Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20172020

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to_______

Commission filenumber 1-35166

Fortune Brands Home & Security, Inc.

(Exact name of registrant as specified in its charter)

520 Lake Cook Road, Deerfield, IL 60015-5611

(Address of Principal Executive Offices)    (Zip Code)

Registrant’s telephone number, including area code:(847) 484-4400

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes    ☒         No    ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes    ☐         No    ☒

Yes    ☐        No    ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    ☒        No    ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes    ☒        No    ☐

Yes    ☒        No    ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to thisForm 10-K.        ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and, “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Large accelerated filer      ☒      Accelerated filer      ☐Non-accelerated filer (Do not check if a smaller reporting company)      ☐ Smaller reporting company      ☐      Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act). Yes    ☐        No    ☒

Yes    ☐        No    ☒

The aggregate market value of the registrant’s voting common equity held bynon-affiliates of the registrant at June 30, 20172020 (the last day of the registrant’s most recent second quarter) was $10,015,217,282.$8,785,219,109.  The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, at February 2, 2018,5, 2021, was 151,950,428.138,666,262.  

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the registrant’s proxy statement for its Annual Meeting of Stockholders to be held on May 1, 20184, 2021 (to be filed not later than 120 days after the end of the registrant’s fiscal year) (the “2018“2021 Proxy Statement”) is incorporated by reference into Part III hereof.

Form 10-K

Table of Contents

Form 10-K Table of Contents

Table of Contents

PART I

Item 1.    Business.

Cautionary Statement Concerning Forward-Looking Statements

This Annual Report on Form10-K contains certain “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding the expected or potential impact of the novel coronavirus pandemic (“COVID-19”) on our business, operations or financial condition in addition to statements regarding our general business strategies, anticipated market potential, future financial performance, the potential of our brands expected capital spending, expected pension contributions, the anticipated effects of recently issued accounting standards on our financial statements, planned business strategies, estimated impact and effects of the U.S. Tax Cuts and Jobs Act of 2017, market potential, future financial performance and other matters. Statements that include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plansexpectations, estimates, assumptions and expectationsprojection about our industry, business and future financial results available at the time this report is filed with the Securities and Exchange Commission (the “SEC”) or, with respect to any documents incorporated by reference, available at the time such document was prepared or filed with the SEC. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those listed in the section below entitled “Risk Factors.” Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise.otherwise, except as required by the law.

Unless the context otherwise requires, references in this Annual Report on Form10-K to “Fortune Brands,” the “Company,” “we,” “our” or “us” refer to Fortune Brands Home & Security, Inc. and its consolidated subsidiaries.

Our Company

We are a leading home and security products company that competes in attractive long-term growth markets in our product categories. With a foundation of market-leading brands across a diversified mix of channels and lean and flexible supply chains, as well as a tradition of strong product innovation and customer service, we are focused on outperforming our markets in both growth and returns and driving increased shareholderstockholder value. As a manufacturer, conducting business ethically is a priority for our businesses. We continue to look for ways to improve our environmental, social and governance (“ESG”) programs and practices by focusing on ways to improve water conservation, waste reduction and carbon and climate impact, keeping our employees safe and creating a culture where all employees are treated with dignity and respect. We believe that advancing ESG initiatives are critical to making sure we continue to serve our customers with products that meet their needs.

We continue to have fourthree business segments: Cabinets, Plumbing, Outdoors & Security and Cabinets. In the fourth quarter of 2020, our Doors & Security segment was renamed “Outdoors & Security” to better align with the segment’s strategic focus on the fast-growing outdoor living space and Security. to better represent the brands within the segment, including the newly acquired Larson Manufacturing (“Larson”). The Outdoors & Security segment name change is to the name only and had no impact on the Company’s historical financial position, results of operations, cash flow or segment level results previously reported.

We sell our products through a wide array of sales channels, including kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors,“do-it-yourself” “do-it-yourself” remodeling-oriented home centers, e-commerce and other retail outlets. We believe the Company’s impressive track record reflects the long-term attractivenessoutlets Despite increased pressures on commodity and potential oflogistics costs driven in part by tariffs, higher commodity costs and COVID-19, our categories and our leading brands. Our performance in the six years since becoming an independent publicly traded companyduring 2020 demonstrates the strength of our operating model and our ability to generate profitable growth as sales volume increases and we leverage our structural competitive advantages to gain share in our categories. We believe the Company’s impressive track record reflects the long-term attractiveness and potential of our categories and our leading brands.

Our Strategy

Build on leading business and brand positions in attractive growth and return categories. We believe that we have leading market positions and brands in many of our product categories. We continue to invest in targeted advertising and other strategic initiatives aimed at enhancing brand awareness and educating consumers regarding the breadth, features and benefits of our product lines. For example,categories in the third quarterUnited States. In 2020, we expanded further into the outdoor living market by acquiring Larson, the leading brand of 2017, Moen launched itsstorm, screen and security doors in North America. Larson’s suite of products creates a bridge from the inside to the outside of the home, and further strengthens the products offered by our Outdoors & Security segment. During 2020 and since acquiring Fiber Composites LLC (“Fiberon”) in 2018, we significantly expanded our distribution partnerships for our Fiberon brand in the U.S., including a major new “Innovated By…” advertising campaign which brings Moen innovationdistribution partnership with

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Orepac. In addition, our Cabinets segment continued to life through compelling narratives designedfocus on growth initiatives in the value priced segments of the market. In Plumbing, we continued to evoke emotion

and provoke thought. We also strive to leverage our brands by expanding into adjacent product categories and continue to develop new programs by working closely with our customers.

Continue to develop innovative products for customers, designers, installers and consumers. Sustained investments in consumer-driven product innovation and customer service, along with our low costlow-cost structures, have contributed to our success in the marketplace and creating consumer demand.to gain share in our product categories. In 2017,2020, our Global Plumbing Group (“GPG”) continued to develop products with our partners in the “whole home” and “smart home” water category including the Flo by Moen Smart Water Detector and U by Moen Smart Faucet. GPG also continued to work with partners in 2020 to develop new technologies and designs such as the Nebia by Moen spa shower and aromatherapy handshowers. In 2020, MasterBrand Cabinets, which provides a wide range of cabinets for the home, launchedfocused on the shift in the marketplace toward stock cabinetry by introducing its value-priced cabinet line into the U.S. Southwest region. In Cabinets, we continued to develop innovative new cabinet door designs, cabinet lighting systems, color palettes and features in a range of styles that allowsallow consumers to create a custom kitchen look at an affordable price and introduced new, exclusive laminate door and finish options across multiple price segments. We continue to provide channel support with responsive websites featuring our cabinet brands that drives consumers to our partnerpartner/third-party dealers. In 2016, we created the Global Plumbing Group (“GPG”), a strategic platform within our Plumbing segment that spans across brands and geographic areas in order to accelerate growth opportunities and transform our existing plumbing business. During 2017 and 2016, we expanded our brand presence in plumbing through acquisitions. In 2017, we acquired Victoria + Albert, a U.K. manufacturerThe Therma-Tru portfolio of luxury freestanding tubs and basins and Shaws Since1987 Limited (“Shaws”), a U.K.-based company that specializes in the design, production and marketing of luxury fire-clay kitchen sinks. In 2016, we acquired Riobel Inc. (“Riobel”), a Canadian premium showroom brand and ROHL LLC (“ROHL”), a California-based luxury brand and in a related transaction and TCL Manufacturing Ltd, which gave us ownership of Perrin & Rowe Limited (“Perrin & Rowe”), a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. In addition, GPG’s legacy brand, Moen had a number of innovative product launches in 2017, including a customizable shower technology with personal device integration. TheTherma-Tru portfolio ofon-trendfashionable door and glass collections continuedcontinues to evolve to meet current and emerging architectural design trends including widertrends. In 2020, Fiberon expanded its offering of premium PVC decking products and taller door styles, expanding panel configurations, as well as additional decorative, privacy and textured glass designs.also brought new products to its railing category. Master Lock continued to be an innovation leader in security and safety products and services, driven by consumer and end user focused insights with continued emphasis on electronic enabled solutions for enhanced capability and convenience. SentrySafe continued to provide a full line portfolio of quality security, fire and water resistant safes to help consumers and small business owners protect documents and valuables.

Expand in international markets. We expect to have opportunities to expand sales by further penetrating international markets, which represented approximately 15% 16%of net sales in 2017.2020. We continue to develop our relationship with dealers and distributors and their Moen brandedMoen-branded stores throughout China. In our Cabinets segment, Kitchen Craft remainedWoodCrafters introduced a leadingvariety of cabinetry brandproducts in Canada, while WoodCrafters provided a company presence in Mexico. Master Lock continued to expand its presence in Europe and Asia (primarily Japan), whileTherma-Tru made inroads in Canada as consumers transitioned from traditional entry door materials to more advanced and energy-efficient fiberglass doors.

Leverage our global supply chains. We are using lean manufacturing,design-to-manufacture and distributive assembly techniques to make our supply chains more flexible and improve supply chain quality, cost, response times and asset efficiency. We view our global supply chains and manufacturing presence as a strategic asset not only to support strong operating leverage as volumes increase, but also to enable the profitable growth of new products, adjacent market expansion and international growth. We believe our flexible supply chain will enable us to compete effectively during and after the COVID-19 pandemic.

Enhance returns and deploy our cash flow to high-return opportunities.opportunities. We continue to believe our most attractive opportunities are to invest in profitable organic growth initiatives, pursue accretive strategic acquisitions, non-controlling equity investments, and joint ventures, and return cash to stockholders through a combination of dividends and repurchases of shares of our common stock under our share repurchase program. Bothadd-on acquisitions and share repurchase opportunities may be particularly attractive in the next few years.stock. In 2017,2020, we repurchased 3.4approximately 2.9 million shares of our outstanding common stock under the Company’s share repurchase programsprogram for $214.8 million.$187.6 million and returned $133.3million to stockholders through dividends. In July 2017,December 2020, we acquired Shaws,Larson, providing category expansion and product extension opportunities in the outdoor living space for our Outdoors & Security segment.

Invest in ESG initiatives that positively impact our employees and community and conduct business responsibly. As aUK-based luxury plumbing manufacturer, conducting business ethically is a priority for our businesses. We believe that holding our team, our suppliers and the products that we deliver to a high set of standards strengthens our company that specializes in manufacturing and selling fireclay sinks.builds a foundation for lasting success and stockholder value creation. Employee safety is also a priority for our businesses and our emphasis on it has yielded strong results over time with fewer recordable incidents and lower lost time rates. Our Company enhanced our safety protocols and practices to provide safe workplaces for our employees during COVID-19. In October 2017,2020, we acquired Victoria +Albert,also took steps to raise awareness and build aUK-based premium brand of standalone bathtubs, sink, tub fillers, faucets more diverse, equitable and other accessories. These acquisitions broadened our plumbing portfolioinclusive organization through training, inclusive culture councils and enhanced future growth opportunities.

Our Competitive Strengths

We believe our competitive strengths include the following:

Leading brands. We have leading brands with sustainable competitive advantages in many of our product categories.categories in the U.S. and China. We believe that established brands are meaningful to both consumers and trade customers in their respective categories and that we have the opportunity to, among other things, gain share in the marketplace and continue to expandstrengthen many of our brands through cross-branding, expanding into adjacent product categories, and growing in international and e-commerce markets.

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Strategic focus on attractive consumer-facing categories. We believe we operate in categories that, while very competitive, are among the more attractive categories in the home products and security products markets. Some of the key characteristics that make these categories attractive in our view include the following:

Operational excellence. We believe our investments in lean manufacturing and productivity initiatives have resulted in supply chain flexibility and the ability to cost-effectively add or reduce capacity in order to match demand levels. In 2017,2020, we invested approximately $40$87.1 million to support long-term growth potential and new products both in the U.S. and international markets. In addition, our supply chains and low cost manufacturing structures have created favorable operating leverage allowing volumesallow us to grow without sacrificing customer service levels.adapt to challenging market conditions, including the impact from COVID-19 and tariffs. We believe that margin improvement will continue to be driven predominantly by organic volume growth that can be readily accommodated by additionalcurrent production shiftscapacity, prioritized investments in higher growth areas, and equipment as necessary.leveraging best practices across our brands.

Commitment to innovation. We have a long track record of successful product and process innovations that introduce valued new products and services to our customers and consumers. We are committed to continuing to invest in new product development and enhance customer service to strengthen our leading brands and penetrate adjacent markets.

Diverse salesend-use mix. We sell in a variety of product categories and sales channels in the U.S. home and security products markets. In addition, our exposure to changing levels of U.S. residential new home construction activity is balanced withrepair-and-remodel repair and remodel activity, which comprised a substantial majority of the overall U.S. home products market and abouttwo-thirds of our U.S. home products sales in 2017.2020. We also benefit from a stable market for plumbing and security products and international sales growth opportunities.

DiverseStrong sales and distribution channels. We sell through a wide array of sales channels, including kitchen and bath dealers, wholesalers oriented to builders or professional remodelers, industrial and locksmith distributors,“do-it-yourself” “do-it-yourself” remodeling-oriented home centers, e-commerce and other retail outlets. We also sell security products to locksmiths, industrial distributors and mass merchants. We are able to leverage these existing sales channels to expand into adjacent product categories. In 2017,2020, sales to our top ten customers represented less than half of total sales.

Decentralized business modelLeveraging cross-company experience. Our business segments are focused on distinct product categories and are responsible for their own performance.performance while Operating Councils across our brands share best practices and common core capabilities. This structure enables each of our segments to independently best position itself within each category in which it competes, andwhile gaining the benefit of cross-company synergies. This structure also reinforces strong accountability for operational and financial performance. Each of our segments focuses on its unique set of consumers, customers, competitors and suppliers, while also sharing best practices.

Strong capital structure.    structure. We exited 20172020 with a strong balance sheet. In 2017, we repurchased 3.4 million of our shares. As of December 31, 2017,2020, we had $323.0$419.1 million of cash and cash equivalents and total debt was $1,507.6$2,572.2 million, resulting in a net debt position of $1,184.6$2,153.1 million. In addition, we had $635.0$865.0 million available under our credit facilityfacilities as of December 31, 2017.2020.

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Business Segments

We have fourthree business segments:  Cabinets, Plumbing, Outdoors & Security and Cabinets. In the fourth quarter of 2020, our Doors & Security segment was renamed “Outdoors & Security” to better align with the segment’s strategic focus on the fast-growing outdoor living space and Security. to better represent the brands within the segment, including the newly acquired Larson. The Outdoors & Security segment name change had no impact on the Company’s historical financial position, results of operations, cash flow or segment level results previously reported. The following table shows net sales for each of these segments and key brands within each segment:

Our segments compete on the basis of innovation, fashion, quality, price, service and responsiveness to distributor, retailer and installer needs, as well asend-user consumer preferences. Our markets are very competitive. Approximately 15%16% of 20172020 net sales were to international markets, and sales to two of the Company’s customers, The Home Depot, Inc. (“The Home Depot”) and Lowe’s Companies, Inc. (“Lowe’s”), each accounted for more than 10%15% of the Company’s net sales in 2017.2020. Sales to all U.S. home centers in the aggregate were approximately 27%31% of net sales in 2017.2020.

Cabinets.    Our Cabinets segment manufactures custom, semi-custom and stock cabinetry, as well as vanities, for the kitchen, bath and other parts of the home through a regional supply chain footprint to deliver high quality and service to our customers. This segment sells a portfolio of brands that enables our customers to differentiate themselves against competitors. This portfolio includes brand names such as Aristokraft, Diamond,Mid-Continent, Kitchen Craft, Schrock, Homecrest, Omega, Thomasville, Kemper, StarMark and Ultracraft. Substantially all of this segment’s sales are in North America. This segment sells directly to kitchen and bath dealers, home centers, wholesalers and large builders. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 34% of net sales of the Cabinets segment in 2017. This segment’s competitors include Masco, American Woodmark and RSI (owned by American Woodmark), as well as a large number of regional and local suppliers.

Plumbing. Our Plumbing segment manufactures or assembles and sells faucets, accessories, kitchen sinks and waste disposals, in North America and China, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe Victoria + Albert,and Shaws and Waste King brands. Although this segment sells products principally in the U.S., CanadaChina and China,Canada, this segment also sells in Mexico, Southeast Asia, Europe and

South America. Approximately 26%31% of 20172020 net sales were to international markets. This segment sells directly through its own sales force and indirectly through independent manufacturers’ representatives, primarily to wholesalers, home centers, mass merchandisers and industrial distributors. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 23%25% of net sales of the Plumbing segment in 2017.2020. This segment’s chief competitors include Delta (owned by Masco),Masco, Kohler, Pfister (owned by Spectrum Brands), American Standard (owned by LIXIL Group),Group, InSinkErator (owned by Emerson Electronic Company) and imported private-label brands.

Doors.Outdoors & Security. Our DoorsOutdoors & Security segment manufactures and sells fiberglass and steel entry door systems under theTherma-Tru brand name, storm, screen and security doors under the Larson brand name, composite decking and railing under the Fiberon brand name, and urethane millwork product lines under the Fypon brand name. It also manufactures, sources and distributes locks, safety and security devices, and electronic security products under the Master Lock and American Lock brands and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand. This segment benefits from the long-term trend away from traditional materials, such as wood, steel and aluminum, toward more energy-efficient and durable synthetic materials.Therma-Trusells products include fiberglass and steel residential entry door and patio door systems, primarily for saleprincipally in the U.S., Canada, Europe, Central America, Japan and Canada.Australia. Approximately 11% of 2020 net sales were to international markets. This segment’s principal customers are home centers, hardware and other retailers, millwork building products and wholesale distributors, and specialty dealers that provide products to the residential new construction market, as well as to the remodeling and renovation markets. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 14% of net sales of the Doors segment in 2017. This segment’s competitors include Masonite,JELD-WEN, Plastpro and Pella.

Security.    Our Security segment’s products consist of locks, safety and security devices, and electronic security products manufactured, sourced and distributed primarily under the Master Lock brand and fire resistant safes, security containers and commercial cabinets manufactured, sourced and distributed under the SentrySafe brand. This segment sells products principally in the U.S., Canada, Europe, Central America, Japan and Australia. Approximately 25% of 2017 net sales were to international markets. This segment manufactures and sellskey-controlled and combination padlocks, bicycle and cable locks,built-in locker locks, door hardware, automotive, trailer and towing locks, electronic access control solutions, and other specialty safety and security devices for consumer use to hardware, home center and other retail outlets. In addition, the segmentit sells lock systems and fire resistant safes to locksmiths, industrial and institutional users, and original equipment manufacturers. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 18%26% of the net sales of the Outdoors & Security segment in 2017.2020. Therma-Tru, Larson, Fiberon and Fypon brands compete with Masonite, JELD-WEN, Andersen, Trex, Azek, Plastpro, Pella and various regional and local suppliers. The Master Lock brand competes with Abus, W.H. Brady, Hampton, Kwikset (owned by Spectrum Brands), Schlage (owned by Allegion),Allegion, Assa Abloy and various imports, andimports. The SentrySafe brand competes with First Alert, Magnum, FortressStack-On and Fire King.Interlocks.

AnnualCabinets. Our Cabinets segment manufactures high quality stock, semi-custom and custom cabinetry, as well as vanities, for the kitchen, bath and other parts of the home through a regional supply chain footprint to deliver high quality cabinets and service to our customers. This segment sells a portfolio of brands that enable our customers to differentiate themselves against competitors. This portfolio includes brand names such as, Aristokraft, Diamond Now, Mid-Continent, Homecrest, Kitchen Craft, Omega, EVE, Diamond Reflections, Diamond, Kemper, Schrock, Starmark, Ultracraft and Mantra. Substantially all of this segment’s sales are in North America. This segment sells directly to kitchen and bath dealers, home centers, wholesalers and large builders. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 38% of net sales for each of the last three fiscal years for eachCabinets segment in 2020. This segment’s competitors include Cabinetworks Group (formerly ACPI) and American Woodmark, as well as a large number of our business segments were as follows:overseas, regional and local suppliers.

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For additional financial information for each of our business segments, refer to Note 18, “Information on Business Segments,” to the Consolidated Financial Statements in Item 8 of this Annual Report on Form10-K.

Other Information

Raw materials. The table below indicates the principal raw materials used by each of our segments. These materials are available from a number of sources. Volatility in the prices of commodities and energy used in making and distributing our products impacts the cost of manufacturing our products.

Intellectual property. Product innovation and branding are important to the success of our business. In addition to the brand protection offered by our trademarks, patent protection helps distinguish our unique product features in the market by preventing copying and making it more difficult for competitors to benefit unfairly from our design innovation. We hold U.S. and foreign patents covering various features used in products sold within all of our business segments. Although each of our segments relies on a number of patents and patent groups that, in the aggregate, provide important protections to the Company, no single patent or patent group is material to any of the Company’s segments.

Employees.Human Capital Resources. As of December 31, 2017, we2020, Fortune Brands had approximately 23,80027,500 full-time employees. Of theseand part-time employees approximately 2,000worldwide (excluding contract workers). Approximately 77% of theseour workforce is composed of hourly production associates and the remaining population is composed of associates in a professional role. Approximately 15% of employees are covered byin the U.S. work under collective bargaining agreements. Below is a summary of the number of employees by segment and role:

Our employees are our greatest asset. The Company endeavors to create an environment that keeps our employees safe, treats them with dignity and respect and fosters a culture of performance. Fortune Brands does this through the programs summarized below, the objectives and related risks of each is overseen by our Board of Directors or one of its committees.

Health and Safety

Safety is a critical element to Fortune Brands’ growth strategy, integral to Company culture and one of our core values. Our Employee relations are generally good.Safety & Environmental Stewardship Principles set standards for how we maintain a safe work environment and guides our business operations. The Company also has an Environmental, Health & Safety Leadership council comprised of representatives from across the Company’s businesses that share best practices and is responsible for driving environmental, health and safety strategy. This helps drive our best-in-class programs designed to reinforce positive behaviors, empower our employees to actively take part in maintaining a safe work environment, to heighten awareness and mitigate risk on critical safety components. Within each of our manufacturing and distribution facilities, we have site-specific safety and environmental plans designed to reduce risk.

Information about geographic areas.    For additional information about net sales and assets by geographic areas, refer to Note 18, “Information on Business Segments,”

COVID-19 Safety

Our safety focus was demonstrated in our response to the Consolidated Financial StatementsCOVID-19 pandemic when we quickly acted to enhance our safety protocols and practices to provide safer workplaces for our associates and continue to operate our businesses during the pandemic.

During the early stages of the COVID-19 pandemic, Fortune Brands formed an organization-wide, cross-functional COVID-19 project management team to coordinate the Company's overall response and to make decisions that protect the safety and well-being of our employees. This team led efforts to develop and monitor business continuity plans and shared best practices so that the entire Company could benefit from our collective experiences.

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In 2020, Fortune Brands joined the CEO Action for Diversity & Inclusion. We also implemented an unconscious bias learning program to the most senior leaders across the organization to increase DEI awareness and break bias in the decision making process, and plan to roll it out to more associates in the coming year. We also established a key partnership with Network of Executive Women to help focus on Form10-K.the development and advancement of women. These actions supplemented the Company’s (i) inclusive culture councils which are responsible for setting priorities and initiatives that support an inclusive work environment, and (ii) employee resource groups that support diversity, equity, and inclusion initiatives, provide networking and professional development opportunities.

Talent Development and Succession

We aim to inspire and equip our associates to be successful in their current role within the organization and help them to develop the skills to build on opportunities to grow their career. We understand our most critical roles that serve as points of leverage to deliver value and place our best people in those roles, while attracting new talent and capabilities in support of continuous improvement in all we do. Fortune Brands uses performance management programs to support a high-performance culture, strengthening our employee engagement and helping to retain our top talent. The Company provides associates with relevant skills training and provides leadership training for production associates in a supervisory role and mid-level professional associates. The Company also makes a significant investment in assessing our talent against the jobs both in the near term and in the future state and ensuring our leaders are prepared for greater levels of responsibility and can successfully transition into new roles.

Succession planning for critical roles is an important part of our talent program. Succession and development plans are created and monitored to ensure progress is made along established timelines.

Seasonality. All of our operating segments traditionally experience lower sales in the first quarter of the year when new home construction,repair-and-remodel repair and remodel activity and security buying are at their lowest. As a result of sales seasonality and associated timing of working capital fluctuations, our cash flow from operating activities is typically higher in the second half of the year.

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Environmental matters. We are involved in remediation activities to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs of each site are based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of future environmental remediation exposures. Some of the potential liabilities relate to sites we own, and some relate to sites we no longer own or never owned. Several of our subsidiaries have been designated as potentially responsible parties (“PRP”) under “Superfund” or similar state laws. As of December 31, 2017, eleven2020, ten such instances have not been dismissed, settled or otherwise resolved.  In 2017,2020, none of our subsidiaries were identified as a PRP in a new instance and no instances were settled, dismissed or otherwise resolved. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other PRPs or insurance, will not have a material adverse effect on our results of operations, cash flows or financial condition. At December 31, 20172020 and 2016,2019, we had accruals of $0.7$0.3 and $1.0$0.2 million, respectively, relating to environmental compliance and cleanup including, but not limited to, the above mentioned Superfund sites.

Legal structure. Fortune Brands Home & Security, Inc. is a holding company that was initially organized as a Delaware corporation in 1988. Wholly-owned subsidiaries of the Company include MasterBrand Cabinets, Inc., Moen Incorporated, Fortune Brands Global Plumbing Group LLC, Fortune Brands Doors, Inc. and Fortune Brands Storage & Security LLC. As a holding company, we are a legal entity separate and distinct from our subsidiaries. Accordingly, the rights of the Company, and thus the rights of our creditors (including holders of debt securities and other obligations) and stockholders to participate in any distribution of the assets or earnings of any subsidiary is subject to the claims of creditors

of the subsidiary, except to the extent that claims of the Company itself as a creditor of such subsidiary may be recognized, in which event the Company’s claims may in certain circumstances be subordinate to certain claims of others. In addition, as a holding company, the source of our unconsolidated revenues and funds is dividends and other payments from subsidiaries. Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company.

Available Information. The Company’s website address is www.FBHS.com. The Company’s annual report onForm 10-K, quarterly reports onForm 10-Q, current reports onForm 8-K and any amendments to these reports are available free of charge on the Company’s website as soon as reasonably practicable after the reports are filed or furnished electronically with the SEC. These documents also are made available to read and copy at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information about the Public Reference Room by contacting the SEC at1-800-SEC-0330.Reports filed with the SEC are also made available on its website at www.sec.gov. We also make available on our website, or in printed form upon request, free of charge, our annual ESG report, Corporate Governance Principles, Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers, Charters for the Committees of our Board of Directors and certain other information related to the Company.

Item 1A.    Risk Factors.

There are inherent risks and uncertainties associated with our business that could adversely affect our business, financial condition or operating results. Set forth below are descriptions of those risks and uncertainties that we currently believe to be material, but the risks and uncertainties described below are not the only risks and uncertainties that could adversely affect our business, financial condition or operating results. If any of these risks materialize, our business, financial condition or operating results could suffer. In this case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business

Industry Risks

Our business primarily relies on North American home improvement, repair and remodel and new home construction activity levels, all of which are impacted by risks associated with fluctuations in the housing market. Downward changes in the general economy, the housing market or other business conditions could adversely affect our results of operations, cash flows and financial condition.

Our business primarily relies on home improvement, repair and remodel, and new home construction activity levels, principally in North America. The housing market is sensitive to changes in economic conditions and other factors, such as the level of employment, access to labor, consumer confidence, demographic changes, consumer income, government tax programs, availability of financing and interest rate levels. Adverse changes in any of these conditions generally, or in any of the markets where we operate, could decrease demand and could adversely impact our businesses by: causing consumers to delay or decrease homeownership; making consumers more price conscious resulting in a shift in demand to smaller, less expensive homes; making consumers more reluctant to make investments in their existing homes, including large kitchen and bath repair and remodel projects; or making it more difficult to secure loans for major renovations. Although the U.S. new home construction market continues to improve, demand for new homes is still recovering after the 2007-2009 U.S. economic recession and continues to remain below historical levels.

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We operate in very competitive consumer and trade brand categories.

The markets in which we operate are very competitive. Although we believe that competition in our businesses is based largely on product quality, consumer and trade brand reputation, customer service and product features, as well as fashion trends, innovation and ease of installation, price is a significant factor for

consumers as well as our trade customers. Some of our competitors may resort to price competition to sustain or grow market share and manufacturing capacity utilization. Also, certain large customers continue to offer private-label brands that compete with some of our product offerings as a lower-cost alternative. We also face pressure from imported ‘flat pack’ cabinets. The strong competition that we face in all of our businesses may adversely affect our profitability and revenue levels, as well as our results of operations, cash flows and financial condition.

Risks associated with strategic acquisitions and joint ventures could adversely affect our results of operations, cash flows and financial condition.

We consider acquisitions and joint ventures as a means of enhancing shareholder value. Acquisitions and joint ventures involve risks and uncertainties, including difficulties integrating acquired companies and operating joint ventures; difficulties retaining the acquired businesses’ customers and brands; the inability to achieve the expected financial results and benefits of transactions; the loss of key employees from acquired companies; implementing and maintaining consistent standards, controls, policies and information systems; and diversion of management’s attention from other business matters. Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in dilution in earnings per share and return on capital.

We may not successfully develop new products or processes or improve existing products or processes.

Our success depends on meeting consumer needs and anticipating changes in consumer preferences with successful new products and product improvements. We aim to introduce products and new or improved production processes proactively to offset obsolescence and decreases in sales of existing products. While we devote significant focus to the development of new or updated products and processes, weWe may not be successful in product development and our new products may not be commercially successful. In addition, it is possible that competitors may improve their products or processes more rapidly or effectively, which could adversely affect our sales. Furthermore, market demand may decline as a result of consumer preferences trending away from our categories or trending down within our brands or product categories, which could adversely impact our results of operations, cash flows and financial condition.

Our businesses rely on the performance of wholesale distributors, dealers and other marketing arrangements and could be adversely affected by poor performance or other disruptions in our distribution channels and customers.

We rely on a distribution network comprised of consolidating customers. Any disruption to the existing distribution channels could adversely affect our results of operations, cash flows and financial condition. The consolidation of distributors or the financial instability or default of a distributor or one of its major customers could potentially cause such a disruption. In addition to our own sales force, we offer our products through a variety of third-party distributors, representatives and retailers. Certain of our distributors, representatives or retailers may also market other products that compete with our products. The loss or termination of one or more of our major distributors, representatives or retailers, the failure of one or more of our distributors, representatives or retailers to effectively promote our products, or changes in the financial or business condition of these distributors, representatives or retailers could adversely affect our ability to bring products to market.

Operational and Sourcing Risks

Risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility could adversely affect our results of operations, cash flows and financial condition.

We regularly evaluate our organizational productivity and global supply chains and assess opportunities to increase capacity, reduce costs and enhance quality. We may be unable to enhance quality, speed and flexibility to meet changing and uncertain market conditions, as well as manage cost inflation, including wages, pension and medical costs. Our success depends in part on refining our cost structure and supply chains to promote consistently flexible and low cost supply chains that can respond to market changes to protect profitability and cash flow or ramp up quickly and effectively to meet demand. Import tariffs could potentially lead to increases in prices of raw materials or components which are critical to our business. Failure to achieve the desired level of quality, capacity or cost reductions could impair our results of operations, cash flows and financial condition.

Future tax law changes or the interpretation of existing tax laws may materially impact our effective income tax rate, the resolution of unrecognized tax benefits and cash tax payments.

Our businesses are subject to income taxation in the U.S., as well as internationally. We are routinely audited by income tax authorities in many jurisdictions. Although we believe that the recorded tax estimates are reasonable and appropriate, there are significant uncertainties in these estimates. As a result, the ultimate outcome from any audit could be materially different from amounts reflected in our income tax provisions and accruals. Future settlements of income tax audits may have a material adverse effect on earnings between the period of initial recognition of tax estimates in our financial statements and the point of ultimate tax audit settlement.

Risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, could adversely affect our results of operations, cash flows and financial condition.

We are exposed to risks associated with global commodity price volatility arising from restricted or uneven supply conditions, the sustained expansion and volatility of demand from emerging markets, potentially unstable geopolitical and economic variables, weather and other unpredictable external factors. We buy raw materials that contain commodities such as brass, zinc, steel, wood, and glass and petroleum-based products such as resins. In addition, our distribution costs are significantly impacted by the price of oil and diesel fuel. Decreased availability and increased or volatile prices for these commodities, as well as energy used in making, distributing and transporting our products, could increase the costs of our products. While in the past we have been able to mitigate the impact of these cost increases through productivity improvements and passing on increasing costs to our customers over time, there is no assurance that we will be able to offset such cost increases in the future, and the risk of potentially sustained high levels of inflation could adversely impact our results of operations, cash flows and financial condition. While we may use derivative contracts to limit our short-term exposure to commodity price volatility, the commodity exposures under these contracts could still be material to our results of operations, cash flows and financial condition. In addition, in periods of declining commodity prices, these derivative contracts may have the short-term effect of increasing our expenditures for these raw materials.

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We manufacture, source and sell products internationally and are exposed to risks associated with doing business globally.globally, including risks associated with uncertain trade environments.

We manufacture, source or sell our products in a number of locations throughout the world, predominantly in the U.S., Mexico, Europe, Africa, Canada China, Europe and Mexico.China. Accordingly, we are subject to risks associated with potential disruption caused by changes in political, economic and social environments, including civil and political unrest, illnesses declared as a public health emergency (including viral pandemics), terrorism, possible expropriation, local labor conditions, changes in laws, regulations and policies of foreign governments and trade disputes with the U.S., and U.S. laws affecting activities of U.S. companies abroad. We could be adversely affected by international trade regulations, including duties, tariffs and antidumping penalties. Risks inherent to international operations include: potentially adverse tax laws, unfavorable changes or uncertainty relating to trade agreements or importation duties, uncertainty regarding clearance and enforcement of intellectual property rights, risks associated with the Foreign Corrupt Practices Act, mandatory or voluntary shutdowns of our facilities or our suppliers due to changes in political, economic or health emergencies and difficulty enforcing contracts. While we hedge certain foreign currency transactions, a change in the value of the currencies will impact our financial statements when translated into U.S. dollars. In addition, fluctuations in currency can adversely impact the cost position of our products in local currency, making it more difficult for us to compete. Our success will depend, in part, on our ability to effectively manage our businesses through the impact of these potential changes. In addition, we source certain raw materials, components and finished goods from China where we have experienced higher manufacturing costs and longer lead times due to higher tariffs, currency fluctuations, higher wage rates, labor shortages and higher raw material costs.

Changes in government and industry regulatory standards could adversely affect our results of operations, cash flows and financial condition.

Government regulations and policies pertaining to trade agreements, health and safety (including protection of employees as well as consumers), taxes and environmental concerns continue to emerge domestically, as well as internationally. In particular, there may be additional tariffs or taxes related to our imported inputsraw materials, components and finished goods.  It is necessary for us to comply with current requirements (including requirements that do not become effective until a future date), and even more stringent requirements could be imposed on our products or processes in the future. Compliance with changes in taxes, tariffs and other regulations may require us to further alter our manufacturing and installation processes and our sourcing. Such actions could increase our capital expenditures and adversely impact our results of operations, cash flows and financial condition.

Our inability to secure and protect our intellectual property rights could negatively impact revenues and brand reputation.

We have many patents, trademarks, brand names and trade names that are important to our business. Unauthorized useRisks associated with the disruption of these intellectual property rights may not only erode sales of our products, but may also cause significant damage to our brand name and reputation, interfere with our ability to effectively represent the Company to our customers, contractors and suppliers, and increase litigation costs. There can be no assurance that our efforts to protect our brands and trademark rights will prevent violations. In addition, existing patent, trade secret and trademark laws offer only limited protection, and the laws of some countries in which our products are or may be developed, manufactured or sold may not fully protect our intellectual property from infringement by others. There can be no assurance that our efforts to assess possible third party intellectual property rights will ensure that Company’s ability to manufacture, distribute, market or sell in any given country or territory. Furthermore, others may assert intellectual property infringement claims against us or our customers.

Our businesses rely on the performance of wholesale distributors, dealers and other marketing arrangements and could be adversely affected by poor performance or other disruptions in our distribution channels and customers.

We rely on a distribution network comprised of consolidating customers. Any disruption to the existing distribution channelsoperations could adversely affect our results of operations, cash flows and financial condition. The consolidation

We manufacture a significant portion of distributorsthe products we sell. Any prolonged disruption in our operations, whether due to technical or thelabor difficulties, COVID-19, weather, lack of raw material or component availability, startup inefficiencies for new operations, destruction of or damage to any facility (as a result of natural disasters, fires and explosions, use and storage of hazardous materials or other events) or other reasons, could negatively impact our profitability and competitive position and adversely affect our results of operations, cash flows and financial instability or default ofcondition.

Our inability to obtain raw materials and finished goods in a distributor or one of its major customerstimely and cost-effective manner from suppliers could potentially cause such a disruption. In addition to our own sales force, we offer our products through a variety of third-party distributors, representatives and retailers. Certain of our distributors, representatives or retailers may also market other products that compete with our products. The loss or termination of one or more of our major distributors, representatives or retailers, the failure of one or more of our distributors, representatives or retailers to effectively promote our products, or changes in the financial or business condition of these distributors, representatives or retailers couldadversely affect our ability to bringmanufacture and market our products.

We purchase raw materials to be used in manufacturing our products and also rely on third-party manufacturers as a source for finished goods. We typically do not enter into long-term contracts with our suppliers or sourcing partners. Instead, most raw materials and sourced goods are obtained on a “purchase order” basis. In addition, in some instances we maintain single-source or limited-source sourcing relationships, either because multiple sources are not available or the relationship is advantageous due to market.performance, quality, support, delivery, capacity or price considerations. Financial, operating or other difficulties encountered by our suppliers or sourcing partners or changes in our relationships with them could result in manufacturing or sourcing interruptions, delays and inefficiencies, and prevent us from manufacturing or obtaining the finished goods necessary to meet customer demand. If we are unable to meet customer demand, there could be an adverse effect on our results of operations, cash flows and financial condition.

Impairment charges could have a material adverse effect on the Company’s financial results.

Goodwill and other acquired intangible assets expected to contribute indefinitely to our cash flows are not amortized, but must be evaluated for impairment by management at least annually. If the carrying value exceeds the implied fair value of goodwill, the goodwill is considered impaired and is reduced to fair value via a non-cash charge to earnings. If the carrying value of an indefinite-lived intangible asset is greater than its fair value, the intangible asset is considered impaired and is reduced to fair value via a non-cash charge to earnings. During the years ended December 31, 2020, 2019 and 2018, we recorded non-cash impairment charges related to indefinite-lived intangible assets of $22.5 million, $41.5 million and $62.6 million, respectively. Future events may occur that would adversely affect the fair value of our goodwill or other acquired intangible assets and require impairment charges. Such events may include, but are not limited to, lower than forecasted revenues, actual new construction and repair and remodel growth rates that fall below our assumptions, actions of key customers, increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of

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Our pension costs and funding requirements could increase as a result of volatility in the financial markets and changes in interest rates and actuarial assumptions.

Increases in the costs of pension benefits may continue and negatively affect our business as a result of: the effect of potential declines in the stock and bond markets on the performance of our pension plan assets; potential reductions in the discount rate used to determine the present value of our benefit obligations; and changes to our investment strategy that may impact our expected return on pension plan assets assumptions. U.S. generally accepted accounting principles require that we calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions about financial markets and interest rates, which may change based on economic conditions. Our accounting policy for defined benefit plans may subject earnings to volatility due to the recognition of actuarial gains and losses, particularly due to the change in the fair value of pension assets and interest rates. Funding requirements for our U.S. pension plans may become more significant. However, the ultimate amounts to be contributed are dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory changes related to pension funding obligations.

General Risk Factors

The current outbreak of COVID-19 impacted our business and may cause further disruptions to our business, financial performance and operating results.

The COVID-19 pandemic had an impact on many aspects of the Company’s operations and may impact the Company in the future, including impacting our ability to efficiently operate our facilities across the globe, the ability of our suppliers to manufacture key inputs, as well as potential other impacts on customer behaviors, the Company’s employees and the market generally. Our business could be negatively impacted over the longer term if the disruptions related to COVID-19 decrease consumer confidence and housing investments; or precipitate a prolonged economic downturn and/or an extended rise in unemployment or tempering of wage growth, any of which could lower demand for our products.

The inherent uncertainty surrounding COVID-19, makes it more challenging for our management to estimate the future performance of our business and the economic impact of the COVID-19 pandemic, including but not limited to, possible impairment, restructuring and other charges. Accordingly, future developments may materially impact our current estimates of such charges.

Risks associated with the disruption of operationsstrategic acquisitions and joint ventures could adversely affect our results of operations, cash flows and financial condition.

We manufactureconsider acquisitions and joint ventures as a means of enhancing stockholder value. Acquisitions and joint ventures involve risks and uncertainties, including difficulties integrating acquired companies and operating joint ventures; difficulties retaining the acquired businesses’ customers and brands; the inability to achieve the expected financial results and benefits of transactions; the loss of key employees from acquired companies; implementing and maintaining consistent standards, controls, policies and information systems; and diversion of management’s attention from other business matters. Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in dilution in earnings per share and return on capital.

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Table of Contents

Future tax law changes or the interpretation of existing tax laws may materially impact our effective income tax rate, the resolution of unrecognized tax benefits and cash tax payments.

Our businesses are subject to income taxation in the U.S., as well as internationally. We are routinely audited by income tax authorities in many jurisdictions. Although we believe that the recorded tax estimates are reasonable and appropriate, there are significant portion ofuncertainties in these estimates. As a result, the products we sell. Any prolonged disruptionultimate outcome from any audit could be materially different from amounts reflected in our operations, whether dueincome tax provisions and accruals. Future settlements of income tax audits may have a material adverse effect on earnings between the period of initial recognition of tax estimates in our financial statements and the point of ultimate tax audit settlement. In addition, significant judgement is required in determining our provision for income taxes. Our total income tax expense could be affected by changes in tax rates in the jurisdictions in which our businesses are subject to technicaltaxation, changes in the valuation of deferred tax assets and liabilities or labor difficulties, weather, lackchanges in tax laws or the interpretation of raw material or component availability, startup inefficiencies for new operations, destruction of or damagesuch laws by tax authorities.

Our inability to any facility (as a result of natural disasters, firessecure and explosions, use and storage of hazardous materials or other events) or other reasons,protect our intellectual property rights could negatively impact revenues and brand reputation.

We have many patents, trademarks, brand names and trade names that, in the aggregate, are important to our profitabilitybusiness. Unauthorized use of these intellectual property rights may not only erode sales of our products, but may also cause significant damage to our brand name and competitive position and adversely affect our results of operations, cash flows and financial condition.

Our inability to obtain raw materials and finished goods in a timely and cost-effective manner from suppliers could adversely affectreputation, interfere with our ability to manufactureeffectively represent the Company to our customers, contractors and marketsuppliers, and increase litigation costs. There can be no assurance that our products.

We purchase raw materialsefforts to be usedprotect our brands and trademark rights will prevent violations. In addition, existing patent, trade secret and trademark laws offer only limited protection, and the laws of some countries in manufacturingwhich our products and also rely on third-party manufacturers as a source for finished goods. We typically doare or may be developed, manufactured or sold may not enter into long-term contracts withfully protect our suppliersintellectual property from infringement by others. There can be no assurance that our efforts to assess possible third party intellectual property rights will ensure the Company’s ability to manufacture, distribute, market or sourcing partners. Instead, most raw materials and sourced goods are obtained on a “purchase order” basis. In addition,sell in some instances we maintain single-sourceany given country or limited-source sourcing relationships, either because multiple sources are not availableterritory. Furthermore, others may assert intellectual property infringement claims against us or the relationship is advantageous due to performance, quality, support, delivery, capacity or price considerations. Financial, operating or other difficulties encountered by our suppliers or sourcing partners or changes in our relationships with them could result in manufacturing or sourcing interruptions, delays and inefficiencies, and prevent us from manufacturing or obtaining the finished goods necessary to meet customer demand. If we are unable to meet customer demand, there could be an adverse effect on our results of operations, cash flows and financial condition.customers.

Our failure to attract and retain qualified personnel and other labor constraints could adversely affect our results of operations, cash flows and financial condition.

Our success depends in part on the efforts and abilities of qualified personnel at all levels, including our senior management team and other key employees. Their motivation, skills, experience, contacts and industry knowledge significantly benefit our operations and administration. TheLow unemployment rates in the U.S., competition for qualified talent and attracting and retaining personnel in remote locations could result in the failure to attract, motivate and retain members of our senior management team and key employeespersonnel, which could have an adverse effect on our results of operations, cash flows and financial condition.

Potential liabilities and costs from claims and litigation could adversely affect our results of operations, cash flows and financial condition.

We are, from time to time, involved in various claims, litigation matters and regulatory proceedings that arise in the ordinary course of our business and that could have an adverse effect on us. These matters may include contract disputes, intellectual property disputes, product recalls, personal injury claims, construction defects and home warranty claims, warranty disputes, environmental claims or proceedings, other tort claims, employment and tax matters and other proceedings and litigation, including class actions. It is not possible to predict the outcome of pending or future litigation, and, as with any litigation, it is possible that some of the actions could be decided unfavorably and could have an adverse effect on our results of operations, cash flows and financial condition.

We are subject to product safety regulations, recalls and direct claims for product liability that can result in significant liability and, regardless of the ultimate outcome, can be costly to defend. As a result of the difficulty of controlling the quality of products or components sourced from other manufacturers, we are exposed to risks relating to the quality of such products and to limitations on our recourse against such suppliers.

An impairment in the carrying value of goodwill or other acquired intangible assets could negatively affect our results of operations and financial condition.

The carrying value of goodwill represents the fair value of acquired businesses in excess of identifiable assets and liabilities as of the acquisition date. The carrying value of other intangible assets represents the fair value of customer relationships, tradenames and other acquired intangible assets as of the acquisition date. Goodwill and other acquired intangible assets expected to contribute indefinitely to our cash flows are not amortized, but must be evaluated for impairment by management at least annually. If the carrying value exceeds the implied fair value of goodwill, the goodwill is considered impaired and is reduced to fair value via anon-cash charge to earnings. If the carrying value of an indefinite-lived intangible asset is greater than its fair value, the intangible asset is considered impaired and is reduced to fair value via anon-cash charge to earnings. Events or circumstances that could have a potential negative effect on the

estimated fair value of our reporting units and indefinite-lived tradenames include: actual new construction and repair and remodel growth rates that lag our assumptions, actions of key customers, volatility of discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending and a decline in the price of our common stock. If the value of goodwill or other acquired intangible assets is impaired, our results of operations and financial condition could be adversely affected.

We may experience delays or outages in our information technology system and computer networks. We may be subject to breaches of our information technology systems, which could damage our reputation and consumer relationships. Such breaches could subject us to significant financial, legal and operational consequences.

We, like most companies, may be subject to information technology system failures and network disruptions. These may be caused by delays or disruptions due to system updates, natural disasters, malicious attacks, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronicbreak-ins, or similar events or disruptions. Our businesses may implement enterprise resource planning systems or add applications to replace outdated systems and to operate more efficiently. We may not be able to successfully implement the projects without experiencing difficulties. In addition, any expected benefits of implementing projects might not be realized or the costs of implementation might outweigh the benefits realized. In addition, information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks. We believe we devote appropriate resources to network security, data encryption, and other security measures to protect our systems and data, but these security measures cannot provide absolute security. In the event of a breach, we would be exposed to a risk of loss or litigation and possible liability, which could have an adverse effect on our business, results of operations, cash flows and financial condition.

There can be no assurance that we will have access to the capital markets on terms acceptable to us.

From time to time we may need to access the long-term and short-term capital markets to obtain financing. Although we believe that the sources of capital currently in place permit us to finance our operations for the foreseeable future on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including, but not limited to: our financial performance, our credit ratings, reference rate reform, the liquidity of the overall capital markets and the state of the economy, including the U.S. housing market. There can be no assurance that we will have access to the capital markets on terms acceptable to us. In addition, a prolonged global economic downturn may also adversely impact our access to long-term capital markets, result in increased interest rates on our corporate debt, and weaken operating cash flow and liquidity. Decreased cash flow and liquidity could potentially adversely impact our ability to pay dividends, fund acquisitions and repurchase shares in the future.

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Item 1B.    Unresolved Staff Comments.

None.

Item 2.    Properties.

Our principal executive office is located at 520 Lake Cook Road,in Deerfield, Illinois 60015.Illinois. We operate 2936 U.S. manufacturing facilities in 1619 states and have 1921 manufacturing facilities in international locations (8 in Mexico, 32 in Asia, 4 in Europe, 24 in Africa, and 23 in Canada). In addition, we have 5064 distribution centers and warehouses worldwide, of which 4149 are leased. The following table provides additional information with respect to these properties.

We are of the opinion that the properties are suitable to our respective businesses and have production capacities adequate to meet the current needs of our businesses.

Item 3.    Legal Proceedings.

The Company is a defendant in lawsuits that are ordinary routine litigation matters incidental to its businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company’s results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote.

Item 4.    Mine Safety Disclosures.

Not applicable.

Information about our Executive Officers of the Registrant.Officers.

Our current executive officers are as follows:

Christopher J. Klein has

Nicholas I. Fink has served as Chief Executive Officer since January 2020. From March 2019 to January 2020, Mr. Fink served as President and Chief Operating Officer of Fortune Brands since January 2010.Brands. From July 2016 to March 2019, Mr. Fink served as President of the Company’s Plumbing business. From June 2015 to July 2016, Mr. Fink served as Senior Vice President of Global Growth and Development of Fortune Brands.

Patrick D. Hallinanhas served as Senior Vice President and& Chief Financial Officer of Fortune Brands since July 2017. From January 2017 to July 2017, Mr. Hallinan served as Senior Vice President of Finance of Fortune Brands. Prior to joining Fortune Brands’ executive team, Mr. Hallinan served as chief financial officerVice President, Finance and Chief Financial Officer of Moen Incorporated, a subsidiary of Fortune Brands, from November 2013 to January 2017.

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Michael P. BauerTable of Contents

Cheri M. Phyfer has served as President of The Master Lock Companythe Plumbing segment since December 2014. From April 2011 through December 2014, Mr. BauerMarch 2019. Ms. Phyfer served as President of Moen’s U.S. business from February 2018 to March 2019. Prior to that, Ms. Phyfer held various positions at the Sherwin-Williams Company, a manufacturer of paint and coatings products, including President of the U.S. Businesses at Moen Incorporated, a subsidiary of Fortune Brands.Consumer Brands Group (2017) and President & General Manager – Diversified Brands from 2013 to 2017.

Nicholas I. FinkBrett E. Finley has served as President of Fortune Brands Global Plumbing Group LLCthe Outdoors & Security segment since August 2016.July 2018. From June 2015February 2016 to August 2016,July 2018, Mr. FinkFinley served as Senior Vice President-Global Growth and Development of Fortune Brands. From June 2006 to May 2015, Mr. Fink worked at Beam Suntory, Inc., a global spirits company, and its predecessor entities in various senior positions including as Senior Vice President and President, Asia-Pacific/South America.

Brett E. Finleyhas served asthe President of Fortune Brands Doors, Inc. since February 2016. From February 2008Prior to February 2016,that, Mr. Finley held various leadership positions at IDEX Corporation, a global manufacturer of fluidics systems and specialty engineered products, including Senior Vice President and Group Executive, Fluid & Metering Technologies Segment and President- IDEX-Asia.Segment.

R. David M. RandichBanyard, Jr. has served as President of MasterBrandthe Cabinets Inc., a subsidiarysegment since November 2019. Mr. Banyard served as President and Chief Executive Officer of Fortune Brands, sinceMyer Industries, an international manufacturer of packaging, storage, and safety products and specialty molding, from December 2015 to October 2012.2019.

Tracey L. BelcourtJohn D. Lee has served as Senior Vice President, of Global Growth and& Development of Fortune Brands since December 2016. From 2012 to 2016, Ms. BelcourtJanuary 2020. Mr. Lee served as ExecutiveSenior Vice President, Global Growth & Development of the Plumbing segment from July 2016 to January 2020. Prior to that he served as Vice President and Head of Strategy, Americas of Mondelez International,Beam Suntory, Inc., a confectionary, food and beverage company.global spirits company, from January 2015 to July 2016.

Robert K. Biggart has served as Senior Vice President, General Counsel and& Secretary of Fortune Brands since December 2013. From March 2005 through December 2013, Mr. Biggart served as Senior Vice President — General Counsel of PepsiCo Americas Beverages, a business division of PepsiCo, Inc., a global food and beverage company.

Sheri R. Grissomhas served as Senior Vice President, —Chief Human Resources Officer since January 2020 and as Senior Vice President - Human Resources of Fortune Brands since February 2015. Ms. Grissom served as Executive Vice President — Global Human Resources of Actuant Corporation, a diversified industrial company, from October 2010 to February 2015.

Dan Luburichas served as Vice President and Corporate Controller of Fortune Brands since October 2011.

Brian C. Lantzhas served as Senior Vice President, Communications & Corporate Administration since January 2017. Mr. Lantz joined Fortune Brands in June 2011served as Vice President of Investor Relations.Relations and Corporate Communications from July 2013 to December 2016.

Marty Thomashas served as Senior Vice President, Operations and& Supply Chain Strategy since September 2017. Mr. Thomas served as Senior Vice President of Global Operations and Engineering Services at Rockwell Automation, Inc., a provider of industrial automation and information products, from 2006 to 2016.

Dan Luburic has served as Vice President and Corporate Controller of Fortune Brands since October 2011.

PART II

Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information, Dividends and Holders of Record

Our common stock is listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “FBHS”. The following table presents the high and low prices for our common stock as reported on the NYSE and the dividends declared for each of the periods indicated.

In December 2017,2020, our Board of Directors increased the quarterly cash dividend by 11%8% to $0.20$0.26 per share of our common stock.  Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis. There can be no assurance as to when and if future dividends will be paid, or at what level, because the payment of dividends is dependent upon our financial condition, results of operations, capital requirements and other factors deemed relevant by our Board of Directors.

On February 2, 2018,5, 2021, there were 10,6158,604 record holders of the Company’s common stock, par value $0.01 per share. A substantially greater number of holders of the Company’s common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers or other financial institutions.

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Below are the repurchases of common stock by the Company or any “affiliated purchaser” (as defined inRule 10b-18(a)(3) under the Exchange Act) for the three months ended December 31, 2017:2020:

Stock Performance

The above graph compares the relative performance of our common stock, the S&P 500 Index and a Peer Group Index. This graph covers the period from December 31, 20122015 through December 31, 2017.2020. This graph assumes $100 was invested in the stock or the index on December 31, 20122015 and also assumes the reinvestment of dividends. The foregoing performance graph is being furnished as part of this Annual Report on Form10-K solely in accordance with the requirement under Rule14a-3(b)(9) to furnish our stockholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any filings by the Company under the Securities Act or the Exchange Act.

Peer Group IndexIndex. The 20172020 peer group is composed of the following publicly traded companies corresponding to the Company’s core businesses:

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Table of Contents

American Woodmark Corporation, Armstrong World Industries, Inc., Fastenal Company, Leggett & Platt Incorporated, Lennox International Inc., Masco Corporation, Masonite International Corporation, Mohawk Industries, Inc., Newell Brands Inc., The Sherwin-Williams Company, Stanley Black & Decker, Inc. and USG Corporation.Fastenal Company.

Calculation of Peer Group Index

The weighted-average total return of the entire peer group, for the period of December 31, 20122015 through December 31, 2017,2020, is calculated in the following manner: