☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) | Identification No.) | |
Title of Each Class | Trading Symbol(s) | Shares of Stock Outstanding January 31, | Name of Each Exchangeon Which Registered | |||||||||||||||||
Class A Common Stock (par value $5.00 per share) | 25,905,276 | Not listed | ||||||||||||||||||
Common Stock (par value $1.00 per share) | 124,974,017 | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||||||||
Emerging growth company | |||||||||||||||||
☐ | |||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
1. | Portions of the company’s definitive Proxy Statement for the |
Page | ||||||||||||
3 | ||||||||||||
1B. | ||||||||||||
Item 9C. | ||||||||||||
Name (Age) | Positions Held | Period Position Was Held | ||||||||||||
Senior Vice President – Global Operations | ||||||||||||||
Vice President – | ||||||||||||||
2021 | ||||||||||||||
2011 | ||||||||||||||
Robert J. Heideman | Senior Vice President – Chief Technology Officer | 2013 to Present | ||||||||||||
Senior Vice President – Engineering & Technology | 2011 to 2012 | |||||||||||||
2011 | ||||||||||||||
D. Samuel Karge (48) | Senior Vice President | 2018 to Present | ||||||||||||
President – North America Water Treatment | 2018 to Present | |||||||||||||
Vice President, Sales and Marketing – Zurn Industries (water solutions manufacturer) | 2016 to 2018 | |||||||||||||
Daniel L. Kempken | Senior Vice President – Strategy and Corporate Development | 2019 to Present | ||||||||||||
Vice President and Controller | 2011 to 2019 | |||||||||||||
Parag Kulkarni (55) | Senior Vice President, International; President - A. O. Smith India Water Products Private Limited | 2022 to Present | ||||||||||||
Managing Director - A. O. Smith India Water Products Private Limited | 2015 to 2022 | |||||||||||||
Charles T. Lauber | Executive Vice President and Chief Financial Officer | 2019 to Present | ||||||||||||
Senior Vice President, Strategy and Corporate Development | 2013 to 2019 | |||||||||||||
Senior Vice President – Chief Financial Officer – A. O. Smith Water Products Company | 2006 to 2012 | |||||||||||||
2006 | ||||||||||||||
Stephen D. O'Brien (54) | Senior Vice President; President - Lochinvar, LLC | 2022 to Present | ||||||||||||
Chief Operating Officer – Lochinvar, LLC | 2021 to 2022 | |||||||||||||
Senior Vice President | ||||||||||||||
2021 | ||||||||||||||
Mark A. Petrarca (59) | Senior Vice President | |||||||||||||
Present | ||||||||||||||
2006 | ||||||||||||||
Various A.O. Smith Officer and Management Positions | 1999 to 2005 | |||||||||||||
Jack Qiu (50) | Senior Vice President | 2020 to Present | ||||||||||||
President - A. O. Smith | ||||||||||||||
2012 to 2020 | ||||||||||||||
Various A.O. Smith Officer and Management Positions | 2003 to 2012 | |||||||||||||
S. Melissa Scheppele (60) | Senior Vice President - Chief Information Officer | 2020 to Present | ||||||||||||
Vice President and Chief | ||||||||||||||
2020 | ||||||||||||||
James F. Stern | Executive Vice President, General Counsel and Secretary | 2007 to Present | ||||||||||||
Partner – Foley & Lardner LLP | 1997 to 2007 |
Name (Age) | Positions Held | Period Position Was Held | ||||||||||||
David R. Warren | Senior Vice President | 2017 to Present | ||||||||||||
President and General Manager – North America Water | 2017 to Present | |||||||||||||
Vice President – International | 2008 to 2017 | |||||||||||||
2008 | ||||||||||||||
Kevin J. Wheeler (63) | Chairman | 2020 to Present | ||||||||||||
President and Chief Executive Officer | 2018 to Present | |||||||||||||
President and Chief Operating Officer | 2017 to 2018 | |||||||||||||
Senior Vice President | 2013 to 2017 | |||||||||||||
President and General Manager – North America, India and Europe Water Heating | 2013 to 2017 | |||||||||||||
2013 | ||||||||||||||
ISSUER PURCHASES OF EQUITY SECURITIES | ||||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that may yet be Purchased Under the Plans or Programs | ||||||||||||
October 1 – October 31, 2019 | 414,700 | $ | 48.17 | 414,700 | 3,739,015 | |||||||||||
November 1 – November 30, 2019 | 370,800 | 50.20 | 370,800 | 3,368,215 | ||||||||||||
December 1 – December 31, 2019 | 406,000 | 47.02 | 406,000 | 2,962,215 |
Base Period | Indexed Returns | Base Period | Indexed Returns | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company/Index | 12/31/14 | 12/31/15 | 12/31/16 | 12/31/17 | 12/31/18 | 12/31/19 | Company/Index | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 | 12/31/21 | 12/31/22 | ||||||||||||||||||||||||||||||||||||||||||||||
A. O. Smith Corporation | 100.0 | 137.3 | 171.6 | 224.5 | 158.5 | 180.1 | A. O. Smith Corporation | 100.0 | 70.6 | 80.2 | 94.2 | 149.9 | 101.7 | ||||||||||||||||||||||||||||||||||||||||||||||
S&P 500 Index | 100.0 | 101.4 | 113.5 | 138.3 | 132.2 | 173.8 | S&P 500 Index | 100.0 | 95.6 | 125.7 | 148.9 | 191.6 | 156.9 | ||||||||||||||||||||||||||||||||||||||||||||||
S&P 500 Select Industrial Index | 100.0 | 95.8 | 115.1 | 142.8 | 123.8 | 160.2 | S&P 500 Select Industrial Index | 100.0 | 86.7 | 112.2 | 124.5 | 150.8 | 142.6 |
(dollars in millions, except per share amounts) | ||||||||||||||||||||
Years ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 (1) | 2016 (2) | 2015 | ||||||||||||||||
Net sales | $ | 2,992.7 | $ | 3,187.9 | $ | 2,996.7 | $ | 2,685.9 | $ | 2,536.5 | ||||||||||
Net earnings (1) | $ | 370.0 | $ | 444.2 | $ | 296.5 | $ | 326.5 | $ | 282.9 | ||||||||||
Basic earnings per share of common stock (1,2) | ||||||||||||||||||||
Net earnings | $ | 2.24 | $ | 2.60 | $ | 1.72 | $ | 1.87 | $ | 1.59 | ||||||||||
Diluted earnings per share of common stock (1,2) | ||||||||||||||||||||
Net earnings | $ | 2.22 | $ | 2.58 | $ | 1.70 | $ | 1.85 | $ | 1.58 | ||||||||||
Cash dividends per common share (2) | $ | 0.90 | $ | 0.76 | $ | 0.56 | $ | 0.48 | $ | 0.38 |
Years ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Total assets | $ | 3,058.0 | $ | 3,071.5 | $ | 3,197.4 | $ | 2,891.0 | $ | 2,629.2 | ||||||||||
Long-term debt(3) | 277.2 | 221.4 | 402.9 | 316.4 | 236.1 | |||||||||||||||
Total stockholders’ equity | 1,666.8 | 1,717.0 | 1,644.9 | 1,511.4 | 1,442.3 |
Years Ended December 31, | |||||||||||||||||
(dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||
Net sales | $ | 3,753.9 | $ | 3,538.9 | $ | 2,895.3 | |||||||||||
Cost of products sold | 2,424.3 | 2,228.0 | 1,787.1 | ||||||||||||||
Gross profit | 1,329.6 | 1,310.9 | 1,108.2 | ||||||||||||||
Gross profit margin % | 35.4 | % | 37.0 | % | 38.3 | % | |||||||||||
Selling, general and administrative expenses | 670.9 | 701.4 | 660.3 | ||||||||||||||
Severance and restructuring expenses | — | — | 7.7 | ||||||||||||||
Interest expense | 9.4 | 4.3 | 7.3 | ||||||||||||||
Other expense (income)-net | 425.6 | (20.4) | (11.0) | ||||||||||||||
Earnings before provision for income taxes | 223.7 | 625.6 | 443.9 | ||||||||||||||
(Benefit from) provision for income taxes | (12.0) | 138.5 | 99.0 | ||||||||||||||
Net Earnings | $ | 235.7 | $ | 487.1 | $ | 344.9 |
Years ended December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Net Sales | $ | 2,819.1 | $ | 2,529.5 | |||||||
Segment Earnings | 266.0 | 590.8 | |||||||||
Segment Margin | 9.4 | % | 23.4 | % |
Years ended December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Net Sales | $ | 965.8 | $ | 1,036.5 | |||||||
Segment Earnings | 96.3 | 91.4 | |||||||||
Segment Margin | 10.0 | % | 8.8 | % |
Years ended December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Cash provided by operating activities | $ | 391.4 | $ | 641.1 | |||||||
Cash provided by (used in) investing activities | 8.1 | (349.9) | |||||||||
Cash used in financing activities | (430.8) | (421.0) |
(dollars in millions) | Payments due by period | |||||||||||||||||||
Contractual Obligations | Total | Less Than 1 year | 1 - 2 Years | 3 - 5 Years | More than 5 years | |||||||||||||||
Long-term debt | $ | 284.0 | $ | 6.8 | $ | 177.6 | $ | 20.1 | $ | 79.5 | ||||||||||
Fixed rate interest | 26.0 | 3.7 | 6.8 | 5.7 | 9.8 | |||||||||||||||
Operating leases | 64.9 | 14.0 | 19.5 | 8.6 | 22.8 | |||||||||||||||
Purchase obligations | 145.9 | 145.8 | 0.1 | — | — | |||||||||||||||
Pension and post-retirement obligations | 49.3 | 9.8 | 2.2 | 2.0 | 35.3 | |||||||||||||||
Total | $ | 570.1 | $ | 180.1 | $ | 206.2 | $ | 36.4 | $ | 147.4 | ||||||||||
Twelve Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net Earnings (GAAP) | $ | 235.7 | $ | 487.1 | |||||||
Pension settlement expense, before tax | 417.3 | — | |||||||||
Pension expense (income), before tax | 11.7 | (13.1) | |||||||||
Legal judgment income, before tax | (11.5) | — | |||||||||
Terminated acquisition-related expenses, before tax | 4.3 | — | |||||||||
Tax effect on above items | (168.8) | 3.3 | |||||||||
Adjusted Earnings (non-GAAP) | $ | 488.7 | $ | 477.3 | |||||||
Diluted Earnings Per Share (GAAP)(1) | $ | 1.51 | $ | 3.02 | |||||||
Pension settlement expense per diluted share, before tax | 2.68 | — | |||||||||
Pension expense (income) per diluted share, before tax | 0.08 | (0.08) | |||||||||
Legal judgment income per diluted share, before tax | (0.07) | — | |||||||||
Terminated acquisition-related expenses per diluted share, before tax | 0.03 | — | |||||||||
Tax effect on above items per diluted share | (1.09) | 0.02 | |||||||||
Adjusted Earnings Per Share (non-GAAP)(1) | $ | 3.14 | $ | 2.96 |
Years ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Net Earnings (GAAP) | $ | 370.0 | $ | 444.2 | $ | 296.5 | ||||||
Restructuring and impairment expenses, before tax (1) | — | 6.7 | — | |||||||||
Tax effect of restructuring and impairment expenses | — | (1.7 | ) | — | ||||||||
U.S. Tax Reform income tax expense (2) | — | — | 81.8 | |||||||||
Adjusted Earnings | $ | 370.0 | $ | 449.2 | $ | 378.3 | ||||||
Diluted EPS (GAAP) | $ | 2.22 | $ | 2.58 | $ | 1.70 | ||||||
Restructuring and impairment expenses per diluted share (1) | $ | — | $ | 0.4 | $ | — | ||||||
Tax effect of restructuring and impairment expenses per diluted share | — | (0.1 | ) | — | ||||||||
U.S. Tax Reform income tax expense (2) | — | — | 0.47 | |||||||||
Adjusted EPS | $ | 2.22 | $ | 2.61 | $ | 2.17 | ||||||
Years ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Segment Earnings (GAAP) | ||||||||||||
North America | $ | 488.9 | $ | 464.1 | $ | 428.6 | ||||||
Rest of World | 40.2 | 149.3 | 149.3 | |||||||||
Total Segment Earnings (GAAP) | $ | 529.1 | $ | 613.4 | $ | 577.9 | ||||||
Adjustments | ||||||||||||
North America (1) | $ | — | $ | 6.7 | $ | — | ||||||
Rest of World | — | — | — | |||||||||
Total Adjustments | $ | — | $ | 6.7 | $ | — | ||||||
Adjusted Segment Earnings | ||||||||||||
North America | $ | 488.9 | $ | 470.8 | $ | 428.6 | ||||||
Rest of World | 40.2 | 149.3 | 149.3 | |||||||||
Total Adjusted Segment Earnings | $ | 529.1 | $ | 620.1 | $ | 577.9 | ||||||
Twelve Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Segment Earnings (GAAP) | |||||||||||
North America | $ | 266.0 | $ | 590.8 | |||||||
Rest of World | 96.3 | 91.4 | |||||||||
Inter-segment earnings elimination | (0.3) | (0.2) | |||||||||
Total Segment Earnings (GAAP) | $ | 362.0 | $ | 682.0 | |||||||
Adjustments: | |||||||||||
North America | $ | 345.0 | $ | (10.5) | |||||||
Rest of World | — | — | |||||||||
Inter-segment earnings elimination | — | — | |||||||||
Total Adjustments | $ | 345.0 | $ | (10.5) | |||||||
Adjusted Segment Earnings (non-GAAP) | |||||||||||
North America | $ | 611.0 | $ | 580.3 | |||||||
Rest of World | 96.3 | 91.4 | |||||||||
Inter-segment earnings elimination | (0.3) | (0.2) | |||||||||
Total Adjusted Segment Earnings (non-GAAP) | $ | 707.0 | $ | 671.5 | |||||||
Additional Information | |||||||||||
Adjustments: North America Segment | |||||||||||
Pension settlement expense, before tax | $ | 346.8 | $ | — | |||||||
Pension expense (income), before tax | 9.7 | (10.5) | |||||||||
Legal judgment income, before tax | (11.5) | — | |||||||||
Total Adjustments | $ | 345.0 | $ | (10.5) |
Twelve Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Corporate Expense (GAAP) | $ | (128.9) | $ | (52.1) | |||||||
Adjustments: | |||||||||||
Pension settlement expense, before tax | 70.5 | — | |||||||||
Corporate pension expense (income) | 2.0 | (2.6) | |||||||||
Terminated acquisition-related expenses | 4.3 | — | |||||||||
Corporate Expense (non-GAAP) | $ | (52.1) | $ | (54.7) |
Twelve Months Ended, December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash provided by operating activities (GAAP) | $ | 391.4 | $ | 641.1 | |||||||
Less: Capital expenditures | (70.3) | (75.1) | |||||||||
Free cash flow (non-GAAP) | $ | 321.1 | $ | 566.0 |
2023 Guidance | 2022 | |||||||||||||
Diluted EPS (GAAP) | $ 3.15-3.45 | $ | 1.51 | |||||||||||
Pension settlement expense | — | 1.60 | (1) | |||||||||||
Pension expense | — | 0.06 | (2) | |||||||||||
Legal judgment income | — | (0.05) | ||||||||||||
Terminated acquisition-related expenses | — | 0.02 | ||||||||||||
Adjusted EPS (non-GAAP) | $ 3.15-3.45 | $ | 3.14 |
Product Warranty Liability Valuation | ||||||||
Description of the Matter | At December 31, | |||||||
Auditing the product warranty liability was complex due to the judgmental nature of the warranty loss experience assumptions, including the estimated product failure rate and the estimated cost of product replacement. In particular, it is possible that future product failure rates may not be reflective of historical product failure rates, or that a product quality issue has not yet been identified as of the financial statement date. Additionally, the cost of product replacement could differ from estimates due to fluctuations in the replacement cost of the product. |
How We Addressed the Matter in our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s product warranty liability calculation. For example, we tested controls over management’s review of the product warranty liability calculation, including the significant assumptions and the data inputs to the calculation. To test the Company’s calculation of the product warranty liability, our audit procedures included, among others, evaluating the methodology used, and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We tested the validity and categorization of claims by product type and warranty period within the calculation and tested the completeness and accuracy of the claims | |||||||
December 31 (dollars in millions) | |||||||||||
2022 | 2021 | ||||||||||
Assets | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 391.2 | $ | 443.3 | |||||||
Marketable securities | 90.6 | 188.1 | |||||||||
Receivables | 581.2 | 634.4 | |||||||||
Inventories | 516.4 | 447.7 | |||||||||
Other current assets | 54.3 | 39.1 | |||||||||
Total Current Assets | 1,633.7 | 1,752.6 | |||||||||
Net property, plant and equipment | 590.7 | 606.7 | |||||||||
Goodwill | 619.7 | 627.8 | |||||||||
Other intangibles | 347.9 | 364.8 | |||||||||
Operating lease assets | 29.8 | 32.5 | |||||||||
Other assets | 110.5 | 90.0 | |||||||||
Total Assets | $ | 3,332.3 | $ | 3,474.4 | |||||||
Liabilities | |||||||||||
Current Liabilities | |||||||||||
Trade payables | $ | 625.8 | $ | 745.9 | |||||||
Accrued payroll and benefits | 75.7 | 113.4 | |||||||||
Accrued liabilities | 159.1 | 181.8 | |||||||||
Product warranties | 63.6 | 70.9 | |||||||||
Long-term debt due within one year | 10.0 | 6.8 | |||||||||
Total Current Liabilities | 934.2 | 1,118.8 | |||||||||
Long-term debt | 334.5 | 189.9 | |||||||||
Product warranties | 118.9 | 113.5 | |||||||||
Pension liabilities | 9.9 | 15.9 | |||||||||
Long-term operating lease liabilities | 22.4 | 22.3 | |||||||||
Other liabilities | 164.7 | 181.8 | |||||||||
Total Liabilities | 1,584.6 | 1,642.2 | |||||||||
Commitments and contingencies | — | — | |||||||||
Stockholders’ Equity | |||||||||||
Preferred Stock | — | — | |||||||||
Class A Common Stock (shares issued 26,035,656 and 26,104,441 as of December 31, 2022 and 2021, respectively) | 130.2 | 130.5 | |||||||||
Common Stock (shares issued 164,671,938 and 164,603,153 as of December 31, 2022 and 2021, respectively) | 164.7 | 164.7 | |||||||||
Capital in excess of par value | 555.9 | 545.2 | |||||||||
Retained earnings | 2,885.0 | 2,826.6 | |||||||||
Accumulated other comprehensive loss | (82.4) | (331.4) | |||||||||
Treasury stock at cost | (1,905.7) | (1,503.4) | |||||||||
Total Stockholders’ Equity | 1,747.7 | 1,832.2 | |||||||||
Total Liabilities and Stockholders’ Equity | $ | 3,332.3 | $ | 3,474.4 |
December 31 (dollars in millions) | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 374.0 | $ | 259.7 | ||||
Marketable securities | 177.4 | 385.3 | ||||||
Receivables | 589.5 | 647.3 | ||||||
Inventories | 303.0 | 304.7 | ||||||
Other current assets | 56.5 | 41.5 | ||||||
Total Current Assets | 1,500.4 | 1,638.5 | ||||||
Net property, plant and equipment | 545.4 | 540.0 | ||||||
Goodwill | 546.0 | 513.0 | ||||||
Other intangibles | 338.4 | 293.1 | ||||||
Operating lease assets | 46.9 | — | ||||||
Other assets | 80.9 | 86.9 | ||||||
Total Assets | $ | 3,058.0 | $ | 3,071.5 | ||||
Liabilities | ||||||||
Current Liabilities | ||||||||
Trade payables | $ | 509.6 | $ | 543.8 | ||||
Accrued payroll and benefits | 64.6 | 79.4 | ||||||
Accrued liabilities | 143.7 | 120.4 | ||||||
Product warranties | 41.8 | 41.7 | ||||||
Long-term debt due within one year | 6.8 | — | ||||||
Total Current Liabilities | 766.5 | 785.3 | ||||||
Long-term debt | 277.2 | 221.4 | ||||||
Product warranties | 92.4 | 97.7 | ||||||
Pension liabilities | 27.8 | 49.4 | ||||||
Long-term operating lease liabilities | 38.7 | — | ||||||
Other liabilities | 188.6 | 200.7 | ||||||
Total Liabilities | 1,391.2 | 1,354.5 | ||||||
Commitments and contingencies | — | — | ||||||
Stockholders’ Equity | ||||||||
Preferred Stock | — | — | ||||||
Class A Common Stock (shares issued 26,180,885 and 26,191,327) | 130.9 | 131.0 | ||||||
Common Stock (shares issued 164,526,709 and 164,516,267) | 164.5 | 164.5 | ||||||
Capital in excess of par value | 509.0 | 496.7 | ||||||
Retained earnings | 2,323.4 | 2,102.8 | ||||||
Accumulated other comprehensive loss | (348.3 | ) | (350.8 | ) | ||||
Treasury stock at cost | (1,112.7 | ) | (827.2 | ) | ||||
Total Stockholders’ Equity | 1,666.8 | 1,717.0 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 3,058.0 | $ | 3,071.5 | ||||
Years ended December 31 (dollars in millions, except per share amounts) | Years ended December 31 (dollars in millions, except per share amounts) | ||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||
Net sales | $ | 2,992.7 | $ | 3,187.9 | $ | 2,996.7 | Net sales | $ | 3,753.9 | $ | 3,538.9 | $ | 2,895.3 | ||||||||||||||||
Cost of products sold | 1,812.0 | 1,882.4 | 1,764.3 | Cost of products sold | 2,424.3 | 2,228.0 | 1,787.1 | ||||||||||||||||||||||
Gross profit | 1,180.7 | 1,305.5 | 1,232.4 | Gross profit | 1,329.6 | 1,310.9 | 1,108.2 | ||||||||||||||||||||||
Selling, general and administrative expenses | 715.6 | 753.8 | 722.8 | Selling, general and administrative expenses | 670.9 | 701.4 | 660.3 | ||||||||||||||||||||||
Restructuring and impairment expenses | — | 6.7 | — | ||||||||||||||||||||||||||
Severance and restructuring expenses | Severance and restructuring expenses | — | — | 7.7 | |||||||||||||||||||||||||
Interest expense | 11.0 | 8.4 | 10.1 | Interest expense | 9.4 | 4.3 | 7.3 | ||||||||||||||||||||||
Other income - net | (18.0 | ) | (21.2 | ) | (21.3 | ) | |||||||||||||||||||||||
Other expense (income), net | Other expense (income), net | 425.6 | (20.4) | (11.0) | |||||||||||||||||||||||||
Earnings before provision for income taxes | 472.1 | 557.8 | 520.8 | Earnings before provision for income taxes | 223.7 | 625.6 | 443.9 | ||||||||||||||||||||||
Provision for income taxes | 102.1 | 113.6 | 224.3 | ||||||||||||||||||||||||||
(Benefit from) provision for income taxes | (Benefit from) provision for income taxes | (12.0) | 138.5 | 99.0 | |||||||||||||||||||||||||
Net Earnings | $ | 370.0 | $ | 444.2 | $ | 296.5 | Net Earnings | $ | 235.7 | $ | 487.1 | $ | 344.9 | ||||||||||||||||
Net Earnings Per Share of Common Stock | $ | 2.24 | $ | 2.60 | $ | 1.72 | |||||||||||||||||||||||
Diluted Net Earnings Per Share of Common Stock | $ | 2.22 | $ | 2.58 | $ | 1.70 | |||||||||||||||||||||||
Net Earnings Per Share of Common Stock (1) | Net Earnings Per Share of Common Stock (1) | $ | 1.52 | $ | 3.05 | $ | 2.13 | ||||||||||||||||||||||
Diluted Net Earnings Per Share of Common Stock (1) | Diluted Net Earnings Per Share of Common Stock (1) | $ | 1.51 | $ | 3.02 | $ | 2.12 |
Years ended December 31 (dollars in millions) | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Net Earnings | $ | 235.7 | $ | 487.1 | $ | 344.9 | |||||||||||
Other comprehensive earnings (loss) | |||||||||||||||||
Foreign currency translation adjustments | (39.4) | 3.4 | 18.1 | ||||||||||||||
Unrealized net gain on cash flow derivative instruments, less related income tax provision of $(1.4) in 2022, $— in 2021 and $(0.1) in 2020 | 4.3 | — | 0.4 | ||||||||||||||
Change in pension liability less related income tax (provision) benefit of $(179.0) in 2022 $4.5 in 2021 and $(2.8) in 2020 | 284.1 | (13.6) | 8.6 | ||||||||||||||
Comprehensive Earnings | $ | 484.7 | $ | 476.9 | $ | 372.0 |
Years ended December 31 (dollars in millions) | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Net Earnings | $ | 370.0 | $ | 444.2 | $ | 296.5 | ||||||
Other comprehensive earnings (loss) | ||||||||||||
Foreign currency translation adjustments | (1.3 | ) | (38.4 | ) | 52.7 | |||||||
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of ($0.3) in 2019, ($0.1) in 2018 and $0.7 in 2017 | 0.9 | 0.2 | (1.1 | ) | ||||||||
Change in pension liability less related income tax (provision) benefit of $(1.0) in 2019, $4.3 in 2018 and $(7.5) in 2017 | 2.9 | (13.1 | ) | 12.1 | ||||||||
Comprehensive Earnings | $ | 372.5 | $ | 392.9 | $ | 360.2 | ||||||
Years ended December 31 (dollars in millions) | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Operating Activities | |||||||||||||||||
Net earnings | $ | 235.7 | $ | 487.1 | $ | 344.9 | |||||||||||
Adjustments to reconcile earnings to cash provided by (used in) operating activities: | |||||||||||||||||
Depreciation and amortization | 76.9 | 77.9 | 80.0 | ||||||||||||||
Stock based compensation expense | 11.1 | 11.9 | 12.7 | ||||||||||||||
Pension settlement expense | 417.3 | — | — | ||||||||||||||
Pension settlement non-cash taxes | (167.7) | — | — | ||||||||||||||
Net changes in operating assets and liabilities, net of acquisitions: | |||||||||||||||||
Current assets and liabilities | (194.1) | 90.8 | 130.4 | ||||||||||||||
Noncurrent assets and liabilities | 12.2 | (26.6) | (5.9) | ||||||||||||||
Cash Provided by Operating Activities | 391.4 | 641.1 | 562.1 | ||||||||||||||
Investing Activities | |||||||||||||||||
Acquisitions of businesses | (8.0) | (207.6) | — | ||||||||||||||
Investments in marketable securities | (91.6) | (185.4) | (157.4) | ||||||||||||||
Proceeds from sales of marketable securities | 178.0 | 118.2 | 226.0 | ||||||||||||||
Capital expenditures | (70.3) | (75.1) | (56.8) | ||||||||||||||
Cash Provided by (Used in) Investing Activities | 8.1 | (349.9) | 11.8 | ||||||||||||||
Financing Activities | |||||||||||||||||
Long-term debt incurred (repaid) | 150.6 | 83.5 | (170.8) | ||||||||||||||
Common stock repurchases | (403.5) | (366.5) | (56.7) | ||||||||||||||
Net (payments) proceeds from stock option activity | (0.7) | 32.1 | 11.4 | ||||||||||||||
Dividends paid | (177.2) | (170.1) | (158.7) | ||||||||||||||
Cash Used in Financing Activities | (430.8) | (421.0) | (374.8) | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (20.8) | — | — | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (52.1) | (129.8) | 199.1 | ||||||||||||||
Cash and cash equivalents-beginning of year | 443.3 | 573.1 | 374.0 | ||||||||||||||
Cash and Cash Equivalents-End of Year | $ | 391.2 | $ | 443.3 | $ | 573.1 |
Years ended December 31 (dollars in millions) | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating Activities | ||||||||||||
Net earnings | $ | 370.0 | $ | 444.2 | $ | 296.5 | ||||||
Adjustments to reconcile earnings to cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 78.3 | 71.9 | 70.1 | |||||||||
U.S. Tax Reform income tax expense | — | — | 81.8 | |||||||||
Stock based compensation expense | 13.3 | 10.1 | 9.9 | |||||||||
Net changes in operating assets and liabilities, net of acquisitions: | ||||||||||||
Current assets and liabilities | 32.6 | (40.0 | ) | (127.8 | ) | |||||||
Noncurrent assets and liabilities | (38.0 | ) | (37.3 | ) | (4.1 | ) | ||||||
Cash Provided by Operating Activities | 456.2 | 448.9 | 326.4 | |||||||||
Investing Activities | ||||||||||||
Acquisitions of businesses | (107.0 | ) | — | (43.1 | ) | |||||||
Investments in marketable securities | (272.7 | ) | (523.4 | ) | (583.5 | ) | ||||||
Proceeds from sales of marketable securities | 478.0 | 595.9 | 562.7 | |||||||||
Capital expenditures | (64.4 | ) | (85.2 | ) | (94.2 | ) | ||||||
Cash Provided by (Used in) Investing Activities | 33.9 | (12.7 | ) | (158.1 | ) | |||||||
Financing Activities | ||||||||||||
Long-term debt incurred (repaid) | 62.6 | (189.0 | ) | 86.5 | ||||||||
Common stock repurchases | (287.7 | ) | (202.6 | ) | (139.1 | ) | ||||||
Net (payments) proceeds from stock option activity | (0.5 | ) | 0.9 | (0.9 | ) | |||||||
Payment of contingent consideration | (1.0 | ) | (2.3 | ) | (1.7 | ) | ||||||
Dividends paid | (149.2 | ) | (130.1 | ) | (96.9 | ) | ||||||
Cash Used in Financing Activities | (375.8 | ) | (523.1 | ) | (152.1 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 114.3 | (86.9 | ) | 16.2 | ||||||||
Cash and cash equivalents-beginning of year | 259.7 | 346.6 | 330.4 | |||||||||
Cash and Cash Equivalents-End of Year | $ | 374.0 | $ | 259.7 | $ | 346.6 | ||||||
Years ended December 31 (dollars in millions) | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Class A Common Stock | |||||||||||||||||
Balance at the beginning of the year | $ | 130.5 | $ | 130.8 | $ | 130.9 | |||||||||||
Conversion of Class A Common Stock | (0.3) | (0.3) | (0.1) | ||||||||||||||
Balance at the end of the year | $ | 130.2 | $ | 130.5 | $ | 130.8 | |||||||||||
Common Stock | |||||||||||||||||
Balance at the beginning of the year | $ | 164.7 | $ | 164.6 | $ | 164.5 | |||||||||||
Conversion of Class A Common Stock | — | 0.1 | 0.1 | ||||||||||||||
Balance at the end of the year | $ | 164.7 | $ | 164.7 | $ | 164.6 | |||||||||||
Capital in Excess of Par Value | |||||||||||||||||
Balance at the beginning of the year | $ | 545.2 | $ | 520.4 | $ | 509.0 | |||||||||||
Conversion of Class A Common Stock | 0.3 | 0.3 | 0.1 | ||||||||||||||
Issuance of share units | (6.0) | (5.6) | (6.7) | ||||||||||||||
Vesting of share units | (3.0) | (2.2) | (1.8) | ||||||||||||||
Stock based compensation expense | 11.1 | 10.3 | 12.4 | ||||||||||||||
Exercises of stock options | 1.3 | 15.4 | 0.1 | ||||||||||||||
Stock incentives | 7.0 | 6.6 | 7.3 | ||||||||||||||
Balance at the end of the year | $ | 555.9 | $ | 545.2 | $ | 520.4 | |||||||||||
Retained Earnings | |||||||||||||||||
Balance at the beginning of the year | $ | 2,826.6 | $ | 2,509.6 | $ | 2,323.4 | |||||||||||
Net earnings | 235.7 | 487.1 | 344.9 | ||||||||||||||
Dividends on stock | (177.3) | (170.1) | (158.7) | ||||||||||||||
Balance at the end of the year | $ | 2,885.0 | $ | 2,826.6 | $ | 2,509.6 | |||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
Balance at the beginning of the year | $ | (331.4) | $ | (321.2) | $ | (348.3) | |||||||||||
Foreign currency translation adjustments | (39.4) | 3.4 | 18.1 | ||||||||||||||
Unrealized net gain on cash flow derivative instruments, less related income tax provision of $(1.4) in 2022 $— in 2021 and $(0.1) in 2020 | 4.3 | — | 0.4 | ||||||||||||||
Change in pension liability less related income tax (provision) benefit of $(179.0) in 2022, $4.5 in 2021 and $(2.8) in 2020 | 284.1 | (13.6) | 8.6 | ||||||||||||||
Balance at the end of the year | $ | (82.4) | $ | (331.4) | $ | (321.2) | |||||||||||
Treasury Stock | |||||||||||||||||
Balance at the beginning of the year | $ | (1,503.4) | $ | (1,155.9) | $ | (1,112.7) | |||||||||||
Exercise of stock options, net of 47,309, 34,679 and 35,467 shares surrendered as proceeds and to pay taxes in 2022, 2021 and 2020, respectively | (2.1) | 16.5 | 11.3 | ||||||||||||||
Stock incentives and directors’ compensation | 0.3 | 0.3 | 0.4 | ||||||||||||||
Shares repurchased | (403.5) | (366.5) | (56.7) | ||||||||||||||
Vesting of share units | 3.0 | 2.2 | 1.8 | ||||||||||||||
Balance at the end of the year | $ | (1,905.7) | $ | (1,503.4) | $ | (1,155.9) | |||||||||||
Total Stockholders’ Equity | $ | 1,747.7 | $ | 1,832.2 | $ | 1,848.3 |
Years ended December 31 (dollars in millions) | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Class A Common Stock | ||||||||||||
Balance at the beginning of the year | $ | 131.0 | $ | 131.2 | $ | 131.6 | ||||||
Conversion of Class A Common Stock | (0.1 | ) | (0.2 | ) | (0.4 | ) | ||||||
Balance at the end of the year | $ | 130.9 | $ | 131.0 | $ | 131.2 | ||||||
Common Stock | ||||||||||||
Balance at the beginning of the year | $ | 164.5 | $ | 164.5 | $ | 164.4 | ||||||
Conversion of Class A Common Stock | — | — | 0.1 | |||||||||
Balance at the end of the year | $ | 164.5 | $ | 164.5 | $ | 164.5 | ||||||
Capital in Excess of Par Value | ||||||||||||
Balance at the beginning of the year | $ | 496.7 | $ | 486.5 | $ | 477.6 | ||||||
Conversion of Class A Common Stock | 0.1 | 0.2 | 0.3 | |||||||||
Issuance of share units | (6.2 | ) | (6.0 | ) | (4.9 | ) | ||||||
Vesting of share units | (2.2 | ) | (2.4 | ) | (2.9 | ) | ||||||
Stock based compensation expense | 12.9 | 10.1 | 9.2 | |||||||||
Exercises of stock options | 0.7 | 1.4 | 1.4 | |||||||||
Stock incentives | 7.0 | 6.9 | 5.8 | |||||||||
Balance at the end of the year | $ | 509.0 | $ | 496.7 | $ | 486.5 | ||||||
Retained Earnings | ||||||||||||
Balance at the beginning of the year | $ | 2,102.8 | $ | 1,788.7 | $ | 1,589.1 | ||||||
Net earnings | 370.0 | 444.2 | 296.5 | |||||||||
Cash dividends on stock | (149.4 | ) | (130.1 | ) | (96.9 | ) | ||||||
Balance at the end of the year | $ | 2,323.4 | $ | 2,102.8 | $ | 1,788.7 | ||||||
Accumulated Other Comprehensive Loss | ||||||||||||
Balance at the beginning of the year | $ | (350.8 | ) | $ | (299.5 | ) | $ | (363.2 | ) | |||
Foreign currency translation adjustments | (1.3 | ) | (38.4 | ) | 52.7 | |||||||
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of ($0.3) in 2019, ($0.1) in 2018 and $0.7 in 2017 | 0.9 | 0.2 | (1.1 | ) | ||||||||
Change in pension liability less related income tax benefit (provision) of $(1.0) in 2019, $4.3 in 2018 and $(7.5) in 2017 | 2.9 | (13.1 | ) | 12.1 | ||||||||
Balance at the end of the year | $ | (348.3 | ) | $ | (350.8 | ) | $ | (299.5 | ) | |||
Treasury Stock | ||||||||||||
Balance at the beginning of the year | $ | (827.2 | ) | $ | (626.5 | ) | $ | (488.1 | ) | |||
Exercise of stock options, net of 87,918, 54,180 and 160,856 shares surrendered as proceeds and to pay taxes in 2019, 2018 and 2017, respectively | (0.2 | ) | (0.7 | ) | (2.4 | ) | ||||||
Stock incentives and directors’ compensation | 0.2 | 0.1 | 0.2 | |||||||||
Shares repurchased | (287.7 | ) | (202.6 | ) | (139.1 | ) | ||||||
Vesting of share units | 2.2 | 2.5 | 2.9 | |||||||||
Balance at the end of the year | $ | (1,112.7 | ) | $ | (827.2 | ) | $ | (626.5 | ) | |||
Total Stockholders’ Equity | $ | 1,666.8 | $ | 1,717.0 | $ | 1,644.9 | ||||||
Years ended December 31 (dollars in millions) | 2019 | 2018 | ||||||
Balance at beginning of year | $ | 139.4 | $ | 141.2 | ||||
Expense | 44.3 | 40.7 | ||||||
Claims settled | (49.4 | ) | (42.5 | ) | ||||
Balance at end of year | $ | 134.3 | $ | 139.4 | ||||
Years ended December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Balance at beginning of year | $ | 184.4 | $ | 142.3 | |||||||
Expense | 64.2 | 81.2 | |||||||||
Claims settled | (66.1) | (51.3) | |||||||||
Acquired obligations | — | 12.2 | |||||||||
Balance at end of year | $ | 182.5 | $ | 184.4 |
Fair Value Measurement Using | Balance Sheet Location | December 31, 2022 | December 31, 2021 | |||||||||||
Quoted prices in active markets for identical assets (Level 1) | Marketable Securities | $ | 90.6 | $ | 188.1 | |||||||||
Significant other observable inputs (Level 2) | Other current assets / Accrued liabilities | 6.5 | (0.7) |
Fair Value Measurement Using | December 31, 2019 | December 31, 2018 | ||||||
Quoted prices in active markets for identical assets (Level | $ | 177.4 | $ | 385.3 | ||||
Significant other observable inputs (Level 2) | 6.9 | 7.5 |
2019 | 2018 | 2017 | ||||||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 165,450,441 | 170,589,345 | 172,666,056 | |||||||||
Effect of dilutive stock options, restricted stock and share units | 1,260,456 | 1,604,695 | 1,939,133 | |||||||||
Denominator for diluted earnings per share | 166,710,897 | 172,194,040 | 174,605,189 | |||||||||
2022 | 2021 | 2020 | |||||||||||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 154,786,327 | 159,906,834 | 161,530,589 | ||||||||||||||
Effect of dilutive stock options, restricted stock and share units | 993,037 | 1,413,068 | 1,073,560 | ||||||||||||||
Denominator for diluted earnings per share | 155,779,364 | 161,319,902 | 162,604,149 |
Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||
North America | |||||||||||||||||
Water heaters and related parts(1) | $ | 2,325.1 | $ | 2,115.9 | $ | 1,753.9 | |||||||||||
Boilers and related parts | 272.0 | 212.1 | 187.2 | ||||||||||||||
Water treatment products | 222.0 | 201.5 | 177.2 | ||||||||||||||
Total North America | 2,819.1 | 2,529.5 | 2,118.3 | ||||||||||||||
Rest of World | |||||||||||||||||
China | $ | 839.1 | $ | 922.4 | $ | 701.0 | |||||||||||
All other Rest of World | 126.7 | 114.1 | 99.3 | ||||||||||||||
Total Rest of World | 965.8 | 1,036.5 | 800.3 | ||||||||||||||
Inter-segment sales | (31.0) | (27.1) | (23.3) | ||||||||||||||
Total Net Sales | $ | 3,753.9 | $ | 3,538.9 | $ | 2,895.3 |
Years ending December 31 (dollars in millions) | 2019 | 2018 | 2017 | |||||||||
North America | ||||||||||||
Water heaters and related parts | $ | 1,742.6 | $ | 1,757.0 | $ | 1,663.0 | ||||||
Boilers and related parts | 199.5 | 200.4 | 183.3 | |||||||||
Water treatment products (1) | 141.4 | 87.3 | 58.5 | |||||||||
Total North America | 2,083.5 | 2,044.7 | 1,904.8 | |||||||||
Rest of World | ||||||||||||
China | $ | 827.2 | $ | 1,070.4 | $ | 1,029.4 | ||||||
All other Rest of World | 108.6 | 103.2 | 86.9 | |||||||||
Total Rest of World | 935.8 | 1,173.6 | 1,116.3 | |||||||||
Inter-segment sales | (26.6 | ) | (30.4 | ) | (24.4 | ) | ||||||
Total Net Sales | $ | 2,992.7 | $ | 3,187.9 | $ | 2,996.7 | ||||||
April 8, 2019 (dollars in millions) | ||||
Current assets, net of cash acquired | $ | 9.7 | ||
Property, plant and equipment | 8.6 | |||
Intangible assets | 60.4 | |||
Goodwill | 31.0 | |||
Total assets acquired | 109.7 | |||
Current liabilities | (2.7 | ) | ||
Net assets acquired | $ | |||
October 19, 2021 (dollars in millions) | |||||
Current assets, net of cash acquired | $ | 60.1 | |||
Property, plant and equipment | 55.8 | ||||
Intangible assets | 53.8 | ||||
Goodwill | 77.6 | ||||
Total assets acquired | 247.3 | ||||
Current liabilities | (39.2) | ||||
Long Term liabilities | (9.5) | ||||
Net assets acquired | $ | 198.6 |
September 5, 2017 (dollars in millions) | ||||
Current assets, net of cash acquired | $ | 7.8 | ||
Property, plant and equipment | 6.9 | |||
Intangible assets | 12.8 | |||
Goodwill | 22.2 | |||
Total assets acquired | 49.7 | |||
Current liabilities | (5.6 | ) | ||
Long-term liabilities | (1.0 | ) | ||
Total liabilities assumed | (6.6 | ) | ||
Net assets acquired | $ | 43.1 | ||
(dollars in millions) | December 31, 2022 | December 31, 2021 | |||||||||
Liabilities | |||||||||||
Short term: Accrued liabilities | $ | 9.9 | $ | 11.7 | |||||||
Long term: Operating lease liabilities | 22.4 | 22.3 | |||||||||
Total operating lease liabilities | $ | 32.3 | $ | 34.0 | |||||||
Less: Rent incentives and deferrals | (2.5) | (1.5) | |||||||||
Assets | |||||||||||
Operating lease assets | $ | 29.8 | $ | 32.5 |
(dollars in millions) | ||||
December 31, 2019 | ||||
Liabilities | ||||
Short term: Accrued liabilities | $ | 12.0 | ||
Long term: Operating lease liabilities | 38.7 | |||
Total operating lease liabilities | $ | 50.7 | ||
Less: Rent incentives and deferrals | (3.8 | ) | ||
Assets | ||||
Operating lease assets | $ | 46.9 | ||
Lease Term and Discount Rate | December 31, | 2022 | ||||||
Weighted-average remaining lease term | ||||||||
Weighted-average discount rate | 3.21% |
(dollars in millions) | (dollars in millions) | ||||||||||||||||||||||
Lease Expense | Classification | Twelve months ended December 31, 2019 | Classification | Year ended December 31, 2022 | Year ended December 31, 2021 | ||||||||||||||||||
Operating lease expense | Cost of products sold | $ | 3.0 | Cost of products sold | $ | 4.3 | $ | 3.6 | |||||||||||||||
Selling, general and administrative expenses | 17.6 | Selling, general and administrative expenses | 15.8 | 16.8 |
(1)Includes short-term lease expense |
(dollars in millions) | ||||
December 31, 2019 | ||||
2020 | $ | 14.0 | ||
2021 | 10.5 | |||
2022 | 9.0 | |||
2023 | 4.9 | |||
2024 | 3.7 | |||
After 2024 | 22.8 | |||
Total lease payments | 64.9 | |||
Less: imputed interest | (14.2 | ) | ||
Present value of operating lease liabilities | $ | 50.7 | ||
(dollars in millions) | December 31, 2022 | ||||
2023 | $ | 10.6 | |||
2024 | 7.9 | ||||
2025 | 5.3 | ||||
2026 | 3.2 | ||||
2027 | 1.7 | ||||
After 2027 | 7.5 | ||||
Total lease payments | 36.2 | ||||
Less: Imputed interest | (3.9) | ||||
Present value of operating lease liabilities | $ | 32.3 |
(dollars in millions) | ||||||||||||||||
Severance Costs | Lease Exit Costs | Fixed Assets Impairment | Total | |||||||||||||
Balance at January 1, 2018 | $ | — | $ | — | $ | — | $ | — | ||||||||
Restructuring expense recognized | 4.0 | 2.1 | 0.6 | 6.7 | ||||||||||||
Cash payments and disposals | (3.8 | ) | (0.8 | ) | (0.6 | ) | (5.2 | ) | ||||||||
Balance at December 31, 2018 | 0.2 | 1.3 | — | 1.5 | ||||||||||||
Cash payments and disposals | (0.2 | ) | (0.8 | ) | — | (1.0 | ) | |||||||||
Balance at December 31, 2019 | $ | — | $ | 0.5 | $ | — | $ | 0.5 | ||||||||
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2017 | Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||||
Net change in current assets and liabilities, net of acquisitions: | Net change in current assets and liabilities, net of acquisitions: | ||||||||||||||||||||||||||||
Receivables | $ | 62.4 | $ | (54.6 | ) | $ | (75.8 | ) | Receivables | $ | 42.5 | $ | (25.5) | $ | 4.5 | ||||||||||||||
Inventories | 6.3 | (7.7 | ) | (37.5 | ) | Inventories | (82.8) | (109.5) | 2.9 | ||||||||||||||||||||
Other current assets | (4.8 | ) | 10.0 | (9.0 | ) | Other current assets | (9.1) | 4.9 | 4.7 | ||||||||||||||||||||
Trade payables | (35.4 | ) | 8.8 | (5.1 | ) | Trade payables | (89.4) | 142.9 | 85.6 | ||||||||||||||||||||
Accrued liabilities, including payroll and benefits | 14.2 | (3.5 | ) | 12.2 | Accrued liabilities, including payroll and benefits | (46.5) | 56.3 | 29.3 | |||||||||||||||||||||
Income taxes | (10.1 | ) | 7.0 | (12.6 | ) | Income taxes | (8.8) | 21.7 | 3.4 | ||||||||||||||||||||
$ | (194.1) | $ | 90.8 | $ | 130.4 | ||||||||||||||||||||||||
$ | 32.6 | $ | (40.0 | ) | $ | (127.8 | ) | ||||||||||||||||||||||
December 31 (dollars in millions) | 2019 | 2018 | ||||||
Finished products | $ | 136.8 | $ | 137.6 | ||||
Work in process | 21.7 | 23.3 | ||||||
Raw materials | 168.3 | 174.4 | ||||||
Inventories, at FIFO cost | 326.8 | 335.3 | ||||||
LIFO reserve | (23.8 | ) | (30.6 | ) | ||||
$ | 303.0 | $ | 304.7 | |||||
December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Finished products | $ | 174.4 | $ | 190.2 | |||||||
Work in process | 42.1 | 42.0 | |||||||||
Raw materials | 349.2 | 286.3 | |||||||||
Inventories, at FIFO cost | 565.7 | 518.5 | |||||||||
LIFO reserve | (49.3) | (70.8) | |||||||||
Inventories, at LIFO cost | $ | 516.4 | $ | 447.7 |
December 31 (dollars in millions) | 2019 | 2018 | December 31 (dollars in millions) | 2022 | 2021 | ||||||||||||||
Land | $ | 11.6 | $ | 11.2 | Land | $ | 28.5 | $ | 22.9 | ||||||||||
Buildings | 334.1 | 323.3 | Buildings | 373.2 | 377.0 | ||||||||||||||
Equipment | 686.9 | 643.8 | Equipment | 822.5 | 805.8 | ||||||||||||||
Software | 124.3 | 118.5 | Software | 140.6 | 137.5 | ||||||||||||||
1,364.8 | 1,343.2 | ||||||||||||||||||
1,156.9 | 1,096.8 | ||||||||||||||||||
Less accumulated depreciation and amortization | 611.5 | 556.8 | |||||||||||||||||
$ | 545.4 | $ | 540.0 | ||||||||||||||||
Accumulated depreciation and amortization | Accumulated depreciation and amortization | (774.1) | (736.5) | ||||||||||||||||
Net property, plant, and equipment | Net property, plant, and equipment | $ | 590.7 | $ | 606.7 |
(dollars in millions) | North America | Rest of World | Total | ||||||||||||||
Balance at December 31, 2020 | $ | 487.7 | $ | 59.1 | $ | 546.8 | |||||||||||
Currency translation adjustment | (1.3) | (0.2) | (1.5) | ||||||||||||||
Acquisitions | 82.5 | — | 82.5 | ||||||||||||||
Balance at December 31, 2021 | 568.9 | 58.9 | 627.8 | ||||||||||||||
Currency translation adjustment | (7.8) | (0.3) | (8.1) | ||||||||||||||
Balance at December 31, 2022 | $ | 561.1 | $ | 58.6 | $ | 619.7 |
(dollars in millions) | North America | Rest of World | Total | |||||||||
Balance at December 31, 2017 | $ | 457.2 | $ | 59.5 | $ | 516.7 | ||||||
Currency translation adjustment | (3.3 | ) | (0.4 | ) | (3.7 | ) | ||||||
Balance at December 31, 2018 | 453.9 | 59.1 | 513.0 | |||||||||
Acquisition | 31.0 | — | 31.0 | |||||||||
Currency translation adjustment | 2.0 | — | 2.0 | |||||||||
Balance at December 31, 2019 | $ | 486.9 | $ | 59.1 | $ | 546.0 | ||||||
2019 | 2018 | |||||||||||||||||||||||
December 31 (dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||||||||
Patents | $ | 3.7 | $ | (3.5 | ) | $ | 0.2 | $ | 3.7 | $ | (3.3 | ) | $ | 0.4 | ||||||||||
Customer lists | 278.0 | (123.6 | ) | 154.4 | 236.8 | (108.2 | ) | 128.6 | ||||||||||||||||
Total amortizable intangible assets | 281.7 | (127.1 | ) | 154.6 | 240.5 | (111.5 | ) | 129.0 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
Trade names | 183.8 | — | 183.8 | 164.1 | — | 164.1 | ||||||||||||||||||
Total intangible assets | $ | 465.5 | $ | (127.1 | ) | $ | 338.4 | $ | 404.6 | $ | (111.5 | ) | $ | 293.1 | ||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
December 31 (dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||||||||||||||||||||
Patents | $ | 3.7 | $ | (3.7) | $ | — | $ | 3.7 | $ | (3.7) | $ | — | |||||||||||||||||||||||
Customer lists | 288.6 | (164.0) | 124.6 | 288.3 | (150.8) | 137.5 | |||||||||||||||||||||||||||||
Total amortizable intangible assets | 292.3 | (167.7) | 124.6 | 292.0 | (154.5) | 137.5 | |||||||||||||||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||||||||||||
Trade names | 223.3 | — | 223.3 | 227.3 | — | 227.3 | |||||||||||||||||||||||||||||
Total intangible assets | $ | 515.6 | $ | (167.7) | $ | 347.9 | $ | 519.3 | $ | (154.5) | $ | 364.8 |
December 31 (dollars in millions) | 2022 | 2021 | |||||||||
Bank credit lines, average year-end interest rates of 5.0% for 2021 | $ | — | $ | 0.8 | |||||||
Revolving credit agreement borrowings, average year-end interest rates of 5.3% for 2022 and 1.1% for 2021 | 185.4 | 50.0 | |||||||||
Commercial paper, average year-end interest rate of 4.6% for 2022 | 22.6 | — | |||||||||
Term notes with insurance companies, expiring 2029-2034, average year-end interest rates of 3.1% for 2022 and 3.1% for 2021 | 136.5 | 145.9 | |||||||||
344.5 | 196.7 | ||||||||||
Long-term debt due within one year | (10.0) | (6.8) | |||||||||
Long-term debt | $ | 334.5 | $ | 189.9 |
December 31 (dollars in millions) | 2019 | 2018 | ||||||
Bank credit lines, average year-end interest rates of 2.4% for 2019 and 3.4% for 2018 | $ | 4.7 | $ | 17.1 | ||||
Revolving credit agreement borrowings, average year-end interest rates of 2.8% for 2019 and 3.5% for 2018 | 85.0 | 10.0 | ||||||
Commercial paper, average year-end interest rates of 2.2% for 2019 and 2.7% for 2018 | 74.3 | 74.3 | ||||||
Term notes with insurance companies, expiring 2029-2034, average year-end interest rates of 3.3% for 2019 and 3.3% for 2018 | 120.0 | 120.0 | ||||||
284.0 | 221.4 | |||||||
Less long-term debt due within one year | 6.8 | — | ||||||
Long-term debt | $ | 277.2 | $ | 221.4 | ||||
Years ending December 31 (dollars in millions) | Amount | |||
2020 | $ | 6.8 | ||
2021 | 170.8 | |||
2022 | 6.8 | |||
2023 | 10.0 | |||
2024 | 10.0 |
Years ending December 31 (dollars in millions) | Amount | ||||
2023 | $ | 10.0 | |||
2024 | 10.0 | ||||
2025 | 10.0 | ||||
2026 | 236.5 | ||||
2027 | 28.5 |
(dollars in millions) | Years ended December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Cumulative foreign currency translation | ||||||||||||||
Balance at beginning of period | $ | (44.7) | $ | (48.1) | ||||||||||
Other comprehensive (loss) gain before reclassifications | (39.4) | 3.4 | ||||||||||||
Balance at end of period | (84.1) | (44.7) | ||||||||||||
Unrealized net gain (loss) on cash flow derivatives | ||||||||||||||
Balance at beginning of period | 0.6 | 0.6 | ||||||||||||
Other comprehensive gain (loss) before reclassifications | 7.4 | (0.6) | ||||||||||||
Realized (gains) losses on derivatives reclassified to cost of products sold (net of tax provision (benefit) of $1.0 and $(0.2) in 2022 and 2021, respectively)(1) | (3.1) | 0.6 | ||||||||||||
Balance at end of period | 4.9 | 0.6 | ||||||||||||
Pension liability | ||||||||||||||
Balance at beginning of period | (287.3) | (273.7) | ||||||||||||
Other comprehensive gain (loss) before reclassifications | 19.8 | (28.6) | ||||||||||||
Amounts reclassified from accumulated other comprehensive loss(1) | 264.3 | 15.0 | ||||||||||||
Balance at end of period | (3.2) | (287.3) | ||||||||||||
Total accumulated other comprehensive loss, end of period | $ | (82.4) | $ | (331.4) |
Realized (gains) losses on derivatives reclassified to cost of products sold | $ | (4.1) | $ | 0.8 | |||||||||||||
Tax provision (benefit) | 1.0 | (0.2) | |||||||||||||||
Reclassification net of tax | $ | (3.1) | $ | 0.6 | |||||||||||||
Amortization of pension items: | |||||||||||||||||
Actuarial losses | $ | 437.2 | (2) | $ | 20.3 | (2) | |||||||||||
Prior year service cost | (0.4) | (2) | (0.4) | (2) | |||||||||||||
436.8 | 19.9 | ||||||||||||||||
Tax benefit | (172.5) | (4.9) | |||||||||||||||
Reclassification net of tax | $ | 264.3 | $ | 15.0 |
Years ended December 31, | ||||||||
2019 | 201 8 | |||||||
Cumulative foreign currency translation | ||||||||
Balance at beginning of period | $ | (64.9 | ) | $ | (26.5 | ) | ||
Other comprehensive gain (loss) before reclassifications | (1.3 | ) | (38.4 | ) | ||||
Balance at end of period | (66.2 | ) | (64.9 | ) | ||||
Unrealized net (loss) gain on cash flow derivatives | ||||||||
Balance at beginning of period | (0.7 | ) | (0.9 | ) | ||||
Other comprehensive (loss) gain before reclassifications | (0.3 | ) | 0.6 | |||||
Realized losses (gains) on derivatives reclassified to cost of products sold (net of tax (benefit) provision of ($0.5) and $0.2 in 2019 and 2018, respectively) (1) | 1.2 | (0.4 | ) | |||||
Balance at end of period | 0.2 | (0.7 | ) | |||||
Pension liability | ||||||||
Balance at beginning of period | (285.2 | ) | (272.1 | ) | ||||
Other comprehensive (loss) gain before reclassifications | (9.5 | ) | (27.0 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss (1) | 12.4 | 13.9 | ||||||
Balance at end of period | (282.3 | ) | (285.2 | ) | ||||
Total accumulated other comprehensive loss, end of period | $ | (348.3) | $ | (350.8) | ||||
Realized loss (gains) on derivatives reclassified to cost of products sold | 1.7 | (0.6 | ) | |||||
Tax (benefit) provision | (0.5 | ) | 0.2 | |||||
Reclassification net of tax | $ | 1.2 | $ | (0.4 | ) | |||
Amortization of pension items: | ||||||||
Actuarial losses | $ | 16.8 | (2) | $ | 19.0 | (2) | ||
Prior year service cost | (0.5 | ) (2) | (0.5 | ) (2) | ||||
16.3 | 18.5 | |||||||
Tax benefit | (3.9 | ) | (4.6 | ) | ||||
Reclassification net of tax | $ | 12.4 | $ | 13.9 | ||||
Years Ended December 31 | 2019 | 2018 | 2017 | Years Ended December 31 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Options | Weighted Avg. Per Share Exercise Price | Number of Options | Weighted Avg. Per Share Exercise Price | Number of Options | Weighted Avg. Per Share Exercise Price | Number of Options | Weighted Avg. Per Share Exercise Price | Number of Options | Weighted Avg. Per Share Exercise Price | Number of Options | Weighted Avg. Per Share Exercise Price | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares under options: | Number of shares under options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at beginning of year | 2,432,689 | 33.05 | 2,263,126 | 27.73 | 2,664,333 | 21.69 | Outstanding at beginning of year | 2,252,498 | $ | 47.73 | 2,785,654 | $ | 43.01 | 2,728,350 | $ | 37.64 | |||||||||||||||||||||||||||||||||||||||||||
Granted | 557,045 | 49.49 | 373,220 | 61.62 | 358,150 | 50.16 | Granted | 322,460 | 74.11 | 368,780 | 60.85 | 798,970 | 42.50 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercised (1) | (249,840 | ) | 18.55 | (176,302 | ) | 22.93 | (752,603 | ) | 16.93 | Exercised(1) | (66,697) | 39.77 | (889,345) | 38.35 | (662,215) | 19.59 | |||||||||||||||||||||||||||||||||||||||||||
Forfeited | (11,544 | ) | 54.02 | (27,355 | ) | 47.95 | (6,754 | ) | 37.46 | Forfeited | (26,655) | 61.46 | (12,591) | 49.18 | (79,451) | 48.98 | |||||||||||||||||||||||||||||||||||||||||||
Outstanding at end of year (2) | 2,728,350 | 37.64 | 2,432,689 | 33.05 | 2,263,126 | 27.73 | Outstanding at end of year(2) | 2,481,606 | 51.22 | 2,252,498 | 47.73 | 2,785,654 | 43.01 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercisable at end of year (3) | 1,820,743 | 30.07 | 1,665,184 | 24.52 | 1,387,259 | 20.48 | Exercisable at end of year(3) | 1,675,552 | 46.88 | 1,191,795 | 45.71 | 1,529,464 | 40.35 | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Options | Weighted Avg. Per Share Exercise Price | ||||||||||
Nonvested options at beginning of year | 1,060,703 | $ | 49.99 | ||||||||
Granted | 322,460 | 74.11 | |||||||||
Vested | (559,150) | 48.73 | |||||||||
Forfeited | (17,959) | 61.83 | |||||||||
Nonvested options at end of year | 806,054 | 60.26 |
Number of Options | Weighted Avg. Per Share Exercise Price | |||||||
Nonvested options at beginning of year | 767,505 | 51.55 | ||||||
Granted | 557,045 | 49.49 | ||||||
Vested | (408,648 | ) | 45.87 | |||||
Forfeited | (8,295 | ) | 53.88 | |||||
Nonvested options at end of year | 907,607 | 52.82 | ||||||
2022 | 2021 | 2020 | |||||||||||||||
Expected life (years) | 5.7 | 5.8 | 5.7 | ||||||||||||||
Risk-free interest rate | 1.9 | % | 1.2 | % | 1.5 | % | |||||||||||
Dividend yield | 1.5 | % | 1.6 | % | 2.1 | % | |||||||||||
Expected volatility | 26.8 | % | 27.4 | % | 23.7 | % |
2019 | 2018 | 2017 | ||||||||||
Expected life (years) | 5.5 | 5.7 | 5.7 | |||||||||
Risk-free interest rate | 2.7 | % | 2.9 | % | 2.4 | % | ||||||
Dividend yield | 1.6 | % | 1.0 | % | 1.0 | % | ||||||
Expected volatility | 22.8 | % | 22.1 | % | 26.5 | % |
Number of Units | Weighted-Average Grant Date Value | |||||||
Issued and unvested at January 1, 2019 | 379,601 | $ | 42.93 | |||||
Granted | 140,102 | 49.44 | ||||||
Vested | (147,642 | ) | 31.35 | |||||
Forfeited | (5,959 | ) | 55.48 | |||||
Issued and unvested at December 31, 2019 | 366,102 | 49.92 | ||||||
Number of Units | Weighted-Average Grant Date Value | ||||||||||
Issued and unvested at January 1, 2021 | 421,138 | $ | 47.28 | ||||||||
Granted | 94,731 | 73.40 | |||||||||
Vested | (126,631) | 49.49 | |||||||||
Forfeited | (9,319) | 56.28 | |||||||||
Issued and unvested at December 31, 2022 | 379,919 | 52.92 |
Pension Benefits | Post-retirement Benefits | |||||||||||||||
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Accumulated benefit obligation (ABO) at December 31 | $ | 868.7 | $ | 833.0 | N/A | N/A | ||||||||||
Change in projected benefit obligations (PBO) | ||||||||||||||||
PBO at beginning of year | $ | (833.8 | ) | $ | (922.7 | ) | $ | (7.0 | ) | $ | (7.6 | ) | ||||
Service cost | (1.6 | ) | (2.0 | ) | (0.1 | ) | (0.2 | ) | ||||||||
Interest cost | (31.6 | ) | (28.9 | ) | (0.3 | ) | (0.3 | ) | ||||||||
Participant contributions | — | — | (0.1 | ) | (0.1 | ) | ||||||||||
Actuarial (loss) gain including assumption changes | (98.6 | ) | 61.2 | (1.2 | ) | 0.6 | ||||||||||
Benefits paid | 96.3 | 58.6 | 0.7 | 0.6 | ||||||||||||
PBO at end of year | $ | (869.3 | ) | $ | (833.8 | ) | $ | (8.0 | ) | $ | (7.0 | ) | ||||
Change in fair value of plan assets | ||||||||||||||||
Plan assets at beginning of year | $ | 777.5 | $ | 874.8 | $ | — | $ | — | ||||||||
Actual return on plan assets | 143.4 | (39.3 | ) | — | — | |||||||||||
Contribution by the Company | 7.8 | 0.6 | 0.5 | 0.5 | ||||||||||||
Participant contributions | — | — | 0.1 | 0.1 | ||||||||||||
Benefits paid | (96.3 | ) | (58.6 | ) | (0.6 | ) | (0.6 | ) | ||||||||
Plan assets at end of year | $ | 832.4 | $ | 777.5 | $ | — | $ | — | ||||||||
Funded status | $ | (36.9 | ) | $ | (56.3 | ) | $ | (8.0 | ) | $ | (7.0 | ) | ||||
Amount recognized in the balance sheet | ||||||||||||||||
Current liabilities | $ | (9.3 | ) | $ | (7.1 | ) | $ | (0.5 | ) | $ | (0.5 | ) | ||||
Non-current liabilities | (27.6 | ) | (49.2 | ) | (7.5 | ) | (6.5 | ) | ||||||||
Net pension liability at end of year | $ | (36.9 | )* | $ | (56.3 | )* | $ | (8.0 | ) | $ | (7.0 | ) | ||||
Amounts recognized in accumulated other comprehensive loss before tax | ||||||||||||||||
Net actuarial loss (gain) | $ | 463.1 | $ | 468.9 | $ | (0.2 | ) | $ | (1.4 | ) | ||||||
Prior service cost | 0.5 | — | (1.8 | ) | (2.2 | ) | ||||||||||
Total recognized in accumulated other comprehensive loss | $ | 463.6 | $ | 468.9 | $ | (2.0 | ) | $ | (3.6 | ) | ||||||
Pension Benefits | Post-retirement Benefits | ||||||||||||||||||||||
Years ended December 31 (dollars in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Accumulated benefit obligation (ABO) at December 31 | $ | (27.7) | $ | (841.2) | N/A | N/A | |||||||||||||||||
Change in projected benefit obligations (PBO) | |||||||||||||||||||||||
PBO at beginning of year | $ | (842.1) | $ | (869.8) | $ | (2.2) | $ | (5.9) | |||||||||||||||
Service cost | (1.4) | (1.6) | — | — | |||||||||||||||||||
Interest cost | (14.5) | (14.5) | (0.1) | (0.1) | |||||||||||||||||||
Participant contributions | — | — | (0.1) | (0.1) | |||||||||||||||||||
Plan amendments | — | — | — | — | |||||||||||||||||||
Actuarial gain (loss) including assumption changes | 147.6 | (9.0) | (0.2) | 0.6 | |||||||||||||||||||
Benefits paid | 219.3 | 52.8 | 0.9 | 3.3 | |||||||||||||||||||
Transfer to insurer | 462.8 | — | — | — | |||||||||||||||||||
PBO at end of year | $ | (28.3) | $ | (842.1) | $ | (1.7) | $ | (2.2) | |||||||||||||||
Change in fair value of plan assets | |||||||||||||||||||||||
Plan assets at beginning of year | $ | 825.9 | $ | 858.8 | $ | — | $ | — | |||||||||||||||
Actual return on plan assets | (99.1) | 18.9 | — | — | |||||||||||||||||||
Contribution by the Company | 0.5 | 1.0 | 0.8 | 3.2 | |||||||||||||||||||
Participant contributions | — | — | 0.1 | 0.1 | |||||||||||||||||||
Benefits paid | (219.3) | (52.8) | (0.9) | (3.3) | |||||||||||||||||||
Transfer to insurer | (462.8) | — | — | — | |||||||||||||||||||
Plan assets at end of year | $ | 45.2 | $ | 825.9 | $ | — | $ | — | |||||||||||||||
Funded status | $ | 16.9 | $ | (16.2) | $ | (1.7) | $ | (2.2) | |||||||||||||||
Amount recognized in the balance sheet | |||||||||||||||||||||||
Noncurrent assets | $ | 27.1 | $ | — | $ | — | $ | — | |||||||||||||||
Current liabilities | (0.5) | (0.5) | (0.2) | (0.2) | |||||||||||||||||||
Non-current liabilities | (9.7) | (15.7) | (1.5) | (2.0) | |||||||||||||||||||
Net pension asset (liability) at end of year | $ | 16.9 | * | $ | (16.2) | * | $ | (1.7) | $ | (2.2) | |||||||||||||
Amounts recognized in accumulated other comprehensive loss before tax | |||||||||||||||||||||||
Net actuarial loss | $ | 5.2 | $ | 469.7 | $ | 0.2 | $ | �� | |||||||||||||||
Prior service cost | 2.1 | 1.4 | (2.3) | (2.8) | |||||||||||||||||||
Total recognized in accumulated other comprehensive loss | $ | 7.3 | $ | 471.1 | $ | (2.1) | $ | (2.8) |
Pension Benefits | Post-retirement Benefits | |||||||||||||||||||||||
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Net periodic benefit cost | ||||||||||||||||||||||||
Service cost | $ | 1.6 | $ | 2.0 | $ | 1.8 | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||||||||
Interest cost | 31.6 | 28.9 | 30.0 | 0.3 | 0.3 | 0.3 | ||||||||||||||||||
Expected return on plan assets | (57.3 | ) | (58.1 | ) | (58.4 | ) | — | — | — | |||||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||
Net actuarial loss (gain) | 16.8 | 19.0 | 17.9 | — | — | (0.1 | ) | |||||||||||||||||
Prior service cost | (0.5 | ) | (0.5 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | ||||||||||||
Defined-benefit plan income | (7.8 | ) | (8.7 | ) | (9.1 | ) | $ | — | $ | — | $ | (0.1 | ) | |||||||||||
Curtailment and other one-time charges | 1.6 | — | — | |||||||||||||||||||||
Various U.S. defined contribution plans cost | 13.3 | 12.2 | 12.0 | |||||||||||||||||||||
$ | 7.1 | $ | 3.5 | $ | 2.9 | |||||||||||||||||||
Other changes in plan assets and projected benefit obligation recognized in other comprehensive | ||||||||||||||||||||||||
Net actuarial loss (gain) | $ | 12.6 | $ | 36.1 | $ | (3.8 | ) | $ | 1.2 | $ | (0.6 | ) | $ | 1.1 | ||||||||||
Amortization of net actuarial (loss) gain | (18.4 | ) | (19.0 | ) | (17.9 | ) | — | — | 0.1 | |||||||||||||||
Amortization of prior service cost | 0.5 | 0.5 | 0.5 | 0.4 | 0.4 | 0.4 | ||||||||||||||||||
Total recognized in other comprehensive loss | (5.3 | ) | 17.6 | (21.2 | ) | 1.6 | (0.2 | ) | 1.6 | |||||||||||||||
Total recognized in net periodic (benefit) cost and other comprehensive loss | $ | (11.5 | ) | $ | 8.9 | $ | (30.3 | ) | $ | 1.6 | $ | (0.2 | ) | $ | 1.5 | |||||||||
Pension Benefits | Post-retirement Benefits | ||||||||||||||||||||||||||||||||||
Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||
Net periodic cost (benefit) | |||||||||||||||||||||||||||||||||||
Service cost | $ | 1.4 | $ | 1.6 | $ | 1.5 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Interest cost | 14.5 | 14.5 | 23.0 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||||||
Expected return on plan assets | (21.5) | (48.0) | (51.9) | — | — | — | |||||||||||||||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||||||||||||||
Net actuarial loss | 19.9 | 20.3 | 20.2 | — | — | — | |||||||||||||||||||||||||||||
Prior service cost | (0.4) | (0.4) | (0.4) | (0.5) | (0.5) | (0.5) | |||||||||||||||||||||||||||||
Defined-benefit plan income | 13.9 | (12.0) | (7.6) | (0.4) | (0.4) | $ | (0.4) | ||||||||||||||||||||||||||||
Settlements, curtailments and other one-time charges | 417.3 | — | 2.5 | — | — | (0.5) | |||||||||||||||||||||||||||||
Various U.S. defined contribution plans cost | 15.3 | 14.6 | 14.4 | — | — | — | |||||||||||||||||||||||||||||
$ | 446.5 | $ | 2.6 | $ | 9.3 | $ | (0.4) | $ | (0.4) | $ | (0.9) | ||||||||||||||||||||||||
Other changes in plan assets and projected benefit obligation recognized in other comprehensive loss | |||||||||||||||||||||||||||||||||||
Net actuarial (gain) loss | $ | (27.0) | $ | 38.1 | $ | 11.7 | $ | 0.2 | $ | (0.6) | $ | 0.8 | |||||||||||||||||||||||
Amortization of net actuarial loss | (19.9) | (20.3) | (22.8) | — | — | — | |||||||||||||||||||||||||||||
Settlement loss | (417.3) | — | — | — | — | — | |||||||||||||||||||||||||||||
Prior service credit | — | — | — | — | ��� | (2.0) | |||||||||||||||||||||||||||||
Amortization of prior service cost | 0.4 | 0.4 | 0.4 | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||||||||||
Total recognized in other comprehensive loss | (463.8) | 18.2 | (10.7) | 0.7 | (0.1) | (0.7) | |||||||||||||||||||||||||||||
Total recognized in net periodic (benefit) cost and other comprehensive loss | $ | (32.6) | $ | 6.2 | $ | (15.8) | $ | 0.3 | $ | (0.5) | $ | (1.6) |
Pension Benefits | Post-retirement Benefits | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Discount rate | 5.13 | % | 2.72 | % | 5.02 | % | 2.43 | % |
Pension Benefits | Post-retirement Benefits | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Discount rate | 3.18 | % | 4.32 | % | 3.40 | % | 4.46 | % |
Pension Benefits | Post-retirement Benefits | ||||||||||||||||||||||||||||||||||
Years ended December 31 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||
Discount rate | 2.80 | % | 2.47 | % | 3.18 | % | 2.44 | % | 2.05 | % | 2.95 | % | |||||||||||||||||||||||
Expected long-term return on plan assets | 3.12 | % | 6.25 | % | 6.75 | % | N/A | N/A | N/A | ||||||||||||||||||||||||||
Rate of compensation increase | 4.00 | % | 4.00 | % | 4.00 | % | N/A | 4.00 | % | 4.00 | % |
Pension Benefits | Post-retirement Benefits | |||||||||||||||||||||||
Years ended December 31 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Discount rate | 4.32 | % | 3.65 | % | 4.15 | % | 4.45 | % | 3.79 | % | 4.40 | % | ||||||||||||
Expected long-term return on plan assets | 7.15 | % | 7.15 | % | 7.50 | % | n/a | n/a | n/a | |||||||||||||||
Rate of compensation increase | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % |
2019 | 2018 | |||||||
Health care cost trend rate assumed for next year | 7.70 | % | 6.00 | % | ||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00 | % | 5.00 | % | ||||
Year that the rate reaches the ultimate trend rate | 2029 | 2021 |
2022 (1) | 2021 | ||||||||||
Health care cost trend rate assumed for next year | N/A | 7.00 | % | ||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | N/A | 5.00 | % | ||||||||
Year that the rate reaches the ultimate trend rate | N/A | 2029 |
Asset Category | 2022 | 2021 | |||||||||
Equity securities | 8 | % | 1 | % | |||||||
Debt securities | 27 | 75 | |||||||||
Private equity | 5 | 1 | |||||||||
Cash | 60 | 23 | |||||||||
100 | % | 100 | % |
Asset Category | 2019 | 2018 | ||||||
Equity securities | 42 | % | 40 | % | ||||
Debt securities | 47 | 48 | ||||||
Real estate | 10 | 10 | ||||||
Private equity | 1 | 2 | ||||||
100 | % | 100 | % | |||||
December 31, 2019 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Asset Category | Total | Quoted Prices in Active Markets for Identical Contracts (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Non- observable Inputs (Level 3) | Asset Category | Total | Quoted Prices in Active Markets for Identical Contracts (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Non- observable Inputs (Level 3) | ||||||||||||||||||||||||||||||
Short-term investments | $ | 14.6 | $ | 2.8 | $ | 11.8 | $ | — | Short-term investments | $ | 26.9 | $ | 26.9 | $ | — | $ | — | ||||||||||||||||||||||
Equity securities | Equity securities | ||||||||||||||||||||||||||||||||||||||
Common stocks | 127.0 | 127.0 | — | — | Common stocks | 3.7 | 3.7 | — | — | ||||||||||||||||||||||||||||||
Commingled equity funds | 113.4 | — | 113.4 | — | |||||||||||||||||||||||||||||||||||
Fixed income securities | Fixed income securities | ||||||||||||||||||||||||||||||||||||||
U.S. treasury securities | 49.8 | 49.8 | — | — | |||||||||||||||||||||||||||||||||||
U.S. Treasury securities | U.S. Treasury securities | 8.6 | 8.6 | — | — | ||||||||||||||||||||||||||||||||||
Other fixed income securities | 225.1 | — | 225.1 | — | Other fixed income securities | 2.7 | — | 2.7 | — | ||||||||||||||||||||||||||||||
Commingled fixed income funds | 114.0 | — | 114.0 | — | |||||||||||||||||||||||||||||||||||
Options | (10.8 | ) | — | (10.8 | ) | — | |||||||||||||||||||||||||||||||||
Other types of investments | Other types of investments | ||||||||||||||||||||||||||||||||||||||
Mutual funds | 104.9 | — | 104.9 | — | Mutual funds | 0.8 | — | 0.8 | — | ||||||||||||||||||||||||||||||
Real estate funds | 82.3 | — | — | 82.3 | |||||||||||||||||||||||||||||||||||
Private equity | 8.6 | — | — | 8.6 | Private equity | 2.2 | — | — | 2.2 | ||||||||||||||||||||||||||||||
Total fair value of plan asset investments | $ | 828.9 | $ | 179.6 | $ | 558.4 | $ | 90.9 | Total fair value of plan asset investments | $ | 44.9 | $ | 39.2 | $ | 3.5 | $ | 2.2 | ||||||||||||||||||||||
Non-investment plan assets | 3.4 | Non-investment plan assets | 0.3 | ||||||||||||||||||||||||||||||||||||
Total plan assets | $ | 832.3 | Total plan assets | $ | 45.2 | ||||||||||||||||||||||||||||||||||
December 31, 2018 | ||||||||||||||||
Asset Category | Total | Quoted Prices in Active Markets for Identical Contracts (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Non- observable Inputs (Level 3) | ||||||||||||
Short-term investments | $ | 14.4 | $ | — | $ | 14.4 | $ | — | ||||||||
Equity securities | ||||||||||||||||
Common stocks | 125.6 | 125.6 | — | — | ||||||||||||
Commingled equity funds | 104.3 | — | 104.3 | — | ||||||||||||
Fixed income securities | ||||||||||||||||
U.S. treasury securities | 86.0 | 86.0 | — | — | ||||||||||||
Other fixed income securities | 185.8 | — | 185.8 | — | ||||||||||||
Commingled fixed income funds | 92.0 | — | 92.0 | — | ||||||||||||
Other types of investments | ||||||||||||||||
Mutual funds | 73.6 | — | 73.6 | — | ||||||||||||
Real estate funds | 80.4 | — | — | 80.4 | ||||||||||||
Private equity | 13.2 | — | — | 13.2 | ||||||||||||
Total fair value of plan asset investments | $ | 775.3 | $ | 211.6 | $ | 470.1 | $ | 93.6 | ||||||||
Non-investment plan assets | 2.2 | |||||||||||||||
Total plan assets | $ | 777.5 | ||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Asset Category | Total | Quoted Prices in Active Markets for Identical Contracts (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Non- observable Inputs (Level 3) | |||||||||||||||||||
Short-term investments | $ | 182.9 | $ | 182.9 | $ | — | $ | — | |||||||||||||||
Equity securities | |||||||||||||||||||||||
Common stocks | 3.7 | 3.7 | — | — | |||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||
U.S. Treasury securities | 52.8 | 52.8 | — | — | |||||||||||||||||||
Other fixed income securities | 551.2 | — | 551.2 | — | |||||||||||||||||||
Other types of investments | |||||||||||||||||||||||
Mutual funds | 26.7 | — | 26.7 | — | |||||||||||||||||||
Private equity | 5.1 | — | — | 5.1 | |||||||||||||||||||
Total fair value of plan asset investments | $ | 822.4 | $ | 239.4 | $ | 577.9 | $ | 5.1 | |||||||||||||||
Non-investment plan assets | 3.5 | ||||||||||||||||||||||
Total plan assets | $ | 825.9 |
Real estate funds | Private equity | Total | ||||||||||
Balance at December 31, 2017 | $ | 77.8 | $ | 20.9 | $ | 98.7 | ||||||
Actual return (loss) on plan assets: | ||||||||||||
Relating to assets still held at the reporting date | 2.6 | (0.3 | ) | 2.3 | ||||||||
Relating to assets sold during the period | — | (0.8 | ) | (0.8 | ) | |||||||
Purchases, sales and settlements | — | (6.6 | ) | (6.6 | ) | |||||||
Balance at December 31, 2018 | 80.4 | 13.2 | 93.6 | |||||||||
Actual return (loss) on plan assets: | ||||||||||||
Relating to assets still held at the reporting date | 1.9 | — | 1.9 | |||||||||
Relating to assets sold during the period | — | (1.4 | ) | (1.4 | ) | |||||||
Purchases, sales and settlements | — | (3.2 | ) | (3.2 | ) | |||||||
Balance at December 31, 2019 | $ | 82.3 | $ | 8.6 | $ | 90.9 | ||||||
Real estate funds | Private equity | Total | |||||||||||||||
Balance at December 31, 2020 | $ | 79.8 | $ | 4.9 | $ | 84.7 | |||||||||||
Actual (loss) return on plan assets: | |||||||||||||||||
Relating to assets still held at the reporting date | — | 3.8 | 3.8 | ||||||||||||||
Relating to assets sold during the period | 8.3 | (3.1) | 5.2 | ||||||||||||||
Purchases, sales and settlements | (88.1) | (0.5) | (88.6) | ||||||||||||||
Balance at December 31, 2021 | — | 5.1 | 5.1 | ||||||||||||||
Actual return (loss) on plan assets: | |||||||||||||||||
Relating to assets still held at the reporting date | — | (2.8) | (2.8) | ||||||||||||||
Relating to assets sold during the period | — | (0.2) | (0.2) | ||||||||||||||
Purchases, sales and settlements | — | 0.1 | 0.1 | ||||||||||||||
Balance at December 31, 2022 | $ | — | $ | 2.2 | $ | 2.2 |
Years ending December 31 (dollars in millions) | Pension Benefits | Post-retirement Benefits | ||||||
2020 | $ | 66.8 | $ | 0.5 | ||||
2021 | 57.7 | 0.5 | ||||||
2022 | 57.1 | 0.5 | ||||||
2023 | 56.2 | 0.5 | ||||||
2024 | 55.4 | 0.5 | ||||||
2025 – 2029 | 270.9 | 2.3 |
Years ended December 31 (dollars in millions) | Pension Benefits | Post-retirement Benefits | |||||||||
2023 | $ | 4.9 | $ | 0.2 | |||||||
2024 | 0.7 | 0.2 | |||||||||
2025 | 0.8 | 0.2 | |||||||||
2026 | 0.9 | 0.2 | |||||||||
2027 | 5.1 | 0.2 | |||||||||
2028 – 2032 | 9.2 | 0.7 |
December 31 (dollars in millions) | 2019 | 2018 | December 31 (dollars in millions) | 2022 | 2021 | ||||||||||||||||||||||||||||||||||
Buy | Sell | Buy | Sell | Buy | Sell | Buy | Sell | ||||||||||||||||||||||||||||||||
British pound | $ | — | $ | 1.3 | $ | — | $ | 1.0 | British pound | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Canadian dollar | — | 49.7 | — | — | Canadian dollar | — | 76.8 | — | 113.4 | ||||||||||||||||||||||||||||||
Euro | 36.0 | — | 32.0 | — | Euro | 30.2 | — | 24.2 | — | ||||||||||||||||||||||||||||||
Mexican peso | 18.6 | — | 27.8 | — | Mexican peso | 15.7 | — | 23.8 | — | ||||||||||||||||||||||||||||||
Total | $ | 54.6 | $ | 51.0 | $ | 59.8 | $ | 1.0 | Total | $ | 45.9 | $ | 76.8 | $ | 48.0 | $ | 113.4 | ||||||||||||||||||||||
December 31 (dollars in millions) | Balance Sheet Location | 2022 | 2021 | ||||||||||||||
Foreign currency contracts | Other current assets | $ | 6.4 | $ | 1.7 | ||||||||||||
Accrued liabilities | — | (1.6) | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 6.4 | $ | 0.1 |
Fair Value | ||||||||||
December 31 (dollars in millions) | Balance Sheet Location | 2019 | 2018 | |||||||
Foreign currency contracts | Other current assets | $ | 8.4 | $ | 3.9 | |||||
Other non-current assets | — | 5.1 | ||||||||
Accrued liabilities | (1.5 | ) | (0.6 | ) | ||||||
Commodities contracts | Accrued liabilities | — | (0.9 | ) | ||||||
Total derivatives designated as hedging instruments | $ | $ | ||||||||
Derivatives in ASC 815 cash flow hedging relationships | Amount of gain (loss) recognized in other comprehensive loss on derivatives | Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings | Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings | ||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||
Foreign currency contracts | $ | 9.8 | $ | (0.8) | Cost of products sold | $ | 4.1 | $ | (0.8) | ||||||||||||||||||||
December 31 (dollars in millions) | 2022 | 2021 | |||||||||||||||||||||
Buy | Sell | Buy | Sell | ||||||||||||||||||||
Canadian dollar | $ | — | $ | 81.5 | $ | — | $ | 125.6 | |||||||||||||||
Derivatives in ASC 815 cash flow hedging relationships | Amount of gain (loss) recognized in other comprehensive loss on derivative s | Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings | Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Foreign currency contracts | $ | 0.2 | $ | 1.8 | Cost of products sold | $ | (0.2 | ) | $ | 0.3 | ||||||||||
Commodities contracts | (0.5 | ) | (1.1 | ) | Cost of products sold | (1.5 | ) | 0.3 | ||||||||||||
$ | (0.3 | ) | $ | 0.7 | $ | (1.7 | ) | $ | 0.6 | |||||||||||
Derivatives not designated as hedging instruments: | Location of gain within the consolidated statements of earnings | 2022 | 2021 | 2020 | |||||||||||||||||||
Foreign exchange contracts | Other expense (income) - net | $ | 1.2 | $ | (0.9) | $ | — |
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2017 | Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||||
Current: | Current: | ||||||||||||||||||||||||||||
Federal | $ | 66.4 | $ | 60.1 | $ | 148.0 | Federal | $ | 101.8 | $ | 92.2 | $ | 67.1 | ||||||||||||||||
State | 14.8 | 15.6 | 9.4 | State | 26.6 | 22.4 | 17.4 | ||||||||||||||||||||||
International | 19.9 | 38.6 | 43.8 | International | 30.5 | 29.5 | 25.8 | ||||||||||||||||||||||
Deferred: | Deferred: | ||||||||||||||||||||||||||||
Federal | 0.4 | (1.7 | ) | 23.5 | Federal | (136.9) | (3.2) | 5.6 | |||||||||||||||||||||
State | 1.8 | 1.5 | 5.8 | State | (34.1) | (0.6) | 2.3 | ||||||||||||||||||||||
International | (1.2 | ) | (0.5 | ) | (6.2 | ) | International | 0.1 | (1.8) | (19.2) | |||||||||||||||||||
$ | (12.0) | $ | 138.5 | $ | 99.0 | ||||||||||||||||||||||||
$ | 102.1 | $ | 113.6 | $ | 224.3 | ||||||||||||||||||||||||
Years ended December 31 | 2019 | 2018 | 2017 | Years ended December 31 | 2022 | 2021 | 2020 | ||||||||||||||||||||||
Provision at U.S. federal statutory rate | 21.0 | % | 21.0 | % | 35.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||||||||
State taxes, net of federal benefit | 2.8 | 2.4 | 1.9 | 2.7 | 2.8 | 3.5 | |||||||||||||||||||||||
U.S pension plan settlement expense(1) | U.S pension plan settlement expense(1) | (29.5) | — | — | |||||||||||||||||||||||||
International income tax rate differential—China | (1.3 | ) | (2.3 | ) | (6.5 | ) | International income tax rate differential—China | (4.6) | (1.6) | (0.6) | |||||||||||||||||||
International income tax rate differential—other | 0.4 | 1.1 | 0.1 | International income tax rate differential—other | 3.5 | 0.7 | 0.2 | ||||||||||||||||||||||
U.S. manufacturing credit | — | — | (1.4 | ) | |||||||||||||||||||||||||
Research tax credits | (0.4 | ) | (0.5 | ) | (0.3 | ) | Research tax credits | (1.0) | (0.4) | (0.5) | |||||||||||||||||||
Excess tax benefit on stock compensation | (0.5 | ) | (0.4 | ) | (2.2 | ) | Excess tax benefit on stock compensation | (0.5) | (0.9) | (0.9) | |||||||||||||||||||
Other | (0.4 | ) | (0.9 | ) | 0.8 | Other | 3.0 | 0.5 | (0.4) | ||||||||||||||||||||
(5.4) | % | 22.1 | % | 22.3 | % | ||||||||||||||||||||||||
21.6 | % | 20.4 | % | 27.4 | % | ||||||||||||||||||||||||
U.S. Tax Cuts & Jobs Act (U.S. Tax Reform) | — | — | 15.7 | ||||||||||||||||||||||||||
21.6 | % | 20.4 | % | 43.1 | % |
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2017 | Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||||
U.S. | $ | 400.3 | $ | 376.0 | $ | 329.9 | U.S. | $ | 63.9 | $ | 479.0 | $ | 407.3 | ||||||||||||||||
International | 71.8 | 181.8 | 190.9 | International | 159.8 | 146.6 | 36.6 | ||||||||||||||||||||||
$ | 223.7 | $ | 625.6 | $ | 443.9 | ||||||||||||||||||||||||
$ | 472.1 | $ | 557.8 | $ | 520.8 | ||||||||||||||||||||||||
December 31 (dollars in millions) | 2022 | 2021 | |||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
Employee benefits | $ | 13.9 | $ | — | $ | 22.6 | $ | — | |||||||||||||||
Product liability and warranties | 50.7 | — | 52.3 | — | |||||||||||||||||||
Inventories | 1.4 | — | 7.6 | — | |||||||||||||||||||
Accounts receivable | 14.6 | — | 18.3 | — | |||||||||||||||||||
Property, plant and equipment | — | 51.5 | — | 46.6 | |||||||||||||||||||
Intangibles | — | 66.2 | — | 85.2 | |||||||||||||||||||
Environmental liabilities | 1.6 | — | 1.7 | — | |||||||||||||||||||
Undistributed foreign earnings | — | 5.3 | — | 6.5 | |||||||||||||||||||
Tax loss and credit carryovers | 10.1 | — | 8.9 | — | |||||||||||||||||||
All other | 14.0 | — | 12.9 | — | |||||||||||||||||||
Valuation allowance | (8.3) | — | (7.1) | — | |||||||||||||||||||
$ | 98.0 | $ | 123.0 | $ | 117.2 | $ | 138.3 | ||||||||||||||||
Net liability | $ | 25.0 | $ | 21.1 |
December 31 (dollars in millions) | ||||||||||||||||
2019 | 2018 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Employee benefits | $ | 27.3 | $ | — | $ | 32.5 | $ | — | ||||||||
Product liability and warranties | 39.7 | — | 42.5 | — | ||||||||||||
Inventories | — | 0.3 | — | 0.6 | ||||||||||||
Accounts receivable | 16.3 | — | 18.3 | — | ||||||||||||
Property, plant and equipment | — | 34.9 | — | 36.3 | ||||||||||||
Intangibles | — | 61.3 | — | 57.3 | ||||||||||||
Environmental liabilities | 1.9 | — | 2.1 | — | ||||||||||||
Undistributed foreign earnings | — | 20.8 | — | 28.9 | ||||||||||||
Tax loss and credit carryovers | 15.2 | — | 17.5 | — | ||||||||||||
All other | 7.7 | — | 4.0 | — | ||||||||||||
Valuation allowance | (11.9 | ) | — | (13.1 | ) | — | ||||||||||
$ | 96.2 | $ | 117.3 | $ | 103.8 | $ | 123.1 | |||||||||
Net liability | $ | 21.1 | $ | 19.3 | ||||||||||||
Net Operating Losses and Tax Credits | Valuation Allowances | ||||||||||||||||||||||
December 31 (dollars in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Beginning balance | $ | 8.9 | $ | 20.3 | $ | 7.1 | $ | 13.0 | |||||||||||||||
(Decreases) / increases | 1.2 | (11.4) | 1.2 | (5.9) | |||||||||||||||||||
Ending balance | $ | 10.1 | $ | 8.9 | $ | 8.3 | $ | 7.1 |
December 31 (dollars in millions) | ||||||||||||||||
Net Operating Losses and Tax Credits | Valuation Allowances | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Beginning balance | $ | 17.5 | $ | 19.8 | $ | 13.1 | $ | 15.0 | ||||||||
Reductions | (2.3 | ) | (2.3 | ) | (1.2 | ) | (1.9 | ) | ||||||||
Ending balance | $ | 15.2 | $ | 17.5 | $ | 11.9 | $ | 13.1 | ||||||||
(Dollars in millions) | 2019 | 2018 | ||||||
Balance at January 1 | $ | 8.3 | $ | 6.2 | ||||
Additions for tax positions of prior years | 1.4 | 2.1 | ||||||
Balance at December 31 | $ | 9.7 | $ | 8.3 | ||||
(Dollars in millions) | 2022 | 2021 | |||||||||
Balance at January 1 | $ | 14.3 | $ | 9.0 | |||||||
Additions / (decreases) for tax positions of prior years | 0.7 | 5.3 | |||||||||
Balance at December 31 | $ | 15.0 | $ | 14.3 |
Net Sales | Earnings | Net Sales | Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years ended December 31 (dollars in millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | Years ended December 31 (dollars in millions) | 2022 | 2021 | 2020 | 2022 (1) | 2021 | 2020 (2) | ||||||||||||||||||||||||||||||||||||||||||||||
North America | $ | 2,083.5 | $ | 2,044.7 | $ | 1,904.8 | $ | 488.9 | $ | 464.1 | $ | 428.6 | $ | 2,819.1 | $ | 2,529.5 | $ | 2,118.3 | $ | 266.0 | $ | 590.8 | $ | 503.5 | |||||||||||||||||||||||||||||||||||
Rest of World | 935.8 | 1,173.6 | 1,116.3 | 40.2 | 149.3 | 149.3 | Rest of World | 965.8 | 1,036.5 | 800.3 | 96.3 | 91.4 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Inter-segment | (26.6 | ) | (30.4 | ) | (24.4 | ) | — | — | — | Inter-segment | (31.0) | (27.1) | (23.3) | (0.3) | (0.2) | (0.3) | |||||||||||||||||||||||||||||||||||||||||||
Total segments – sales, segment earnings | $ | 2,992.7 | $ | 3,187.9 | $ | 2,996.7 | $ | 529.1 | $ | 613.4 | $ | 577.9 | Total segments – sales, segment earnings | $ | 3,753.9 | $ | 3,538.9 | $ | 2,895.3 | $ | 362.0 | $ | 682.0 | $ | 503.2 | ||||||||||||||||||||||||||||||||||
Corporate expenses | (46.0 | ) | (47.2 | ) | (47.0 | ) | Corporate expenses | (128.9) | (52.1) | (52.0) | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (11.0 | ) | (8.4 | ) | (10.1 | ) | Interest expense | (9.4) | (4.3) | (7.3) | |||||||||||||||||||||||||||||||||||||||||||||||||
Earnings before income taxes | 472.1 | 557.8 | 520.8 | Earnings before income taxes | 223.7 | 625.6 | 443.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes (2) | (102.1 | ) | (113.6 | ) | (224.3 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Benefit from) provision for income taxes | (Benefit from) provision for income taxes | (12.0) | 138.5 | 99.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | $ | 370.0 | $ | 444.2 | $ | 296.5 | Net earnings | $ | 235.7 | $ | 487.1 | $ | 344.9 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Assets (December 31) | Depreciation and Amortization (Years Ended December 31) | Capital Expenditures (Years Ended December 31) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
North America | $ | 2,230.3 | $ | 2,181.9 | $ | 1,759.1 | $ | 55.7 | $ | 52.2 | $ | 51.5 | $ | 48.6 | $ | 48.0 | $ | 41.7 | |||||||||||||||||||||||||||||||||||
Rest of World | 597.7 | 792.7 | 664.9 | 20.5 | 25.1 | 27.9 | 10.9 | 15.8 | 14.9 | ||||||||||||||||||||||||||||||||||||||||||||
Corporate | 504.3 | 499.8 | 736.7 | 0.7 | 0.6 | 0.6 | 10.8 | 11.3 | 0.2 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,332.3 | $ | 3,474.4 | $ | 3,160.7 | $ | 76.9 | $ | 77.9 | $ | 80.0 | $ | 70.3 | $ | 75.1 | $ | 56.8 |
Total Assets (December 31) | Depreciation and Amortization (Years Ended December 31) | Capital Expenditures (Years Ended December 31) | ||||||||||||||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
North America | $ | 1,742.8 | $ | 1,653.6 | $ | 1,592.6 | $ | 49.3 | $ | 45.5 | $ | 45.1 | $ | 47.6 | $ | 45.8 | $ | 38.5 | ||||||||||||||||||
Rest of World | 709.1 | 721.6 | 741.4 | 27.9 | 25.2 | 23.8 | 15.9 | 32.3 | 55.2 | |||||||||||||||||||||||||||
Corporate | 606.1 | 696.3 | 863.4 | 1.1 | 1.2 | 1.2 | 0.9 | 7.1 | 0.5 | |||||||||||||||||||||||||||
Total | $ | 3,058.0 | $ | 3,071.5 | $ | 3,197.4 | $ | 78.3 | $ | 71.9 | $ | 70.1 | $ | 64.4 | $ | 85.2 | $ | 94.2 | ||||||||||||||||||
Long-lived Assets (December 31) | Net Sales (Years Ended December 31) | |||||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||
United States | $ | 360.2 | $ | 327.3 | $ | 303.0 | United States | $ | 1,868.7 | $ | 1,820.8 | | $ | 1,698.1 | ||||||||||||
China | 266.7 | 252.6 | 250.8 | China | 825.4 | 1,071.2 | 1,034.9 | |||||||||||||||||||
Canada | 4.2 | 3.1 | 3.2 | Canada | 168.5 | 175.0 | 163.7 | |||||||||||||||||||
Other Foreign | 42.1 | 42.9 | 47.1 | Other Foreign | 130.1 | 120.9 | 100.0 | |||||||||||||||||||
Total | $ | 673.2 | $ | 625.9 | $ | 604.1 | Total | $ | 2,992.7 | $ | 3,187.9 | $ | 2,996.7 | |||||||||||||
(dollars in millions, except per share amounts) | ||||||||||||||||||||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Net sales | $ | 748.2 | $ | 788.0 | $ | 765.4 | $ | 833.3 | $ | 728.2 | $ | 754.1 | $ | 750.9 | $ | 812.5 | ||||||||||||||||
Gross profit | 292.8 | 321.5 | 308.7 | 341.0 | 284.2 | 306.0 | 295.0 | 337.0 | ||||||||||||||||||||||||
Net earnings | 89.3 | 98.8 | 102.1 | 114.5 | 87.3 | 104.6 | 91.3 | 126.3 | ||||||||||||||||||||||||
Basic earnings per share | 0.53 | 0.58 | 0.61 | 0.67 | 0.53 | 0.61 | 0.56 | 0.75 | ||||||||||||||||||||||||
Diluted earnings per share | 0.53 | 0.57 | 0.61 | 0.66 | 0.53 | 0.61 | 0.56 | 0.74 | ||||||||||||||||||||||||
Common dividends declared | 0.22 | 0.18 | 0.22 | 0.18 | 0.22 | 0.18 | 0.24 | 0.22 |
Long-lived Assets (December 31) | Net Sales (Years Ended December 31) | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
United States | $ | 409.8 | $ | 366.2 | $ | 355.8 | United States | $ | 2,430.0 | $ | 2,239.1 | $ | 1,904.9 | |||||||||||||||||||||||||
China | 225.2 | 259.9 | 268.3 | China | 826.6 | 912.6 | 695.6 | |||||||||||||||||||||||||||||||
Canada | 54.7 | 59.1 | 4.5 | Canada | 341.6 | 247.2 | 175.0 | |||||||||||||||||||||||||||||||
Other Foreign | 41.3 | 44.0 | 43.4 | Other Foreign | 155.7 | 140.0 | 119.8 | |||||||||||||||||||||||||||||||
Total | $ | 731.0 | $ | 729.2 | $ | 672.0 | Total | $ | 3,753.9 | $ | 3,538.9 | $ | 2,895.3 |
/s/ Ernst & Young LLP |
Plan Category | Number of securities to be issued upon the exercise of outstanding options, warrants and rights | Weighted-average exerciseprice of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | |||||||||
Equity compensation plans approved by security holders | 3,321,472 | (1) | $ | 37.64 | (2) | 1,855,560 | (3) | |||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 3,321,472 | $ | 37.64 | 1,855,560 | ||||||||
Plan Category | Number of securities to be issued upon the exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | |||||||||||||||||||||||
Equity compensation plans approved by security holders | 3,073,707 | (1) | $ | 51.22 | (2) | 2,613,804 | (3) | |||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||||||||
Total | 3,073,707 | 51.22 | 2,613,804 |
Form 10-K Page Number | ||||||||
The following consolidated financial statements of A. O. Smith Corporation are included in Item 8: | ||||||||
For each of the three years in the period ended December 31, | ||||||||
Exhibit Number | Description | ||||||||||||
(3)(i) | |||||||||||||
(3)(ii) | |||||||||||||
(4) | (a) | ||||||||||||
(b) | |||||||||||||
(c) | |||||||||||||
(d) | The corporation has instruments that define the rights of holders of long-term debt that are not being filed with this Registration Statement in reliance upon Item 601(b)(4)(iii) of Regulation S-K. The Registrant agrees to furnish to the SEC, upon request, copies of these instruments. | ||||||||||||
(10) | Material Contracts | ||||||||||||
(a) | |||||||||||||
(b) | |||||||||||||
(c) | |||||||||||||
(d) | |||||||||||||
(e) | |||||||||||||
(f) | |||||||||||||
(g) |
Number | ||||||||||||
(h) | ||||||||||||
(i) | ||||||||||||
(j) |
Exhibit Number | Description | |||||||||||
(k) | ||||||||||||
(l) | ||||||||||||
(m) | ||||||||||||
(n) | ||||||||||||
(o) | ||||||||||||
(21) | ||||||||||||
(23) | ||||||||||||
(31.1) | ||||||||||||
(31.2) | ||||||||||||
(32.1) | ||||||||||||
(32.2) | ||||||||||||
(101) | The following materials from A. O. Smith Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, |
A. O. SMITH CORPORATION | ||||||||||||||||
Date: February 14, 2023 | By: | |||||||||||||||
Kevin J. Wheeler Chairman, President and Chief Executive | ||||||||||||||||
Name and Title | Signature | |||||||
KEVIN J. WHEELER | /s/ Kevin J. Wheeler | |||||||
Director | Kevin J. Wheeler | |||||||
Chairman, President and Chief Executive Officer | ||||||||
CHARLES T. LAUBER | /s/ Charles T. Lauber | |||||||
Executive Vice President and Chief Financial Officer | Charles T. Lauber | |||||||
/s/ | ||||||||
Vice President and Controller | ||||||||
RONALD D. BROWN | /s/ Ronald D. Brown | |||||||
Director | Ronald D. Brown | |||||||
/s/ | ||||||||
Director | ||||||||
/s/ | ||||||||
Director | ||||||||
DR. ILHAM KADRI | /s/ Dr. Ilham Kadri | |||||||
Director | Dr. Ilham Kadri | |||||||
/s/ | ||||||||
Director | ||||||||
AJITA G. RAJENDRA | /s/ Ajita G. Rajendra | |||||||
Director | Ajita G. Rajendra | |||||||
MARK D. SMITH | /s/ Mark D. Smith | |||||||
Director | Mark D. Smith | |||||||
IDELLE K. WOLF | /s/ Idelle K. Wolf | |||||||
Director | Idelle K. Wolf | |||||||
GENE C. WULF | /s/ Gene C. Wulf | |||||||
Director | Gene C. Wulf |
Description | Balance at Beginning of Year | Charged to Costs and Expenses | Acquisition of Businesses | Deductions | Balance at End of Year | |||||||||||||||
2019: | ||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 6.4 | $ | 0.3 | $ | — | $ | (0.1 | ) | $ | 6.6 | |||||||||
Valuation allowance for deferred tax assets | 13.1 | — | — | (1.2 | ) | 11.9 | ||||||||||||||
2018: | ||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 5.3 | $ | 1.5 | $ | — | $ | (0.4 | ) | $ | 6.4 | |||||||||
Valuation allowance for deferred tax assets | 15.0 | — | — | (1.9 | ) | 13.1 | ||||||||||||||
2017: | ||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 6.3 | $ | — | $ | 0.2 | $ | (1.2 | ) | $ | 5.3 | |||||||||
Valuation allowance for deferred tax assets | 13.1 | 1.9 | — | — | 15.0 |
Description | Balance at Beginning of Year | Charged to Costs and Expenses | Acquisition of Businesses | Deductions | Balance at End of Year | ||||||||||||||||||||||||
2022: | |||||||||||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 9.5 | $ | 0.6 | $ | — | $ | (0.6) | $ | 9.5 | |||||||||||||||||||
Valuation allowance for deferred tax assets | 7.1 | 1.2 | — | — | 8.3 | ||||||||||||||||||||||||
2021: | |||||||||||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 5.6 | $ | 4.2 | $ | 0.8 | $ | (1.1) | $ | 9.5 | |||||||||||||||||||
Valuation allowance for deferred tax assets | 13.0 | — | — | (5.9) | 7.1 | ||||||||||||||||||||||||
2020: | |||||||||||||||||||||||||||||
Valuation allowance for trade and notes receivable | $ | 6.6 | $ | 0.8 | $ | — | $ | (1.8) | $ | 5.6 | |||||||||||||||||||
Valuation allowance for deferred tax assets | 11.9 | 1.1 | — | — | 13.0 |