2017 Form 10-K Financial Statement

#000119312518063999 Filed on February 28, 2018

View on sec.gov

Income Statement

Concept 2017 2016 Q4 2016 Q3
Revenue $5.283B $1.302B $1.279B
YoY Change 5.99% 6.28% 3.25%
Cost Of Revenue $3.358B $826.4M $801.0M
YoY Change 5.32% 2.57% -0.41%
Gross Profit $1.925B $474.1M $478.0M
YoY Change 6.67% 12.85% 10.01%
Gross Profit Margin 36.44% 36.42% 37.37%
Selling, General & Admin $1.197B $297.6M $284.5M
YoY Change 5.41% 10.43% 7.08%
% of Gross Profit 62.18% 62.77% 59.52%
Research & Development $50.70M
YoY Change -4.52%
% of Gross Profit 2.63%
Depreciation & Amortization $98.60M $33.00M $29.90M
YoY Change 4.23% -0.9% -5.38%
% of Gross Profit 5.12% 6.96% 6.26%
Operating Expenses $1.248B $305.3M $284.5M
YoY Change 4.96% 10.7% 7.08%
Operating Profit $682.5M $166.4M $183.1M
YoY Change 10.33% 18.6% 14.22%
Interest Expense $49.40M -$11.80M $11.80M
YoY Change 0.61% 372.0% 6.31%
% of Operating Profit 7.24% -7.09% 6.44%
Other Income/Expense, Net $1.700M -$2.300M -$600.0K
YoY Change -86.51% -20.69% 20.0%
Pretax Income $634.8M $153.2M $170.7M
YoY Change 9.05% 19.41% 14.79%
Income Tax $159.5M $48.80M $48.80M
% Of Pretax Income 25.13% 31.85% 28.59%
Net Earnings $472.6M $103.7M $123.4M
YoY Change 14.38% 17.84% 14.79%
Net Earnings / Revenue 8.95% 7.97% 9.65%
Basic Earnings Per Share $3.08 $0.67 $0.80
Diluted Earnings Per Share $3.03 $0.66 $0.78
COMMON SHARES
Basic Shares Outstanding 153.2M 154.3M shares 154.2M shares
Diluted Shares Outstanding 155.8M 157.6M shares

Balance Sheet

Concept 2017 2016 Q4 2016 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $323.0M $251.5M $278.6M
YoY Change 28.43% 5.45% -20.54%
Cash & Equivalents $323.0M $251.5M $278.6M
Short-Term Investments
Other Short-Term Assets $142.6M $111.9M $129.8M
YoY Change 27.44% -7.75% -26.0%
Inventory $580.8M $531.1M $562.5M
Prepaid Expenses
Receivables $555.3M $550.7M $568.8M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.602B $1.445B $1.540B
YoY Change 10.83% 1.92% -5.16%
LONG-TERM ASSETS
Property, Plant & Equipment $740.0M $662.5M $642.9M
YoY Change 11.7% 5.51% 6.04%
Goodwill $1.834B $1.835B
YoY Change 4.47% 1.9%
Intangibles $1.107B $1.114B
YoY Change 11.07% 13.41%
Long-Term Investments
YoY Change
Other Assets $95.30M $80.00M $81.10M
YoY Change 19.13% 2.83% 16.69%
Total Long-Term Assets $3.910B $3.683B $3.673B
YoY Change 6.15% 6.52% 6.19%
TOTAL ASSETS
Total Short-Term Assets $1.602B $1.445B $1.540B
Total Long-Term Assets $3.910B $3.683B $3.673B
Total Assets $5.511B $5.129B $5.213B
YoY Change 7.47% 5.18% 2.57%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $428.8M $393.8M $361.9M
YoY Change 8.89% 14.41% 2.35%
Accrued Expenses $449.0M
YoY Change 8.74%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due $0.00 $0.00
YoY Change -100.0%
Total Short-Term Liabilities $906.8M $842.8M $776.7M
YoY Change 7.59% 11.2% -0.13%
LONG-TERM LIABILITIES
Long-Term Debt $1.508B $1.431B $1.586B
YoY Change 5.35% 22.45% 18.56%
Other Long-Term Liabilities $329.1M $111.9M $111.3M
YoY Change 0.3% 48.8% -62.47%
Total Long-Term Liabilities $1.837B $1.543B $1.697B
YoY Change 4.41% 24.05% 3.85%
TOTAL LIABILITIES
Total Short-Term Liabilities $906.8M $842.8M $776.7M
Total Long-Term Liabilities $1.837B $1.543B $1.697B
Total Liabilities $2.912B $2.766B $2.852B
YoY Change 5.24% 14.19% 6.52%
SHAREHOLDERS EQUITY
Retained Earnings $814.6M $738.4M
YoY Change 62.4% 68.05%
Common Stock $2.656B $2.647B
YoY Change 1.98% 2.47%
Preferred Stock
YoY Change
Treasury Stock (at cost) $1.037B $974.6M
YoY Change 72.18% 67.43%
Treasury Stock Shares $24.31M
Shareholders Equity $2.600B $2.362B $2.359B
YoY Change
Total Liabilities & Shareholders Equity $5.511B $5.129B $5.213B
YoY Change 7.47% 5.18% 2.57%

Cashflow Statement

Concept 2017 2016 Q4 2016 Q3
OPERATING ACTIVITIES
Net Income $472.6M $103.7M $123.4M
YoY Change 14.38% 17.84% 14.79%
Depreciation, Depletion And Amortization $98.60M $33.00M $29.90M
YoY Change 4.23% -0.9% -5.38%
Cash From Operating Activities $600.3M $269.9M $215.6M
YoY Change -7.72% 78.27% -3.06%
INVESTING ACTIVITIES
Capital Expenditures $165.0M -$43.20M -$31.40M
YoY Change 10.52% 3.85% -2.79%
Acquisitions $124.6M
YoY Change -48.02%
Other Investing Activities -$122.7M -$7.600M -$147.3M
YoY Change -47.96% -1152.14%
Cash From Investing Activities -$287.7M -$50.80M -$178.7M
YoY Change -25.29% 22.12% 876.5%
FINANCING ACTIVITIES
Cash Dividend Paid $110.3M
YoY Change 12.32%
Common Stock Issuance & Retirement, Net $214.8M
YoY Change -49.4%
Debt Paid & Issued, Net $565.0M
YoY Change -29.81%
Cash From Financing Activities -250.1M -240.9M -35.70M
YoY Change -0.12% 10.5% -49.36%
NET CHANGE
Cash From Operating Activities 600.3M 269.9M 215.6M
Cash From Investing Activities -287.7M -50.80M -178.7M
Cash From Financing Activities -250.1M -240.9M -35.70M
Net Change In Cash 71.50M -21.80M 1.200M
YoY Change 376.67% -79.85% -99.1%
FREE CASH FLOW
Cash From Operating Activities $600.3M $269.9M $215.6M
Capital Expenditures $165.0M -$43.20M -$31.40M
Free Cash Flow $435.3M $313.1M $247.0M
YoY Change -13.15% 62.23% -3.02%

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CY2017 us-gaap Loss Contingency Disclosures
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<div> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> <font style="FONT-FAMILY: ARIAL" size="2"><b>22.&#xA0;&#xA0;&#xA0;&#xA0;Contingencies</b></font></p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> <font style="FONT-FAMILY: ARIAL" size="2"><b>Litigation</b></font></p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> <font style="FONT-FAMILY: ARIAL" size="2">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&#x2019;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.</font></p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> <font style="FONT-FAMILY: ARIAL" size="2"><b>Environmental</b></font></p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial"> <font style="FONT-FAMILY: ARIAL" size="2">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 (&#x201C;PRPs&#x201D;) under &#x201C;Superfund&#x201D; or similar state laws.&#xA0;As of December&#xA0;31, 2016, eleven such instances have not been dismissed, settled or otherwise resolved.&#xA0;In calendar year 2017, 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 an adverse effect on our results of operations, cash flows or financial condition. At December&#xA0;31, 2017 and 2016, we had accruals of $0.7&#xA0;million and $1.0&#xA0;million, respectively, relating to environmental compliance and cleanup including, but not limited to, the above mentioned Superfund sites.</font></p> </div>
CY2017 us-gaap Revenue Recognition Incentives
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<div> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px"><font style="FONT-FAMILY: ARIAL" size="2"><b>Customer Program Costs</b>&#xA0;&#xA0;&#xA0;&#xA0;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. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for in either &#x201C;net sales&#x201D; or the category &#x201C;selling, general and administrative expenses&#x201D; at the time the program is initiated and/or the revenue is recognized. The costs are predominantly recognized in &#x201C;net sales&#x201D; and include, but are not limited to, volume allowances and rebates, promotional allowances, and cooperative advertising programs. These costs are recorded at the later of the time of sale or the implementation of the program based on management&#x2019;s best estimates. Estimates are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on management&#x2019;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 &#x201C;selling, general and administrative expenses&#x201D; include product displays, point of sale materials and media production costs. The costs included in the &#x201C;selling, general and administrative expenses&#x201D; category were $62.4&#xA0;million, $44.1&#xA0;million and $43.2&#xA0;million for the years ended December&#xA0;31, 2017, 2016 and 2015, respectively.</font></p> </div>
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CY2016Q3 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerDilutedShare
0.01
CY2016Q3 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.80
CY2016Q3 us-gaap Sales Revenue Net
SalesRevenueNet
1279000000
CY2016Q3 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.79
CY2016Q3 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
0.01
CY2017Q4 us-gaap Operating Income Loss
OperatingIncomeLoss
163000000
CY2017Q4 us-gaap Profit Loss
ProfitLoss
128000000
CY2017Q4 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
128000000
CY2017Q4 us-gaap Gross Profit
GrossProfit
493000000
CY2016Q4 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
104400000
CY2016Q4 us-gaap Gross Profit
GrossProfit
474100000
CY2017Q4 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.83
CY2017Q4 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.83
CY2017Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.84
CY2017Q4 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.84
CY2017Q4 us-gaap Sales Revenue Net
SalesRevenueNet
1382500000
CY2017Q4 us-gaap Income Loss Attributable To Parent
IncomeLossAttributableToParent
128000000
CY2016Q3 us-gaap Income Loss Attributable To Parent
IncomeLossAttributableToParent
123400000
CY2016Q3 us-gaap Operating Income Loss
OperatingIncomeLoss
183100000
CY2016Q3 us-gaap Income Loss From Discontinued Operations Net Of Tax
IncomeLossFromDiscontinuedOperationsNetOfTax
1500000
CY2016Q3 us-gaap Profit Loss
ProfitLoss
123400000
CY2016Q3 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
121900000
CY2016Q3 us-gaap Gross Profit
GrossProfit
478000000
CY2017Q3 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.83
CY2017Q3 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.83
CY2017Q3 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.84
CY2017Q3 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.84
CY2017Q3 us-gaap Sales Revenue Net
SalesRevenueNet
1348600000
CY2017Q3 us-gaap Income Loss Attributable To Parent
IncomeLossAttributableToParent
129500000
CY2017Q3 us-gaap Operating Income Loss
OperatingIncomeLoss
201800000
CY2017Q3 us-gaap Profit Loss
ProfitLoss
129600000
CY2017Q3 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
129600000
CY2017Q3 us-gaap Gross Profit
GrossProfit
507000000
CY2016Q4 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.66
CY2016Q4 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.67
CY2016Q4 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerDilutedShare
-0.01
CY2016Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
0.68
CY2016Q4 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
-0.01
CY2016Q4 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.67
CY2016Q4 us-gaap Sales Revenue Net
SalesRevenueNet
1301600000
CY2016Q4 us-gaap Income Loss Attributable To Parent
IncomeLossAttributableToParent
103600000
CY2016Q4 us-gaap Operating Income Loss
OperatingIncomeLoss
166400000
CY2016Q4 us-gaap Income Loss From Discontinued Operations Net Of Tax
IncomeLossFromDiscontinuedOperationsNetOfTax
-700000
CY2016Q4 us-gaap Profit Loss
ProfitLoss
103700000
CY2017Q4 fbhs Tax Cuts And Jobs Act Of2017 Change In Tax Rate Income Tax Expense Benefit
TaxCutsAndJobsActOf2017ChangeInTaxRateIncomeTaxExpenseBenefit
25700000

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