Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 17, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
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 | 138,148,321 | |
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 | 62-1411546 | |
Entity Address, Address Line One | 520 Lake Cook Road | |
Entity Address, City or Town | Deerfield | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015-5611 | |
City Area Code | 847 | |
Local Phone Number | 484-4400 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net sales | $ 1,375.8 | $ 1,507.2 | $ 2,778.5 | $ 2,835.1 |
Cost of products sold | 892.9 | 969.6 | 1,802.4 | 1,838.7 |
Selling, general and administrative expenses | 276.2 | 320.6 | 590.1 | 632.6 |
Amortization of intangible assets | 10.3 | 10.1 | 20.6 | 20.1 |
Asset impairment charges | 13 | 22.5 | ||
Restructuring charges | 10.4 | 4.5 | 14.9 | 5.7 |
Operating income | 173 | 202.4 | 328 | 338 |
Interest expense | 22.2 | 24.5 | 44.3 | 48.2 |
Other income, net | (5.2) | (0.7) | (11.3) | (1.9) |
Income before taxes | 156 | 178.6 | 295 | 291.7 |
Income tax | 37.8 | 41.5 | 67.7 | 70.1 |
Income after tax | 118.2 | 137.1 | 227.3 | 221.6 |
Equity in losses of affiliate | 2 | 2.3 | ||
Net income | 116.2 | 137.1 | 225 | 221.6 |
Less: Noncontrolling interests | 0.4 | (0.4) | 0.1 | (0.6) |
Net income attributable to Fortune Brands | $ 115.8 | $ 137.5 | $ 224.9 | $ 222.2 |
Basic earnings per common share | $ 0.84 | $ 0.98 | $ 1.62 | $ 1.58 |
Diluted earnings per common share | $ 0.83 | $ 0.97 | $ 1.61 | $ 1.57 |
Comprehensive income | $ 129.1 | $ 140.3 | $ 187.3 | $ 233.1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 398.4 | $ 387.9 | |
Accounts receivable less allowances for discounts and doubtful accounts | 657.7 | 624.8 | |
Inventories | 732.3 | 718.6 | |
Other current assets | 168.9 | 166.9 | |
Total current assets | 1,957.3 | 1,898.2 | |
Property, plant and equipment, net of accumulated depreciation | 794.2 | 824.2 | |
Operating lease assets | 164.4 | 165.6 | |
Goodwill | [1] | 2,081.3 | 2,090.2 |
Other intangible assets, net of accumulated amortization | 1,118 | 1,168.9 | |
Other assets | 217.1 | 144.2 | |
Total assets | 6,332.3 | 6,291.3 | |
Current liabilities | |||
Short-term debt | 399.7 | ||
Accounts payable | 463.9 | 460 | |
Other current liabilities | 488.9 | 549.6 | |
Total current liabilities | 952.8 | 1,409.3 | |
Long-term debt | 2,245.9 | 1,784.6 | |
Deferred income taxes | 152.1 | 157.2 | |
Accrued defined benefit plans | 197.5 | 201.4 | |
Operating lease liabilities | 137.5 | 139.8 | |
Other non-current liabilities | 183.4 | 171.2 | |
Total liabilities | 3,869.2 | 3,863.5 | |
Commitments and contingencies (see Note 17) | |||
Equity | |||
Common stock | [2] | 1.8 | 1.8 |
Paid-in capital | 2,852.9 | 2,813.8 | |
Accumulated other comprehensive loss | (110.3) | (72.6) | |
Retained earnings | 1,954.7 | 1,763 | |
Treasury stock | (2,237.3) | (2,079.4) | |
Total Fortune Brands equity | 2,461.8 | 2,426.6 | |
Noncontrolling interests | 1.3 | 1.2 | |
Total equity | 2,463.1 | 2,427.8 | |
Total liabilities and equity | $ 6,332.3 | $ 6,291.3 | |
[1] | Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. | ||
[2] | Common stock, par value $0.01 per share; 183.0 million shares and 181.9 million shares issued at June 30, 2020 and December 31, 2019, respectively. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 183 | 181.9 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Operating activities | |||
Net income | $ 225 | $ 221.6 | |
Non-cash pre-tax expense: | |||
Depreciation | 57 | 56 | |
Amortization of intangibles | 20.6 | 20 | |
Non-cash lease expense | 16.7 | 17.9 | |
Stock-based compensation | 15 | 14.5 | |
Deferred taxes | (11.8) | 5 | |
Asset impairment charges | 22.5 | 1.7 | |
Amortization of deferred financing fees | 2.1 | 1.5 | |
Equity in losses of affiliate | 2.3 | ||
Gain on equity investments | (6.6) | ||
Loss (gain) on sale of property, plant and equipment | 1.2 | (1) | |
Changes in assets and liabilities: | |||
Increase in accounts receivable | (59.6) | (132.6) | |
Increase in inventories | (18.1) | (61.1) | |
Increase in accounts payable | 11.9 | 26.8 | |
Increase in other assets | (8.1) | (13.8) | |
Decrease in accrued expenses and other liabilities | (62.2) | (41.2) | |
Increase (decrease) in accrued taxes | 52.6 | (3.3) | |
Net cash provided by operating activities | 260.5 | 112 | |
Investing activities | |||
Capital expenditures | [1] | (42.3) | (54.9) |
Proceeds from the disposition of assets | 1.5 | 4.1 | |
Cost of investments in equity securities | (59.4) | ||
Net cash used in investing activities | (100.2) | (50.8) | |
Financing activities | |||
Decrease in short-term debt | (175) | ||
Issuance of long-term debt | 900 | 665 | |
Repayment of long-term debt | (840) | (410) | |
Proceeds from the exercise of stock options | 24.1 | 6.1 | |
Treasury stock purchases | (150) | (50) | |
Employee withholding taxes related to stock-based compensation | (7.9) | (8.2) | |
Deferred acquisition payments | (19) | ||
Dividends to stockholders | (66.6) | (61.7) | |
Other financing, net | (1.8) | (0.2) | |
Net cash used in financing activities | (142.2) | (53) | |
Effect of foreign exchange rate changes on cash | (8) | 4.9 | |
Net increase in cash and cash equivalents | 10.1 | 13.1 | |
Cash, cash equivalents and restricted cash at beginning of period | [2] | 394.9 | 270.7 |
Cash, cash equivalents and restricted cash at end of period | [2] | $ 405 | $ 283.8 |
[1] | Capital expenditures of $3.9 million and $7.8 million that had not been paid as of June 30, 2020 and 2019, respectively, were excluded from the Statement of Cash Flows. | ||
[2] | Restricted cash of $1.0 million and $5.6 million is included in Other current assets and Other assets, respectively, as of June 30, 2020 and 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. Restricted cash of $0.8 million and $6.1 million is included in Other current assets and Other assets, respectively, as of December 31, 2019. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Capital expenditures incurred but not yet paid | $ 3.9 | $ 7.8 | |
Other Current Assets [Member] | |||
Restricted Cash | 1 | 0.7 | $ 0.8 |
Other Assets [Member] | |||
Restricted Cash | $ 5.6 | $ 6.8 | $ 6.1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) IncomeCumulative Effect of Adjustment | Retained Earnings | Retained EarningsCumulative Effect of Adjustment | Treasury Stock | Non-controlling Interests |
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 (loss) | 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 | ASU 2018-02 | $ (8.6) | $ 8.6 | |||||||
Treasury stock purchases | (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 (loss) | 3.2 | 3.2 | |||||||
Stock options exercised | 3.2 | 3.2 | |||||||
Stock-based compensation | 6.9 | 7.4 | (0.5) | ||||||
Treasury stock purchases | (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 | ||
Beginning Balance at Dec. 31, 2019 | 2,427.8 | 1.8 | 2,813.8 | (72.6) | 1,763 | (2,079.4) | 1.2 | ||
Comprehensive income: | |||||||||
Net income | 225 | 224.9 | 0.1 | ||||||
Other comprehensive income (loss) | (37.7) | (37.7) | |||||||
Stock options exercised | 24.1 | 24.1 | |||||||
Stock-based compensation | 7.1 | 15 | (7.9) | ||||||
Treasury stock purchases | (150) | (150) | |||||||
Dividends | (33.2) | (33.2) | |||||||
Ending Balance at Jun. 30, 2020 | 2,463.1 | 1.8 | 2,852.9 | (110.3) | 1,954.7 | (2,237.3) | 1.3 | ||
Beginning Balance at Mar. 31, 2020 | 2,357.9 | 1.8 | 2,843.3 | (123.2) | 1,872.1 | (2,237) | 0.9 | ||
Comprehensive income: | |||||||||
Net income | 116.2 | 115.8 | 0.4 | ||||||
Other comprehensive income (loss) | 12.9 | 12.9 | |||||||
Stock options exercised | 5.7 | 5.7 | |||||||
Stock-based compensation | 3.6 | 3.9 | (0.3) | ||||||
Dividends | (33.2) | (33.2) | |||||||
Ending Balance at Jun. 30, 2020 | $ 2,463.1 | $ 1.8 | $ 2,852.9 | $ (110.3) | $ 1,954.7 | $ (2,237.3) | $ 1.3 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Stockholders Equity [Abstract] | ||||
Dividends per Common share | $ 0.24 | $ 0.22 | $ 0.24 | $ 0.22 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020, the related condensed consolidated statements of comprehensive income and equity for the six and three months ended June 30, 2020 and 2019, and the related condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year. 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, 2019 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, 2019. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 replaced the “incurred loss” approach under the previous guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. 2. Recently Issued Accounting Standards (Continued) Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, which is intended to simplify accounting for income taxes and improve consistency in application. ASU 2019-12 amends certain elements of income tax accounting, including but not limited to intraperiod tax allocations, step-ups in tax basis of goodwill, and calculating taxes on year-to-date losses in interim periods. The guidance is effective for the Company’s fiscal year beginning January 1, 2021, with early adoption permitted. We are assessing the impact that the adoption of this guidance will have on our financial statements. Clarifications in Accounting for Equity Securities In January 2020, the FASB issued ASU 2020-01, which clarifies the interactions between accounting for equity investments (ASC 321), equity method accounting (ASC 323) and derivatives and hedges (ASC 815). As a result of the ASU, when entities apply the measurement alternative to non-controlling equity investments under ASC 321, and must transition to the equity method of accounting because of an observable transaction, existing investments should be remeasured immediately before applying the equity method of accounting. Additionally, it states that if entities hold non-derivative forward contracts or purchased call options to acquire equity securities, such instruments should be measured using the fair value principles of ASC 321 before settlement or exercise. The Company early adopted this guidance on January 1, 2020, and as a result recognized gains of $11.0 million within other income during the first six months of 2020 related to our investment in Flo Technologies, Inc. (see note 4). Effects of Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, which provides relief from accounting analysis and impacts that may otherwise be required for modifications to agreements necessitated by reference rate reform. It also provides optional expedients to enable the continuance of hedge accounting where certain hedging relationships are impacted by reference rate reform. This optional guidance is effective immediately, and available to be used through December 31, 2022. We are assessing the impact that reference rate reform and the related adoption of this guidance may have on our financial statements. |
Balance Sheet Information
Balance Sheet Information | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 December 31, 2019 Inventories: Raw materials and supplies $ 280.4 $ 274.4 Work in process 81.3 72.2 Finished products 370.6 372.0 Total inventories $ 732.3 $ 718.6 Property, plant and equipment, gross $ 1,985.7 $ 1,982.5 Less: accumulated depreciation 1,191.5 1,158.3 Property, plant and equipment, net $ 794.2 $ 824.2 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | 4. Acquisitions and Dispositions In 2018 our Plumbing segment entered into a strategic partnership with, and acquired non-controlling equity interests in, Flo Technologies, Inc. (“Flo”), a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. In January 2020, we entered into an agreement to acquire 100% of the outstanding shares of Flo in a multi-phase transaction. As part of this agreement, we acquired additional shares for $44.2 million in cash, including direct transactions costs, contract to purchase all remaining shares of Flo at a future date in exchange for an additional $7.9 million in cash, which is included in other assets in our condensed consolidated balance sheet. In April 2020, we acquired additional shares of Flo under a separate option agreement which increased our ownership to approximately 80% and resulted in a non-cash gain of $4.4 million on the forward contract within other income. We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. In applying the equity method, we record our investment at cost and subsequently increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses of the investee. We record dividends or other equity distributions as reductions in the carrying value of our investment. As of June 30, 2020, we owned approximately 80% of Flo’s outstanding shares. Starting in the first quarter of 2020, we applied the equity method of accounting to our investment in Flo as the minority shareholders have substantive participating rights which preclude consolidation in our results of operations and statements of financial position and cash flows. The substantive participating rights are due to expire in the first quarter of 2021, at which time we will obtain control of, and begin consolidating, Flo in our results. The second phase, scheduled to occur in the first quarter of 2022, will result in the acquisition of the remaining outstanding shares of Flo for a price based on a multiple of Flo’s 2021 sales and adjusted earnings before interest and taxes. Immediately prior to applying the equity method of accounting, we recognized a gain of $6.6 million within other income during the six months ended June 30, 2020 related to the remeasurement of our previously existing investment in Flo The carrying value of our investment in Flo was $81.5 |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangible Assets | 5 . Goodwill and Identifiable Intangible Assets We had goodwill of $2,081.3 million (In millions) Cabinets Plumbing Doors & Security Total Goodwill Goodwill at December 31, 2019 (a) $ 925.5 $ 747.3 $ 417.4 $ 2,090.2 Year-to-date translation adjustments (1.6 ) (6.7 ) (0.6 ) (8.9 ) Goodwill at June 30, 2020 (a) $ 923.9 $ 740.6 $ 416.8 $ 2,081.3 (a) Net of accumulated impairment losses of $399.5 million in the Doors & Security segment. We also had net identifiable intangible assets of $1,118.0 million and $1,168.9 million as of June 30, 2020 and December 31, 2019, respectively. The $32.3 million decrease in gross identifiable intangible assets was due to tradename impairment charges of $22.5 million in our Plumbing and Cabinets segments and foreign translation adjustments. The gross carrying value and accumulated amortization by class of identifiable intangible assets as of June 30, 2020 and December 31, 2019 were as follows: (In millions) As of June 30, 2020 As of December 31, 2019 Gross Carrying Amounts Accumulated Amortization Net Book Value Gross Carrying Amounts Accumulated Amortization Net Book Value Indefinite-lived tradenames $ 596.2 $ — $ 596.2 $ 635.6 $ — $ 635.6 Amortizable intangible assets Tradenames 32.7 (13.0 ) 19.7 20.6 (12.9 ) 7.7 Customer and contractual relationships 797.3 (315.0 ) 482.3 803.9 (299.6 ) 504.3 Patents/proprietary technology 75.0 (55.2 ) 19.8 73.4 (52.1 ) 21.3 Total 905.0 (383.2 ) 521.8 897.9 (364.6 ) 533.3 Total identifiable intangibles $ 1,501.2 $ (383.2 ) $ 1,118.0 $ 1,533.5 $ (364.6 ) $ 1,168.9 Amortizable identifiable intangible assets, principally 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, which includes customer attrition rates and other relevant factors. In March 2020, the World Health Organization declared a global pandemic related to the novel corona virus (“COVID-19”), and governments around the globe enacted significant and wide-ranging measures to slow and limit the transmission of the virus, including stay at home orders in the United States and globally. The impacts of these measures negatively impacted our net sales in the second quarter and may continue to affect later periods. During the second quarter of 2020, extended closures of luxury plumbing showrooms associated with the COVID-19 pandemic led to lower than expected sales related to an indefinite-lived tradename within the Plumbing segment, which combined with the updated financial outlook compared to previous forecasts and the continued uncertainty of the pandemic on the sales and profitability related to the tradename led us to conclude that it was more likely than not that the indefinite-lived tradename was impaired. Therefore we performed an interim impairment test as of June 30, 2020, and as a result we recognized a pre-tax impairment charge of $13.0 million related to this tradename. We also performed an evaluation of the useful life of this tradename and determined it was no longer indefinite-lived due to changes in long-term management expectations and future operating plans. As of June 30, 2020, the estimated fair value of this tradename equaled its carrying value of $12.7 million, which will be amortized over its estimated remaining useful life of 30 years. 5. Goodwill and Identifiable Intangible Assets In the first quarter of 2020, we recognized an impairment charge of $9.5 million related to an indefinite-lived tradename in our Cabinets segment. This charge was primarily the result of lower expected sales of custom cabinetry products related to the impact of COVID-19. In the fourth quarter of 2019, we recognized an impairment charge of $12.0 million related to the same indefinite-lived tradename, which was the result of a strategic shift associated with new segment leadership and acceleration of our capacity rebalancing initiatives from custom cabinetry products to value-based cabinetry products as a result of lower than expected sales of custom cabinetry products compared to prior forecasts. As of June 30, 2020, the carrying value of this tradename was $29.1 million. In the third quarter of 2019, we recognized an impairment charge of $29.5 million related to a second indefinite-lived tradename in our Cabinets segment, which was primarily the result of a continuing shift in consumer demand from semi-custom cabinetry products to value-priced cabinetry products, which led to consecutive downward adjustments of internal sales forecasts and future growth rates associated with the tradename. As of June 30, 2020, the carrying value of this tradename was $85.0 million. The estimated fair value of a third tradename in our Cabinets segment exceeded its carrying value by less than 10% as of March 31, 2020. As of June 30, 2020, the carrying value of this tradename was $37.3 million. The fair values of these tradenames were measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life. Some of the more significant assumptions inherent in estimating the fair values include forecasted revenue growth rates for the tradename, assumed royalty rate, and a market-participant discount rate that reflects the level of risk associated with the tradenames’ future revenues and profitability. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates, and management plans. These assumptions represent Level 3 inputs of the fair value hierarchy (refer to Note 8). The significant assumptions used to estimate the fair values of the tradenames impaired during the six months ended June 30, 2020 and the year ended December 31, 2019 were as follows: 2020 2019 Unobservable Input Minimum Maximum Weighted Average (a) Minimum Maximum Weighted Average (a) Discount rate 14.8 % 15.8 % 15.1 % 13.0 % 13.5 % 13.3 % Royalty rate (b) 4.0 % 5.0 % 4.3 % 3.0 % 4.0 % 3.3 % Long-term revenue growth rate (c) 1.0 % 3.0 % 1.6 % 3.0 % 3.0 % 3.0 % (a) Weighted by relative fair value of the impaired tradenames. (b) Represents estimated percentage of sales a market-participant would pay to license the impaired tradenames. (c) Selected long-term revenue growth rate within 10-year A reduction in the estimated fair value of the tradenames in our Cabinets segment could trigger additional impairment charges in future periods. Events or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: lower than forecasted revenues, more severe impacts of the COVID-19 pandemic than currently expected, 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 a decline in the trading price of our common stock. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived assets. |
External Debt and Financing Arr
External Debt and Financing Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
External Debt and Financing Arrangements | 6 . External Debt and Financing Arrangements Unsecured Senior Notes At June 30, 2020, the Company had aggregate outstanding notes in the amount of $1.8 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts, and debt issuance costs as of June 30, 2020 and December 31, 2019: Net Carrying Value (in millions) Principal Amount Issuance Date Maturity Date June 30, 2020 December 31, 2019 3.000% Senior Notes $ 400.0 June 2015 June 2020 $ — $ 399.7 4.000% Senior Notes 500.0 June 2015 June 2025 496.2 495.8 4.000% Senior Notes (the "2018 Notes") 600.0 September 2018 September 2023 596.6 596.1 3.250% Senior Notes 700.0 September 2019 September 2029 693.1 692.7 Total Senior Notes $ 1,785.9 $ 2,184.3 During June 2020, we repaid all amounts outstanding on the 3.000% Senior Notes issued in June 2015 which were scheduled to mature in June 2020 using borrowings under our 2019 Revolving Credit Agreement (as defined below). In September 2019, the Company issued $700 million of unsecured senior notes (“2019 Notes”) in a registered public offering. The 2019 Notes are due in 2029 with a coupon rate of 3.25%. The Company used the proceeds from the 2019 Notes offering to repay in full a $350 million term loan and to pay down outstanding balances under our 2019 Revolving Credit Agreement. Credit Facilities In April 2020, the Company entered into a 364-day supplemental, $400 million revolving credit facility (the “2020 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. Given the uncertain nature and duration of the COVID-19 pandemic, this was a proactive step taken out of an abundance of caution to provide ample liquidity for the business. The terms and conditions of the 2020 Revolving Credit Agreement are essentially the same as the Company’s existing $1.25 billion revolving credit facility except for additional provisions related to cash hoarding and the use of debt issuance proceeds. Interest rates under the 2020 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 1.4% to LIBOR + 1.8%. The 2020 Revolving Credit Agreement includes a covenant under which the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. In addition, the 2020 Revolving Credit Agreement includes a covenant under which the Company’s ratio of consolidated total indebtedness minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. As of June 30, 2020, there were no outstanding borrowings under this facility. As of June 30, 2020, we were in compliance with all covenants under this facility. In September 2019, the Company entered into a second amended and restated $1.25 billion revolving credit facility (the “2019 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. The terms and conditions of the 2019 Revolving Credit Agreement, including the total commitment amount, essentially remained the same as under the previous credit agreement, except that the maturity date was extended to September 2024. Borrowings amounting to $165.0 million were rolled-over from the prior revolving credit facility into the 2019 Revolving Credit Agreement. Interest rates under the 2019 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.91% to LIBOR + 1.4%. This amendment and restatement of the credit agreement was a non-cash transaction for the Company. On June 30, 2020, our outstanding borrowings under this facility was $460.0 million. On December 31, 2019, our outstanding borrowings under this facility was zero. This facility is included in Long-term debt in the condensed consolidated balance sheets. As of June 30, 2020, we were in compliance with all covenants under this facility. In September 2019, the Company used the proceeds from the 2019 Notes to repay the full outstanding balance on the Term Loan entered into in March 2018 and subsequently amended in August 2018 and March 2019 (the “Term Loan”). Following the March 2019 amendment, the Term Loan provided for borrowings of $350 million and matured in March 2020 . At December 31, 2019, amounts due under the Term Loan were zero. We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $17.5 million in aggregate, of which there were no outstanding balances as of June 30, 2020 and December 31, 2019. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 7 . 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 Mexican peso and the Chinese yuan. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at June 30, 2020 was $378.3 million. Based on foreign exchange rates as of June 30, 2020, we estimate that $3.3 million of net derivative losses included in accumulated other comprehensive income as of June 30, 2020 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, 2020 and December 31, 2019 were as follows: Fair Value (In millions) Location June 30, 2020 December 31, 2019 Assets: Foreign exchange contracts Other current assets $ 2.5 $ 2.9 Commodity contracts Other current assets — 0.1 Net investment hedges Other current assets 0.1 — Total assets $ 2.6 $ 3.0 Liabilities: Foreign exchange contracts Other current liabilities $ 6.0 $ 2.2 Net investment hedges Other current liabilities 0.4 0.3 Total liabilities $ 6.4 $ 2.5 7 . Financial Instruments (Continued) The effects of derivative financial instruments on the statements of comprehensive income for the six months ended June 30, 2020 and 2019 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, 2020 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 1,802.4 $ 44.3 $ 11.3 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (8.8 ) Derivative designated as hedging instruments 10.0 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.7 ) Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.4 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.3 (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 Comprehensive Income $ 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 7 . Financial Instruments (Continued) The effects of derivative financial instruments on the statements of comprehensive income for the three months ended June 30, 2020 and 2019 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, 2020 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 892.9 $ 22.2 $ 5.2 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items 1.2 Derivative designated as hedging instruments (0.5 ) Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (1.3 ) Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.2 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.1 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 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 The cash flow hedges recognized in other comprehensive income were net losses of $6.7 $0.2 of $0.2 $0.7 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8 . 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 and fair value of debt as of June 30, 2020 and December 31, 2019 were as follows: (In millions) June 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Notes, net of underwriting commissions, price discounts and debt issuance costs $ 1,785.9 $ 1,950.9 $ 2,184.3 $ 2,271.4 2019 Revolving Credit Agreement 460.0 460.0 — — Total debt 2,245.9 2,410.9 2,184.3 2,271.4 The estimated fair value of our 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, 2020 and December 31, 2019 were as follows: (In millions) Fair Value June 30, 2020 December 31, 2019 Assets Derivative financial instruments (Level 2) $ 2.6 $ 3.0 Deferred compensation program assets (Level 2) 13.2 12.1 Total assets $ 15.8 $ 15.1 Liabilities Derivative financial instruments (Level 2) $ 6.4 $ 2.5 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | 9 . 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, 2020 and 2019 were as follows: (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments Accumulated Other Comprehensive Loss 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 (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 ) Balance at December 31, 2019 $ (11.5 ) $ 5.5 $ (66.6 ) $ (72.6 ) Amounts classified into accumulated other comprehensive (loss) income (30.3 ) (7.7 ) (0.8 ) (38.8 ) Amounts reclassified from accumulated other comprehensive (loss) income — 1.1 — 1.1 Net current-period other comprehensive (loss) income (30.3 ) (6.6 ) (0.8 ) (37.7 ) Balance at June 30, 2020 $ (41.8 ) $ (1.1 ) $ (67.4 ) $ (110.3 ) (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments Accumulated Other Comprehensive Loss 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 ) Balance at March 31, 2020 $ (53.2 ) $ (2.6 ) $ (67.4 ) $ (123.2 ) Amounts classified into accumulated other comprehensive (loss) income 11.4 — — 11.4 Amounts reclassified from accumulated other comprehensive (loss) income — 1.5 — 1.5 Net current-period other comprehensive (loss) income 11.4 1.5 — 12.9 Balance at June 30, 2020 $ (41.8 ) $ (1.1 ) $ (67.4 ) $ (110.3 ) 9 . Accumulated Other Comprehensive (Loss) Income (Continued) The reclassifications out of accumulated other comprehensive loss for the six and three months ended June 30, 2020 and 2019 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 2020 2019 Gains (losses) on cash flow hedges Foreign exchange contracts $ (0.7 ) $ 2.8 Cost of products sold Commodity contracts (0.4 ) — Cost of products sold Interest rate contracts 0.3 0.2 Interest expense (0.8 ) 3.0 Total before tax (0.3 ) (0.5 ) Tax expense Total reclassifications for the period $ (1.1 ) $ 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 2020 2019 Gains (losses) on cash flow hedges Foreign exchange contracts $ (1.3 ) $ 1.6 Cost of products sold Commodity contracts (0.2 ) (0.1 ) Cost of products sold Interest rate contracts 0.1 0.1 Interest expense (1.4 ) 1.6 Total before tax (0.1 ) (0.2 ) Tax expense Total reclassifications for the period $ (1.5 ) $ 1.4 Net of tax |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 10 . Revenue The following table disaggregates our consolidated revenue by major sales distribution channels for the six and three months ended June 30, 2020 and 2019: (In millions) Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Wholesalers (a) $ 1,246.9 $ 1,317.8 $ 592.7 $ 706.0 Home Center retailers (b) 840.1 821.9 420.9 431.0 Other retailers (c) 159.6 142.4 77.0 75.0 Builder direct 106.8 112.4 52.1 57.3 U.S. net sales 2,353.4 2,394.5 1,142.7 1,269.3 International (d) 425.1 440.6 233.1 237.9 Net sales $ 2,778.5 $ 2,835.1 $ 1,375.8 $ 1,507.2 ( a ) Represents sales to customers ( b ) 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. ( c ) Represents sales principally to our mass merchant and standalone independent e-commerce customers. ( d ) 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, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Benefit Plans | 1 1 . Defined Benefit Plans The components of net periodic benefit cost for pension for the six and three months ended June 30, 2020 and 2019 were as follows: (In millions) Six Months Ended June 30, Three Months Ended June 30, Pension Benefits Pension Benefits 2020 2019 2020 2019 Service cost $ 0.2 $ 0.2 $ 0.1 $ 0.1 Interest cost 14.2 16.4 7.1 8.2 Expected return on plan assets (16.4 ) (17.6 ) (8.2 ) (8.8 ) Net periodic benefit income $ (2.0 ) $ (1.0 ) $ (1.0 ) $ (0.5 ) 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, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 1 2 . Income Taxes The effective income tax rates for the six months ended June 30, 2020 and 2019 were 22.9% and 24.0%, respectively. The effective income tax rate in 2020 was favorably impacted by a benefit related to share-based compensation, and in 2019, was favorably impacted by a benefit related to decreases in uncertain tax positions, as a result of audit settlements with taxing authorities. The effective income tax rates for the three months ended June 30, 2020 and 2019 were 24.2% and 23.2%, respectively. The effective income tax rate in 2019 was favorably impacted by decreases to uncertain tax positions, as a result of audit settlements with taxing authorities. It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease in the range of $2.5 million to $8.5 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, 2020 | |
Guarantees And Product Warranties [Abstract] | |
Product Warranties | 1 3 . 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, 2020 and 2019, respectively. (In millions) Six Months Ended June 30, 2020 2019 Reserve balance at January 1, $ 24.7 $ 24.9 Provision for warranties issued 11.6 13.0 Settlements made (in cash or in kind) (12.6 ) (12.5 ) Reserve balance at June 30, $ 23.7 $ 25.4 |
Information on Business Segment
Information on Business Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Information on Business Segments | 1 4 . Information on Business Segments Net sales and operating income for the six and three months ended June 30, 2020 and 2019 by segment were as follows: Six Months Ended June 30, (In millions) 2020 2019 % Change vs. Prior Year Net Sales Cabinets $ 1,158.7 $ 1,208.0 (4.1 ) % Plumbing 973.8 964.7 0.9 Doors & Security 646.0 662.4 (2.5 ) Net sales $ 2,778.5 $ 2,835.1 (2.0 ) % Operating Income (Loss) Cabinets $ 81.0 $ 108.9 (25.6 ) % Plumbing 214.0 195.9 9.2 Doors & Security 76.7 72.4 5.9 Less: Corporate expenses (43.7 ) (39.2 ) (11.5 ) Operating income $ 328.0 $ 338.0 (3.0 ) % Three Months Ended June 30, (In millions) 2020 2019 % Change vs. Prior Year Net Sales Cabinets $ 538.7 $ 635.0 (15.2 ) % Plumbing 504.8 506.1 (0.3 ) Doors & Security 332.3 366.1 (9.2 ) Net sales $ 1,375.8 $ 1,507.2 (8.7 ) % Operating Income (Loss) Cabinets $ 37.3 $ 65.7 (43.2 ) % Plumbing 109.5 106.7 2.6 Doors & Security 45.2 50.0 (9.6 ) Less: Corporate expenses (19.0 ) (20.0 ) 5.0 Operating income $ 173.0 $ 202.4 (14.5 ) % |
Restructuring and Other Charges
Restructuring and Other Charges | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Other Charges | 1 5 . Restructuring and Other Charges Pre-tax restructuring and other charges for the six and three months ended June 30, 2020 and 2019 are shown below. (In millions) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 7.1 $ 2.3 $ 9.4 $ 2.3 $ 0.7 $ 3.0 Plumbing 3.2 (2.3 ) 0.9 3.3 5.8 9.1 Doors & Security 3.1 0.8 3.9 0.1 2.0 2.1 Corporate 1.5 0.3 1.8 — — — Total $ 14.9 $ 1.1 $ 16.0 $ 5.7 $ 8.5 $ 14.2 (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. 15. Restructuring and Other Charges (Continued) Restructuring and other charges in the first six months of 2020 largely related to headcount actions associated with COVID-19 reductions in demand across all of our segments. Restructuring and other charges in the first six months of 2019 largely related to severance costs within our Plumbing and Cabinets segment and costs associated with closing facilities within our Plumbing and Doors & Security segments. Due to the continued uncertainty surrounding the COVID-19 pandemic, we may incur additional restructuring in future periods. (In millions) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 4.7 $ 2.2 $ 6.9 $ 1.2 $ 0.4 $ 1.6 Plumbing 2.9 (1.9 ) 1.0 3.2 4.6 7.8 Doors & Security 2.8 — 2.8 0.1 0.1 0.2 Total $ 10.4 $ 0.3 $ 10.7 $ 4.5 $ 5.1 $ 9.6 (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 2020 largely related to headcount actions associated with COVID-19 reductions in demand across all of our segments. Restructuring and other charges in the second quarter of 2019 largely related to severance costs within our Plumbing and Cabinets segment and costs associated with closing facilities within our Plumbing segment. Reconciliation of Restructuring Liability (In millions) Balance at 12/31/19 2020 Provision Cash Expenditures (a) Non-Cash Write-offs Balance at 6/30/20 Workforce reduction costs $ 6.7 $ 14.5 $ (7.2 ) $ — $ 14.0 Other 0.1 0.4 (0.4 ) — 0.1 $ 6.8 $ 14.9 $ (7.6 ) $ — $ 14.1 (a) Cash expenditures primarily relate to severance charges. (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) Cash expenditures primarily relate to severance charges. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 1 6 . Earnings Per Share The computations of earnings per common share for the six and three months ended June 30, 2020 and 2019 were as follows: (In millions, except per share data) Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Net income $ 225.0 $ 221.6 $ 116.2 $ 137.1 Less: Noncontrolling interest 0.1 (0.6 ) 0.4 (0.4 ) Net income attributable to Fortune Brands 224.9 222.2 115.8 137.5 Basic earnings per common share $ 1.62 $ 1.58 $ 0.84 $ 0.98 Diluted earnings per common share $ 1.61 $ 1.57 $ 0.83 $ 0.97 Basic average shares outstanding 138.6 140.3 138.0 139.9 Stock-based awards 1.2 1.3 0.8 1.4 Diluted average shares outstanding 139.8 141.6 138.8 141.3 Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share 1.4 2.4 1.9 1.9 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. 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, 2020 and 2019. 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. |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 replaced the “incurred loss” approach under the previous guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. 2. Recently Issued Accounting Standards (Continued) Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, which is intended to simplify accounting for income taxes and improve consistency in application. ASU 2019-12 amends certain elements of income tax accounting, including but not limited to intraperiod tax allocations, step-ups in tax basis of goodwill, and calculating taxes on year-to-date losses in interim periods. The guidance is effective for the Company’s fiscal year beginning January 1, 2021, with early adoption permitted. We are assessing the impact that the adoption of this guidance will have on our financial statements. Clarifications in Accounting for Equity Securities In January 2020, the FASB issued ASU 2020-01, which clarifies the interactions between accounting for equity investments (ASC 321), equity method accounting (ASC 323) and derivatives and hedges (ASC 815). As a result of the ASU, when entities apply the measurement alternative to non-controlling equity investments under ASC 321, and must transition to the equity method of accounting because of an observable transaction, existing investments should be remeasured immediately before applying the equity method of accounting. Additionally, it states that if entities hold non-derivative forward contracts or purchased call options to acquire equity securities, such instruments should be measured using the fair value principles of ASC 321 before settlement or exercise. The Company early adopted this guidance on January 1, 2020, and as a result recognized gains of $11.0 million within other income during the first six months of 2020 related to our investment in Flo Technologies, Inc. (see note 4). Effects of Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, which provides relief from accounting analysis and impacts that may otherwise be required for modifications to agreements necessitated by reference rate reform. It also provides optional expedients to enable the continuance of hedge accounting where certain hedging relationships are impacted by reference rate reform. This optional guidance is effective immediately, and available to be used through December 31, 2022. We are assessing the impact that reference rate reform and the related adoption of this guidance may have on our financial statements. |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 December 31, 2019 Inventories: Raw materials and supplies $ 280.4 $ 274.4 Work in process 81.3 72.2 Finished products 370.6 372.0 Total inventories $ 732.3 $ 718.6 Property, plant and equipment, gross $ 1,985.7 $ 1,982.5 Less: accumulated depreciation 1,191.5 1,158.3 Property, plant and equipment, net $ 794.2 $ 824.2 |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 (a) $ 925.5 $ 747.3 $ 417.4 $ 2,090.2 Year-to-date translation adjustments (1.6 ) (6.7 ) (0.6 ) (8.9 ) Goodwill at June 30, 2020 (a) $ 923.9 $ 740.6 $ 416.8 $ 2,081.3 (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, 2020 and December 31, 2019 were as follows: (In millions) As of June 30, 2020 As of December 31, 2019 Gross Carrying Amounts Accumulated Amortization Net Book Value Gross Carrying Amounts Accumulated Amortization Net Book Value Indefinite-lived tradenames $ 596.2 $ — $ 596.2 $ 635.6 $ — $ 635.6 Amortizable intangible assets Tradenames 32.7 (13.0 ) 19.7 20.6 (12.9 ) 7.7 Customer and contractual relationships 797.3 (315.0 ) 482.3 803.9 (299.6 ) 504.3 Patents/proprietary technology 75.0 (55.2 ) 19.8 73.4 (52.1 ) 21.3 Total 905.0 (383.2 ) 521.8 897.9 (364.6 ) 533.3 Total identifiable intangibles $ 1,501.2 $ (383.2 ) $ 1,118.0 $ 1,533.5 $ (364.6 ) $ 1,168.9 |
Significant Assumptions Used to Estimate the Fair Values of Tradenames Impaired | The significant assumptions used to estimate the fair values of the tradenames impaired during the six months ended June 30, 2020 and the year ended December 31, 2019 were as follows: 2020 2019 Unobservable Input Minimum Maximum Weighted Average (a) Minimum Maximum Weighted Average (a) Discount rate 14.8 % 15.8 % 15.1 % 13.0 % 13.5 % 13.3 % Royalty rate (b) 4.0 % 5.0 % 4.3 % 3.0 % 4.0 % 3.3 % Long-term revenue growth rate (c) 1.0 % 3.0 % 1.6 % 3.0 % 3.0 % 3.0 % (a) Weighted by relative fair value of the impaired tradenames. (b) Represents estimated percentage of sales a market-participant would pay to license the impaired tradenames. (c) Selected long-term revenue growth rate within 10-year |
External Debt and Financing A_2
External Debt and Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Notes | The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts, and debt issuance costs as of June 30, 2020 and December 31, 2019: Net Carrying Value (in millions) Principal Amount Issuance Date Maturity Date June 30, 2020 December 31, 2019 3.000% Senior Notes $ 400.0 June 2015 June 2020 $ — $ 399.7 4.000% Senior Notes 500.0 June 2015 June 2025 496.2 495.8 4.000% Senior Notes (the "2018 Notes") 600.0 September 2018 September 2023 596.6 596.1 3.250% Senior Notes 700.0 September 2019 September 2029 693.1 692.7 Total Senior Notes $ 1,785.9 $ 2,184.3 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and December 31, 2019 were as follows: Fair Value (In millions) Location June 30, 2020 December 31, 2019 Assets: Foreign exchange contracts Other current assets $ 2.5 $ 2.9 Commodity contracts Other current assets — 0.1 Net investment hedges Other current assets 0.1 — Total assets $ 2.6 $ 3.0 Liabilities: Foreign exchange contracts Other current liabilities $ 6.0 $ 2.2 Net investment hedges Other current liabilities 0.4 0.3 Total liabilities $ 6.4 $ 2.5 |
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, 2020 and 2019 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, 2020 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 1,802.4 $ 44.3 $ 11.3 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items (8.8 ) Derivative designated as hedging instruments 10.0 Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.7 ) Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.4 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.3 (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 Comprehensive Income $ 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 The effects of derivative financial instruments on the statements of comprehensive income for the three months ended June 30, 2020 and 2019 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, 2020 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 892.9 $ 22.2 $ 5.2 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships Foreign exchange contracts: Hedged items 1.2 Derivative designated as hedging instruments (0.5 ) Gain (loss) on cash flow hedging relationships Foreign exchange contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (1.3 ) Commodity contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income (0.2 ) Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income 0.1 (In millions) Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended June 30, 2019 Cost of products sold Interest expense Other income, net Total amounts per Consolidated Statements of Comprehensive Income $ 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 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Value and Fair Value of Debt | The carrying value and fair value of debt as of June 30, 2020 and December 31, 2019 were as follows: (In millions) June 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Notes, net of underwriting commissions, price discounts and debt issuance costs $ 1,785.9 $ 1,950.9 $ 2,184.3 $ 2,271.4 2019 Revolving Credit Agreement 460.0 460.0 — — Total debt 2,245.9 2,410.9 2,184.3 2,271.4 |
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, 2020 and December 31, 2019 were as follows: (In millions) Fair Value June 30, 2020 December 31, 2019 Assets Derivative financial instruments (Level 2) $ 2.6 $ 3.0 Deferred compensation program assets (Level 2) 13.2 12.1 Total assets $ 15.8 $ 15.1 Liabilities Derivative financial instruments (Level 2) $ 6.4 $ 2.5 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 were as follows: (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments Accumulated Other Comprehensive Loss 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 (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 ) Balance at December 31, 2019 $ (11.5 ) $ 5.5 $ (66.6 ) $ (72.6 ) Amounts classified into accumulated other comprehensive (loss) income (30.3 ) (7.7 ) (0.8 ) (38.8 ) Amounts reclassified from accumulated other comprehensive (loss) income — 1.1 — 1.1 Net current-period other comprehensive (loss) income (30.3 ) (6.6 ) (0.8 ) (37.7 ) Balance at June 30, 2020 $ (41.8 ) $ (1.1 ) $ (67.4 ) $ (110.3 ) (In millions) Foreign Currency Adjustments Derivative Hedging Gain (Loss) Defined Benefit Plan Adjustments Accumulated Other Comprehensive Loss 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 ) Balance at March 31, 2020 $ (53.2 ) $ (2.6 ) $ (67.4 ) $ (123.2 ) Amounts classified into accumulated other comprehensive (loss) income 11.4 — — 11.4 Amounts reclassified from accumulated other comprehensive (loss) income — 1.5 — 1.5 Net current-period other comprehensive (loss) income 11.4 1.5 — 12.9 Balance at June 30, 2020 $ (41.8 ) $ (1.1 ) $ (67.4 ) $ (110.3 ) |
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, 2020 and 2019 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 2020 2019 Gains (losses) on cash flow hedges Foreign exchange contracts $ (0.7 ) $ 2.8 Cost of products sold Commodity contracts (0.4 ) — Cost of products sold Interest rate contracts 0.3 0.2 Interest expense (0.8 ) 3.0 Total before tax (0.3 ) (0.5 ) Tax expense Total reclassifications for the period $ (1.1 ) $ 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 2020 2019 Gains (losses) on cash flow hedges Foreign exchange contracts $ (1.3 ) $ 1.6 Cost of products sold Commodity contracts (0.2 ) (0.1 ) Cost of products sold Interest rate contracts 0.1 0.1 Interest expense (1.4 ) 1.6 Total before tax (0.1 ) (0.2 ) Tax expense Total reclassifications for the period $ (1.5 ) $ 1.4 Net of tax |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019: (In millions) Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Wholesalers (a) $ 1,246.9 $ 1,317.8 $ 592.7 $ 706.0 Home Center retailers (b) 840.1 821.9 420.9 431.0 Other retailers (c) 159.6 142.4 77.0 75.0 Builder direct 106.8 112.4 52.1 57.3 U.S. net sales 2,353.4 2,394.5 1,142.7 1,269.3 International (d) 425.1 440.6 233.1 237.9 Net sales $ 2,778.5 $ 2,835.1 $ 1,375.8 $ 1,507.2 ( a ) Represents sales to customers ( b ) 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. ( c ) Represents sales principally to our mass merchant and standalone independent e-commerce customers. ( d ) 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, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost for Pension | The components of net periodic benefit cost for pension for the six and three months ended June 30, 2020 and 2019 were as follows: (In millions) Six Months Ended June 30, Three Months Ended June 30, Pension Benefits Pension Benefits 2020 2019 2020 2019 Service cost $ 0.2 $ 0.2 $ 0.1 $ 0.1 Interest cost 14.2 16.4 7.1 8.2 Expected return on plan assets (16.4 ) (17.6 ) (8.2 ) (8.8 ) Net periodic benefit income $ (2.0 ) $ (1.0 ) $ (1.0 ) $ (0.5 ) |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019, respectively. (In millions) Six Months Ended June 30, 2020 2019 Reserve balance at January 1, $ 24.7 $ 24.9 Provision for warranties issued 11.6 13.0 Settlements made (in cash or in kind) (12.6 ) (12.5 ) Reserve balance at June 30, $ 23.7 $ 25.4 |
Information on Business Segme_2
Information on Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Income by Segment | Net sales and operating income for the six and three months ended June 30, 2020 and 2019 by segment were as follows: Six Months Ended June 30, (In millions) 2020 2019 % Change vs. Prior Year Net Sales Cabinets $ 1,158.7 $ 1,208.0 (4.1 ) % Plumbing 973.8 964.7 0.9 Doors & Security 646.0 662.4 (2.5 ) Net sales $ 2,778.5 $ 2,835.1 (2.0 ) % Operating Income (Loss) Cabinets $ 81.0 $ 108.9 (25.6 ) % Plumbing 214.0 195.9 9.2 Doors & Security 76.7 72.4 5.9 Less: Corporate expenses (43.7 ) (39.2 ) (11.5 ) Operating income $ 328.0 $ 338.0 (3.0 ) % Three Months Ended June 30, (In millions) 2020 2019 % Change vs. Prior Year Net Sales Cabinets $ 538.7 $ 635.0 (15.2 ) % Plumbing 504.8 506.1 (0.3 ) Doors & Security 332.3 366.1 (9.2 ) Net sales $ 1,375.8 $ 1,507.2 (8.7 ) % Operating Income (Loss) Cabinets $ 37.3 $ 65.7 (43.2 ) % Plumbing 109.5 106.7 2.6 Doors & Security 45.2 50.0 (9.6 ) Less: Corporate expenses (19.0 ) (20.0 ) 5.0 Operating income $ 173.0 $ 202.4 (14.5 ) % |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 are shown below. (In millions) Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 7.1 $ 2.3 $ 9.4 $ 2.3 $ 0.7 $ 3.0 Plumbing 3.2 (2.3 ) 0.9 3.3 5.8 9.1 Doors & Security 3.1 0.8 3.9 0.1 2.0 2.1 Corporate 1.5 0.3 1.8 — — — Total $ 14.9 $ 1.1 $ 16.0 $ 5.7 $ 8.5 $ 14.2 (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 2020 largely related to headcount actions associated with COVID-19 reductions in demand across all of our segments. Restructuring and other charges in the first six months of 2019 largely related to severance costs within our Plumbing and Cabinets segment and costs associated with closing facilities within our Plumbing and Doors & Security segments. Due to the continued uncertainty surrounding the COVID-19 pandemic, we may incur additional restructuring in future periods. (In millions) Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Restructuring Charges Other Charges (a) Total Charges Restructuring Charges Other Charges (a) Total Charges Cabinets $ 4.7 $ 2.2 $ 6.9 $ 1.2 $ 0.4 $ 1.6 Plumbing 2.9 (1.9 ) 1.0 3.2 4.6 7.8 Doors & Security 2.8 — 2.8 0.1 0.1 0.2 Total $ 10.4 $ 0.3 $ 10.7 $ 4.5 $ 5.1 $ 9.6 (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 12/31/19 2020 Provision Cash Expenditures (a) Non-Cash Write-offs Balance at 6/30/20 Workforce reduction costs $ 6.7 $ 14.5 $ (7.2 ) $ — $ 14.0 Other 0.1 0.4 (0.4 ) — 0.1 $ 6.8 $ 14.9 $ (7.6 ) $ — $ 14.1 (a) Cash expenditures primarily relate to severance charges. (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) Cash expenditures primarily relate to severance charges. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 were as follows: (In millions, except per share data) Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Net income $ 225.0 $ 221.6 $ 116.2 $ 137.1 Less: Noncontrolling interest 0.1 (0.6 ) 0.4 (0.4 ) Net income attributable to Fortune Brands 224.9 222.2 115.8 137.5 Basic earnings per common share $ 1.62 $ 1.58 $ 0.84 $ 0.98 Diluted earnings per common share $ 1.61 $ 1.57 $ 0.83 $ 0.97 Basic average shares outstanding 138.6 140.3 138.0 139.9 Stock-based awards 1.2 1.3 0.8 1.4 Diluted average shares outstanding 139.8 141.6 138.8 141.3 Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share 1.4 2.4 1.9 1.9 |
Recently Issued Accounting St_3
Recently Issued Accounting Standards - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2018 | Jun. 30, 2016 | Jun. 30, 2020 | |
Accounting Standards Update 2016-13 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 replaced the “incurred loss” approach under the previous guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. | |||||
Accounting Standards Update 2018-13 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not 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. We adopted this guidance on January 1, 2020. The adoption of this guidance did not have a material effect on our financial statements. | |||||
Accounting Standards Update 2019-12 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, which is intended to simplify accounting for income taxes and improve consistency in application. ASU 2019-12 amends certain elements of income tax accounting, including but not limited to intraperiod tax allocations, step-ups in tax basis of goodwill, and calculating taxes on year-to-date losses in interim periods. The guidance is effective for the Company’s fiscal year beginning January 1, 2021, with early adoption permitted. We are assessing the impact that the adoption of this guidance will have on our financial statements. | |||||
Accounting Standards Update 2020-01 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | Clarifications in Accounting for Equity Securities In January 2020, the FASB issued ASU 2020-01, which clarifies the interactions between accounting for equity investments (ASC 321), equity method accounting (ASC 323) and derivatives and hedges (ASC 815). As a result of the ASU, when entities apply the measurement alternative to non-controlling equity investments under ASC 321, and must transition to the equity method of accounting because of an observable transaction, existing investments should be remeasured immediately before applying the equity method of accounting. Additionally, it states that if entities hold non-derivative forward contracts or purchased call options to acquire equity securities, such instruments should be measured using the fair value principles of ASC 321 before settlement or exercise. The Company early adopted this guidance on January 1, 2020, and as a result recognized gains of $11.0 million within other income during the first six months of 2020 related to our investment in Flo Technologies, Inc. (see note 4). | |||||
Accounting Standards Update 2020-01 [Member] | Flo Technologies, Inc. [Member] | Other Income [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Remeasurement gains on investment | $ 11 | |||||
Accounting Standards Update 2020-04 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Description | Effects of Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, which provides relief from accounting analysis and impacts that may otherwise be required for modifications to agreements necessitated by reference rate reform. It also provides optional expedients to enable the continuance of hedge accounting where certain hedging relationships are impacted by reference rate reform. This optional guidance is effective immediately, and available to be used through December 31, 2022. We are assessing the impact that reference rate reform and the related adoption of this guidance may have on our financial statements. |
Balance Sheet Information - Sup
Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Inventories: | ||
Raw materials and supplies | $ 280.4 | $ 274.4 |
Work in process | 81.3 | 72.2 |
Finished products | 370.6 | 372 |
Total inventories | 732.3 | 718.6 |
Property, plant and equipment, gross | 1,985.7 | 1,982.5 |
Less: accumulated depreciation | 1,191.5 | 1,158.3 |
Property, plant and equipment, net | $ 794.2 | $ 824.2 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) - Flo Technologies, Inc. [Member] - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Jan. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Percentage of outstanding shares to be acquired | 100.00% | |||
Business acquisition, shares acquired in cash | $ 44.2 | |||
Business acquisition, percentage of ownership increased | 80.00% | |||
Percentage of outstanding shares acquired | 80.00% | |||
Other income related to remeasurement of previously existing investment | $ 6.6 | |||
Substantive participating rights expiration period | first quarter of 2021 | |||
Second phase of substantive participating rights scheduled to occur | first quarter of 2022 | |||
Carrying value of investment | $ 81.5 | $ 25.7 | ||
Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests of investee to exercise significant influence | 20.00% | |||
Other Income [Member] | ||||
Business Acquisition [Line Items] | ||||
Non cash gain on forward contract | $ 4.4 | |||
Other Assets [Member] | ||||
Business Acquisition [Line Items] | ||||
Business combination remaining shares to be exchanged for additional cash in future | $ 7.9 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2020 | ||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Goodwill | [1] | $ 2,090.2 | $ 2,081.3 | ||
Net identifiable intangible assets | 1,168.9 | 1,118 | |||
Decrease in gross identifiable intangible assets | (32.3) | ||||
Gross Carrying Amounts, Indefinite-lived tradenames | 635.6 | $ 596.2 | |||
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 | ||||
Plumbing and Cabinets Segments [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Impairment of intangible assets, trade names | $ 22.5 | ||||
Plumbing [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Goodwill | [1] | 747.3 | 740.6 | ||
Plumbing [Member] | COVID-19 [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Impairment of intangible assets, trade names | $ 13 | ||||
Amortizable identifiable intangible assets, estimated useful life | 30 years | ||||
Gross Carrying Amounts, Indefinite-lived tradenames | $ 12.7 | ||||
Cabinets [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Goodwill | [1] | 925.5 | 923.9 | ||
Cabinets [Member] | Trade Names [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Impairment of intangible assets, trade names | $ 12 | ||||
Gross Carrying Amounts, Indefinite-lived tradenames | $ 29.1 | ||||
Cabinets [Member] | Second Indefinite-Lived Trade Name [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Impairment of intangible assets, trade names | $ 29.5 | ||||
Gross Carrying Amounts, Indefinite-lived tradenames | 85 | ||||
Cabinets [Member] | Third Indefinite-Lived Trade Name [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Gross Carrying Amounts, Indefinite-lived tradenames | $ 37.3 | ||||
Cabinets [Member] | COVID-19 [Member] | Trade Names [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Impairment of intangible assets, trade names | $ 9.5 | ||||
Cabinets [Member] | Maximum [Member] | Third Indefinite-Lived Trade Name [Member] | |||||
Goodwill and Identifiable Intangible Assets [Line Items] | |||||
Estimated fair value in excess of carrying amount | 10.00% | ||||
[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, 2020USD ($) | ||
Goodwill [Line Items] | ||
Beginning Balance | $ 2,090.2 | [1] |
Translation adjustments | (8.9) | |
Ending Balance | 2,081.3 | [1] |
Cabinets [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 925.5 | [1] |
Translation adjustments | (1.6) | |
Ending Balance | 923.9 | [1] |
Plumbing [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 747.3 | [1] |
Translation adjustments | (6.7) | |
Ending Balance | 740.6 | [1] |
Doors & Security [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 417.4 | [1] |
Translation adjustments | (0.6) | |
Ending Balance | $ 416.8 | [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, 2020USD ($) |
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, 2020 | Dec. 31, 2019 |
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Indefinite-lived tradenames | $ 596.2 | $ 635.6 |
Net Book Value, Indefinite-lived tradenames | 596.2 | 635.6 |
Gross Carrying Amounts, Finite Lived | 905 | 897.9 |
Accumulated Amortization, Finite Lived | (383.2) | (364.6) |
Net Book Value, Finite Lived | 521.8 | 533.3 |
Gross Carrying Amounts, Total identifiable intangibles | 1,501.2 | 1,533.5 |
Accumulated Amortization, Total identifiable intangibles | (383.2) | (364.6) |
Net Book Value, Total identifiable intangibles | 1,118 | 1,168.9 |
Tradenames [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 32.7 | 20.6 |
Accumulated Amortization, Finite Lived | (13) | (12.9) |
Net Book Value, Finite Lived | 19.7 | 7.7 |
Customer and contractual relationships [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 797.3 | 803.9 |
Accumulated Amortization, Finite Lived | (315) | (299.6) |
Net Book Value, Finite Lived | 482.3 | 504.3 |
Patents/proprietary technology [Member] | ||
Intangible Assets [Line Items] | ||
Gross Carrying Amounts, Finite Lived | 75 | 73.4 |
Accumulated Amortization, Finite Lived | (55.2) | (52.1) |
Net Book Value, Finite Lived | $ 19.8 | $ 21.3 |
Goodwill and Identifiable Int_7
Goodwill and Identifiable Intangible Assets - Significant Assumptions Used to Estimate the Fair Values of Tradenames Impaired (Detail) | Jun. 30, 2020 | Dec. 31, 2019 | |
Long-term Revenue Growth Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Alternative Investment, Type [Extensible List] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember | |
Minimum [Member] | Discount Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | 0.148 | 0.130 | |
Alternative Investment, Type [Extensible List] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember | |
Minimum [Member] | Royalty Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [1] | 0.040 | 0.030 |
Alternative Investment, Type [Extensible List] | [1] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Minimum [Member] | Long-term Revenue Growth Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [2] | 0.010 | 0.030 |
Alternative Investment, Type [Extensible List] | [2] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Maximum [Member] | Discount Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | 0.158 | 0.135 | |
Alternative Investment, Type [Extensible List] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember | |
Maximum [Member] | Royalty Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [1] | 0.050 | 0.040 |
Alternative Investment, Type [Extensible List] | [1] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Maximum [Member] | Long-term Revenue Growth Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [2] | 0.030 | 0.030 |
Alternative Investment, Type [Extensible List] | [2] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Weighted Average [Member] | Discount Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [3] | 0.151 | 0.133 |
Alternative Investment, Type [Extensible List] | [3] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Weighted Average [Member] | Royalty Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [1],[3] | 0.043 | 0.033 |
Alternative Investment, Type [Extensible List] | [1],[3] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
Weighted Average [Member] | Long-term Revenue Growth Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Assumptions used to estimate the fair values | [2],[3] | 0.016 | 0.030 |
Alternative Investment, Type [Extensible List] | [2],[3] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
[1] | Represents estimated percentage of sales a market-participant would pay to license the impaired tradenames. | ||
[2] | Selected long-term revenue growth rate within 10-year | ||
[3] | Weighted by relative fair value of the impaired tradenames. |
Goodwill and Identifiable Int_8
Goodwill and Identifiable Intangible Assets - Significant Assumptions Used to Estimate the Fair Values of Tradenames Impaired (Parenthetical) (Detail) - Long-term Revenue Growth Rate [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Long-term revenue growth rate projection period | 10 years | 10 years |
Alternative Investment, Type [Extensible List] | us-gaap:TradeNamesMember | us-gaap:TradeNamesMember |
External Debt and Financing A_3
External Debt and Financing Arrangements - Additional Information (Detail) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Aggregate outstanding notes | $ 1,800,000,000 | ||||
Repayment of long-term debt | 840,000,000 | $ 410,000,000 | |||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital | 17,500,000 | $ 17,500,000 | |||
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital amount outstanding | 0 | 0 | |||
Term Loan Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, price | $ 350,000,000 | ||||
Repayment of long-term debt | $ 350,000,000 | ||||
Term loan, outstanding borrowings | 0 | ||||
Term loan maturity period | 2020-03 | ||||
Debt instrument, description | In September 2019, the Company used the proceeds from the 2019 Notes to repay the full outstanding balance on the Term Loan entered into in March 2018 and subsequently amended in August 2018 and March 2019 (the “Term Loan”). Following the March 2019 amendment, the Term Loan provided for borrowings of $350 million and matured in March 2020. At December 31, 2019, amounts due under the Term Loan were zero. | ||||
3.000% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, price | $ 400,000,000 | ||||
Senior unsecured notes, coupon rate | 3.00% | ||||
Maturity date | 2020-06 | ||||
Issuance Date | 2015-06 | ||||
2019 Senior Notes [Member] | Notes due 2029 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, price | $ 700,000,000 | ||||
Senior unsecured notes, maturity year | 2029 | ||||
Senior unsecured notes, coupon rate | 3.25% | ||||
2020 Revolving Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | ||||
Debt Instrument, Description of Variable Rate Basis | Interest rates under the 2020 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 1.4% to LIBOR + 1.8%. | ||||
Debt instrument, covenant description | The 2020 Revolving Credit Agreement includes a covenant under which the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. In addition, the 2020 Revolving Credit Agreement includes a covenant under which the Company’s ratio of consolidated total indebtedness minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. As of June 30, 2020 | ||||
Required minimum ratio of consolidated EBITDA to consolidated interest expense | 3 | ||||
Ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA | 3.5 | ||||
Term loan, outstanding borrowings | $ 0 | ||||
2020 Revolving Credit Agreement [Member] | LIBOR [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 1.40% | ||||
2020 Revolving Credit Agreement [Member] | LIBOR [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 1.80% | ||||
2019 Revolving Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,250,000,000 | ||||
Debt Instrument, Description of Variable Rate Basis | Interest rates under the 2019 Revolving Credit Agreement are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.91% to LIBOR + 1.4%. | ||||
Term loan, outstanding borrowings | $ 460,000,000 | $ 0 | |||
Term loan maturity period | 2024-09 | ||||
Rollover amount from prior credit facility included in current facility | $ 165,000,000 | ||||
2019 Revolving Credit Agreement [Member] | LIBOR [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 0.91% | ||||
2019 Revolving Credit Agreement [Member] | LIBOR [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate over LIBOR | 1.40% |
External Debt and Financing A_4
External Debt and Financing Arrangements - Summary of Outstanding Notes (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Net Carrying Value | $ 1,785.9 | $ 2,184.3 |
3.000% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 400 | |
Issuance Date | 2015-06 | |
Maturity Date | 2020-06 | |
Net Carrying Value | 399.7 | |
4.000% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 500 | |
Issuance Date | 2015-06 | |
Maturity Date | 2025-06 | |
Net Carrying Value | $ 496.2 | 495.8 |
4.000% Senior Notes [Member] | 2018 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 600 | |
Issuance Date | 2018-09 | |
Maturity Date | 2023-09 | |
Net Carrying Value | $ 596.6 | 596.1 |
3.250% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 700 | |
Issuance Date | 2019-09 | |
Maturity Date | 2029-09 | |
Net Carrying Value | $ 693.1 | $ 692.7 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Foreign exchange contracts [Member] | ||||
Derivative [Line Items] | ||||
Notional amount of foreign currency derivative hedges | $ 378,300,000 | $ 378,300,000 | ||
Cash flow hedge [Member] | ||||
Derivative [Line Items] | ||||
Derivative instrument losses | (200,000) | $ (700,000) | (6,700,000) | $ (200,000) |
Cash flow hedge [Member] | Foreign exchange contracts [Member] | ||||
Derivative [Line Items] | ||||
Estimated amount of net derivative losses in accumulated other comprehensive income reclassified to earnings within 12 months | $ 3,300,000 | $ 3,300,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 2.6 | $ 3 |
Derivative liabilities, fair value | 6.4 | 2.5 |
Net investment hedges [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0.1 | |
Net investment hedges [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 0.4 | 0.3 |
Foreign exchange contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 2.5 | 2.9 |
Foreign exchange contracts [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | $ 6 | 2.2 |
Commodity Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 0.1 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cost of products sold [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 892.9 | $ 969.6 | $ 1,802.4 | $ 1,838.7 |
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 | (1.3) | 1.6 | (0.7) | 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 | (0.2) | (0.1) | (0.4) | |
Interest expense [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 22.2 | 24.5 | 44.3 | 48.2 |
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 | 0.1 | 0.3 | 0.2 |
Other income, net [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 5.2 | 0.7 | 11.3 | 1.9 |
Other income, net [Member] | Foreign exchange contracts [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 1.2 | (0.5) | (8.8) | 0.5 |
Other income, net [Member] | Foreign exchange contracts [Member] | Designated as hedging instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (0.5) | $ 0.7 | $ 10 | $ (0.2) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | Jun. 30, 2020USD ($) |
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, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | $ 2,245.9 | $ 2,184.3 |
Carrying Value | Senior Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | 1,785.9 | 2,184.3 |
Carrying Value | 2019 Revolving Credit Agreement [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | 460 | |
Fair Value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | 2,410.9 | 2,271.4 |
Fair Value | Senior Notes [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | 1,950.9 | $ 2,271.4 |
Fair Value | 2019 Revolving Credit Agreement [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total Debt | $ 460 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial instruments (Level 2) | $ 2.6 | $ 3 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 15.8 | 15.1 |
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 | 3 |
Deferred compensation program assets (Level 2) | 13.2 | 12.1 |
Derivative financial instruments (Level 2) | $ 6.4 | $ 2.5 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ 2,357.9 | $ 2,247.1 | $ 2,427.8 | $ 2,180 |
Amounts classified into accumulated other comprehensive (loss) income | 11.4 | 4.6 | (38.8) | 14 |
Amounts reclassified from accumulated other comprehensive (loss) income | 1.5 | (1.4) | 1.1 | (2.5) |
Other comprehensive (loss) income, net of tax | 12.9 | 3.2 | (37.7) | 2.9 |
Ending Balance | 2,463.1 | 2,344.7 | 2,463.1 | 2,344.7 |
Revision of Prior Period, Accounting Standards Update, Adjustment [Member] | ASU 2018-02 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Adoption of ASU 2018-02 | (8.6) | |||
Foreign Currency Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (53.2) | (16.5) | (11.5) | (25.3) |
Amounts classified into accumulated other comprehensive (loss) income | 11.4 | 4.9 | (30.3) | 13.7 |
Other comprehensive (loss) income, net of tax | 11.4 | 4.9 | (30.3) | 13.7 |
Ending Balance | (41.8) | (11.6) | (41.8) | (11.6) |
Derivative Hedging Gain (Loss) [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (2.6) | 3.7 | 5.5 | 4.2 |
Amounts classified into accumulated other comprehensive (loss) income | (0.3) | (7.7) | 0.3 | |
Amounts reclassified from accumulated other comprehensive (loss) income | 1.5 | (1.4) | 1.1 | (2.5) |
Other comprehensive (loss) income, net of tax | 1.5 | (1.7) | (6.6) | (2.2) |
Ending Balance | (1.1) | 2 | (1.1) | 2 |
Defined Benefit Plan Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (67.4) | (54.5) | (66.6) | (45.9) |
Amounts classified into accumulated other comprehensive (loss) income | (0.8) | |||
Other comprehensive (loss) income, net of tax | (0.8) | (8.6) | ||
Ending Balance | (67.4) | (54.5) | (67.4) | (54.5) |
Defined Benefit Plan Adjustments [Member] | Revision of Prior Period, Accounting Standards Update, Adjustment [Member] | ASU 2018-02 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Adoption of ASU 2018-02 | (8.6) | |||
Accumulated Other Comprehensive Loss [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (123.2) | (67.3) | (72.6) | (67) |
Ending Balance | $ (110.3) | $ (64.1) | $ (110.3) | $ (64.1) |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of products sold | $ 892.9 | $ 969.6 | $ 1,802.4 | $ 1,838.7 |
Tax (expense) benefit | (37.8) | (41.5) | (67.7) | (70.1) |
Income after tax | 118.2 | 137.1 | 227.3 | 221.6 |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gain (Loss) [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (1.4) | 1.6 | (0.8) | 3 |
Tax (expense) benefit | (0.1) | (0.2) | (0.3) | (0.5) |
Income after tax | (1.5) | 1.4 | (1.1) | 2.5 |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gain (Loss) [Member] | Foreign exchange contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of products sold | (1.3) | 1.6 | (0.7) | 2.8 |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gain (Loss) [Member] | Commodity Contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of products sold | (0.2) | (0.1) | (0.4) | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gain (Loss) [Member] | Interest rate contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.2 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 1,375.8 | $ 1,507.2 | $ 2,778.5 | $ 2,835.1 | |
Wholesalers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | 592.7 | 706 | 1,246.9 | 1,317.8 |
Home Center retailers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 420.9 | 431 | 840.1 | 821.9 |
Other retailers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [3] | 77 | 75 | 159.6 | 142.4 |
Builder direct [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 52.1 | 57.3 | 106.8 | 112.4 | |
United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 1,142.7 | 1,269.3 | 2,353.4 | 2,394.5 | |
International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [4] | $ 233.1 | $ 237.9 | $ 425.1 | $ 440.6 |
[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 (Detail) - Net Periodic Benefit Cost - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 |
Interest cost | 7.1 | 8.2 | 14.2 | 16.4 |
Expected return on plan assets | (8.2) | (8.8) | (16.4) | (17.6) |
Net periodic benefit income | $ (1) | $ (0.5) | $ (2) | $ (1) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes [Line Items] | ||||
Effective income tax rate | 24.20% | 23.20% | 22.90% | 24.00% |
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 | $ 8,500,000 | $ 8,500,000 |
Product Warranties - Activity R
Product Warranties - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Guarantees And Product Warranties [Abstract] | ||
Reserve balance at the beginning of the year | $ 24.7 | $ 24.9 |
Provision for warranties issued | 11.6 | 13 |
Settlements made (in cash or in kind) | (12.6) | (12.5) |
Reserve balance at end of year | $ 23.7 | $ 25.4 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 1,375.8 | $ 1,507.2 | $ 2,778.5 | $ 2,835.1 |
Operating income | $ 173 | 202.4 | $ 328 | 338 |
Net Sales, Percentage Change vs. Prior Year | (8.70%) | (2.00%) | ||
Operating Income, Percentage Change vs. Prior Year | (14.50%) | (3.00%) | ||
Corporate [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income | $ (19) | (20) | $ (43.7) | (39.2) |
Operating Income, Percentage Change vs. Prior Year | 5.00% | (11.50%) | ||
Cabinets [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 538.7 | 635 | $ 1,158.7 | 1,208 |
Operating income | $ 37.3 | 65.7 | $ 81 | 108.9 |
Net Sales, Percentage Change vs. Prior Year | (15.20%) | (4.10%) | ||
Operating Income, Percentage Change vs. Prior Year | (43.20%) | (25.60%) | ||
Plumbing [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 504.8 | 506.1 | $ 973.8 | 964.7 |
Operating income | $ 109.5 | 106.7 | $ 214 | 195.9 |
Net Sales, Percentage Change vs. Prior Year | (0.30%) | 0.90% | ||
Operating Income, Percentage Change vs. Prior Year | 2.60% | 9.20% | ||
Doors & Security [Member] | Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net sales | $ 332.3 | 366.1 | $ 646 | 662.4 |
Operating income | $ 45.2 | $ 50 | $ 76.7 | $ 72.4 |
Net Sales, Percentage Change vs. Prior Year | (9.20%) | (2.50%) | ||
Operating Income, Percentage Change vs. Prior Year | (9.60%) | 5.90% |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 10.4 | $ 4.5 | $ 14.9 | $ 5.7 | |
Other Charges | [1] | 0.3 | 5.1 | 1.1 | 8.5 |
Total Charges | 10.7 | 9.6 | 16 | 14.2 | |
Operating Segments [Member] | Cabinets [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 4.7 | 1.2 | 7.1 | 2.3 | |
Other Charges | [1] | 2.2 | 0.4 | 2.3 | 0.7 |
Total Charges | 6.9 | 1.6 | 9.4 | 3 | |
Operating Segments [Member] | Plumbing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 2.9 | 3.2 | 3.2 | 3.3 | |
Other Charges | [1] | (1.9) | 4.6 | (2.3) | 5.8 |
Total Charges | 1 | 7.8 | 0.9 | 9.1 | |
Operating Segments [Member] | Doors & Security [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 2.8 | 0.1 | 3.1 | 0.1 | |
Other Charges | [1] | 0.1 | 0.8 | 2 | |
Total Charges | $ 2.8 | $ 0.2 | 3.9 | $ 2.1 | |
Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 1.5 | ||||
Other Charges | [1] | 0.3 | |||
Total Charges | $ 1.8 | ||||
[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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | $ 6.8 | $ 10.5 | |||
Provision | $ 10.4 | $ 4.5 | 14.9 | 5.7 | |
Cash Expenditures | [1] | (7.6) | (6.6) | ||
Non-Cash Write-offs | (0.1) | ||||
Ending Balance | 14.1 | 9.5 | 14.1 | 9.5 | |
Workforce Reduction Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | 6.7 | 9.9 | |||
Provision | 14.5 | 4.9 | |||
Cash Expenditures | [1] | (7.2) | (5.7) | ||
Non-Cash Write-offs | (0.1) | ||||
Ending Balance | 14 | 9 | 14 | 9 | |
Other [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Beginning Balance | 0.1 | 0.6 | |||
Provision | 0.4 | 0.8 | |||
Cash Expenditures | [1] | (0.4) | (0.9) | ||
Ending Balance | $ 0.1 | $ 0.5 | $ 0.1 | $ 0.5 | |
[1] | Cash expenditures primarily relate to severance charges. |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 116.2 | $ 137.1 | $ 225 | $ 221.6 |
Less: Noncontrolling interest | 0.4 | (0.4) | 0.1 | (0.6) |
Net income attributable to Fortune Brands | $ 115.8 | $ 137.5 | $ 224.9 | $ 222.2 |
Basic earnings per common share | $ 0.84 | $ 0.98 | $ 1.62 | $ 1.58 |
Diluted earnings per common share | $ 0.83 | $ 0.97 | $ 1.61 | $ 1.57 |
Basic average shares outstanding | 138 | 139.9 | 138.6 | 140.3 |
Stock-based awards | 0.8 | 1.4 | 1.2 | 1.3 |
Diluted average shares outstanding | 138.8 | 141.3 | 139.8 | 141.6 |
Antidilutive stock-based awards excluded from weighted- average number of shares outstanding for diluted earnings per share | 1.9 | 1.9 | 1.4 | 2.4 |