Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AOS | |
Entity Registrant Name | SMITH A O CORP | |
Entity Central Index Key | 91142 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 76,047,352 | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 13,153,138 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net sales | $618.50 | $552.20 |
Cost of products sold | 389.3 | 356.3 |
Gross profit | 229.2 | 195.9 |
Selling, general and administrative expenses | 147.2 | 130.9 |
Interest expense | 1.9 | 1.4 |
Other income | -2.7 | -1.3 |
Earnings before income taxes | 82.8 | 64.9 |
Provision for income taxes | 24.4 | 18.2 |
Net Earnings | $58.40 | $46.70 |
Net Earnings Per Share of Common Stock | $0.65 | $0.51 |
Diluted Net Earnings Per Share of Common Stock | $0.65 | $0.51 |
Dividends Per Share of Common Stock | $0.19 | $0.15 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net earnings | $58.40 | $46.70 |
Other comprehensive earnings (loss) | ||
Foreign currency translation adjustments | -9.3 | -10.4 |
Unrealized net gain on cash flow derivative instruments, less related income tax provision of $(0.8) in 2015 and $(0.5) in 2014 | 1.2 | 0.9 |
Adjustment to pension liability, less related income tax provision of $(1.8) in 2015 and $(3.3) in 2014 | 2.5 | 5.3 |
Comprehensive Earnings | $52.80 | $42.50 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Unrealized net gain on cash flow derivative instruments, related income tax provision | ($0.80) | ($0.50) |
Adjustment to pension liability, related income tax provision | ($1.80) | ($3.30) |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $284.10 | $319.40 |
Marketable securities | 290.8 | 222.5 |
Receivables | 495.9 | 475.4 |
Inventories | 218.8 | 208.3 |
Deferred income taxes | 39.4 | 40.5 |
Other current assets | 47.3 | 52.9 |
Total Current Assets | 1,376.30 | 1,319 |
Property, plant and equipment | 826.8 | 815.9 |
Less accumulated depreciation | -396.4 | -388.2 |
Net property, plant and equipment | 430.4 | 427.7 |
Goodwill | 424.6 | 428.8 |
Other intangibles | 303.3 | 308.5 |
Other assets | 30.7 | 31.3 |
Total Assets | 2,565.30 | 2,515.30 |
Liabilities | ||
Trade payables | 368.4 | 393.8 |
Accrued payroll and benefits | 50.1 | 70.3 |
Accrued liabilities | 86.2 | 85.1 |
Product warranties | 42.5 | 42.3 |
Debt due within one year | 48.6 | 13.7 |
Total Current Liabilities | 595.8 | 605.2 |
Long-term debt | 255.3 | 210.1 |
Pension liabilities | 128.9 | 133.1 |
Other liabilities | 180.2 | 185.6 |
Total Liabilities | 1,160.20 | 1,134 |
Stockholders' Equity | ||
Capital in excess of par value | 607.7 | 600.1 |
Retained earnings | 1,176.90 | 1,135.50 |
Accumulated other comprehensive loss | -277.6 | -272 |
Treasury stock at cost | -250.1 | -230.5 |
Total Stockholders' Equity | 1,405.10 | 1,381.30 |
Total Liabilities and Stockholders' Equity | 2,565.30 | 2,515.30 |
Common Stock | ||
Stockholders' Equity | ||
Common Stock,value | 82.1 | 82.1 |
Common Class A | ||
Stockholders' Equity | ||
Common Stock,value | $66.10 | $66.10 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Common Stock | ||
Common Stock, par value | $1 | $1 |
Common Stock, authorized | 120,000,000 | 120,000,000 |
Common Stock, shares issued | 82,135,460 | 82,133,326 |
Common Class A | ||
Common Stock, par value | $5 | $5 |
Common Stock, authorized | 14,000,000 | 14,000,000 |
Common Stock, shares issued | 13,218,336 | 13,220,470 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Activities | ||
Net earnings | $58.40 | $46.70 |
Adjustments to reconcile net earnings to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15.6 | 14.8 |
Pension expense | 6.6 | |
Loss on disposal of assets | 0.2 | 0.4 |
Net changes in operating assets and liabilities: | ||
Current assets and liabilities | -70.8 | -56.7 |
Noncurrent assets and liabilities | -6.6 | 0.5 |
Cash (Used in) Provided by Operating Activities - continuing operations | -3.2 | 12.3 |
Cash Used in Operating Activities - discontinued operations | -0.2 | -0.5 |
Cash (Used in) Provided by Operating Activities | -3.4 | 11.8 |
Investing Activities | ||
Capital expenditures | -14.9 | -25.3 |
Investments in marketable securities | -121.9 | -33.7 |
Net proceeds from sale of marketable securities | 54 | 33.6 |
Cash Used in Investing Activities | -82.8 | -25.4 |
Financing Activities | ||
Debt incurred | 81.9 | 36.2 |
Common stock repurchases | -20.7 | -21.3 |
Net proceeds from stock option activity | 6.8 | 1.6 |
Dividends paid | -17.1 | -13.8 |
Cash Provided by Financing Activities | 50.9 | 2.7 |
Net decrease in cash and cash equivalents | -35.3 | -10.9 |
Cash and cash equivalents - beginning of period | 319.4 | 380.7 |
Cash and Cash Equivalents - End of Period | $284.10 | $369.80 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | ||
Mar. 31, 2015 | |||
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 month period ended March 31, 2015 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 Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on February 17, 2015. | |||
Recent Accounting Pronouncements | |||
In May 2014, the Financial Accounting Standards Board (FASB) issued 606-10, Revenue from Contracts with Customers (issued under Accounting Standards No. 2014-09). Accounting Standard Codification (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. | |||
In April 2015, the FASB amended ASC 835-30, Interest - Imputation of Interest (issued under Accounting Standards No. 2015-03). This amendment to ASC 835-30 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. The amendment is effective for the year beginning January 1, 2016 and requires using a retrospective approach. The Company does not expect the adoption of amended ASC 835-30 will have an impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventories | 2 | Inventories | |||||||
(dollars in millions) | |||||||||
March 31, 2015 | December 31, 2014 | ||||||||
Finished products | $ | 108.7 | $ | 100.2 | |||||
Work in process | 11.1 | 10.7 | |||||||
Raw materials | 122.9 | 121.3 | |||||||
Inventories, at FIFO cost | 242.7 | 232.2 | |||||||
LIFO reserve | (23.9 | ) | (23.9 | ) | |||||
Net inventory | $ | 218.8 | $ | 208.3 | |||||
Product_Warranties
Product Warranties | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Product Warranties | 3 | 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. | |||||||||
(dollars in millions) | |||||||||
2015 | 2014 | ||||||||
Balance at January 1 | $ | 136.2 | $ | 136.6 | |||||
Expense | 17.2 | 16.6 | |||||||
Claims settled | (16.2 | ) | (17.3 | ) | |||||
Balance at March 31 | $ | 137.2 | $ | 135.9 | |||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||
Mar. 31, 2015 | |||
Long-Term Debt | 4 | Long-Term Debt | |
The Company has a $400 million multi-currency revolving credit agreement with a group of 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 March 31, 2015. | |||
On January 15, 2015, the Company issued $75 million in term notes to an insurance company. Principal payments commence in 2020 and the notes mature in 2030. The notes have an interest rate of 3.52 percent. The proceeds of the notes were used to pay down borrowings under the Company’s revolving credit facility. |
Earnings_per_Share_of_Common_S
Earnings per Share of Common Stock | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings per Share of Common Stock | 5 | 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 March 31, | |||||||||
2015 | 2014 | ||||||||
Denominator for basic earnings per share - weighted average shares | 89,436,496 | 91,230,882 | |||||||
Effect of dilutive stock options, restricted stock and share units | 730,429 | 735,113 | |||||||
Denominator for diluted earnings per share | 90,166,925 | 91,965,995 | |||||||
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Stock Based Compensation | 6 | Stock Based Compensation | |||||||||||||
The Company adopted the A. O. Smith Combined Incentive Compensation Plan (the “plan”) effective January 1, 2007. The plan was reapproved by stockholders 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 or share units at March 31, 2015 was 2,007,854. Upon stock option exercise or share unit vesting, shares are issued from treasury stock. | |||||||||||||||
Total stock based compensation expense recognized in the three months ended March 31, 2015 and 2014 was $5.6 million and $5.8 million, respectively. | |||||||||||||||
Stock Options | |||||||||||||||
The stock options granted in the three months ended March 31, 2015 and 2014, 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 2015 and 2014 expire ten years after date of grant. The Company’s stock options are expensed ratably over the three year vesting period; however, included in stock option expense for the three months ended March 31, 2015 and 2014 is expense associated with the accelerated vesting of stock option awards for certain employees who either are retirement eligible or become etirement eligible during the vesting period. Stock based compensation cost attributable to stock options in the three months ended March 31, 2015 and 2014 was $2.5 million and $2.8 million, respectively. | |||||||||||||||
Changes in option awards, all of which relate to Common Stock, were as follows for the three months ended March 31, 2015: | |||||||||||||||
Weighted-Avg. | Number of | Average | Aggregate | ||||||||||||
Per Share | Options | Remaining | Intrinsic Value | ||||||||||||
Exercise Price | Contractual | (dollars in millions) | |||||||||||||
Life | |||||||||||||||
Outstanding at January 1, 2015 | $ | 27.5 | 1,577,003 | ||||||||||||
Granted | 61.53 | 242,495 | |||||||||||||
Exercised | 20.99 | (231,059 | ) | ||||||||||||
Outstanding at March 31, 2015 | 33.6 | 1,588,439 | 6 years | $ | 40.8 | ||||||||||
Exercisable at March 31, 2015 | 24.45 | 1,036,873 | 4 years | $ | 36 | ||||||||||
The weighted-average fair value per option at the date of grant during the three months ended March 31, 2015 and 2014 using the Black-Scholes option-pricing model was $17.17 and $16.55, respectively. Assumptions were as follows: | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Expected life (years) | 5.9 | 6 | |||||||||||||
Risk-free interest rate | 2 | % | 2.7 | % | |||||||||||
Dividend yield | 1 | % | 1.1 | % | |||||||||||
Expected volatility | 29.3 | % | 36.6 | % | |||||||||||
The expected life is based on historical exercise behavior and the projected exercises 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 respective expected life of the option. The expected dividend yield is based on the expected annual dividends divided by the grant date market value of the Common Stock. The expected volatility is based on the historical volatility of the Common Stock. | |||||||||||||||
Stock Appreciations Rights (SARs) | |||||||||||||||
Certain non-U.S.-based employees are granted SARs. Each SAR award grants the employee the right to receive cash equal to the excess of the share price of the Common Stock on the date that a participant exercises such right over the grant date price of the stock. SARs granted in the three months ended March 31, 2015 have three year pro rata vesting from the date of grant. SARs are issued at exercise prices equal to the fair value of Common Stock on the date of grant and expire ten years from the date of grant. Compensation expense for SARs is remeasured at each reporting period based on the estimated fair value on the date of grant using the Black-Scholes option-pricing model, using assumptions similar to stock option awards. SARs are subsequently remeasured at each interim reporting period based on a revised Black-Scholes value. In the first three months of 2015, the Company granted 10,390 cash-settled SARs and no SARs were exercisable. | |||||||||||||||
Restricted Stock and Share Units | |||||||||||||||
Participants may also be awarded shares of restricted stock or share units under the plan. The Company granted 75,315 and 110,310 share units under the plan in the three months ended March 31, 2015 and 2014, respectively. The share units were valued at $4.6 million and $5.1 million at the date of issuance in 2015 and 2014, respectively, based on the price of the Common Stock at the date of grant. The share units are recognized as compensation expense ratably over the three-year vesting period; however, included in share unit expense in the three months ended March 31, 2015 and 2014 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. Stock based compensation expense attributable to share units of $3.1 million and $3.0 million was recognized in the three months ended March 31, 2015 and 2014, respectively. Certain non-U.S.-based employees receive the cash value of vested shares at the vesting date in lieu of shares. | |||||||||||||||
A summary of share unit activity under the plan is as follows for the three months ended March 31, 2015: | |||||||||||||||
Number of Units | Weighted-Average | ||||||||||||||
Grant Date Value | |||||||||||||||
Issued and unvested at January 1, 2015 | 416,289 | $ | 33.06 | ||||||||||||
Granted | 75,315 | 61.53 | |||||||||||||
Vested | (154,548 | ) | 22.9 | ||||||||||||
Forfeited | (635 | ) | 35.44 | ||||||||||||
Issued and unvested at March 31, 2015 | 336,421 | 44.1 | |||||||||||||
Pensions
Pensions | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Pensions | 7 | Pensions | |||||||
The following table presents the components of the Company’s net pension expense. | |||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Service cost | $ | 0.5 | $ | 2.1 | |||||
Interest cost | 9.4 | 11 | |||||||
Expected return on plan assets | (14.3 | ) | (15.0 | ) | |||||
Amortization of unrecognized loss | 4.7 | 8.8 | |||||||
Amortization of prior service cost | (0.3 | ) | (0.3 | ) | |||||
Defined benefit plan expense | $ | — | $ | 6.6 | |||||
The Company’s pension plan sunset for the majority of its employees on December 31, 2014. | |||||||||
The Company did not make a contribution to its U.S. pension plan in 2014. The Company is not required to make a contribution and does not anticipate making a contribution in 2015. |
Operations_by_Segment
Operations by Segment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Operations by Segment | 8 | 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 gas, gas tankless and electric water heaters and commercial water heating equipment. Both segments primarily serve their respective regions of the world. The North America segment also manufactures and 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 and markets air purifier products, primarily in Asia. | |||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
North America | $ | 429.2 | $ | 388.5 | |||||
Rest of World | 195.9 | 172.8 | |||||||
Inter-segment sales | (6.6 | ) | (9.1 | ) | |||||
$ | 618.5 | $ | 552.2 | ||||||
Operating earnings | |||||||||
North America | $ | 71.2 | $ | 55.3 | |||||
Rest of World | 26.2 | 25.1 | |||||||
97.4 | 80.4 | ||||||||
Corporate expenses | (12.7 | ) | (14.1 | ) | |||||
Interest expense | (1.9 | ) | (1.4 | ) | |||||
Earnings before income taxes | 82.8 | 64.9 | |||||||
Provision for income taxes | 24.4 | 18.2 | |||||||
Net earnings | $ | 58.4 | $ | 46.7 | |||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value Measurements | 9 | Fair Value Measurements | |||||||
ASC 820, Fair Value Measurements, 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 measured at fair value on a recurring basis are as follows (dollars in millions): | |||||||||
Fair Value Measurement Using | March 31, 2015 | December 31, 2014 | |||||||
Quoted prices in active markets for identical assets (Level 1) | $ | 294.5 | $ | 224.1 | |||||
Significant other observable inputs (Level 2) | (0.3 | ) | (0.2 | ) | |||||
Total assets measured at fair value | $ | 294.2 | $ | 223.9 | |||||
There were no changes in our valuation techniques used to measure fair values on a recurring basis during the three months ended March 31, 2015. |
Derivative_Instruments
Derivative Instruments | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Derivative Instruments | 10 | 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, a cash flow hedge, or a hedge of a net investment in a foreign operation. | |||||||||||||||||||||||||||||
The Company designates that all of its hedging instruments, with the exception of its steel futures contracts, 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 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. | |||||||||||||||||||||||||||||
The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts. | |||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Buy | Sell | Buy | Sell | ||||||||||||||||||||||||||
British pound | $ | — | $ | 0.7 | $ | — | $ | 1.3 | |||||||||||||||||||||
Canadian dollar | — | 69.2 | — | 54.5 | |||||||||||||||||||||||||
Euro | 24.6 | 0.8 | 7 | 1.2 | |||||||||||||||||||||||||
Mexican peso | 14 | — | 11.5 | — | |||||||||||||||||||||||||
Total | $ | 38.6 | $ | 70.7 | $ | 18.5 | $ | 57 | |||||||||||||||||||||
Commodity Futures Contracts | |||||||||||||||||||||||||||||
In addition to entering into supply arrangements in the normal course of business, the Company also entered 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 commodities futures contracts on the open market of the London Metals Exchange (LME) or over the counter contracts based on the LME for copper. Additionally, steel futures contracts were purchased on the New York Metals Exchange (NYMEX). | |||||||||||||||||||||||||||||
With NYMEX, the Company is required to make cash deposits on unrealized losses on steel derivative contracts. | |||||||||||||||||||||||||||||
The minimal after-tax loss of the effective portion of the copper contracts as of March 31, 2015 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. The steel contracts did not qualify for hedge accounting and were adjusted to fair value through earnings. Commodity hedges outstanding at March 31, 2015 involved a total of approximately 1.1 million pounds of copper. There were no steel futures contracts outstanding at March 31, 2015. | |||||||||||||||||||||||||||||
The impact of derivative contracts on the Company’s financial statements is as follows: | |||||||||||||||||||||||||||||
Fair value of derivatives designated as hedging instruments under ASC 815: | |||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||
Balance Sheet Location | March 31, | December 31, | |||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 8.8 | $ | 4.6 | ||||||||||||||||||||||||
Accrued liabilities | (5.1 | ) | (3.0 | ) | |||||||||||||||||||||||||
Commodities contracts | Accrued liabilities | (0.3 | ) | (0.2 | ) | ||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 3.4 | $ | 1.4 | |||||||||||||||||||||||||
The effect of derivatives instruments on the condensed consolidated statement of earnings: | |||||||||||||||||||||||||||||
Three Months Ended March 31 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in ASC 815 cash flow hedging relationships | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
(loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | |||||||||||||||||||||||||
recognized in | reclassified | from accumulated | recognized in | recognized in | |||||||||||||||||||||||||
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) | |||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 3.4 | $ | 2.6 | Cost of | $ | 1.4 | $ | 1 | N/A | $ | — | $ | — | |||||||||||||||
products sold | |||||||||||||||||||||||||||||
Commodities contracts | — | (0.2 | ) | Cost of | — | — | Cost of | (0.1 | ) | — | |||||||||||||||||||
products sold | products sold | ||||||||||||||||||||||||||||
$ | 3.4 | $ | 2.4 | $ | 1.4 | $ | 1 | $ | (0.1 | ) | $ | — | |||||||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended | ||
Mar. 31, 2015 | |||
Income Taxes | 11 | Income Taxes | |
The effective income tax rate for the three months ended March 31, 2015 was 29.5 percent compared to 28.0 percent for the first three months of 2014. The Company estimates that its annual effective income tax rate for the full year of 2015 will be between 29.0 and 30.0 percent. The full year effective income tax rate in 2014 was 27.5 percent. The higher effective income tax rate in the first three months of 2015 was primarily due to a change in geographic earnings mix in the first three months of 2015 compared to the first three months of 2014. | |||
As of March 31, 2015, the Company had $1.2 million of unrecognized tax benefits of which $0.8 million would affect its effective income tax rate if recognized. The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. | |||
The Company’s U.S. federal income tax returns for 2011-2014 are subject to audit. The Company is subject to state and local income tax audits for tax years 2000-2014. The Company is subject to non-U.S. income tax examinations for years 2006-2014. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Loss by Component | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Changes in Accumulated Other Comprehensive Loss by Component | 12 | Changes in Accumulated Other Comprehensive Loss by Component | |||||||
Changes to accumulated other comprehensive loss by component are as follows: | |||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Cumulative foreign currency translation | |||||||||
Balance at beginning of period | $ | 3.3 | $ | 19.9 | |||||
Other comprehensive loss before reclassifications | (9.3 | ) | (10.4 | ) | |||||
Balance at end of period | (6.0 | ) | 9.5 | ||||||
Unrealized net gain on cash flow derivatives | |||||||||
Balance at beginning of period | 0.9 | 1 | |||||||
Other comprehensive earnings before reclassifications | 2.1 | 1.5 | |||||||
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $0.5 and $0.4 in 2015 and 2014, respectively) | (0.9 | ) | (0.6 | ) | |||||
Balance at end of period | 2.1 | 1.9 | |||||||
Pension liability | |||||||||
Balance at beginning of period | (276.2 | ) | (280.0 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 2.5 | 5.3 | |||||||
Balance at end of period | (273.7 | ) | (274.7 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (277.6 | ) | $ | (263.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 4.6 | (2) | $ | 8.9 | (2) | |||
Prior year service cost | (0.3 | ) (2) | (0.3 | ) (2) | |||||
4.3 | 8.6 | ||||||||
Income tax benefit | (1.8 | ) | (3.3 | ) | |||||
Reclassification net of income tax benefit | $ | 2.5 | $ | 5.3 | |||||
(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 7 - Pensions for additional details |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board (FASB) issued 606-10, Revenue from Contracts with Customers (issued under Accounting Standards No. 2014-09). Accounting Standard Codification (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. | |
In April 2015, the FASB amended ASC 835-30, Interest - Imputation of Interest (issued under Accounting Standards No. 2015-03). This amendment to ASC 835-30 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. The amendment is effective for the year beginning January 1, 2016 and requires using a retrospective approach. The Company does not expect the adoption of amended ASC 835-30 will have an impact on the Company’s consolidated financial condition, results of operations or cash flows. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Schedule of Inventories | |||||||||
(dollars in millions) | |||||||||
March 31, 2015 | December 31, 2014 | ||||||||
Finished products | $ | 108.7 | $ | 100.2 | |||||
Work in process | 11.1 | 10.7 | |||||||
Raw materials | 122.9 | 121.3 | |||||||
Inventories, at FIFO cost | 242.7 | 232.2 | |||||||
LIFO reserve | (23.9 | ) | (23.9 | ) | |||||
Net inventory | $ | 218.8 | $ | 208.3 | |||||
Product_Warranties_Tables
Product Warranties (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Schedule of Product Warranty Liability Activity | The following table presents the Company’s warranty liability activity. | ||||||||
(dollars in millions) | |||||||||
2015 | 2014 | ||||||||
Balance at January 1 | $ | 136.2 | $ | 136.6 | |||||
Expense | 17.2 | 16.6 | |||||||
Claims settled | (16.2 | ) | (17.3 | ) | |||||
Balance at March 31 | $ | 137.2 | $ | 135.9 | |||||
Earnings_per_Share_of_Common_S1
Earnings per Share of Common Stock (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 March 31, | |||||||||
2015 | 2014 | ||||||||
Denominator for basic earnings per share - weighted average shares | 89,436,496 | 91,230,882 | |||||||
Effect of dilutive stock options, restricted stock and share units | 730,429 | 735,113 | |||||||
Denominator for diluted earnings per share | 90,166,925 | 91,965,995 | |||||||
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Schedule of Changes in Option Shares | Changes in option awards, all of which relate to Common Stock, were as follows for the three months ended March 31, 2015: | ||||||||||||||
Weighted-Avg. | Number of | Average | Aggregate | ||||||||||||
Per Share | Options | Remaining | Intrinsic Value | ||||||||||||
Exercise Price | Contractual | (dollars in millions) | |||||||||||||
Life | |||||||||||||||
Outstanding at January 1, 2015 | $ | 27.5 | 1,577,003 | ||||||||||||
Granted | 61.53 | 242,495 | |||||||||||||
Exercised | 20.99 | (231,059 | ) | ||||||||||||
Outstanding at March 31, 2015 | 33.6 | 1,588,439 | 6 years | $ | 40.8 | ||||||||||
Exercisable at March 31, 2015 | 24.45 | 1,036,873 | 4 years | $ | 36 | ||||||||||
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 three months ended March 31, 2015 and 2014 using the Black-Scholes option-pricing model was $17.17 and $16.55, respectively. Assumptions were as follows: | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Expected life (years) | 5.9 | 6 | |||||||||||||
Risk-free interest rate | 2 | % | 2.7 | % | |||||||||||
Dividend yield | 1 | % | 1.1 | % | |||||||||||
Expected volatility | 29.3 | % | 36.6 | % | |||||||||||
Schedule of Share Unit Activity Under Plan | A summary of share unit activity under the plan is as follows for the three months ended March 31, 2015: | ||||||||||||||
Number of Units | Weighted-Average | ||||||||||||||
Grant Date Value | |||||||||||||||
Issued and unvested at January 1, 2015 | 416,289 | $ | 33.06 | ||||||||||||
Granted | 75,315 | 61.53 | |||||||||||||
Vested | (154,548 | ) | 22.9 | ||||||||||||
Forfeited | (635 | ) | 35.44 | ||||||||||||
Issued and unvested at March 31, 2015 | 336,421 | 44.1 | |||||||||||||
Pensions_Tables
Pensions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Schedule of Components of Net Pension Expense | The following table presents the components of the Company’s net pension expense. | ||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Service cost | $ | 0.5 | $ | 2.1 | |||||
Interest cost | 9.4 | 11 | |||||||
Expected return on plan assets | (14.3 | ) | (15.0 | ) | |||||
Amortization of unrecognized loss | 4.7 | 8.8 | |||||||
Amortization of prior service cost | (0.3 | ) | (0.3 | ) | |||||
Defined benefit plan expense | $ | — | $ | 6.6 | |||||
Operations_by_Segment_Tables
Operations by Segment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Schedule of Operating Earnings | |||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales | |||||||||
North America | $ | 429.2 | $ | 388.5 | |||||
Rest of World | 195.9 | 172.8 | |||||||
Inter-segment sales | (6.6 | ) | (9.1 | ) | |||||
$ | 618.5 | $ | 552.2 | ||||||
Operating earnings | |||||||||
North America | $ | 71.2 | $ | 55.3 | |||||
Rest of World | 26.2 | 25.1 | |||||||
97.4 | 80.4 | ||||||||
Corporate expenses | (12.7 | ) | (14.1 | ) | |||||
Interest expense | (1.9 | ) | (1.4 | ) | |||||
Earnings before income taxes | 82.8 | 64.9 | |||||||
Provision for income taxes | 24.4 | 18.2 | |||||||
Net earnings | $ | 58.4 | $ | 46.7 | |||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets measured at fair value on a recurring basis are as follows (dollars in millions): | ||||||||
Fair Value Measurement Using | March 31, 2015 | December 31, 2014 | |||||||
Quoted prices in active markets for identical assets (Level 1) | $ | 294.5 | $ | 224.1 | |||||
Significant other observable inputs (Level 2) | (0.3 | ) | (0.2 | ) | |||||
Total assets measured at fair value | $ | 294.2 | $ | 223.9 | |||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Schedule of Effect of Derivatives Instruments on Condensed Consolidated Statement of Earning | The effect of derivatives instruments on the condensed consolidated statement of earnings: | ||||||||||||||||||||||||||||
Three Months Ended March 31 (dollars in millions): | |||||||||||||||||||||||||||||
Derivatives in ASC 815 cash flow hedging relationships | Amount of gain | Location of | Amount of gain | Location of | Amount of | ||||||||||||||||||||||||
(loss) | gain (loss) | (loss) reclassified | gain (loss) | gain (loss) | |||||||||||||||||||||||||
recognized in | reclassified | from accumulated | recognized in | recognized in | |||||||||||||||||||||||||
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) | |||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Foreign currency contracts | $ | 3.4 | $ | 2.6 | Cost of | $ | 1.4 | $ | 1 | N/A | $ | — | $ | — | |||||||||||||||
products sold | |||||||||||||||||||||||||||||
Commodities contracts | — | (0.2 | ) | Cost of | — | — | Cost of | (0.1 | ) | — | |||||||||||||||||||
products sold | products sold | ||||||||||||||||||||||||||||
$ | 3.4 | $ | 2.4 | $ | 1.4 | $ | 1 | $ | (0.1 | ) | $ | — | |||||||||||||||||
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. | ||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Buy | Sell | Buy | Sell | ||||||||||||||||||||||||||
British pound | $ | — | $ | 0.7 | $ | — | $ | 1.3 | |||||||||||||||||||||
Canadian dollar | — | 69.2 | — | 54.5 | |||||||||||||||||||||||||
Euro | 24.6 | 0.8 | 7 | 1.2 | |||||||||||||||||||||||||
Mexican peso | 14 | — | 11.5 | — | |||||||||||||||||||||||||
Total | $ | 38.6 | $ | 70.7 | $ | 18.5 | $ | 57 | |||||||||||||||||||||
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 ASC 815: | |||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||
Balance Sheet Location | March 31, | December 31, | |||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 8.8 | $ | 4.6 | ||||||||||||||||||||||||
Accrued liabilities | (5.1 | ) | (3.0 | ) | |||||||||||||||||||||||||
Commodities contracts | Accrued liabilities | (0.3 | ) | (0.2 | ) | ||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 3.4 | $ | 1.4 | |||||||||||||||||||||||||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Changes to Accumulated Other Comprehensive Loss by Component | Changes to accumulated other comprehensive loss by component are as follows: | ||||||||
(dollars in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Cumulative foreign currency translation | |||||||||
Balance at beginning of period | $ | 3.3 | $ | 19.9 | |||||
Other comprehensive loss before reclassifications | (9.3 | ) | (10.4 | ) | |||||
Balance at end of period | (6.0 | ) | 9.5 | ||||||
Unrealized net gain on cash flow derivatives | |||||||||
Balance at beginning of period | 0.9 | 1 | |||||||
Other comprehensive earnings before reclassifications | 2.1 | 1.5 | |||||||
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $0.5 and $0.4 in 2015 and 2014, respectively) | (0.9 | ) | (0.6 | ) | |||||
Balance at end of period | 2.1 | 1.9 | |||||||
Pension liability | |||||||||
Balance at beginning of period | (276.2 | ) | (280.0 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss: (1) | 2.5 | 5.3 | |||||||
Balance at end of period | (273.7 | ) | (274.7 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (277.6 | ) | $ | (263.3 | ) | |||
(1) Amortization of pension items: | |||||||||
Actuarial losses | $ | 4.6 | (2) | $ | 8.9 | (2) | |||
Prior year service cost | (0.3 | ) (2) | (0.3 | ) (2) | |||||
4.3 | 8.6 | ||||||||
Income tax benefit | (1.8 | ) | (3.3 | ) | |||||
Reclassification net of income tax benefit | $ | 2.5 | $ | 5.3 | |||||
(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 7 - Pensions for additional details |
Schedule_of_Inventories_Detail
Schedule of Inventories (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventories | ||
Finished products | $108.70 | $100.20 |
Work in process | 11.1 | 10.7 |
Raw materials | 122.9 | 121.3 |
Inventories, at FIFO cost | 242.7 | 232.2 |
LIFO reserve | -23.9 | -23.9 |
Net inventory | $218.80 | $208.30 |
Companys_Warranty_Liability_Ac
Company's Warranty Liability Activity (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Product Warranties | ||
Balance at beginning of year | $136.20 | $136.60 |
Expense | 17.2 | 16.6 |
Claims settled | -16.2 | -17.3 |
Balance at end of year | $137.20 | $135.90 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Jan. 15, 2015 |
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 | |
Term Notes Issued to Insurance Company | ||
Debt Instrument [Line Items] | ||
Debt instrument, issued | $75 | |
Debt instrument, principle repayment commencement year | 2020 | |
Debt instrument, interest rate | 3.52% | |
Debt instrument, maturity year | 2030 |
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 | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Earnings Per Share Of Common Stock | ||
Denominator for basic earnings per share - weighted average shares | 89,436,496 | 91,230,882 |
Effect of dilutive stock options, restricted stock and share units | 730,429 | 735,113 |
Denominator for diluted earnings per share | 90,166,925 | 91,965,995 |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock based compensation expense recognized | $5.60 | $5.80 |
Stock option compensation recognized | 2.5 | 2.8 |
Weighted-average fair value per option at the date of grant | $17.17 | $16.55 |
Number of Options, Granted | 242,495 | |
Number of Options, Exercisable at End of Period | 1,036,873 | |
Share based compensation expense attributable to share units | 3.1 | 3 |
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 | 75,315 | 110,310 |
Value of share units at the date of issuance | $4.60 | $5.10 |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Award expiration period | 10 years | |
Number of Options, Granted | 10,390 | |
Number of Options, Exercisable at End of Period | 0 | |
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 | 2,007,854 |
Changes_in_Option_Awards_All_o
Changes in Option Awards All of Which Related to Common Stock (Detail) (USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-Average Per Share Exercise Price, beginning period | $27.50 |
Weighted-Average Per Share Exercise Price - Granted | $61.53 |
Weighted-Average Per Share Exercise Price - Exercised | $20.99 |
Weighted-Average Per Share Exercise Price, ending period | $33.60 |
Weighted-Average Per Share Exercise Price, Exercisable | $24.45 |
Number of Options Outstanding, Beginning Balance | 1,577,003 |
Number of Options, Granted | 242,495 |
Number of Options, Exercised | -231,059 |
Number of Options Outstanding, Ending Balance | 1,588,439 |
Number of Options, Exercisable at End of Period | 1,036,873 |
Average Remaining Contractual Life, Outstanding at End of Period, Years | 6 years |
Average Remaining Contractual Life, Exercisable at End of Period, Years | 4 years |
Aggregate Intrinsic Value, Outstanding at End of Period | $40.80 |
Aggregate Intrinsic Value, Exercisable at End of Period | $36 |
Schedule_of_WeightedAverage_Fa
Schedule of Weighted-Average Fair Value per Option at Date of Grant (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Stock Based Compensation [Abstract] | ||
Expected life (years) | 5 years 10 months 24 days | 6 years |
Risk-free interest rate | 2.00% | 2.70% |
Dividend yield | 1.00% | 1.10% |
Expected volatility | 29.30% | 36.60% |
Summary_of_Share_Unit_Activity
Summary of Share Unit Activity Under Plan (Detail) (Restricted Stock And Share Units, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
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 | 416,289 | |
Number of Units - Granted | 75,315 | 110,310 |
Number of Units - Vested | -154,548 | |
Number of Units - Forfeited | -635 | |
Number of Units Issued and unvested, End of Period | 336,421 | |
Weighted-Average Grant Date Value, Beginning of Period | $33.06 | |
Weighted-Average Grant Date Value - Granted | $61.53 | |
Weighted-Average Grant Date Value - Vested | $22.90 | |
Weighted-Average Grant Date Value - Forfeited | $35.44 | |
Weighted-Average Grant Date Value, End of Period | $44.10 |
Components_of_Companys_Net_Pen
Components of Company's Net Pension Expense (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pensions [Abstract] | ||
Service cost | $0.50 | $2.10 |
Interest cost | 9.4 | 11 |
Expected return on plan assets | -14.3 | -15 |
Amortization of unrecognized loss | 4.7 | 8.8 |
Amortization of prior service cost | -0.3 | -0.3 |
Defined benefit plan expense | $6.60 |
Operations_by_Segment_Addition
Operations by Segment - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of reporting segments | 2 |
Schedule_of_Operating_Earnings
Schedule of Operating Earnings (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Net sales | $618.50 | $552.20 |
Operating earnings | 97.4 | 80.4 |
Other income (expense) | 2.7 | 1.3 |
Interest expense | -1.9 | -1.4 |
Earnings before income taxes | 82.8 | 64.9 |
Provision for income taxes | 24.4 | 18.2 |
Net earnings | 58.4 | 46.7 |
Inter-segment sales | ||
Segment Reporting Information [Line Items] | ||
Net sales | -6.6 | -9.1 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Other income (expense) | -12.7 | -14.1 |
North America | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 429.2 | 388.5 |
Operating earnings | 71.2 | 55.3 |
Rest of World | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 195.9 | 172.8 |
Operating earnings | $26.20 | $25.10 |
Assets_and_Liabilities_Measure
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | $294.20 | $223.90 |
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 | 294.5 | 224.1 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on recurring basis | ($0.30) | ($0.20) |
Schedule_of_Summary_by_Currenc
Schedule of Summary by Currency of Foreign Currency Forward Contracts (Detail) (Foreign currency forward contracts, USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Buy | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | $38.60 | $18.50 |
Buy | Euro | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 24.6 | 7 |
Buy | Mexico, Pesos | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 14 | 11.5 |
Sell | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 70.7 | 57 |
Sell | British Pound | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 0.7 | 1.3 |
Sell | Canadian Dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 69.2 | 54.5 |
Sell | Euro | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | $0.80 | $1.20 |
Organization_and_Significant_A
Organization and Significant Accounting Policies - Additional Information (Detail) (Commodity Futures Contracts) | 3 Months Ended |
Mar. 31, 2015 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |
Reclassification period for effective portion of contract, in years | 1 year |
Copper | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |
Commodity hedges outstanding, total weight of metals | 1,100,000 |
Impact_of_Derivative_Contracts
Impact of Derivative Contracts on Company's Financial Statements (Detail) (Designated as Hedging Instrument, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, total | $3.40 | $1.40 |
Foreign Currency Contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, assets | 8.8 | 4.6 |
Foreign Currency Contracts | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, liabilities | -5.1 | -3 |
Commodities Contracts | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, liabilities | ($0.30) | ($0.20) |
Effect_of_Derivatives_Instrume
Effect of Derivatives Instruments on Condensed Consolidated Statement of Earnings (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | $3.40 | $2.40 |
Amount of gain/(loss) reclassified from accumulated OCI into earnings (effective portion) | 1.4 | 1 |
Amount of gain/(loss) recognized in earnings on a derivative (ineffective portion) | -0.1 | |
Foreign Currency Contracts | ||
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | 3.4 | 2.6 |
Foreign Currency Contracts | Cost Of Products Sold | ||
Derivative [Line Items] | ||
Amount of gain/(loss) reclassified from accumulated OCI into earnings (effective portion) | 1.4 | 1 |
Commodities Contracts | ||
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in OCI on derivative (effective portion) | -0.2 | |
Commodities Contracts | Cost Of Products Sold | ||
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in earnings on a derivative (ineffective portion) | ($0.10) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2015 |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 29.50% | 28.00% | 27.50% | |
Unrecognized tax benefits | $1.20 | |||
Unrecognized tax benefits that would affect the effective tax rate, if recognized | $0.80 | |||
Earliest Tax Year | U.S. federal | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2011 | |||
Latest Tax Year | U.S. federal | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2014 | |||
State and local | Earliest Tax Year | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2000 | |||
State and local | Latest Tax Year | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2014 | |||
Non-U.S. | Earliest Tax Year | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2006 | |||
Non-U.S. | Latest Tax Year | ||||
Income Tax Contingency [Line Items] | ||||
Income tax examinations, years under examination | 2014 | |||
Scenario, Forecast | Minimum | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 29.00% | |||
Scenario, Forecast | Maximum | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 30.00% |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Loss by Component (Detail) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | ($272) | |||
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $0.5 and $0.4 in 2015 and 2014, respectively) | 1.4 | 1 | ||
Accumulated Other Comprehensive Income loss Ending Balance | -277.6 | -263.3 | ||
Pension liability | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | -276.2 | -280 | ||
Amounts reclassified from accumulated other comprehensive loss: | 2.5 | [1] | 5.3 | [1] |
Accumulated Other Comprehensive Income loss Ending Balance | -273.7 | -274.7 | ||
Cumulative foreign currency translation | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated Other Comprehensive Income loss Beginning Balance | 3.3 | 19.9 | ||
Other comprehensive earnings before reclassifications | -9.3 | -10.4 | ||
Accumulated Other Comprehensive Income loss Ending Balance | -6 | 9.5 | ||
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 | 0.9 | 1 | ||
Other comprehensive earnings before reclassifications | 2.1 | 1.5 | ||
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $0.5 and $0.4 in 2015 and 2014, respectively) | -0.9 | -0.6 | ||
Accumulated Other Comprehensive Income loss Ending Balance | $2.10 | $1.90 | ||
[1] | Amortization of pension items: |
Changes_in_Accumulated_Other_C3
Changes in Accumulated Other Comprehensive Loss by Component (Parenthetical) (Detail) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Income tax benefit | $24.40 | $18.20 | ||
Pension liability | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Reclassification net of income tax benefit | -2.5 | [1] | -5.3 | [1] |
Pension liability | Reclassification out of Accumulated Other Comprehensive Income | ||||
Schedule of Amounts in Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Actuarial losses | 4.6 | [2] | 8.9 | [2] |
Prior year service cost | -0.3 | [2] | -0.3 | [2] |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, before Tax | 4.3 | 8.6 | ||
Income tax benefit | -1.8 | -3.3 | ||
Reclassification net of income tax benefit | 2.5 | 5.3 | ||
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 | $0.50 | $0.40 | ||
[1] | Amortization of pension items: | |||
[2] | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 7 - Pensions for additional details |