Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 19, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Fortune Brands Home & Security, Inc. | |
Entity Central Index Key | 0001519751 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | FBHS | |
Entity Common Stock, Shares Outstanding | 140,019,208 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 1-35166 | |
Entity Tax Identification Number | 621411546 | |
Entity Address, Address Line One | 520 Lake Cook Road | |
Entity Address, City or Town | Deerfield | |
Entity Address, State or Province | Illinois | |
Entity Address, Postal Zip Code | 60015-5611 | |
City Area Code | 847 | |
Local Phone Number | 484-4400 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net sales | $ 1,507.2 | $ 1,429 | $ 2,835.1 | $ 2,683.6 |
Cost of products sold | 969.6 | 904.9 | 1,838.7 | 1,719.9 |
Selling, general and administrative expenses | 320.6 | 316.5 | 632.6 | 627.7 |
Amortization of intangible assets | 10.1 | 8.2 | 20.1 | 16.4 |
Restructuring charges | 4.5 | 10.8 | 5.7 | 11.6 |
Operating income | 202.4 | 188.6 | 338 | 308 |
Interest expense | 24.5 | 17.4 | 48.2 | 32.1 |
Other income, net | (0.7) | (3.4) | (1.9) | (6.2) |
Income from continuing operations before income taxes | 178.6 | 174.6 | 291.7 | 282.1 |
Income tax | 41.5 | 44.9 | 70.1 | 77.3 |
Income from continuing operations, net of tax | 137.1 | 129.7 | 221.6 | 204.8 |
Loss from discontinued operations, net of tax | (0.2) | |||
Net income | 137.1 | 129.7 | 221.6 | 204.6 |
Less: Noncontrolling interests | (0.4) | 0.1 | (0.6) | |
Net income attributable to Fortune Brands | $ 137.5 | $ 129.6 | $ 222.2 | $ 204.6 |
Basic earnings per common share | ||||
Continuing operations | $ 0.98 | $ 0.89 | $ 1.58 | $ 1.39 |
Net income attributable to Fortune Brands common shareholders | 0.98 | 0.89 | 1.58 | 1.39 |
Diluted earnings per common share | ||||
Continuing operations | 0.97 | 0.88 | 1.57 | 1.37 |
Net income attributable to Fortune Brands common shareholders | $ 0.97 | $ 0.88 | $ 1.57 | $ 1.37 |
Comprehensive income | $ 140.3 | $ 112.4 | $ 233.1 | $ 190.6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Current assets | |||
Cash and cash equivalents | $ 276.3 | $ 262.9 | |
Accounts receivable less allowances for discounts and doubtful accounts | 706.2 | 571.7 | |
Inventories | 741.9 | 678.9 | |
Other current assets | 192.5 | 172.6 | |
Total current assets | 1,916.9 | 1,686.1 | |
Property, plant and equipment, net of accumulated depreciation | 804.9 | 813.4 | |
Operating lease assets | 173.2 | ||
Goodwill | [1] | 2,085.7 | 2,080.3 |
Other intangible assets, net of accumulated amortization | 1,229.2 | 1,246.8 | |
Other assets | 133.5 | 138 | |
Total assets | 6,343.4 | 5,964.6 | |
Current liabilities | |||
Short-term debt | 749.3 | 525 | |
Accounts payable | 476.6 | 459 | |
Other current liabilities | 469.3 | 508.1 | |
Total current liabilities | 1,695.2 | 1,492.1 | |
Long-term debt | 1,666 | 1,809 | |
Deferred income taxes | 167.9 | 162.6 | |
Accrued defined benefit plans | 162.1 | 163.3 | |
Operating lease liabilities | 146.3 | ||
Other non-current liabilities | 161.2 | 157.6 | |
Total liabilities | 3,998.7 | 3,784.6 | |
Commitments and contingencies (see Note 18) | |||
Equity | |||
Common stock | [2] | 1.8 | 1.8 |
Paid-in capital | 2,786.6 | 2,766 | |
Accumulated other comprehensive loss | (64.1) | (67) | |
Retained earnings | 1,648.1 | 1,448.1 | |
Treasury stock | (2,028.9) | (1,970.7) | |
Total Fortune Brands equity | 2,343.5 | 2,178.2 | |
Noncontrolling interests | 1.2 | 1.8 | |
Total equity | 2,344.7 | 2,180 | |
Total liabilities and equity | $ 6,343.4 | $ 5,964.6 | |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. | ||
[2] | Common stock, par value $0.01 per share; 181.4 million shares and 180.6 million shares issued at June 30, 2019 and December 31, 2018, respectively. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 181.4 | 180.6 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
Operating activities | |||
Net income | $ 221.6 | $ 204.6 | |
Non-cash pre-tax expense: | |||
Depreciation | 56 | 55 | |
Amortization of intangibles | 20 | 16.4 | |
Non-cash lease expense | 17.9 | ||
Stock-based compensation | 14.5 | 22.9 | |
Deferred taxes | 5 | (9.9) | |
Asset impairment charges | 1.7 | ||
Amortization of deferred financing fees | 1.5 | 1 | |
(Gain) loss on sale of property, plant and equipment | (1) | 1.8 | |
Changes in assets and liabilities: | |||
Increase in accounts receivable | (132.6) | (94.5) | |
Increase in inventories | (61.1) | (49) | |
Increase in accounts payable | 26.8 | 12.3 | |
Increase in other assets | (13.8) | (18) | |
Decrease in accrued expenses and other liabilities | (41.2) | (30) | |
(Decrease) Increase in accrued taxes | (3.3) | 24.7 | |
Net cash provided by operating activities | 112 | 137.3 | |
Investing activities | |||
Capital expenditures | [1] | (54.9) | (67.2) |
Proceeds from the disposition of assets | 4.1 | 0.7 | |
Cost of acquisition, net of cash acquired | (5.8) | ||
Net cash used in investing activities | (50.8) | (72.3) | |
Financing activities | |||
(Decrease) increase in short-term debt | (175) | 350 | |
Issuance of long-term debt | 665 | 920 | |
Repayment of long-term debt | (410) | (635) | |
Proceeds from the exercise of stock options | 6.1 | 3.8 | |
Treasury stock purchases | (50) | (602.7) | |
Employee withholding taxes related to stock-based compensation | (8.2) | (12.7) | |
Deferred acquisition payments | (19) | ||
Dividends to stockholders | (61.7) | (58.6) | |
Other financing, net | (0.2) | ||
Net cash used in financing activities | (53) | (35.2) | |
Effect of foreign exchange rate changes on cash | 4.9 | (7.3) | |
Net increase in cash and cash equivalents | 13.1 | 22.5 | |
Cash, cash equivalents and restricted cash at beginning of period | [2] | 270.7 | 323 |
Cash, cash equivalents and restricted cash at end of period | [2] | $ 283.8 | $ 345.5 |
[1] | Capital expenditures of $7.8 million and $8.2 million that had not been paid as of June 30, 2019 and 2018 respectively, were excluded from the Statement of Cash Flows. | ||
[2] | Restricted cash of $0.7 million and $6.8 million is included in Other current assets and Other assets, respectively, as of June 30, 2019 and restricted cash of $0.9 million and $6.9 million is included in Other current assets and Other assets, respectively, as of December 31, 2018. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Capital expenditures incurred but not yet paid | $ 7.8 | $ 8.2 | |
Other Current Assets [Member] | |||
Restricted Cash | 0.7 | $ 0.9 | |
Other Assets [Member] | |||
Restricted Cash | $ 6.8 | $ 6.9 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Treasury Stock | Non- controlling Interests |
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 | 204.6 | 204.6 | |||||
Other comprehensive income | (14) | (14) | |||||
Stock options exercised | 3.8 | 0.1 | 3.7 | ||||
Stock-based compensation | 10.2 | 22.9 | (12.7) | ||||
Treasury stock purchase | (602.7) | (602.7) | |||||
Dividends | (28.3) | (28.3) | |||||
Ending Balance at Jun. 30, 2018 | 2,174.7 | 1.8 | 2,751.5 | (53.2) | 1,350.5 | (1,877.5) | 1.6 |
Beginning Balance at Mar. 31, 2018 | 2,358.3 | 1.8 | 2,740.6 | (36) | 1,249.9 | (1,599.5) | 1.5 |
Comprehensive income: | |||||||
Net income | 129.7 | 129.6 | 0.1 | ||||
Other comprehensive income | (17.2) | (17.2) | |||||
Stock options exercised | 0.6 | 0.6 | |||||
Stock-based compensation | 9.8 | 10.3 | (0.5) | ||||
Treasury stock purchase | (277.5) | (277.5) | |||||
Dividends | (29) | (29) | |||||
Ending Balance at Jun. 30, 2018 | 2,174.7 | 1.8 | 2,751.5 | (53.2) | 1,350.5 | (1,877.5) | 1.6 |
Beginning Balance at Dec. 31, 2018 | 2,180 | 1.8 | 2,766 | (67) | 1,448.1 | (1,970.7) | 1.8 |
Comprehensive income: | |||||||
Net income | 221.6 | 222.2 | (0.6) | ||||
Other comprehensive income | 11.5 | 11.5 | |||||
Stock options exercised | 6.1 | 6.1 | |||||
Stock-based compensation | 6.3 | 14.5 | (8.2) | ||||
Adoption of ASU 2018-02 | (8.6) | 8.6 | |||||
Treasury stock purchase | (50) | (50) | |||||
Dividends | (30.8) | (30.8) | |||||
Ending Balance at Jun. 30, 2019 | 2,344.7 | 1.8 | 2,786.6 | (64.1) | 1,648.1 | (2,028.9) | 1.2 |
Beginning Balance at Mar. 31, 2019 | 2,247.1 | 1.8 | 2,776 | (67.3) | 1,541.4 | (2,006.4) | 1.6 |
Comprehensive income: | |||||||
Net income | 137.1 | 137.5 | (0.4) | ||||
Other comprehensive income | 3.2 | 3.2 | |||||
Stock options exercised | 3.2 | 3.2 | |||||
Stock-based compensation | 6.9 | 7.4 | (0.5) | ||||
Treasury stock purchase | (22) | (22) | |||||
Dividends | (30.8) | (30.8) | |||||
Ending Balance at Jun. 30, 2019 | $ 2,344.7 | $ 1.8 | $ 2,786.6 | $ (64.1) | $ 1,648.1 | $ (2,028.9) | $ 1.2 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||||
Dividends per Common share | $ 0.22 | $ 0.20 | $ 0.22 | $ 0.20 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | FORTUNE BRANDS HOME & SECURITY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 June 30, 2019, the related condensed consolidated statements of comprehensive income and equity for the six and three months ended June 30, 2019 and 2018, and the related condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 are unaudited. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year. The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our annual audited consolidated financial statements and notes. The December 31, 2018 condensed consolidated balance sheet was derived from our audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). This Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. In September 2018, we acquired 100% of the membership interests of Fiber Composites, LLC (“Fiberon”), a leading U.S. manufacturer of outdoor performance materials used in decking, railing and fencing products, for a total purchase price of approximately $470 million, subject to certain post-closing adjustments. The acquisition of Fiberon provided category expansion and product extension opportunities into the outdoor living space for our Doors & Security segment. We financed the transaction using cash on hand and borrowings under our revolving credit and term loan facilities. The financial results of Fiberon were included in the Company’s consolidated statements of income and statements of cash flow beginning in September 2018 and the consolidated balance sheet as of December 31, 2018. The results of operations are included in the Doors & Security segment from the date of acquisition. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which requires lessees to recognize almost all leases on their balance sheet as “right-of-use” assets and lease liabilities but recognize related expenses in a manner similar to previous accounting guidance. The guidance also eliminates previous real estate-specific provisions for all entities. In January 2018, the FASB issued ASU 2018-01, which clarifies the application of the new leases guidance to land easements. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11, which clarify certain guidance included in ASU 2016-02 and introduces a new optional transition method, which does not require revisions to comparative periods. We adopted this standard as of January 1, 2019 using the transition method introduced by ASU 2018-11, which does not require revisions to comparative periods. We elected to implement the transition package of practical expedients permitted within the new standard, which among other things, allows us to carryforward the historical lease classification. In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. Adoption of the new standard resulted in the recording of lease assets and lease liabilities of approximately $177.2 million and $182.6 million, respectively, as of January 1, 2019. The difference between the lease assets and lease liabilities primarily relates to accrued rent and unamortized lease incentives recorded in accordance with the previous leasing guidance. The new standard did not materially impact our condensed consolidated statements of income or cash flows. 2. Recently Issued Accounting Standards (Continued) Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, which amends the current hedge accounting model. The new standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item (which is consistent with our prior practice). The change in fair value for qualifying cash flow and net investment hedges is included in other comprehensive loss (until they are reclassified into the income statement). The standard also eased certain documentation and assessment requirements and modified the accounting for components excluded from the assessment of hedge effectiveness. We adopted this standard as of January 1, 2019. The adoption of this standard did not have a material effect on our financial statements. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU 2018-02, which permits companies to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income (“AOCI”) as a result of U.S. Tax Cuts and Jobs Act of 2017. We adopted this standard on January 1, 2019, which resulted in a reclassification of $8.6 million between accumulated other comprehensive loss and retained earnings in our condensed consolidated statement of equity. Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based arrangements with nonemployees. The new guidance generally aligns the accounting for share-based awards to nonemployees with the guidance for share-based awards to employees. The guidance was effective for the Company’s fiscal year beginning January 1, 2019. The adoption of this standard did not have a material effect on our financial statements. Codification Improvements In July 2018, the FASB issued ASU 2018-09, which includes technical corrections, clarifications, and other minor improvements to various areas including business combinations, fair value measurements and hedging. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this standard were effective immediately, while others were effective for the Company’s fiscal year beginning January 1, 2019. The adoption of this standard did not have a material effect on our financial statements. Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, which removes several disclosure requirements, including the amount in AOCI expected to be recognized in income over the next fiscal year and the effects of a 1% change in assumed health care cost trend rates. The standard also adds new requirements to disclose reasons for significant gains and losses related to changes in the benefit obligation for the period and weighted-average interest crediting rates for plans with promised interest crediting rates. We adopted this guidance on January 1, 2019. The adoption of this standard did not have a material effect on our financial statements. Financial Instruments—Credit Losses In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance applies to most financial assets measured at amortized cost, including trade and other receivables and loans as well as off-balance-sheet credit exposures (e.g., loan commitments and standby letters of credit). The standard will replace the “incurred loss” approach under the current guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” The standard is effective for the Company’s fiscal year beginning January 1, 2020 with early adoption permitted beginning January 1, 2019. We are assessing the impact the adoption of this standard will have on our financial statements. 2. Recently Issued Accounting Standards (Continued) Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which removes the requirement to disclose: 1) amount of and reasons for transfers between Levels 1 and 2 of the fair value hierarchy, 2) policy for timing of transfers between levels, and 3) valuation processes for Level 3 investments. In addition, this guidance modifies and adds other disclosure requirements, which primarily relate to valuation of Level 3 assets and liabilities. The guidance is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Costs to obtain software, including configuration and integration with legacy IT systems, coding and testing, including parallel process phases are eligible for capitalization under the new standard. In addition, activities that would be expensed include costs related to vendor demonstrations, determining performance and technology requirements and training activities. The standard is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We are assessing the impact the adoption of this standard will have on our financial statements. |
Balance Sheet Information
Balance Sheet Information | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Information | 3 . Balance Sheet Information Supplemental information on our balance sheets is as follows: (In millions) June 30, 2019 December 31, 2018 Inventories: Raw materials and supplies $ 267.0 $ 227.4 Work in process 75.5 66.4 Finished products 399.4 385.1 Total inventories $ 741.9 $ 678.9 Property, plant and equipment, gross $ 1,945.5 $ 1,911.7 Less: accumulated depreciation 1,140.6 1,098.3 Property, plant and equipment, net $ 804.9 $ 813.4 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | 4. Acquisitions and Dispositions In September 2018, we acquired 100% of the membership interests of Fiberon, a leading U.S. manufacturer of outdoor performance materials used in decking, railing and fencing products, for a total purchase price of approximately $470 million, subject to certain post-closing adjustments. The acquisition of Fiberon provided category expansion and product extension opportunities into the outdoor living space for our Doors & Security segment. We financed the transaction using cash on hand and borrowings under our revolving credit and term loan facilities. The financial results of Fiberon were included in the Company’s consolidated statements of income and statements of cash flow beginning in September 2018 and the consolidated balance sheet as of December 31, 2018. The results of operations are included in the Doors & Security segment from the date of acquisition. Goodwill related to this acquisition is deductible for income tax purposes. The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition. (In millions) Accounts receivable $ 18.8 Inventories 50.9 Property, plant and equipment 48.5 Goodwill 174.9 Identifiable intangible assets 195.0 Other assets 4.8 Total assets 492.9 Accounts payable 16.8 Other liabilities and accruals 16.3 Net assets acquired $ 459.8 The preceding purchase price allocation has been determined provisionally and is subject to revision as additional information about the fair value of individual assets and liabilities becomes available. We apply significant judgement in determining the estimates and assumptions used to determine the fair value of the identifiable intangible assets, including forecasted revenue growth rates, customer attrition rates, discount rates and assumed royalty rates. Any change in the acquisition date fair value of the acquired net assets will change the amount of the purchase price allocable to goodwill. Goodwill includes expected sales and cost synergies. Identifiable intangible assets primarily consist of customer relationships and tradenames. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangible Assets | 5 . Goodwill and Identifiable Intangible Assets We had goodwill of $2,085.7 (In millions) Cabinets Plumbing Doors & Security Total Goodwill Goodwill at December 31, 2018⁽ª⁾ $ 924.0 $ 743.7 $ 412.6 $ 2,080.3 Year-to-date translation adjustments 1.5 1.8 0.6 3.9 Acquisition-related adjustments — — 1.5 1.5 Goodwill at June 30, 2019⁽ª⁾ $ 925.5 $ 745.5 $ 414.7 $ 2,085.7 (a) Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. We also had net identifiable intangible assets, principally tradenames, of $1,229.2 million and $1,246.8 million as of June 30, 2019 and December 31, 2018, respectively. The $5.1 million increase in gross identifiable intangible assets was primarily due to foreign translation adjustments. 5. Goodwill and Identifiable Intangible Assets (Continued) The gross carrying value and accumulated amortization by class of identifiable intangible assets as of June 30, 2019 and December 31, 2018 were as follows: (In millions) As of June 30, 2019 As of December 31, 2018 Gross Carrying Amounts Accumulated Amortization Net Book Value Gross Carrying Amounts Accumulated Amortization Net Book Value Indefinite-lived tradenames $ 676.2 $ — $ 676.2 $ 673.9 $ — $ 673.9 Amortizable intangible assets Tradenames 20.1 (12.5 ) 7.6 19.8 (11.9 ) 7.9 Customer and contractual relationships 802.8 (280.6 ) 522.2 800.3 (260.2 ) 540.1 Patents/proprietary technology 73.5 (50.3 ) 23.2 73.5 (48.6 ) 24.9 Total 896.4 (343.4 ) 553.0 893.6 (320.7 ) 572.9 Total identifiable intangibles $ 1,572.6 $ (343.4 ) $ 1,229.2 $ 1,567.5 $ (320.7 ) $ 1,246.8 Amortizable identifiable intangible assets, principally tradenames and customer relationships, are subject to amortization over their estimated useful life, ranging from 2 to 30 years, based on the assessment of a number of factors that may impact useful life. These factors include historical and tradename performance with respect to consumer name recognition, geographic market presence, market share, plans for ongoing tradename support and promotion, customer attrition rates and other relevant factors. In the first half of 2019, no events or circumstances occurred that would have required us to perform interim impairment tests of goodwill or indefinite-lived tradenames. During the third and fourth quarters of 2018, we recognized impairment charges related to two tradenames in the Cabinets segment. Accordingly, a further reduction in the estimated fair value of these tradenames could trigger an impairment. In addition, due to lower than expected sales in our custom and semi-custom cabinetry product lines during the six months ended June 30, 2019, an impairment could be triggered on a third tradename on continuing sales decreases. As of December 31, 2018, the total carrying value of these tradenames was approximately $203 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 fall below our assumptions, actions of key customers, increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 6 . Leases As discussed in Note 2, we adopted ASU 2016-02 as of January 1, 2019. We have operating and finance leases for buildings and certain machinery and equipment. Operating leases are included in operating lease assets, other current liabilities, and operating lease liabilities in our condensed consolidated balance sheets. Amounts recognized for finance leases as of and for the six months ended June 30, 2019 were immaterial. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our lease contracts do not provide an explicit interest rate, we use our incremental borrowing rate in determining the present value of future lease payments. Our incremental borrowing rates include estimates related to the impact of collateralization and the economic environment where the leased asset is located. The operating lease assets also include any prepaid lease payments and initial direct costs incurred, but exclude lease incentives received at lease commencement. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of 1 to 36 years, some of which may include options to extend or terminate the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term in a manner similar to previous accounting guidance. We do not recognize leases with an initial term of twelve months or less on the balance sheet and instead recognize the related lease payments as expense in the statement of comprehensive income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Additionally, for certain equipment leases, we apply a portfolio approach and account for multiple lease components as a single lease component. 6 . Leases (Continued) Certain of our lease agreements include variable rental payments, including rental payments adjusted periodically for inflation. Variable rental payments are expensed during the period they are incurred and therefore are excluded from our lease assets and liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease expense recognized in the condensed consolidated statement of comprehensive income during the six and three months ended June 30, 2019 was $25.7 $12.7 $4.0 $1.9 Other information related to leases was as follows: (In millions, except lease term and discount rate) Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20.5 Right-of-use assets obtained in exchange for operating lease obligations $ 12.8 Weighted average remaining lease term - operating leases 7.4 years Weighted average discount rate - operating leases 4.4 % Total lease payments under non-cancellable operating leases as of June 30, 2019 were as follows: (In millions) Year Ending December 31, 2019 (excluding six months ended June 30, 2019) $ 20.3 2020 36.6 2021 30.5 2022 24.4 2023 20.2 Thereafter 79.8 Total lease payments 211.8 Less imputed interest (32.2 ) Total $ 179.6 Reported as of June 30, 2019 Other current liabilities $ 33.3 Operating lease liabilities 146.3 Total $ 179.6 |
External Debt and Financing Arr
External Debt and Financing Arrangements | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
External Debt and Financing Arrangements | 7 . External Debt and Financing Arrangements In September 2018, we issued $600 million of unsecured senior notes (“2018 Senior Notes”) in a registered public offering. The 2018 Senior Notes are due in 2023 with a coupon rate of 4%. We used the proceeds from the 2018 Senior Notes offering to pay down our revolving credit facility. On June 30, 2019 and December 31, 2018, the net carrying value of the 2018 Senior Notes, net of underwriting commissions, price discounts, and debt issuance costs, was $595.5 In June 2015, we issued $900 million of unsecured senior notes (“2015 Senior Notes”, and collectively with the 2018 Senior Notes, the “Senior Notes”) in a registered public offering. The 2015 Senior Notes consist of two tranches: $400 million of five-year notes due in 2020 with a coupon rate of 3% and $500 million of ten-year notes due in 2025 with a coupon rate of 4%. We used the proceeds from the 2015 Senior Notes offering to pay down our revolving credit facility and for general corporate purposes. On June 30, 2019 and December 31, 2018, the net carrying value of the 2015 Senior Notes, net of underwriting commissions, price discounts and debt issuance costs, was $894.8 7. External Debt and Financing Arrangements (Continued) In March 2018, the Company entered into a $350 million term loan for general corporate purposes scheduled to mature in March 2019. In August 2018, the Company amended its existing $350 million term loan to increase the borrowings under the term loan from $350 million to $525 million. In March 2019, the Company amended the $525 million term loan to decrease the borrowings from $525 million to $350 million and extend the maturity date to March 2020. All other terms and conditions on the amended term loan remain the same as the previous $525 million term loan. At June 30, 2019 and December 31, 2018, amounts due under the term loan were $350.0 In June 2016, the Company amended and restated its 2011 credit agreement to combine and rollover the prior 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 transaction for the Company. Terms and conditions of the credit agreement, including the total commitment amount, essentially remained the same as under the 2011 credit agreement. The revolving credit facility will mature in June 2021 and borrowings thereunder will be used for general corporate purposes. On June 30, 2019 and December 31, 2018, our outstanding borrowings under this facility were $575.0 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 June 30, 2019 and December 31, 2018. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
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, the Chinese yuan and the Mexican peso. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at June 30, 2019 was $392.9 million. Based on foreign exchange rates as of June 30, 2019, we estimate that $0.4 million of net foreign currency derivative gains included in other comprehensive income as of June 30, 2019 will be reclassified to earnings within the next twelve months. The fair values of derivative instruments on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 were as follows: (In millions) Fair Value Type of hedge Type of contract Location June 30, 2019 December 31, 2018 Cash flow Foreign exchange contracts Other current assets $ 1.3 $ 3.9 Fair value Foreign exchange contracts Other current assets 0.7 1.4 Net investment hedges Net investment hedges Other current assets - 0.7 Total assets $ 2.0 $ 6.0 Cash flow Foreign exchange contracts Other current liabilities $ 0.7 $ 0.3 Fair value Foreign exchange contracts Other current liabilities 0.4 1.6 Net investment hedges Net investment hedges Other current liabilities 0.5 1.6 Total liabilities $ 1.6 $ 1.9 8. Financial Instruments (Continued) The effects of derivative financial instruments on the statements of comprehensive income for the six months ended June 30, 2019 and 2018 were as follows: (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Six Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 1,838.7 $ 48.2 $ 1.9 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items 0.5 Derivative designated as hedging instruments (0.2 ) Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 2.8 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.2 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Six Months Ended June 30, 2018 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 1,719.9 $ 32.1 $ 6.2 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (1.6 ) Derivative designated as hedging instruments 1.2 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - 8. Financial Instruments (Continued) The effects of derivative financial instruments on the statements of comprehensive income for the three months ended June 30, 2019 and 2018 were as follows: (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 969.6 $ 24.5 $ 0.7 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (0.5 ) Derivative designated as hedging instruments 0.7 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 1.6 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.1 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.1 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2018 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 904.9 $ 17.4 $ 3.4 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (4.2 ) Derivative designated as hedging instruments 3.2 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.6 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.1 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income — The cash flow hedges recognized in other comprehensive income was a net loss of $0.2 $4.0 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9 . Fair Value Measurements FASB Accounting Standards Codification (“ASC”) requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect 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 (In millions) June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facility $ 575.0 $ 575.0 $ 320.0 $ 320.0 Term Loan 350.0 350.0 525.0 525.0 Senior Notes 1,490.3 1,552.4 1,489.0 1,490.4 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 1 inputs. Assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 were as follows: (In millions) Fair Value June 30, 2019 December 31, 2018 Assets Derivative financial instruments (Level 2) $ 2.0 $ 6.0 Deferred compensation program assets (Level 2) 10.1 9.3 Total assets $ 12.1 $ 15.3 Liabilities Derivative financial instruments (Level 2) $ 1.6 $ 1.9 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | 10 . Accumulated Other Comprehensive (Loss) Income Total accumulated other comprehensive (loss) income consists of net income and other changes in business equity from transactions and other events from sources other than shareholders. It includes currency translation gains and losses, unrealized gains and losses from derivative instruments designated as cash flow hedges, and defined benefit plan adjustments. The after-tax components of and changes in accumulated other comprehensive (loss) income for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments (a) Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) Amounts classified into accumulated other comprehensive (loss) income (17.1 ) 2.9 0.2 (14.0 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Net current-period other comprehensive (loss) income (17.1 ) 2.9 0.2 (14.0 ) Balance at June 30, 2018 $ (11.3 ) $ 0.5 $ (42.4 ) $ (53.2 ) Balance at December 31, 2018 $ (25.3 ) $ 4.2 $ (45.9 ) $ (67.0 ) Amounts classified into accumulated other comprehensive (loss) income 13.7 0.3 — 14.0 Adoption of ASU 2018-02(b) — — (8.6 ) (8.6 ) Amounts reclassified from accumulated other comprehensive (loss) income — (2.5 ) — (2.5 ) Net current-period other comprehensive (loss) income 13.7 (2.2 ) (8.6 ) 2.9 Balance at June 30, 2019 $ (11.6 ) $ 2.0 $ (54.5 ) $ (64.1 ) (a) See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. (b) See Note 2, “Recently Issued Accounting Standards,” for further information on the impact of adopting ASU 2018-02 . (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments (a) Accumulated Other Comprehensive Loss Balance at March 31, 2018 $ 5.0 $ 1.4 $ (42.4 ) $ (36.0 ) Amounts classified into accumulated other comprehensive (loss) income (16.3 ) (0.6 ) — (16.9 ) Amounts reclassified from accumulated other comprehensive (loss) income — (0.3 ) — (0.3 ) Net current-period other comprehensive (loss) income (16.3 ) (0.9 ) — (17.2 ) Balance at June 30, 2018 $ (11.3 ) $ 0.5 $ (42.4 ) $ (53.2 ) Balance at March 31, 2019 $ (16.5 ) $ 3.7 $ (54.5 ) $ (67.3 ) Amounts classified into accumulated other comprehensive (loss) income 4.9 (0.3 ) — 4.6 Amounts reclassified from accumulated other comprehensive (loss) income — (1.4 ) — (1.4 ) Net current-period other comprehensive (loss) income 4.9 (1.7 ) — 3.2 Balance at June 30, 2019 $ (11.6 ) $ 2.0 $ (54.5 ) $ (64.1 ) (a) See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. 10. Accumulated Other Comprehensive (Loss) Income (Continued) The reclassifications out of accumulated other comprehensive loss for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Six months ended June 30, Affected Line Item in the Statement of Comprehensive Income 2019 2018 Gains (losses) on cash flow hedges Foreign exchange contracts $ 2.8 — Cost of products sold Interest rate contracts 0.2 — Interest expense 3.0 — Total before tax (0.5 ) — Tax expense Total reclassifications for the period $ 2.5 — Net of tax (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Three Months Ended June 30, Affected Line Item in the Statement of Comprehensive Income 2019 2018 Gains (losses) on cash flow hedges Foreign exchange contracts $ 1.6 $ 0.6 Cost of products sold Commodity contracts (0.1 ) (0.1 ) Cost of products sold Interest rate contracts 0.1 — Interest expense 1.6 0.5 Total before tax (0.2 ) (0.2 ) Tax expense Total reclassifications for the period $ 1.4 $ 0.3 Net of tax |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 11. Revenue The following table disaggregates our consolidated revenue by major sales distribution channels for the six and three months ended June 30, 2019 and 2018: (In millions) Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Wholesalers (1) $ 1,317.8 $ 1,268.7 $ 706.0 $ 683.1 Home Center retailers (2) 821.9 724.7 431.0 375.0 Other retailers (3) 142.4 157.2 75.0 81.1 Builder direct 112.4 110.1 57.3 58.6 U.S. net sales 2,394.5 2,260.7 1,269.3 1,197.8 International (4) 440.6 422.9 237.9 231.2 Net sales $ 2,835.1 $ 2,683.6 $ 1,507.2 $ 1,429.0 (1) Represents sales to customers (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 Canada, China, Europe and Mexico. |
Defined Benefit Plans
Defined Benefit Plans | 6 Months Ended |
Jun. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Benefit Plans | 1 2 . Defined Benefit Plans The components of net periodic benefit cost for pension benefits for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Six Months Ended June 30, Three Months Ended June 30, Pension Benefits Pension Benefits 2019 2018 2019 2018 Service cost $ 0.2 $ 0.3 $ 0.1 $ 0.1 Interest cost 16.4 15.3 8.2 7.7 Expected return on plan assets (17.6 ) (20.5 ) (8.8 ) (10.2 ) Net periodic benefit income $ (1.0 ) $ (4.9 ) $ (0.5 ) $ (2.4 ) Service cost relates to benefit accruals in an hourly Union defined benefit plan in our Doors & Security segment. All other defined benefit pension plans were frozen as of December 31, 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 1 3 . Income Taxes The effective income tax rates for the six months ended June 30, 2019 and 2018 were 24.0% and 27.4%, respectively. The effective income tax rates in 2019 and 2018 were favorably impacted by a benefit associated with the U.S. research and development credit and unfavorably impacted by state and local taxes and unfavorable tax rates in foreign jurisdictions. Additionally, the 2018 effective income tax rate was unfavorably impacted by an adjustment to the deemed repatriation tax liability recorded in 2017 under the Tax Cuts and Jobs Act of 2017 and increases to uncertain tax positions. The effective income tax rates for the three months ended June 30, 2019 and 2018 were 23.2% and 25.7%, respectively. The effective income tax rates in 2019 and 2018 were favorably impacted by a benefit associated with the U.S. research and development credit and unfavorably impacted by state and local taxes and unfavorable tax rates in foreign jurisdictions. Additionally, the 2019 effective income tax rate was favorably impacted by decreases to uncertain tax positions, as a result of audit settlements. It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease in the range of $2.5 to $3.1 million, primarily as a result of the conclusion of pending U.S. federal, state and foreign income tax proceedings. |
Product Warranties
Product Warranties | 6 Months Ended |
Jun. 30, 2019 | |
Guarantees And Product Warranties [Abstract] | |
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 six months ended June 30, 2019 and 2018, respectively. (In millions) Six Months Ended June 30, 2019 2018 Reserve balance at January 1, $ 24.9 $ 17.2 Provision for warranties issued 13.0 12.6 Settlements made (in cash or in kind) (12.5 ) (12.8 ) Reserve balance at June 30, (a) $ 25.4 $ 17.0 (a) Balance at January 1, 2019 includes the impact of acquiring Fiberon. See Note 4, “Acquisitions and Dispositions,” for additional information . |
Information on Business Segment
Information on Business Segments | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Information on Business Segments | 1 5 . Information on Business Segments Beginning in the third quarter of 2018, we combined our Doors and Security segments and historical financial segment information has been restated to conform to the new segment presentation. Net sales and operating income for the six and three months ended June 30, 2019 and 2018 by segment were as follows: Six Months Ended June 30, (In millions) 2019 2018 % Change vs. Prior Year Net Sales Cabinets $ 1,208.0 $ 1,194.8 1.1 % Plumbing 964.7 933.4 3.4 Doors & Security 662.4 555.4 19.3 Net sales $ 2,835.1 $ 2,683.6 5.6 % Operating Income (Loss) Cabinets $ 108.9 $ 93.5 16.5 % Plumbing 195.9 183.7 6.6 Doors & Security 72.4 73.5 (1.5 ) Less: Corporate expenses (39.2 ) (42.7 ) 8.2 Operating income $ 338.0 $ 308.0 9.7 % Three Months Ended June 30, (In millions) 2019 2018 % Change vs. Prior Year Net Sales Cabinets $ 635.0 $ 637.6 (0.4 ) % Plumbing 506.1 483.7 4.6 Doors & Security 366.1 307.7 19.0 Net sales $ 1,507.2 $ 1,429.0 5.5 % Operating Income (Loss) Cabinets $ 65.7 $ 69.4 (5.3 ) % Plumbing 106.7 95.3 12.0 Doors & Security 50.0 45.3 10.4 Less: Corporate expenses (20.0 ) (21.4 ) 6.5 Operating income $ 202.4 $ 188.6 7.3 % |
Restructuring and Other Charges
Restructuring and Other Charges | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Other Charges | 1 6 . Restructuring and Other Charges Pre-tax restructuring and other charges for the six and three months ended June 30, 2019 and 2018 are shown below. (In millions) Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 2.3 $ 0.7 $ 3.0 $ 7.6 $ 4.3 $ 11.9 Plumbing 3.3 5.8 9.1 1.5 0.1 1.6 Doors & Security 0.1 2.0 2.1 2.5 1.0 3.5 Total $ 5.7 $ 8.5 $ 14.2 $ 11.6 $ 5.4 $ 17.0 (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 six months of 2019 largely related to severance costs within our Plumbing and Cabinets segments and costs associated with closing facilities within our Plumbing and Doors & Security segments. Restructuring and other charges in the first six months of 2018 largely related to severance costs across all segments and our initiatives to consolidate our manufacturing footprint in our Cabinets segment. (In millions) Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 1.2 $ 0.4 $ 1.6 $ 7.3 $ 4.5 $ 11.8 Plumbing 3.2 4.6 7.8 1.7 0.1 1.8 Doors & Security 0.1 0.1 0.2 1.8 0.9 2.7 Total $ 4.5 $ 5.1 $ 9.6 $ 10.8 $ 5.5 $ 16.3 (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 second quarter of 2019 largely related to severance costs within our Plumbing and Cabinets segments and costs associated with closing facilities within our Plumbing segment. Restructuring and other charges in the second quarter of 2018 primarily resulted from severance costs across all segments and our initiatives to consolidate our manufacturing footprint in our Cabinets segment. Reconciliation of Restructuring Liability (In millions) Balance at 12/31/18 2019 Provision Cash Expenditures (a) Non-Cash Write-offs Balance at 6/30/19 Workforce reduction costs $ 9.9 $ 4.9 $ (5.7 ) $ (0.1 ) $ 9.0 Other 0.6 0.8 (0.9 ) — 0.5 $ 10.5 $ 5.7 $ (6.6 ) $ (0.1 ) $ 9.5 (a) (In millions) Balance at 12/31/17 2018 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 6/30/18 Workforce reduction costs $ 5.0 $ 11.1 $ (3.7 ) $ — $ 12.4 Other 0.8 0.5 (0.5 ) (0.6 ) 0.2 $ 5.8 $ 11.6 $ (4.2 ) $ (0.6 ) $ 12.6 (a) (b) |
Earning Per Share
Earning Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 1 7 . Earnings Per Share The computations of earnings per common share for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions, except per share data) Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Income from continuing operations, net of tax $ 221.6 $ 204.8 $ 137.1 $ 129.7 Less: Noncontrolling interest (0.6 ) — (0.4 ) 0.1 Income from continuing operations for EPS 222.2 204.8 137.5 129.6 Loss from discontinued operations - (0.2 ) — - Net income attributable to Fortune Brands $ 222.2 $ 204.6 $ 137.5 129.6 Earnings per common share Basic Continuing operations $ 1.58 $ 1.39 $ 0.98 $ 0.89 Discontinued operations — — — — Net income attributable to Fortune Brands common stockholders $ 1.58 $ 1.39 $ 0.98 $ 0.89 Diluted Continuing operations $ 1.57 $ 1.37 $ 0.97 $ 0.88 Discontinued operations — — — — Net income attributable to Fortune Brands common stockholders $ 1.57 $ 1.37 $ 0.97 $ 0.88 Basic average shares outstanding 140.3 147.4 139.9 144.9 Stock-based awards 1.3 2.0 1.4 1.8 Diluted average shares outstanding 141.6 149.4 141.3 146.7 Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share 2.4 1.0 1.9 1.5 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1 8 . Commitments and Contingencies Litigation We are defendants in lawsuits associated with the normal conduct of our businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote. Environmental Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Fortune Brands during the six and three months ended June 30, 2019 and 2018. 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. 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. Lease Commitments Future minimum rental payments under non-cancelable operating leases as of December 31, 2018 were as follows: (In millions) 2019 $ 37.8 2020 29.6 2021 23.4 2022 18.9 2023 13.8 Remainder 58.8 Total minimum rental payments $ 182.3 These minimum rental payments were determined in accordance with the previous leasing guidance (ASC 840). Accordingly, the minimum payments exclude optional lease payments that we can avoid. The minimum lease payments as of June 30, 2019, disclosed in Note 6, are determined in accordance with the new leasing guidance (ASC 842), which include optional lease payments if we are reasonably certain to incur them. |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Supplemental Information on Balance Sheets | Supplemental information on our balance sheets is as follows: (In millions) June 30, 2019 December 31, 2018 Inventories: Raw materials and supplies $ 267.0 $ 227.4 Work in process 75.5 66.4 Finished products 399.4 385.1 Total inventories $ 741.9 $ 678.9 Property, plant and equipment, gross $ 1,945.5 $ 1,911.7 Less: accumulated depreciation 1,140.6 1,098.3 Property, plant and equipment, net $ 804.9 $ 813.4 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition. (In millions) Accounts receivable $ 18.8 Inventories 50.9 Property, plant and equipment 48.5 Goodwill 174.9 Identifiable intangible assets 195.0 Other assets 4.8 Total assets 492.9 Accounts payable 16.8 Other liabilities and accruals 16.3 Net assets acquired $ 459.8 |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
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 Goodwill at December 31, 2018⁽ª⁾ $ 924.0 $ 743.7 $ 412.6 $ 2,080.3 Year-to-date translation adjustments 1.5 1.8 0.6 3.9 Acquisition-related adjustments — — 1.5 1.5 Goodwill at June 30, 2019⁽ª⁾ $ 925.5 $ 745.5 $ 414.7 $ 2,085.7 (a) Net of accumulated impairment losses of $399.5 million in the Doors & Security 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 June 30, 2019 and December 31, 2018 were as follows: (In millions) As of June 30, 2019 As of December 31, 2018 Gross Carrying Amounts Accumulated Amortization Net Book Value Gross Carrying Amounts Accumulated Amortization Net Book Value Indefinite-lived tradenames $ 676.2 $ — $ 676.2 $ 673.9 $ — $ 673.9 Amortizable intangible assets Tradenames 20.1 (12.5 ) 7.6 19.8 (11.9 ) 7.9 Customer and contractual relationships 802.8 (280.6 ) 522.2 800.3 (260.2 ) 540.1 Patents/proprietary technology 73.5 (50.3 ) 23.2 73.5 (48.6 ) 24.9 Total 896.4 (343.4 ) 553.0 893.6 (320.7 ) 572.9 Total identifiable intangibles $ 1,572.6 $ (343.4 ) $ 1,229.2 $ 1,567.5 $ (320.7 ) $ 1,246.8 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Other Information Related to Leases | Other information related to leases was as follows: (In millions, except lease term and discount rate) Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20.5 Right-of-use assets obtained in exchange for operating lease obligations $ 12.8 Weighted average remaining lease term - operating leases 7.4 years Weighted average discount rate - operating leases 4.4 % |
Lease Payments Under Non-Cancellable Leases | Total lease payments under non-cancellable operating leases as of June 30, 2019 were as follows: (In millions) Year Ending December 31, 2019 (excluding six months ended June 30, 2019) $ 20.3 2020 36.6 2021 30.5 2022 24.4 2023 20.2 Thereafter 79.8 Total lease payments 211.8 Less imputed interest (32.2 ) Total $ 179.6 Reported as of June 30, 2019 Other current liabilities $ 33.3 Operating lease liabilities 146.3 Total $ 179.6 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Values of Derivative Instruments | The fair values of derivative instruments on the consolidated balance sheets as of June 30, 2019 and December 31, 2018 were as follows: (In millions) Fair Value Type of hedge Type of contract Location June 30, 2019 December 31, 2018 Cash flow Foreign exchange contracts Other current assets $ 1.3 $ 3.9 Fair value Foreign exchange contracts Other current assets 0.7 1.4 Net investment hedges Net investment hedges Other current assets - 0.7 Total assets $ 2.0 $ 6.0 Cash flow Foreign exchange contracts Other current liabilities $ 0.7 $ 0.3 Fair value Foreign exchange contracts Other current liabilities 0.4 1.6 Net investment hedges Net investment hedges Other current liabilities 0.5 1.6 Total liabilities $ 1.6 $ 1.9 |
Effects of Derivative Financial Instruments on Consolidated Statements of Income | The effects of derivative financial instruments on the statements of comprehensive income for the six months ended June 30, 2019 and 2018 were as follows: (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Six Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 1,838.7 $ 48.2 $ 1.9 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items 0.5 Derivative designated as hedging instruments (0.2 ) Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 2.8 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.2 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Six Months Ended June 30, 2018 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 1,719.9 $ 32.1 $ 6.2 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (1.6 ) Derivative designated as hedging instruments 1.2 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income - 8. Financial Instruments (Continued) The effects of derivative financial instruments on the statements of comprehensive income for the three months ended June 30, 2019 and 2018 were as follows: (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 969.6 $ 24.5 $ 0.7 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (0.5 ) Derivative designated as hedging instruments 0.7 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 1.6 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.1 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.1 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2018 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Earnings $ 904.9 $ 17.4 $ 3.4 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (4.2 ) Derivative designated as hedging instruments 3.2 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.6 Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.1 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Carrying Value and Fair Value of Debt | The carrying value, net of underwriting commissions, price discounts, and debt issuance costs (In millions) June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facility $ 575.0 $ 575.0 $ 320.0 $ 320.0 Term Loan 350.0 350.0 525.0 525.0 Senior Notes 1,490.3 1,552.4 1,489.0 1,490.4 |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 were as follows: (In millions) Fair Value June 30, 2019 December 31, 2018 Assets Derivative financial instruments (Level 2) $ 2.0 $ 6.0 Deferred compensation program assets (Level 2) 10.1 9.3 Total assets $ 12.1 $ 15.3 Liabilities Derivative financial instruments (Level 2) $ 1.6 $ 1.9 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income | The after-tax components of and changes in accumulated other comprehensive (loss) income for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments (a) Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 5.8 $ (2.4 ) $ (42.6 ) $ (39.2 ) Amounts classified into accumulated other comprehensive (loss) income (17.1 ) 2.9 0.2 (14.0 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Net current-period other comprehensive (loss) income (17.1 ) 2.9 0.2 (14.0 ) Balance at June 30, 2018 $ (11.3 ) $ 0.5 $ (42.4 ) $ (53.2 ) Balance at December 31, 2018 $ (25.3 ) $ 4.2 $ (45.9 ) $ (67.0 ) Amounts classified into accumulated other comprehensive (loss) income 13.7 0.3 — 14.0 Adoption of ASU 2018-02(b) — — (8.6 ) (8.6 ) Amounts reclassified from accumulated other comprehensive (loss) income — (2.5 ) — (2.5 ) Net current-period other comprehensive (loss) income 13.7 (2.2 ) (8.6 ) 2.9 Balance at June 30, 2019 $ (11.6 ) $ 2.0 $ (54.5 ) $ (64.1 ) (a) See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. (b) See Note 2, “Recently Issued Accounting Standards,” for further information on the impact of adopting ASU 2018-02 . (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments (a) Accumulated Other Comprehensive Loss Balance at March 31, 2018 $ 5.0 $ 1.4 $ (42.4 ) $ (36.0 ) Amounts classified into accumulated other comprehensive (loss) income (16.3 ) (0.6 ) — (16.9 ) Amounts reclassified from accumulated other comprehensive (loss) income — (0.3 ) — (0.3 ) Net current-period other comprehensive (loss) income (16.3 ) (0.9 ) — (17.2 ) Balance at June 30, 2018 $ (11.3 ) $ 0.5 $ (42.4 ) $ (53.2 ) Balance at March 31, 2019 $ (16.5 ) $ 3.7 $ (54.5 ) $ (67.3 ) Amounts classified into accumulated other comprehensive (loss) income 4.9 (0.3 ) — 4.6 Amounts reclassified from accumulated other comprehensive (loss) income — (1.4 ) — (1.4 ) Net current-period other comprehensive (loss) income 4.9 (1.7 ) — 3.2 Balance at June 30, 2019 $ (11.6 ) $ 2.0 $ (54.5 ) $ (64.1 ) (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) Income | The reclassifications out of accumulated other comprehensive loss for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Six months ended June 30, Affected Line Item in the Statement of Comprehensive Income 2019 2018 Gains (losses) on cash flow hedges Foreign exchange contracts $ 2.8 — Cost of products sold Interest rate contracts 0.2 — Interest expense 3.0 — Total before tax (0.5 ) — Tax expense Total reclassifications for the period $ 2.5 — Net of tax (In millions) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Three Months Ended June 30, Affected Line Item in the Statement of Comprehensive Income 2019 2018 Gains (losses) on cash flow hedges Foreign exchange contracts $ 1.6 $ 0.6 Cost of products sold Commodity contracts (0.1 ) (0.1 ) Cost of products sold Interest rate contracts 0.1 — Interest expense 1.6 0.5 Total before tax (0.2 ) (0.2 ) Tax expense Total reclassifications for the period $ 1.4 $ 0.3 Net of tax |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our consolidated revenue by major sales distribution channels for the six and three months ended June 30, 2019 and 2018: (In millions) Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Wholesalers (1) $ 1,317.8 $ 1,268.7 $ 706.0 $ 683.1 Home Center retailers (2) 821.9 724.7 431.0 375.0 Other retailers (3) 142.4 157.2 75.0 81.1 Builder direct 112.4 110.1 57.3 58.6 U.S. net sales 2,394.5 2,260.7 1,269.3 1,197.8 International (4) 440.6 422.9 237.9 231.2 Net sales $ 2,835.1 $ 2,683.6 $ 1,507.2 $ 1,429.0 (1) Represents sales to customers (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 Canada, China, Europe and Mexico. |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost for Pension Benefits | The components of net periodic benefit cost for pension benefits for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions) Six Months Ended June 30, Three Months Ended June 30, Pension Benefits Pension Benefits 2019 2018 2019 2018 Service cost $ 0.2 $ 0.3 $ 0.1 $ 0.1 Interest cost 16.4 15.3 8.2 7.7 Expected return on plan assets (17.6 ) (20.5 ) (8.8 ) (10.2 ) Net periodic benefit income $ (1.0 ) $ (4.9 ) $ (0.5 ) $ (2.4 ) |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Guarantees And Product Warranties [Abstract] | |
Activity Related to Product Warranty Liability | The following table summarizes activity related to our product warranty liability for the six months ended June 30, 2019 and 2018, respectively. (In millions) Six Months Ended June 30, 2019 2018 Reserve balance at January 1, $ 24.9 $ 17.2 Provision for warranties issued 13.0 12.6 Settlements made (in cash or in kind) (12.5 ) (12.8 ) Reserve balance at June 30, (a) $ 25.4 $ 17.0 (a) Balance at January 1, 2019 includes the impact of acquiring Fiberon. See Note 4, “Acquisitions and Dispositions,” for additional information . |
Information on Business Segme_2
Information on Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Income by Segment | Net sales and operating income for the six and three months ended June 30, 2019 and 2018 by segment were as follows: Six Months Ended June 30, (In millions) 2019 2018 % Change vs. Prior Year Net Sales Cabinets $ 1,208.0 $ 1,194.8 1.1 % Plumbing 964.7 933.4 3.4 Doors & Security 662.4 555.4 19.3 Net sales $ 2,835.1 $ 2,683.6 5.6 % Operating Income (Loss) Cabinets $ 108.9 $ 93.5 16.5 % Plumbing 195.9 183.7 6.6 Doors & Security 72.4 73.5 (1.5 ) Less: Corporate expenses (39.2 ) (42.7 ) 8.2 Operating income $ 338.0 $ 308.0 9.7 % Three Months Ended June 30, (In millions) 2019 2018 % Change vs. Prior Year Net Sales Cabinets $ 635.0 $ 637.6 (0.4 ) % Plumbing 506.1 483.7 4.6 Doors & Security 366.1 307.7 19.0 Net sales $ 1,507.2 $ 1,429.0 5.5 % Operating Income (Loss) Cabinets $ 65.7 $ 69.4 (5.3 ) % Plumbing 106.7 95.3 12.0 Doors & Security 50.0 45.3 10.4 Less: Corporate expenses (20.0 ) (21.4 ) 6.5 Operating income $ 202.4 $ 188.6 7.3 % |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Pre-tax Restructuring and Other Charges | Pre-tax restructuring and other charges for the six and three months ended June 30, 2019 and 2018 are shown below. (In millions) Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 2.3 $ 0.7 $ 3.0 $ 7.6 $ 4.3 $ 11.9 Plumbing 3.3 5.8 9.1 1.5 0.1 1.6 Doors & Security 0.1 2.0 2.1 2.5 1.0 3.5 Total $ 5.7 $ 8.5 $ 14.2 $ 11.6 $ 5.4 $ 17.0 (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 six months of 2019 largely related to severance costs within our Plumbing and Cabinets segments and costs associated with closing facilities within our Plumbing and Doors & Security segments. Restructuring and other charges in the first six months of 2018 largely related to severance costs across all segments and our initiatives to consolidate our manufacturing footprint in our Cabinets segment. (In millions) Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 1.2 $ 0.4 $ 1.6 $ 7.3 $ 4.5 $ 11.8 Plumbing 3.2 4.6 7.8 1.7 0.1 1.8 Doors & Security 0.1 0.1 0.2 1.8 0.9 2.7 Total $ 4.5 $ 5.1 $ 9.6 $ 10.8 $ 5.5 $ 16.3 (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 12/31/18 2019 Provision Cash Expenditures (a) Non-Cash Write-offs Balance at 6/30/19 Workforce reduction costs $ 9.9 $ 4.9 $ (5.7 ) $ (0.1 ) $ 9.0 Other 0.6 0.8 (0.9 ) — 0.5 $ 10.5 $ 5.7 $ (6.6 ) $ (0.1 ) $ 9.5 (a) (In millions) Balance at 12/31/17 2018 Provision Cash Expenditures (a) Non-Cash Write-offs (b) Balance at 6/30/18 Workforce reduction costs $ 5.0 $ 11.1 $ (3.7 ) $ — $ 12.4 Other 0.8 0.5 (0.5 ) (0.6 ) 0.2 $ 5.8 $ 11.6 $ (4.2 ) $ (0.6 ) $ 12.6 (a) (b) |
Earning Per Share (Tables)
Earning Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computations of Earnings (Loss) per Common Share | The computations of earnings per common share for the six and three months ended June 30, 2019 and 2018 were as follows: (In millions, except per share data) Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Income from continuing operations, net of tax $ 221.6 $ 204.8 $ 137.1 $ 129.7 Less: Noncontrolling interest (0.6 ) — (0.4 ) 0.1 Income from continuing operations for EPS 222.2 204.8 137.5 129.6 Loss from discontinued operations - (0.2 ) — - Net income attributable to Fortune Brands $ 222.2 $ 204.6 $ 137.5 129.6 Earnings per common share Basic Continuing operations $ 1.58 $ 1.39 $ 0.98 $ 0.89 Discontinued operations — — — — Net income attributable to Fortune Brands common stockholders $ 1.58 $ 1.39 $ 0.98 $ 0.89 Diluted Continuing operations $ 1.57 $ 1.37 $ 0.97 $ 0.88 Discontinued operations — — — — Net income attributable to Fortune Brands common stockholders $ 1.57 $ 1.37 $ 0.97 $ 0.88 Basic average shares outstanding 140.3 147.4 139.9 144.9 Stock-based awards 1.3 2.0 1.4 1.8 Diluted average shares outstanding 141.6 149.4 141.3 146.7 Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share 2.4 1.0 1.9 1.5 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments under Non-Cancelable Operating Leases | Future minimum rental payments under non-cancelable operating leases as of December 31, 2018 were as follows: (In millions) 2019 $ 37.8 2020 29.6 2021 23.4 2022 18.9 2023 13.8 Remainder 58.8 Total minimum rental payments $ 182.3 |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation - Additional Information (Detail) - Fiberon [Member] $ in Millions | 1 Months Ended |
Sep. 30, 2018USD ($) | |
Basis of Presentation [Line Items] | |
Business acquisition, percentage of voting interests acquired | 100.00% |
Business acquisition, total purchase price | $ 470 |
Recently Issued Accounting St_2
Recently Issued Accounting Standards - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jan. 01, 2019 | Aug. 31, 2018 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 146.3 | ||
Effect of health care cost trend rate | 1.00% | ||
Accounting Standards Update 2017-12 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Operating Lease, Right-of-Use Asset | $ 177.2 | ||
Operating lease liabilities | $ 182.6 | ||
Accounting Standards Update 2018 02 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ 8.6 |
Balance Sheet Information - Sup
Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Inventories: | ||
Raw materials and supplies | $ 267 | $ 227.4 |
Work in process | 75.5 | 66.4 |
Finished products | 399.4 | 385.1 |
Total inventories | 741.9 | 678.9 |
Property, plant and equipment, gross | 1,945.5 | 1,911.7 |
Less: accumulated depreciation | 1,140.6 | 1,098.3 |
Property, plant and equipment, net | $ 804.9 | $ 813.4 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) - Fiberon [Member] $ in Millions | 1 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition [Line Items] | |
Business acquisition, membership interests acquired | 100.00% |
Business acquisition consideration price paid | $ 470 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||
Goodwill | [1] | $ 2,085.7 | $ 2,080.3 |
Fiberon [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 18.8 | ||
Inventories | 50.9 | ||
Property, plant and equipment | 48.5 | ||
Goodwill | 174.9 | ||
Identifiable intangible assets | 195 | ||
Other assets | 4.8 | ||
Total assets | 492.9 | ||
Accounts payable | 16.8 | ||
Other liabilities and accruals | 16.3 | ||
Net assets acquired | $ 459.8 | ||
[1] | Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018USD ($)asset-group | Sep. 30, 2018asset-group | Jun. 30, 2019USD ($)asset-group | ||
Goodwill and Identifiable Intangible Assets [Line Items] | ||||
Goodwill | [1] | $ 2,080.3 | $ 2,085.7 | |
Other intangible assets, net of accumulated amortization | 1,246.8 | 1,229.2 | ||
Increase in gross identifiable intangible assets | 5.1 | |||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 673.9 | 676.2 | ||
Cabinets [Member] | ||||
Goodwill and Identifiable Intangible Assets [Line Items] | ||||
Goodwill | [1] | $ 924 | $ 925.5 | |
Number of tradenames | asset-group | 2 | 2 | 3 | |
Cabinets [Member] | Trade Names [Member] | ||||
Goodwill and Identifiable Intangible Assets [Line Items] | ||||
Indefinite-lived Intangible Assets (Excluding Goodwill) | $ 203 | |||
Tradenames and Customer Relationship [Member] | Minimum [Member] | ||||
Goodwill and Identifiable Intangible Assets [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 2 years | |||
Tradenames and Customer Relationship [Member] | Maximum [Member] | ||||
Goodwill and Identifiable Intangible Assets [Line Items] | ||||
Amortizable identifiable intangible assets, estimated useful life | 30 years | |||
[1] | Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Detail) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
Goodwill [Line Items] | ||
Beginning Balance | $ 2,080.3 | [1] |
Translation adjustments | 3.9 | |
Acquisition-related adjustments | 1.5 | |
Ending Balance | 2,085.7 | [1] |
Cabinets [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 924 | [1] |
Translation adjustments | 1.5 | |
Ending Balance | 925.5 | [1] |
Plumbing [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 743.7 | [1] |
Translation adjustments | 1.8 | |
Ending Balance | 745.5 | [1] |
Doors & Security [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 412.6 | [1] |
Translation adjustments | 0.6 | |
Acquisition-related adjustments | 1.5 | |
Ending Balance | $ 414.7 | [1] |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. |
Goodwill and Identifiable Int_5
Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) $ in Millions | Jun. 30, 2019USD ($) |
Doors & Security [Member] | |
Goodwill [Line Items] | |
Accumulated impairment losses | $ 399.5 |
Goodwill and Identifiable Int_6
Goodwill and Identifiable Intangible Assets - Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Indefinite-lived tradenames | $ 676.2 | $ 673.9 |
Net Book Value, Indefinite-lived tradenames | 676.2 | 673.9 |
Gross Carrying Amounts, Finite Lived | 896.4 | 893.6 |
Accumulated Amortization, Finite Lived | (343.4) | (320.7) |
Net Book Value, Finite Lived | 553 | 572.9 |
Gross Carrying Amounts, Total identifiable intangibles | 1,572.6 | 1,567.5 |
Accumulated Amortization, Total identifiable intangibles | (343.4) | (320.7) |
Net Book Value, Total identifiable intangibles | 1,229.2 | 1,246.8 |
Tradenames [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 20.1 | 19.8 |
Accumulated Amortization, Finite Lived | (12.5) | (11.9) |
Net Book Value, Finite Lived | 7.6 | 7.9 |
Customer and contractual relationships [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 802.8 | 800.3 |
Accumulated Amortization, Finite Lived | (280.6) | (260.2) |
Net Book Value, Finite Lived | 522.2 | 540.1 |
Patents/proprietary technology [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 73.5 | 73.5 |
Accumulated Amortization, Finite Lived | (50.3) | (48.6) |
Net Book Value, Finite Lived | $ 23.2 | $ 24.9 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lessee Lease Description [Line Items] | ||
Operating lease cost | $ 12.7 | $ 25.7 |
Variable lease cost | $ 1.9 | $ 4 |
Minimum [Member] | ||
Lessee Lease Description [Line Items] | ||
Lease term remaining | 1 year | |
Maximum [Member] | ||
Lessee Lease Description [Line Items] | ||
Lease term remaining | 36 years |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 20.5 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 12.8 |
Weighted average remaining lease term - operating leases | 7 years 4 months 24 days |
Weighted average discount rate - operating leases | 4.40% |
Leases - Total Lease Payments U
Leases - Total Lease Payments Under Non-Cancellable Leases (Detail) $ in Millions | Jun. 30, 2019USD ($) |
Operating Leased Assets [Line Items] | |
2019 (excluding six months ended June 30, 2019) | $ 20.3 |
2020 | 36.6 |
2021 | 30.5 |
2022 | 24.4 |
2023 | 20.2 |
Thereafter | 79.8 |
Total lease payments | 211.8 |
Less imputed interest | (32.2) |
Total minimum rental payments | 179.6 |
Operating lease liabilities | 146.3 |
Other Current Liabilities [Member] | |
Operating Leased Assets [Line Items] | |
Operating lease liabilities | 33.3 |
Operating leases liabilities [Member] | |
Operating Leased Assets [Line Items] | |
Operating lease liabilities | $ 146.3 |
External Debt and Financing A_2
External Debt and Financing Arrangements - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2015 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||||||
Term loan maturity period | 2019-03 | |||||||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital | $ 23.5 | $ 23.5 | ||||||
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% | |||||||
Term Loan Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior unsecured notes, price | $ 350 | $ 350 | $ 525 | |||||
Term loan maturity period | 2020-03 | |||||||
Term loan, outstanding borrowings | $ 350 | 525 | ||||||
Debt instrument, description | In March 2018, the Company entered into a $350 million term loan for general corporate purposes scheduled to mature in March 2019. In August 2018, the Company amended its existing $350 million term loan to increase the borrowings under the term loan from $350 million to $525 million. In March 2019, the Company amended the $525 million term loan to decrease the borrowings from $525 million to $350 million and extend the maturity date to March 2020. All other terms and conditions on the amended term loan remain the same as the previous $525 million term loan. | |||||||
Debt Instrument, Description of Variable Rate Basis | 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%. | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan, outstanding borrowings | $ 575 | 320 | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,250 | |||||||
2018 Senior Notes [Member] | Notes due 2023 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior unsecured notes, price | $ 600 | |||||||
Senior unsecured notes, maturity year | 2023 | |||||||
Senior unsecured notes, coupon rate | 4.00% | |||||||
Senior notes, outstanding amount | 595.5 | 595 | ||||||
2015 Senior Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior unsecured notes, price | $ 900 | |||||||
Senior notes, outstanding amount | $ 894.8 | $ 894 | ||||||
2015 Senior Notes [Member] | Notes Due 2020 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior unsecured notes, price | $ 400 | |||||||
Senior unsecured notes, maturity year | 2020 | |||||||
Senior unsecured notes, coupon rate | 3.00% | |||||||
Senior unsecured notes, maturity period | 5 years | |||||||
2015 Senior Notes [Member] | Notes Due 2025 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior unsecured notes, price | $ 500 | |||||||
Senior unsecured notes, maturity year | 2025 | |||||||
Senior unsecured notes, coupon rate | 4.00% | |||||||
Senior unsecured notes, maturity period | 10 years | |||||||
Amended and Restated Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,250 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign exchange contracts [Member] | ||||
Derivative [Line Items] | ||||
Notional amount of foreign currency derivative hedges | $ 392,900,000 | $ 392,900,000 | ||
Cash flow hedge [Member] | ||||
Derivative [Line Items] | ||||
Derivative instrument gain (loss), effective portion | (700,000) | $ (300,000) | (200,000) | $ 4,000,000 |
Cash flow hedge [Member] | Foreign exchange contracts [Member] | ||||
Derivative [Line Items] | ||||
Estimated amount of net foreign currency derivative gain in other comprehensive income reclassified to earnings within 12 months | $ 400,000 | $ 400,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 2 | $ 6 |
Derivative liabilities, fair value | 1.6 | 1.9 |
Net investment hedges [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.7 | |
Net investment hedges [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 0.5 | 1.6 |
Foreign exchange contracts [Member] | Cash flow hedging [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 1.3 | 3.9 |
Foreign exchange contracts [Member] | Cash flow hedging [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 0.7 | 0.3 |
Foreign exchange contracts [Member] | Fair value hedging [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.7 | 1.4 |
Foreign exchange contracts [Member] | Fair value hedging [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | $ 0.4 | $ 1.6 |
Financial Instruments - Classif
Financial Instruments - Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cost of products sold [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 969.6 | $ 904.9 | $ 1,838.7 | $ 1,719.9 |
Cost of products sold [Member] | Foreign exchange contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income | 1.6 | 0.6 | 2.8 | |
Cost of products sold [Member] | Commodity Contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income | (0.1) | (0.1) | ||
Interest expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 24.5 | 17.4 | 48.2 | 32.1 |
Interest expense [Member] | Interest rate contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income | 0.1 | 0.2 | ||
Other income, net [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 0.7 | 3.4 | 1.9 | 6.2 |
Other income, net [Member] | Foreign exchange contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | (0.5) | (4.2) | 0.5 | (1.6) |
Other income, net [Member] | Foreign exchange contracts [Member] | Designated as hedging instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 0.7 | $ 3.2 | $ (0.2) | $ 1.2 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | Jun. 30, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
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 | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying Value | Term Loan Facility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 350 | $ 525 |
Carrying Value | Senior Unsecured Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 1,490.3 | 1,489 |
Carrying Value | Revolving Credit Facility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 575 | 320 |
Fair Value | Term Loan Facility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 350 | 525 |
Fair Value | Senior Unsecured Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 1,552.4 | 1,490.4 |
Fair Value | Revolving Credit Facility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 575 | $ 320 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial instruments (Level 2) | $ 2 | $ 6 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 12.1 | 15.3 |
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 | 6 |
Deferred compensation program assets (Level 2) | 10.1 | 9.3 |
Derivative financial instruments (Level 2) | $ 1.6 | $ 1.9 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income - After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning Balance | $ 2,247.1 | $ 2,358.3 | $ 2,180 | $ 2,601.1 | |
Ending Balance | 2,344.7 | 2,174.7 | 2,344.7 | 2,174.7 | |
Foreign Currency Adjustments [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning Balance | (16.5) | 5 | (25.3) | 5.8 | |
Amounts classified into accumulated other comprehensive (loss) income | 4.9 | (16.3) | 13.7 | (17.1) | |
Other comprehensive (loss) income, net of tax | 4.9 | (16.3) | 13.7 | (17.1) | |
Ending Balance | (11.6) | (11.3) | (11.6) | (11.3) | |
Derivative Hedging Gain (Loss) [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning Balance | 3.7 | 1.4 | 4.2 | (2.4) | |
Amounts classified into accumulated other comprehensive (loss) income | (0.3) | (0.6) | 0.3 | 2.9 | |
Amounts reclassified from accumulated other comprehensive (loss) income | (1.4) | (0.3) | (2.5) | ||
Other comprehensive (loss) income, net of tax | (1.7) | (0.9) | (2.2) | 2.9 | |
Ending Balance | 2 | 0.5 | 2 | 0.5 | |
Defined benefit plan items [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning Balance | [1] | (54.5) | (42.4) | (45.9) | (42.6) |
Amounts classified into accumulated other comprehensive (loss) income | [1] | 0.2 | |||
Adoption of ASU 2018-02 | [1],[2] | (8.6) | (8.6) | ||
Other comprehensive (loss) income, net of tax | [1] | (8.6) | 0.2 | ||
Ending Balance | [1] | (54.5) | (42.4) | (54.5) | (42.4) |
Accumulated Other Comprehensive Loss [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning Balance | (67.3) | (36) | (67) | (39.2) | |
Amounts classified into accumulated other comprehensive (loss) income | 4.6 | (16.9) | 14 | (14) | |
Adoption of ASU 2018-02 | [2] | (8.6) | (8.6) | ||
Amounts reclassified from accumulated other comprehensive (loss) income | (1.4) | (0.3) | (2.5) | ||
Other comprehensive (loss) income, net of tax | 3.2 | (17.2) | 2.9 | (14) | |
Ending Balance | $ (64.1) | $ (53.2) | $ (64.1) | $ (53.2) | |
[1] | See Note 12, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans. | ||||
[2] | See Note 2, “Recently Issued Accounting Standards,” for further information on the impact of adopting ASU 2018-02 . |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive (Loss) Income - Reclassifications Out of Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of products sold | $ 969.6 | $ 904.9 | $ 1,838.7 | $ 1,719.9 |
Tax (expense) benefit | (41.5) | (44.9) | (70.1) | (77.3) |
Income from continuing operations, net of tax | 137.1 | 129.7 | 221.6 | $ 204.8 |
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 Income Taxes, Noncontrolling Interest | 1.6 | 0.5 | 3 | |
Tax (expense) benefit | (0.2) | (0.2) | (0.5) | |
Income from continuing operations, net of tax | 1.4 | 0.3 | 2.5 | |
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 | 1.6 | 0.6 | 2.8 | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Losses (Gains) [Member] | Interest rate contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other income, net | 0.1 | $ 0.2 | ||
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 | $ (0.1) | $ (0.1) |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 1,507.2 | $ 1,429 | $ 2,835.1 | $ 2,683.6 | |
Wholesalers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | 706 | 683.1 | 1,317.8 | 1,268.7 |
Home Center retailers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 431 | 375 | 821.9 | 724.7 |
Other retailers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [3] | 75 | 81.1 | 142.4 | 157.2 |
Builder direct [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 57.3 | 58.6 | 112.4 | 110.1 | |
United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 1,269.3 | 1,197.8 | 2,394.5 | 2,260.7 | |
International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [4] | $ 237.9 | $ 231.2 | $ 440.6 | $ 422.9 |
[1] | Represents sales to customers | ||||
[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 Canada, China, Europe and Mexico. |
Defined Benefit Plans - Compone
Defined Benefit Plans - Components of Net Periodic Benefit Cost for Pension Benefits (Detail) - Net Periodic Benefit Cost - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.3 |
Interest cost | 8.2 | 7.7 | 16.4 | 15.3 |
Expected return on plan assets | (8.8) | (10.2) | (17.6) | (20.5) |
Net periodic benefit income | $ (0.5) | $ (2.4) | $ (1) | $ (4.9) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes [Line Items] | ||||
Effective income tax rate | 23.20% | 25.70% | 24.00% | 27.40% |
Minimum [Member] | ||||
Income Taxes [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 2,500,000 | $ 2,500,000 | ||
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits | $ 3,100,000 | $ 3,100,000 |
Product Warranties - Activity R
Product Warranties - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
Guarantees And Product Warranties [Abstract] | |||
Reserve balance at the beginning of the year | $ 24.9 | $ 17.2 | |
Provision for warranties issued | 13 | 12.6 | |
Settlements made (in cash or in kind) | (12.5) | (12.8) | |
Reserve balance at end of year | [1] | $ 25.4 | $ 17 |
[1] | Balance at January 1, 2019 includes the impact of acquiring Fiberon. See Note 4, “Acquisitions and Dispositions,” for additional information |
Information on Business Segme_3
Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 1,507.2 | $ 1,429 | $ 2,835.1 | $ 2,683.6 |
Operating income | $ 202.4 | 188.6 | $ 338 | 308 |
Net Sales, Percentage Change vs. Prior Year | 5.50% | 5.60% | ||
Operating Income, Percentage Change vs. Prior Year | 7.30% | 9.70% | ||
Corporate [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income | $ (20) | (21.4) | $ (39.2) | (42.7) |
Operating Income, Percentage Change vs. Prior Year | 6.50% | 8.20% | ||
Cabinets [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 635 | 637.6 | $ 1,208 | 1,194.8 |
Operating income | $ 65.7 | 69.4 | $ 108.9 | 93.5 |
Net Sales, Percentage Change vs. Prior Year | (0.40%) | 1.10% | ||
Operating Income, Percentage Change vs. Prior Year | (5.30%) | 16.50% | ||
Plumbing [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 506.1 | 483.7 | $ 964.7 | 933.4 |
Operating income | $ 106.7 | 95.3 | $ 195.9 | 183.7 |
Net Sales, Percentage Change vs. Prior Year | 4.60% | 3.40% | ||
Operating Income, Percentage Change vs. Prior Year | 12.00% | 6.60% | ||
Doors & Security [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 366.1 | 307.7 | $ 662.4 | 555.4 |
Operating income | $ 50 | $ 45.3 | $ 72.4 | $ 73.5 |
Net Sales, Percentage Change vs. Prior Year | 19.00% | 19.30% | ||
Operating Income, Percentage Change vs. Prior Year | 10.40% | (1.50%) |
Restructuring and Other Charg_3
Restructuring and Other Charges - Pre-tax Restructuring and Other Charges (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 4.5 | $ 10.8 | $ 5.7 | $ 11.6 | |
Other Charges | [1] | 5.1 | 5.5 | 8.5 | 5.4 |
Total Charges | 9.6 | 16.3 | 14.2 | 17 | |
Operating Segments [Member] | Cabinets [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 1.2 | 7.3 | 2.3 | 7.6 | |
Other Charges | [1] | 0.4 | 4.5 | 0.7 | 4.3 |
Total Charges | 1.6 | 11.8 | 3 | 11.9 | |
Operating Segments [Member] | Plumbing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 3.2 | 1.7 | 3.3 | 1.5 | |
Other Charges | [1] | 4.6 | 0.1 | 5.8 | 0.1 |
Total Charges | 7.8 | 1.8 | 9.1 | 1.6 | |
Operating Segments [Member] | Doors & Security [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 0.1 | 1.8 | 0.1 | 2.5 | |
Other Charges | [1] | 0.1 | 0.9 | 2 | 1 |
Total Charges | $ 0.2 | $ 2.7 | $ 2.1 | $ 3.5 | |
[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 Charg_4
Restructuring and Other Charges - Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | $ 10.5 | $ 5.8 | ||||
Provision | $ 4.5 | $ 10.8 | 5.7 | 11.6 | ||
Cash Expenditures | [1] | (6.6) | (4.2) | |||
Non-Cash Write-offs | (0.1) | (0.6) | [2] | |||
Ending Balance | 9.5 | 12.6 | 9.5 | 12.6 | ||
Workforce Reduction Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 9.9 | 5 | ||||
Provision | 4.9 | 11.1 | ||||
Cash Expenditures | [1] | (5.7) | (3.7) | |||
Non-Cash Write-offs | (0.1) | |||||
Ending Balance | 9 | 12.4 | 9 | 12.4 | ||
Other [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning Balance | 0.6 | 0.8 | ||||
Provision | 0.8 | 0.5 | ||||
Cash Expenditures | [1] | (0.9) | (0.5) | |||
Non-Cash Write-offs | [2] | (0.6) | ||||
Ending Balance | $ 0.5 | $ 0.2 | $ 0.5 | $ 0.2 | ||
[1] | Cash expenditures primarily relate 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 (Loss) per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations, net of tax | $ 137.1 | $ 129.7 | $ 221.6 | $ 204.8 |
Less: Noncontrolling interest | (0.4) | 0.1 | (0.6) | |
Income from continuing operations for EPS | 137.5 | 129.6 | 222.2 | 204.8 |
Loss from discontinued operations | (0.2) | |||
Net income attributable to Fortune Brands | $ 137.5 | $ 129.6 | $ 222.2 | $ 204.6 |
Basic | ||||
Continuing operations | $ 0.98 | $ 0.89 | $ 1.58 | $ 1.39 |
Net income attributable to Fortune Brands common shareholders | 0.98 | 0.89 | 1.58 | 1.39 |
Diluted | ||||
Continuing operations | 0.97 | 0.88 | 1.57 | 1.37 |
Net income attributable to Fortune Brands common shareholders | $ 0.97 | $ 0.88 | $ 1.57 | $ 1.37 |
Basic average shares outstanding | 139.9 | 144.9 | 140.3 | 147.4 |
Stock-based awards | 1.4 | 1.8 | 1.3 | 2 |
Diluted average shares outstanding | 141.3 | 146.7 | 141.6 | 149.4 |
Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share | 1.9 | 1.5 | 2.4 | 1 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Rental Payments under Non-Cancelable Operating Leases (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 37.8 |
2020 | 29.6 |
2021 | 23.4 |
2022 | 18.9 |
2023 | 13.8 |
Remainder | 58.8 |
Total minimum rental payments | $ 182.3 |