Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 02, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
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 | 151,950,428 | ||
Entity Public Float | $ 10,015,217,282 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Net sales | [1] | $ 5,283.3 | $ 4,984.9 | $ 4,579.4 |
Cost of products sold | 3,350.8 | 3,180.3 | 2,997.5 | |
Selling, general and administrative expenses | 1,194.8 | 1,129.9 | 1,047.6 | |
Amortization of intangible assets | 31.7 | 28.1 | 21.6 | |
Loss on sale of product line (see Note 4) | 2.4 | |||
Asset impairment charges | 3.2 | |||
Restructuring charges | 8.3 | 13.9 | 16.6 | |
OPERATING INCOME | 692.1 | 632.7 | 496.1 | |
Interest expense | 49.4 | 49.1 | 31.9 | |
Other expense, net | 7.9 | 1.5 | 4.3 | |
Income from continuing operations before income taxes | 634.8 | 582.1 | 459.9 | |
Income taxes | 159.5 | 169.7 | 153.4 | |
Income from continuing operations, net of tax | 475.3 | 412.4 | 306.5 | |
(Loss) income from discontinued operations, net of tax | (2.6) | 0.8 | 9 | |
NET INCOME | 472.7 | 413.2 | 315.5 | |
Less: Noncontrolling interests | 0.1 | 0.5 | ||
NET INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 472.6 | $ 413.2 | $ 315 | |
Basic earnings (loss) per common share | ||||
Continuing operations | $ 3.10 | $ 2.67 | $ 1.92 | |
Discontinuing operations | (0.02) | 0.01 | 0.05 | |
Net income attributable to Fortune Brands common shareholders | 3.08 | 2.68 | 1.97 | |
Diluted earnings (loss) per common share | ||||
Continuing operations | 3.05 | 2.61 | 1.88 | |
Discontinuing operations | (0.02) | 0.01 | 0.05 | |
Net income attributable to Fortune Brands common shareholders | $ 3.03 | $ 2.62 | $ 1.93 | |
Basic average number of shares outstanding | 153.2 | 154.3 | 159.5 | |
Diluted average number of shares outstanding | 155.8 | 157.8 | 163 | |
Dividends declared per common share | $ 0.74 | $ 0.66 | $ 0.58 | |
[1] | Based on country of destination |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Net income | $ 472.7 | $ 413.2 | $ 315.5 | |
Other comprehensive (loss) income, before tax: | ||||
Foreign currency translation adjustments | 33.8 | (14.7) | (44.3) | |
Unrealized (losses) gains on derivatives: | ||||
Unrealized holding (losses) gains arising during period | (1.8) | (6.7) | 6.8 | |
Less: reclassification adjustment for losses (gains) included in net income | (0.9) | 3.5 | (3.6) | |
Unrealized (losses) gains on derivatives | (2.7) | (3.2) | 3.2 | |
Defined benefit plans: | ||||
Prior service credit (cost) arising during period | 12.1 | (0.1) | ||
Prior service credit (cost) recognition due to settlement and curtailment | 0.1 | (1) | ||
Net actuarial gain (loss) arising during period | 6.2 | (1.9) | 6.3 | |
Less: amortization of prior service credit included in net periodic pension cost | (5.1) | (13.5) | (13.4) | |
Defined benefit plans | 1.1 | (3.2) | (8.2) | |
Other comprehensive income (loss), before tax | 32.2 | (21.1) | (49.3) | |
Income tax benefit (expense) related to items of other comprehensive income | [1] | 0.5 | 1.7 | 3.5 |
Other comprehensive income (loss), net of tax | 32.7 | (19.4) | (45.8) | |
COMPREHENSIVE INCOME | 505.4 | 393.8 | 269.7 | |
Less: comprehensive income attributable to noncontrolling interest | 0.5 | |||
COMPREHENSIVE INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 505.4 | $ 393.8 | $ 269.2 | |
[1] | Income tax benefit (expense) on unrealized (losses) gains on derivatives of $0.9 million, $0.5 million and $(0.5) million and on defined benefit plans of $(0.4) million, $1.2 million and $4.0 million in 2017, 2016 and 2015, respectively. |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Unrealized (losses) gains on derivatives, tax | $ 0.9 | $ 0.5 | $ (0.5) |
Defined benefit plans, tax | $ (0.4) | $ 1.2 | $ 4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets | |||
Cash and cash equivalents | $ 323 | $ 251.5 | |
Accounts receivable less allowances for discounts, doubtful accounts and returns | 555.3 | 550.7 | |
Inventories | 580.8 | 531.1 | |
Other current assets | 142.6 | 111.9 | |
TOTAL CURRENT ASSETS | 1,601.7 | 1,445.2 | |
Property, plant and equipment, net of accumulated depreciation | 740 | 662.5 | |
Goodwill | [1] | 1,912 | 1,833.8 |
Other intangible assets, net of accumulated amortization | 1,162.4 | 1,107 | |
Other assets | 95.3 | 80 | |
TOTAL ASSETS | 5,511.4 | 5,128.5 | |
Current liabilities | |||
Accounts payable | 428.8 | 393.8 | |
Other current liabilities | 478 | 449 | |
TOTAL CURRENT LIABILITIES | 906.8 | 842.8 | |
Long-term debt | 1,507.6 | 1,431.1 | |
Deferred income taxes | 166.8 | 163.5 | |
Accrued defined benefit plans | 175.9 | 216.2 | |
Other non-current liabilities | 153.2 | 111.9 | |
TOTAL LIABILITIES | 2,910.3 | 2,765.5 | |
Commitments (Note 17) and Contingencies (Note 22) | |||
Equity | |||
Common stock | [2] | 1.7 | 1.7 |
Paid-in capital | 2,724.9 | 2,653.8 | |
Accumulated other comprehensive loss | (39.2) | (71.9) | |
Retained earnings | 1,174.2 | 814.6 | |
Treasury stock | (1,262.1) | (1,036.7) | |
TOTAL FORTUNE BRANDS EQUITY | 2,599.5 | 2,361.5 | |
Noncontrolling interests | 1.6 | 1.5 | |
TOTAL EQUITY | 2,601.1 | 2,363 | |
TOTAL LIABILITIES AND EQUITY | $ 5,511.4 | $ 5,128.5 | |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. | ||
[2] | Common stock, par value $0.01 per share, 179.8 million shares and 177.7 million shares issued at December 31, 2017 and 2016, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 179.8 | 177.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
OPERATING ACTIVITIES | ||||
Net income | $ 472.7 | $ 413.2 | $ 315.5 | |
Non-cash expense (income): | ||||
Depreciation | 98.6 | 94.6 | 93.5 | |
Amortization of intangibles | 31.7 | 28.1 | 21.6 | |
Stock-based compensation | 43 | 32 | 27.6 | |
Restructuring charges | (0.1) | 1 | ||
Loss (gain) on sale of property, plant and equipment | 0.9 | 1.2 | (0.5) | |
Loss on sale of product line | 2.4 | |||
Asset impairment charges | 15.3 | |||
Recognition of actuarial (gains) losses | (0.5) | 1.9 | 8.6 | |
Deferred taxes | (18.7) | (25.8) | (13.6) | |
Amortization of deferred financing costs | 2 | 3.6 | 0.6 | |
Changes in assets and liabilities including effects subsequent to acquisitions: | ||||
Decrease (increase) in accounts receivable | 1 | (39.1) | (6.9) | |
(Increase) decrease in inventories | (24.8) | 52.4 | (69.8) | |
Increase (decrease) in accounts payable | 24 | 57.6 | (16) | |
(Increase) decrease in other assets | (28.3) | 10.7 | (24.4) | |
(Decrease) increase in accrued taxes | (24.4) | 0.3 | 6.7 | |
Increase in accrued expenses and other liabilities | 5.4 | 19.9 | 68.6 | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 600.3 | 650.5 | 429.2 | |
INVESTING ACTIVITIES | ||||
Capital expenditures | [1] | (165) | (149.3) | (128.5) |
Proceeds from the disposition of assets | 0.4 | 3.9 | 2.5 | |
Proceeds from sale of product line | 1.5 | |||
Cost of acquisitions, net of cash acquired | (124.6) | (239.7) | (652.8) | |
NET CASH USED IN INVESTING ACTIVITIES | (287.7) | (385.1) | (766.6) | |
FINANCING ACTIVITIES | ||||
(Decrease) increase in short-term debt | (1.1) | 0.8 | ||
Issuance of long-term debt | 640 | 1,065 | 1,748.9 | |
Repayment of long-term debt | (565) | (805) | (1,250) | |
Proceeds from the exercise of stock options | 28.5 | 25.5 | 28.9 | |
Excess tax benefit from the exercise of stock-based compensation | 30.7 | |||
Employee withholding taxes paid related to stock-based compensation | (10.6) | (10.1) | (18.1) | |
Deferred acquisition payments | (17.9) | |||
Dividends to stockholders | (110.3) | (98.2) | (89.5) | |
Treasury stock purchases | (214.8) | (424.5) | (51.7) | |
Other financing activities, net | (2) | (1.2) | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (250.1) | (250.4) | 398.8 | |
Effect of foreign exchange rate changes on cash | 9 | (2) | (14.8) | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 71.5 | 13 | 46.6 | |
Cash and cash equivalents at beginning of year | 251.5 | 238.5 | 191.9 | |
Cash and cash equivalents at end of year | 323 | 251.5 | 238.5 | |
Cash paid during the year for: | ||||
Interest | 44.4 | 43.7 | 26 | |
Income taxes paid directly to taxing authorities | 169.7 | 172.1 | 102.2 | |
Income taxes (received from) paid to Fortune Brands, Inc. | (0.6) | 2 | ||
Dividends declared but not paid | $ 30.4 | $ 27.6 | 25.6 | |
Discontinued Operations [Member] | ||||
Non-cash expense (income): | ||||
Loss on sale of product line | 16.7 | |||
INVESTING ACTIVITIES | ||||
Proceeds from sale of product line | $ 12.2 | |||
[1] | Capital expenditures of $17.2 million, $11.9 million and $20.0 million that have not been paid as of December 31, 2017, 2016 and 2015, respectively, were excluded from the Statement of Cash Flows. |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capital expenditures incurred but not yet paid | $ 17.2 | $ 11.9 | $ 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, 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 ($0.58 per common share) in 2015, ($0.66 per common share) in 2016 and ($0.74 per common share) in 2017 | (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 |
Comprehensive income: | |||||||
Net income | 413.2 | 413.2 | |||||
Other comprehensive (loss) income | (19.4) | (19.4) | |||||
Stock options exercised | 25.5 | 25.5 | |||||
Stock-based compensation | 21.9 | 32 | (10.1) | ||||
Treasury stock purchase | (424.5) | (424.5) | |||||
Dividends ($0.58 per common share) in 2015, ($0.66 per common share) in 2016 and ($0.74 per common share) in 2017 | (100.2) | (100.2) | |||||
Dividends paid to noncontrolling interests | (1.4) | (1.4) | |||||
Other | (5.9) | (5.9) | |||||
Ending Balance at Dec. 31, 2016 | 2,363 | 1.7 | 2,653.8 | (71.9) | 814.6 | (1,036.7) | 1.5 |
Comprehensive income: | |||||||
Net income | 472.7 | 472.6 | 0.1 | ||||
Other comprehensive (loss) income | 32.7 | 32.7 | |||||
Stock options exercised | 28.5 | 28.5 | |||||
Stock-based compensation | 32 | 42.6 | (10.6) | ||||
Treasury stock purchase | (214.8) | (214.8) | |||||
Dividends ($0.58 per common share) in 2015, ($0.66 per common share) in 2016 and ($0.74 per common share) in 2017 | (113) | (113) | |||||
Ending Balance at Dec. 31, 2017 | $ 2,601.1 | $ 1.7 | $ 2,724.9 | $ (39.2) | $ 1,174.2 | $ (1,262.1) | $ 1.6 |
Consolidated Statements of Eq10
Consolidated Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends per Common share | $ 0.74 | $ 0.66 | $ 0.58 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
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. Basis of Presentation 10-K year-end year-end. In October 2017, we acquired Victoria +Albert, a UK-based UK-based In September 2016, we acquired ROHL LLC (“ROHL”) and in a related transaction, we acquired TCL Manufacturing which gave us ownership of Perrin & Rowe Limited (“Perrin & Rowe”), and in May 2016, we acquired Riobel Inc (“Riobel”). The financial results of ROHL, Perrin & Rowe and Riobel were included in the Company’s consolidated balance sheets as of December 31, 2017 and 2016, and in the Company’s consolidated statements of income and statements of cash flow beginning in September 2016 and May 2016, respectively. In September 2015, we completed the sale of Waterloo Industries, Inc. (“Waterloo”). 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 2015. In May 2015, we acquired Norcraft Companies, Inc. (“Norcraft”). The financial results of Norcraft were included in the Company’s consolidated statements of income and statements of cash flow beginning in May 2015 and the consolidated balance sheets as of December 31, 2017 and 2016. The cash flows from discontinued operations for 2017, 2016 and 2015 were not separately classified on the accompanying 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, 2017 | |
Significant Accounting Policies | 2. Significant Accounting Policies Use of Estimates Cash and Cash Equivalents Allowances for Doubtful Accounts Inventories first-in, first-out We also use the last-in, first-out 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 During 2017, we recorded an impairment of $5.1 million related to a long lived asset to be disposed of in selling, general and administrative expenses. 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 based on that difference, if any. 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 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 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 events and/or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: actual new construction and repair and remodel growth rates that lag our assumptions, actions of key customers, volatility of discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending and a decrease in royalty rates. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived intangible assets. 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 Insurance Reserves Litigation Contingencies Income Taxes In accordance with ASC requirements for Income Taxes, we establish deferred tax liabilities or assets for temporary differences between financial and tax reporting bases and subsequently adjust them to reflect changes in tax rates expected to be in effect when the temporary differences reverse. We record a valuation allowance reducing deferred tax assets when it is more likely than not that such assets will not be realized. We record liabilities for uncertain income tax positions based on a two-step On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued regarding the application of U.S. GAAP to situations where a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 on December 22, 2017 (the “Tax Act”). In accordance with SAB 118, we have calculated and included our best estimate of the impact of the Tax Act in our year end income tax provision. In accordance with our understanding of the Tax Act and guidance available, a provisional net tax benefit of $25.7 million was recorded in the fourth quarter of 2017. This provisional amount includes a tax benefit of $62.4 million due to the remeasurement of the Company’s net deferred tax liabilities, tax expense on deemed repatriation of foreign earnings of $28.5 million and tax expense of $8.2 million on foreign earnings not considered permanently reinvested. The impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, refinement of calculations due to additional analysis, changes in interpretations, assumptions made and additional guidance that may be issued. Any subsequent adjustment, related to the aforementioned, will be recorded in current tax expense when such analysis is completed or such guidance is issued. Revenue Recognition Cost of Products Sold Customer Program Costs Selling, General and Administrative Expenses Advertising costs, which amounted to $233.2 million, $199.1 million and $195.4 million in 2017, 2016 and 2015, respectively, are principally expensed as incurred. Advertising costs include product displays, marketing administration costs, media production costs and point of sale materials. Advertising costs recorded as a reduction to net sales, primarily cooperative advertising, were $65.6 million, $52.5 million and $63.2 million in 2017, 2016 and 2015, respectively. Advertising costs recorded in selling, general and administrative expenses were $167.6 million, $146.6 million and $132.2 million in 2017, 2016 and 2015, respectively. Research and development expenses include product development, product improvement, product engineering and process improvement costs. Research and development expenses, which were $50.7 million, $53.1 million and $48.7 million in 2017, 2016 and 2015, respectively, are expensed as incurred. Stock-based Compensation Earnings Per Share Foreign Currency Translation Derivative Financial Instruments Deferred currency gains/(losses) of $0.4 million, $(3.5) million and $3.6 million (before tax impact) were reclassified into earnings for the year ended December 31, 2017, 2016 and 2015, respectively. Based on foreign exchange rates as of December 31, 2017, we estimate that $3.0 million of net currency derivative losses included in AOCI as of December 31, 2017 will be reclassified to earnings within the next twelve months. Recently Issued Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, 2014-09 Leases In February 2016, the FASB issued ASU 2016-02, “right-of-use” Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets In May 2017, the FASB issued ASU 2017-05 that clarifies the scope and application of various standards for the sale of nonfinancial assets (e.g. PP&E including real estate, intangible assets, materials and supplies). The standard distinguishes between a sale to customer vs non-customer. Stock Compensation Scope of Modification Accounting In May 2017, the FASB issued ASU 2017-09, which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance provides a relief to entities that make non-substantive Presentation of Net Periodic Pension and Postretirement Cost In March 2017, the FASB issued ASU 2017-07, Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-01, Restricted Cash In November 2016, the FASB issued ASU 2016-18, Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16, Classification of Certain Cash Receipts and Cash Payments In September 2016 the FASB issued ASU 2016-15, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, available-for-sale Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12 Financial Instruments — Credit Losses In June 2016, the FASB issued ASU 2016-13, off-balance-sheet |
Balance Sheet Information
Balance Sheet Information | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Information | 3. Balance Sheet Information Supplemental information on our year-end (In millions) 2017 2016 Inventories: Raw materials and supplies $ 224.9 $ 207.6 Work in process 58.3 55.9 Finished products 297.6 267.6 Total inventories $ 580.8 $ 531.1 Property, plant and equipment: Land and improvements $ 58.7 $ 57.0 Buildings and improvements to leaseholds 464.1 429.4 Machinery and equipment 1,167.5 1,079.8 Construction in progress 90.1 64.5 Property, plant and equipment, gross 1,780.4 1,630.7 Less: accumulated depreciation 1,040.4 968.2 Property, plant and equipment, net of accumulated depreciation $ 740.0 $ 662.5 Other current liabilities: Accrued salaries, wages and other compensation $ 105.9 $ 112.6 Accrued customer programs 142.8 129.3 Accrued taxes 61.4 46.3 Dividends payable 30.4 27.6 Other accrued expenses 137.5 133.2 Total other current liabilities $ 478.0 $ 449.0 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions and Dispositions | 4. Acquisitions and Dispositions In October 2017, we acquired Victoria + Albert, a UK manufacturer of luxury freestanding tubs and basins. In July 2017, we acquired Shaws, a UK-based In April 2017, we completed the sale of Field ID, our cloud-based inspection and safety compliance software product line included in our Security segment. We recorded a pre-tax pre-tax In September 2016, we acquired ROHL, a California-based luxury plumbing company. In a related transaction, we also acquired Perrin & Rowe, a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. The total combined purchase price was approximately $166 million (including $3 million of liabilities assumed), subject to certain post-closing adjustments. We financed the transaction using cash on hand and borrowings under our existing credit facility. Net sales and operating income in the twelve months ended December 31, 2016 were not material to the Company. The results of operations are included in the Plumbing segment. The goodwill expected to be deductible for income tax purposes is approximately $49 million. In May 2016, we acquired Riobel, a Canadian plumbing company specializing in premium showroom bath and shower fittings, for a total purchase price of $94.6 million in cash, subject to certain post-closing adjustments. We financed the transaction using cash on hand and borrowings under our existing credit facility. Net sales and operating income in the twelve months ended December 31, 2016 were not material to the Company. The results of operations are included in the Plumbing segment. We do not expect any portion of goodwill to be deductible for income tax purposes. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2017 | |
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 after-tax In the twelve months ended December 31, 2017, the loss on discontinued operations is primarily related to the prior sale of the Waterloo tool storage and Simonton window businesses. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Identifiable Intangible Assets | 6. Goodwill and Identifiable Intangible Assets We had goodwill of $1,912.0 million and $1,833.8 million as of December 31, 2017 and 2016, respectively. The increase of $78.2 million was primarily due to the acquisitions of Shaws and Victoria + Albert . The change in the net carrying amount of goodwill by segment was as follows: (In millions) Cabinets Plumbing Doors Security Total Goodwill Balance at December 31, 2015 (a) $ 937.7 $ 578.6 $ 143.0 $ 96.0 $ 1,755.3 2016 translation adjustments 0.8 (2.3 ) — 0.3 (1.2 ) Acquisition-related adjustments (14.2 ) 93.9 — — 79.7 Balance at December 31, 2016 (a) $ 924.3 $ 670.2 $ 143.0 $ 96.3 $ 1,833.8 2017 translation adjustments 2.0 3.3 — 1.2 6.5 Acquisition-related adjustments — 71.7 — — 71.7 Balance at December 31, 2017 (a) $ 926.3 $ 745.2 $ 143.0 $ 97.5 $ 1,912.0 (a) Net of accumulated impairment losses of $399.5 million in the Doors segment. We also had identifiable intangible assets, principally tradenames, of $1,162.4 million and $1,107.0 million as of December 31, 2017 and 2016, respectively. The $88.2 million increase in gross identifiable intangible assets was primarily due to acquisition-related adjustments in our Plumbing segment (See Note 4) as well as foreign translation adjustments, partially offset by impairment charges during the first quarter of 2017 related to our decision to sell Field ID (See Note 4 and 7). The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2017 and 2016 were as follows: As of December 31, 2017 As of December 31, 2016 (In millions) Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived tradenames $ 709.9 $ — $ 709.9 $ 671.8 $ — $ 671.8 Amortizable intangible assets Tradenames 15.7 (9.9 ) 5.8 15.8 (7.3 ) 8.5 Customer and contractual relationships 663.8 (232.0 ) 431.8 611.9 (203.1 ) 408.8 Patents/proprietary technology 60.2 (45.3 ) 14.9 61.9 (44.0 ) 17.9 Total 739.7 (287.2 ) 452.5 689.6 (254.4 ) 435.2 Total identifiable intangibles $ 1,449.6 $ (287.2 ) $ 1,162.4 $ 1,361.4 $ (254.4 ) $ 1,107.0 Amortizable intangible assets, principally tradenames and customer relationships, are subject to amortization on a straight-line basis over their estimated useful life, ranging from 2 to 20 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 $33 million in 2018, $30 million in 2019, $30 million in 2020, $30 million in 2021, and $29 million in 2022. 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 2017, 2016 and 2015, we did not record any asset impairment charges associated with goodwill or indefinite-lived intangible assets. As of December 31, 2017, the fair value of two tradenames in the Cabinets segment exceeded their carrying value by less than 10%. Accordingly, a reduction in the estimated fair value of these tradenames could trigger an impairment. As of December 31, 2017, the total carrying value of these tradenames was $217.8 million. Factors influencing our fair value estimates of the tradenames are described in the following paragraph. The events and/or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: actual new construction and repair and remodel growth rates that lag our assumptions, actions of key customers, volatility of discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending, a decrease in royalty rates and decline in the trading price of our common stock. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived intangible assets. |
Asset Impairment Charges
Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2017 | |
Asset Impairment Charges | 7. Asset Impairment Charges In January 2017, we committed to a plan to sell Field ID, our cloud-based inspection and safety compliance software product line included in our Security segment. In accordance with FASB Accounting Standards Codification (“ASC”) 360, as a result of our decision to sell, during the first quarter of 2017 we recorded $3.2 million of pre-tax |
External Debt and Financing Arr
External Debt and Financing Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
External Debt and Financing Arrangements | 8. External Debt and Financing Arrangements In June 2016, the Company amended and restated its credit agreement to combine and rollover the existing revolving credit facility and term loan into a new standalone $1.25 billion revolving credit facility. This amendment and restatement of the credit agreement was a non-cash wrote-off 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 We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $23.5 million in aggregate, of which zero were outstanding, as of December 31, 2017 and 2016. The weighted-average interest rates on these borrowings were zero, 1.5% and 1.0% in 2017, 2016 and 2015 respectively. The components of external long-term debt were as follows: (In millions) 2017 2016 $400 million unsecured senior note due June 2020 $ 398.3 $ 397.6 $500 million unsecured senior note due June 2025 494.3 493.5 $1,250 million revolving credit agreement due June 2021 615.0 540.0 Total debt 1,507.6 1,431.1 Less: current portion — — Total long-term debt $ 1,507.6 $ 1,431.1 Senior Notes payments during the next five years as of December 31, 2017 are zero in 2018 through 2019, $400 million in 2020 and zero in 2021 through 2022. 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, 2017. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
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. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations. 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, 2017 and 2016. 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 changes in fair value for net investment hedges are recognized in the statement of income when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity. 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 British pound, and the Mexican peso. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at December 31, 2017 was $282.8 million, representing a net settlement liability of $4.8 million. Based on foreign exchange rates as of December 31, 2017, we estimate that $3.0 million of net foreign currency derivative losses included in OCI as of December 31, 2017 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, 2017 and 2016 were: Fair Value (In millions) Location 2017 2016 Assets: Foreign exchange contracts Other current assets $ 0.8 $ 2.8 Commodity contracts Other current assets 0.2 — Net investment hedges Other current assets — 0.6 Total assets $ 1.0 $ 3.4 Liabilities: Foreign exchange contracts Other current liabilities $ 5.6 $ 2.9 Net investment hedges Other current liabilities 0.8 0.2 Total liabilities $ 6.4 $ 3.1 The effects of derivative financial instruments on the consolidated statements of income in 2017, 2016 and 2015 were: (In millions) Gain (Loss) Recognized in Income Type of hedge Location 2017 2016 2015 Cash flow Cost of products sold $ 0.9 $ (3.5 ) $ 3.6 Fair value Other (income) expense, net (2.0 ) 2.0 8.2 Total $ (1.1 ) $ (1.5 ) $ 11.8 The effective portion of cash flow hedges recognized in other comprehensive income were net losses of $(1.8) million and $(6.7) million in 2017 and 2016, respectively. In the years ended December 31, 2017, 2016 and 2015, the ineffective portion of cash flow hedges recognized in other (income) expense, net, was insignificant. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | 10. Fair Value Measurements The carrying value and fair value of debt as of December 31, 2017 and 2016 were as follows: (In millions) December 31, 2017 December 31, 2016 Carrying Fair Carrying Fair Revolving credit facility $ 615.0 $ 615.0 $ 540.0 $ 540.0 Senior Notes, net of underwriting commissions and price discounts 892.6 926.3 891.1 919.2 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 Senior Notes is determined primarily using broker quotes, which are level 2 inputs. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 were as follows: (In millions) Fair Value 2017 2016 Assets: Derivative asset financial instruments (level 2) $ 1.0 $ 3.4 Deferred compensation program assets (level 2) 7.5 4.5 Total assets $ 8.5 $ 7.9 Liabilities: Derivative liability financial instruments (level 2) $ 6.4 $ 3.1 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. During the second quarter of 2016, we entered into a joint venture arrangement with a partner to operate a manufacturing facility in China. Under the arrangement, we are required to make certain fixed payments to our partner each year starting in June 2017 and through June 2024 (final year of the agreement) and also purchase the outstanding preferred shares of our partner in 2024. During the second quarter of 2016, we recognized the fair value of $8.2 million of these contractual payments, including a redemption of the preferred shares ($7.2 million within other non-current paid-in |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
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 2017 and 2016 were as follows: Common Shares Treasury Shares 2017 2016 2017 2016 Balance at the beginning of the year 153,412,050 159,906,032 24,305,930 15,293,877 Stock plan shares issued 2,068,746 2,518,071 — — Shares surrendered by optionees (180,537 ) (204,538 ) 180,537 204,538 Common stock repurchases (3,393,462 ) (8,807,515 ) 3,393,462 8,807,515 Balance at the end of the year 151,906,797 153,412,050 27,879,929 24,305,930 In December 2017, our Board of Directors increased the quarterly cash dividend by 11% to $0.20 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, 2017, 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 2017, we repurchased approximately 3.4 million shares of outstanding common stock under the Company’s share repurchase program at a cost of $214.8 million. As of December 31, 2017, the Company’s total remaining share repurchase authorization under the remaining program was approximately $558.4 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, 2017 | |
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, 2017 and 2016 were as follows: (In millions) Details about Accumulated Other Comprehensive Affected Line Item in the 2017 2016 Gains (losses) on cash flow hedges Foreign exchange contracts $ 0.4 $ (3.5 ) Cost of products sold Commodity contracts 0.5 — Cost of products sold 0.9 (3.5 ) Total before tax (0.1 ) — Tax expense $ 0.8 $ (3.5 ) Net of tax Defined benefit plan items Amortization of prior service cost $ 5.1 $ 13.5 (a) Recognition of actuarial gains (losses) 0.5 (1.9 ) (a) 5.6 11.6 Total before tax (2.0 ) (4.3 ) Tax expense $ 3.6 $ 7.3 Net of tax Total reclassifications for the period $ 4.4 $ 3.8 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. 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 (In millions) Foreign Derivative Hedging Gain Defined Plan Accumulated 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 ) Amounts classified into accumulated other comprehensive (loss) income (14.7 ) (6.2 ) 5.3 (15.6 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings — 3.5 (7.3 ) (3.8 ) Net current period other comprehensive (loss) income (14.7 ) (2.7 ) (2.0 ) (19.4 ) Balance at December 31, 2016 $ (28.0 ) $ (0.6 ) $ (43.3 ) $ (71.9 ) Amounts classified into accumulated other comprehensive (loss) income 33.8 (1.0 ) 4.3 37.1 Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (0.8 ) (3.6 ) (4.4 ) Net current period other comprehensive (loss) income 33.8 (1.8 ) 0.7 32.7 Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation | 13. Stock-Based Compensation As of December 31, 2017, 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”). Our stockholders approved the Plan in 2013, 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, 2017, approximately six 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 the required 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 stock options under the 2011 Plan that continue to be exercisable. Upon the exercise or payment of stock-based awards, shares of common stock are issued from authorized common shares. Pre-tax (In millions) 2017 2016 2015 Stock option awards $ 7.4 $ 7.2 $ 7.4 Restricted stock units 21.6 17.2 13.4 Performance awards 13.6 6.7 5.9 Director awards 1.0 0.9 0.9 Total pre-tax 43.6 32.0 27.6 Tax benefit 15.2 11.4 9.9 Total after tax expense $ 28.4 $ 20.6 $ 17.7 Included in compensation costs are cash-settled restricted stock units of $0.6 million that are classified as a liability. 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 through each vesting date. Restricted stock units granted to certain officers are also subject to attaining specific performance criteria. In addition, certain employees can elect to defer receipt of a portion of their RSU awards upon vesting. 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, 2017 was as follows: Number of Restricted Weighted-Average Non-vested 723,398 $ 49.22 Granted 408,608 58.59 Vested (338,988 ) 48.13 Forfeited (64,953 ) 53.56 Non-vested 728,065 $ 54.59 The remaining unrecognized pre-tax Stock Option Awards Stock options were granted to officers and certain 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: 2017 2016 2015 Current expected dividend yield 1.4% 1.4% 1.5% Expected volatility 26.0% 30.0% 27.0% Risk-free interest rate 1.9% 1.3% 1.8% Expected term 5.5 years 5.5 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. In 2017 and 2016, the expected term was determined based on the historical employee exercise behavior and the contractual term of the options. In 2015, the expected term was determined 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, 2017, 2016 and 2015 was $13.49, $12.70 and $11.58, respectively. A summary of Fortune Brands stock option activity related to Fortune Brands and employees of Fortune Brands, Inc., the Company from which we spun off from in 2011, for the year ended December 31, 2017 was as follows: Options Weighted- Outstanding at December 31, 2016 4,815,291 $ 27.34 Granted 603,230 58.43 Exercised (1,605,999 ) 17.73 Expired/forfeited (129,564 ) 37.02 Outstanding at December 31, 2017 3,682,958 $ 36.28 Options outstanding and exercisable at December 31, 2017 were as follows: Options Outstanding (a) Options Exercisable (b) Range Of Exercise Prices Options Weighted- Weighted- Options Weighted- $9.00 to $12.99 104,500 3.8 $ 12.30 104,500 $ 12.30 13.00 to 20.00 1,250,011 3.6 16.17 1,250,011 16.17 20.01 to 65.41 2,328,447 7.4 48.16 1,220,692 42.82 3,682,958 6.0 $ 36.28 2,575,203 $ 28.64 (a) At December 31, 2017, the aggregate intrinsic value of options outstanding was $118.4 million. (b) At December 31, 2017, the weighted-average remaining contractual life of options exercisable was 4.9 years and the aggregate intrinsic value of options exercisable was $102.5 million. The remaining unrecognized compensation cost related to unvested awards at December 31, 2017 was $6.0 million, and the weighted-average period of time over which this cost will be recognized is 1.4 years. The fair value of options that vested during the years ended December 31, 2017, 2016 and 2015 was $6.8 million, $6.0 million and $7.8 million, respectively. The intrinsic value of Fortune Brands stock options exercised in the years ended December 31, 2017, 2016 and 2015 was $70.6 million, $88.1 million and $78.0 million, respectively. Performance Awards Performance share awards were granted to officers and certain employees of the Company under the Plans and represent the right to earn shares of Company common stock based on the achievement of or company-wide performance conditions, including cumulative diluted earnings per share, average return on invested capital, average return on net tangible assets and EBITDA 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, 2017, as well as activity during the year then ended. The number of Performance share awards granted are shown below at the target award amounts: Number of Weighted-Average Grant-Date Non-vested 421,600 $ 48.00 Granted 160,196 58.02 Vested (95,183 ) 45.13 Forfeited (58,285 ) 48.22 Non-vested 428,328 $ 52.35 The remaining unrecognized pre-tax 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 2017, 2016 and 2015, we awarded 15,311, 16,471 and 19,695 shares of Company common stock to outside directors with a weighted average fair value on the date of the award of $63.43, $57.37 and $46.21, respectively. |
Defined Benefit Plans
Defined Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
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 these plans have been closed to new hires. The plans provide for payment of retirement benefits, mainly commencing between the ages of 55 and 65. 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. Service cost for 2017 relates to benefit accruals in an hourly Union defined benefit plan in our Security segment. Benefit accruals under all other defined benefit pension plans were frozen as of December 31, 2016. 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 2017 2016 2017 2016 Change in the Projected Benefit Obligation (PBO): Projected benefit obligation at beginning of year $ 791.7 $ 767.7 $ 3.6 $ 15.6 Service cost 0.6 9.6 — — Interest cost 33.3 34.4 — 0.3 Plan amendments — 0.1 — (12.3 ) Actuarial loss (gain) 40.6 11.7 (1.4 ) 1.6 Benefits paid (33.8 ) (31.8 ) (0.4 ) (1.6 ) Foreign exchange — — (0.2 ) — Projected benefit obligation at end of year $ 832.4 $ 791.7 $ 1.6 $ 3.6 Accumulated benefit obligation at end of year (excludes $ 832.4 $ 791.7 Change in Plan Assets: Fair value of plan assets at beginning of year $ 577.7 $ 561.9 $ — $ — Actual return on plan assets 83.2 46.6 — — Employer contributions 29.5 1.0 0.5 1.5 Benefits paid (33.8 ) (31.8 ) (0.5 ) (1.5 ) Fair value of plan assets at end of year $ 656.6 $ 577.7 $ — $ — Funded status (Fair value of plan assets less PBO) $ (175.8 ) $ (214.0 ) $ (1.6 ) $ (3.6 ) The accumulated benefit obligation exceeds the fair value of assets for all pension plans. Amounts recognized in the consolidated balance sheets consist of: Pension Benefits Postretirement Benefits (In millions) 2017 2016 2017 2016 Current benefit payment liability $ (1.1 ) $ (1.0 ) $ (0.2 ) $ (0.4 ) Accrued benefit liability (174.7 ) (213.0 ) (1.4 ) (3.2 ) Net amount recognized $ (175.8 ) $ (214.0 ) $ (1.6 ) $ (3.6 ) In the first quarter of 2013, the Company communicated a plan amendment to reduce health benefits to certain retired employees. Due to the risk of litigation at the time of the initial communication, the Company elected to defer the full recognition of the benefit arising from the plan amendment. Following a favorable court decision in the first quarter of 2016, the Company determined that it would realize the benefit from the plan amendment. As a result, the Company performed a re-measurement In the third quarter of 2015, we recognized actuarial losses of $6.1 million in discontinued operations related to curtailment accounting due to the sale of the Waterloo tool storage business in addition to the $2.5 million of actuarial losses reflected below in net periodic benefit cost. As of December 31, 2017, we adopted the new Society of Actuaries MP-2017 MP-2016 The amounts in accumulated other comprehensive loss 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 loss at December 31, 2015 $ 71.1 $ 0.3 Recognition of actuarial loss — (1.9 ) Current year actuarial loss 2.3 1.6 Net actuarial loss at December 31, 2016 $ 73.4 $ — Recognition of actuarial (loss) gain (0.9 ) 1.4 Current year actuarial gain (5.3 ) (1.4 ) Net actuarial loss at December 31, 2017 $ 67.2 $ — Net prior service cost (credit) at December 31, 2015 $ 0.1 $ (6.4 ) Prior service cost recognition due to plan amendments — (12.2 ) Amortization — 13.5 Prior service cost recognition due to curtailment (0.1 ) — Net prior service cost (credit) at December 31, 2016 $ — $ (5.1 ) Amortization — 5.1 Net prior service cost (credit) at December 31, 2017 $ — $ — Total at December 31, 2017 $ 67.2 $ — There are no accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. Components of net periodic benefit cost were as follows: Components of Net Periodic Benefit (Income) Cost Pension Benefits Postretirement Benefits (In millions) 2017 2016 2015 2017 2016 2015 Service cost $ 0.6 $ 9.6 $ 11.5 $ — $ — $ 0.1 Interest cost 33.3 34.4 33.7 — 0.3 0.6 Expected return on plan assets (37.3 ) (37.2 ) (40.2 ) — — — Recognition of actuarial losses (gains) 0.9 — 2.9 (1.4 ) 1.9 (0.4 ) Amortization of prior service cost (credits) — — 0.1 (5.1 ) (13.5 ) (13.5 ) Net periodic benefit (income) cost $ (2.5 ) $ 6.8 $ 8.0 $ (6.5 ) $ (11.3 ) $ (13.2 ) Assumptions Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Weighted-Average Assumptions Used to Discount rate 3.8% 4.3% 4.6% 3.4% 3.4% 4.1% Rate of compensation increase — 4.0% 4.0% — — — Weighted-Average Assumptions Used to Discount rate 4.3% 4.6% 4.2% 3.4% 4.1% 3.5% Expected long-term rate of return on plan assets 6.4% 6.6% 6.8% — — — Rate of compensation increase — 4.0% 4.0% — — — Postretirement Benefits 2017 2016 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 7.1/8.4 % (a) 7.3/8.2 % (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 2026 2025 (a) The pre-65 post-65 A one-percentage-point (In millions) 1-Percentage- Point Increase 1-Percentage- Point Decrease Effect on postretirement benefit obligation (0.1 ) 0.1 Plan Assets The fair value of the pension assets by major category of plan assets as of December 31, 2017 and 2016 were as follows: (In millions) Total as of 2017 2016 Group annuity/insurance contracts (level 3) $ 23.3 $ 22.8 Collective trusts: Cash and cash equivalents 12.5 6.9 Equity 285.9 258.8 Fixed income 277.7 235.4 Multi-strategy hedge funds 24.6 23.1 Real estate 32.6 30.7 Total $ 656.6 $ 577.7 A reconciliation of Level 3 measurements was as follows: Group annuity/ (In millions) 2017 2016 January 1 $ 22.8 $ 22.3 Actual return on assets related to assets still held 0.5 0.5 December 31 $ 23.3 $ 22.8 Our defined benefit plans Master Trust own a variety of investment assets. All of these investment assets, except for group annuity/insurance contracts are measured using net asset value per share as a practical expedient per ASC 820. Following the retrospective adoption of ASU 2015-07 The terms and conditions for redemptions vary for each class of the investment assets valued at net asset value per share as a practical expedient. Real estate assets may be redeemed quarterly with a 45 day redemption notice period. Investment assets in multi-strategy hedge funds may be redeemed semi-annually with a 95 day redemption notice period. Equity, fixed income and cash and cash equivalents have no specified redemption frequency and notice period and may be redeemed daily. As of December 31, 2017 we do not have an intent to sell or otherwise dispose of these investment assets at prices different than the net asset value per share. Our investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. The defined benefit asset allocation policy of the plans allow 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 of 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 2018 expected blended long-term rate of return on plan assets of 6.4% 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 2018 $ 37.4 $ 0.1 2019 39.1 0.1 2020 40.4 0.1 2021 41.6 0.1 2022 43.1 0.1 Years 2023-2027 229.9 0.3 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 $29.1 million, $22.7 million and $18.3 million in 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | 15. Income Taxes The components of income from continuing operations before income taxes and noncontrolling interests were as follows: (In millions) 2017 2016 2015 Domestic operations $ 554.7 $ 513.8 $ 387.7 Foreign operations 80.1 68.3 72.2 Income before income taxes and noncontrolling interests $ 634.8 $ 582.1 $ 459.9 A reconciliation of income taxes at the 35% federal statutory income tax rate to the income tax provision reported was as follows: (In millions) 2017 2016 2015 Income tax expense computed at federal statutory income tax rate $ 222.2 $ 203.7 $ 161.0 Other income taxes, net of federal tax benefit 13.4 12.6 9.4 Foreign taxes at a different rate than U.S. federal statutory income tax rate (8.3 ) (7.6 ) (8.7 ) Tax benefit on income attributable to domestic production activities (10.9 ) (13.0 ) (12.5 ) Net adjustments for uncertain tax positions 11.6 13.2 4.7 Share-based compensation (ASU 2016-09) (23.9 ) (27.8 ) — Tax Act impact (25.7 ) — — Deferred tax impact of state tax rate changes (2.0 ) (1.1 ) 0.2 Valuation allowance increase (decrease) (5.2 ) (2.1 ) 0.8 Miscellaneous other, net (11.7 ) (8.2 ) (1.5 ) Income tax expense as reported $ 159.5 $ 169.7 $ 153.4 Effective income tax rate 25.1 % 29.2 % 33.4 % The 2017 effective income tax rate was favorably impacted by The Tax Cuts and Jobs Act of 2017, (the “Tax Act”). The effective income tax rates for 2017, 2016 and 2015 were favorably impacted by the tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction and favorable tax rates in foreign jurisdictions, partially offset by state and local taxes and increases to uncertain tax positions. In addition, the 2017 and 2016 effective income tax rates were favorably impacted by a tax benefit related to share-based compensation. 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. The 2015 effective income tax rate was unfavorably impacted by $2.4 million related to nondeductible acquisition costs. The Tax Act made significant changes to the U.S. Internal Revenue Code including a reduction in the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, generally providing for an exemption from federal income tax for dividends received from foreign subsidiaries, and imposing a one-time A reconciliation of the beginning and ending amount of unrecognized tax benefits (“UTBs”) was as follows: (In millions) 2017 2016 2015 Unrecognized tax benefits — beginning of year $ 58.2 $ 38.2 $ 31.0 Gross additions — current year tax positions 31.0 10.7 4.6 Gross additions — prior year tax positions 10.9 10.4 8.3 Gross additions (reductions) — purchase accounting adjustments 4.0 9.7 0.1 Gross reductions — prior year tax positions (9.4 ) (9.8 ) (2.1 ) Gross reductions — settlements with taxing authorities (7.2 ) (1.0 ) (3.6 ) Impact of change in foreign exchange rates (0.0 ) (0.0 ) (0.1 ) Unrecognized tax benefits — end of year $ 87.5 $ 58.2 $ 38.2 The amount of UTBs that, if recognized as of December 31, 2017, would affect the Company’s effective tax rate was $53.0 million. It is reasonably possible that, within the next twelve months, total UTBs may decrease in the range of $1.5 million to $21.5 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 2017, we recognized an interest and penalty expense of approximately $2.0 million. In 2016, we recognized an interest and penalty expense of approximately $1.1 million. In 2015, we recognized an interest and penalty expense of approximately $1.0 million. At December 31, 2017 and 2016, we had accruals for the payment of interest and penalties of $11.8 million and $11.0 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 2013 through 2015, and is open and subject to examination for subsequent tax years. In addition to the U.S., we have tax years that remain open and subject to examination by tax authorities in the following major taxing jurisdictions: Canada for years after 2012, Mexico for years after 2011 and China for years after 2013. Income taxes in 2017, 2016 and 2015 were as follows: (In millions) 2017 2016 2015 Current Federal $ 133.1 $ 150.4 $ 130.6 Foreign 22.4 22.3 19.7 State and other 22.8 22.9 16.1 Deferred Federal, state and other (27.2 ) (23.9 ) (11.3 ) Foreign 8.4 (2.0 ) (1.7 ) Total income tax expense $ 159.5 $ 169.7 $ 153.4 The components of net deferred tax assets (liabilities) as of December 31, 2017 and 2016 were as follows: (In millions) 2017 2016 Deferred tax assets: Compensation and benefits $ 22.1 $ 56.1 Defined benefit plans 43.7 82.5 Capitalized inventories 11.1 13.6 Accounts receivable 7.8 10.3 Other accrued expenses 45.6 41.4 Net operating loss and other tax carryforwards 25.6 39.7 Valuation allowance (11.0 ) (16.4 ) Miscellaneous 3.7 2.5 Total deferred tax assets 148.6 229.7 Deferred tax liabilities: LIFO inventories (4.2 ) (6.7 ) Fixed assets (44.5 ) (57.1 ) Intangible assets (232.0 ) (210.4 ) Investment in partnership (9.2 ) (109.3 ) Miscellaneous (16.1 ) (0.2 ) Total deferred tax liabilities (306.0 ) (383.7 ) Net deferred tax liability $ (157.4 ) $ (154.0 ) In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2017 and 2016 as follows: (In millions) 2017 2016 Other assets $ 9.4 $ 9.5 Deferred income taxes (166.8 ) (163.5 ) Net deferred tax liability $ (157.4 ) $ (154.0 ) As of December 31, 2017 and 2016, the Company had deferred tax assets relating to net operating losses, capital losses, and other tax carryforwards of $25.6 million and $39.7 million, respectively, of which approximately $8.3 million will expire between 2018 and 2022, and the remainder of which will expire in 2023 and thereafter. 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. Under the Tax Act, the accumulated foreign earnings and profits of the Company’s foreign subsidiaries are subject to a deemed repatriation tax and should not be subject to additional U.S. federal income tax upon an actual repatriation of those earnings. As a result, the Company has recorded an estimated tax liability of $9.6 million for foreign and state taxes that would be payable on a distribution of those earnings and profits. We have not provided for deferred taxes on the remaining book over tax outside basis differences of our foreign subsidiaries. The outside basis differences of foreign subsidiaries considered indefinitely reinvested totaled approximately $50 million at December 31, 2017. The associated deferred tax liability on this basis difference would not be material. |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Other Charges | 16. Restructuring and Other Charges Pre-tax Year Ended December 31, 2017 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.4 $ 1.6 $ 2.2 $ 5.2 Plumbing 2.8 — — 2.8 Doors (0.1 ) — 0.1 — Security 4.2 5.6 0.7 10.5 Total $ 8.3 $ 7.2 $ 3.0 $ 18.5 (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, write-off of displays from exiting a customer relationship, 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 of $18.5 million before tax ($12.3 million after tax) in 2017, primarily related to losses on disposal of inventory associated with exiting a product line in our Security segment and exiting a customer relationship in our Cabinets segment, as well as severance costs within our Security, Plumbing and Cabinets segments. Pre-tax Year Ended December 31, 2016 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.8 $ — $ — $ 1.8 Plumbing 1.6 0.3 0.2 2.1 Doors 0.4 — — 0.4 Security 10.1 4.2 0.7 15.0 Total $ 13.9 $ 4.5 $ 0.9 $ 19.3 (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 2016 primarily related to severance costs and charges associated with the relocation of a manufacturing facility within our Security segment. Pre-tax 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, Cabinets and Corporate segments. Reconciliation of Restructuring Liability (In millions) Balance at 12/31/16 2017 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 12/31/17 Workforce reduction costs $ 2.4 $ 6.7 $ (3.9 ) $ (0.2 ) $ 5.0 Other 0.6 1.6 (1.3 ) (0.1 ) 0.8 $ 3.0 $ 8.3 $ (5.2 ) $ (0.3 ) $ 5.8 (a) Cash expenditures primarily related to severance charges. (b) Non-cash (In millions) Balance at 12/31/15 2016 Provision Cash Expenditures (c) Non-Cash Write-offs (d) Balance at 12/31/16 Workforce reduction costs $ 10.4 $ 9.3 $ (17.5 ) $ 0.2 $ 2.4 Asset disposals — 0.1 — (0.1 ) — Other 0.5 4.5 (4.1 ) (0.3 ) 0.6 $ 10.9 $ 13.9 $ (21.6 ) $ (0.2 ) $ 3.0 (c) Cash expenditures primarily related to severance charges. (d) Non-cash |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments | 17. Commitments Purchase Obligations Purchase obligations of the Company as of December 31, 2017 were $397.3 million, of which $371.3 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 (In millions) 2018 $ 31.0 2019 26.9 2020 20.7 2021 15.9 2022 13.0 Remainder 50.7 Total minimum rental payments $ 158.2 Total rental expense for all operating leases (reduced by minor amounts from subleases) amounted to $42.1 million, $43.5 million and $34.9 million in 2017, 2016 and 2015, respectively. Product Warranties We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on 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, 2017, 2016 and 2015. (In millions) 2017 2016 2015 Reserve balance at the beginning of the year $ 16.2 $ 16.0 $ 13.0 Provision for warranties issued 25.1 25.8 29.9 Settlements made (in cash or in kind) (24.3 ) (25.5 ) (28.3 ) Acquisition — 0.3 1.6 Foreign currency 0.2 (0.4 ) (0.2 ) Reserve balance at end of year $ 17.2 $ 16.2 $ 16.0 |
Information on Business Segment
Information on Business Segments | 12 Months Ended |
Dec. 31, 2017 | |
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, Mid-Continent, Therma-Tru The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe. (In millions) 2017 2016 2015 Net sales: Cabinets $ 2,467.1 $ 2,397.8 $ 2,173.4 Plumbing 1,720.8 1,534.4 1,414.5 Doors 502.9 473.0 439.1 Security 592.5 579.7 552.4 Net sales $ 5,283.3 $ 4,984.9 $ 4,579.4 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 2017, 2016 and 2015. All segments sell to both The Home Depot and Lowe’s. Net sales to The Home Depot were 13%, 13% and 14% of net sales in 2017, 2016 and 2015, respectively. Net sales to Lowe’s were 14%, 14% and 14% of net sales in 2017, 2016 and 2015, respectively. (In millions) 2017 2016 2015 Operating income: Cabinets $ 267.2 $ 257.8 $ 192.4 Plumbing 363.6 326.3 285.4 Doors 74.5 61.9 44.0 Security 72.4 66.6 55.9 Less: Corporate expenses (a) (85.6 ) (79.9 ) (81.6 ) Operating income $ 692.1 $ 632.7 $ 496.1 (a) General and administrative expense $ (85.2 ) $ (80.9 ) $ (70.1 ) Defined benefit plan income 4.2 2.9 6.1 Recognition of defined benefit plan actuarial gains (losses) 0.5 (1.9 ) (2.5 ) Long-lived asset impairment (5.1 ) — — Norcraft transaction costs (b) — — (15.1 ) Total Corporate expenses $ (85.6 ) $ (79.9 ) $ (81.6 ) (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) 2017 2016 2015 Total assets: Cabinets $ 2,416.3 $ 2,349.4 $ 2,364.0 Plumbing 1,854.1 1,626.8 1,341.4 Doors 494.8 480.6 483.9 Security 537.4 514.5 520.7 Corporate 208.8 157.2 165.7 Total assets $ 5,511.4 $ 5,128.5 $ 4,875.7 Depreciation expense: Cabinets $ 42.8 $ 40.1 $ 38.1 Plumbing 26.9 24.6 21.3 Doors 9.1 9.0 11.2 Security 16.8 17.2 19.5 Corporate 3.0 3.7 3.4 Depreciation expense $ 98.6 $ 94.6 $ 93.5 Amortization of intangible assets: Cabinets $ 19.7 $ 18.4 $ 14.3 Plumbing 7.7 3.6 1.2 Doors 2.3 3.8 3.8 Security 2.0 2.3 2.3 Amortization of intangible assets $ 31.7 $ 28.1 $ 21.6 Capital expenditures: Cabinets $ 63.4 $ 61.7 $ 61.3 Plumbing 43.5 48.3 27.2 Doors 20.8 12.9 13.3 Security 19.3 25.9 17.3 Corporate 18.0 0.5 9.4 Capital expenditures, gross 165.0 149.3 128.5 Less: proceeds from disposition of assets (0.4 ) (3.9 ) (2.5 ) Capital expenditures, net $ 164.6 $ 145.4 $ 126.0 Net sales by geographic region (a) United States $ 4,492.2 $ 4,258.5 $ 3,892.9 Canada 427.6 406.4 385.1 China 202.3 175.0 163.2 Other international 161.2 145.0 138.2 Net sales $ 5,283.3 $ 4,984.9 $ 4,579.4 Property, plant and equipment, net: United States $ 562.3 $ 499.8 $ 498.9 Mexico 89.0 90.8 74.2 Canada 50.5 45.5 39.4 China 24.8 22.7 14.4 Other international 13.4 3.7 1.0 Property, plant and equipment, net $ 740.0 $ 662.5 $ 627.9 (a) Based on country of destination |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data | 19. Quarterly Financial Data Unaudited (In millions, except per share amounts) 2017 1 st 2 nd 3 rd 4 th Full Year Net sales $ 1,186.8 $ 1,365.4 $ 1,348.6 $ 1,382.5 $ 5,283.3 Gross profit 417.0 515.5 507.0 493.0 1,932.5 Operating income 114.9 212.4 201.8 163.0 692.1 Income from continuing operations, net of tax 77.4 140.3 129.6 128.0 475.3 Income (loss) from discontinued operations, net of tax — (2.6 ) — — (2.6 ) Net income 77.4 137.7 129.6 128.0 472.7 Net income attributable to Fortune Brands 77.4 137.7 129.5 128.0 472.6 Basic earnings (loss) per common share Continuing operations 0.50 0.91 0.84 0.84 3.10 Discontinued operations — (0.02 ) — — (0.02 ) Net income attributable to Fortune Brands 0.50 0.89 0.84 0.84 3.08 Diluted earnings (loss) per common share Continuing operations 0.50 0.90 0.83 0.83 3.05 Discontinued operations — (0.02 ) — — (0.02 ) Net income attributable to Fortune Brands 0.50 0.88 0.83 0.83 3.03 2016 1 st(a) 2 nd 3 rd 4 th Full Year Net sales $ 1,106.5 $ 1,297.8 $ 1,279.0 $ 1,301.6 $ 4,984.9 Gross profit 377.8 474.7 478.0 474.1 1,804.6 Operating income 95.5 187.7 183.1 166.4 632.7 Income from continuing operations, net of tax 61.0 125.1 121.9 104.4 412.4 Income (loss) from discontinued operations, net of tax — — 1.5 (0.7 ) 0.8 Net income 61.0 125.1 123.4 103.7 413.2 Net income attributable to Fortune Brands 61.0 125.2 123.4 103.6 413.2 Basic earnings (loss) per common share Continuing operations 0.39 0.82 0.79 0.68 2.67 Discontinued operations — — 0.01 (0.01 ) 0.01 Net income attributable to Fortune Brands 0.39 0.82 0.80 0.67 2.68 Diluted earnings (loss) per common share Continuing operations 0.38 0.80 0.77 0.67 2.61 Discontinued operations — — 0.01 (0.01 ) 0.01 Net income attributable to Fortune Brands 0.38 0.80 0.78 0.66 2.62 (a) Amounts revised to reflect adoption of ASU 2016-09 In 2017, we recorded pre-tax In 2016, we recorded pre-tax |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | 20. Earnings Per Share The computations of earnings (loss) per common share were as follows: (In millions, except per share data) 2017 2016 2015 Income from continuing operations, net of tax $ 475.3 $ 412.4 $ 306.5 Less: Noncontrolling interests 0.1 — 0.5 Income from continuing operations for EPS 475.2 412.4 306.0 Income (loss) from discontinued operations (2.6 ) 0.8 9.0 Net income attributable to Fortune Brands $ 472.6 $ 413.2 $ 315.0 Earnings (loss) per common share Basic Continuing operations $ 3.10 $ 2.67 $ 1.92 Discontinued operations (0.02 ) 0.01 0.05 Net income attributable to Fortune Brands common stockholders $ 3.08 $ 2.68 $ 1.97 Diluted Continuing operations $ 3.05 $ 2.61 $ 1.88 Discontinued operations (0.02 ) 0.01 0.05 Net income attributable to Fortune Brands common stockholders $ 3.03 $ 2.62 $ 1.93 Basic average shares outstanding 153.2 154.3 159.5 Stock-based awards 2.6 3.5 3.5 Diluted average shares outstanding 155.8 157.8 163.0 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.5 0.5 0.7 |
Other Expense, Net
Other Expense, Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Expense, Net | 21. Other Expense, Net The components of other expense, net for the years ended December 31, 2017, 2016 and 2015 were as follows: (In millions) 2017 2016 2015 Asset impairment charge $ 7.0 $ — $ — Other items, net 0.9 1.5 4.3 Total other expense, net $ 7.9 $ 1.5 $ 4.3 During 2017, we recorded an impairment charge of $7.0 million pertaining to a cost method investment in a development stage home products company due to an other-than-temporary decline in its fair value. As a result of the impairment, the carrying value of the investment 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, 2017 | |
Contingencies | 22. Contingencies Litigation The Company is a defendant in lawsuits that are ordinary routine litigation matters incidental to its businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company’s results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly the Company believes the likelihood of material loss is remote. 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 (“PRPs”) under “Superfund” or similar state laws. As of December 31, 2016, eleven such instances have not been dismissed, settled or otherwise resolved. In calendar year 2017, none of our subsidiaries were identified as a PRP in a new instance and no instances were settled, dismissed or otherwise resolved. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other PRPs or insurance, will not have an adverse effect on our results of operations, cash flows or financial condition. At December 31, 2017 and 2016, we had accruals of $0.7 million and $1.0 million, respectively, relating to environmental compliance and cleanup including, but not limited to, the above mentioned Superfund sites. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts For the years ended December 31, 2017, 2016 and 2015 (In millions) Balance at Charged to Reclassifications (c) Write-offs (a) Business (b) Balance at 2017: Allowance for cash discounts, returns and sales allowances $ 68.2 $ 205.7 $ 3.0 $ 192.9 $ — $ 84.0 Allowance for doubtful accounts 7.4 0.2 — 4.5 0.2 3.3 Allowance for deferred tax assets 16.4 (5.4 ) — — — 11.0 2016: Allowance for cash discounts, returns and sales allowances $ 50.3 $ 148.6 $ — $ 130.7 $ — $ 68.2 Allowance for doubtful accounts 5.8 4.3 — 2.7 — 7.4 Allowance for deferred tax assets 19.7 (3.3 ) — — — 16.4 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 (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) (c) Represents a reclassification of certain customer program liabilities to sales allowances (reduction to accounts receivable) in Security segment during 2017. |
Significant Accounting Polici34
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts |
Inventories | Inventories first-in, first-out We also use the last-in, first-out |
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 During 2017, we recorded an impairment of $5.1 million related to a long lived asset to be disposed of in selling, general and administrative expenses. |
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 based on that difference, if any. 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 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 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 events and/or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: actual new construction and repair and remodel growth rates that lag our assumptions, actions of key customers, volatility of discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending and a decrease in royalty rates. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived intangible assets. |
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 |
Insurance Reserves | Insurance Reserves |
Litigation Contingencies | Litigation Contingencies |
Income Taxes | Income Taxes In accordance with ASC requirements for Income Taxes, we establish deferred tax liabilities or assets for temporary differences between financial and tax reporting bases and subsequently adjust them to reflect changes in tax rates expected to be in effect when the temporary differences reverse. We record a valuation allowance reducing deferred tax assets when it is more likely than not that such assets will not be realized. We record liabilities for uncertain income tax positions based on a two-step On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued regarding the application of U.S. GAAP to situations where a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 on December 22, 2017 (the “Tax Act”). In accordance with SAB 118, we have calculated and included our best estimate of the impact of the Tax Act in our year end income tax provision. In accordance with our understanding of the Tax Act and guidance available, a provisional net tax benefit of $25.7 million was recorded in the fourth quarter of 2017. This provisional amount includes a tax benefit of $62.4 million due to the remeasurement of the Company’s net deferred tax liabilities, tax expense on deemed repatriation of foreign earnings of $28.5 million and tax expense of $8.2 million on foreign earnings not considered permanently reinvested. The impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, refinement of calculations due to additional analysis, changes in interpretations, assumptions made and additional guidance that may be issued. Any subsequent adjustment, related to the aforementioned, will be recorded in current tax expense when such analysis is completed or such guidance is issued. |
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 $233.2 million, $199.1 million and $195.4 million in 2017, 2016 and 2015, respectively, are principally expensed as incurred. Advertising costs include product displays, marketing administration costs, media production costs and point of sale materials. Advertising costs recorded as a reduction to net sales, primarily cooperative advertising, were $65.6 million, $52.5 million and $63.2 million in 2017, 2016 and 2015, respectively. Advertising costs recorded in selling, general and administrative expenses were $167.6 million, $146.6 million and $132.2 million in 2017, 2016 and 2015, respectively. Research and development expenses include product development, product improvement, product engineering and process improvement costs. Research and development expenses, which were $50.7 million, $53.1 million and $48.7 million in 2017, 2016 and 2015, 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 Deferred currency gains/(losses) of $0.4 million, $(3.5) million and $3.6 million (before tax impact) were reclassified into earnings for the year ended December 31, 2017, 2016 and 2015, respectively. Based on foreign exchange rates as of December 31, 2017, we estimate that $3.0 million of net currency derivative losses included in AOCI as of December 31, 2017 will be reclassified to earnings within the next twelve months. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, 2014-09 Leases In February 2016, the FASB issued ASU 2016-02, “right-of-use” Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets In May 2017, the FASB issued ASU 2017-05 that clarifies the scope and application of various standards for the sale of nonfinancial assets (e.g. PP&E including real estate, intangible assets, materials and supplies). The standard distinguishes between a sale to customer vs non-customer. Stock Compensation Scope of Modification Accounting In May 2017, the FASB issued ASU 2017-09, which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance provides a relief to entities that make non-substantive Presentation of Net Periodic Pension and Postretirement Cost In March 2017, the FASB issued ASU 2017-07, Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-01, Restricted Cash In November 2016, the FASB issued ASU 2016-18, Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16, Classification of Certain Cash Receipts and Cash Payments In September 2016 the FASB issued ASU 2016-15, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, available-for-sale Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12 Financial Instruments — Credit Losses In June 2016, the FASB issued ASU 2016-13, off-balance-sheet |
Significant Accounting Polici35
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 | |
Supplemental Information on Balance Sheets | Supplemental information on our year-end (In millions) 2017 2016 Inventories: Raw materials and supplies $ 224.9 $ 207.6 Work in process 58.3 55.9 Finished products 297.6 267.6 Total inventories $ 580.8 $ 531.1 Property, plant and equipment: Land and improvements $ 58.7 $ 57.0 Buildings and improvements to leaseholds 464.1 429.4 Machinery and equipment 1,167.5 1,079.8 Construction in progress 90.1 64.5 Property, plant and equipment, gross 1,780.4 1,630.7 Less: accumulated depreciation 1,040.4 968.2 Property, plant and equipment, net of accumulated depreciation $ 740.0 $ 662.5 Other current liabilities: Accrued salaries, wages and other compensation $ 105.9 $ 112.6 Accrued customer programs 142.8 129.3 Accrued taxes 61.4 46.3 Dividends payable 30.4 27.6 Other accrued expenses 137.5 133.2 Total other current liabilities $ 478.0 $ 449.0 |
Goodwill and Identifiable Int37
Goodwill and Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) Cabinets Plumbing Doors Security Total Goodwill Balance at December 31, 2015 (a) $ 937.7 $ 578.6 $ 143.0 $ 96.0 $ 1,755.3 2016 translation adjustments 0.8 (2.3 ) — 0.3 (1.2 ) Acquisition-related adjustments (14.2 ) 93.9 — — 79.7 Balance at December 31, 2016 (a) $ 924.3 $ 670.2 $ 143.0 $ 96.3 $ 1,833.8 2017 translation adjustments 2.0 3.3 — 1.2 6.5 Acquisition-related adjustments — 71.7 — — 71.7 Balance at December 31, 2017 (a) $ 926.3 $ 745.2 $ 143.0 $ 97.5 $ 1,912.0 (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, 2017 and 2016 were as follows: As of December 31, 2017 As of December 31, 2016 (In millions) Gross Accumulated Net Book Gross Accumulated Net Book Indefinite-lived tradenames $ 709.9 $ — $ 709.9 $ 671.8 $ — $ 671.8 Amortizable intangible assets Tradenames 15.7 (9.9 ) 5.8 15.8 (7.3 ) 8.5 Customer and contractual relationships 663.8 (232.0 ) 431.8 611.9 (203.1 ) 408.8 Patents/proprietary technology 60.2 (45.3 ) 14.9 61.9 (44.0 ) 17.9 Total 739.7 (287.2 ) 452.5 689.6 (254.4 ) 435.2 Total identifiable intangibles $ 1,449.6 $ (287.2 ) $ 1,162.4 $ 1,361.4 $ (254.4 ) $ 1,107.0 |
External Debt and Financing A38
External Debt and Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Components of External Long-Term Debt | The components of external long-term debt were as follows: (In millions) 2017 2016 $400 million unsecured senior note due June 2020 $ 398.3 $ 397.6 $500 million unsecured senior note due June 2025 494.3 493.5 $1,250 million revolving credit agreement due June 2021 615.0 540.0 Total debt 1,507.6 1,431.1 Less: current portion — — Total long-term debt $ 1,507.6 $ 1,431.1 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Values of Derivative Instruments | The fair values of foreign exchange and commodity derivative instruments on the consolidated balance sheets as of December 31, 2017 and 2016 were: Fair Value (In millions) Location 2017 2016 Assets: Foreign exchange contracts Other current assets $ 0.8 $ 2.8 Commodity contracts Other current assets 0.2 — Net investment hedges Other current assets — 0.6 Total assets $ 1.0 $ 3.4 Liabilities: Foreign exchange contracts Other current liabilities $ 5.6 $ 2.9 Net investment hedges Other current liabilities 0.8 0.2 Total liabilities $ 6.4 $ 3.1 |
Effects of Derivative Financial Instruments on Consolidated Statements of Income | The effects of derivative financial instruments on the consolidated statements of income in 2017, 2016 and 2015 were: (In millions) Gain (Loss) Recognized in Income Type of hedge Location 2017 2016 2015 Cash flow Cost of products sold $ 0.9 $ (3.5 ) $ 3.6 Fair value Other (income) expense, net (2.0 ) 2.0 8.2 Total $ (1.1 ) $ (1.5 ) $ 11.8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Carrying Value and Fair Value of Debt | The carrying value and fair value of debt as of December 31, 2017 and 2016 were as follows: (In millions) December 31, 2017 December 31, 2016 Carrying Fair Carrying Fair Revolving credit facility $ 615.0 $ 615.0 $ 540.0 $ 540.0 Senior Notes, net of underwriting commissions and price discounts 892.6 926.3 891.1 919.2 |
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, 2017 and 2016 were as follows: (In millions) Fair Value 2017 2016 Assets: Derivative asset financial instruments (level 2) $ 1.0 $ 3.4 Deferred compensation program assets (level 2) 7.5 4.5 Total assets $ 8.5 $ 7.9 Liabilities: Derivative liability financial instruments (level 2) $ 6.4 $ 3.1 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Common Stock and Treasury Stock Activity | The number of shares of common stock and treasury stock and the share activity for 2017 and 2016 were as follows: Common Shares Treasury Shares 2017 2016 2017 2016 Balance at the beginning of the year 153,412,050 159,906,032 24,305,930 15,293,877 Stock plan shares issued 2,068,746 2,518,071 — — Shares surrendered by optionees (180,537 ) (204,538 ) 180,537 204,538 Common stock repurchases (3,393,462 ) (8,807,515 ) 3,393,462 8,807,515 Balance at the end of the year 151,906,797 153,412,050 27,879,929 24,305,930 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income | The reclassifications out of accumulated other comprehensive (loss) income for the year ended December 31, 2017 and 2016 were as follows: (In millions) Details about Accumulated Other Comprehensive Affected Line Item in the 2017 2016 Gains (losses) on cash flow hedges Foreign exchange contracts $ 0.4 $ (3.5 ) Cost of products sold Commodity contracts 0.5 — Cost of products sold 0.9 (3.5 ) Total before tax (0.1 ) — Tax expense $ 0.8 $ (3.5 ) Net of tax Defined benefit plan items Amortization of prior service cost $ 5.1 $ 13.5 (a) Recognition of actuarial gains (losses) 0.5 (1.9 ) (a) 5.6 11.6 Total before tax (2.0 ) (4.3 ) Tax expense $ 3.6 $ 7.3 Net of tax Total reclassifications for the period $ 4.4 $ 3.8 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. |
After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income | The after-tax (In millions) Foreign Derivative Hedging Gain Defined Plan Accumulated 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 ) Amounts classified into accumulated other comprehensive (loss) income (14.7 ) (6.2 ) 5.3 (15.6 ) Amounts reclassified from accumulated other comprehensive (loss) income into earnings — 3.5 (7.3 ) (3.8 ) Net current period other comprehensive (loss) income (14.7 ) (2.7 ) (2.0 ) (19.4 ) Balance at December 31, 2016 $ (28.0 ) $ (0.6 ) $ (43.3 ) $ (71.9 ) Amounts classified into accumulated other comprehensive (loss) income 33.8 (1.0 ) 4.3 37.1 Amounts reclassified from accumulated other comprehensive (loss) income into earnings — (0.8 ) (3.6 ) (4.4 ) Net current period other comprehensive (loss) income 33.8 (1.8 ) 0.7 32.7 Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pre-Tax Stock-Based Compensation Expense from Continuing Operations | Pre-tax (In millions) 2017 2016 2015 Stock option awards $ 7.4 $ 7.2 $ 7.4 Restricted stock units 21.6 17.2 13.4 Performance awards 13.6 6.7 5.9 Director awards 1.0 0.9 0.9 Total pre-tax 43.6 32.0 27.6 Tax benefit 15.2 11.4 9.9 Total after tax expense $ 28.4 $ 20.6 $ 17.7 |
Restricted Stock Units Activity | A summary of activity with respect to restricted stock units outstanding under the Plans for the year ended December 31, 2017 was as follows: Number of Restricted Weighted-Average Non-vested 723,398 $ 49.22 Granted 408,608 58.59 Vested (338,988 ) 48.13 Forfeited (64,953 ) 53.56 Non-vested 728,065 $ 54.59 |
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: 2017 2016 2015 Current expected dividend yield 1.4% 1.4% 1.5% Expected volatility 26.0% 30.0% 27.0% Risk-free interest rate 1.9% 1.3% 1.8% Expected term 5.5 years 5.5 years 6 years |
Stock Option Activity | A summary of Fortune Brands stock option activity related to Fortune Brands and employees of Fortune Brands, Inc., the Company from which we spun off from in 2011, for the year ended December 31, 2017 was as follows: Options Weighted- Outstanding at December 31, 2016 4,815,291 $ 27.34 Granted 603,230 58.43 Exercised (1,605,999 ) 17.73 Expired/forfeited (129,564 ) 37.02 Outstanding at December 31, 2017 3,682,958 $ 36.28 |
Options Outstanding and Exercisable | Options outstanding and exercisable at December 31, 2017 were as follows: Options Outstanding (a) Options Exercisable (b) Range Of Exercise Prices Options Weighted- Weighted- Options Weighted- $9.00 to $12.99 104,500 3.8 $ 12.30 104,500 $ 12.30 13.00 to 20.00 1,250,011 3.6 16.17 1,250,011 16.17 20.01 to 65.41 2,328,447 7.4 48.16 1,220,692 42.82 3,682,958 6.0 $ 36.28 2,575,203 $ 28.64 (a) At December 31, 2017, the aggregate intrinsic value of options outstanding was $118.4 million. (b) At December 31, 2017, the weighted-average remaining contractual life of options exercisable was 4.9 years and the aggregate intrinsic value of options exercisable was $102.5 million. |
Summarizes Information of Performance Share Awards | The following table summarizes information about performance share awards as of December 31, 2017, as well as activity during the year then ended. The number of Performance share awards granted are shown below at the target award amounts: Number of Weighted-Average Grant-Date Non-vested 421,600 $ 48.00 Granted 160,196 58.02 Vested (95,183 ) 45.13 Forfeited (58,285 ) 48.22 Non-vested 428,328 $ 52.35 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Obligations and Funded Status | (In millions) Pension Benefits Postretirement Benefits Obligations and Funded Status at December 31 2017 2016 2017 2016 Change in the Projected Benefit Obligation (PBO): Projected benefit obligation at beginning of year $ 791.7 $ 767.7 $ 3.6 $ 15.6 Service cost 0.6 9.6 — — Interest cost 33.3 34.4 — 0.3 Plan amendments — 0.1 — (12.3 ) Actuarial loss (gain) 40.6 11.7 (1.4 ) 1.6 Benefits paid (33.8 ) (31.8 ) (0.4 ) (1.6 ) Foreign exchange — — (0.2 ) — Projected benefit obligation at end of year $ 832.4 $ 791.7 $ 1.6 $ 3.6 Accumulated benefit obligation at end of year (excludes $ 832.4 $ 791.7 Change in Plan Assets: Fair value of plan assets at beginning of year $ 577.7 $ 561.9 $ — $ — Actual return on plan assets 83.2 46.6 — — Employer contributions 29.5 1.0 0.5 1.5 Benefits paid (33.8 ) (31.8 ) (0.5 ) (1.5 ) Fair value of plan assets at end of year $ 656.6 $ 577.7 $ — $ — Funded status (Fair value of plan assets less PBO) $ (175.8 ) $ (214.0 ) $ (1.6 ) $ (3.6 ) |
Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the consolidated balance sheets consist of: Pension Benefits Postretirement Benefits (In millions) 2017 2016 2017 2016 Current benefit payment liability $ (1.1 ) $ (1.0 ) $ (0.2 ) $ (0.4 ) Accrued benefit liability (174.7 ) (213.0 ) (1.4 ) (3.2 ) Net amount recognized $ (175.8 ) $ (214.0 ) $ (1.6 ) $ (3.6 ) |
Amounts in Accumulated Other Comprehensive Loss that have not yet been Recognized as Components of Net Periodic Benefit Cost | The amounts in accumulated other comprehensive loss 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 loss at December 31, 2015 $ 71.1 $ 0.3 Recognition of actuarial loss — (1.9 ) Current year actuarial loss 2.3 1.6 Net actuarial loss at December 31, 2016 $ 73.4 $ — Recognition of actuarial (loss) gain (0.9 ) 1.4 Current year actuarial gain (5.3 ) (1.4 ) Net actuarial loss at December 31, 2017 $ 67.2 $ — Net prior service cost (credit) at December 31, 2015 $ 0.1 $ (6.4 ) Prior service cost recognition due to plan amendments — (12.2 ) Amortization — 13.5 Prior service cost recognition due to curtailment (0.1 ) — Net prior service cost (credit) at December 31, 2016 $ — $ (5.1 ) Amortization — 5.1 Net prior service cost (credit) at December 31, 2017 $ — $ — Total at December 31, 2017 $ 67.2 $ — |
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 (Income) Cost Pension Benefits Postretirement Benefits (In millions) 2017 2016 2015 2017 2016 2015 Service cost $ 0.6 $ 9.6 $ 11.5 $ — $ — $ 0.1 Interest cost 33.3 34.4 33.7 — 0.3 0.6 Expected return on plan assets (37.3 ) (37.2 ) (40.2 ) — — — Recognition of actuarial losses (gains) 0.9 — 2.9 (1.4 ) 1.9 (0.4 ) Amortization of prior service cost (credits) — — 0.1 (5.1 ) (13.5 ) (13.5 ) Net periodic benefit (income) cost $ (2.5 ) $ 6.8 $ 8.0 $ (6.5 ) $ (11.3 ) $ (13.2 ) |
Schedule of Assumptions Used | Assumptions Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Weighted-Average Assumptions Used to Discount rate 3.8% 4.3% 4.6% 3.4% 3.4% 4.1% Rate of compensation increase — 4.0% 4.0% — — — Weighted-Average Assumptions Used to Discount rate 4.3% 4.6% 4.2% 3.4% 4.1% 3.5% Expected long-term rate of return on plan assets 6.4% 6.6% 6.8% — — — Rate of compensation increase — 4.0% 4.0% — — — |
Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost | Postretirement Benefits 2017 2016 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 7.1/8.4 % (a) 7.3/8.2 % (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 2026 2025 (a) The pre-65 post-65 |
Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A one-percentage-point (In millions) 1-Percentage- Point Increase 1-Percentage- Point Decrease Effect on postretirement benefit obligation (0.1 ) 0.1 |
Fair Value of Pension Assets by Major Category of Plan Assets | The fair value of the pension assets by major category of plan assets as of December 31, 2017 and 2016 were as follows: (In millions) Total as of 2017 2016 Group annuity/insurance contracts (level 3) $ 23.3 $ 22.8 Collective trusts: Cash and cash equivalents 12.5 6.9 Equity 285.9 258.8 Fixed income 277.7 235.4 Multi-strategy hedge funds 24.6 23.1 Real estate 32.6 30.7 Total $ 656.6 $ 577.7 |
Reconciliation of Level Three Measurements | A reconciliation of Level 3 measurements was as follows: Group annuity/ (In millions) 2017 2016 January 1 $ 22.8 $ 22.3 Actual return on assets related to assets still held 0.5 0.5 December 31 $ 23.3 $ 22.8 |
Schedule of Expected Benefit Payments | The following retirement benefit payments are expected to be paid: (In millions) Pension Postretirement 2018 $ 37.4 $ 0.1 2019 39.1 0.1 2020 40.4 0.1 2021 41.6 0.1 2022 43.1 0.1 Years 2023-2027 229.9 0.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) 2017 2016 2015 Domestic operations $ 554.7 $ 513.8 $ 387.7 Foreign operations 80.1 68.3 72.2 Income before income taxes and noncontrolling interests $ 634.8 $ 582.1 $ 459.9 |
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) 2017 2016 2015 Income tax expense computed at federal statutory income tax rate $ 222.2 $ 203.7 $ 161.0 Other income taxes, net of federal tax benefit 13.4 12.6 9.4 Foreign taxes at a different rate than U.S. federal statutory income tax rate (8.3 ) (7.6 ) (8.7 ) Tax benefit on income attributable to domestic production activities (10.9 ) (13.0 ) (12.5 ) Net adjustments for uncertain tax positions 11.6 13.2 4.7 Share-based compensation (ASU 2016-09) (23.9 ) (27.8 ) — Tax Act impact (25.7 ) — — Deferred tax impact of state tax rate changes (2.0 ) (1.1 ) 0.2 Valuation allowance increase (decrease) (5.2 ) (2.1 ) 0.8 Miscellaneous other, net (11.7 ) (8.2 ) (1.5 ) Income tax expense as reported $ 159.5 $ 169.7 $ 153.4 Effective income tax rate 25.1 % 29.2 % 33.4 % |
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) 2017 2016 2015 Unrecognized tax benefits — beginning of year $ 58.2 $ 38.2 $ 31.0 Gross additions — current year tax positions 31.0 10.7 4.6 Gross additions — prior year tax positions 10.9 10.4 8.3 Gross additions (reductions) — purchase accounting adjustments 4.0 9.7 0.1 Gross reductions — prior year tax positions (9.4 ) (9.8 ) (2.1 ) Gross reductions — settlements with taxing authorities (7.2 ) (1.0 ) (3.6 ) Impact of change in foreign exchange rates (0.0 ) (0.0 ) (0.1 ) Unrecognized tax benefits — end of year $ 87.5 $ 58.2 $ 38.2 |
Income Taxes | Income taxes in 2017, 2016 and 2015 were as follows: (In millions) 2017 2016 2015 Current Federal $ 133.1 $ 150.4 $ 130.6 Foreign 22.4 22.3 19.7 State and other 22.8 22.9 16.1 Deferred Federal, state and other (27.2 ) (23.9 ) (11.3 ) Foreign 8.4 (2.0 ) (1.7 ) Total income tax expense $ 159.5 $ 169.7 $ 153.4 |
Components of Net Deferred Tax Assets Liabilities | The components of net deferred tax assets (liabilities) as of December 31, 2017 and 2016 were as follows: (In millions) 2017 2016 Deferred tax assets: Compensation and benefits $ 22.1 $ 56.1 Defined benefit plans 43.7 82.5 Capitalized inventories 11.1 13.6 Accounts receivable 7.8 10.3 Other accrued expenses 45.6 41.4 Net operating loss and other tax carryforwards 25.6 39.7 Valuation allowance (11.0 ) (16.4 ) Miscellaneous 3.7 2.5 Total deferred tax assets 148.6 229.7 Deferred tax liabilities: LIFO inventories (4.2 ) (6.7 ) Fixed assets (44.5 ) (57.1 ) Intangible assets (232.0 ) (210.4 ) Investment in partnership (9.2 ) (109.3 ) Miscellaneous (16.1 ) (0.2 ) Total deferred tax liabilities (306.0 ) (383.7 ) Net deferred tax liability $ (157.4 ) $ (154.0 ) In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2017 and 2016 as follows: (In millions) 2017 2016 Other assets $ 9.4 $ 9.5 Deferred income taxes (166.8 ) (163.5 ) Net deferred tax liability $ (157.4 ) $ (154.0 ) |
Restructuring and Other Charg46
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pre Tax Restructuring and Other Charges | Pre-tax Year Ended December 31, 2017 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.4 $ 1.6 $ 2.2 $ 5.2 Plumbing 2.8 — — 2.8 Doors (0.1 ) — 0.1 — Security 4.2 5.6 0.7 10.5 Total $ 8.3 $ 7.2 $ 3.0 $ 18.5 (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, write-off of displays from exiting a customer relationship, 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 Year Ended December 31, 2016 Other Charges (a) (In millions) Restructuring Cost of SG&A (b) Total Cabinets $ 1.8 $ — $ — $ 1.8 Plumbing 1.6 0.3 0.2 2.1 Doors 0.4 — — 0.4 Security 10.1 4.2 0.7 15.0 Total $ 13.9 $ 4.5 $ 0.9 $ 19.3 (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 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 |
Reconciliation of Restructuring Liability | Reconciliation of Restructuring Liability (In millions) Balance at 12/31/16 2017 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 12/31/17 Workforce reduction costs $ 2.4 $ 6.7 $ (3.9 ) $ (0.2 ) $ 5.0 Other 0.6 1.6 (1.3 ) (0.1 ) 0.8 $ 3.0 $ 8.3 $ (5.2 ) $ (0.3 ) $ 5.8 (a) Cash expenditures primarily related to severance charges. (b) Non-cash (In millions) Balance at 12/31/15 2016 Provision Cash Expenditures (c) Non-Cash Write-offs (d) Balance at 12/31/16 Workforce reduction costs $ 10.4 $ 9.3 $ (17.5 ) $ 0.2 $ 2.4 Asset disposals — 0.1 — (0.1 ) — Other 0.5 4.5 (4.1 ) (0.3 ) 0.6 $ 10.9 $ 13.9 $ (21.6 ) $ (0.2 ) $ 3.0 (c) Cash expenditures primarily related to severance charges. (d) Non-cash |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Future Minimum Rental Payments under Non-Cancelable Operating Leases | Future minimum rental payments under non-cancelable (In millions) 2018 $ 31.0 2019 26.9 2020 20.7 2021 15.9 2022 13.0 Remainder 50.7 Total minimum rental payments $ 158.2 |
Activity Related to Product Warranty Liability | The following table summarizes activity related to our product warranty liability for the years ended December 31, 2017, 2016 and 2015. (In millions) 2017 2016 2015 Reserve balance at the beginning of the year $ 16.2 $ 16.0 $ 13.0 Provision for warranties issued 25.1 25.8 29.9 Settlements made (in cash or in kind) (24.3 ) (25.5 ) (28.3 ) Acquisition — 0.3 1.6 Foreign currency 0.2 (0.4 ) (0.2 ) Reserve balance at end of year $ 17.2 $ 16.2 $ 16.0 |
Information on Business Segme48
Information on Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) 2017 2016 2015 Net sales: Cabinets $ 2,467.1 $ 2,397.8 $ 2,173.4 Plumbing 1,720.8 1,534.4 1,414.5 Doors 502.9 473.0 439.1 Security 592.5 579.7 552.4 Net sales $ 5,283.3 $ 4,984.9 $ 4,579.4 (In millions) 2017 2016 2015 Operating income: Cabinets $ 267.2 $ 257.8 $ 192.4 Plumbing 363.6 326.3 285.4 Doors 74.5 61.9 44.0 Security 72.4 66.6 55.9 Less: Corporate expenses (a) (85.6 ) (79.9 ) (81.6 ) Operating income $ 692.1 $ 632.7 $ 496.1 (a) General and administrative expense $ (85.2 ) $ (80.9 ) $ (70.1 ) Defined benefit plan income 4.2 2.9 6.1 Recognition of defined benefit plan actuarial gains (losses) 0.5 (1.9 ) (2.5 ) Long-lived asset impairment (5.1 ) — — Norcraft transaction costs (b) — — (15.1 ) Total Corporate expenses $ (85.6 ) $ (79.9 ) $ (81.6 ) (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) 2017 2016 2015 Total assets: Cabinets $ 2,416.3 $ 2,349.4 $ 2,364.0 Plumbing 1,854.1 1,626.8 1,341.4 Doors 494.8 480.6 483.9 Security 537.4 514.5 520.7 Corporate 208.8 157.2 165.7 Total assets $ 5,511.4 $ 5,128.5 $ 4,875.7 Depreciation expense: Cabinets $ 42.8 $ 40.1 $ 38.1 Plumbing 26.9 24.6 21.3 Doors 9.1 9.0 11.2 Security 16.8 17.2 19.5 Corporate 3.0 3.7 3.4 Depreciation expense $ 98.6 $ 94.6 $ 93.5 Amortization of intangible assets: Cabinets $ 19.7 $ 18.4 $ 14.3 Plumbing 7.7 3.6 1.2 Doors 2.3 3.8 3.8 Security 2.0 2.3 2.3 Amortization of intangible assets $ 31.7 $ 28.1 $ 21.6 Capital expenditures: Cabinets $ 63.4 $ 61.7 $ 61.3 Plumbing 43.5 48.3 27.2 Doors 20.8 12.9 13.3 Security 19.3 25.9 17.3 Corporate 18.0 0.5 9.4 Capital expenditures, gross 165.0 149.3 128.5 Less: proceeds from disposition of assets (0.4 ) (3.9 ) (2.5 ) Capital expenditures, net $ 164.6 $ 145.4 $ 126.0 Net sales by geographic region (a) United States $ 4,492.2 $ 4,258.5 $ 3,892.9 Canada 427.6 406.4 385.1 China 202.3 175.0 163.2 Other international 161.2 145.0 138.2 Net sales $ 5,283.3 $ 4,984.9 $ 4,579.4 Property, plant and equipment, net: United States $ 562.3 $ 499.8 $ 498.9 Mexico 89.0 90.8 74.2 Canada 50.5 45.5 39.4 China 24.8 22.7 14.4 Other international 13.4 3.7 1.0 Property, plant and equipment, net $ 740.0 $ 662.5 $ 627.9 (a) Based on country of destination |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Quarterly Financial Data | (In millions, except per share amounts) 2017 1 st 2 nd 3 rd 4 th Full Year Net sales $ 1,186.8 $ 1,365.4 $ 1,348.6 $ 1,382.5 $ 5,283.3 Gross profit 417.0 515.5 507.0 493.0 1,932.5 Operating income 114.9 212.4 201.8 163.0 692.1 Income from continuing operations, net of tax 77.4 140.3 129.6 128.0 475.3 Income (loss) from discontinued operations, net of tax — (2.6 ) — — (2.6 ) Net income 77.4 137.7 129.6 128.0 472.7 Net income attributable to Fortune Brands 77.4 137.7 129.5 128.0 472.6 Basic earnings (loss) per common share Continuing operations 0.50 0.91 0.84 0.84 3.10 Discontinued operations — (0.02 ) — — (0.02 ) Net income attributable to Fortune Brands 0.50 0.89 0.84 0.84 3.08 Diluted earnings (loss) per common share Continuing operations 0.50 0.90 0.83 0.83 3.05 Discontinued operations — (0.02 ) — — (0.02 ) Net income attributable to Fortune Brands 0.50 0.88 0.83 0.83 3.03 2016 1 st(a) 2 nd 3 rd 4 th Full Year Net sales $ 1,106.5 $ 1,297.8 $ 1,279.0 $ 1,301.6 $ 4,984.9 Gross profit 377.8 474.7 478.0 474.1 1,804.6 Operating income 95.5 187.7 183.1 166.4 632.7 Income from continuing operations, net of tax 61.0 125.1 121.9 104.4 412.4 Income (loss) from discontinued operations, net of tax — — 1.5 (0.7 ) 0.8 Net income 61.0 125.1 123.4 103.7 413.2 Net income attributable to Fortune Brands 61.0 125.2 123.4 103.6 413.2 Basic earnings (loss) per common share Continuing operations 0.39 0.82 0.79 0.68 2.67 Discontinued operations — — 0.01 (0.01 ) 0.01 Net income attributable to Fortune Brands 0.39 0.82 0.80 0.67 2.68 Diluted earnings (loss) per common share Continuing operations 0.38 0.80 0.77 0.67 2.61 Discontinued operations — — 0.01 (0.01 ) 0.01 Net income attributable to Fortune Brands 0.38 0.80 0.78 0.66 2.62 (a) Amounts revised to reflect adoption of ASU 2016-09 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Computations of Earnings (Loss) per Common Share | The computations of earnings (loss) per common share were as follows: (In millions, except per share data) 2017 2016 2015 Income from continuing operations, net of tax $ 475.3 $ 412.4 $ 306.5 Less: Noncontrolling interests 0.1 — 0.5 Income from continuing operations for EPS 475.2 412.4 306.0 Income (loss) from discontinued operations (2.6 ) 0.8 9.0 Net income attributable to Fortune Brands $ 472.6 $ 413.2 $ 315.0 Earnings (loss) per common share Basic Continuing operations $ 3.10 $ 2.67 $ 1.92 Discontinued operations (0.02 ) 0.01 0.05 Net income attributable to Fortune Brands common stockholders $ 3.08 $ 2.68 $ 1.97 Diluted Continuing operations $ 3.05 $ 2.61 $ 1.88 Discontinued operations (0.02 ) 0.01 0.05 Net income attributable to Fortune Brands common stockholders $ 3.03 $ 2.62 $ 1.93 Basic average shares outstanding 153.2 154.3 159.5 Stock-based awards 2.6 3.5 3.5 Diluted average shares outstanding 155.8 157.8 163.0 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.5 0.5 0.7 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Components of Other Expense , Net | The components of other expense, net for the years ended December 31, 2017, 2016 and 2015 were as follows: (In millions) 2017 2016 2015 Asset impairment charge $ 7.0 $ — $ — Other items, net 0.9 1.5 4.3 Total other expense, net $ 7.9 $ 1.5 $ 4.3 |
Background and Basis of Prese52
Background and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Basis of Presentation [Line Items] | ||
Payments made to third parties | $ 38 | $ 49 |
Significant Accounting Polici53
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Of Accounting Policies [Line Items] | ||||||
Highly liquid investments included in cash and cash equivalents, maturity period | 3 months | |||||
Allowances for doubtful accounts | $ 3,300,000 | $ 3,300,000 | $ 7,400,000 | |||
Inventories | 580,800,000 | 580,800,000 | 531,100,000 | |||
Impairment of long-lived asset | $ 3,000,000 | |||||
Unrecognized tax benefits pertaining to uncertain tax positions | 87,500,000 | 87,500,000 | 58,200,000 | $ 38,200,000 | $ 31,000,000 | |
Income taxes, estimated net benefit | 25,700,000 | |||||
Tax Reform deferred tax impact of tax rate changes | 62,400,000 | |||||
Tax reform deemed repatriation tax Impact | 28,500,000 | |||||
Tax reform impact on earnings not permanently reinvested | 8,200,000 | |||||
Advertising costs | 233,200,000 | 199,100,000 | 195,400,000 | |||
Advertising costs, reduction to net sales | 65,600,000 | 52,500,000 | 63,200,000 | |||
Research and development expenses | 50,700,000 | 53,100,000 | 48,700,000 | |||
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | (3,000,000) | (3,000,000) | ||||
Cash flow hedge [Member] | Foreign exchange contracts [Member] | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Gain (loss) reclassified from Accumulated OCI into earnings | 400,000 | (3,500,000) | 3,600,000 | |||
Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings | (3,000,000) | (3,000,000) | ||||
Selling, general and administrative Expenses [Member] | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Impairment of long-lived asset | 5,100,000 | |||||
Customer program costs | 62,400,000 | 44,100,000 | 43,200,000 | |||
Shipping and handling costs | 204,700,000 | 197,000,000 | 184,600,000 | |||
Advertising costs | 167,600,000 | 146,600,000 | $ 132,200,000 | |||
Minimum [Member] | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Reasonably possible decrease in unrecognized tax benefits | 1,500,000 | 1,500,000 | ||||
Maximum [Member] | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Reasonably possible decrease in unrecognized tax benefits | $ 21,500,000 | $ 21,500,000 | ||||
Income Approach | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Goodwill recoverability weighted percentage | 80.00% | 80.00% | ||||
Market Approach | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
Goodwill recoverability weighted percentage | 20.00% | 20.00% | ||||
Metals inventories [Member] | ||||||
Significant Of Accounting Policies [Line Items] | ||||||
LIFO inventories | $ 245,600,000 | $ 245,600,000 | 235,500,000 | |||
Inventories | $ 259,300,000 | $ 259,300,000 | $ 244,400,000 |
Significant Accounting Polici54
Significant Accounting Policies - Estimated Useful Lives of Property, Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings and Leasehold Improvements | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 15 years |
Buildings and Leasehold 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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories: | |||
Raw materials and supplies | $ 224.9 | $ 207.6 | |
Work in process | 58.3 | 55.9 | |
Finished products | 297.6 | 267.6 | |
Total inventories | 580.8 | 531.1 | |
Property, plant and equipment: | |||
Land and improvements | 58.7 | 57 | |
Buildings and improvements to leaseholds | 464.1 | 429.4 | |
Machinery and equipment | 1,167.5 | 1,079.8 | |
Construction in progress | 90.1 | 64.5 | |
Property, plant and equipment, gross | 1,780.4 | 1,630.7 | |
Less: accumulated depreciation | 1,040.4 | 968.2 | |
Property, plant and equipment, net of accumulated depreciation | 740 | 662.5 | $ 627.9 |
Other current liabilities: | |||
Accrued salaries, wages and other compensation | 105.9 | 112.6 | |
Accrued customer programs | 142.8 | 129.3 | |
Accrued taxes | 61.4 | 46.3 | |
Dividends payable | 30.4 | 27.6 | |
Other accrued expenses | 137.5 | 133.2 | |
Total other current liabilities | $ 478 | $ 449 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | May 31, 2016 | Mar. 31, 2017 | Dec. 31, 2017 | |
Acquisitions and Dispositions [Line Items] | ||||
Loss on sale of product line | $ 2.4 | |||
Asset impairment charge | $ 3.2 | 3.2 | ||
TCL Manufacturing Limited and ROHL [Member] | ||||
Acquisitions and Dispositions [Line Items] | ||||
Business acquisition purchase price | $ 166 | |||
Business acquisition, liabilities assumed | $ 3 | |||
Goodwill expected to be deductible for income tax purposes | 49 | |||
Riobel [Member] | ||||
Acquisitions and Dispositions [Line Items] | ||||
Payment to acquire business | $ 94.6 | |||
Victoria Plus Albert and Shaws [Member] | ||||
Acquisitions and Dispositions [Line Items] | ||||
Business acquisition purchase price | $ 125 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from sale of business | $ 1.5 | |
Waterloo [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from sale of business | $ 14 | |
Gain (loss) on sale of business, discontinued operations | $ 7 | |
Discontinued operation beginning period | Jan. 1, 2014 | |
Pre-tax loss on sale of discontinued operations | $ 16.9 | |
Transaction and other sale-related costs of discontinued operation | 2.8 | |
Estimated tax effect on sale of discontinued operation | $ 26.5 |
Goodwill and Identifiable Int58
Goodwill and Identifiable Intangible Assets - Additional Information (Detail) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($)asset_group | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Goodwill [Line Items] | ||||
Goodwill | [1] | $ 1,912 | $ 1,833.8 | $ 1,755.3 |
Other intangible assets, net of accumulated amortization | 1,162.4 | 1,107 | ||
Expected intangible amortization expense in 2018 | 33 | |||
Expected intangible amortization expense in 2019 | 30 | |||
Expected intangible amortization expense in 2020 | 30 | |||
Expected intangible amortization expense in 2021 | 30 | |||
Expected intangible amortization expense in 2022 | 29 | |||
Asset impairment charge | 0 | 0 | 0 | |
Carrying value of tradenames | 709.9 | 671.8 | ||
Plumbing [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | [1] | 745.2 | 670.2 | 578.6 |
Increase in gross identifiable intangible assets | 88.2 | |||
Cabinets [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | [1] | $ 926.3 | $ 924.3 | $ 937.7 |
Number of tradenames, with the fair value exceeded their carrying value | asset_group | 2 | |||
Carrying value of tradenames | $ 217.8 | |||
Victoria Plus Albert and Shaws [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill increase (decrease) due to acquisition-related | $ 78.2 | |||
Minimum [Member] | Tradenames and Customer Relationship [Member] | ||||
Goodwill [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 2 years | |||
Maximum [Member] | Cabinets [Member] | Tradenames [Member] | ||||
Goodwill [Line Items] | ||||
Percentage of fair value of reporting unit in excess of carrying amount | 10.00% | |||
Maximum [Member] | Tradenames and Customer Relationship [Member] | ||||
Goodwill [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 20 years | |||
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Goodwill and Identifiable Int59
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Goodwill [Line Items] | |||
Beginning Balance | [1] | $ 1,833.8 | $ 1,755.3 |
Translation adjustments | 6.5 | (1.2) | |
Acquisition-related adjustments | 71.7 | 79.7 | |
Ending Balance | [1] | 1,912 | 1,833.8 |
Cabinets [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 924.3 | 937.7 |
Translation adjustments | 2 | 0.8 | |
Acquisition-related adjustments | (14.2) | ||
Ending Balance | [1] | 926.3 | 924.3 |
Plumbing [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 670.2 | 578.6 |
Translation adjustments | 3.3 | (2.3) | |
Acquisition-related adjustments | 71.7 | 93.9 | |
Ending Balance | [1] | 745.2 | 670.2 |
Doors [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 143 | 143 |
Ending Balance | [1] | 143 | 143 |
Security [Member] | |||
Goodwill [Line Items] | |||
Beginning Balance | [1] | 96.3 | 96 |
Translation adjustments | 1.2 | 0.3 | |
Ending Balance | [1] | $ 97.5 | $ 96.3 |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Goodwill and Identifiable Int60
Goodwill and Identifiable Intangible Assets - Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Total identifiable intangibles | $ 1,449.6 | $ 1,361.4 |
Accumulated Amortization, Total identifiable intangibles | (287.2) | (254.4) |
Net Book Value, Total identifiable intangibles | 1,162.4 | 1,107 |
Gross Carrying Amounts, Indefinite-lived tradenames | 709.9 | 671.8 |
Net Book Value, Indefinite-lived tradenames | 709.9 | 671.8 |
Gross Carrying Amounts, Finite Lived | 739.7 | 689.6 |
Accumulated Amortization, Finite Lived | (287.2) | (254.4) |
Net Book Value, Finite Lived | 452.5 | 435.2 |
Tradenames [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 15.7 | 15.8 |
Accumulated Amortization, Finite Lived | (9.9) | (7.3) |
Net Book Value, Finite Lived | 5.8 | 8.5 |
Customer and contractual relationships [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 663.8 | 611.9 |
Accumulated Amortization, Finite Lived | (232) | (203.1) |
Net Book Value, Finite Lived | 431.8 | 408.8 |
Patents/proprietary technology [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 60.2 | 61.9 |
Accumulated Amortization, Finite Lived | (45.3) | (44) |
Net Book Value, Finite Lived | $ 14.9 | $ 17.9 |
Asset Impairment Charges - Addi
Asset Impairment Charges - Additional information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2017 | |
Asset Impairment Charges [Line Items] | ||
Asset impairment charge | $ 3.2 | $ 3.2 |
Definite-lived intangible assets | 3 | |
Fixed Assets | $ 0.2 |
External Debt and Financing A62
External Debt and Financing Arrangements - Additional Information (Detail) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||
Revolving credit facility, extended expiration date | 2021-06 | ||||
Current portion of long-term debt | $ 0 | $ 0 | |||
Prepaid debt issuance cost, write off | $ 1,300,000 | ||||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital | 23,500,000 | 23,500,000 | |||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital amount outstanding | $ 0 | $ 0 | |||
Weighted-average interest rates on borrowings | 0.00% | 1.50% | 1.00% | ||
LIBOR [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 0.90% | ||||
LIBOR [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 1.50% | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Term loan, outstanding borrowings | $ 615,000,000 | $ 540,000,000 | |||
Current portion of long-term debt | 0 | 0 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 1,250,000,000 | 1,250,000,000 | |||
Senior Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, price | $ 900,000,000 | ||||
Senior notes, outstanding amount | 892,600,000 | $ 891,100,000 | |||
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% | ||||
Amended and Restated Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,250,000,000 | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt payments in 2018 | 0 | ||||
Long-term debt payments in 2019 | 0 | ||||
Long-term debt payments in 2020 | 400,000,000 | ||||
Long-term debt payments in 2021 | 0 | ||||
Long-term debt payments in 2022 | $ 0 |
External Debt and Financing A63
External Debt and Financing Arrangements - Components of External Long-Term Debt (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,507,600,000 | $ 1,431,100,000 |
Less: current portion | 0 | 0 |
Total long-term debt | 1,507,600,000 | 1,431,100,000 |
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 398,300,000 | 397,600,000 |
Senior Unsecured Notes [Member] | Notes Due June Twenty Twenty Five [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 494,300,000 | 493,500,000 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 615,000,000 | 540,000,000 |
Less: current portion | $ 0 | $ 0 |
External Debt and Financing A64
External Debt and Financing Arrangements - Components of External Long-Term Debt (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 900,000,000 | ||
Notes Due June Twenty Twenty [Member] | Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 400,000,000 | $ 400,000,000 | |
Debt instrument, maturity date | 2020-06 | 2020-06 | |
Notes Due June Twenty Twenty Five [Member] | Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 500,000,000 | $ 500,000,000 | |
Debt instrument, maturity date | 2025-06 | 2025-06 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,250,000,000 | $ 1,250,000,000 | |
Revolving credit facility, expiration date | 2021-06 | 2021-06 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Net settlement payable | $ 4,800,000 | |
Estimated amount of net foreign currency derivative losses in other comprehensive income reclassified to earnings within 12 months | $ (3,000,000) | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Foreign exchange contracts period | 12 months | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Foreign exchange contracts period | 15 months | |
Foreign exchange contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount of foreign currency derivative hedges | $ 282,800,000 | |
Cash flow hedge [Member] | ||
Derivative [Line Items] | ||
Net losses recognized in OCI | (1,800,000) | $ (6,700,000) |
Cash flow hedge [Member] | Foreign exchange contracts [Member] | ||
Derivative [Line Items] | ||
Estimated amount of net foreign currency derivative losses in other comprehensive income reclassified to earnings within 12 months | $ (3,000,000) |
Financial Instruments - Fair Va
Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 1 | $ 3.4 |
Derivative liabilities, fair value | 6.4 | 3.1 |
Net investment hedges [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.6 | |
Net investment hedges [Member] | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 0.8 | 0.2 |
Foreign exchange contracts [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.8 | 2.8 |
Foreign exchange contracts [Member] | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 5.6 | $ 2.9 |
Commodity Contracts [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 0.2 |
Financial Instruments - Effects
Financial Instruments - Effects of Derivative Financial Instruments on Consolidated Statements of Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | $ (1.1) | $ (1.5) | $ 11.8 |
Cash flow hedge [Member] | Cost of products sold [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | 0.9 | (3.5) | 3.6 |
Fair value hedge [Member] | Other (income) expense, net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Income | $ (2) | $ 2 | $ 8.2 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Debt (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Value | Revolving Credit Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | $ 615 | $ 540 |
Carrying Value | Senior Unsecured Notes [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 892.6 | 891.1 |
Fair Value | Revolving Credit Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 615 | 540 |
Fair Value | Senior Unsecured Notes [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | $ 926.3 | $ 919.2 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2017 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Assets or liabilities measured at fair value on recurring basis | $ 0 | |
Fixed payments to partner, year | 2017-06 | |
Fixed payments to partner, year | 2024-06 | |
Purchase of outstanding preferred shares, year | 2,024 | |
Additional paid in capital excess of cash contributed | $ 5,200,000 | |
Cash contribution by partner in joint venture | 3,000,000 | |
Level 3 [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Joint Venture liability (level 3) | 8,200,000 | |
Level 3 [Member] | Other Noncurrent Liabilities [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Joint Venture liability (level 3) | 7,200,000 | |
Level 3 [Member] | Other current liabilities [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Joint Venture liability (level 3) | $ 1,000,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset financial instruments (level 2) | $ 1 | $ 3.4 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 8.5 | 7.9 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset financial instruments (level 2) | 1 | 3.4 |
Deferred compensation program assets (level 2) | 7.5 | 4.5 |
Derivative liability financial instruments (level 2) | $ 6.4 | $ 3.1 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 11.00% | ||
Dividend declared, per share | $ 0.20 | ||
Preferred stock, shares authorized | 60,000,000 | ||
Preferred stock, par value | $ 0.01 | ||
Common stock repurchases | 3,393,462 | 8,807,515 | |
Treasury stock purchases | $ 214.8 | $ 424.5 | $ 51.7 |
Stock repurchase program, remaining authorized repurchase amount | $ 558.4 |
Capital Stock - Common Stock an
Capital Stock - Common Stock and Treasury Stock Activity (Detail) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Common shares | ||
Balance at the beginning of the year | 153,412,050 | 159,906,032 |
Stock plan shares issued | 2,068,746 | 2,518,071 |
Shares surrendered by optionees | (180,537) | (204,538) |
Common stock repurchases | (3,393,462) | (8,807,515) |
Balance at the end of the year | 151,906,797 | 153,412,050 |
Treasury shares | ||
Balance at the beginning of the year | 24,305,930 | 15,293,877 |
Stock plan shares issued | 0 | 0 |
Shares surrendered by optionees | 180,537 | 204,538 |
Common stock repurchases | 3,393,462 | 8,807,515 |
Balance at the end of the year | 27,879,929 | 24,305,930 |
Accumulated Other Comprehensi73
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | [1] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Cost of products sold | $ 3,350.8 | $ 3,180.3 | $ 2,997.5 | ||||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | (634.8) | (582.1) | (459.9) | ||||||||||
Tax (expense) benefit | 159.5 | 169.7 | 153.4 | ||||||||||
Income (Loss) from Continuing Operations Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (128) | $ (129.6) | $ (140.3) | $ (77.4) | $ (104.4) | $ (121.9) | $ (125.1) | $ (61) | (475.3) | (412.4) | (306.5) | ||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | 4.4 | 3.8 | |||||||||||
Derivative Hedging Losses (Gains) [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | 0.8 | (3.5) | 1.8 | ||||||||||
Prior service cost [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [2] | 5.1 | 13.5 | ||||||||||
Actuarial gains (losses) [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | [2] | 0.5 | (1.9) | ||||||||||
Defined benefit plan items [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 5.6 | 11.6 | |||||||||||
Reclassification from AOCI, Current Period, Tax | (2) | (4.3) | |||||||||||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | 3.6 | 7.3 | $ 2.8 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Losses (Gains) [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 0.9 | (3.5) | |||||||||||
Tax (expense) benefit | (0.1) | ||||||||||||
Income (Loss) from Continuing Operations Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0.8 | (3.5) | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Losses (Gains) [Member] | Foreign exchange contracts [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Cost of products sold | 0.4 | $ (3.5) | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Losses (Gains) [Member] | Commodity Contracts [Member] | |||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||
Cost of products sold | $ 0.5 | ||||||||||||
[1] | Amounts revised to reflect adoption of ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting." | ||||||||||||
[2] | 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. |
Accumulated Other Comprehensi74
Accumulated Other Comprehensive Loss - After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 2,363 | $ 2,453.8 | $ 2,263.1 |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (4.4) | (3.8) | |
Other comprehensive income (loss), net of tax | 32.7 | (19.4) | (45.8) |
Ending Balance | 2,601.1 | 2,363 | 2,453.8 |
Foreign Currency Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (28) | (13.3) | 31 |
Amounts classified into accumulated other comprehensive (loss) income | 33.8 | (14.7) | (44.3) |
Other comprehensive income (loss), net of tax | 33.8 | (14.7) | (44.3) |
Ending Balance | 5.8 | (28) | (13.3) |
Derivative Hedging Losses (Gains) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (0.6) | 2.1 | (0.6) |
Amounts classified into accumulated other comprehensive (loss) income | (1) | (6.2) | 4.5 |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (0.8) | 3.5 | (1.8) |
Other comprehensive income (loss), net of tax | (1.8) | (2.7) | 2.7 |
Ending Balance | (2.4) | (0.6) | 2.1 |
Defined benefit plan items [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (43.3) | (41.3) | (37.1) |
Amounts classified into accumulated other comprehensive (loss) income | 4.3 | 5.3 | (1.4) |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (3.6) | (7.3) | (2.8) |
Other comprehensive income (loss), net of tax | 0.7 | (2) | (4.2) |
Ending Balance | (42.6) | (43.3) | (41.3) |
Accumulated Other Comprehensive (Loss) Income [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (71.9) | (52.5) | (6.7) |
Amounts classified into accumulated other comprehensive (loss) income | 37.1 | (15.6) | (41.2) |
Amounts reclassified from accumulated other comprehensive (loss) income into earnings | (4.4) | (3.8) | (4.6) |
Other comprehensive income (loss), net of tax | 32.7 | (19.4) | (45.8) |
Ending Balance | $ (39.2) | $ (71.9) | $ (52.5) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Incentive Plan, common stock available for issuance | 6,000,000 | ||
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 | $ 13.49 | $ 12.70 | $ 11.58 |
Unrecognized compensation cost related to unvested option | $ 6 | ||
Fair value of options vested | 6.8 | $ 6 | $ 7.8 |
Intrinsic value of stock options exercised | $ 70.6 | 88.1 | 78 |
Performance Condition Achievement | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of performance share awards vested | 100,580 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation costs classified as liability | $ 0.6 | ||
Unrecognized pre-tax compensation cost | $ 18.9 | ||
Unrecognized compensation cost, weighted-average recognition period | 1 year 6 months | ||
Fair value of performance share awards vested | $ 20.3 | $ 16.4 | $ 24.9 |
Stock Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, weighted-average recognition period | 1 year 4 months 24 days | ||
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized pre-tax compensation cost | $ 6.8 | ||
Unrecognized compensation cost, weighted-average recognition period | 1 year 3 months 19 days | ||
Fair value of performance share awards vested | $ 5.6 | ||
Number of performance share awards vested | 95,183 | ||
Director Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards issued | 15,311 | 16,471 | 19,695 |
Common stock issued to outside directors | $ 63.43 | $ 57.37 | $ 46.21 |
Stock-Based Compensation - Pre-
Stock-Based Compensation - Pre-Tax Stock-Based Compensation Expense from Continuing Operations (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 43.6 | $ 32 | $ 27.6 |
Tax benefit | 15.2 | 11.4 | 9.9 |
Total after tax expense | 28.4 | 20.6 | 17.7 |
Stock Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 7.4 | 7.2 | 7.4 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 21.6 | 17.2 | 13.4 |
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 13.6 | 6.7 | 5.9 |
Director Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1 | $ 0.9 | $ 0.9 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Detail) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested at December 31, 2016 | shares | 723,398 |
Granted | shares | 408,608 |
Vested | shares | (338,988) |
Forfeited | shares | (64,953) |
Non-vested at December 31, 2017 | shares | 728,065 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at December 31, 2016 | $ / shares | $ 49.22 |
Granted | $ / shares | 58.59 |
Vested | $ / shares | 48.13 |
Forfeited | $ / shares | 53.56 |
Non-vested at December 31, 2017 | $ / shares | $ 54.59 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Current expected dividend yield | 1.40% | 1.40% | 1.50% |
Expected volatility | 26.00% | 30.00% | 27.00% |
Risk-free interest rate | 1.90% | 1.30% | 1.80% |
Expected term | 5 years 6 months | 5 years 6 months | 6 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Detail) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Options | |
Outstanding at December 31, 2016 | shares | 4,815,291 |
Granted | shares | 603,230 |
Exercised | shares | (1,605,999) |
Expired/forfeited | shares | (129,564) |
Outstanding at December 31, 2017 | shares | 3,682,958 |
Weighted-Average Exercise Price | |
Outstanding at December 31, 2016 | $ / shares | $ 27.34 |
Granted | $ / shares | 58.43 |
Exercised | $ / shares | 17.73 |
Expired/forfeited | $ / shares | 37.02 |
Outstanding at December 31, 2017 | $ / shares | $ 36.28 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Outstanding and Exercisable (Detail) | 12 Months Ended | |
Dec. 31, 2017$ / sharesshares | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options Outstanding | shares | 3,682,958 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 6 years | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 36.28 | [1] |
Options Exercisable | shares | 2,575,203 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 28.64 | [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 | 104,500 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 3 years 9 months 18 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 12.30 | [1] |
Options Exercisable | shares | 104,500 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 12.30 | [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 | 1,250,011 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 3 years 7 months 6 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 16.17 | [1] |
Options Exercisable | shares | 1,250,011 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 16.17 | [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 | $ 65.41 | |
Options Outstanding | shares | 2,328,447 | [1] |
Options Outstanding, Weighted-Average Remaining Contractual Life | 7 years 4 months 24 days | [1] |
Options Outstanding, Weighted-Average Exercise Price | $ 48.16 | [1] |
Options Exercisable | shares | 1,220,692 | [2] |
Options Exercisable, Weighted-Average Exercise Price | $ 42.82 | [2] |
[1] | At December 31, 2017, the aggregate intrinsic value of options outstanding was $118.4 million. | |
[2] | At December 31, 2017, the weighted-average remaining contractual life of options exercisable was 4.9 years and the aggregate intrinsic value of options exercisable was $102.5 million. |
Stock-Based Compensation - Op81
Stock-Based Compensation - Options Outstanding and Exercisable (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding, aggregate intrinsic value | $ 118.4 |
Options exercisable, weighted-average remaining contractual life | 4 years 10 months 25 days |
Options exercisable, aggregate intrinsic value | $ 102.5 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summarizes Information of Performance Share Awards (Detail) - Performance Awards | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested at December 31, 2016 | shares | 421,600 |
Granted | shares | 160,196 |
Vested | shares | (95,183) |
Forfeited | shares | (58,285) |
Non-vested at December 31, 2017 | shares | 428,328 |
Non-vested at December 31, 2016 | $ / shares | $ 48 |
Granted | $ / shares | 58.02 |
Vested | $ / shares | 45.13 |
Forfeited | $ / shares | 48.22 |
Non-vested at December 31, 2017 | $ / shares | $ 52.35 |
Defined Benefit Plans - Additio
Defined Benefit Plans - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2017USD ($)Age | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Recognition of actuarial (losses) gains | $ (2,500,000) | $ 500,000 | $ (1,900,000) | $ (8,600,000) | |
Accumulated other comprehensive income, net periodic benefit cost | $ 0 | ||||
Defined benefit plans, blended long-term rate of return on plan assets | 6.40% | ||||
Defined Contribution Plan, cash contributions | $ 29,100,000 | 22,700,000 | $ 18,300,000 | ||
Postretirement Benefits [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Reduction in accrued retiree benefit plans | $ (10,700,000) | 12,300,000 | |||
Prior service credits amortized over the next 5 months | 10,700,000 | ||||
Recognition of actuarial (losses) gains | $ (900,000) | 1,400,000 | (1,600,000) | ||
Pension Benefits [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Reduction in accrued retiree benefit plans | (100,000) | ||||
Recognition of actuarial (losses) gains | (40,600,000) | (11,700,000) | |||
Defined benefit plans, increase (decrease) in liability | $ 5,000,000 | $ 100,000 | |||
Defined benefit plans, blended long-term rate of return on plan assets | 6.40% | 6.60% | 6.80% | ||
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 | Minimum [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit asset allocation, maximum | 0.00% | ||||
Equity Securities | Maximum [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit asset allocation, maximum | 75.00% | ||||
Fixed income | Minimum [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit asset allocation, maximum | 25.00% | ||||
Fixed income | Maximum [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
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% | ||||
Group annuity/insurance contracts (Level 3) | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Investments measured using net asset value per share | $ 633,300,000 | $ 554,900,000 | |||
Real estate [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Assets redemption notice period | 45 days | ||||
Investment Assets [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Assets redemption notice period | 95 days | ||||
Defined benefit plan items [Member] | Waterloo [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Recognition of actuarial (losses) gains | $ (6,100,000) |
Defined Benefit Plans - Obligat
Defined Benefit Plans - Obligations and Funded Status (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in the Projected Benefit Obligation (PBO): | |||||
Recognition of actuarial losses (gains) | $ 2.5 | $ (0.5) | $ 1.9 | $ 8.6 | |
Change in Plan Assets: | |||||
Fair value of plan assets at beginning of year | 577.7 | ||||
Fair value of plan assets at end of year | 656.6 | 577.7 | |||
Pension Benefits [Member] | |||||
Change in the Projected Benefit Obligation (PBO): | |||||
Projected benefit obligation at beginning of year | $ 767.7 | 791.7 | 767.7 | ||
Service cost | 0.6 | 9.6 | |||
Interest cost | 33.3 | 34.4 | |||
Plan amendments | 0.1 | ||||
Recognition of actuarial losses (gains) | 40.6 | 11.7 | |||
Benefits paid | (33.8) | (31.8) | |||
Projected benefit obligation at end of year | 832.4 | 791.7 | 767.7 | ||
Accumulated benefit obligation at end of year (excludes the impact of future compensation increases) | 832.4 | 791.7 | |||
Change in Plan Assets: | |||||
Fair value of plan assets at beginning of year | 561.9 | 577.7 | 561.9 | ||
Actual return on plan assets | 83.2 | 46.6 | |||
Employer contributions | 29.5 | 1 | |||
Benefits paid | (33.8) | (31.8) | |||
Fair value of plan assets at end of year | 656.6 | 577.7 | 561.9 | ||
Funded status (Fair value of plan assets less PBO) | (175.8) | (214) | |||
Postretirement Benefits [Member] | |||||
Change in the Projected Benefit Obligation (PBO): | |||||
Projected benefit obligation at beginning of year | 15.6 | 3.6 | 15.6 | ||
Interest cost | 0.3 | ||||
Plan amendments | 10.7 | (12.3) | |||
Recognition of actuarial losses (gains) | $ 0.9 | (1.4) | 1.6 | ||
Benefits paid | (0.4) | (1.6) | |||
Foreign exchange | (0.2) | ||||
Projected benefit obligation at end of year | 1.6 | 3.6 | $ 15.6 | ||
Change in Plan Assets: | |||||
Employer contributions | 0.5 | 1.5 | |||
Benefits paid | (0.5) | (1.5) | |||
Funded status (Fair value of plan assets less PBO) | $ (1.6) | $ (3.6) |
Defined Benefit Plans - Amounts
Defined Benefit Plans - Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued benefit liability | $ (175.9) | $ (216.2) |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current benefit payment liability | (1.1) | (1) |
Accrued benefit liability | (174.7) | (213) |
Net amount recognized | (175.8) | (214) |
Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current benefit payment liability | (0.2) | (0.4) |
Accrued benefit liability | (1.4) | (3.2) |
Net amount recognized | $ (1.6) | $ (3.6) |
Defined Benefit Plans - Amoun86
Defined Benefit Plans - Amounts in Accumulated Other Comprehensive loss that have not yet been Recognized as Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Recognition of actuarial (gains) losses | $ 2.5 | $ (0.5) | $ 1.9 | $ 8.6 | |
Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Recognition of actuarial (gains) losses | 40.6 | 11.7 | |||
Postretirement Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Recognition of actuarial (gains) losses | $ 0.9 | (1.4) | 1.6 | ||
Other Accumulated Other Comprehensive Income | Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Beginning Balance | 71.1 | 73.4 | 71.1 | ||
Recognition of actuarial (gains) losses | (0.9) | ||||
Current year actuarial loss (gain) | (5.3) | 2.3 | |||
Ending Balance | 67.2 | 73.4 | 71.1 | ||
Beginning Balance | 0.1 | 0.1 | |||
Prior service cost recognition due to curtailment | (0.1) | ||||
Ending Balance | 0.1 | ||||
Total at December 31, 2017 | 67.2 | ||||
Other Accumulated Other Comprehensive Income | Postretirement Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Beginning Balance | 0.3 | 0.3 | |||
Recognition of actuarial (gains) losses | 1.4 | (1.9) | |||
Current year actuarial loss (gain) | (1.4) | 1.6 | |||
Ending Balance | 0.3 | ||||
Beginning Balance | $ (6.4) | (5.1) | (6.4) | ||
Prior service cost recognition due to plan amendments | (12.2) | ||||
Amortization | $ 5.1 | 13.5 | |||
Ending Balance | $ (5.1) | $ (6.4) |
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 | 12 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Recognition of actuarial losses (gains) | $ 2.5 | $ (0.5) | $ 1.9 | $ 8.6 | |
Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 0.6 | 9.6 | |||
Interest cost | 33.3 | 34.4 | |||
Recognition of actuarial losses (gains) | 40.6 | 11.7 | |||
Postretirement Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Interest cost | 0.3 | ||||
Recognition of actuarial losses (gains) | $ 0.9 | (1.4) | 1.6 | ||
Amortization of prior service cost (credits) | $ 10.7 | ||||
Net Periodic Benefit Cost | Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 0.6 | 9.6 | 11.5 | ||
Interest cost | 33.3 | 34.4 | 33.7 | ||
Expected return on plan assets | (37.3) | (37.2) | (40.2) | ||
Recognition of actuarial losses (gains) | 0.9 | 2.9 | |||
Amortization of prior service cost (credits) | 0.1 | ||||
Net periodic benefit (income) cost | (2.5) | 6.8 | 8 | ||
Net Periodic Benefit Cost | Postretirement Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 0.1 | ||||
Interest cost | 0.3 | 0.6 | |||
Recognition of actuarial losses (gains) | (1.4) | 1.9 | (0.4) | ||
Amortization of prior service cost (credits) | (5.1) | (13.5) | (13.5) | ||
Net periodic benefit (income) cost | $ (6.5) | $ (11.3) | $ (13.2) |
Defined Benefit Plans - Schedul
Defined Benefit Plans - Schedule of Assumptions Used (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Expected long-term rate of return on plan assets | 6.40% | ||
Pension Benefits [Member] | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: | |||
Discount rate | 3.80% | 4.30% | 4.60% |
Rate of compensation increase | 4.00% | 4.00% | |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Discount rate | 4.30% | 4.60% | 4.20% |
Expected long-term rate of return on plan assets | 6.40% | 6.60% | 6.80% |
Rate of compensation increase | 4.00% | 4.00% | |
Postretirement Benefits [Member] | |||
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31: | |||
Discount rate | 3.40% | 3.40% | 4.10% |
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31: | |||
Discount rate | 3.40% | 4.10% | 3.50% |
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, 2017 | Dec. 31, 2016 | ||
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 | 2,026 | 2,025 | |
Pre Age Sixty Five | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate assumed for next year | [1] | 7.10% | 7.30% |
Post Age Sixty Five | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Health care cost trend rate assumed for next year | [1] | 8.40% | 8.20% |
[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, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Effect on total of service and interest cost, 1-Percentage-Point Increase | $ (0.1) |
Effect on total of service and interest cost, 1-Percentage-Point Decrease | $ 0.1 |
Defined Benefit Plans - Fair Va
Defined Benefit Plans - Fair Value of Pension Assets by Major Category of Plan Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | $ 656.6 | $ 577.7 |
Group annuity/insurance contracts (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | 23.3 | 22.8 |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | 12.5 | 6.9 |
Equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | 285.9 | 258.8 |
Fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | 277.7 | 235.4 |
Multi-strategy hedge funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | 24.6 | 23.1 |
Real estate [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of pension assets | $ 32.6 | $ 30.7 |
Defined Benefit Plans - Reconci
Defined Benefit Plans - Reconciliation of Level Three Measurements (Detail) - Group annuity/insurance contracts (Level 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Beginning balance | $ 22.8 | $ 22.3 |
Actual return on assets related to assets still held | 0.5 | 0.5 |
Ending balance | $ 23.3 | $ 22.8 |
Defined Benefit Plans - Sched93
Defined Benefit Plans - Schedule of Expected Benefit Payments (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 37.4 |
2,019 | 39.1 |
2,020 | 40.4 |
2,021 | 41.6 |
2,022 | 43.1 |
Years 2023-2027 | 229.9 |
Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 0.1 |
2,019 | 0.1 |
2,020 | 0.1 |
2,021 | 0.1 |
2,022 | 0.1 |
Years 2023-2027 | $ 0.3 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Income Before Income Tax [Line Items] | |||
Domestic operations | $ 554.7 | $ 513.8 | $ 387.7 |
Foreign operations | 80.1 | 68.3 | 72.2 |
Income before income taxes and noncontrolling interests | $ 634.8 | $ 582.1 | $ 459.9 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Line Items] | |||||
Reconciliation of income taxes | 35.00% | ||||
Effective income tax rate impact related to nondeductible acquisition costs | $ 2,400,000 | ||||
Tax Reform deferred tax impact of tax rate changes | $ 62,400,000 | ||||
Income taxes, estimated net benefit | $ 25,700,000 | ||||
Tax reform deemed repatriation tax Impact | 28,500,000 | ||||
Tax reform impact on earnings not permanently reinvested | 8,200,000 | ||||
Unrecognized tax benefits that would impact effective tax rate | 53,000,000 | 53,000,000 | |||
Unrecognized tax expense (benefits), interest and penalty expense (benefit) recognized | 2,000,000 | $ 1,100,000 | $ 1,000,000 | ||
Unrecognized tax benefits, accrued interest and penalties | 11,800,000 | 11,800,000 | 11,000,000 | ||
Deferred tax assets, net operating losses and other tax carryforwards | 25,600,000 | 25,600,000 | $ 39,700,000 | ||
Deferred tax assets, net operating losses and other tax carryforwards | 8,300,000 | 8,300,000 | |||
Undistributed earnings of foreign subsidiaries | 50,000,000 | 50,000,000 | |||
Foreign and State Tax [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax liability for foreign and state taxes | 9,600,000 | ||||
Scenario, Forecast In the first quarter of 2014 | |||||
Income Taxes [Line Items] | |||||
Reconciliation of income taxes | 21.00% | ||||
Minimum [Member] | |||||
Income Taxes [Line Items] | |||||
Reasonably possible decrease in unrecognized tax benefits | 1,500,000 | $ 1,500,000 | |||
Deferred tax assets, remaining net operating losses and other tax carryforwards expiration period | 2,023 | ||||
Maximum [Member] | |||||
Income Taxes [Line Items] | |||||
Reasonably possible decrease in unrecognized tax benefits | $ 21,500,000 | $ 21,500,000 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation Of Income Taxes [Line Items] | |||
Income tax expense computed at federal statutory income tax rate | $ 222.2 | $ 203.7 | $ 161 |
Other income taxes, net of federal tax benefit | 13.4 | 12.6 | 9.4 |
Foreign taxes at a different rate than U.S. federal statutory income tax rate | (8.3) | (7.6) | (8.7) |
Tax benefit on income attributable to domestic production activities | (10.9) | (13) | (12.5) |
Net adjustments for uncertain tax positions | 11.6 | 13.2 | 4.7 |
Share-based compensation (ASU 2016-09) | (23.9) | (27.8) | |
Tax Act impact | (25.7) | ||
Valuation allowance increase (decrease) | (5.2) | (2.1) | 0.8 |
Miscellaneous other, net | (11.7) | (8.2) | (1.5) |
Income tax expense as reported | $ 159.5 | $ 169.7 | $ 153.4 |
Effective income tax rate | 25.10% | 29.20% | 33.40% |
State and Local Jurisdiction [Member] | |||
Reconciliation Of Income Taxes [Line Items] | |||
Tax Reform deferred tax impact of tax rate changes | $ (2) | $ (1.1) | $ 0.2 |
Income Taxes - Reconciliation97
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Unrecognized Tax Benefits [Line Items] | |||
Unrecognized tax benefits - beginning of year | $ 58.2 | $ 38.2 | $ 31 |
Gross additions - current year tax positions | 31 | 10.7 | 4.6 |
Gross additions - prior year tax positions | 10.9 | 10.4 | 8.3 |
Gross additions (reductions) - purchase accounting adjustments | 4 | 9.7 | 0.1 |
Gross reductions - prior year tax positions | (9.4) | (9.8) | (2.1) |
Gross reductions - settlements with taxing authorities | (7.2) | (1) | (3.6) |
Impact of change in foreign exchange rates | 0 | 0 | (0.1) |
Unrecognized tax benefits - end of year | $ 87.5 | $ 58.2 | $ 38.2 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
Federal | $ 133.1 | $ 150.4 | $ 130.6 |
Foreign | 22.4 | 22.3 | 19.7 |
State and other | 22.8 | 22.9 | 16.1 |
Deferred | |||
Federal, state and other | (27.2) | (23.9) | (11.3) |
Foreign | 8.4 | (2) | (1.7) |
Income tax expense as reported | $ 159.5 | $ 169.7 | $ 153.4 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Compensation and benefits | $ 22.1 | $ 56.1 |
Defined benefit plans | 43.7 | 82.5 |
Capitalized inventories | 11.1 | 13.6 |
Accounts receivable | 7.8 | 10.3 |
Other accrued expenses | 45.6 | 41.4 |
Net operating loss and other tax carryforwards | 25.6 | 39.7 |
Valuation allowance | (11) | (16.4) |
Miscellaneous | 3.7 | 2.5 |
Total deferred tax assets | 148.6 | 229.7 |
Deferred tax liabilities: | ||
LIFO inventories | (4.2) | (6.7) |
Fixed assets | (44.5) | (57.1) |
Intangible assets | (232) | (210.4) |
Investment in partnership | (9.2) | (109.3) |
Miscellaneous | (16.1) | (0.2) |
Total deferred tax liabilities | (306) | (383.7) |
Net deferred tax liability | (157.4) | (154) |
Other assets | 9.4 | 9.5 |
Deferred income taxes | (166.8) | (163.5) |
Net deferred tax liability | $ (157.4) | $ (154) |
Restructuring and Other Char100
Restructuring and Other Charges - Pre-tax Restructuring and Other Charges (Detail) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 8.3 | $ 13.9 | $ 16.6 | |||
Total Charges | 18.5 | 19.3 | 22.7 | |||
Cost of products sold [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 7.2 | 4.5 | [1] | 5.5 | [2] | |
Selling, general and administrative Expenses [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 3 | 0.9 | [1],[3] | 0.6 | [2],[3] | |
Operating Segments [Member] | Cabinets [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 1.4 | 1.8 | 1.2 | |||
Total Charges | 5.2 | 1.8 | 1.3 | |||
Operating Segments [Member] | Plumbing [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 2.8 | 1.6 | 6.4 | |||
Total Charges | 2.8 | 2.1 | 7.1 | |||
Operating Segments [Member] | Doors [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (0.1) | 0.4 | ||||
Total Charges | 0.4 | |||||
Operating Segments [Member] | Security [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 4.2 | 10.1 | 8.1 | |||
Total Charges | 10.5 | 15 | 13.4 | |||
Operating Segments [Member] | Cost of products sold [Member] | Cabinets [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 1.6 | 0.1 | [2] | |||
Operating Segments [Member] | Cost of products sold [Member] | Plumbing [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 0.3 | [1] | 0.1 | [2] | ||
Operating Segments [Member] | Cost of products sold [Member] | Security [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 5.6 | 4.2 | [1] | 5.3 | [2] | |
Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Cabinets [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 2.2 | |||||
Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Plumbing [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | [3] | 0.2 | [1] | 0.6 | [2] | |
Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Doors [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | 0.1 | |||||
Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Security [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other Charges | $ 0.7 | $ 0.7 | [1],[3] | |||
Corporate [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 0.9 | |||||
Total Charges | $ 0.9 | |||||
[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, write-off of displays from exiting a customer relationship, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities. | |||||
[2] | "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. | |||||
[3] | Selling, general and administrative expenses |
Restructuring and Other Char101
Restructuring and Other Charges - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other charges, before tax | $ 18.5 | $ 19.3 | $ 22.7 |
Restructuring and other charges, after tax | $ 12.3 |
Restructuring and Other Char102
Restructuring and Other Charges - Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | $ 3 | $ 10.9 | ||
Provision | 8.3 | 13.9 | $ 16.6 | |
Cash Expenditures | [1] | (5.2) | (21.6) | |
Non-Cash Write-offs | [2] | (0.3) | (0.2) | |
Ending Balance | 5.8 | 3 | 10.9 | |
Workforce Reduction Costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 2.4 | 10.4 | ||
Provision | 6.7 | 9.3 | ||
Cash Expenditures | [1] | (3.9) | (17.5) | |
Non-Cash Write-offs | [2] | (0.2) | 0.2 | |
Ending Balance | 5 | 2.4 | 10.4 | |
Asset Disposals [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Provision | 0.1 | |||
Non-Cash Write-offs | [2] | (0.1) | ||
Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 0.6 | 0.5 | ||
Provision | 1.6 | 4.5 | ||
Cash Expenditures | [1] | (1.3) | (4.1) | |
Non-Cash Write-offs | [2] | (0.1) | (0.3) | |
Ending Balance | $ 0.8 | $ 0.6 | $ 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. |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitment And Contingencies [Line Items] | |||
Purchase obligations | $ 397.3 | ||
Purchase obligations due in one year | 371.3 | ||
Operating leases, rent expense net | $ 42.1 | $ 43.5 | $ 34.9 |
Commitments - Future Minimum Re
Commitments - Future Minimum Rental Payments under Non-Cancelable Operating Leases (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Schedule of Operating Leases [Line Items] | |
2,018 | $ 31 |
2,019 | 26.9 |
2,020 | 20.7 |
2,021 | 15.9 |
2,022 | 13 |
Remainder | 50.7 |
Total minimum rental payments | $ 158.2 |
Commitments - Activity Related
Commitments - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranty Liability [Line Items] | |||
Reserve balance at the beginning of the year | $ 16.2 | $ 16 | $ 13 |
Provision for warranties issued | 25.1 | 25.8 | 29.9 |
Settlements made (in cash or in kind) | (24.3) | (25.5) | (28.3) |
Acquisition | 0.3 | 1.6 | |
Foreign currency | 0.2 | (0.4) | (0.2) |
Reserve balance at end of year | $ 17.2 | $ 16.2 | $ 16 |
Information on Business Segm106
Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | [1] | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | $ 1,382.5 | $ 1,348.6 | $ 1,365.4 | $ 1,186.8 | $ 1,301.6 | $ 1,279 | $ 1,297.8 | $ 1,106.5 | $ 5,283.3 | [2] | $ 4,984.9 | [2] | $ 4,579.4 | [2] | |||
Operating income | 163 | 201.8 | 212.4 | 114.9 | 166.4 | 183.1 | 187.7 | 95.5 | 692.1 | 632.7 | 496.1 | ||||||
Net sales | 1,382.5 | $ 1,348.6 | $ 1,365.4 | 1,186.8 | 1,301.6 | $ 1,279 | $ 1,297.8 | $ 1,106.5 | 5,283.3 | [2] | 4,984.9 | [2] | 4,579.4 | [2] | |||
Property, plant and equipment, net | 740 | 662.5 | 740 | 662.5 | 627.9 | ||||||||||||
Recognition of defined benefit plan actuarial gains (losses) | $ (2.5) | 0.5 | (1.9) | (8.6) | |||||||||||||
Long-lived asset impairment | $ (3) | ||||||||||||||||
Assets | 5,511.4 | 5,128.5 | 5,511.4 | 5,128.5 | 4,875.7 | ||||||||||||
Depreciation expense | 98.6 | 94.6 | 93.5 | ||||||||||||||
Amortization of intangible assets | 31.7 | 28.1 | 21.6 | ||||||||||||||
Capital expenditures, gross | [3] | 165 | 149.3 | 128.5 | |||||||||||||
Less: proceeds from disposition of assets | (0.4) | (3.9) | (2.5) | ||||||||||||||
Capital expenditures, net | 164.6 | 145.4 | 126 | ||||||||||||||
Corporate [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Operating income | [4] | (85.6) | (79.9) | (81.6) | |||||||||||||
General and administrative expense | (85.2) | (80.9) | (70.1) | ||||||||||||||
Defined benefit plan income | 4.2 | 2.9 | 6.1 | ||||||||||||||
Recognition of defined benefit plan actuarial gains (losses) | 0.5 | (1.9) | (2.5) | ||||||||||||||
Long-lived asset impairment | (5.1) | ||||||||||||||||
Norcraft transaction costs | [5] | (15.1) | |||||||||||||||
Total Corporate expenses | (85.6) | (79.9) | (81.6) | ||||||||||||||
Assets | 208.8 | 157.2 | 208.8 | 157.2 | 165.7 | ||||||||||||
Depreciation expense | 3 | 3.7 | 3.4 | ||||||||||||||
Capital expenditures, gross | 18 | 0.5 | 9.4 | ||||||||||||||
United States | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | [2] | 4,492.2 | 4,258.5 | 3,892.9 | |||||||||||||
Net sales | [2] | 4,492.2 | 4,258.5 | 3,892.9 | |||||||||||||
Property, plant and equipment, net | 562.3 | 499.8 | 562.3 | 499.8 | 498.9 | ||||||||||||
Canada | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | [2] | 427.6 | 406.4 | 385.1 | |||||||||||||
Net sales | [2] | 427.6 | 406.4 | 385.1 | |||||||||||||
Property, plant and equipment, net | 50.5 | 45.5 | 50.5 | 45.5 | 39.4 | ||||||||||||
China | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | [2] | 202.3 | 175 | 163.2 | |||||||||||||
Net sales | [2] | 202.3 | 175 | 163.2 | |||||||||||||
Property, plant and equipment, net | 24.8 | 22.7 | 24.8 | 22.7 | 14.4 | ||||||||||||
Other International | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | [2] | 161.2 | 145 | 138.2 | |||||||||||||
Net sales | [2] | 161.2 | 145 | 138.2 | |||||||||||||
Property, plant and equipment, net | 13.4 | 3.7 | 13.4 | 3.7 | 1 | ||||||||||||
Mexico | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Property, plant and equipment, net | 89 | 90.8 | 89 | 90.8 | 74.2 | ||||||||||||
Cabinets [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Assets | 2,416.3 | 2,349.4 | 2,416.3 | 2,349.4 | 2,364 | ||||||||||||
Depreciation expense | 42.8 | 40.1 | 38.1 | ||||||||||||||
Amortization of intangible assets | 19.7 | 18.4 | 14.3 | ||||||||||||||
Capital expenditures, gross | 63.4 | 61.7 | 61.3 | ||||||||||||||
Cabinets [Member] | Operating Segments [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | 2,467.1 | 2,397.8 | 2,173.4 | ||||||||||||||
Operating income | 267.2 | 257.8 | 192.4 | ||||||||||||||
Net sales | 2,467.1 | 2,397.8 | 2,173.4 | ||||||||||||||
Plumbing [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Assets | 1,854.1 | 1,626.8 | 1,854.1 | 1,626.8 | 1,341.4 | ||||||||||||
Depreciation expense | 26.9 | 24.6 | 21.3 | ||||||||||||||
Amortization of intangible assets | 7.7 | 3.6 | 1.2 | ||||||||||||||
Capital expenditures, gross | 43.5 | 48.3 | 27.2 | ||||||||||||||
Plumbing [Member] | Operating Segments [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | 1,720.8 | 1,534.4 | 1,414.5 | ||||||||||||||
Operating income | 363.6 | 326.3 | 285.4 | ||||||||||||||
Net sales | 1,720.8 | 1,534.4 | 1,414.5 | ||||||||||||||
Doors [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Assets | 494.8 | 480.6 | 494.8 | 480.6 | 483.9 | ||||||||||||
Depreciation expense | 9.1 | 9 | 11.2 | ||||||||||||||
Amortization of intangible assets | 2.3 | 3.8 | 3.8 | ||||||||||||||
Capital expenditures, gross | 20.8 | 12.9 | 13.3 | ||||||||||||||
Doors [Member] | Operating Segments [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | 502.9 | 473 | 439.1 | ||||||||||||||
Operating income | 74.5 | 61.9 | 44 | ||||||||||||||
Net sales | 502.9 | 473 | 439.1 | ||||||||||||||
Security [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Assets | $ 537.4 | $ 514.5 | 537.4 | 514.5 | 520.7 | ||||||||||||
Depreciation expense | 16.8 | 17.2 | 19.5 | ||||||||||||||
Amortization of intangible assets | 2 | 2.3 | 2.3 | ||||||||||||||
Capital expenditures, gross | 19.3 | 25.9 | 17.3 | ||||||||||||||
Security [Member] | Operating Segments [Member] | |||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||
Net sales | 592.5 | 579.7 | 552.4 | ||||||||||||||
Operating income | 72.4 | 66.6 | 55.9 | ||||||||||||||
Net sales | $ 592.5 | $ 579.7 | $ 552.4 | ||||||||||||||
[1] | Amounts revised to reflect adoption of ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting." | ||||||||||||||||
[2] | Based on country of destination | ||||||||||||||||
[3] | Capital expenditures of $17.2 million, $11.9 million and $20.0 million that have not been paid as of December 31, 2017, 2016 and 2015, respectively, were excluded from the Statement of Cash Flows. | ||||||||||||||||
[4] | Below is a table detailing Corporate expenses: General and administrative expense $ (85.2 ) $ (80.9 ) $ (70.1 ) Defined benefit plan income 4.2 2.9 6.1 Recognition of defined benefit plan actuarial gains (losses) 0.5 (1.9 ) (2.5 ) Long-lived asset impairment (5.1 ) - - Norcraft transaction costs(b) - - (15.1 ) Total Corporate expenses $ (85.6 ) $ (79.9 ) $ (81.6 ) | ||||||||||||||||
[5] | 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 Segm107
Information on Business Segments - Additional Information (Detail) - Customer | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 13.00% | 13.00% | 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% |
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | [1] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Schedule Of Quarterly Financial Data [Line Items] | |||||||||||||||
Net sales | $ 1,382.5 | $ 1,348.6 | $ 1,365.4 | $ 1,186.8 | $ 1,301.6 | $ 1,279 | $ 1,297.8 | $ 1,106.5 | $ 5,283.3 | [2] | $ 4,984.9 | [2] | $ 4,579.4 | [2] | |
Gross profit | 493 | 507 | 515.5 | 417 | 474.1 | 478 | 474.7 | 377.8 | 1,932.5 | 1,804.6 | |||||
Operating income | 163 | 201.8 | 212.4 | 114.9 | 166.4 | 183.1 | 187.7 | 95.5 | 692.1 | 632.7 | 496.1 | ||||
Income from continuing operations, net of tax | 128 | 129.6 | 140.3 | 77.4 | 104.4 | 121.9 | 125.1 | 61 | 475.3 | 412.4 | 306.5 | ||||
Income (loss) from discontinued operations, net of tax | (2.6) | (0.7) | 1.5 | (2.6) | 0.8 | 9 | |||||||||
Net income | 128 | 129.6 | 137.7 | 77.4 | 103.7 | 123.4 | 125.1 | 61 | 472.7 | 413.2 | $ 315.5 | ||||
Net income attributable to Fortune Brands | $ 128 | $ 129.5 | $ 137.7 | $ 77.4 | $ 103.6 | $ 123.4 | $ 125.2 | $ 61 | $ 472.6 | $ 413.2 | |||||
Basic earnings (loss) per common share | |||||||||||||||
Continuing operations | $ 0.84 | $ 0.84 | $ 0.91 | $ 0.50 | $ 0.68 | $ 0.79 | $ 0.82 | $ 0.39 | $ 3.10 | $ 2.67 | $ 1.92 | ||||
Discontinued operations | (0.02) | (0.01) | 0.01 | (0.02) | 0.01 | 0.05 | |||||||||
Net income attributable to Fortune Brands | 0.84 | 0.84 | 0.89 | 0.50 | 0.67 | 0.80 | 0.82 | 0.39 | 3.08 | 2.68 | 1.97 | ||||
Diluted earnings (loss) per common share | |||||||||||||||
Continuing operations | 0.83 | 0.83 | 0.90 | 0.50 | 0.67 | 0.77 | 0.80 | 0.38 | 3.05 | 2.61 | 1.88 | ||||
Discontinued operations | (0.02) | (0.01) | 0.01 | (0.02) | 0.01 | 0.05 | |||||||||
Net income attributable to Fortune Brands | $ 0.83 | $ 0.83 | $ 0.88 | $ 0.50 | $ 0.66 | $ 0.78 | $ 0.80 | $ 0.38 | $ 3.03 | $ 2.62 | $ 1.93 | ||||
[1] | Amounts revised to reflect adoption of ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting." | ||||||||||||||
[2] | Based on country of destination |
Quarterly Financial Data - Addi
Quarterly Financial Data - Additional Information (Detail) - Tradenames [Member] - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information [Line Items] | ||||||
Pre-tax defined benefit plan actuarial gains (losses) | $ (0.8) | $ 1.3 | $ (1) | $ (0.9) | $ 0.5 | $ (1.9) |
After-tax defined benefit plan actuarial gains (losses) | $ (0.5) | $ 0.9 | $ (0.7) | $ (0.6) |
Earnings Per Share - Computatio
Earnings Per Share - Computations of Earnings (Loss) per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | [1] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||||||||||||
Income from continuing operations, net of tax | $ 128 | $ 129.6 | $ 140.3 | $ 77.4 | $ 104.4 | $ 121.9 | $ 125.1 | $ 61 | $ 475.3 | $ 412.4 | $ 306.5 | |
Less: Noncontrolling interests | 0.1 | 0.5 | ||||||||||
Income from continuing operations for EPS | 475.2 | 412.4 | 306 | |||||||||
Income (loss) from discontinued operations | (2.6) | 0.8 | 9 | |||||||||
NET INCOME ATTRIBUTABLE TO FORTUNE BRANDS | $ 472.6 | $ 413.2 | $ 315 | |||||||||
Basic | ||||||||||||
Continuing operations | $ 0.84 | $ 0.84 | $ 0.91 | $ 0.50 | $ 0.68 | $ 0.79 | $ 0.82 | $ 0.39 | $ 3.10 | $ 2.67 | $ 1.92 | |
Discontinued operations | (0.02) | (0.01) | 0.01 | (0.02) | 0.01 | 0.05 | ||||||
Net income attributable to Fortune Brands common stockholders | 0.84 | 0.84 | 0.89 | 0.50 | 0.67 | 0.80 | 0.82 | 0.39 | 3.08 | 2.68 | 1.97 | |
Diluted | ||||||||||||
Continuing operations | 0.83 | 0.83 | 0.90 | 0.50 | 0.67 | 0.77 | 0.80 | 0.38 | 3.05 | 2.61 | 1.88 | |
Discontinued operations | (0.02) | (0.01) | 0.01 | (0.02) | 0.01 | 0.05 | ||||||
Net income attributable to Fortune Brands common stockholders | $ 0.83 | $ 0.83 | $ 0.88 | $ 0.50 | $ 0.66 | $ 0.78 | $ 0.80 | $ 0.38 | $ 3.03 | $ 2.62 | $ 1.93 | |
Basic average shares outstanding | 153.2 | 154.3 | 159.5 | |||||||||
Stock-based awards | 2.6 | 3.5 | 3.5 | |||||||||
Diluted average shares outstanding | 155.8 | 157.8 | 163 | |||||||||
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share | 0.5 | 0.5 | 0.7 | |||||||||
[1] | Amounts revised to reflect adoption of ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting." |
Other Expense, Net - Components
Other Expense, Net - Components of Other Expense Net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Component Of Other Expense Income Nonoperating [Line Items] | |||
Asset impairment charge | $ 7 | ||
Other items, net | 0.9 | $ 1.5 | $ 4.3 |
Total other expense (income), net | $ 7.9 | $ 1.5 | $ 4.3 |
Other expense, Net - Additional
Other expense, Net - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Component Of Other Expense Income Nonoperating [Line Items] | |
Impairment charge | $ 7,000,000 |
Carrying value of the investment | $ 0 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Accruals, relating to environmental compliance and clean up | $ 0.7 | $ 1 |
Schedule II Valuation and Qu114
Schedule II Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Allowance for cash discounts, returns and sales allowances | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | $ 68.2 | $ 50.3 | $ 45.1 | |
Charged to Expense | 205.7 | 148.6 | 150.7 | |
Reclassifications | [1] | 3 | ||
Write-offs, and Deductions | [2] | 192.9 | 130.7 | 145.5 |
Balance at End of Period | 84 | 68.2 | 50.3 | |
Allowance for doubtful accounts | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | 7.4 | 5.8 | 5.4 | |
Charged to Expense | 0.2 | 4.3 | 2.8 | |
Write-offs, and Deductions | [2] | 4.5 | 2.7 | 2.4 |
Business Acquisition | [3] | 0.2 | ||
Balance at End of Period | 3.3 | 7.4 | 5.8 | |
Allowance for deferred tax assets | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | 16.4 | 19.7 | 12 | |
Charged to Expense | (5.4) | (3.3) | 6.4 | |
Business Acquisition | [3] | 1.3 | ||
Balance at End of Period | $ 11 | $ 16.4 | $ 19.7 | |
[1] | Represents a reclassification of certain customer program liabilities to sales allowances (reduction to accounts receivable) in Security segment during 2017. | |||
[2] | Net of recoveries of amounts written off in prior years and immaterial foreign currency impact. | |||
[3] | Represents a valuation allowance on an acquired net operating loss carryforward (Norcraft Canada) |