Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
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 Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 145,922,725 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net sales | $ 1,254.6 | $ 1,186.8 |
Cost of products sold | 815 | 772.7 |
Selling, general and administrative expenses | 311.2 | 289.6 |
Amortization of intangible assets | 8.2 | 8.1 |
Asset impairment charges | 3.2 | |
Restructuring charges | 0.8 | 2.2 |
Operating income | 119.4 | 111 |
Interest expense | 14.7 | 11.9 |
Other income, net | (2.8) | (4.7) |
Income from continuing operations before income taxes | 107.5 | 103.8 |
Income tax | 32.4 | 26.4 |
Income from continuing operations, net of tax | 75.1 | 77.4 |
Loss from discontinued operations, net of tax | (0.2) | |
Net income | 74.9 | 77.4 |
Less: Noncontrolling interests | (0.1) | |
Net income attributable to Fortune Brands | $ 75 | $ 77.4 |
Basic earnings per common share | ||
Continuing operations | $ 0.50 | $ 0.50 |
Discontinued operations | 0 | 0 |
Net income attributable to Fortune Brands common shareholders | 0.50 | 0.50 |
Diluted earnings per common share | ||
Continuing operations | 0.49 | 0.50 |
Discontinued operations | 0 | 0 |
Net income attributable to Fortune Brands common shareholders | $ 0.49 | $ 0.50 |
Comprehensive income | $ 78.2 | $ 84.6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Current assets | |||
Cash and cash equivalents | $ 244.4 | $ 323 | |
Accounts receivable, net | 631.5 | 555.3 | |
Inventories | 619.2 | 580.8 | |
Other current assets | 149.4 | 142.6 | |
Total current assets | 1,644.5 | 1,601.7 | |
Property, plant and equipment, net of accumulated depreciation | 742.8 | 740 | |
Goodwill | [1] | 1,918.7 | 1,912 |
Other intangible assets, net of accumulated amortization | 1,151.2 | 1,162.4 | |
Other assets | 94.8 | 95.3 | |
Total assets | 5,552 | 5,511.4 | |
Current liabilities | |||
Short-term debt | 350 | ||
Accounts payable | 417.1 | 428.8 | |
Other current liabilities | 373.7 | 478 | |
Total current liabilities | 1,140.8 | 906.8 | |
Long-term debt | 1,538 | 1,507.6 | |
Deferred income taxes | 158.2 | 166.8 | |
Accrued defined benefit plans | 173.4 | 175.9 | |
Other non-current liabilities | 183.3 | 153.2 | |
Total liabilities | 3,193.7 | 2,910.3 | |
Commitments and contingencies (see Note 18) | |||
Fortune Brands stockholders' equity | |||
Common stock | [2] | 1.8 | 1.7 |
Paid-in capital | 2,740.6 | 2,724.9 | |
Accumulated other comprehensive loss | (36) | (39.2) | |
Retained earnings | 1,249.9 | 1,174.2 | |
Treasury stock | (1,599.5) | (1,262.1) | |
Total Fortune Brands stockholders' equity | 2,356.8 | 2,599.5 | |
Noncontrolling interests | 1.5 | 1.6 | |
Total equity | 2,358.3 | 2,601.1 | |
Total liabilities and equity | $ 5,552 | $ 5,511.4 | |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. | ||
[2] | Common stock, par value $0.01 per share; 180.4 million shares and 179.8 million shares issued at March 31, 2018 and December 31, 2017, respectively. |
Condensed Consolidated Balance4
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 180.4 | 179.8 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net income | $ 74.9 | $ 77.4 |
Non-cash pre-tax expense: | ||
Depreciation | 25.3 | 23.7 |
Amortization | 8.2 | 8.1 |
Stock-based compensation | 12.6 | 9.5 |
Deferred income taxes | (9.2) | 7.6 |
Asset impairment charges | 3.2 | |
Amortization of deferred financing fees | 0.5 | 0.5 |
Loss on sale of property, plant and equipment | 0.2 | |
Changes in assets and liabilities: | ||
Increase in accounts receivable | (63) | (12.3) |
Increase in inventories | (36.9) | (26.2) |
Decrease in accounts payable | (3.2) | (10.6) |
Increase in other assets | (4.8) | (5.9) |
Decrease in accrued expenses and other liabilities | (73.3) | (95.1) |
Increase in accrued taxes | 16.8 | 2.2 |
Net cash used in operating activities | (51.9) | (17.9) |
Investing activities | ||
Capital expenditures | (37.6) | (29.5) |
Proceeds from disposition of assets | 0.7 | |
Cost of acquisition, net of cash acquired | (5.8) | (0.1) |
Net cash used in investing activities | (42.7) | (29.6) |
Financing activities | ||
Increase in short-term debt | 350 | |
Issuance of long-term debt | 545 | 110 |
Repayment of long-term debt | (515) | (50) |
Proceeds from the exercise of stock options | 3.2 | 8.7 |
Treasury stock purchases | (325.2) | (27.3) |
Employee withholding taxes related to stock-based compensation | (12.2) | (7.8) |
Dividends to stockholders | (29.6) | (27.6) |
Net cash provided by financing activities | 16.2 | 6 |
Effect of foreign exchange rate changes on cash | (0.2) | 0.8 |
Net decrease in cash and cash equivalents | (78.6) | (40.7) |
Cash and cash equivalents at beginning of period | 323 | 251.5 |
Cash and cash equivalents at end of period | $ 244.4 | $ 210.8 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Capital expenditures incurred but not yet paid | $ 7.6 | $ 7.9 |
Treasury stock purchased but not yet paid | $ 24.8 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Non- controlling Interests |
Beginning 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 | 77.4 | 77.4 | |||||
Other comprehensive income | 7.2 | 7.2 | |||||
Stock options exercised | 8.7 | 8.7 | |||||
Stock-based compensation | 1.7 | 9.5 | (7.8) | ||||
Treasury stock purchase | (27.3) | (27.3) | |||||
Ending Balance at Mar. 31, 2017 | 2,430.7 | 1.7 | 2,672 | (64.7) | 892 | (1,071.8) | 1.5 |
Beginning Balance at Dec. 31, 2017 | 2,601.1 | 1.7 | 2,724.9 | (39.2) | 1,174.2 | (1,262.1) | 1.6 |
Comprehensive income: | |||||||
Net income | 74.9 | 75 | (0.1) | ||||
Other comprehensive income | 3.2 | 3.2 | |||||
Stock options exercised | 3.2 | 0.1 | 3.1 | ||||
Stock-based compensation | 0.4 | 12.6 | (12.2) | ||||
Treasury stock purchase | (325.2) | (325.2) | |||||
Dividends | 0.7 | 0.7 | |||||
Ending Balance at Mar. 31, 2018 | $ 2,358.3 | $ 1.8 | $ 2,740.6 | $ (36) | $ 1,249.9 | $ (1,599.5) | $ 1.5 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation and Principles of Consolidation | 1. Basis of Presentation and Principles of Consolidation References to “Fortune Brands,” “the Company,” “we,” “our” and “us” refer to Fortune Brands Home & Security, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires. The Company is a leading home and security products company with a portfolio of leading branded products used for residential home repair, remodeling, new construction and security applications. The condensed consolidated balance sheet as of March 31, 2018, the related condensed consolidated statements of comprehensive income for the three-months ended March 31, 2018 and 2017 and the related condensed consolidated statements of cash flows and equity for the three-month periods ended March 31, 2018 and 2017 are unaudited. During the first quarter of 2018, we adopted Accounting Standards Update (“ASU”) 2017-07 The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our annual consolidated financial statements and notes. The December 31, 2017 condensed consolidated balance sheet was derived from our audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). This Quarterly Report on Form 10-Q 10-K In October 2017, we acquired Victoria +Albert, a UK-based UK-based |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2018 | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, 2014-09 A majority of our sales revenue continues to be recognized when products are shipped from our facilities to our customers. Previously, for certain products, we recognized sales revenue at destination as we determined risks and rewards transferred at that point. We will now recognize sales revenue for these customers at the shipping point of the products consistent with the respective contractual terms. See Note 11 for further information. Leases In February 2016, the FASB issued ASU 2016-02, “right-of-use” 2018-01, Stock Compensation Scope of Modification Accounting In May 2017, the FASB issued ASU 2017-09, non-substantive 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 Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets In May 2017, the FASB issued ASC 610-20 non-customer. 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 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, |
Balance Sheet Information
Balance Sheet Information | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Information | 3. Balance Sheet Information Supplemental information on our balance sheets is as follows: (In millions) March 31, December 31, Inventories: Raw materials and supplies $ 233.8 $ 224.9 Work in process 62.6 58.3 Finished products 322.8 297.6 Total inventories $ 619.2 $ 580.8 Property, plant and equipment, gross $ 1,803.8 $ 1,780.4 Less: accumulated depreciation 1,061.0 1,040.4 Property, plant and equipment, net $ 742.8 $ 740.0 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2018 | |
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 formerly included in our Security segment. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Identifiable Intangible Assets | 5. Goodwill and Identifiable Intangible Assets We had goodwill of $1,918.7 million and $1,912.0 million as of March 31, 2018 and December 31, 2017, respectively. The $6.7 million increase was primarily due to acquisition-related adjustments in our Plumbing segment, including $5.8 million of additional purchase price consideration paid during the three months ended March 31, 2018 related to our acquisition of Victoria + Albert, partially offset by foreign translation adjustments. The change in the net carrying amount of goodwill by segment was as follows: (In millions) Cabinets Plumbing Doors Security Total Goodwill at December 31, 2017 (a) $ 926.3 $ 745.2 $ 143.0 $ 97.5 $ 1,912.0 Year-to-date (0.2 ) (1.1 ) — (0.5 ) (1.8 ) Acquisition-related adjustments — 8.5 — — 8.5 Goodwill at March 31, 2018 (a) $ 926.1 $ 752.6 $ 143.0 $ 97.0 $ 1,918.7 (a) Net of accumulated impairment losses of $399.5 million in the Doors segment. We also had net identifiable intangible assets, principally tradenames, of $1,151.2 million and $1,162.4 million as of March 31, 2018 and December 31, 2017, respectively. The $3.3 million decrease in gross identifiable intangible assets was primarily due to acquisition related adjustments and foreign translation adjustments. The gross carrying value and accumulated amortization by class of identifiable intangible assets as of March 31, 2018 and December 31, 2017 were as follows: (In millions) As of March 31, 2018 As of December 31, 2017 Gross Accumulated Net Gross Accumulated Net Indefinite-lived tradenames $ 709.2 $ — $ 709.2 $ 709.9 $ — $ 709.9 Amortizable intangible assets Tradenames 15.7 (10.4 ) 5.3 15.7 (9.9 ) 5.8 Customer and contractual relationships 661.1 (238.8 ) 422.3 663.8 (232.0 ) 431.8 Patents/proprietary technology 60.3 (45.9 ) 14.4 60.2 (45.3 ) 14.9 Total 737.1 (295.1 ) 442.0 739.7 (287.2 ) 452.5 Total identifiable intangibles $ 1,446.3 $ (295.1 ) $ 1,151.2 $ 1,449.6 $ (287.2 ) $ 1,162.4 Amortizable identifiable intangible assets, principally tradenames and customer relationships, are subject to amortization 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 and 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. In the first quarter of 2018, no events or circumstances occurred that would have required us to perform interim impairment tests of goodwill or indefinite-lived tradenames. 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
Asset Impairment | 3 Months Ended |
Mar. 31, 2018 | |
Asset Impairment | 6. Asset Impairment 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, we recorded $3.2 million of pre-tax |
External Debt and Financing Arr
External Debt and Financing Arrangements | 3 Months Ended |
Mar. 31, 2018 | |
External Debt and Financing Arrangements | 7. External Debt and Financing Arrangements In March 2018, the Company entered into a $350 million term loan for general corporate purposes that matures in March 2019. Interest rates under the term loan are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.625% to LIBOR + 1.25%. Covenants under the term loan are the same as the existing $1.25 billion revolving credit agreement. As of March 31, 2018, we were in compliance with all covenants under this facility. 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. The facility amendment of the amended and restated credit agreement was a non-cash 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 there were no outstanding balances as of March 31, 2018 and December 31, 2017. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments | 8. 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. 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 March 31, 2018 was $304.3 million. Based on foreign exchange rates as of March 31, 2018, we estimate that $1.9 million of net foreign currency derivative gains included in other comprehensive income as of March 31, 2018 will be reclassified to earnings within the next twelve months. The fair values of derivative instruments on the consolidated balance sheets as of March 31, 2018 and December 31, 2017 were as follows: (In millions) Fair Value Location March 31, December 31, Assets Foreign exchange contracts Other current assets $ 2.8 $ 0.8 Commodity contracts Other current assets — 0.2 Total assets $ 2.8 $ 1.0 Liabilities Foreign exchange contracts Other current liabilities $ 1.6 $ 5.6 Net investment hedges Other current liabilities 1.1 0.8 Total liabilities $ 2.7 $ 6.4 The effects of derivative financial instruments on the statements of comprehensive income for the three months ended March 31, 2018 and 2017 were as follows: (Loss) Gain Recognized in Income (In millions) Type of hedge Location March 31, March 31, Cash flow Cost of products sold $ (0.5 ) $ (0.6 ) Fair value Other income, net (0.1 ) (1.1 ) Total $ (0.6 ) $ (1.7 ) The effective portion of cash flow hedges recognized in other comprehensive income were net gains of $4.3 million and $2.1 million at March 31, 2018 and 2017, respectively. In the three months ended March 31, 2018 and 2017, the ineffective portion of cash flow hedges recognized in other income, net, was insignificant. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | 9. Fair Value Measurements ASC requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect inputs other than quoted prices included in level 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 carrying value, net of underwriting commissions, price discounts, and debt issuance costs and fair value of debt as of March 31, 2018 and December 31, 2017 were as follows: (In millions) March 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Revolving credit facility $ 645.0 $ 645.0 $ 615.0 $ 615.0 Term Loan 350.0 350.0 — — Senior Notes 893.0 908.2 892.6 926.3 The estimated fair value of our term loan and revolving credit facility is determined primarily using broker quotes, which are level 2 inputs. The estimated fair value of our Senior Notes is determined by using quoted market prices of our debt securities, which are level 2 inputs. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 were as follows: (In millions) Fair Value March 31, December 31, Assets Derivative financial instruments (level 2) $ 2.8 $ 1.0 Deferred compensation program assets (level 2) 7.8 7.5 Total assets $ 10.6 $ 8.5 Liabilities Derivative financial instruments (level 2) $ 2.7 $ 6.4 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Loss | 10. Accumulated Other Comprehensive Loss 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 Defined (a) Accumulated Balance at December 31, 2016 $ (28.0 ) $ (0.6 ) $ (43.3 ) $ (71.9 ) Amounts classified into accumulated other comprehensive loss 6.8 1.6 — 8.4 Amounts reclassified from accumulated other comprehensive loss — 0.6 (1.8 ) (1.2 ) Net current-period other comprehensive income (loss) 6.8 2.2 (1.8 ) 7.2 Balance at March 31, 2017 $ (21.2 ) $ 1.6 $ (45.1 ) $ (64.7 ) Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) Amounts classified into accumulated other comprehensive (income) loss (0.8 ) 3.5 0.2 2.9 Amounts reclassified from accumulated other comprehensive loss — 0.3 — 0.3 Net current-period other comprehensive income (loss) (0.8 ) 3.8 0.2 3.2 Balance at March 31, 2018 $ 5.0 $ 1.4 $ (42.4 ) $ (36.0 ) (a) See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. The reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 were as follows: (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Affected Line Item in 2018 2017 Losses on cash flow hedges Foreign exchange contracts $ (0.5 ) $ (0.6 ) Cost of products sold (0.5 ) (0.6 ) Total Before Tax 0.2 — Tax expense $ (0.3 ) $ (0.6 ) Net of tax Defined benefit plan items Recognition of prior service credits $ — $ 3.0 (a) — 3.0 Total before tax — (1.2 ) Tax expense $ — $ 1.8 Net of tax Total reclassifications for the period $ (0.3 ) $ 1.2 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 12, “Defined Benefit Plans,” for additional information. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | 11. Revenue Our principal performance obligations are the sale of kitchen and bath cabinets, faucets and accessories, fiberglass and steel entry-door systems and locks, safes, safety and security devices (“goods” or “products”). The Company recognizes revenue for the sale of goods based on its assessment of when control transfers to our customers. For the majority of our sales, we recognize revenue at the point in time when we ship product from our facilities to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods to our customers. Payment terms on our product sales range from 30 to 90 days. Taxes assessed by a governmental authority that we collect are excluded from revenue. The expected costs associated with our contractual warranties will continue to be recognized as expense when the products are sold (See Note 14). We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration the Company will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer. In addition, for certain customer program incentives, we receive an identifiable benefit (goods or services) in exchange for the consideration given and record the associated expenditure in selling, general and administrative expenses. We account for shipping and handling costs that occur after the customer has obtained control of a product as a fulfillment activity (i.e., as an expense) rather than as a promised service (i.e., as a revenue element). These costs are classified within selling, general and administrative expenses. Settlement of our outstanding accounts receivable balances is normally within 30 to 90 days of the original sale transaction date. Obligations arising from customer rights to return our goods for any reason, including among others, product obsolescence, stock rotations, trade-in agreements for newer products and upon termination of a customer contract. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund obligation, which amounted to $11.7 million as of March 31, 2018. Refund obligations are classified within other current liabilities in our consolidated balance sheet. Return assets related to the refund obligation are measured at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value. Return assets are classified within other current assets and were immaterial as of March 31, 2018. The Company disaggregates revenue from contracts with customers into (i) major sales distribution channels in the U.S. and (ii) total sales to customers outside the U.S. market as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors. The following table disaggregates our consolidated revenue by major sales distribution channels for the three months ended March 31, 2018. (In millions) Three Months 2018 Wholesalers (1) $ 585.6 Home Center retailers (2) 349.7 Other retailers (3) 76.1 Builder direct 51.5 U.S. net sales 1,062.9 International (4) 191.7 Net sales $ 1,254.6 (1) Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customer’s respective internet website portals. (2) Represents sales to the three largest “Do-It-Yourself” retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc, inclusive of sales through their respective internet website portals. (3) Represents sales principally to our mass merchant and standalone independent e-commerce customers. (4) Represents sales in markets outside the United States, principally in China, Canada, Europe and Mexico. Practical Expedients Incremental costs of obtaining a contract include only those costs the company incurs that would not have been incurred if the contract had not been obtained. These costs are required to be recognized as assets and amortized over the period that the related goods or services transfer to the customer. As a practical expedient, we expense as incurred costs to obtain a contract when the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses. |
Defined Benefit Plans
Defined Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plans | 12. Defined Benefit Plans The components of net periodic benefit cost for pension and postretirement benefits for the three months ended March 31, 2018 and 2017 were as follows: (In millions) Three Months Ended March 31, Pension Benefits Postretirement Benefits 2018 2017 2018 2017 Service cost $ 0.2 $ 0.1 $ — $ — Interest cost 7.6 8.4 — — Expected return on plan assets (10.3 ) (9.3 ) — — Recognition of prior service credits — — — (3.0 ) Net periodic benefit income $ (2.5 ) $ (0.8 ) $ — $ (3.0 ) Service cost for 2018 relates to benefit accruals in an hourly Union defined benefit plan in our Security segment. All other defined benefit pension plans were frozen as of December 31, 2016. In March 2017, the FASB issued ASU 2017-07, non-service 2017-07 (In millions) Three Months Ended 2017 Increase/(decrease) to cost of products sold $ 2.9 Increase/(decrease) to selling, general and administrative expenses 1.0 Increase/(decrease) to operating income $ (3.9 ) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | 13. Income Taxes The effective income tax rates for the three months ended March 31, 2018 and 2017 were 30.1% and 25.4%, respectively. The effective income tax rate in 2018 was favorably impacted by the corporate tax rate reduction from 35% to 21% under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), and a benefit associated with the U.S. research and development credit. The effective income tax rate in 2018 was unfavorably impacted by an adjustment to the deemed repatriation tax liability recorded in 2017 under the Tax Act, the repeal of the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, state and local taxes, and increases to uncertain tax positions. The effective income tax rate in 2017 was favorably impacted by a tax benefit attributable to the share-based compensation (ASU 2016-09) On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued which deals with 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 Tax Act. In accordance with SAB 118 we calculated our best estimate of the impact of the Tax Act on our 2017 effective income tax rate at our assessment date of January 22, 2018. Due to additional guidance received after our assessment date and additional analysis, an unfavorable adjustment of $5.4 million, impacting the three months ended March 31, 2018, was recorded to income tax expense. As of March 31, 2018, we have not completed our accounting for all of the tax effects of the Tax Act. It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease in the range of $2.0 million to $22.0 million, primarily as a result of the conclusion of pending U.S. federal, state and foreign income tax proceedings. |
Product Warranties
Product Warranties | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranties | 14. 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 three months ended March 31, 2018 and 2017, respectively. (In millions) Three Months Ended March 31, 2018 2017 Reserve balance at January 1, $ 17.2 $ 16.2 Provision for warranties issued 6.2 8.2 Settlements made (in cash or in kind) (6.2 ) (8.5 ) Reserve balance at March 31, $ 17.2 $ 15.9 |
Information on Business Segment
Information on Business Segments | 3 Months Ended |
Mar. 31, 2018 | |
Information on Business Segments | 15. Information on Business Segments Net sales and operating income for the three months ended March 31, 2018 and 2017 by segment were as follows: Three Months Ended March 31, (In millions) 2018 2017 % Change Net Sales Cabinets $ 557.2 $ 573.6 (2.9 )% Plumbing 449.7 378.4 18.8 Doors 110.3 102.2 7.9 Security 137.4 132.6 3.6 Net sales $ 1,254.6 $ 1,186.8 5.7 % Operating Income (Loss) Cabinets $ 24.1 $ 47.0 (48.7 )% Plumbing (a) 88.4 67.2 31.5 Doors 13.1 8.2 59.8 Security 15.1 10.1 49.5 Less: Corporate expenses (a) (21.3 ) (21.5 ) 0.9 Operating income $ 119.4 $ 111.0 7.6 % Corporate expenses (a) General and administrative expense $ (21.3 ) $ (21.5 ) Total Corporate expenses $ (21.3 ) $ (21.5 ) 0.9 (a) We revised our previously reported results for the three months ended March 31, 2017 for ASU 2017-07, |
Restructuring and Other Charges
Restructuring and Other Charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Other Charges | 16. Restructuring and Other Charges Pre-tax (In millions) Three Months Ended March 31, 2018 Restructuring Other Charges (a) Total Cabinets $ 0.3 $ (0.2 ) $ 0.1 Plumbing (0.2 ) — (0.2 ) Security — 0.1 0.1 Doors 0.7 — 0.7 Total $ 0.8 $ (0.1 ) $ 0.7 Restructuring and other charges in the first quarter of 2018 largely related to severance costs within our Doors and Cabinets segments. (In millions) Three Months Ended March 31, 2017 Restructuring Other Charges (a) Total Plumbing $ 1.4 $ — $ 1.4 Doors (0.2 ) — (0.2 ) Security 1.0 0.7 1.7 Total $ 2.2 $ 0.7 $ 2.9 (a) “Other Charges” represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities. Restructuring and other charges in the first quarter of 2017 largely related to severance costs within our Plumbing and Security segments. Reconciliation of Restructuring Liability (In millions) Balance at 2018 Cash (a) Non-Cash Write-offs (b) Balance at Workforce reduction costs $ 5.0 $ 0.8 $ (2.0 ) $ — $ 3.8 Other 0.8 — — (0.3 ) 0.5 $ 5.8 $ 0.8 $ (2.0 ) $ (0.3 ) $ 4.3 (a) Cash expenditures primarily related to severance charges. (b) Non-cash (In millions) Balance at 2017 Cash (a) Non-Cash Write-offs (b) Balance at Workforce reduction costs $ 2.4 $ 1.9 $ (1.0 ) $ — $ 3.3 Other 0.6 0.3 (0.6 ) — 0.3 $ 3.0 $ 2.2 $ (1.6 ) $ — $ 3.6 (a) Cash expenditures primarily related to severance charges. (b) Non-cash |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | 17. Earnings Per Share The computations of earnings per common share for the three months ended March 31, 2018 and 2017 were as follows: (In millions, except per share data) Three Months Ended March 31, 2018 2017 Income from continuing operations, net of tax $ 75.1 $ 77.4 Less: Noncontrolling interest (0.1 ) — Income from continuing operations for EPS 75.2 77.4 Loss from discontinued operations (0.2 ) — Net income attributable to Fortune Brands $ 75.0 $ 77.4 Earnings per common share Basic Continuing operations $ 0.50 $ 0.50 Discontinued operations — — Net income attributable to Fortune Brands common stockholders $ 0.50 $ 0.50 Diluted Continuing operations $ 0.49 $ 0.50 Discontinued operations — — Net income attributable to Fortune Brands common stockholders $ 0.49 $ 0.50 Basic average shares outstanding 149.9 153.3 Stock-based awards 2.2 2.9 Diluted average shares outstanding 152.1 156.2 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.5 0.6 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Contingencies | 18. Contingencies Litigation We are defendants in lawsuits associated with the normal conduct of our businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Environmental Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Fortune Brands during the three months ended March 31, 2018 and 2017. We are involved in remediation activities to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs of each site are based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. We believe, compliance with current environmental protection laws (before taking into account estimated recoveries from third parties) will not have a material adverse effect upon our results of operations, cash flows or financial condition. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Event | 19. Subsequent Event On April 30, 2018, the Company’s Board of Directors authorized the repurchase of up to $150 million of shares of the Company’s common stock over the two years ending April 30, 2020. The share repurchase programs do not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time. |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Information on Balance Sheets | Supplemental information on our balance sheets is as follows: (In millions) March 31, December 31, Inventories: Raw materials and supplies $ 233.8 $ 224.9 Work in process 62.6 58.3 Finished products 322.8 297.6 Total inventories $ 619.2 $ 580.8 Property, plant and equipment, gross $ 1,803.8 $ 1,780.4 Less: accumulated depreciation 1,061.0 1,040.4 Property, plant and equipment, net $ 742.8 $ 740.0 |
Goodwill and Identifiable Int28
Goodwill and Identifiable Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 at December 31, 2017 (a) $ 926.3 $ 745.2 $ 143.0 $ 97.5 $ 1,912.0 Year-to-date (0.2 ) (1.1 ) — (0.5 ) (1.8 ) Acquisition-related adjustments — 8.5 — — 8.5 Goodwill at March 31, 2018 (a) $ 926.1 $ 752.6 $ 143.0 $ 97.0 $ 1,918.7 (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 identifiable intangible assets as of March 31, 2018 and December 31, 2017 were as follows: (In millions) As of March 31, 2018 As of December 31, 2017 Gross Accumulated Net Gross Accumulated Net Indefinite-lived tradenames $ 709.2 $ — $ 709.2 $ 709.9 $ — $ 709.9 Amortizable intangible assets Tradenames 15.7 (10.4 ) 5.3 15.7 (9.9 ) 5.8 Customer and contractual relationships 661.1 (238.8 ) 422.3 663.8 (232.0 ) 431.8 Patents/proprietary technology 60.3 (45.9 ) 14.4 60.2 (45.3 ) 14.9 Total 737.1 (295.1 ) 442.0 739.7 (287.2 ) 452.5 Total identifiable intangibles $ 1,446.3 $ (295.1 ) $ 1,151.2 $ 1,449.6 $ (287.2 ) $ 1,162.4 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Values of Derivative Instruments | The fair values of derivative instruments on the consolidated balance sheets as of March 31, 2018 and December 31, 2017 were as follows: (In millions) Fair Value Location March 31, December 31, Assets Foreign exchange contracts Other current assets $ 2.8 $ 0.8 Commodity contracts Other current assets — 0.2 Total assets $ 2.8 $ 1.0 Liabilities Foreign exchange contracts Other current liabilities $ 1.6 $ 5.6 Net investment hedges Other current liabilities 1.1 0.8 Total liabilities $ 2.7 $ 6.4 |
Effects of Derivative Financial Instruments on Consolidated Statements of Income | The effects of derivative financial instruments on the statements of comprehensive income for the three months ended March 31, 2018 and 2017 were as follows: (Loss) Gain Recognized in Income (In millions) Type of hedge Location March 31, March 31, Cash flow Cost of products sold $ (0.5 ) $ (0.6 ) Fair value Other income, net (0.1 ) (1.1 ) Total $ (0.6 ) $ (1.7 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Carrying Value and Fair Value of Debt | The carrying value, net of underwriting commissions, price discounts, and debt issuance costs and fair value of debt as of March 31, 2018 and December 31, 2017 were as follows: (In millions) March 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Revolving credit facility $ 645.0 $ 645.0 $ 615.0 $ 615.0 Term Loan 350.0 350.0 — — Senior Notes 893.0 908.2 892.6 926.3 |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 were as follows: (In millions) Fair Value March 31, December 31, Assets Derivative financial instruments (level 2) $ 2.8 $ 1.0 Deferred compensation program assets (level 2) 7.8 7.5 Total assets $ 10.6 $ 8.5 Liabilities Derivative financial instruments (level 2) $ 2.7 $ 6.4 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income | The after-tax (In millions) Foreign Derivative Defined (a) Accumulated Balance at December 31, 2016 $ (28.0 ) $ (0.6 ) $ (43.3 ) $ (71.9 ) Amounts classified into accumulated other comprehensive loss 6.8 1.6 — 8.4 Amounts reclassified from accumulated other comprehensive loss — 0.6 (1.8 ) (1.2 ) Net current-period other comprehensive income (loss) 6.8 2.2 (1.8 ) 7.2 Balance at March 31, 2017 $ (21.2 ) $ 1.6 $ (45.1 ) $ (64.7 ) Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) Amounts classified into accumulated other comprehensive (income) loss (0.8 ) 3.5 0.2 2.9 Amounts reclassified from accumulated other comprehensive loss — 0.3 — 0.3 Net current-period other comprehensive income (loss) (0.8 ) 3.8 0.2 3.2 Balance at March 31, 2018 $ 5.0 $ 1.4 $ (42.4 ) $ (36.0 ) (a) See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. |
Reclassifications Out of Accumulated Other Comprehensive Loss | The reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 were as follows: (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Affected Line Item in 2018 2017 Losses on cash flow hedges Foreign exchange contracts $ (0.5 ) $ (0.6 ) Cost of products sold (0.5 ) (0.6 ) Total Before Tax 0.2 — Tax expense $ (0.3 ) $ (0.6 ) Net of tax Defined benefit plan items Recognition of prior service credits $ — $ 3.0 (a) — 3.0 Total before tax — (1.2 ) Tax expense $ — $ 1.8 Net of tax Total reclassifications for the period $ (0.3 ) $ 1.2 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 12, “Defined Benefit Plans,” for additional information. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disaggregation of Revenue | The Company disaggregates revenue from contracts with customers into (i) major sales distribution channels in the U.S. and (ii) total sales to customers outside the U.S. market as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors. The following table disaggregates our consolidated revenue by major sales distribution channels for the three months ended March 31, 2018. (In millions) Three Months 2018 Wholesalers (1) $ 585.6 Home Center retailers (2) 349.7 Other retailers (3) 76.1 Builder direct 51.5 U.S. net sales 1,062.9 International (4) 191.7 Net sales $ 1,254.6 (1) Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customer’s respective internet website portals. (2) Represents sales to the three largest “Do-It-Yourself” retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc, inclusive of sales through their respective internet website portals. (3) Represents sales principally to our mass merchant and standalone independent e-commerce customers. (4) Represents sales in markets outside the United States, principally in China, Canada, Europe and Mexico. |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits | The components of net periodic benefit cost for pension and postretirement benefits for the three months ended March 31, 2018 and 2017 were as follows: (In millions) Three Months Ended March 31, Pension Benefits Postretirement Benefits 2018 2017 2018 2017 Service cost $ 0.2 $ 0.1 $ — $ — Interest cost 7.6 8.4 — — Expected return on plan assets (10.3 ) (9.3 ) — — Recognition of prior service credits — — — (3.0 ) Net periodic benefit income $ (2.5 ) $ (0.8 ) $ — $ (3.0 ) |
Accounting Standards Update 2017-07 [Member] | |
Schedule of Retrospective Impact of Adopting ASU 2017-07 | The retrospective impact of adopting ASU 2017-07 (In millions) Three Months Ended 2017 Increase/(decrease) to cost of products sold $ 2.9 Increase/(decrease) to selling, general and administrative expenses 1.0 Increase/(decrease) to operating income $ (3.9 ) |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Activity Related to Product Warranty Liability | The following table summarizes activity related to our product warranty liability for the three months ended March 31, 2018 and 2017, respectively. (In millions) Three Months Ended March 31, 2018 2017 Reserve balance at January 1, $ 17.2 $ 16.2 Provision for warranties issued 6.2 8.2 Settlements made (in cash or in kind) (6.2 ) (8.5 ) Reserve balance at March 31, $ 17.2 $ 15.9 |
Information on Business Segme35
Information on Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Sales and Operating Income by Segment | Net sales and operating income for the three months ended March 31, 2018 and 2017 by segment were as follows: Three Months Ended March 31, (In millions) 2018 2017 % Change Net Sales Cabinets $ 557.2 $ 573.6 (2.9 )% Plumbing 449.7 378.4 18.8 Doors 110.3 102.2 7.9 Security 137.4 132.6 3.6 Net sales $ 1,254.6 $ 1,186.8 5.7 % Operating Income (Loss) Cabinets $ 24.1 $ 47.0 (48.7 )% Plumbing (a) 88.4 67.2 31.5 Doors 13.1 8.2 59.8 Security 15.1 10.1 49.5 Less: Corporate expenses (a) (21.3 ) (21.5 ) 0.9 Operating income $ 119.4 $ 111.0 7.6 % Corporate expenses (a) General and administrative expense $ (21.3 ) $ (21.5 ) Total Corporate expenses $ (21.3 ) $ (21.5 ) 0.9 (a) We revised our previously reported results for the three months ended March 31, 2017 for ASU 2017-07, |
Restructuring and Other Charg36
Restructuring and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Pre-tax Restructuring and Other Charges | Pre-tax (In millions) Three Months Ended March 31, 2018 Restructuring Other Charges (a) Total Cabinets $ 0.3 $ (0.2 ) $ 0.1 Plumbing (0.2 ) — (0.2 ) Security — 0.1 0.1 Doors 0.7 — 0.7 Total $ 0.8 $ (0.1 ) $ 0.7 Restructuring and other charges in the first quarter of 2018 largely related to severance costs within our Doors and Cabinets segments. (In millions) Three Months Ended March 31, 2017 Restructuring Other Charges (a) Total Plumbing $ 1.4 $ — $ 1.4 Doors (0.2 ) — (0.2 ) Security 1.0 0.7 1.7 Total $ 2.2 $ 0.7 $ 2.9 (a) “Other Charges” represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities. |
Reconciliation of Restructuring Liability | Reconciliation of Restructuring Liability (In millions) Balance at 2018 Cash (a) Non-Cash Write-offs (b) Balance at Workforce reduction costs $ 5.0 $ 0.8 $ (2.0 ) $ — $ 3.8 Other 0.8 — — (0.3 ) 0.5 $ 5.8 $ 0.8 $ (2.0 ) $ (0.3 ) $ 4.3 (a) Cash expenditures primarily related to severance charges. (b) Non-cash (In millions) Balance at 2017 Cash (a) Non-Cash Write-offs (b) Balance at Workforce reduction costs $ 2.4 $ 1.9 $ (1.0 ) $ — $ 3.3 Other 0.6 0.3 (0.6 ) — 0.3 $ 3.0 $ 2.2 $ (1.6 ) $ — $ 3.6 (a) Cash expenditures primarily related to severance charges. (b) Non-cash |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Computations of Earnings per Common Share | The computations of earnings per common share for the three months ended March 31, 2018 and 2017 were as follows: (In millions, except per share data) Three Months Ended March 31, 2018 2017 Income from continuing operations, net of tax $ 75.1 $ 77.4 Less: Noncontrolling interest (0.1 ) — Income from continuing operations for EPS 75.2 77.4 Loss from discontinued operations (0.2 ) — Net income attributable to Fortune Brands $ 75.0 $ 77.4 Earnings per common share Basic Continuing operations $ 0.50 $ 0.50 Discontinued operations — — Net income attributable to Fortune Brands common stockholders $ 0.50 $ 0.50 Diluted Continuing operations $ 0.49 $ 0.50 Discontinued operations — — Net income attributable to Fortune Brands common stockholders $ 0.49 $ 0.50 Basic average shares outstanding 149.9 153.3 Stock-based awards 2.2 2.9 Diluted average shares outstanding 152.1 156.2 Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share 0.5 0.6 |
Balance Sheet Information - Sup
Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories: | ||
Raw materials and supplies | $ 233.8 | $ 224.9 |
Work in process | 62.6 | 58.3 |
Finished products | 322.8 | 297.6 |
Total inventories | 619.2 | 580.8 |
Property, plant and equipment, gross | 1,803.8 | 1,780.4 |
Less: accumulated depreciation | 1,061 | 1,040.4 |
Property, plant and equipment, net | $ 742.8 | $ 740 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Victoria Plus Albert and Shaws [Member] | |
Acquisitions and Dispositions [Line Items] | |
Business acquisition consideration price paid | $ 132 |
Goodwill and Identifiable Int40
Goodwill and Identifiable Intangible Assets - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)asset_group | ||
Goodwill [Line Items] | |||
Goodwill | [1] | $ 1,918.7 | $ 1,912 |
Other intangible assets, net of accumulated amortization | 1,151.2 | 1,162.4 | |
Decrease in gross identifiable intangible assets | (3.3) | ||
Carrying value of tradenames | 709.2 | 709.9 | |
Victoria Plus Albert [Member] | |||
Goodwill [Line Items] | |||
Additional purchase price consideration paid | 5.8 | ||
Plumbing [Member] | |||
Goodwill [Line Items] | |||
Goodwill | [1] | 752.6 | 745.2 |
Goodwill increase due to foreign exchange adjustments | 6.7 | ||
Cabinets [Member] | |||
Goodwill [Line Items] | |||
Goodwill | [1] | $ 926.1 | $ 926.3 |
Number of tradenames, with the fair value exceeded their carrying value | asset_group | 2 | ||
Carrying value of tradenames | $ 217.8 | ||
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 Int41
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($) | ||
Goodwill [Line Items] | ||
Beginning Balance | $ 1,912 | [1] |
Year-to-date translation adjustments | (1.8) | |
Acquisition-related adjustments | 8.5 | |
Ending Balance | 1,918.7 | [1] |
Cabinets [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 926.3 | [1] |
Year-to-date translation adjustments | (0.2) | |
Ending Balance | 926.1 | [1] |
Plumbing [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 745.2 | [1] |
Year-to-date translation adjustments | (1.1) | |
Acquisition-related adjustments | 8.5 | |
Ending Balance | 752.6 | [1] |
Doors [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 143 | [1] |
Ending Balance | 143 | [1] |
Security [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 97.5 | [1] |
Year-to-date translation adjustments | (0.5) | |
Ending Balance | $ 97 | [1] |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors segment. |
Goodwill and Identifiable Int42
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) $ in Millions | Mar. 31, 2018USD ($) |
Doors [Member] | |
Goodwill [Line Items] | |
Accumulated impairment losses | $ 399.5 |
Goodwill and Identifiable Int43
Goodwill and Identifiable Intangible Assets - Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Total identifiable intangibles | $ 1,446.3 | $ 1,449.6 |
Accumulated Amortization, Total identifiable intangibles | (295.1) | (287.2) |
Net Book Value, Total identifiable intangibles | 1,151.2 | 1,162.4 |
Gross Carrying Amounts, Indefinite-lived tradenames | 709.2 | 709.9 |
Net Book Value, Indefinite-lived tradenames | 709.2 | 709.9 |
Gross Carrying Amounts, Finite Lived | 737.1 | 739.7 |
Accumulated Amortization, Finite Lived | (295.1) | (287.2) |
Net Book Value, Finite Lived | 442 | 452.5 |
Tradenames [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 15.7 | 15.7 |
Accumulated Amortization, Finite Lived | (10.4) | (9.9) |
Net Book Value, Finite Lived | 5.3 | 5.8 |
Customer and contractual relationships [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 661.1 | 663.8 |
Accumulated Amortization, Finite Lived | (238.8) | (232) |
Net Book Value, Finite Lived | 422.3 | 431.8 |
Patents/proprietary technology [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 60.3 | 60.2 |
Accumulated Amortization, Finite Lived | (45.9) | (45.3) |
Net Book Value, Finite Lived | $ 14.4 | $ 14.9 |
Asset Impairment - Additional i
Asset Impairment - Additional information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Asset Impairment Charges [Line Items] | |
Asset impairment charge | $ 3.2 |
Definite-lived intangible assets | 3 |
Fixed Assets | $ 0.2 |
External Debt and Financing A45
External Debt and Financing Arrangements - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Term loan maturity period | 2019-03 | |||
Revolving credit facility, extended expiration date | 2021-06 | |||
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 | ||
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 | $ 645,000,000 | 615,000,000 | ||
Current portion of long-term debt | 0 | 0 | ||
Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 350,000,000 | |||
Term Loan Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate over LIBOR | 0.625% | |||
Term Loan Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate over LIBOR | 1.25% | |||
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 Unsecured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 900,000,000 | |||
Senior notes, outstanding amount | $ 893,000,000 | $ 892,600,000 | ||
Senior Unsecured Notes [Member] | Notes Due 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 400,000,000 | |||
Senior unsecured notes, maturity period | 5 years | |||
Senior unsecured notes, maturity year | 2,020 | |||
Senior unsecured notes, coupon rate | 3.00% | |||
Senior Unsecured Notes [Member] | Notes Due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes, price | $ 500,000,000 | |||
Senior unsecured notes, maturity period | 10 years | |||
Senior unsecured notes, maturity year | 2,025 | |||
Senior unsecured notes, coupon rate | 4.00% |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Estimated amount of net foreign currency derivative gains in other comprehensive income reclassified to earnings within 12 months | $ 1,900,000 | |
Foreign exchange contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount of foreign currency derivative hedges | 304,300,000 | |
Cash flow hedge [Member] | ||
Derivative [Line Items] | ||
Net gains recognized in OCI | $ 4,300,000 | $ 2,100,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 2.8 | $ 1 |
Derivative liabilities, fair value | 2.7 | 6.4 |
Net investment hedges [Member] | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 1.1 | 0.8 |
Foreign exchange contracts [Member] | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 2.8 | 0.8 |
Foreign exchange contracts [Member] | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | $ 1.6 | 5.6 |
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 | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Loss) Gain Recognized in Income | $ (0.6) | $ (1.7) |
Cash flow hedge [Member] | Cost of products sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Loss) Gain Recognized in Income | (0.5) | (0.6) |
Fair value hedge [Member] | Other income, net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Loss) Gain Recognized in Income | $ (0.1) | $ (1.1) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | Mar. 31, 2018USD ($) |
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 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Debt (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Value | Term Loan Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | $ 350 | |
Carrying Value | Senior Unsecured Notes [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 893 | $ 892.6 |
Carrying Value | Revolving Credit Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 645 | 615 |
Fair Value | Term Loan Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 350 | |
Fair Value | Senior Unsecured Notes [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | 908.2 | 926.3 |
Fair Value | Revolving Credit Facility [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair Value | $ 645 | $ 615 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial instruments (level 2) | $ 2.8 | $ 1 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10.6 | 8.5 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial instruments (level 2) | 2.8 | 1 |
Deferred compensation program assets (level 2) | 7.8 | 7.5 |
Derivative financial instruments (level 2) | $ 2.7 | $ 6.4 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Loss - After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 2,601.1 | $ 2,363 | |
Other comprehensive (loss) income, net of tax | 3.2 | 7.2 | |
Ending Balance | 2,358.3 | 2,430.7 | |
Foreign Currency Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 5.8 | (28) | |
Amounts classified into accumulated other comprehensive (income) loss | (0.8) | 6.8 | |
Other comprehensive (loss) income, net of tax | (0.8) | 6.8 | |
Ending Balance | 5 | (21.2) | |
Derivative Hedging Gains (Loss) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (2.4) | (0.6) | |
Amounts classified into accumulated other comprehensive (income) loss | 3.5 | 1.6 | |
Amounts reclassified from accumulated other comprehensive loss | 0.3 | 0.6 | |
Other comprehensive (loss) income, net of tax | 3.8 | 2.2 | |
Ending Balance | 1.4 | 1.6 | |
Defined benefit plan items [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | [1] | (42.6) | (43.3) |
Amounts classified into accumulated other comprehensive (income) loss | [1] | 0.2 | |
Amounts reclassified from accumulated other comprehensive loss | [1] | (1.8) | |
Other comprehensive (loss) income, net of tax | [1] | 0.2 | (1.8) |
Ending Balance | [1] | (42.4) | (45.1) |
Accumulated Other Comprehensive (Loss) Income [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (39.2) | (71.9) | |
Amounts classified into accumulated other comprehensive (income) loss | 2.9 | 8.4 | |
Amounts reclassified from accumulated other comprehensive loss | 0.3 | (1.2) | |
Other comprehensive (loss) income, net of tax | 3.2 | 7.2 | |
Ending Balance | $ (36) | $ (64.7) | |
[1] | See Note 12, "Defined Benefit Plans," for further information on the adjustments related to defined benefit plans. |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of products sold | $ 815 | $ 772.7 | |
Derivative Hedging Gains (Loss) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | (0.3) | (0.6) | |
Defined benefit plan items [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | [1] | 1.8 | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | (0.3) | 1.2 | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gains (Loss) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (0.5) | (0.6) | |
Reclassification from AOCI, Current Period, Tax | 0.2 | ||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | (0.3) | (0.6) | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gains (Loss) [Member] | Foreign exchange contracts [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of products sold | $ (0.5) | (0.6) | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | 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] | 3 | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | 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 | 3 | ||
Reclassification from AOCI, Current Period, Tax | (1.2) | ||
Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax | $ 1.8 | ||
[1] | See Note 12, "Defined Benefit Plans," for further information on the adjustments related to defined benefit plans. | ||
[2] | These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 12, "Defined Benefit Plans," for additional information. |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Payment term on product sales range, description | Payment terms on our product sales range from 30 to 90 days. |
Other current liabilities [Member] | |
Disaggregation of Revenue [Line Items] | |
Refund obligation | $ 11.7 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 1,254.6 | $ 1,186.8 | |
Wholesalers [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [1] | 585.6 | |
Home Center Retailers [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [2] | 349.7 | |
Other Retailers [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [3] | 76.1 | |
Builder Direct [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 51.5 | ||
United States [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,062.9 | ||
International [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [4] | $ 191.7 | |
[1] | Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customer's respective internet website portals. | ||
[2] | Represents sales to the three largest "Do-It-Yourself" retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc, inclusive of sales through their respective internet website portals. | ||
[3] | Represents sales principally to our mass merchant and standalone independent e-commerce customers. | ||
[4] | Represents sales in markets outside the United States, principally in China, Canada, Europe and Mexico. |
Defined Benefit Plans - Compone
Defined Benefit Plans - Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits (Detail) - Net Periodic Benefit Cost - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0.2 | $ 0.1 |
Interest cost | 7.6 | 8.4 |
Expected return on plan assets | (10.3) | (9.3) |
Net periodic benefit income | $ (2.5) | (0.8) |
Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Recognition of prior service credits | (3) | |
Net periodic benefit income | $ (3) |
Defined Benefit Plans - Additio
Defined Benefit Plans - Additional Information (Detail) $ in Millions | 1 Months Ended |
Mar. 31, 2017USD ($) | |
Accounting Standards Update 2017-07 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Reclassifications from operating income to other income | $ 3.9 |
Defined Benefit Plans - Schedul
Defined Benefit Plans - Schedule of Retrospective Impact of Adopting ASU 2017-07 (Detail) - Accounting Standards Update 2017-07 [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase/(decrease) to operating income | $ (3.9) |
Cost of products sold [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase/(decrease) to operating income | 2.9 |
Selling, general and administrative Expenses [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase/(decrease) to operating income | $ 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Effective income tax rate | 30.10% | 25.40% | |
Reduction in corporate tax rate | 21.00% | 35.00% | |
Adjustment to income tax expense | $ 5,400,000 | ||
Minimum [Member] | |||
Income Taxes [Line Items] | |||
Reasonably possible decrease in unrecognized tax benefits | 2,000,000 | ||
Maximum [Member] | |||
Income Taxes [Line Items] | |||
Reasonably possible decrease in unrecognized tax benefits | $ 22,000,000 |
Product Warranties - Activity R
Product Warranties - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Product Warranty Liability [Line Items] | ||
Reserve balance at the beginning of the year | $ 17.2 | $ 16.2 |
Provision for warranties issued | 6.2 | 8.2 |
Settlements made (in cash or in kind) | (6.2) | (8.5) |
Reserve balance at end of year | $ 17.2 | $ 15.9 |
Information on Business Segme61
Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 1,254.6 | $ 1,186.8 | |
Operating Income (Loss) | $ 119.4 | 111 | |
Net Sales, Percentage Change vs. Prior Year | 5.70% | ||
Operating Income (Loss), Percentage Change vs. Prior Year | 7.60% | ||
Corporate [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating Income (Loss) | [1] | $ (21.3) | (21.5) |
General and administrative expense | [1] | (21.3) | (21.5) |
Total Corporate expenses | [1] | $ (21.3) | (21.5) |
Operating Income (Loss), Percentage Change vs. Prior Year | [1] | 0.90% | |
Total Corporate expenses, Percentage Change vs. Prior Year | [1] | 0.90% | |
Cabinets [Member] | Operating Segments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 557.2 | 573.6 | |
Operating Income (Loss) | $ 24.1 | 47 | |
Net Sales, Percentage Change vs. Prior Year | (2.90%) | ||
Operating Income (Loss), Percentage Change vs. Prior Year | (48.70%) | ||
Plumbing [Member] | Operating Segments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 449.7 | 378.4 | |
Operating Income (Loss) | [1] | $ 88.4 | 67.2 |
Net Sales, Percentage Change vs. Prior Year | 18.80% | ||
Operating Income (Loss), Percentage Change vs. Prior Year | [1] | 31.50% | |
Doors [Member] | Operating Segments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 110.3 | 102.2 | |
Operating Income (Loss) | $ 13.1 | 8.2 | |
Net Sales, Percentage Change vs. Prior Year | 7.90% | ||
Operating Income (Loss), Percentage Change vs. Prior Year | 59.80% | ||
Security [Member] | Operating Segments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 137.4 | 132.6 | |
Operating Income (Loss) | $ 15.1 | $ 10.1 | |
Net Sales, Percentage Change vs. Prior Year | 3.60% | ||
Operating Income (Loss), Percentage Change vs. Prior Year | 49.50% | ||
[1] | We revised our previously reported results for the three months ended March 31, 2017 for ASU 2017-07, Presentation of Net Periodic Pension and Postretirement Costs. |
Restructuring and Other Charg62
Restructuring and Other Charges - Pre-tax Restructuring and Other Charges (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 0.8 | $ 2.2 | |
Other Charges | [1] | (0.1) | 0.7 |
Total Charges | 0.7 | 2.9 | |
Operating Segments [Member] | Cabinets [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0.3 | ||
Other Charges | [1] | (0.2) | |
Total Charges | 0.1 | ||
Operating Segments [Member] | Plumbing [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | (0.2) | 1.4 | |
Total Charges | (0.2) | 1.4 | |
Operating Segments [Member] | Security [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1 | ||
Other Charges | [1] | 0.1 | 0.7 |
Total Charges | 0.1 | 1.7 | |
Operating Segments [Member] | Doors [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0.7 | (0.2) | |
Total Charges | $ 0.7 | $ (0.2) | |
[1] | "Other Charges" represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities. |
Restructuring and Other Charg63
Restructuring and Other Charges - Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | $ 5.8 | $ 3 | |
Provision | 0.8 | 2.2 | |
Cash Expenditures | [1] | (2) | (1.6) |
Non-Cash Write-offs | [2] | (0.3) | |
Ending Balance | 4.3 | 3.6 | |
Workforce Reduction Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | 5 | 2.4 | |
Provision | 0.8 | 1.9 | |
Cash Expenditures | [1] | (2) | (1) |
Ending Balance | 3.8 | 3.3 | |
Other [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | 0.8 | 0.6 | |
Provision | 0.3 | ||
Cash Expenditures | [1] | (0.6) | |
Non-Cash Write-offs | [2] | (0.3) | |
Ending Balance | $ 0.5 | $ 0.3 | |
[1] | Cash expenditures primarily related to severance charges. | ||
[2] | Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions. |
Earnings Per Share - Computatio
Earnings Per Share - Computations of Earnings per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||
Income from continuing operations, net of tax | $ 75.1 | $ 77.4 |
Less: Noncontrolling interest | (0.1) | |
Income from continuing operations for EPS | 75.2 | 77.4 |
Loss from discontinued operations | (0.2) | |
Net income attributable to Fortune Brands | $ 75 | $ 77.4 |
Basic | ||
Continuing operations | $ 0.50 | $ 0.50 |
Discontinued operations | 0 | 0 |
Net income attributable to Fortune Brands common stockholders | 0.50 | 0.50 |
Diluted | ||
Continuing operations | 0.49 | 0.50 |
Discontinued operations | 0 | 0 |
Net income attributable to Fortune Brands common stockholders | $ 0.49 | $ 0.50 |
Basic average shares outstanding | 149.9 | 153.3 |
Stock-based awards | 2.2 | 2.9 |
Diluted average shares outstanding | 152.1 | 156.2 |
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share | 0.5 | 0.6 |
Subsequent Event (Detail)
Subsequent Event (Detail) $ in Millions | Apr. 30, 2018USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Stock repurchase program, authorized amount | $ 150 |