8
|
|
|
21.6
|
|
||
Baby & Parenting
|
5.4
|
|
|
23.9
|
|
||
Restructuring costs
|
(12.0
|
)
|
|
(34.4
|
)
|
||
Corporate
|
(26.8
|
)
|
|
(29.3
|
)
|
||
|
$
|
105.2
|
|
|
$
|
97.8
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Identifiable Assets
|
|
|
|
||||
Writing
|
$
|
918.6
|
|
|
$
|
931.2
|
|
Home Solutions
|
554.7
|
|
|
559.4
|
|
||
Tools
|
614.0
|
|
|
595.7
|
|
||
Commercial Products
|
336.8
|
|
|
343.3
|
|
||
Baby & Parenting
|
305.3
|
|
|
321.9
|
|
||
Corporate
(3)
|
3,264.5
|
|
|
3,318.2
|
|
||
|
$
|
5,993.9
|
|
|
$
|
6,069.7
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(
in millions
)
|
2014
|
|
2013
|
||||
Net Sales
(1), (4)
|
|
|
|
||||
United States
|
$
|
831.2
|
|
|
$
|
818.9
|
|
Canada
|
53.0
|
|
|
61.8
|
|
||
Total North America
|
884.2
|
|
|
880.7
|
|
||
Europe, Middle East and Africa
|
164.2
|
|
|
167.1
|
|
||
Latin America
|
92.0
|
|
|
93.2
|
|
||
Asia Pacific
|
91.8
|
|
|
99.8
|
|
||
Total International
|
348.0
|
|
|
360.1
|
|
||
|
$
|
1,232.2
|
|
|
$
|
1,240.8
|
|
Operating Income (Loss)
(2), (5)
|
|
|
|
||||
United States
|
$
|
65.9
|
|
|
$
|
81.0
|
|
Canada
|
10.4
|
|
|
10.2
|
|
||
Total North America
|
76.3
|
|
|
91.2
|
|
||
Europe, Middle East and Africa
|
15.1
|
|
|
(14.8
|
)
|
||
Latin America
|
10.8
|
|
|
7.3
|
|
||
Asia Pacific
|
3.0
|
|
|
14.1
|
|
||
Total International
|
28.9
|
|
|
6.6
|
|
||
|
$
|
105.2
|
|
|
$
|
97.8
|
|
(1)
|
All intercompany transactions have been eliminated. Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to approximately
9.9%
and
9.6%
of consolidated net sales in the three months ended March 31, 2014 and 2013, respectively.
|
(2)
|
Operating income (loss) by segment is net sales less cost of products sold and selling, general & administrative (“SG&A”) expenses for continuing operations. Operating income by geographic area is net sales less cost of products sold, SG&A expenses, restructuring costs and impairment charges, if any, for continuing operations. Certain headquarters expenses of an operational nature are allocated to business segments and geographic areas primarily on a net sales basis. Depreciation and amortization is allocated to the segments on a percentage of sales basis, and the allocated depreciation and amortization is included in segment operating income.
|
(3)
|
Corporate assets primarily include goodwill, capitalized software, cash and deferred tax assets.
|
(4)
|
Geographic sales information is based on the region from which the products are shipped and invoiced.
|
(5)
|
The following table summarizes the restructuring costs by region included in operating income (loss) above (
in millions
):
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
Restructuring Costs
|
|
|
|
||||
United States
|
$
|
7.9
|
|
|
$
|
5.7
|
|
Canada
|
0.1
|
|
|
—
|
|
||
Total North America
|
8.0
|
|
|
5.7
|
|
||
Europe, Middle East and Africa
|
2.8
|
|
|
26.2
|
|
||
Latin America
|
0.1
|
|
|
2.5
|
|
||
Asia Pacific
|
1.1
|
|
|
—
|
|
||
Total International
|
4.0
|
|
|
28.7
|
|
||
|
$
|
12.0
|
|
|
$
|
34.4
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Customer accruals
|
$
|
218.8
|
|
|
$
|
292.6
|
|
Accruals for manufacturing, marketing and freight expenses
|
74.0
|
|
|
89.8
|
|
||
Accrued self-insurance liabilities
|
58.4
|
|
|
58.5
|
|
||
Accrued pension, defined contribution and other postretirement benefits
|
29.2
|
|
|
46.5
|
|
||
Accrued contingencies, primarily legal, environmental and warranty
|
38.9
|
|
|
35.0
|
|
||
Accrued restructuring (See Footnote 4)
|
56.5
|
|
|
76.7
|
|
||
Other
|
115.1
|
|
|
104.4
|
|
||
Other accrued liabilities
|
$
|
590.9
|
|
|
$
|
703.5
|
|
•
|
A growing brand-led business with a strong home in the United States and global ambition.
|
•
|
Consumer brands that win at the point of decision through excellence in performance, design and innovation.
|
•
|
Professional brands that win the loyalty of the chooser by improving the productivity and performance of the user.
|
•
|
Collaboration with our partners across the total enterprise in a shared commitment to growth and creating value.
|
•
|
Delivering competitive returns to shareholders through consistent, sustainable and profitable growth.
|
•
|
Win Bigger — Deploying resources to businesses and regions with higher growth opportunities through investments in innovation and geographic expansion.
|
•
|
Win Where We Are — Optimizing the performance of businesses and brands in existing markets by investing in innovation to increase market share and reducing structural spend within the existing geographic footprint.
|
•
|
Incubate For Growth — Investing in businesses that have unique opportunities for growth, with a primary focus on businesses that are in the early stages of the business cycle.
|
•
|
Make Our Brands Really Matter — Sharpening brand strategies on the highest impact growth levers and partnering to win with customers and suppliers.
|
•
|
Build An Execution Powerhouse — Realigning the customer development organization and developing joint business plans for new channel penetration and broader distribution.
|
•
|
Unlock Trapped Capacity For Growth — Delivering savings from ongoing restructuring projects, working capital reductions and simplification of business processes.
|
•
|
Develop The Team For Growth — Driving a performance culture aligned to the business strategy and building a more global perspective and talent base.
|
•
|
Extend Beyond Our Borders — Accelerating investments and growth in emerging markets.
|
Segment
|
|
Key Brands
|
|
Description of Primary Products
|
Writing
|
|
Sharpie
®
, Paper Mate
®
, Expo
®
, Parker
®
, Waterman
®
, Dymo
®
Office, Endicia
®
|
|
Writing instruments, including markers and highlighters, pens and pencils; art products; fine writing instruments; office technology solutions, including labeling and on-line postage solutions
|
Home Solutions
|
|
Rubbermaid
®
, Calphalon
®
, Levolor
®
, Goody
®
|
|
Indoor/outdoor organization, food storage and home storage products; gourmet cookware, bakeware and cutlery; drapery hardware and window treatments; hair care accessories
|
Tools
|
|
Irwin
®
, Lenox
®
, Dymo
®
Industrial, hilmor
™
|
|
Hand tools and power tool accessories; industrial bandsaw blades; tools for pipes and HVAC systems; label makers for industrial use
|
Commercial Products
|
|
Rubbermaid
Commercial
Products
®
, Rubbermaid
®
Healthcare
|
|
Cleaning and refuse products, hygiene systems, material handling solutions; medical and computer carts and wall-mounted workstations
|
Baby & Parenting
|
|
Graco
®
, Aprica
®
, Teutonia
®
|
|
Infant and juvenile products such as car seats, strollers, highchairs and playards
|
•
|
Core sales, which exclude the impact of changes in foreign currency, increased 0.7% in 2014 compared to the same period last year. Core sales growth of 10.0% and 0.9% in Latin America and North America, respectively, were partially offset by declines of 5.1% and 0.3% in Europe and Asia Pacific, respectively. The decline in Europe was due primarily to exiting select product lines and geographies in the European region, primarily in the Baby & Parenting and Fine Writing categories. Core sales is determined by applying a fixed exchange rate, calculated as the 12-month average in 2013, to the current and prior year local currency sales amounts, with the difference equal to changes in core sales, and the difference between the changes in reported sales and the changes in core sales being attributable to currency.
|
•
|
Core sales increased 8.0% in the Writing segment, with strong sales in the Latin America region, driven by the Ink Joy
®
advertising campaign in Mexico, the Caribbean and Colombia, a new distribution model in Brazil, as well as volume increases and pricing in the region, coupled with strong sales performance in North America. Core sales grew 2.4% in the Tools segment driven by pricing and volume growth in North America. Core sales increased 0.2% in the Commercial Products segment, primarily driven by increased volume in Europe, partially offset by a sales decline in North America compared to a record quarter last year in Rubbermaid
®
Healthcare. Core sales decreased 4.5% in the Home Solutions segment as a result of softness in North America, which was largely attributable to severe weather conditions, and the negative effect on volume of less merchandising on certain low margin Rubbermaid Consumer product lines. Baby & Parenting’s core sales decreased 4.4%, primarily due to decreased volume in North America, attributable to the impact of the U.S. recall of harness buckles on select car seats, and the exit of certain product lines in Europe.
|
•
|
Gross margin was 38.1%. Favorable pricing, product mix and productivity offset the effects of input cost inflation, unfavorable transactional currency impacts and costs associated with the recall of harness buckles on select car seats. Gross margin for the first three months of 2014 was adversely impacted by $8.6 million, or 70 basis points, due to the costs of the recall.
|
•
|
During the first three months of 2014, the Company’s investments for brand-building and consumer demand creation and commercialization activities included the following:
|
•
|
a New Distributor Model, building a structure that assigns relationship owners to key distributors, removing redundancies and simplifying the approach with distributors to sell a broader assortment of the Company’s products;
|
•
|
a new line of Sharpie
®
highlighters called Sharpie
®
Clear View highlighters which have a unique, see-through tip for more precise highlighting;
|
•
|
working media in the Baby & Parenting business to support new product development in Japan, along with the Parker “Dreams Cannot be Rushed” campaign in Japan.
|
•
|
Continued the execution of Project Renewal to simplify the business, reduce structural costs and increase investment in the most significant growth platforms within the business by taking significant steps in implementing activities centered around Project Renewal’s five workstreams, resulting in $12.0 million of restructuring costs in the first three months of 2014.
|
•
|
Realized a $38.7 million foreign exchange loss in the first three months of 2014 due to the adoption of the SICAD I rate for the Company’s Venezuelan operations.
|
•
|
Reported a $1.3 million income tax benefit in 2014 compared to $6.4 million of income tax expense in 2013, primarily due to the income tax rate applicable to the $38.7 million foreign exchange loss associated with Venezuela being higher than the Company’s overall effective tax rate. In addition, during 2014, the Company recognized discrete income tax benefits of $8.0 million related to the resolution of certain tax contingencies. During 2013, the Company recognized $13.1 million of tax benefits, including $8.3 million of net tax benefits associated with the recognition of incremental deferred taxes and $4.8 million associated with the resolution of certain tax contingencies.
|
•
|
Expanded and extended the Company’s share repurchase plan (the “SRP”), allowing for total repurchases of $300.0 million between February 2014 and the end of 2016. During the first three months of 2014, the Company repurchased and retired an additional
1.5 million
shares of common stock for
$44.4 million
, leaving $255.6 million available under the SRP for future repurchases.
|
•
|
Completed the restructuring of the Development organization as part of the Organizational Simplification workstream, which includes the consolidation and relocation of its design and innovation capabilities into a new center of excellence - a design center in Kalamazoo, Michigan, and the consolidation of the marketing function into a global center of excellence.
|
•
|
The ongoing implementation of the EMEA Simplification workstream, which includes projects aimed at refocusing the region on profitable growth, including the closure, consolidation and/or relocation of certain manufacturing facilities, distribution centers, customer support and sales and administrative offices. As part of the EMEA Simplification workstream, the Company has exited certain markets and product lines, as follows:
|
•
|
Exit direct sales in over 50 of the 120 countries and territories that the EMEA region serves;
|
•
|
Discontinue the Baby & Parenting business in about 19 countries;
|
•
|
Discontinue several lines of Baby & Parenting products; and
|
•
|
Exit the custom-logo Fine Writing business.
|
•
|
The implementation of the Best Cost Finance workstream by consolidating and realigning its shared services and decision support capabilities.
|
•
|
The continued execution of projects to streamline the three business partnering functions, Human Resources, Finance/IT and Legal, and to align these functions with the new operating structure.
|
•
|
The ongoing reconfiguration and consolidation of the Company’s manufacturing footprint and distribution centers to reduce overhead, improve operational efficiencies and better utilize existing assets, including initiating projects to close a distribution center and a manufacturing facility in North America.
|
|
Three Months Ended March 31,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
Net sales
|
$
|
1,232.2
|
|
|
100.0
|
%
|
|
$
|
1,240.8
|
|
|
100.0
|
%
|
Cost of products sold
|
762.9
|
|
|
61.9
|
|
|
767.2
|
|
|
61.8
|
|
||
Gross margin
|
469.3
|
|
|
38.1
|
|
|
473.6
|
|
|
38.2
|
|
||
Selling, general and administrative expenses
|
352.1
|
|
|
28.6
|
|
|
341.4
|
|
|
27.5
|
|
||
Restructuring costs
|
12.0
|
|
|
1.0
|
|
|
34.4
|
|
|
2.8
|
|
||
Operating income
|
105.2
|
|
|
8.5
|
|
|
97.8
|
|
|
7.9
|
|
||
Nonoperating expenses:
|
|
|
|
|
|
|
|
||||||
Interest expense, net
|
14.4
|
|
|
1.2
|
|
|
14.6
|
|
|
1.2
|
|
||
Other expense, net
|
40.0
|
|
|
3.2
|
|
|
13.0
|
|
|
1.0
|
|
||
Net nonoperating expenses
|
54.4
|
|
|
4.4
|
|
|
27.6
|
|
|
2.2
|
|
||
Income before income taxes
|
50.8
|
|
|
4.1
|
|
|
70.2
|
|
|
5.7
|
|
||
Income tax (benefit) expense
|
(1.3
|
)
|
|
(0.1
|
)
|
|
6.4
|
|
|
0.5
|
|
||
Income from continuing operations
|
52.1
|
|
|
4.2
|
|
|
63.8
|
|
|
5.1
|
|
||
Income (loss) from discontinued operations
|
0.8
|
|
|
0.1
|
|
|
(9.6
|
)
|
|
(0.8
|
)
|
||
Net income
|
$
|
52.9
|
|
|
4.3
|
%
|
|
$
|
54.2
|
|
|
4.4
|
%
|
Core sales
|
$
|
8.2
|
|
|
0.7
|
%
|
Foreign currency
|
(16.8
|
)
|
|
(1.4
|
)
|
|
Total change in net sales
|
$
|
(8.6
|
)
|
|
(0.7
|
)%
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Writing
|
$
|
361.3
|
|
|
$
|
340.6
|
|
|
6.1
|
%
|
Home Solutions
|
321.2
|
|
|
338.9
|
|
|
(5.2
|
)
|
||
Tools
|
187.8
|
|
|
188.6
|
|
|
(0.4
|
)
|
||
Commercial Products
|
182.6
|
|
|
183.1
|
|
|
(0.3
|
)
|
||
Baby & Parenting
|
179.3
|
|
|
189.6
|
|
|
(5.4
|
)
|
||
Total net sales
|
$
|
1,232.2
|
|
|
$
|
1,240.8
|
|
|
(0.7
|
)%
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Writing
|
$
|
77.1
|
|
|
$
|
63.2
|
|
|
22.0
|
%
|
Home Solutions
|
26.3
|
|
|
34.1
|
|
|
(22.9
|
)
|
||
Tools
|
21.4
|
|
|
18.7
|
|
|
14.4
|
|
||
Commercial Products
|
13.8
|
|
|
21.6
|
|
|
(36.1
|
)
|
||
Baby & Parenting
(1)
|
5.4
|
|
|
23.9
|
|
|
(77.4
|
)
|
||
Restructuring costs
|
(12.0
|
)
|
|
(34.4
|
)
|
|
NM
|
|
||
Corporate
(2)
|
(26.8
|
)
|
|
(29.3
|
)
|
|
8.5
|
|
||
Total operating income
|
$
|
105.2
|
|
|
$
|
97.8
|
|
|
7.6
|
%
|
(1)
|
Results for the three months ended March 31, 2014 includes
$11.0 million
of charges relating to the harness buckle recall in the U.S.
|
(2)
|
Includes organizational change implementation and restructuring-related costs of
$7.7 million
and
$6.6 million
associated with Project Renewal for the three months ended March 31, 2014 and 2013, respectively.
|
|
2014
|
|
2013
|
||||
Cash used in operating activities
|
$
|
(92.1
|
)
|
|
$
|
(123.1
|
)
|
Cash used in investing activities
|
(32.2
|
)
|
|
(33.9
|
)
|
||
Cash provided by financing activities
|
73.9
|
|
|
148.1
|
|
||
Currency effect on cash and cash equivalents
|
(39.1
|
)
|
|
(0.7
|
)
|
||
Decrease in cash and cash equivalents
|
$
|
(89.5
|
)
|
|
$
|
(9.6
|
)
|
•
|
a $50.2 million year-over-year increase in collections of accounts receivable due to the timing of sales and collection efforts; and
|
•
|
a $100.0 million contribution to the Company’s primary U.S. pension plan during the first three months of 2013;
|
•
|
a $61.2 million year-over-year decrease in accounts payable;
|
•
|
a $13.9 million increase in cash paid for restructuring activities; and
|
•
|
a $27.7 million increase in customer program payments.
|
|
March 31, 2014
|
|
December 31, 2013
|
|
March 31, 2013
|
|||
Accounts receivable
|
72
|
|
|
68
|
|
|
71
|
|
Inventory
|
96
|
|
|
67
|
|
|
91
|
|
Accounts payable
|
(65
|
)
|
|
(55
|
)
|
|
(64
|
)
|
Cash conversion cycle
|
103
|
|
|
80
|
|
|
98
|
|
•
|
Cash and cash equivalents at
March 31, 2014
were
$136.8 million
, and the Company had
$835.3 million
of total available borrowing capacity under the $800.0 million unsecured syndicated revolving credit facility and $350.0 million receivables financing facility.
|
•
|
Working capital at
March 31, 2014
was
$678.5 million
compared to
$681.1 million
at December 31, 2013, and the current ratio at
March 31, 2014
was
1.44
:1 compared to
1.42
:1 at December 31, 2013.
|
•
|
The Company monitors its overall capitalization by evaluating net debt to total capitalization. Net debt to total capitalization is defined as the sum of short- and long-term debt, less cash, divided by the sum of total debt and stockholders’ equity, less cash. Net debt to total capitalization was
0.47
:1 at
March 31, 2014
and
0.44
:1 at December 31, 2013, as the Company increased its short-term borrowings during the first quarter of 2014 due to seasonal inventory builds and annual cash payments for the paydown of customer accruals and annual incentive compensation.
|
|
2014
|
|
2013
|
||||||||||||
Short-term Borrowing Arrangement
|
Maximum
|
|
Average
|
|
Maximum
|
|
Average
|
||||||||
Commercial paper
|
$
|
152.7
|
|
|
$
|
82.7
|
|
|
$
|
237.5
|
|
|
$
|
118.1
|
|
Receivables financing facility
|
$
|
175.0
|
|
|
$
|
103.9
|
|
|
200.0
|
|
|
200.0
|
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Average outstanding debt
|
$
|
1,862.6
|
|
|
$
|
1,998.7
|
|
Average interest rate
(1)
|
3.2
|
%
|
|
3.0
|
%
|
(1)
|
The average interest rate includes the impacts of outstanding fixed-for-floating interest rate swaps.
|
|
Senior Debt
Credit Rating
|
|
Short-term Debt
Credit Rating
|
|
Outlook
|
|
|
|
|
|
|
Moody’s Investors Service
|
Baa3
|
|
P-3
|
|
Stable
|
Standard & Poor’s
|
BBB-
|
|
A-3
|
|
Positive
|
Fitch Ratings
|
BBB
|
|
F-2
|
|
Positive
|
|
Three Months Ended March 31, 2014
|
||||||||||||||||
|
North America
|
|
Europe, Middle East and Africa
|
|
Latin America
|
|
Asia Pacific
|
|
Total International
|
|
Total Company
|
||||||
Core sales
|
0.9
|
%
|
|
(5.1
|
)%
|
|
10.0
|
%
|
|
(0.3
|
)%
|
|
—
|
%
|
|
0.7
|
%
|
Foreign currency
|
(0.5
|
)
|
|
3.4
|
|
|
(11.3
|
)
|
|
(7.7
|
)
|
|
(3.4
|
)
|
|
(1.4
|
)
|
Total change in net sales
|
0.4
|
%
|
|
(1.7
|
)%
|
|
(1.3
|
)%
|
|
(8.0
|
)%
|
|
(3.4
|
)%
|
|
(0.7
|
)%
|
Calendar Month
|
Total Number of
Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs (1)
|
|
Maximum
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs (1)
|
||||||
January
|
74,968
|
|
(2)
|
$
|
32.29
|
|
|
—
|
|
|
$
|
300,000,000
|
|
February
|
519,665
|
|
(2)
|
31.13
|
|
|
213,000
|
|
|
293,242,051
|
|
||
March
(3)
|
3,232,656
|
|
(2)
|
30.52
|
|
|
3,230,855
|
|
|
255,614,479
|
|
||
Total
|
3,827,289
|
|
|
$
|
30.64
|
|
|
3,443,855
|
|
|
|
(1)
|
In August 2011, the Company announced a $300.0 million share repurchase program (the “SRP”). Under the SRP, the Company may repurchase its own shares of common stock through a combination of a 10b5-1 automatic trading plan, discretionary market purchases or in privately negotiated transactions. In February 2014, the SRP was expanded and extended such that the Company may repurchase up to $300.0 million of its own shares from February 2014 through the end of 2016. Prior to its expansion and extension in February 2014, the Company had repurchased and retired 12.9 million shares for $257.1 million under the SRP. The average per share purchase price for shares purchased under the SRP in
February
and March 2014 were
$31.73
and
$30.32
, respectively.
|
(2)
|
All shares purchased by the Company during the quarter ended March 31, 2014 other than those purchased under the SRP and accelerated stock buyback were acquired to satisfy employees' tax withholding and payment obligations in connection with the vesting of awards of restricted stock units, which are repurchased by the Company based on their fair market value on the vesting date. In
January
,
February
and March 2014, in addition to the shares purchased under the SRP and accelerated stock buyback, the Company purchased
74,968
shares (average price:
$32.29
),
306,665
shares (average price:
$30.72
) and
1,801
shares (average price:
$30.98
), respectively, in connection with vesting of employees’ stock-based awards.
|
(3)
|
In October 2013, the Company entered into a Master Confirmation and a Supplemental Confirmation (collectively, the “ASB”) with Goldman, Sachs & Co. (“Goldman Sachs”) to effect an accelerated stock buyback of the Company’s common stock. Under the ASB, the Company paid Goldman Sachs an initial purchase price of $350.0 million, and Goldman Sachs delivered to the Company 9,430,785 shares of the Company’s common stock based on an initial per share amount of $29.69. The number of shares that the Company ultimately purchased under the ASB was determined based on the average of the daily volume-weighted average share prices of the Company’s common stock over the course of a calculation period. In March 2014, the ASB was completed and Goldman Sachs delivered 1,989,855 shares of the Company’s common stock to the Company based on a per share price of $30.65. Such shares were immediately retired.
|
10.1
|
|
Newell Rubbermaid Inc. Long-Term Incentive Plan for 2014.
|
10.2
|
|
Form of Restricted Stock Unit Agreement under the 2013 Incentive Plan for 2014 Awards.
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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99.1
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Safe Harbor Statement.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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NEWELL RUBBERMAID INC.
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Registrant
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Date:
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May 9, 2014
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/s/ Douglas L. Martin
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Douglas L. Martin
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Executive Vice President and Chief Financial Officer
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Date:
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May 9, 2014
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/s/ John B. Ellis
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John B. Ellis
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Vice President – Corporate Controller and
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Chief Accounting Officer
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(a)
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On or prior to March 31 of each applicable calendar year, the Committee will determine:
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(i)
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For each Key Employee a target value expressed as a percentage of the Key Employee’s base salary rate as in effect on January 1 of that year, which percentage will be based on the Key Employee’s Salary Band as of January 1 of that year (the “Target Value”). For Key Employees hired after December 31 of the prior year that are determined by the Committee to be eligible to receive an LTIP award, the Target Value will be based on their base salary rate at time of hire. Subject to the approval of the Committee, the CEO may recommend changes to the Target Value for Key Employees based on individual performance. With respect to an award to the CEO, the Board of Directors may recommend changes to the Target Value based on individual performance.
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(ii)
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A comparator group of companies for purposes of determining the Company’s relative Total Shareholder Return (“TSR”) for the three-year performance period beginning as of January 1 of the year in which this determination is made (the “TSR Comparator Group”).
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(b)
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Of the Target Value determined for each Key Employee for each year:
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(i)
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Time-Based Restricted Stock Units
. The Committee will authorize a Restricted Stock Unit grant to each Key Employee for a number of shares of Common Stock determined by dividing the following percentage of the applicable Target Value for such Key Employee by the Fair Market Value of a share of Common Stock on the date of grant:
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(ii)
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Performance-Based Restricted Stock Units
. The Committee will authorize a Restricted Stock Unit grant to each Key Employee for a number of shares determined by dividing the following percentage of the applicable Target Value for such Key Employee by the Fair Market Value of a share of Common Stock on the date of grant:
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(c)
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Following the completion of the applicable three-year performance period, the Committee will determine the extent to which the TSR Comparator Group Target has been achieved. The TSR will be calculated based on the following formula:
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1.
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The Performance-Based RSUs covered by the Award will be subject to analysis with respect to the following Total Shareholder Return (“TSR”) Comparator Group members:
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2.
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The Company’s ranking (in the range of highest to lowest) in the TSR Comparator Group at the end of the three-year performance period beginning January 1, 2014, and ending December 31, 2016, will be determined by the Committee on the basis of the following formula applied to each of the members in the TSR Comparator Group (with the highest number ranked first and the lowest number ranked last):
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3.
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The number of Performance-Based RSUs will be
multiplied by
an interpolated percentage attributable to the Company’s ranking in the TSR Comparator Group as set forth below:
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1.
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I have reviewed this report on Form 10-Q for the quarterly period ended
March 31, 2014
of Newell Rubbermaid Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 9, 2014
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/s/ Michael B. Polk
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Michael B. Polk
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Chief Executive Officer
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1.
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I have reviewed this report on Form 10-Q for the quarterly period ended
March 31, 2014
of Newell Rubbermaid Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 9, 2014
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/s/ Douglas L. Martin
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Douglas L. Martin
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Executive Vice President and Chief Financial Officer
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/s/ Michael B. Polk
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Michael B. Polk
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Chief Executive Officer
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May 9, 2014
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/s/ Douglas L. Martin
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Douglas L. Martin
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Executive Vice President and Chief Financial Officer
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May 9, 2014
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•
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difficulties in the separation of operations, services, products and personnel;
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•
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the diversion of management's attention from other business concerns;
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•
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the retention of certain current or future liabilities in order to induce a buyer to complete a divestiture;
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•
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the disruption of the Company’s business; and
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the potential loss of key employees.
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•
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ordering and managing materials from suppliers;
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converting materials to finished products;
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shipping products to customers;
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marketing and selling products to consumers;
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collecting and storing customer, consumer, employee, investor and other stakeholder information and personal data;
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•
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processing transactions;
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summarizing and reporting results of operations;
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hosting, processing and sharing confidential and proprietary research, business plans and financial information;
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complying with regulatory, legal or tax requirements;
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providing data security; and
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handling other processes necessary to manage the Company’s business.
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