View Filing Data

Selling, general and administrative expenses

3,525.7

3,358.3

3,188.8

1,241.4

1,196.9

1,135.5

Loss on sale of product line (see Note 4)

36.1

31.7

28.1

2.4

Asset impairment charges

62.6

3.2

Income from continuing operations before income taxes

24.1

8.3

13.9

^[2]

OPERATING INCOME

595.2

682.5

618.6

Interest expense

74.5

49.4

49.1

Other income, net

(16.3)

(1.7)

(12.6)

537.0

634.8

582.1

Income taxes

147.0

159.5

169.7

Income from continuing operations, net of tax

390.0

475.3

412.4

(Loss) income from discontinued operations, net of tax

(0.2)

(2.6)

0.8

NET INCOME

389.8

472.7

413.2

Less: Noncontrolling interests

0.2

0.1

NET INCOME ATTRIBUTABLE TO FORTUNE BRANDS

$ 389.6

$ 472.6

$ 413.2

BASIC EARNINGS (LOSS) PER COMMON SHARE

Net income attributable to Fortune Brands common shareholders

$ 2.69

$ 3.10

$ 2.67

Discontinuing operations

(0.02)

0.01

2.69

3.08

2.68

DILUTED EARNINGS (LOSS) PER COMMON SHARE

Net income attributable to Fortune Brands common shareholders

2.66

3.05

2.61

Discontinuing operations

(0.02)

0.01

$ 2.66

$ 3.03

$ 2.62

Basic average number of shares outstanding

144.6

153.2

154.3

Diluted average number of shares outstanding

146.4

155.8

157.8

[1]

Based on country of destination

[2]

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

Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

NET INCOME

$ 389.8

$ 472.7

$ 413.2

Other comprehensive (loss) income, before tax:

Foreign currency translation adjustments

(31.1)

33.8

(14.7)

Unrealized (losses) gains on derivatives:

Unrealized holding gains (losses) arising during period

10.1

(1.8)

(6.7)

Less: reclassification adjustment for (gains) losses included in net income

(2.1)

(0.9)

3.5

Unrealized gains (losses) on derivatives

8.0

(2.7)

(3.2)

Defined benefit plans:

Prior service credit (cost) arising during period

12.1

Prior service credit (cost) recognition due to settlement and curtailment

0.1

Net actuarial (loss) gains arising during period

(4.2)

6.2

(1.9)

Less: amortization of prior service credit included in net periodic pension cost

(5.1)

(13.5)

Defined benefit plans

(4.2)

1.1

(3.2)

Other comprehensive (loss) income, before tax

(27.3)

32.2

(21.1)

Income tax (expense) benefit related to items of other comprehensive income

^[1]

(0.5)

0.5

1.7

Other comprehensive (loss) income, net of tax

(27.8)

32.7

(19.4)

COMPREHENSIVE INCOME

362.0

505.4

393.8

Less: comprehensive income attributable to noncontrolling interest

0.2

COMPREHENSIVE INCOME ATTRIBUTABLE TO FORTUNE BRANDS

$ 361.8

$ 505.4

$ 393.8

[1]	Income tax benefit (expense) benefit on unrealized (losses) gains on derivatives of $(1.4) million, $0.9 million and $0.5 million and on defined benefit plans of $0.9 million, $(0.4) million and $1.2 million in 2018, 2017 and 2016, respectively.

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Unrealized (losses) gains on derivatives, tax	$ (1.4)	$ 0.9	$ 0.5
Defined benefit plans, tax	$ 0.9	$ (0.4)	$ 1.2

Consolidated Balance Sheets - USD ($)
$ in Millions

Dec. 31, 2018

Dec. 31, 2017

Current assets

Cash and cash equivalents

$ 262.9

$ 323.0

Accounts receivable less allowances for discounts and doubtful accounts

571.7

555.3

Property, plant and equipment, net of accumulated depreciation

678.9

^[1]

580.8

Other current assets

172.6

142.6

TOTAL CURRENT ASSETS

1,686.1

1,601.7

813.4

^[1]

740.0

Other intangible assets, net of accumulated amortization

^[2]

2,080.3

1,912.0

1,246.8

1,162.4

Other assets

138.0

95.3

TOTAL ASSETS

5,964.6

5,511.4

Current liabilities

Short-term debt

525.0

Accounts payable

459.0

428.8

Other current liabilities

508.1

^[1]

478.0

TOTAL CURRENT LIABILITIES

1,492.1

906.8

Long-term debt

1,809.0

1,507.6

Deferred income taxes

162.6

166.8

Accrued defined benefit plans

163.3

175.9

Other non-current liabilities

157.6

153.2

TOTAL LIABILITIES

3,784.6

2,910.3

Commitments (Note 18) and Contingencies (Note 23)

Equity

Common stock

^[3]

1.8

1.7

Paid-in capital

2,766.0

2,724.9

Accumulated other comprehensive loss

(67.0)

(39.2)

Retained earnings

1,448.1

1,174.2

Treasury stock

(1,970.7)

(1,262.1)

TOTAL FORTUNE BRANDS EQUITY

2,178.2

2,599.5

Noncontrolling interests

1.8

1.6

TOTAL EQUITY

2,180.0

2,601.1

TOTAL LIABILITIES AND EQUITY

$ 5,964.6

$ 5,511.4

[1]	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.
[2]	Net of accumulated impairment losses of $399.5 million in the Doors & Security segment.
[3]	Common stock, par value $0.01 per share, 180.6 million shares and 179.8 million shares issued at December 31, 2018 and 2017, respectively.

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions	Dec. 31, 2018	Dec. 31, 2017
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	180.6	179.8

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

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

OPERATING ACTIVITIES

Net income

$ 389.8

$ 472.7

$ 413.2

Non-cash expense (income):

Depreciation

113.5

98.6

94.6

Amortization of intangibles

36.1

31.7

28.1

Stock-based compensation

36.1

43.0

32.0

Loss on sale of property, plant and equipment

(0.1)

1.2

0.9

1.2

Loss on sale of product line

2.4

Asset impairment charges

62.6

15.3

Recognition of actuarial losses (gains)

3.8

(0.5)

1.9

Deferred taxes

2.8

(18.7)

(25.8)

Amortization of deferred financing costs

2.3

2.0

3.6

Changes in assets and liabilities including effects subsequent to acquisitions

Decrease (increase) in accounts receivable

9.8

1.0

(39.1)

(Increase) decrease in inventories

(55.0)

(24.8)

52.4

Increase in accounts payable

21.0

24.0

57.6

(Increase) decrease in other assets

(24.7)

(28.3)

10.7

Increase (decrease) in accrued taxes

9.5

(24.4)

0.3

(Decrease) increase in accrued expenses and other liabilities

(4.8)

5.4

19.9

NET CASH PROVIDED BY OPERATING ACTIVITIES

604.0

600.3

650.5

INVESTING ACTIVITIES

Capital expenditures

^[1]

(150.1)

(165.0)

(149.3)

Proceeds from the disposition of assets

6.1

0.4

3.9

Proceeds from sale of product line

1.5

Cost of acquisitions, net of cash acquired

(465.6)

(124.6)

(239.7)

Cost of investments in equity securities

(28.7)

Other investing activities, net

4.0

NET CASH USED IN INVESTING ACTIVITIES

(634.3)

(287.7)

(385.1)

FINANCING ACTIVITIES

Increase in short-term debt

525.0

(1.1)

Issuance of long-term debt

2,191.2

640.0

1,065.0

Repayment of long-term debt

(1,890.0)

(565.0)

(805.0)

Proceeds from the exercise of stock options

4.9

28.5

25.5

Employee withholding taxes paid related to stock-based compensation

(14.0)

(10.6)

(10.1)

Deferred acquisition payments

(13.1)

(17.9)

Dividends to stockholders

(115.2)

(110.3)

(98.2)

Treasury stock purchases

(694.6)

(214.8)

(424.5)

Other financing activities, net

(1.0)

(2.0)

NET CASH USED IN FINANCING ACTIVITIES

(6.8)

(250.1)

(250.4)

Effect of foreign exchange rate changes on cash

(15.2)

9.0

(2.0)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(52.3)

71.5

13.0

Cash, cash equivalents and restricted cash at beginning of year

^[2]

323.0

251.5

238.5

Cash, cash equivalents and restricted cash at end of year

^[2]

270.7

323.0

251.5

Cash paid during the year for

Interest

63.4

44.4

43.7

Income taxes paid directly to taxing authorities

114.2

169.7

172.1

Income taxes (received from) paid to Fortune Brands, Inc.

(0.6)

Dividends declared but not paid

$ 30.9

$ 30.4

$ 27.6

[1]	Capital expenditures of $16.7 million, $17.2 million and $11.9 million that have not been paid as of December 31, 2018, 2017 and 2016, respectively, were excluded from the Statement of Cash Flows.
[2]	Restricted cash of $0.9 and $6.9 million is included in Other current assets and Other assets, respectively, as of December 31, 2018 within our Consolidated Balance Sheet. There was no restricted cash as of December 31, 2017.

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital expenditures incurred but not yet paid	$ 16.7	$ 17.2	$ 11.9
Restricted Cash		$ 0.0	$ 0.0
Other Current Assets [Member]
Restricted Cash	0.9
Other Assets [Member]
Restricted Cash	$ 6.9

Consolidated Statements of Equity - USD ($) $ in Millions	Total	Common Stock	Paid-In Capital	Accumulated Other Comprehensive (Loss) Income	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	413.2				413.2
Other comprehensive income (loss)	(19.4)			(19.4)
Stock options exercised	25.5		25.5
Stock-based compensation	21.9		32.0			(10.1)
Treasury stock purchase	(424.5)					(424.5)
Dividends	(100.2)				(100.2)
Dividends paid to noncontrolling interests	(1.4)						(1.4)
Other (See Note 10)	(5.9)		(5.9)
Ending 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	472.7				472.6		0.1
Other comprehensive income (loss)	32.7			32.7
Stock options exercised	28.5		28.5
Stock-based compensation	32.0		42.6			(10.6)
Treasury stock purchase	(214.8)					(214.8)
Dividends	(113.0)				(113.0)
Ending Balance at Dec. 31, 2017	2,601.1	1.7	2,724.9	(39.2)	1,174.2	(1,262.1)	1.6
Comprehensive income:
Net income	389.8				389.6		0.2
Other comprehensive income (loss)	(27.8)			(27.8)
Stock options exercised	5.1	0.1	5.0
Stock-based compensation	22.1		36.1			(14.0)
Treasury stock purchase	(694.6)					(694.6)
Dividends	(115.7)				(115.7)
Ending Balance at Dec. 31, 2018	$ 2,180.0	$ 1.8	$ 2,766.0	$ (67.0)	$ 1,448.1	$ (1,970.7)	$ 1.8

Consolidated Statements of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Dividends per Common share	$ 0.82	$ 0.74	$ 0.66

Background and Basis of Presentation

12 Months Ended

Dec. 31, 2018

Background and Basis of Presentation

1. Background and Basis of Presentation

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. 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.

Basis of Presentation

The consolidated financial statements in this Annual Report on Form

10-K

have been derived from the accounts of the Company and its wholly-owned subsidiaries. The Company’s consolidated financial statements are based on a fiscal year ending December 31. Certain of the Company’s subsidiaries operate on a 52 or 53 week fiscal year ending during the month of December. In December 2017, there were certain transactions that resulted in approximately $38 million of net cash outflows relating to payments made to third parties in the normal course of business during the period between the

year-end

of our wholly-owned subsidiaries and the Company’s

year-end

(in 2018, amounts were immaterial).

In July 2018, we publicly announced an internal reorganization to combine our Doors & Security segments under common leadership to drive innovation, accelerate product development, and enhance investments and business processes. In connection with the reorganization, we changed how our chief operating decision maker evaluates and allocates the resources for the combined business. Reporting for the new Doors & Security segment began in the third quarter of 2018 and historical financial segment information has been restated to conform to the new segment presentation.

In October 2017, we acquired Victoria + Albert, a

UK-based

premium brand of standalone bathtubs, sink, tub fillers, faucets and other accessories. 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. The financial results of both of the acquisitions were included in the Company’s December 31, 2018 and 2017 consolidated balance sheets and in the Company’s consolidated statements of income and statements of cash flow beginning in October 2017 and July 2017, respectively.

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”), and 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 December 31, 2018 and 2017, and in the Company’s consolidated statements of income and statements of cash flow beginning in September 2016 and May 2016, respectively.

The cash flows from discontinued operations for 2018, 2017 and 2016 were not separately classified on the accompanying consolidated statements of cash flows. Information on Business Segments was revised to exclude these discontinued operations.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies

2. Significant Accounting Policies

Use of Estimates

The presentation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results in future periods could differ from those estimates.

Cash and Cash Equivalents

Highly liquid investments with an original maturity of three months or less are included in cash and cash equivalents.

Allowances for Doubtful Accounts

Trade receivables are recorded at the stated amount, less allowances for discounts and doubtful accounts. The allowances for doubtful accounts represent estimated uncollectible receivables associated with potential customer defaults on contractual obligations (usually due to customers’ potential insolvency), or discounts related to early payment of accounts receivables by our customers. The allowances include provisions for certain customers where a risk of default has been specifically identified. In addition, the allowances include a provision for customer defaults on a general formula basis when it is determined the risk of some default is probable and estimable, but cannot yet be associated with specific customers. The assessment of the likelihood of customer defaults is based on various factors, including the length of time the receivables are past due, historical collection experience and existing economic conditions. In accordance with this policy, our allowance for doubtful accounts was $3.7 million and $3.3 million as of December 31, 2018 and 2017, respectively.

Inventories

The majority of our inventories are accounted for using the

first-in,

first-out

(“FIFO”) inventory method. Inventory provisions are recorded to reduce inventory to the lower of cost or market value for obsolete or slow moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions, inventory levels and turns, product spoilage and specific identification of items, such as product discontinuance, engineering/material changes, or regulatory-related changes.

During the fourth quarter of 2018, we determined that it was preferable to change our accounting policy from

last-in,

first-out

(“LIFO”) to FIFO for product groups in which metals comprise a significant portion of inventory cost. We believe this change is preferable because it results in a uniform method to value our inventory across all our segments, improves comparability with our peers, and is expected to better reflect the current value of inventory on the consolidated balance sheets. The change in costing method, which affected our Plumbing and Doors & Security segments, was recognized during the fourth quarter of 2018, by adjusting the cost of inventories to FIFO, resulting in a pretax benefit of approximately $7.3 million ($5.5 million after tax) to Cost of products sold in the consolidated statements of income. The impact of this change is not material to our 2017 or 2016 results of operations or our financial position as of December 31, 2017, and therefore we did not retrospectively apply the change in accounting policy. LIFO inventories were zero and $245.6 million (with a current cost of $259.3 million) at December 31, 2018 and 2017, respectively.

Property, Plant and Equipment

Property, plant and equipment are carried at cost. Depreciation is provided, principally on a straight-line basis, over the estimated useful lives of the assets. Gains or losses resulting from dispositions are included in operating income. Betterments and renewals, which improve and extend the life of an asset, are capitalized; maintenance and repair costs are expensed as incurred. Assets held for use to be disposed of at a future date are depreciated over the remaining useful life. Assets to be sold are written down to fair value at the time the assets are being actively marketed for sale. Estimated useful lives of the related assets are as follows:


Buildings and leasehold improvements			15 to 40 years
Machinery and equipment			3 to 15 years
Software			3 to 7 years

Long-lived Assets

In accordance with ASC requirements for Property, Plant and Equipment, a long-lived asset (including amortizable identifiable intangible assets) or asset group held for use is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, we compare the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on our best estimate of future cash flows derived from the most recent business projections. If this comparison indicates that there is an impairment, the amount of the impairment is calculated based on fair value. Fair value is estimated primarily using discounted expected future cash flows on a market-participant basis.

During 2017, we recorded an impairment of $5.1 million related to a long lived asset to be disposed of in selling, general and administrative expenses.

Goodwill and Indefinite-lived Intangible Assets

In accordance with ASC requirements for Intangibles — Goodwill and Other, goodwill is tested for impairment at least annually in the fourth quarter, and written down when impaired. An interim impairment test is performed if an event occurs or conditions change that would more likely than not reduce the fair value of the reporting unit below the carrying value.

We evaluate the recoverability of goodwill using a weighting of the income (80%) and market (20%) approaches. For the income approach, we use a discounted cash flow model, estimating the future cash flows of the reporting units to which the goodwill relates, and then discounting the future cash flows at a market-participant-derived discount rate. In determining the estimated future cash flows, we consider current and projected future levels of income based on management’s plans for that business; business trends, prospects and market and economic conditions; and market-participant considerations. Furthermore, our projection for the U.S. home products market is inherently subject to a number of uncertain factors, such as employment, home prices, credit availability, new home starts and the rate of home foreclosures. For the market approach, we apply market multiples for peer groups to the current operating results of the reporting units to determine each reporting unit’s fair value. The Company’s reporting units are operating segments, or one level below operating segments when appropriate. When the estimated fair value of a reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss based on that difference.

Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The determination of the useful life of an intangible asset other than goodwill is based on factors including historical tradename performance with respect to consumer name recognition, geographic market presence, market share, and plans for ongoing tradename support and promotion. Certain of our tradenames have been assigned an indefinite life as we currently anticipate that these tradenames will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate. We measure the fair value of identifiable intangible assets upon acquisition and we review for impairment annually in the fourth quarter, and whenever market or business events indicate there may be a potential impairment of that intangible asset. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. We measure fair value using the standard relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. The determination of fair value using this technique requires the use of estimates and assumptions related to the projected tradename revenue growth, the assumed royalty rate and the discount rate. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Qualitative factors include changes in volume, customers and the industry. If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test.

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 fall below our assumptions, actions of key customers, increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending and a decrease in royalty rates. 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.

Investments in Equity Securities

In accordance with ASC requirements for Investments – equity securities, we account for

non-controlling

investments in equity securities at fair value, with any gains or losses recognized through other income and expense. Equity securities without readily determinable fair values are recorded at cost minus impairment, plus or minus any changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

During the fourth quarter of 2018, our Plumbing segment entered into strategic partnerships with several companies who incorporate emerging technology into plumbing-related products, and at the same time acquired

non-controlling

equity interests in some of our partners. This includes an investment in Flo Technologies, Inc. (“Flo”), a U.S. manufacturer of a comprehensive water monitoring and

shut-off

system with leak detection and proactive leak detection technologies. Flo’s products are being rebranded to “Flo by Moen”, and our Plumbing segment will utilize its existing retail, wholesale and builder networks to expand the reach of Flo’s technology.

As of December 31, 2018, all of our investments in our strategic partners do not have readily determinable fair values. As of December 31, 2018 and 2017, the carrying value of our investments was $28.7 million and zero, respectively, which is included in other assets within our Consolidated Balance Sheet. There were no impairments or other changes resulting from observable prices changes recorded during the year ended December 31, 2018. Impairments of $7.0 million were recorded within Other income, net within the Consolidated Statements of Income during the year ended December 31, 2017 (see Note 22).

Defined Benefit Plans

We have a number of pension plans in the United States, covering many of the Company’s employees. In addition, the Company provides postretirement health care and life insurance benefits to certain retirees. Service cost for 2018 relates to benefit accruals in an hourly Union defined benefit plan in our Doors & Security segment. Benefit accruals under all other defined benefit pension plans were frozen as of December 31, 2016.

We record amounts relating to these plans based on calculations in accordance with ASC requirements for Compensation – Retirement Benefits, which include various actuarial assumptions, including discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10 percent of the greater of the fair value of pension plan assets or each plan’s projected benefit obligation (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each year. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current economic conditions and trends. The discount rate used to measure obligations is based on a spot-rate yield curve on a

plan-by-plan

basis that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments. The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return. Compensation increases reflect expected future compensation trends. For postretirement benefits, our health care trend rate assumption is based on historical cost increases and expectations for long-term increases. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. We believe that the assumptions utilized in recording obligations under our plans, which are presented in Note 15, “Defined Benefit Plans,” are reasonable based on our experience and on advice from our independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect our financial position and results of operations. We will continue to monitor these assumptions as market conditions warrant.

Insurance Reserves

We provide for expenses associated with workers’ compensation and product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability.

Litigation Contingencies

Our businesses are subject to risks related to threatened or pending litigation and are routinely defendants in lawsuits associated with the normal conduct of business. Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel. We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss in accordance with ASC requirements for Contingencies. We evaluate the measurement of recorded liabilities each reporting period based on the then-current facts and circumstances specific to each matter. The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at any particular balance sheet date. Changes in estimates are recorded in earnings in the period in which such changes occur.

Income Taxes

In accordance with ASC requirements for Income Taxes, we establish deferred tax liabilities or assets for temporary differences between financial and tax reporting bases and subsequently adjust them to reflect changes in tax rates expected to be in effect when the temporary differences reverse. We record a valuation allowance reducing deferred tax assets when it is more likely than not that such assets will not be realized.

We record liabilities for uncertain income tax positions based on a

two-step

process. The first step is recognition, where we evaluate whether an individual tax position has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, we perform the second step of measuring the benefit to be recorded. The actual benefits ultimately realized may differ from our estimates. In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the consolidated statement of income and consolidated balance sheet in the period in which such changes occur. As of December 31, 2018, we had liabilities for unrecognized tax benefits pertaining to uncertain tax positions totaling $83.5 million. It is reasonably possible that the unrecognized tax benefits may decrease in the range of $1.4 million to $3.5 million in the next 12 months primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings.

The Tax Act made significant changes to the U.S. Internal Revenue Code including a reduction in the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, generally providing for an exemption from federal income tax for dividends received from foreign subsidiaries, and imposing a

one-

time

transition tax on the deemed repatriation of cumulative foreign earnings and profits as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued, which deals with the application of U.S. GAAP to situations where a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, we calculated our best estimate of the impact of the Tax Act on our 2017 effective income tax rate. As a result, the Company recorded a provisional net benefit of $25.7 million in the fourth quarter of 2017, the period in which the Tax Act was enacted. This provisional amount included an estimated reduction in the Company’s net deferred tax liabilities of $62.4 million resulting from the decrease in the federal income tax rate; an estimated deemed repatriation tax liability of $28.5 million; and an estimated net increase to our provision for taxes on foreign earnings not considered permanently reinvested of $8.2 million. In the quarter ended December 31, 2018, the Company completed its analysis in conjunction with the SAB 118 measurement period ending on December 22, 2018. The total tax provision impact for the year ended December 31, 2018 was an unfavorable adjustment of $5.5 million related primarily to certain deferred tax assets and liabilities.

The Tax Act included a provision for Global Intangible

Low-Taxed

Income (GILTI), the Company elected an accounting policy to treat GILTI as a period cost when incurred. The GILTI provision is effective for taxable years of foreign corporations beginning after December 31, 2017.

Revenue Recognition

The Company recognizes revenue for the sale of goods based on its assessment of when control transfers to our customers. Refer to Note 14 for additional information.

Cost of Products Sold

Cost of products sold includes all costs to make products saleable, such as labor costs, inbound freight, purchasing and receiving costs, inspection costs and internal transfer costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of products sold.

Customer Program Costs

Customer programs and incentives are a common practice in our businesses. Our businesses incur customer program costs to obtain favorable product placement, to promote sales of products and to maintain competitive pricing. We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration the Company will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer. In addition, for certain customer program incentives, we receive an identifiable benefit (goods or services) in exchange for the consideration given and record the associated expenditure in selling, general and administrative expenses. Volume allowances are accrued based on management’s estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, levels of returns and customer training. Management periodically reviews accruals for these rebates and allowances, and adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). The costs typically recognized in selling, general and administrative expenses include product displays, point of sale materials and media production costs. The costs included in the selling, general and administrative expenses category were $66.5 million, $62.4 million and $44.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include advertising costs; marketing costs; selling costs, including commissions; research and development costs; shipping and handling costs, including warehousing costs; and general and administrative expenses. Shipping and handling costs included in selling, general and administrative expenses were $215.9 million, $204.7 million and $197.0 million in 2018, 2017 and 2016, respectively

Advertising costs, which amounted to $243.6 million, $233.2 million and $199.1 million in 2018, 2017 and 2016, respectively, are principally expensed as incurred. Advertising costs paid to customers as pricing rebates include product displays, marketing administration costs, media production costs and point of sale materials. Advertising costs recorded as a reduction to net sales, primarily cooperative advertising, were $72.4 million, $65.6 million and $52.5 million in 2018, 2017 and 2016, respectively. Advertising costs recorded in selling, general and administrative expenses were $171.2 million, $167.6 million and $146.6 million in 2018, 2017 and 2016, respectively.

Research and development expenses include product development, product improvement, product engineering and process improvement costs. Research and development expenses, which were $50.3 million, $50.7 million and $53.1 million in 2018, 2017 and 2016, respectively, are expensed as incurred.

Stock-based Compensation

Stock-based compensation expense, measured as the fair value of an award on the date of grant, is recognized in the financial statements over the period that an employee is required to provide services in exchange for the award. The fair value of each option award is measured on the date of grant using the Black-Scholes option-pricing model. The fair value of each performance share award is based on the average of the high and low share prices on the date of grant and the probability of meeting performance targets. The fair value of each restricted stock unit granted is equal to the average of the high and low share prices on the date of grant. See Note 13, “Stock-Based Compensation,” for additional information.

Earnings Per Share

Earnings per common share is calculated by dividing net income attributable to Fortune Brands by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per common share include the impact of all potentially dilutive securities outstanding during the year. See Note 21, “Earnings Per Share,” for further discussion.

Foreign Currency Translation

Foreign currency balance sheet accounts are translated into U.S. dollars at the actual rates of exchange at the balance sheet date. Income and expenses are translated at the average rates of exchange in effect during the period for the foreign subsidiaries where the local currency is the functional currency. The related translation adjustments are made directly to a separate component of the “accumulated other comprehensive income” (“AOCI”) caption in equity. Transactions denominated in a currency other than the functional currency of a subsidiary are translated into functional currency with resulting transaction gains or losses recorded in other expense, net.

Derivative Financial Instruments

In accordance with ASC requirements for Derivatives and Hedging, all derivatives are recognized as either assets or liabilities on the balance sheet and measurement of those instruments is at fair value. If the derivative is designated as a fair value hedge and is highly effective, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded directly to a separate component of AOCI, and are recognized in the consolidated statement of income when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings.

Deferred currency gains/(losses) of $2.2 million, $0.4 million and $(3.5) million (before tax impact) were reclassified into earnings for the year ended December 31, 2018, 2017 and 2016, respectively. Based on foreign exchange rates as of December 31, 2018, we estimate that $3.3 million of net currency derivative gains included in AOCI as of December 31, 2018 will be reclassified to earnings within the next twelve months.

Recently Issued Accounting Standards

Revenue from Contracts with Customers

In May 2014, the Financial Accounting Standards Board (“FASB”) issued 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. We adopted ASU

2014-09

as of January 1, 2018 and for periods thereafter using the modified retrospective approach, which we applied to all contracts not completed as of January 1, 2018. The cumulative effect of adopting the new revenue standard was not material and no adjustment was recorded to retained earnings. The comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of this standard did not have a material impact in 2018 and we do not expect it to have a material impact on revenue or net income on an ongoing basis.

A majority of our sales revenue continues to be recognized when products are shipped from our facilities to our customers. Previously, for certain products, we recognized sales revenue at destination as we determined risks and rewards transferred at that point. We now recognize sales revenue for these customers at the shipping point of the products consistent with the respective contractual terms.

See Note 14, “Revenue,” for further information.

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. In January 2018, the FASB issued ASU

2018-01,

which clarifies the application of the new leases guidance to land easements. In July 2018, the FASB issued ASU

2018-10

and ASU

2018-11,

which clarify certain guidance included in ASU

2016-02

and introduces a new optional transition method. The standard is effective for annual periods beginning after December 15, 2018 (calendar year 2019 for Fortune Brands) and earlier application is permitted.

We plan to adopt the standard in the first quarter of 2019 using the transition method introduced by ASU

2018-11,

which does not require revisions to comparative periods. We will elect to implement the transition package of practical expedients permitted within the new standard, which among other things, allows us to carryforward the historical lease classification. In addition, we are electing the hindsight practical expedient to determine the lease term. We will make an accounting policy election to not recognize leases with an initial term of less than twelve months on the balance sheet and we will recognize the related lease payments as expense in the statement of comprehensive income on a straight-line basis over the lease term.

While we are continuing to finalize our assessment of the impacts of the standard, we have completed our scoping reviews, identified our significant leases by segment and by asset type, and made progress in developing accounting policies upon adoption of the standard. We have implemented an accounting system to support the future state leasing process and input the data from substantially all of our existing leases into the system. We continue to refine our future process design as part of the overall system implementation. Upon adoption, we expect to recognize a lease liability, with an offsetting increase to

right-of-use

assets ranging from $170 million to $200 million. Differences between the lease liability and

right-of-use

asset, recognized are not expected to material. We do not expect the standard to materially affect our consolidated net income.

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. Companies will present the other components (i.e., amortization of prior service cost/credits, 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. We adopted ASU

2014-09

as of January 1, 2018 and for periods thereafter using the retrospective approach. The adoption of this standard did not have a material effect on our financial statements. See Note 15 for further information.

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 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. We adopted the new standard beginning January 1, 2018. The adoption of this standard did not have a material effect on our financial statements.

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). We adopted the new standard beginning January 1, 2018. The adoption of this standard did not 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 and this has resulted in diversity in cash flows presentation. We adopted the new standard beginning January 1, 2018. The adoption of this standard did not 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 previous guidance companies were 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). We adopted the new standard beginning January 1, 2018 using a “modified retrospective” approach (i.e., with a cumulative adjustment to retained earnings at adoption). The adoption of this standard did not have a material effect 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) and cash payments made “soon after” the consummation of a business combination generally would be classified as cash outflows from 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. We retrospectively adopted the new standard beginning January 1, 2018. The adoption of this standard did not have a material effect 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. We adopted the new standard beginning January 1, 2018. The adoption of this standard did not have a material effect on our financial statements.

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

In February 2017, the FASB issued ASU

2017-05,

which 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 a customer versus a

non-customer.

Sales to customers are within the scope of the new revenue standard. It also clarifies a derecognition model for nonfinancial assets that do not represent a business. We adopted the new standard beginning January 1, 2018 consistent with the effective date for the new revenue recognition standard. The adoption of this standard did not have a material effect on our financial statements.

Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU

2017-12

which amends the 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 (which is 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 hedge effectiveness. The standard is effective as of January 1, 2019. 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.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU

2018-02,

“Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This guidance permits companies to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income as a result of U.S. Tax Cuts and Jobs Act of 2017. This guidance is effective for the Company’s fiscal year beginning January 1, 2019. We do not expect the adoption of this guidance to have a material effect on our financial statements.

Improvements to Nonemployee Share-Based Payment Accounting

In June 2018, the FASB issued ASU

2018-07

which simplifies the accounting for share-based arrangements with nonemployees. The new guidance generally aligns the accounting for share-based awards to nonemployees with the guidance for share-based awards to employees. The guidance is effective for the Company’s fiscal year beginning January 1, 2019. We do not expect the adoption of this guidance to have a material effect on our financial statements.

Codification Improvements

In July 2018, the FASB issued ASU

2018-09

which includes technical corrections, clarifications, and other minor improvements to various areas including business combinations, fair value measurements and hedging. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this standard were effective immediately, while others will be effective for the Company’s fiscal year beginning January 1, 2019. Our adoption of the immediately effective pieces of this standard did not have a material effect on our financial statements, nor do we expect the adoption of the other aspects of this standard to be material.

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU

2018-13

which removes the requirement to disclose: 1) amount of and reasons for transfers between Levels 1 and 2 of the fair value hierarchy, 2) policy for timing of transfers between levels, and 3) valuation processes for Level 3 investments. In addition, this guidance modifies and adds other disclosure requirements, which primarily relate to valuation of Level 3 assets and liabilities. The guidance is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements.

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU

2018-14

which removes several disclosure requirements, including the amount in AOCI expected to be recognized in income over the next fiscal year and the effects of a 1% change in assumed health care cost trend rates and adds new disclosure requirements to explain reasons for significant gains and losses related to changes in the benefit obligation for the period, and to disclose weighted-average interest crediting rates for plans with promised interest crediting rates. The guidance is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements.

Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

In August 2018, the FASB issued ASU

2018-15

which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain

internal-use

software. Costs to obtain software, including configuration and integration with legacy IT systems, coding and testing, including parallel process phases are eligible for capitalization under the new standard. In addition, activities that would be expensed include costs related to vendor demonstrations, determining performance and technology requirements and training activities. The standard is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

Balance Sheet Information

12 Months Ended

Dec. 31, 2018

Balance Sheet Information

3. Balance Sheet Information

Supplemental information on our

year-end

consolidated balance sheets is as follows:



(In millions)	2018 (a)		2017
Inventories:
Raw materials and supplies	$	227.4	$	224.9
Work in process		66.4		58.3
Finished products		385.1		297.6
Total inventories	$	678.9	$	580.8

Property, plant and equipment:
Land and improvements	$	66.8	$	58.7
Buildings and improvements to leaseholds		500.1		464.1
Machinery and equipment		1,249.0		1,167.5
Construction in progress		95.8		90.1
Property, plant and equipment, gross		1,911.7		1,780.4
Less: accumulated depreciation		1,098.3		1,040.4
Property, plant and equipment, net of accumulated depreciation	$	813.4	$	740.0

Other current liabilities:
Accrued salaries, wages and other compensation	$	85.9	$	105.9
Accrued customer programs		167.8		142.8
Accrued taxes		57.7		61.4
Dividends payable		30.9		30.4
Other accrued expenses		165.8		137.5
Total other current liabilities	$	508.1	$	478.0

(a)	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.

Acquisitions and Dispositions

12 Months Ended

Dec. 31, 2018

Acquisitions and Dispositions

4. Acquisitions and Dispositions

In September 2018, we acquired 100% of membership interests of Fiber Composites LLC (“Fiberon”), a leading U.S. manufacturer of outdoor performance materials used in decking, railing and fencing products for a total purchase price of approximately $470.0 million, subject to certain post-closing adjustments. The acquisition of Fiberon provides category expansion and product extension opportunities into the outdoor living space for our Doors & Security segment. Fiberon’s net sales and operating income in 2018 were not material to the Company. We have not included pro forma financial information as it is immaterial to our consolidated statements of comprehensive income. We financed the transaction using cash on hand and borrowings under our revolving credit and term loan facilities. The results of operations are included in the Doors & Security segment from the date of the acquisition. We expect goodwill related to this acquisition to be deductible for income tax purposes.

The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition.



(In millions)
Accounts receivable	$	19.2
Inventories		49.4
Property, plant and equipment		49.0
Goodwill		173.4
Identifiable intangible assets		195.0
Other assets		4.8
Total assets		490.8
Accounts payable		16.5
Other liabilities and accruals		14.5
Net assets acquired	$	459.8

The preceding purchase price allocation has been determined provisionally and is subject to revision as additional information about the fair value of individual assets and liabilities becomes available. We apply significant judgement in determining the estimates and assumptions used to determine the fair value of the identifiable intangible assets, including forecasted revenue growth rates, customer attrition rates, discount rates and assumed royalty rates. The Company is in the process of finalizing valuations of certain tangible and intangible assets, including property, plant and equipment and identifiable intangible assets. The provisional measurement of property, plant and equipment, identifiable intangible assets, and goodwill is subject to change. Any change in the acquisition date fair value of the acquired net assets will change the amount of the purchase price allocable to goodwill.

Goodwill includes expected sales and cost synergies. Identifiable intangible assets primarily consist of customer relationships and tradenames.

In October 2017, we acquired Victoria + Albert, a UK-based premium brand of standalone bathtubs, sinks, tub fillers, faucets and other accessories. 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. The total combined consideration paid was approximately $146 million, including $19.9 million of additional purchase price consideration paid related to post-closing adjustments and deferred acquisition payments during 2018. The combined consideration paid is subject to further deferred acquisition payments. Net sales and operating income in 2017 from these acquisitions were not material to the Company. We financed the transactions using cash on hand and borrowings under our existing revolving and term loan credit facilities. The results of the operations are included in the Plumbing segment from the respective dates of acquisition. We do not expect any portion of goodwill to be deductible for income tax purposes.

In April 2017, we completed the sale of Field ID, our cloud-based inspection and safety compliance software product line included in our Doors & Security segment. We recorded a

pre-tax

loss of $2.4 million and a

pre-tax

impairment charge to write down the long-lived assets included in this disposal group to fair value of $3.2 million as a result of this sale (See Note 7). The estimated tax expense on the sale was insignificant. Field ID did not qualify for presentation as a discontinued operation in our financia

l statements.

Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations

5. Discontinued Operations

In the twelve months ended December 31, 2017, the loss on discontinued operations is primarily related to the prior sale of the Waterloo tool storage and Simonton window businesses.

Goodwill and Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Identifiable Intangible Assets

6. Goodwill and Identifiable Intangible Assets

We had goodwill of $2,080.3 million and $1,912.0 million as of December 31, 2018 and 2017, respectively. The increase of $168.3 million was primarily due to the acquisition of Fiberon in the Doors & Security segment as well as acquisition related adjustments in our Plumbing segment related to the acquisition of Victoria + Albert, partially offset by 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
Balance at December 31, 2016 (a)	$	924.3		$	670.2		$	239.3		$	1,833.8
2017 translation adjustments		2.0			3.3			1.2			6.5
Acquisition-related adjustments		—			71.7			—			71.7
Balance at December 31, 2017 (a)	$	926.3		$	745.2		$	240.5		$	1,912.0
2018 translation adjustments		(2.3	)		(5.9	)		(1.4	)		(9.6	)
Acquisition-related adjustments		—			4.4			173.5			177.9
Balance at December 31, 2018 (a)	$	924.0		$	743.7		$	412.6		$	2,080.3

(a)	Net of accumulated impairment losses of $399.5 million in the Doors & Security segment.

We also had identifiable intangible assets, principally tradenames and customer relationships, of $1,246.8 million and $1,162.4 million as of December 31, 2018 and 2017, respectively. The $117.9 million increase in gross identifiable intangible assets was primarily due to the acquisition of Fiberon in our Doors & Security segment partially offset by a tradename impairment charges of $62.6 million in our Cabinets segment.

The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2018 and 2017 were as follows:



	As of December 31, 2018							As of December 31, 2017
(In millions)	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived tradenames	$	673.9	$	—		$	673.9	$	709.9	$	—		$	709.9
Amortizable intangible assets
Tradenames		19.8		(11.9	)		7.9		15.7		(9.9	)		5.8
Customer and contractual relationships		800.3		(260.2	)		540.1		663.8		(232.0	)		431.8
Patents/proprietary technology		73.5		(48.6	)		24.9		60.2		(45.3	)		14.9
Total		893.6		(320.7	)		572.9		739.7		(287.2	)		452.5
Total identifiable intangibles	$	1,567.5	$	(320.7	)	$	1,246.8	$	1,449.6	$	(287.2	)	$	1,162.4

Amortizable intangible assets, principally customer relationships and patents/proprietary technology, 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 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. We expect to record intangible amortization of approximately $43 million in 2019, $42 million in 2020, $42 million in 2021, $40 million in 2022, and $39 million in 2023.

We review indefinite-lived tradename intangible assets for impairment annually in the fourth quarter, as well as whenever market or business events indicate there may be a potential impact on a specific intangible asset. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. We measure fair value using the standard relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over the remaining useful life. The determination of fair value using this technique requires the use of estimates and assumptions related to projected tradename revenue growth, the assumed royalty rate and the discount rate.

During 2018, we recognized asset impairment charges of $62.6 million related to two indefinite-lived tradenames within our Cabinets segment. During the third quarter of 2018, we recognized an impairment of $27.1 million related to one tradename, which was primarily the result of reduced revenue growth expectations associated with Cabinets operations in Canada, including the announced closure of Company-owned retail locations during the third quarter of 2018. During the fourth quarter of 2018, we recognized an impairment of $35.5 million related to another tradename, which was primarily the result of lower than forecasted sales during the fourth quarter of 2018 as well as projected changes in the mix of revenue across our tradenames in future periods, including the impact of more moderate industry growth expectations, which were finalized during our annual planning process conducted during the fourth quarter. The fair values of the impaired tradenames were measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life. Some of the more significant assumptions inherent in estimating the fair value include estimated future annual net sales for the tradename, assumed royalty rate, income tax rate, and a discount rate that reflects the level of risk associated with the tradename’s future sales and profitability. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates, and management plans. These assumptions represent level 3 inputs of the fair value hierarchy (refer to Note 10). As of December 31, 2018, the carrying value of the tradenames that were impaired was approximately $152.0 million. We did not record any asset impairment changes associated with goodwill or indefinite-lived assets in 2017 or 2016.

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 fall below our assumptions, actions of key customers, increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending, a decrease in royalty rates and 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.

Asset Impairment Charges

12 Months Ended

Dec. 31, 2018

Asset Impairment Charges

7. Asset Impairment Charges

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 Doors & 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.

External Debt and Financing Arrangements

12 Months Ended

Dec. 31, 2018

External Debt and Financing Arrangements

8. External Debt and Financing Arrangements

In September 2018, we issued $600 million of unsecured senior notes (“2018 Senior Notes”) in a registered public offering. The 2018 Senior Notes are due in 2023 with a coupon rate of 4%. All other terms and conditions of the 2018 Senior Notes are substantially consistent with the 2015 Senior Notes. We used the proceeds from the 2018 Senior Notes offering to pay down our revolving credit facility. On December 31, 2018, the net carrying value of the 2018 Senior Notes, net of underwriting commissions, price discounts, and debt issuance costs, was $595.0 million.

In June 2015, we issued $900 million of unsecured senior notes (“2015 Senior Notes”, and collectively with the 2018 Senior Notes, the “Senior Notes”) in a registered public offering. The 2015 Senior Notes consist of two tranches: $400 million of five-year notes due in 2020 with a coupon rate of 3% and $500 million of

ten-

year

notes due in 2025 with a coupon rate of 4%. We used the proceeds from the 2015 Senior Notes offering to pay down our revolving credit facility and for general corporate purposes. On December 31, 2018 and December 31, 2017, the net carrying value of the 2015 Senior Notes, net of underwriting commissions, price discounts, and debt issuance costs, was $894.0 million and $892.6 million, respectively.

In March 2018, the Company entered into a $350 million term loan for general corporate purposes that matures in March 2019. In August 2018, the Company amended its existing $350 million term loan to increase the borrowings under the term loan from $350 million to $525 million. All other terms and conditions on the amended term loan remain the same as the previous $350 million term loan. Interest rates under the term loan are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.625% to LIBOR + 1.25%. Covenants under the term loan are the same as the existing $1.25 billion revolving credit agreement. As of December 31, 2018, we were in compliance with all covenants under this term loan.

In June 2016, the Company amended and restated its credit agreement to combine and rollover the 2011 revolving credit facility and term loan into a new standalone $1.25 billion revolving credit facility. The amendment and restatement was a

non-cash

transaction for the Company. Terms and conditions of the credit agreement, including the total commitment amount, essentially remained the same. The revolving credit facility will mature in June 2021 and borrowings thereunder will be used for general corporate purposes. On December 31, 2018 and December 31, 2017, our outstanding borrowings under this facility were $320.0 million and $615.0 million, respectively. At December 31, 2018 and December 31, 2017, the current portion of long-term debt under this facility 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 December 31, 2018, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $23.5 million in aggregate, of which zero were outstanding, as of December 31, 2018 and 2017. The weighted-average interest rates on these borrowings were zero in 2018 and 2017.

The components of external long-term debt were as follows:



(In millions)	2018		2017
$400 million unsecured senior note due June 2020	$	399.0	$	398.3
$500 million unsecured senior note due June 2025		495.0		494.3
$600 million unsecured senior note due September 2023		595.0		—
$1,250 million revolving credit agreement due June 2021		320.0		615.0
$525 million term loan due March 2019		525.0		—
Total debt		2,334.0		1,507.6
Less: current portion		525.0		—
Total long-term debt	$	1,809.0	$	1,507.6

Senior Notes payments during the next five years as of December 31, 2018 are zero in 2019, $400 million in 2020, zero in 2021 and $600 million in 2022 through 2023.

In our debt agreements, there are normal and customary events of default which would permit the lenders to accelerate the debt if not cured within applicable grace periods, such as failure to pay principal or interest when due or a change in control of the Company. There were no events of default as of December 31, 2018.

Financial Instruments

12 Months Ended

Dec. 31, 2018

Financial Instruments

9. Financial Instruments

We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates and commodities used as raw materials in our products. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value. The counterparties to derivative contracts are major financial institutions. We are subject to credit risk on these contracts equal to the fair value of these instruments. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company.

Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, geopolitical and economic variables, and other unpredictable external factors. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations. We account for these commodity derivatives as economic hedges or cash flow hedges. Changes in the fair value of economic hedges are recorded directly into current period earnings. There were no material commodity swap contracts outstanding for the years ended December 31, 2018 and 2017.

We enter into foreign exchange contracts primarily to hedge forecasted sales and purchases denominated in select foreign currencies, thereby limiting currency risk that would otherwise result from changes in exchange rates. The periods of the foreign exchange contracts correspond to the periods of the forecasted transactions, which generally do not exceed 12 to 15 months subsequent to the latest balance sheet date.

For derivative instruments that are designated as fair value hedges, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, are recognized on the same line of the statement of income. The effective portions of cash flow hedges are reported in other comprehensive income (“OCI”) and are recognized in the statement of income when the hedged item affects earnings. The changes in fair value for net investment hedges are recognized in the statement of income when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity. The ineffective portion of all hedges is recognized in current period earnings. In addition, changes in the fair value of all economic hedge transactions are immediately recognized in current period earnings. Our primary foreign currency hedge contracts pertain to the Canadian dollar, the British pound, the Chinese yuan and the Mexican peso. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at December 31, 2018 was $345.3 million, representing a net settlement assets of $3.4 million. Based on foreign exchange rates as of December 31, 2018, we estimate that $3.3 million of net foreign currency derivative losses included in OCI as of December 31, 2018 will be reclassified to earnings within the next twelve months.

The fair values of foreign exchange and commodity derivative instruments on the consolidated balance sheets as of December 31, 2018 and 2017 were:



		Fair Value

(In millions)	Location	2018		2017
Assets:
Foreign exchange contracts	Other current assets	$	5.3	$	0.8
Commodity contracts	Other current assets		—		0.2
Net investment hedges	Other current assets		0.7		—
	Total assets	$	6.0	$	1.0
Liabilities:
Foreign exchange contracts	Other current liabilities	$	1.9	$	5.6
Net investment hedges	Other current liabilities		—		0.8
	Total liabilities	$	1.9	$	6.4

The effects of derivative financial instruments on the consolidated statements of income in 2018, 2017 and 2016 were:



(In millions)	Gain (Loss) Recognized in Income

Type of hedge	Location	2018		2017			2016
Cash flow	Cost of products sold	$	2.0	$	0.9		$	(3.5	)
Fair value	Other (income) expense, net		3.7		(2.0	)		2.0
Total		$	5.7	$	(1.1	)	$	(1.5	)

The effective portion of cash flow hedges recognized in other comprehensive income were net gains (losses) of $10.1 million and $(1.8) million in 2018 and 2017, respectively. In the year ended December 31, 2018, the ineffective portion of cash flow hedges recognized in other income, net, was $3.8 million and insignificant in the years ended December 31, 2017 and 2016.

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Fair Value Measurements

10. 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 other than quoted prices included in level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs due to little or no market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are level 3.

The carrying value and fair value of debt as of December 31, 2018 and 2017 were as follows:



(In millions)	December 31, 2018				December 31, 2017

	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility	$	320.0	$	320.0	$	615.0	$	615.0
Term Loan		525.0		525.0		—		—
Senior Notes, net of underwriting commissions and price discounts		1,489.0		1,490.4		892.6		926.3

The estimated fair value of our term loan and 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 December 31, 2018 and 2017 were as follows:



(In millions)	Fair Value

	2018		2017
Assets:
Derivative asset financial instruments (level 2)	$	6.0	$	1.0
Deferred compensation program assets (level 2)		9.3		7.5
Total assets	$	15.3	$	8.5
Liabilities:
Derivative liability financial instruments (level 2)	$	1.9	$	6.4

The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. In addition, from time to time, we enter into commodity swaps. Derivative financial instruments are recorded at fair value.

- 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

Capital Stock

12 Months Ended

Dec. 31, 2018

Capital Stock

11. Capital Stock

The Company has 750 million authorized shares of common stock, par value $0.01 per share. The number of shares of common stock and treasury stock and the share activity for 2018 and 2017 were as follows:



	Common Shares						Treasury Shares

	2018			2017			2018		2017
Balance at the beginning of the year		151,906,797			153,412,050			27,879,929		24,305,930
Stock plan shares issued		822,878			2,068,746			—		—
Shares surrendered by optionees		(230,550	)		(180,537	)		230,550		180,537
Common stock repurchases		(12,000,144	)		(3,393,462	)		12,000,144		3,393,462
Balance at the end of the year		140,498,981			151,906,797			40,110,623		27,879,929

In December 2018, our Board of Directors increased the quarterly cash dividend by 10% to $0.22 per share of our common stock.

The Company has 60 million authorized shares of preferred stock, par value $0.01 per share. At December 31, 2018, no shares of our preferred stock were outstanding. Our Board of Directors has the authority, without action by the Company’s stockholders, to designate and issue our preferred stock in one or more series and to designate the rights, preferences, limitations and privileges of each series of preferred stock, which may be greater than the rights of the Company’s common stock.

In 2018, we repurchased approximately 12.0 million shares of outstanding common stock under the Company’s share repurchase program at a cost of $694.6 million. As of December 31, 2018, the Company’s total remaining share repurchase authorization under the remaining program was approximately $413.7 million. The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.

Accumulated Other Comprehensive (Loss) Income

12 Months Ended

Dec. 31, 2018

Accumulated Other Comprehensive (Loss) Income

12. Accumulated Other Comprehensive (Loss) Income

The reclassifications out of accumulated other comprehensive (loss) income for the years ended December 31, 2018 and 2017 were as follows:



(In millions)

Details about Accumulated Other Comprehensive Income Components				Affected Line Item in the Consolidated Statements of Income

	2018			2017
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	2.2		$	0.4		Cost of products sold
Interest rate contracts		0.1			—		Other income, net
Commodity contracts		(0.2	)		0.5		Cost of products sold
		2.1			0.9		Total before tax
		(0.4	)		(0.1	)	Tax expense
	$	1.7		$	0.8		Net of tax
Defined benefit plan items
Recognition of prior service cost	$	—		$	5.1		(a)
Recognition of actuarial (losses) gains		(3.8	)		0.5		(a)
		(3.8	)		5.6		Total before tax
		0.8			(2.0	)	Tax expense
	$	(3.0	)	$	3.6		Net of tax
Total reclassifications for the period	$	(1.3	)	$	4.4		Net of tax

(a)	These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 15, “Defined Benefit Plans,” for additional information.

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

after-tax

components of and changes in accumulated other comprehensive (loss) income were as follows:



(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2015	$	(13.3	)	$	2.1		$	(41.3	)	$	(52.5	)
Amounts classified into accumulated other comprehensive (loss) income		(14.7	)		(6.2	)		5.3			(15.6	)
Amounts reclassified from accumulated other comprehensive (loss) income into earnings		—			3.5			(7.3	)		(3.8	)
Net current period other comprehensive (loss) income		(14.7	)		(2.7	)		(2.0	)		(19.4	)
Balance at December 31, 2016	$	(28.0	)	$	(0.6	)	$	(43.3	)	$	(71.9	)
Amounts classified into accumulated other comprehensive (loss) income		33.8			(1.0	)		4.3			37.1
Amounts reclassified from accumulated other comprehensive (loss) income into earnings		—			(0.8	)		(3.6	)		(4.4	)
Net current period other comprehensive (loss) income		33.8			(1.8	)		0.7			32.7
Balance at December 31, 2017	$	5.8		$	(2.4	)	$	(42.6	)	$	(39.2	)
Amounts classified into accumulated other comprehensive (loss) income		(31.1	)		8.3			(6.3	)		(29.1	)
Amounts reclassified into earnings		—			(1.7	)		3.0			1.3
Net current period other comprehensive (loss) income		(31.1	)		6.6			(3.3	)		(27.8	)
Balance at December 31, 2018	$	(25.3	)	$	4.2		$	(45.9	)	$	(67.0	)

Stock-Based Compensation (Updated by Corporate)

12 Months Ended

Dec. 31, 2018

Stock-Based Compensation (Updated by Corporate)

13. Stock-Based Compensation

As of December 31, 2018, we had awards outstanding under two Long-Term Incentive Plans, the Fortune Brands Home & Security, Inc. 2013 Long-Term Incentive Plan (the “Plan”) and the 2011 Long-Term Incentive Plan (the “2011 Plan”, and together with the Plan—the “Plans”). Our stockholders approved the Plan in 2013, which provides for the granting of stock options, performance share awards, restricted stock units, and other equity-based awards, to employees, directors and consultants. As of December 31, 2018, approximately 4.6 million shares of common stock remained authorized for issuance under the Plan. In addition, shares of common stock may be automatically added to the number of shares of common stock that may be issued as awards expire, are terminated, cancelled or forfeited, or are used to satisfy the required withholding taxes with respect to existing awards under the Plans. No new stock-based awards can be made under the 2011 Plan, but there are outstanding stock options under the 2011 Plan that continue to be exercisable. Upon the exercise or payment of stock-based awards, shares of common stock are issued from authorized common shares.

Stock-based compensation expense from continuing operations was as follows:



(In millions)	2018		2017		2016
Stock option awards	$	8.6	$	7.4	$	7.2
Restricted stock units		21.3		21.6		17.2
Performance awards		6.3		13.6		6.7
Director awards		1.0		1.0		0.9
Total pre-tax expense		37.2		43.6		32.0
Tax benefit		6.2		15.2		11.4
Total after tax expense	$	31.0	$	28.4	$	20.6

Included in compensation costs are cash-settled restricted stock units of $0.9 million that are classified as a liability. Compensation costs that were capitalized in inventory were not material.

Restricted Stock Units

Restricted stock units have been granted to officers and certain employees of the Company and represent the right to receive unrestricted shares of Company common stock subject to continued employment through each vesting date. In addition, certain employees can elect to defer receipt of a portion of their RSU awards upon vesting. Compensation cost is recognized over the service period. We calculate the fair value of each restricted stock unit granted by using the average of the high and low share prices on the date of grant. Restricted stock units generally vest ratably over a three-year period.

A summary of activity with respect to restricted stock units outstanding under the Plans for the year ended December 31, 2018 was as follows:



	Number of Restricted Stock Units			Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2017		728,065		$	54.59
Granted		356,860			61.07
Vested		(373,593	)		52.92
Forfeited		(50,957	)		59.87
Non-vested at December 31, 2018		660,375		$	58.63

The remaining unrecognized

pre-tax

compensation cost related to restricted stock units at December 31, 2018 was approximately $17.1 million, and the weighted-average period of time over which this cost will be recognized is 1.7 years. The fair value of restricted stock units that vested during 2018, 2017 and 2016 was $22.2 million, $20.3 million and $16.4 million, respectively.

Stock Option Awards

Stock options were granted to officers and certain employees of the Company and represent the right to purchase shares of Company common stock subject to continued employment through each vesting date.

All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. We recognize compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Stock options granted under the Plans generally vest over a three-year period and have a maturity of ten years from the grant date.

The fair value of Fortune Brands options was estimated at the date of grant using a Black-Scholes option pricing model with the assumptions shown in the following table:



	2018		2017		2016
Current expected dividend yield		1.3%		1.4%		1.4%
Expected volatility		24.0%		26.0%		30.0%
Risk-free interest rate		2.6%		1.9%		1.3%
Expected term		5 years		5.5 years		5.5 years

The determination of expected volatility is based on a blended peer group volatility for companies in similar industries, at a similar stage of life and with similar market capitalization. The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The expected term is the period over which our employees are expected to hold their options. The expected term was determined based on the historical employee exercise behavior and the contractual term of the options. The dividend yield is based on the Company’s estimated dividend over the expected term. The weighted-average grant date fair value of stock options granted under the Plans during the years ended December 31, 2018, 2017 and 2016 was $14.14, $13.49 and $12.70, respectively.

A summary of Fortune Brands stock option activity related to Fortune Brands and former employees of Fortune Brands, Inc., the Company from which we spun off from in 2011, for the year ended December 31, 2018 was as follows:



	Options			Weighted- Average Exercise Price
Outstanding at December 31, 2017		3,682,958		$	36.28
Granted		628,614			63.44
Exercised		(214,727	)		22.86
Expired/forfeited		(73,023	)		59.07
Outstanding at December 31, 2018		4,023,822		$	40.83

Options outstanding and exercisable at December 31, 2018 were as follows:



	Options Outstanding (a)					Options Exercisable (b)

Range Of Exercise Prices	Options Outstanding	Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Options Exercisable		Weighted- Average Exercise Price
$9.00 to $12.99	104,500		2.0	$	12.30		104,500	$	12.30
13.00 to 20.00	1,096,463		2.5		16.37		1,096,463		16.37
20.01 to 65.41	2,822,859		6.8		51.38		1,731,059		45.91
	4,023,822		5.5	$	40.83		2,932,022	$	33.67

(a)	At December 31, 2018, the aggregate intrinsic value of options outstanding was $28.1 million.

(b)	At December 31, 2018, the weighted-average remaining contractual life of options exercisable was 4.4 years and the aggregate intrinsic value of options exercisable was $28.1 million.

The remaining unrecognized compensation cost related to unvested awards at December 31, 2018 was $5.1 million, and the weighted-average period of time over which this cost will be recognized is 1.6 years. The fair value of options that vested during the years ended December 31, 2018, 2017 and 2016 was $6.7 million, $6.8 million and $6.0 million, respectively. The intrinsic value of Fortune Brands stock options exercised in the years ended December 31, 2018, 2017 and 2016 was $8.7 million, $70.6 million and $88.1 million, respectively.

Performance Awards

Performance share awards were granted to officers and certain employees of the Company and represent the right to earn

shares of Company common stock based on the achievement of company-wide

non-GAAP

performance conditions, including cumulative diluted earnings per share, average return on invested capital, average return on net tangible assets and cumulative EBITDA during the three-year performance period. Compensation cost is amortized into expense over the performance period, which is generally three years, and is based on the probability of meeting performance targets. The fair value of each performance share award is based on the average of the high and low stock price on the date of grant.

The following table summarizes information about

performance share awards as of December 31, 2018, as well as activity during the year then ended. The number of performance share awards granted are shown below at the target award amounts:



	Number of Performance Share Awards			Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2017		428,328		$	52.35
Granted		140,071			63.44
Vested		(136,822	)		47.48
Forfeited		(22,486	)		57.41
Non-vested at December 31, 2018		409,091		$	57.50

The remaining unrecognized

pre-tax

compensation cost related to performance share awards at December 31, 2018 was approximately $2.6 million, and the weighted-average period of time over which this cost will be recognized is 1.5 years. The fair value of performance share awards that vested during 2018 was $13.8 million (218,912 shares).

Director Awards

Stock awards are used as part of the compensation provided to outside directors under the Plan. Awards are issued annually in the second quarter. In addition, outside directors can elect to have director fees paid in stock or can elect to defer payment of stock. Compensation cost is expensed at the time of an award based on the fair value of a share at the date of the award. In 2018, 2017 and 2016, we awarded 19,109, 15,311 and 16,471 shares of Company common stock to outside directors with a weighted average fair value on the date of the award of $54.93, $63.43 and $57.37, respectively.

Revenue

12 Months Ended

Dec. 31, 2018

Revenue

14. Revenue

Our principal performance obligations are the sale of kitchen and bath cabinets, faucets and accessories, fiberglass and steel entry-door systems and locks, safes, safety, security devices and decking (collectively, “goods” or “products”). We recognize revenue for the sale of goods based on our assessment of when control transfers to our customers. For the majority of our sales, we recognize revenue at the point in time when we ship product from our facilities to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods to our customers. Payment terms on our product sales normally range from 30 to 90 days. Taxes assessed by a governmental authority that we collect are excluded from revenue. The expected costs associated with our contractual warranties will continue to be recognized as expense when the products are sold. See Note 18, “Product Warranties,” for further discussion.

We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration the Company will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer. In addition, for certain customer program incentives, we receive an identifiable benefit (goods or services) in exchange for the consideration given and record the associated expenditure in selling, general and administrative expenses.

We account for shipping and handling costs that occur after the customer has obtained control of a product as a fulfillment activity (i.e., as an expense) rather than as a promised service (i.e., as a revenue element). These costs are classified within selling, general and administrative expenses.

Settlement of our outstanding accounts receivable balances is normally within 30 to 90 days of the original sale transaction date. Obligations arise for us from customer rights to return our goods for any reason, including among others, product obsolescence, stock rotations,

trade-in

agreements for newer products and upon termination of a customer contract. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund obligation, which amounted to $14.8 million as of December 31, 2018. Refund obligations are classified within other current liabilities in our consolidated balance sheet. Return assets related to the refund obligation are measured at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value. Return assets are classified within other current assets and were approximately $2.3 million as of December 31, 2018.

The Company disaggregates revenue from contracts with customers into (i) major sales distribution channels in the U.S. and (ii) total sales to customers outside the U.S. market as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors. The following table disaggregates our consolidated revenue by major sales distribution channels for the year ended December 31, 2018.



(In millions)	December 31, 2018
Wholesalers (1)	$	2,607.3
Home Center retailers (2)		1,452.3
Other retailers (3)		311.6
Builder direct		235.4
U.S. net sales		4,606.6
International (4)		878.5
Net sales	$	5,485.1

(1)	Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customers’ respective internet website portals.

(2)	Represents sales to the three largest “Do-It-Yourself” retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc., inclusive of sales through their respective internet website portals.

(3)	Represents sales principally to our mass merchant and standalone independent e-commerce customers.

(4)	Represents sales in markets outside the United States, principally in Canada, China, Europe and Mexico.

Practical Expedients

Incremental costs of obtaining a contract include only those costs the Company incurs that would not have been incurred if the contract had not been obtained. These costs are required to be recognized as assets and amortized over the period that the related goods or services transfer to the customer. As a practical expedient, we expense as incurred costs to obtain a contract when the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses.

Defined Benefit Plans

12 Months Ended

Dec. 31, 2018

Defined Benefit Plans

15. Defined Benefit Plans

We have a number of pension plans in the United States, covering many of the Company’s employees, however these plans have been closed to new hires. The plans provide for payment of retirement benefits, mainly commencing between the ages of 55 and 65. After meeting certain qualifications, an employee acquires a vested right to future benefits. The benefits payable under the plans are generally determined on the basis of an employee’s length of service and/or earnings. Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied. Also, from time to time, we may make contributions in excess of the legal funding requirements. Service cost for 2018 relates to benefit accruals in an hourly Union defined benefit plan in our Doors & Security segment. Benefit accruals under all other defined benefit pension plans were frozen as of December 31, 2016.

In addition, the Company provides postretirement health care and life insurance benefits to certain retirees.



(In millions)	Pension Benefits						Postretirement Benefits

Obligations and Funded Status at December 31	2018			2017			2018			2017
Change in the Projected Benefit Obligation (PBO):
Projected benefit obligation at beginning of year	$	832.4		$	791.7		$	1.6		$	3.6
Service cost		0.5			0.6			—			—
Interest cost		30.7			33.3			—			—
Plan amendments		—			—			—			—
Actuarial loss (gain)		(63.1	)		40.6			(0.2	)		(1.4	)
Benefits paid		(37.3	)		(33.8	)		—			(0.4	)
Foreign exchange		—			—			—			(0.2	)
Projected benefit obligation at end of year	$	763.2		$	832.4		$	1.4		$	1.6
Accumulated benefit obligation at end of year (excludes the impact of future compensation increases)	$	763.2		$	832.4
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	656.6		$	577.7		$	—		$	—
Actual return on plan assets		(30.7	)		83.2			—			—
Employer contributions		11.0			29.5			—			0.5
Benefits paid		(37.3	)		(33.8	)		—			(0.5	)
Fair value of plan assets at end of year	$	599.6		$	656.6		$	—		$	—
Funded status (Fair value of plan assets less PBO)	$	(163.6	)	$	(175.8	)	$	(1.4	)	$	(1.6	)

The accumulated benefit obligation exceeds the fair value of assets for all pension plans. Amounts recognized in the consolidated balance sheets consist of:



	Pension Benefits						Postretirement Benefits

(In millions)	2018			2017			2018			2017
Current benefit payment liability	$	(1.5	)	$	(1.1	)	$	(0.2	)	$	(0.2	)
Accrued benefit liability		(162.1	)		(174.7	)		(1.2	)		(1.4	)
Net amount recognized	$	(163.6	)	$	(175.8	)	$	(1.4	)	$	(1.6	)

In the first quarter of 2013, the Company communicated a plan amendment to reduce health benefits to certain retired employees. Due to the risk of litigation at the time of the initial communication, the Company elected to defer the full recognition of the benefit arising from the plan amendment. Following a favorable court decision in the first quarter of 2016, the Company determined that it would realize the benefit from the plan amendment. As a result, the Company performed a

re-measurement

of the affected retiree plan liability as of March 31, 2016. This remeasurement resulted in a $10.7 million reduction of accrued retiree benefit plan liabilities and a corresponding increase in prior service credits. In accordance with accounting requirements, the liability reduction from this remeasurement is recorded as amortization of prior service credits in net income. In addition, we recorded a $0.9 million actuarial loss during the first quarter of 2016.

In January 2018, we adopted ASU

2017-07,

which requires entities to present the defined benefit plan

non-service

related costs outside the operating income subtotal. The new guidance was applied retrospectively in the consolidated statement of comprehensive income. As a result, we reclassified $9.6 million and $14.1 million of income from the operating income subtotal to other income, in the twelve months ended December 31, 2017 and 2016, respectively. The retrospective impact of adopting ASU

2017-07

is as follows:



(In millions)	2017			2016
Increase to cost of products sold	$	7.5		$	8.5
Increase to selling, general and administrative expenses		2.1			5.6
Decrease to operating income	$	(9.6	)	$	(14.1	)

As of December 31, 2018, we adopted the new Society of Actuaries

MP-2018

mortality tables, resulting in an immaterial decrease of our pension benefit obligation, and deferred actuarial losses in accumulated other comprehensive income. As of December 31, 2017, we adopted the new Society of Actuaries

MP-2017

mortality tables, resulting in a decrease in our pension benefit obligations of approximately $5.0 million, and a corresponding decrease in deferred actuarial losses in accumulated other comprehensive income.

The amounts in accumulated other comprehensive loss on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows:



(In millions)	Pension Benefits			Postretirement Benefits
Net actuarial loss at December 31, 2016	$	73.4		$	—
Recognition of actuarial (loss) gain		(0.9	)		1.4
Current year actuarial gain		(5.3	)		(1.4	)
Net actuarial loss at December 31, 2017	$	67.2		$	—
Recognition of actuarial (loss) gain		(3.9	)		0.1
Current year actuarial loss (gain)		8.5			(0.4	)
Net actuarial loss at December 31, 2018	$	71.8		$	(0.3	)
Net prior service cost (credit) at December 31, 2016	$	—		$	(5.1	)
Amortization		—			5.1
Net prior service cost (credit) at December 31, 2017	$	—		$	—
Amortization		—			—
Net prior service cost (credit) at December 31, 2018	$	—		$	—
Total at December 31, 2018	$	71.8		$	(0.3	)

There are no accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year.

Components of net periodic benefit cost were as follows:



Components of Net Periodic Benefit (Income) Cost	Pension Benefits									Postretirement Benefits

(In millions)	2018			2017			2016			2018			2017			2016
Service cost	$	0.5		$	0.6		$	9.6		$	—		$	—		$	—
Interest cost		30.7			33.3			34.4			—			—			0.3
Expected return on plan assets		(41.0	)		(37.3	)		(37.2	)		—			—			—
Recognition of actuarial losses (gains)		3.9			0.9			—			(0.1	)		(1.4	)		1.9
Amortization of prior service credits		—			—			—			—			(5.1	)		(13.5	)
Net periodic benefit (income) cost	$	(5.9	)	$	(2.5	)	$	6.8		$	(0.1	)	$	(6.5	)	$	(11.3	)



Assumptions	Pension Benefits			Postretirement Benefits

	2018	2017	2016	2018	2017	2016
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31:
Discount rate	4.4%	3.8%	4.3%	4.2%	3.4%	3.4%
Rate of compensation increase	—	—	4.0%	—	—	—
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31:
Discount rate	3.8%	4.3%	4.6%	3.4%	3.4%	4.1%
Expected long-term rate of return on plan assets	6.0%	6.4%	6.6%	—	—	—
Rate of compensation increase	—	—	4.0%	—	—	—



	Postretirement Benefits

	2018			2017
Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost at December 31:
Health care cost trend rate assumed for next year		6.9/8.0	% (a)		7.1/8.4	% (a)
Rate that the cost trend rate is assumed to decline (the ultimate trend rate)		4.5	%		4.5	%
Year that the rate reaches the ultimate trend rate		2027			2026

(a)	The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate.

one-percentage-point

change in assumed health care cost trend rates would have had the following effects in 2018:



(In millions)	1-Percentage- Point Increase			1-Percentage- Point Decrease
Effect on postretirement benefit obligation		(0.1	)		0.1

Plan Assets

The fair value of the pension assets by major category of plan assets as of December 31, 2018 and 2017 were as follows:



(In millions)	Total as of balance sheet date

	2018		2017
Group annuity/insurance contracts (level 3)	$	23.6	$	23.3
Collective trusts:
Cash and cash equivalents		7.7		12.5
Equity		197.7		285.9
Fixed income		324.6		277.7
Multi-strategy hedge funds		22.0		24.6
Real estate		24.0		32.6
Total	$	599.6	$	656.6

A reconciliation of Level 3 measurements was as follows:



	Group annuity/ insurance contracts

(In millions)	2018		2017
January 1	$	23.3	$	22.8
Actual return on assets related to assets still held		0.3		0.5
December 31	$	23.6	$	23.3

Our defined benefit plans Master Trust own a variety of investment assets. All of these investment assets, except for group annuity/insurance contracts are measured using net asset value per share as a practical expedient per ASC 820. Following the retrospective adoption of ASU

2015-07

(Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share) we excluded all investments measured using net asset value per share in the amount of $576.0 million and $633.3 million as of December 31, 2018 and 2017, respectively, from the tabular fair value hierarchy disclosure.

The terms and conditions for redemptions vary for each class of the investment assets valued at net asset value per share as a practical expedient. Real estate assets may be redeemed quarterly with a 45 day redemption notice period. Investment assets in multi-strategy hedge funds may be redeemed semi-annually with a 95 day redemption notice period. Equity, fixed income and cash and cash equivalents have no specified redemption frequency and notice period and may be redeemed daily. As of December 31, 2018 we do not have an intent to sell or otherwise dispose of these investment assets at prices different than the net asset value per share.

Our investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. The defined benefit asset allocation policy of the plans allow for an equity allocation of 0% to 75%, a fixed income allocation of 25% to 100%, a cash allocation of up to 25% and other investments of up to 20%. Asset allocations are based on the underlying liability structure. All retirement asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure.

Our 2019 expected blended long-term rate of return on plan assets of 6.0% was determined based on the nature of the plans’ investments, our current asset allocation and projected long-term rates of return from pension investment consultants.

Estimated Future Retirement Benefit Payments

The following retirement benefit payments are expected to be paid:



(In millions)	Pension Benefits		Postretirement Benefits
2019	$	39.4	$	0.1
2020		41.0		0.1
2021		42.1		0.1
2022		43.4		0.1
2023		44.4		0.1
Years 2024-2028		234.7		0.3

Estimated future retirement benefit payments above are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to participants in certain plans.

Defined Contribution Plan Contributions

We sponsor a number of defined contribution plans. Contributions are determined under various formulas. Cash contributions by the Company related to these plans amounted to $29.5 million, $29.1 million and $22.7 million in 2018, 2017 and 2016, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes

16. Income Taxes

The components of income from continuing operations before income taxes and noncontrolling interests were as follows:



(In millions)	2018		2017		2016
Domestic operations	$	456.7	$	554.7	$	513.8
Foreign operations		80.3		80.1		68.3
Income before income taxes and noncontrolling interests	$	537.0	$	634.8	$	582.1

A reconciliation of income taxes at the 35% federal statutory income tax rate for 2016 and 2017 and 21% for 2018 to the income tax provision reported was as follows:



(In millions)	2018			2017			2016
Income tax expense computed at federal statutory income tax rate	$	112.8		$	222.2		$	203.7
Other income taxes, net of federal tax benefit		13.7			13.4			12.6
Foreign taxes at a different rate than U.S. federal statutory income tax rate		3.5			(8.3	)		(7.6	)
Tax benefit on income attributable to domestic production activities		0.0			(10.9	)		(13.0	)
Net adjustments for uncertain tax positions		4.1			11.6			13.2
Share-based compensation (ASU 2016-09)		(2.1	)		(23.9	)		(27.8	)
Tax Act impact		5.5			(25.7	)		—
Deferred tax impact of state tax rate changes		3.5			(2.0	)		(1.1	)
Valuation allowance increase (decrease)		3.0			(5.2	)		(2.1	)
Miscellaneous other, net		3.0			(11.7	)		(8.2	)
Income tax expense as reported	$	147.0		$	159.5		$	169.7
Effective income tax rate		27.4	%		25.1	%		29.2	%

The 2018 effective income tax rate was favorably impacted by the corporate tax rate reduction from 35% to 21% under The Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The 2018 effective income tax rate was unfavorably impacted by the repeal of the Domestic Production Activity (Internal Revenue Code Section 199) Deduction, a valuation allowance increase, an adjustment to the provisional net benefit recorded in 2017 under the Tax Act, state and local taxes, unfavorable tax rates in foreign jurisdictions, and increases in uncertain tax positions.

The 2017 effective income tax rate was favorably impacted by the Tax Act. The effective income tax rates for 2017 and 2016 were favorably impacted by a tax benefit related to share-based compensation, the tax benefit attributable to the Domestic Production Activity (Internal Revenue Code Section 199) Deduction and favorable tax rates in foreign jurisdictions, partially offset by state and local taxes and increases to uncertain tax positions.

one-

time

The Tax Act included a provision for Global Intangible

Low-Taxed

Income (GILTI). The Company elected an accounting policy to treat GILTI as a period cost when incurred. The GILTI provision is effective for taxable years of foreign corporations beginning after December 31, 2017.

A reconciliation of the beginning and ending amount of unrecognized tax benefits (“UTBs”) was as follows:



(In millions)	2018			2017			2016
Unrecognized tax benefits — beginning of year	$	87.5		$	58.2		$	38.2
Gross additions — current year tax positions		9.1			31.0			10.7
Gross additions — prior year tax positions		9.3			10.9			10.4
Gross additions (reductions) — purchase accounting adjustments		1.0			4.0			9.7
Gross reductions — prior year tax positions		(14.5	)		(9.4	)		(9.8	)
Gross reductions — settlements with taxing authorities		(8.9	)		(7.2	)		(1.0	)
Unrecognized tax benefits — end of year	$	83.5		$	87.5		$	58.2

The amount of UTBs that, if recognized as of December 31, 2018, would affect the Company’s effective tax rate was $64.3 million. It is reasonably possible that, within the next twelve months, total UTBs may decrease in the range of $1.4 million to $3.5 million primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings.

We classify interest and penalty accruals related to UTBs as income tax expense. In 2018, we recognized an interest and penalty expense of approximately $2.2 million. In 2017, we recognized an interest and penalty expense of approximately $2.0 million. In 2016, we recognized an interest and penalty expense of approximately $1.1 million. At December 31, 2018 and 2017, we had accruals for the payment of interest and penalties of $14.4 million and $11.8 million, respectively.

We file income tax returns in the U.S., various state and foreign jurisdictions. The Company is open and subject to examination for tax years 2016 and subsequent by the U.S. Internal Revenue Service (“IRS”). In addition to the U.S., we have tax years that remain open and subject to examination by tax authorities in the following major taxing jurisdictions: Canada for years after 2013, Mexico for years after 2012 and China for years after 2014.

Income taxes in 2018, 2017 and 2016 were as follows:



(In millions)	2018			2017			2016
Current
Federal	$	93.5		$	133.1		$	150.4
Foreign		26.4			22.4			22.3
State and other		24.1			22.8			22.9
Deferred
Federal, state and other		4.8			(27.2	)		(23.9	)
Foreign		(1.8	)		8.4			(2.0	)
Total income tax expense	$	147.0		$	159.5		$	169.7

The components of net deferred tax assets (liabilities) as of December 31, 2018 and 2017 were as follows:



(In millions)	2018			2017
Deferred tax assets:
Compensation and benefits	$	31.5		$	22.1
Defined benefit plans		39.3			43.7
Capitalized inventories		16.1			11.1
Accounts receivable		5.4			7.8
Other accrued expenses		55.2			45.6
Net operating loss and other tax carryforwards		21.2			25.6
Valuation allowance		(13.3	)		(11.0	)
Miscellaneous		2.5			3.7
Total deferred tax assets		157.9			148.6
Deferred tax liabilities:
LIFO inventories		0.0			(4.2	)
Fixed assets		(60.2	)		(44.5	)
Intangible assets		(224.6	)		(232.0	)
Investment in partnership		(3.8	)		(9.2	)
Miscellaneous		(20.0	)		(16.1	)
Total deferred tax liabilities		(308.6	)		(306.0	)
Net deferred tax liability	$	(150.7	)	$	(157.4	)

In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2018 and 2017 as follows:



(In millions)	2018			2017
Other assets		11.9			9.4
Deferred income taxes		(162.6	)		(166.8	)
Net deferred tax liability	$	(150.7	)	$	(157.4	)

As of December 31, 2018 and 2017, the Company had deferred tax assets relating to net operating losses, capital losses, and other tax carryforwards of $21.2 million and $25.6 million, respectively, of which approximately $7.1 million will expire between 2019 and 2023, and the remainder of which will expire in 2024 and thereafter.

The Company has provided a valuation allowance to reduce the carrying value of certain of these deferred tax assets, as management has concluded that, based on the available evidence, it is more likely than not that the deferred tax assets will not be fully realized.

Under the Tax Act, the accumulated foreign earnings and profits of the Company’s foreign subsidiaries as of December 31, 2017 are subject to a deemed repatriation tax and should not be subject to additional U.S. federal income tax upon an actual repatriation of those earnings. As a result, the Company has recorded an estimated tax liability of $9.3 million for foreign and state taxes that would be payable on a distribution of those earnings and profits.

We have not provided for deferred taxes on the remaining book over tax outside basis differences of our foreign subsidiaries. The outside basis differences of foreign subsidiaries considered indefinitely reinvested totaled approximately $128.1million at December 31, 2018. The associated deferred tax liability on this basis difference is less than $5 million.

Restructuring and Other Charges

12 Months Ended

Dec. 31, 2018

Restructuring and Other Charges

17. Restructuring and Other Charges

Pre-tax

restructuring and other charges for the year ended December 31, 2018 were as follows:



	Year Ended December 31, 2018
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)			Total Charges
Cabinets	$	16.8	$	9.1	$	0.3		$	26.2
Plumbing		2.6		0.6		0.1			3.3
Doors & Security		4.7		2.4		(1.2	)		5.9
Total	$	24.1	$	12.1	$	(0.8	)	$	35.4

(a)

write-off

of displays from exiting a customer relationship, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities.

(b)	Selling, general and administrative expenses

Restructuring and other charges in 2018 are largely related to our initiatives to consolidate and rationalize our manufacturing footprint and discontinue certain product lines in our Cabinets segment and severance costs within all our segments.

Pre-tax

restructuring and other charges for the year ended December 31, 2017 were as follows:



	Year Ended December 31, 2017
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)		Total Charges
Cabinets	$	1.4	$	1.6	$	2.2	$	5.2
Plumbing		2.8		—		—		2.8
Doors & Security		4.1		5.6		0.8		10.5
Total	$	8.3	$	7.2	$	3.0	$	18.5

(a)

(b)	Selling, general and administrative expenses

Restructuring and other charges in 2017, primarily related to losses on disposal of inventory associated with exiting a product line in our Doors & Security segment and exiting a customer relationship in our Cabinets segment, as well as severance costs within our Doors & Security, Plumbing and Cabinets segments.

Pre-tax

restructuring and other charges for the year ended December 31, 2016 were as follows:



	Year Ended December 31, 2016
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)		Total Charges
Cabinets	$	1.8	$	—	$	—	$	1.8
Plumbing		1.6		0.3		0.2		2.1
Doors & Security		10.5		4.2		0.7		15.4
Total	$	13.9	$	4.5	$	0.9	$	19.3

(a)

(b)	Selling, general and administrative expenses

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

Reconciliation of Restructuring Liability



(In millions)	Balance at 12/31/17		2018 Provision		Cash Expenditures (a)			Non-Cash Write-offs (b)			Balance at 12/31/18
Workforce reduction costs	$	5.0	$	21.4	$	(16.3	)	$	(0.2	)	$	9.9
Other		0.8		2.7		(2.4	)		(0.5	)		0.6
	$	5.8	$	24.1	$	(18.7	)	$	(0.7	)	$	10.5

(a)	Cash expenditures primarily related to severance charges.

(b)	Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions.



(In millions)	Balance at 12/31/16		2017 Provision		Cash Expenditures (a)			Non-Cash Write-offs (b)			Balance at 12/31/17
Workforce reduction costs	$	2.4	$	6.7	$	(3.9	)	$	(0.2	)	$	5.0
Other		0.6		1.6		(1.3	)		(0.1	)		0.8
	$	3.0	$	8.3	$	(5.2	)	$	(0.3	)	$	5.8

(a)	Cash expenditures primarily related to severance charges.

(b)	Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions.

Commitments

12 Months Ended

Dec. 31, 2018

Commitments

18. Commitments

Purchase Obligations

Purchase obligations of the Company as of December 31, 2018 were $369.9 million, of which $342.4 million is due within one year. Purchase obligations include contracts for raw materials and finished goods purchases, selling and administrative services, and capital expenditures.

Lease Commitments

Future minimum rental payments under

non-cancelable

operating leases as of December 31, 2018 were as follows:



(In millions)
2019	$	37.8
2020		29.6
2021		23.4
2022		18.9
2023		13.8
Remainder		58.8
Total minimum rental payments	$	182.3

Total rental expense for all operating leases (reduced by immaterial amounts from subleases) amounted to $48.4 million, $42.1 million and $43.5 million in 2018, 2017 and 2016, respectively.

Product Warranties

We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historic claim experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the years ended December 31, 2018, 2017 and 2016.



(In millions)	2018			2017			2016
Reserve balance at the beginning of the year	$	17.2		$	16.2		$	16.0
Provision for warranties issued		25.1			25.1			25.8
Settlements made (in cash or in kind)		(25.7	)		(24.3	)		(25.5	)
Acquisition		8.9			—			0.3
Foreign currency		(0.6	)		0.2			(0.4	)
Reserve balance at end of year	$	24.9		$	17.2		$	16.2

Information on Business Segments

12 Months Ended

Dec. 31, 2018

Information on Business Segments

19. Information on Business Segments

We report our operating segments based on how operating results are regularly reviewed by our chief operating decision maker for making decisions about resource allocations to segments and assessing performance. The Company’s operating segments and types of products from which each segment derives revenues are described below.

The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names including Aristokraft, Diamond,

Mid-Continent,

Kitchen Craft, Schrock, Homecrest, Omega, Kemper, StarMark and Ultracraft. In addition, cabinets are distributed under the Thomasville Cabinetry brand names. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals predominantly under the Moen, ROHL, Riobel, Perrin & Rowe, Victoria + Albert and Shaws brands. The Doors & Security segment includes residential fiberglass and steel entry door systems under the

Therma-Tru

brand name, urethane millwork product lines under the Fypon brand name, locks, safety and security devices and electronic security products under the Master Lock and American Lock brand names, fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name and composite decking, railing and fencing under the Fiberon brand name. Corporate expenses consist of headquarters administrative expenses and defined benefit plans costs, primarily interest costs and expected return on plan assets, as well as actuarial gains and losses arising from the periodic remeasurement of our liabilities. Corporate assets consist primarily of cash.

The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe.



(In millions)	2018		2017		2016
Net sales:
Cabinets	$	2,418.6	$	2,467.1	$	2,397.8
Plumbing		1,883.3		1,720.8		1,534.4
Doors & Security		1,183.2		1,095.4		1,052.7
Net sales	$	5,485.1	$	5,283.3	$	4,984.9

Net sales to two of the Company’s customers, The Home Depot, Inc. (“The Home Depot”) and Lowe’s Companies, Inc. (“Lowe’s”) each accounted for greater than 10% of the Company’s net sales in 2018, 2017 and 2016. All segments sell to both The Home Depot and Lowe’s. Net sales to The Home Depot were 13%, 13% and 13% of net sales in 2018, 2017 and 2016, respectively. Net sales to Lowe’s were 14%, 14% and 14% of net sales in 2018, 2017 and 2016, respectively.



(In millions)	2018			2017			2016

Operating income:
Cabinets	$	143.5		$	267.2		$	257.8
Plumbing (b)		375.3			358.5			314.9
Doors & Security (b)		155.6			146.9			126.4
Less: Corporate expenses (a) (b)		(79.2	)		(90.1	)		(80.5	)
Operating income	$	595.2		$	682.5		$	618.6
(a) Below is a table detailing Corporate expenses:
General and administrative expense	$	(79.2	)	$	(85.0	)	$	(80.5	)
Long-lived asset impairment		—			(5.1	)		—
Total Corporate expenses	$	(79.2	)	$	(90.1	)	$	(80.5	)

(b)	We revised our previously reported results in 2017 and 2016 for ASU 2017-07, Presentation of Net Periodic and Postretirement Costs and to reflect our new Doors & Security segment resulting from the reorganization we announced in July 2018.



(In millions)	2018			2017			2016
Total assets:
Cabinets	$	2,318.7		$	2,416.3		$	2,349.4
Plumbing		1,943.1			1,854.1			1,626.8
Doors & Security		1,526.0			1,032.2			995.1
Corporate		176.8			208.8			157.2
Total assets	$	5,964.6		$	5,511.4		$	5,128.5

Depreciation expense:
Cabinets	$	50.9		$	42.8		$	40.1
Plumbing		29.1			26.9			24.6
Doors & Security		30.2			25.9			26.2
Corporate		3.3			3.0			3.7
Depreciation expense	$	113.5		$	98.6		$	94.6

Amortization of intangible assets:
Cabinets	$	19.6		$	19.7		$	18.4
Plumbing		10.4			7.7			3.6
Doors & Security		6.1			4.3			6.1
Amortization of intangible assets	$	36.1		$	31.7		$	28.1

Capital expenditures:
Cabinets	$	73.8		$	63.4		$	61.7
Plumbing		41.4			43.5			48.3
Doors & Security		34.3			40.1			38.8
Corporate		0.6			18.0			0.5
Capital expenditures, gross		150.1			165.0			149.3
Less: proceeds from disposition of assets		(6.1	)		(0.4	)		(3.9	)
Capital expenditures, net	$	144.0		$	164.6		$	145.4

Net sales by geographic region (a) :
United States	$	4,606.6		$	4,492.2		$	4,258.5
Canada		433.1			427.6			406.4
China		260.6			202.3			175.0
Other international		184.8			161.2			145.0
Net sales	$	5,485.1		$	5,283.3		$	4,984.9

Property, plant and equipment, net:
United States	$	628.9		$	562.3		$	499.8
Mexico		103.4			89.0			90.8
Canada		46.0			50.5			45.5
China		22.5			24.8			22.7
Other international		12.6			13.4			3.7
Property, plant and equipment, net	$	813.4		$	740.0		$	662.5

(a)	Based on country of destination

Quarterly Financial Data

12 Months Ended

Dec. 31, 2018

Quarterly Financial Data

20. Quarterly Financial Data

Unaudited

(In millions, except per share amounts)



2018	1 st			2 nd		3 rd		4 th		Full Year
Net sales	$	1,254.6		$	1,429.0	$	1,380.8	$	1,420.7	$	5,485.1
Gross profit		439.6			524.1		493.9		501.8		1,959.4
Operating income		119.4			188.6		147.1		140.1		595.2
Income from continuing operations, net of tax		75.1			129.7		99.9		85.3		390.0
Income (loss) from discontinued operations, net of tax		(0.2	)		—		—		—		(0.2	)
Net income		74.9			129.7		99.9		85.3		389.8
Net income attributable to Fortune Brands		75.0			129.6		99.8		85.2		389.6
Basic earnings (loss) per common share
Continuing operations		0.50			0.89		0.70		0.60		2.69
Discontinued operations		—			—		—		—		—
Net income attributable to Fortune Brands		0.50			0.89		0.70		0.60		2.69
Diluted earnings (loss) per common share
Continuing operations		0.49			0.88		0.69		0.60		2.66
Discontinued operations		—			—		—		—		—
Net income attributable to Fortune Brands		0.49			0.88		0.69		0.60		2.66



2017	1 st		2 nd			3 rd		4 th		Full Year
Net sales	$	1,186.8	$	1,365.4		$	1,348.6	$	1,382.5	$	5,283.3
Gross profit (a)		414.1		513.3			505.3		492.3		1,925.0
Operating income (a)		111.0		209.2			199.5		162.8		682.5
Income from continuing operations, net of tax		77.4		140.3			129.6		128.0		475.3
Income (loss) from discontinued operations, net of tax		—		(2.6	)		—		—		(2.6	)
Net income		77.4		137.7			129.6		128.0		472.7
Net income attributable to Fortune Brands		77.4		137.7			129.5		128.0		472.6
Basic earnings (loss) per common share
Continuing operations		0.50		0.91			0.84		0.84		3.10
Discontinued operations		—		(0.02	)		—		—		(0.02	)
Net income attributable to Fortune Brands		0.50		0.89			0.84		0.84		3.08
Diluted earnings (loss) per common share
Continuing operations		0.50		0.90			0.83		0.83		3.05
Discontinued operations		—		(0.02	)		—		—		(0.02	)
Net income attributable to Fortune Brands		0.50		0.88			0.83		0.83		3.03

(a)	Amounts revised to reflect adoption of ASU 2017-07 “Presentation of Net Periodic Pension and Postretirement Costs.”

In 2018, we recorded

pre-tax

defined benefit plan actuarial loss of $3.8 million—$0.3 million of actuarial loss ($0.2 million after tax) in the third quarter and $3.5 million of actuarial losses ($2.8 million after tax) in the fourth quarter.

In 2017, we recorded

pre-tax

defined benefit plan actuarial gains of $0.5 million—$1.3 million of actuarial gains ($0.9 million after tax) in the third quarter and ($0.8) million of actuarial losses (($0.5) million after tax) in the fourth quarter.

Earnings Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share

21. Earnings Per Share

The computations of earnings (loss) per common share were as follows:



(In millions, except per share data)	2018			2017			2016
Income from continuing operations, net of tax	$	390.0		$	475.3		$	412.4
Less: Noncontrolling interests		0.2			0.1			—
Income from continuing operations for EPS		389.8			475.2			412.4
Income (loss) from discontinued operations		(0.2	)		(2.6	)		0.8
Net income attributable to Fortune Brands	$	389.6		$	472.6		$	413.2
Earnings (loss) per common share
Basic
Continuing operations	$	2.69		$	3.10		$	2.67
Discontinued operations		—			(0.02	)		0.01
Net income attributable to Fortune Brands common stockholders	$	2.69		$	3.08		$	2.68
Diluted
Continuing operations	$	2.66		$	3.05		$	2.61
Discontinued operations		—			(0.02	)		0.01
Net income attributable to Fortune Brands common stockholders	$	2.66		$	3.03		$	2.62
Basic average shares outstanding		144.6			153.2			154.3
Stock-based awards		1.8			2.6			3.5
Diluted average shares outstanding		146.4			155.8			157.8
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share		1.5			0.5			0.5

Other Income, Net

12 Months Ended

Dec. 31, 2018

Other Expense, Net

22. Other Income, Net

The components of other income, net for the years ended December 31, 2018, 2017 and 2016 were as follows:



(In millions)	2018			2017			2016
Defined benefit plan (a)	$	(6.5	)	$	(9.6	)	$	(14.2	)
Asset impairment charge	$	—		$	7.0		$	—
Foreign currency (gains)/losses	$	(2.0	)	$	0.9		$	2.8
Ineffective portion of cash flow hedge	$	(3.8	)		—			—
Other items, net	$	(4.0	)		—			(1.2	)
Total other income, net	$	(16.3	)	$	(1.7	)	$	(12.6	)

(a)	Amounts revised to reflect adoption of ASU 2017-07 “Presentation of Net Periodic Pension and Postretirement Costs.”

In the year ended December 31, 2018, the ineffective portion of cash flow hedges recognized in other items, net, was $3.8 million and insignificant in the years ended December 31, 2017 and 2016.

During 2017, we recorded an impairment charge of $7.0 million pertaining to a cost method investment in a development stage home products company due to an other-than-temporary decline in its fair value. As a result of the impairment, the carrying value of the investment was reduced to zero and the Company is not subject to further impairment or funding obligations with regard to this investment.

Contingencies

12 Months Ended

Dec. 31, 2018

Contingencies

23. Contingencies

Litigation

The Company is a defendant in lawsuits that are ordinary routine litigation matters incidental to its businesses. 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 the Company’s results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly the Company believes the likelihood of material loss is remote.

Environmental

Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not have a material effect on capital expenditures, earnings or the competitive position of Fortune Brands. Several of our subsidiaries have been designated as potentially responsible parties (“PRPs”) under “Superfund” or similar state laws. As of December 31, 2018, ten such instances have not been dismissed, settled or otherwise resolved. In 2018, none of our subsidiaries were identified as a PRP in a new instance and no instances were settled, dismissed or otherwise resolved. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other PRPs or insurance, will not have a material adverse effect on our results of operations, cash flows or financial condition. At December 31, 2018 and 2017, we had accruals of $0.6 million and $0.7 million, respectively, relating to environmental compliance and cleanup including, but not limited to, the above mentioned Superfund sites.

Schedule II Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2018

Schedule II Valuation and Qualifying Accounts

For the years ended December 31, 2018, 2017 and 2016



(In millions)	Balance at Beginning of Period		Charged to Expense			Reclassifications (c)			Write-offs and Deductions (a)			Business Acquisition (b)		Balance at End of Period
2018:
Allowance for cash discounts and sales allowances	$	84.0	$	216.1		$	(16.0	)	$	199.5		$	—	$	84.6
Allowance for doubtful accounts		3.3		—			—			(0.1	)		0.3		3.7
Allowance for deferred tax assets		11.0		2.3			—			—			—		13.3

2017:
Allowance for cash discounts, returns and sales allowances	$	68.2	$	205.7		$	3.0		$	192.9		$	—	$	84.0
Allowance for doubtful accounts		7.4		0.2			—			4.5			0.2		3.3
Allowance for deferred tax assets		16.4		(5.4	)		—			—			—		11.0

2016:
Allowance for cash discounts, returns and sales allowances	$	50.3	$	148.6			—		$	130.7		$	—	$	68.2
Allowance for doubtful accounts		5.8		4.3			—			2.7			—		7.4
Allowance for deferred tax assets		19.7		(3.3	)		—			—			—		16.4

(a)	Net of recoveries of amounts written off in prior years and immaterial foreign currency impact.

(b)	Represents purchase accounting adjustment related to the Fiberon acquisition within our Doors and Security segment in 2018. 2017 represents a valuation allowance on an acquired net operating loss carryforward (Norcraft Canada).

(c)

Represents reclassification of reserve for returns to a separate liability account due to our adoption of the revenue recognition standard and a reclassification of sales allowances to certain customer program liabilities across all segments during 2018. 2017 represents a reclassification of certain customer program liabilities to sales allowances (reduction to accounts receivable) in the Doors & Security segment.

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Use of Estimates

Cash and Cash Equivalents

Highly liquid investments with an original maturity of three months or less are included in cash and cash equivalents.

Allowances for Doubtful Accounts

Property, Plant and Equipment

The majority of our inventories are accounted for using the

first-in,

first-out

During the fourth quarter of 2018, we determined that it was preferable to change our accounting policy from

last-in,

first-out


Buildings and leasehold improvements			15 to 40 years
Machinery and equipment			3 to 15 years
Software			3 to 7 years

Long-lived Assets

During 2017, we recorded an impairment of $5.1 million related to a long lived asset to be disposed of in selling, general and administrative expenses.

Goodwill and Indefinite-lived Intangible Assets

Equity securities

Investments in Equity Securities

In accordance with ASC requirements for Investments – equity securities, we account for

non-controlling

equity interests in some of our partners. This includes an investment in Flo Technologies, Inc. (“Flo”), a U.S. manufacturer of a comprehensive water monitoring and

shut-off

Defined Benefit Plans

plan-by-plan

Insurance Reserves

Litigation Contingencies

Income Taxes

We record liabilities for uncertain income tax positions based on a

two-step

one-

time

The Tax Act included a provision for Global Intangible

Low-Taxed

Revenue Recognition

The Company recognizes revenue for the sale of goods based on its assessment of when control transfers to our customers. Refer to Note 14 for additional information.

Cost of Products Sold

Customer Program Costs

Selling, General and Administrative Expenses

Stock-based Compensation

Earnings Per Share

Foreign Currency Translation

Derivative Financial Instruments

Recently Issued Accounting Standards

Revenue from Contracts with Customers

In May 2014, the Financial Accounting Standards Board (“FASB”) issued 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. We adopted ASU

2014-09

See Note 14, “Revenue,” for further information.

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”

2018-01,

which clarifies the application of the new leases guidance to land easements. In July 2018, the FASB issued ASU

2018-10

and ASU

2018-11,

which clarify certain guidance included in ASU

2016-02

We plan to adopt the standard in the first quarter of 2019 using the transition method introduced by ASU

2018-11,

right-of-use

assets ranging from $170 million to $200 million. Differences between the lease liability and

right-of-use

asset, recognized are not expected to material. We do not expect the standard to materially affect our consolidated net income.

Presentation of Net Periodic Pension and Postretirement Cost

In March 2017, the FASB issued

ASU 2017-07, which

2014-09

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 guidance provides a relief to entities that make

non-substantive

Clarifying the Definition of a Business

In January 2017, the FASB issued ASU

2017-01,

Restricted Cash

In November 2016, the FASB issued ASU

2016-18,

Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU

2016-16,

Classification of Certain Cash Receipts and Cash Payments

In September 2016, the FASB issued ASU

2016-15,

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU

2016-01,

available-for-sale

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

In February 2017, the FASB issued ASU

2017-05,

non-customer.

Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU

2017-12

Financial Instruments — Credit Losses

In June 2016, the FASB issued ASU

2016-13,

off-balance-sheet

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU

2018-02,

Improvements to Nonemployee Share-Based Payment Accounting

In June 2018, the FASB issued ASU

2018-07

Codification Improvements

In July 2018, the FASB issued ASU

2018-09

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU

2018-13

Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU

2018-14

Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

In August 2018, the FASB issued ASU

2018-15

internal-use

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Estimated Useful Lives of Property, Plant and Equipment

Estimated useful lives of the related assets are as follows:


Buildings and leasehold improvements			15 to 40 years
Machinery and equipment			3 to 15 years
Software			3 to 7 years

Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2018

Supplemental Information on Balance Sheets

Supplemental information on our

year-end

consolidated balance sheets is as follows:



(In millions)	2018 (a)		2017
Inventories:
Raw materials and supplies	$	227.4	$	224.9
Work in process		66.4		58.3
Finished products		385.1		297.6
Total inventories	$	678.9	$	580.8

Property, plant and equipment:
Land and improvements	$	66.8	$	58.7
Buildings and improvements to leaseholds		500.1		464.1
Machinery and equipment		1,249.0		1,167.5
Construction in progress		95.8		90.1
Property, plant and equipment, gross		1,911.7		1,780.4
Less: accumulated depreciation		1,098.3		1,040.4
Property, plant and equipment, net of accumulated depreciation	$	813.4	$	740.0

Other current liabilities:
Accrued salaries, wages and other compensation	$	85.9	$	105.9
Accrued customer programs		167.8		142.8
Accrued taxes		57.7		61.4
Dividends payable		30.9		30.4
Other accrued expenses		165.8		137.5
Total other current liabilities	$	508.1	$	478.0

(a)	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.

Acquisitions and Dispositions (Tables)

12 Months Ended

Dec. 31, 2018

Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition.



(In millions)
Accounts receivable	$	19.2
Inventories		49.4
Property, plant and equipment		49.0
Goodwill		173.4
Identifiable intangible assets		195.0
Other assets		4.8
Total assets		490.8
Accounts payable		16.5
Other liabilities and accruals		14.5
Net assets acquired	$	459.8

Goodwill and Identifiable Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Change in Net Carrying Amount of Goodwill by Segment



(In millions)	Cabinets			Plumbing			Doors & Security			Total Goodwill
Balance at December 31, 2016 (a)	$	924.3		$	670.2		$	239.3		$	1,833.8
2017 translation adjustments		2.0			3.3			1.2			6.5
Acquisition-related adjustments		—			71.7			—			71.7
Balance at December 31, 2017 (a)	$	926.3		$	745.2		$	240.5		$	1,912.0
2018 translation adjustments		(2.3	)		(5.9	)		(1.4	)		(9.6	)
Acquisition-related adjustments		—			4.4			173.5			177.9
Balance at December 31, 2018 (a)	$	924.0		$	743.7		$	412.6		$	2,080.3

(a)	Net of accumulated impairment losses of $399.5 million in the Doors & Security segment.

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

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

The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2018 and 2017 were as follows:



	As of December 31, 2018							As of December 31, 2017
(In millions)	Gross Carrying Amounts		Accumulated Amortization			Net Book Value		Gross Carrying Amounts		Accumulated Amortization			Net Book Value
Indefinite-lived tradenames	$	673.9	$	—		$	673.9	$	709.9	$	—		$	709.9
Amortizable intangible assets
Tradenames		19.8		(11.9	)		7.9		15.7		(9.9	)		5.8
Customer and contractual relationships		800.3		(260.2	)		540.1		663.8		(232.0	)		431.8
Patents/proprietary technology		73.5		(48.6	)		24.9		60.2		(45.3	)		14.9
Total		893.6		(320.7	)		572.9		739.7		(287.2	)		452.5
Total identifiable intangibles	$	1,567.5	$	(320.7	)	$	1,246.8	$	1,449.6	$	(287.2	)	$	1,162.4

External Debt and Financing Arrangements (Tables)

12 Months Ended

Dec. 31, 2018

Components of External Long-Term Debt

The components of external long-term debt were as follows:



(In millions)	2018		2017
$400 million unsecured senior note due June 2020	$	399.0	$	398.3
$500 million unsecured senior note due June 2025		495.0		494.3
$600 million unsecured senior note due September 2023		595.0		—
$1,250 million revolving credit agreement due June 2021		320.0		615.0
$525 million term loan due March 2019		525.0		—
Total debt		2,334.0		1,507.6
Less: current portion		525.0		—
Total long-term debt	$	1,809.0	$	1,507.6

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Fair Values of Derivative Instruments

The fair values of foreign exchange and commodity derivative instruments on the consolidated balance sheets as of December 31, 2018 and 2017 were:



		Fair Value

(In millions)	Location	2018		2017
Assets:
Foreign exchange contracts	Other current assets	$	5.3	$	0.8
Commodity contracts	Other current assets		—		0.2
Net investment hedges	Other current assets		0.7		—
	Total assets	$	6.0	$	1.0
Liabilities:
Foreign exchange contracts	Other current liabilities	$	1.9	$	5.6
Net investment hedges	Other current liabilities		—		0.8
	Total liabilities	$	1.9	$	6.4

Effects of Derivative Financial Instruments on Consolidated Statements of Income

The effects of derivative financial instruments on the consolidated statements of income in 2018, 2017 and 2016 were:



(In millions)	Gain (Loss) Recognized in Income

Type of hedge	Location	2018		2017			2016
Cash flow	Cost of products sold	$	2.0	$	0.9		$	(3.5	)
Fair value	Other (income) expense, net		3.7		(2.0	)		2.0
Total		$	5.7	$	(1.1	)	$	(1.5	)

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Carrying Value and Fair Value of Debt

The carrying value and fair value of debt as of December 31, 2018 and 2017 were as follows:



(In millions)	December 31, 2018				December 31, 2017

	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving credit facility	$	320.0	$	320.0	$	615.0	$	615.0
Term Loan		525.0		525.0		—		—
Senior Notes, net of underwriting commissions and price discounts		1,489.0		1,490.4		892.6		926.3

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017 were as follows:



(In millions)	Fair Value

	2018		2017
Assets:
Derivative asset financial instruments (level 2)	$	6.0	$	1.0
Deferred compensation program assets (level 2)		9.3		7.5
Total assets	$	15.3	$	8.5
Liabilities:
Derivative liability financial instruments (level 2)	$	1.9	$	6.4

Capital Stock (Tables)

12 Months Ended

Dec. 31, 2018

Common Stock and Treasury Stock Activity

The number of shares of common stock and treasury stock and the share activity for 2018 and 2017 were as follows:



	Common Shares						Treasury Shares

	2018			2017			2018		2017
Balance at the beginning of the year		151,906,797			153,412,050			27,879,929		24,305,930
Stock plan shares issued		822,878			2,068,746			—		—
Shares surrendered by optionees		(230,550	)		(180,537	)		230,550		180,537
Common stock repurchases		(12,000,144	)		(3,393,462	)		12,000,144		3,393,462
Balance at the end of the year		140,498,981			151,906,797			40,110,623		27,879,929

Accumulated Other Comprehensive (Loss) Income (Tables)

12 Months Ended

Dec. 31, 2018

Reclassifications Out of Accumulated Other Comprehensive (Loss) Income

The reclassifications out of accumulated other comprehensive (loss) income for the years ended December 31, 2018 and 2017 were as follows:



(In millions)

Details about Accumulated Other Comprehensive Income Components				Affected Line Item in the Consolidated Statements of Income

	2018			2017
Gains (losses) on cash flow hedges
Foreign exchange contracts	$	2.2		$	0.4		Cost of products sold
Interest rate contracts		0.1			—		Other income, net
Commodity contracts		(0.2	)		0.5		Cost of products sold
		2.1			0.9		Total before tax
		(0.4	)		(0.1	)	Tax expense
	$	1.7		$	0.8		Net of tax
Defined benefit plan items
Recognition of prior service cost	$	—		$	5.1		(a)
Recognition of actuarial (losses) gains		(3.8	)		0.5		(a)
		(3.8	)		5.6		Total before tax
		0.8			(2.0	)	Tax expense
	$	(3.0	)	$	3.6		Net of tax
Total reclassifications for the period	$	(1.3	)	$	4.4		Net of tax

(a)	These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 15, “Defined Benefit Plans,” for additional information.

After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income

The

after-tax

components of and changes in accumulated other comprehensive (loss) income were as follows:



(In millions)	Foreign Currency Adjustments			Derivative Hedging Gain (Loss)			Defined Benefit Plan Adjustments			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2015	$	(13.3	)	$	2.1		$	(41.3	)	$	(52.5	)
Amounts classified into accumulated other comprehensive (loss) income		(14.7	)		(6.2	)		5.3			(15.6	)
Amounts reclassified from accumulated other comprehensive (loss) income into earnings		—			3.5			(7.3	)		(3.8	)
Net current period other comprehensive (loss) income		(14.7	)		(2.7	)		(2.0	)		(19.4	)
Balance at December 31, 2016	$	(28.0	)	$	(0.6	)	$	(43.3	)	$	(71.9	)
Amounts classified into accumulated other comprehensive (loss) income		33.8			(1.0	)		4.3			37.1
Amounts reclassified from accumulated other comprehensive (loss) income into earnings		—			(0.8	)		(3.6	)		(4.4	)
Net current period other comprehensive (loss) income		33.8			(1.8	)		0.7			32.7
Balance at December 31, 2017	$	5.8		$	(2.4	)	$	(42.6	)	$	(39.2	)
Amounts classified into accumulated other comprehensive (loss) income		(31.1	)		8.3			(6.3	)		(29.1	)
Amounts reclassified into earnings		—			(1.7	)		3.0			1.3
Net current period other comprehensive (loss) income		(31.1	)		6.6			(3.3	)		(27.8	)
Balance at December 31, 2018	$	(25.3	)	$	4.2		$	(45.9	)	$	(67.0	)

Stock-Based Compensation (Updated by Corporate) (Tables)

12 Months Ended

Dec. 31, 2018

Pre-Tax Stock-Based Compensation Expense from Continuing Operations

Stock-based compensation expense from continuing operations was as follows:



(In millions)	2018		2017		2016
Stock option awards	$	8.6	$	7.4	$	7.2
Restricted stock units		21.3		21.6		17.2
Performance awards		6.3		13.6		6.7
Director awards		1.0		1.0		0.9
Total pre-tax expense		37.2		43.6		32.0
Tax benefit		6.2		15.2		11.4
Total after tax expense	$	31.0	$	28.4	$	20.6

Restricted Stock Units Activity

A summary of activity with respect to restricted stock units outstanding under the Plans for the year ended December 31, 2018 was as follows:



	Number of Restricted Stock Units			Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2017		728,065		$	54.59
Granted		356,860			61.07
Vested		(373,593	)		52.92
Forfeited		(50,957	)		59.87
Non-vested at December 31, 2018		660,375		$	58.63

Black-Scholes Option Pricing Model Assumptions used to Estimate Fair Value of Options

The fair value of Fortune Brands options was estimated at the date of grant using a Black-Scholes option pricing model with the assumptions shown in the following table:



	2018		2017		2016
Current expected dividend yield		1.3%		1.4%		1.4%
Expected volatility		24.0%		26.0%		30.0%
Risk-free interest rate		2.6%		1.9%		1.3%
Expected term		5 years		5.5 years		5.5 years

Stock Option Activity



	Options			Weighted- Average Exercise Price
Outstanding at December 31, 2017		3,682,958		$	36.28
Granted		628,614			63.44
Exercised		(214,727	)		22.86
Expired/forfeited		(73,023	)		59.07
Outstanding at December 31, 2018		4,023,822		$	40.83

Options Outstanding and Exercisable

Options outstanding and exercisable at December 31, 2018 were as follows:



	Options Outstanding (a)					Options Exercisable (b)

Range Of Exercise Prices	Options Outstanding	Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Options Exercisable		Weighted- Average Exercise Price
$9.00 to $12.99	104,500		2.0	$	12.30		104,500	$	12.30
13.00 to 20.00	1,096,463		2.5		16.37		1,096,463		16.37
20.01 to 65.41	2,822,859		6.8		51.38		1,731,059		45.91
	4,023,822		5.5	$	40.83		2,932,022	$	33.67

(a)	At December 31, 2018, the aggregate intrinsic value of options outstanding was $28.1 million.

(b)	At December 31, 2018, the weighted-average remaining contractual life of options exercisable was 4.4 years and the aggregate intrinsic value of options exercisable was $28.1 million.

Summarizes Information of Performance Share Awards

The following table summarizes information about

performance share awards as of December 31, 2018, as well as activity during the year then ended. The number of performance share awards granted are shown below at the target award amounts:



	Number of Performance Share Awards			Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2017		428,328		$	52.35
Granted		140,071			63.44
Vested		(136,822	)		47.48
Forfeited		(22,486	)		57.41
Non-vested at December 31, 2018		409,091		$	57.50

Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Disaggregation of Revenue



(In millions)	December 31, 2018
Wholesalers (1)	$	2,607.3
Home Center retailers (2)		1,452.3
Other retailers (3)		311.6
Builder direct		235.4
U.S. net sales		4,606.6
International (4)		878.5
Net sales	$	5,485.1

(1)	Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customers’ respective internet website portals.

(2)	Represents sales to the three largest “Do-It-Yourself” retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc., inclusive of sales through their respective internet website portals.

(3)	Represents sales principally to our mass merchant and standalone independent e-commerce customers.

(4)	Represents sales in markets outside the United States, principally in Canada, China, Europe and Mexico.

Defined Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Obligations and Funded Status



(In millions)	Pension Benefits						Postretirement Benefits

Obligations and Funded Status at December 31	2018			2017			2018			2017
Change in the Projected Benefit Obligation (PBO):
Projected benefit obligation at beginning of year	$	832.4		$	791.7		$	1.6		$	3.6
Service cost		0.5			0.6			—			—
Interest cost		30.7			33.3			—			—
Plan amendments		—			—			—			—
Actuarial loss (gain)		(63.1	)		40.6			(0.2	)		(1.4	)
Benefits paid		(37.3	)		(33.8	)		—			(0.4	)
Foreign exchange		—			—			—			(0.2	)
Projected benefit obligation at end of year	$	763.2		$	832.4		$	1.4		$	1.6
Accumulated benefit obligation at end of year (excludes the impact of future compensation increases)	$	763.2		$	832.4
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	656.6		$	577.7		$	—		$	—
Actual return on plan assets		(30.7	)		83.2			—			—
Employer contributions		11.0			29.5			—			0.5
Benefits paid		(37.3	)		(33.8	)		—			(0.5	)
Fair value of plan assets at end of year	$	599.6		$	656.6		$	—		$	—
Funded status (Fair value of plan assets less PBO)	$	(163.6	)	$	(175.8	)	$	(1.4	)	$	(1.6	)

Amounts Recognized in Consolidated Balance Sheets

Amounts recognized in the consolidated balance sheets consist of:



	Pension Benefits						Postretirement Benefits

(In millions)	2018			2017			2018			2017
Current benefit payment liability	$	(1.5	)	$	(1.1	)	$	(0.2	)	$	(0.2	)
Accrued benefit liability		(162.1	)		(174.7	)		(1.2	)		(1.4	)
Net amount recognized	$	(163.6	)	$	(175.8	)	$	(1.4	)	$	(1.6	)

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The retrospective impact of adopting ASU

2017-07

is as follows:



(In millions)	2017			2016
Increase to cost of products sold	$	7.5		$	8.5
Increase to selling, general and administrative expenses		2.1			5.6
Decrease to operating income	$	(9.6	)	$	(14.1	)

Amounts in Accumulated Other Comprehensive Loss that have not yet been Recognized as Components of Net Periodic Benefit Cost

The amounts in accumulated other comprehensive loss on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows:



(In millions)	Pension Benefits			Postretirement Benefits
Net actuarial loss at December 31, 2016	$	73.4		$	—
Recognition of actuarial (loss) gain		(0.9	)		1.4
Current year actuarial gain		(5.3	)		(1.4	)
Net actuarial loss at December 31, 2017	$	67.2		$	—
Recognition of actuarial (loss) gain		(3.9	)		0.1
Current year actuarial loss (gain)		8.5			(0.4	)
Net actuarial loss at December 31, 2018	$	71.8		$	(0.3	)
Net prior service cost (credit) at December 31, 2016	$	—		$	(5.1	)
Amortization		—			5.1
Net prior service cost (credit) at December 31, 2017	$	—		$	—
Amortization		—			—
Net prior service cost (credit) at December 31, 2018	$	—		$	—
Total at December 31, 2018	$	71.8		$	(0.3	)

Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits

Components of net periodic benefit cost were as follows:



Components of Net Periodic Benefit (Income) Cost	Pension Benefits									Postretirement Benefits

(In millions)	2018			2017			2016			2018			2017			2016
Service cost	$	0.5		$	0.6		$	9.6		$	—		$	—		$	—
Interest cost		30.7			33.3			34.4			—			—			0.3
Expected return on plan assets		(41.0	)		(37.3	)		(37.2	)		—			—			—
Recognition of actuarial losses (gains)		3.9			0.9			—			(0.1	)		(1.4	)		1.9
Amortization of prior service credits		—			—			—			—			(5.1	)		(13.5	)
Net periodic benefit (income) cost	$	(5.9	)	$	(2.5	)	$	6.8		$	(0.1	)	$	(6.5	)	$	(11.3	)

Schedule of Assumptions Used



Assumptions	Pension Benefits			Postretirement Benefits

	2018	2017	2016	2018	2017	2016
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31:
Discount rate	4.4%	3.8%	4.3%	4.2%	3.4%	3.4%
Rate of compensation increase	—	—	4.0%	—	—	—
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31:
Discount rate	3.8%	4.3%	4.6%	3.4%	3.4%	4.1%
Expected long-term rate of return on plan assets	6.0%	6.4%	6.6%	—	—	—
Rate of compensation increase	—	—	4.0%	—	—	—

Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost



	Postretirement Benefits

	2018			2017
Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost at December 31:
Health care cost trend rate assumed for next year		6.9/8.0	% (a)		7.1/8.4	% (a)
Rate that the cost trend rate is assumed to decline (the ultimate trend rate)		4.5	%		4.5	%
Year that the rate reaches the ultimate trend rate		2027			2026

(a)	The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate.

Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

one-percentage-point

change in assumed health care cost trend rates would have had the following effects in 2018:



(In millions)	1-Percentage- Point Increase			1-Percentage- Point Decrease
Effect on postretirement benefit obligation		(0.1	)		0.1

Fair Value of Pension Assets by Major Category of Plan Assets

The fair value of the pension assets by major category of plan assets as of December 31, 2018 and 2017 were as follows:



(In millions)	Total as of balance sheet date

	2018		2017
Group annuity/insurance contracts (level 3)	$	23.6	$	23.3
Collective trusts:
Cash and cash equivalents		7.7		12.5
Equity		197.7		285.9
Fixed income		324.6		277.7
Multi-strategy hedge funds		22.0		24.6
Real estate		24.0		32.6
Total	$	599.6	$	656.6

Reconciliation of Level Three Measurements

A reconciliation of Level 3 measurements was as follows:



	Group annuity/ insurance contracts

(In millions)	2018		2017
January 1	$	23.3	$	22.8
Actual return on assets related to assets still held		0.3		0.5
December 31	$	23.6	$	23.3

Schedule of Expected Benefit Payments

The following retirement benefit payments are expected to be paid:



(In millions)	Pension Benefits		Postretirement Benefits
2019	$	39.4	$	0.1
2020		41.0		0.1
2021		42.1		0.1
2022		43.4		0.1
2023		44.4		0.1
Years 2024-2028		234.7		0.3

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of Loss Income Before Income Taxes and Noncontrolling Interests

The components of income from continuing operations before income taxes and noncontrolling interests were as follows:



(In millions)	2018		2017		2016
Domestic operations	$	456.7	$	554.7	$	513.8
Foreign operations		80.3		80.1		68.3
Income before income taxes and noncontrolling interests	$	537.0	$	634.8	$	582.1

Reconciliation of Income Taxes at Federal Statutory Income Tax Rate to Income Taxes from Continuing Operations

A reconciliation of income taxes at the 35% federal statutory income tax rate for 2016 and 2017 and 21% for 2018 to the income tax provision reported was as follows:



(In millions)	2018			2017			2016
Income tax expense computed at federal statutory income tax rate	$	112.8		$	222.2		$	203.7
Other income taxes, net of federal tax benefit		13.7			13.4			12.6
Foreign taxes at a different rate than U.S. federal statutory income tax rate		3.5			(8.3	)		(7.6	)
Tax benefit on income attributable to domestic production activities		0.0			(10.9	)		(13.0	)
Net adjustments for uncertain tax positions		4.1			11.6			13.2
Share-based compensation (ASU 2016-09)		(2.1	)		(23.9	)		(27.8	)
Tax Act impact		5.5			(25.7	)		—
Deferred tax impact of state tax rate changes		3.5			(2.0	)		(1.1	)
Valuation allowance increase (decrease)		3.0			(5.2	)		(2.1	)
Miscellaneous other, net		3.0			(11.7	)		(8.2	)
Income tax expense as reported	$	147.0		$	159.5		$	169.7
Effective income tax rate		27.4	%		25.1	%		29.2	%

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits (“UTBs”) was as follows:



(In millions)	2018			2017			2016
Unrecognized tax benefits — beginning of year	$	87.5		$	58.2		$	38.2
Gross additions — current year tax positions		9.1			31.0			10.7
Gross additions — prior year tax positions		9.3			10.9			10.4
Gross additions (reductions) — purchase accounting adjustments		1.0			4.0			9.7
Gross reductions — prior year tax positions		(14.5	)		(9.4	)		(9.8	)
Gross reductions — settlements with taxing authorities		(8.9	)		(7.2	)		(1.0	)
Unrecognized tax benefits — end of year	$	83.5		$	87.5		$	58.2

Income Taxes

Income taxes in 2018, 2017 and 2016 were as follows:



(In millions)	2018			2017			2016
Current
Federal	$	93.5		$	133.1		$	150.4
Foreign		26.4			22.4			22.3
State and other		24.1			22.8			22.9
Deferred
Federal, state and other		4.8			(27.2	)		(23.9	)
Foreign		(1.8	)		8.4			(2.0	)
Total income tax expense	$	147.0		$	159.5		$	169.7

Components of Net Deferred Tax Assets Liabilities

The components of net deferred tax assets (liabilities) as of December 31, 2018 and 2017 were as follows:



(In millions)	2018			2017
Deferred tax assets:
Compensation and benefits	$	31.5		$	22.1
Defined benefit plans		39.3			43.7
Capitalized inventories		16.1			11.1
Accounts receivable		5.4			7.8
Other accrued expenses		55.2			45.6
Net operating loss and other tax carryforwards		21.2			25.6
Valuation allowance		(13.3	)		(11.0	)
Miscellaneous		2.5			3.7
Total deferred tax assets		157.9			148.6
Deferred tax liabilities:
LIFO inventories		0.0			(4.2	)
Fixed assets		(60.2	)		(44.5	)
Intangible assets		(224.6	)		(232.0	)
Investment in partnership		(3.8	)		(9.2	)
Miscellaneous		(20.0	)		(16.1	)
Total deferred tax liabilities		(308.6	)		(306.0	)
Net deferred tax liability	$	(150.7	)	$	(157.4	)

In accordance with ASC requirements for Income Taxes, deferred taxes were classified in the consolidated balance sheets as of December 31, 2018 and 2017 as follows:



(In millions)	2018			2017
Other assets		11.9			9.4
Deferred income taxes		(162.6	)		(166.8	)
Net deferred tax liability	$	(150.7	)	$	(157.4	)

Restructuring and Other Charges (Tables)

12 Months Ended

Dec. 31, 2018

Pre-tax Restructuring and Other Charges

Pre-tax

restructuring and other charges for the year ended December 31, 2018 were as follows:



	Year Ended December 31, 2018
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)			Total Charges
Cabinets	$	16.8	$	9.1	$	0.3		$	26.2
Plumbing		2.6		0.6		0.1			3.3
Doors & Security		4.7		2.4		(1.2	)		5.9
Total	$	24.1	$	12.1	$	(0.8	)	$	35.4

(a)

write-off

of displays from exiting a customer relationship, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities.

(b)	Selling, general and administrative expenses

Pre-tax

restructuring and other charges for the year ended December 31, 2017 were as follows:



	Year Ended December 31, 2017
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)		Total Charges
Cabinets	$	1.4	$	1.6	$	2.2	$	5.2
Plumbing		2.8		—		—		2.8
Doors & Security		4.1		5.6		0.8		10.5
Total	$	8.3	$	7.2	$	3.0	$	18.5

(a)

(b)	Selling, general and administrative expenses

Pre-tax

restructuring and other charges for the year ended December 31, 2016 were as follows:



	Year Ended December 31, 2016
			Other Charges (a)
(In millions)	Restructuring Charges		Cost of Products Sold		SG&A (b)		Total Charges
Cabinets	$	1.8	$	—	$	—	$	1.8
Plumbing		1.6		0.3		0.2		2.1
Doors & Security		10.5		4.2		0.7		15.4
Total	$	13.9	$	4.5	$	0.9	$	19.3

(a)

(b)	Selling, general and administrative expenses

Reconciliation of Restructuring Liability



(In millions)	Balance at 12/31/17		2018 Provision		Cash Expenditures (a)			Non-Cash Write-offs (b)			Balance at 12/31/18
Workforce reduction costs	$	5.0	$	21.4	$	(16.3	)	$	(0.2	)	$	9.9
Other		0.8		2.7		(2.4	)		(0.5	)		0.6
	$	5.8	$	24.1	$	(18.7	)	$	(0.7	)	$	10.5

(a)	Cash expenditures primarily related to severance charges.

(b)	Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions.



(In millions)	Balance at 12/31/16		2017 Provision		Cash Expenditures (a)			Non-Cash Write-offs (b)			Balance at 12/31/17
Workforce reduction costs	$	2.4	$	6.7	$	(3.9	)	$	(0.2	)	$	5.0
Other		0.6		1.6		(1.3	)		(0.1	)		0.8
	$	3.0	$	8.3	$	(5.2	)	$	(0.3	)	$	5.8

(a)	Cash expenditures primarily related to severance charges.

(b)	Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions.

Commitments (Tables)

12 Months Ended

Dec. 31, 2018

Future Minimum Rental Payments under Non-Cancelable Operating Leases

Future minimum rental payments under

non-cancelable

operating leases as of December 31, 2018 were as follows:



(In millions)
2019	$	37.8
2020		29.6
2021		23.4
2022		18.9
2023		13.8
Remainder		58.8
Total minimum rental payments	$	182.3

The following table summarizes activity related to our product warranty liability for the years ended December 31, 2018, 2017 and 2016.



(In millions)	2018			2017			2016
Reserve balance at the beginning of the year	$	17.2		$	16.2		$	16.0
Provision for warranties issued		25.1			25.1			25.8
Settlements made (in cash or in kind)		(25.7	)		(24.3	)		(25.5	)
Acquisition		8.9			—			0.3
Foreign currency		(0.6	)		0.2			(0.4	)
Reserve balance at end of year	$	24.9		$	17.2		$	16.2

Information on Business Segments (Tables)

12 Months Ended

Dec. 31, 2018

Net Sales and Operating Income by Segment

The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe.



(In millions)	2018		2017		2016
Net sales:
Cabinets	$	2,418.6	$	2,467.1	$	2,397.8
Plumbing		1,883.3		1,720.8		1,534.4
Doors & Security		1,183.2		1,095.4		1,052.7
Net sales	$	5,485.1	$	5,283.3	$	4,984.9



(In millions)	2018			2017			2016

Operating income:
Cabinets	$	143.5		$	267.2		$	257.8
Plumbing (b)		375.3			358.5			314.9
Doors & Security (b)		155.6			146.9			126.4
Less: Corporate expenses (a) (b)		(79.2	)		(90.1	)		(80.5	)
Operating income	$	595.2		$	682.5		$	618.6
(a) Below is a table detailing Corporate expenses:
General and administrative expense	$	(79.2	)	$	(85.0	)	$	(80.5	)
Long-lived asset impairment		—			(5.1	)		—
Total Corporate expenses	$	(79.2	)	$	(90.1	)	$	(80.5	)

(b)	We revised our previously reported results in 2017 and 2016 for ASU 2017-07, Presentation of Net Periodic and Postretirement Costs and to reflect our new Doors & Security segment resulting from the reorganization we announced in July 2018.



(In millions)	2018			2017			2016
Total assets:
Cabinets	$	2,318.7		$	2,416.3		$	2,349.4
Plumbing		1,943.1			1,854.1			1,626.8
Doors & Security		1,526.0			1,032.2			995.1
Corporate		176.8			208.8			157.2
Total assets	$	5,964.6		$	5,511.4		$	5,128.5

Depreciation expense:
Cabinets	$	50.9		$	42.8		$	40.1
Plumbing		29.1			26.9			24.6
Doors & Security		30.2			25.9			26.2
Corporate		3.3			3.0			3.7
Depreciation expense	$	113.5		$	98.6		$	94.6

Amortization of intangible assets:
Cabinets	$	19.6		$	19.7		$	18.4
Plumbing		10.4			7.7			3.6
Doors & Security		6.1			4.3			6.1
Amortization of intangible assets	$	36.1		$	31.7		$	28.1

Capital expenditures:
Cabinets	$	73.8		$	63.4		$	61.7
Plumbing		41.4			43.5			48.3
Doors & Security		34.3			40.1			38.8
Corporate		0.6			18.0			0.5
Capital expenditures, gross		150.1			165.0			149.3
Less: proceeds from disposition of assets		(6.1	)		(0.4	)		(3.9	)
Capital expenditures, net	$	144.0		$	164.6		$	145.4

Net sales by geographic region (a) :
United States	$	4,606.6		$	4,492.2		$	4,258.5
Canada		433.1			427.6			406.4
China		260.6			202.3			175.0
Other international		184.8			161.2			145.0
Net sales	$	5,485.1		$	5,283.3		$	4,984.9

Property, plant and equipment, net:
United States	$	628.9		$	562.3		$	499.8
Mexico		103.4			89.0			90.8
Canada		46.0			50.5			45.5
China		22.5			24.8			22.7
Other international		12.6			13.4			3.7
Property, plant and equipment, net	$	813.4		$	740.0		$	662.5

(a)	Based on country of destination

Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Quarterly Financial Data

(In millions, except per share amounts)



2018	1 st			2 nd		3 rd		4 th		Full Year
Net sales	$	1,254.6		$	1,429.0	$	1,380.8	$	1,420.7	$	5,485.1
Gross profit		439.6			524.1		493.9		501.8		1,959.4
Operating income		119.4			188.6		147.1		140.1		595.2
Income from continuing operations, net of tax		75.1			129.7		99.9		85.3		390.0
Income (loss) from discontinued operations, net of tax		(0.2	)		—		—		—		(0.2	)
Net income		74.9			129.7		99.9		85.3		389.8
Net income attributable to Fortune Brands		75.0			129.6		99.8		85.2		389.6
Basic earnings (loss) per common share
Continuing operations		0.50			0.89		0.70		0.60		2.69
Discontinued operations		—			—		—		—		—
Net income attributable to Fortune Brands		0.50			0.89		0.70		0.60		2.69
Diluted earnings (loss) per common share
Continuing operations		0.49			0.88		0.69		0.60		2.66
Discontinued operations		—			—		—		—		—
Net income attributable to Fortune Brands		0.49			0.88		0.69		0.60		2.66



2017	1 st		2 nd			3 rd		4 th		Full Year
Net sales	$	1,186.8	$	1,365.4		$	1,348.6	$	1,382.5	$	5,283.3
Gross profit (a)		414.1		513.3			505.3		492.3		1,925.0
Operating income (a)		111.0		209.2			199.5		162.8		682.5
Income from continuing operations, net of tax		77.4		140.3			129.6		128.0		475.3
Income (loss) from discontinued operations, net of tax		—		(2.6	)		—		—		(2.6	)
Net income		77.4		137.7			129.6		128.0		472.7
Net income attributable to Fortune Brands		77.4		137.7			129.5		128.0		472.6
Basic earnings (loss) per common share
Continuing operations		0.50		0.91			0.84		0.84		3.10
Discontinued operations		—		(0.02	)		—		—		(0.02	)
Net income attributable to Fortune Brands		0.50		0.89			0.84		0.84		3.08
Diluted earnings (loss) per common share
Continuing operations		0.50		0.90			0.83		0.83		3.05
Discontinued operations		—		(0.02	)		—		—		(0.02	)
Net income attributable to Fortune Brands		0.50		0.88			0.83		0.83		3.03

(a)	Amounts revised to reflect adoption of ASU 2017-07 “Presentation of Net Periodic Pension and Postretirement Costs.”

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2018

Computations of Earnings (Loss) per Common Share

The computations of earnings (loss) per common share were as follows:



(In millions, except per share data)	2018			2017			2016
Income from continuing operations, net of tax	$	390.0		$	475.3		$	412.4
Less: Noncontrolling interests		0.2			0.1			—
Income from continuing operations for EPS		389.8			475.2			412.4
Income (loss) from discontinued operations		(0.2	)		(2.6	)		0.8
Net income attributable to Fortune Brands	$	389.6		$	472.6		$	413.2
Earnings (loss) per common share
Basic
Continuing operations	$	2.69		$	3.10		$	2.67
Discontinued operations		—			(0.02	)		0.01
Net income attributable to Fortune Brands common stockholders	$	2.69		$	3.08		$	2.68
Diluted
Continuing operations	$	2.66		$	3.05		$	2.61
Discontinued operations		—			(0.02	)		0.01
Net income attributable to Fortune Brands common stockholders	$	2.66		$	3.03		$	2.62
Basic average shares outstanding		144.6			153.2			154.3
Stock-based awards		1.8			2.6			3.5
Diluted average shares outstanding		146.4			155.8			157.8
Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share		1.5			0.5			0.5

Other Income, Net (Tables)

12 Months Ended

Dec. 31, 2018

Components of Other Expense , Net

The components of other income, net for the years ended December 31, 2018, 2017 and 2016 were as follows:



(In millions)	2018			2017			2016
Defined benefit plan (a)	$	(6.5	)	$	(9.6	)	$	(14.2	)
Asset impairment charge	$	—		$	7.0		$	—
Foreign currency (gains)/losses	$	(2.0	)	$	0.9		$	2.8
Ineffective portion of cash flow hedge	$	(3.8	)		—			—
Other items, net	$	(4.0	)		—			(1.2	)
Total other income, net	$	(16.3	)	$	(1.7	)	$	(12.6	)

(a)	Amounts revised to reflect adoption of ASU 2017-07 “Presentation of Net Periodic Pension and Postretirement Costs.”

Background and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Basis of Presentation [Line Items]
Payments made to third parties		$ 38.0
Fiberon [Member]
Basis of Presentation [Line Items]
Business acquisition, membership interest acquired	100.00%
Business acquisition, total purchase price	$ 470.0

Significant Accounting Policies - Additional Information (Detail) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

Aug. 31, 2018

Jul. 31, 2018

Jun. 30, 2018

Dec. 31, 2018

Dec. 31, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Significant Of Accounting Policies [Line Items]

Highly liquid investments included in cash and cash equivalents, maturity period

3 months

Allowances for doubtful accounts

$ 3,700,000

$ 3,300,000

$ 3,700,000

$ 3,300,000

Impairment of long-lived asset

678,900,000

^[1]

580,800,000

678,900,000

^[1]

580,800,000

$ 3,000,000

Unrecognized tax benefits pertaining to uncertain tax positions

83,500,000

87,500,000

83,500,000

87,500,000

$ 58,200,000

$ 38,200,000

Income taxes, estimated net benefit

25,700,000

Tax reform deferred tax impact of tax rate changes

5,500,000

Advertising costs

243,600,000

233,200,000

199,100,000

Advertising costs, reduction to net sales

72,400,000

65,600,000

52,500,000

Research and development expenses

50,300,000

50,700,000

53,100,000

Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings

3,300,000

Effect of health care cost trend rate

1.00%

Investments

28,700,000

ImpairmentOfInvestments

$ 0

7,000,000

New Accounting Pronouncement or Change in Accounting Principle, Description

Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13 which removes the requirement to disclose: 1) amount of and reasons for transfers between Levels 1 and 2 of the fair value hierarchy, 2) policy for timing of transfers between levels, and 3) valuation processes for Level 3 investments. In addition, this guidance modifies and adds other disclosure requirements, which primarily relate to valuation of Level 3 assets and liabilities. The guidance is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements. Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14 which removes several disclosure requirements, including the amount in AOCI expected to be recognized in income over the next fiscal year and the effects of a 1% change in assumed health care cost trend rates and adds new disclosure requirements to explain reasons for significant gains and losses related to changes in the benefit obligation for the period, and to disclose weighted-average interest crediting rates for plans with promised interest crediting rates. The guidance is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Costs to obtain software, including configuration and integration with legacy IT systems, coding and testing, including parallel process phases are eligible for capitalization under the new standard. In addition, activities that would be expensed include costs related to vendor demonstrations, determining performance and technology requirements and training activities. The standard is effective for the Company’s fiscal year beginning January 1, 2020, with early adoption permitted. We are assessing the impact the adoption of this standard will have on our financial statements.

Codification Improvements In July 2018, the FASB issued ASU 2018-09 which includes technical corrections, clarifications, and other minor improvements to various areas including business combinations, fair value measurements and hedging. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this standard were effective immediately, while others will be effective for the Company’s fiscal year beginning January 1, 2019. Our adoption of the immediately effective pieces of this standard did not have a material effect on our financial statements, nor do we expect the adoption of the other aspects of this standard to be material.

Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based arrangements with nonemployees. The new guidance generally aligns the accounting for share-based awards to nonemployees with the guidance for share-based awards to employees. The guidance is effective for the Company’s fiscal year beginning January 1, 2019. We do not expect the adoption of this guidance to have a material effect on our financial statements.

Change in Accounting Estimate, Description

During the fourth quarter of 2018, we determined that it was preferable to change our accounting policy from last-in, first-out (“LIFO”) to FIFO for product groups in which metals comprise a significant portion of inventory cost.

Reduction in deferred tax liabilities

150,700,000

157,400,000

$ 150,700,000

157,400,000

Repatriation tax liability

28,500,000

Increase In Provision For Tax

8,200,000

Adjustments to deferred tax liabilty

5,500,000

Federal Income Tax Rate [Member]

Significant Of Accounting Policies [Line Items]

Reduction in deferred tax liabilities

62,400,000

Change in Accounting Method Accounted for as Change in Estimate [Member]

Significant Of Accounting Policies [Line Items]

Adjustment to cost of inventories to FIFO pre-tax benefit

7,300,000

Adjustment To Cost Of Inventories to FIFO Post Tax Benefit

5,500,000

Cash flow hedge [Member] | Foreign exchange contracts [Member]

Significant Of Accounting Policies [Line Items]

Gain (loss) reclassified from Accumulated OCI into earnings

2,200,000

400,000

(3,500,000)

Estimated amount of net foreign currency derivative gains (loss) in other comprehensive income reclassified to earnings

3,300,000

Selling, general and administrative Expenses [Member]

Significant Of Accounting Policies [Line Items]

Impairment of long-lived asset

5,100,000

Customer program costs

66,500,000

62,400,000

44,100,000

Shipping and handling costs

215,900,000

204,700,000

197,000,000

Advertising costs

171,200,000

167,600,000

$ 146,600,000

Minimum [Member]

Significant Of Accounting Policies [Line Items]

Reasonably possible decrease in unrecognized tax benefits

1,400,000

Operating Lease, Right-of-Use Asset

170,000,000

Maximum [Member]

Significant Of Accounting Policies [Line Items]

Reasonably possible decrease in unrecognized tax benefits

3,500,000

Operating Lease, Right-of-Use Asset

$ 200,000,000

Income Approach [Member]

Significant Of Accounting Policies [Line Items]

Goodwill recoverability weighted percentage

80.00%

Market Approach [Member]

Significant Of Accounting Policies [Line Items]

Goodwill recoverability weighted percentage

20.00%

Metals inventories [Member]

Significant Of Accounting Policies [Line Items]

LIFO inventories

$ 0

245,600,000

$ 0

245,600,000

Raw materials and supplies

$ 0

$ 259,300,000

$ 0

$ 259,300,000

[1]	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.

Significant Accounting Policies - Estimated Useful Lives of Property, Plant and Equipment (Detail)	12 Months Ended
	Dec. 31, 2018
Buildings and Leasehold Improvements \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	15 years
Buildings and Leasehold Improvements \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	40 years
Machinery and Equipment \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	3 years
Machinery and Equipment \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	15 years
Software \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	3 years
Software \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	7 years

Balance Sheet Information - Supplemental Information on Balance Sheets (Detail) - USD ($)
$ in Millions

Dec. 31, 2018

^[1]

Dec. 31, 2017

Dec. 31, 2016

Inventories:

$ 227.4

$ 224.9

Work in process

66.4

58.3

Finished products

385.1

297.6

Total inventories

678.9

580.8

Property, plant and equipment:

Land and improvements

66.8

58.7

Buildings and improvements to leaseholds

500.1

464.1

Machinery and equipment

1,249.0

1,167.5

Construction in progress

95.8

90.1

Property, plant and equipment, gross

1,911.7

1,780.4

Less: accumulated depreciation

1,098.3

1,040.4

Property, plant and equipment, net of accumulated depreciation

813.4

740.0

$ 662.5

Other current liabilities:

Accrued salaries, wages and other compensation

85.9

105.9

Accrued customer programs

167.8

142.8

Accrued taxes

57.7

61.4

Dividends payable

30.9

30.4

Other accrued expenses

165.8

137.5

Total other current liabilities

$ 508.1

$ 478.0

[1]	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.

Acquisitions and Dispositions - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended		3 Months Ended	12 Months Ended
	Sep. 30, 2018	Apr. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Loss on sale of product line		$ (2.4)			$ (2.4)
Asset impairment charges		$ 3.2	$ 3.2	$ 62.6	$ 3.2
Fiberon [Member]
Business Acquisition [Line Items]
Business acquisition consideration price paid	$ 470.0
Business acquisition, membership interest acquired	100.00%
Victoria Plus Albert and Shaws [Member]
Business Acquisition [Line Items]
Business acquisition consideration price paid				146.0
Business acquisition additional purchase price consideration				$ 19.9

Acquisitions and Dispositions - Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($)
$ in Millions

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Business Acquisition [Line Items]

^[1]

$ 2,080.3

$ 1,912.0

$ 1,833.8

Fiberon [Member]

Business Acquisition [Line Items]

Accounts receivable

19.2

Property, plant and equipment

49.4

49.0

Identifiable intangible assets

173.4

195.0

Other assets

4.8

Total assets

490.8

Accounts payable

16.5

Other liabilities and accruals

14.5

Net assets acquired

$ 459.8

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

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

1 Months Ended

3 Months Ended

12 Months Ended

Apr. 30, 2017

USD ($)

Dec. 31, 2018

USD ($)

Sep. 30, 2018

USD ($)

Mar. 31, 2017

USD ($)

Dec. 31, 2018

USD ($)

asset-group

Dec. 31, 2017

USD ($)

Dec. 31, 2016

USD ($)

Goodwill and Identifiable Intangible Assets [Line Items]

Other intangible assets, net of accumulated amortization

^[1]

$ 2,080.3

$ 1,912.0

$ 1,833.8

1,246.8

1,162.4

Expected intangible amortization expense in 2019

43.0

Expected intangible amortization expense in 2020

42.0

Expected intangible amortization expense in 2021

42.0

Expected intangible amortization expense in 2022

40.0

Expected intangible amortization expense in 2023

39.0

Asset Impairment Charges

$ 3.2

62.6

3.2

Indefinite-lived Intangible Assets (Excluding Goodwill)

673.9

709.9

Trade Names [Member]

Goodwill and Identifiable Intangible Assets [Line Items]

Indefinite-lived Intangible Assets (Excluding Goodwill)

152.0

Indefinite-lived Intangible Assets [Member] | Trade Names [Member]

Goodwill and Identifiable Intangible Assets [Line Items]

Asset Impairment Charges

35.5

$ 27.1

62.6

Fiberon & Victoria plus Albert [Member]

Goodwill and Identifiable Intangible Assets [Line Items]

Goodwill increase (decrease) due to acquisition-related

168.3

Cabinets [Member]

Goodwill and Identifiable Intangible Assets [Line Items]

Impairment of intangible assets, trade names

^[1]

924.0

926.3

924.3

$ 62.6

Number of tradenames, with the fair value exceeded their carrying value | asset-group

Doors & Security [Member]

Goodwill and Identifiable Intangible Assets [Line Items]

Increase in gross identifiable intangible assets

^[1]

$ 412.6

$ 240.5

$ 239.3

$ 117.9

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

Goodwill and Identifiable Intangible Assets [Line Items]

Amortizable identifiable intangible assets, estimated useful life

30 years

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

Goodwill and Identifiable Intangible Assets [Line Items]

Amortizable identifiable intangible assets, estimated useful life

2 years

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

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

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

^[1]

$ 1,912.0

$ 1,833.8

Acquisition-related adjustments

(9.6)

6.5

177.9

71.7

^[1]

2,080.3

1,912.0

Cabinets [Member]

^[1]

926.3

924.3

(2.3)

2.0

^[1]

924.0

926.3

Plumbing [Member]

^[1]

745.2

670.2

Acquisition-related adjustments

(5.9)

3.3

4.4

71.7

Doors & Security [Member]

^[1]

743.7

745.2

^[1]

240.5

239.3

Acquisition-related adjustments

(1.4)

1.2

173.5

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

^[1]

$ 412.6

$ 240.5

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

Goodwill and Identifiable Intangible Assets - Change in Net Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) $ in Millions	Dec. 31, 2018 USD ($)
Doors & Security [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	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets [Line Items]
Gross Carrying Amounts, Total identifiable intangibles	$ 1,567.5	$ 1,449.6
Gross Carrying Amounts, Finite Lived	893.6	739.7
Accumulated Amortization, Finite Lived	(320.7)	(287.2)
Net Book Value, Finite Lived	572.9	452.5
Gross Carrying Amounts, Indefinite-lived tradenames	673.9	709.9
Net Book Value, Indefinite-lived tradenames	673.9	709.9
Accumulated Amortization, Total identifiable intangibles	(320.7)	(287.2)
Net Book Value, Total identifiable intangibles	1,246.8	1,162.4
Tradenames [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	19.8	15.7
Accumulated Amortization, Finite Lived	(11.9)	(9.9)
Net Book Value, Finite Lived	7.9	5.8
Customer and contractual relationships [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	800.3	663.8
Accumulated Amortization, Finite Lived	(260.2)	(232.0)
Net Book Value, Finite Lived	540.1	431.8
Patents/proprietary technology [Member]
Intangible Assets [Line Items]
Gross Carrying Amounts, Finite Lived	73.5	60.2
Accumulated Amortization, Finite Lived	(48.6)	(45.3)
Net Book Value, Finite Lived	$ 24.9	$ 14.9

Asset Impairment Charges - Additional information (Detail) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Asset Impairment Charges [Line Items]
Asset impairment charge	$ 3.2	$ 3.2	$ 62.6	$ 3.2
Definite-lived intangible assets		3.0
Fixed Assets		$ 0.2

External Debt and Financing Arrangements - Additional Information (Detail) - USD ($)	1 Months Ended			12 Months Ended
	Sep. 30, 2018	Aug. 31, 2018	Jun. 30, 2015	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2016
Debt Instrument [Line Items]
Term loan maturity period		2019-03
Uncommitted bank lines of credit, which provide for unsecured borrowings for working capital				$ 23,500,000		$ 23,500,000
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				$ 320,000,000		615,000,000
Line of Credit Facility, Maximum Borrowing Capacity				1,250,000,000		1,250,000,000
Term Loan Facility [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price		$ 525,000,000			$ 350,000,000
Debt instrument, description		In March 2018, the Company entered into a $350 million term loan for general corporate purposes that matures in March 2019. In August 2018, the Company amended its existing $350 million term loan to increase the borrowings under the term loan from $350 million to $525 million. All other terms and conditions on the amended term loan remain the same as the previous $350 million term loan.
Debt Instrument, Description of Variable Rate Basis		Interest rates under the term loan are variable based on LIBOR at the time of the borrowing and the Company’s long-term credit rating and can range from LIBOR + 0.625% to LIBOR + 1.25%.
2018 Senior Notes [Member] \| Notes due 2023 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price	$ 600,000,000
Senior unsecured notes, maturity year	2023
Senior unsecured notes, coupon rate	4.00%
Senior notes, outstanding amount				595,000,000
2015 Senior Notes [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price			$ 900,000,000
Senior notes, outstanding amount				894,000,000		$ 892,600,000
2015 Senior Notes [Member] \| Notes Due 2020 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price			$ 400,000,000
Senior unsecured notes, maturity year			2020
Senior unsecured notes, coupon rate			3.00%
Senior unsecured notes, maturity period			5 years
2015 Senior Notes [Member] \| Notes due 2025 [Member]
Debt Instrument [Line Items]
Senior unsecured notes, price			$ 500,000,000
Senior unsecured notes, maturity year			2025
Senior unsecured notes, coupon rate			4.00%
Senior unsecured notes, maturity period			10 years
Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity							$ 1,250,000,000
Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt payments in 2019				0
Long-term debt payments in 2020				400,000,000
Long-term debt payments in 2021				0
Long-term debt payments in 2022				600,000,000
Long-term debt payments in 2023				$ 600,000,000

External Debt and Financing Arrangements - Components of External Long-Term Debt (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt	$ 2,334.0	$ 1,507.6
Less: current portion	525.0	0.0
Total long-term debt	1,809.0	1,507.6
Senior Unsecured Notes [Member] \| Notes due June 2020 [Member]
Debt Instrument [Line Items]
Long-term debt	399.0	398.3
Senior Unsecured Notes [Member] \| Notes due June 2025 [Member]
Debt Instrument [Line Items]
Long-term debt	495.0	494.3
Senior Unsecured Notes [Member] \| Notes due September 2023 [Member]
Debt Instrument [Line Items]
Long-term debt	595.0
Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt	525.0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt	$ 320.0	$ 615.0

External Debt and Financing Arrangements - Components of External Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 525	$ 525
Debt instrument, maturity date	2019-03	2019-03
Notes due June 2020 [Member] \| Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 400	$ 400
Debt instrument, maturity date	2020-06	2020-06
Notes due June 2025 [Member] \| Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 500	$ 500
Debt instrument, maturity date	2025-06	2025-06
Notes due September 2023 [Member] \| Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 600	$ 600
Debt instrument, maturity date	2023-09	2023-09
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,250	$ 1,250
Revolving credit facility, expiration date	2021-06	2021-06

Financial Instruments - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Derivative [Line Items]
Net settlement payable	$ 3,400,000
Estimated amount of net foreign currency derivative losses in other comprehensive income reclassified to earnings within 12 months	3,300,000
Derivative instrument gain (loss), effective portion	$ 10,100,000	$ (1,800,000)	$ (6,700,000)
Minimum [Member]
Derivative [Line Items]
Foreign exchange contracts period	12 months
Maximum [Member]
Derivative [Line Items]
Foreign exchange contracts period	15 months
Foreign exchange contracts [Member]
Derivative [Line Items]
Notional amount of foreign currency derivative hedges	$ 345,300,000
Derivative instrument gain (loss), ineffective portion		3,800,000
Cash flow hedge [Member]
Derivative [Line Items]
Derivative instrument gain (loss), effective portion	10,100,000	$ (1,800,000)
Cash flow hedge [Member] \| Foreign exchange contracts [Member]
Derivative [Line Items]
Estimated amount of net foreign currency derivative losses in other comprehensive income reclassified to earnings within 12 months	$ 3,300,000

Financial Instruments - Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	$ 6.0	$ 1.0
Derivative liabilities, fair value	1.9	6.4
Net investment hedges [Member] \| Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	0.7
Net investment hedges [Member] \| Other current liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities, fair value		0.8
Foreign exchange contracts [Member] \| Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	5.3	0.8
Foreign exchange contracts [Member] \| Other current liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities, fair value	$ 1.9	5.6
Commodity Contracts [Member] \| Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, fair value		$ 0.2

Financial Instruments - Effects of Derivative Financial Instruments on Consolidated Statements of Income (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income	$ 5.7	$ (1.1)	$ (1.5)
Cash flow hedge [Member] \| Cost of products sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income	2.0	0.9	(3.5)
Fair value hedge [Member] \| Other (income) expense, net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Income	$ 3.7	$ (2.0)	$ 2.0

Fair Value Measurements - Additional Information (Detail)	Dec. 31, 2018 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	Dec. 31, 2018	Dec. 31, 2017
Carrying Value \| Term Loan Facility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 525.0
Carrying Value \| Senior Unsecured Notes [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	1,489.0	$ 892.6
Carrying Value \| Revolving Credit Facility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	320.0	615.0
Fair Value \| Term Loan Facility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	525.0
Fair Value \| Senior Unsecured Notes [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	1,490.4	926.3
Fair Value \| Revolving Credit Facility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 320.0	$ 615.0

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset financial instruments (level 2)	$ 6.0	$ 1.0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	15.3	8.5
Fair Value, Measurements, Recurring [Member] \| Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset financial instruments (level 2)	6.0	1.0
Deferred compensation program assets (level 2)	9.3	7.5
Derivative liability financial instruments (level 2)	$ 1.9	$ 6.4

Capital Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Class of Stock [Line Items]
Common stock, shares authorized	750,000,000	750,000,000
Common stock, par value	$ 0.01	$ 0.01
Percentage of increase in quarterly cash dividend	10.00%
Dividend declared, per share	$ 0.22
Preferred stock, shares authorized	60,000,000
Preferred stock, par value	$ 0.01
Common stock repurchases	12,000,144	3,393,462
Treasury stock purchases	$ 694.6	$ 214.8	$ 424.5
Stock repurchase program, remaining authorized repurchase amount	$ 413.7

Capital Stock - Common Stock and Treasury Stock Activity (Detail) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Common shares
Balance at the beginning of the year	151,906,797	153,412,050
Stock plan shares issued	822,878	2,068,746
Shares surrendered by optionees	(230,550)	(180,537)
Common stock repurchases	(12,000,144)	(3,393,462)
Balance at the end of the year	140,498,981	151,906,797
Treasury shares
Balance at the beginning of the year	27,879,929	24,305,930
Stock plan shares issued
Shares surrendered by optionees	230,550	180,537
Common stock repurchases	12,000,144	3,393,462
Balance at the end of the year	40,110,623	27,879,929

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

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest

$ 3,525.7

$ 3,358.3

$ 3,188.8

537.0

634.8

582.1

Tax (expense) benefit

147.0

159.5

169.7

Income (Loss) from Continuing Operations Net of Tax, Including Portion Attributable to Noncontrolling Interest

$ 85.3

$ 99.9

$ 129.7

$ 75.1

$ 128.0

$ 129.6

$ 140.3

$ 77.4

390.0

475.3

412.4

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

(1.3)

4.4

Derivative Hedging Losses (Gains) [Member]

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

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

1.7

0.8

(3.5)

Derivative Hedging Losses (Gains) [Member] | Interest rate contracts [Member]

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

Prior service cost [Member]

0.1

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

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

^[1]

5.1

Actuarial (losses) gains [Member]

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

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

^[1]

(3.8)

0.5

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

(3.8)

5.6

Reclassification from AOCI, Current Period, Tax

0.8

(2.0)

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

(3.0)

3.6

$ 7.3

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

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

Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest

2.1

0.9

Tax (expense) benefit

(0.4)

(0.1)

Income (Loss) from Continuing Operations Net of Tax, Including Portion Attributable to Noncontrolling Interest

1.7

0.8

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

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

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

2.2

0.4

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

Other income, net

0.1

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

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

Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]

$ (0.2)

$ 0.5

[1]	These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost. Refer to Note 15, “Defined Benefit Plans,” for additional information.

Accumulated Other Comprehensive (Loss) Income - After-Tax Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 2,601.1	$ 2,363.0	$ 2,453.8
Amounts reclassified from accumulated other comprehensive (loss) income into earnings	1.3	(4.4)
Other comprehensive (loss) income, net of tax	(27.8)	32.7	(19.4)
Ending Balance	2,180.0	2,601.1	2,363.0
Foreign Currency Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	5.8	(28.0)	(13.3)
Amounts classified into accumulated other comprehensive (loss) income	(31.1)	33.8	(14.7)
Other comprehensive (loss) income, net of tax	(31.1)	33.8	(14.7)
Ending Balance	(25.3)	5.8	(28.0)
Derivative Hedging Losses (Gains) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2.4)	(0.6)	2.1
Amounts classified into accumulated other comprehensive (loss) income	8.3	(1.0)	(6.2)
Amounts reclassified from accumulated other comprehensive (loss) income into earnings	(1.7)	(0.8)	3.5
Other comprehensive (loss) income, net of tax	6.6	(1.8)	(2.7)
Ending Balance	4.2	(2.4)	(0.6)
Defined benefit plan items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(42.6)	(43.3)	(41.3)
Amounts classified into accumulated other comprehensive (loss) income	(6.3)	4.3	5.3
Amounts reclassified from accumulated other comprehensive (loss) income into earnings	3.0	(3.6)	(7.3)
Other comprehensive (loss) income, net of tax	(3.3)	0.7	(2.0)
Ending Balance	(45.9)	(42.6)	(43.3)
Accumulated Other Comprehensive (Loss) Income [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(39.2)	(71.9)	(52.5)
Amounts classified into accumulated other comprehensive (loss) income	(29.1)	37.1	(15.6)
Amounts reclassified from accumulated other comprehensive (loss) income into earnings	1.3	(4.4)	(3.8)
Other comprehensive (loss) income, net of tax	(27.8)	32.7	(19.4)
Ending Balance	$ (67.0)	$ (39.2)	$ (71.9)

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incentive Plan, common stock available for issuance	4,600,000
Unrecognized compensation cost, weighted-average recognition period	1 year 8 months 12 days
Incentive Plan, options vesting period	3 years
Incentive Plan, options maturity period	10 years
Incentive Plan, weighted-average grant date fair value of stock options granted	$ 14.14	$ 13.49	$ 12.70
Unrecognized compensation cost related to unvested option	$ 5.1
Fair value of options vested	6.7	$ 6.8	$ 6.0
Intrinsic value of stock options exercised	$ 8.7	70.6	88.1
Performance Condition Achievement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of performance share awards vested	(218,912)
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs classified as liability	$ 0.9
Unrecognized pre-tax compensation cost	17.1
Fair value of performance share awards vested	$ 22.2	$ 20.3	$ 16.4
Stock Option Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost, weighted-average recognition period	1 year 7 months 6 days
Performance Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized pre-tax compensation cost	$ 2.6
Unrecognized compensation cost, weighted-average recognition period	1 year 6 months
Fair value of performance share awards vested	$ 13.8
Number of performance share awards vested	(136,822)
Director Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards issued	19,109	15,311	16,471
Common stock issued to outside directors	$ 54.93	$ 63.43	$ 57.37

Stock-Based Compensation - Pre-Tax Stock-Based Compensation Expense from Continuing Operations (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 37.2	$ 43.6	$ 32.0
Tax benefit	6.2	15.2	11.4
Total after tax expense	31.0	28.4	20.6
Stock Option Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	8.6	7.4	7.2
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	21.3	21.6	17.2
Performance Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	6.3	13.6	6.7
Director Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 1.0	$ 1.0	$ 0.9

Stock-Based Compensation - Restricted Stock Units Activity (Detail) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Number of Restricted Stock Units
Non-vested at December 31, 2017 \| shares	728,065
Granted \| shares	356,860
Vested \| shares	(373,593)
Forfeited \| shares	(50,957)
Non-vested at December 31, 2018 \| shares	660,375
Weighted-Average Grant-Date Fair Value
Non-vested at December 31, 2017 \| $ / shares	$ 54.59
Granted \| $ / shares	61.07
Vested \| $ / shares	52.92
Forfeited \| $ / shares	59.87
Non-vested at December 31, 2018 \| $ / shares	$ 58.63

Stock-Based Compensation - Black-Scholes Option Pricing Model Assumptions used to Estimate Fair Value of Options (Detail)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Current expected dividend yield	1.30%	1.40%	1.40%
Expected volatility	24.00%	26.00%	30.00%
Risk-free interest rate	2.60%	1.90%	1.30%
Expected term	5 years	5 years 6 months	5 years 6 months

Stock-Based Compensation - Stock Option Activity (Detail)	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Options
Outstanding at December 31, 2017 \| shares	3,682,958
Granted \| shares	628,614
Exercised \| shares	(214,727)
Expired/forfeited \| shares	(73,023)
Outstanding at December 31, 2018 \| shares	4,023,822
Weighted-Average Exercise Price
Outstanding at December 31, 2017 \| $ / shares	$ 36.28
Granted \| $ / shares	63.44
Exercised \| $ / shares	22.86
Expired/forfeited \| $ / shares	59.07
Outstanding at December 31, 2018 \| $ / shares	$ 40.83

Stock-Based Compensation - Options Outstanding and Exercisable (Detail)

12 Months Ended

Dec. 31, 2018

$ / shares

Options Outstanding, Weighted-Average Remaining Contractual Life

4,023,822

^[1]

5 years 6 months

^[1]

Options Outstanding, Weighted-Average Exercise Price

$ 40.83

^[1]

Options Exercisable, Weighted-Average Exercise Price

2,932,022

^[2]

$ 33.67

^[2]

Exercise Price Range One

Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]

Range of Exercise Prices, Lower limit

9.00

Range of Exercise Prices, upper limit

$ 12.99

Options Outstanding, Weighted-Average Remaining Contractual Life

104,500

^[1]

2 years

^[1]

Options Outstanding, Weighted-Average Exercise Price

$ 12.30

^[1]

Options Exercisable, Weighted-Average Exercise Price

104,500

^[2]

$ 12.30

^[2]

Exercise Price Range Two

Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]

Range of Exercise Prices, Lower limit

13.00

Range of Exercise Prices, upper limit

$ 20.00

Options Outstanding, Weighted-Average Remaining Contractual Life

1,096,463

^[1]

2 years 6 months

^[1]

Options Outstanding, Weighted-Average Exercise Price

$ 16.37

^[1]

Options Exercisable, Weighted-Average Exercise Price

1,096,463

^[2]

$ 16.37

^[2]

Exercise Price Range Three

Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]

Range of Exercise Prices, Lower limit

20.01

Range of Exercise Prices, upper limit

$ 65.41

Options Outstanding, Weighted-Average Remaining Contractual Life

2,822,859

^[1]

6 years 9 months 18 days

^[1]

Options Outstanding, Weighted-Average Exercise Price

$ 51.38

^[1]

Options Exercisable, Weighted-Average Exercise Price

1,731,059

^[2]

$ 45.91

^[2]

[1]	At December 31, 2018, the aggregate intrinsic value of options outstanding was $28.1 million.
[2]	At December 31, 2018, the weighted-average remaining contractual life of options exercisable was 4.4 years and the aggregate intrinsic value of options exercisable was $28.1 million.

Stock-Based Compensation - Options Outstanding and Exercisable (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options outstanding, aggregate intrinsic value	$ 28.1
Options exercisable, weighted-average remaining contractual life	4 years 4 months 24 days
Options exercisable, aggregate intrinsic value	$ 28.1

Stock-Based Compensation - Summarizes Information of Performance Share Awards (Detail) - Performance Awards	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested at December 31, 2017 \| shares	428,328
Granted \| shares	140,071
Vested \| shares	(136,822)
Forfeited \| shares	(22,486)
Non-vested at December 31, 2018 \| shares	409,091
Non-vested at December 31, 2017 \| $ / shares	$ 52.35
Granted \| $ / shares	63.44
Vested \| $ / shares	47.48
Forfeited \| $ / shares	57.41
Non-vested at December 31, 2018 \| $ / shares	$ 57.50

Revenue - Additional Information (Detail) $ in Millions	12 Months Ended
Revenue - Additional Information (Detail) $ in Millions	Dec. 31, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Payment term on product sales range, description	Payment terms on our product sales normally range from 30 to 90 days.
Other current liabilities [Member]
Disaggregation of Revenue [Line Items]
Refund obligation	$ 14.8
Other Current Assets [Member]
Disaggregation of Revenue [Line Items]
Contract with customer, right to recover product, current	$ 2.3

Revenue - Disaggregation of Revenue (Detail)
$ in Millions

12 Months Ended

Dec. 31, 2018

USD ($)

$ 5,485.1

Wholesalers [Member]

Home Center Retailers [Member]

2,607.3

^[1]

1,452.3

^[2]

Other Retailers [Member]

311.6

^[3]

Builder Direct [Member]

235.4

United States [Member]

4,606.6

International [Member]

$ 878.5

^[4]

[1]	Represents sales to customers whose business is oriented towards builders, professional trades and home remodelers, inclusive of sales through our customers’ respective internet website portals.
[2]	Represents sales to the three largest “Do-It-Yourself” retailers; The Home Depot, Inc., Lowes Companies, Inc. and Menards, Inc., inclusive of sales through their respective internet website portals.
[3]	Represents sales principally to our mass merchant and standalone independent e-commerce customers.
[4]	Represents sales in markets outside the United States, principally in Canada, China, Europe and Mexico.

Defined Benefit Plans - Additional Information (Detail)	3 Months Ended	12 Months Ended
Defined Benefit Plans - Additional Information (Detail)	Mar. 31, 2016 USD ($)	Dec. 31, 2018 USD ($) age	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Recognition of actuarial gains (losses)		$ (3,800,000)	$ 500,000	$ (1,900,000)
Accumulated other comprehensive income, net periodic benefit cost			0
Defined Contribution Plan, cash contributions		29,500,000	29,100,000	22,700,000
Accounting Standards Update 2017-07 [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Reclassifications from operating income to other income			9,600,000	$ 14,100,000
Fair Value Measured at Net Asset Value Per Share [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Investments measured using net asset value per share		$ 576,000,000	633,300,000
Real estate [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Assets redemption notice period		45 days
Investment Assets [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Assets redemption notice period		95 days
Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Recognition of actuarial gains (losses)		$ 63,100,000	(40,600,000)
Defined benefit plans, increase (decrease) in liability			$ (5,000,000)
Defined benefit plans, blended long-term rate of return on plan assets		6.00%	6.40%	6.60%
Pension Benefits [Member] \| Minimum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plans, retirement benefits payment commencement age \| age		55
Pension Benefits [Member] \| Maximum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plans, retirement benefits payment commencement age \| age		65
Postretirement Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Reduction in accrued retiree benefit plans	$ (10,700,000)
Recognition of actuarial gains (losses)	$ (900,000)	$ 200,000	$ 1,400,000
Equity Securities \| Minimum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		0.00%
Equity Securities \| Maximum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		75.00%
Fixed income \| Minimum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		25.00%
Fixed income \| Maximum [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		100.00%
Cash and cash equivalents
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		25.00%
Other Investment
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit asset allocation, maximum		20.00%

Defined Benefit Plans - Obligations and Funded Status (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Change in the Projected Benefit Obligation (PBO):
Recognition of actuarial losses (gains)		$ 3.8	$ (0.5)	$ 1.9
Change in Plan Assets:
Beginning balance		656.6
Ending balance		599.6	656.6
Pension Benefits [Member]
Change in the Projected Benefit Obligation (PBO):
Projected benefit obligation at beginning of year		832.4	791.7
Service cost		0.5	0.6
Interest cost		30.7	33.3
Recognition of actuarial losses (gains)		(63.1)	40.6
Benefits paid		(37.3)	(33.8)
Projected benefit obligation at end of year		763.2	832.4	791.7
Accumulated benefit obligation at end of year (excludes the impact of future compensation increases)		763.2	832.4
Change in Plan Assets:
Beginning balance		656.6	577.7
Actual return on plan assets		(30.7)	83.2
Employer contributions		11.0	29.5
Benefits paid		(37.3)	(33.8)
Ending balance		599.6	656.6	577.7
Funded status (Fair value of plan assets less PBO)		(163.6)	(175.8)
Postretirement Benefits [Member]
Change in the Projected Benefit Obligation (PBO):
Projected benefit obligation at beginning of year		1.6	3.6
Recognition of actuarial losses (gains)	$ 0.9	(0.2)	(1.4)
Benefits paid			(0.4)
Foreign exchange			(0.2)
Projected benefit obligation at end of year		1.4	1.6	$ 3.6
Change in Plan Assets:
Employer contributions			0.5
Benefits paid			(0.5)
Funded status (Fair value of plan assets less PBO)		$ (1.4)	$ (1.6)

Defined Benefit Plans - Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Accrued benefit liability	$ (163.3)	$ (175.9)
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Current benefit payment liability	(1.5)	(1.1)
Accrued benefit liability	(162.1)	(174.7)
Net amount recognized	(163.6)	(175.8)
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Current benefit payment liability	(0.2)	(0.2)
Accrued benefit liability	(1.2)	(1.4)
Net amount recognized	$ (1.4)	$ (1.6)

Defined Benefit Plans - Accumulated Benefit Obligation (Detail) - Accounting Standards Update 2017-07 [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Decrease to operating income	$ (9.6)	$ (14.1)
Cost of products sold [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease to operating income	7.5	8.5
Selling, general and administrative expenses [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease to operating income	$ 2.1	$ 5.6

Defined Benefit Plans - Amounts in Accumulated Other Comprehensive loss that have not yet been Recognized as Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial (gains) losses		$ 3.8	$ (0.5)	$ 1.9
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial (gains) losses		(63.1)	40.6
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial (gains) losses	$ 0.9	(0.2)	(1.4)
Other Accumulated Other Comprehensive Income \| Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Beginning Balance		67.2	73.4
Recognition of actuarial (gains) losses		(3.9)	(0.9)
Current year actuarial loss (gain)		8.5	(5.3)
Ending Balance		71.8	67.2	$ 73.4
Total at December 31, 2018		71.8
Other Accumulated Other Comprehensive Income \| Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial (gains) losses		0.1	1.4
Current year actuarial loss (gain)		(0.4)	(1.4)
Ending Balance		$ (0.3)
Beginning Balance			(5.1)
Amortization			5.1
Total at December 31, 2018			$ (0.3)

Defined Benefit Plans - Components of Net Periodic Benefit Cost for Pension and Postretirement Benefits (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial losses (gains)		$ 3.8	$ (0.5)	$ 1.9
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost		0.5	0.6
Interest cost		30.7	33.3
Recognition of actuarial losses (gains)		(63.1)	40.6
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Recognition of actuarial losses (gains)	$ 0.9	(0.2)	(1.4)
Net Periodic Benefit Cost \| Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost		0.5	0.6	9.6
Interest cost		30.7	33.3	34.4
Expected return on plan assets		(41.0)	(37.3)	(37.2)
Recognition of actuarial losses (gains)		3.9	0.9
Net periodic benefit (income) cost		(5.9)	(2.5)	6.8
Net Periodic Benefit Cost \| Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost				0.3
Recognition of actuarial losses (gains)		(0.1)	(1.4)	1.9
Amortization of prior service credits			(5.1)	(13.5)
Net periodic benefit (income) cost		$ (0.1)	$ (6.5)	$ (11.3)

Defined Benefit Plans - Schedule of Assumptions Used (Detail)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Pension Benefits [Member]
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31:
Discount rate	4.40%	3.80%	4.30%
Rate of compensation increase			4.00%
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31:
Discount rate	3.80%	4.30%	4.60%
Expected long-term rate of return on plan assets	6.00%	6.40%	6.60%
Rate of compensation increase			4.00%
Postretirement Benefits [Member]
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31:
Discount rate	4.20%	3.40%	3.40%
Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31:
Discount rate	3.40%	3.40%	4.10%

Defined Benefit Plans - Assumed Health Care Cost Trend Rates Used to Determine Benefit Obligations and Net Cost (Detail)

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Aug. 31, 2018

Health care cost trend rate assumed for next year

1.00%

Postretirement Benefits [Member]

Rate that the cost trend rate is assumed to decline (the ultimate trend rate)

4.50%

Year that the rate reaches the ultimate trend rate

2027

2026

Postretirement Benefits [Member] | Pre Age Sixty Five

Health care cost trend rate assumed for next year

^[1]

6.90%

7.10%

Postretirement Benefits [Member] | Post Age Sixty Five

Health care cost trend rate assumed for next year

^[1]

8.00%

8.40%

[1]	The pre-65 initial health care cost trend rate is shown first / followed by the post-65 rate.

Defined Benefit Plans - Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Effect on total of service and interest cost, 1-Percentage-Point Increase	$ (0.1)
Effect on total of service and interest cost, 1-Percentage-Point Decrease	$ 0.1

Defined Benefit Plans - Fair Value of Pension Assets by Major Category of Plan Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	$ 599.6	$ 656.6
Group annuity/insurance contracts (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	23.6	23.3	$ 22.8
Cash and cash equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	7.7	12.5
Equity
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	197.7	285.9
Fixed income
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	324.6	277.7
Multi-strategy hedge funds
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	22.0	24.6
Real estate
Defined Benefit Plan Disclosure [Line Items]
Fair value of pension assets	$ 24.0	$ 32.6

Defined Benefit Plans - Reconciliation of Level Three Measurements (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Beginning balance	$ 656.6
Ending balance	599.6	$ 656.6
Group annuity/insurance contracts (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Beginning balance	23.3	22.8
Actual return on assets related to assets still held	0.3	0.5
Ending balance	$ 23.6	$ 23.3

Defined Benefit Plans - Schedule of Expected Benefit Payments (Detail) $ in Millions	Dec. 31, 2018 USD ($)
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
2019	$ 39.4
2020	41.0
2021	42.1
2022	43.4
2023	44.4
Years 2024-2028	234.7
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
2019	0.1
2020	0.1
2021	0.1
2022	0.1
2023	0.1
Years 2024-2028	$ 0.3

Income Taxes - Components of Loss Income Before Income Taxes and Noncontrolling Interests (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Schedule of Income Before Income Tax [Line Items]
Domestic operations	$ 456.7	$ 554.7	$ 513.8
Foreign operations	80.3	80.1	68.3
Income before income taxes and noncontrolling interests	$ 537.0	$ 634.8	$ 582.1

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Line Items]
Reconciliation of income taxes		21.00%	35.00%	35.00%
Income taxes, estimated net benefit	$ 25,700,000
Unrecognized tax benefits that would impact effective tax rate		$ 64,300,000
Unrecognized tax expense (benefits), interest and penalty expense (benefit) recognized		2,200,000	$ 2,000,000	$ 1,100,000
Unrecognized tax benefits, accrued interest and penalties		14,400,000		$ 11,800,000
Deferred tax assets, net operating losses and other tax carryforwards	25,600,000	21,200,000	25,600,000
Deferred tax assets, net operating losses and other tax carryforwards		7,100,000
Undistributed earnings of foreign subsidiaries		128,100,000
Reduction in deferred tax liabilities	$ 157,400,000	150,700,000	$ 157,400,000
Repatriation tax liability		28,500,000
Increase In Provision For Tax		8,200,000
Adjustments to deferred tax liabilty		5,500,000
Deferred tax liabilities of Foreign Subsidiaries		5,000,000
Federal Income Tax Rate [Member]
Income Taxes [Line Items]
Reduction in deferred tax liabilities		62,400,000
Foreign and State Tax [Member]
Income Taxes [Line Items]
Income tax liability for foreign and state taxes		9,300,000
Minimum [Member]
Income Taxes [Line Items]
Reasonably possible decrease in unrecognized tax benefits		$ 1,400,000
Deferred tax assets, remaining net operating losses and other tax carryforwards expiration period		2023
Maximum [Member]
Income Taxes [Line Items]
Reasonably possible decrease in unrecognized tax benefits		$ 3,500,000

Income Taxes - Reconciliation of Income Taxes at Federal Statutory Income Tax Rate (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation Of Income Taxes [Line Items]
Income tax expense computed at federal statutory income tax rate	$ 112.8	$ 222.2	$ 203.7
Other income taxes, net of federal tax benefit	13.7	13.4	12.6
Foreign taxes at a different rate than U.S. federal statutory income tax rate	3.5	(8.3)	(7.6)
Tax benefit on income attributable to domestic production activities	0.0	(10.9)	(13.0)
Net adjustments for uncertain tax positions	4.1	11.6	13.2
Share-based compensation (ASU 2016-09)	(2.1)	(23.9)	(27.8)
Tax Act impact	5.5	(25.7)
Deferred tax impact of state tax rate changes	3.5	(2.0)	(1.1)
Valuation allowance increase (decrease)	3.0	(5.2)	(2.1)
Miscellaneous other, net	3.0	(11.7)	(8.2)
Income tax expense as reported	$ 147.0	$ 159.5	$ 169.7
Effective income tax rate	27.40%	25.10%	29.20%

Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Schedule of Unrecognized Tax Benefits [Line Items]
Unrecognized tax benefits — beginning of year	$ 87.5	$ 58.2	$ 38.2
Gross additions — current year tax positions	9.1	31.0	10.7
Gross additions — prior year tax positions	9.3	10.9	10.4
Gross additions (reductions) — purchase accounting adjustments	1.0	4.0	9.7
Gross reductions — prior year tax positions	(14.5)	(9.4)	(9.8)
Gross reductions — settlements with taxing authorities	(8.9)	(7.2)	(1.0)
Unrecognized tax benefits — end of year	$ 83.5	$ 87.5	$ 58.2

Income Taxes (Detail) - USD ($) $ in Millions	12 Months Ended
Income Taxes (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current
Federal	$ 93.5	$ 133.1	$ 150.4
Foreign	26.4	22.4	22.3
State and other	24.1	22.8	22.9
Deferred
Federal, state and other	4.8	(27.2)	(23.9)
Foreign	(1.8)	8.4	(2.0)
Income tax expense as reported	$ 147.0	$ 159.5	$ 169.7

Income Taxes - Components of Net Deferred Tax Assets Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Compensation and benefits	$ 31.5	$ 22.1
Defined benefit plans	39.3	43.7
Capitalized inventories	16.1	11.1
Accounts receivable	5.4	7.8
Other accrued expenses	55.2	45.6
Net operating loss and other tax carryforwards	21.2	25.6
Valuation allowance	(13.3)	(11.0)
Miscellaneous	2.5	3.7
Total deferred tax assets	157.9	148.6
Deferred tax liabilities:
LIFO inventories	0.0	(4.2)
Fixed assets	(60.2)	(44.5)
Intangible assets	(224.6)	(232.0)
Investment in partnership	(3.8)	(9.2)
Miscellaneous	(20.0)	(16.1)
Total deferred tax liabilities	(308.6)	(306.0)
Net deferred tax liability	(150.7)	(157.4)
Other assets	11.9	9.4
Deferred income taxes	$ (162.6)	$ (166.8)

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

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

^[1]

$ 24.1

$ 8.3

$ 13.9

Cost of products sold [Member]

35.4

^[2]

18.5

^[1],[3]

19.3

Selling, general and administrative Expenses [Member]

12.1

^[2]

7.2

^[1],[3]

4.5

Operating Segments [Member] | Cabinets [Member]

^[3]

(0.8)

^[2]

3.0

^[1]

0.9

16.8

^[2]

1.4

^[1],[3]

1.8

Operating Segments [Member] | Plumbing [Member]

26.2

^[2]

5.2

^[1],[3]

1.8

2.6

^[2]

2.8

^[1],[3]

1.6

Operating Segments [Member] | Doors & Security [Member]

3.3

^[2]

2.8

^[1],[3]

2.1

4.7

^[2]

4.1

^[1],[3]

10.5

Operating Segments [Member] | Cost of products sold [Member] | Cabinets [Member]

5.9

^[2]

10.5

^[1],[3]

15.4

Operating Segments [Member] | Cost of products sold [Member] | Plumbing [Member]

9.1

^[2]

1.6

^[1],[3]

Operating Segments [Member] | Cost of products sold [Member] | Doors & Security [Member]

0.6

^[2]

0.3

Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Cabinets [Member]

2.4

^[2]

5.6

^[1],[3]

4.2

Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Plumbing [Member]

^[3]

0.3

^[2]

2.2

^[1]

Operating Segments [Member] | Selling, general and administrative Expenses [Member] | Doors & Security [Member]

^[3]

0.1

^[2]

0.2

^[3]

$ (1.2)

^[2]

$ 0.8

^[1]

$ 0.7

[1]	“Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities.
[2]	“Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, write-off of displays from exiting a customer relationship, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities.
[3]	Selling, general and administrative expenses.

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

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

$ 5.8

$ 3.0

Provision

24.1

8.3

$ 13.9

^[1]

Cash Expenditures

^[2]

(18.7)

(5.2)

Non-Cash Write-offs

^[3]

(0.7)

(0.3)

Workforce Reduction Costs [Member]

10.5

5.8

3.0

5.0

2.4

Provision

21.4

6.7

Cash Expenditures

^[2]

(16.3)

(3.9)

Non-Cash Write-offs

^[3]

(0.2)

9.9

5.0

2.4

Other [Member]

0.8

0.6

Provision

2.7

1.6

Cash Expenditures

^[2]

(2.4)

(1.3)

Non-Cash Write-offs

^[3]

(0.5)

(0.1)

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

$ 0.6

$ 0.8

$ 0.6

[1]	“Other Charges” represent charges or gains directly related to restructuring initiatives that cannot be reported as restructuring under GAAP. Such charges or gains may include losses on disposal of inventories, trade receivables allowances from exiting product lines, accelerated depreciation resulting from the closure of facilities, and gains and losses on the sale of previously closed facilities.
[2]	Cash expenditures primarily related to severance charges.
[3]	Non-cash write-offs include long-lived asset impairment charges attributable to restructuring actions.

Commitments - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitment And Contingencies [Line Items]
Purchase obligations	$ 369.9
Purchase obligations due in one year	342.4
Operating leases, rent expense net	$ 48.4	$ 42.1	$ 43.5

Commitments - Future Minimum Rental Payments under Non-Cancelable Operating Leases (Detail) $ in Millions	Dec. 31, 2018 USD ($)
Schedule of Operating Leases [Line Items]
2019	$ 37.8
2020	29.6
2021	23.4
2022	18.9
2023	13.8
Remainder	58.8
Total minimum rental payments	$ 182.3

Commitments - Activity Related to Product Warranty Liability (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Product Warranty Liability [Line Items]
Reserve balance at the beginning of the year	$ 17.2	$ 16.2	$ 16.0
Provision for warranties issued	25.1	25.1	25.8
Settlements made (in cash or in kind)	(25.7)	(24.3)	(25.5)
Acquisition	8.9		0.3
Foreign currency	(0.6)	0.2	(0.4)
Reserve balance at end of year	$ 24.9	$ 17.2	$ 16.2

Information on Business Segments - Net Sales and Operating Income by Segment (Detail) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

$ 1,420.7

$ 1,380.8

$ 1,429.0

$ 1,254.6

$ 1,382.5

$ 1,348.6

$ 1,365.4

$ 1,186.8

$ 5,485.1

^[1]

$ 5,283.3

^[1]

$ 4,984.9

^[1]

140.1

$ 147.1

$ 188.6

$ 119.4

162.8

$ 199.5

$ 209.2

111.0

595.2

682.5

618.6

Long-lived asset impairment

813.4

^[2]

740.0

813.4

^[2]

740.0

662.5

$ (3.0)

5,964.6

5,511.4

5,964.6

5,511.4

5,128.5

113.5

98.6

94.6

36.1

31.7

28.1

Less: proceeds from disposition of assets

^[3]

150.1

165.0

149.3

(6.1)

(0.4)

(3.9)

Capital expenditures, net

144.0

164.6

145.4

Corporate [Member]

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

General and administrative expense

^[4],[5]

(79.2)

(90.1)

(80.5)

(79.2)

(85.0)

(80.5)

Long-lived asset impairment

(5.1)

Total Corporate expenses

(79.2)

(90.1)

(80.5)

176.8

208.8

176.8

208.8

157.2

3.3

3.0

3.7

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

0.6

18.0

0.5

United States [Member]

^[1]

4,606.6

4,492.2

4,258.5

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

628.9

562.3

628.9

562.3

499.8

Canada

^[1]

433.1

427.6

406.4

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

46.0

50.5

46.0

50.5

45.5

China

^[1]

260.6

202.3

175.0

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

22.5

24.8

22.5

24.8

22.7

Other International

^[1]

184.8

161.2

145.0

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

12.6

13.4

12.6

13.4

3.7

Mexico

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

103.4

89.0

103.4

89.0

90.8

Cabinets [Member]

2,318.7

2,416.3

2,318.7

2,416.3

2,349.4

50.9

42.8

40.1

19.6

19.7

18.4

Cabinets [Member] | Operating Segments [Member]

73.8

63.4

61.7

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

2,418.6

2,467.1

2,397.8

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

143.5

267.2

257.8

Plumbing [Member]

1,943.1

1,854.1

1,943.1

1,854.1

1,626.8

29.1

26.9

24.6

10.4

7.7

3.6

Plumbing [Member] | Operating Segments [Member]

41.4

43.5

48.3

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

1,883.3

1,720.8

1,534.4

Doors & Security [Member]

^[5]

375.3

358.5

314.9

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

$ 1,526.0

$ 1,032.2

1,526.0

1,032.2

995.1

30.2

25.9

26.2

6.1

4.3

6.1

Doors & Security [Member] | Operating Segments [Member]

34.3

40.1

38.8

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

1,183.2

1,095.4

1,052.7

Schedule Of Quarterly Financial Data [Line Items]

^[5]

$ 155.6

$ 146.9

$ 126.4

[1]	Based on country of destination
[2]	2018 includes the impact of acquiring Fiberon. See Note 4 for additional information.
[3]	Capital expenditures of $16.7 million, $17.2 million and $11.9 million that have not been paid as of December 31, 2018, 2017 and 2016, respectively, were excluded from the Statement of Cash Flows.
[4]	(a) Below is a table detailing Corporate expenses:
[5]	We revised our previously reported results in 2017 and 2016 for ASU 2017-07, Presentation of Net Periodic and Postretirement Costs and to reflect our new Doors & Security segment resulting from the reorganization we announced in July 2018.

Information on Business Segments - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Number of customers accounted for greater than 10% of net sales	2	2	2
Customer Concentration Risk \| Net Sales \| The Home Depot, Inc.
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Percentage of net sales to major customer	13.00%	13.00%	13.00%
Customer Concentration Risk \| Net Sales \| Lowe's Companies, Inc
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Percentage of net sales to major customer	14.00%	14.00%	14.00%

Quarterly Financial Data - Schedule of Quarterly Financial Data (Detail) - USD ($)
$ / shares in Units, $ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

$ 1,420.7

$ 1,380.8

$ 1,429.0

$ 1,254.6

$ 1,382.5

$ 1,348.6

$ 1,365.4

$ 1,186.8

$ 5,485.1

^[1]

$ 5,283.3

^[1]

$ 4,984.9

^[1]

Gross profit

501.8

493.9

524.1

439.6

492.3

^[2]

505.3

^[2]

513.3

^[2]

414.1

^[2]

1,959.4

1,925.0

^[2]

Income from continuing operations, net of tax

140.1

147.1

188.6

119.4

162.8

199.5

209.2

111.0

595.2

682.5

618.6

85.3

99.9

129.7

75.1

128.0

129.6

140.3

77.4

390.0

475.3

412.4

Income (loss) from discontinued operations, net of tax

(0.2)

(2.6)

(0.2)

(2.6)

0.8

Net income

85.3

99.9

129.7

74.9

128.0

129.6

137.7

77.4

389.8

472.7

$ 413.2

Net income attributable to Fortune Brands

$ 85.2

$ 99.8

$ 129.6

$ 75.0

$ 128.0

$ 129.5

$ 137.7

$ 77.4

$ 389.6

$ 472.6

Basic earnings (loss) per common share

Net income attributable to Fortune Brands

$ 0.60

$ 0.70

$ 0.89

$ 0.50

$ 0.84

$ 0.91

$ 0.50

$ 2.69

$ 3.10

$ 2.67

Discontinued operations

(0.02)

0.01

0.60

0.70

0.89

0.50

0.84

0.89

0.50

2.69

3.08

2.68

Diluted earnings (loss) per common share