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Other intangible assets, net of accumulated amortization

^[1]

1,852.8

1,833.8

1,105.4

1,107.0

Other assets

102.2

80.0

Total assets

5,349.3

5,128.5

Current liabilities

Accounts payable

392.5

393.8

Other current liabilities

460.0

449.0

Total current liabilities

852.5

842.8

Long-term debt

1,462.2

1,431.1

Deferred income taxes

176.2

163.5

Accrued defined benefit plans

185.1

216.2

Other non-current liabilities

127.4

111.9

Total liabilities

2,803.4

2,765.5

Commitments and contingencies (see Note 17)

Fortune Brands stockholders' equity

Common stock

^[2]

1.7

Paid-in capital

2,712.2

2,653.8

Accumulated other comprehensive loss

(25.5)

(71.9)

Retained earnings

1,076.5

814.6

Treasury stock

(1,220.6)

(1,036.7)

Total Fortune Brands stockholders' equity

2,544.3

2,361.5

Noncontrolling interests

1.6

1.5

Total equity

2,545.9

2,363.0

Total liabilities and equity

$ 5,349.3

$ 5,128.5

[1]	Net of accumulated impairment losses of $399.5 million in the Doors segment.
[2]	Common stock, par value $0.01 per share: 179.6 million shares and 177.7 million shares issued at September 30, 2017 and December 31, 2016, respectively.

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions	Sep. 30, 2017	Dec. 31, 2016
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	179.6	177.7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

Operating activities

Net income

$ 344.7

$ 309.5

Non-cash pre-tax expense (income):

Depreciation

72.7

69.3

Amortization

23.6

20.4

Stock-based compensation

32.7

24.3

Recognition of actuarial (gains) losses

(1.3)

1.9

Deferred income taxes

8.2

(23.0)

Loss on sale of product line

2.4

Asset impairment charges

3.2

Amortization of deferred financing costs

1.5

3.0

Loss on sale of property, plant and equipment

0.3

1.2

Changes in assets and liabilities:

Increase in accounts receivable

(34.5)

(53.1)

(Increase) decrease in inventories

(60.7)

22.6

(Decrease) increase in accounts payable

(3.5)

28.7

Increase in other assets

(28.0)

(11.6)

Decrease in accrued expenses and other liabilities

(23.9)

(12.0)

Increase (decrease) in accrued taxes

15.2

(0.6)

Net cash provided by operating activities

352.6

380.6

Investing activities

Capital expenditures

^[1]

(95.5)

(106.1)

Proceeds from the sale of assets

0.2

2.3

Proceeds from sale of product line

1.5

Cost of acquisitions, net of cash acquired

(19.4)

(230.5)

Net cash used in investing activities

(113.2)

(334.3)

Financing activities

Decrease in short-term debt, net

(1.0)

Issuance of long-term debt

375.0

880.0

Repayment of long-term debt

(345.0)

(465.0)

Proceeds from the exercise of stock options

25.8

24.8

Treasury stock purchases

(173.7)

(362.7)

Employee withholding taxes paid related to stock-based compensation

(10.2)

(9.8)

Deferred acquisition payment

(12.4)

Dividends to stockholders

(82.7)

(73.7)

Other financing, net

(0.3)

(2.1)

Net cash used in financing activities

(223.5)

(9.5)

Effect of foreign exchange rate changes on cash

9.7

3.3

Net increase in cash and cash equivalents

25.6

40.1

Cash and cash equivalents at beginning of period

251.5

238.5

Cash and cash equivalents at end of period

$ 277.1

$ 278.6

[1]	Capital expenditures of $11.3 million and $4.7 million that have not been paid as of September 30, 2017 and 2016, respectively, were excluded from the Statements of Cash Flows.

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Capital expenditures incurred but not yet paid	$ 11.3	$ 4.7

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Treasury Stock	Non- controlling Interests
Beginning Balance at Dec. 31, 2015	$ 2,453.8	$ 1.7	$ 2,602.2	$ (52.5)	$ 501.6	$ (602.1)	$ 2.9
Comprehensive income:
Net income	309.5				309.6		(0.1)
Other comprehensive income	0.3			0.3
Stock options exercised	24.8		24.8
Stock-based compensation	14.5		24.3			(9.8)
Treasury stock purchase	(362.7)					(362.7)
Dividends	(72.8)				(72.8)
Dividends paid to noncontrolling interests	(1.4)						(1.4)
Other	(5.8)		(5.8)
Ending Balance at Sep. 30, 2016	2,360.2	1.7	2,645.5	(52.2)	738.4	(974.6)	1.4
Beginning Balance at Dec. 31, 2016	2,363.0	1.7	2,653.8	(71.9)	814.6	(1,036.7)	1.5
Comprehensive income:
Net income	344.7				344.6		0.1
Other comprehensive income	46.4			46.4
Stock options exercised	25.7		25.7
Stock-based compensation	22.5		32.7			(10.2)
Treasury stock purchase	(173.7)					(173.7)
Dividends	(82.7)				(82.7)
Ending Balance at Sep. 30, 2017	$ 2,545.9	$ 1.7	$ 2,712.2	$ (25.5)	$ 1,076.5	$ (1,220.6)	$ 1.6

Basis of Presentation and Principles of Consolidation

9 Months Ended

Sep. 30, 2017

Basis of Presentation and Principles of Consolidation

1.	Basis of Presentation and Principles of Consolidation

References to “Fortune Brands,” “the Company,” “we,” “our” and “us” refer to Fortune Brands Home & Security, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.

The Company is a leading home and security products company with a portfolio of leading branded products used for residential home repair, remodeling, new construction and security applications.

The condensed consolidated balance sheet as of September 30, 2017, the related condensed consolidated statements of comprehensive income for the nine and three-month periods ended September 30, 2017 and 2016 and the related condensed consolidated statements of cash flows and equity for the nine-month periods ended September 30, 2017 and 2016 are unaudited. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year.

The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our annual consolidated financial statements and notes. The December 31, 2016 condensed consolidated balance sheet was derived from the audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). This Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2016.

In July 2017, we acquired Shaws Since1897 Limited (“Shaws”), a UK-based luxury plumbing products company that specializes in manufacturing and selling fireclay sinks and selling brassware and accessories in partnership with Perrin & Rowe. This acquisition broadened our plumbing portfolio and enhanced future growth opportunities. Net sales and operating income in the three months ended September 30, 2017 were not material to the Company. The financial results of Shaws were included in the Company’s consolidated balance sheets as of September 30, 2017, the Company’s consolidated statements of income for the nine and three months ended September 30, 2017, and statement of cash flows for the nine months ended September 30, 2017.

In September 2016, we acquired ROHL LLC (“ROHL”) and in a related transaction, we acquired TCL Manufacturing which gave us ownership of Perrin & Rowe Limited (“Perrin & Rowe”). In addition, in May 2016, we acquired Riobel Inc (“Riobel”). The financial results of ROHL, Perrin & Rowe, and Riobel were included in the Company’s consolidated balance sheets as of September 30, 2017 and December 31, 2016, the Company’s consolidated statements of income for the nine and three months ended September 30, 2017, and statement of cash flows for the nine months ended September 30, 2017.

Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2017

Recently Issued Accounting Standards

2.	Recently Issued Accounting Standards

Revenue from Contracts with Customers

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which clarifies the accounting for revenue arising from contracts with customers and specifies the disclosures that an entity should include in its financial statements. The standard is effective for annual reporting periods beginning after December 15, 2017 (calendar year 2018 for Fortune Brands). During 2016, the FASB issued certain amendments to the standard relating to the principal versus agent guidance, accounting for licenses of intellectual property and identifying performance obligations as well as the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. The effective date and transition requirements for these amendments are the same as those of the original ASU. We have elected the modified retrospective transition approach and also have identified focus areas for each of our reporting segments and have made substantial progress in our assessment of the accounting and financial reporting implications as of September 30, 2017. Our key considerations pursuant to ASU 2014-09 are the control of goods (i.e., timing of revenue recognition), separate performance obligations, customer rights of return (i.e., the reclassification on the balance sheet of the customer rights of return from accounts receivable to a refund liability as well as the recognition of a corresponding asset) and our accounting for display assets. We do not expect the change in accounting related to these considerations to have a material effect on our financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize almost all leases on their balance sheet as a “right-of-use” asset and lease liability but recognize related expenses in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. The standard is effective for annual periods beginning after December 15, 2018 (calendar year 2019 for Fortune Brands) and earlier application is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU 2017-12, that amends current hedge accounting model. The new standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item (consistent with our current practice). The change in fair value for qualifying cash flow and net investment hedges will be included in Other comprehensive income (until they are reclassified into the income statement). The standard also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of the hedge effectiveness. Standard is effective as of January 1, 2019 and earlier application is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

Clarifying Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

In May 2017, the FASB issued ASC 610-20 that clarifies the scope and application of various standards for the sale of nonfinancial assets (e.g. PP&E including real estate, intangible assets, materials and supplies). The standard distinguishes between a sale to customer vs non-customer. Sales to customers are in scope of the new revenue standard. It also clarifies a derecognition model for nonfinancial assets that do not represent a business. The standard is effective as of January 1, 2018 consistent with the effective date for the new revenue recognition standard. We are assessing the impact the adoption of this standard will have on our financial statements and we will consider the implications of the new standard on case by case basis for all non-recurring transactions where we sell or transfer nonfinancial assets.

Stock Compensation Scope of Modification Accounting

In May 2017, the FASB issued ASU 2017-09, which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance provides a relief to entities that make non-substantive changes to their share-based payment awards and will result in fewer changes to the terms of an award being accounted for as modifications. The standard is effective January 1, 2018 and early adoption is permitted; however we have elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

Presentation of Net Periodic Pension and Postretirement Cost

In March 2017, the FASB issued ASU 2017-07, which requires entities to present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. Employers will present the other components (i.e., interest cost, expected return on plan assets and actuarial gains/losses) separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. The standard is effective January 1, 2018 and early adoption is permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, which simplifies the accounting for goodwill impairment for all entities. Under the new standard, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The standard eliminates the current requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount (i.e., hypothetical purchase price allocation). The new standard is effective for annual and interim impairment tests performed in the periods beginning after January 1, 2020 and early adoption is permitted. We plan to early adopt ASU 2017-04 in conjunction with our annual goodwill impairment test during the fourth quarter of 2017.

Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01, which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business and therefore business combination guidance would apply. The new standard requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset (i.e., a business) or a group of similar identifiable assets (i.e., not a business). The guidance also requires a business to include at least one substantive process and narrows the definition of outputs (e.g., revenues with customers). The standard is effective January 1, 2018 and early adoption is permitted. We do not expect the adoption of this standard to have a material effect on our financial statements.

Restricted Cash

In November 2016, the FASB issued ASU 2016-18, according to which entities are no longer required to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The prior standard did not address the classification of activity related to restricted cash and restricted cash equivalents in the statement of cash flows, which has resulted in diversity in the presentation of cash flows. The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU 2016-16, which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. Under the current guidance, companies are required to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized (e.g., depreciated, amortized or impaired). The standard is effective January 1, 2018 and early adoption is permitted; however, we elected not to early adopt. The transition method will be a “modified retrospective” (i.e., with a cumulative adjustment to retained earnings at adoption). We are assessing the impact the adoption of this standard will have on our financial statements.

Classification of Certain Cash Receipts and Cash Payments

In September 2016, the FASB issued ASU 2016-15, which changes how an entity classifies certain cash receipts and cash payments on its statement of cash flows. The key changes that may potentially impact our financial statements include the following: 1) Cash payments for debt prepayment or extinguishment costs would be classified as financing cash outflows; 2) Contingent consideration payments that are not made within three months after the consummation of a business combination would be classified as financing (if the payment is made up to the acquisition date fair value of liability) or operating outflows (if in excess of acquisition fair value). Cash payments made “soon after” the consummation of a business combination generally would be classified as cash outflows for investing activities; 3) Insurance settlement proceeds would be classified based on the nature of the loss; and 4) Company-owned life insurance settlement proceeds would be presented as investing cash inflows, and premiums would be classified as investing or operating cash outflows, or a combination of both. The new standard is effective January 1, 2018 and should be adopted retrospectively. Early adoption is permitted; however, we elected not to early adopt. We do not expect the adoption of this standard to have a material effect on our financial statements.

Financial Instruments—Credit Losses

In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance applies to most financial assets measured at amortized cost, including trade and other receivables and loans as well as off-balance-sheet credit exposures (e.g., loan commitments and standby letters of credit). The standard will replace the “incurred loss” approach under the current guidance with an “expected loss” model that requires an entity to estimate its lifetime “expected credit loss.” The standard is effective January 1, 2020 and early application is permitted beginning January 1, 2019. We are assessing the impact the adoption of this standard will have on our financial statements.

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, which requires entities to measure investments in unconsolidated entities (other than those accounted for using the equity method of accounting) at fair value through the income statement. There will no longer be an available-for-sale classification (with changes in fair value reported in Other Comprehensive Income). In addition, the cost method is eliminated for equity investments without readily determinable fair values. The new standard is effective January 1, 2018. Early application is permitted for certain provisions of the standard; however, we elected not to early adopt. We do not expect this standard to have a material effect on our financial statements.

Balance Sheet Information

9 Months Ended

Sep. 30, 2017

Balance Sheet Information

3.	Balance Sheet Information

Supplemental information on our balance sheets is as follows:


(In millions)	September 30, 2017		December 31, 2016
Inventories:
Raw materials and supplies	$	211.6	$	207.6
Work in process		61.8		55.9
Finished products		326.7		267.6

Total inventories	$	600.1	$	531.1
Property, plant and equipment, gross	$	1,715.8	$	1,630.7
Less: accumulated depreciation		1,025.2		968.2

Property, plant and equipment, net	$	690.6	$	662.5

Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2017

Acquisitions and Dispositions

4.	Acquisitions and Dispositions

In July 2017, we acquired Shaws, a UK-based luxury plumbing products company that specializes in manufacturing and selling fireclay sinks and selling brassware and accessories in partnership with Perrin & Rowe. Net sales and operating income in the three months ended September 30, 2017 were not material to the Company. We financed the transaction using cash on hand and borrowings under our existing credit facilities. The results of the operations are included in the Plumbing segment from the date of acquisition.

In April 2017, we completed the sale of Field ID, our cloud-based inspection and safety compliance software product line included in our Security segment. We recorded a pre-tax loss of $2.4 million as the result of this sale. The estimated tax expense on the sale was insignificant. Field ID did not qualify for presentation as a discontinued operation in our financial statements.

In September 2016, we acquired ROHL, a California-based luxury plumbing company. In a related transaction, we also acquired Perrin & Rowe, a UK manufacturer and designer of luxury kitchen and bathroom plumbing products. The total combined purchase price was approximately $166 million (including $3 million of liabilities assumed), subject to certain post-closing adjustments. We financed the transaction using cash on hand and borrowings under our existing credit facility. Net sales and operating income in the first nine months of 2017 were not material to the Company. The results of operations are included in the Plumbing segment. The goodwill expected to be deductible for income tax purposes is approximately $49 million.

In May 2016, we acquired Riobel, a Canadian plumbing company specializing in premium showroom bath and shower fittings, for a total purchase price of $94.6 million in cash. We financed the transaction using cash on hand and borrowings under our existing credit facilities. Net sales and operating income in the first nine months of 2017 were not material to the Company. The results of operations are included in the Plumbing segment. We do not expect any portion of goodwill to be deductible for income tax purposes.

We recognized a loss on discontinued operations primarily related to the prior sale of the Waterloo tool storage and Simonton window businesses for the nine months ended September 30, 2017.

Goodwill and Identifiable Intangible Assets

9 Months Ended

Sep. 30, 2017

Goodwill and Identifiable Intangible Assets

5.	Goodwill and Identifiable Intangible Assets

We had goodwill of $1,852.8 million and $1,833.8 million as of September 30, 2017 and December 31, 2016, respectively. The $19.0 million increase was primarily due to the acquisition-related adjustments in our Plumbing segment (See Note 4) and foreign translation adjustments. The change in the net carrying amount of goodwill by segment was as follows:


(In millions)	Cabinets		Plumbing		Doors		Security		Total Goodwill
Goodwill at December 31, 2016 ^(a)	$	924.3	$	670.2	$	143.0	$	96.3	$	1,833.8
Year-to-date translation adjustments		3.3		4.6		—		1.5		9.4
Acquisition-related adjustments		—		9.6		—		—		9.6

Goodwill at September 30, 2017 ^(a)	$	927.6	$	684.4	$	143.0	$	97.8	$	1,852.8

^(a)

Net of accumulated impairment losses of $399.5 million in the Doors segment.

We also had net identifiable intangible assets, principally tradenames, of $1,105.4 million and $1,107.0 million as of September 30, 2017 and December 31, 2016, respectively.

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	As of September 30, 2017							As of December 31, 2016
	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived tradenames	$	682.6	$	—		$	682.6	$	671.8	$	—		$	671.8

Amortizable intangible assets
Tradenames		18.6		(9.4	)		9.2		15.8		(7.3	)		8.5
Customer and contractual relationships		627.1		(226.0	)		401.1		611.9		(203.1	)		408.8
Patents/proprietary technology		57.2		(44.7	)		12.5		61.9		(44.0	)		17.9

Total		702.9		(280.1	)		422.8		689.6		(254.4	)		435.2

Total identifiable intangibles	$	1,385.5	$	(280.1	)	$	1,105.4	$	1,361.4	$	(254.4	)	$	1,107.0

The $24.1 million increase in gross identifiable intangible assets was primarily due to acquisition-related adjustments in our Plumbing segment (See Note 4) as well as foreign translation adjustments, partially offset by impairment charges during the first quarter of 2017 related to our decision to sell Field ID (See Note 6).

Amortizable identifiable intangible assets, principally tradenames and customer relationships, are subject to amortization on a straight-line basis over their estimated useful life, ranging from 2 to 30 years, based on the assessment of a number of factors that may impact useful life. These factors include historical and tradename performance with respect to consumer name recognition, geographic market presence, market share, plans for ongoing tradename support and promotion, customer attrition rates and other relevant factors.

As of December 31, 2016, the fair value of one of the tradenames in the Cabinets segment and one of the tradenames in the Doors segment exceeded their carrying value by less than 10%. In the second quarter of 2017, we performed an interim impairment test on the tradename in the Cabinets segment and concluded the fair value continues to exceed its carrying value. A further reduction in fair value of these tradenames may result in an impairment charge in future periods. As of September 30, 2017, the carrying values of these tradenames was $168 million. We did not identify any impairment triggers during the third quarter of 2017. In addition to evaluating the interim events that may require more frequent impairment testing, we will conduct our annual impairment testing in the fourth quarter of 2017.

The Company cannot predict the occurrence of certain events that might adversely affect the carrying value of goodwill and other intangible assets. The events and/or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: actual new construction and repair and remodel growth rates that lag our assumptions, actions of key customers, volatility of discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending, a decrease in royalty rates and decline in the trading price of our common stock. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived intangible assets.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Asset Impairment

9 Months Ended

Sep. 30, 2017

Asset Impairment

6.	Asset Impairment

In January 2017, we committed to a plan to sell Field ID, our cloud-based inspection and safety compliance software product line included in our Security segment. In accordance with FASB Accounting Standards Codification (“ASC”) 360, as a result of our decision to sell, during the first quarter of 2017 we recorded $3.2 million of pre-tax impairment charges to write down the long-lived assets included in this disposal group to fair value, based upon their estimated fair value less cost to sell. These charges consisted of approximately $3.0 million for definite-lived intangible assets and $0.2 million for fixed assets. We completed the sale of Field ID in April 2017 (See Note 4).

External Debt and Financing Arrangements

9 Months Ended

Sep. 30, 2017

External Debt and Financing Arrangements

7.	External Debt and Financing Arrangements

In June 2016, the Company amended and restated its credit agreement to combine and rollover the existing revolving credit facility and term loan into a new standalone $1.25 billion revolving credit facility. This amendment of the credit agreement was a non-cash transaction for the Company. Terms and conditions of the amended and restated credit agreement, including the total commitment amount, essentially remained the same. As a result of the refinancing, we wrote-off prepaid debt issuance costs of approximately $1.3 million during the three months ended June 30, 2016. The revolving credit facility will mature in June 2021 and borrowings thereunder will be used for general corporate purposes. On September 30, 2017 and December 31, 2016, our outstanding borrowings under this facility were $570.0 million and $540.0 million, respectively. At September 30, 2017 and December 31, 2016, the current portion of long-term debt was zero. Interest rates under the facility are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.9% to LIBOR + 1.5%. As of September 30, 2017, we were in compliance with all covenants under this facility.

In June 2015, we issued $900 million of unsecured senior notes (“Senior Notes”) in a registered public offering. The Senior Notes consist of two tranches: $400 million of five-year notes due 2020 with a coupon of 3% and $500 million of ten-year notes due 2025 with a coupon of 4%. We used the proceeds from the Senior Notes offering to pay down our revolving credit facility and for general corporate purposes. On September 30, 2017 and December 31, 2016, the carrying value of the Senior Notes, net of underwriting commissions, price discounts and debt issuance costs, was $892.2 million and $891.1 million, respectively.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $25.7 million in aggregate, of which there were no outstanding balances as of September 30, 2017 and December 31, 2016.

Financial Instruments

9 Months Ended

Sep. 30, 2017

Financial Instruments

8.	Financial Instruments

We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates and commodities used as raw materials in our products. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value. The counterparties to derivative contracts are major financial institutions. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company. Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, geopolitical and economic variables, and other unpredictable external factors. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations.

Our primary foreign currency hedge contracts pertain to the Canadian dollar, the Mexican peso, the Chinese yuan and the Euro. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at September 30, 2017 was $190.2 million, representing a net settlement payable of $2.3 million. Based on foreign exchange rates as of September 30, 2017, we estimate that $1.2 million of net foreign currency derivative losses included in other comprehensive income as of September 30, 2017 will be reclassified to earnings within the next twelve months.

The fair values of derivative instruments on the consolidated balance sheets as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)		Fair Value
	Location	September 30, 2017		December 31, 2016
Assets
Foreign exchange contracts	Other current assets	$	3.0	$	2.8
Net investment hedges	Other current assets		0.2		0.6

	Total assets	$	3.2	$	3.4

Liabilities
Foreign exchange contracts	Other current liabilities	$	5.1	$	2.9
Net investment hedges	Other current liabilities		0.4		0.2

	Total current liabilities	$	5.5	$	3.1

The effects of derivative financial instruments on the statements of comprehensive income for the nine and three months ended September 30, 2017 and 2016 were:


(In millions)		Gain (Loss) Recognized in Income Nine Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	0.9		$	(2.6	)
Fair value	Other (income) expense, net		(1.4	)		1.3

Total		$	(0.5	)	$	(1.3	)

(In millions)		Gain (Loss) Recognized in Income Three Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	(0.1	)	$	(1.2	)
Fair value	Other (income) expense, net		(0.9	)		0.3

Total		$	(1.0	)	$	(0.9	)

The effective portion of cash flow hedges recognized in other comprehensive income were net losses of $(0.1) million and $(8.0) million in the nine months ended September 30, 2017 and 2016, respectively. The effective portion of cash flow hedges recognized in other comprehensive income were net losses of $(3.8) million and zero in the three months ended September 30, 2017 and 2016, respectively. In the nine and three months ended September 30, 2017 and 2016, the ineffective portion of cash flow hedges recognized in other (income) expense, net, was insignificant.

Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Measurements

9.	Fair Value Measurements

ASC requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect inputs other than quoted prices included in level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs, due to little or no market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are level 3.

The carrying value, net of underwriting commissions, price discounts, and debt issuance costs and fair value of debt as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility	$	570.0	$	570.0	$	540.0	$	540.0
Senior Notes		892.2		927.5		891.1		919.2

The estimated fair value of our revolving credit facility is determined primarily using broker quotes, which are level 2 inputs. The estimated fair value of our Senior Notes is determined by using quoted market prices of our debt securities, which are level 1 inputs.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	Fair Value
	September 30, 2017		December 31, 2016
Assets
Derivative financial instruments (level 2)	$	3.2	$	3.4
Deferred compensation program assets (level 2)		7.0		4.5

Total assets	$	10.2	$	7.9

Liabilities
Derivative financial instruments (level 2)	$	5.5	$	3.1

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2017

Accumulated Other Comprehensive Loss

10.

Accumulated Other Comprehensive Loss

Total accumulated other comprehensive loss consists of net income and other changes in business equity from transactions and other events from sources other than shareholders. It includes currency translation gains and losses, unrealized gains and losses from derivative instruments designated as cash flow hedges, and defined benefit plan adjustments. The components of and changes in accumulated other comprehensive loss, net of tax, were as follows:


(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments^(a)			Accumulated Other Comprehensive Loss
Balance at December 31, 2015	$	(13.3	)	$	2.1		$	(41.3	)	$	(52.5	)
Amounts classified into accumulated other comprehensive loss		0.9			(7.3	)		9.0			2.6
Amounts reclassified from accumulated other comprehensive loss		—			2.8			(5.1	)		(2.3	)

Net current-period other comprehensive income (loss)		0.9			(4.5	)		3.9			0.3

Balance at September 30, 2016	$	(12.4	)	$	(2.4	)	$	(37.4	)	$	(52.2	)

Balance at December 31, 2016	$	(28.0	)	$	(0.6	)	$	(43.3	)	$	(71.9	)
Amounts classified into accumulated other comprehensive loss		47.0			0.6			3.5			51.1
Amounts reclassified from accumulated other comprehensive loss		—			(0.6	)		(4.1	)		(4.7	)

Net current-period other comprehensive income (loss)		47.0			—			(0.6	)		46.4

Balance at September 30, 2017	$	19.0		$	(0.6	)	$	(43.9	)	$	(25.5	)

^(a)

See Note 11, “Defined Benefit Plans,” for further information on the adjustments related to defined benefit plans.

The reclassifications out of accumulated other comprehensive loss for the nine and three months ended September 30, 2017 and 2016 were as follows:


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Nine Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2017			2016
(Losses) gains on cash flow hedges
Foreign exchange contracts	$	0.5		$	(2.5	)		Cost of products sold
Commodity contracts		0.4			(0.1	)		Cost of products sold

		0.9			(2.6	)		Total before tax
		(0.3	)		(0.2	)		Tax expense

	$	0.6		$	(2.8	)		Net of tax
Defined benefit plan items
Recognition of prior service credits	$	5.1		$	10.0			^(a)
Recognition of actuarial gains (losses)		1.3			(1.9	)		^(a)

		6.4			8.1			Total before tax
		(2.3	)		(3.0	)		Tax expense

	$	4.1		$	5.1			Net of tax

Total reclassifications for the period	$	4.7		$	2.3			Net of tax


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Three Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2017			2016
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	(0.5	)	$	(1.3	)		Cost of products sold
Commodity contracts		0.4			0.1			Cost of products sold

		(0.1	)		(1.2	)		Total before tax
		0.2			—			Tax expense

	$	0.1		$	(1.2	)		Net of tax
Defined benefit plan items
Recognition of prior service credits	$	—		$	3.8			^(a)
Recognition of actuarial gains (losses)		1.3			(1.0	)		^(a)

		1.3			2.8			Total before tax
		(0.4	)		(1.0	)		Tax expense

	$	0.9		$	1.8			Net of tax

Total reclassifications for the period	$	1.0		$	0.6			Net of tax

^(a)

These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 11, “Defined Benefit Plans,” for additional information.

Defined Benefit Plans

9 Months Ended

Sep. 30, 2017

Defined Benefit Plans

11.

Defined Benefit Plans

The components of net periodic benefit cost for pension and postretirement benefits for the nine and three months ended September 30, 2017 and 2016 were as follows:


(In millions)	Nine Months Ended September 30,
	Pension Benefits						Postretirement Benefits
	2017			2016			2017			2016
Service cost	$	0.4		$	7.2		$	—		$	—
Interest cost		25.0			25.8			—			0.2
Expected return on plan assets		(28.0	)		(27.9	)		—			—
Recognition of prior service costs (credits)		—			—			(5.1	)		(10.0	)
Recognition of actuarial losses (gains)		0.3			—			(1.6	)		1.9

Net periodic benefit (income) cost	$	(2.3	)	$	5.1		$	(6.7	)	$	(7.9	)

(In millions)	Three Months Ended September 30,
	Pension Benefits						Postretirement Benefits
	2017			2016			2017			2016
Service cost		$0.1			$1.6			$—			$—
Interest cost		8.3			8.4			—			(0.1)
Expected return on plan assets		(9.3)			(8.9)			—			—
Recognition of prior service costs (credits)		—			—			—			(3.8)
Recognition of actuarial losses (gains)		0.3			—			(1.6)			1.0

Net periodic benefit (income) cost	$	(0.6	)	$	1.1		$	(1.6	)	$	(2.9	)

Service cost for 2017 relates to benefit accruals in an hourly Union defined benefit plan in our Security segment. All other defined benefit pension plans were frozen as of December 31, 2016.

Income Taxes

9 Months Ended

Sep. 30, 2017

Income Taxes

12.

Income Taxes

The effective income tax rates for the nine months ended September 30, 2017 and 2016 were 29.5% and 28.2%, respectively. The increase in the effective tax rate reflected a lower tax benefit on share-based compensation, partially offset by a valuation allowance release related to state deferred tax assets. In addition, the effective tax rates in both periods were favorably impacted by a tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions, and a benefit associated with the U.S. research and development credit, offset by state and local taxes and increases to uncertain tax positions.

The effective income tax rates for the three months ended September 30, 2017 and 2016 were 31.6% and 28.6%, respectively. The increase in the effective tax rate reflected a lower tax benefit on share-based compensation, partially offset by a valuation allowance release related to state deferred tax assets. In addition, the effective tax rates in both periods were favorably impacted by a tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, favorable tax rates in foreign jurisdictions, and a benefit associated with the U.S. research and development credit, offset by state and local taxes and increases to uncertain tax positions.

It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease up to $1.5 million, primarily as a result of the conclusion of pending U.S. federal, state and foreign income tax proceedings.

Product Warranties

9 Months Ended

Sep. 30, 2017

Product Warranties

13.

Product Warranties

We generally record warranty expense at the time of sale. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historical claims experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the nine months ended September 30, 2017 and 2016, respectively.


(In millions)	Nine Months Ended September 30,
	2017			2016
Reserve balance at January 1,	$	16.2		$	16.0
Provision for warranties issued		23.3			23.8
Settlements made (in cash or in kind)		(17.0	)		(22.8	)
Foreign translation adjustments		(1.2	)		—
Acquisitions		0.7			0.4

Reserve balance at September 30,	$	22.0		$	17.4

Information on Business Segments

9 Months Ended

Sep. 30, 2017

Information on Business Segments

14.

Information on Business Segments

Net sales and operating income for the nine and three months ended September 30, 2017 and 2016 by segment were as follows:


	Nine Months Ended September 30,
(In millions)	2017			2016			% Change vs. Prior Year
Net Sales
Cabinets	$	1,841.2		$	1,797.2			2.4	%
Plumbing		1,251.5			1,108.0			13.0
Doors		374.2			351.3			6.5
Security		433.9			426.8			1.7

Net sales	$	3,900.8		$	3,683.3			5.9	%

Operating Income
Cabinets	$	205.4		$	194.0			5.9	%
Plumbing		270.8			242.6			11.6
Doors		55.8			46.1			21.0
Security		56.4			44.7			26.2
Less: Corporate expenses		(59.3	)		(61.1	)		2.9

Operating income	$	529.1		$	466.3			13.5	%

Corporate expenses
General and administrative expense	$	(63.8	)	$	(61.3	)
Defined benefit plan income		3.2			2.1
Recognition of defined benefit plan actuarial gains (losses)		1.3			(1.9	)

Total Corporate expenses	$	(59.3	)	$	(61.1	)		2.9	%


	Three Months Ended September 30,
(In millions)	2017			2016			% Change vs. Prior Year
Net Sales
Cabinets	$	614.2		$	602.1			2.0	%
Plumbing		438.3			391.1			12.1
Doors		138.5			129.2			7.2
Security		157.6			156.6			0.6

Net sales	$	1,348.6		$	1,279.0			5.4	%

Operating Income
Cabinets	$	69.7		$	74.8			(6.8	)%
Plumbing		97.3			84.0			15.8
Doors		25.1			22.3			12.6
Security		27.7			22.9			21.0
Less: Corporate expenses		(18.0	)		(20.9	)		13.9

Operating income	$	201.8		$	183.1			10.2	%

Corporate expenses
General and administrative expense	$	(20.5	)	$	(20.5	)
Defined benefit plan income		1.2			0.6
Recognition of defined benefit plan actuarial gains (losses)		1.3			(1.0	)

Total Corporate expenses	$	(18.0	)	$	(20.9	)		13.9	%

Restructuring and Other Charges

9 Months Ended

Sep. 30, 2017

Restructuring and Other Charges

15.

Restructuring and Other Charges

Pre-tax restructuring and other charges for the nine and three months ended September 30, 2017 and 2016 are shown below.


(In millions)	Nine Months Ended September 30, 2017
	Restructuring Charges		Other Charges ^(a)		Total Charges
Plumbing		1.6	$	—	$	1.6
Security		1.9		0.9		2.8

Total	$	3.5	$	0.9	$	4.4

^(a)

“Other Charges” represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities.

Restructuring and other charges in the first nine months of 2017 largely related to severance costs within our Security and Plumbing segments.


(In millions)	Nine Months Ended September 30, 2016
	Restructuring Charges		Other Charges ^(a)		Total Charges
Cabinets	$	1.8	$	—	$	1.8
Plumbing		1.1		0.8		1.9
Security		9.5		3.5		13.0

Total	$	12.4	$	4.3	$	16.7

^a)

Restructuring and other charges in the first nine months of 2016 primarily related to severance costs and charges associated with the relocation of a manufacturing facility within our Security segment.


(In millions)	Three Months Ended September 30, 2017
	Restructuring Charges		Other Charges ^(a)			Total Charges
Doors	$	0.2	$	(0.1	)	$	0.1
Security		0.2		0.3			0.5

Total	$	0.4	$	0.2		$	0.6

^(a)

Restructuring and other charges in the third quarter of 2017 primarily resulted from severance costs within our Doors and Plumbing Segments.


(In millions)	Three Months Ended September 30, 2016
	Restructuring Charges		Other Charges ^(a)		Total Charges
Plumbing	$	0.4	$	0.5	$	0.9
Security		2.7		1.0		3.7

Total	$	3.1	$	1.5	$	4.6

^(a)

Restructuring and other charges in the third quarter of 2016 primarily resulted from severance costs within our Security segment.

Reconciliation of Restructuring Liability


(In millions)	Balance at 12/31/16		2017 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs			Balance at 9/30/17
Workforce reduction costs	$	2.4	$	2.8	$	(2.9	)	$	(0.5	)	$	1.8
Other		0.6		0.7		(1.3	)		—			0.0

	$	3.0	$	3.5	$	(4.2	)	$	(0.5	)	$	1.8

^(a)

Cash expenditures primarily related to severance charges.


(In millions)	Balance at 12/31/15		2016 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs ^(b)			Balance at 9/30/16
Workforce reduction costs	$	10.4	$	8.7	$	(15.0	)	$	0.2		$	4.3
Other		0.5		3.7		(3.0	)		(0.6	)		0.6

	$	10.9	$	12.4	$	(18.0	)	$	(0.4	)	$	4.9

^(a)

Cash expenditures primarily related to severance charges.

^(b)

Non-cash write-offs include asset impairment charges attributable to restructuring actions.

Earnings Per Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share

16.

Earnings Per Share

The computations of earnings per common share were as follows:


(In millions, except per share data)	Nine Months Ended September 30,						Three Months Ended September 30,
	2017			2016			2017		2016
Income from continuing operations, net of tax	$	347.3		$	308.0		$	129.6	$	121.9
Less: Noncontrolling interest		0.1			(0.1	)		0.1		—

Income from continuing operations for EPS		347.2			308.1			129.5		121.9
Income from discontinued operations		(2.6	)		1.5			—		1.5

Net income attributable to Fortune Brands	$	344.6		$	309.6		$	129.5	$	123.4


Earnings per common share
Basic
Continuing operations	$	2.26		$	2.00		$	0.84	$	0.79
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common stockholders	$	2.24		$	2.01		$	0.84	$	0.80
Diluted
Continuing operations	$	2.22		$	1.95		$	0.83	$	0.77
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common stockholders	$	2.20		$	1.96		$	0.83	$	0.78

Basic average shares outstanding		153.7			154.4			153.5		154.2
Stock-based awards		2.5			3.6			2.4		3.4

Diluted average shares outstanding		156.2			158.1			155.9		157.6
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share		0.6			0.5			0.6		—

Contingencies

9 Months Ended

Sep. 30, 2017

Contingencies

17.

Contingencies

Litigation

We are defendants in lawsuits associated with the normal conduct of our businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested.

Environmental

Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Fortune Brands during the nine months ended September 30, 2017 and 2016. We are involved in remediation activities to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs of each site are based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. We believe, compliance with current environmental protection laws (before taking into account estimated recoveries from third parties) will not have a material adverse effect upon our results of operations, cash flows or financial condition. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures.

Subsequent Event

9 Months Ended

Sep. 30, 2017

Subsequent Event

18.

Subsequent Event

In October 2017, the Company acquired Victoria + Albert, a UK manufacturer of luxury freestanding tubs and basins. Victoria + Albert represent a strong strategic fit, adding a preeminent luxury tub brand to our plumbing portfolio. The results of operations of the acquired company will be included in the Plumbing segment from the date of acquisition. This acquisition will not have a material effect on net sales or operating income.

Balance Sheet Information (Tables)

9 Months Ended

Sep. 30, 2017

Supplemental Information on Balance Sheets

Supplemental information on our balance sheets is as follows:


(In millions)	September 30, 2017		December 31, 2016
Inventories:
Raw materials and supplies	$	211.6	$	207.6
Work in process		61.8		55.9
Finished products		326.7		267.6
Total inventories	$	600.1	$	531.1
Property, plant and equipment, gross	$	1,715.8	$	1,630.7
Less: accumulated depreciation		1,025.2		968.2

Property, plant and equipment, net	$	690.6	$	662.5

Goodwill and Identifiable Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2017

Change in Net Carrying Amount of Goodwill by Segment

The change in the net carrying amount of goodwill by segment was as follows:


(In millions)	Cabinets		Plumbing		Doors		Security		Total Goodwill
Goodwill at December 31, 2016 ^(a)	$	924.3	$	670.2	$	143.0	$	96.3	$	1,833.8
Year-to-date translation adjustments		3.3		4.6		—		1.5		9.4
Acquisition-related adjustments		—		9.6		—		—		9.6

Goodwill at September 30, 2017 ^(a)	$	927.6	$	684.4	$	143.0	$	97.8	$	1,852.8

^(a)

Net of accumulated impairment losses of $399.5 million in the Doors segment.

Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	As of September 30, 2017							As of December 31, 2016
	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived tradenames	$	682.6	$	—		$	682.6	$	671.8	$	—		$	671.8

Amortizable intangible assets
Tradenames		18.6		(9.4	)		9.2		15.8		(7.3	)		8.5
Customer and contractual relationships		627.1		(226.0	)		401.1		611.9		(203.1	)		408.8
Patents/proprietary technology		57.2		(44.7	)		12.5		61.9		(44.0	)		17.9

Total		702.9		(280.1	)		422.8		689.6		(254.4	)		435.2

Total identifiable intangibles	$	1,385.5	$	(280.1	)	$	1,105.4	$	1,361.4	$	(254.4	)	$	1,107.0

Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Values of Derivative Instruments

The fair values of derivative instruments on the consolidated balance sheets as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)		Fair Value
	Location	September 30, 2017		December 31, 2016
Assets
Foreign exchange contracts	Other current assets	$	3.0	$	2.8
Net investment hedges	Other current assets		0.2		0.6

	Total assets	$	3.2	$	3.4

Liabilities
Foreign exchange contracts	Other current liabilities	$	5.1	$	2.9
Net investment hedges	Other current liabilities		0.4		0.2

	Total current liabilities	$	5.5	$	3.1

Effects of Derivative Financial Instruments on Consolidated Statements of Income

The effects of derivative financial instruments on the statements of comprehensive income for the nine and three months ended September 30, 2017 and 2016 were:


(In millions)		Gain (Loss) Recognized in Income Nine Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	0.9		$	(2.6	)
Fair value	Other (income) expense, net		(1.4	)		1.3

Total		$	(0.5	)	$	(1.3	)

(In millions)		Gain (Loss) Recognized in Income Three Months Ended September 30,
Type of hedge	Location	2017			2016
Cash flow	Cost of products sold	$	(0.1	)	$	(1.2	)
Fair value	Other (income) expense, net		(0.9	)		0.3

Total		$	(1.0	)	$	(0.9	)

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Carrying Value and Fair Value of Debt

The carrying value, net of underwriting commissions, price discounts, and debt issuance costs and fair value of debt as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility	$	570.0	$	570.0	$	540.0	$	540.0
Senior Notes		892.2		927.5		891.1		919.2

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 were as follows:


(In millions)	Fair Value
	September 30, 2017		December 31, 2016
Assets
Derivative financial instruments (level 2)	$	3.2	$	3.4
Deferred compensation program assets (level 2)		7.0		4.5

Total assets	$	10.2	$	7.9

Liabilities
Derivative financial instruments (level 2)	$	5.5	$	3.1

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2017

Net of Tax Components of and Changes in Accumulated Other Comprehensive Loss

The components of and changes in accumulated other comprehensive loss, net of tax, were as follows:


(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments^(a)			Accumulated Other Comprehensive Loss
Balance at December 31, 2015	$	(13.3	)	$	2.1		$	(41.3	)	$	(52.5	)
Amounts classified into accumulated other comprehensive loss		0.9			(7.3	)		9.0			2.6
Amounts reclassified from accumulated other comprehensive loss		—			2.8			(5.1	)		(2.3	)

Net current-period other comprehensive income (loss)		0.9			(4.5	)		3.9			0.3

Balance at September 30, 2016	$	(12.4	)	$	(2.4	)	$	(37.4	)	$	(52.2	)

Balance at December 31, 2016	$	(28.0	)	$	(0.6	)	$	(43.3	)	$	(71.9	)
Amounts classified into accumulated other comprehensive loss		47.0			0.6			3.5			51.1
Amounts reclassified from accumulated other comprehensive loss		—			(0.6	)		(4.1	)		(4.7	)

Net current-period other comprehensive income (loss)		47.0			—			(0.6	)		46.4

Balance at September 30, 2017	$	19.0		$	(0.6	)	$	(43.9	)	$	(25.5	)

Reclassifications Out of Accumulated Other Comprehensive Loss

The reclassifications out of accumulated other comprehensive loss for the nine and three months ended September 30, 2017 and 2016 were as follows:


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Nine Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2017			2016
(Losses) gains on cash flow hedges
Foreign exchange contracts	$	0.5		$	(2.5	)		Cost of products sold
Commodity contracts		0.4			(0.1	)		Cost of products sold

		0.9			(2.6	)		Total before tax
		(0.3	)		(0.2	)		Tax expense

	$	0.6		$	(2.8	)		Net of tax
Defined benefit plan items
Recognition of prior service credits	$	5.1		$	10.0			^(a)
Recognition of actuarial gains (losses)		1.3			(1.9	)		^(a)

		6.4			8.1			Total before tax
		(2.3	)		(3.0	)		Tax expense

	$	4.1		$	5.1			Net of tax

Total reclassifications for the period	$	4.7		$	2.3			Net of tax


(In millions)
Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss Three Months Ended September 30,						Affected Line Item in the Statement of Comprehensive Income
	2017			2016
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	(0.5	)	$	(1.3	)		Cost of products sold
Commodity contracts		0.4			0.1			Cost of products sold

		(0.1	)		(1.2	)		Total before tax
		0.2			—			Tax expense

	$	0.1		$	(1.2	)		Net of tax
Defined benefit plan items
Recognition of prior service credits	$	—		$	3.8			^(a)
Recognition of actuarial gains (losses)		1.3			(1.0	)		^(a)

		1.3			2.8			Total before tax
		(0.4	)		(1.0	)		Tax expense

	$	0.9		$	1.8			Net of tax

Total reclassifications for the period	$	1.0		$	0.6			Net of tax

^(a)

These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 11, “Defined Benefit Plans,” for additional information.

Defined Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2017

Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits

The components of net periodic benefit cost for pension and postretirement benefits for the nine and three months ended September 30, 2017 and 2016 were as follows:


(In millions)	Nine Months Ended September 30,
	Pension Benefits						Postretirement Benefits
	2017			2016			2017			2016
Service cost	$	0.4		$	7.2		$	—		$	—
Interest cost		25.0			25.8			—			0.2
Expected return on plan assets		(28.0	)		(27.9	)		—			—
Recognition of prior service costs (credits)		—			—			(5.1	)		(10.0	)
Recognition of actuarial losses (gains)		0.3			—			(1.6	)		1.9

Net periodic benefit (income) cost	$	(2.3	)	$	5.1		$	(6.7	)	$	(7.9	)

(In millions)	Three Months Ended September 30,
	Pension Benefits						Postretirement Benefits
	2017			2016			2017			2016
Service cost		$0.1			$1.6			$—			$—
Interest cost		8.3			8.4			—			(0.1)
Expected return on plan assets		(9.3)			(8.9)			—			—
Recognition of prior service costs (credits)		—			—			—			(3.8)
Recognition of actuarial losses (gains)		0.3			—			(1.6)			1.0

Net periodic benefit (income) cost	$	(0.6	)	$	1.1		$	(1.6	)	$	(2.9	)

Product Warranties (Tables)

9 Months Ended

Sep. 30, 2017

The following table summarizes activity related to our product warranty liability for the nine months ended September 30, 2017 and 2016, respectively.


(In millions)	Nine Months Ended September 30,
	2017			2016
Reserve balance at January 1,	$	16.2		$	16.0
Provision for warranties issued		23.3			23.8
Settlements made (in cash or in kind)		(17.0	)		(22.8	)
Foreign translation adjustments		(1.2	)		—
Acquisitions		0.7			0.4

Reserve balance at September 30,	$	22.0		$	17.4

Information on Business Segments (Tables)

9 Months Ended

Sep. 30, 2017

Net Sales and Operating Income by Segment

Net sales and operating income for the nine and three months ended September 30, 2017 and 2016 by segment were as follows:


	Nine Months Ended September 30,
(In millions)	2017			2016			% Change vs. Prior Year
Net Sales
Cabinets	$	1,841.2		$	1,797.2			2.4	%
Plumbing		1,251.5			1,108.0			13.0
Doors		374.2			351.3			6.5
Security		433.9			426.8			1.7

Net sales	$	3,900.8		$	3,683.3			5.9	%

Operating Income
Cabinets	$	205.4		$	194.0			5.9	%
Plumbing		270.8			242.6			11.6
Doors		55.8			46.1			21.0
Security		56.4			44.7			26.2
Less: Corporate expenses		(59.3	)		(61.1	)		2.9

Operating income	$	529.1		$	466.3			13.5	%

Corporate expenses
General and administrative expense	$	(63.8	)	$	(61.3	)
Defined benefit plan income		3.2			2.1
Recognition of defined benefit plan actuarial gains (losses)		1.3			(1.9	)

Total Corporate expenses	$	(59.3	)	$	(61.1	)		2.9	%


	Three Months Ended September 30,
(In millions)	2017			2016			% Change vs. Prior Year
Net Sales
Cabinets	$	614.2		$	602.1			2.0	%
Plumbing		438.3			391.1			12.1
Doors		138.5			129.2			7.2
Security		157.6			156.6			0.6

Net sales	$	1,348.6		$	1,279.0			5.4	%

Operating Income
Cabinets	$	69.7		$	74.8			(6.8	)%
Plumbing		97.3			84.0			15.8
Doors		25.1			22.3			12.6
Security		27.7			22.9			21.0
Less: Corporate expenses		(18.0	)		(20.9	)		13.9

Operating income	$	201.8		$	183.1			10.2	%

Corporate expenses
General and administrative expense	$	(20.5	)	$	(20.5	)
Defined benefit plan income		1.2			0.6
Recognition of defined benefit plan actuarial gains (losses)		1.3			(1.0	)

Total Corporate expenses	$	(18.0	)	$	(20.9	)		13.9	%

Restructuring and Other Charges (Tables)

9 Months Ended

Sep. 30, 2017

Pre Tax Restructuring and Other Charges

Pre-tax restructuring and other charges for the nine and three months ended September 30, 2017 and 2016 are shown below.


(In millions)	Nine Months Ended September 30, 2017
	Restructuring Charges		Other Charges ^(a)		Total Charges
Plumbing		1.6	$	—	$	1.6
Security		1.9		0.9		2.8

Total	$	3.5	$	0.9	$	4.4

^(a)


(In millions)	Nine Months Ended September 30, 2016
	Restructuring Charges		Other Charges ^(a)		Total Charges
Cabinets	$	1.8	$	—	$	1.8
Plumbing		1.1		0.8		1.9
Security		9.5		3.5		13.0

Total	$	12.4	$	4.3	$	16.7

^a)


(In millions)	Three Months Ended September 30, 2017
	Restructuring Charges		Other Charges ^(a)			Total Charges
Doors	$	0.2	$	(0.1	)	$	0.1
Security		0.2		0.3			0.5

Total	$	0.4	$	0.2		$	0.6

^(a)


(In millions)	Three Months Ended September 30, 2016
	Restructuring Charges		Other Charges ^(a)		Total Charges
Plumbing	$	0.4	$	0.5	$	0.9
Security		2.7		1.0		3.7

Total	$	3.1	$	1.5	$	4.6

^(a)

Reconciliation of Restructuring Liability

Reconciliation of Restructuring Liability


(In millions)	Balance at 12/31/16		2017 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs			Balance at 9/30/17
Workforce reduction costs	$	2.4	$	2.8	$	(2.9	)	$	(0.5	)	$	1.8
Other		0.6		0.7		(1.3	)		—			0.0

	$	3.0	$	3.5	$	(4.2	)	$	(0.5	)	$	1.8

^(a)

Cash expenditures primarily related to severance charges.


(In millions)	Balance at 12/31/15		2016 Provision		Cash Expenditures ^(a)			Non-Cash Write-offs ^(b)			Balance at 9/30/16
Workforce reduction costs	$	10.4	$	8.7	$	(15.0	)	$	0.2		$	4.3
Other		0.5		3.7		(3.0	)		(0.6	)		0.6

	$	10.9	$	12.4	$	(18.0	)	$	(0.4	)	$	4.9

^(a)

Cash expenditures primarily related to severance charges.

^(b)

Non-cash write-offs include asset impairment charges attributable to restructuring actions.

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Computations of Earnings per Common Share

The computations of earnings per common share were as follows:


(In millions, except per share data)	Nine Months Ended September 30,						Three Months Ended September 30,
	2017			2016			2017		2016
Income from continuing operations, net of tax	$	347.3		$	308.0		$	129.6	$	121.9
Less: Noncontrolling interest		0.1			(0.1	)		0.1		—

Income from continuing operations for EPS		347.2			308.1			129.5		121.9
Income from discontinued operations		(2.6	)		1.5			—		1.5

Net income attributable to Fortune Brands	$	344.6		$	309.6		$	129.5	$	123.4


Earnings per common share
Basic
Continuing operations	$	2.26		$	2.00		$	0.84	$	0.79
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common stockholders	$	2.24		$	2.01		$	0.84	$	0.80
Diluted
Continuing operations	$	2.22		$	1.95		$	0.83	$	0.77
Discontinued operations		(0.02	)		0.01			—		0.01

Net income attributable to Fortune Brands common stockholders	$	2.20		$	1.96		$	0.83	$	0.78

Basic average shares outstanding		153.7			154.4			153.5		154.2
Stock-based awards		2.5			3.6			2.4		3.4

Diluted average shares outstanding		156.2			158.1			155.9		157.6
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share		0.6			0.5			0.6		—

Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Inventories:
Raw materials and supplies	$ 211.6	$ 207.6
Work in process	61.8	55.9
Finished products	326.7	267.6
Total inventories	600.1	531.1
Property, plant and equipment, gross	1,715.8	1,630.7
Less: accumulated depreciation	1,025.2	968.2
Property, plant and equipment, net	$ 690.6	$ 662.5

Acquisitions and Dispositions - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended		9 Months Ended
	Sep. 30, 2016	May 31, 2016	Sep. 30, 2017
Acquisitions and Dispositions [Line Items]
Loss on sale of product line			$ 2.4
TCL Manufacturing Ltd [Member]
Acquisitions and Dispositions [Line Items]
Business acquisition purchase price	$ 166.0
Business acquisition, liabilities assumed	$ 3.0
Goodwill expected to be deductible for income tax purposes			$ 49.0
Riobel [Member]
Acquisitions and Dispositions [Line Items]
Payment to acquire business		$ 94.6

Goodwill and Identifiable Intangible Assets - Additional Information (Detail)
$ in Millions

9 Months Ended

12 Months Ended

Sep. 30, 2017

USD ($)

Dec. 31, 2016

USD ($)

asset_group

Other intangible assets, net of accumulated amortization

^[1]

$ 1,852.8

$ 1,833.8

1,105.4

1,107.0

Carrying value of tradenames

682.6

671.8

Plumbing [Member]

Goodwill decrease due to foreign exchange adjustments

^[1]

684.4

670.2

19.0

Increase in gross identifiable intangible assets

24.1

Cabinets [Member]

Number of tradenames, with the fair value exceeded their carrying value | asset_group

^[1]

927.6

$ 924.3

Doors [Member]

Number of tradenames, with the fair value exceeded their carrying value | asset_group

^[1]

143.0

$ 143.0

Cabinets and Doors Segment [Member]

Carrying value of tradenames

$ 168.0

Minimum [Member] | Tradenames and Customer Relationship [Member]

Amortizable identifiable intangible assets, estimated useful life

2 years

Maximum [Member] | Cabinets [Member] | Tradenames [Member]

Percentage of fair value of reporting unit in excess of carrying amount

10.00%

Maximum [Member] | Doors [Member] | Tradenames [Member]

Percentage of fair value of reporting unit in excess of carrying amount

10.00%

Maximum [Member] | Tradenames and Customer Relationship [Member]

Amortizable identifiable intangible assets, estimated useful life

30 years

[1]	Net of accumulated impairment losses of $399.5 million in the Doors segment.

Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Detail)
$ in Millions

9 Months Ended

Sep. 30, 2017

USD ($)

$ 1,833.8

^[1]

Acquisition-related adjustments

9.4

9.6

1,852.8

^[1]

Cabinets [Member]

924.3

^[1]

3.3

927.6

^[1]

Plumbing [Member]

670.2

^[1]

Acquisition-related adjustments

4.6

9.6

684.4

^[1]

Doors [Member]

143.0

^[1]

143.0

^[1]

Security [Member]

96.3

^[1]

1.5

Accumulated Other Comprehensive Income (Loss) [Line Items]

$ 97.8

^[1]

[1]	Net of accumulated impairment losses of $399.5 million in the Doors segment.

Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Doors [Member]
Goodwill [Line Items]
Accumulated impairment losses	$ 399.5

Goodwill and Identifiable Intangible Assets - Gross Carrying Value and Accumulated Amortization by Class of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Intangible Assets [Line Items]
Gross Carrying Amounts, Total identifiable intangibles	$ 1,385.5	$ 1,361.4
Gross Carrying Amounts, Finite Lived	702.9	689.6
Accumulated Amortization, Finite Lived	(280.1)	(254.4)
Net Book Value, Total identifiable intangibles	1,105.4	1,107.0
Net Book Value, Finite Lived	422.8	435.2
Gross Carrying Amounts, Indefinite-lived tradenames	682.6	671.8
Net Book Value, Indefinite-lived tradenames	682.6	671.8
Tradenames [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	18.6	15.8
Accumulated Amortization, Finite Lived	(9.4)	(7.3)
Net Book Value, Finite Lived	9.2	8.5
Customer and contractual relationships [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	627.1	611.9
Accumulated Amortization, Finite Lived	(226.0)	(203.1)
Net Book Value, Finite Lived	401.1	408.8
Patents/proprietary technology [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	57.2	61.9
Accumulated Amortization, Finite Lived	(44.7)	(44.0)
Net Book Value, Finite Lived	$ 12.5	$ 17.9

Asset Impairment - Additional information (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2017	Sep. 30, 2017
Asset Impairment Charges [Line Items]
Asset impairment charge	$ 3.2	$ 3.2
Definite-lived intangible assets	3.0
Fixed Assets	$ 0.2

External Debt and Financing Arrangements - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Revolving credit facility, extended expiration date			2021-06
Prepaid debt issuance cost, write off		$ 1,300,000
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital			$ 25,700,000	$ 25,700,000
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital amount outstanding			$ 0	0
LIBOR [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Interest rate over LIBOR			0.90%
LIBOR [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Interest rate over LIBOR			1.50%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Term loan, outstanding borrowings			$ 570,000,000	540,000,000
Current portion of long-term debt			0	0
Amended and Restated Credit Agreement [Member] \| Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,250,000,000
Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price	$ 900,000,000
Senior notes, outstanding amount			$ 892,200,000	$ 891,100,000
Senior Unsecured Notes [Member] \| Notes Due 2020 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price	$ 400,000,000
Senior unsecured notes, maturity period	5 years
Senior unsecured notes, maturity year	2020
Senior unsecured notes, coupon rate	3.00%
Senior Unsecured Notes [Member] \| Notes Due 2025 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price	$ 500,000,000
Senior unsecured notes, maturity period	10 years
Senior unsecured notes, maturity year	2025
Senior unsecured notes, coupon rate	4.00%

Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Derivative [Line Items]
Net settlement payable	$ 2,300,000		$ 2,300,000
Estimated amount of net foreign currency derivative losses in other comprehensive income reclassified to earnings within 12 months	(1,200,000)		(1,200,000)
Cash flow hedge
Derivative [Line Items]
Net losses recognized in OCI	(3,800,000)	$ 0	(100,000)	$ (8,000,000)
Foreign exchange contracts [Member]
Derivative [Line Items]
Notional amount of foreign currency derivative hedges	$ 190,200,000		$ 190,200,000

Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	$ 3.2	$ 3.4
Derivative liabilities, fair value	5.5	3.1
Net investment hedges [Member] \| Other current assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	0.2	0.6
Net investment hedges [Member] \| Other current liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities, fair value	0.4	0.2
Foreign exchange contracts [Member] \| Other current assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	3.0	2.8
Foreign exchange contracts [Member] \| Other current liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities, fair value	$ 5.1	$ 2.9

Financial Instruments - Effects of Derivative Financial Instruments on Consolidated Statements of Income (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) Gain Recognized in Income	$ (1.0)	$ (0.9)	$ (0.5)	$ (1.3)
Cash flow hedge \| Cost of products sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) Gain Recognized in Income	(0.1)	(1.2)	0.9	(2.6)
Fair value hedge [Member] \| Other (income) expense, net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) Gain Recognized in Income	$ (0.9)	$ 0.3	$ (1.4)	$ 1.3

Fair Value Measurements - Additional Information (Detail)	Sep. 30, 2017 USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets or liabilities measured at fair value on recurring basis	$ 0

Fair Value Measurements - Carrying Value and Fair Value of Debt (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Carrying Value \| Senior Unsecured Notes [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair Value	$ 892.2	$ 891.1
Carrying Value \| Revolving Credit Facility [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair Value	570.0	540.0
Fair Value \| Senior Unsecured Notes [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair Value	927.5	919.2
Fair Value \| Revolving Credit Facility [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair Value	$ 570.0	$ 540.0

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments (level 2)	$ 3.2	$ 3.4
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	10.2	7.9
Fair Value, Measurements, Recurring [Member] \| Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments (level 2)	3.2	3.4
Deferred compensation program assets (level 2)	7.0	4.5
Derivative financial instruments (level 2)	$ 5.5	$ 3.1

Accumulated Other Comprehensive Loss - After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($)
$ in Millions

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

$ 2,363.0

$ 2,453.8

46.4

0.3

Foreign Currency Adjustments [Member]

2,545.9

2,360.2

Accumulated Other Comprehensive Income (Loss) [Line Items]

Amounts classified into accumulated other comprehensive loss

(28.0)

(13.3)

47.0

0.9

47.0

0.9

Derivative Hedging Gains (Loss) [Member]

19.0

(12.4)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Amounts classified into accumulated other comprehensive loss

(0.6)

2.1

0.6

(7.3)

Amounts reclassified from accumulated other comprehensive loss

(0.6)

2.8

(4.5)

Defined benefit plan items [Member]

(0.6)

(2.4)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Amounts classified into accumulated other comprehensive loss

^[1]

(43.3)

(41.3)

^[1]

3.5

9.0

Amounts reclassified from accumulated other comprehensive loss

^[1]

(4.1)

(5.1)

^[1]

(0.6)

3.9

Accumulated Other Comprehensive Loss [Member]

^[1]

(43.9)

(37.4)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Amounts classified into accumulated other comprehensive loss

(71.9)

(52.5)

51.1

2.6

Amounts reclassified from accumulated other comprehensive loss

(4.7)

(2.3)

46.4

0.3

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

$ (25.5)

$ (52.2)

[1]	See Note 11, "Defined Benefit Plans," for further information on the adjustments related to defined benefit plans.

Accumulated Other Comprehensive (Loss) Income - Reclassifications Out of Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

Sep. 30, 2017

Sep. 30, 2016

Cost of products sold

$ 841.6

$ 801.0

$ 2,461.3

$ 2,352.8

Derivative Hedging Gains (Loss) [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax

0.6

(2.8)

Defined benefit plan items [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax

^[1]

4.1

5.1

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax

1.0

0.6

4.7

2.3

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gains (Loss) [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax

(0.1)

(1.2)

0.9

(2.6)

Reclassification from AOCI, Current Period, Tax

0.2

(0.3)

(0.2)

Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax

0.1

(1.2)

0.6

(2.8)

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gains (Loss) [Member] | Foreign exchange contracts [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Cost of products sold

(0.5)

(1.3)

0.5

(2.5)

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Derivative Hedging Gains (Loss) [Member] | Commodity contracts [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Cost of products sold

0.4

0.1

0.4

(0.1)

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Prior service credits [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax

3.8

^[2]

5.1

10.0

^[2]

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Actuarial gains (losses) [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax

1.3

(1.0)

^[2]

1.3

(1.9)

^[2]

Reclassification out of Accumulated Other Comprehensive Income (Loss) [Member] | Defined benefit plan items [Member]

Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]

Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax

1.3

2.8

6.4

8.1

Reclassification from AOCI, Current Period, Tax

(0.4)

(1.0)

(2.3)

(3.0)

Reclassification from Accumulated Other Comprehensive Income (Loss), Current Period, Net of Tax

$ 0.9

$ 1.8

$ 4.1

$ 5.1

[1]	See Note 11, "Defined Benefit Plans," for further information on the adjustments related to defined benefit plans.
[2]	These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. Refer to Note 11, "Defined Benefit Plans," for additional information.

Defined Benefit Plans - Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial losses (gains)			$ (1.3)	$ 1.9
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0.1	$ 1.6	0.4	7.2
Interest cost	8.3	8.4	25.0	25.8
Expected return on plan assets	(9.3)	(8.9)	(28.0)	(27.9)
Recognition of actuarial losses (gains)	0.3		0.3
Net periodic benefit (income) cost	(0.6)	1.1	(2.3)	5.1
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost		(0.1)		0.2
Recognition of prior service costs (credits)		(3.8)	(5.1)	(10.0)
Recognition of actuarial losses (gains)	(1.6)	1.0	(1.6)	1.9
Net periodic benefit (income) cost	$ (1.6)	$ (2.9)	$ (6.7)	$ (7.9)

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Taxes [Line Items]
Effective income tax rate	31.60%	28.60%	29.50%	28.20%
Maximum [Member]
Income Taxes [Line Items]
Reasonably possible decrease in unrecognized tax benefits	$ 1,500,000		$ 1,500,000

Product Warranties - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Product Warranty Liability [Line Items]
Reserve balance at the beginning of the year	$ 16.2	$ 16.0
Provision for warranties issued	23.3	23.8
Settlements made (in cash or in kind)	(17.0)	(22.8)
Foreign translation adjustments	(1.2)
Acquisitions	0.7	0.4
Reserve balance at end of year	$ 22.0	$ 17.4

Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net sales	$ 1,348.6	$ 1,279.0	$ 3,900.8	$ 3,683.3
Operating Income (Loss)	$ 201.8	183.1	529.1	466.3
Recognition of defined benefit plan actuarial gains (losses)			$ 1.3	(1.9)
Net Sales, Percentage Change vs. Prior Year	5.40%		5.90%
Operating Income (Loss), Percentage Change vs. Prior Year	10.20%		13.50%
Corporate [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating Income (Loss)	$ (18.0)	(20.9)	$ (59.3)	(61.1)
General and administrative expense	(20.5)	(20.5)	(63.8)	(61.3)
Defined benefit plan costs	1.2	0.6	3.2	2.1
Recognition of defined benefit plan actuarial gains (losses)	1.3	(1.0)	1.3	(1.9)
Total Corporate expenses	$ (18.0)	(20.9)	$ (59.3)	(61.1)
Operating Income (Loss), Percentage Change vs. Prior Year	13.90%		2.90%
Total Corporate expenses, Percentage Change vs. Prior Year	13.90%		2.90%
Cabinets [Member] \| Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net sales	$ 614.2	602.1	$ 1,841.2	1,797.2
Operating Income (Loss)	$ 69.7	74.8	$ 205.4	194.0
Net Sales, Percentage Change vs. Prior Year	2.00%		2.40%
Operating Income (Loss), Percentage Change vs. Prior Year	(6.80%)		5.90%
Plumbing [Member] \| Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net sales	$ 438.3	391.1	$ 1,251.5	1,108.0
Operating Income (Loss)	$ 97.3	84.0	$ 270.8	242.6
Net Sales, Percentage Change vs. Prior Year	12.10%		13.00%
Operating Income (Loss), Percentage Change vs. Prior Year	15.80%		11.60%
Doors [Member] \| Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net sales	$ 138.5	129.2	$ 374.2	351.3
Operating Income (Loss)	$ 25.1	22.3	$ 55.8	46.1
Net Sales, Percentage Change vs. Prior Year	7.20%		6.50%
Operating Income (Loss), Percentage Change vs. Prior Year	12.60%		21.00%
Security [Member] \| Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net sales	$ 157.6	156.6	$ 433.9	426.8
Operating Income (Loss)	$ 27.7	$ 22.9	$ 56.4	$ 44.7
Net Sales, Percentage Change vs. Prior Year	0.60%		1.70%
Operating Income (Loss), Percentage Change vs. Prior Year	21.00%		26.20%

Restructuring and Other Charges - Pre-tax Restructuring and Other Charges (Detail) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

Sep. 30, 2017

Sep. 30, 2016

$ 0.4

$ 3.1

$ 3.5

$ 12.4

^[1]

0.2

1.5

0.9

4.3

Operating Segments [Member] | Cabinets [Member]

0.6

4.6

4.4

16.7

1.8

Operating Segments [Member] | Plumbing [Member]

1.8

0.4

1.6

1.1

^[1]

0.5

0.8

Operating Segments [Member] | Security [Member]

0.9

1.6

1.9

0.2

2.7

1.9

9.5

^[1]

0.3

1.0

0.9

3.5

Operating Segments [Member] | Doors [Member]

0.5

$ 3.7

$ 2.8

$ 13.0

0.2

^[1]

(0.1)

$ 0.1

[1]

"Other Charges" represent charges directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities and gains or losses on the sale of previously closed facilities.

Restructuring and Other Charges - Reconciliation of Restructuring Liability (Detail) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

Sep. 30, 2017

Sep. 30, 2016

$ 3.0

$ 10.9

Provision

$ 0.4

$ 3.1

3.5

12.4

Cash Expenditures

^[1]

(4.2)

(18.0)

Non-Cash Write-offs

(0.5)

(0.4)

^[2]

Workforce Reduction Costs [Member]

1.8

4.9

1.8

4.9

2.4

10.4

Provision

2.8

8.7

Cash Expenditures

^[1]

(2.9)

(15.0)

Non-Cash Write-offs

(0.5)

0.2

^[2]

1.8

4.3

1.8

4.3

Other [Member]

0.6

0.5

Provision

0.7

3.7

Cash Expenditures

^[1]

(1.3)

(3.0)

Non-Cash Write-offs

^[2]

(0.6)