Press Release

Highlights from continuing operations reflect continued solid execution:

• Q2 2017 sales increased 5 percent year-over-year to $1.4 billion
• EPS $0.90; EPS before charges/gains increased 12 percent to $0.92
• Company raises bottom-end of full-year 2017 EPS outlook by 4 cents; EPS before charges/gains outlook now $3.04 - $3.12 on sales growth of 6 - 8 percent

DEERFIELD, Ill.--(BUSINESS WIRE)-- Fortune Brands Home & Security, Inc. (NYSE: FBHS), an industry-leading home and security products company, today announced second quarter 2017 results.

"The home products market continued to grow in the second quarter, with strong growth in new construction and continued growth in repair and remodel—particularly at entry and mid-price points. Our teams grew operating margin across all businesses, and delivered exceptional sales growth in plumbing," said Chris Klein, chief executive officer, Fortune Brands. "We remain on-track to achieve our 2017 outlook for sales and operating margin."

Second Quarter 2017

For the second quarter of 2017, sales were $1.4 billion, an increase of 5 percent over the second quarter of 2016. Earnings per share were $0.90, compared to $0.80 in the prior-year quarter. EPS before charges/gains were $0.92, compared to $0.82 the same quarter last year. Operating income was $212.4 million, compared to $187.7 million in the prior-year quarter. Operating income before charges/gains was $215.6 million, compared to $191.7 million the same quarter last year, up 12 percent.

"In the second quarter, sales increased 6 percent for our home products businesses, and 7 percent excluding foreign currency. Importantly, our teams focused on profitable growth and increased total company operating margin before charges/gains by 100 basis points to 15.8 percent," Klein said.

For each segment in the second quarter of 2017, compared to the prior-year quarter:

• Plumbing sales increased 15 percent and high single digits organically, with growth in all businesses. Operating margin before charges/gains was 23.8 percent.
• Cabinet sales increased 1 percent against a strong 17 percent prior year comparison. Growth was driven by strength in new construction and in-stock cabinets and vanities, partly offset by softness in higher-end repair and remodel and in Canada. Segment operating margin before charges/gains increased 70 basis points to 13.6 percent.
• Door sales increased 4.5 percent driven by new construction and operating margin before charges/gains increased 160 basis points to 16.9 percent.
• Security sales decreased 2 percent due primarily to shifts in the timing of sales. Operating margin before charges/gains increased 160 basis points to 15.0 percent.

Annual Outlook for 2017

The Company's 2017 annual outlook continues to be based on a U.S. home products market growth assumption of 6 to 7 percent and an assumption of 5 to 6 percent growth for our total global market. The Company expects full-year 2017 sales growth in the range of 6 to 8 percent.

The Company raised the midpoint of its full-year 2017 EPS outlook before charges/gains by two cents, with a new range of $3.04 to $3.12 versus the prior range of $3.00 to $3.12.

The Company also expects to generate free cash flow of approximately $450 million for the full year 2017.

"I am pleased with our teams' performance in the second quarter and the demand for home products remains solid," said Klein. "We remain focused on driving profitable growth in the second half of the year, and we continue to evaluate a healthy pipeline of potential acquisitions."

CFO Transition

As previously announced on June 26, Fortune Brands appointed Patrick Hallinan as senior vice president and chief financial officer effective July 1, 2017. The Company's former senior vice president and chief financial officer, Lee Wyatt, was named executive vice president effective July 1, and will retire at the end of 2017.

About Fortune Brands

Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield, Ill., creates products and services that fulfill the dreams of homeowners and help people feel more secure. The Company's four operating segments are Cabinets, Plumbing, Doors and Security. Its trusted brands include more than a dozen core brands under MasterBrand Cabinets; Moen, ROHL and Riobel under the Global Plumbing Group (GPG); Therma-Tru entry door systems; and Master Lock and SentrySafe security products under The Master Lock Company. Fortune Brands holds market leadership positions in all of its segments. Fortune Brands is part of the S&P 500 Index. For more information, please visit www.FBHS.com.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains certain "forward-looking statements" regarding business strategies, market potential, future financial performance, the potential of our categories and brands, and other matters. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "estimates," "plans," "look to," "outlook," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including the factors discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission. The forward-looking statements included in this release are made as of the date hereof, and except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this release.

Use of Non-GAAP Financial Information

This press release includes measures not derived in accordance with generally accepted accounting principles ("GAAP"), such as diluted earnings per share before charges/gains, operating income before charges/gains, net sales for the home products segments excluding impact of foreign exchange, operating margin before charge/gains and free cash flow. These measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the most closely comparable GAAP measures, and reasons for the Company's use of these measures, are presented in the attached pages.

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions, except per share amounts)
(Unaudited)
Net Sales
				Three Months Ended June 30,																	Six Months Ended June 30,
				2017				2016				% Change									2017				2016				% Change
Net Sales (GAAP)																	Net Sales (GAAP)
Cabinets				$	653.4			$	645.1			1					Cabinets				$	1,227.0			$	1,195.1			3
Plumbing					434.8				378.3			15					Plumbing					813.2				716.9			13
Doors					133.5				127.8			4					Doors					235.7				222.1			6
Security					143.7				146.6			(2	)				Security					276.3				270.2			2
Total Net Sales				$	1,365.4			$	1,297.8			5					Total Net Sales				$	2,552.2			$	2,404.3			6
Current Quarter Operating Income
				Before Charges & Gains																	GAAP
				Three Months Ended June 30,																	Three Months Ended June 30,
Operating Income (loss) Before Charges/Gains (a)					2017				2016			% Change					Operating Income (loss)					2017				2016			% Change
Cabinets				$	88.7			$	83.5			6					Cabinets				$	88.7			$	83.5			6
Plumbing					103.4				87.7			18					Plumbing					103.3				87.1			19
Doors					22.6				19.6			15					Doors					22.5				19.6			15
Security					21.6				19.6			10					Security					18.6				16.2			15
Corporate:																	Corporate:
General and administrative expense					(21.7	)			(19.5	)		(11	)				General and administrative expense					(21.7	)			(19.5	)		(11	)
Defined benefit plan income (b)					1.0				0.8			25					Defined benefit plan income (1)					1.0				0.8			25
Total Corporate Expenses					(20.7	)			(18.7	)		(11	)				Total Corporate Expenses					(20.7	)			(18.7	)		(11	)
Total Operating Income Before Charges/Gains				$	215.6			$	191.7			12					Total Operating Income (GAAP)				$	212.4			$	187.7			13
Earnings Per Share Before Charges/Gains (c)																	Diluted EPS from Continuing Operations (GAAP)
Diluted - Continuing Operations				$	0.92			$	0.82			12					Diluted EPS - Continuing Operations				$	0.90			$	0.80			13
EBITDA Before Charges/Gains (d)				$	246.9			$	221.1			12					Income from Continuing Operations, net of tax				$	140.3			$	125.1			12
Year to Date Operating Income
				Before Charges & Gains																	GAAP
				Six Months Ended June 30,																	Six Months Ended June 30,
Operating Income (loss) Before Charges/Gains (a)					2017				2016			% Change					Operating Income (loss)					2017				2016			% Change
Cabinets				$	135.7			$	121.0			12					Cabinets				$	135.7			$	119.2			14
Plumbing					176.0				159.6			10					Plumbing					173.5				158.6			9
Doors					30.6				23.8			29					Doors					30.7				23.8			29
Security					36.6				31.1			18					Security					28.7				21.8			32
Corporate:																	Corporate:
General and administrative expense					(43.3	)			(40.8	)		(6	)				General and administrative expense					(43.3	)			(40.9	)		(6	)
Defined benefit plan income (b)					2.0				1.6			25					Defined benefit plan income (1)					2.0				0.7			186
Total Corporate Expenses					(41.3	)			(39.2	)		(5	)				Total Corporate Expenses					(41.3	)			(40.2	)		(3	)
Total Operating Income Before Charges/Gains				$	337.6			$	296.3			14					Total Operating Income (GAAP)				$	327.3			$	283.2			16
Earnings Per Share Before Charges/Gains (c)																	Diluted EPS From Continuing Operations (GAAP)
Diluted - Continuing Operations				$	1.45			$	1.24			17					Diluted EPS - Continuing Operations				$	1.39			$	1.18			18
EBITDA Before Charges/Gains (d)				$	401.5			$	354.3			13					Income from Continuing Operations, net of tax				$	217.7			$	186.1			17
(1) Corporate expenses as derived in accordance with GAAP include the components of defined benefit plan expense other than service cost including actuarial gains and losses.
(a) (b) (c) (d) For definitions of Non-GAAP measures, see Definitions of Terms page

	FORTUNE BRANDS HOME & SECURITY, INC.
	CONDENSED CONSOLIDATED BALANCE SHEET (GAAP)
	(In millions)
	(Unaudited)
						June 30,			December 31,
						2017			2016
		Assets
		Current assets
		Cash and cash equivalents				$	252.7		$	251.5
		Accounts receivable, net					595.7			550.7
		Inventories					581.4			531.1
		Other current assets					123.3			111.9
		Total current assets					1,553.1			1,445.2
		Property, plant and equipment, net					675.6			662.5
		Goodwill					1,832.1			1,833.8
		Other intangible assets, net of accumulated amortization					1,093.2			1,107.0
		Other assets					99.4			80.0
		Total assets				$	5,253.4		$	5,128.5
		Liabilities and Equity
		Current liabilities
		Accounts payable				$	397.0		$	393.8
		Other current liabilities					394.1			449.0
		Total current liabilities					791.1			842.8
		Long-term debt					1,391.9			1,431.1
		Deferred income taxes					168.3			163.5
		Other non-current liabilities					333.4			328.1
		Total liabilities					2,684.7			2,765.5
		Stockholders' equity					2,567.2			2,361.5
		Noncontrolling interests					1.5			1.5
		Total equity					2,568.7			2,363.0
		Total liabilities and equity				$	5,253.4		$	5,128.5

FORTUNE BRANDS HOME & SECURITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
				Six Months Ended June 30,
				2017				2016
	Operating Activities
	Net income			$	215.1			$	186.1
	Depreciation and amortization				64.0				59.8
	Asset impairment charges				3.2				-
	Recognition of actuarial losses				-				0.9
	Deferred taxes				5.6				(25.0	)
	Loss on sale of product line				2.4				-
	Other noncash items				21.9				18.3
	Changes in assets and liabilities, net				(141.0	)			(75.1	)
	Net cash provided by operating activities			$	171.2			$	165.0
	Investing Activities
	Capital expenditures, net of proceeds from asset sales			$	(59.5	)		$	(74.7	)
	Proceeds from the sale of assets				-				0.3
	Proceeds from sale of product line				1.5				-
	Cost of acquisitions, net of cash				(0.1	)			(81.2	)
	Net cash used in investing activities			$	(58.1	)		$	(155.6	)
	Financing Activities
	(Decrease)/Increase in debt, net			$	(40.0	)		$	432.4
	Proceeds from the exercise of stock options				22.1				14.5
	Treasury stock purchases				(32.7	)			(362.7	)
	Dividends to stockholders				(55.3	)			(49.0	)
	All other, net				(9.3	)			(9.0	)
	Net cash (used) provided by financing activities			$	(115.2	)		$	26.2
	Effect of foreign exchange rate changes on cash				3.3				4.6
	Net increase in cash and cash equivalents			$	1.2			$	40.2
	Cash and cash equivalents at beginning of period				251.5				238.5
	Cash and cash equivalents at end of period			$	252.7			$	278.7
	FREE CASH FLOW			Six Months Ended June 30,								2017 Full Year
				2017				2016				Approximation
	Free Cash Flow*			$	133.8			$	105.1			$	450.0
	Add:
	Capital expenditures				59.5				74.7				135.0 - 140.0
	Less:
	Proceeds from the sale of assets				-				0.3				-
	Proceeds from the exercise of stock options				22.1				14.5				25.0 - 30.0
	Cash Flow From Operations (GAAP)			$	171.2			$	165.0			$	560.0
	* Free cash flow is cash flow from operations calculated in accordance with U.S. generally accepted accounting principles ("GAAP") less net capital expenditures (capital expenditures less proceeds from the sale of assets including property, plant and equipment, and the proceeds from the exercise of stock options). Free cash flow does not include adjustments for certain non-discretionary cash flows such as mandatory debt repayments. Free cash flow is a measure not derived in accordance with GAAP. Management believes that free cash flow provides investors with helpful supplemental information about the Company's ability to fund internal growth, make acquisitions, repay debt and related interest, pay dividends and repurchase common stock. This measure may be inconsistent with similar measures presented by other companies.

FORTUNE BRANDS HOME & SECURITY, INC.
CONSOLIDATED STATEMENT OF INCOME (GAAP)
(In millions, except per share amounts)
(Unaudited)
				Three Months Ended June 30,									Six Months Ended June 30,
					2017			2016		% Change				2017			2016		% Change
	Net Sales			$	1,365.4		$	1,297.8		5			$	2,552.2		$	2,404.3		6
	Cost of products sold				849.9			823.1		3				1,619.7			1,551.8		4
	Selling, general
	and administrative expenses				291.8			276.7		5				580.4			546.9		6
	Amortization of intangible assets				8.0			6.6		21				16.1			13.1		23
	Loss on sale of product line				2.4			-		100				2.4			-		100
	Asset impairment charges				-			-		-				3.2			-		100
	Restructuring charges				0.9			3.7		(76	)			3.1			9.3		(67	)
	Operating Income				212.4			187.7		13				327.3			283.2		16
	Interest expense				12.3			13.9		(12	)			24.2			25.7		(6	)
	Other expense (income), net				0.9			(0.4	)	325				0.1			(0.7	)	114
	Income from continuing operations before income taxes				199.2			174.2		14				303.0			258.2		17
	Income taxes				58.9			49.1		20				85.3			72.1		18
	Income from continuing operations, net of tax			$	140.3		$	125.1		12			$	217.7		$	186.1		17
	Loss from discontinued operations, net of tax				(2.6	)		-		(100	)			(2.6	)		-		(100	)
	Net income			$	137.7		$	125.1		10			$	215.1		$	186.1		16
	Less: Noncontrolling interests				-			(0.1	)	100				-			(0.1	)	100
	Net income attributable to
	Fortune Brands Home & Security			$	137.7		$	125.2		10			$	215.1		$	186.2		16
	Earnings Per Common Share, Diluted:
	Net Income from continuing operations			$	0.90		$	0.80		13			$	1.39		$	1.18		18
	Diluted Average Shares Outstanding				156.6			157.2		-				156.4			158.3		(1	)

	DILUTED EPS BEFORE CHARGES/GAINS RECONCILIATION
	For the second quarter of 2017, diluted EPS before charges/gains is net income from continuing operations, net of tax including the impact from noncontrolling interests calculated on a diluted per-share basis excluding $0.8 million ($0.5 million after tax) of restructuring and other charges and a loss on sale of product line of $2.4 million ($2.5 million after tax or $0.02 per diluted share).
	For the six months ended June 30, 2017, diluted EPS before charges/gains is net income from continuing operations, net of tax including the impact from noncontrolling interests calculated on a diluted per-share basis excluding $4.7 million ($3.4 million after tax or $0.02 per diluted share) of restructuring and other charges, asset impairment charges of $3.2 million ($3.2 million after tax or $0.02 per diluted share) and the loss on sale of product line of $2.4 million ($2.5 million after tax or $0.02 per diluted share).
	For the second quarter of 2016, diluted EPS before charges/gains is net income including the impact from noncontrolling interests calculated on a diluted per-share basis excluding $4.0 million ($2.8 million after tax or $0.02 per diluted share) of net restructuring and other charges, the impact of the write-off of prepaid debt issuance costs of $1.3 million ($0.8 million after tax) and a tax item of $0.8 million.
	For the six months ended June 30, 2016, diluted EPS before charges/gains is net income including the impact from noncontrolling interests calculated on a diluted per-share basis excluding $12.2 million ($8.4 million after tax or $0.06 per diluted share) of net restructuring and other charges, the impact of the write-off of prepaid debt issuance costs of $1.3 million ($0.8 million after tax), tax items of $1.1 million and actuarial losses of $0.9 million ($0.6 million after tax).
				Three Months Ended June 30,								Six Months Ended June 30,
					2017			2016		% Change			2017			2016		% Change
	Earnings Per Common Share - Diluted
	Diluted EPS Before Charges/Gains - Continuing Operations(c)			$	0.92		$	0.82		12		$	1.45		$	1.24		17
	Restructuring and other charges				-			(0.02	)	100			(0.02	)		(0.06	)	67
	Asset impairment charges				-			-		-			(0.02	)		-		-
	Loss on sale of product line				(0.02	)		-		-			(0.02	)		-		-
	Defined benefit plan actuarial losses				-			-		-			-			-		-
	Tax item				-			-		-			-			-		-
	Diluted EPS - Continuing Operations			$	0.90		$	0.80		13		$	1.39		$	1.18		18
	RECONCILIATION OF FULL YEAR 2017 EARNINGS GUIDANCE TO GAAP
	The Company is targeting diluted EPS before charges/gains from continuing operations to be in the range of $3.04 to $3.12 per share. For the full year, on a GAAP basis, the Company is targeting diluted EPS from continuing operations to be in the range of $2.98 to $3.06 per share. Reconciliation of non-GAAP diluted EPS guidance to GAAP diluted EPS guidance cannot be provided without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to gains and losses associated with our defined benefit plans and restructuring and other charges, which are excluded from the diluted EPS before charges/gains. In addition, the Company's GAAP EPS range assumes the Company incurs no additional gains or losses associated with its defined benefit plans.
	(c) For definitions of Non-GAAP measures, see Definitions of Terms page

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions)
(Unaudited)
	RECONCILIATION OF EBITDA BEFORE CHARGES/GAINS TO NET INCOME
			Three Months Ended June 30,									Six Months Ended June 30,
			2017			2016			% Change			2017			2016			% Change
	EBITDA BEFORE CHARGES/GAINS (d)		$	246.9		$	221.1		12			$	401.5		$	354.3		13
	Depreciation *		$	(24.2	)	$	(22.4	)	(8	)		$	(47.9	)	$	(44.2	)	(8	)
	Amortization of intangible assets			(8.0	)		(6.6	)	(21	)			(16.1	)		(13.1	)	(23	)
	Restructuring and other charges			(0.8	)		(4.0	)	80				(4.7	)		(12.2	)	61
	Interest expense **			(12.3	)		(13.9	)	12				(24.2	)		(25.7	)	6
	Loss on sale of product line			(2.4	)		-		(100	)			(2.4	)		-		(100	)
	Asset impairment charges			-			-		-				(3.2	)		-		(100	)
	Defined benefit plan actuarial losses			-			-		-				-			(0.9	)	100
	Income taxes			(58.9	)		(49.1	)	(20	)			(85.3	)		(72.1	)	(18	)
	Income from continuing operations, net tax		$	140.3		$	125.1		12			$	217.7		$	186.1		17
	* Depreciation excludes accelerated depreciation of ($2.5) million for the six months ended June 30, 2016. Accelerated depreciation is included in restructuring and other charges.
	** Interest expense includes the write-off of prepaid debt issuance costs of ($1.3) million for the three and six months ended June 30, 2016.
	(d) For definitions of Non-GAAP measures, see Definitions of Terms page

FORTUNE BRANDS HOME & SECURITY, INC.
Reconciliation of Income Statement - GAAP to Before Charges/Gains Information
Three Months Ended June 30,
$ in millions, except per share amounts
(unaudited)
					Before Charges/Gains adjustments
					Restructuring				Write-off of		Loss on sale			Before
		GAAP			and other		Tax Item		Prepaid Debt		of product line			Charges/Gains
		(unaudited)			charges				Issuance Costs					(Non-GAAP)
2017		SECOND QUARTER
Net Sales		$ 1,365.4			-		-		-		-
Cost of products sold		849.9			0.1		-		-		-
Selling, general & administrative expenses		291.8			-		-		-		-
Amortization of intangible assets		8.0			-		-		-		-
Loss on sale of product line		2.4			-		-		-		(2.4)
Restructuring charges		0.9			(0.9)		-		-		-
Operating Income		212.4			0.8		-		-		2.4			215.6
Interest expense		12.3			-		-		-		-
Other expense, net		0.9			-		-		-		-
Income from continuing operations before income taxes		199.2			0.8		-		-		2.4			202.4
Income taxes		58.9			0.3		-		-		(0.1)
Income from continuing operations, net of tax		$ 140.3			0.5		-		-		2.5			$ 143.3
Loss from discontinued operations		(2.6)			-		-		-		-
Net Income		137.7			-		-		-		-
Less: Noncontrolling interests		-			-		-		-		-
Net Income attributable
to Fortune Brands Home & Security, Inc.		$ 137.7			0.5		-		-		2.5			$ 140.7
Income from continuing operations, net of tax
less noncontrolling interests		$ 140.3			0.5		-		-		2.5			$ 143.3
Diluted Average Shares Outstanding		156.6												156.6
Diluted EPS - Continuing Operations		0.90												0.92
2016
Net Sales		$ 1,297.8			-		-		-		-
Cost of products sold		823.1			(0.2)		-		-		-
Selling, general & administrative expenses		276.7			(0.1)		-		-		-
Amortization of intangible assets		6.6			-		-		-		-
Restructuring charges		3.7			(3.7)		-		-		-
Operating Income		187.7			4.0		-		-		-			191.7
Interest expense		13.9			-		-		(1.3)		-
Other income, net		(0.4)			-		-		-		-
Income from continuing operations before income taxes		174.2			4.0		-		1.3		-			179.5
Income taxes		49.1			1.2		(0.8)		0.5		-
Income from continuing operations, net of tax		$ 125.1			2.8		0.8		0.8		-			$ 129.5
Income from discontinued operations, net of tax		-			-		-		-		-
Net Income		125.1			-		-		-		-
Less: Noncontrolling interests		(0.1)			-		-		-		-
Net Income attributable
to Fortune Brands Home & Security, Inc.		$ 125.2			2.8		0.8		0.8		-			$ 129.6
Income from continuing operations, net of tax
less noncontrolling interests		$ 125.2			2.8		0.8		0.8		-			$ 129.6
Diluted Average Shares Outstanding		157.2												157.2
Diluted EPS - Continuing Operations		0.80												0.82

FORTUNE BRANDS HOME & SECURITY, INC.
Reconciliation of Income Statement - GAAP to Before Charges/Gains Information
Six Months Ended June 30,
$ in millions, except per share amounts
(unaudited)
							Before Charges/Gains adjustments
							Restructuring			Defined benefit			Asset						Write-off of			Loss on sale				Before
		GAAP					and other			plan actuarial			impairment			Tax Items			Prepaid Debt			of product line				Charges/Gains
		(unaudited)					charges			losses			charges						Issuance Costs							(Non-GAAP)
2017		YEAR TO DATE
Net Sales		$	2,552.2				-			-			-			-			-			-
Cost of products sold			1,619.7				(0.9	)		-			-			-			-			-
Selling, general & administrative expenses			580.4				(0.7	)		-			-			-			-			-
Amortization of intangible assets			16.1				-			-			-			-			-			-
Loss on sale of product line			2.4				-			-			-			-			-			(2.4	)
Asset impairment charges			3.2				-			-			(3.2	)		-			-			-
Restructuring charges			3.1				(3.1	)		-			-			-			-			-
Operating Income			327.3				4.7			-			3.2			-			-			2.4					337.6
Interest expense			24.2				-			-			-			-			-			-
Other expense, net			0.1				-			-			-			-			-			-
Income from continuing operations before income taxes			303.0				4.7			-			3.2			-			-			2.4					313.3
Income taxes			85.3				1.3			-			-			-			-			(0.1	)
Income from continuing operations, net of tax		$	217.7				3.4			-			3.2			-			-			2.5				$	226.8
Loss from discontinued operations, net of tax			(2.6	)			-			-			-			-			-			-
Net Income			215.1				-			-			-			-			-			-
Less: Noncontrolling interests			-				-			-			-			-			-			-
Net Income attributable
to Fortune Brands Home & Security, Inc.		$	215.1				3.4			-			3.2			-			-			2.5				$	224.2
Income from continuing operations, net of tax
less noncontrolling interests		$	217.7				3.4			-			3.2			-			-			2.5				$	226.8
Diluted Average Shares Outstanding			156.4																								156.4
Diluted EPS - Continuing Operations			1.39																								1.45
2016
Net Sales		$	2,404.3				-			-			-			-			-			-
Cost of products sold			1,551.8				(2.7	)		(0.6	)		-			-			-			-
Selling, general & administrative expenses			546.9				(0.2	)		(0.3	)		-			-			-			-
Amortization of intangible assets			13.1				-			-			-			-			-			-
Restructuring charges			9.3				(9.3	)		-			-			-			-			-
Operating Income			283.2				12.2			0.9			-			-			-			-					296.3
Interest expense			25.7				-			-			-			-			(1.3	)		-
Other income, net			(0.7	)			-			-			-			-			-			-
Income from continuing operations before income taxes			258.2				12.2			0.9			-			-			1.3			-					272.6
Income taxes			72.1				3.8			0.3			-			(1.1	)		0.5			-
Income from continuing operations, net of tax		$	186.1				8.4			0.6			-			1.1			0.8			-				$	197.0
Income from discontinued operations, net of tax			-				-			-			-			-			-			-
Net Income			186.1				-			-			-			-			-			-
Less: Noncontrolling interests			(0.1	)			-			-			-			-			-			-
Net Income attributable
to Fortune Brands Home & Security, Inc.		$	186.2				8.4			0.6			-			1.1			0.8			-				$	197.1
Income from continuing operations, net of tax
less noncontrolling interests		$	186.2				8.4			0.6			-			1.1			0.8			-				$	197.1
Diluted Average Shares Outstanding			158.3																								158.3
Diluted EPS - Continuing Operations			1.18																								1.24

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions, except per share amounts)
(Unaudited)
				Three Months Ended June 30,													Six Months Ended June 30,
					2017			2016		% Change								2017			2016		% Change
		Net Sales (GAAP)
		Cabinets		$	653.4		$	645.1		1							$	1,227.0		$	1,195.1		3
		Plumbing			434.8			378.3		15								813.2			716.9		13
		Doors			133.5			127.8		4								235.7			222.1		6
		Security			143.7			146.6		(2	)							276.3			270.2		2
		Total Net Sales		$	1,365.4		$	1,297.8		5							$	2,552.2		$	2,404.3		6
		Operating Income (loss)
		Cabinets		$	88.7		$	83.5		6							$	135.7		$	119.2		14
		Plumbing			103.3			87.1		19								173.5			158.6		9
		Doors			22.5			19.6		15								30.7			23.8		29
		Security			18.6			16.2		15								28.7			21.8		32
		Corporate:
		General and administrative expense			(21.7	)		(19.5	)	(11	)							(43.3	)		(40.9	)	(6	)
		Defined benefit plan income (1)			1.0			0.8		25								2.0			0.7		186
		Total Corporate expenses			(20.7	)		(18.7	)	(11	)							(41.3	)		(40.2	)	(3	)
		Total Operating Income (GAAP)		$	212.4		$	187.7		13							$	327.3		$	283.2		16
		OPERATING INCOME BEFORE CHARGES/GAINS RECONCILIATION
		Operating Income (loss) Before Charges/Gains (a)
		Cabinets		$	88.7		$	83.5		6							$	135.7		$	121.0		12
		Plumbing			103.4			87.7		18								176.0			159.6		10
		Doors			22.6			19.6		15								30.6			23.8		29
		Security			21.6			19.6		10								36.6			31.1		18
		Corporate:
		General and administrative expense			(21.7	)		(19.5	)	(11	)							(43.3	)		(40.8	)	(6	)
		Defined benefit plan income (b)			1.0			0.8		25								2.0			1.6		25
		Total Corporate expenses			(20.7	)		(18.7	)	(11	)							(41.3	)		(39.2	)	(5	)
		Total Operating Income Before Charges/Gains (a)			215.6			191.7		12								337.6			296.3		14
		Restructuring and other charges (2) (3)			(0.8	)		(4.0	)	80								(4.7	)		(12.2	)	61
		Asset impairment charge			-			-		-								(3.2	)		-		(100	)
		Loss on sale of product line			(2.4	)		-		(100	)							(2.4	)		-		(100	)
		Defined benefit plan actuarial losses (4)			-			-		-								-			(0.9	)	100
		Total Operating Income (GAAP)		$	212.4		$	187.7		13							$	327.3		$	283.2		16
		(1) Corporate expenses as derived in accordance with GAAP include the components of defined benefit plan expense other than service cost including actuarial gains and losses.
		(2) Restructuring charges are costs incurred to implement significant cost reduction initiatives and include workforce reduction costs.
		(3) "Other charges" represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains or losses on the sale of previously closed facilities. For Corporate, other charges incurred represent external costs directly related to the acquisition of Norcraft and primarily include expenditures for banking, legal, accounting and other similar services. In addition, it includes estimated acquisition related inventory step-up expense in our Plumbing segment of $0.9 million for the six months ended June 30, 2017.
		(4) Represents actuarial gains or losses associated with our defined benefit plans. Actuarial gains or losses in a period represent the difference between actual and actuarially assumed experience, principally related to liability discount rates and plan asset returns, as well as other actuarial assumptions including compensation rates, turnover rates, and health care cost trend rates. The Company recognizes actuarial gains or losses immediately in operating income to the extent they cumulatively exceed a "corridor." The corridor is equal to the greater of 10% of the fair value of plan assets or 10% of a plan's projected benefit obligation. Actuarial gains or losses are determined at required remeasurement dates which occur at least annually in the fourth quarter. Remeasurements due to plan amendments and settlements may also occur in interim periods during the year. Our operating income before charges/gains reflects our expected rate of return on pension plan assets which in a given period may materially differ from our actual return on plan assets. Our liability discount rates and plan asset returns are based upon difficult to predict fluctuations in global bond and equity markets that are not directly related to the Company's business. We believe that the exclusion of actuarial gains or losses from operating income before charges/gains provides investors with useful supplemental information regarding the underlying performance of the business from period to period that may be considered in conjunction with our operating income as measured on a GAAP basis. We present this supplemental information because such actuarial gains or losses may create volatility in our operating income that does not necessarily have an immediate corresponding impact on operating cash flow or the actual compensation and benefits provided to our employees. The table below sets forth additional supplemental information on the Company's historical actual and expected rate of return on plan assets, as well as discount rates used to value its defined benefit obligations:
		($ In millions)
				Year Ended								Year Ended
				December 31, 2016								December 31, 2015
					%			$				%		$
		Actual return on plan assets			10.0	%		$46.6				(2.1	)%	($18.2	)
		Expected return on plan assets			6.6	%		37.2				6.8	%	40.2
		Discount rate at December 31:
		Pension benefits			4.3	%						4.6	%
		Postretirement benefits			3.4	%						4.1	%
		(a) (b) For definitions of Non-GAAP measures, see Definitions of Terms page

	FORTUNE BRANDS HOME & SECURITY, INC.
	BEFORE CHARGES/GAINS OPERATING MARGIN TO OPERATING MARGIN
	(Unaudited)
					Three Months Ended June 30,
					2017		2016		Change
	CABINETS
	Before Charges/Gains Operating Margin				13.6	%	12.9	%	70 bps
	Operating Margin				13.6	%	12.9	%	70 bps
	PLUMBING
	Before Charges/Gains Operating Margin				23.8	%	23.2	%	60 bps
	Restructuring & Other Charges				-		(0.2	%)
	Operating Margin				23.8	%	23.0	%	80 bps
	DOORS
	Before Charges/Gains Operating Margin				16.9	%	15.3	%	160 bps
	Restructuring & Other Charges				-		-
	Operating Margin				16.9	%	15.3	%	160 bps
	SECURITY
	Before Charges/Gains Operating Margin				15.0	%	13.4	%	160 bps
	Restructuring & Other Charges				(0.4	%)	(2.3	%)
	Loss on sale of product line				(1.7	%)	-
	Operating Margin				12.9	%	11.1	%	180 bps
	FBHS
	Before Charges/Gains Operating Margin				15.8	%	14.8	%	100 bps
	Restructuring & Other Charges				(0.1	%)	(0.3	%)
	Loss on sale of product line				(0.1	%)	-
	Operating Margin				15.6	%	14.5	%	110 bps
	Operating margin is calculated as operating income derived in accordance with GAAP divided by GAAP Net Sales. Before charges/gains operating margin is operating income derived in accordance with GAAP excluding restructuring and other charges and the loss on sale of operation divided by GAAP net sales. Before charges/gains operating margin is a measure not derived in accordance with GAAP. Management uses this measure to evaluate the returns generated by FBHS and its business segments. Management believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This measure may be inconsistent with similar measures presented by other companies.

	FORTUNE BRANDS HOME & SECURITY, INC.
	RECONCILIATION OF PERCENTAGE CHANGE IN HOME PRODUCTS SEGMENTS NET SALES EXCLUDING THE IMPACT OF CURRENCY TO PERCENTAGE CHANGE IN NET SALES (GAAP)
	(Unaudited)
				Three Months Ended June 30, 2017
	HOME PRODUCTS SEGMENTS (CABINETS, PLUMBING & DOORS)
	Percentage change in Home Products Segments Net Sales excluding the impact of currency Q2 2017			7%
	Impact of currency Q2 2017			(1%)
	Percentage change in Home Products Segments Net Sales (GAAP)			6%
	Home Products Segments net sales excluding the impact of currency in Q2 2017 is net sales derived in accordance with GAAP excluding the Security segment of FBHS and the impact of foreign currency in Q2 2017. Management uses this measure to evaluate the overall performance of the Home Products businesses and believes this measure provides investors with helpful supplemental information regarding the underlying performance of the segment from period to period. This measure may be inconsistent with similar measures presented by other companies.

Definitions of Terms: Non-GAAP Measures
(a) Operating income before charges/gains is operating income derived in accordance with GAAP excluding restructuring and other charges, the impact of income and expense from actuarial gains or losses associated with our defined benefit plans, asset impairment charges, the loss on the sale of product line and a tax item. Operating income before charges/gains is a measure not derived in accordance with GAAP. Management uses this measure to evaluate the returns generated by FBHS and its business segments. Management believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This measure may be inconsistent with similar measures presented by other companies.
(b) Defined benefit plan income includes the components of defined benefit plan expense other than service costs. It further excludes actuarial gains or losses.
(c) Diluted EPS before charges/gains is income from continuing operations, net of tax, less noncontrolling interests calculated on a diluted per-share basis excluding restructuring and other charges, the impact of an income tax item, the impact of income and expense from actuarial gains or losses associated with our defined benefit plans, asset impairment charges and the loss on the sale of product line. Diluted EPS before charges/gains is a measure not derived in accordance with GAAP. Management uses this measure to evaluate the overall performance of the Company and believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This measure may be inconsistent with similar measures presented by other companies.
(d) EBITDA before charges/gains is income from continuing operations, net of tax, derived in accordance with GAAP excluding restructuring and other charges, the impact of income and expense from actuarial gains or losses associated with our defined benefit plans, depreciation, asset impairment charges, the loss on sale of product line, amortization of intangible assets, interest expense, and income taxes. EBITDA before charges/gains is a measure not derived in accordance with GAAP. Management uses this measure to assess returns generated by FBHS. Management believes this measure provides investors with helpful supplemental information about the Company's ability to fund internal growth, make acquisitions and repay debt and related interest. This measure may be inconsistent with similar measures presented by other companies.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006312/en/

Fortune Brands Home & Security, Inc.
Investor and Media Contact:
Brian Lantz, 847-484-4574
brian.lantz@FBHS.com

Source: Fortune Brands Home & Security, Inc.

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