Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 05, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FBHS | ||
Entity Registrant Name | FORTUNE BRANDS HOME & SECURITY, INC. | ||
Entity Central Index Key | 1,519,751 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 157,593,390 | ||
Entity Public Float | $ 7,264,910,465 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Net sales | [1] | $ 4,579.4 | $ 4,013.6 | $ 3,703.6 |
Cost of products sold | 2,997.5 | 2,646.7 | 2,408.5 | |
Selling, general and administrative expenses | 1,047.6 | 943.3 | 938.7 | |
Amortization of intangible assets | 21.6 | 13.1 | 9.4 | |
Restructuring charges | 16.6 | 7 | 2.8 | |
Asset impairment charges | 0 | 0 | 21.2 | |
OPERATING INCOME | 496.1 | 403.5 | 323 | |
Interest expense | 31.9 | 10.4 | 7.2 | |
Other expense, net | 4.3 | 1.2 | 5.3 | |
Income from continuing operations before income taxes | 459.9 | 391.9 | 310.5 | |
Income taxes | 153.4 | 118.3 | 101.5 | |
Income from continuing operations, net of tax | 306.5 | 273.6 | 209 | |
Income (loss) from discontinued operations, net of tax | 9 | (114.3) | 21.9 | |
NET INCOME | 315.5 | 159.3 | 230.9 | |
Less: Noncontrolling interests | 0.5 | 1.2 | 1.2 | |
NET INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 315 | $ 158.1 | $ 229.7 | |
Basic earnings (loss) per common share | ||||
Continuing operations | $ 1.92 | $ 1.68 | $ 1.26 | |
Discontinuing operations | 0.05 | (0.70) | 0.13 | |
Net income attributable to Fortune Brands common shareholders | 1.97 | 0.98 | 1.39 | |
Diluted earnings (loss) per common share | ||||
Continuing operations | 1.88 | 1.64 | 1.21 | |
Discontinuing operations | 0.05 | (0.69) | 0.13 | |
Net income attributable to Fortune Brands common shareholders | $ 1.93 | $ 0.95 | $ 1.34 | |
Basic average number of shares outstanding | 159.5 | 161.8 | 165.5 | |
Diluted average number of shares outstanding | 163 | 166.3 | 171.3 | |
Dividends declared per common share | $ 0.58 | $ 0.50 | $ 0.42 | |
[1] | Based on country of destination |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Net Income | $ 315.5 | $ 159.3 | $ 230.9 | |
Other comprehensive (loss) income, before tax: | ||||
Foreign currency translation adjustments | (44.3) | (22.3) | (10.2) | |
Unrealized gains (losses) on derivatives: | ||||
Unrealized holding gains (losses) arising during period | 6.8 | (1.3) | 3 | |
Less: reclassification adjustment for gains included in net income | (3.6) | (0.1) | (2) | |
Unrealized gains (losses) on derivatives | 3.2 | (1.4) | 1 | |
Defined benefit plans: | ||||
Prior service (cost) credit arising during period | (0.1) | 15.3 | 34.7 | |
Prior service cost recognition due to settlement and curtailment | (1) | |||
Net actuarial gain (loss) arising during period | 6.3 | (112.5) | 111.3 | |
Less: amortization of prior service credit included in net periodic pension cost | (13.4) | (27.5) | (27.3) | |
Defined benefit plans | (8.2) | (124.7) | 118.7 | |
Other comprehensive (loss) income, before tax | (49.3) | (148.4) | 109.5 | |
Income tax benefit (expense) related to items of other comprehensive income | [1] | 3.5 | 46.2 | (44.7) |
Other comprehensive (loss) income, net of tax | (45.8) | (102.2) | 64.8 | |
COMPREHENSIVE INCOME | 269.7 | 57.1 | 295.7 | |
Less: comprehensive income attributable to noncontrolling interest | 0.5 | 1.1 | 1.2 | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 269.2 | $ 56 | $ 294.5 | |
[1] | Income tax benefit (expense) on unrealized gains (losses) on derivatives of $(0.5) million, $(0.2) million and $(0.2) million and on defined benefit plans of $4.0 million, $46.4 million and $(44.5) million in 2015, 2014 and 2013, respectively. |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrealized gains (losses) on derivatives, tax | $ (0.5) | $ (0.2) | $ (0.2) |
Defined benefit plans, tax | $ 4 | $ 46.4 | $ (44.5) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets | |||
Cash and cash equivalents | $ 238.5 | $ 191.9 | |
Accounts receivable less allowances for discounts, doubtful accounts and returns | 502.6 | 458.9 | |
Inventories | 555.6 | 462.2 | |
Other current assets | 122 | 122.8 | |
Current assets of discontinued operations | 63.3 | ||
TOTAL CURRENT ASSETS | 1,418.7 | 1,299.1 | |
Property, plant and equipment, net of accumulated depreciation | [1] | 627.9 | 539.8 |
Goodwill | [2] | 1,755.3 | 1,467.8 |
Other intangible assets, net of accumulated amortization | 996.7 | 656.5 | |
Other assets | 80 | 72.4 | |
Non-current assets of discontinued operations | 17.3 | ||
TOTAL ASSETS | 4,878.6 | 4,052.9 | |
Current liabilities | |||
Notes payable to banks | 0.8 | ||
Current portion of long-term debt | 0 | 26.3 | |
Accounts payable | 344.2 | 333.8 | |
Other current liabilities | 412.9 | 322 | |
Current liabilities of discontinued operations | 17.5 | ||
TOTAL CURRENT LIABILITIES | 757.9 | 699.6 | |
Long-term debt | 1,171.6 | 643.7 | |
Deferred income taxes | 201.7 | 150.6 | |
Accrued defined benefit plans | 218.4 | 216.9 | |
Other non-current liabilities | 75.2 | 75.6 | |
Non-current liabilities of discontinued operations | 3.4 | ||
TOTAL LIABILITIES | $ 2,424.8 | $ 1,789.8 | |
Commitments (Note 17) and Contingencies (Note 22) | |||
Equity | |||
Common stock | [3] | $ 1.7 | $ 1.7 |
Paid-in capital | 2,602.2 | 2,517.3 | |
Accumulated other comprehensive loss | (52.5) | (6.7) | |
Retained earnings | 501.6 | 279.5 | |
Treasury stock | (602.1) | (532.3) | |
TOTAL FORTUNE BRANDS EQUITY | 2,450.9 | 2,259.5 | |
Noncontrolling interests | 2.9 | 3.6 | |
TOTAL EQUITY | 2,453.8 | 2,263.1 | |
TOTAL LIABILITIES AND EQUITY | $ 4,878.6 | $ 4,052.9 | |
[1] | Purchases of property, plant and equipment not yet paid for as of December 31, 2015, 2014 and 2013 were $16.1 million, $4.2 million and $0.2 million, respectively. | ||
[2] | Net of accumulated impairment losses of $399.5 million in the Doors segment. | ||
[3] | Common stock, par value $0.01 per share, 175.2 million shares and 172.0 million shares issued at December 31, 2015 and 2014, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 175.2 | 172 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES | |||
Net Income | $ 315.5 | $ 159.3 | $ 230.9 |
Non-cash expense (income): | |||
Depreciation | 93.5 | 82.9 | 77.2 |
Amortization of intangibles | 21.6 | 15.9 | 13.2 |
Stock-based compensation | 27.6 | 29.7 | 26.1 |
Restructuring charges | 1 | 2.5 | 0.2 |
(Gain) loss on sale of property, plant and equipment | (0.5) | 0.9 | 0.8 |
Loss on sale of discontinued operation | 16.7 | 83.2 | |
Asset impairment charges | 10.7 | 27.4 | |
Actuarial (gain) loss | 8.6 | 13.7 | 5.2 |
Deferred taxes | (13.6) | 0.3 | (12.7) |
Amortization of deferred financing costs | 0.6 | ||
Changes in assets and liabilities including effects subsequent to acquisitions: | |||
Increase in accounts receivable | (6.9) | (39.9) | (58.5) |
(Increase) decrease in inventories | (69.8) | 14.5 | (89.7) |
(Decrease) increase in accounts payable | (16) | (9.5) | 39.8 |
(Increase) decrease in other assets | (24.4) | (24.4) | 32.2 |
Increase (decrease) in accrued taxes | 6.7 | (0.2) | 5.7 |
Increase (decrease) in accrued expenses and other liabilities | 50.5 | (85.9) | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 411.1 | 253.7 | 297.8 |
INVESTING ACTIVITIES | |||
Capital expenditures | (128.5) | (127.5) | (96.7) |
Proceeds from the disposition of assets | 2.5 | 0.7 | 2.2 |
Proceeds from sale of discontinued operation | 12.2 | 130 | |
Cost of acquisitions, net of cash acquired | (652.8) | (147.3) | (302) |
Other investing activities | (7) | (0.2) | |
NET CASH USED IN INVESTING ACTIVITIES | (766.6) | (151.1) | (396.7) |
FINANCING ACTIVITIES | |||
Increase (decrease) in short-term debt | 0.8 | (6.2) | 1.3 |
Issuance of long-term debt | 1,748.9 | 1,057 | 220 |
Repayment of long-term debt | (1,250) | (737) | (190) |
Proceeds from the exercise of stock options | 28.9 | 28.9 | 50.7 |
Excess tax benefit from the exercise of stock-based compensation | 30.7 | 29.2 | 26.8 |
Dividends to stockholders | (89.5) | (77.4) | (49.9) |
Treasury stock purchases | (51.7) | (439.8) | (52.1) |
Other financing activities, net | (1.2) | (2.2) | (2.7) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 416.9 | (147.5) | 4.1 |
Effect of foreign exchange rate changes on cash | (14.8) | (4.6) | 0.2 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 46.6 | (49.5) | (94.6) |
Cash and cash equivalents at beginning of year | 191.9 | 241.4 | 336 |
Cash and cash equivalents at end of year | 238.5 | 191.9 | 241.4 |
Cash paid during the year for: | |||
External interest | 26 | 9.6 | 6.7 |
Income taxes paid directly to taxing authorities | 102.2 | 109.1 | 89.4 |
Income taxes (received from) paid to Fortune Brands, Inc. | 2 | (1.2) | |
Dividends declared but not paid | $ 25.6 | $ 22.1 | $ 20 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings (Deficit) | Treasury Stock | Non- controlling Interests | |
Beginning Balance at Dec. 31, 2012 | $ 2,384.7 | $ 1.6 | $ 2,324.8 | $ 30.6 | $ 41 | $ (16.9) | $ 3.6 | |
Comprehensive income: | ||||||||
Net Income | 230.9 | 229.7 | 1.2 | |||||
Other comprehensive (loss) income | 64.8 | 64.8 | ||||||
Stock options exercised | 50.8 | 0.1 | 50.7 | |||||
Stock-based compensation | 14.5 | 25.7 | (11.2) | |||||
Tax benefit on exercise of stock options | [1] | 30.1 | 30.1 | |||||
Treasury stock purchase | (51.7) | (51.7) | ||||||
Dividends ($0.42 per common share) in 2013, ($0.50 per common share) in 2014 and ($0.50 per common share) in 2015 | (69.9) | (69.9) | ||||||
Dividends paid to noncontrolling interests | (1.1) | (1.1) | ||||||
Ending Balance at Dec. 31, 2013 | 2,653.1 | 1.7 | 2,431.3 | 95.4 | 200.8 | (79.8) | 3.7 | |
Comprehensive income: | ||||||||
Net Income | 159.3 | 158.1 | 1.2 | |||||
Other comprehensive (loss) income | (102.2) | (102.1) | (0.1) | |||||
Stock options exercised | 29.1 | 29.1 | ||||||
Stock-based compensation | 16.5 | 29.2 | (12.7) | |||||
Tax benefit on exercise of stock options | 27.7 | 27.7 | ||||||
Treasury stock purchase | (439.8) | (439.8) | ||||||
Dividends ($0.42 per common share) in 2013, ($0.50 per common share) in 2014 and ($0.50 per common share) in 2015 | (79.4) | (79.4) | ||||||
Dividends paid to noncontrolling interests | (1.2) | (1.2) | ||||||
Ending Balance at Dec. 31, 2014 | 2,263.1 | 1.7 | 2,517.3 | (6.7) | 279.5 | (532.3) | 3.6 | |
Comprehensive income: | ||||||||
Net Income | 315.5 | 315 | 0.5 | |||||
Other comprehensive (loss) income | (45.8) | (45.8) | ||||||
Stock options exercised | 28.9 | 28.9 | ||||||
Stock-based compensation | 9.5 | 27.6 | (18.1) | |||||
Tax benefit on exercise of stock options | 28.4 | 28.4 | ||||||
Treasury stock purchase | (51.7) | (51.7) | ||||||
Dividends ($0.42 per common share) in 2013, ($0.50 per common share) in 2014 and ($0.50 per common share) in 2015 | (92.9) | (92.9) | ||||||
Dividends paid to noncontrolling interests | (1.2) | (1.2) | ||||||
Ending Balance at Dec. 31, 2015 | $ 2,453.8 | $ 1.7 | $ 2,602.2 | $ (52.5) | $ 501.6 | $ (602.1) | $ 2.9 | |
[1] | Includes $4.1 million of adjustments related to previous years' vested and unvested restricted stock units. |
Consolidated Statements of Equ9
Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Dividends per Common share | $ 0.58 | $ 0.50 | $ 0.42 |
Adjustments related to previous years' vested and unvested restricted stock units | $ 4.1 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Background and Basis of Presentation | 1. Background and Basis of Presentation 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. References to (i) “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, after giving effect to the spin-off of Fortune Brands from Fortune Brands, Inc. in 2011 and (ii) “Former Parent” refer to Fortune Brands, Inc. Basis of Presentation The consolidated financial statements included in this Annual Report on Form 10-K were derived principally from the consolidated financial statements of the Company. In May 2015, we acquired Norcraft Companies, Inc. (“Norcraft”). The financial results of Norcraft have been included in the Company’s consolidated statements of income and consolidated statements of cash flow beginning in May 2015 and the consolidated balance sheet as of December 31, 2015. On September 10, 2015, we completed the sale of Waterloo Industries, Inc. (“Waterloo”), our tool storage business. Therefore, in accordance with Accounting Standards Codification (“ASC”) requirements, the results of operations of Waterloo through the date of sale, were classified and separately stated as discontinued operations in the accompanying consolidated statements of income for the twelve months ended December 31, 2015, 2014 and 2013. The assets and liabilities of Waterloo were classified as discontinued operations in the accompanying consolidated balance sheet as of December 31, 2014. In September 2014, we sold all of the shares of stock of Fortune Brands Windows, Inc., our subsidiary that owned and operated the Simonton windows business (“Simonton”). Therefore, in accordance with ASC requirements, the results of operations of Simonton were reclassified and separately stated as discontinued operations in the accompanying consolidated statements of income for 2014 and 2013. The cash flows from discontinued operations for 2015, 2014 and 2013 were not separately classified on the accompanying condensed consolidated statements of cash flows. Information on Business Segments was revised to exclude these discontinued operations. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | 2. Significant Accounting Policies Use of Estimates Cash and Cash Equivalents Allowances for Doubtful Accounts Inventories We also use the last-in, first-out (“LIFO”) inventory method in those product groups in which metals inventories comprise a significant portion of our inventories. LIFO inventories at December 31, 2015 and 2014 were $227.9 million (with a current cost of $243.1 million) and $197.6 million (with a current cost of $217.5 million), respectively. Property, Plant and Equipment Buildings and leasehold improvements 15 to 40 years Machinery and equipment 3 to 10 years Software 3 to 7 years Long-lived Assets Goodwill and Indefinite-lived Intangible Assets We evaluate the recoverability of goodwill using a weighting of the income (80%) and market (20%) approaches. For the income approach, we use a discounted cash flow model, estimating the future cash flows of the reporting units to which the goodwill relates, and then discounting the future cash flows at a market-participant-derived weighted-average cost of capital. In determining the estimated future cash flows, we consider current and projected future levels of income based on management’s plans for that business; business trends, prospects and market and economic conditions; and market-participant considerations. Furthermore, our projection for the U.S. home products market is inherently subject to a number of uncertain factors, such as employment, home prices, credit availability, new home starts and the rate of home foreclosures. For the market approach, we apply market multiples for peer groups to the current operating results of the reporting units to determine each reporting unit’s fair value. The Company’s reporting units are operating segments. When the estimated fair value of a reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss, if any. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying value of a reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of a reporting unit is estimated based on a hypothetical allocation of each reporting unit’s fair value to all of its underlying assets and liabilities. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The determination of the useful life of an intangible asset other than goodwill is based on factors including historical and tradename performance with respect to consumer name recognition, geographic market presence, market share, and plans for ongoing tradename support and promotion. Certain of our tradenames have been assigned an indefinite life as we currently anticipate that these tradenames will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate. We review indefinite-lived intangible assets for impairment annually in the fourth quarter, and whenever market or business events indicate there may be a potential impairment of that intangible. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. We measure fair value using the standard relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Qualitative factors include changes in volume, customers and the industry. If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test. The Company 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. Such events may include, but are not limited to, the impact of the economic environment; a material negative change in relationships with significant customers; or strategic decisions made in response to economic and competitive conditions. Defined Benefit Plans We record amounts relating to these plans based on calculations in accordance with ASC requirements for Compensation — Retirement Benefits, which include various actuarial assumptions, including discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10 percent of the greater of the fair value of pension plan assets or each plan’s projected benefit obligation (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each year. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current economic conditions and trends. The discount rate used to measure obligations is based on a spot-rate yield curve on a plan-by-plan basis that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments. The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return. Compensation increases reflect expected future compensation trends. For postretirement benefits, our health care trend rate assumption is based on historical cost increases and expectations for long-term increases. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. We believe that the assumptions utilized in recording obligations under our plans, which are presented in Note 14, “Defined Benefit Plans,” are reasonable based on our experience and on advice from our independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect our financial position and results of operations. We will continue to monitor these assumptions as market conditions warrant. Litigation Contingencies Income Taxes We record liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where we evaluate whether an individual tax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, we perform the second step of measuring the benefit to be recorded. The actual benefits ultimately realized may differ from our estimates. In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the consolidated statement of income and consolidated balance sheet in the period in which such changes occur. As of December 31, 2015, we had liabilities for unrecognized tax benefits pertaining to uncertain tax positions totaling $38.2 million. It is reasonably possible that the unrecognized tax benefits may decrease in the range of $7.5 million to $12.5 million in the next 12 months primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings. Revenue Recognition Cost of Products Sold Customer Program Costs Selling, General and Administrative Expenses . Advertising costs, which amounted to $195.4 million, $200.4 million and $197.1 million in 2015, 2014 and 2013, respectively, are principally expensed as incurred. Advertising costs include product displays, media production costs and point of sale materials. Advertising costs recorded as a reduction to net sales, primarily cooperative advertising, were $63.2 million, $66.8 million and $56.8 million in 2015, 2014 and 2013, respectively. Advertising costs recorded in selling, general and administrative expenses were $132.2 million, $133.6 million and $140.3 million in 2015, 2014 and 2013, respectively. Research and development expenses include product development, product improvement, product engineering and process improvement costs. Research and development expenses, which were $48.7 million, $46.1 million and $50.8 million in 2015, 2014 and 2013, respectively, are expensed as incurred. Stock-based Compensation Earnings Per Share Foreign Currency Translation Derivative Financial Instruments Net deferred currency gains of $3.8 million was reclassified into earnings for the year ended December 31, 2015. There was no impact of deferred currency gains/losses on earnings in 2014. Net deferred currency gains of $2.3 million was reclassified into earnings for the years ended December 31, 2013. Based on foreign exchange rates as of December 31, 2015, we estimate that $3.1 million of net currency derivative gains included in AOCI as of December 31, 2015 will be reclassified to earnings within the next twelve months. Recently Issued Accounting Standards Balance Sheet Classification of Deferred Taxes In November 2015, the Financial Accounting Standards Board (“FASB”) issued final guidance that requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. While the guidance changes the way deferred taxes are classified on the balance sheet, companies are still required to offset deferred tax assets and liabilities for each taxpaying component within a tax jurisdiction. The standard is effective starting January 1, 2017. We have early adopted this standard as of December 31, 2015. We have elected to apply the new standard prospectively and therefore we have not adjusted prior periods presented. Simplifying Accounting for Measurement-Period Adjustments In September 2015, the FASB issued a final standard that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The new standard is effective for the annual period beginning January 1, 2016 (calendar year 2016 for Fortune Brands). Early application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Simplifying Subsequent Measurement of Inventory In July 2015, the FASB issued a final standard that simplifies the subsequent measurement of inventory by replacing lower of cost or market test under the current GAAP. Under the current guidance the subsequent measurement of inventory is measured at the lower of cost or market, where “market” may have multiple possible outcomes. The new guidance requires subsequent measurement of inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs to sell (completion, disposal, and transportation). This new standard is effective for the annual period beginning January 1, 2017 (calendar year 2017 for Fortune Brands). Earlier application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share In May 2015, the FASB issued a final standard that eliminates the requirement to categorize within the fair value hierarchy investments whose fair values are measured at net asset value. Instead, entities will be required to disclose the fair values of such investments so that financial statement users can reconcile amounts reported in the fair value hierarchy table and the amounts reported on the balance sheet. The new guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2015 (calendar year 2016 for Fortune Brands). Early adoption is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, instead of as a deferred charge (i.e., as an asset). This new standard is effective for the annual period beginning after December 15, 2015 (calendar year 2016 for Fortune Brands), and for annual periods and interim periods thereafter. Early adoption is permitted, however we elected not to early adopt. The guidance will be applied on a retrospective basis. The adoption of this ASU will require us to reclassify approximately $3 million of debt issuance costs from a deferred asset to long-term debt as of March 31, 2016. Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This amendment is effective for the annual period ending after December 15, 2016 (calendar year 2016 for Fortune Brands), and for annual periods and interim periods thereafter. Early application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This ASU clarifies the accounting for revenue arising from contracts with customers and specifies the disclosures that an entity should include in its financial statements. Further, in August 2015, the FASB issued a standard, which clarified that the amendment is effective for annual reporting periods beginning after December 15, 2017 (calendar year 2018 for Fortune Brands), and annual and interim periods thereafter. We are assessing the impact the adoption of this standard will have on our financial statements. |
Balance Sheet Information
Balance Sheet Information | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Information | 3. Balance Sheet Information Supplemental information on our year-end consolidated balance sheets is as follows: (In millions) 2015 2014 Inventories: Raw materials and supplies $ 237.8 $ 178.1 Work in process 60.2 54.0 Finished products 257.6 230.1 Total inventories $ 555.6 $ 462.2 Property, plant and equipment: Land and improvements $ 56.2 $ 48.5 Buildings and improvements to leaseholds 407.6 356.3 Machinery and equipment 1,005.6 920.2 Construction in progress 82.3 71.3 Property, plant and equipment, gross 1,551.7 1,396.3 Less: accumulated depreciation 923.8 856.5 Property, plant and equipment, net of accumulated depreciation $ 627.9 $ 539.8 Other current liabilities: Accrued salaries, wages and other compensation $ 118.0 $ 69.8 Accrued customer programs 124.8 102.5 Accrued taxes 43.3 28.0 Other accrued expenses 126.8 121.7 Total other current liabilities $ 412.9 $ 322.0 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions | 4. Acquisitions In May 2015, we completed our tender offer to purchase all of the outstanding shares of common stock of Norcraft, a leading publicly-owned manufacturer of kitchen and bathroom cabinetry, for a total purchase price of $648.6 million in cash. We financed the transaction using cash on hand and borrowings under our existing credit facilities. Net sales and operating income for this acquired business in the year ended December 31, 2015 were approximately $258 million and $28 million, respectively. Operating income included a $2.0 million charge related to an inventory purchase accounting adjustment to fair value. The results of operations of Norcraft are included in the Cabinets segment. We incurred $15.1 million of Norcraft acquisition-related transaction costs in the year ended December 31, 2015. The goodwill expected to be deductible for income tax purposes is approximately $60.3 million. The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition. (In millions) Accounts receivable $ 31.0 Inventories 28.4 Property, plant and equipment 45.7 Goodwill 304.7 Identifiable intangible assets 360.0 Other assets 9.4 Total assets 779.2 Deferred tax liabilities 101.4 Other liabilities and accruals 29.2 Net assets acquired (a) $ 648.6 (a) Net assets exclude $15.5 million of cash transferred to the Company as the result of the Norcraft 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. 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 cost synergies. Identifiable intangible assets consist of an indefinite-lived tradename of $150 million and customer relationships of $210 million. The useful life of the customer relationships identifiable intangible asset is estimated to be 20 years. The following unaudited pro forma summary presents consolidated financial information as if Norcraft had been acquired on January 1, 2014. The unaudited pro forma financial information is based on historical results of operations and financial position of the Company and Norcraft. The pro forma results include: > the effect of certain transactions recorded in historical financial statements of Norcraft including: the expense relating to Norcraft’s tax receivable agreements settled upon the acquisition of Norcraft and the pro forma effect of a release of deferred tax valuation allowance, > estimated amortization of a definite-lived customer relationship intangible asset, > the estimated cost of the inventory adjustment to fair value, > interest expense associated with debt that would have been incurred in connection with the acquisition, > the reclassification of Norcraft transaction costs from 2015 to the first quarter of 2014, and > adjustments to conform accounting policies. The unaudited pro forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2014. In addition, the unaudited pro forma information should not be deemed to be indicative of future results. (In millions, except per share amounts) 2015 2014 Net sales $ 4,721.8 $ 4,387.8 Income from continuing operations 323.1 269.7 Basic earnings per common share $ 2.02 $ 1.66 Diluted earnings per common share $ 1.98 $ 1.61 In March 2015, we acquired a cabinets component company for approximately $6 million in cash. This acquisition did not have a material impact on our financial statements. In December 2014, we acquired all of the issued and outstanding shares of capital stock of Anafree Holdings, Inc., the sole owner of Anaheim Manufacturing Company (“Anaheim”), which markets and sells garbage disposals, for $28.9 million in cash. We paid the purchase price using a combination of cash on hand and borrowings under our existing credit facilities. We completed our purchase price allocation in the first half of 2015 and as a result reclassified $17 million from goodwill to other identifiable assets. The results of operations of Anaheim are included in the Plumbing segment. In July 2014, we acquired all of the voting equity of John D. Brush & Co., Inc. (“SentrySafe”) for a purchase price of $116.7 million in cash. The purchase price was funded from our existing credit facilities. This acquisition broadened our product offering of security products. The results of operations of SentrySafe are included in the Security segment. These 2014 acquisitions were not material for the purposes of supplemental disclosure and did not have a material impact on our consolidated financial statements. In June 2013, we acquired Woodcrafters Home Products Holding, LLC (“WoodCrafters”), a manufacturer of bathroom vanities and tops, for a purchase price of $302.0 million. We paid the purchase price using a combination of cash on hand and borrowings under our existing credit facilities. This acquisition greatly expanded our offerings of bathroom cabinetry products. The results of operations of WoodCrafters are included in the Cabinets segment. Substantially all of the acquired goodwill was tax deductible. Goodwill primarily represents expected supply chain synergies. Identifiable intangible assets primarily consisted of customer relationships ($75.9 million) and technology ($9.6 million). The useful lives of these identifiable intangible assets are 18 years and 10 years, respectively. The following unaudited pro forma summary presents consolidated financial information as if WoodCrafters had been acquired on January 1, 2013. The unaudited pro forma financial information is based on historical results of operations and financial position of the Company and WoodCrafters. The pro forma results include adjustments for the impact of a preliminary allocation of the purchase price and interest expense associated with debt that would have been incurred in connection with the acquisition. The unaudited pro forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2013. In addition, the unaudited pro forma information should not be deemed to be indicative of future results. (In millions except per share amounts) 2013 Net sales $ 3,811.0 Net income attributable to Fortune Brands 240.8 Basic earnings per common share $ 1.45 Diluted earnings per common share $ 1.41 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations | 5. Discontinued Operations In 2015, we completed the sale of Waterloo for approximately $14 million in cash, subject to certain post-closing adjustments. We recorded a pre-tax loss of $16.7 million as the result of this sale. Transaction and other sale-related costs were approximately $2.8 million. The estimated tax benefit on the sale was $26.5 million with the after-tax gain of $7.0 million recorded within discontinued operations. The estimated tax benefit resulted primarily from a tax loss in excess of the financial reporting loss as a result of prior period nondeductible asset impairments. Waterloo is presented as a discontinued operation in our financial statements beginning January 1, 2013 and through the date of sale in accordance with ASC 205 requirements. Prior to classifying Waterloo as a discontinued operation, it was reported in the Security segment. In addition, in August 2014, we entered into a stock purchase agreement to sell the Simonton business for $130 million in cash. The sale was completed in September 2014. Simonton is presented as a discontinued operation in the Company’s financial statements in accordance with ASC requirements. The 2014 income (loss) from discontinued operations, net of tax, included a loss on sale of the Simonton business of $111.2 million as well as $14.1 million of restructuring and impairment charges for Waterloo in order to remeasure this business at the estimated fair value less costs to sell. Simonton was previously reported in the Doors segment. The following table summarizes the results of discontinued operations for the years ended December 31, 2015, 2014 and 2013. The year ended December 31, 2015 on a pre-tax basis consists of Waterloo only, however comparable periods in 2014 and 2013 include both Waterloo and Simonton. (in millions) 2015 2014 2013 Net sales $ 78.2 $ 369.4 $ 453.8 (Loss) income from discontinued operations before income taxes $ (16.0 ) $ (90.8 ) $ 34.4 Income tax (benefit) expense (25.0 ) 23.5 12.5 Income (loss) from discontinued operations, net of tax $ 9.0 $ (114.3 ) $ 21.9 The following table summarizes the major classes of assets and liabilities of Waterloo, which is reflected as a discontinued operation on the consolidated balance sheet as of December 31, 2014: (in millions) 2014 Accounts receivable, net $ 40.1 Inventories 15.9 Other current assets 7.3 Total current assets 63.3 Property, plant and equipment, net 13.3 Other non-current assets 4.0 Total assets $ 80.6 Accounts payable $ 8.5 Other current liabilities 9.0 Total current liabilities 17.5 Other non-current liabilities 3.4 Total liabilities $ 20.9 |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Identifiable Intangible Assets | 6. Goodwill and Identifiable Intangible Assets We had goodwill of $1,755.3 million and $1,467.8 million as of December 31, 2015 and 2014, respectively. The increase of $287.5 million was primarily due to the acquisitions of Norcraft and Anaheim. The change in the net carrying amount of goodwill by segment was as follows: (In millions) Plumbing Doors Security Total Balance at December 31, 2013 (a) $ 631.7 $ 569.7 $ 143.0 $ 89.4 $ 1,433.8 2014 translation adjustments (2.7 ) — — (1.4 ) (4.1 ) Acquisition-related adjustments 1.1 25.9 — 11.1 38.1 Balance at December 31, 2014 (a) $ 630.1 $ 595.6 $ 143.0 $ 99.1 $ 1,467.8 2015 translation adjustments (4.9 ) — — (2.7 ) (7.6 ) Acquisition-related adjustments 312.5 (17.0 ) — (0.4 ) 295.1 Balance at December 31, 2015 (a) $ 937.7 $ 578.6 $ 143.0 $ 96.0 $ 1,755.3 (a) Net of accumulated impairment losses of $399.5 million in the Doors segment. We also had identifiable intangible assets, principally tradenames, of $996.7 million and $656.5 million as of December 31, 2015 and 2014, respectively. The $356.4 million increase in gross identifiable intangible assets was primarily due to the acquisition of Norcraft. The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2015 and 2014 were as follows: As of December 31, 2015 As of December 31, 2014 (In millions) Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived intangible assets—tradenames $ 680.6 $ (42.0 ) (a) $ 638.6 $ 542.7 $ (42.0 ) (a) $ 500.7 Amortizable intangible assets Tradenames 19.1 (8.6 ) 10.5 14.6 (6.4 ) 8.2 Customer and contractual relationships 511.2 (177.4 ) 333.8 294.2 (164.0 ) 130.2 Patents/proprietary technology 54.7 (40.9 ) 13.8 57.7 (40.3 ) 17.4 Total 585.0 (226.9 ) 358.1 366.5 (210.7 ) 155.8 Total identifiable intangibles $ 1,265.6 $ (268.9 ) $ 996.7 $ 909.2 $ (252.7 ) $ 656.5 (a) Accumulated amortization prior to the adoption of revised ASC requirements for Intangibles — Goodwill and Other Assets. Amortizable intangible assets, principally tradenames and customer relationships, are subject to amortization over their estimated useful life, ranging from 3 to 30 years, based on the assessment of a number of factors that may impact useful life. These factors include historical tradename performance with respect to consumer name recognition, geographic market presence, market share, plans for ongoing tradename support and promotion, customer attrition rates, and other relevant factors. We expect to record intangible amortization of approximately $26 million in 2016, $24 million in 2017, $22 million in 2018, $21 million in 2019 and $21 million in 2020. We review indefinite-lived tradename intangible assets for impairment annually in the fourth quarter, as well as whenever market or business events indicate there may be a potential impact on a specific intangible asset. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. We measure fair value using the standard 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 the remaining useful life. In 2015, 2014 and 2013, we did not record any asset impairment charges associated with goodwill or indefinite-lived intangible assets. |
Asset Impairment Charges
Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2015 | |
Asset Impairment Charges | 7. Asset Impairment Charges No asset impairment charges were recorded in 2015 and 2014 in operating income. In 2013, our Cabinets segment abandoned certain software developed for internal use, which resulted in a pre-tax impairment charge of $21.2 million, which was recorded in operating income on the asset impairment charges line of the income statement and reduced property, plant and equipment. In addition, in 2014, as a result of our decision to sell Waterloo, we recorded $9.1 million of pre-tax impairment charges in order to remeasure this business at the estimated fair value less costs to sell. These charges consisted of $8.1 million for fixed assets and $1.0 million for definite-lived intangible assets. Refer to Note 5, “Discontinued Operations,” for additional information. |
External Debt and Financing Arr
External Debt and Financing Arrangements | 12 Months Ended |
Dec. 31, 2015 | |
External Debt and Financing Arrangements | 8. External Debt and Financing Arrangements 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 December 31, 2015, the outstanding amount of the Senior Notes, net of underwriting commissions and price discounts, was $891.6 million. We have a $975 million committed revolving credit facility, as well as a term loan in the initial amount of $525 million, both of which expire in July 2018. Both facilities can be used for general corporate purposes. On December 31, 2015 and 2014, our outstanding borrowings under the revolving credit facility were zero and $145.0 million, respectively; the amounts outstanding under the term loan were $280.0 million and $525.0 million, respectively. The interest rates under these facilities are variable based on LIBOR at the time of the borrowing and the Company’s leverage as measured by a debt to Adjusted EBITDA ratio. Based upon the Company’s debt to Adjusted EBITDA ratio, the Company’s borrowing rate could range from LIBOR + 1.0% to LIBOR + 2.0%. The credit facilities also include a minimum Consolidated Interest Coverage Ratio requirement of 3.0 to 1.0. The Consolidated Interest Coverage Ratio is defined as the ratio of Adjusted EBITDA to Consolidated Interest Expense. Adjusted EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. Consolidated Interest Expense is as disclosed in our financial statements. The credit facilities also include a Maximum Leverage Ratio of 3.5 to 1.0 as measured by the ratio of our debt to Adjusted EBITDA. The Maximum Leverage Ratio is permitted to increase to 3.75 to 1.0 for three succeeding quarters in the event of an acquisition. At December 31, 2015, we were in compliance with our debt covenant ratios. At December 31, 2015 and 2014, the current portion of long-term debt was zero and $26.3 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 million in aggregate, of which $0.8 million and zero were outstanding, as of December 31, 2015 and 2014. The weighted-average interest rates on these borrowings were 1.0%, 7.6% and 12.3% in 2015, 2014 and 2013, respectively. The components of external long-term debt were as follows: (In millions) 2015 2014 $400 million unsecured senior note due June 2020 $ 397.7 $ — $500 million unsecured senior note due June 2025 493.9 — $975 million revolving credit agreement due July 2018 — 145.0 $525 million term loan due July 2018 280.0 525.0 Total debt 1,171.6 670.0 Less: current portion — 26.3 Total long-term debt $ 1,171.6 $ 643.7 Senior Notes payments during the next five years as of December 31, 2015 are zero in 2016 through 2019 and $400 million in 2020. Term loan amortization payments during the next five years as of December 31, 2015 are zero in 2016, $52.5 million in 2017, $227.5 million in 2018, zero in 2019 and 2020. In our debt agreements, there are normal and customary events of default which would permit the lenders to accelerate the debt if not cured within applicable grace periods, such as failure to pay principal or interest when due or a change in control of the Company. There were no events of default as of December 31, 2015. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments | 9. Financial Instruments 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. From time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations. We account for these commodity derivatives as economic hedges or cash flow hedges. Changes in the fair value of economic hedges are recorded directly into current period earnings. There were no material commodity swap contracts outstanding for the years ended December 31, 2015 and 2014. We enter into foreign exchange contracts primarily to hedge forecasted sales and purchases denominated in select foreign currencies, thereby limiting currency risk that would otherwise result from changes in exchange rates. The periods of the foreign exchange contracts correspond to the periods of the forecasted transactions, which generally do not exceed 12 to 15 months subsequent to the latest balance sheet date. For derivative instruments that are designated as fair value hedges, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, are recognized on the same line of the statement of income. The effective portions of cash flow hedges are reported in other comprehensive income (“OCI”) and are recognized in the statement of income when the hedged item affects earnings. The ineffective portion of all hedges is recognized in current period earnings. In addition, changes in the fair value of all economic hedge transactions are immediately recognized in current period earnings. Our primary foreign currency hedge contracts pertain to the Canadian dollar, the Mexican peso and the Chinese yuan. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at December 31, 2015 was $226.7 million, representing a net settlement receivable of $3.7 million. Based on foreign exchange rates as of December 31, 2015, we estimate that $3.1 million of net foreign currency derivative gains included in OCI as of December 31, 2015 will be reclassified to earnings within the next twelve months. The fair values of foreign exchange and commodity derivative instruments on the consolidated balance sheets as of December 31, 2015 and 2014 were: Fair Value (In millions) Location 2015 2014 Assets: Foreign exchange contracts Other current assets $ 6.7 $ 5.1 Net investment hedges Other current assets 0.1 0.5 Total assets $ 6.8 $ 5.6 Liabilities: Foreign exchange contracts Other current liabilities $ 3.1 $ 5.4 The effects of derivative financial instruments on the consolidated statements of income in 2015, 2014 and 2013 were: (In millions) Gain (Loss) Recognized in Income Type of hedge Location 2015 2014 2013 Cash flow Net sales $ — $ — $ — Cost of products sold 3.6 0.5 1.9 Other expense, net — (0.4 ) — Fair value Other expense, net 8.2 3.6 1.2 Total $ 11.8 $ 3.7 $ 3.1 For cash flow hedges that are effective, the amounts recognized in OCI were gains/(losses) of $6.7 million and $(1.3) million in 2015 and 2014, respectively. In the years ended December 31, 2015, 2014 and 2013, the ineffective portion of cash flow hedges recognized in other expense, net, was insignificant. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | 10. Fair Value Measurements The carrying value and fair value of debt as of December 31, 2015 and 2014 were as follows: (In millions) December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Value Revolving credit facility $ — $ — $ 145.0 $ 145.0 Notes payable to bank 0.8 0.8 — — Term loan, including current portion 280.0 280.0 525.0 525.0 Senior Notes, net of underwriting commissions and price discounts 891.6 894.1 — — 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 other than quoted prices included in level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs due to little or no 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 estimated fair value of our term loan and the current portion thereof 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 1 inputs. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014 were as follows: (In millions) Fair Value 2015 2014 Assets: Derivative asset financial instruments (level 2) $ 6.8 $ 5.6 Deferred compensation program assets (level 2) 3.1 3.3 Total assets $ 9.9 $ 8.9 Liabilities: Derivative liability financial instruments (level 2) $ 3.1 $ 5.4 The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. In addition, from time to time, we enter into commodity swaps. Derivative financial instruments are recorded at fair value. In 2015 and 2014, we did not record impairment charges in operating income. In 2013, we recorded pre-tax intangible asset impairment charges of $21.2 million, refer to Note 7, “Asset Impairment Charges,” for additional information. There were no losses for indefinite-lived intangible assets in 2015, 2014 and 2013. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Capital Stock | 11. Capital Stock The Company has 750 million authorized shares of common stock, par value $0.01 per share. The number of shares of common stock and treasury stock and the share activity for 2015 and 2014 were as follows: Common Shares Treasury Shares 2015 2014 2015 2014 Balance at the beginning of the year 158,140,128 166,667,936 13,809,889 2,404,320 Stock plan shares issued 3,249,892 2,877,761 — — Shares surrendered by optionees (392,921 ) (288,797 ) 392,921 288,797 Common stock repurchases (1,091,067 ) (11,116,772 ) 1,091,067 11,116,772 Balance at the end of the year 159,906,032 158,140,128 15,293,877 13,809,889 In December 2015, our Board of Directors increased the quarterly cash dividend by 14% to $0.16 per share of our common stock. The Company has 60 million authorized shares of preferred stock, par value $0.01 per share. At December 31, 2015, no shares of our preferred stock were outstanding. Our Board of Directors has the authority, without action by the Company’s stockholders, to designate and issue our preferred stock in one or more series and to designate the rights, preferences, limitations and privileges of each series of preferred stock, which may be greater than the rights of the Company’s common stock. In 2015, we repurchased 1,091,067 shares of outstanding common stock under the Company’s share repurchase programs at cost of $51.7 million. As of December 31, 2015, the Company’s total remaining share repurchase authorization under the remaining program was approximately $247.8 million. The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive (Loss) Income | 12. Accumulated Other Comprehensive (Loss) Income The reclassifications out of accumulated other comprehensive (loss) income for the year ended December 31, 2015 and 2014 were as follows: (In millions) Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Income 2015 2014 Cumulative translation adjustments $ — 1.5 Restructuring charges Gains (losses) on cash flow hedges Foreign exchange contracts $ 4.0 $ 0.5 Cost of products sold — (0.4 ) Other expense, net Commodity contracts (0.4 ) — Cost of products sold 3.6 0.1 Total before tax (1.8 ) (0.1 ) Tax expense $ 1.8 $ — Net of tax Defined benefit plan items Amortization of prior service cost $ 13.4 $ 27.5 (a) Recognition of actuarial losses (2.5 ) (13.7 ) (a) Recognition of prior service in discontinued operations 1.0 — (b) Recognition of actuarial losses in discontinued operations (6.1 ) — (b) 5.8 13.8 Total before tax (3.0 ) (5.2 ) Tax expense $ 2.8 $ 8.6 Net of tax Total reclassifications for the period $ 4.6 $ 10.1 Net of tax (a) These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 14, “Defined Benefit Plans,” for additional information. (b) These accumulated other comprehensive loss components are included in discontinued operations. Total accumulated other comprehensive (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) income were as follows: (In millions) Foreign Derivative Hedging Gain Defined Plan Accumulated Balance at December 31, 2012 $ 63.5 $ 0.2 $ (33.1 ) $ 30.6 Amounts classified into accumulated other comprehensive (loss) income (10.2 ) 2.0 87.8 79.6 Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (1.3 ) (13.5 ) (14.8 ) Net current period other comprehensive (loss) income (10.2 ) 0.7 74.3 64.8 Balance at December 31, 2013 53.3 0.9 41.2 95.4 Amounts classified into accumulated other comprehensive (loss) income (20.8 ) (1.5 ) (69.7 ) (92.0 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings (1.5 ) — (8.6 ) (10.1 ) Net current period other comprehensive (loss) income (22.3 ) (1.5 ) (78.3 ) (102.1 ) Balance at December 31, 2014 31.0 (0.6 ) (37.1 ) (6.7 ) Amounts classified into accumulated other comprehensive (loss) income (44.3 ) 4.5 (1.4 ) (41.2 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (1.8 ) (2.8 ) (4.6 ) Net current period other comprehensive (loss) income (44.3 ) 2.7 (4.2 ) (45.8 ) Balance at December 31, 2015 $ (13.3 ) $ 2.1 $ (41.3 ) $ (52.5 ) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | 13. Stock-Based Compensation As of December 31, 2015, we had awards outstanding under two Long-Term Incentive Plans, the Fortune Brands Home & Security, Inc. 2013 Long-Term Incentive Plan (the “Plan”) and the 2011 Long-Term Incentive Plan (the “2011 Plan”, and together with the Plan — the “Plans”). During 2013, our stockholders approved the Plan, which provides for the granting of stock options, performance share awards, restricted stock units, and other equity-based awards, to employees, directors and consultants. As of December 31, 2015, approximately 7 million shares of common stock remained authorized for issuance under the Plan. In addition, shares of common stock may be automatically added to the number of shares of common stock that may be issued as awards expire, are terminated, cancelled or forfeited, or are used to satisfy withholding taxes with respect to existing awards under the Plans. No new stock-based awards can be made under the 2011 Plan, but there are outstanding awards under the 2011 Plan that continue to vest and/or be exercisable. Upon the exercise or payment of stock-based awards, shares of common stock are issued from authorized common shares. Pre-tax stock-based compensation expense from continuing operations was as follows: (In millions) 2015 2014 2013 Stock option awards $ 7.4 $ 7.8 $ 7.9 Restricted stock units 13.4 11.8 9.6 Performance awards 5.9 7.6 6.5 Director awards 0.9 0.9 0.9 Total pre-tax expense 27.6 28.1 24.9 Tax benefit 9.9 10.5 9.1 Total after tax expense $ 17.7 $ 17.6 $ 15.8 Compensation costs that were capitalized in inventory were not material. Restricted Stock Units Restricted stock units have been granted to officers and certain employees of the Company and represent the right to receive unrestricted shares of Company common stock subject to continued employment. Restricted stock units granted to certain officers are also subject to attaining specific performance criteria. Compensation cost is recognized over the service period. We calculate the fair value of each restricted stock unit granted by using the average of the high and low share prices on the date of grant. Restricted stock units generally vest ratably over a three-year period. A summary of activity with respect to restricted stock units outstanding under the Plans for the year ended December 31, 2015 was as follows: Number of Restricted Weighted-Average Fair Value Non-vested at December 31, 2014 842,937 $ 30.79 Granted 427,715 47.38 Vested (516,990 ) 24.44 Forfeited (67,636 ) 43.30 Non-vested at December 31, 2015 686,026 $ 44.69 The remaining unrecognized pre-tax compensation cost related to restricted stock units at December 31, 2015 was approximately $17.8 million, and the weighted-average period of time over which this cost will be recognized is 1.9 years. The fair value of restricted stock units that vested during 2015, 2014 and 2013 was $24.9 million, $31.1 million and $26.9 million, respectively. Stock Option Awards Stock options were granted to officers and select employees of the Company and represent the right to purchase shares of Company common stock subject to continued employment through each vesting date. All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. We recognize compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Stock options granted under the Plans generally vest over a three-year period and have a maturity of ten years from the grant date. The fair value of Fortune Brands options was estimated at the date of grant using a Black-Scholes option pricing model with the assumptions shown in the following table: 2015 2014 2013 Current expected dividend yield 1.5% 1.5% 1.5% Expected volatility 27.0% 32.0% 32.0% Risk-free interest rate 1.8% 1.9% 1.1% Expected term 6 years 6 years 6 years The determination of expected volatility is based on a blended peer group volatility for companies in similar industries, at a similar stage of life and with similar market capitalization because there is not sufficient historical volatility data for Fortune Brands common stock over the period commensurate with the expected term of stock options, as well as other relevant factors. The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The expected term is the period over which our employees are expected to hold their options. It is based on the simplified method from the Securities and Exchange Commission’s safe harbor guidelines. The dividend yield is based on the Company’s estimated dividend over the expected term. The weighted-average grant date fair value of stock options granted under the Plans during the years ended December 31, 2015, 2014 and 2013 was $11.58, $12.72 and $9.02, respectively. A summary of Fortune Brands stock option activity related to Fortune Brands and our Former Parent employees for the year ended December 31, 2015 was as follows: Options Weighted- Outstanding at December 31, 2014 7,879,778 $ 16.60 Granted 651,700 47.73 Exercised (2,223,962 ) 12.99 Expired/forfeited (107,990 ) 41.14 Outstanding at December 31, 2015 6,199,526 $ 20.74 Options outstanding and exercisable at December 31, 2015 were as follows: Options Outstanding (a) Options Exercisable (b) Range Of Exercise Prices Options Weighted- Weighted- Options Weighted- $9.00 to $12.99 2,391,073 3.4 $ 11.02 2,391,073 $ 11.02 13.00 to 20.00 2,191,678 5.5 15.64 2,191,678 15.64 20.01 to 47.87 1,616,775 8.2 42.02 508,623 36.66 6,199,526 5.4 $ 20.74 5,091,374 $ 15.57 (a) At December 31, 2015, the aggregate intrinsic value of options outstanding was $215.5 million. (b) At December 31, 2015, the weighted-average remaining contractual life of options exercisable was 4.7 years and the aggregate intrinsic value of options exercisable was $203.3 million. The remaining unrecognized compensation cost related to unvested awards at December 31, 2015 was $6.4 million, and the weighted-average period of time over which this cost will be recognized is 1.6 years. The fair value of options that vested during the years ended December 31, 2015, 2014 and 2013 was $7.8 million, $9.8 million and $12.4 million, respectively. The intrinsic value of Fortune Brands stock options exercised in the years ended December 31, 2015, 2014 and 2013 was $78.0 million, $63.4 million and $97.1 million, respectively. Performance Awards Performance share awards were granted to officers and select employees of the Company under the Plans and represent the right to earn shares of Company common stock based on the achievement of various segment or company-wide performance conditions, including cumulative diluted earnings per share, average return on invested capital, average return on net tangible assets and cumulative operating income during the three-year performance period. Compensation cost is amortized into expense over the performance period, which is generally three years, and is based on the probability of meeting performance targets. The fair value of each performance share award is based on the average of the high and low stock price on the date of grant. The following table summarizes information about performance share awards as of December 31, 2015, as well as activity during the year then ended, based on the target award amounts in the performance share award agreements: Number of Weighted-Average Fair Value Non-vested at December 31, 2014 595,700 $ 30.06 Granted 163,400 47.52 Vested (268,390 ) 19.47 Forfeited (47,610 ) 37.10 Non-vested at December 31, 2015 443,100 $ 42.15 The remaining unrecognized pre-tax compensation cost related to performance share awards at December 31, 2015 was approximately $6.4 million, and the weighted-average period of time over which this cost will be recognized is 1.6 years. The fair value of performance share awards that vested during 2015 was $11.8 million. Director Awards Stock awards are used as part of the compensation provided to outside directors under the Plan. Awards are issued annually in the second quarter. In addition, outside directors can elect to have director fees paid in stock or can elect to defer payment of stock. Compensation cost is expensed at the time of an award based on the fair value of a share at the date of the award. In 2015, 2014 and 2013, we awarded 19,695, 22,654 and 24,672 shares of Company common stock to outside directors with a weighted average fair value on the date of the award of $46.21, $40.01 and $36.47, respectively. |
Defined Benefit Plans
Defined Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Plans | 14. Defined Benefit Plans We have a number of pension plans in the United States, covering many of the Company’s employees, however most have been closed to new hires. The plans provide for payment of retirement benefits, mainly commencing between the ages of 55 and 65, and also for payment of certain disability benefits. After meeting certain qualifications, an employee acquires a vested right to future benefits. The benefits payable under the plans are generally determined on the basis of an employee’s length of service and/or earnings. Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied. Also, from time to time, we may make contributions in excess of the legal funding requirements. In addition, the Company provides postretirement health care and life insurance benefits to certain retirees. (In millions) Pension Benefits Postretirement Benefits Obligations and Funded Status at December 31 2015 2014 2015 2014 Change in the Projected Benefit Obligation (PBO): Projected benefit obligation at beginning of year $ 808.6 $ 662.3 $ 20.1 $ 34.2 Service cost 11.5 10.4 0.1 0.1 Interest cost 33.7 32.9 0.6 0.8 Plan amendments — — 0.1 (15.3 ) Actuarial (gain) loss (54.1 ) 133.1 (1.3 ) 3.9 Participants’ contributions — — — 0.3 Benefits paid (31.4 ) (30.1 ) (2.6 ) (4.2 ) Medicare Part D reimbursement — — 0.3 0.4 Plan curtailment gain (0.6 ) — — — Plan settlement gain — — (1.6 ) — Foreign exchange — — (0.1 ) (0.1 ) Projected benefit obligation at end of year $ 767.7 $ 808.6 $ 15.6 $ 20.1 Accumulated benefit obligation at end of year (excludes the impact of future compensation increases) $ 759.8 $ 793.2 Change in Plan Assets: Fair value of plan assets at beginning of year $ 608.2 $ 583.8 $ — $ — Actual return on plan assets (18.2 ) 52.0 — — Employer contributions 3.3 2.5 2.3 3.5 Participants’ contributions — — — 0.3 Medicare Part D reimbursement — — 0.3 0.4 Benefits paid (31.4 ) (30.1 ) (2.6 ) (4.2 ) Fair value of plan assets at end of year $ 561.9 $ 608.2 $ — $ — Funded status (Fair value of plan assets less PBO) $ (205.8 ) $ (200.4 ) $ (15.6 ) $ (20.1 ) The accumulated benefit obligation exceeds the fair value of assets for all pension plans. The 2014 actuarial loss includes $0.9 million related to an acquired business. Amounts recognized in the consolidated balance sheets consist of: Pension Benefits Postretirement Benefits (In millions) 2015 2014 2015 2014 Current benefit payment liability $ (1.1 ) $ (1.0 ) $ (2.0 ) $ (2.6 ) Accrued benefit liability (204.7 ) (199.4 ) (13.6 ) (17.5 ) Net amount recognized $ (205.8 ) $ (200.4 ) $ (15.6 ) $ (20.1 ) In the third quarter of 2015, we recognized actuarial losses of $6.1 million related to curtailment accounting due to the sale of the Waterloo tool storage business in discontinued operations in addition to the $2.5 million of actuarial losses reflected below in net periodic benefit cost. In the first quarter of 2014, we communicated our decision to amend certain postretirement benefit plans to reduce health benefits for certain current and retired employees. The reduction in accrued retiree benefit plan liabilities was $15.3 million and we recorded actuarial losses of $0.6 million and prior service credits of $3.5 million. In the first half of 2013, we communicated our decision to amend certain postretirement benefit plans to reduce health benefits for certain current and retired employees. The impact of these changes was a reduction in accrued retiree benefit plan liabilities of $34.7 million in 2013, and we recognized actuarial losses of $4.0 million due to a decrease in the discount rate and a resulting lower threshold for loss recognition because of the reduced postretirement obligation. Liability reductions resulting from these benefit reductions are recorded as amortization of prior service credits in net income in accordance with accounting requirements. In addition, in the first quarter of 2013, we communicated to certain employees our decision to freeze an hourly pension plan by December 31, 2016. As a result, we remeasured our pension liability, updating our pension measurement assumptions, and recorded a $20.0 million reduction in the liability. The curtailment charge associated with this pension freeze was insignificant. See Note 12, “Accumulated Other Comprehensive (Loss) Income,” for information on the impact on accumulated other comprehensive income. As of December 31 2015, we adopted the new Society of Actuaries MP-2015 mortality tables, resulting in a decrease in our postretirement obligations of approximately $0.5 million, and a corresponding decrease in deferred actuarial losses in accumulated other comprehensive income. As of December 31 2014, we adopted the Society of Actuaries RP-2014 mortality tables, resulting in an increase in our postretirement obligations of approximately $48 million, and a corresponding increase in deferred actuarial losses in accumulated other comprehensive income. The amounts in accumulated other comprehensive income on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows: (In millions) Pension Benefits Postretirement Benefits Net actuarial gain at December 31, 2013 $ (34.3 ) $ (0.5 ) Recognition of actuarial loss (12.5 ) (1.2 ) Current year actuarial gain 123.3 2.9 Net actuarial loss at December 31, 2014 $ 76.5 $ 1.2 Recognition of actuarial (loss) gain (9.0 ) 0.4 Current year actuarial gain (loss) 4.2 (1.3 ) Net actuarial loss due to curtailment (0.6 ) — Net actuarial loss at December 31, 2015 $ 71.1 $ 0.3 Net prior service cost (credit) at December 31, 2013 $ 0.5 $ (33.5 ) Prior service credit recognition due to plan amendments — (15.3 ) Amortization (0.1 ) 27.6 Net prior service cost (credit) at December 31, 2014 $ 0.4 $ (21.2 ) Prior service cost recognition due to plan amendments — 0.1 Amortization (0.1 ) 13.5 Prior service cost recognition due to curtailment (0.2 ) — Prior service credit recognition due to settlement — 1.2 Net prior service cost (credit) at December 31, 2015 $ 0.1 $ (6.4 ) Total at December 31, 2015 $ 71.2 $ (6.1 ) The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year are amortization of net prior service credits related pension benefits of zero and postretirement benefits of $(5.5) million. Components of net periodic benefit cost were as follows: Components of Net Periodic Benefit Cost Pension Benefits Postretirement Benefits (In millions) 2015 2014 2013 2015 2014 2013 Service cost $ 11.5 $ 10.4 $ 11.4 $ 0.1 $ 0.1 $ 0.3 Interest cost 33.7 32.9 30.1 0.6 0.8 1.7 Expected return on plan assets (40.2 ) (42.2 ) (41.8 ) — — — Recognition of actuarial losses (gains) 2.9 12.5 0.8 (0.4 ) 1.2 4.4 Amortization of prior service cost (credits) 0.1 0.1 0.1 (13.5 ) (27.6 ) (27.4 ) Curtailment and settlement losses — — 0.1 — — 0.1 Net periodic benefit cost $ 8.0 $ 13.7 $ 0.7 $ (13.2 ) $ (25.5 ) $ (20.9 ) Assumptions Pension Benefits Postretirement Benefits 2015 2014 2013 2015 2014 2013 Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: Discount rate 4.6% 4.2% 4.1% 3.5% Rate of compensation increase 4.0% 4.0% — — Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: Discount rate 4.2% 5.0% 4.2% 3.5% 4.3% 3.7% Expected long-term rate of return on plan assets 6.8% 7.4% 7.8% — — — Rate of compensation increase 4.0% 4.0% 4.0% — — — Postretirement Benefits 2015 2014 Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost at December 31: Health care cost trend rate assumed for next year 7.3/8.2 % (a) 7.6/7.5 % (a) Rate that the cost trend rate is assumed to decline (the ultimate trend rate) 4.5 % 4.5 % Year that the rate reaches the ultimate trend rate 2024 2022 (a) The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate. A one-percentage-point change in assumed health care cost trend rates would have the following effects: (In millions) 1-Percentage- Point Increase 1-Percentage- Point Decrease Effect on total of service and interest cost $ — $ (0.1 ) Effect on postretirement benefit obligation 1.2 (1.3 ) Plan Assets Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2015 were as follows: (In millions) Total as of Level 2 – Level 3 – Group annuity/insurance contracts $ 22.3 $ — $ 22.3 Commingled funds: Cash and cash equivalents 5.8 5.8 — Equity 249.1 249.1 — Fixed income 233.8 233.8 — Multi-strategy hedge funds 22.3 — 22.3 Real estate 28.6 — 28.6 Total $ 561.9 $ 488.7 $ 73.2 A reconciliation of Level 3 measurements as of December 31, 2015 was as follows: Commingled Funds (In millions) Group insurance Multi-strategy Real estate Total January 1, 2015 $ 21.8 $ 21.6 $ 25.1 $ 68.5 Actual return on assets related to assets still held 0.5 0.7 3.5 4.7 December 31, 2015 $ 22.3 $ 22.3 $ 28.6 $ 73.2 Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2014 were as follows: (In millions) Total as of Level 2 – Level 3 – Group annuity/insurance contracts $ 21.8 $ — $ 21.8 Commingled funds: Cash and cash equivalents 9.1 9.1 — Equity 282.6 282.6 — Fixed income 248.0 248.0 — Multi-strategy hedge funds 21.6 — 21.6 Real estate 25.1 — 25.1 Total $ 608.2 $ 539.7 $ 68.5 A reconciliation of Level 3 measurements as of December 31, 2014 was as follows: Commingled Funds (In millions) Group insurance Multi-strategy Real estate Total January 1, 2014 $ 21.2 $ 20.5 $ 22.8 $ 64.5 Actual return on assets related to assets still held 0.6 1.1 2.3 4.0 December 31, 2014 $ 21.8 $ 21.6 $ 25.1 $ 68.5 Our defined benefit plans owns a variety of investment assets. Level 2 assets include primarily pooled funds, involving investments in fixed income and equity securities valued using net asset values of participation units held in common collective trusts, as reported by the managers of the trusts and as supported by the unit prices of actual purchase and sale transactions. Level 2 plan assets also include an unregistered money market fund that invests in a variety of cash and cash equivalents. Level 3 plan assets include a hedge fund-of-funds and a real estate fund that invests primarily in direct and indirect equity and debt investments in improved real properties, both of which are valued using the net asset value. Level 3 assets also include group annuity/insurance contracts valued at institutional evaluation prices consistent with industry practices. Our investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. A Master Trust was established to hold the assets of our domestic defined benefit plans. The defined benefit asset allocation policy of the trust allows for an equity allocation of 0% to 75%, a fixed income allocation of 25% to 100%, a cash allocation of up to 25% and other investments up to 20%. Asset allocations are based on the underlying liability structure. All retirement asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure. Our 2016 expected blended long-term rate of return on plan assets of 6.8% was determined based on the nature of the plans’ investments, our current asset allocation and projected long-term rates of return from pension investment consultants. Estimated Future Retirement Benefit Payments The following retirement benefit payments are expected to be paid: (In millions) Pension Postretirement 2016 $ 34.6 $ 1.8 2017 36.2 1.1 2018 37.6 1.1 2019 39.5 1.0 2020 41.0 1.0 Years 2021-2025 226.4 4.6 Estimated future retirement benefit payments above are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to participants in certain plans. Defined Contribution Plan Contributions We sponsor a number of defined contribution plans. Contributions are determined under various formulas. Cash contributions by the Company related to these plans amounted to $18.3 million, $21.5 million and $18.7 million in 2015, 2014 and 2013, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | 15. Income Taxes The components of income from continuing operations before income taxes and noncontrolling interests were as follows: (In millions) 2015 2014 2013 Domestic operations $ 387.7 $ 301.4 $ 243.8 Foreign operations 72.2 90.5 66.7 Income before income taxes and noncontrolling interests $ 459.9 $ 391.9 $ 310.5 A reconciliation of income taxes at the 35% federal statutory income tax rate to the income tax provision reported was as follows: (In millions) 2015 2014 2013 Income tax expense computed at federal statutory income tax rate $ 161.0 $ 137.2 $ 108.7 Other income taxes, net of federal tax benefit 9.4 7.2 7.0 Foreign taxes at a different rate than U.S. federal statutory income (8.7 ) (13.4 ) (10.1 ) Tax benefit on income attributable to domestic production activities (12.5 ) (7.6 ) (5.2 ) Net adjustments for uncertain tax positions 4.7 4.7 3.0 Net effect of rate changes on deferred taxes 0.2 (0.7 ) (1.6 ) Valuation allowance increase (decrease) 0.8 (4.1 ) 2.1 Miscellaneous other, net (1.5 ) (5.0 ) (2.4 ) Income tax expense as reported $ 153.4 $ 118.3 $ 101.5 Effective income tax rate 33.4 % 30.2 % 32.7 % The effective income tax rates for 2015, 2014 and 2013 were favorably impacted by the 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 various extensions of the U.S. research and development credit, offset by state and local taxes and increases to uncertain tax positions. The benefit associated with the favorable tax rates in foreign jurisdictions is affected by overall allocation of income, rate changes and impact of foreign exchange rates. In 2015, the effective income tax rate benefit from foreign tax rates was reduced, as compared to prior years, due to the overall allocation of income within foreign jurisdictions and an expiration of a favorable tax incentive that in total increased the effective foreign tax rate by 6%. The 2015 effective income tax rate was unfavorably impacted by $2.4 million related to nondeductible acquisition costs. The effective tax rate in 2014 was favorably impacted by the release of valuation allowances related to state net operating loss carryforwards of $4.1 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits (UTBs) was as follows: (In millions) 2015 2014 2013 Unrecognized tax benefits — beginning of year $ 31.0 $ 23.7 $ 20.8 Gross additions — current year tax positions 4.6 8.7 4.4 Gross additions — prior year tax positions 8.3 2.2 0.7 Gross additions (reductions) — purchase accounting adjustments 0.1 (1.1 ) 1.6 Gross reductions — prior year tax positions (2.1 ) (2.5 ) (3.2 ) Gross reductions — settlements with taxing authorities (3.6 ) — (0.6 ) Impact of change in foreign exchange rates (0.1 ) — — Unrecognized tax benefits — end of year $ 38.2 $ 31.0 $ 23.7 The amount of UTBs that, if recognized as of December 31, 2015, would affect the Company’s effective tax rate was $27.8 million. It is reasonably possible that, within the next twelve months, total UTBs may decrease in the range of $7.5 million to $12.5 million primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings. We classify interest and penalty accruals related to UTBs as income tax expense. In 2015, we recognized an interest and penalty expense of approximately $1.0 million. In 2014, we recognized an interest and penalty expense of approximately $0.5 million. In 2013, we recognized an interest and penalty benefit of approximately $0.2 million. At December 31, 2015 and 2014, we had accruals for the payment of interest and penalties of $10.2 million and $10.7 million, respectively. We file income tax returns in the U.S., various state and foreign jurisdictions. The Company is currently under examination by the U.S. Internal Revenue Service (“IRS”) for the periods related to 2011 through 2012. We have tax years that remain open and subject to examination by tax authorities in the following major taxing jurisdictions: Canada for years after 2010, Mexico for years after 2006 and China for years after 2011. Income taxes in 2015, 2014 and 2013 were as follows: (In millions) 2015 2014 2013 Current Federal $ 130.6 $ 86.9 $ 96.3 Foreign 19.7 12.3 12.5 State and other 16.1 12.0 11.1 Deferred Federal, state and other (11.3 ) 2.7 (20.2 ) Foreign (1.7 ) 4.4 1.8 Total income tax expense $ 153.4 $ 118.3 $ 101.5 The components of net deferred tax assets (liabilities) as of December 31, 2015 and 2014 were as follows: (In millions) 2015 2014 Deferred tax assets: Compensation and benefits $ 32.8 $ 32.5 Defined benefit plans 84.4 83.9 Capitalized inventories 12.1 10.9 Accounts receivable 7.7 7.5 Other accrued expenses 23.7 17.2 Net operating loss and other tax carryforwards 39.9 15.8 Valuation allowance (19.7 ) (12.0 ) Miscellaneous 6.1 3.7 Total deferred tax assets 187.0 159.5 Deferred tax liabilities: LIFO inventories (8.2 ) (9.3 ) Fixed assets (48.5 ) (60.6 ) Identifiable intangible assets (194.6 ) (205.0 ) Investment in partnership (129.8 ) — Miscellaneous (0.2 ) (1.7 ) Total deferred tax liabilities (381.3 ) (276.6 ) Net deferred tax liability $ (194.3 ) $ (117.1 ) In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2015 and 2014 as follows: (In millions) 2015 2014 Other current assets $ — $ 33.8 Other current liabilities — (2.4 ) Other assets 7.4 2.1 Deferred income taxes (201.7 ) (150.6 ) Net deferred tax liability $ (194.3 ) $ (117.1 ) In accordance with the ASU 2015-17, Balance Sheet Classification of Deferred Taxes, issued by the FASB on November 20, 2015, the Company has elected to adopt the provisions of the ASU, beginning with its year ended December 31, 2015. The Company has applied the provisions of this ASU on a prospective basis, and therefore, has not retrospectively adjusted its prior periods’ classification of deferred taxes. See ‘Recently Issued Accounting Standards’ section in Note 2 “Significant Accounting Policies” for more discussion on this early adoption of the standard. Included in the Company’s 2015 components of net deferred tax liabilities is an investment in partnership resulting from the purchase of Norcraft, whose primary operating company is structured as a partnership. As of December 31, 2015 and 2014, the Company had deferred tax assets relating to net operating losses, capital losses, and other tax carryforwards of $39.9 million and $15.8 million, respectively, of which approximately $10.1 million will expire between 2016 and 2020, and the remainder which will expire in 2021 and thereafter. Included in the tax loss carryforwards are net operating loss carryforwards acquired in the purchase of Norcraft. The Company has provided a valuation allowance to reduce the carrying value of certain of these deferred tax assets, as management has concluded that, based on the available evidence, it is more likely than not that the deferred tax assets will not be fully realized. The undistributed earnings of foreign subsidiaries that are considered indefinitely reinvested were $270.1 million at December 31, 2015. A quantification of the associated deferred tax liability on these undistributed earnings has not been made, as the determination of such liability is not practicable. In October, 2011, we separated from our Former Parent. During 2012, we analyzed the subsidiary legal and capital structures inherited from our Former Parent to assess their compatibility with our strategies as a new independent company. Based on this analysis, in the fourth quarter of 2012, we committed to a plan to reorganize certain foreign subsidiaries and adjust their capital structures to better align with our business strategy as a new independent company. As part of this plan, we committed to a non-recurring remittance of certain foreign earnings and recorded an associated tax liability of $12.4 million. The remaining portion of this liability as of December 31, 2015 is $1.4 million. We have not provided deferred income taxes on the remaining undistributed earnings of foreign subsidiaries. In general, under the Tax Allocation Agreement that we entered into with our Former Parent, Fortune Brands is responsible for all taxes to the extent such taxes are attributable to the Home & Security business, and we agreed to indemnify our Former Parent for these taxes. Our Former Parent will be responsible for all taxes to the extent such taxes are not attributable to the Fortune Brands business and our Former Parent has agreed to indemnify us for these taxes. Though valid as between the parties, the Tax Allocation Agreement will not be binding on the IRS or other taxing authorities. |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Other Charges | 16. Restructuring and Other Charges Pre-tax restructuring and other charges for the year ended December 31, 2015 were: Year Ended December 31, 2015 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.2 $ 0.1 $ — $ 1.3 Plumbing 6.4 0.1 0.6 7.1 Security 8.1 5.3 — 13.4 Corporate 0.9 — — 0.9 Total $ 16.6 $ 5.5 $ 0.6 $ 22.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses Restructuring and other charges in 2015 related to severance costs to relocate a plumbing manufacturing facility in China and severance costs and accelerated depreciation to relocate a manufacturing facility within our Security segment, as well as severance costs in the Security and Cabinets segments, as well as Corporate. Pre-tax restructuring and other charges for the year ended December 31, 2014 were: Year Ended December 31, 2014 Other Charges (a) (In millions) Restructuring Cost of Products SG&A (b) Total Cabinets $ 0.4 $ — $ — $ 0.4 Plumbing 0.5 0.1 0.6 1.2 Security 4.1 — — 4.1 Corporate 2.0 — — 2.0 Total $ 7.0 $ 0.1 $ 0.6 $ 7.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses Restructuring and other charges in 2014 primarily resulted from severance charges in Security, Plumbing and Corporate, partially offset by a benefit from release of a foreign currency gain associated with the dissolution of a foreign entity in Plumbing. Pre-tax restructuring and other charges for the year ended December 31, 2013 were: Year Ended December 31, 2013 Other Charges (a) (In millions) Restructuring Cost of Products SG&A (b) Total Cabinets $ 2.2 $ 0.1 $ — $ 2.3 Plumbing 0.6 0.6 0.2 1.4 Total $ 2.8 $ 0.7 $ 0.2 $ 3.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses 2013 restructuring and other charges related to supply chain initiatives. Reconciliation of Restructuring Liability (In millions) Balance at 12/31/14 2015 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 12/31/15 Workforce reduction costs $ 7.9 $ 13.3 $ (11.2 ) $ 0.4 $ 10.4 Asset disposals — 0.7 — (0.7 ) — Contract termination costs — 0.2 — (0.2 ) — Other — 2.4 (0.7 ) (1.2 ) 0.5 $ 7.9 $ 16.6 $ (11.9 ) $ (1.7 ) $ 10.9 (a) Cash expenditures primarily related to severance charges. (b) Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions. (In millions) Balance at 12/31/13 2014 Provision Cash Expenditures (c) Non-Cash Write-offs (d) Balance at 12/31/14 Workforce reduction costs $ 1.5 $ 8.1 $ (3.1 ) $ 1.4 $ 7.9 Contract termination costs 0.4 — (0.4 ) — — Other — (1.0 ) (0.4 ) 1.5 — $ 1.9 $ 7.0 $ (3.9 ) $ 2.9 $ 7.9 (c) Cash expenditures primarily related to severance charges. (d) Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions and the benefit from release of a foreign currency gain associated with the dissolution of a foreign entity |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments | 17. Commitments Purchase Obligations Purchase obligations of the Company as of December 31, 2015 were $332.9 million, of which $311.8 million is due within one year. Purchase obligations include contracts for raw materials and finished goods purchases, selling and administrative services, and capital expenditures. Lease Commitments Future minimum rental payments under non-cancelable operating leases as of December 31, 2015 were as follows: (In millions) 2016 $ 28.9 2017 23.0 2018 15.5 2019 11.9 2020 7.9 Remainder 27.0 Total minimum rental payments $ 114.2 Total rental expense for all operating leases (reduced by minor amounts from subleases) amounted to $34.9 million, $33.4 million and $29.0 million in 2015, 2014 and 2013, respectively. Product Warranties We generally record warranty expense at the time of sale. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historic claim experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the years ended December 31, 2015, 2014 and 2013. (In millions) 2015 2014 2013 Reserve balance at the beginning of the year $ 13.0 $ 10.3 $ 9.4 Provision for warranties issued 29.9 24.9 18.3 Settlements made (in cash or in kind) (28.3 ) (23.6 ) (17.4 ) Acquisition 1.6 1.4 — Foreign currency (0.2 ) — — Reserve balance at end of year $ 16.0 $ 13.0 $ 10.3 |
Information on Business Segment
Information on Business Segments | 12 Months Ended |
Dec. 31, 2015 | |
Information on Business Segments | 18. Information on Business Segments We report our operating segments based on how operating results are regularly reviewed by our chief operating decision maker for making decisions about resource allocations to segments and assessing performance. The Company’s operating segments and types of products from which each segment derives revenues are described below. The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names including Aristokraft, Diamond, Kitchen Craft, Mid-Continent, Kitchen Classics, Schrock, Omega, Homecrest, Ultracraft and StarMark. In addition, cabinets are distributed under the Thomasville Cabinetry brand names. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals predominantly under the Moen and Waste King brands. The Doors segment includes residential fiberglass and steel entry door systems under the Therma-Tru brand name and urethane millwork product lines under the Fypon brand name. The Security segment includes locks, safety and security devices and electronic security products under the Master Lock brand name and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name. Corporate expenses consist of headquarter administrative expenses and defined benefit plans costs, primarily interest costs and expected return on plan assets, as well as actuarial gains and losses arising from periodic remeasurement of our liabilities. Corporate assets primarily consist of cash. The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe. (In millions) 2015 2014 2013 Net sales: Cabinets $ 2,173.4 $ 1,787.5 $ 1,642.2 Plumbing 1,414.5 1,331.0 1,287.0 Doors 439.1 413.9 371.6 Security 552.4 481.2 402.8 Net sales $ 4,579.4 $ 4,013.6 $ 3,703.6 Net sales to two of the Company’s customers, The Home Depot, Inc. (“The Home Depot”) and Lowe’s Companies, Inc. (“Lowe’s”) each accounted for greater than 10% of the Company’s net sales in 2015, 2014 and 2013. All segments sell to both The Home Depot and Lowe’s. Net sales to The Home Depot were 14%, 15% and 14% of net sales in 2015, 2014 and 2013, respectively. Net sales to Lowe’s were 14%, 14% and 14% of net sales in 2015, 2014 and 2013, respectively. (In millions) 2015 2014 2013 Operating income: Cabinets $ 192.4 $ 137.9 $ 97.1 Plumbing 285.4 258.9 228.3 Doors 44.0 29.2 15.3 Security 55.9 49.4 55.4 Less: Corporate expenses (a) (81.6 ) (71.9 ) (73.1 ) Operating income $ 496.1 $ 403.5 $ 323.0 (a) General and administrative expense $ (70.1 ) $ (67.0 ) $ (78.0 ) Defined benefit plan income 6.1 8.8 10.1 Recognition of defined benefit plan actuarial losses (2.5 ) (13.7 ) (5.2 ) Norcraft transaction costs (b) (15.1 ) — — Total Corporate expenses $ (81.6 ) $ (71.9 ) $ (73.1 ) (b) Representing external costs directly related to the acquisition of Norcraft and primarily includes expenditures for banking, legal, accounting and other similar services. (In millions) 2015 2014 2013 Total assets: Cabinets $ 2,364.0 $ 1,603.6 $ 1,588.0 Plumbing 1,341.4 1,270.2 1,176.3 Doors 483.9 459.3 462.0 Security 520.7 528.5 361.8 Corporate 168.6 110.7 185.9 Continuing operations 4,878.6 3,972.3 3,774.0 Discontinued operations — 80.6 404.1 Total assets $ 4,878.6 $ 4,052.9 $ 4,178.1 Depreciation expense: Cabinets $ 38.1 $ 31.0 $ 29.3 Plumbing 21.3 18.5 16.7 Doors 11.2 11.7 11.4 Security 19.5 10.0 8.2 Corporate 3.4 2.0 1.3 Continuing operations 93.5 73.2 66.9 Discontinued operations — 9.7 10.3 Depreciation expense $ 93.5 $ 82.9 $ 77.2 Amortization of intangible assets: Cabinets $ 14.3 $ 8.0 $ 5.1 Plumbing 1.2 — — Doors 3.8 3.8 3.8 Security 2.3 1.3 0.5 Continuing operations 21.6 13.1 9.4 Discontinued operations — 2.8 3.8 Amortization of intangible assets $ 21.6 $ 15.9 $ 13.2 Capital expenditures: Cabinets $ 61.3 $ 64.0 $ 36.4 Plumbing 27.2 25.8 25.3 Doors 13.3 10.9 7.3 Security 17.3 16.2 12.6 Corporate 9.4 4.8 2.5 Continuing operations 128.5 121.7 84.1 Discontinued operations — 5.8 12.6 Capital expenditures, gross 128.5 127.5 96.7 Less: proceeds from disposition of assets (2.5 ) (0.7 ) (2.2 ) Capital expenditures, net $ 126.0 $ 126.8 $ 94.5 Net sales by geographic region (a) United States $ 3,892.9 $ 3,313.1 $ 3,046.5 Canada 385.1 405.8 413.2 China and other international 301.4 294.7 243.9 Net sales $ 4,579.4 $ 4,013.6 $ 3,703.6 Property, plant and equipment, net (b) United States $ 498.9 $ 429.1 $ 378.0 Mexico 74.2 72.5 50.8 Canada 39.4 28.4 29.4 China and other international 15.4 9.8 10.1 Property, plant and equipment, net $ 627.9 $ 539.8 $ 468.3 (a) Based on country of destination (b) Purchases of property, plant and equipment not yet paid for as of December 31, 2015, 2014 and 2013 were $16.1 million, $4.2 million and $0.2 million, respectively. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data | 19. Quarterly Financial Data Unaudited (In millions, except per share amounts) 2015 1 st 2 nd 3 rd 4 th Full Year Net sales $ 950.8 $ 1,165.1 $ 1,238.8 $ 1,224.7 $ 4,579.4 Gross profit 316.9 410.4 434.5 420.1 1,581.9 Operating income 67.3 128.2 160.3 140.3 496.1 Income from continuing operations, net of tax 40.9 78.0 100.0 87.6 306.5 Income (loss) from discontinued operations, net of tax (0.6 ) 1.4 7.8 0.4 9.0 Net income 40.3 79.4 107.8 88.0 315.5 Net income attributable to Fortune Brands 40.0 79.7 107.5 87.8 315.0 Basic earnings (loss) per common share Continuing operations 0.26 0.49 0.62 0.55 1.92 Discontinued operations (0.01 ) 0.01 0.05 — 0.05 Net income attributable to Fortune Brands 0.25 0.50 0.67 0.55 1.97 Diluted earnings (loss) per common share Continuing operations 0.25 0.48 0.61 0.54 1.88 Discontinued operations — 0.01 0.05 — 0.05 Net income attributable to Fortune Brands 0.25 0.49 0.66 0.54 1.93 2014 1 st 2 nd 3 rd 4 th Full Year Net sales $ 889.1 $ 1,027.2 $ 1,057.7 $ 1,039.6 $ 4,013.6 Gross profit 295.3 361.8 368.0 341.8 1,366.9 Operating income 69.3 125.5 129.5 79.2 403.5 Income from continuing operations, net of tax 46.3 86.3 84.5 56.5 273.6 Income (loss) from discontinued operations, net of tax (5.1 ) 7.3 (105.4 ) (11.1 ) (114.3 ) Net income 41.2 93.6 (20.9 ) 45.4 159.3 Net income attributable to Fortune Brands 40.8 93.3 (21.1 ) 45.1 158.1 Basic earnings (loss) per common share Continuing operations 0.28 0.52 0.53 0.36 1.68 Discontinued operations (0.03 ) 0.05 (0.66 ) (0.07 ) (0.70 ) Net income attributable to Fortune Brands 0.25 0.57 (0.13 ) 0.29 0.98 Diluted earnings (loss) per common share Continuing operations 0.27 0.51 0.52 0.35 1.64 Discontinued operations (0.03 ) 0.04 (0.65 ) (0.07 ) (0.69 ) Net income attributable to Fortune Brands 0.24 0.55 (0.13 ) 0.28 0.95 In 2015, we recorded pre-tax defined benefit plan actuarial losses of $2.5 million — $2.8 million ($1.8 million after tax or $0.01 million per diluted share) in the third quarter, and $(0.3) million ($(0.2) million after tax or zero per diluted share) in the fourth quarter. In 2014, we recorded pre-tax defined benefit plan actuarial losses of $13.7 million—$0.6 million ($0.4 million after tax or zero per diluted share) in the first quarter, $1.1 million ($0.7 million after tax or $0.01 million per diluted share) in the third quarter, and $12.0 million ($7.6 million after tax or $0.04 per diluted share) in the fourth quarter. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings (Loss) Per Share | 20. Earnings Per Share The computations of earnings (loss) per common share were as follows: (In millions, except per share data) 2015 2014 2013 Income from continuing operations, net of tax $ 306.5 $ 273.6 $ 209.0 Less: Noncontrolling interests 0.5 1.2 1.2 Income from continuing operations for EPS 306.0 272.4 207.8 Income (loss) from discontinued operations 9.0 (114.3 ) 21.9 Net income attributable to Fortune Brands $ 315.0 $ 158.1 $ 229.7 Earnings (loss) per common share Basic Continuing operations $ 1.92 $ 1.68 $ 1.26 Discontinued operations 0.05 (0.70 ) 0.13 Net income attributable to Fortune Brands common stockholders $ 1.97 $ 0.98 $ 1.39 Diluted Continuing operations $ 1.88 $ 1.64 $ 1.21 Discontinued operations 0.05 (0.69 ) 0.13 Net income attributable to Fortune Brands common stockholders $ 1.93 $ 0.95 $ 1.34 Basic average shares outstanding 159.5 161.8 165.5 Stock-based awards 3.5 4.5 5.8 Diluted average shares outstanding 163.0 166.3 171.3 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.7 0.5 0.4 |
Other Expense, Net
Other Expense, Net | 12 Months Ended |
Dec. 31, 2015 | |
Other Expense, Net | 21. Other Expense, Net The components of other expense, net for the years ended December 31, 2015, 2014 and 2013 were as follows: (In millions) 2015 2014 2013 Asset impairment charges $ — $ 1.6 $ 6.2 Other items, net 4.3 (0.4 ) (0.9 ) Total other expense, net $ 4.3 $ 1.2 $ 5.3 In 2014 and 2013, we recorded impairment charges of $1.6 million and $6.2 million, respectively, pertaining to different cost method investments due to an other-than-temporary declines in the fair value of the investments. As a result of the impairments, the carrying value of the investments was reduced to zero and the Company is not subject to further impairment or funding obligations with regard to this investment. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Contingencies | 22. Contingencies Litigation The Company is a defendant in lawsuits associated with the normal conduct of its 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 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. Several of our subsidiaries have been designated as potentially responsible parties (“PRP”) under “Superfund” or similar state laws. As of December 31, 2015, ten such instances have not been dismissed, settled or otherwise resolved. In calendar year 2015, none of our subsidiaries were identified as a PRP in any new instances and no instances were settled, dismissed or otherwise resolved. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other PRPs or insurance, will not have an adverse effect on our results of operations, cash flows or financial condition. At December 31, 2015 and 2014, we had accruals of $2.8 million, relating to environmental compliance and clean up including, but not limited to, the above mentioned Superfund sites. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Event | 23. Subsequent Event On February 16, 2016, the Company’s Board of Directors authorized the repurchase of up to $400 million of shares of the Company’s common stock over the two years ending February 16, 2018. 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. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts For the years ended December 31, 2015, 2014 and 2013 (In millions) Balance at Charged to Write-offs (a) Business (b) Balance at 2015: Allowance for cash discounts, returns and sales allowances $ 45.1 $ 150.7 $ 145.5 $ — $ 50.3 Allowance for doubtful accounts 5.4 2.8 2.4 — 5.8 Allowance for deferred tax assets 12.0 6.4 — 1.3 19.7 2014: Allowance for cash discounts, returns and sales allowances $ 33.9 $ 129.6 $ 118.4 $ — $ 45.1 Allowance for doubtful accounts 5.8 1.3 1.7 — 5.4 Allowance for deferred tax assets 19.8 (7.8 ) — — 12.0 2013: Allowance for cash discounts, returns and sales allowances $ 32.7 $ 122.1 $ 120.9 $ — $ 33.9 Allowance for doubtful accounts 7.9 0.5 2.6 — 5.8 Allowance for deferred tax assets 18.8 1.0 — — 19.8 (a) Net of recoveries of amounts written off in prior years and immaterial foreign currency impact. (b) Represents a valuation allowance on an acquired net operating loss carryforward (Norcraft Canada) |
Significant Accounting Polici34
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts |
Inventories | Inventories We also use the last-in, first-out (“LIFO”) inventory method in those product groups in which metals inventories comprise a significant portion of our inventories. LIFO inventories at December 31, 2015 and 2014 were $227.9 million (with a current cost of $243.1 million) and $197.6 million (with a current cost of $217.5 million), respectively. |
Property, Plant and Equipment | Property, Plant and Equipment Buildings and leasehold improvements 15 to 40 years Machinery and equipment 3 to 10 years Software 3 to 7 years |
Long-lived Assets | Long-lived Assets |
Goodwill and Indefinite-lived Intangible Assets | Goodwill and Indefinite-lived Intangible Assets We evaluate the recoverability of goodwill using a weighting of the income (80%) and market (20%) approaches. For the income approach, we use a discounted cash flow model, estimating the future cash flows of the reporting units to which the goodwill relates, and then discounting the future cash flows at a market-participant-derived weighted-average cost of capital. In determining the estimated future cash flows, we consider current and projected future levels of income based on management’s plans for that business; business trends, prospects and market and economic conditions; and market-participant considerations. Furthermore, our projection for the U.S. home products market is inherently subject to a number of uncertain factors, such as employment, home prices, credit availability, new home starts and the rate of home foreclosures. For the market approach, we apply market multiples for peer groups to the current operating results of the reporting units to determine each reporting unit’s fair value. The Company’s reporting units are operating segments. When the estimated fair value of a reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss, if any. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying value of a reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of a reporting unit is estimated based on a hypothetical allocation of each reporting unit’s fair value to all of its underlying assets and liabilities. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The determination of the useful life of an intangible asset other than goodwill is based on factors including historical and tradename performance with respect to consumer name recognition, geographic market presence, market share, and plans for ongoing tradename support and promotion. Certain of our tradenames have been assigned an indefinite life as we currently anticipate that these tradenames will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate. We review indefinite-lived intangible assets for impairment annually in the fourth quarter, and whenever market or business events indicate there may be a potential impairment of that intangible. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. We measure fair value using the standard relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Qualitative factors include changes in volume, customers and the industry. If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test. The Company 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. Such events may include, but are not limited to, the impact of the economic environment; a material negative change in relationships with significant customers; or strategic decisions made in response to economic and competitive conditions. |
Defined Benefit Plans | Defined Benefit Plans We record amounts relating to these plans based on calculations in accordance with ASC requirements for Compensation — Retirement Benefits, which include various actuarial assumptions, including discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10 percent of the greater of the fair value of pension plan assets or each plan’s projected benefit obligation (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each year. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current economic conditions and trends. The discount rate used to measure obligations is based on a spot-rate yield curve on a plan-by-plan basis that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments. The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return. Compensation increases reflect expected future compensation trends. For postretirement benefits, our health care trend rate assumption is based on historical cost increases and expectations for long-term increases. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. We believe that the assumptions utilized in recording obligations under our plans, which are presented in Note 14, “Defined Benefit Plans,” are reasonable based on our experience and on advice from our independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect our financial position and results of operations. We will continue to monitor these assumptions as market conditions warrant |
Litigation Contingencies | Litigation Contingencies |
Income Taxes | Income Taxes We record liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where we evaluate whether an individual tax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, we perform the second step of measuring the benefit to be recorded. The actual benefits ultimately realized may differ from our estimates. In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the consolidated statement of income and consolidated balance sheet in the period in which such changes occur. As of December 31, 2015, we had liabilities for unrecognized tax benefits pertaining to uncertain tax positions totaling $38.2 million. It is reasonably possible that the unrecognized tax benefits may decrease in the range of $7.5 million to $12.5 million in the next 12 months primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings. |
Revenue Recognition | Revenue Recognition |
Cost of Products Sold | Cost of Products Sold |
Customer Program Costs | Customer Program Costs |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses . Advertising costs, which amounted to $195.4 million, $200.4 million and $197.1 million in 2015, 2014 and 2013, respectively, are principally expensed as incurred. Advertising costs include product displays, media production costs and point of sale materials. Advertising costs recorded as a reduction to net sales, primarily cooperative advertising, were $63.2 million, $66.8 million and $56.8 million in 2015, 2014 and 2013, respectively. Advertising costs recorded in selling, general and administrative expenses were $132.2 million, $133.6 million and $140.3 million in 2015, 2014 and 2013, respectively. Research and development expenses include product development, product improvement, product engineering and process improvement costs. Research and development expenses, which were $48.7 million, $46.1 million and $50.8 million in 2015, 2014 and 2013, respectively, are expensed as incurred. |
Stock-based Compensation | Stock-based Compensation |
Earnings Per Share | Earnings Per Share |
Foreign Currency Translation | Foreign Currency Translation |
Derivative Financial Instruments | Derivative Financial Instruments Net deferred currency gains of $3.8 million was reclassified into earnings for the year ended December 31, 2015. There was no impact of deferred currency gains/losses on earnings in 2014. Net deferred currency gains of $2.3 million was reclassified into earnings for the years ended December 31, 2013. Based on foreign exchange rates as of December 31, 2015, we estimate that $3.1 million of net currency derivative gains included in AOCI as of December 31, 2015 will be reclassified to earnings within the next twelve months. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Balance Sheet Classification of Deferred Taxes In November 2015, the Financial Accounting Standards Board (“FASB”) issued final guidance that requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. While the guidance changes the way deferred taxes are classified on the balance sheet, companies are still required to offset deferred tax assets and liabilities for each taxpaying component within a tax jurisdiction. The standard is effective starting January 1, 2017. We have early adopted this standard as of December 31, 2015. We have elected to apply the new standard prospectively and therefore we have not adjusted prior periods presented. Simplifying Accounting for Measurement-Period Adjustments In September 2015, the FASB issued a final standard that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The new standard is effective for the annual period beginning January 1, 2016 (calendar year 2016 for Fortune Brands). Early application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Simplifying Subsequent Measurement of Inventory In July 2015, the FASB issued a final standard that simplifies the subsequent measurement of inventory by replacing lower of cost or market test under the current GAAP. Under the current guidance the subsequent measurement of inventory is measured at the lower of cost or market, where “market” may have multiple possible outcomes. The new guidance requires subsequent measurement of inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs to sell (completion, disposal, and transportation). This new standard is effective for the annual period beginning January 1, 2017 (calendar year 2017 for Fortune Brands). Earlier application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share In May 2015, the FASB issued a final standard that eliminates the requirement to categorize within the fair value hierarchy investments whose fair values are measured at net asset value. Instead, entities will be required to disclose the fair values of such investments so that financial statement users can reconcile amounts reported in the fair value hierarchy table and the amounts reported on the balance sheet. The new guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2015 (calendar year 2016 for Fortune Brands). Early adoption is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, instead of as a deferred charge (i.e., as an asset). This new standard is effective for the annual period beginning after December 15, 2015 (calendar year 2016 for Fortune Brands), and for annual periods and interim periods thereafter. Early adoption is permitted, however we elected not to early adopt. The guidance will be applied on a retrospective basis. The adoption of this ASU will require us to reclassify approximately $3 million of debt issuance costs from a deferred asset to long-term debt as of March 31, 2016. Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This amendment is effective for the annual period ending after December 15, 2016 (calendar year 2016 for Fortune Brands), and for annual periods and interim periods thereafter. Early application is permitted, however we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This ASU clarifies the accounting for revenue arising from contracts with customers and specifies the disclosures that an entity should include in its financial statements. Further, in August 2015, the FASB issued a standard, which clarified that the amendment is effective for annual reporting periods beginning after December 15, 2017 (calendar year 2018 for Fortune Brands), and annual and interim periods thereafter. We are assessing the impact the adoption of this standard will have on our financial statements. |
Significant Accounting Polici35
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Estimated Useful Lives of Property Plant and Equipment | Estimated useful lives of the related assets are as follows: Buildings and leasehold improvements 15 to 40 years Machinery and equipment 3 to 10 years Software 3 to 7 years |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information on Balance Sheets | Supplemental information on our year-end consolidated balance sheets is as follows: (In millions) 2015 2014 Inventories: Raw materials and supplies $ 237.8 $ 178.1 Work in process 60.2 54.0 Finished products 257.6 230.1 Total inventories $ 555.6 $ 462.2 Property, plant and equipment: Land and improvements $ 56.2 $ 48.5 Buildings and improvements to leaseholds 407.6 356.3 Machinery and equipment 1,005.6 920.2 Construction in progress 82.3 71.3 Property, plant and equipment, gross 1,551.7 1,396.3 Less: accumulated depreciation 923.8 856.5 Property, plant and equipment, net of accumulated depreciation $ 627.9 $ 539.8 Other current liabilities: Accrued salaries, wages and other compensation $ 118.0 $ 69.8 Accrued customer programs 124.8 102.5 Accrued taxes 43.3 28.0 Other accrued expenses 126.8 121.7 Total other current liabilities $ 412.9 $ 322.0 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Norcraft Companies, Inc [Member] | |
Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition. (In millions) Accounts receivable $ 31.0 Inventories 28.4 Property, plant and equipment 45.7 Goodwill 304.7 Identifiable intangible assets 360.0 Other assets 9.4 Total assets 779.2 Deferred tax liabilities 101.4 Other liabilities and accruals 29.2 Net assets acquired (a) $ 648.6 (a) Net assets exclude $15.5 million of cash transferred to the Company as the result of the Norcraft acquisition. |
Proforma Consolidated Financial Information | The unaudited pro forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2014. In addition, the unaudited pro forma information should not be deemed to be indicative of future results. (In millions, except per share amounts) 2015 2014 Net sales $ 4,721.8 $ 4,387.8 Income from continuing operations 323.1 269.7 Basic earnings per common share $ 2.02 $ 1.66 Diluted earnings per common share $ 1.98 $ 1.61 |
WoodCrafters Home Products, LLC | |
Proforma Consolidated Financial Information | The following unaudited pro forma summary presents consolidated financial information as if WoodCrafters had been acquired on January 1, 2013. The unaudited pro forma financial information is based on historical results of operations and financial position of the Company and WoodCrafters. The pro forma results include adjustments for the impact of a preliminary allocation of the purchase price and interest expense associated with debt that would have been incurred in connection with the acquisition. The unaudited pro forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2013. In addition, the unaudited pro forma information should not be deemed to be indicative of future results. (In millions except per share amounts) 2013 Net sales $ 3,811.0 Net income attributable to Fortune Brands 240.8 Basic earnings per common share $ 1.45 Diluted earnings per common share $ 1.41 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of the Results of Discontinued Operations | The following table summarizes the results of discontinued operations for the years ended December 31, 2015, 2014 and 2013. The year ended December 31, 2015 on a pre-tax basis consists of Waterloo only, however comparable periods in 2014 and 2013 include both Waterloo and Simonton. (in millions) 2015 2014 2013 Net sales $ 78.2 $ 369.4 $ 453.8 (Loss) income from discontinued operations before income taxes $ (16.0 ) $ (90.8 ) $ 34.4 Income tax (benefit) expense (25.0 ) 23.5 12.5 Income (loss) from discontinued operations, net of tax $ 9.0 $ (114.3 ) $ 21.9 The following table summarizes the major classes of assets and liabilities of Waterloo, which is reflected as a discontinued operation on the consolidated balance sheet as of December 31, 2014: (in millions) 2014 Accounts receivable, net $ 40.1 Inventories 15.9 Other current assets 7.3 Total current assets 63.3 Property, plant and equipment, net 13.3 Other non-current assets 4.0 Total assets $ 80.6 Accounts payable $ 8.5 Other current liabilities 9.0 Total current liabilities 17.5 Other non-current liabilities 3.4 Total liabilities $ 20.9 |
Goodwill and Identifiable Int39
Goodwill and Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Change in Net Carrying Amount of Goodwill by Segment | The change in the net carrying amount of goodwill by segment was as follows: (In millions) Plumbing Doors Security Total Balance at December 31, 2013 (a) $ 631.7 $ 569.7 $ 143.0 $ 89.4 $ 1,433.8 2014 translation adjustments (2.7 ) — — (1.4 ) (4.1 ) Acquisition-related adjustments 1.1 25.9 — 11.1 38.1 Balance at December 31, 2014 (a) $ 630.1 $ 595.6 $ 143.0 $ 99.1 $ 1,467.8 2015 translation adjustments (4.9 ) — — (2.7 ) (7.6 ) Acquisition-related adjustments 312.5 (17.0 ) — (0.4 ) 295.1 Balance at December 31, 2015 (a) $ 937.7 $ 578.6 $ 143.0 $ 96.0 $ 1,755.3 (a) Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets | The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2015 and 2014 were as follows: As of December 31, 2015 As of December 31, 2014 (In millions) Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived intangible assets—tradenames $ 680.6 $ (42.0 ) (a) $ 638.6 $ 542.7 $ (42.0 ) (a) $ 500.7 Amortizable intangible assets Tradenames 19.1 (8.6 ) 10.5 14.6 (6.4 ) 8.2 Customer and contractual relationships 511.2 (177.4 ) 333.8 294.2 (164.0 ) 130.2 Patents/proprietary technology 54.7 (40.9 ) 13.8 57.7 (40.3 ) 17.4 Total 585.0 (226.9 ) 358.1 366.5 (210.7 ) 155.8 Total identifiable intangibles $ 1,265.6 $ (268.9 ) $ 996.7 $ 909.2 $ (252.7 ) $ 656.5 (a) Accumulated amortization prior to the adoption of revised ASC requirements for Intangibles — Goodwill and Other Assets. |
Gross Carrying Value and Accumulated Amortization by Class of Indefinite Lived Intangible Assets | The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2015 and 2014 were as follows: As of December 31, 2015 As of December 31, 2014 (In millions) Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived intangible assets—tradenames $ 680.6 $ (42.0 ) (a) $ 638.6 $ 542.7 $ (42.0 ) (a) $ 500.7 Amortizable intangible assets Tradenames 19.1 (8.6 ) 10.5 14.6 (6.4 ) 8.2 Customer and contractual relationships 511.2 (177.4 ) 333.8 294.2 (164.0 ) 130.2 Patents/proprietary technology 54.7 (40.9 ) 13.8 57.7 (40.3 ) 17.4 Total 585.0 (226.9 ) 358.1 366.5 (210.7 ) 155.8 Total identifiable intangibles $ 1,265.6 $ (268.9 ) $ 996.7 $ 909.2 $ (252.7 ) $ 656.5 (a) Accumulated amortization prior to the adoption of revised ASC requirements for Intangibles — Goodwill and Other Assets. |
External Debt and Financing A40
External Debt and Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of External Long-Term Debt | The components of external long-term debt were as follows: (In millions) 2015 2014 $400 million unsecured senior note due June 2020 $ 397.7 $ — $500 million unsecured senior note due June 2025 493.9 — $975 million revolving credit agreement due July 2018 — 145.0 $525 million term loan due July 2018 280.0 525.0 Total debt 1,171.6 670.0 Less: current portion — 26.3 Total long-term debt $ 1,171.6 $ 643.7 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Values of Derivative Instruments | The fair values of foreign exchange and commodity derivative instruments on the consolidated balance sheets as of December 31, 2015 and 2014 were: Fair Value (In millions) Location 2015 2014 Assets: Foreign exchange contracts Other current assets $ 6.7 $ 5.1 Net investment hedges Other current assets 0.1 0.5 Total assets $ 6.8 $ 5.6 Liabilities: Foreign exchange contracts Other current liabilities $ 3.1 $ 5.4 |
Effects of Derivative Financial Instruments on Consolidated Statements of Income | The effects of derivative financial instruments on the consolidated statements of income in 2015, 2014 and 2013 were: (In millions) Gain (Loss) Recognized in Income Type of hedge Location 2015 2014 2013 Cash flow Net sales $ — $ — $ — Cost of products sold 3.6 0.5 1.9 Other expense, net — (0.4 ) — Fair value Other expense, net 8.2 3.6 1.2 Total $ 11.8 $ 3.7 $ 3.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Carrying Value and Fair Value of Debt | The carrying value and fair value of debt as of December 31, 2015 and 2014 were as follows: (In millions) December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair Value Revolving credit facility $ — $ — $ 145.0 $ 145.0 Notes payable to bank 0.8 0.8 — — Term loan, including current portion 280.0 280.0 525.0 525.0 Senior Notes, net of underwriting commissions and price discounts 891.6 894.1 — — |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014 were as follows: (In millions) Fair Value 2015 2014 Assets: Derivative asset financial instruments (level 2) $ 6.8 $ 5.6 Deferred compensation program assets (level 2) 3.1 3.3 Total assets $ 9.9 $ 8.9 Liabilities: Derivative liability financial instruments (level 2) $ 3.1 $ 5.4 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock and Treasury Stock Activity | The number of shares of common stock and treasury stock and the share activity for 2015 and 2014 were as follows: Common Shares Treasury Shares 2015 2014 2015 2014 Balance at the beginning of the year 158,140,128 166,667,936 13,809,889 2,404,320 Stock plan shares issued 3,249,892 2,877,761 — — Shares surrendered by optionees (392,921 ) (288,797 ) 392,921 288,797 Common stock repurchases (1,091,067 ) (11,116,772 ) 1,091,067 11,116,772 Balance at the end of the year 159,906,032 158,140,128 15,293,877 13,809,889 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income | The reclassifications out of accumulated other comprehensive (loss) income for the year ended December 31, 2015 and 2014 were as follows: (In millions) Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Income 2015 2014 Cumulative translation adjustments $ — 1.5 Restructuring charges Gains (losses) on cash flow hedges Foreign exchange contracts $ 4.0 $ 0.5 Cost of products sold — (0.4 ) Other expense, net Commodity contracts (0.4 ) — Cost of products sold 3.6 0.1 Total before tax (1.8 ) (0.1 ) Tax expense $ 1.8 $ — Net of tax Defined benefit plan items Amortization of prior service cost $ 13.4 $ 27.5 (a) Recognition of actuarial losses (2.5 ) (13.7 ) (a) Recognition of prior service in discontinued operations 1.0 — (b) Recognition of actuarial losses in discontinued operations (6.1 ) — (b) 5.8 13.8 Total before tax (3.0 ) (5.2 ) Tax expense $ 2.8 $ 8.6 Net of tax Total reclassifications for the period $ 4.6 $ 10.1 Net of tax (a) These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 14, “Defined Benefit Plans,” for additional information. (b) These accumulated other comprehensive loss components are included in discontinued operations. |
After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income | The after-tax components of and changes in accumulated other comprehensive (loss) income were as follows: (In millions) Foreign Derivative Hedging Gain Defined Plan Accumulated Balance at December 31, 2012 $ 63.5 $ 0.2 $ (33.1 ) $ 30.6 Amounts classified into accumulated other comprehensive (loss) income (10.2 ) 2.0 87.8 79.6 Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (1.3 ) (13.5 ) (14.8 ) Net current period other comprehensive (loss) income (10.2 ) 0.7 74.3 64.8 Balance at December 31, 2013 53.3 0.9 41.2 95.4 Amounts classified into accumulated other comprehensive (loss) income (20.8 ) (1.5 ) (69.7 ) (92.0 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings (1.5 ) — (8.6 ) (10.1 ) Net current period other comprehensive (loss) income (22.3 ) (1.5 ) (78.3 ) (102.1 ) Balance at December 31, 2014 31.0 (0.6 ) (37.1 ) (6.7 ) Amounts classified into accumulated other comprehensive (loss) income (44.3 ) 4.5 (1.4 ) (41.2 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (1.8 ) (2.8 ) (4.6 ) Net current period other comprehensive (loss) income (44.3 ) 2.7 (4.2 ) (45.8 ) Balance at December 31, 2015 $ (13.3 ) $ 2.1 $ (41.3 ) $ (52.5 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Pre-Tax Stock-Based Compensation Expense from Continuing Operations | Pre-tax stock-based compensation expense from continuing operations was as follows: (In millions) 2015 2014 2013 Stock option awards $ 7.4 $ 7.8 $ 7.9 Restricted stock units 13.4 11.8 9.6 Performance awards 5.9 7.6 6.5 Director awards 0.9 0.9 0.9 Total pre-tax expense 27.6 28.1 24.9 Tax benefit 9.9 10.5 9.1 Total after tax expense $ 17.7 $ 17.6 $ 15.8 |
Restricted Stock Units Activity | A summary of activity with respect to restricted stock units outstanding under the Plans for the year ended December 31, 2015 was as follows: Number of Restricted Weighted-Average Fair Value Non-vested at December 31, 2014 842,937 $ 30.79 Granted 427,715 47.38 Vested (516,990 ) 24.44 Forfeited (67,636 ) 43.30 Non-vested at December 31, 2015 686,026 $ 44.69 |
Black-Scholes Option Pricing Model Assumptions used to Estimate Fair Value of Options | The fair value of Fortune Brands options was estimated at the date of grant using a Black-Scholes option pricing model with the assumptions shown in the following table: 2015 2014 2013 Current expected dividend yield 1.5% 1.5% 1.5% Expected volatility 27.0% 32.0% 32.0% Risk-free interest rate 1.8% 1.9% 1.1% Expected term 6 years 6 years 6 years |
Stock Option Activity | A summary of Fortune Brands stock option activity related to Fortune Brands and our Former Parent employees for the year ended December 31, 2015 was as follows: Options Weighted- Outstanding at December 31, 2014 7,879,778 $ 16.60 Granted 651,700 47.73 Exercised (2,223,962 ) 12.99 Expired/forfeited (107,990 ) 41.14 Outstanding at December 31, 2015 6,199,526 $ 20.74 |
Options Outstanding and Exercisable | Options outstanding and exercisable at December 31, 2015 were as follows: Options Outstanding (a) Options Exercisable (b) Range Of Exercise Prices Options Weighted- Weighted- Options Weighted- $9.00 to $12.99 2,391,073 3.4 $ 11.02 2,391,073 $ 11.02 13.00 to 20.00 2,191,678 5.5 15.64 2,191,678 15.64 20.01 to 47.87 1,616,775 8.2 42.02 508,623 36.66 6,199,526 5.4 $ 20.74 5,091,374 $ 15.57 (a) At December 31, 2015, the aggregate intrinsic value of options outstanding was $215.5 million. (b) At December 31, 2015, the weighted-average remaining contractual life of options exercisable was 4.7 years and the aggregate intrinsic value of options exercisable was $203.3 million. |
Summarizes Information of Performance Share Awards | The following table summarizes information about performance share awards as of December 31, 2015, as well as activity during the year then ended, based on the target award amounts in the performance share award agreements: Number of Weighted-Average Fair Value Non-vested at December 31, 2014 595,700 $ 30.06 Granted 163,400 47.52 Vested (268,390 ) 19.47 Forfeited (47,610 ) 37.10 Non-vested at December 31, 2015 443,100 $ 42.15 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Obligations and Funded Status | (In millions) Pension Benefits Postretirement Benefits Obligations and Funded Status at December 31 2015 2014 2015 2014 Change in the Projected Benefit Obligation (PBO): Projected benefit obligation at beginning of year $ 808.6 $ 662.3 $ 20.1 $ 34.2 Service cost 11.5 10.4 0.1 0.1 Interest cost 33.7 32.9 0.6 0.8 Plan amendments — — 0.1 (15.3 ) Actuarial (gain) loss (54.1 ) 133.1 (1.3 ) 3.9 Participants’ contributions — — — 0.3 Benefits paid (31.4 ) (30.1 ) (2.6 ) (4.2 ) Medicare Part D reimbursement — — 0.3 0.4 Plan curtailment gain (0.6 ) — — — Plan settlement gain — — (1.6 ) — Foreign exchange — — (0.1 ) (0.1 ) Projected benefit obligation at end of year $ 767.7 $ 808.6 $ 15.6 $ 20.1 Accumulated benefit obligation at end of year (excludes the impact of future compensation increases) $ 759.8 $ 793.2 Change in Plan Assets: Fair value of plan assets at beginning of year $ 608.2 $ 583.8 $ — $ — Actual return on plan assets (18.2 ) 52.0 — — Employer contributions 3.3 2.5 2.3 3.5 Participants’ contributions — — — 0.3 Medicare Part D reimbursement — — 0.3 0.4 Benefits paid (31.4 ) (30.1 ) (2.6 ) (4.2 ) Fair value of plan assets at end of year $ 561.9 $ 608.2 $ — $ — Funded status (Fair value of plan assets less PBO) $ (205.8 ) $ (200.4 ) $ (15.6 ) $ (20.1 ) |
Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the consolidated balance sheets consist of: Pension Benefits Postretirement Benefits (In millions) 2015 2014 2015 2014 Current benefit payment liability $ (1.1 ) $ (1.0 ) $ (2.0 ) $ (2.6 ) Accrued benefit liability (204.7 ) (199.4 ) (13.6 ) (17.5 ) Net amount recognized $ (205.8 ) $ (200.4 ) $ (15.6 ) $ (20.1 ) |
Amounts in Accumulated Other Comprehensive Income that have not yet been Recognized as Components of Net Periodic Benefit Cost | The amounts in accumulated other comprehensive income on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows: (In millions) Pension Benefits Postretirement Benefits Net actuarial gain at December 31, 2013 $ (34.3 ) $ (0.5 ) Recognition of actuarial loss (12.5 ) (1.2 ) Current year actuarial gain 123.3 2.9 Net actuarial loss at December 31, 2014 $ 76.5 $ 1.2 Recognition of actuarial (loss) gain (9.0 ) 0.4 Current year actuarial gain (loss) 4.2 (1.3 ) Net actuarial loss due to curtailment (0.6 ) — Net actuarial loss at December 31, 2015 $ 71.1 $ 0.3 Net prior service cost (credit) at December 31, 2013 $ 0.5 $ (33.5 ) Prior service credit recognition due to plan amendments — (15.3 ) Amortization (0.1 ) 27.6 Net prior service cost (credit) at December 31, 2014 $ 0.4 $ (21.2 ) Prior service cost recognition due to plan amendments — 0.1 Amortization (0.1 ) 13.5 Prior service cost recognition due to curtailment (0.2 ) — Prior service credit recognition due to settlement — 1.2 Net prior service cost (credit) at December 31, 2015 $ 0.1 $ (6.4 ) Total at December 31, 2015 $ 71.2 $ (6.1 ) |
Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits | Components of net periodic benefit cost were as follows: Components of Net Periodic Benefit Cost Pension Benefits Postretirement Benefits (In millions) 2015 2014 2013 2015 2014 2013 Service cost $ 11.5 $ 10.4 $ 11.4 $ 0.1 $ 0.1 $ 0.3 Interest cost 33.7 32.9 30.1 0.6 0.8 1.7 Expected return on plan assets (40.2 ) (42.2 ) (41.8 ) — — — Recognition of actuarial losses (gains) 2.9 12.5 0.8 (0.4 ) 1.2 4.4 Amortization of prior service cost (credits) 0.1 0.1 0.1 (13.5 ) (27.6 ) (27.4 ) Curtailment and settlement losses — — 0.1 — — 0.1 Net periodic benefit cost $ 8.0 $ 13.7 $ 0.7 $ (13.2 ) $ (25.5 ) $ (20.9 ) |
Schedule of Assumptions Used | Assumptions Pension Benefits Postretirement Benefits 2015 2014 2013 2015 2014 2013 Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: Discount rate 4.6% 4.2% 4.1% 3.5% Rate of compensation increase 4.0% 4.0% — — Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: Discount rate 4.2% 5.0% 4.2% 3.5% 4.3% 3.7% Expected long-term rate of return on plan assets 6.8% 7.4% 7.8% — — — Rate of compensation increase 4.0% 4.0% 4.0% — — — |
Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost | Postretirement Benefits 2015 2014 Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost at December 31: Health care cost trend rate assumed for next year 7.3/8.2 % (a) 7.6/7.5 % (a) Rate that the cost trend rate is assumed to decline (the ultimate trend rate) 4.5 % 4.5 % Year that the rate reaches the ultimate trend rate 2024 2022 (a) The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate. |
Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A one-percentage-point change in assumed health care cost trend rates would have the following effects: (In millions) 1-Percentage- Point Increase 1-Percentage- Point Decrease Effect on total of service and interest cost $ — $ (0.1 ) Effect on postretirement benefit obligation 1.2 (1.3 ) |
Pension Assets by Major Category of Plan Assets and Type of Fair Value Measurement | Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2015 were as follows: (In millions) Total as of Level 2 – Level 3 – Group annuity/insurance contracts $ 22.3 $ — $ 22.3 Commingled funds: Cash and cash equivalents 5.8 5.8 — Equity 249.1 249.1 — Fixed income 233.8 233.8 — Multi-strategy hedge funds 22.3 — 22.3 Real estate 28.6 — 28.6 Total $ 561.9 $ 488.7 $ 73.2 Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2014 were as follows: (In millions) Total as of Level 2 – Level 3 – Group annuity/insurance contracts $ 21.8 $ — $ 21.8 Commingled funds: Cash and cash equivalents 9.1 9.1 — Equity 282.6 282.6 — Fixed income 248.0 248.0 — Multi-strategy hedge funds 21.6 — 21.6 Real estate 25.1 — 25.1 Total $ 608.2 $ 539.7 $ 68.5 |
Reconciliation of Level Three Measurements | A reconciliation of Level 3 measurements as of December 31, 2015 was as follows: Commingled Funds (In millions) Group insurance Multi-strategy Real estate Total January 1, 2015 $ 21.8 $ 21.6 $ 25.1 $ 68.5 Actual return on assets related to assets still held 0.5 0.7 3.5 4.7 December 31, 2015 $ 22.3 $ 22.3 $ 28.6 $ 73.2 A reconciliation of Level 3 measurements as of December 31, 2014 was as follows: Commingled Funds (In millions) Group insurance Multi-strategy Real estate Total January 1, 2014 $ 21.2 $ 20.5 $ 22.8 $ 64.5 Actual return on assets related to assets still held 0.6 1.1 2.3 4.0 December 31, 2014 $ 21.8 $ 21.6 $ 25.1 $ 68.5 |
Schedule of Expected Benefit Payments | The following retirement benefit payments are expected to be paid: (In millions) Pension Postretirement 2016 $ 34.6 $ 1.8 2017 36.2 1.1 2018 37.6 1.1 2019 39.5 1.0 2020 41.0 1.0 Years 2021-2025 226.4 4.6 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of Loss Income Before Income Taxes and Noncontrolling Interests | The components of income from continuing operations before income taxes and noncontrolling interests were as follows: (In millions) 2015 2014 2013 Domestic operations $ 387.7 $ 301.4 $ 243.8 Foreign operations 72.2 90.5 66.7 Income before income taxes and noncontrolling interests $ 459.9 $ 391.9 $ 310.5 |
Reconciliation of Income Taxes at Federal Statutory Income Tax Rate to Income Taxes from Continuing Operations | A reconciliation of income taxes at the 35% federal statutory income tax rate to the income tax provision reported was as follows: (In millions) 2015 2014 2013 Income tax expense computed at federal statutory income tax rate $ 161.0 $ 137.2 $ 108.7 Other income taxes, net of federal tax benefit 9.4 7.2 7.0 Foreign taxes at a different rate than U.S. federal statutory income (8.7 ) (13.4 ) (10.1 ) Tax benefit on income attributable to domestic production activities (12.5 ) (7.6 ) (5.2 ) Net adjustments for uncertain tax positions 4.7 4.7 3.0 Net effect of rate changes on deferred taxes 0.2 (0.7 ) (1.6 ) Valuation allowance increase (decrease) 0.8 (4.1 ) 2.1 Miscellaneous other, net (1.5 ) (5.0 ) (2.4 ) Income tax expense as reported $ 153.4 $ 118.3 $ 101.5 Effective income tax rate 33.4 % 30.2 % 32.7 % |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits (UTBs) was as follows: (In millions) 2015 2014 2013 Unrecognized tax benefits — beginning of year $ 31.0 $ 23.7 $ 20.8 Gross additions — current year tax positions 4.6 8.7 4.4 Gross additions — prior year tax positions 8.3 2.2 0.7 Gross additions (reductions) — purchase accounting adjustments 0.1 (1.1 ) 1.6 Gross reductions — prior year tax positions (2.1 ) (2.5 ) (3.2 ) Gross reductions — settlements with taxing authorities (3.6 ) — (0.6 ) Impact of change in foreign exchange rates (0.1 ) — — Unrecognized tax benefits — end of year $ 38.2 $ 31.0 $ 23.7 |
Income Taxes | Income taxes in 2015, 2014 and 2013 were as follows: (In millions) 2015 2014 2013 Current Federal $ 130.6 $ 86.9 $ 96.3 Foreign 19.7 12.3 12.5 State and other 16.1 12.0 11.1 Deferred Federal, state and other (11.3 ) 2.7 (20.2 ) Foreign (1.7 ) 4.4 1.8 Total income tax expense $ 153.4 $ 118.3 $ 101.5 |
Components of Net Deferred Tax Assets Liabilities | The components of net deferred tax assets (liabilities) as of December 31, 2015 and 2014 were as follows: (In millions) 2015 2014 Deferred tax assets: Compensation and benefits $ 32.8 $ 32.5 Defined benefit plans 84.4 83.9 Capitalized inventories 12.1 10.9 Accounts receivable 7.7 7.5 Other accrued expenses 23.7 17.2 Net operating loss and other tax carryforwards 39.9 15.8 Valuation allowance (19.7 ) (12.0 ) Miscellaneous 6.1 3.7 Total deferred tax assets 187.0 159.5 Deferred tax liabilities: LIFO inventories (8.2 ) (9.3 ) Fixed assets (48.5 ) (60.6 ) Identifiable intangible assets (194.6 ) (205.0 ) Investment in partnership (129.8 ) — Miscellaneous (0.2 ) (1.7 ) Total deferred tax liabilities (381.3 ) (276.6 ) Net deferred tax liability $ (194.3 ) $ (117.1 ) In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2015 and 2014 as follows: (In millions) 2015 2014 Other current assets $ — $ 33.8 Other current liabilities — (2.4 ) Other assets 7.4 2.1 Deferred income taxes (201.7 ) (150.6 ) Net deferred tax liability $ (194.3 ) $ (117.1 ) |
Restructuring and Other Charg48
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Pre Tax Restructuring and Other Charges | Pre-tax restructuring and other charges for the year ended December 31, 2015 were: Year Ended December 31, 2015 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.2 $ 0.1 $ — $ 1.3 Plumbing 6.4 0.1 0.6 7.1 Security 8.1 5.3 — 13.4 Corporate 0.9 — — 0.9 Total $ 16.6 $ 5.5 $ 0.6 $ 22.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses Pre-tax restructuring and other charges for the year ended December 31, 2014 were: Year Ended December 31, 2014 Other Charges (a) (In millions) Restructuring Cost of Products SG&A (b) Total Cabinets $ 0.4 $ — $ — $ 0.4 Plumbing 0.5 0.1 0.6 1.2 Security 4.1 — — 4.1 Corporate 2.0 — — 2.0 Total $ 7.0 $ 0.1 $ 0.6 $ 7.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses Pre-tax restructuring and other charges for the year ended December 31, 2013 were: Year Ended December 31, 2013 Other Charges (a) (In millions) Restructuring Cost of Products SG&A (b) Total Cabinets $ 2.2 $ 0.1 $ — $ 2.3 Plumbing 0.6 0.6 0.2 1.4 Total $ 2.8 $ 0.7 $ 0.2 $ 3.7 (a) “Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. (b) Selling, general and administrative expenses |
Reconciliation of Restructuring Liability | Reconciliation of Restructuring Liability (In millions) Balance at 12/31/14 2015 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 12/31/15 Workforce reduction costs $ 7.9 $ 13.3 $ (11.2 ) $ 0.4 $ 10.4 Asset disposals — 0.7 — (0.7 ) — Contract termination costs — 0.2 — (0.2 ) — Other — 2.4 (0.7 ) (1.2 ) 0.5 $ 7.9 $ 16.6 $ (11.9 ) $ (1.7 ) $ 10.9 (a) Cash expenditures primarily related to severance charges. (b) Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions. (In millions) Balance at 12/31/13 2014 Provision Cash Expenditures (c) Non-Cash Write-offs (d) Balance at 12/31/14 Workforce reduction costs $ 1.5 $ 8.1 $ (3.1 ) $ 1.4 $ 7.9 Contract termination costs 0.4 — (0.4 ) — — Other — (1.0 ) (0.4 ) 1.5 — $ 1.9 $ 7.0 $ (3.9 ) $ 2.9 $ 7.9 (c) Cash expenditures primarily related to severance charges. (d) Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions and the benefit from release of a foreign currency gain associated with the dissolution of a foreign entity |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Future Minimum Rental Payments under Non-Cancelable Operating Leases | Future minimum rental payments under non-cancelable operating leases as of December 31, 2015 were as follows: (In millions) 2016 $ 28.9 2017 23.0 2018 15.5 2019 11.9 2020 7.9 Remainder 27.0 Total minimum rental payments $ 114.2 |
Activity Related to Product Warranty Liability | The following table summarizes activity related to our product warranty liability for the years ended December 31, 2015, 2014 and 2013. (In millions) 2015 2014 2013 Reserve balance at the beginning of the year $ 13.0 $ 10.3 $ 9.4 Provision for warranties issued 29.9 24.9 18.3 Settlements made (in cash or in kind) (28.3 ) (23.6 ) (17.4 ) Acquisition 1.6 1.4 — Foreign currency (0.2 ) — — Reserve balance at end of year $ 16.0 $ 13.0 $ 10.3 |
Information on Business Segme50
Information on Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Sales and Operating Income by Segment | The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe. (In millions) 2015 2014 2013 Net sales: Cabinets $ 2,173.4 $ 1,787.5 $ 1,642.2 Plumbing 1,414.5 1,331.0 1,287.0 Doors 439.1 413.9 371.6 Security 552.4 481.2 402.8 Net sales $ 4,579.4 $ 4,013.6 $ 3,703.6 (In millions) 2015 2014 2013 Operating income: Cabinets $ 192.4 $ 137.9 $ 97.1 Plumbing 285.4 258.9 228.3 Doors 44.0 29.2 15.3 Security 55.9 49.4 55.4 Less: Corporate expenses (a) (81.6 ) (71.9 ) (73.1 ) Operating income $ 496.1 $ 403.5 $ 323.0 (a) General and administrative expense $ (70.1 ) $ (67.0 ) $ (78.0 ) Defined benefit plan income 6.1 8.8 10.1 Recognition of defined benefit plan actuarial losses (2.5 ) (13.7 ) (5.2 ) Norcraft transaction costs (b) (15.1 ) — — Total Corporate expenses $ (81.6 ) $ (71.9 ) $ (73.1 ) (b) Representing external costs directly related to the acquisition of Norcraft and primarily includes expenditures for banking, legal, accounting and other similar services. (In millions) 2015 2014 2013 Total assets: Cabinets $ 2,364.0 $ 1,603.6 $ 1,588.0 Plumbing 1,341.4 1,270.2 1,176.3 Doors 483.9 459.3 462.0 Security 520.7 528.5 361.8 Corporate 168.6 110.7 185.9 Continuing operations 4,878.6 3,972.3 3,774.0 Discontinued operations — 80.6 404.1 Total assets $ 4,878.6 $ 4,052.9 $ 4,178.1 Depreciation expense: Cabinets $ 38.1 $ 31.0 $ 29.3 Plumbing 21.3 18.5 16.7 Doors 11.2 11.7 11.4 Security 19.5 10.0 8.2 Corporate 3.4 2.0 1.3 Continuing operations 93.5 73.2 66.9 Discontinued operations — 9.7 10.3 Depreciation expense $ 93.5 $ 82.9 $ 77.2 Amortization of intangible assets: Cabinets $ 14.3 $ 8.0 $ 5.1 Plumbing 1.2 — — Doors 3.8 3.8 3.8 Security 2.3 1.3 0.5 Continuing operations 21.6 13.1 9.4 Discontinued operations — 2.8 3.8 Amortization of intangible assets $ 21.6 $ 15.9 $ 13.2 Capital expenditures: Cabinets $ 61.3 $ 64.0 $ 36.4 Plumbing 27.2 25.8 25.3 Doors 13.3 10.9 7.3 Security 17.3 16.2 12.6 Corporate 9.4 4.8 2.5 Continuing operations 128.5 121.7 84.1 Discontinued operations — 5.8 12.6 Capital expenditures, gross 128.5 127.5 96.7 Less: proceeds from disposition of assets (2.5 ) (0.7 ) (2.2 ) Capital expenditures, net $ 126.0 $ 126.8 $ 94.5 Net sales by geographic region (a) United States $ 3,892.9 $ 3,313.1 $ 3,046.5 Canada 385.1 405.8 413.2 China and other international 301.4 294.7 243.9 Net sales $ 4,579.4 $ 4,013.6 $ 3,703.6 Property, plant and equipment, net (b) United States $ 498.9 $ 429.1 $ 378.0 Mexico 74.2 72.5 50.8 Canada 39.4 28.4 29.4 China and other international 15.4 9.8 10.1 Property, plant and equipment, net $ 627.9 $ 539.8 $ 468.3 (a) Based on country of destination (b) Purchases of property, plant and equipment not yet paid for as of December 31, 2015, 2014 and 2013 were $16.1 million, $4.2 million and $0.2 million, respectively. |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Quarterly Financial Data | (In millions, except per share amounts) 2015 1 st 2 nd 3 rd 4 th Full Year Net sales $ 950.8 $ 1,165.1 $ 1,238.8 $ 1,224.7 $ 4,579.4 Gross profit 316.9 410.4 434.5 420.1 1,581.9 Operating income 67.3 128.2 160.3 140.3 496.1 Income from continuing operations, net of tax 40.9 78.0 100.0 87.6 306.5 Income (loss) from discontinued operations, net of tax (0.6 ) 1.4 7.8 0.4 9.0 Net income 40.3 79.4 107.8 88.0 315.5 Net income attributable to Fortune Brands 40.0 79.7 107.5 87.8 315.0 Basic earnings (loss) per common share Continuing operations 0.26 0.49 0.62 0.55 1.92 Discontinued operations (0.01 ) 0.01 0.05 — 0.05 Net income attributable to Fortune Brands 0.25 0.50 0.67 0.55 1.97 Diluted earnings (loss) per common share Continuing operations 0.25 0.48 0.61 0.54 1.88 Discontinued operations — 0.01 0.05 — 0.05 Net income attributable to Fortune Brands 0.25 0.49 0.66 0.54 1.93 2014 1 st 2 nd 3 rd 4 th Full Year Net sales $ 889.1 $ 1,027.2 $ 1,057.7 $ 1,039.6 $ 4,013.6 Gross profit 295.3 361.8 368.0 341.8 1,366.9 Operating income 69.3 125.5 129.5 79.2 403.5 Income from continuing operations, net of tax 46.3 86.3 84.5 56.5 273.6 Income (loss) from discontinued operations, net of tax (5.1 ) 7.3 (105.4 ) (11.1 ) (114.3 ) Net income 41.2 93.6 (20.9 ) 45.4 159.3 Net income attributable to Fortune Brands 40.8 93.3 (21.1 ) 45.1 158.1 Basic earnings (loss) per common share Continuing operations 0.28 0.52 0.53 0.36 1.68 Discontinued operations (0.03 ) 0.05 (0.66 ) (0.07 ) (0.70 ) Net income attributable to Fortune Brands 0.25 0.57 (0.13 ) 0.29 0.98 Diluted earnings (loss) per common share Continuing operations 0.27 0.51 0.52 0.35 1.64 Discontinued operations (0.03 ) 0.04 (0.65 ) (0.07 ) (0.69 ) Net income attributable to Fortune Brands 0.24 0.55 (0.13 ) 0.28 0.95 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Computations of Earnings per Common Share | The computations of earnings (loss) per common share were as follows: (In millions, except per share data) 2015 2014 2013 Income from continuing operations, net of tax $ 306.5 $ 273.6 $ 209.0 Less: Noncontrolling interests 0.5 1.2 1.2 Income from continuing operations for EPS 306.0 272.4 207.8 Income (loss) from discontinued operations 9.0 (114.3 ) 21.9 Net income attributable to Fortune Brands $ 315.0 $ 158.1 $ 229.7 Earnings (loss) per common share Basic Continuing operations $ 1.92 $ 1.68 $ 1.26 Discontinued operations 0.05 (0.70 ) 0.13 Net income attributable to Fortune Brands common stockholders $ 1.97 $ 0.98 $ 1.39 Diluted Continuing operations $ 1.88 $ 1.64 $ 1.21 Discontinued operations 0.05 (0.69 ) 0.13 Net income attributable to Fortune Brands common stockholders $ 1.93 $ 0.95 $ 1.34 Basic average shares outstanding 159.5 161.8 165.5 Stock-based awards 3.5 4.5 5.8 Diluted average shares outstanding 163.0 166.3 171.3 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.7 0.5 0.4 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of Other Expense , Net | The components of other expense, net for the years ended December 31, 2015, 2014 and 2013 were as follows: (In millions) 2015 2014 2013 Asset impairment charges $ — $ 1.6 $ 6.2 Other items, net 4.3 (0.4 ) (0.9 ) Total other expense, net $ 4.3 $ 1.2 $ 5.3 |
Significant Accounting Polici54
Significant Accounting Policies - Additional Information (Detail) - USD ($) | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Significant Accounting Policies [Line Items] | |||||
Highly liquid investments included in cash and cash equivalents, maturity period | 3 months | ||||
Allowances for doubtful accounts | $ 5,800,000 | $ 5,800,000 | $ 5,400,000 | ||
Inventories | 555,600,000 | 555,600,000 | 462,200,000 | ||
Unrecognized tax benefits pertaining to uncertain tax positions | 38,200,000 | 38,200,000 | 31,000,000 | $ 23,700,000 | $ 20,800,000 |
Selling, general and administrative expenses | 1,047,600,000 | 943,300,000 | 938,700,000 | ||
Advertising costs | 195,400,000 | 200,400,000 | 197,100,000 | ||
Research and development expenses | 48,700,000 | 46,100,000 | 50,800,000 | ||
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | 3,100,000 | 3,100,000 | |||
Debt issuance costs | 3,000,000 | ||||
Cash flow hedge [Member] | Foreign exchange contracts [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Gain (loss) reclassified from Accumulated OCI into earnings | 3,800,000 | 0 | 2,300,000 | ||
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | 3,100,000 | 3,100,000 | |||
Shipping And Handling Expense | |||||
Significant Accounting Policies [Line Items] | |||||
Selling, general and administrative expenses | 184,600,000 | 169,700,000 | 161,200,000 | ||
Advertising | |||||
Significant Accounting Policies [Line Items] | |||||
Selling, general and administrative expenses | 132,200,000 | 133,600,000 | 140,300,000 | ||
Advertising costs, reduction to net sales | 63,200,000 | 66,800,000 | 56,800,000 | ||
Selling, general and administrative expenses [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Customer program costs | 43,200,000 | 43,400,000 | $ 43,500,000 | ||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Reasonably possible decrease in unrecognized tax benefits | 7,500,000 | 7,500,000 | |||
Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Reasonably possible decrease in unrecognized tax benefits | $ 12,500,000 | $ 12,500,000 | |||
Income Approach | |||||
Significant Accounting Policies [Line Items] | |||||
Goodwill recoverability weighted percentage | 80.00% | 80.00% | |||
Market Approach | |||||
Significant Accounting Policies [Line Items] | |||||
Goodwill recoverability weighted percentage | 20.00% | 20.00% | |||
Metals inventories | |||||
Significant Accounting Policies [Line Items] | |||||
LIFO inventories | $ 227,900,000 | $ 227,900,000 | 197,600,000 | ||
Inventories | $ 243,100,000 | $ 243,100,000 | $ 217,500,000 |
Significant Accounting Polici55
Significant Accounting Policies - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Building and Building Improvements | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 15 years |
Building and Building Improvements | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 40 years |
Machinery and Equipment | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 3 years |
Machinery and Equipment | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 10 years |
Software | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 3 years |
Software | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 7 years |
Balance Sheet Information - Sup
Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Inventories: | ||||
Raw materials and supplies | $ 237.8 | $ 178.1 | ||
Work in process | 60.2 | 54 | ||
Finished products | 257.6 | 230.1 | ||
Total inventories | 555.6 | 462.2 | ||
Property, plant and equipment: | ||||
Land and improvements | 56.2 | 48.5 | ||
Buildings and improvements to leaseholds | 407.6 | 356.3 | ||
Machinery and equipment | 1,005.6 | 920.2 | ||
Construction in progress | 82.3 | 71.3 | ||
Property, plant and equipment, gross | 1,551.7 | 1,396.3 | ||
Less: accumulated depreciation | 923.8 | 856.5 | ||
Property, plant and equipment, net of accumulated depreciation | [1] | 627.9 | 539.8 | $ 468.3 |
Other current liabilities: | ||||
Accrued salaries, wages and other compensation | 118 | 69.8 | ||
Accrued customer programs | 124.8 | 102.5 | ||
Accrued taxes | 43.3 | 28 | ||
Other accrued expenses | 126.8 | 121.7 | ||
Total other current liabilities | $ 412.9 | $ 322 | ||
[1] | Purchases of property, plant and equipment not yet paid for as of December 31, 2015, 2014 and 2013 were $16.1 million, $4.2 million and $0.2 million, respectively. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
May. 31, 2015 | Mar. 31, 2015 | Jul. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Business Acquisition [Line Items] | ||||||||||||||||||
Operating income | $ 140.3 | $ 160.3 | $ 128.2 | $ 67.3 | $ 79.2 | $ 129.5 | $ 125.5 | $ 69.3 | $ 496.1 | $ 403.5 | $ 323 | |||||||
Net sales | 1,224.7 | $ 1,238.8 | $ 1,165.1 | $ 950.8 | $ 1,039.6 | $ 1,057.7 | $ 1,027.2 | $ 889.1 | 4,579.4 | [1] | 4,013.6 | [1] | $ 3,703.6 | [1] | ||||
Payment to acquire business | $ 6 | |||||||||||||||||
Acquisition-related adjustments | 295.1 | 38.1 | ||||||||||||||||
Plumbing [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition-related adjustments | (17) | 25.9 | ||||||||||||||||
Norcraft Companies, Inc [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business acquisition purchase price | $ 648.6 | |||||||||||||||||
Operating income | 28 | |||||||||||||||||
Acquisition related transaction costs | 15.1 | |||||||||||||||||
Net sales | 258 | |||||||||||||||||
Goodwill expected to be deductible for income tax purposes | 60.3 | 60.3 | ||||||||||||||||
Identifiable intangible assets | 210 | 210 | ||||||||||||||||
Indefinite intangible assets, tradename | 360 | $ 150 | 150 | |||||||||||||||
Payment to acquire business | $ 15.5 | |||||||||||||||||
Norcraft Companies, Inc [Member] | Operating Income | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Inventory purchase accounting adjustment to fair value | $ 2 | |||||||||||||||||
Norcraft Companies, Inc [Member] | Customer Relationships | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Amortizable identifiable intangible assets, estimated useful life | 20 years | |||||||||||||||||
Anaheim Manufacturing Company [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business acquisition purchase price | $ 28.9 | |||||||||||||||||
Anaheim Manufacturing Company [Member] | Plumbing [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition-related adjustments | $ (17) | |||||||||||||||||
SentrySafe [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business acquisition purchase price | $ 116.7 | |||||||||||||||||
WoodCrafters Home Products, LLC | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business acquisition purchase price | $ 302 | |||||||||||||||||
WoodCrafters Home Products, LLC | Customer Relationships | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Identifiable intangible assets | $ 75.9 | |||||||||||||||||
Amortizable identifiable intangible assets, estimated useful life | 18 years | |||||||||||||||||
WoodCrafters Home Products, LLC | Technology | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Identifiable intangible assets | $ 9.6 | |||||||||||||||||
Amortizable identifiable intangible assets, estimated useful life | 10 years | |||||||||||||||||
[1] | Based on country of destination |
Acquisitions - Preliminary Allo
Acquisitions - Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | May. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||||
Goodwill | [1] | $ 1,755.3 | $ 1,467.8 | $ 1,433.8 | |
Norcraft Companies, Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 31 | ||||
Inventories | 28.4 | ||||
Property, plant and equipment | 45.7 | ||||
Goodwill | 304.7 | ||||
Identifiable intangible assets | $ 150 | 360 | |||
Other assets | 9.4 | ||||
Total assets | 779.2 | ||||
Deferred tax liabilities | 101.4 | ||||
Other liabilities and accruals | 29.2 | ||||
Net assets acquired | [2] | $ 648.6 | |||
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. | ||||
[2] | Net assets exclude $15.5 million of cash transferred to the Company as the result of the Norcraft acquisition. |
Acquisitions - Preliminary Al59
Acquisitions - Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed (Parenthetical) (Detail) - USD ($) $ in Millions | 1 Months Ended | |
May. 31, 2015 | Mar. 31, 2015 | |
Business Acquisition [Line Items] | ||
Payment to acquire business | $ 6 | |
Norcraft Companies, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Payment to acquire business | $ 15.5 |
Acquisitions - Proforma Consoli
Acquisitions - Proforma Consolidated Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Net sales | $ 4,721.8 | $ 4,387.8 | $ 3,811 |
Income from continuing operations | $ 323.1 | $ 269.7 | $ 240.8 |
Basic earnings per common share | $ 2.02 | $ 1.66 | $ 1.45 |
Diluted earnings per common share | $ 1.98 | $ 1.61 | $ 1.41 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 12.2 | $ 130 | ||
Gain on disposal of discontinued operations | 111.2 | |||
Restructuring and impairment charges | 10.7 | $ 27.4 | ||
Waterloo [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | 14 | |||
Gain on disposal of discontinued operations | $ 7 | |||
Discontinued operation beginning period | Jan. 1, 2013 | |||
Pre-tax loss on sale of discontinued operations | $ 16.7 | |||
Transaction and other sale-related costs of discontinued operation | 2.8 | |||
Estimated tax effect on sale of discontinued operation | $ 26.5 | |||
Restructuring and impairment charges | $ 14.1 | |||
Simonton Windows [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 130 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Operating Results and Summary of Major Classes of Assets and Liabilities Reflected as Discontinued Operations on Consolidated Comprehensive Income and Balance Sheet (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Income (loss) from discontinued operations, net of tax | $ 0.4 | $ 7.8 | $ 1.4 | $ (0.6) | $ (11.1) | $ (105.4) | $ 7.3 | $ (5.1) | $ 9 | $ (114.3) | $ 21.9 |
Total current assets | 63.3 | 63.3 | |||||||||
Total current liabilities | 17.5 | 17.5 | |||||||||
Waterloo [Member] | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Net sales | 78.2 | ||||||||||
(Loss) income from discontinued operations before income taxes | (16) | ||||||||||
Income tax (benefit) expense | (25) | ||||||||||
Income (loss) from discontinued operations, net of tax | $ 9 | ||||||||||
Accounts receivable, net | 40.1 | 40.1 | |||||||||
Inventories | 15.9 | 15.9 | |||||||||
Other current assets | 7.3 | 7.3 | |||||||||
Total current assets | 63.3 | 63.3 | |||||||||
Property, plant and equipment, net | 13.3 | 13.3 | |||||||||
Other non-current assets | 4 | 4 | |||||||||
Total assets | 80.6 | 80.6 | |||||||||
Accounts payable | 8.5 | 8.5 | |||||||||
Other current liabilities | 9 | 9 | |||||||||
Total current liabilities | 17.5 | 17.5 | |||||||||
Other non-current liabilities | 3.4 | 3.4 | |||||||||
Total liabilities | $ 20.9 | 20.9 | |||||||||
Waterloo and Simonton [Member] | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Net sales | 369.4 | 453.8 | |||||||||
(Loss) income from discontinued operations before income taxes | (90.8) | 34.4 | |||||||||
Income tax (benefit) expense | 23.5 | 12.5 | |||||||||
Income (loss) from discontinued operations, net of tax | $ (114.3) | $ 21.9 |
Goodwill and Identifiable Int63
Goodwill and Identifiable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Goodwill [Line Items] | ||||
Goodwill | [1] | $ 1,755.3 | $ 1,467.8 | $ 1,433.8 |
Identifiable intangible assets, tradenames | 996.7 | $ 656.5 | ||
Expected intangible amortization expense in 2016 | 26 | |||
Expected intangible amortization expense in 2017 | 24 | |||
Expected intangible amortization expense in 2018 | 22 | |||
Expected intangible amortization expense in 2019 | 21 | |||
Expected intangible amortization expense in 2020 | 21 | |||
Norcraft and Anaheim [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill increase (decrease) due to acquisition-related adjustments | 287.5 | |||
Increase in gross identifiable intangible assets acquired | $ 356.4 | |||
Minimum [Member] | Tradenames and Customer Relationship [Member] | ||||
Goodwill [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 3 years | |||
Maximum [Member] | Tradenames and Customer Relationship [Member] | ||||
Goodwill [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 30 years | |||
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Goodwill and Identifiable Int64
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Goodwill [Line Items] | |||
Beginning Balance | [1] | $ 1,467.8 | $ 1,433.8 |
Translation adjustments | (7.6) | (4.1) | |
Acquisition-related adjustments | 295.1 | 38.1 | |
Ending Balance | [1] | 1,755.3 | 1,467.8 |
Cabinets [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 630.1 | 631.7 |
Translation adjustments | (4.9) | (2.7) | |
Acquisition-related adjustments | 312.5 | 1.1 | |
Ending Balance | [1] | 937.7 | 630.1 |
Plumbing [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 595.6 | 569.7 |
Acquisition-related adjustments | (17) | 25.9 | |
Ending Balance | [1] | 578.6 | 595.6 |
Doors [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 143 | 143 |
Ending Balance | [1] | 143 | 143 |
Security [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 99.1 | 89.4 |
Translation adjustments | (2.7) | (1.4) | |
Acquisition-related adjustments | (0.4) | 11.1 | |
Ending Balance | [1] | $ 96 | $ 99.1 |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Goodwill and Identifiable Int65
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Doors [Member] | |
Goodwill [Line Items] | |
Accumulated impairment losses | $ 399.5 |
Goodwill and Identifiable Int66
Goodwill and Identifiable Intangible Assets - Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets [Line Items] | |||
Gross Carrying Amounts, Total identifiable intangibles | $ 1,265.6 | $ 909.2 | |
Accumulated Amortization, Total identifiable intangibles | (268.9) | (252.7) | |
Net Book Value, Total identifiable intangibles | 996.7 | 656.5 | |
Gross Carrying Amounts, Indefinite-lived tradenames | 680.6 | 542.7 | |
Accumulated Amortization, Indefinite-lived tradenames | [1] | (42) | (42) |
Net Book Value, Indefinite-lived tradenames | 638.6 | 500.7 | |
Gross Carrying Amounts, Finite Lived | 585 | 366.5 | |
Accumulated Amortization, Finite Lived | (226.9) | (210.7) | |
Net Book Value, Finite Lived | 358.1 | 155.8 | |
Tradenames | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amounts, Finite Lived | 19.1 | 14.6 | |
Accumulated Amortization, Finite Lived | (8.6) | (6.4) | |
Net Book Value, Finite Lived | 10.5 | 8.2 | |
Customer and contractual relationships [Member] | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amounts, Finite Lived | 511.2 | 294.2 | |
Accumulated Amortization, Finite Lived | (177.4) | (164) | |
Net Book Value, Finite Lived | 333.8 | 130.2 | |
Patents/proprietary technology [Member] | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amounts, Finite Lived | 54.7 | 57.7 | |
Accumulated Amortization, Finite Lived | (40.9) | (40.3) | |
Net Book Value, Finite Lived | $ 13.8 | $ 17.4 | |
[1] | Accumulated amortization prior to the adoption of revised ASC requirements for Intangibles - Goodwill and Other Assets. |
Asset Impairment Charges - Addi
Asset Impairment Charges - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Asset Impairment Charges [Line Items] | |||
Asset impairment charge | $ 0 | $ 0 | $ 21.2 |
Waterloo [Member] | |||
Asset Impairment Charges [Line Items] | |||
Asset impairment charge | 9.1 | ||
Fixed Assets | 8.1 | ||
Definite-lived intangible assets | $ 1 |
External Debt and Financing A68
External Debt and Financing Arrangements - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||||
Revolving credit facility, extended expiration date | 2018-07 | |||
Term loan, extended expiration date | 2018-07 | |||
Credit facility, minimum Consolidated Interest Coverage Ratio | 3.00% | |||
Maximum Leverage Ratio measured by debt to Adjusted EBITDA | 350.00% | |||
Increase Maximum Leverage Ratio | 375.00% | |||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital | $ 25,700,000 | $ 25,700,000 | ||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital amount outstanding | $ 800,000 | $ 0 | ||
Weighted-average interest rates on borrowings | 1.00% | 7.60% | 12.30% | |
Current portion of long-term debt | $ 0 | $ 26,300,000 | ||
Senior Unsecured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 900,000,000 | |||
Senior notes, outstanding amount | 891,600,000 | |||
Senior Unsecured Notes [Member] | Notes Due 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 400,000,000 | |||
Senior unsecured notes, maturity period | 5 years | |||
Senior unsecured notes, maturity year | 2,020 | |||
Senior unsecured notes, coupon rate | 3.00% | |||
Senior Unsecured Notes [Member] | Notes Due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 500,000,000 | |||
Senior unsecured notes, maturity period | 10 years | |||
Senior unsecured notes, maturity year | 2,025 | |||
Senior unsecured notes, coupon rate | 4.00% | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Senior notes, outstanding amount | 891,600,000 | |||
Long-term debt payments 2016 | 0 | |||
Long-term debt payments 2017 | 0 | |||
Long-term debt payments 2018 | 0 | |||
Long-term debt payments 2019 | 0 | |||
Long-term debt payments 2020 | $ 400,000,000 | |||
LIBOR [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate over LIBOR | 1.00% | |||
LIBOR [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate over LIBOR | 2.00% | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, maximum borrowing capacity | $ 975,000,000 | |||
Term loan, outstanding borrowings | 0 | 145,000,000 | ||
Term Loan Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, maximum borrowing capacity | 525,000,000 | |||
Term loan, outstanding borrowings | 280,000,000 | $ 525,000,000 | ||
Long-term debt payments 2016 | 0 | |||
Long-term debt payments 2017 | 52,500,000 | |||
Long-term debt payments 2018 | 227,500,000 | |||
Long-term debt payments 2019 | 0 | |||
Long-term debt payments 2020 | $ 0 |
External Debt and Financing A69
External Debt and Financing Arrangements - Components of External Long-Term Debt (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,171.6 | $ 670 |
Less: current portion | 0 | 26.3 |
Total long-term debt | 1,171.6 | 643.7 |
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 397.7 | |
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty Five [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 493.9 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 145 | |
Term Loan Facilities [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 280 | $ 525 |
External Debt and Financing A70
External Debt and Financing Arrangements - Components of External Long-Term Debt (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 900,000,000 | ||
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 400,000,000 | ||
Debt instrument, maturity date | 2020-06 | ||
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty Five [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 500,000,000 | ||
Debt instrument, maturity date | 2025-06 | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | $ 975,000,000 | $ 975,000,000 | |
Revolving credit facility, expiration date | 2018-07 | 2018-07 | |
Term Loan Facilities [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 525,000,000 | $ 525,000,000 | |
Debt instrument, maturity date | 2018-07 | 2018-07 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | ||
Foreign exchange contracts period, minimum | 12 months | |
Foreign exchange contracts period, maximum | 15 months | |
Net settlement asset | $ 3,700,000 | |
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | 3,100,000 | |
Foreign exchange contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount of foreign currency derivative hedges | 226,700,000 | |
Cash flow hedge [Member] | ||
Derivative [Line Items] | ||
Net gains (losses) recognized in OCI | 6,700,000 | $ (1,300,000) |
Cash flow hedge [Member] | Foreign exchange contracts [Member] | ||
Derivative [Line Items] | ||
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | $ 3,100,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 6.8 | $ 5.6 |
Net investment hedges [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.1 | 0.5 |
Foreign exchange contracts [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 6.7 | 5.1 |
Foreign exchange contracts [Member] | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | $ 3.1 | $ 5.4 |
Financial Instruments - Effects
Financial Instruments - Effects of Derivative Financial Instruments on Consolidated Statements of Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | $ 11.8 | $ 3.7 | $ 3.1 |
Cash flow hedge [Member] | Cost of products sold [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | 3.6 | 0.5 | 1.9 |
Cash flow hedge [Member] | Other expense, net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | (0.4) | ||
Fair value hedge [Member] | Other expense, net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | $ 8.2 | $ 3.6 | $ 1.2 |
Fair Value Measurement - Carryi
Fair Value Measurement - Carrying Value and Fair Value of Debt (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Revolving Credit Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Carrying Value | $ 0 | $ 145 |
Fair Value | 145 | |
Term Loan Facilities [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Carrying Value | 280 | 525 |
Fair Value | 280 | $ 525 |
Notes Payable to Banks [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Carrying Value | 0.8 | |
Fair Value | 0.8 | |
Senior Notes | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Carrying Value | 891.6 | |
Fair Value | $ 894.1 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets financial instruments (level 2) | $ 6.8 | $ 5.6 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 9.9 | 8.9 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets financial instruments (level 2) | 6.8 | 5.6 |
Deferred compensation program assets (level 2) | 3.1 | 3.3 |
Derivative liabilities financial instruments (level 2) | $ 3.1 | $ 5.4 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Pre-tax indefinite-lived intangible assets impairment charges | $ 0 | $ 0 | $ 21,200,000 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 750,000,000 | 750,000,000 | |
Common Stock, par value | $ 0.01 | $ 0.01 | |
Percentage of increase in quarterly cash dividend | 14.00% | ||
Dividend declared, per share | $ 0.16 | ||
Preferred stock, shares authorized | 60,000,000 | ||
Preferred stock, par value | $ 0.01 | ||
Common stock repurchases | 1,091,067 | 11,116,772 | |
Treasury stock purchases | $ 51.7 | $ 439.8 | $ 52.1 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 247.8 |
Capital Stock - Common Stock an
Capital Stock - Common Stock and Treasury Stock Activity (Detail) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Common shares | ||
Balance at the beginning of the year | 158,140,128 | 166,667,936 |
Stock plan shares issued | 3,249,892 | 2,877,761 |
Shares surrendered by optionees | (392,921) | (288,797) |
Common stock repurchases | (1,091,067) | (11,116,772) |
Balance at the end of the year | 159,906,032 | 158,140,128 |
Treasury shares | ||
Balance at the beginning of the year | 13,809,889 | 2,404,320 |
Stock plan shares issued | 0 | 0 |
Shares surrendered by optionees | 392,921 | 288,797 |
Common stock repurchases | 1,091,067 | 11,116,772 |
Balance at the end of the year | 15,293,877 | 13,809,889 |
Accumulated Other Comprehensi79
Accumulated Other Comprehensive (Loss) Income - Reclassifications Out of Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Restructuring charges | $ (16.6) | $ (7) | $ (2.8) | |||||||||
Amortization of prior service cost | (13.4) | (27.5) | (27.3) | |||||||||
Cost of products sold | (2,997.5) | (2,646.7) | (2,408.5) | |||||||||
Other expense, net | (4.3) | (1.2) | (5.3) | |||||||||
Income from continuing operations before income taxes | 459.9 | 391.9 | 310.5 | |||||||||
Tax (expense) benefit | (153.4) | (118.3) | (101.5) | |||||||||
NET INCOME | $ 88 | $ 107.8 | $ 79.4 | $ 40.3 | $ 45.4 | $ (20.9) | $ 93.6 | $ 41.2 | 315.5 | 159.3 | $ 230.9 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
NET INCOME | 4.6 | 10.1 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign Currency Adjustments [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Restructuring charges | 1.5 | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Derivative Hedging Gain Loss [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Other expense, net | (0.4) | |||||||||||
Income from continuing operations before income taxes | 3.6 | 0.1 | ||||||||||
Tax (expense) benefit | (1.8) | (0.1) | ||||||||||
NET INCOME | 1.8 | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Derivative Hedging Gain Loss [Member] | Foreign exchange contracts [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Cost of products sold | 4 | 0.5 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Derivative Hedging Gain Loss [Member] | Commodity contracts | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Cost of products sold | (0.4) | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Plan Adjustments [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Amortization of prior service cost | [1] | 13.4 | 27.5 | |||||||||
Recognition of actuarial losses | [1] | (2.5) | (13.7) | |||||||||
Income from continuing operations before income taxes | 5.8 | 13.8 | ||||||||||
Tax (expense) benefit | (3) | (5.2) | ||||||||||
NET INCOME | 2.8 | $ 8.6 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Plan Adjustments [Member] | Discontinued Operations | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Amortization of prior service cost | [2] | 1 | ||||||||||
Recognition of actuarial losses | [2] | $ (6.1) | ||||||||||
[1] | These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 14, "Defined Benefit Plans," for additional information. | |||||||||||
[2] | These accumulated other comprehensive loss components are included in discontinued operations. |
Accumulated Other Comprehensi80
Accumulated Other Comprehensive (Loss) Income - After-Tax Components of and Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ (6.7) | $ 95.4 | $ 30.6 |
Amounts classified into accumulated other comprehensive (loss) income | (41.2) | (92) | 79.6 |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (4.6) | (10.1) | (14.8) |
Net current period other comprehensive (loss) income | (45.8) | (102.1) | 64.8 |
Balance at December 31, 2015 | (52.5) | (6.7) | 95.4 |
Foreign Currency Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 31 | 53.3 | 63.5 |
Amounts classified into accumulated other comprehensive (loss) income | (44.3) | (20.8) | (10.2) |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (1.5) | ||
Net current period other comprehensive (loss) income | (44.3) | (22.3) | (10.2) |
Balance at December 31, 2015 | (13.3) | 31 | 53.3 |
Derivative Hedging Gain Loss [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (0.6) | 0.9 | 0.2 |
Amounts classified into accumulated other comprehensive (loss) income | 4.5 | (1.5) | 2 |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (1.8) | (1.3) | |
Net current period other comprehensive (loss) income | 2.7 | (1.5) | 0.7 |
Balance at December 31, 2015 | 2.1 | (0.6) | 0.9 |
Defined Benefit Plan Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (37.1) | 41.2 | (33.1) |
Amounts classified into accumulated other comprehensive (loss) income | (1.4) | (69.7) | 87.8 |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (2.8) | (8.6) | (13.5) |
Net current period other comprehensive (loss) income | (4.2) | (78.3) | 74.3 |
Balance at December 31, 2015 | $ (41.3) | $ (37.1) | $ 41.2 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incentive Plan, common stock available for issuance | 7,000,000 | ||
Incentive Plan, options vesting period | 3 years | ||
Incentive Plan, options maturity period | 10 years | ||
Incentive Plan, weighted-average grant date fair value of stock options granted | $ 11.58 | $ 12.72 | $ 9.02 |
Unrecognized compensation cost related to unvested option | $ 6.4 | ||
Fair value of options vested | 7.8 | $ 9.8 | $ 12.4 |
Intrinsic value of stock options exercised | 78 | 63.4 | 97.1 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized pre-tax compensation cost | $ 17.8 | ||
Unrecognized compensation cost, weighted-average recognition period | 1 year 10 months 24 days | ||
Fair value of performance share awards vested | $ 24.9 | $ 31.1 | $ 26.9 |
Stock Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, weighted-average recognition period | 1 year 7 months 6 days | ||
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized pre-tax compensation cost | $ 6.4 | ||
Unrecognized compensation cost, weighted-average recognition period | 1 year 7 months 6 days | ||
Fair value of performance share awards vested | $ 11.8 | ||
Director Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards issued | 19,695 | 22,654 | 24,672 |
Common stock issued to outside directors | $ 46.21 | $ 40.01 | $ 36.47 |
Stock-Based Compensation - Pre-
Stock-Based Compensation - Pre-Tax Stock-Based Compensation Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 27.6 | $ 28.1 | $ 24.9 |
Tax benefit | 9.9 | 10.5 | 9.1 |
Total after tax expense | 17.7 | 17.6 | 15.8 |
Stock Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 7.4 | 7.8 | 7.9 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 13.4 | 11.8 | 9.6 |
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 5.9 | 7.6 | 6.5 |
Director Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 0.9 | $ 0.9 | $ 0.9 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Detail) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested at December 31, 2014 | shares | 595,700 |
Granted | shares | 163,400 |
Forfeited | shares | (47,610) |
Non-vested at December 31, 2015 | shares | 443,100 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at December 31, 2014 | $ 30.06 |
Granted | 47.52 |
Vested | 19.47 |
Forfeited | 37.10 |
Non-vested at December 31, 2015 | $ 42.15 |
Restricted Stock Units | |
Number of Restricted Stock Units | |
Non-vested at December 31, 2014 | shares | 842,937 |
Granted | shares | 427,715 |
Vested | shares | (516,990) |
Forfeited | shares | (67,636) |
Non-vested at December 31, 2015 | shares | 686,026 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at December 31, 2014 | $ 30.79 |
Granted | 47.38 |
Vested | 24.44 |
Forfeited | 43.30 |
Non-vested at December 31, 2015 | $ 44.69 |
Stock-Based Compensation - Blac
Stock-Based Compensation - Black-Scholes Option Pricing Model Assumptions used to Estimate Fair Value of Options (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Current expected dividend yield | 1.50% | 1.50% | 1.50% |
Expected volatility | 27.00% | 32.00% | 32.00% |
Risk-free interest rate | 1.80% | 1.90% | 1.10% |
Expected term | 6 years | 6 years | 6 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Detail) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Options | |
Outstanding at December 31, 2014 | shares | 7,879,778 |
Granted | shares | 651,700 |
Exercised | shares | (2,223,962) |
Expired/forfeited | shares | (107,990) |
Outstanding at December 31, 2015 | shares | 6,199,526 |
Weighted-Average Exercise Price | |
Outstanding at December 31, 2014 | $ / shares | $ 16.60 |
Granted | $ / shares | 47.73 |
Exercised | $ / shares | 12.99 |
Expired/forfeited | $ / shares | 41.14 |
Outstanding at December 31, 2015 | $ / shares | $ 20.74 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Outstanding and Exercisable (Detail) | 12 Months Ended | |
Dec. 31, 2015$ / sharesshares | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options Outstanding | shares | 6,199,526 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 5 years 4 months 24 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 20.74 | [1] |
Options Exercisable | shares | 5,091,374 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 15.57 | [2] |
Exercise Price Range One | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower limit | 9 | |
Range of Exercise Prices, upper limit | $ 12.99 | |
Options Outstanding | shares | 2,391,073 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 3 years 4 months 24 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 11.02 | [1] |
Options Exercisable | shares | 2,391,073 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 11.02 | [2] |
Exercise Price Range Two | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower limit | 13 | |
Range of Exercise Prices, upper limit | $ 20 | |
Options Outstanding | shares | 2,191,678 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 5 years 6 months | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 15.64 | [1] |
Options Exercisable | shares | 2,191,678 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 15.64 | [2] |
Exercise Price Range Three | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower limit | 20.01 | |
Range of Exercise Prices, upper limit | $ 47.87 | |
Options Outstanding | shares | 1,616,775 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 8 years 2 months 12 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 42.02 | [1] |
Options Exercisable | shares | 508,623 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 36.66 | [2] |
[1] | At December 31, 2015, the aggregate intrinsic value of options outstanding was $215.5 million. | |
[2] | At December 31, 2015, the weighted-average remaining contractual life of options exercisable was 4.7 years and the aggregate intrinsic value of options exercisable was $203.3 million. |
Stock-Based Compensation - Op87
Stock-Based Compensation - Options Outstanding and Exercisable (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding, aggregate intrinsic value | $ 215.5 |
Options exercisable, weighted-average remaining contractual life | 4 years 8 months 12 days |
Options exercisable, aggregate intrinsic value | $ 203.3 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summarizes Information of Performance Share Awards (Detail) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested at December 31, 2014 | shares | 595,700 |
Granted | shares | 163,400 |
Vested | shares | (268,390) |
Forfeited | shares | (47,610) |
Non-vested at December 31, 2015 | shares | 443,100 |
Non-vested at December 31, 2014 | $ / shares | $ 30.06 |
Granted | $ / shares | 47.52 |
Vested | $ / shares | 19.47 |
Forfeited | $ / shares | 37.10 |
Non-vested at December 31, 2015 | $ / shares | $ 42.15 |
Defined Benefit Plans - Additio
Defined Benefit Plans - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2015USD ($) | Mar. 31, 2014USD ($) | Jun. 30, 2013USD ($) | Dec. 31, 2015USD ($)Age | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Actuarial loss related to acquisition | $ 0.9 | |||||
Recognition of actuarial (losses) gains | $ (2.5) | $ (8.6) | (13.7) | $ (5.2) | ||
Reduction in accrued retiree benefit plans | $ (34.7) | |||||
Defined benefit plans, blended long-term rate of return on plan assets | 6.80% | |||||
Defined Contribution Plan, cash contributions | $ 18.3 | 21.5 | $ 18.7 | |||
Postretirement Benefits [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Recognition of actuarial (losses) gains | $ (0.6) | (4) | 1.3 | (3.9) | ||
Reduction in accrued retiree benefit plans | (15.3) | (0.1) | 15.3 | |||
Defined benefit plans, curtailment charges | $ (3.5) | |||||
Defined benefit plans, amortization of net prior service credits | (5.5) | |||||
Pension Benefits [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Recognition of actuarial (losses) gains | 54.1 | (133.1) | ||||
Defined benefit plans, curtailment charges | 0.6 | |||||
Defined benefit plans, increase (decrease) in liability | $ (20) | (0.5) | $ 48 | |||
Defined benefit plans, amortization of net prior service credits | $ 0 | |||||
Defined benefit plans, blended long-term rate of return on plan assets | 6.80% | 7.40% | 7.80% | |||
Pension Benefits [Member] | Minimum [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit plans, retirement benefits payment commencement age | Age | 55 | |||||
Pension Benefits [Member] | Maximum [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit plans, retirement benefits payment commencement age | Age | 65 | |||||
Equity Securities | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit asset allocation, minimum | 0.00% | |||||
Defined benefit asset allocation, maximum | 75.00% | |||||
Fixed income | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit asset allocation, minimum | 25.00% | |||||
Defined benefit asset allocation, maximum | 100.00% | |||||
Cash and cash equivalents | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit asset allocation, maximum | 25.00% | |||||
Other Investment | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Defined benefit asset allocation, maximum | 20.00% | |||||
Defined Benefit Plan Adjustments [Member] | Waterloo [Member] | ||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Recognition of actuarial (losses) gains | $ (6.1) |
Defined Benefit Plans - Obligat
Defined Benefit Plans - Obligations and Funded Status (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Mar. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change in the Projected Benefit Obligation (PBO): | ||||||
Plan amendments | $ 34.7 | |||||
Actuarial (gain) loss | $ 2.5 | $ 8.6 | $ 13.7 | $ 5.2 | ||
Change in Plan Assets: | ||||||
Fair value of plan assets at beginning of year | 608.2 | |||||
Fair value of plan assets at end of year | 561.9 | 608.2 | ||||
Pension Benefits [Member] | ||||||
Change in the Projected Benefit Obligation (PBO): | ||||||
Projected benefit obligation at beginning of year | $ 662.3 | 808.6 | 662.3 | |||
Service cost | 11.5 | 10.4 | ||||
Interest cost | 33.7 | 32.9 | ||||
Actuarial (gain) loss | (54.1) | 133.1 | ||||
Benefits paid | (31.4) | (30.1) | ||||
Plan curtailment gain | (0.6) | |||||
Projected benefit obligation at end of year | 767.7 | 808.6 | 662.3 | |||
Accumulated benefit obligation at end of year (excludes the impact of future compensation increases) | 759.8 | 793.2 | ||||
Change in Plan Assets: | ||||||
Fair value of plan assets at beginning of year | 583.8 | 608.2 | 583.8 | |||
Actual return on plan assets | (18.2) | 52 | ||||
Employer contributions | 3.3 | 2.5 | ||||
Benefits paid | (31.4) | (30.1) | ||||
Fair value of plan assets at end of year | 561.9 | 608.2 | 583.8 | |||
Funded status (Fair value of plan assets less PBO) | (205.8) | (200.4) | ||||
Postretirement Benefits [Member] | ||||||
Change in the Projected Benefit Obligation (PBO): | ||||||
Projected benefit obligation at beginning of year | 34.2 | 20.1 | 34.2 | |||
Service cost | 0.1 | 0.1 | ||||
Interest cost | 0.6 | 0.8 | ||||
Plan amendments | 15.3 | 0.1 | (15.3) | |||
Actuarial (gain) loss | 0.6 | $ 4 | (1.3) | 3.9 | ||
Participants' contributions | 0.3 | |||||
Benefits paid | (2.6) | (4.2) | ||||
Medicare Part D reimbursement | 0.3 | 0.4 | ||||
Plan curtailment gain | $ 3.5 | |||||
Plan settlement gain | (1.6) | |||||
Foreign exchange | (0.1) | (0.1) | ||||
Projected benefit obligation at end of year | 15.6 | 20.1 | $ 34.2 | |||
Change in Plan Assets: | ||||||
Employer contributions | 2.3 | 3.5 | ||||
Participants' contributions | 0.3 | |||||
Medicare Part D reimbursement | 0.3 | 0.4 | ||||
Benefits paid | (2.6) | (4.2) | ||||
Funded status (Fair value of plan assets less PBO) | $ (15.6) | $ (20.1) |
Defined Benefit Plans - Amounts
Defined Benefit Plans - Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued benefit liability | $ (218.4) | $ (216.9) |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current benefit payment liability | (1.1) | (1) |
Accrued benefit liability | (204.7) | (199.4) |
Net amount recognized | (205.8) | (200.4) |
Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current benefit payment liability | (2) | (2.6) |
Accrued benefit liability | (13.6) | (17.5) |
Net amount recognized | $ (15.6) | $ (20.1) |
Defined benefits Plans - Amount
Defined benefits Plans - Amounts in Accumulated Other Comprehensive Income that have not yet been Recognized as Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Mar. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Actuarial (gain) loss | $ 2.5 | $ 8.6 | $ 13.7 | $ 5.2 | ||
Pension Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Actuarial (gain) loss | (54.1) | 133.1 | ||||
Net actuarial loss due to curtailment | (0.6) | |||||
Pension Benefits [Member] | Other Accumulated Other Comprehensive Income | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Beginning Balance | $ (34.3) | 76.5 | (34.3) | |||
Actuarial (gain) loss | (9) | (12.5) | ||||
Current year actuarial gain | 4.2 | 123.3 | ||||
Net actuarial loss due to curtailment | (0.6) | |||||
Ending Balance | 71.1 | 76.5 | (34.3) | |||
Beginning Balance | 0.5 | 0.4 | 0.5 | |||
Amortization | (0.1) | (0.1) | ||||
Prior service cost recognition due to curtailment | (0.2) | |||||
Ending Balance | 0.1 | 0.4 | 0.5 | |||
Total at December 31, 2015 | 71.2 | |||||
Postretirement Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Actuarial (gain) loss | 0.6 | $ 4 | (1.3) | 3.9 | ||
Net actuarial loss due to curtailment | 3.5 | |||||
Postretirement Benefits [Member] | Other Accumulated Other Comprehensive Income | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Beginning Balance | (0.5) | 1.2 | (0.5) | |||
Actuarial (gain) loss | 0.4 | (1.2) | ||||
Current year actuarial gain | (1.3) | 2.9 | ||||
Ending Balance | 0.3 | 1.2 | (0.5) | |||
Beginning Balance | $ (33.5) | (21.2) | (33.5) | |||
Prior service cost recognition due to plan amendments | 0.1 | (15.3) | ||||
Amortization | 13.5 | 27.6 | ||||
Prior service credit recognition due to settlement | 1.2 | |||||
Ending Balance | (6.4) | $ (21.2) | $ (33.5) | |||
Total at December 31, 2015 | $ (6.1) |
Defined Benefit Plans - Compone
Defined Benefit Plans - Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Mar. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Recognition of actuarial losses (gains) | $ 2.5 | $ 8.6 | $ 13.7 | $ 5.2 | ||
Pension Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 11.5 | 10.4 | ||||
Interest cost | 33.7 | 32.9 | ||||
Recognition of actuarial losses (gains) | (54.1) | 133.1 | ||||
Amortization of prior service cost (credits) | 0 | |||||
Postretirement Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 0.1 | 0.1 | ||||
Interest cost | 0.6 | 0.8 | ||||
Recognition of actuarial losses (gains) | $ 0.6 | $ 4 | (1.3) | 3.9 | ||
Amortization of prior service cost (credits) | (5.5) | |||||
Net Periodic Benefit Cost | Pension Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 11.5 | 10.4 | 11.4 | |||
Interest cost | 33.7 | 32.9 | 30.1 | |||
Expected return on plan assets | (40.2) | (42.2) | (41.8) | |||
Recognition of actuarial losses (gains) | 2.9 | 12.5 | 0.8 | |||
Amortization of prior service cost (credits) | 0.1 | 0.1 | 0.1 | |||
Curtailment and settlement losses | 0.1 | |||||
Net periodic benefit cost | 8 | 13.7 | 0.7 | |||
Net Periodic Benefit Cost | Postretirement Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Service cost | 0.1 | 0.1 | 0.3 | |||
Interest cost | 0.6 | 0.8 | 1.7 | |||
Recognition of actuarial losses (gains) | (0.4) | 1.2 | 4.4 | |||
Amortization of prior service cost (credits) | (13.5) | (27.6) | (27.4) | |||
Curtailment and settlement losses | 0.1 | |||||
Net periodic benefit cost | $ (13.2) | $ (25.5) | $ (20.9) |
Defined Benefit Plans - Schedul
Defined Benefit Plans - Schedule of Assumptions Used (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Expected long-term rate of return on plan assets | 6.80% | ||
Pension Benefits [Member] | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: | |||
Discount rate | 4.60% | 4.20% | |
Rate of compensation increase | 4.00% | 4.00% | |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Discount rate | 4.20% | 5.00% | 4.20% |
Expected long-term rate of return on plan assets | 6.80% | 7.40% | 7.80% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Postretirement Benefits [Member] | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: | |||
Discount rate | 4.10% | 3.50% | |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Discount rate | 3.50% | 4.30% | 3.70% |
Defined Benefit Plans - Assumed
Defined Benefit Plans - Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost (Detail) - Postretirement Benefits [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Rate that the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 4.50% | |
Year that the rate reaches the ultimate trend rate | 2,024 | 2,022 | |
Pre Age Sixty Five | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate assumed for next year | [1] | 7.30% | 7.60% |
Post Age Sixty Five | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate assumed for next year | [1] | 8.20% | 7.50% |
[1] | The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate. |
Defined Benefit Plans - Effect
Defined Benefit Plans - Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Effect on total of service and interest cost, 1-Percentage-Point Increase | $ 0 |
Effect on total of service and interest cost, 1-Percentage-Point Increase | 1.2 |
Effect on total of service and interest cost, 1-Percentage-Point Decrease | (0.1) |
Effect on total of service and interest cost, 1-Percentage-Point Decrease | $ (1.3) |
Defined Benefit Plans - Pension
Defined Benefit Plans - Pension Assets by Major Category of Plan Assets and Type of Fair Value Measurement (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | $ 561.9 | $ 608.2 |
Group annuity/insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 22.3 | 21.8 |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 5.8 | 9.1 |
Equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 249.1 | 282.6 |
Fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 233.8 | 248 |
Multi-strategy hedge funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 22.3 | 21.6 |
Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 28.6 | 25.1 |
Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 488.7 | 539.7 |
Level 2 [Member] | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 5.8 | 9.1 |
Level 2 [Member] | Equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 249.1 | 282.6 |
Level 2 [Member] | Fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 233.8 | 248 |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 73.2 | 68.5 |
Level 3 | Group annuity/insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 22.3 | 21.8 |
Level 3 | Multi-strategy hedge funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | 22.3 | 21.6 |
Level 3 | Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value asset measurements | $ 28.6 | $ 25.1 |
Defined Benefit Plans - Reconci
Defined Benefit Plans - Reconciliation of Level Three Measurements (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Beginning balance | $ 68.5 | $ 64.5 |
Actual return on assets related to assets still held | 4.7 | 4 |
Ending balance | 73.2 | 68.5 |
Group annuity/insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Beginning balance | 21.8 | 21.2 |
Actual return on assets related to assets still held | 0.5 | 0.6 |
Ending balance | 22.3 | 21.8 |
Commingled Funds | Multi-strategy hedge funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Beginning balance | 21.6 | 20.5 |
Actual return on assets related to assets still held | 0.7 | 1.1 |
Ending balance | 22.3 | 21.6 |
Commingled Funds | Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Beginning balance | 25.1 | 22.8 |
Actual return on assets related to assets still held | 3.5 | 2.3 |
Ending balance | $ 28.6 | $ 25.1 |
Defined Benefit Plans - Sched99
Defined Benefit Plans - Schedule of Expected Benefit Payments (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | $ 34.6 |
2,017 | 36.2 |
2,018 | 37.6 |
2,019 | 39.5 |
2,020 | 41 |
Years 2021-2025 | 226.4 |
Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 1.8 |
2,017 | 1.1 |
2,018 | 1.1 |
2,019 | 1 |
2,020 | 1 |
Years 2021-2025 | $ 4.6 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Income Before Income Taxes and Noncontrolling Interests (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Income Before Income Tax [Line Items] | |||
Domestic operations | $ 387.7 | $ 301.4 | $ 243.8 |
Foreign operations | 72.2 | 90.5 | 66.7 |
Income from continuing operations before income taxes | $ 459.9 | $ 391.9 | $ 310.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ||||
Reconciliation of income taxes | 35.00% | |||
Valuation allowances related to state net operating loss carryforwards | $ 4.1 | |||
Increase in effective foreign tax rate | 6.00% | |||
Effective income tax rate impact related to nondeductible acquisition costs | $ 2.4 | |||
Unrecognized tax benefits that would impact effective tax rate | 27.8 | |||
Unrecognized tax expense (benefits), interest and penalty expense (benefit) recognized | 1 | 0.5 | $ (0.2) | |
Unrecognized tax benefits, accrued interest and penalties | 10.2 | 10.7 | ||
Deferred tax assets, net operating losses and other tax carryforwards | 39.9 | $ 15.8 | ||
Deferred tax assets, net operating losses and other tax carryforwards | 10.1 | |||
Undistributed earnings of foreign subsidiaries | 270.1 | |||
Tax liability associated with remittance of certain foreign earnings | 1.4 | $ 12.4 | ||
Minimum [Member] | ||||
Income Taxes [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 7.5 | |||
Deferred tax assets, remaining net operating losses and other tax carryforwards expiration period | 2,021 | |||
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 12.5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes at Federal Statutory Income Tax Rate (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation Of Income Taxes [Line Items] | |||
Income tax expense computed at federal statutory income tax rate | $ 161 | $ 137.2 | $ 108.7 |
Other income taxes, net of federal tax benefit | 9.4 | 7.2 | 7 |
Foreign taxes at a different rate than U.S. federal statutory income tax rate | (8.7) | (13.4) | (10.1) |
Tax benefit on income attributable to domestic production activities | (12.5) | (7.6) | (5.2) |
Net adjustments for uncertain tax positions | 4.7 | 4.7 | 3 |
Net effect of rate changes on deferred taxes | 0.2 | (0.7) | (1.6) |
Valuation allowance increase (decrease) | 0.8 | (4.1) | 2.1 |
Miscellaneous other, net | (1.5) | (5) | (2.4) |
Income tax expense as reported | $ 153.4 | $ 118.3 | $ 101.5 |
Effective income tax rate | 33.40% | 30.20% | 32.70% |
Income Taxes - Reconciliatio103
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Unrecognized Tax Benefits [Line Items] | |||
Unrecognized tax benefits - beginning of year | $ 31 | $ 23.7 | $ 20.8 |
Gross additions - current year tax positions | 4.6 | 8.7 | 4.4 |
Gross additions - prior year tax positions | 8.3 | 2.2 | 0.7 |
Gross additions (reductions) - purchase accounting adjustments | 0.1 | (1.1) | 1.6 |
Gross reductions - prior year tax positions | (2.1) | (2.5) | (3.2) |
Gross reductions - settlements with taxing authorities | (3.6) | (0.6) | |
Impact of change in foreign exchange rates | (0.1) | ||
Unrecognized tax benefits - end of year | $ 38.2 | $ 31 | $ 23.7 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current | |||
Federal | $ 130.6 | $ 86.9 | $ 96.3 |
Foreign | 19.7 | 12.3 | 12.5 |
State and other | 16.1 | 12 | 11.1 |
Deferred | |||
Federal, state and other | (11.3) | 2.7 | (20.2) |
Foreign | (1.7) | 4.4 | 1.8 |
Income tax expense as reported | $ 153.4 | $ 118.3 | $ 101.5 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Compensation and benefits | $ 32.8 | $ 32.5 |
Defined benefit plans | 84.4 | 83.9 |
Capitalized inventories | 12.1 | 10.9 |
Accounts receivable | 7.7 | 7.5 |
Other accrued expenses | 23.7 | 17.2 |
Net operating loss and other tax carryforwards | 39.9 | 15.8 |
Valuation allowance | (19.7) | (12) |
Miscellaneous | 6.1 | 3.7 |
Total deferred tax assets | 187 | 159.5 |
Deferred tax liabilities: | ||
LIFO inventories | (8.2) | (9.3) |
Fixed assets | (48.5) | (60.6) |
Identifiable intangible assets | (194.6) | (205) |
Investment in partnership | (129.8) | |
Miscellaneous | (0.2) | (1.7) |
Total deferred tax liabilities | (381.3) | (276.6) |
Net deferred tax liability | (194.3) | (117.1) |
Net deferred tax liability | ||
Other current assets | 33.8 | |
Other current liabilities | (2.4) | |
Other assets | 7.4 | 2.1 |
Deferred income taxes | (201.7) | (150.6) |
Net deferred tax liability | $ (194.3) | $ (117.1) |
Restructuring and Other Char106
Restructuring and Other Charges - Pre-tax Restructuring and Other Charges (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 16.6 | $ 7 | $ 2.8 | |
Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 16.6 | 7 | 2.8 | |
Total Charges | 22.7 | 7.7 | 3.7 | |
Operating Segments [Member] | Cabinets [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1.2 | 0.4 | 2.2 | |
Total Charges | 1.3 | 0.4 | 2.3 | |
Operating Segments [Member] | Plumbing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 6.4 | 0.5 | 0.6 | |
Total Charges | 7.1 | 1.2 | 1.4 | |
Operating Segments [Member] | Security [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 8.1 | 4.1 | ||
Total Charges | 13.4 | 4.1 | ||
Operating Segments [Member] | Cost of products sold [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1] | 5.5 | 0.1 | 0.7 |
Operating Segments [Member] | Cost of products sold [Member] | Cabinets [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1] | 0.1 | 0.1 | |
Operating Segments [Member] | Cost of products sold [Member] | Plumbing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1] | 0.1 | 0.1 | 0.6 |
Operating Segments [Member] | Cost of products sold [Member] | Security [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1] | 5.3 | ||
Operating Segments [Member] | Selling, general and administrative expenses [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1],[2] | 0.6 | 0.6 | 0.2 |
Operating Segments [Member] | Selling, general and administrative expenses [Member] | Plumbing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Charges | [1],[2] | 0.6 | 0.6 | $ 0.2 |
Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0.9 | 2 | ||
Total Charges | $ 0.9 | $ 2 | ||
[1] | "Other Charges" represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. | |||
[2] | Selling, general and administrative expenses |
Restructuring and Other Char107
Restructuring and Other Charges - Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | $ 7.9 | $ 1.9 | ||||
Provision | 16.6 | 7 | $ 2.8 | |||
Cash Expenditures | [1] | (11.9) | (3.9) | |||
Non-Cash Write-offs | (1.7) | [2] | 2.9 | [3] | ||
Ending Balance | 10.9 | 7.9 | 1.9 | |||
Workforce Reduction Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 7.9 | 1.5 | ||||
Provision | 13.3 | 8.1 | ||||
Cash Expenditures | [1] | (11.2) | (3.1) | |||
Non-Cash Write-offs | 0.4 | [2] | 1.4 | [3] | ||
Ending Balance | 10.4 | 7.9 | 1.5 | |||
Asset Disposals [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Provision | 0.7 | |||||
Non-Cash Write-offs | [2] | (0.7) | ||||
Contract Termination Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 0.4 | |||||
Provision | 0.2 | |||||
Cash Expenditures | [1] | (0.4) | ||||
Non-Cash Write-offs | [2] | (0.2) | ||||
Ending Balance | $ 0.4 | |||||
Other [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Provision | 2.4 | (1) | ||||
Cash Expenditures | [1] | (0.7) | (0.4) | |||
Non-Cash Write-offs | (1.2) | [2] | $ 1.5 | [3] | ||
Ending Balance | $ 0.5 | |||||
[1] | Cash expenditures primarily related to severance charges. | |||||
[2] | Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions. | |||||
[3] | Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions and the benefit from release of a foreign currency gain associated with the dissolution of a foreign entity |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitment And Contingencies [Line Items] | |||
Purchase obligations | $ 332.9 | ||
Purchase obligations due in one year | 311.8 | ||
Operating leases, rent expense net | $ 34.9 | $ 33.4 | $ 29 |
Commitments - Future Minimum Re
Commitments - Future Minimum Rental Payments under Non-Cancelable Operating Leases (Detail) $ in Millions | Dec. 31, 2015USD ($) |
Schedule of Operating Leases [Line Items] | |
2,016 | $ 28.9 |
2,017 | 23 |
2,018 | 15.5 |
2,019 | 11.9 |
2,020 | 7.9 |
Remainder | 27 |
Total minimum rental payments | $ 114.2 |
Commitments - Activity Related
Commitments - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Product Warranty Liability [Line Items] | |||
Reserve balance at the beginning of the year | $ 13 | $ 10.3 | $ 9.4 |
Provision for warranties issued | 29.9 | 24.9 | 18.3 |
Settlements made (in cash or in kind) | (28.3) | (23.6) | (17.4) |
Acquisition | 1.6 | 1.4 | |
Foreign currency | (0.2) | ||
Reserve balance at end of year | $ 16 | $ 13 | $ 10.3 |
Information on Business Segm111
Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | $ 1,224.7 | $ 1,238.8 | $ 1,165.1 | $ 950.8 | $ 1,039.6 | $ 1,057.7 | $ 1,027.2 | $ 889.1 | $ 4,579.4 | [1] | $ 4,013.6 | [1] | $ 3,703.6 | [1] | |
Operating income | 140.3 | 160.3 | $ 128.2 | $ 67.3 | 79.2 | $ 129.5 | $ 125.5 | $ 69.3 | 496.1 | 403.5 | 323 | ||||
Recognition of defined benefit plan actuarial losses | $ (2.5) | (8.6) | (13.7) | (5.2) | |||||||||||
Assets | 4,878.6 | 4,052.9 | 4,878.6 | 4,052.9 | 4,178.1 | ||||||||||
Depreciation expense | 93.5 | 82.9 | 77.2 | ||||||||||||
Amortization of intangible assets | 21.6 | 15.9 | 13.2 | ||||||||||||
Capital expenditures, gross | 128.5 | 127.5 | 96.7 | ||||||||||||
Less: proceeds from disposition of assets | (2.5) | (0.7) | (2.2) | ||||||||||||
Capital expenditures, net | 126 | 126.8 | 94.5 | ||||||||||||
Property, plant and equipment, net | [2] | 627.9 | 539.8 | 627.9 | 539.8 | 468.3 | |||||||||
Continuing Operations | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | 4,878.6 | 3,972.3 | 4,878.6 | 3,972.3 | 3,774 | ||||||||||
Depreciation expense | 93.5 | 73.2 | 66.9 | ||||||||||||
Amortization of intangible assets | 21.6 | 13.1 | 9.4 | ||||||||||||
Capital expenditures, gross | 128.5 | 121.7 | 84.1 | ||||||||||||
Discontinued Operations | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | 80.6 | 80.6 | 404.1 | ||||||||||||
Depreciation expense | 9.7 | 10.3 | |||||||||||||
Amortization of intangible assets | 2.8 | 3.8 | |||||||||||||
Capital expenditures, gross | 5.8 | 12.6 | |||||||||||||
United States | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | [1] | 3,892.9 | 3,313.1 | 3,046.5 | |||||||||||
Property, plant and equipment, net | [2] | 498.9 | 429.1 | 498.9 | 429.1 | 378 | |||||||||
Canada | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | [1] | 385.1 | 405.8 | 413.2 | |||||||||||
Property, plant and equipment, net | [2] | 39.4 | 28.4 | 39.4 | 28.4 | 29.4 | |||||||||
China and Other International | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | [1] | 301.4 | 294.7 | 243.9 | |||||||||||
Property, plant and equipment, net | [2] | 15.4 | 9.8 | 15.4 | 9.8 | 10.1 | |||||||||
Mexico | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Property, plant and equipment, net | [2] | 74.2 | 72.5 | 74.2 | 72.5 | 50.8 | |||||||||
Corporate [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Operating income | [3] | (81.6) | (71.9) | (73.1) | |||||||||||
General and administrative expense | (70.1) | (67) | (78) | ||||||||||||
Defined benefit plan income | 6.1 | 8.8 | 10.1 | ||||||||||||
Recognition of defined benefit plan actuarial losses | (2.5) | (13.7) | (5.2) | ||||||||||||
Norcraft transaction costs | [4] | (15.1) | |||||||||||||
Total Corporate expenses | (81.6) | (71.9) | (73.1) | ||||||||||||
Assets | 168.6 | 110.7 | 168.6 | 110.7 | 185.9 | ||||||||||
Depreciation expense | 3.4 | 2 | 1.3 | ||||||||||||
Capital expenditures, gross | 9.4 | 4.8 | 2.5 | ||||||||||||
Cabinets [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | 2,364 | 1,603.6 | 2,364 | 1,603.6 | 1,588 | ||||||||||
Depreciation expense | 38.1 | 31 | 29.3 | ||||||||||||
Amortization of intangible assets | 14.3 | 8 | 5.1 | ||||||||||||
Capital expenditures, gross | 61.3 | 64 | 36.4 | ||||||||||||
Cabinets [Member] | Operating Segments [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | 2,173.4 | 1,787.5 | 1,642.2 | ||||||||||||
Operating income | 192.4 | 137.9 | 97.1 | ||||||||||||
Plumbing [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | 1,341.4 | 1,270.2 | 1,341.4 | 1,270.2 | 1,176.3 | ||||||||||
Depreciation expense | 21.3 | 18.5 | 16.7 | ||||||||||||
Amortization of intangible assets | 1.2 | ||||||||||||||
Capital expenditures, gross | 27.2 | 25.8 | 25.3 | ||||||||||||
Plumbing [Member] | Operating Segments [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | 1,414.5 | 1,331 | 1,287 | ||||||||||||
Operating income | 285.4 | 258.9 | 228.3 | ||||||||||||
Doors [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | 483.9 | 459.3 | 483.9 | 459.3 | 462 | ||||||||||
Depreciation expense | 11.2 | 11.7 | 11.4 | ||||||||||||
Amortization of intangible assets | 3.8 | 3.8 | 3.8 | ||||||||||||
Capital expenditures, gross | 13.3 | 10.9 | 7.3 | ||||||||||||
Doors [Member] | Operating Segments [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | 439.1 | 413.9 | 371.6 | ||||||||||||
Operating income | 44 | 29.2 | 15.3 | ||||||||||||
Security [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Assets | $ 520.7 | $ 528.5 | 520.7 | 528.5 | 361.8 | ||||||||||
Depreciation expense | 19.5 | 10 | 8.2 | ||||||||||||
Amortization of intangible assets | 2.3 | 1.3 | 0.5 | ||||||||||||
Capital expenditures, gross | 17.3 | 16.2 | 12.6 | ||||||||||||
Security [Member] | Operating Segments [Member] | |||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||
Net sales | 552.4 | 481.2 | 402.8 | ||||||||||||
Operating income | $ 55.9 | $ 49.4 | $ 55.4 | ||||||||||||
[1] | Based on country of destination | ||||||||||||||
[2] | Purchases of property, plant and equipment not yet paid for as of December 31, 2015, 2014 and 2013 were $16.1 million, $4.2 million and $0.2 million, respectively. | ||||||||||||||
[3] | Below is a table detailing Corporate expenses: General and administrative expense $ (70.1 ) $ (67.0 ) $ (78.0 ) Defined benefit plan income 6.1 8.8 10.1 Recognition of defined benefit plan actuarial losses (2.5 ) (13.7 ) (5.2 ) Norcraft transaction costs(b) (15.1 ) - - Total Corporate expenses $ (81.6 ) $ (71.9 ) $ (73.1 ) | ||||||||||||||
[4] | Representing external costs directly related to the acquisition of Norcraft and primarily includes expenditures for banking, legal, accounting and other similar services. |
Information on Business Segm112
Information on Business Segments - Additional Information (Detail) - Customer | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Number of customers accounted for greater than 10% of net sales | 2 | 2 | 2 |
Customer Concentration Risk | Net Sales | The Home Depot, Inc. | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Percentage of net sales to major customer | 14.00% | 15.00% | 14.00% |
Customer Concentration Risk | Net Sales | Lowe's Companies, Inc | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Percentage of net sales to major customer | 14.00% | 14.00% | 14.00% |
Information on Business Segm113
Information on Business Segments - Net Sales and Operating Income by Segment (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Purchases of property,plant and equipment not yet paid | $ 16.1 | $ 4.2 | $ 0.2 |
Quarterly Financial Data - Sche
Quarterly Financial Data - Schedule of Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Schedule Of Quarterly Financial Data [Line Items] | ||||||||||||||
Net sales | $ 1,224.7 | $ 1,238.8 | $ 1,165.1 | $ 950.8 | $ 1,039.6 | $ 1,057.7 | $ 1,027.2 | $ 889.1 | $ 4,579.4 | [1] | $ 4,013.6 | [1] | $ 3,703.6 | [1] |
Gross profit | 420.1 | 434.5 | 410.4 | 316.9 | 341.8 | 368 | 361.8 | 295.3 | 1,581.9 | 1,366.9 | ||||
Operating income | 140.3 | 160.3 | 128.2 | 67.3 | 79.2 | 129.5 | 125.5 | 69.3 | 496.1 | 403.5 | 323 | |||
Income from continuing operations, net of tax | 87.6 | 100 | 78 | 40.9 | 56.5 | 84.5 | 86.3 | 46.3 | 306.5 | 273.6 | 209 | |||
Income (loss) from discontinued operations, net of tax | 0.4 | 7.8 | 1.4 | (0.6) | (11.1) | (105.4) | 7.3 | (5.1) | 9 | (114.3) | 21.9 | |||
Net Income | 88 | 107.8 | 79.4 | 40.3 | 45.4 | (20.9) | 93.6 | 41.2 | 315.5 | 159.3 | $ 230.9 | |||
Net income attributable to Fortune Brands | $ 87.8 | $ 107.5 | $ 79.7 | $ 40 | $ 45.1 | $ (21.1) | $ 93.3 | $ 40.8 | $ 315 | $ 158.1 | ||||
Basic earnings (loss) per common share | ||||||||||||||
Continuing operations | $ 0.55 | $ 0.62 | $ 0.49 | $ 0.26 | $ 0.36 | $ 0.53 | $ 0.52 | $ 0.28 | $ 1.92 | $ 1.68 | $ 1.26 | |||
Discontinued operations | 0.05 | 0.01 | (0.01) | (0.07) | (0.66) | 0.05 | (0.03) | 0.05 | (0.70) | 0.13 | ||||
Net income attributable to Fortune Brands | 0.55 | 0.67 | 0.50 | 0.25 | 0.29 | (0.13) | 0.57 | 0.25 | 1.97 | 0.98 | 1.39 | |||
Diluted earnings (loss) per common share | ||||||||||||||
Continuing operations | 0.54 | 0.61 | 0.48 | 0.25 | 0.35 | 0.52 | 0.51 | 0.27 | 1.88 | 1.64 | 1.21 | |||
Discontinued operations | 0.05 | 0.01 | (0.07) | (0.65) | 0.04 | (0.03) | 0.05 | (0.69) | 0.13 | |||||
Net income attributable to Fortune Brands | $ 0.54 | $ 0.66 | $ 0.49 | $ 0.25 | $ 0.28 | $ (0.13) | $ 0.55 | $ 0.24 | $ 1.93 | $ 0.95 | $ 1.34 | |||
[1] | Based on country of destination |
Quarterly Financial Data - Addi
Quarterly Financial Data - Additional Information (Detail) - Tradenames - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information [Line Items] | |||||||
Pre-tax defined benefit plan actuarial losses | $ (0.3) | $ (2.8) | $ (12) | $ (1.1) | $ (0.6) | $ (2.5) | $ (13.7) |
After-tax defined benefit plan actuarial losses | $ (0.2) | $ (1.8) | $ (7.6) | $ (0.7) | $ (0.4) | ||
Actuarial loss per diluted share | $ 0 | $ 0.01 | $ 0.04 | $ 0.01 | $ 0 |
Earnings Per Share - Computatio
Earnings Per Share - Computations of Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Income from continuing operations, net of tax | $ 87.6 | $ 100 | $ 78 | $ 40.9 | $ 56.5 | $ 84.5 | $ 86.3 | $ 46.3 | $ 306.5 | $ 273.6 | $ 209 |
Less: Noncontrolling interests | 0.5 | 1.2 | 1.2 | ||||||||
Income from continuing operations for EPS | 306 | 272.4 | 207.8 | ||||||||
Income (loss) from discontinued operations | 9 | (114.3) | 21.9 | ||||||||
NET INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 315 | $ 158.1 | $ 229.7 | ||||||||
Basic | |||||||||||
Continuing operations | $ 0.55 | $ 0.62 | $ 0.49 | $ 0.26 | $ 0.36 | $ 0.53 | $ 0.52 | $ 0.28 | $ 1.92 | $ 1.68 | $ 1.26 |
Discontinued operations | 0.05 | 0.01 | (0.01) | (0.07) | (0.66) | 0.05 | (0.03) | 0.05 | (0.70) | 0.13 | |
Net income attributable to Fortune Brands common stockholders | 0.55 | 0.67 | 0.50 | 0.25 | 0.29 | (0.13) | 0.57 | 0.25 | 1.97 | 0.98 | 1.39 |
Diluted | |||||||||||
Continuing operations | 0.54 | 0.61 | 0.48 | 0.25 | 0.35 | 0.52 | 0.51 | 0.27 | 1.88 | 1.64 | 1.21 |
Discontinued operations | 0.05 | 0.01 | (0.07) | (0.65) | 0.04 | (0.03) | 0.05 | (0.69) | 0.13 | ||
Net income attributable to Fortune Brands common stockholders | $ 0.54 | $ 0.66 | $ 0.49 | $ 0.25 | $ 0.28 | $ (0.13) | $ 0.55 | $ 0.24 | $ 1.93 | $ 0.95 | $ 1.34 |
Basic average shares outstanding | 159.5 | 161.8 | 165.5 | ||||||||
Stock-based awards | 3.5 | 4.5 | 5.8 | ||||||||
Diluted average shares outstanding | 163 | 166.3 | 171.3 | ||||||||
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share | 0.7 | 0.5 | 0.4 |
Other Expense, Net - Components
Other Expense, Net - Components of Other Expense Net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Asset impairment charges | $ 1.6 | $ 6.2 | |
Other items, net | $ 4.3 | (0.4) | (0.9) |
Total other expense (income), net | $ 4.3 | $ 1.2 | $ 5.3 |
Other expense, Net - Additional
Other expense, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Component Of Other Expense Income Nonoperating [Line Items] | ||
Impairment charge | $ 1.6 | $ 6.2 |
Carrying value of the investment | $ 0 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Accruals, relating to environmental compliance and clean up | $ 2.8 | $ 2.8 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Subsequent Event | Feb. 16, 2016USD ($) |
Subsequent Event [Line Items] | |
Share repurchase program, authorized amount | 2 years |
Share repurchase program, ending period | Feb. 16, 2018 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Share repurchase program, authorized amount | $ 400,000,000 |
Schedule II Valuation and Qu121
Schedule II Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Allowance for cash discounts, returns and sales allowances | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | $ 45.1 | $ 33.9 | $ 32.7 | |
Charged to Expense | 150.7 | 129.6 | 122.1 | |
Write-offs, and Deductions | [1] | 145.5 | 118.4 | 120.9 |
Balance at End of Period | 50.3 | 45.1 | 33.9 | |
Allowance for doubtful accounts | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | 5.4 | 5.8 | 7.9 | |
Charged to Expense | 2.8 | 1.3 | 0.5 | |
Write-offs, and Deductions | [1] | 2.4 | 1.7 | 2.6 |
Balance at End of Period | 5.8 | 5.4 | 5.8 | |
Allowance for deferred tax assets | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | 12 | 19.8 | 18.8 | |
Charged to Expense | 6.4 | (7.8) | 1 | |
Business Acquisition | [2] | 1.3 | ||
Balance at End of Period | $ 19.7 | $ 12 | $ 19.8 | |
[1] | Net of recoveries of amounts written off in prior years and immaterial foreign currency impact. | |||
[2] | Represents a valuation allowance on an acquired net operating loss carryforward (Norcraft Canada) |