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

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

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 is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, at October ~~20, 2017~~15, 2021 was ~~151,800,773.~~135,734,346.

For the Nine and Three Months Ended September 30, ~~2017~~2021 and ~~2016~~2020

	Common Stock		Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Retained Earnings			Treasury Stock			Non- controlling Interests			Total Equity
Balance at December 31, 2019	$	1.8	$	2,813.8	$	(72.6	)	$	1,763.0		$	(2,079.4	)	$	1.2		$	2,427.8
Comprehensive income:
Net income		—		—		—			389.5			—			1.3			390.8
Other comprehensive income (loss)		—		—		(18.9	)		—			—			—			(18.9	)
Stock options exercised		—		56.0		—			—			—			—			56.0
Stock-based compensation		—		33.5		—			—			(8.3	)		—			25.2
Treasury stock purchases		—		—		—			—			(150.0	)		—			(150.0	)
Dividends to non-controlling interest		—		—		—			—			—			(2.5	)		(2.5	)
Dividends ($0.72 per common share)		—		—		—			(99.8	)		—			—			(99.8	)
Balance at September 30, 2020	$	1.8	$	2,903.3	$	(91.5	)	$	2,052.7		$	(2,237.7	)	$	—		$	2,628.6

Balance at December 31, 2020	$	1.8	$	2,926.3	$	(55.1	)	$	2,180.2		$	(2,277.7	)	$	—		$	2,775.5
Comprehensive income:
Net income		—		—		—			597.1			—			—			597.1
Other comprehensive income (loss)		—		—		1.3			—			—			—			1.3
Stock options exercised		0.1		32.5		—			—			—			—			32.6
Stock-based compensation		—		36.0		—			—			(10.5	)		—			25.5
Treasury stock purchases		—		—		—			—			(270.1	)		—			(270.1	)
Dividends ($0.78 per common share)		—		—		—			(107.3	)		—			—			(107.3	)
Balance at September 30, 2021	$	1.9	$	2,994.8	$	(53.8	)	$	2,670.0		$	(2,558.3	)	$	—		$	3,054.6

	Common Stock		Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Retained Earnings			Treasury Stock			Non- controlling Interests			Total Equity
Balance at June 30, 2020	$	1.8	$	2,852.9	$	(110.3	)	$	1,954.7		$	(2,237.3	)	$	1.3		$	2,463.1
Comprehensive income:
Net income		—		—		—			164.6			—			1.2			165.8
Other comprehensive income (loss)		—		—		18.8			—			—			—			18.8
Stock options exercised		—		31.9		—			—			—			—			31.9
Stock-based compensation		—		18.5		—			—			(0.4	)		—			18.1
Treasury stock purchases		—		—		—			—			—			—			—
Dividends to non-controlling interests		—		—		—			—			—			(2.5	)		(2.5	)
Dividends ($0.48 per common share)		—		—		—			(66.6	)		—			—			(66.6	)
Balance at September 30, 2020	$	1.8	$	2,903.3	$	(91.5	)	$	2,052.7		$	(2,237.7	)	$	—		$	2,628.6

Balance at June 30, 2021	$	1.9	$	2,982.8	$	(38.4	)	$	2,539.3		$	(2,442.1	)	$	—		$	3,043.5
Comprehensive income:
Net income		—		—		—			202.1			—			—			202.1
Other comprehensive income (loss)		—		—		(15.4	)		—			—			—			(15.4	)
Stock options exercised		—		0.4		—			—			—			—			0.4
Stock-based compensation		—		11.6		—			—			(2.1	)		—			9.5
Treasury stock purchases		—		—		—			—			(114.1	)		—			(114.1	)
Dividends ($0.52 per common share)		—		—		—			(71.4	)		—			—			(71.4	)
Balance at September 30, 2021	$	1.9	$	2,994.8	$	(53.8	)	$	2,670.0		$	(2,558.3	)	$	—		$	3,054.6

The Company is a leading home and security products company with a portfolio of leading branded products used for residential home repair, remodeling, new construction and security applications.

The condensed consolidated balance sheet as of September 30, ~~2017,~~2021, the related condensed consolidated statements of comprehensive income and equity for the nine and ~~three-month periods~~three months ended September 30, ~~2017~~2021 and ~~2016~~2020, and the related condensed consolidated statements of cash flows ~~and equity~~ for the ~~nine-month periods~~nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year.

In 2018 our Plumbing segment entered into a strategic partnership with, and acquired non-controlling equity interests in, Flo Technologies, Inc. (“Flo”), a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. In January 2020, we entered into an agreement to acquire the remaining outstanding shares of Flo in a multi-phase transaction.In January 2021, upon the expiration of the minority shareholders’ substantive participating rights, we began to consolidate the financial results of Flo into the Company’s financial results. The financial results of Flo are included in the Company’s condensed consolidated statements of comprehensive income for the nine and three months ended September 30, 2021, the condensed consolidated statement of cash flow for the nine months ended September 30, 2021 and the condensed consolidated balance sheet as of September 30, 2021. The results of operations are included in the Plumbing segment.

In December 2020, we acquired 100% of the outstanding equity interests of Larson Manufacturing (“Larson”), the North American market leading brand of storm, screen and security doors. Larson also sells related outdoor living products including retractable screens and porch windows. The Company completed the acquisition for a total purchase price, excluding expected tax benefits, of approximately $717.5 million, net of cash acquired. We financed the transaction with borrowings under our existing credit facilities. The financial results of Larson were included in the Company’s condensed consolidated statements of comprehensive income for the nine and three months ended September 30, 2021 the condensed consolidated statement of cash flow for the nine months ended September 30, 2021, and the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020. The results of operations are included in the Outdoors & Security segment.

The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our annual audited consolidated financial statements and notes. The December 31, ~~2016~~2020 condensed consolidated balance sheet was derived from ~~the~~our audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). This Quarterly Report on Form10-Q should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020.

~~In July 2017, we acquired Shaws Since1897 Limited (“Shaws”), aUK-based~~ luxury plumbing products company that specializes in manufacturing and selling fireclay sinks and selling brassware and accessories in partnership with Perrin & Rowe. This acquisition broadened our plumbing portfolio and enhanced future growth opportunities. Net sales and operating income in the three months ended September 30, 2017 were not material to the Company. The financial results of Shaws were included in the Company’s consolidated balance sheets as of September 30, 2017, the Company’s consolidated statements of income for the nine and three months ended September 30, 2017, and statement of cash flows for the nine months ended September 30, 2017.

In September 2016, we acquired ROHL LLC (“ROHL”) and in a related transaction, we acquired TCL Manufacturing which gave us ownership of Perrin & Rowe Limited (“Perrin & Rowe”). In addition, in May 2016, we acquired Riobel Inc (“Riobel”). The financial results of ROHL, Perrin & Rowe, and Riobel were included in the Company’s consolidated balance sheets as of September 30, 2017 and December 31, 2016, the Company’s consolidated statements of income for the nine and three months ended September 30, 2017, and statement of cash flows for the nine months ended September 30, 2017.

~~Revenue from Contracts with Customers~~Simplifying the Accounting for Income Taxes

In ~~May 2014,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)~~2014-09,~~ 2019-12, which ~~clarifies the~~is intended to simplify accounting for ~~revenue arising from contracts with customers~~income taxes and ~~specifies the disclosures that an entity should include~~improve consistency in ~~its financial statements.~~application. ASU 2019-12 amends certain elements of income tax accounting, including but not limited to intraperiod tax allocations, step-ups in tax basis of goodwill, and calculating taxes on year-to-date losses in interim periods. The ~~standard is~~guidance was effective for ~~annual reporting periods~~the Company’s fiscal year beginning after December 15, 2017 (calendar year 2018 for Fortune Brands). During 2016, the FASB issued certain amendments to the standard relating to the principal versus agent guidance, accounting for licenses of intellectual property and identifying performance obligations as well as the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes.January 1, 2021. The effective date and transition requirements for these amendments are the same as those of the original ASU. We have elected the modified retrospective transition approach and also have identified focus areas for each of our reporting segments and have made substantial progress in our assessment of the accounting and financial reporting implications as of September 30, 2017. Our key considerations pursuant to ASU 2014-09 are the control of goods (i.e., timing of revenue recognition), separate performance obligations, customer rights of return (i.e., the reclassification on the balance sheet of the customer rights of return from accounts receivable to a refund liability as well as the recognition of a corresponding asset) and our accounting for display assets. We do not expect the change in accounting related to these considerations to have a material effect on our financial statements.

~~In February 2016, the FASB issued ASU2016-02,~~ ~~which requires lessees to recognize almost all leases on their balance sheet as a“right-of-use”~~ asset and lease liability but recognize related expenses in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. The standard is effective for annual periods beginning after December 15, 2018 (calendar year 2019 for Fortune Brands) and earlier application is permitted. We are assessing the impact the adoption of this ~~standard will have on our financial statements.~~

~~In August 2017, the FASB issued ASU2017-12,~~ that amends current hedge accounting model. The new standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item (consistent with our current practice). The change in fair value for qualifying cash flow and net investment hedges will be included in Other comprehensive income (until they are reclassified into the income statement). The standard also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of the hedge effectiveness. Standard is effective as of January 1, 2019 and earlier application is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

~~Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets~~

~~In May 2017, the FASB issued ASC610-20~~ that clarifies the scope and application of various standards for the sale of nonfinancial assets (e.g. PP&E including real estate, intangible assets, materials and supplies). The standard distinguishes between a sale to customer vs~~non-customer.~~ Sales to customers are in scope of the new revenue standard. It also clarifies a derecognition model for nonfinancial assets that do not represent a business. The standard is effective as of January 1, 2018 consistent with the effective date for the new revenue recognition standard. We are assessing the impact the adoption of this standard will have on our financial statements and we will consider the implications of the new standard on case by case basis for all~~non-recurring~~ ~~transactions where we sell or transfer nonfinancial assets.~~

~~In May 2017, the FASB issued ASU2017-09,~~ ~~which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new~~ guidance ~~provides a relief to entities that makenon-substantive~~ changes to their share-based payment awards and will result in fewer changes to the terms of an award being accounted for as modifications. The standard is effective January 1, 2018 and early adoption is permitted; however we have elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~In March 2017, the FASB issued ASU2017-07,~~ which requires entities to present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. Employers will present the other components (i.e., interest cost, expected return on plan assets and actuarial gains/losses) separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. The standard is effective January 1, 2018 and early adoption is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

~~In January 2017, the FASB issued ASU2017-04,~~ which simplifies the accounting for goodwill impairment for all entities. Under the new standard, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The standard eliminates the current requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount (i.e., hypothetical purchase price allocation). The new standard is effective for annual and interim impairment tests performed in the periods beginning after January 1, 2020 and early adoption is permitted. We plan to early adopt ASU~~2017-04~~ ~~in conjunction with our annual goodwill impairment test during the fourth quarter of 2017.~~

~~In January 2017, the FASB issued ASU2017-01,~~ which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business and therefore business combination guidance would apply. The new standard requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset (i.e., a business) or a group of similar identifiable assets (i.e., not a business). The guidance also requires a business to include at least one substantive process and narrows the definition of outputs (e.g., revenues with customers). The standard is effective January 1, 2018 and early adoption is permitted. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~In November 2016, the FASB issued ASU2016-18,~~ according to which entities are no longer required to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The prior standard did not address the classification of activity related to restricted cash and restricted cash equivalents in the statement of cash flows, which has resulted in diversity in the presentation of cash flows. The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~In October 2016, the FASB issued ASU2016-16,~~ which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. Under the current guidance, companies are required to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized (e.g., depreciated, amortized or impaired). The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. The transition method will be a “modified retrospective” (i.e., with a cumulative adjustment to retained earnings at adoption). We are assessing the impact the adoption of this standard will have on our financial statements.

~~In September 2016, the FASB issued ASU2016-15,~~ which changes how an entity classifies certain cash receipts and cash payments on its statement of cash flows. The key changes that may potentially impact our financial statements include the following: 1) Cash payments for debt prepayment or extinguishment costs would be classified as financing cash outflows; 2) Contingent consideration payments that are not made within three months after the consummation of a business combination would be classified as financing (if the payment is made up to the acquisition date fair value of liability) or operating outflows (if in excess of acquisition fair value). Cash payments made “soon after” the consummation of a business combination generally would be classified as cash outflows for investing activities; 3) Insurance settlement proceeds would be classified based on the nature of the loss; and 4) Company-owned life insurance settlement proceeds would be presented as investing cash inflows, and premiums would be classified as investing or operating cash outflows, or a combination of both. The new standard is effective January 1, 2018 and should be adopted retrospectively. Early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~In June 2016, the FASB issued ASU2016-13,~~ which changes the impairment model for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance applies to most financial assets measured at amortized cost, including trade and other receivables and loans as well as~~off-balance-sheet~~ credit exposures (e.g., loan commitments and standby letters of credit). The standard will replace the “incurred loss” approach under the current guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” The standard is effective January 1, 2020 and early application is permitted beginning January 1, 2019. We are assessing the impact the adoption of this standard will have on our financial statements.

~~In January 2016, the FASB issued ASU2016-01,~~ which requires entities to measure investments in unconsolidated entities (other than those accounted for using the equity method of accounting) at fair value through the income statement. There will no longer be an~~available-for-sale~~ classification (with changes in fair value reported in Other Comprehensive Income). In addition, the cost method is eliminated for equity investments without readily determinable fair values. The new standard is effective January 1, 2018. Early application is permitted for certain provisions of the standard; however, we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements.

In ~~July 2017,~~2018 our Plumbing segment entered into a strategic partnership with, and acquired non-controlling equity interests in, Flo, a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. In January 2020, we entered into an agreement to acquire the remaining outstanding shares of Flo in a multi-phase transaction. As part of this agreement, we acquired ~~Shaws,~~ a ~~UK-based luxury plumbing products company that specializes~~majority of Flo’s outstanding shares during 2020 and entered into a forward contract to purchase all remaining shares of Flo during the first quarter of 2022 for a price based on a multiple of Flo’s 2021 sales and adjusted earnings before interest and taxes.

During 2020, we applied the equity method of accounting to our investment in ~~manufacturing~~Flo as the minority shareholders had substantive participating rights which precluded consolidation in our results of operations and ~~selling fireclay sinks~~statements of financial position and ~~selling brassware~~cash flows. Immediately prior to applying the equity method of accounting, we recognized a non-cash gain of $6.6 million within other income during the nine months ended September 30, 2020 related to the remeasurement of our previously existing investment in Flo.

The minority shareholders’ substantive participating rights expired on January 1, 2021, at which time we obtained control of, and ~~accessories~~began consolidating, Flo in ~~partnership with Perrin & Rowe. Net~~our results of operations and statements of financial positions and cash flows. Immediately prior to consolidating Flo, we recognized a non-cash loss of $4.5 million within other expense during the nine months ended September 30, 2021 related to the remeasurement of our previously existing investment in Flo. The fair value allocated to assets acquired and liabilities assumed as of January 1, 2021 was $87.8 million,net of cash acquired of $9.7 million. Flo’s net sales and operating income infor the nine and three months ended September 30, ~~2017~~2021 were not material to the Company.

In December 2020, we acquired 100% of the outstanding equity interests of Larson, the North American market leading brand of storm, screen and security doors. Larson also sells related outdoor living products including retractable screens and porch windows. The Company completed the acquisition for a total purchase price, excluding expected tax benefits, of approximately $717.5 million, net of cash acquired. We financed the transaction ~~using cash on hand and borrowings under our existing credit facilities. The results of the operations are included in the Plumbing segment from the date of acquisition.~~

~~In April 2017, we completed the sale of Field ID, our cloud-based inspection and safety compliance software product line included in our Security segment. We recorded apre-tax~~ loss of $2.4 million as the result of this sale. The estimated tax expense on the sale was insignificant. Field ID did not qualify for presentation as a discontinued operation in our financial statements.

In September 2016, we acquired ROHL, a California-based luxury plumbing company. In a related transaction, we also acquired Perrin & Rowe, a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. The total combined purchase price was approximately $166 million (including $3 million of liabilities assumed), subject to certain post-closing adjustments. We financed the transaction using cash on hand andwith borrowings under our existing credit facility. ~~Net sales and operating income~~The financial results of Larson were included in the ~~first nine months~~Company’s consolidated balance sheet as of ~~2017 were not material to the Company.~~December 31, 2020. The results of operations are included in the ~~Plumbing~~Outdoors & Security segment. We incurred $4.5 million of Larson acquisition-related transaction costs in the year ended December 31, 2020. The goodwill expected to be deductible for income tax purposes is approximately ~~$49 million.~~

~~In May 2016, we acquired Riobel, a Canadian plumbing company specializing in premium showroom bath and shower fittings, for a total~~$290 million, subject to the finalization of the purchase price allocation.

The following table summarizes the preliminary allocation of ~~$94.6~~the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition.

(a) Net assets exclude $0.4 million of cash transferred to the Company as the result of the Larson acquisition.

The preceding purchase price allocation has been determined provisionally and is subject to revision as additional information about the fair value of individual assets and liabilities becomes available. We apply significant judgement in ~~cash. We financed~~determining the ~~transaction using cash on hand~~estimates and ~~borrowings under our existing credit facilities. Net~~assumptions used to determine the fair value of the identifiable intangible assets, including forecasted revenue growth rates, EBITDA margins, percentage of revenue attributable to the tradename, contributory asset charges, customer attrition rate, market-participant discount rates and the assumed royalty rates. The Company is in the process of finalizing valuations of certain tangible and intangible assets, including property, plant and equipment. The provisional measurement of property, plant and equipment and goodwill is subject to change. Any change in the acquisition date fair value of the acquired assets and liabilities will change the amount of the purchase price allocable to goodwill.

Goodwill includes expected sales and ~~operating income~~cost synergies. The goodwill is included in our Outdoors & Security segment. Larson’s identifiable intangible assets consist of a finite-lived customer relationships asset of $168.0 million, an indefinite-lived tradename of $111.0 million and a finite-lived proprietary technology asset of $34.0 million. The useful life of the ~~first nine months of 2017 were not material~~customer relationship intangible asset is estimated to be 13 years. The Larson tradename has been assigned an indefinite life as we currently anticipate that this tradename will contribute cash flows to the ~~Company.~~Company indefinitely. The ~~results~~useful life of ~~operations are included in~~ the ~~Plumbing segment. We do not expect any portion of goodwill~~proprietary technology intangible asset is estimated to be ~~deductible for income tax purposes.~~

~~We recognized~~7 years. Customer and contractual relationships and proprietary technology are amortized on a ~~loss on discontinued operations primarily related to the prior sale of the Waterloo tool storage and Simonton window businesses for the nine months ended September 30, 2017.~~straight-line basis over their useful lives.

We had goodwill of ~~$1,852.8~~$2,466.6 million and ~~$1,833.8~~$2,394.8 million as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. ~~The $19.0 million increase was primarily due to the acquisition-related adjustments in our Plumbing segment (See Note 4) and foreign translation adjustments.~~ The change in the net carrying amount of goodwill by segment was as follows:

~~We also had net identifiable intangible assets, principally tradenames, of $1,105.4 million and $1,107.0 million as of September 30, 2017 and December 31, 2016, respectively.~~

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

We had net identifiable intangible assets of $1,401.3 million and $1,420.3 as of September 30, 2021 and December 31, 2020, respectively. The ~~$24.1~~$30.5 million increase in gross identifiable intangible assets was primarily due to ~~acquisition-related adjustments in our Plumbing segment (See Note 4) as well as~~the consolidation of Flo and foreign translation ~~adjustments, partially offset by impairment charges during the first quarter of 2017 related to our decision to sell Field ID (See Note 6).~~adjustments.

Amortizable identifiable intangible assets, principally ~~tradenames and~~ customer relationships, are subject to amortization ~~on a straight-line basis~~ over their estimated useful life, ranging from 25 to 30 years, based on the assessment of a number of factors that may impact useful ~~life. These factors include historical and tradename performance with respect to consumer name recognition, geographic market presence, market share, plans for ongoing tradename support and promotion,~~life, which includes customer attrition rates and other relevant factors.

During the second quarter of 2020, we recognized a pre-tax charge of $13.0 million related to a tradename in our Plumbing segment and the remaining carrying value of this tradename is being amortized over its estimated useful life of 30 years. This charge was primarily due to extended closures of luxury plumbing showrooms associated with the impact of the novel coronavirus (“COVID-19”) pandemic that led to lower than expected sales related to an indefinite-lived tradename combined with the updated financial outlook compared to previous forecasts and uncertainty of the COVID-19 pandemic on the sales and profitability.

In the first quarter of 2020, we recognized an impairment charge of $9.5 million related to an indefinite-lived tradename in our Cabinets segment. This charge was primarily the result of lower expected sales of custom cabinetry products related to the impact of COVID-19. As of September 30, 2021, the carrying value of this tradename was $29.1 million.

The fair values of these tradenames were measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life. Some of the more significant assumptions inherent in estimating the fair values include forecasted revenue growth rates for the tradename, assumed royalty rate, and a market-participant discount rate that reflects the level of risk associated with the tradenames’ future revenues and profitability. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates, and management plans. These assumptions represent Level 3 inputs of the fair value hierarchy (refer to Note 8).

The significant assumptions used to estimate the fair values of the tradenames impaired during the year ended December 31, 2020 were as follows:

As of December 31, ~~2016,~~2020, the fair value of ~~one~~four Cabinets' tradenames exceeded their carrying values of $180.6 million by less than 30%. A reduction in the estimated fair value of the tradenames in ~~the~~our Cabinets segment ~~and one of the tradenames~~could trigger additional impairment charges in the Doors segment exceeded their carrying value by less than 10%. In the second quarter of 2017, we performed an interim impairment test on the tradename in the Cabinets segment and concluded the fair value continues to exceed its carrying value. A further reduction in fair value of these tradenames may result in an impairment charge in

future periods. ~~As of September 30, 2017, the carrying values of these tradenames was $168 million~~.We did not identify any impairment triggers during the third quarter of 2017. In addition to evaluating the interim events that may require more frequent impairment testing, we will conduct our annual impairment testing in the fourth quarter of 2017.

~~The Company cannot predict the occurrence of certain events that might adversely affect the carrying value of goodwill and other intangible assets. The events and/~~Events or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: lower than forecasted revenues, more severe impacts of the COVID-19 pandemic than currently expected, including due to resurgences of the virus, actual new construction and repair and remodel growth rates that ~~lag~~fall below our assumptions, actions of key customers, ~~volatility of~~increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending, a decrease in royalty rates and a decline in the trading price of our common stock. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived ~~intangible~~ assets.

At September 30, 2021, the Company ~~amended~~had aggregate outstanding notes in the amount of $1.8 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts, and ~~restated its credit agreement to combine~~debt issuance costs as of September 30, 2021 and ~~rollover~~December 31, 2020:

In April 2020, the ~~existing~~Company entered into a 364-day supplemental, $400 million revolving credit facility ~~and term loan~~(the “2020 Revolving Credit Agreement”). This supplemental facility was never utilized by the Company prior to its expiration in April 2021.

In September 2019, the Company entered into a ~~new standalone~~second amended and restated $1.25 billion revolving credit ~~facility. This amendment of the credit agreement was anon-cash~~ ~~transaction for the Company. Terms and conditions of the amended and restated credit agreement, including the total commitment amount, essentially remained the same. As a result of the refinancing, wewrote-off~~ ~~prepaid debt issuance costs of approximately $1.3 million during the three months ended June 30, 2016. The revolving credit~~ facility ~~will mature in June 2021~~(the “2019 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. OnThe terms and conditions of the 2019 Revolving Credit Agreement, including the total commitment amount, essentially remained the same as under the previous credit agreement, except that the maturity date was extended to September 30, 2017 and December 31, 2016, our outstanding borrowings under this facility were $570.0 million and $540.0 million, respectively. At September 30, 2017 and December 31, 2016, the current portion of long-term debt was zero.2024. Interest rates under the ~~facility~~2019 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + ~~0.9%~~0.91% to LIBOR + ~~1.5%~~1.4%. On September 30, 2021 and December 31, 2020, our outstanding borrowings under this facility were $840.0 million and $785.0 million, respectively. This facility is included in Long-term debt in the condensed consolidated balance sheets. As of September 30, ~~2017,~~2021, we were in compliance with all covenants under this facility.

In June 2015, we issued $900 million of unsecured senior notes (“Senior Notes”) in a registered public offering. The Senior Notes consist of two tranches: $400 million of five-year notes due 2020 with a coupon of 3% and $500 million of~~ten-year~~ notes due 2025 with a coupon of 4%. We used the proceeds from the Senior Notes offering to pay down our revolving credit facility and for general corporate purposes. On September 30, 2017 and December 31, 2016, the carrying value of the Senior Notes, net of underwriting commissions, price discounts and debt issuance costs, was $892.2 million and $891.1 million, respectively.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to ~~$25.7~~$17.5 million in aggregate, of which there were no0 outstanding balances as of September 30, ~~2017~~2021 and December 31, ~~2016.~~2020.

We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates and commodities used as raw materials in our products. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value. The counterparties to derivative contracts are major financial institutions. We are subject to credit risk on these contracts equal to the fair value of these instruments. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company.

Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, geopolitical and economic variables, and other unpredictable external factors. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations.

Our primary foreign currency hedge contracts pertain to the Canadian dollar, the British pound, the Mexican peso and the Chinese ~~yuan and the Euro.~~yuan. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at September 30, ~~2017~~2021 was ~~$190.2 million, representing a net settlement payable of $2.3~~$463.0 million. Based on foreign exchange rates as of September 30, ~~2017,~~2021, we estimate that ~~$1.2~~$2.7 million of net ~~foreign currency~~ derivative ~~losses~~gains included in accumulated other comprehensive income as of September 30, ~~2017~~2021 will be reclassified to earnings within the next twelve months.

The fair values of derivative instruments on the consolidated balance sheets as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

The effects of derivative financial instruments on the statements of comprehensive income for the nine months ended September 30, 2021 and 2020 were as follows:

The effects of derivative financial instruments on the statements of comprehensive income for the three months ended September 30, ~~2017~~2021 and ~~2016 were:~~2020 were as follows:

The ~~effective portion of~~ cash flow hedges recognized in other comprehensive income were a net ~~losses~~gain of ~~$(0.1)~~ $1.8million and ~~$(8.0)~~ a net loss of $7.0 million in the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. The ~~effective portion of~~ cash flow hedges recognized in other comprehensive income were a net ~~losses~~gain of ~~$(3.8)~~$2.4 million and ~~zero~~a net loss of $0.3 million in the three months ended September 30, ~~2017~~2021 and ~~2016, respectively. In the nine and three months ended September 30, 2017 and 2016, the ineffective portion of cash flow hedges recognized in other (income) expense, net, was insignificant.~~2020, respectively.

FASB Accounting Standards Codification (“ASC”) requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect ~~inputs~~ other than quoted prices included in ~~level~~Level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs, due to little or no0 market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are ~~level 3.~~

The carrying value ~~net of underwriting commissions, price discounts, and debt issuance costs~~ and fair value of debt as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

The estimated fair value of our revolving credit facility is determined primarily using broker quotes, which are level 2 inputs. The estimated fair value of our ~~Senior~~ Notes is determined by using quoted market prices of our debt securities, which are ~~level~~Level 1 inputs.

Assets and liabilities measured at fair value on a recurring basis as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

Total accumulated other comprehensive ~~loss~~(loss) income consists of net income and other changes in business equity from transactions and other events from sources other than shareholders. It includes currency translation gains and losses, unrealized gains and losses from derivative instruments designated as cash flow hedges, and defined benefit plan adjustments. The after-tax components of and changes in accumulated other comprehensive ~~loss, net of tax,~~(loss) income for the nine and three months ended September 30, 2021 and 2020 were as follows:

The reclassifications out of accumulated other comprehensive loss for the nine and three months ended September 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

The following table disaggregates our consolidated revenue by major sales distribution channels for the nine and three months ended September 30, 2021 and 2020:

The components of net periodic benefit ~~cost~~income for pension ~~and postretirement~~ benefits for the nine and three months ended September 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

Service cost ~~for 2017~~ relates to benefit accruals in an hourly Union defined benefit plan in our Outdoors & Security segment. All other defined benefit pension plans were frozen as of December 31, 2016.

The effective income tax rates for the nine and three months ended September 30 ~~2017~~were 22.0% and ~~2016 were 29.5%~~24.4% for 2021 and 28.2%, respectively. The increase in the effective tax rate reflected a lower tax benefit on share-based compensation, partially offset by a valuation allowance release related to state deferred tax assets. In addition, the effective tax rates in both periods were favorably impacted by a tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions,23.5% and ~~a benefit associated with the U.S. research and development credit, offset by state and local taxes and increases to uncertain tax positions.~~24.3% for 2020, respectively.

The effective income tax ~~rates~~rate for the ~~three~~nine months ended September 30, 2017 and 2016 were 31.6% and 28.6%, respectively. The increase in the effective tax rate reflected a lower tax benefit on share-based compensation, partially offset by a valuation allowance release related to state deferred tax assets. In addition, the effective tax rates in both periods were2021 was favorably impacted by a benefit related to decreases in uncertain tax ~~benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions,~~positions and a benefit ~~associated with the U.S. research and development credit, offset by state and local taxes and increases~~related to ~~uncertain tax positions.~~

It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease up to $1.5 million, primarily as a result of the conclusion of pending U.S. federal, state and foreign income tax proceedings.share-based compensation.

We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on ~~historical claims~~historic claim experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively.

Net sales and operating income for the nine and three months ended September 30, ~~2017~~2021 and ~~2016~~2020 by segment were as follows:

Pre-tax restructuring and other charges for the nine and three months ended September 30, ~~2017~~2021 and ~~2016~~2020 are shown below.

Restructuring and other charges in the first nine months of ~~2017~~2021 largely related to severance costs associated with the relocation of manufacturing facilitieswithin our Outdoors & Security and Cabinets segments. Restructuring and other charges in the first nine months of 2020 largely related to headcount actions associated with COVID-19-related reductions in demand across all segments and costs associated with changes in our manufacturing processes within our Plumbing ~~segments.~~segment.

^a)

(a)

“Other Charges” represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities.

Restructuring and other charges in the first nine months of 2016 primarily related to severance costs and charges associated with the relocation of a manufacturing facility within our Security segment.

~~FORTUNE BRANDS HOME & SECURITY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~15.~~

~~Restructuring and Other Charges (Continued)~~

(In millions)    Three Months Ended September 30, 2017
   Restructuring
Charges    Other Charges ^(a)    Total
Charges
Doors
   $ 0.2    $ (0.1 )    $ 0.1
Security
   0.2    0.3    0.5






Total
   $ 0.4    $ 0.2    $ 0.6

^(a)

Restructuring and other charges in the third quarter of ~~2017 primarily resulted from~~2021 largely related to severance costs associated with headcount actions within our ~~Doors~~Outdoors & Security and ~~Plumbing Segments.~~

(In millions)    Three Months Ended September 30, 2016
   Restructuring
Charges    Other Charges ^(a)    Total
Charges
Plumbing
   $ 0.4    $ 0.5    $ 0.9
Security
   2.7    1.0    3.7






Total
   $ 3.1    $ 1.5    $ 4.6

^(a)

Cabinets segments. Restructuring and other charges in the third quarter of ~~2016 primarily resulted from~~2020 largely related to headcount actions associated with COVID-19-related reductions in demand across all segments and other costs associated with changes in our manufacturing processes within our Plumbing segment, partially offset by a credit related to severance costs due to the cancellation of the previously approved restructuring action within our ~~Security~~Cabinets segment.

~~FORTUNE BRANDS HOME & SECURITY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~15.~~

~~Restructuring and Other Charges (Continued)~~

Reconciliation of Restructuring Liability


(In millions)	Balance at 12/31/16		2017 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs			Balance at 9/30/17		Balance at 12/31/20		2021 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs		Balance at 9/30/21
Workforce reduction costs	$	2.4	$	2.8	$	(2.9	)	$	(0.5	)	$	1.8	$	6.9	$	9.6	$	(11.2	)	$	—	$	5.3
Other		0.6		0.7		(1.3	)		—			0.0		0.7		1.9		(1.5	)		—		1.1

	$	3.0	$	3.5	$	(4.2	)	$	(0.5	)	$	1.8
Total													$	7.6	$	11.5	$	(12.7	)	$	—	$	6.4

(a)

Cash expenditures primarily ~~related~~relate to severance charges.


(In millions)	Balance at 12/31/15		2016 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs ^(b)			Balance at 9/30/16		Balance at 12/31/19		2020 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs		Balance at 9/30/20
Workforce reduction costs	$	10.4	$	8.7	$	(15.0	)	$	0.2		$	4.3	$	6.7	$	16.0	$	(12.2	)	$	—	$	10.5
Other		0.5		3.7		(3.0	)		(0.6	)		0.6		0.1		0.5		(0.6	)		—		—

	$	10.9	$	12.4	$	(18.0	)	$	(0.4	)	$	4.9
Total													$	6.8	$	16.5	$	(12.8	)	$	—	$	10.5

(a)

Cash expenditures primarily ~~related~~relate to severance charges.

16.

^(b)

~~Non-cash~~ ~~write-offs include asset impairment charges attributable to restructuring actions.~~

~~FORTUNE BRANDS HOME & SECURITY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~16.~~

Earnings Per Share

The computations of earnings per common share for the nine and three months ended September 30, 2021 and 2020 were as follows:

(In millions, except per share data)    Nine Months Ended
September 30,    Three Months Ended
September 30,
   2017    2016    2017    2016
Income from continuing operations, net of tax
   $ 347.3    $ 308.0    $ 129.6    $ 121.9
Less: Noncontrolling interest
   0.1    (0.1 )    0.1    —








Income from continuing operations for EPS
   347.2    308.1    129.5    121.9
Income from discontinued operations
   (2.6 )    1.5    —      1.5








Net income attributable to Fortune Brands
   $ 344.6    $ 309.6    $ 129.5    $ 123.4








Earnings per common share

Basic

Continuing operations
   $ 2.26    $ 2.00    $ 0.84    $ 0.79
Discontinued operations
   (0.02 )    0.01    —      0.01








Net income attributable to Fortune Brands common stockholders
   $ 2.24    $ 2.01    $ 0.84    $ 0.80
Diluted

Continuing operations
   $ 2.22    $ 1.95    $ 0.83    $ 0.77
Discontinued operations
   (0.02 )    0.01    —      0.01








Net income attributable to Fortune Brands common stockholders
   $ 2.20    $ 1.96    $ 0.83    $ 0.78
Basic average shares outstanding
   153.7    154.4    153.5    154.2
Stock-based awards
   2.5    3.6    2.4    3.4








Diluted average shares outstanding
   156.2    158.1    155.9    157.6
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share
   0.6    0.5    0.6    —

(In millions, except per share data)	Nine Months Ended September 30,				Three Months Ended September 30,
	2021		2020		2021		2020
Net income	$	597.1	$	390.8	$	202.1	$	165.8
Less: Noncontrolling interest		—		1.3		—		1.2
Net income attributable to Fortune Brands		597.1		389.5		202.1		164.6

Basic earnings per common share	$	4.32	$	2.81	$	1.47	$	1.19
Diluted earnings per common share	$	4.26	$	2.78	$	1.45	$	1.17

Basic average shares outstanding		138.3		138.6		137.8		138.6
Stock-based awards		1.9		1.4		1.9		1.9
Diluted average shares outstanding		140.2		140.0		139.7		140.5
Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share		0.3		1.1		0.4		0.3

2617.Commitments and Contingencies

~~FORTUNE BRANDS HOME & SECURITY, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)~~

~~17.~~

~~Contingencies~~

Litigation

We are defendants in lawsuits associated with the normal conduct of our businesses and operations. 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 our 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.

Environmental

Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Fortune Brands during the nine and three months ended September 30, ~~2017~~2021 and ~~2016.~~2020. 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.~~costs. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures. We believe compliance with current environmental protection laws (before taking into account estimated recoveries from third parties) will not have a material adverse effect upon our results of operations, cash flows or financial condition. ~~Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures.~~

~~18.~~

~~Subsequent Event~~

In October 2017, the Company acquired Victoria + Albert, a UK manufacturer of luxury freestanding tubs and basins. Victoria + Albert represent a strong strategic fit, adding a preeminent luxury tub brand to our plumbing portfolio. The results of operations of the acquired company will be included in the Plumbing segment from the date of acquisition. This acquisition will not have a material effect on net sales or operating income.

~~Item 2.~~

Item 2.FORTUNE BRANDS HOME & SECURITY, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto, which are included in this report, as well as our audited consolidated financial statements for the year ended December 31, ~~2016,~~2020, which are included in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020.

This discussion contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding our business, operations or financial condition in addition to statements regarding our general business strategies, market potential, future financial performance, the potential of our brands and other matters, expected capital spending, expected pension contributions, the anticipated impact of supply chain, labor and transportation constraints, a volatile global supply chain environment as well as increased rates of inflation, unfavorable fluctuations in foreign exchange rates and the ongoing costs of tariffs, the anticipated impact of recently issued accounting standards on our financial statements, planned business strategies, anticipated market potential, future financial performance, impact of acquisitions and other ~~matters.~~matters including the expected or potential impact of the novel coronavirus (“COVID-19”) pandemic. Statements preceded by, followed by or that otherwise 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 current expectations, estimates, assumptions and projections about our industry, business and future financial results, ~~based on information~~ available at the time this report is filed with the Securities and Exchange Commission. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including but not limited to: (i) our reliance on the North American home improvement, repair and remodel and new home construction activity levels, ~~(ii)~~and the North American and global economies generally, (ii) the competitive nature of consumer and trade brand businesses, (iii) our ability to develop new products or processes and improve existing products and processes, (iv) our reliance on key customers and suppliers, including wholesale distributors and dealers, (v) risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility, (vi) risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, (vii) risks associated with doing business globally, including changes in trade-related tariffs and risks with uncertain trade environments, (viii) changes in government and industry regulatory standards, (ix) risks associated with the disruption of operations, (x) our inability to obtain raw materials and finished goods in a timely and cost-effective manner, (xi) impairments in the carrying value of goodwill or other acquired intangible assets, (xii) delays or outages in our information technology system or computer networks, (xiii) risk of increases in our defined benefit-related costs and funding requirements, (xiv) the uncertainties relating to the impact of COVID-19 on the Company’s business, financial performance and operating results, (xv) risks associated with entering into potential strategic acquisitions and integrating acquired property, ~~(iv)~~(xvi) future tax law changes or the interpretation of existing tax laws, (xvii) our ability to ~~remain competitive, innovative~~secure and protect our intellectual property ~~(v)~~rights, (xviii) our ~~reliance~~ability to attract and retain qualified personnel and other labor constraints, (xix) potential liabilities and costs from claims and litigation, and (xx) our ability to access the capital markets on key customers and suppliers, (vi) the cost and availability associated with our supply chains and the availability of raw materials, (vii) risk of increases in our defined benefit-related costs and funding requirements, (viii) compliance with tax, environmental and federal, state and international laws and industry regulatory standards and (ix) the risk of doing business internationally.terms acceptable to us. These and other factors are discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020. We undertake no obligation to, and expressly disclaim any such obligation to, update or clarify 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, except as required by law.

OVERVIEW

References to “Fortune Brands,” “the Company,” “we,” “our” and “us” refer to Fortune Brands Home & Security, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires. The Company is a ~~leader in~~leading home and security products ~~focused on the design, manufacture and sale~~company with a portfolio of ~~market-leading~~leading branded products ~~in the following categories: kitchen and bath cabinetry, plumbing and accessories, entry door systems~~used for residential home repair, remodeling, new construction and security ~~products.~~applications.

We believe that the Company has certain competitive advantages including market-leading brands, a diversified mix of channels, lean and flexible supply chains, a decentralized business model and a strong capital structure, as well as a tradition of strong innovation and customer service. We ~~are focused~~believe these long-held strengths will enable us to compete effectively and continue to focus on outperforming our markets in growth, profitability and returns in order to drive increased shareholder value. We believe the Company’s track record reflects the long-term attractiveness and potential of ~~our~~the categories we serve and our leading brands. As consumer demand and the housing market grow, we expect the benefits of operating leverage and strategic spending to support increased manufacturing capacity and long-term growth initiatives will help us continue to achieve profitable organic growth.

~~OVERVIEW (Continued)~~

We believe long-term our most attractive opportunities are to invest in profitable organic growth initiatives. We also believe that ~~as the market grows,~~ we have the potential to generate additional growth from leveraging our cash flow and balance sheet strength by pursuing accretive strategic acquisitions, non-controlling equity investments and joint ventures, and by returning cash to shareholders through a combination of dividends and ~~common stock~~share repurchases ~~under our share repurchase programs~~ as explained in further detail under “Liquidity and Capital Resources” below.

The U.S. market for our ~~home~~ products primarily consists of spending on both new home construction and repair and remodel activities within existing homes, with ~~the~~a substantial majority of the markets we serve consisting of repair and remodel spending. We believe the market for our home products in the U.S. will continue to grow due to demographics that support long-term sustainable housing growth as well as an underbuilt housing supply and an aged housing stock requiring repair and remodel investments. We believe that these market conditions will result in even more elongated demand for our products. Growth in the U.S. market for our ~~home~~ products ~~is in the midst of an elongated recovery from the U.S. economic recession that ended inmid-2009~~ ~~and that a continued recovery~~ will largely depend on consumer confidence, employment, home prices, stable mortgage rates and credit availability. Over the long term, we believe that the U.S. home products market will benefit from favorable population and immigration trends, which will drive demand for new housing units, and from an aging existing housing stock that will continue to need to be repaired and remodeled.

We have been and may continue to be impacted by ~~fluctuations in raw material~~near-term supply, labor and ~~transportation costs, changes~~freight constraints, a volatile global supply chain environment, as well as increased rates of inflation, unfavorable fluctuations in foreign exchange rates and ~~promotional activity among our competitors.~~the ongoing costs of tariffs. We ~~strive~~continue to manage these challenges and are diligently working to offset ~~the~~ potential unfavorable ~~impact~~impacts of these items ~~with~~through continuous productivity improvement initiatives and price increases.

In ~~July 2017,~~January 2021, we obtained control of and began consolidating Flo Technologies, Inc. (“Flo”) in our Plumbing segment results. Flo is a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. During 2020, we applied the equity method of accounting to our investment in Flo as the minority shareholders had substantive participating rights which precluded consolidation. The fair value allocated to assets acquired and liabilities assumed as of January 1, 2021 was $87.8 million, net of cash acquired of $9.7 million.

In December 2020, we acquired ~~Shaws Since1897 Limited~~100% of the outstanding equity of Larson Manufacturing, the North American market leading brand of storm, screen and security doors (“~~Shaws”~~Larson”)~~, aUK-based~~ ~~luxury plumbing~~. Larson also sells related outdoor living products ~~company that specializes in manufacturing~~including retractable screens and ~~selling fireclay sinks and selling brassware and accessories in partnership with Perrin & Rowe. We financed~~porch windows. The Company completed the ~~transaction using~~acquisition for a total purchase price, excluding expected tax benefits, of approximately $717.5 million, net of cash on hand and borrowings under our existing credit facilities. This acquisition broadened our plumbing portfolio and enhanced future growth opportunities. Net sales and operating income in the three months ended September 30, 2017 were not material to the Company.acquired. The results of ~~the~~ operations are included in the ~~Plumbing~~Outdoors & Security segment.

During the third quarter of 2016, we created the Global Plumbing Group (“GPG”), which was designed to support the growth of multiple plumbing brands with an enhanced set of products and brands, while leveraging Moen’s existing global supply chain and broad distribution network.

RESULTS OF OPERATIONS

In September 2016, we acquired ROHL LLC (“ROHL”), a California-based luxury plumbing company and in a related transaction, we acquired TCL Manufacturing Ltd, which gave us ownership of Perrin & Rowe Limited, a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. The total combined purchase price was approximately $166 million, subject to certain post-closing adjustments. We financed both acquisitions using cash on hand and borrowings under our existing credit facility. These transactions broadened the plumbing portfolio and enhanced future growth opportunities.

In June 2016, we amended and restated our credit agreement to combine and rollover our existing revolving credit facility and term loan into a new standalone $1.25 billion revolving credit facility. Terms and conditions of the credit agreement, including the total commitment amount, essentially remained the same. The revolving credit facility will mature in June 2021 and borrowings thereunder will be used for general corporate purposes.

In May 2016, we acquired Riobel Inc. (“Riobel”), a Canadian plumbing company specializing in premium showroom bath and shower fittings, for a total purchase price of $94.6 million in cash. We financed the transaction using cash on hand and borrowings under our existing credit facility.

Nine Months Ended September 30, ~~2017~~2021 Compared To Nine Months Ended September 30, ~~2016~~2020

	Net Sales
(In millions)	2021			2020			% Change vs. Prior Year
Plumbing	$	2,057.6		$	1,564.4			31.5		%
Outdoors & Security		1,525.4			1,052.7			44.9
Cabinets		2,110.4			1,813.5			16.4
Net sales	$	5,693.4		$	4,430.6			28.5		%

	Operating Income (Loss)
	2021			2020			% Change vs. Prior Year
Plumbing	$	483.3		$	330.6			46.2		%
Outdoors & Security		211.7			143.5			47.5
Cabinets		214.2			163.1			31.3
Less: Corporate expenses		(79.3	)		(69.0	)		(14.9	)
Operating income	$	829.9		$	568.2			46.1		%

   Net Sales
(In millions)    2017    2016    % Change
vs. Prior Year
Cabinets
   $ 1,841.2    $ 1,797.2    2.4 %
Plumbing
   1,251.5    1,108.0    13.0
Doors
   374.2    351.3    6.5
Security
   433.9    426.8    1.7






Net sales
   $ 3,900.8    $ 3,683.3    5.9 %
   Operating Income
   2017    2016    % Change
vs. Prior Year
Cabinets
   $ 205.4    $ 194.0    5.9 %
Plumbing
   270.8    242.6    11.6
Doors
   55.8    46.1    21.0
Security
   56.4    44.7    26.2
Less: Corporate expenses
   (59.3 )    (61.1 )    2.9
Operating income
   $ 529.1    $ 466.3    13.5 %

The following discussion of consolidated results of operations and segment results refers to the nine months ended September 30, ~~2017~~2021 compared to the nine months ended September 30, ~~2016.~~2020. Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales

Net sales increased ~~$217.5~~by $1,262.8 million, or ~~5.9%. The increase was~~28.5%, due to higher sales volume ~~primarily~~including the favorable comparison to 2020 when our volumes were impacted by the COVID-19 pandemic, the benefit from the ~~continuing improvement in U.S. market conditions for home products, new product introductions, the benefits from the acquisitions in our Plumbing segment and~~Larson acquisition ($316.0 million), price increases to help mitigate the impact of cumulative ~~raw material~~commodity and transportation cost ~~increases.~~increases and favorable mix, as well as favorable foreign exchange of approximately $51 million. These benefits were partially offset by ~~unfavorable mix,~~ higher ~~sales promotions, sales rebates~~promotion and ~~unfavorable foreign exchange of approximately $4 million.~~rebate costs.

Cost of products sold

Cost of products sold increased ~~$108.5~~by $763.3 million, or ~~4.6%~~26.6%, due to higher net sales, ~~including~~ the impact of the ~~acquisitions~~Larson acquisition including higher amortization of the acquisition related inventory fair value adjustment ($3.4 million in ~~our Plumbing segment~~2021), commodity cost inflation, product mix, labor inflation, and ~~raw material cost increases,~~higher tariffs, partially offset by the benefit offrom manufacturing productivity improvements.

Selling, general and administrative expenses

Selling, general and administrative expenses increased ~~$46.3~~by $247.9 million, or ~~5.6%~~27.0%, due to higher employee-related, ~~costs~~transportation and advertising ~~costs as well as the impact of the acquisitions in our Plumbing segment.~~

costs.

~~RESULTS OF OPERATIONS (Continued)~~

Amortization of intangible assets

Amortization of intangible assets increased ~~$3.2~~by $17.4 million primarily due to the ~~acquisitions~~Larson acquisition in our Outdoors & Security segment and the 2021 consolidation of Flo in our Plumbing ~~segment, partially offset by a decrease relating to a definite-lived customer relationship intangible in our Doors segment that was fully amortized during the second quarter of 2017.~~segment.

~~Loss on sale of product line~~

Asset impairment charges

Asset impairment charges of ~~$3.2~~$22.5 million ~~relate~~in 2020 related to indefinite-lived tradenames within our ~~decision in the first quarter of 2017 to sell Field ID, our cloud-based inspection~~Plumbing and ~~safety compliance software product line included in our Security segment.~~Cabinets segments.

Restructuring charges

Restructuring charges of ~~$3.5~~$11.5 million in the nine months ended September 30, ~~2017 primarily relates~~2021 largely related to severance costs associated with the relocation of manufacturing facilities within our Outdoors & Security and ~~Plumbing~~Cabinets segments. Restructuring charges ~~in the nine months ended September 30, 2016 were $12.4 million and primarily related to severance costs and charges associated with supply chain initiatives within our Security segment.~~

~~Operating income~~

Operating income increased $62.8 million, or 13.5%, primarily due to higher net sales, including the benefits from the acquisitions in our Plumbing segment and productivity improvements. These benefits were partially offset by unfavorable mix, higher employee-related, raw material and advertising costs.

~~Interest expense~~

~~Interest expense decreased $1.0 million to $36.5 million primarily due to the absence in 2017~~ of ~~thewrite-off~~ ~~of debt issuance costs of approximately $1.3 million incurred during 2016.~~

~~Other (income) expense, net~~

~~Other (income) expense, net, was expense of $0.2~~$16.5 million in the nine months ended September 30, ~~2017, compared~~2020 largely related to headcount actions associated with COVID-19-related reductions in demand across all segments and costs associated with changes in our manufacturing process within our Plumbing segment.

RESULTS OF OPERATIONS (Continued)

Operating income

Operating income increased by $261.7 million, or 46.1%, primarily due to higher net sales, the benefit from the Larson acquisition, manufacturing productivity improvements and the absence of ~~$0.1~~the 2020 asset impairment charges, as well as favorable foreign exchange of approximately $16 million. These benefits were partially offset by higher employee-related, commodity, transportation, and advertising costs, higher amortization of intangible assets, higher promotion and rebate costs and higher tariffs.

Interest expense

Interest expense decreased $1.2 million to $63.2 million due to lower average interest rates, partially offset by higher average borrowings.

Other expense (income), net

Other expense, net, of $0.7 million in the nine months ended September 30, ~~2016.~~2021, included foreign currency adjustments, net of hedges, and a non-cash loss of $4.5 million related to the remeasurement of our investment in Flo immediately prior to consolidation, partially offset by defined benefit plan and interest income. Other income, net was $13.4 million in the nine months ended September 30, 2020, primarily due to gains of $11.0 million related to our January 2020 investment in Flo.

Income taxes

The effective income tax rates for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 were ~~29.5%~~22.0% and ~~28.2%~~23.5%, respectively. The ~~increase in the~~ effective income tax rate ~~reflected a lower tax benefit on share-based compensation, partially offset by a valuation allowance release related to state deferred tax assets. In addition, the effective tax rates~~ in ~~both periods were~~2021 was favorably impacted by a benefit related to decreases in uncertain tax ~~benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions,~~positions and a benefit ~~associated with the U.S. research and development credit, offset by state and local taxes and increases~~related to ~~uncertain tax positions.~~

~~Net income from continuing operations~~share-based compensation.

Net income ~~from continuing operations~~attributable to Fortune Brands

Net income attributable to Fortune Brands was ~~$347.3~~$597.1 million in the nine months ended September 30, ~~2017~~2021 compared to ~~$308.0~~$389.5 million in the nine months ended September 30, ~~2016.~~2020. The increase ~~of $39.3 million~~ was primarily due to higher operating ~~income.~~

~~RESULTS OF OPERATIONS (Continued)~~

~~Loss from discontinued operations~~

~~The loss from discontinued operations~~income, lower equity in losses of ~~$2.6 million in the nine months ended September 30, 2017 primarily related to the prior sale of the Waterloo tool storage~~affiliate and ~~Simonton window businesses. The~~lower interest expense, partly offset by higher income ~~from discontinued operations of $1.5 million in the nine months ended September 30, 2016 included the effect of~~ tax ~~adjustments relating to the Waterloo business.~~expenses and higher other expense.

Results byBy Segment

~~Cabinets~~Plumbing

Net sales increased ~~$44.0~~by $493.2 million, or ~~2.4%~~31.5%, due to higher sales volume ~~driven primarily~~across all brands and markets, including showroom customers whose locations were negatively impacted in 2020 by ~~continuing improvement in~~ the ~~U.S. home products market and the benefit from new product introductions~~COVID-19 pandemic, and price increases to help mitigate the impact of cumulative ~~raw material~~commodity and transportation cost ~~increases.~~increases, as well as favorable foreign exchange of approximately $46 million. These benefits were partially offset by ~~unfavorable mix and~~ higher sales ~~promotions.~~rebate costs.

Operating income increased ~~$11.4~~by $152.7 million, or ~~5.9%~~46.2%, due to higher net sales, the absence of the 2020 asset impairment charge ($13.0 million), the benefit from manufacturing productivity improvements and favorable mix, as well as favorable foreign exchange of approximately $17 million. These benefits were partially offset by the impact of higher employee-related, advertising, freight, tariffs, commodity and rebate costs.

Outdoors & Security

Net sales increased by $472.7 million, or 44.9%, due to the ~~increase~~benefit from the Larson acquisition ($316.0 million), higher sales volume including the favorable comparison to 2020 when our volumes were impacted by the COVID-19 pandemic, price increases to help mitigate the impact of cumulative commodity and transportation cost increases, favorable product mix and lower rebates due to timing of sales in 2021 versus prior year period, as well as favorable foreign exchange of approximately $1 million.

Operating income increased by $68.2 million, or 47.5%, due to higher net sales, the benefit from the Larson acquisition and manufacturing productivity improvements. These benefits were partially offset by ~~unfavorable mix~~commodity cost inflation, higher freight and employee-related costs and higher ~~employee-related costs.~~restructuring charges, as well as unfavorable foreign exchange of approximately $1 million.

~~Plumbing~~Cabinets

Net sales increased ~~$143.5~~by $296.9 million, or ~~13.0%~~16.4%, due to higher sales volume ~~driven~~in both our make-to-order and stock products, including the favorable comparison to 2020 when our volumes were impacted by ~~continuing improvement in~~ the ~~U.S. home products market~~COVID-19 pandemic, favorable mix and price increases to help mitigate the ~~benefit from new product introductions, higher sales in international markets, principally China,~~impact of cumulative commodity and ~~the benefit from the acquisitions of Riobel, ROHL and Perrin & Rowe in 2016~~transportation cost increases, as well as ~~Shaws in 2017. These benefits were partially offset by higher sales rebates and unfavorable~~favorable foreign exchange of approximately $4 million.

RESULTS OF OPERATIONS (Continued)

Operating income increased ~~$28.2~~by $51.1 million, or ~~11.6%~~31.3%, due to higher net sales, the benefit from manufacturing productivity improvements, the absence of the 2020 asset impairment charge ($9.5 million) and ~~favorable mix.~~lower tariff, advertising and restructuring costs. These ~~benefits~~factors were ~~partially~~partly offset by higher ~~employee-related~~freight costs, ~~raw material costs~~commodity cost inflation and ~~advertising costs.~~

~~Doors~~

~~Net sales increased $22.9 million, or 6.5%, due to~~ higher sales volume driven primarily by continuing improvement in the U.S. home products market and the benefit from new product introductions and price increases to help mitigate cumulative raw material cost increases.

~~Operating income increased $9.7 million, or 21.0%, due to the higher net sales and leveraging sales on our existing fixed cost base.~~

~~RESULTS OF OPERATIONS (Continued)~~

~~Results by Segment (Continued)~~

~~Security~~

Net sales increased $7.1 million, or 1.7%, due to higher sales volume and price increases to help mitigate cumulative raw material cost increases. These benefits were partially offset by unfavorable foreign exchange of approximately $1 million and by the impact of our exiting of two product lines in our commercial distribution channel.

Operating income increased $11.7 million, or 26.2%, primarily due to productivity improvements, lower restructuring and other charges (approximately $10 million) relating to the completion in 2016 of a manufacturing facility relocation and the related cost savings resulting from the facility relocation, as well as higher net sales. These benefits were partially offset by higher raw materialemployee-related costs.

Corporate

Corporate expenses ~~decreased~~increased by ~~$1.8~~$10.3 million, ~~predominantly~~or 14.9%, due to ~~recognition of an actuarial gain versus an actuarial loss in the prior year~~higher employee-related and ~~higher defined benefit plan income during 2017 in comparison to prior year.~~

(In millions)    Nine Months Ended
September 30,
   2017    2016
General and administrative expense
   $ (63.8 )    $ (61.3 )
Defined benefit plan income
   3.2    2.1
Defined benefit plan recognition of actuarial gain/(loss)
   1.3    (1.9 )




Total Corporate expenses
   $ (59.3 )    $ (61.1 )

In future periods the Company may record, in the Corporate segment, material expense or income associated with actuarial gains and losses arising from periodic remeasurement of our liabilities for defined benefit plans. At a minimum, the Company will remeasure its defined benefit plan liabilities in the fourth quarter of each year. Remeasurements due to plan amendments and settlements may also occur in interim periods during the year. Remeasurement of these liabilities attributable to updating our liability discount rates and expected return on assets may, in particular, result in material income or expense recognition.consulting costs.

~~RESULTS OF OPERATIONS (Continued)~~

Three Months Ended September 30, ~~2017~~2021 Compared To Three Months Ended September 30, ~~2016~~2020

	Net Sales
(In millions)	2021			2020			% Change vs. Prior Year
Plumbing	$	741.4		$	590.6			25.5		%
Outdoors & Security		528.4			406.7			29.9
Cabinets		716.5			654.8			9.4
Net sales	$	1,986.3		$	1,652.1			20.2		%

	Operating Income (Loss)
	2021			2020			% Change vs. Prior Year
Plumbing	$	166.5		$	116.6			42.8		%
Outdoors & Security		80.4			66.8			20.4
Cabinets		67.2			82.1			(18.1	)
Less: Corporate expenses		(27.5	)		(25.3	)		(8.7	)
Operating income	$	286.6		$	240.2			19.3		%

   Net Sales
(In millions)    2017    2016    % Change
vs. Prior Year
Cabinets
   $ 614.2    $ 602.1    2.0 %
Plumbing
   438.3    391.1    12.1
Doors
   138.5    129.2    7.2
Security
   157.6    156.6    0.6





Net sales
   $ 1,348.6    $ 1,279.0    5.4 %

   Operating Income
   2017    2016    % Change
vs. Prior Year
Cabinets
   $ 69.7    $ 74.8    (6.8 )%
Plumbing
   97.3    84.0    15.8
Doors
   25.1    22.3    12.6
Security
   27.7    22.9    21.0
Less: Corporate expenses
   (18.0 )    (20.9 )    13.9





Operating income
   $ 201.8    $ 183.1    10.2 %

The following discussion of consolidated results of operations and segment results refers to the three months ended September 30, ~~2017~~2021 compared to the three months ended September 30, ~~2016.~~2020. Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales

Net sales increased ~~$69.6~~by $334.2 million, or ~~5.4%. The increase was~~20.2%, due to higher sales volume, ~~primarily~~the benefit from the ~~continuing improvement in U.S. market conditions for home products, new product introductions, the benefits from the acquisitions in our Plumbing segment,~~Larson acquisition ($99.1 million), price increases to help mitigate the impact of cumulative ~~raw material~~commodity and transportation cost increases, lower promotion and rebate costs due to the timing of sales in 2021 versus prior year period, as well as favorable foreign exchange of approximately $4$16 million. ~~These benefits were partially offset by unfavorable mix, higher sales rebates and sales promotions.~~

Cost of products sold

Cost of products sold increased ~~$40.6~~by $208.5 million, or ~~5.1%~~19.5%, due to the impact of the Larson acquisition, higher net sales, ~~including the impact of acquisitions in our Plumbing segment~~commodity cost inflation, higher employee-related costs and higher ~~raw material costs,~~tariffs, partially offset by ~~the benefit of productivity improvements.~~favorable mix.

Selling, general and administrative expenses

Selling, general and administrative expenses increased ~~$12.8~~by $71.9 million, or ~~4.5%~~21.9%, due to higher transportation, advertising and employee-related ~~costs, including higher healthcare costs, as well as the impact of the acquisitions in our Plumbing segment.~~costs.

~~RESULTS OF OPERATIONS (Continued)~~

Amortization of intangible assets

Amortization of intangible assets increased ~~$0.2 million due to the acquisitions in our Plumbing segment, partially offset~~ by ~~a decrease relating to a definite-lived customer relationship intangible in Doors segment that was fully amortized during the second quarter of 2017.~~

~~Restructuring charges~~

Restructuring charges in the three months ended September 30, 2017 and 2016 were $0.4 million and $3.1 million, respectively. Restructuring charges in 2017 relate to severance costs within our Security and Doors segments. Restructuring charges in 2016 primarily relate to supply chain initiatives within our Security segment.

~~Operating income~~

Operating income increased $18.7 million, or 10.2%, primarily due to higher net sales and productivity improvements. These benefits were partially offset by unfavorable mix and higher employee-related costs.

~~Interest expense~~

~~Interest expense increased $0.5 million to $12.3~~$5.4 million primarily due to ~~higher average interest rates partially offset by lower average borrowings.~~the Larson acquisition in our Outdoors & Security segment and the 2021 consolidation of Flo in our Plumbing segment.

~~Other (income) expense, net~~Restructuring charges

~~Other (income) expense, net, was expense~~Restructuring charges of ~~$0.1~~$3.6 million in the three months ended September 30, ~~2017 compared~~2021 largely related to ~~expense~~severance costs associated with headcount actions within our Outdoors & Security and Cabinets segments. Restructuring charges of ~~$0.6~~$1.6 million in the three months ended September 30, ~~2016.~~

~~Income taxes~~

~~The effective income tax rates for the three months ended September 30, 2017~~2020 largely related to headcount actions associated with COVID-19-related reductions in demand across all segments and ~~2016 were 31.6% and 28.6%, respectively. The increase~~other costs associated with changes in ~~the effective tax rate reflected a lower tax benefit on share-based compensation,~~our manufacturing process within our Plumbing segment, partially offset by a ~~valuation allowance release~~credit related to ~~state deferred tax assets. In addition,~~severance costs and the ~~effective tax rates~~cancellation of a previously approved restructuring action in ~~both periods~~our Cabinets segment.

RESULTS OF OPERATIONS (Continued)

Operating income

Operating income increased by $46.4 million, or 19.3%, primarily due to higher net sales, the benefit from the Larson acquisition, manufacturing productivity improvements and favorable mix, as well as favorable foreign exchange of approximately $5 million. These benefits were favorably impacted by a tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions, and a benefit associated with the U.S. research and development credit,partially offset by ~~state~~higher commodity, transportation, employee-related and ~~local taxes~~advertising costs, higher amortization of intangible assets and ~~increases~~higher tariff costs.

Interest expense

Interest expense increased by $0.5 million to ~~uncertain tax positions.~~$20.6 million due to higher average borrowings, partially offset by lower average interest rates.

~~Net~~Other income, ~~from continuing operations~~net

~~Net~~Other income, ~~from continuing operations~~net was ~~$129.6~~$1.3 million in the three months ended September 30, ~~2017~~2021, compared to ~~$121.9~~$2.1 million in the three months ended September 30, ~~2016.~~2020. The ~~increase~~decrease in other income, net is primarily due unfavorable foreign currency adjustments, net of ~~$7.7~~hedges, partially offset by higher defined benefit income in the quarter ($1.4 million increase).

Income taxes

TheeffectiveincometaxratesforthethreemonthsendedSeptember30,2021and2020were24.4%and24.3%,respectively.

Net income attributable to Fortune Brands

Net income attributable to Fortune Brands was $202.1 million in the three months ended September 30, 2021 compared to $164.6 million in the three months ended September 30, 2020. The increase was primarily due to a higher operating ~~income.~~income and lower equity in losses of affiliate, partly offset by higher income tax expenses, lower other income and higher interest expense.

Results By Segment

~~RESULTS OF OPERATIONS (Continued)~~

~~Results by Segment~~

~~Cabinets~~Plumbing

Net sales increased ~~$12.1~~by $150.8 million, or ~~2.0%~~25.5%, due to higher sales volume ~~driven primarily by continuing improvement in the U.S. home products market~~across all brands and ~~the benefit from new product introductions,~~markets, price increases to help mitigate the impact of cumulative ~~raw material~~commodity and transportation cost increases and lower sales rebate costs due to timing of sales in 2021 versus prior year period, as well as favorable foreign exchange of approximately $15 million.

Operating income increased by $49.9 million, or 42.8%, due to higher net sales, favorable mix, lower restructuring costs and the benefit from manufacturing productivity improvements, as well as favorable foreign exchange of approximately $6 million. These benefits were partially offset by the impact of higher employee-related costs, commodity cost inflation, advertising costs, tariffs, and freight costs.

Outdoors & Security

Net sales increased by $121.7 million, or 29.9%, due to the benefit from the Larson acquisition ($99.1 million) and price increases to help mitigate the impact of cumulative commodity and transportation cost increases. These benefits were partially offset by unfavorable product mix due to material availability.

Operating income increased by $13.6 million, or 20.4%, due to higher net sales, the benefit from the Larson acquisition and lower employee-related costs. These benefits were partially offset by commodity cost inflation and higher freight and restructuring costs, as well as unfavorable foreign exchange of approximately $1 million.

Cabinets

Net sales increased by $61.7 million, or 9.4%, due to price increases to help mitigate the impact of cumulative commodity and transportation cost increases, higher sales volume in both our make-to-order and stock products and favorable mix, as well as favorable foreign exchange of approximately $2 million.

Operating income decreased by $14.9 million, or 18.1%, due to higher freight costs, commodity cost inflation and higher restructuring costs. These ~~benefits~~factors were partly offset by ~~unfavorable mix and~~ higher ~~sales promotions.~~

~~Operating income decreased $5.1 million, or 6.8%, due to higher employee-related costs, including higher healthcare costs. These benefits were partially offset by the increase in~~ net sales, ~~and productivity improvements.~~

~~Plumbing~~

~~Net sales increased $47.2 million, or 12.1%, due to higher sales volume in the U.S. driven by continuing improvement in the U.S. home products market and~~ the benefit from new product introductions, higher sales in international markets, principally China and Canada, the benefit from the acquisitions of ROHL and Perrin & Rowe in 2016 as well as Shaws in 2017 and favorable foreign exchange of approximately $2 million. These benefits were partially offset by higher sales rebates.

~~Operating income increased $13.3 million, or 15.8%, due to higher net sales and~~manufacturing productivity improvements ~~partially offset by higher employee-related costs, sales rebates~~ and ~~raw material~~lower tariff costs.

~~Doors~~

Net sales increased $9.3 million, or 7.2%, due to favorable mix, higher sales volume driven primarily by improved conditions in the U.S. home products markets and the benefit from new product introductions and price increases to help mitigate cumulative raw material cost increases.

~~Operating income increased $2.8 million, or 12.6%, due to higher net sales and leveraging sales on our existing fixed cost base.~~

~~Security~~

Net sales increased $1.0 million, or 0.6%, due to higher sales volume in the U.S. and international markets for our core locks and safes product lines and favorable foreign exchange offset by the impact from our exiting of two product lines in our commercial sales distribution channel.

Operating income increased $4.8 million, or 21.0%, primarily due to productivity improvements, lower restructuring and other charges (approximately $3 million) relating to the completion in 2016 of a manufacturing facility relocation and the related cost savings resulting from the facility relocation.

~~RESULTS OF OPERATIONS (Continued)~~

~~Results by Segment (Continued)~~

Corporate

Corporate expenses ~~decreased~~increased by ~~$2.9~~$2.2 million, ~~predominantly~~or 8.7%, due to ~~recognition of an actuarial gain versus an actuarial loss in the prior quarter~~higher consulting and ~~higher defined benefit plan income during 2017 in comparison to prior quarter.~~employee-related costs.

(In millions)    Three Months Ended
September 30,
   2017    2016
General and administrative expense
   $ (20.5 )    $ (20.5 )
Defined benefit plan income
   1.2    0.6
Defined benefit plan recognition of actuarial gains (losses)
   1.3    (1.0 )




Total Corporate expenses
   $ (18.0 )    $ (20.9 )

LIQUIDITY AND CAPITAL RESOURCES

Our ~~primary~~principal sources of liquidity are cash on hand, cash flows from operating activities, cash borrowed under our credit facilities and cash from debt issuances in the capital markets. Our operating income is generated by our subsidiaries. We believe our operating cash flows, including funds available under our credit facilities and access to capital markets, provide sufficient liquidity to support the Company’s liquidity and financing needs, which are to support working capital requirements, fund capital expenditures and service indebtedness, as well as to finance acquisitions, repurchase shares of our common stock and pay dividends to stockholders, as ~~deemed~~the Board of Directors deems appropriate.

Our ~~principal sources of liquidity have been cash on hand,~~ cash flows from ~~operating activities~~operations, borrowing availability and ~~availability under our credit facilities. Our operating income is generated by our subsidiaries. There~~overall liquidity are ~~no restrictions on~~subject to certain risks and uncertainties, including those described in the ~~ability~~section of our ~~subsidiaries to~~Annual Report on Form 10-K for the year-ended December 31, 2020 entitled “Item 1A. Risk Factors.” In addition, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, pay dividends, or ~~make other distributions~~what impact any such transactions could have on our results of operations, cash flows or financial condition, whether as a result of the issuance of debt or equity securities, or otherwise.

Long-Term Debt

At September 30, 2021, the Company had aggregate outstanding notes in the amount of $1.8 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of September 30, 2021 and December 31, 2020:

					Net Carrying Value
(in millions)	Principal Amount		Issuance Date	Maturity Date	September 30, 2021		December 31, 2020
4.000% Senior Notes	$	500.0	June 2015	June 2025	$	497.2	$	496.6
4.000% Senior Notes (the "2018 Notes")		600.0	September 2018	September 2023		597.9		597.1
3.250% Senior Notes (the "2019 Notes")		700.0	September 2019	September 2029		694.0		693.5
Total Senior Notes	$	1,800.0			$	1,789.1	$	1,787.2

Credit Facilities

In April 2020, the Company entered into a 364-day, supplemental $400 million revolving credit facility (the “2020 Revolving Credit Agreement”). This supplemental facility was never utilized by the Company prior to ~~Fortune Brands.~~ its expiration in April 2021.

In September 2019, the Company entered into a second amended and restated $1.25 billion revolving credit facility (the “2019 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. The terms and conditions of the 2019 Revolving Credit Agreement, including the total commitment amount, essentially remained the same as under the previous credit agreement, except that the maturity date was extended to September 2024. Interest rates under the 2019 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.91% to LIBOR + 1.4%.On September 30, 2021 and December ~~2016,~~31, 2020 our outstanding borrowings under this facility were $840.0 million and $785.0 million, respectively. This facility is included in long-term debt in the condensed consolidated balance sheets. As of September 30, 2021, we were in compliance with all covenants under this facility.

Cash and Seasonality

On September 30, 2021, we had cash and cash equivalents of $460.7 million, of which $404.1 million was held at non-U.S. subsidiaries. We manage our global cash requirements considering (i) available funds among the subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. The repatriation of non-U.S. cash balances from certain subsidiaries could have adverse tax consequences as we may be required to pay and record tax expense on those funds that are repatriated.

Our operating cash flows are significantly impacted by the seasonality of our business. We typically generate most of our operating cash flow in the third and fourth quarters of each year. We use operating cash in the first quarter of the year.

We believe that our current cash position, cash flow generated from operations, and amounts available under our revolving credit facility should be sufficient for our operating requirements and enable us to fund our capital expenditures, dividend payments, and any required long-term debt payments. In addition, we believe that we have the ability to obtain alternative sources of financing if required.

Share Repurchases and Dividends

In the first nine months of 2021, we repurchased 2.9 million shares of our outstanding common stock under the Company’s 2020 share repurchase program for $270.1 million. On July 23, 2021, our Board of Directors ~~increased~~authorized the ~~quarterly cash dividend by 13%~~repurchase of up to ~~$0.18 per share~~an additional $400 million of shares of our ~~outstanding~~ common ~~stock.~~stock over the two years ending July 23, 2023. As of September 30, 2021, the Company’s total remaining share repurchase authorization under its 2020 and 2021 share repurchase programs was approximately $592.4 million. The share repurchase programs do not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.

In the first nine months of 2021, we paid dividends in the amount of $107.9 million to the Company’s shareholders. 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, and at what level, because the payment of dividends is dependent on our financial condition, results of operations, cash flows, capital requirements and other factors deemed relevant by our Board of Directors.

In There are no restrictions on the ~~first nine months of 2017, we repurchased 2.8 million shares~~ability of our outstanding common stock under the Company’s share repurchase programs for $173.7 million. As of September 30, 2017, the Company’s total remaining share repurchase authorization under the repurchase programs was approximately $347 million. The share repurchase programs do not obligate the Companysubsidiaries to ~~repurchase any specific dollar amount~~pay dividends or ~~number of shares and may be suspended or discontinued at any time.~~make other distributions to Fortune Brands.

Acquisitions

We periodically review our portfolio of brands and evaluate potential strategic transactions and other capital initiatives to increase shareholder value. ~~However,~~

In January 2021, we ~~cannot predict whether or when~~obtained control of and began consolidating Flo in our Plumbing segment results. Flo is a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. During 2020, we ~~may enter into acquisitions, joint ventures or dispositions, make any purchases~~applied the equity method of ~~shares~~accounting to our investment in Flo as the minority shareholders had substantive participating rights which precluded consolidation. The fair value allocated to assets acquired and liabilities assumed as of ~~our common stock under our share repurchase programs, or pay dividends, or what impact any such transactions could have on our results~~January 1, 2021 was $87.8 million, net of ~~operations,~~ cash ~~flows or financial condition, whether as a result~~acquired of $9.7 million.

In December 2020, we acquired 100% of the ~~issuance~~outstanding equity interests of ~~debt or equity securities, or otherwise. Our cash flows from operations, borrowing availability~~Larson, the North American market leading brand of storm, screen and ~~overall liquidity are subject to certain risks~~security doors. Larson also sells related outdoor living products including retractable screens and ~~uncertainties, including those described in~~porch windows. The Company completed the ~~section of our Annual Report on Form10-K~~ ~~for the year-ended December 31, 2016 entitled “Item 1A. Risk Factors.”~~

~~Acquisitions in 2017 and 2016 included:~~

In October 2017, the Company acquired Victoria + Albert, a UK manufacturer of luxury freestanding tubs and basins. The results of operations of the acquired company will be included in the Plumbing segment from the date of acquisition. This acquisition ~~will not have a material effect on net sales or operating income.~~

In July 2017, we acquired Shaws Since1897 Limited, a U.K.-based company that specializes in the design, production and marketing of luxury fire-clay kitchen sinks. We financed the transaction using cash on hand and borrowings under our existing credit facilities. Net sales and operating income in the three months ended September 30, 2017 were not material to the Company.

In September 2016, we acquired ROHL, a California-based luxury plumbing company and in a related transaction, we acquired TCL Manufacturing Ltd, which gave us ownership of Perrin & Rowe, a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. The total combined purchase price was approximately $166 million, subject to certain post-closing adjustments. We financed both acquisitions using cash on hand and borrowings under our existing credit facility.

~~In May 2016, we acquired Riobel, a Canadian plumbing company specializing in premium showroom bath and shower fittings,~~ for a total purchase price, excluding expected tax benefits, of ~~$94.6~~approximately $717.5 million, ~~in cash. We financed the transaction using~~net of cash ~~on hand and borrowings under our existing credit facilities.~~

~~On September 30, 2017, we had cash and cash equivalents~~acquired. The results of ~~$277.1 million, of which $257.9 million was held atnon-U.S.~~ subsidiaries. We manage our global cash requirements considering (i) available funds among the subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. The repatriation of~~non-U.S.~~ cash balances from certain subsidiaries could have adverse tax consequences as we may be required to pay and record income tax expense on those funds to the extent they were previously considered indefinitely reinvested.

~~Our operating cash flows~~operations are ~~significantly impacted by the seasonality of our business. We typically generate most of our operating cash flow~~included in the ~~third and fourth quarters of each year. We use operating cash in the first half of the year, particularly in the first quarter.~~Outdoors & Security segment.

Cash Flows

Below is a summary of cash flows for the nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020.


(In millions)	Nine Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2021			2020
Net cash provided by operating activities	$	352.6		$	380.6		$	430.8		$	506.8
Net cash used in investing activities		(113.2	)		(334.3	)		(106.1	)		(124.1	)
Net cash used in financing activities		(223.5	)		(9.5	)		(285.1	)		(308.8	)
Effect of foreign exchange rate changes on cash		9.7			3.3			1.0			1.9

Net increase in cash and cash equivalents	$	25.6		$	40.1		$	40.6		$	75.8

Net cash provided by operating activities was ~~$352.6~~$430.8 million in the nine months ended September 30, ~~2017~~2021, compared to ~~$380.6~~net cash provided by operating activities of $506.8 million in the nine months ended September 30, ~~2016.~~2020. The decrease in cash provided of ~~$28.0~~$76.0 million was primarily due to a higher ~~build~~increases in ~~working capital during 2017 compared~~accounts receivable associated with our sales growth, and our planned increase in inventory to ~~2016 which included inventory reductions as we completed our manufacturing facility relocations in our Plumbing~~mitigate the impact of an uncertain and ~~Security businesses, partly~~volatile global supply chain environment. These factors were partially offset by higher accounts payable and higher net income.

Net cash used in investing activities was ~~$113.2~~$106.1 million in the nine months ended September 30, ~~2017~~2021, compared to ~~$334.3~~net cash used in investing activities of $124.1 million in the nine months ended September 30, ~~2016.~~2020. The decrease in cash used of ~~$221.1~~$18.0 million in 2021 was primarily due to the ~~decrease~~acquisition of additional shares of Flo in ~~cost~~January and April 2020 ($59.4 million) and the cash acquired during the consolidation of ~~acquisitions of $211.1 million.~~Flo in January 2021, partially offset by higher capital expenditures.

Net cash used byin financing activities was ~~$223.5~~$285.1 million in the nine months ended September 30, ~~2017~~2021, compared to ~~net~~ cash used in financing activities of ~~$9.5~~$308.8 million in the nine months ended September 30, ~~2016.~~2020. The ~~increase~~decrease in cash used of ~~$214~~$23.7 million ~~during 2017~~ was primarily due to ~~lower~~higher net borrowings in 2021 compared to 2020 ($155.0 million increase), partially offset by higher share repurchases in 2021 compared to 2020 ($102.9 million increase), and $23.4 decrease in the proceeds from the exercise of ~~$384 million~~stock options and higher dividends ~~of $9~~to shareholders ($8.0 million ~~partially offset by lower share repurchases in 2017 compared to 2016 ($189 million decrease)~~increase). Additionally, during the third quarter 2017, we paid deferred acquisition payments totaling $12.4 million (net of certain working capital and other adjustments) relating to the ROHL and Perrin & Rowe acquisitions.

Pension Plans

Subsidiaries of Fortune Brands sponsor their respective defined benefit pension plans that are funded by a portfolio of investments maintained within our benefit plan trust. As of December 31, ~~2016,~~2020, the fair value of our total pension plan assets was ~~$577.7~~$784.9 million, representing ~~73%~~84% of the accumulated benefit obligation liability. ~~In 2017,~~During the nine months ended September 30, 2021, we ~~expect to make total~~made pension contributions of approximately ~~$25 million of which $22 million has been paid as of September 30, 2017.~~$21 million. For the foreseeable future, we believe that we have sufficient liquidity to meet the minimum funding that may be required by the Pension Protection Act of 2006.

Foreign Exchange

We have operations in various foreign countries, principally Canada, China, Mexico, the United Kingdom, France, Australia, Japan and ~~France.~~South Africa. Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars.

RECENTLY ISSUED ACCOUNTING STANDARDS

~~Revenue from Contracts with Customers~~

~~In May 2014, the Financial~~The adoption of recent accounting standards, as discussed in Note 2, “Recently Issued Accounting Standards, ~~Board (“FASB”) issued Accounting Standards Update (“ASU”)2014-09,~~ ~~which clarifies the accounting for revenue arising from contracts with customers~~” to our Consolidated Financial Statements, has not had and ~~specifies the disclosures that an entity should include in its financial statements. The standard~~ is effective for annual reporting periods beginning after December 15, 2017 (calendar year 2018 for Fortune Brands). During 2016, the FASB issued certain amendments to the standard relating to the principal versus agent guidance, accounting for licenses of intellectual property and identifying performance obligations as well as the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. The effective date and transition requirements for these amendments are the same as those of the original ASU. We have elected the modified retrospective transition approach and also have identified focus areas for each of our reporting segments and have made substantial progress in our assessment of the accounting and financial reporting implications as of September 30, 2017. Our key considerations pursuant to~~ASU 2014-09~~ are the control of goods (i.e., timing of revenue recognition), separate performance obligations, customer rights of return (i.e., the reclassification on the balance sheet of the customer rights of return from accounts receivable to a refund liability as well as the recognition of a corresponding asset) and our accounting for display assets. We do not ~~expect the change in accounting related to these considerations~~expected to have a ~~material effect~~significant impact on our ~~financial statements.~~

~~Leases~~

~~Improvements to Accounting for Hedging Activities~~

~~In August 2017, the FASB issued ASU2017-12,~~ that amends current hedge accounting model. The new standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item (consistent with our current practice). The change in fair value for qualifying cash flow and net investment hedges will be included in Other comprehensive income (until they are reclassified into the income statement). The standard also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The standard is effective as of January 1, 2019 and earlier application is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

~~RECENTLY ISSUED ACCOUNTING STANDARDS (Continued)~~

~~Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets~~

~~In May 2017, the FASB issued ASC610-20~~ that clarifies the scope and application of various standards for the sale of nonfinancial assets (e.g. PP&E including real estate, intangible assets, materials and supplies). The standard distinguishes between a sale to customer vs~~non-customer.~~ ~~Sales to customers are in scope of the new~~ revenue, standard. It also clarifies a derecognition model for nonfinancial assets that do not represent a business. The standard is effective as of January 1, 2018 consistent with the effective date for the new revenue recognition standard. We are assessing the impact the adoption of this standard will have on our financial statements and we will consider the implications of the new standard on case by case basis for all~~non-recurring~~ ~~transactions where we sell~~earnings or ~~transfer nonfinancial assets.~~liquidity.

~~Stock Compensation Scope of Modification Accounting~~

~~In May 2017, the FASB issued ASU2017-09,~~ ~~which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance provides a relief to entities that makenon-substantive~~ changes to their share-based payment awards and will result in fewer changes to the terms of an award being accounted for as modifications. The standard is effective January 1, 2018 and early adoption is permitted, however we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~Presentation of Net Periodic Pension and Postretirement Cost~~

~~Simplifying the Test for Goodwill Impairment~~

~~In January 2017, the FASB issued ASU2017-04,~~ which simplifies the accounting for goodwill impairment for all entities. Under the new standard, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The standard eliminates the current requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount (i.e., hypothetical purchase price allocation). The standard is effective for annual and interim impairment tests performed in the periods beginning after January 1, 2020 and early adoption is permitted. We plan to early adopt ASU~~2017-04~~ ~~in conjunction with our annual goodwill impairment test during the fourth quarter of 2017.~~

~~RECENTLY ISSUED ACCOUNTING STANDARDS (Continued)~~

~~Clarifying the Definition of a Business~~

~~Restricted Cash~~

~~In November 2016, the FASB issued ASU2016-18,~~ according to which entities are no longer required to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The prior standard did not address the classification of activity related to restricted cash and restricted cash equivalents in the statement of cash flows which has resulted in diversity in cash flows presentation. The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~Intra-Entity Transfers of Assets Other Than Inventory~~

~~In October 2016, the FASB issued ASU2016-16,~~ which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. Under the current guidance companies are required to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized (e.g., depreciated, amortized or impaired). The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. The transition method will be a “modified retrospective” (i.e., with a cumulative adjustment to retained earnings at adoption). We are assessing the impact the adoption of this standard will have on our financial statements.

~~Classification of Certain Cash Receipts and Cash Payments~~

~~In September 2016 the FASB issued ASU2016-15,~~ which changes how an entity classifies certain cash receipts and cash payments on its statement of cash flows. The key changes that may potentially impact our financial statements include the following: 1) Cash payments for debt prepayment or extinguishment costs would be classified as financing cash outflows; 2) Contingent consideration payments that are not made within three months after the consummation of a business combination would be classified as financing (if the payment is made up to the acquisition date fair value of liability) or operating outflows (if in excess of acquisition fair value). Cash payments made “soon after” the consummation of a business combination generally would be classified as cash outflows for investing activities; 3) Insurance settlement proceeds would be classified based on the nature of the loss; and 4) Company-owned life insurance settlement proceeds would be presented as investing cash inflows, and premiums would be classified as investing or operating cash outflows, or a combination of both. The new standard is effective January 1, 2018 and should be adopted retrospectively. Early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

~~RECENTLY ISSUED ACCOUNTING STANDARDS (Continued)~~

~~Financial Instruments—Credit Losses~~

~~Recognition and Measurement of Financial Assets and Financial Liabilities~~

~~In January 2016, the FASB issued ASU2016-01,~~ which requires entities to measure investments in unconsolidated entities (other than those accounted for using the equity method of accounting) at fair value through the income statement. There will no longer be an~~available-for-sale~~ classification (with changes in fair value reported in Other Comprehensive Income). In addition, the cost method is eliminated for equity investments without readily determinable fair values. The standard is effective January 1, 2018. Early application is permitted for certain provisions of the standard; however, we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in the information provided in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2020.

Item 4.

CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures.

The Company’s management has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the ~~Company’s~~Company's disclosure controls and procedures (as defined in Rules13a-15(e) and15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the ~~Company’s~~Company's disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)

Changes in Internal Control Over Financial Reporting.

There have not been any changes in the ~~Company’s~~Company's internal control over financial reporting that occurred during the ~~Company’s~~ fiscal quarter ended September 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, the ~~Company’s~~Company's internal control over financial reporting. The Company is in the process of reviewing the internal control structure of ~~acquired businesses~~Larson and Flo and, if necessary, will make the appropriate changes as we incorporate our controls and procedures into ~~those~~these recently acquired businesses.

PART II. OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS.

(a)

~~Other~~

Litigation.

~~The Company is a defendant~~We are defendants in lawsuits associated with the normal conduct of ~~its~~our businesses and operations. 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~~our 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.

(b)

Environmental Matters.

Item 1A.

RISK FACTORS.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form10-K for the year ended December 31, ~~2016~~2020 in the section entitled “Risk Factors.”

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Below are the repurchases of common stock by the Company or any “affiliated purchaser” (as defined in Rule10b-18(a)(3) under the Exchange Act) for the three months ended September 30, ~~2017:~~2021:

Issuer Purchases of Equity Securities


Period	Total number of shares purchased^(a)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs^(a)		Maximum dollar amount that may yet be purchased under the plans or programs^(a)
Three Months Ended September 30, 2021									Total number of shares purchased ^(a)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs ^(a)		Maximum dollar amount that may yet be purchased under the plans or programs ^(a)
July 1 – July 31		603,750	$	66.18		603,750	$	450,381,443		—	$	—		—	$	706,417,616
August 1 – August 31		881,646		63.53		881,646		394,375,046		—		—		—		706,417,616
September 1 – September 30		729,023		64.51		729,023		347,346,977		1,224,100		93.2		1,224,100		592,380,952

Total		2,214,419	$	64.57		2,214,419				1,224,100	$	93.2		1,224,100

^(a)

Information on the Company’s share repurchase ~~programs~~program follows:

Authorization date

Announcement date

Authorization amount of shares of outstanding common stock

Expiration date

~~Authorization and announcement date~~September 21, 2020

~~Announcement date~~

September 21, 2020

$500,000,000

~~Authorization amount of~~
~~shares of outstanding~~
~~common stock~~

~~Expiration date~~

September 21, 2022

~~February 16, 2016~~July 23, 2021

~~February 22, 2016~~

~~400 million~~

~~February 16, 2018~~

~~February 28, 2017~~

July 23, 2021

~~March 1, 2017~~

$400,000,000

~~300 million~~

~~February 28, 2019~~

July 23, 2023

Item 6.

EXHIBITS



3(i).		Restated Certificate of Incorporation of Fortune Brands Home & Security, Inc. ~~(incorporated~~is incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form10-Q filed with the SEC on November 5, ~~2012, Commission file number1-35166).~~2012.

3(ii).		Amended and Restated~~By-laws~~ Bylaws of Fortune Brands Home & Security, Inc., ~~as adopted September 27, 2011 (incorporated~~effective February 23, 2021, are incorporated herein by reference to Exhibit ~~3.2~~3.1 to the Company’s Current Report on Form8-K filed with the SEC on ~~September 30, 2011, Commission file number1-35166).~~February 23, 2021.

31.1.* 31.1*		Certificate of Chief Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

31.2.* 31.2*		Certificate of Chief Financial Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

32.*		Joint CEO/CFO Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002.

101.*		The following materials from the Company’s Quarterly Report on Form10-Q for the quarter ended September 30, ~~2017~~2021 formatted in Inline eXtensible Business Reporting Language ~~(XBRL)~~(iXBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Comprehensive Income, ~~(ii)~~(iii) the Condensed Consolidated Balance Sheets, ~~(iii)~~(iv) the Condensed Consolidated Statements of Cash Flows, ~~(iv)~~(v) the Condensed Consolidated Statements of Equity, and ~~(v)~~(vi) the Notes to the Condensed Consolidated Financial Statements.

104.*	Cover Page Interactive Data File (embedded within the iXBRL document).

*	Filed or furnished herewith.

*	~~Filed herewith.~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		FORTUNE BRANDS HOME & SECURITY, INC.
	(Registrant)

Date: October ~~31, 2017~~27, 2021		/s/ Patrick D. Hallinan
		Patrick D. Hallinan
		Senior Vice President and Chief Financial Officer
		(Duly authorized officer and principal financial officer of the Registrant)

4832

Delaware
~~DELAWARE~~		62-1411546
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~520 Lake Cook Road, Deerfield, Illinois~~		~~60015-5611~~
~~(Address of principal executive offices)~~		~~(Zip Code)~~

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FBHS	New York Stock Exchange


	September 30, 2017			December 31, 2016			September 30, 2021			December 31, 2020
Assets
Current assets
Cash and cash equivalents	$	277.1		$	251.5		$	460.7		$	419.1
Accounts receivable, net		594.7			550.7
Accounts receivable less allowances for discounts and credit losses								921.8			734.9
Inventories		600.1			531.1			1,128.3			867.2
Other current assets		126.4			111.9			215.2			187.3

Total current assets		1,598.3			1,445.2			2,726.0			2,208.5
Property, plant and equipment, net of accumulated depreciation		690.6			662.5			934.7			917.4
Operating lease assets								199.4			170.2
Goodwill		1,852.8			1,833.8			2,466.6			2,394.8
Other intangible assets, net of accumulated amortization		1,105.4			1,107.0			1,401.3			1,420.3
Other assets		102.2			80.0			140.8			247.5

Total assets	$	5,349.3		$	5,128.5		$	7,868.8		$	7,358.7


Liabilities and equity
Current liabilities
Accounts payable	$	392.5		$	393.8			735.7			620.5
Other current liabilities		460.0			449.0			793.1			724.6

Total current liabilities		852.5			842.8			1,528.8			1,345.1
Long-term debt		1,462.2			1,431.1			2,629.1			2,572.2
Deferred income taxes		176.2			163.5			167.2			160.5
Accrued defined benefit plans		185.1			216.2			132.0			159.5
Operating lease liabilities								166.9			140.5
Othernon-current liabilities		127.4			111.9			190.2			205.4

Total liabilities		2,803.4			2,765.5			4,814.2			4,583.2
Commitments and contingencies (see Note 17)
Equity
Fortune Brands stockholders’ equity
Stockholders' equity
Common stock^(a)		1.7			1.7			1.9			1.8
Paid-in capital		2,712.2			2,653.8			2,994.8			2,926.3
Accumulated other comprehensive loss		(25.5	)		(71.9	)		(53.8	)		(55.1	)
Retained earnings		1,076.5			814.6			2,670.0			2,180.2
Treasury stock		(1,220.6	)		(1,036.7	)		(2,558.3	)		(2,277.7	)

Total Fortune Brands stockholders’ equity		2,544.3			2,361.5
Noncontrolling interests		1.6			1.5

Total equity		2,545.9			2,363.0


Total stockholders' equity								3,054.6			2,775.5
Total liabilities and equity	$	5,349.3		$	5,128.5		$	7,868.8		$	7,358.7


	2017			2016			2021			2020
Operating activities
Net income	$	344.7		$	309.5		$	597.1		$	390.8
Non-cashpre-tax expense (income):
Non-cash adjustments:
Depreciation		72.7			69.3			92.9			85.8
Amortization		23.6			20.4
Amortization of intangibles								48.5			31.1
Non-cash lease expense								31.8			26.6
Stock-based compensation		32.7			24.3			36.0			33.5
Recognition of actuarial (gains) losses		(1.3	)		1.9
Deferred income taxes		8.2			(23.0	)
Loss on sale of product line		2.4			—
Recognition of actuarial losses								1.1			0.6
Deferred taxes								9.6			(17.0	)
Asset impairment charges		3.2			—			—			22.5
Amortization of deferred financing costs		1.5			3.0
Amortization of deferred financing fees								2.8			3.3
Equity in losses of affiliate								—			4.7
Loss (gain) on equity investments								2.9			(6.6	)
Loss on sale of property, plant and equipment		0.3			1.2			1.5			1.3
Changes in assets and liabilities:
Increase in accounts receivable		(34.5	)		(53.1	)		(186.2	)		(164.4	)
(Increase) decrease in inventories		(60.7	)		22.6
(Decrease) increase in accounts payable		(3.5	)		28.7
Increase in inventories								(258.0	)		(20.5	)
Increase in accounts payable								116.5			88.5
Increase in other assets		(28.0	)		(11.6	)		(0.6	)		(21.2	)
Decrease in accrued expenses and other liabilities		(23.9	)		(12.0	)
Increase (decrease) in accrued taxes		15.2			(0.6	)

(Decrease) increase in accrued expenses and other liabilities								(65.0	)		25.0
(Decrease) increase in accrued taxes								(0.1	)		22.8
Net cash provided by operating activities		352.6			380.6			430.8			506.8


Investing activities
Capital expenditures^(a)		(95.5	)		(106.1	)		(113.0	)		(66.2	)
Proceeds from the sale of assets		0.2			2.3
Proceeds from sale of product line		1.5			—
Proceeds from the disposition of assets								1.7			1.5
Cost of acquisitions, net of cash acquired		(19.4	)		(230.5	)		5.2			—

Cost of investments in equity securities								—			(59.4	)
Net cash used in investing activities		(113.2)			(334.3)			(106.1	)		(124.1	)

Financing activities
Decrease in short-term debt, net		—			(1.0	)
Issuance of long-term debt		375.0			880.0			825.0			1,020.0
Repayment of long-term debt		(345.0	)		(465.0	)		(770.0	)		(1,120.0	)
Proceeds from the exercise of stock options		25.8			24.8			32.6			56.0
Treasury stock purchases		(173.7	)		(362.7	)
Employee withholding taxes paid related to stock-based compensation		(10.2	)		(9.8	)
Deferred acquisition payment		(12.4	)		—
Treasury stock purchases^(b)								(252.9	)		(150.0	)
Employee withholding taxes related to stock-based compensation								(10.5	)		(8.3	)
Dividends to stockholders		(82.7	)		(73.7	)		(107.9	)		(99.9	)
Dividends paid to non-controlling interests								—			(2.5	)
Other financing, net		(0.3	)		(2.1	)		(1.4	)		(4.1	)

Net cash used in financing activities		(223.5	)		(9.5	)		(285.1	)		(308.8	)


Effect of foreign exchange rate changes on cash		9.7			3.3			1.0			1.9


Net increase in cash and cash equivalents	$	25.6		$	40.1		$	40.6		$	75.8


Cash and cash equivalents at beginning of period	$	251.5		$	238.5
Cash and cash equivalents at end of period	$	277.1		$	278.6
Cash, cash equivalents and restricted cash^(c) at beginning of period							$	425.0		$	394.9
Cash, cash equivalents and restricted cash^(c)at end of period							$	465.6		$	470.7


(In millions)	September 30, 2017		December 31, 2016		September 30, 2021		December 31, 2020
Inventories:
Raw materials and supplies	$	211.6	$	207.6	$	443.9	$	346.6
Work in process		61.8		55.9		82.3		76.7
Finished products		326.7		267.6		602.1		443.9
Total inventories					$	1,128.3	$	867.2

Total inventories	$	600.1	$	531.1
Property, plant and equipment, gross	$	1,715.8	$	1,630.7	$	2,217.3	$	2,150.1
Less: accumulated depreciation		1,025.2		968.2		1,282.6		1,232.7

Property, plant and equipment, net	$	690.6	$	662.5	$	934.7	$	917.4


Large accelerated filer	☒	☒	Accelerated filer		☐

Non-accelerated filer	☐	~~☐ (Do not check if a smaller reporting company)~~	Smaller reporting company		☐

			Emerging growth company	☐	☐

											Nine Months Ended					Three Months Ended
	Nine Months Ended September 30,						Three Months Ended September 30,				September 30,					September 30,
	2017			2016			2017		2016		2021		2020			2021			2020
Net sales	$	3,900.8		$	3,683.3		$	1,348.6	$	1,279.0	$	5,693.4	$	4,430.6		$	1,986.3		$	1,652.1
Cost of products sold		2,461.3			2,352.8			841.6		801.0		3,637.2		2,873.9			1,280.0			1,071.5
Selling, general and administrative expenses		877.7			831.4			297.3		284.5		1,166.3		918.4			400.2			328.3
Amortization of intangible assets		23.6			20.4			7.5		7.3		48.5		31.1			15.9			10.5
Loss on sale of product line (see Note 4)		2.4			—			—		—
Asset impairment charges		3.2			—			—		—		—		22.5			—			—
Restructuring charges		3.5			12.4			0.4		3.1		11.5		16.5			3.6			1.6


Operating income		529.1			466.3			201.8		183.1		829.9		568.2			286.6			240.2
Interest expense		36.5			37.5			12.3		11.8		63.2		64.4			20.6			20.1
Other expense (income), net		0.2			(0.1	)		0.1		0.6		0.7		(13.4	)		(1.3	)		(2.1	)


Income before income taxes		492.4			428.9			189.4		170.7
Income taxes		145.1			120.9			59.8		48.8

Income from continuing operations, net of tax		347.3			308.0			129.6		121.9
(Loss) income from discontinued operations , net of tax		(2.6	)		1.5			—		1.5

Income before taxes												766.0		517.2			267.3			222.2
Income tax												168.9		121.7			65.2			54.0
Income after tax												597.1		395.5			202.1			168.2
Equity in losses of affiliate												—		4.7			—			2.4
Net income		344.7			309.5			129.6		123.4		597.1		390.8			202.1			165.8
Less: Noncontrolling interests		0.1			(0.1	)		0.1		—		—		1.3			—			1.2

Net income attributable to Fortune Brands	$	344.6		$	309.6		$	129.5	$	123.4	$	597.1	$	389.5		$	202.1		$	164.6

Basic earnings per common share											$	4.32	$	2.81		$	1.47		$	1.19
Diluted earnings per common share											$	4.26	$	2.78		$	1.45		$	1.17

Basic earnings per common share
Continuing operations	$	2.26		$	2.00		$	0.84	$	0.79
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common shareholders	$	2.24		$	2.01		$	0.84	$	0.80
Diluted earnings per common share
Continuing operations	$	2.22		$	1.95		$	0.83	$	0.77
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common shareholders	$	2.20		$	1.96		$	0.83	$	0.78
Comprehensive income	$	391.1		$	309.8		$	158.7	$	110.5	$	598.4	$	371.9		$	186.7		$	184.6


	Common Stock		Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Non- controlling Interests			Total Equity
Balance at December 31, 2015	$	1.7	$	2,602.2		$	(52.5	)	$	501.6		$	(602.1	)	$	2.9		$	2,453.8
Comprehensive income:
Net income		—		—			—			309.6			—			(0.1	)		309.5
Other comprehensive income		—		—			0.3			—			—			—			0.3
Stock options exercised		—		24.8			—			—			—			—			24.8
Stock-based compensation		—		24.3			—			—			(9.8	)		—			14.5
Treasury stock purchase		—		—			—			—			(362.7	)		—			(362.7	)
Dividends ($0.28 per common share)		—		—			—			(72.8	)		—			—			(72.8	)
Dividends paid to noncontrolling interests		—		—			—			—			—			(1.4	)		(1.4	)
Other		—		(5.8	)		—			—			—			—			(5.8	)

Balance at September 30, 2016	$	1.7	$	2,645.5		$	(52.2	)	$	738.4		$	(974.6	)	$	1.4		$	2,360.2


Balance at December 31, 2016	$	1.7	$	2,653.8		$	(71.9	)	$	814.6		$	(1,036.7	)	$	1.5		$	2,363.0
Comprehensive income:
Net income		—		—			—			344.6			—			0.1			344.7
Other comprehensive income		—		—			46.4			—			—			—			46.4
Stock options exercised		—		25.7			—			—			—			—			25.7
Stock-based compensation		—		32.7			—			—			(10.2	)		—			22.5
Treasury stock purchase		—		—			—			—			(173.7	)		—			(173.7	)
Dividends ($0.54 per common share)		—		—			—			(82.7	)		—			—			(82.7	)

Balance at September 30, 2017	$	1.7	$	2,712.2		$	(25.5	)	$	1,076.5		$	(1,220.6	)	$	1.6		$	2,545.9

(In millions)
Accounts receivable	$	42.3
Inventories		51.1
Property, plant and equipment		66.1
Goodwill		305.8
Identifiable intangible assets		313.0
Operating lease assets		6.1
Other assets		3.7
Total assets		788.1
Accounts payable		6.5
Other current liabilities and accruals		31.5
Other non-current liabilities		32.6
Net assets acquired^(a)	$	717.5


(In millions)	As of September 30, 2017							As of December 31, 2016							As of September 30, 2021							As of December 31, 2020
	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived tradenames	$	682.6	$	—		$	682.6	$	671.8	$	—		$	671.8	$	711.7	$	—		$	711.7	$	711.0	$	—		$	711.0

Amortizable intangible assets
Tradenames		18.6		(9.4	)		9.2		15.8		(7.3	)		8.5		37.1		(15.3	)		21.8		34.8		(14.0	)		20.8
Customer and contractual relationships		627.1		(226.0	)		401.1		611.9		(203.1	)		408.8		977.3		(375.1	)		602.2		973.2		(337.3	)		635.9
Patents/proprietary technology		57.2		(44.7	)		12.5		61.9		(44.0	)		17.9		133.0		(67.4	)		65.6		109.6		(57.0	)		52.6

Total		702.9		(280.1	)		422.8		689.6		(254.4	)		435.2		1,147.4		(457.8	)		689.6		1,117.6		(408.3	)		709.3

Total identifiable intangibles	$	1,385.5	$	(280.1	)	$	1,105.4	$	1,361.4	$	(254.4	)	$	1,107.0	$	1,859.1	$	(457.8	)	$	1,401.3	$	1,828.6	$	(408.3	)	$	1,420.3

	2020
Unobservable Input	Minimum			Maximum			Weighted Average^(a)
Discount rate		14.8	%		15.8	%		15.1	%
Royalty rate^(b)		4.0	%		5.0	%		4.3	%
Long-term revenue growth rate^(c)		1.0	%		3.0	%		1.6	%

					Net Carrying Value
(in millions)	Principal Amount		Issuance Date	Maturity Date	September 30, 2021		December 31, 2020
4.000% Senior Notes	$	500.0	June 2015	June 2025	$	497.2	$	496.6
4.000% Senior Notes (the "2018 Notes")		600.0	September 2018	September 2023		597.9		597.1
3.250% Senior Notes (the "2019 Notes")		700.0	September 2019	September 2029		694.0		693.5
Total Senior Notes	$	1,800.0			$	1,789.1	$	1,787.2

							Fair Value
(In millions)		Fair Value				Location	September 30, 2021		December 31, 2020
	Location	September 30, 2017		December 31, 2016
Assets
Assets:
Foreign exchange contracts	Other current assets	$	3.0	$	2.8	Other current assets	$	3.2	$	3.7
Commodity contracts						Other current assets		0.2		1.9
Net investment hedges	Other current assets		0.2		0.6	Other current assets		0.1		—
						Total assets	$	3.5	$	5.6
Liabilities:
Foreign exchange contracts						Other current liabilities	$	1.3	$	6.5
	Total assets	$	3.2	$	3.4	Total liabilities	$	1.3	$	6.5

Liabilities
Foreign exchange contracts	Other current liabilities	$	5.1	$	2.9
Net investment hedges	Other current liabilities		0.4		0.2

	Total current liabilities	$	5.5	$	3.1

(In millions)	Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Nine Months Ended September 30, 2021
	Cost of products sold			Interest expense		Other expense, net
Total amounts per Consolidated Statements of Comprehensive Income	$	3,637.2		$	63.2	$	0.7
The effects of fair value and cash flow hedging:
Gain (loss) on fair value hedging relationships
Foreign exchange contracts:
Hedged items		—			—		(2.1	)
Derivative designated as hedging instruments		—			—		(0.6	)
Gain (loss) on cash flow hedging relationships
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		0.2			—		—
Commodity contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		0.9			—		—
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		—			0.5		—

(In millions)	Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Nine Months Ended September 30, 2020
	Cost of products sold			Interest expense		Other income, net
Total amounts per Consolidated Statements of Comprehensive Income	$	2,873.9		$	64.4	$	13.4
The effects of fair value and cash flow hedging:
Gain (loss) on fair value hedging relationships
Foreign exchange contracts:
Hedged items		—			—		(5.3	)
Derivative designated as hedging instruments		—			—		6.9
Gain (loss) on cash flow hedging relationships
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		(2.1	)		—		—
Commodity contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		(0.2	)		—		—
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income		—			0.5		—


(In millions)		Gain (Loss) Recognized in Income Nine Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	0.9		$	(2.6	)
Fair value	Other (income) expense, net		(1.4	)		1.3

Total		$	(0.5	)	$	(1.3	)

(In millions)		Gain (Loss) Recognized in Income Three Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	(0.1	)	$	(1.2	)
Fair value	Other (income) expense, net		(0.9	)		0.3

Total		$	(1.0	)	$	(0.9	)


(In millions)	September 30, 2017				December 31, 2016				September 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Notes, net of underwriting commissions, price discounts and debt issuance costs									$	1,789.1	$	1,933.8	$	1,787.2	$	1,994.9
Revolving credit facility	$	570.0	$	570.0	$	540.0	$	540.0		840.0		840.0		785.0		785.0
Senior Notes		892.2		927.5		891.1		919.2
Total debt									$	2,629.1	$	2,773.8	$	2,572.2	$	2,779.9


(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments^(a)			Accumulated Other Comprehensive Loss
Balance at December 31, 2015	$	(13.3	)	$	2.1		$	(41.3	)	$	(52.5	)
Amounts classified into accumulated other comprehensive loss		0.9			(7.3	)		9.0			2.6
Amounts reclassified from accumulated other comprehensive loss		—			2.8			(5.1	)		(2.3	)

Net current-period other comprehensive income (loss)		0.9			(4.5	)		3.9			0.3

Balance at September 30, 2016	$	(12.4	)	$	(2.4	)	$	(37.4	)	$	(52.2	)

Balance at December 31, 2016	$	(28.0	)	$	(0.6	)	$	(43.3	)	$	(71.9	)
Amounts classified into accumulated other comprehensive loss		47.0			0.6			3.5			51.1
Amounts reclassified from accumulated other comprehensive loss		—			(0.6	)		(4.1	)		(4.7	)

Net current-period other comprehensive income (loss)		47.0			—			(0.6	)		46.4

Balance at September 30, 2017	$	19.0		$	(0.6	)	$	(43.9	)	$	(25.5	)

(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments			Accumulated Other Comprehensive Loss
Balance at December 31, 2019	$	(11.5	)	$	5.5		$	(66.6	)	$	(72.6	)
Amounts classified into accumulated other comprehensive (loss) income		(12.7	)		(7.7	)		(1.0	)		(21.4	)
Amounts reclassified from accumulated other comprehensive (loss) income		—			2.1			0.4			2.5
Net current-period other comprehensive (loss) income		(12.7	)		(5.6	)		(0.6	)		(18.9	)
Balance at September 30, 2020	$	(24.2	)	$	(0.1	)	$	(67.2	)	$	(91.5	)

Balance at December 31, 2020	$	7.2		$	4.2		$	(66.5	)	$	(55.1	)
Amounts classified into accumulated other comprehensive (loss) income		2.9			1.4			(2.6	)		1.7
Amounts reclassified from accumulated other comprehensive (loss) income		—			(1.8	)		1.4			(0.4	)
Net current-period other comprehensive (loss) income		2.9			(0.4	)		(1.2	)		1.3
Balance at September 30, 2021	$	10.1		$	3.8		$	(67.7	)	$	(53.8	)


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Nine Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2017			2016
(Losses) gains on cash flow hedges
Foreign exchange contracts	$	0.5		$	(2.5	)		Cost of products sold
Commodity contracts		0.4			(0.1	)		Cost of products sold

		0.9			(2.6	)		Total before tax
		(0.3	)		(0.2	)		Tax expense

	$	0.6		$	(2.8	)		Net of tax
Defined benefit plan items
Recognition of prior service credits	$	5.1		$	10.0			^(a)
Recognition of actuarial gains (losses)		1.3			(1.9	)		^(a)

		6.4			8.1			Total before tax
		(2.3	)		(3.0	)		Tax expense

	$	4.1		$	5.1			Net of tax

Total reclassifications for the period	$	4.7		$	2.3			Net of tax

(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Nine Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2021			2020
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	0.2		$	(2.1	)	Cost of products sold
Commodity contracts		0.9			(0.2	)	Cost of products sold
Interest rate contracts		0.5			0.5		Interest expense
		1.6			(1.8	)	Total before tax
		0.2			(0.3	)	Tax expense
	$	1.8		$	(2.1	)	Net of tax
Defined benefit plan items
Recognition of actuarial losses	$	(1.1	)	$	(0.6	)	Other expense (income), net
		(1.1	)		(0.6	)	Total before tax
		(0.3	)		0.2		Tax expense
	$	(1.4	)	$	(0.4	)	Net of tax
Total reclassifications for the period	$	0.4		$	(2.5	)	Net of tax


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Three Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2021			2020
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	0.9		$	(1.4	)	Cost of products sold
Commodity contracts		—			0.2		Cost of products sold
Interest rate contracts		0.2			0.2		Interest expense
		1.1			(1.0	)	Total before tax
		0.1			—		Tax expense
Total reclassifications for the period	$	1.2		$	(1.0	)	Net of tax
Defined benefit plan items
Recognition of actuarial losses	$	(1.1	)	$	(0.6	)	Other expense (income), net
		(1.1	)		(0.6	)	Total before tax
		(0.3	)		0.2		Tax expense
	$	(1.4	)	$	(0.4	)	Net of tax
Total reclassifications for the period	$	(0.2	)	$	(1.4	)	Net of tax


	Three Months Ended September 30,
(In millions)	2017			2016			% Change vs. Prior Year
Net Sales
Cabinets	$	614.2		$	602.1			2.0	%
Plumbing		438.3			391.1			12.1
Doors		138.5			129.2			7.2
Security		157.6			156.6			0.6

Net sales	$	1,348.6		$	1,279.0			5.4	%

Operating Income
Cabinets	$	69.7		$	74.8			(6.8	)%
Plumbing		97.3			84.0			15.8
Doors		25.1			22.3			12.6
Security		27.7			22.9			21.0
Less: Corporate expenses		(18.0	)		(20.9	)		13.9

Operating income	$	201.8		$	183.1			10.2	%

Corporate expenses
General and administrative expense	$	(20.5	)	$	(20.5	)
Defined benefit plan income		1.2			0.6
Recognition of defined benefit plan actuarial gains (losses)		1.3			(1.0	)

Total Corporate expenses	$	(18.0	)	$	(20.9	)		13.9	%


(In millions)	Nine Months Ended September 30, 2017						Nine Months Ended September 30, 2021							Nine Months Ended September 30, 2020
	Restructuring Charges		Other Charges ^(a)		Total Charges		Restructuring Charges		Other Charges ^(a)			Total Charges		Restructuring Charges		Other Charges ^(a)		Total Charges
Plumbing		1.6	$	—	$	1.6	$	—	$	2.8		$	2.8	$	7.2	$	0.1	$	7.3
Security		1.9		0.9		2.8

Outdoors & Security								8.5		(0.4	)		8.1		3.2		0.5		3.7
Cabinets								3.0		3.5			6.5		4.7		2.6		7.3
Corporate								—		—			—		1.4		0.3		1.7
Total	$	3.5	$	0.9	$	4.4	$	11.5	$	5.9		$	17.4	$	16.5	$	3.5	$	20.0


(In millions)	Nine Months Ended September 30, 2016						Three Months Ended September 30, 2021							Three Months Ended September 30, 2020
	Restructuring Charges		Other Charges ^(a)		Total Charges		Restructuring Charges		Other Charges ^(a)			Total Charges		Restructuring Charges			Other Charges ^(a)			Total Charges
Plumbing							$	—	$	1.2		$	1.2	$	4.0		$	2.4		$	6.4
Outdoors & Security								2.4		(0.4	)		2.0		-			(0.3	)		(0.3	)
Cabinets	$	1.8	$	—	$	1.8		1.2		0.9			2.1		(2.4	)		0.3			(2.1	)
Plumbing		1.1		0.8		1.9
Security		9.5		3.5		13.0

Total	$	12.4	$	4.3	$	16.7	$	3.6	$	1.7		$	5.3	$	1.6		$	2.4		$	4.0