Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 28, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'AOS | ' |
Entity Registrant Name | 'SMITH A O CORP | ' |
Entity Central Index Key | '0000091142 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 76,382,084 |
Common Class A | ' | ' |
Document Information [Line Items] | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 13,163,850 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net sales | $581.60 | $536.20 | $1,729.20 | $1,594.90 |
Cost of products sold | 366.3 | 339.6 | 1,101.80 | 1,021 |
Gross profit | 215.3 | 196.6 | 627.4 | 573.9 |
Selling, general and administrative expenses | 145.5 | 133.7 | 413.8 | 385.3 |
Restructuring, impairment and settlement expenses, net | ' | 1.3 | ' | 7.2 |
Interest expense | 1.5 | 1.4 | 4.3 | 4.5 |
Other income | -1 | -1.1 | -3.5 | -2.8 |
Earnings before income taxes | 69.3 | 61.3 | 212.8 | 179.7 |
Provision for income taxes | 18.7 | 15.1 | 58.2 | 52.4 |
Net Earnings | $50.60 | $46.20 | $154.60 | $127.30 |
Net Earnings Per Share of Common Stock | $0.56 | $0.50 | $1.71 | $1.38 |
Diluted Net Earnings Per Share of Common Stock | $0.56 | $0.50 | $1.69 | $1.37 |
Dividends Per Share of Common Stock | $0.15 | $0.12 | $0.45 | $0.34 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net earnings | $50.60 | $46.20 | $154.60 | $127.30 |
Other comprehensive (loss) earnings | ' | ' | ' | ' |
Foreign currency translation adjustments | -1.5 | 3.6 | -9.2 | -2 |
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of $(0.4) and $- in 2014, $0.3 and $0.4 in 2013 | 0.7 | -0.5 | 0.1 | -0.7 |
Adjustment to pension liability gain, less related income tax provision of $(3.3) and $(9.9) in 2014 and $(4.0) and $(11.9) in 2013 | 5.2 | 6.3 | 13.7 | 13.9 |
Comprehensive Earnings | $55 | $55.60 | $159.20 | $138.50 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Unrealized net gain (loss) on cash flow derivative instruments, related income tax (provision) benefit | ($0.40) | $0.30 | ' | $0.40 |
Adjustment to pension liability gain, related income tax provision | ($3.30) | ($4) | ($9.90) | ($11.90) |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $400.50 | $380.70 |
Marketable securities | 123.2 | 105.3 |
Receivables | 474.3 | 458.7 |
Inventories | 218.5 | 193.4 |
Deferred income taxes | 40.1 | 40.1 |
Other current assets | 38.2 | 27.4 |
Total Current Assets | 1,294.80 | 1,205.60 |
Property, plant and equipment | 802.8 | 758.7 |
Less accumulated depreciation | 381.8 | 367.4 |
Net property, plant and equipment | 421 | 391.3 |
Goodwill | 430.7 | 433.5 |
Other intangibles | 312.9 | 324.8 |
Other assets | 27.4 | 36.3 |
Total Assets | 2,486.80 | 2,391.50 |
Liabilities | ' | ' |
Trade payables | 374.8 | 387.1 |
Accrued payroll and benefits | 61.8 | 61.7 |
Accrued liabilities | 90.8 | 81.2 |
Product warranties | 46.1 | 46.7 |
Long-term debt due within one year | 13.8 | 14.2 |
Total Current Liabilities | 587.3 | 590.9 |
Long-term debt | 240.7 | 177.7 |
Pension liabilities | 107.5 | 110.7 |
Other liabilities | 176.1 | 183.5 |
Total Liabilities | 1,111.60 | 1,062.80 |
Stockholders' Equity | ' | ' |
Common Stock,value | 82.1 | 82.1 |
Capital in excess of par value | 599.4 | 589.7 |
Retained earnings | 1,095.80 | 982.2 |
Accumulated other comprehensive loss | -254.5 | -259.1 |
Treasury stock at cost | -213.8 | -132.6 |
Total Stockholders' Equity | 1,375.20 | 1,328.70 |
Total Liabilities and Stockholders' Equity | 2,486.80 | 2,391.50 |
Common Class A | ' | ' |
Stockholders' Equity | ' | ' |
Common Stock,value | $66.20 | $66.40 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Common Stock, par value | $1 | $1 |
Common Stock, authorized | 120,000,000 | 120,000,000 |
Common Stock, shares issued | 82,123,867 | 82,065,280 |
Common Class A | ' | ' |
Common Stock, par value | $5 | $5 |
Common Stock, authorized | 14,000,000 | 14,000,000 |
Common Stock, shares issued | 13,229,929 | 13,288,516 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities | ' | ' |
Net earnings | $154.60 | $127.30 |
Adjustments to reconcile net earnings to cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 44.4 | 42.2 |
Pension expense | 19.8 | 20.9 |
Loss on disposal of assets | 0.2 | 0.2 |
Net changes in operating assets and liabilities, net of acquisitions: | ' | ' |
Current assets and liabilities | -53.8 | -2.7 |
Noncurrent assets and liabilities | 0.1 | 1.9 |
Cash Provided by Operating Activities-continuing operations | 165.3 | 189.8 |
Cash Used in Operating Activities-discontinued operations | -1.5 | -1.8 |
Cash Provided by Operating Activities | 163.8 | 188 |
Investing Activities | ' | ' |
Capital expenditures | -66 | -65.7 |
Acquisition of business | ' | -4 |
Investments in marketable securities | -149.1 | -63.8 |
Net proceeds from sale of securities | 129.7 | 158.4 |
Cash (Used in) Provided by Investing Activities | -85.4 | 24.9 |
Financing Activities | ' | ' |
Long-term debt incurred (retired) | 64.3 | -16.5 |
Common stock repurchases | -86.6 | -66.5 |
Net proceeds from stock option activity | 4.7 | 8.9 |
Dividends paid | -41 | -31.6 |
Cash Used in Financing Activities | -58.6 | -105.7 |
Net increase in cash and cash equivalents | 19.8 | 107.2 |
Cash and cash equivalents-beginning of period | 380.7 | 266.9 |
Cash and Cash Equivalents-End of Period | $400.50 | $374.10 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | |
Sep. 30, 2014 | ||
Basis of Presentation | ' | |
1 | Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results expected for the full year. It is suggested that the accompanying condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the company’s latest Annual Report on Form 10-K filed with the SEC on February 20, 2014. | ||
On April 15, 2013, the company’s stockholders approved a proposal to increase the company’s authorized shares of Common Stock and the company’s board of directors declared a two-for-one stock split of the company’s Class A Common Stock and Common Stock (including treasury shares) in the form of a 100 percent stock dividend to stockholders of record on April 30, 2013 and payable on May 15, 2013. All references in the financial statements and footnotes to the number of shares outstanding, price per share, per share amounts and stock based compensation data have been recast to reflect the split for all periods presented. | ||
Recent Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers (issued under Accounting Standards Update No. 2014-09). | ||
ASC 606-10 will replace all existing revenue recognition guidance when effective. ASC 606-10 is effective for the year beginning January 1, 2017. Either full retrospective adoption or modified retrospective adoption is allowed under ASC 606-10. The company is in the process of determining whether the adoption of ASC 606-10 will have an impact on the company’s consolidated financial condition, results of operations or cash flows. |
Acquisition
Acquisition | 9 Months Ended | |
Sep. 30, 2014 | ||
Acquisition | ' | |
2 | Acquisition | |
On February 14, 2013, the company acquired 100 percent of the shares of MiM Isitma Sogutma Havalandirma ve Aritma Sistemleri San. Tic. A.S. (MiM), a privately-held Turkish water treatment company. The addition of MiM expanded the company’s product offerings and gave the company access to Eastern Europe and Black Sea region water treatment markets. MiM is included in the Rest of World segment. | ||
The company paid an aggregate cash purchase price of $4.0 million, net of cash received of $1.9 million. In addition the company assumed debt of $1.7 million and recorded contingent consideration of $1.1 million, the fair value of the contingent payment due to the former owners of MiM if certain targets are met for growth in sales, gross profits and operating profits through 2017. | ||
The fair value of the purchase price resulted in an allocation to acquired intangible assets totaling $4.3 million of which $2.4 million has been assigned to customer lists which are being amortized over ten years. | ||
MiM’s results of operations have been included in the company’s financial statements from February 14, 2013, the date of acquisition. Revenues and pre-tax results associated with MiM included in results of operations for the three and nine months ended September 30, 2013 were not material to the company’s net sales or pre-tax earnings. |
Restructuring_Impairment_and_S
Restructuring, Impairment and Settlement Expenses - Net | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Restructuring, Impairment and Settlement Expenses - Net | ' | ||||||||||||||||
3 | Restructuring, Impairment and Settlement Expenses - Net | ||||||||||||||||
In the first quarter of 2013, the company announced the move of manufacturing operations from its Fergus, Ontario facility to other North American facilities. During the three months ended September 30, 2013, the company recognized $1.3 million of pre-tax restructuring and impairment expenses, comprised of $1.3 million of equipment relocation costs and $0.3 million of inventory obsolescence reserves and a reduction in severance costs of $0.3 million, as well as a corresponding $0.3 million tax benefit related to the expenses. For the nine months ended September 30, 2013, the company recognized $18.2 million of pre-tax restructuring and impairment expenses, comprised of $7.5 million of severance costs, $1.9 million of inventory obsolescence reserves, impairment charges related to long-lived assets totaling $7.5 million and $1.3 million for equipment relocation costs, as well as a corresponding $4.6 million tax benefit related to the expenses. The majority of the consolidation of operations occurred in the second quarter of 2013. | |||||||||||||||||
In the first quarter of 2013, the company entered into a settlement agreement with a former supplier of a North American subsidiary regarding previous overcharges and warranty costs. The terms of the settlement agreement resulted in an $11.0 million cash payment to the company, a pre-tax gain of $11.0 million and a related $4.2 million income tax expense. | |||||||||||||||||
The following table presents an analysis of the company’s restructuring and impairment reserves: | |||||||||||||||||
(dollars in millions) | Inventory | Severance | Equipment | Total | |||||||||||||
Obsolescence | Costs | Relocation | |||||||||||||||
Costs | |||||||||||||||||
Balance at December 31, 2013 | $ | 1.7 | $ | 1.5 | $ | 0.4 | $ | 3.6 | |||||||||
Cash payments/disposals | (0.4 | ) | (0.5 | ) | (0.2 | ) | (1.1 | ) | |||||||||
Balance at March 31, 2014 | $ | 1.3 | $ | 1 | $ | 0.2 | $ | 2.5 | |||||||||
Reserve adjustments | (0.4 | ) | 0.4 | — | — | ||||||||||||
Cash payments/disposals | (0.4 | ) | (0.2 | ) | (0.2 | ) | (0.8 | ) | |||||||||
Balance at June 30, 2014 | $ | 0.5 | $ | 1.2 | $ | — | $ | 1.7 | |||||||||
Cash payments/disposals | (0.2 | ) | (0.2 | ) | — | (0.4 | ) | ||||||||||
Balance at September 30, 2014 | $ | 0.3 | $ | 1 | $ | — | $ | 1.3 | |||||||||
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories | ' | ||||||||
4 | Inventories | ||||||||
The following table presents the components of the company’s inventory balances: | |||||||||
(dollars in millions) | September 30, 2014 | December 31, 2013 | |||||||
Finished products | $ | 106.6 | $ | 88.8 | |||||
Work in process | 11.1 | 12.3 | |||||||
Raw materials | 122 | 113.6 | |||||||
239.7 | 214.7 | ||||||||
LIFO reserve | (21.2 | ) | (21.3 | ) | |||||
$ | 218.5 | $ | 193.4 | ||||||
LongTerm_Debt
Long-Term Debt | 9 Months Ended | |
Sep. 30, 2014 | ||
Long-Term Debt | ' | |
5 | Long-Term Debt | |
The company has a $400 million multi-currency revolving credit agreement with eight banks, which expires on December 12, 2017. The facility has an accordion provision which allows it to be increased up to $500 million if certain conditions (including lender approval) are satisfied. Borrowings under bank credit lines and commercial paper borrowings are supported by the $400 million revolving credit agreement. As a result of the long-term nature of this facility, the company’s commercial paper and credit line borrowings are classified as long-term debt at September 30, 2014. |
Product_Warranties
Product Warranties | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Product Warranties | ' | ||||||||
6 | Product Warranties | ||||||||
The company offers warranties on the sales of certain of its products and records an accrual for the estimated future claims. The following table presents the company’s warranty liability activity. | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Balance at July 1, | $ | 136.4 | $ | 129.8 | |||||
Expense | 14.6 | 15.5 | |||||||
Claims settled | (14.8 | ) | (13.6 | ) | |||||
Balance at September 30, | $ | 136.2 | $ | 131.7 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Balance at January 1, | $ | 136.6 | $ | 129.6 | |||||
Expense | 46.9 | 47.2 | |||||||
Claims settled | (47.3 | ) | (45.1 | ) | |||||
Balance at September 30, | $ | 136.2 | $ | 131.7 | |||||
Earnings_Per_Share_of_Common_S
Earnings Per Share of Common Stock | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share of Common Stock | ' | ||||||||||||||||
7 | Earnings Per Share of Common Stock | ||||||||||||||||
The numerator for the calculation of basic and diluted earnings per share is net earnings. The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Denominator for basic earnings per share – weighted average shares | 89,945,464 | 92,050,932 | 90,559,459 | 92,417,352 | |||||||||||||
Effect of dilutive stock options and share units | 660,286 | 677,129 | 680,671 | 629,201 | |||||||||||||
Denominator for diluted earnings per share | 90,605,750 | 92,728,061 | 91,240,130 | 93,046,553 | |||||||||||||
Stock_Based_Compensation
Stock Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stock Based Compensation | ' | ||||||||||||||||
8 | Stock Based Compensation | ||||||||||||||||
The company adopted the A. O. Smith Combined Incentive Compensation Plan (the “plan”) effective January 1, 2007. Stockholders reapproved the plan on April 16, 2012. The plan is a continuation of the A. O. Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002. The number of shares available for granting of options, restricted stock or share units under the plan at September 30, 2014 was 2,321,641. Upon stock option exercise or share unit vesting, shares are issued from treasury stock. | |||||||||||||||||
Total stock based compensation cost recognized in the three months ended September 30, 2014 and 2013 was $1.8 million and $2.3 million, respectively. Total stock based compensation cost recognized in the nine months ended September 30, 2014 and 2013 was $9.6 million and $8.8 million, respectively. | |||||||||||||||||
Stock Options | |||||||||||||||||
The stock options granted in the nine months ended September 30, 2014 and 2013 have three year pro-rata vesting from the date of grant. Stock options are issued at exercise prices equal to the fair value of Common Stock on the date of grant. For active employees, all options granted in 2014 and 2013 expire ten years after date of grant. Options are expensed ratably over the three-year vesting period; however, included in the stock option expense for the three and nine months ended September 30, 2014 and 2013 is expense associated with the accelerated vesting of stock option awards for certain employees who either are retirement eligible or become retirement eligible during the vesting period. Stock based compensation cost attributable to stock options in the three months ended September 30, 2014 and 2013 was $0.8 million and $1.1 million, respectively. Stock based compensation expense attributable to stock options in the nine months ended September 30, 2014 and 2013 was $4.5 million and $4.1 million, respectively. | |||||||||||||||||
Changes in option awards, all of which relate to Common Stock, were as follows for the nine months ended September 30, 2014: | |||||||||||||||||
Weighted- | Nine Months | Average | Aggregate | ||||||||||||||
Average | Ended | Remaining | Intrinsic | ||||||||||||||
Per Share | September 30, | Contractual | Value | ||||||||||||||
Exercise Price | 2014 | Life | (dollars in | ||||||||||||||
millions) | |||||||||||||||||
Outstanding at January 1, 2014 | $ | 22.37 | 1,440,623 | ||||||||||||||
Granted | 46.5 | 298,750 | |||||||||||||||
Exercised | 14.87 | (133,002 | ) | ||||||||||||||
Forfeited | 42.13 | (4,119 | ) | ||||||||||||||
Outstanding at September 30, 2014 | 27.42 | 1,602,252 | 8 years | $ | 27.6 | ||||||||||||
Exercisable at September 30, 2014 | $ | 20.09 | 951,732 | 7 years | $ | 24.5 | |||||||||||
The weighted-average fair value per option at the date of grant during the nine months ended September 30, 2014 and 2013 using the Black-Scholes option-pricing model was $16.55 and $12.48, respectively. Assumptions were as follows: | |||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected life (years) | 6 | 6.1 | |||||||||||||||
Risk-free interest rate | 2.7 | % | 2 | % | |||||||||||||
Dividend yield | 1.1 | % | 1.1 | % | |||||||||||||
Expected volatility | 36.6 | % | 38.4 | % | |||||||||||||
The expected life is based on historical exercise behavior and the projected exercise of unexercised stock options. The risk free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant for the expected life of the option. The actual dividend yield is based on the actual annual dividends divided by the grant date market value of the company’s common stock. The expected volatility is based on the historical volatility of the company’s common stock. | |||||||||||||||||
Restricted Stock and Share Units | |||||||||||||||||
Participants may also be awarded shares of restricted stock or share units under the plan. The company granted 110,605 and 142,900 share units under the plan in the nine months ended September 30, 2014 and 2013, respectively. The share units were valued at $5.1 million and $4.9 million at the dates of issuance in 2014 and 2013, respectively, based on the company’s stock price at the dates of grant. The company’s share units are recognized as compensation expense ratably over the three year vesting period; however, included in share unit expense in the three and nine months ended September 30, 2014 and 2013 is expense associated with accelerated vesting of share unit awards for certain employees who either are retirement eligible or will become retirement eligible during the vesting period. Share based compensation expense attributable to share units of $1.0 million and $1.2 million was recognized in the three months ended September 30, 2014 and 2013, respectively. Share based compensation expense attributable to share units of $5.1 million and $4.7 million was recognized in the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||||||
A summary of share unit activity under the plan is as follows: | |||||||||||||||||
Number of Units | Weighted-Average | ||||||||||||||||
Grant Date Value | |||||||||||||||||
Issued and unvested at January 1, 2014 | 446,036 | $ | 26.14 | ||||||||||||||
Granted | 110,605 | 46.5 | |||||||||||||||
Vested | (144,476 | ) | 21.63 | ||||||||||||||
Forfeited | (1,462 | ) | 42.15 | ||||||||||||||
Issued and unvested at September 30, 2014 | 410,703 | $ | 33.21 | ||||||||||||||
Pensions
Pensions | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Pensions | ' | ||||||||||||||||
9 | Pensions | ||||||||||||||||
The following table presents the components of the company’s net pension expense: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 2 | $ | 2.3 | $ | 5.9 | $ | 6.8 | |||||||||
Interest cost | 11.2 | 9.9 | 33.6 | 29.6 | |||||||||||||
Expected return on plan assets | (15.1 | ) | (15.5 | ) | (45.3 | ) | (46.3 | ) | |||||||||
Amortization of unrecognized loss | 8.8 | 10.6 | 26.4 | 31.5 | |||||||||||||
Amortization of prior service cost | (0.3 | ) | (0.3 | ) | (0.8 | ) | (0.7 | ) | |||||||||
Defined benefit plan expense | $ | 6.6 | $ | 7 | $ | 19.8 | $ | 20.9 | |||||||||
The company did not make a contribution to its U.S. pension plan in 2013. The company is not required to make a contribution and does not intend to make a voluntary contribution in 2014. |
Operations_by_Segment
Operations by Segment | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Operations by Segment | ' | ||||||||||||||||
10 | Operations by Segment | ||||||||||||||||
The company is comprised of two reporting segments: North America and Rest of World. Both segments manufacture and market comprehensive lines of residential and commercial gas, gas tankless and electric water heaters. Both segments primarily manufacture and market in their respective regions of the world. The Rest of World segment is primarily comprised of China, Europe and India. The North America segment also manufactures and globally markets specialty commercial water heating equipment, condensing and non-condensing boilers and water system tanks. The Rest of World segment also manufactures and markets water treatment products, primarily in Asia. | |||||||||||||||||
The company’s operations by segment are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | |||||||||||||||||
North America | $ | 392.4 | $ | 370.1 | $ | 1,191.00 | $ | 1,137.80 | |||||||||
Rest of World | 198.5 | 175.2 | 564.9 | 483 | |||||||||||||
Inter-segment sales | (9.3 | ) | (9.1 | ) | (26.7 | ) | (25.9 | ) | |||||||||
$ | 581.6 | $ | 536.2 | $ | 1,729.20 | $ | 1,594.90 | ||||||||||
Operating earnings | |||||||||||||||||
North America (1) (3) (4) | $ | 53 | $ | 51.5 | $ | 171.5 | $ | 160.6 | |||||||||
Rest of World | 30 | 26.9 | 84.3 | 67.6 | |||||||||||||
Inter-segment earnings elimination | — | (0.1 | ) | — | (0.1 | ) | |||||||||||
83 | 78.3 | 255.8 | 228.1 | ||||||||||||||
Corporate expense (2) | (12.2 | ) | (15.6 | ) | (38.7 | ) | (43.9 | ) | |||||||||
Interest expense | (1.5 | ) | (1.4 | ) | (4.3 | ) | (4.5 | ) | |||||||||
Earnings before income taxes | 69.3 | 61.3 | 212.8 | 179.7 | |||||||||||||
Provision for income taxes | 18.7 | 15.1 | 58.2 | 52.4 | |||||||||||||
Net earnings | $ | 50.6 | $ | 46.2 | $ | 154.6 | $ | 127.3 | |||||||||
(1) Includes non-operating pension costs of: | $ | (3.3 | ) | $ | (3.9 | ) | $ | (11.0 | ) | $ | (11.1 | ) | |||||
(2) Includes non-operating pension costs of: | (1.6 | ) | (1.3 | ) | (3.7 | ) | (3.7 | ) | |||||||||
(3) Includes restructuring and impairment expenses of: | — | (1.3 | ) | — | (18.2 | ) | |||||||||||
(4) Includes settlement income of: | — | — | — | 11 |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Fair Value Measurements | ' | ||||||||
11 | Fair Value Measurements | ||||||||
ASC 820, Fair Value Measures and Disclosures, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring basis or nonrecurring basis. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on the market approach which are prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. | |||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows: | |||||||||
(dollars in millions) | September 30, | December 31, | |||||||
Fair Value Measurement Using | 2014 | 2013 | |||||||
Quoted prices in active markets for identical assets (Level 1) | $ | 125 | $ | 107 | |||||
Significant other observable inputs (Level 2) | (0.1 | ) | — | ||||||
Total assets measured at fair value | $ | 124.9 | $ | 107 | |||||
There were no changes in the company’s valuation techniques used to measure fair values on a recurring basis during the nine months ended September 30, 2014. |
Derivative_Instruments
Derivative Instruments | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||||||||||||||
12 | Derivative Instruments | ||||||||||||||||||||||||||||
ASC 815 Derivatives and Hedging as amended, requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of the hedging relationships. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as a part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the company must designate the hedging instrument, based upon the exposure hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. | |||||||||||||||||||||||||||||
The company designates that all of its hedging instruments are cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive loss, net of tax, and is reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. The amount by which the cumulative change in the value of the hedge more than offsets the cumulative change in the value of the hedged item (i.e., the ineffective portion) is recorded in earnings, net of tax, in the period the ineffectiveness occurs. | |||||||||||||||||||||||||||||
The company utilizes certain derivative instruments to enhance its ability to manage currency as well as raw materials price risk. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The company does not enter into contracts for speculative purposes. The contracts are executed with major financial institutions with no credit loss anticipated for failure of the counterparties to perform. | |||||||||||||||||||||||||||||
Foreign Currency Forward Contracts | |||||||||||||||||||||||||||||
The company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases, sales and certain intercompany transactions in the normal course of business. Currencies for which the company utilizes foreign currency forward contracts include the British pound, Canadian dollar, Euro, Indian rupee and Mexican peso. | |||||||||||||||||||||||||||||
Gains and losses on these instruments are recorded in accumulated other comprehensive loss, net of tax, until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to the statement of earnings. The assessment of effectiveness for forward contracts is based on changes in the forward rates. These hedges have been determined to be effective. | |||||||||||||||||||||||||||||
The majority of the amounts in accumulated other comprehensive loss for cash flow hedges is expected to be reclassified into earnings within one year and all of the hedges will be reclassified into earnings no later than December 31, 2015. | |||||||||||||||||||||||||||||
The following table summarizes, by currency, the contractual amounts of the company’s foreign currency forward contracts: | |||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
(dollars in millions) | Buy | Sell | Buy | Sell | |||||||||||||||||||||||||
British pound | $ | — | $ | 1.3 | $ | — | $ | 1.9 | |||||||||||||||||||||
Canadian dollar | — | 85.9 | — | 67.1 | |||||||||||||||||||||||||
Euro | 17 | 1.4 | 14.8 | 2.2 | |||||||||||||||||||||||||
Indian rupee | — | — | 1.5 | — | |||||||||||||||||||||||||
Mexican peso | 11.5 | — | 15.3 | — | |||||||||||||||||||||||||
Total | $ | 28.5 | $ | 88.6 | $ | 31.6 | $ | 71.2 | |||||||||||||||||||||
Commodity Futures Contracts | |||||||||||||||||||||||||||||
In addition to entering into supply arrangements in the normal course of business, the company also enters into futures contracts to fix the cost of certain raw material purchases, principally copper, with the objective of minimizing changes in cost due to market price fluctuations. The hedging strategy for achieving this objective is to purchase commodity futures contracts on the open market of the London Metals Exchange (LME) or over the counter contracts based on the LME. | |||||||||||||||||||||||||||||
The minimal after-tax gain on the effective portion of the contracts as of September 30, 2014 was recorded in accumulated other comprehensive loss and will be reclassified into cost of products sold in the period in which the underlying transaction is recorded in earnings. The effective portion of the contracts will be reclassified within one year. Commodity hedges outstanding at September 30, 2014 involve a total of approximately 1.0 million pounds of copper. | |||||||||||||||||||||||||||||
The impact of derivative contracts on the company’s financial statements is as follows: | |||||||||||||||||||||||||||||
Fair value of derivatives designated as hedging instruments under: | |||||||||||||||||||||||||||||
(dollars in millions) | Balance Sheet Location | September 30, | December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 2.9 | $ | 1.9 | ||||||||||||||||||||||||
Accrued liabilities | (1.2 | ) | (0.2 | ) | |||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 1.7 | $ | 1.7 | |||||||||||||||||||||||||
The effect of derivatives designated as hedging instruments on the statement of earnings is as follows: | |||||||||||||||||||||||||||||
Three Months Ended September 30 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
ASC 815 cash | (loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | ||||||||||||||||||||||||
flow hedging | recognized in | reclassified | from accumulated | recognized in | recognized in | ||||||||||||||||||||||||
relationships | OCI on | from | OCI into earnings | earnings on | earnings on a | ||||||||||||||||||||||||
derivative | accumulated | (effective portion) | derivative | derivative | |||||||||||||||||||||||||
(effective | OCI into | (ineffective | (ineffective | ||||||||||||||||||||||||||
portion) | earnings | portion) | portion) | ||||||||||||||||||||||||||
(effective | |||||||||||||||||||||||||||||
portion) | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 1.8 | $ | (0.8 | ) | Cost of | $ | 0.7 | $ | 0.3 | N/A | $ | — | $ | — | ||||||||||||||
products sold | |||||||||||||||||||||||||||||
Commodities contracts | — | — | Cost of products sold | — | (0.1 | ) | Cost of | — | — | ||||||||||||||||||||
products sold | |||||||||||||||||||||||||||||
$ | 1.8 | $ | (0.8 | ) | $ | 0.7 | $ | 0.2 | $ | — | $ | — | |||||||||||||||||
Nine Months Ended September 30 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
ASC 815 cash | (loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | ||||||||||||||||||||||||
flow hedging | recognized in | reclassified | from accumulated | recognized in | recognized in | ||||||||||||||||||||||||
relationships | OCI on | from | OCI into earnings | earnings on | earnings on a | ||||||||||||||||||||||||
derivative | accumulated | (effective portion) | derivative | derivative | |||||||||||||||||||||||||
(effective | OCI into | (ineffective | (ineffective | ||||||||||||||||||||||||||
portion) | earnings | portion) | portion) | ||||||||||||||||||||||||||
(effective | |||||||||||||||||||||||||||||
portion) | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 2.6 | $ | 0.8 | Cost of products sold | $ | 2.5 | $ | 1.8 | N/A | $ | — | $ | — | |||||||||||||||
Commodities contracts | — | (0.1 | ) | Cost of products sold | — | (0.1 | ) | Cost of | — | — | |||||||||||||||||||
products sold | |||||||||||||||||||||||||||||
$ | 2.6 | $ | 0.7 | $ | 2.5 | $ | 1.7 | $ | — | $ | — | ||||||||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended | |
Sep. 30, 2014 | ||
Income Taxes | ' | |
13 | Income Taxes | |
The effective tax rate for the three and nine months ended September 30, 2014 was 27.0 percent and 27.3 percent, respectively. The company estimates that its annual effective tax rate for the full year of 2014 will be between 27.0 and 28.0 percent. The full year effective tax rate in 2013 was 28.2 percent. | ||
As of September 30, 2014, the company had $1.3 million of unrecognized tax benefits of which $0.9 million would affect its effective tax rate if recognized. The company recognizes potential interest and penalties related to unrecognized tax benefits as a component of tax expense. | ||
The U.S. federal tax returns for 2011—2013 are subject to audit. The company is subject to state and local audits for tax years 2000—2013. The company is also subject to non-U.S. income tax examinations for years 2006—2013. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Loss by Component | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Changes in Accumulated Other Comprehensive Loss by Component | ' | ||||||||
14 | Changes in Accumulated Other Comprehensive Loss by Component | ||||||||
Changes to accumulated other comprehensive loss by component are as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Cumulative Foreign Currency Translation | |||||||||
Balance at beginning of period | $ | 12.2 | $ | 13.9 | |||||
Other comprehensive (loss) gain before reclassifications | (1.5 | ) | 3.6 | ||||||
Balance at end of period | 10.7 | 17.5 | |||||||
Unrealized Net Gain on Cash Flow Derivatives | |||||||||
Balance at beginning of period | 0.4 | 0.5 | |||||||
Other comprehensive gain (loss) before reclassifications | 1.1 | (0.4 | ) | ||||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.3 and $0.3 in 2014 and 2013, respectively) | (0.4 | ) | (0.1 | ) | |||||
Balance at end of period | 1.1 | — | |||||||
Pension Liability | |||||||||
Balance at beginning of period | (271.5 | ) | (333.1 | ) | |||||
Other comprehensive loss before reclassifications | (0.1 | ) | — | ||||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 5.3 | 6.3 | |||||||
Balance at end of period | (266.3 | ) | (326.8 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (254.5 | ) | $ | (309.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 8.8 | (2) | $ | 10.6 | (2) | |||
Prior year service cost | (0.3 | ) (2) | (0.3 | ) (2) | |||||
8.5 | 10.3 | ||||||||
Tax benefit | (3.2 | ) | (4.0 | ) | |||||
Reclassification net of tax | $ | 5.3 | $ | 6.3 | |||||
(2) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9—Pensions for additional details | ||||||||
Changes to accumulated other comprehensive loss by component are as follows: | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Cumulative Foreign Currency Translation | |||||||||
Balance at beginning of period | $ | 19.9 | $ | 19.5 | |||||
Other comprehensive loss before reclassifications | (9.2 | ) | (2.0 | ) | |||||
Balance at end of period | 10.7 | 17.5 | |||||||
Unrealized Net Gain on Cash Flow Derivatives | |||||||||
Balance at beginning of period | 1 | 0.7 | |||||||
Other comprehensive earnings before reclassifications | 1.6 | 0.4 | |||||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.7 and $0.5 in 2014 and 2013, respectively) | (1.5 | ) | (1.1 | ) | |||||
Balance at end of period | 1.1 | — | |||||||
Pension Liability | |||||||||
Balance at beginning of period | (280.0 | ) | (340.7 | ) | |||||
Other comprehensive loss before reclassifications | (2.1 | ) | (5.0 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 15.8 | 18.9 | |||||||
Balance at end of period | (266.3 | ) | (326.8 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (254.5 | ) | $ | (309.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 26.4 | (2) | $ | 31.5 | (2) | |||
Prior year service cost | (0.8 | ) (2) | (0.7 | ) (2) | |||||
25.6 | 30.8 | ||||||||
Tax benefit | (9.8 | ) | (11.9 | ) | |||||
Reclassification net of tax | $ | 15.8 | $ | 18.9 | |||||
(2) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9—Pensions for additional details |
Restructuring_Impairment_and_S1
Restructuring, Impairment and Settlement Expenses - Net (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Analysis of Company's Restructuring and Impairment Reserves | ' | ||||||||||||||||
The following table presents an analysis of the company’s restructuring and impairment reserves: | |||||||||||||||||
(dollars in millions) | Inventory | Severance | Equipment | Total | |||||||||||||
Obsolescence | Costs | Relocation | |||||||||||||||
Costs | |||||||||||||||||
Balance at December 31, 2013 | $ | 1.7 | $ | 1.5 | $ | 0.4 | $ | 3.6 | |||||||||
Cash payments/disposals | (0.4 | ) | (0.5 | ) | (0.2 | ) | (1.1 | ) | |||||||||
Balance at March 31, 2014 | $ | 1.3 | $ | 1 | $ | 0.2 | $ | 2.5 | |||||||||
Reserve adjustments | (0.4 | ) | 0.4 | — | — | ||||||||||||
Cash payments/disposals | (0.4 | ) | (0.2 | ) | (0.2 | ) | (0.8 | ) | |||||||||
Balance at June 30, 2014 | $ | 0.5 | $ | 1.2 | $ | — | $ | 1.7 | |||||||||
Cash payments/disposals | (0.2 | ) | (0.2 | ) | — | (0.4 | ) | ||||||||||
Balance at September 30, 2014 | $ | 0.3 | $ | 1 | $ | — | $ | 1.3 | |||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Inventories | ' | ||||||||
The following table presents the components of the company’s inventory balances: | |||||||||
(dollars in millions) | September 30, 2014 | December 31, 2013 | |||||||
Finished products | $ | 106.6 | $ | 88.8 | |||||
Work in process | 11.1 | 12.3 | |||||||
Raw materials | 122 | 113.6 | |||||||
239.7 | 214.7 | ||||||||
LIFO reserve | (21.2 | ) | (21.3 | ) | |||||
$ | 218.5 | $ | 193.4 | ||||||
Product_Warranties_Tables
Product Warranties (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Product Warranty Liability Activity | ' | ||||||||
The following table presents the company’s warranty liability activity. | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Balance at July 1, | $ | 136.4 | $ | 129.8 | |||||
Expense | 14.6 | 15.5 | |||||||
Claims settled | (14.8 | ) | (13.6 | ) | |||||
Balance at September 30, | $ | 136.2 | $ | 131.7 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Balance at January 1, | $ | 136.6 | $ | 129.6 | |||||
Expense | 46.9 | 47.2 | |||||||
Claims settled | (47.3 | ) | (45.1 | ) | |||||
Balance at September 30, | $ | 136.2 | $ | 131.7 | |||||
Earnings_Per_Share_of_Common_S1
Earnings Per Share of Common Stock (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Computation of Basic and Diluted Weighted Average Shares Used in EPS Calculations | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Denominator for basic earnings per share – weighted average shares | 89,945,464 | 92,050,932 | 90,559,459 | 92,417,352 | |||||||||||||
Effect of dilutive stock options and share units | 660,286 | 677,129 | 680,671 | 629,201 | |||||||||||||
Denominator for diluted earnings per share | 90,605,750 | 92,728,061 | 91,240,130 | 93,046,553 | |||||||||||||
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Changes in Option Shares | ' | ||||||||||||||||
Changes in option awards, all of which relate to Common Stock, were as follows for the nine months ended September 30, 2014: | |||||||||||||||||
Weighted- | Nine Months | Average | Aggregate | ||||||||||||||
Average | Ended | Remaining | Intrinsic | ||||||||||||||
Per Share | September 30, | Contractual | Value | ||||||||||||||
Exercise Price | 2014 | Life | (dollars in | ||||||||||||||
millions) | |||||||||||||||||
Outstanding at January 1, 2014 | $ | 22.37 | 1,440,623 | ||||||||||||||
Granted | 46.5 | 298,750 | |||||||||||||||
Exercised | 14.87 | (133,002 | ) | ||||||||||||||
Forfeited | 42.13 | (4,119 | ) | ||||||||||||||
Outstanding at September 30, 2014 | 27.42 | 1,602,252 | 8 years | $ | 27.6 | ||||||||||||
Exercisable at September 30, 2014 | $ | 20.09 | 951,732 | 7 years | $ | 24.5 | |||||||||||
Schedule of Weighted Average Fair Value per Option at Date of Grant | ' | ||||||||||||||||
The weighted-average fair value per option at the date of grant during the nine months ended September 30, 2014 and 2013 using the Black-Scholes option-pricing model was $16.55 and $12.48, respectively. Assumptions were as follows: | |||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected life (years) | 6 | 6.1 | |||||||||||||||
Risk-free interest rate | 2.7 | % | 2 | % | |||||||||||||
Dividend yield | 1.1 | % | 1.1 | % | |||||||||||||
Expected volatility | 36.6 | % | 38.4 | % | |||||||||||||
Schedule of Share Unit Activity Under Plan | ' | ||||||||||||||||
A summary of share unit activity under the plan is as follows: | |||||||||||||||||
Number of Units | Weighted-Average | ||||||||||||||||
Grant Date Value | |||||||||||||||||
Issued and unvested at January 1, 2014 | 446,036 | $ | 26.14 | ||||||||||||||
Granted | 110,605 | 46.5 | |||||||||||||||
Vested | (144,476 | ) | 21.63 | ||||||||||||||
Forfeited | (1,462 | ) | 42.15 | ||||||||||||||
Issued and unvested at September 30, 2014 | 410,703 | $ | 33.21 | ||||||||||||||
Pensions_Tables
Pensions (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Components of Net Pension Expense | ' | ||||||||||||||||
The following table presents the components of the company’s net pension expense: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 2 | $ | 2.3 | $ | 5.9 | $ | 6.8 | |||||||||
Interest cost | 11.2 | 9.9 | 33.6 | 29.6 | |||||||||||||
Expected return on plan assets | (15.1 | ) | (15.5 | ) | (45.3 | ) | (46.3 | ) | |||||||||
Amortization of unrecognized loss | 8.8 | 10.6 | 26.4 | 31.5 | |||||||||||||
Amortization of prior service cost | (0.3 | ) | (0.3 | ) | (0.8 | ) | (0.7 | ) | |||||||||
Defined benefit plan expense | $ | 6.6 | $ | 7 | $ | 19.8 | $ | 20.9 | |||||||||
Operations_by_Segment_Tables
Operations by Segment (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Schedule of Operating Earnings | ' | ||||||||||||||||
The company’s operations by segment are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(dollars in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | |||||||||||||||||
North America | $ | 392.4 | $ | 370.1 | $ | 1,191.00 | $ | 1,137.80 | |||||||||
Rest of World | 198.5 | 175.2 | 564.9 | 483 | |||||||||||||
Inter-segment sales | (9.3 | ) | (9.1 | ) | (26.7 | ) | (25.9 | ) | |||||||||
$ | 581.6 | $ | 536.2 | $ | 1,729.20 | $ | 1,594.90 | ||||||||||
Operating earnings | |||||||||||||||||
North America (1) (3) (4) | $ | 53 | $ | 51.5 | $ | 171.5 | $ | 160.6 | |||||||||
Rest of World | 30 | 26.9 | 84.3 | 67.6 | |||||||||||||
Inter-segment earnings elimination | — | (0.1 | ) | — | (0.1 | ) | |||||||||||
83 | 78.3 | 255.8 | 228.1 | ||||||||||||||
Corporate expense (2) | (12.2 | ) | (15.6 | ) | (38.7 | ) | (43.9 | ) | |||||||||
Interest expense | (1.5 | ) | (1.4 | ) | (4.3 | ) | (4.5 | ) | |||||||||
Earnings before income taxes | 69.3 | 61.3 | 212.8 | 179.7 | |||||||||||||
Provision for income taxes | 18.7 | 15.1 | 58.2 | 52.4 | |||||||||||||
Net earnings | $ | 50.6 | $ | 46.2 | $ | 154.6 | $ | 127.3 | |||||||||
(1) Includes non-operating pension costs of: | $ | (3.3 | ) | $ | (3.9 | ) | $ | (11.0 | ) | $ | (11.1 | ) | |||||
(2) Includes non-operating pension costs of: | (1.6 | ) | (1.3 | ) | (3.7 | ) | (3.7 | ) | |||||||||
(3) Includes restructuring and impairment expenses of: | — | (1.3 | ) | — | (18.2 | ) | |||||||||||
(4) Includes settlement income of: | — | — | — | 11 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows: | |||||||||
(dollars in millions) | September 30, | December 31, | |||||||
Fair Value Measurement Using | 2014 | 2013 | |||||||
Quoted prices in active markets for identical assets (Level 1) | $ | 125 | $ | 107 | |||||
Significant other observable inputs (Level 2) | (0.1 | ) | — | ||||||
Total assets measured at fair value | $ | 124.9 | $ | 107 | |||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Schedule of Effect of Derivative Designated as Hedging Instruments on Statement of Earnings | ' | ||||||||||||||||||||||||||||
The effect of derivatives designated as hedging instruments on the statement of earnings is as follows: | |||||||||||||||||||||||||||||
Three Months Ended September 30 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
ASC 815 cash | (loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | ||||||||||||||||||||||||
flow hedging | recognized in | reclassified | from accumulated | recognized in | recognized in | ||||||||||||||||||||||||
relationships | OCI on | from | OCI into earnings | earnings on | earnings on a | ||||||||||||||||||||||||
derivative | accumulated | (effective portion) | derivative | derivative | |||||||||||||||||||||||||
(effective | OCI into | (ineffective | (ineffective | ||||||||||||||||||||||||||
portion) | earnings | portion) | portion) | ||||||||||||||||||||||||||
(effective | |||||||||||||||||||||||||||||
portion) | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 1.8 | $ | (0.8 | ) | Cost of | $ | 0.7 | $ | 0.3 | N/A | $ | — | $ | — | ||||||||||||||
products sold | |||||||||||||||||||||||||||||
Commodities contracts | — | — | Cost of products sold | — | (0.1 | ) | Cost of | — | — | ||||||||||||||||||||
products sold | |||||||||||||||||||||||||||||
$ | 1.8 | $ | (0.8 | ) | $ | 0.7 | $ | 0.2 | $ | — | $ | — | |||||||||||||||||
Nine Months Ended September 30 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
ASC 815 cash | (loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | ||||||||||||||||||||||||
flow hedging | recognized in | reclassified | from accumulated | recognized in | recognized in | ||||||||||||||||||||||||
relationships | OCI on | from | OCI into earnings | earnings on | earnings on a | ||||||||||||||||||||||||
derivative | accumulated | (effective portion) | derivative | derivative | |||||||||||||||||||||||||
(effective | OCI into | (ineffective | (ineffective | ||||||||||||||||||||||||||
portion) | earnings | portion) | portion) | ||||||||||||||||||||||||||
(effective | |||||||||||||||||||||||||||||
portion) | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 2.6 | $ | 0.8 | Cost of products sold | $ | 2.5 | $ | 1.8 | N/A | $ | — | $ | — | |||||||||||||||
Commodities contracts | — | (0.1 | ) | Cost of products sold | — | (0.1 | ) | Cost of | — | — | |||||||||||||||||||
products sold | |||||||||||||||||||||||||||||
$ | 2.6 | $ | 0.7 | $ | 2.5 | $ | 1.7 | $ | — | $ | — | ||||||||||||||||||
Designated as Hedging Instrument | ' | ||||||||||||||||||||||||||||
Schedule of Summary by Currency of Foreign Currency Forward Contracts | ' | ||||||||||||||||||||||||||||
The following table summarizes, by currency, the contractual amounts of the company’s foreign currency forward contracts: | |||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
(dollars in millions) | Buy | Sell | Buy | Sell | |||||||||||||||||||||||||
British pound | $ | — | $ | 1.3 | $ | — | $ | 1.9 | |||||||||||||||||||||
Canadian dollar | — | 85.9 | — | 67.1 | |||||||||||||||||||||||||
Euro | 17 | 1.4 | 14.8 | 2.2 | |||||||||||||||||||||||||
Indian rupee | — | — | 1.5 | — | |||||||||||||||||||||||||
Mexican peso | 11.5 | — | 15.3 | — | |||||||||||||||||||||||||
Total | $ | 28.5 | $ | 88.6 | $ | 31.6 | $ | 71.2 | |||||||||||||||||||||
Schedule of Impact of Cash Flow Hedges on Company's Financial Statements | ' | ||||||||||||||||||||||||||||
The impact of derivative contracts on the company’s financial statements is as follows: | |||||||||||||||||||||||||||||
Fair value of derivatives designated as hedging instruments under: | |||||||||||||||||||||||||||||
(dollars in millions) | Balance Sheet Location | September 30, | December 31, | ||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 2.9 | $ | 1.9 | ||||||||||||||||||||||||
Accrued liabilities | (1.2 | ) | (0.2 | ) | |||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 1.7 | $ | 1.7 | |||||||||||||||||||||||||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Changes to Accumulated Other Comprehensive Loss by Component | ' | ||||||||
Changes to accumulated other comprehensive loss by component are as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Cumulative Foreign Currency Translation | |||||||||
Balance at beginning of period | $ | 12.2 | $ | 13.9 | |||||
Other comprehensive (loss) gain before reclassifications | (1.5 | ) | 3.6 | ||||||
Balance at end of period | 10.7 | 17.5 | |||||||
Unrealized Net Gain on Cash Flow Derivatives | |||||||||
Balance at beginning of period | 0.4 | 0.5 | |||||||
Other comprehensive gain (loss) before reclassifications | 1.1 | (0.4 | ) | ||||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.3 and $0.3 in 2014 and 2013, respectively) | (0.4 | ) | (0.1 | ) | |||||
Balance at end of period | 1.1 | — | |||||||
Pension Liability | |||||||||
Balance at beginning of period | (271.5 | ) | (333.1 | ) | |||||
Other comprehensive loss before reclassifications | (0.1 | ) | — | ||||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 5.3 | 6.3 | |||||||
Balance at end of period | (266.3 | ) | (326.8 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (254.5 | ) | $ | (309.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 8.8 | (2) | $ | 10.6 | (2) | |||
Prior year service cost | (0.3 | ) (2) | (0.3 | ) (2) | |||||
8.5 | 10.3 | ||||||||
Tax benefit | (3.2 | ) | (4.0 | ) | |||||
Reclassification net of tax | $ | 5.3 | $ | 6.3 | |||||
(2) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9—Pensions for additional details | ||||||||
Changes to accumulated other comprehensive loss by component are as follows: | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
(dollars in millions) | 2014 | 2013 | |||||||
Cumulative Foreign Currency Translation | |||||||||
Balance at beginning of period | $ | 19.9 | $ | 19.5 | |||||
Other comprehensive loss before reclassifications | (9.2 | ) | (2.0 | ) | |||||
Balance at end of period | 10.7 | 17.5 | |||||||
Unrealized Net Gain on Cash Flow Derivatives | |||||||||
Balance at beginning of period | 1 | 0.7 | |||||||
Other comprehensive earnings before reclassifications | 1.6 | 0.4 | |||||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.7 and $0.5 in 2014 and 2013, respectively) | (1.5 | ) | (1.1 | ) | |||||
Balance at end of period | 1.1 | — | |||||||
Pension Liability | |||||||||
Balance at beginning of period | (280.0 | ) | (340.7 | ) | |||||
Other comprehensive loss before reclassifications | (2.1 | ) | (5.0 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 15.8 | 18.9 | |||||||
Balance at end of period | (266.3 | ) | (326.8 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (254.5 | ) | $ | (309.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 26.4 | (2) | $ | 31.5 | (2) | |||
Prior year service cost | (0.8 | ) (2) | (0.7 | ) (2) | |||||
25.6 | 30.8 | ||||||||
Tax benefit | (9.8 | ) | (11.9 | ) | |||||
Reclassification net of tax | $ | 15.8 | $ | 18.9 | |||||
(2) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9—Pensions for additional details |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) | 0 Months Ended | 9 Months Ended |
Apr. 15, 2013 | Sep. 30, 2014 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ' | ' |
Stock split ratio | 2 | ' |
Percentage of stock dividend to stock holders | ' | 100.00% |
Dividend payable date | ' | 15-May-13 |
Dividend date of record | ' | 30-Apr-13 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Feb. 14, 2013 | Feb. 14, 2013 | Feb. 14, 2013 | Feb. 14, 2013 |
MiM Isitma Sogutma Havalandirma ve Aritma Sistemleri San. Tic. A.S. | MiM Isitma Sogutma Havalandirma ve Aritma Sistemleri San. Tic. A.S. | Customer Lists | Customer Lists | ||
MiM Isitma Sogutma Havalandirma ve Aritma Sistemleri San. Tic. A.S. | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentage of shares acquired | ' | ' | 100.00% | ' | ' |
Cash received from acquisition | ' | $1.90 | ' | ' | ' |
Aggregate cash purchase price, net of cash received | 4 | 4 | ' | ' | ' |
Recorded contingent consideration | ' | ' | 1.1 | ' | ' |
Debt assumed | ' | ' | 1.7 | ' | ' |
Acquired intangible assets | ' | ' | 4.3 | ' | ' |
Acquired intangible assets subject to amortization | ' | ' | ' | ' | $2.40 |
Acquired intangible assets, amortization period, in years | ' | ' | ' | '10 years | ' |
Restructuring_Impairment_and_S2
Restructuring, Impairment and Settlement Expenses-Net - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Restructuring and impairment expense | ' | $1.30 | ' | ' | $7.20 |
Equipment relocation costs | ' | 1.3 | ' | ' | 1.3 |
Severance costs and impairment expense | ' | ' | ' | ' | 7.5 |
Reduction of severance costs | ' | 0.3 | ' | ' | ' |
Inventory obsolescence reserves | ' | 0.3 | ' | ' | 1.9 |
Tax benefit related to expenses | ' | 0.3 | ' | ' | 4.6 |
Impairment charges related to long-lived assets | ' | ' | ' | ' | 7.5 |
Recovery of costs and damages from vendors | ' | ' | 11 | ' | ' |
Settlement income | ' | ' | 11 | ' | ' |
Income tax expense | 18.7 | 15.1 | 4.2 | 58.2 | 52.4 |
Restructuring and Impairment Charges | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Restructuring and impairment expense | ' | ' | ' | ' | $18.20 |
Schedule_of_Analysis_of_Compan
Schedule of Analysis of Company's Restructuring and Impairment Reserves (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Beginning Balance | $1.70 | $2.50 | $3.60 |
Cash payments/disposals | -0.4 | -0.8 | -1.1 |
Ending Balance | 1.3 | 1.7 | 2.5 |
Inventory Obsolescence | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Beginning Balance | 0.5 | 1.3 | 1.7 |
Reserve adjustments | ' | -0.4 | ' |
Cash payments/disposals | -0.2 | -0.4 | -0.4 |
Ending Balance | 0.3 | 0.5 | 1.3 |
Severance Costs | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Beginning Balance | 1.2 | 1 | 1.5 |
Reserve adjustments | ' | 0.4 | ' |
Cash payments/disposals | -0.2 | -0.2 | -0.5 |
Ending Balance | 1 | 1.2 | 1 |
Equipment Relocation | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Beginning Balance | ' | 0.2 | 0.4 |
Cash payments/disposals | ' | -0.2 | -0.2 |
Ending Balance | ' | ' | $0.20 |
Schedule_of_Inventories_Detail
Schedule of Inventories (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories | ' | ' |
Finished products | $106.60 | $88.80 |
Work in process | 11.1 | 12.3 |
Raw materials | 122 | 113.6 |
Inventories, at FIFO cost | 239.7 | 214.7 |
LIFO reserve | -21.2 | -21.3 |
Net inventory | $218.50 | $193.40 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
lender | |
Debt Instrument [Line Items] | ' |
Multi-currency revolving credit agreement | $400 |
Number of banks involved in multi-year multi-currency revolving credit agreement | 8 |
Revolving credit facility, expiration date | 12-Dec-17 |
Multi-currency revolving credit agreement, maximum amount | $500 |
Companys_Warranty_Liability_Ac
Company's Warranty Liability Activity (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Product Warranties | ' | ' | ' | ' |
Beginning balance | $136.40 | $129.80 | $136.60 | $129.60 |
Expense | 14.6 | 15.5 | 46.9 | 47.2 |
Claims settled | -14.8 | -13.6 | -47.3 | -45.1 |
Ending balance | $136.20 | $131.70 | $136.20 | $131.70 |
Schedule_of_Computation_of_Bas
Schedule of Computation of Basic and Diluted Weighted-Average Shares Used in Earnings per Share Calculations (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share Of Common Stock | ' | ' | ' | ' |
Denominator for basic earnings per share - weighted average shares | 89,945,464 | 92,050,932 | 90,559,459 | 92,417,352 |
Effect of dilutive stock options and share units | 660,286 | 677,129 | 680,671 | 629,201 |
Denominator for diluted earnings per share | 90,605,750 | 92,728,061 | 91,240,130 | 93,046,553 |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock based compensation expense recognized | $1.80 | $2.30 | $9.60 | $8.80 |
Stock option compensation recognized | 0.8 | 1.1 | 4.5 | 4.1 |
Weighted-average fair value per option at the date of grant | ' | ' | $16.55 | $12.48 |
Share based compensation expense attributable to share units | 1 | 1.2 | 5.1 | 4.7 |
Employee Stock Option | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Award vesting period | ' | ' | '3 years | '3 years |
Award expiration period | ' | ' | '10 years | '10 years |
Restricted Stock And Share Units | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Award vesting period | ' | ' | '3 years | '3 years |
Number of Units - Granted | ' | ' | 110,605 | 142,900 |
Value of share units at the date of issuance | ' | ' | $5.10 | $4.90 |
A.O. Smith Combined Compensation Plan | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of shares available for granting of options or share units | 2,321,641 | ' | 2,321,641 | ' |
Changes_in_Option_Awards_All_o
Changes in Option Awards All of Which Related to Common Stock (Detail) (USD $) | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Weighted-Average Per Share Exercise Price, beginning period | $22.37 |
Weighted-Average Per Share Exercise Price - Granted | $46.50 |
Weighted-Average Per Share Exercise Price - Exercised | $14.87 |
Weighted- Average Per Share Exercise Price - Forfeited | $42.13 |
Weighted-Average Per Share Exercise Price, ending period | $27.42 |
Weighted-Average Per Share Exercise Price, Exercisable | $20.09 |
Number of Options Outstanding, Beginning Balance | 1,440,623 |
Number of Options, Granted | 298,750 |
Number of Options, Exercised | -133,002 |
Number of Options, Forfeited | -4,119 |
Number of Options Outstanding, Ending Balance | 1,602,252 |
Number of Options, Exercisable at End of Period | 951,732 |
Average Remaining Contractual Life, Outstanding at End of Period, Years | '8 years |
Average Remaining Contractual Life, Exercisable at End of Period, Years | '7 years |
Aggregate Intrinsic Value, Outstanding at End of Period | $27.60 |
Aggregate Intrinsic Value, Exercisable at End of Period | $24.50 |
Schedule_of_WeightedAverage_Fa
Schedule of Weighted-Average Fair Value per Option at Date of Grant (Detail) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Stock Based Compensation [Abstract] | ' | ' |
Expected life (years) | '6 years | '6 years 1 month 6 days |
Risk-free interest rate | 2.70% | 2.00% |
Dividend yield | 1.10% | 1.10% |
Expected volatility | 36.60% | 38.40% |
Summary_of_Share_Unit_Activity
Summary of Share Unit Activity Under Plan (Detail) (Restricted Stock And Share Units, USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Restricted Stock And Share Units | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of Units Issued and unvested, Beginning of Period | 446,036 | ' |
Number of Units - Granted | 110,605 | 142,900 |
Number of Units - Vested | -144,476 | ' |
Number of Units - Forfeited | -1,462 | ' |
Number of Units Issued and unvested, End of Period | 410,703 | ' |
Weighted-Average Grant Date Value, Beginning of Period | $26.14 | ' |
Weighted-Average Grant Date Value - Granted | $46.50 | ' |
Weighted-Average Grant Date Value - Vested | $21.63 | ' |
Weighted-Average Grant Date Value - Forfeited | $42.15 | ' |
Weighted-Average Grant Date Value, End of Period | $33.21 | ' |
Components_of_Companys_Net_Pen
Components of Company's Net Pension Expense (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Pensions [Abstract] | ' | ' | ' | ' |
Service cost | $2 | $2.30 | $5.90 | $6.80 |
Interest cost | 11.2 | 9.9 | 33.6 | 29.6 |
Expected return on plan assets | -15.1 | -15.5 | -45.3 | -46.3 |
Amortization of unrecognized loss | 8.8 | 10.6 | 26.4 | 31.5 |
Amortization of prior service cost | -0.3 | -0.3 | -0.8 | -0.7 |
Defined benefit plan expense | $6.60 | $7 | $19.80 | $20.90 |
Operations_by_Segment_Addition
Operations by Segment - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Number of reporting segments | 2 |
Schedule_of_Operating_Earnings
Schedule of Operating Earnings (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Net sales | $581.60 | $536.20 | ' | $1,729.20 | $1,594.90 | ||||
Operating earnings | 83 | 78.3 | ' | 255.8 | 228.1 | ||||
Other income (expense) | 1 | 1.1 | ' | 3.5 | 2.8 | ||||
Interest expense | -1.5 | -1.4 | ' | -4.3 | -4.5 | ||||
Earnings before income taxes | 69.3 | 61.3 | ' | 212.8 | 179.7 | ||||
Provision for income taxes | 18.7 | 15.1 | 4.2 | 58.2 | 52.4 | ||||
Net earnings | 50.6 | 46.2 | ' | 154.6 | 127.3 | ||||
Operating Segments | North America | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Net sales | 392.4 | 370.1 | ' | 1,191 | 1,137.80 | ||||
Operating earnings | 53 | [1],[2],[3] | 51.5 | [1],[2],[3] | ' | 171.5 | [1],[2],[3] | 160.6 | [1],[2],[3] |
Operating Segments | Rest of World | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Net sales | 198.5 | 175.2 | ' | 564.9 | 483 | ||||
Operating earnings | 30 | 26.9 | ' | 84.3 | 67.6 | ||||
Inter-segment elimination | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Net sales | -9.3 | -9.1 | ' | -26.7 | -25.9 | ||||
Operating earnings | ' | -0.1 | ' | ' | -0.1 | ||||
Corporate | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Other income (expense) | ($12.20) | [4] | ($15.60) | [4] | ' | ($38.70) | [4] | ($43.90) | [4] |
[1] | Includes non-operating pension costs of: $ (3.3 ) $ (3.9 ) $ (11.0 ) $ (11.1 ) | ||||||||
[2] | Includes restructuring and impairment expenses of: - (1.3 ) - (18.2 ) | ||||||||
[3] | Includes settlement income of: - - - 11.0 | ||||||||
[4] | Includes non-operating pension costs of: (1.6 ) (1.3 ) (3.7 ) (3.7 ) |
Schedule_of_Operating_Earnings1
Schedule of Operating Earnings (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Segments | Operating Segments | Operating Segments | Operating Segments | Corporate | Corporate | Corporate | Corporate | ||||
North America | North America | North America | North America | ||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-operating pension costs | ' | ' | ' | ($3.30) | ($3.90) | ($11) | ($11.10) | ($1.60) | ($1.30) | ($3.70) | ($3.70) |
Restructuring and impairment expenses | 1.3 | ' | 7.2 | ' | -1.3 | ' | -18.2 | ' | ' | ' | ' |
Settlement income | ' | $11 | ' | ' | ' | ' | $11 | ' | ' | ' | ' |
Assets_and_Liabilities_Measure
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Assets measured at fair value on recurring basis | $124.90 | $107 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Assets measured at fair value on recurring basis | 125 | 107 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Assets measured at fair value on recurring basis | ($0.10) | ' |
Schedule_of_Summary_by_Currenc
Schedule of Summary by Currency of Foreign Currency Forward Contracts (Detail) (Foreign currency forward contracts, USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Buy | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | $28.50 | $31.60 |
Buy | Euro | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | 17 | 14.8 |
Buy | Indian Rupee | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | ' | 1.5 |
Buy | Mexico, Pesos | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | 11.5 | 15.3 |
Sell | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | 88.6 | 71.2 |
Sell | British Pound | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | 1.3 | 1.9 |
Sell | Canadian Dollar | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | 85.9 | 67.1 |
Sell | Euro | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Contractual amounts of foreign currency forward contracts | $1.40 | $2.20 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (Commodity Futures Contracts) | 9 Months Ended |
Sep. 30, 2014 | |
lb | |
Commodity Futures Contracts | ' |
Trading Activity, Gains and Losses, Net [Line Items] | ' |
Reclassification period for effective portion of contract, in years | '1 year |
Commodity hedges outstanding, total weight of metals, in pounds | 1,000,000 |
Impact_of_Derivative_Contracts
Impact of Derivative Contracts on Company's Financial Statements (Detail) (Designated as Hedging Instrument, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of derivative instruments, total | $1.70 | $1.70 |
Foreign Currency Contracts | Other Current Assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of derivative instruments, liabilities | 2.9 | 1.9 |
Foreign Currency Contracts | Accrued Liabilities | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of derivative instruments, assets | ($1.20) | ($0.20) |
Effect_of_Derivative_Designate
Effect of Derivative Designated as Hedging Instruments on Statement of Earnings (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative [Line Items] | ' | ' | ' | ' |
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | $1.80 | ($0.80) | $2.60 | $0.70 |
Amount of gain/(loss) reclassified from accumulated OCI into earnings (effective portion) | 0.7 | 0.2 | 2.5 | 1.7 |
Amount of gain/(loss) recognized in earnings on a derivative (ineffective portion) | ' | ' | ' | ' |
Foreign Currency Contracts | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | 1.8 | -0.8 | 2.6 | 0.8 |
Amount of gain/(loss) recognized in earnings on a derivative (ineffective portion) | ' | ' | ' | ' |
Foreign Currency Contracts | Cost Of Products Sold | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Amount of gain/(loss) reclassified from accumulated OCI into earnings (effective portion) | 0.7 | 0.3 | 2.5 | 1.8 |
Commodities Contracts | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | ' | ' | ' | -0.1 |
Commodities Contracts | Cost Of Products Sold | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Amount of gain/(loss) reclassified from accumulated OCI into earnings (effective portion) | ' | -0.1 | ' | -0.1 |
Amount of gain/(loss) recognized in earnings on a derivative (ineffective portion) | ' | ' | ' | ' |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
U.S. federal | U.S. federal | Scenario, Forecast | Scenario, Forecast | State and local | State and local | Non-U.S. | Non-U.S. | ||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective tax rate | 27.00% | 27.30% | 28.20% | ' | ' | 27.00% | 28.00% | ' | ' | ' | ' |
Unrecognized tax benefits | $1.30 | $1.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized tax benefits that would affect the effective tax rate, if recognized | $0.90 | $0.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax examinations, years under examination | ' | ' | ' | '2011 | '2013 | ' | ' | '2000 | '2013 | '2006 | '2013 |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Loss by Component (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | ' | ' | ($259.10) | ' | ||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.3 and $0.3 in 2014 and 2013, respectively) | 0.7 | 0.2 | 2.5 | 1.7 | ||||
Accumulated Other Comprehensive Income loss Ending Balance | -254.5 | -309.3 | -254.5 | -309.3 | ||||
Cumulative Foreign Currency Translation | ' | ' | ' | ' | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | 12.2 | 13.9 | 19.9 | 19.5 | ||||
Other comprehensive (loss) earnings before reclassifications | -1.5 | 3.6 | -9.2 | -2 | ||||
Accumulated Other Comprehensive Income loss Ending Balance | 10.7 | 17.5 | 10.7 | 17.5 | ||||
Unrealized Net Gain on Cash Flow Derivatives | ' | ' | ' | ' | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | 0.4 | 0.5 | 1 | 0.7 | ||||
Other comprehensive (loss) earnings before reclassifications | 1.1 | -0.4 | 1.6 | 0.4 | ||||
Realized gains on derivatives reclassified to cost of products sold (net of tax provision of $0.3 and $0.3 in 2014 and 2013, respectively) | -0.4 | -0.1 | -1.5 | -1.1 | ||||
Accumulated Other Comprehensive Income loss Ending Balance | 1.1 | ' | 1.1 | ' | ||||
Pension Liability | ' | ' | ' | ' | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | -271.5 | -333.1 | -280 | -340.7 | ||||
Other comprehensive (loss) earnings before reclassifications | -0.1 | ' | -2.1 | -5 | ||||
Amounts reclassified from accumulated other comprehensive loss: | 5.3 | [1] | 6.3 | [1] | 15.8 | [2] | 18.9 | [2] |
Accumulated Other Comprehensive Income loss Ending Balance | ($266.30) | ($326.80) | ($266.30) | ($326.80) | ||||
[1] | Amortization of pension items: Actuarial losses $ 8.8 (2) $ 10.6 (2) Prior year service cost (0.3 ) (2) (0.3 ) (2) 8.5 10.3 Tax benefit (3.2 ) (4.0 ) Reclassification net of tax $ 5.3 $ 6.3 | |||||||
[2] | Amortization of pension items: Actuarial losses $ 26.4 (2) $ 31.5 (2) Prior year service cost (0.8 ) (2) (0.7 ) (2) 25.6 30.8 Tax benefit (9.8 ) (11.9 ) Reclassification net of tax $ 15.8 $ 18.9 |
Changes_in_Accumulated_Other_C3
Changes in Accumulated Other Comprehensive Loss by Component (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Amortization of actuarial losses | ($8.80) | ($10.60) | ($26.40) | ($31.50) | ||||
Amortization of prior year service cost | 0.3 | 0.3 | 0.8 | 0.7 | ||||
Reclassification net of tax | 5.2 | 6.3 | 13.7 | 13.9 | ||||
Reclassification out of Accumulated Other Comprehensive Income | ' | ' | ' | ' | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Amortization of actuarial losses | 8.8 | [1] | 10.6 | [1] | 26.4 | [1] | 31.5 | [1] |
Amortization of prior year service cost | -0.3 | [1] | -0.3 | [1] | -0.8 | [1] | -0.7 | [1] |
Other Comprehensive Income Defined Benefit Plans Adjustment Change In Period | 8.5 | 10.3 | 25.6 | 30.8 | ||||
Tax benefit | -3.2 | -4 | -9.8 | -11.9 | ||||
Reclassification net of tax | 5.3 | 6.3 | 15.8 | 18.9 | ||||
Unrealized Net Gain on Cash Flow Derivatives | ' | ' | ' | ' | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' | ||||
Realized losses on derivatives reclassified to cost of products sold, tax effect | $0.30 | $0.30 | $0.70 | $0.50 | ||||
[1] | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 9-Pensions for additional details |