Ladies and gentlemen, good morning, and welcome to Newell Brands Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. In order to stay within the time scheduled for the call, please limit yourself to one question during the Q&A section. As a reminder, today’s conference is being recorded. A live webcast of this call is available at newellbrands.com on the Investor Relations homepage under Events and Presentations. I will now turn the call over to Nancy O’Donnell, Senior Vice President of Investor Relations. Ms. O’Donnell, you may begin. Nancy O’Donnell: Thank you. Welcome everyone to Newell Brands fourth quarter conference call. I’m Nancy O’Donnell. And with me today are Mike Polk, our President and Chief Executive Officer; and Chris Peterson, in his debut call as our new Chief Financial Officer. Please recognize that this conference call includes forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially from management’s current expectations and plans. The Company undertakes no obligation to update any such statements made today. If you review our most recent 10-Q filing and our other SEC filings, you will find a more detailed explanation of the risks, uncertainties and inherent limitations in such forward-looking statements. During the call today, we will focus our discussion on non-GAAP financial measures, including those which we refer to as normalized measures. Management believes providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. The comparable GAAP measures and a reconciliation between the two measures can be found in our earnings release tables, as well as on the Investor Relations area of our website and our filings with the SEC. With that, I’ll turn the call over to Mike.

Thanks, Nancy. Good morning, everyone, and thanks for joining the call. I want to start by welcoming Chris Peterson, our new CFO, to his first Newell Brands earning call. Welcome, Chris, and thanks for joining the team. I hope you felt in your first nine weeks here, a warm welcome from all of us at Newell. I’m personally very pleased to have Chris on board, and I look forward to working together to strengthen our operating and financial performance, while simultaneously shaping the future of the Company. Today, I’ll offer a brief perspective on our fourth quarter results, as well as the progress we’re making on our key strategic priorities. Chris will then provide a detailed review of our financial performance and our outlook for 2019 before we open it up for your questions. Let me start by saying that our performance is beginning to turn the corner. And for the second consecutive quarter, we’ve made good progress. We made a series of organization and leadership changes starting in May that have served us well, been right for the organization, and with strong leadership increasingly in key positions and investable teams in place, our progress should accelerate through 2019. Some of our leaders are own grown, like Laurel Hurd in Writing; Rich Wuerthele, in Home Fragrance; Tom Russo, in Connected Home; and David Hammer, in Appliances & Cookware. And some have come to us from the outside, like Chris Peterson, our new CFO, and Mike Donohoe, who runs Outdoor & Rec, having joined us from Kraft Heinz, where he led the flagship cheese and meat business. And Russ Torres, who has driven the [cost] [ph] work over the last couple of years, establishing our new supply chain organization, while simultaneously leading our Baby business through the turbulence of the Toys"R"Us…

Thanks, Mike, and good morning, everyone. I’m pleased to have joined Newell Brands as the Company’s CFO and look forward to connecting with many of you over the coming weeks. Over the past 2.5 months I’ve taken a very aggressive onboarding approach, which included meetings with each of the seven continuing divisions, in Atlanta, Boca Raton and Deerfield, Massachusetts. Visiting key manufacturing plants in Merrillville, Wichita, Mogadore and Juarez, Mexico; visiting distribution centers in Broomfield, Shelbyville, and El Paso, Texas; visiting stores for each of the company’s top 10 retail customers. Investor meetings with the number of both buy and sell-side analysts. Meeting with each member of the Company’s Board of Directors, and finalizing the 2019 budgeting process with each business unit and corporate function. While it’s still early days for me, I’ve come to quickly appreciate both the complexity of the organization as well as the opportunity for significant shareholder value creation over time. At a high level, my initial observations are as follows. The continuing business comprises a leading group of brands with strong market share positions and brand equities in their respective categories, with the right to win relative to subscale competition. A disruptive external business environment in combination with significant organization change within the Company have weighed on the underlying performance with the full potential of the Company yet to be seen. There is an opportunity for operational discipline improvements in areas, including; sales and operations planning, working capital management and IT infrastructure, to name a few. The ultimate goal is to return the Company to consistent and sustainable core sales growth, accompanied by operating margin expansion and improved cash conversion cycle. I’m committed to partnering with Mike and the team to drive improvements in these areas. Moving on to financial results. Net sales from continuing…

Thanks, Chris. We entered 2019 with building confidence, but also a pragmatic view of the complexity of executing such a broad transformation agenda in the turbulent environment. As Chris laid out in his comments, our outlook for 2019 contemplates a couple of key challenges. The tariff impact on margins in the Toys"R"Us impact on our top line. On tariffs, we priced in taking actions through procurement to mitigate some of the negative margin impacts of tariffs, and will complement this with further work on overheads and aggressive complexity reduction. On top line, we prudently guided core sales growth with the negative consequence of Toys"R"Us bankruptcy to our top line in Q1 2019, embed in our outlook. TRU creates an unavoidable 250 basis point headwind for our total company core sales growth in Q1 2019. Despite these challenges, we’re confident in our agenda and our vision for the Company. We have leading brands in large global in growing categories that positively impact hundreds of millions of consumers lives every day where they live, learn, work and play. We’ve invested to build advantaged capabilities and innovation design in e-commerce to further strengthen these brands. We’ve funded strategic research and done the product development work to significantly strengthen our innovation bundle and our ideas for growth. We’ve proven that our brand and innovation-led strategy coupled with strong commercial selling capabilities that reach consumers where they shop can yield further market share growth in our home markets. We have much more opportunity to release the trapped capacity for investment in our brands and margin development that’s tied up in overheads in working capital, and we have a massive opportunity to deploy our portfolio outside our home markets, and the development of new channels of distribution make the cost of deployment much lower than it’s…

Thank you. [Operator Instructions] And your first question comes from Bill Chappell with SunTrust.

Thanks. Good morning.

Good morning, Bill.

Hi, just a question around kind of your top line outlook for 2019 on the core business. I just want to understand what’s baked in in terms of pricing, in terms of SKU rationalization, how that impact the outlook and does that carry on for beyond this year? And with tariffs and kind of pricing related tariffs you anticipated – I’m not saying it’s going to happen, but if there is any rollback of tariff, that you have to roll back pricing or– in general, what do you expect on price versus volume for this year, and what is SKU rationalization impact on that top line outlook?

I’ll answer part of that question and then Chris can build. On pricing, we are pricing to cover the absolute tariff impact, dollar for dollar. And we’ve had reasonably good success in landing – in landing that. And so, while, that will create an issue for us from a margin percentage standpoint from a dollar for dollar standpoint, I think we’re going to be okay, and that pricing is built in to the plan. Right now we’ve got the 10% tariff rate on category three tariffs in place for January through March, and we’re currently planning to increase again on March 1. Our customers are aware of that. We’ve communicated that. If the tariffs get delayed, we will push that price increase out in that we’ll price appropriately when the tariff increase occurs if it occurs. We’ve built into our modeling for top line, the volume impact as best we can of what is a substantial amount of pricing, that’s a bit of uncertainty that we have because the kinds of price increases we are talking about typically go beyond the model tolerances for predictability, but we’ve done our best job of estimating that. On SKU rat, I’d pass this – that onto to Chris maybe to kind of build on my comments.

Yes. I guess the thing I would add to Mike’s comments are, in the prepared remarks I mentioned that we have $200 million of headwind from FX, commodities and tariffs combined. And so in addition to the pricing that Mike’s talking about on tariffs, we’re also pricing for commodity inflation and transactional FX. So when you put the three of those factors together, we’ve got a fairly significant amount of pricing built into the guidance. We’re not pricing for margin on top of that, so there is a bit of a margin headwind from the pricing baked in, but that’s included in the guidance. If the tariffs did get rolled back, I think it would be a benefit to us as a company, but hard to say how that would flow through, because we probably – we wouldn’t take the pricing for the tariff, if the tariff gets rolls back, as Mike said. On SKU rationalization, we’re working very hard from a sales and operations planning standpoint. We think there’s a big opportunity to unlock cash conversion, productivity and the supply chain through this SKU rationalization opportunity, and we’re working very hard to manage the phase-in and phase-out of that SKU rationalization effort. And I think that’ll be a theme that we’ll be talking about for the next 18 months to two years or so.

Thanks, Bill.

Your next question comes from Wendy Nicholson with Citigroup.

Hi, good morning. Just following on that exact line of questioning, one of the pressures I know that you’ve seen on the top line has been choices that you have made to leave some distribution, either unprofitable distribution or channels that you didn’t think represented good partners for the future. So can you talk about the impact of those choices? From a distribution perspective, how much distribution – forget about Toys"R"Us, but ongoing other retailers – you’ve left some retail on the appliance side, how much of a headwind is that? Because I guess, just looking at the guidance I totally get the first quarter guidance for core sales, but I’m a little bit surprised that you’re not expecting more of a ramp up in core sales growth in the back half when you’ve lapped some of that. Thanks.

Well, let me just give you some of the details on the things that are in the base that we need to lap. There is two – there is two areas where we’ve got lost distribution, and that’s business that we didn’t pursue aggressively through line reviews because of the margin structure and our need to cover inflation and price – and price the businesses, but there really are a few areas. One is, in the Outdoor category, where in coolers and in air beds, we chose not to price down those businesses because of the margin consequences, they would have been nearly unprofitable gross margin, had we chosen to do that, so we took the hit on top line. We have lapped – that it – those choices in particular have turned out to be good ones as we come into 2019, because the alternatives that our customers chose to pursue haven’t worked out for them. And so there is likely to be some benefits flowing back to us later in the year, but we have to lap those losses through the second quarter. The way the Outdoor category works is the seasonal selling will happen in that March-April time frame, and until we get to that, you don’t get to the resets of the aisles, and so we’ve got that that issue to lap into the second quarter. On Appliances, we continue to look at the tail of that business and ask questions about whether these are businesses we should be in at the margins they currently have, and we certainly stepped away from some of the lower-end opening price point offerings that existed in non-strategic product families last year. Again, the timing of that is, those choices were Q2. We will continue to prune this business. There just are – portions of that portfolio that don’t make sense from either a cash generative standpoint or from a margin perspective, and that will be an ongoing headwind that’s contemplated in our guidance. But the big changes we made last year, we lap in the second quarter and we’ll have a little bit longer-tail that drags on through the back half of the year. Our goal – our long-term goal is to drive profitable core sales growth ahead of our markets and build market share, and we think we can do that. We want to simultaneously increase our margins and also significantly improve the cash flow productivity in the business. Some of these choices that we’ve made on distributions are designed to enable those outcomes. And so, yes, we’ve been prudent on our guidance, and we think that’s the right posture to take, and where we will do everything we can to do better than that. But for now, given the uncertainty regarding tariff pricing impact on volumes, we think this is the right posture to take.

Got it. Thank you very much.

Thanks, Wendy.

Your next question comes from Steve Powers with Deutsche Bank.

Good morning, everybody. Welcome aboard, Chris.

Thank you.

So I don’t – I’m not sure how far you can go here on the fly. But I guess I’m wondering if there’s any way for you to break out the anticipated cash flow guidance continued versus discontinued ops, maybe allocating the pro forma interest expense you expect to pay down through the divestiture program to the discontinued bucket. I mean, even some directional commentary will help, because just, it’s really hard to unpack it all and contemplate the cash earnings power of the RemainCo business without having that detail. So any further transparency there whether today or just going forward would be really helpful. Thanks.

Yes. Let me try to provide a little bit of help in this regard. So the operating cash flow guidance that we issued of $300 million to $500 million for the year is the total company operating cash flow. Within that guidance, there’s $200 million of costs that are related to divestitures, which are basically the tax and deal costs related to the divestitures, and there’s over $200 million of restructuring costs. So those two things are effectively one time-ish a nature. So if you were to back those out, that would give you the operating cash flow to the Company, excluding those two things of $700 million to $900 million. If you look at what’s embedded in that guidance, we expect operating cash flow from continuing operations in 2019 to be significantly better than operating cash flow from the continuing operations was in 2018, and that’s because we see an opportunity for cash conversion improvement. When we look at the cash conversion cycle, and benchmark versus our competitors, our days sales outstanding are relatively high, our days of inventory are relatively high, and our days payable are relatively low. And so we are putting – and have put, but are putting a aggressive push on each of those areas. And we think that there is opportunity to go after each of them. We think we can do better at resolving deductions with customers and ensuring that customers comply better with our terms, which will drive our days sales outstanding improvement. We think on inventory, the SKU rationalization program that we’ve talked about, and cutting some of the tail can drive significant improvement in days inventory. And on payables, we think that we’ve got an opportunity to negotiate extended payment terms that are more in line with what the competitive set has been able to do. And when you put that together, I think we’ve got a multi-year cash opportunity on working capital. So...

Steve, the only thing I’d build is, I think Chris brings a real energy to the space and his partnership with Russ in the supply chain leadership teams on strengthening our working capital metrics, I think it’s going to make a huge difference for us going forward. So it’s – I think the disciplines around these three areas are the things that Chris will drive into the organization, and I’m really excited about the possibilities for progress here.

Your next question comes from Kevin Grundy with Jefferies.

Thanks. Good morning, everyone. Hey, good morning, Mike. I hope I can sneak in just two, but the first one is just a data point. Mike, what do you think the category growth rate is for the business at this point in time, understanding the core business declining, we had destocking issues, et cetera, et cetera, but I think that’s really important for folks in terms of when you can get back to sort of the normal rhythm here. And then, but the broader question is, really how you’d like investors to think about productivity and the cost savings opportunity, because, Mike, as you’re well aware, I mean, it was the key reason to own the stock once upon a time with the $500 million synergies going up to $1 billion, but given the challenges, it’s frankly it’s been loss and really there’s nothing just to count in the stock, I would argue for any sort of material upside from it. And if I’m not mistaken the number now is like $750 million, that is like $600 million from synergies and renewal $150 million stranded overhead, which is a huge number, it’s greater than 8% of sales, but it also doesn’t seem like there’s much commitment in terms of getting after it in any sort of flow through for investors that they can rely upon in a meaningful way. So after being a bit for both, but maybe if you can kind of help us think about that, that’d be helpful. Thank you.

Sure, Kevin. I’ll start and then I think it would be helpful for you to get to hear Chris’s perspective on what’s going on in this area. So just on your first question on category growth. As you know, we only measure category growth in the U.S., we really don’t have a good way to measure it outside the U.S.. Historically, you know these categories have grown in line with the GDP growth, but there are things that can happen in a market that create catalytic events that drive either expansion or decline. We – it’s interesting in our numbers in the U.S. in 2018. We see the sort of bifurcated profile where we got some categories with really excellent category growth and that’s generally connected to broaden category distribution for flagship brands or it’s driven by provocative innovation that drives consumer interest in a product family or segment. Best example for that on us is, if you look at the Calphalon appliances launch in the fourth quarter, and you look at the category growth in the toaster oven product family, you see massive shifts in category growth because of the power of that hero item. And we’re getting share growth on top of that, coupled with that category expansion. That sort of the model in this space. When you bring news and it’s an exciting consumer idea, you can create market growth, and we see that on Home Fragrance as we make Yankee and WoodWick and Chesapeake more broadly available. We see that when we nail an innovation like we have on the toaster oven platform between what we’re doing on Oster and what we’re doing on Calphalon. And so the key in most of our businesses is for us to accept – because of our leadership position from…

Yes, I think the – I think the Company has a very aggressive focus on productivity in the cost of goods area, as well as overhead cost reduction. And let me take them sort of each in turn. From the productivity in the supply chain, we think we’ve got opportunities that we’re actioning on manufacturing plant consolidation, distribution center consolidation, we have opportunities to increase forecast accuracy of the SKU level, which will allow us to plan better and take cost out of the system. We’ve got opportunities in automation of lines that drive cost savings. We’ve got opportunities through the SKU rationalization work that we’ve talked about. And I think that embedded in our guidance is a fairly significant help from that already in 2019. It’s being masked, as Mike mentioned, by the inflationary pressure of commodities, foreign exchange and tariffs. But I think as we – as those items get behind us, I think you’ll start to see the gross productivity work come through in a much more meaningful way. On overheads, the Company likewise has a very aggressive plan at cost reduction and right-sizing the organization for the size of the Company post the ATP plan, and that really is looking at a lot of different areas. We mentioned in the prepared remarks, some of the opportunities of the Company has on implementing things like GBS, rationalizing our IT system, for example, when Newell bought Jarden, the Company went from one to, I think 43 ERP systems. We have a plan to get from the 43 ERP systems down to three by the middle of next year. And so that drives significant opportunity. And the three that we’re going to – that we’re going to have our SAP across the majority of the business, Oracle for the Home Fragrance business, and SAP retail for Marmot, because it’s a retail oriented business. So I think we’ll be in a much better place to drive scale, synergies through a lot of the activities that we’re moving on across the organization.

And the only thing that I would build is to call your attention to the guidance, which if you look at the operating margin guidance that we provided on the continuing operations and reflect on Chris’ comments in the script, where he laid out the fact that we have $200 million of headwind connected to tariffs, FX and inflation, you see us committing through guidance to operating margin progression in that context. And so I think that’s sort of the lead indicator of progress from my perspective. But I think it’s an important question, Kevin, and it is really going to be one of the centerpiece of what we have to focus on not just in 2019, but in 2020 and 2021 as we continue to take the retained costs out of the business, but more importantly give ourselves room in the P&L to invest at higher levels for growth. And that – I think we’re on the right track, but I think it’s right to continue to challenge us with those types of questions.

Your next question comes from Bonnie Herzog with Wells Fargo.

Thank you. Good morning.

Hi, Bonnie.

Hi. I wanted to ask about divestiture proceeds. You extended the timing and the total proceeds now you’re expecting to be slightly lower, but I guess help me understand, if your priorities for debt paydown versus buybacks have changed at all. And then, just wanted to clarify that your EPS guidance does consider both of these, and how we should think about maybe the phasing first half versus second half? Thanks.

Sure. So we have updated our guidance on the total proceeds from $10 billion previously to $9 billion is what we’re expecting in total. To-date, our after-tax proceeds that the Company has received has been 5.2% through the end of last year. And our EPS guidance does contemplate the update of the divestiture timing. And as I mentioned in my prepared remarks, because we’re separating out the MAPA-Spontex business from the CCS business, we’re expecting those two deals to happen in the back half of the year. So the guidance reflects that. The U.S. Playing Cards, Rexair and Process Solutions business effectively we’re expecting to happen by the end of the second quarter. And as a result, that changes the timing of when the proceeds are coming in versus what the original plan assumed, which is why we are guiding the share count to be only modestly lower this year, because we’re expecting a significant amount of the proceeds from CCS and MAPA-Spontex toward the end of the calendar year. So all of that is embedded in the guidance, but that’s – that’s the update on where we are on the divestiture program.

And then just quickly to clarify the split between the proceeds, is it still 45-55 in terms of debt paydown versus buybacks?

Yes. So on that, if you look at what we’ve done through 2018, I think we’ve used about 30% of the proceeds for share repurchase. We’re committed to investing in the business and we’re committed to returning excess cash to shareholders and maintaining a strong balance sheet. I think we’re continually looking at the Company’s capital structure, and I think we will make progress on both debt paydown and share repurchase, but given the moving parts here, it may not be a straight line as what it was previously.

Thank you.

Your next question comes from Lauren Lieberman with Barclays.

Great. Thank you. Good morning.

Hi, Lauren.

Hi. So you guys mentioned that you are kind of starting this strategic review process. So two questions off of that, recognizing it’s early days. One is, to what degree you thinking through geography, I feel like when you’d acquired Jarden, part of the conversation was around the geographic opportunities, it opened up for some scaling of entry in some markets. So to what degree geography still sort of an interesting vector, if there is a likelihood of kind of scaling some of that back? And then the second piece is just to think about the longer-term margin profile of the continuing businesses, because I understand there’s the big headwind that you’ve called out for 2019 on – in commodity costs and so on and then lower share count, but it also, if you like, there’s implication that there is now a view that the margin structure of the continuing businesses is probably lower than you might have thought previously. So if you could just comment on that or maybe my math is kind of often and it’s too early to pass judgment on that. Thanks.

Great question, Lauren. So with respect to the future development of our business, there are really three things that we’re focused on. One is, continuing to build out our brand and innovate brand building and innovation agenda for each one of these – each one of the product families that has the best potential to contribute to both our growth in our margin development. And we are obviously investing to shift our selling capabilities to reach consumers where they shop, and then clearly, there is a huge market product deployment or category deployment opportunity for some of our categories around the world. And so if you think about this, the three drivers of growth going forward, it’s brands and innovation, it’s leveraging our selling capabilities both in brick and mortar but also increasingly in e-commerce as a result of the scale we have there and the capability we’ve invested to create, and then deploying the portfolio. In my comments, I mentioned that, that’s a huge opportunity, and that the cost of deployment is coming down as a result of the emergence of new ways to deploy your portfolio, and its a function also of consumers ability to get to know brands prior to them arriving onshore. And so, we are committed to deploying the portions of our portfolio that make the most sense to deploy into the markets where the people in the economic development of the world is going to occur. And so we’ve begun that process, particularly with the focus on Writing, we will do that with Baby over time, and there’s opportunity in the balance of our portfolio is, well, to look – to look forward and make some of those choices. Chris referred to the category strategy work that we’re doing, we call it Cat-Strat activity in the divisions, that’s a process that we’ve launched, that will culminate with the Board in the summer that will help us make a series of choices that is below the division level, that product family level on which categories are most attractive and offer the greatest potential in which categories deserve disproportionate resourcing. And so that work is under way. It’s going to be division-led with insight and help from some of our corporate resources, but it’s essential to road mapping the next three to five years of the Company. And it cuts across, it’s not just a growth-oriented discussion, it’s what kind of supply change you need to be able to support the ambition. What kind of capabilities you’re going to need to be able to strengthen the potential outcomes that come through some of those choices. And so Chris, Rich Mathews, Russ Torres, the division leaders will really drive that process through the summer, and I think it’s going to be really exciting for our people to begin to do this kind of thinking and work an important work for us as we define the roadmap forward.

Yes, I guess what I would add, Lauren, just on the numbers is, the Company reported, I think, in 2018 an operating margin for the year of 10.2%. When you adjust that for the normalization Practice Change, that becomes 9.1% because of the 110 basis point differential in the normalization practice, and we’re guiding to 20 basis points to 60 basis points up from the 9.1% for 2019. Given the work that we’re doing on the category strategy work, as Mike mentioned, and how that ladders into the Company strategy work, we think it’s premature for us to issue long-term guidance. So we are not issuing margin guidance for 2020 or beyond at this point, because we think that that work will help us have better visibility into that. That being said, we see a clear opportunity to take the operating margin on the continuing business higher over time. The pace and path of that, I think is what will be informed by the strategy update work that we’re doing.

And the two levers for that will be in overheads, which are still quite high for the Company as a percent of revenue, some of that due to the retained costs associated with the disposals. And the other being gross margin development, which in today’s environment is pretty tough, although I was pleased with what we saw in Q4, and we will work hard next year to overcome the headwinds we’ve talked about. But if you look backwards, Lauren, at the period between 2011 and 2015 for Newell Rubbermaid, and look at that story, you saw really meaningful gross margin improvement in that window through innovation and through smarter deployment of our programming against the businesses with the best potential for growth, which tended to be the higher margin businesses. You should be looking for us to demonstrate that same dynamic, which has been difficult over the last two years to do as a result of the negative mix effect of the Writing reset that occurred in 2018, and because of the challenges now that the business has with the retained costs associated with the divestitures, but our orientation is going to be to drive those very similar sets of outcomes.

Your next question comes from Olivia Tong with Bank of America Merrill Lynch.

Great, thanks.

Hi, Olivia.

Hi, good morning. One, to talk a little bit more about cash flow, and first in terms of investors, how you’re feeling even with the amended $9 billion expected after-tax proceeds? And I guess, if you don’t end up seeing offers at what you believe are fair prices, what would you consider in terms of other levers to cash, especially given that the dividend is well above market, first goal still 30 to 35 payout. And then just as you think about cash longer term after fiscal 2019, where do you think sort of the right level to get that?

Yes. So thanks, Olivia. So I think our focus is on driving shareholder value. And so to your question, if we don’t get a deal value that we believe drive shareholder value for the Company, we’re not going to sell the assets at fire sale prices. So we’ve done the analysis to look at what the keep value is for the assets, and our $9 billion assumes that we get valuations that exceed that keep value – valuation, is the first point there. So that could change if we get offers that are below what we think the value of the enterprises, because we’re focused on shareholder value creation. Relative to how we deploy the proceeds for our debt repayment versus share repurchase, I think it’s the same answer, which is we’re focused on shareholder value creation, we continue to be committed to having a sustainable balance sheet and leverage ratio and returning excess cash to shareholders, and we’ll make those decisions as we go along through the process here.

And then just on the dividend?

We have no plans to change the dividend.

Got it. Thank you.

Your next question comes from Nik Modi with RBC Capital Markets.

Hi, Nik.

Hey, good morning, Mike. This is Russ Miller on for Nick. We just want to ask on Writing, and specifically now with the Staples and Essendant deal closed, is there any more perspective you can provide on the impact that may have to the Writing business? Thank you.

We are very pleased with the progress in Writing, Laurel Hurd and her team have done a remarkable job, Russ Torres on the sidelines sort of providing some guidance and input to them as they’ve come through a very, very turbulent period of time. As you know, that whole landscape reset in the middle of – started in the middle of 2017 and through the first half of 2018 – under new leadership and new ownership, the traditional channels within Writing established a new set of inventory targets for themselves, which we have worked with them to make progress on achieving. And we have a little bit more work to do there in 2019. But the real pain of that transition is behind us, and we start to see the kind of opportunity you would hope to see in this business. Businesses made very good margin progression, recovering the step down from 2017, and the team is mobilized now on reigniting growth, and you start to see some of that occurring over the last two quarters. So we’re quite optimistic about where the Writing business is. Very proud of the team for fighting through that adversity, and delivering very, very good 2018 in that context, and are excited about the future. They’ve got some great innovations coming in the back half of 2019 that will serve us well into 2020, and we’ve got very good momentum on Slime now around the world. So if you want to create Slime in Europe, you can. If you want to do it in Australia, you can, and we’re looking at new markets every day for that opportunity. So look, I love this business. I think it’s a great business. I think it’s an important business in terms of the role it plays in social and economic development in the emerging markets, and we’re very committed to making this business bigger, and does – and building the equities of these brands around the world.

Thank you.

Your final question comes from Joe Altobello with Raymond James.

Hi, Joe.

Good morning. So welcome, Chris. Welcome aboard.

Thank you.

Looking forward to working with you. I suppose to go back to earlier line of question. And I know Mike you mentioned that Newell earlier was turning the corner, but the core sales outlook for 2019 obviously doesn’t really show that at least on the top line. I would think that if I can ask you that question six or even three months ago, what your 2019 core sales guys would be? It wouldn’t be down low singles and I’m guessing that delta’s probably, call four points from where we are today versus where we would have been maybe six months ago. How much of the change is macro, and how much of the change is the decision you guys have made? I know you’ve mentioned lapping QRQ and the lost distribution in Appliances and Outdoor, but you know knows for a couple of quarters now. So I’m just trying to figure out what’s changed from a macro level, and what are you guys doing differently that has caused that outlook to come down? Thanks.

Yes. We don’t have a different view on the macros. I mean there is some slowdown in Europe and in parts of Asia, but we don’t have a big footprint in those geographies that would cause me to have that factor into our guidance on core sales. We’ve got the realities of what we described, which is Toys"R"Us, in the first half of the year and we’ve got the realities of the distribution issues which will continue to govern the upside. We felt – coming into this year, this was the right way to plan the year. It will enable the continued progress on margin development and set the stage for grocery ignition on this business going forward. The year will be a little different in terms of its flow. Q1 obviously steps down from the sequential result improvement in Q4 and Q3 before it, and we’ve guided 2% to 4%, that is an art-to-fact of Toys"R"Us, there’s really nothing we can do around overcoming 250 basis points of top line headwind. But from that point forward, once we lapped the distribution, you should see sort of the normal progression you would expect to see in our business. We will always ask questions about relative attractiveness of businesses, and we’re going to give ourselves the room in our guidance to be able to make choices around some of those activities. An example of a choice we’ve made that impacts top line, not really core sales but impacts top line, that is the right choice to make, it’s the choice to exit about 100 stores on Yankee – out of mall-based retail from Yankee Candle. That’s – those are not attractive stores, they lose money, as the leases expire there’s an efficient way to get out of those businesses, that will help us in our margin development going forward. And it’s the right choice to make irrespective of the consequences of the top line. And so we’re going to do the right thing. Our long-term goal is to drive profitable core sales growth ahead of our markets. To build market share, to increase our margins and to significantly improve the cash flow productivity in the business, and we have a tremendous opportunity on all of these fronts.

That’s helpful. Thank you guys.

We have reached the end of the time allotted for our question-and-answer session. I will now turn the call back to Mr. Polk for closing remarks.

Well, thank you everyone for all the questions and for sticking with us through the call. Chris and I look forward to seeing many of you next week at CAGNY. And to our team, thank you as always for your drive, your determination, and your commitment to Newell Brands. Chris and I couldn’t be prouder of the energy and effort you put into this business and are very gratified with the progress we’re making in a dealt environment, and we see the green shoots we’ve been talking about, and we’re optimistic and excited about the prospects going forward. Thanks so much. Talk soon.

Ladies and gentlemen, a replay of today’s call will be available later today on our website, newellbrands.com. This concludes our conference. You may now disconnect.