Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Registrant Name | SMITH A O CORP | ||
Entity Central Index Key | 0000091142 | ||
Entity Emerging Growth Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Small Business | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 1-475 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 39-0619790 | ||
Entity Address, Address Line One | 11270 West Park Place | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53224-9508 | ||
Entity Address, City or Town | Milwaukee | ||
Security Exchange Name | NYSE | ||
Trading Symbol | AOS | ||
Title of 12(b) Security | Common Stock | ||
Entity Filer Category | Large Accelerated Filer | ||
City Area Code | 414 | ||
Local Phone Number | 359-4000 | ||
Document Fiscal Year Focus | 2019 | ||
Common Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 26,044,733 | ||
Entity Public Float | $ 42,999,781 | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 135,926,301 | ||
Entity Public Float | $ 6,432,921,438 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 374 | $ 259.7 |
Marketable securities | 177.4 | 385.3 |
Receivables | 589.5 | 647.3 |
Inventories | 303 | 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 |
Goodwill | 546 | 513 |
Other intangibles | 338.4 | 293.1 |
Operating lease assets | 46.9 | |
Other assets | 80.9 | 86.9 |
Total Assets | 3,058 | 3,071.5 |
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 | ||
Common Stock, value | 164.5 | 164.5 |
Capital in excess of par value | 509 | 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 |
Total Liabilities and Stockholders' Equity | 3,058 | 3,071.5 |
Common Class A | ||
Stockholders' Equity | ||
Common Stock, value | 130.9 | 131 |
Total Stockholders' Equity | $ 130.9 | $ 131 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common Stock, shares issued | 164,526,709 | 164,516,267 |
Common Class A | ||
Common Stock, shares issued | 26,180,885 | 26,191,327 |
CONSOLIDATED STATEMENT OF EARNI
CONSOLIDATED STATEMENT OF EARNINGS - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Net sales | $ 2,992.7 | $ 3,187.9 | $ 2,996.7 | |
Cost of products sold | 1,812 | 1,882.4 | 1,764.3 | |
Gross profit | 1,180.7 | 1,305.5 | 1,232.4 | |
Selling, general and administrative expenses | 715.6 | 753.8 | 722.8 | |
Restructuring and impairment expenses | 0 | 6.7 | 0 | |
Interest expense | 11 | 8.4 | 10.1 | |
Other income - net | (18) | (21.2) | (21.3) | |
Earnings before provision for income taxes | 472.1 | 557.8 | 520.8 | |
Provision for income taxes | [1] | 102.1 | 113.6 | 224.3 |
Net Earnings | $ 370 | $ 444.2 | $ 296.5 | |
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 | |
[1] | In 2017, the Company recorded a one-time charge of $81.8 million associated with U.S. Tax Reform, primarily related to the repatriation of undistributed foreign earnings. For additional information, see Note 15 “Income Taxes.” |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Earnings | $ 370 | $ 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 |
CONSOLIDATED STATEMENT OF COM_2
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit | $ 0.3 | $ 0.1 | $ 0.7 |
Change in pension liability less related income tax (provision) benefit | $ (1) | $ 4.3 | $ (7.5) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||
Net earnings | $ 370 | $ 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 | 0 | 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) | (127.8) |
Noncurrent assets and liabilities | (38) | (37.3) | (4.1) |
Cash Provided by Operating Activities | 456.2 | 448.9 | 326.4 |
Investing Activities | |||
Acquisitions of businesses | (107) | (43.1) | |
Investments in marketable securities | (272.7) | (523.4) | (583.5) |
Proceeds from sales of marketable securities | 478 | 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) | 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) | (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 | $ 259.7 | $ 346.6 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Class A | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance at Dec. 31, 2016 | $ 131.6 | $ 164.4 | $ 477.6 | $ 1,589.1 | $ (363.2) | $ (488.1) | |
Conversion of Class A Common Stock | (0.4) | 0.1 | 0.3 | ||||
Foreign currency translation adjustments | $ 52.7 | 52.7 | |||||
Net earnings | 296.5 | 296.5 | |||||
Issuance of share units | (4.9) | ||||||
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of ($0.1) in 2018, $0.7 in 2017 and $0.6 in 2016 | (1.1) | (1.1) | |||||
Cash dividends on stock | (96.9) | ||||||
Vesting of share units | (2.9) | 2.9 | |||||
Change in pension liability less related income tax benefit (provision) of $4.3 in 2018, $(7.5) in 2017 and $5.7 in 2016 | 12.1 | 12.1 | |||||
Stock based compensation expense | 9.2 | ||||||
Exercises of stock options | 1.4 | (2.4) | |||||
Stock incentives and directors' compensation | 5.8 | 0.2 | |||||
Shares repurchased | (139.1) | (139.1) | |||||
Balance at Dec. 31, 2017 | 1,644.9 | 131.2 | 164.5 | 486.5 | 1,788.7 | (299.5) | (626.5) |
Conversion of Class A Common Stock | (0.2) | 0 | 0.2 | ||||
Foreign currency translation adjustments | (38.4) | (38.4) | |||||
Net earnings | 444.2 | 444.2 | |||||
Issuance of share units | (6) | ||||||
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of ($0.1) in 2018, $0.7 in 2017 and $0.6 in 2016 | 0.2 | 0.2 | |||||
Cash dividends on stock | (130.1) | ||||||
Vesting of share units | (2.4) | 2.5 | |||||
Change in pension liability less related income tax benefit (provision) of $4.3 in 2018, $(7.5) in 2017 and $5.7 in 2016 | (13.1) | (13.1) | |||||
Stock based compensation expense | 10.1 | ||||||
Exercises of stock options | 1.4 | (0.7) | |||||
Stock incentives and directors' compensation | 6.9 | 0.1 | |||||
Shares repurchased | (202.6) | (202.6) | |||||
Balance at Dec. 31, 2018 | 1,717 | 131 | 164.5 | 496.7 | 2,102.8 | (350.8) | (827.2) |
Conversion of Class A Common Stock | (0.1) | 0 | 0.1 | ||||
Foreign currency translation adjustments | (1.3) | (1.3) | |||||
Net earnings | 370 | 370 | |||||
Issuance of share units | (6.2) | ||||||
Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of ($0.1) in 2018, $0.7 in 2017 and $0.6 in 2016 | 0.9 | 0.9 | |||||
Cash dividends on stock | (149.4) | ||||||
Vesting of share units | (2.2) | 2.2 | |||||
Change in pension liability less related income tax benefit (provision) of $4.3 in 2018, $(7.5) in 2017 and $5.7 in 2016 | 2.9 | 2.9 | |||||
Stock based compensation expense | 12.9 | ||||||
Exercises of stock options | 0.7 | (0.2) | |||||
Stock incentives and directors' compensation | 7 | 0.2 | |||||
Shares repurchased | (287.7) | (287.7) | |||||
Balance at Dec. 31, 2019 | $ 1,666.8 | $ 130.9 | $ 164.5 | $ 509 | $ 2,323.4 | $ (348.3) | $ (1,112.7) |
CONSOLIDATED STATEMENT OF STO_2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrealized net (loss) gain on cash flow derivative instruments, related income tax benefit (provision) | $ (0.3) | $ (0.1) | $ (0.7) |
Change in pension liability, related income tax (provision) benefit | (1) | 4.3 | (7.5) |
Accumulated Other Comprehensive Loss | |||
Unrealized net (loss) gain on cash flow derivative instruments, related income tax benefit (provision) | 0.3 | 0.1 | 0.7 |
Change in pension liability, related income tax (provision) benefit | $ 1 | $ 4.3 | $ 7.5 |
Treasury Stock | |||
Exercise of stock options, shares surrendered as proceeds and to pay taxes | 87,918 | 54,180 | 160,856 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies Organization. in-home Consolidation. Use of estimates . Fair value of financial instruments. $ million as of December 31, 2019 compared with the carrying amount of $ million Foreign currency translation . non-operating year-end Cash and cash equivalents . Marketable securities . Inventory valuation. last-in, first-out first-in, first-out Property, plant and equipment. straight-line three three Goodwill and other intangibles. five Impairment of long-lived and amortizable intangible assets. Property, plant and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. Such analyses necessarily involve significant judgment. Product warranties. one The Company records a liability for the expected cost of warranty-related claims at the time of sale and is estimated based on the warranty period, product type and loss experience using actual historical failure rates and estimated costs of product replacement. The variables used in the calculation of the provision are reviewed by the Company at least annually. At times, warranty issues may arise which are beyond the scope of the Company’s historical experience. The Company provides for any such warranty issues as they become known and estimable. The allocation of the warranty liability between current and long-term is based on expected warranty claims to be paid in the next year as determined by historical product failure rates. The following table presents the Company’s product warranty liability activity in 2019 and 2018: 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 Derivative instruments. Fair Value Measurements. Fair Value Measurements Assets and liabilities measured at fair value are based on the market approach which are prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Assets measured at fair value on a recurring basis are as follows (dollars in millions): 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 There were no changes in the valuation techniques used to measure fair values on a recurring basis. Revenue recognition. Substantially all of the Company’s sales are from contracts with customers for the purchase of its products. Contracts and customer purchase orders are used to determine the existence of a sales contract. Shipping documents are used to verify shipment. For substantially all of its products, the Company transfers control of products to the customer at the point in time when title and risk are passed to the customer, which generally occurs upon shipment of the product. See Note , “Revenue Recognition” for disclosure of the Company’s revenue recognition activities. Advertising. Research and development. Environmental costs. Stock-based compensation. Income taxes. Income Taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement. Earnings per share of common stock. two-class 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 Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) amended Accounting Standards Codification (ASC) 740, Income Taxes In January 2017, the FASB amended ASC 350, Intangibles – Goodwill and Other 2017-04, 2017-04 In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses 2016-13) 2016-13 2016-13 In February 2016, the FASB amended ASC 842, Leases 2016-02). non-lease 2016-02 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition Disclosure [Text Block] | 2. Revenue Recognition Substantially all of the Company’s sales are from contracts with customers for the purchase of its products. Contracts and customer purchase orders are used to determine the existence of a sales contract. Shipping documents are used to verify shipment. For substantially all of its products, the Company transfers control of products to the customer at the point in time when title and risk are passed to the customer, which generally occurs upon shipment of the product. Each unit sold is considered an independent, unbundled performance obligation. The Company’s sales arrangements do not include other performance obligations that are material in the context of the contract. The nature, timing and amount of revenue for a respective performance obligation are consistent for each customer. The Company measures the sales transaction price based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Sales and value added taxes are excluded from the measurement of transaction price. The Company’s payment terms for the majority of its customers are 30 to 90 days from shipment. Additionally, certain customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $49.6 million and $47.0 million at December 31, 2019 and December 31, 2018, respectively. The Company assesses collectability of customer receivables based on the creditworthiness of a customer as determined by credit checks and analysis, as well as the customer’s payment history. The Company’s allowance for doubtful accounts was $6.7 million and $6.4 million at December 31, 2019 and December 31, 2018, respectively. Rebates and incentives are based on pricing agreements and are tied to sales volume. The amount of revenue is reduced for variable consideration related to customer rebates which are calculated using expected values and are based on program specific factors such as expected rebate percentages based on expected volumes. In situations where the customer has the right to return eligible products, the Company reduces revenue for its estimates of expected product returns, which are primarily based on an analysis of historical experience. Changes in such accruals may be required if actual sales volume differs from estimated sales volume or if future returns differ from historical experience. Shipping and handling costs billed to customers are included in net sales and the related costs are included in cost of products sold and are activities performed to fulfill the promise to transfer products. Disaggregation of Net Sales The Company is comprised of two reporting segments: North America and Rest of World. The Rest of World segment is primarily comprised of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. The Rest of World segment also manufactures and markets in-home As each segment manufactures and markets products in its respective region of the world, the Company has determined that geography is the primary factor in reporting its sales. The Company further disaggregates its North America segment sales by major product line as each of North America’s major product lines is sold through distinct distribution channels and these product lines may be impacted differently by certain economic factors. Within the Rest of World segment, particularly in China and India, the Company’s major customers purchase across the Company’s product lines, utilizing the same distribution channel regardless of product type. In addition, the impact of economic factors is unlikely to be differentiated by product line in the Rest of World segment. The North America segment major product lines are defined as the following: Water heaters Boilers Water treatment products point-of-entry on-the-go point-of-use The following table disaggregates the Company’s net sales by segment. As described above, the Company’s North America segment sales are further disaggregated by major product line. In addition, the Company’s Rest of World segment sales are disaggregated by China and all other Rest of World. 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 (1) Includes the results of Water-Right and Hague Quality Water International (Hague) from the date of acquisition of April 8, 2019 and September 5, 2017, respectively. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | 3. Acquisitions On April 8, 2019, the Company acquired 100 percent of the shares of Water-Right, Inc. and its affiliated entities (Water-Right), a Wisconsin-based water treatment company. With the addition of Water-Right, the Company grew its North America water treatment platform. Water-Right is included in the Company’s North America segment for reporting purposes. The Company paid an aggregate cash purchase price of $107.0 million, net of cash acquired. In addition, the Company established a $4.0 million escrow to satisfy any potential obligations of the former owners of Water-Right, should they arise. The following table summarizes the preliminary estimate of the fair value of the assets acquired and liabilities assumed at the date of acquisition of Water-Right for purposes of allocating the purchase price. The Company is in the process of finalizing the fair value estimates; therefore, the allocation of the purchase price is subject to refinement. Significant assumptions used to estimate the fair value of intangible assets acquired include discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates, attrition rates and royalty rates. non-compete 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 $ As required under ASC 805 Business Combinations pre-tax year ended On September 5, 2017, the Company acquired percent of the shares of Hague, an Ohio-based water softener company. With the addition of Hague, the Company grew its North America water treatment platform. Hague is included in the Company’s North America segment for reporting purposes. The Company paid an aggregate cash purchase price of $43.1 million, net of $4.1 million of cash acquired. In addition, the Company established a $1.5 million holdback liability to satisfy any potential obligations of the former owners of Hague, should they arise. The Company also agreed to make a contingent payment of up to an additional $2.0 million based on the amount by which products manufactured by or branded Hague increase over the two-year As of the acquisition date, the Company estimated the fair value of the holdback liability and additional contingent consideration at $1.5 million and $2.0 million, respectively. During 2018, the Company finalized the amount of acquisition date working capital, which resulted in a $1.3 million payment to the former owners of Hague related to the aforementioned holdback. The Company also paid $2.0 million of contingent payments associated with the amount by which sales of products manufactured by Hague increase over the two-year The following table summarizes the allocation of fair value of the assets acquired and liabilities assumed at the date of acquisition of Hague for purposes of allocating the purchase price. Significant assumptions used to estimate the fair value of intangible assets acquired include discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates, attrition rates and royalty rates. The $12.8 million of acquired intangible assets was comprised of $1.1 million of trade names that are not subject to amortization and $11.7 million of customer lists being amortized over 18 years. 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 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 4. Leases The Company’s lease portfolio consists of operating leases for buildings and equipment, such as forklifts and copiers, primarily in the United States and China. The Company defines a lease as a contract that gives the Company the right to control the use of a physical asset for a stated term. The Company pays the lessor for that right, with a series of payments defined in the contract and a corresponding right of use operating lease asset and liability are recorded. The Company has elected not to record leases with an initial term of 12 months or less on its condensed consolidated balance sheet. To determine balance sheet amounts, required legal payments are discounted using the Company’s incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would incur if it were to borrow, on a collateralized basis, an amount equal to the value of the leased item over a similar term, in a similar economic environment. Variable lease components not based on an index or rate are excluded from the measurement of the lease asset and liability and expensed as incurred for all asset classes. Certain leases include one or more options to renew or terminate. Renewal terms can extend the lease term from one Supplemental balance sheet information related to leases is as follows: (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, 2019 Weighted-average remaining lease term 10 years Weighted-average discount rate 3.93% The components of lease expense were as follows: (dollars in millions) Lease Expense Classification Twelve months ended Operating lease expense (1) Cost of products sold $ 3.0 Selling, general and administrative expenses 17.6 (1) Includes short-term lease expense of $2.0 million for the twelve months ended December 31, 2019. Includes variable lease cost of $2.1 million for the twelve months ended December 31, 2019. Rent expense, including payments under operating leases, was $24.0 million and $23.9 million in 2018 and 2017 respectively. Maturities of lease liabilities were as follows: (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 |
Restructuring and Impairment Ex
Restructuring and Impairment Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Impairment Expenses | 5. Restructuring and Impairment Expenses On March 21, 2018, the Company announced a move of manufacturing operations from its Renton, Washington facility to other U.S. facilities. The Company recognized $6.7 million of restructuring and impairment expenses, comprised of $4.0 million of severance and compensation related costs, lease exit costs of $2.1 million and impairment charges related to long-lived assets totaling $0.6 million, as well as a corresponding $1.7 million tax benefit related to the charges. As of December 31, 2019, the consolidation of the Renton facility to other U.S. facilities was complete. The following table presents an analysis of the Company’s restructuring reserve for the years ended December 31, 2019 and 2018: (dollars in millions) Severance Lease Exit Fixed Assets 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 |
Statement of Cash Flows
Statement of Cash Flows | 12 Months Ended |
Dec. 31, 2019 | |
Statement of Cash Flows | 6. Statement of Cash Flows Supplemental cash flow information is as follows: Years ended December 31 (dollars in millions) 2019 2018 2017 Net change in current assets and liabilities, net of acquisitions: Receivables $ 62.4 $ (54.6 ) $ (75.8 ) Inventories 6.3 (7.7 ) (37.5 ) Other current assets (4.8 ) 10.0 (9.0 ) Trade payables (35.4 ) 8.8 (5.1 ) Accrued liabilities, including payroll and benefits 14.2 (3.5 ) 12.2 Income taxes (10.1 ) 7.0 (12.6 ) $ 32.6 $ (40.0 ) $ (127.8 ) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | 7. Inventories 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 The Company recognized after-tax $ ( ) |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment | 8. Property, Plant and Equipment December 31 (dollars in millions) 2019 2018 Land $ 11.6 $ 11.2 Buildings 334.1 323.3 Equipment 686.9 643.8 Software 124.3 118.5 1,156.9 1,096.8 Less accumulated depreciation and amortization 611.5 556.8 $ 545.4 $ 540.0 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | 9. Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 consisted of the following: (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 The carrying amount of other intangible assets consisted of the following: 2019 2018 December 31 (dollars in millions) Gross Accumulated Net Gross Accumulated 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 Amortization expenses of other intangible assets of $15.8 million, $14.3 million, and $13.7 million were recorded in 2019, 2018 and 2017, respectively. In the future, excluding the impact of any future acquisitions, the Company expects amortization expense of approximately $15.7 million annually and the intangible assets will be amortized over a weighted-average period of 13 years. The Company concluded that no goodwill impairment existed at the time of the annual impairment tests which were performed in the fourth quarters of 2019, 2018 and 2017. No impairments of other intangible assets were recorded in 2019, 2018 and 2017. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt December 31 (dollars in millions) 2019 2018 Bank credit lines, average year-end $ 4.7 $ 17.1 Revolving credit agreement borrowings, average year-end 85.0 10.0 Commercial paper, average year-end 74.3 74.3 Term notes with insurance companies, expiring 2029-2034, average year-end 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 In December 2016, the Company completed a $500 million multi-year multi-currency revolving credit agreement with a group of nine banks, which expires on December 15, 2021. The facility has an accordion provision which allows it to be increased up to $700 million if certain conditions (including lender approval) are satisfied. Borrowings under the Company’s bank credit lines and commercial paper borrowings are supported by the revolving credit agreement. As a result of the long-term nature of this facility, the commercial paper and credit line borrowings are classified as long-term debt at December 31, 2019 and 2018. At its option, the Company either maintains cash balances or pays fees for bank credit and services. Scheduled maturities of long-term Years ending December 31 (dollars in millions) Amount 2020 $ 6.8 2021 170.8 2022 6.8 2023 10.0 2024 10.0 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity | 11. Stockholders’ Equity The Company’s authorized capital consists of three million shares of Preferred Stock $1 par value, 27 million shares of Class A Common Stock $5 par value, and 240 million shares of Common Stock $1 par value. The Common Stock has equal dividend rights with Class A Common Stock and is entitled, as a class, to elect one-third There were 10,442 shares during 2019, 48,232 shares during 2018 and 73,792 shares during 2017, of Class A Common Stock converted into Common Stock. Regular dividends paid on the A. O. Smith Corporation Class A Common Stock and Common Stock amounted to $0.90, $0.76 and $0.56 per share in 2019, 2018 and 2017, respectively. In June 2019, our Board of Directors approved adding 3 million shares of Common Stock to an existing discretionary share repurchase authority. Under the share repurchase program, the Company may purchase the Common Stock through a combination of Rule 10b5-1 10b5-1 At December 31, 2019, a total of 130,380 and 28,205,806 shares of Class A Common Stock and Common Stock, respectively, were held as treasury stock. At December 31, 2018, a total of 130,380 and 22,418,066 shares of Class A Common Stock and Common Stock, respectively, were held as treasury stock. Changes to accumulated other comprehensive loss by component are as follows: 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) (1) Amounts reclassified from accumulated other comprehensive loss: Realized loss (gains) on derivatives reclassified to cost 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 (2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13 “Pensions and Other Post-retirement Benefits” for additional details. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock Based Compensation | 12. Stock Based Compensation The Company adopted the A. O. Smith Combined Incentive Compensation Plan (the “Plan”) effective January 1, 2007. The Plan was reapproved by stockholders on April 16, 2012. The Plan is a continuation of the A. O. Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002. The number of shares available for granting of options or share units at December 31, 2019, was 1,855,560. Upon stock option exercise or share unit vesting, shares are issued from treasury stock. Total stock based compensation expense recognized in 2019, 2018 and 2017 was $13.3 million, $10.1 million and $9.9 million, respectively. Stock Options The stock options granted in 2019, 2018 and 2017 have three year pro rata vesting from the date of grant. Stock options are issued at exercise prices equal to the fair value of the Company’s Common Stock on the date of grant. For active employees, all options granted in 2019, 2018 and 2017 expire ten years after the date of grant. The Company’s stock options are expensed ratably over the three year vesting period. Included in stock option expense for 2019, 2018 and 2017 was $6.4 million, $4.4 million and $4.7 million, respectively. Included in the stock option expense recognized in 2019, 2018 and 2017 is expense associated with the accelerated vesting of stock option awards for certain employees who either are retirement eligible or become retirement eligible during the vesting period. Changes in options, all of which relate to the Company’s Common Stock, were as follows: Years Ended December 31 2019 2018 2017 Number of Weighted Number of Weighted Number of Weighted 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 Granted 557,045 49.49 373,220 61.62 358,150 50.16 Exercised (1) (249,840 ) 18.55 (176,302 ) 22.93 (752,603 ) 16.93 Forfeited (11,544 ) 54.02 (27,355 ) 47.95 (6,754 ) 37.46 Outstanding at end of year (2) 2,728,350 37.64 2,432,689 33.05 2,263,126 27.73 Exercisable at end of year (3) 1,820,743 30.07 1,665,184 24.52 1,387,259 20.48 (1) The total intrinsic value of options exercised in 2019, 2018 and 2017 was $7.7 million, $6.8 million and $29.1 million, respectively. (2) The weighted average remaining contractual life of options outstanding was 7 years at December 31, 2019, December 31, 2018, and December 31, 2017. The aggregate intrinsic value of options outstanding at December 31, 2019 was $34.2 million. (3) The weighted average remaining contractual life of options exercisable was 6 years at December 31, 2019, December 31, 2018 and, December 31, 2017. The aggregate intrinsic value of options exercisable at December 31, 2019 was $34.2 million. Number of Options Weighted Avg. Per 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 The weighted-average fair value per option at the date of grant during 2019, 2018 and 2017, using the Black-Scholes option-pricing model, was $10.83, $14.80 and $13.04, respectively. Assumptions were as follows: 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 % The expected lives of options for purposes of these models are based on historical exercise behavior. The risk free interest rates for purposes of these models are based on the U.S. Treasury yield curve in effect on the date of grant for the respective expected lives of the option. The expected dividend yields for purposes of these models are based on the dividends paid in the preceding four quarters divided by the grant date market value of the Common Stock. The expected volatility for purposes of these models are based on the historical volatility of the Common Stock. Stock Appreciations Rights (SARs) In 2015, certain non-U.S.-based Restricted Stock and Share Units Participants may also be awarded shares of restricted stock or share units under the Plan. Share units vest three years after the date of grant. The Company granted 140,102, 106,581 and 107,853 share units under the plan in 2019, 2018 and 2017, respectively. The share units were valued at $6.9 million, $6.6 million and $5.4 million at the date of issuance in 2019, 2018 and 2017, respectively, based on the price of the Company’s Common Stock at the date of grant. The shares units are recognized as compensation expense ratably over the three-year vesting period; however, included in share unit expense was expense associated with the accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period. Stock based compensation expense of $6.9 million, $5.7 million and $5.2 million was recognized in 2019, 2018 and 2017, respectively. Certain non-U.S.-based A summary of share unit activity under the plan is as follows: 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 |
Pension and Other Post-retireme
Pension and Other Post-retirement Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Pension and Other Post-retirement Benefits | 13. Pension and Other Post-retirement Benefits The Company provides retirement benefits for all U.S. employees including benefits for employees of previously owned businesses which were earned up to the date of sale. The Company also has two foreign pension plans, neither of which is material to the Company’s financial position. The Company has a defined contribution plan which matches 100 percent of the first one percent of contributions made by participating employees and matches 50 percent of the next five percent of employee contributions. The Company also has defined contribution plans for certain hourly employees which provide for matching Company contributions. The Company also has a defined benefit plan for salaried employees and its non-union The Company has unfunded defined-benefit post-retirement plans covering certain hourly and salaried employees that provide medical and life insurance benefits from retirement to age 65. Certain hourly employees retiring after January 1, 1996, are subject to a maximum annual benefit and salaried employees hired after December 31, 1993, are not eligible for post-retirement medical benefits. Obligations and Funded Status Pension and Post-retirement Disclosure Information under ASC 715, Compensation – Retirement Benefits The following tables present the changes in benefit obligations, plan assets and funded status for domestic pension and post-retirement plans and the components of net periodic benefit costs. Pension Benefits Post-retirement 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 (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 ) * In addition, the Company has a liability for a foreign pension plan of $0.2 million at December 31, 2019 and 2018. 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 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 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 The estimated net actuarial loss and prior service cost for the pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2020 are $19.8 million and $(0.5) million, respectively. The estimated net actuarial loss and prior year service cost for the post-retirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2020 are $ The 2019 and 2018 after tax adjustments for additional minimum pension liability resulted in other comprehensive gain (loss) of $2.9 million and ($13.1) million, respectively. Actuarial assumptions used to determine benefit obligations at December 31 are as follows: Pension Benefits Post-retirement 2019 2018 2019 2018 Discount rate 3.18 % 4.32 % 3.40 % 4.46 % Actuarial assumptions used to determine net periodic benefit cost for the year ended December 31 are as follows: Pension Benefits Post-retirement 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 % Assumptions In developing the expected long-term rate of return on plan assets assumption, the Company evaluated its pension plan’s target and actual asset allocation and expected long-term rates of return of equity and bond indices. The Company also considered its pension plan’s historical ten-year 25-year Assumed health care cost trend rates Assumed health care cost trend rates as of December 31 are as follows: 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 A one-percentage-point Plan Assets The Company’s pension plan weighted asset allocations as of December 31 by asset category are as follows: Asset Category 2019 2018 Equity securities 42 % 40 % Debt securities 47 48 Real estate 10 10 Private equity 1 2 100 % 100 % The following tables present the fair value measurement of the Company’s plan assets as of December 31, 2019 and 2018 (dollars in millions): December 31, 2019 Asset Category Total Quoted Prices in Significant Other Significant Non- Short-term investments $ 14.6 $ 2.8 $ 11.8 $ — Equity securities Common stocks 127.0 127.0 — — Commingled equity funds 113.4 — 113.4 — Fixed income securities U.S. treasury securities 49.8 49.8 — — Other fixed income securities 225.1 — 225.1 — Commingled fixed income funds 114.0 — 114.0 — Options (10.8 ) — (10.8 ) — Other types of investments Mutual funds 104.9 — 104.9 — Real estate funds 82.3 — — 82.3 Private equity 8.6 — — 8.6 Total fair value of plan asset investments $ 828.9 $ 179.6 $ 558.4 $ 90.9 Non-investment 3.4 Total plan assets $ 832.3 December 31, 2018 Asset Category Total Quoted Prices in Significant Other Significant Non- 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 2.2 Total plan assets $ 777.5 The following table presents a reconciliation of the fair value measurements using significant unobservable inputs (Level 3) as of December 31, 2019 and 2018 (dollars in millions): Real estate Private 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 The Company’s investment policies employ an approach whereby a diversified blend of equity and bond investments is used to maximize the long-term return of plan assets for a prudent level of risk. Equity investments are diversified across domestic and non-domestic mid- The Company’s actual asset allocations are in line with target allocations. The Company regularly reviews its actual asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate. There was no Company stock included in plan assets at December 31, 2019. Cash Flows The Company was not required to and did not make any contributions in 2019. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Years ending December 31 (dollars in millions) Pension Benefits Post-retirement 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 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments | 14. Derivative Instruments The Company utilizes certain derivative instruments to enhance its ability to manage currency exposure as well as raw materials price risk. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into contracts for speculative purposes. The contracts are executed with major financial institutions with no credit loss anticipated for failure of the counterparties to perform. Cash Flow Hedges With the exception of its net investment hedges, the Company designates that all of its hedging instruments are cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), gains or losses on the derivative instrument are reported as a component of other comprehensive loss, net of tax, and are reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Foreign Currency Forward Contracts The Company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The Company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases, sales and certain intercompany transactions in the normal course of business. Principal currencies for which the Company utilizes foreign currency forward contracts include the British pound, Canadian dollar, Euro and Mexican peso. Gains and losses on these instruments are recorded in accumulated other comprehensive loss, net of tax, until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to the consolidated statement of earnings. The assessment of effectiveness for forward contracts is based on changes in the forward rates. These hedges have been determined to be effective. The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts that are designated as cash flow hedges: December 31 (dollars in millions) 2019 2018 Buy Sell Buy Sell British pound $ — $ 1.3 $ — $ 1.0 Canadian dollar — 49.7 — — Euro 36.0 — 32.0 — Mexican peso 18.6 — 27.8 — Total $ 54.6 $ 51.0 $ 59.8 $ 1.0 Commodity Futures Contracts In addition to entering into supply arrangements in the normal course of business, the Company also enters into futures contracts to fix the cost of certain raw material purchases, principally steel, with the objective of minimizing changes in cost due to market price fluctuations. The hedging strategy for achieving this objective is to purchase steel futures contracts on the New York Metals Exchange (NYMEX) and copper futures contracts on the open market of the London Metals Exchange (LME) or over the counter contracts based on the LME. With NYMEX, the Company is required to make cash deposits on unrealized losses on steel derivative contracts. Net Investment Hedges The Company enters into certain foreign currency forward contracts to hedge the exposure to a portion of the Company’s net investments in certain non-U.S. non-U.S. - after-tax non-U.S. The following tables present the impact of derivative contracts on the Company’s financial statements. Fair value of derivatives designated as hedging instruments under ASC 815: 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 — 5.1 Accrued liabilities (1.5 ) (0.6 ) Commodities contracts Accrued liabilities — (0.9 ) Total derivatives designated as hedging instruments $ $ The effect of cash flow hedges on the condensed consolidated statement of earnings: Years ended December 31 (dollars in millions) Derivatives in ASC 815 cash flow Amount of gain (loss) s Location of gain (loss) Amount of gain 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 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | 15. Income Taxes The components of the provision (benefit) for income taxes consisted of the following: Years ended December 31 (dollars in millions) 2019 2018 2017 Current: Federal $ 66.4 $ 60.1 $ 148.0 State 14.8 15.6 9.4 International 19.9 38.6 43.8 Deferred: Federal 0.4 (1.7 ) 23.5 State 1.8 1.5 5.8 International (1.2 ) (0.5 ) (6.2 ) $ 102.1 $ 113.6 $ 224.3 The provision for income taxes differs from the U.S. federal statutory rate due to the following items: Years ended December 31 2019 2018 2017 Provision at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal benefit 2.8 2.4 1.9 International income tax rate differential—China (1.3 ) (2.3 ) (6.5 ) International income tax rate differential—other 0.4 1.1 0.1 U.S. manufacturing credit — — (1.4 ) Research tax credits (0.4 ) (0.5 ) (0.3 ) Excess tax benefit on stock compensation (0.5 ) (0.4 ) (2.2 ) Other (0.4 ) (0.9 ) 0.8 21.6 % 20.4 % 27.4 % U.S. Tax Cuts & Jobs Act (U.S. Tax Reform) — — 15.7 21.6 % 20.4 % 43.1 % U.S. Tax Reform was enacted on December 22, 2017 and significantly changed U.S. corporate income tax laws. Among other things, U.S. Tax Reform reduced the U.S. corporate income tax rate to 21 percent commencing on January 1, 2018, implemented a territorial tax system and levied a one-time As a result of U.S. Tax Reform, the Company recorded income tax expense of $81.8 million in the fourth quarter of 2017. The income tax expense resulting from U.S. Tax Reform was included in the provision for income taxes on the Company’s consolidated statement of earnings and consisted of two components: $83.5 million of income tax expense related to the one-time The Company completed its accounting for the income tax effects of U.S. Tax Reform as of December 31, 2018 and determined that there was no material adjustment necessary to the provisional amounts it recorded in 2017. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Components of earnings before income taxes were as follows: Years ended December 31 (dollars in millions) 2019 2018 2017 U.S. $ 400.3 $ 376.0 $ 329.9 International 71.8 181.8 190.9 $ 472.1 $ 557.8 $ 520.8 Total income taxes paid by the Company amounted to $116.6 million, $116.4 million, and $131.1 million in 2019, 2018 and 2017, respectively. The tax effects of temporary differences of assets and liabilities between income tax and financial reporting are as follows: 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 The Company believes it is more likely than not that it will realize its deferred tax assets through the reduction of future taxable income. The Company considered historical operating results in determining the probability of the realization of the deferred tax assets. A reconciliation of the beginning and ending amounts of tax loss carryovers, credit carryovers and valuation allowances is as follows: 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 The Company has foreign net operating loss carryovers that expire in 2020 through 2027 and state and local net operating loss carryovers that expire between 2029 and 2030. A reconciliation of the beginning and ending amount of unrecognized benefits is as follows: (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 The amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is $0.8 million. The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. At December 31, 2019, there was an immaterial amount of interest and penalties accrued. The Company anticipates that there will not be a material decrease in the total amount of unrecognized tax benefits in 2020. The Company’s U.S. federal income tax returns and its U.S. state and local income tax returns are subject to audit for the years 2016-2019 and 2002-2019, respectively. The Company is subject to non-U.S. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | 16. Commitments and Contingencies Environmental Contingencies The Company is a potentially responsible party in judicial and administrative proceedings seeking to clean up sites which have been environmentally impacted. In each case, the Company has established reserves, insurance proceeds and/or a potential recovery from third parties. The Company believes any environmental claims will not have a material effect on its financial position or results of operations. Product Liability and Other Matters The Company is subject to various claims and pending lawsuits for product liability and other matters arising out of the conduct of the Company’s business. With respect to product liability claims, the Company has self-insured a portion of its product liability loss exposure for many years. The Company has established reserves and has insurance coverage, which it believes are adequate to cover incurred claims. For the years ended December 31, 2019 and 2018, the Company had $125 million of product liability insurance for individual losses in excess of $7.5 million. The Company periodically reevaluates its exposure on claims and lawsuits and makes adjustments to its reserves as appropriate. The Company believes, based on current knowledge, consultation with counsel, adequate reserves and insurance coverage that the outcome of such claims and lawsuits will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. Inventory Repurchase Arrangements The Company maintains a commercial relationship with a supply-chain service provider (the Provider) in connection with the Company’s business in China. In this capacity, the Provider offers order-entry, warehousing and logistics support. The Provider also offers asset-backed financing to certain of the Company’s distributors in China to facilitate their working capital needs. To facilitate its financing support business, the Provider has collateralized lending facilities in place with multiple Chinese banks under which the Company has agreed to repurchase inventory if both requested by the banks and certain defined conditions are met, primarily related to the aging of the distributors’ notes. The Provider is required to indemnify the Company for any losses the Company would incur in the event of an inventory repurchase under these arrangements. Potential losses under the repurchase arrangements represent the difference between the repurchase price and net proceeds from the resale of product plus costs incurred in the process, less related distributor rebates. Before considering any reduction of distributor rebate accruals of $14.1 and $25.1 million as of December 31, 2019 and December 31, 2018, respectively, and from the resale of the related inventory, the gross amount the Company would be obligated to repurchase, which would be contingent on the default of all of the outstanding loans, was approximately $23.1 million and $75.8 million as of December 31, 2019 and December 31, 2018, respectively. The Company’s reserves for estimated losses under repurchase arrangements were immaterial as of December 31, 2019 and December 31, 2018. |
Operations by Segment
Operations by Segment | 12 Months Ended |
Dec. 31, 2019 | |
Operations by Segment | 17. Operations by Segment The Company is comprised of two reporting segments: North America and Rest of World. The Rest of World segment is primarily comprised of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. Our Rest of World segment also manufactures and markets in-home Net Sales Earnings Years ended December 31 (dollars in millions) 2019 2018 2017 2019 2018 2017 North America (1) $ 2,083.5 $ 2,044.7 $ 1,904.8 $ 488.9 $ 464.1 $ 428.6 Rest of World 935.8 1,173.6 1,116.3 40.2 149.3 149.3 Inter-segment (26.6 ) (30.4 ) (24.4 ) — — — Total segments – sales, segment earnings $ 2,992.7 $ 3,187.9 $ 2,996.7 $ 529.1 $ 613.4 $ 577.9 Corporate expenses (46.0 ) (47.2 ) (47.0 ) Interest expense (11.0 ) (8.4 ) (10.1 ) Earnings before income taxes 472.1 557.8 520.8 Provision for income taxes (2) (102.1 ) (113.6 ) (224.3 ) Net earnings $ 370.0 $ 444.2 $ 296.5 (1) In 2018, the Company recognized $6.7 million of restructuring and impairment expenses in connection with the move of manufacturing operations from our Renton, Washington facility to other U.S. facilities. For additional information, see Note 5 “Restructuring and Impairment Expenses.” (2) In 2017, the Company recorded a one-time In 2019, sales to the North America segment’s two largest customers were $421.1 million and $378.9 million which represented 14 percent and percent of the Company’s net sales, respectively. In , sales to the North America segment’s two largest customers were $ million and $ million which represented percent and percent of the Company’s net sales, respectively. In , sales to the North America segment’s two largest customers were $ million and $ million which represented percent and percent of the Company’s net sales, respectively. Assets, depreciation and capital expenditures by segment 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 Net sales and long-lived assets by geographic location The following data by geographic area includes net sales based on product shipment destination and long-lived assets based on physical location. Long-lived assets include net property, plant and equipment, operating lease assets and other long-term assets. 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 |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations | 18. Quarterly Results of Operations (Unaudited) (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 Net earnings per share are computed separately for each period, and therefore, the sum of such quarterly per share amounts may differ from the total for the year. In the first quarter of 2018, the Company recorded $6.7 million of restructuring and impairment expenses associated with a move of manufacturing operations from its Renton, Washington facility to other U.S. facilities. These charges reduced after-tax |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | 19. Subsequent Event In January 2020, an outbreak of a novel coronavirus (COVID-19) year. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | A. O. SMITH CORPORATION SCHEDULE II - (Dollars in millions) Years ended December 31, 2019, 2018 and 2017 Description Balance at Charged to Acquisition Deductions Balance at 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 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization | Organization. in-home |
Consolidation | Consolidation. |
Use of estimates | Use of estimates . |
Fair value of financial instruments | Fair value of financial instruments. $ million as of December 31, 2019 compared with the carrying amount of $ million |
Foreign currency translation | Foreign currency translation . non-operating year-end |
Cash and cash equivalents | Cash and cash equivalents . |
Marketable securities | Marketable securities . |
Inventory valuation | Inventory valuation. last-in, first-out first-in, first-out |
Property, plant and equipment | Property, plant and equipment. straight-line three three |
Goodwill and other intangibles | Goodwill and other intangibles. five |
Product warranties | Product warranties. one The Company records a liability for the expected cost of warranty-related claims at the time of sale and is estimated based on the warranty period, product type and loss experience using actual historical failure rates and estimated costs of product replacement. The variables used in the calculation of the provision are reviewed by the Company at least annually. At times, warranty issues may arise which are beyond the scope of the Company’s historical experience. The Company provides for any such warranty issues as they become known and estimable. The allocation of the warranty liability between current and long-term is based on expected warranty claims to be paid in the next year as determined by historical product failure rates. The following table presents the Company’s product warranty liability activity in 2019 and 2018: 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 |
Derivative instruments | Derivative instruments. |
Fair Value Measurements | Fair Value Measurements. Fair Value Measurements Assets and liabilities measured at fair value are based on the market approach which are prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Assets measured at fair value on a recurring basis are as follows (dollars in millions): 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 There were no changes in the valuation techniques used to measure fair values on a recurring basis. |
Revenue recognition | Revenue recognition. Substantially all of the Company’s sales are from contracts with customers for the purchase of its products. Contracts and customer purchase orders are used to determine the existence of a sales contract. Shipping documents are used to verify shipment. For substantially all of its products, the Company transfers control of products to the customer at the point in time when title and risk are passed to the customer, which generally occurs upon shipment of the product. See Note , “Revenue Recognition” for disclosure of the Company’s revenue recognition activities. |
Advertising | Advertising. |
Research and development | Research and development. |
Environmental costs | Environmental costs. |
Stock-based compensation | Stock-based compensation. |
Income taxes | Income taxes. Income Taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement. |
Earnings per share of common stock | Earnings per share of common stock. two-class 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 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) amended Accounting Standards Codification (ASC) 740, Income Taxes In January 2017, the FASB amended ASC 350, Intangibles – Goodwill and Other 2017-04, 2017-04 In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses 2016-13) 2016-13 2016-13 In February 2016, the FASB amended ASC 842, Leases 2016-02). non-lease 2016-02 |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Product Warranty Liability Activity | The following table presents the Company’s product warranty liability activity in 2019 and 2018: 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 |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets measured at fair value on a recurring basis are as follows (dollars in millions): 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 |
Schedule of Computation of Basic and Diluted Weighted Average Shares Used in EPS Calculations | The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: 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 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Segment Sales Disaggregated by Major Product Line | 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 (1) Includes the results of Water-Right and Hague Quality Water International (Hague) from the date of acquisition of April 8, 2019 and September 5, 2017, respectively. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Preliminary Allocation of Fair Value of Assets Acquired and Liabilities Assumed at Date of Acquisition | The following table summarizes the preliminary estimate of the fair value of the assets acquired and liabilities assumed at the date of acquisition of Water-Right for purposes of allocating the purchase price. The Company is in the process of finalizing the fair value estimates; therefore, the allocation of the purchase price is subject to refinement. Significant assumptions used to estimate the fair value of intangible assets acquired include discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates, attrition rates and royalty rates. non-compete 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 $ |
Water-Right, Inc | |
Summary of Preliminary Allocation of Fair Value of Assets Acquired and Liabilities Assumed at Date of Acquisition | The following table summarizes the allocation of fair value of the assets acquired and liabilities assumed at the date of acquisition of Hague for purposes of allocating the purchase price. Significant assumptions used to estimate the fair value of intangible assets acquired include discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates, attrition rates and royalty rates. The $12.8 million of acquired intangible assets was comprised of $1.1 million of trade names that are not subject to amortization and $11.7 million of customer lists being amortized over 18 years. 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 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule Of Supplemental Balance Sheet Information Related To Leases [Table Text Block] | Supplemental balance sheet information related to leases is as follows: (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, 2019 Weighted-average remaining lease term 10 years Weighted-average discount rate 3.93% |
Lease, Cost [Table Text Block] | The components of lease expense were as follows: (dollars in millions) Lease Expense Classification Twelve months ended Operating lease expense (1) Cost of products sold $ 3.0 Selling, general and administrative expenses 17.6 (1) Includes short-term lease expense of $2.0 million for the twelve months ended December 31, 2019. Includes variable lease cost of $2.1 million for the twelve months ended December 31, 2019. |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of lease liabilities were as follows: (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 |
Restructuring and Impairment _2
Restructuring and Impairment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Analysis of Company's Restructuring Reserve | The following table presents an analysis of the Company’s restructuring reserve for the years ended December 31, 2019 and 2018: (dollars in millions) Severance Lease Exit Fixed Assets 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 |
Statement of Cash Flows (Tables
Statement of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information is as follows: Years ended December 31 (dollars in millions) 2019 2018 2017 Net change in current assets and liabilities, net of acquisitions: Receivables $ 62.4 $ (54.6 ) $ (75.8 ) Inventories 6.3 (7.7 ) (37.5 ) Other current assets (4.8 ) 10.0 (9.0 ) Trade payables (35.4 ) 8.8 (5.1 ) Accrued liabilities, including payroll and benefits 14.2 (3.5 ) 12.2 Income taxes (10.1 ) 7.0 (12.6 ) $ 32.6 $ (40.0 ) $ (127.8 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Inventories | 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 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Property Plant and Equipment | December 31 (dollars in millions) 2019 2018 Land $ 11.6 $ 11.2 Buildings 334.1 323.3 Equipment 686.9 643.8 Software 124.3 118.5 1,156.9 1,096.8 Less accumulated depreciation and amortization 611.5 556.8 $ 545.4 $ 540.0 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 consisted of the following: (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 |
Schedule of Carrying Amount of Other Intangible Assets | The carrying amount of other intangible assets consisted of the following: 2019 2018 December 31 (dollars in millions) Gross Accumulated Net Gross Accumulated 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 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | December 31 (dollars in millions) 2019 2018 Bank credit lines, average year-end $ 4.7 $ 17.1 Revolving credit agreement borrowings, average year-end 85.0 10.0 Commercial paper, average year-end 74.3 74.3 Term notes with insurance companies, expiring 2029-2034, average year-end 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 |
Schedule of Maturities of Long Term Debt | Scheduled maturities of long-term Years ending December 31 (dollars in millions) Amount 2020 $ 6.8 2021 170.8 2022 6.8 2023 10.0 2024 10.0 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Changes in Accumulated Other Comprehensive Loss by Component | Changes to accumulated other comprehensive loss by component are as follows: 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) (1) Amounts reclassified from accumulated other comprehensive loss: Realized loss (gains) on derivatives reclassified to cost 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 (2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13 “Pensions and Other Post-retirement Benefits” for additional details. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Changes in Option Shares | Changes in options, all of which relate to the Company’s Common Stock, were as follows: Years Ended December 31 2019 2018 2017 Number of Weighted Number of Weighted Number of Weighted 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 Granted 557,045 49.49 373,220 61.62 358,150 50.16 Exercised (1) (249,840 ) 18.55 (176,302 ) 22.93 (752,603 ) 16.93 Forfeited (11,544 ) 54.02 (27,355 ) 47.95 (6,754 ) 37.46 Outstanding at end of year (2) 2,728,350 37.64 2,432,689 33.05 2,263,126 27.73 Exercisable at end of year (3) 1,820,743 30.07 1,665,184 24.52 1,387,259 20.48 (1) The total intrinsic value of options exercised in 2019, 2018 and 2017 was $7.7 million, $6.8 million and $29.1 million, respectively. (2) The weighted average remaining contractual life of options outstanding was 7 years at December 31, 2019, December 31, 2018, and December 31, 2017. The aggregate intrinsic value of options outstanding at December 31, 2019 was $34.2 million. (3) The weighted average remaining contractual life of options exercisable was 6 years at December 31, 2019, December 31, 2018 and, December 31, 2017. The aggregate intrinsic value of options exercisable at December 31, 2019 was $34.2 million. |
Share-based Compensation, Performance Shares Award Nonvested Activity | Number of Options Weighted Avg. Per 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 |
Schedule of Weighted Average Fair Value per Option at Date of Grant | The weighted-average fair value per option at the date of grant during 2019, 2018 and 2017, using the Black-Scholes option-pricing model, was $10.83, $14.80 and $13.04, respectively. Assumptions were as follows: 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 % |
Schedule of Share Unit Activity Under Plan | A summary of share unit activity under the plan is as follows: 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 |
Pension and Other Post-retire_2
Pension and Other Post-retirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Changes in Benefit Obligation, Plan Assets and Funded Status of Defined Benefit Pension and Post Retirement Benefit Plans | The following tables present the changes in benefit obligations, plan assets and funded status for domestic pension and post-retirement plans and the components of net periodic benefit costs. Pension Benefits Post-retirement 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 (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 ) * In addition, the Company has a liability for a foreign pension plan of $0.2 million at December 31, 2019 and 2018. |
Schedule of Net Periodic Benefit Cost | 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 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 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 |
Schedule of Actuarial Assumptions Used To Determine Benefit Obligations | Actuarial assumptions used to determine benefit obligations at December 31 are as follows: Pension Benefits Post-retirement 2019 2018 2019 2018 Discount rate 3.18 % 4.32 % 3.40 % 4.46 % |
Schedule of Actuarial Assumptions Used To Determine Net Periodic Benefit Cost | Actuarial assumptions used to determine net periodic benefit cost for the year ended December 31 are as follows: Pension Benefits Post-retirement 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 % |
Schedule of Health Care Cost Trend Rates | Assumed health care cost trend rates as of December 31 are as follows: 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 |
Schedule of Weighted Asset Allocations by Asset Category | The Company’s pension plan weighted asset allocations as of December 31 by asset category are as follows: Asset Category 2019 2018 Equity securities 42 % 40 % Debt securities 47 48 Real estate 10 10 Private equity 1 2 100 % 100 % |
Schedule of Fair Value Measurement of Plan Assets | The following tables present the fair value measurement of the Company’s plan assets as of December 31, 2019 and 2018 (dollars in millions): December 31, 2019 Asset Category Total Quoted Prices in Significant Other Significant Non- Short-term investments $ 14.6 $ 2.8 $ 11.8 $ — Equity securities Common stocks 127.0 127.0 — — Commingled equity funds 113.4 — 113.4 — Fixed income securities U.S. treasury securities 49.8 49.8 — — Other fixed income securities 225.1 — 225.1 — Commingled fixed income funds 114.0 — 114.0 — Options (10.8 ) — (10.8 ) — Other types of investments Mutual funds 104.9 — 104.9 — Real estate funds 82.3 — — 82.3 Private equity 8.6 — — 8.6 Total fair value of plan asset investments $ 828.9 $ 179.6 $ 558.4 $ 90.9 Non-investment 3.4 Total plan assets $ 832.3 December 31, 2018 Asset Category Total Quoted Prices in Significant Other Significant Non- 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 2.2 Total plan assets $ 777.5 |
Schedule of Reconciliation of Fair Value Measurements Using Significant Unobservable Inputs | The following table presents a reconciliation of the fair value measurements using significant unobservable inputs (Level 3) as of December 31, 2019 and 2018 (dollars in millions): Real estate Private 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 |
Schedule of Estimated Future Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Years ending December 31 (dollars in millions) Pension Benefits Post-retirement 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 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Summary by Currency of Foreign Currency Forward Contracts | The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts that are designated as cash flow hedges: December 31 (dollars in millions) 2019 2018 Buy Sell Buy Sell British pound $ — $ 1.3 $ — $ 1.0 Canadian dollar — 49.7 — — Euro 36.0 — 32.0 — Mexican peso 18.6 — 27.8 — Total $ 54.6 $ 51.0 $ 59.8 $ 1.0 |
Schedule of Impact of Cash Flow Hedges on Company's Financial Statements | The following tables present the impact of derivative contracts on the Company’s financial statements. Fair value of derivatives designated as hedging instruments under ASC 815: 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 — 5.1 Accrued liabilities (1.5 ) (0.6 ) Commodities contracts Accrued liabilities — (0.9 ) Total derivatives designated as hedging instruments $ $ |
Schedule of effect of cash flow hedges on the condensed consolidated statement of earnings | The effect of cash flow hedges on the condensed consolidated statement of earnings: Years ended December 31 (dollars in millions) Derivatives in ASC 815 cash flow Amount of gain (loss) s Location of gain (loss) Amount of gain 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 |
Designated as Hedging Instrument | |
Schedule of effect of cash flow hedges on the condensed consolidated statement of earnings | The effect of cash flow hedges on the condensed consolidated statement of earnings: Years ended December 31 (dollars in millions) Derivatives in ASC 815 cash flow Amount of gain (loss) s Location of gain (loss) Amount of gain 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 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Components of Provision for Income Taxes | The components of the provision (benefit) for income taxes consisted of the following: Years ended December 31 (dollars in millions) 2019 2018 2017 Current: Federal $ 66.4 $ 60.1 $ 148.0 State 14.8 15.6 9.4 International 19.9 38.6 43.8 Deferred: Federal 0.4 (1.7 ) 23.5 State 1.8 1.5 5.8 International (1.2 ) (0.5 ) (6.2 ) $ 102.1 $ 113.6 $ 224.3 |
Difference Between Provision for Income Taxes and U.S. Federal Statutory Rate | The provision for income taxes differs from the U.S. federal statutory rate due to the following items: Years ended December 31 2019 2018 2017 Provision at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal benefit 2.8 2.4 1.9 International income tax rate differential—China (1.3 ) (2.3 ) (6.5 ) International income tax rate differential—other 0.4 1.1 0.1 U.S. manufacturing credit — — (1.4 ) Research tax credits (0.4 ) (0.5 ) (0.3 ) Excess tax benefit on stock compensation (0.5 ) (0.4 ) (2.2 ) Other (0.4 ) (0.9 ) 0.8 21.6 % 20.4 % 27.4 % U.S. Tax Cuts & Jobs Act (U.S. Tax Reform) — — 15.7 21.6 % 20.4 % 43.1 % |
Components of Earnings Before Income Taxes | Components of earnings before income taxes were as follows: Years ended December 31 (dollars in millions) 2019 2018 2017 U.S. $ 400.3 $ 376.0 $ 329.9 International 71.8 181.8 190.9 $ 472.1 $ 557.8 $ 520.8 |
Tax Effects of Temporary Differences of Assets and Liabilities | The tax effects of temporary differences of assets and liabilities between income tax and financial reporting are as follows: 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 |
Reconciliation of Tax Loss Carryovers, Credit Carryovers and Valuation Allowances | A reconciliation of the beginning and ending amounts of tax loss carryovers, credit carryovers and valuation allowances is as follows: 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 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized benefits is as follows: (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 |
Operations by Segment (Tables)
Operations by Segment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Segment Earnings | Segment earnings, defined by the Company as earnings before interest, taxes, general corporate and corporate research and development expenses, were used to measure the performance of the segments. Net Sales Earnings Years ended December 31 (dollars in millions) 2019 2018 2017 2019 2018 2017 North America (1) $ 2,083.5 $ 2,044.7 $ 1,904.8 $ 488.9 $ 464.1 $ 428.6 Rest of World 935.8 1,173.6 1,116.3 40.2 149.3 149.3 Inter-segment (26.6 ) (30.4 ) (24.4 ) — — — Total segments – sales, segment earnings $ 2,992.7 $ 3,187.9 $ 2,996.7 $ 529.1 $ 613.4 $ 577.9 Corporate expenses (46.0 ) (47.2 ) (47.0 ) Interest expense (11.0 ) (8.4 ) (10.1 ) Earnings before income taxes 472.1 557.8 520.8 Provision for income taxes (2) (102.1 ) (113.6 ) (224.3 ) Net earnings $ 370.0 $ 444.2 $ 296.5 (1) In 2018, the Company recognized $6.7 million of restructuring and impairment expenses in connection with the move of manufacturing operations from our Renton, Washington facility to other U.S. facilities. For additional information, see Note 5 “Restructuring and Impairment Expenses.” (2) In 2017, the Company recorded a one-time |
Schedule of Assets, Depreciation And Capital Expenditure By Segment | Assets, depreciation and capital expenditures by segment 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 |
Schedule of Net Sales and Long-Lived Assets by Geographic Location | The following data by geographic area includes net sales based on product shipment destination and long-lived assets based on physical location. Long-lived assets include net property, plant and equipment, operating lease assets and other long-term assets. 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 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Quarterly Results of Operations | (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 |
Organization and Significant _4
Organization and Significant Accounting Policies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Number of reporting segments | Segment | 2 | 2 | |
Fair value of term notes | $ 122.1 | $ 120 | |
Carrying amount of term notes | $ 120 | $ 120 | |
Percentage of (LIFO) inventory | 61.00% | 64.00% | |
Advertising costs charged to operations | $ 110.7 | $ 132.1 | $ 126.9 |
Amortization of total advertising costs | 28.5 | 38.7 | 43 |
Research and development costs | 87.9 | 94 | 86.4 |
Excess tax deductions recognized as financing cash flows | $ 2.3 | $ 2.4 | $ 11.6 |
Minimum percentage of amount likely to be realized upon ultimate settlement to recognize tax benefits | 50.00% | ||
Minimum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Marketable securities, Maturity period | 180 days | ||
Product warranty period | 1 year | ||
Amortization of total advertising costs, months | 12 months | ||
Minimum | Customer Relationships | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 5 years | ||
Minimum | Buildings | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 25 years | ||
Minimum | Equipment | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 3 years | ||
Minimum | Software | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 3 years | ||
Maximum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Marketable securities, Maturity period | 12 months | ||
Product warranty period | 10 years | ||
Amortization of total advertising costs, months | 36 months | ||
Maximum | Customer Relationships | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Intangible assets estimated useful lives | 25 years | ||
Maximum | Buildings | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 50 years | ||
Maximum | Equipment | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 20 years | ||
Maximum | Software | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated service lives used to compute depreciation | 15 years |
Company's Warranty Liability Ac
Company's Warranty Liability Activity (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Product Warranties | ||
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 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 177.4 | $ 385.3 |
Significant other observable inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on recurring basis | $ 6.9 | $ 7.5 |
Schedule of Computation of Basi
Schedule of Computation of Basic and Diluted Weighted-Average Shares Used in Earnings per Share Calculations (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per Share of Common Stock | |||
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 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)SegmentDistributor | Dec. 31, 2018USD ($)Segment | |
Customer deposits liability | $ 49.6 | $ 47 |
Allowance for doubtful accounts | $ 6.7 | $ 6.4 |
Number of reporting segments | Segment | 2 | 2 |
Water Heaters | North America | ||
Number of wholesale distributors | Distributor | 1,300 |
Segment Sales Disaggregated by
Segment Sales Disaggregated by Major Product Line (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Net sales | $ 750.9 | $ 728.2 | $ 765.4 | $ 748.2 | $ 812.5 | $ 754.1 | $ 833.3 | $ 788 | $ 2,992.7 | $ 3,187.9 | $ 2,996.7 | |
China | ||||||||||||
Net sales | 825.4 | 1,071.2 | 1,034.9 | |||||||||
Inter-segment | ||||||||||||
Net sales | (26.6) | (30.4) | (24.4) | |||||||||
Operating Segments [Member] | North America | ||||||||||||
Net sales | [1] | 2,083.5 | 2,044.7 | 1,904.8 | ||||||||
Operating Segments [Member] | North America | Water Heaters And Related Parts [Member] | ||||||||||||
Net sales | 1,742.6 | 1,757 | 1,663 | |||||||||
Operating Segments [Member] | North America | Boilers And Related Parts [Member] | ||||||||||||
Net sales | 199.5 | 200.4 | 183.3 | |||||||||
Operating Segments [Member] | North America | Water Treatment Products [Member] | ||||||||||||
Net sales | [2] | 141.4 | 87.3 | 58.5 | ||||||||
Operating Segments [Member] | Rest of World [Member] | ||||||||||||
Net sales | 935.8 | 1,173.6 | 1,116.3 | |||||||||
Operating Segments [Member] | Rest of World [Member] | China | ||||||||||||
Net sales | 827.2 | 1,070.4 | 1,029.4 | |||||||||
Operating Segments [Member] | Rest of World [Member] | All Other Rest Of World [Member] | ||||||||||||
Net sales | $ 108.6 | $ 103.2 | $ 86.9 | |||||||||
[1] | In 2018, the Company recognized $6.7 million of restructuring and impairment expenses in connection with the move of manufacturing operations from our Renton, Washington facility to other U.S. facilities. For additional information, see Note 5 “Restructuring and Impairment Expenses.” | |||||||||||
[2] | Includes the results of Water-Right and Hague Quality Water International (Hague) from the date of acquisition of April 8, 2019 and September 5, 2017, respectively. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | Apr. 08, 2019 | Sep. 05, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Aggregate cash purchase price, net of cash acquired | $ 107 | $ 43.1 | |||
Acquired intangible assets, amortization period, in years | 13 years | ||||
Payment for Contingent Consideration Liability, Financing Activities | $ 1 | $ 2.3 | 1.7 | ||
Water-Right, Inc | |||||
Business Acquisition [Line Items] | |||||
Percentage of ownership interest acquired | 100.00% | ||||
Aggregate cash purchase price, net of cash acquired | $ 107 | ||||
Acquisition-related costs | 0.4 | ||||
Acquired intangible assets | 60.4 | ||||
Revenues associated with Water-Right | 44.3 | ||||
pre-tax earnings associated with Water-Right | $ 7.5 | ||||
Effective Date Of Acquisition | Apr. 8, 2019 | ||||
operating earnings associated with Water-Right | $ 7.1 | ||||
Water-Right, Inc | Escrow Deposit [Member] | |||||
Business Acquisition [Line Items] | |||||
consideration to former owners | 4 | ||||
Water-Right, Inc | Noncompete agreements | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, subject to amortization | $ 1.2 | ||||
Acquired intangible assets, amortization period, in years | 7 years 6 months | ||||
Water-Right, Inc | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, not subject to amortization | $ 19 | ||||
Acquired intangible assets, subject to amortization | $ 40.2 | ||||
Acquired intangible assets, amortization period, in years | 20 years | ||||
Hague | |||||
Business Acquisition [Line Items] | |||||
Percentage of ownership interest acquired | 100.00% | ||||
Aggregate cash purchase price, net of cash acquired | $ 43.1 | ||||
Cash acquired from business acquisition | 4.1 | ||||
Contingent consideration and holdback | 1.5 | 1.5 | 2 | $ 2 | |
Acquisition-related costs | 0.2 | ||||
Acquired intangible assets | 12.8 | ||||
Payment for Contingent Consideration Liability, Financing Activities | $ 1.3 | ||||
Estimated Fair Value Business Combination Contingent Consideration Liability | $ 2 | ||||
Hague | Trade Names | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, not subject to amortization | 1.1 | ||||
Hague | Customer Lists | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, subject to amortization | $ 11.7 | ||||
Acquired intangible assets, amortization period, in years | 18 years |
Schedule of Preliminary Allocat
Schedule of Preliminary Allocation of Fair Value of Assets Acquired and Liabilities Assumed at Date of Acquisition (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Apr. 08, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 05, 2017 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 546 | $ 513 | $ 516.7 | ||
Hague | |||||
Business Acquisition [Line Items] | |||||
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) | ||||
Total liabilities assumed | (6.6) | ||||
Net assets acquired | $ 43.1 | ||||
Water-Right, Inc | |||||
Business Acquisition [Line Items] | |||||
Current assets, net of cash acquired | $ 9.7 | ||||
Property, plant and equipment | 8.6 | ||||
Intangible assets | 60.4 | ||||
Goodwill | 31 | ||||
Total assets acquired | 109.7 | ||||
Current liabilities | (2.7) | ||||
Net assets acquired | $ 107 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating lease termination option | options to terminate can be effective within one year | ||
Rent expense, including payments under operating leases | $ 24 | $ 23.9 | |
Minimum [Member] | |||
Operating lease term of extension | 1 year | ||
Maximum [Member] | |||
Operating lease term of extension | 5 years |
Leases supplemental balance she
Leases supplemental balance sheet (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Liabilities | |
Short term: Accrued liabilities | $ 12 |
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 | |
Weighted-average remaining lease term | 10 years |
Weighted-average discount rate | 3.93% |
Leases - Components of lease ex
Leases - Components of lease expense (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Short term lease expense | $ 2 | |
Variable lease expenses | 2.1 | |
Cost of products sold [Member] | ||
Operating lease expense | 3 | [1] |
Selling, general and administrative expenses [Member] | ||
Operating lease expense | $ 17.6 | |
[1] | Includes short-term lease expense of $2.0 million for the twelve months ended December 31, 2019. Includes variable lease cost of $2.1 million for the twelve months ended December 31, 2019. |
Maturities of lease liabilities
Maturities of lease liabilities (Detail) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 14 |
2021 | 10.5 |
2022 | 9 |
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 |
Restructuring and Impairment _3
Restructuring and Impairment Expenses - Additional Information (Detail) - USD ($) $ in Millions | Mar. 21, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Costs and Asset Impairment Charges | $ 6.7 | $ 0 | $ 6.7 | $ 0 | |
Severance Costs | 4 | ||||
Lease exit cost | 2.1 | ||||
Impairment of long-lived assets | 0.6 | ||||
Tax benefit related to the charges | [1] | $ 102.1 | $ 113.6 | $ 224.3 | |
Restructuring and Impairment Charges | |||||
Tax benefit related to the charges | $ 1.7 | ||||
[1] | In 2017, the Company recorded a one-time charge of $81.8 million associated with U.S. Tax Reform, primarily related to the repatriation of undistributed foreign earnings. For additional information, see Note 15 “Income Taxes.” |
Schedule of Analysis of Company
Schedule of Analysis of Company's Restructuring Reserve (Detail) - USD ($) $ in Millions | Mar. 21, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Beginning balance | $ 1.5 | $ 0 | ||
Restructuring expense recognized | $ 6.7 | 0 | 6.7 | $ 0 |
Cash payments and disposals | (1) | (5.2) | ||
Ending balance | 0.5 | 1.5 | 0 | |
Severance Costs | ||||
Beginning balance | 0.2 | 0 | ||
Restructuring expense recognized | 4 | |||
Cash payments and disposals | (0.2) | (3.8) | ||
Ending balance | 0 | 0.2 | 0 | |
Lease Exit Costs | ||||
Beginning balance | 1.3 | 0 | ||
Restructuring expense recognized | 2.1 | |||
Cash payments and disposals | (0.8) | (0.8) | ||
Ending balance | 0.5 | 1.3 | $ 0 | |
Fixed Assets Impairment | ||||
Beginning balance | 0 | |||
Restructuring expense recognized | 0.6 | |||
Cash payments and disposals | 0 | (0.6) | ||
Ending balance | $ 0 | $ 0 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net change in current assets and liabilities, net of acquisitions: | |||
Receivables | $ 62.4 | $ (54.6) | $ (75.8) |
Inventories | 6.3 | (7.7) | (37.5) |
Other current assets | (4.8) | 10 | (9) |
Trade payables | (35.4) | 8.8 | (5.1) |
Accrued liabilities, including payroll and benefits | 14.2 | (3.5) | 12.2 |
Income taxes | (10.1) | 7 | (12.6) |
Current assets and liabilities | $ 32.6 | $ (40) | $ (127.8) |
Schedule of Inventories (Detail
Schedule of Inventories (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Inventories | ||
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) |
Net inventory | $ 303 | $ 304.7 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Inventories [Line Items] | |||
After-tax LIFO income | $ 0.7 | $ 0.4 | $ 0.3 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,156.9 | $ 1,096.8 |
Less accumulated depreciation and amortization | 611.5 | 556.8 |
Net property, plant and equipment | 545.4 | 540 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11.6 | 11.2 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 334.1 | 323.3 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 686.9 | 643.8 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 124.3 | $ 118.5 |
Schedule of Changes in Carrying
Schedule of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||
Beginning balance | $ 513 | $ 516.7 |
Acquisitions | 31 | |
Currency translation adjustment | 2 | (3.7) |
Ending balance | 546 | 513 |
North America | ||
Goodwill [Line Items] | ||
Beginning balance | 453.9 | 457.2 |
Acquisitions | 31 | |
Currency translation adjustment | 2 | (3.3) |
Ending balance | 486.9 | 453.9 |
Rest of World | ||
Goodwill [Line Items] | ||
Beginning balance | 59.1 | 59.5 |
Currency translation adjustment | (0.4) | |
Ending balance | $ 59.1 | $ 59.1 |
Schedule of Carrying Amount of
Schedule of Carrying Amount of Other Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount, Amortizable intangible assets | $ 281.7 | $ 240.5 |
Gross Carrying Amount, Total intangible assets | 465.5 | 404.6 |
Accumulated Amortization, Amortizable intangible assets | (127.1) | (111.5) |
Net, Amortizable intangible assets | 154.6 | 129 |
Net, Total intangible assets | 338.4 | 293.1 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount, indefinite-lived intangible assets | 183.8 | 164.1 |
Net, Indefinite-lived intangible assets | 183.8 | 164.1 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount, Amortizable intangible assets | 3.7 | 3.7 |
Accumulated Amortization, Amortizable intangible assets | (3.5) | (3.3) |
Net, Amortizable intangible assets | 0.2 | 0.4 |
Customer Lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount, Amortizable intangible assets | 278 | 236.8 |
Accumulated Amortization, Amortizable intangible assets | (123.6) | (108.2) |
Net, Amortizable intangible assets | $ 154.4 | $ 128.6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill And Other Intangibles [Line Items] | |||
Amortization expenses of other intangible assets | $ 15,800,000 | $ 14,300,000 | $ 13,700,000 |
Amortization of intangible assets, weighted average period, years | 13 years | ||
Annual impairment of goodwill | $ 0 | 0 | 0 |
Intangible asset impairment charge | 0 | $ 0 | $ 0 |
Annually | |||
Goodwill And Other Intangibles [Line Items] | |||
Amortization expenses of other intangible assets | $ 15,700,000 |
Schedule of Debt (Detail)
Schedule of Debt (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Debt | $ 284 | $ 221.4 |
Less long-term debt due within one year | 6.8 | |
Long-term debt | 277.2 | 221.4 |
Revolving Credit Agreement Borrowings | ||
Debt Instrument [Line Items] | ||
Debt | 85 | 10 |
Bank Credit Lines | ||
Debt Instrument [Line Items] | ||
Debt | 4.7 | 17.1 |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Debt | 74.3 | 74.3 |
Term Notes With Insurance Companies | ||
Debt Instrument [Line Items] | ||
Debt | $ 120 | $ 120 |
Schedule of Debt (Parenthetical
Schedule of Debt (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Bank Credit Lines | ||
Debt Instrument [Line Items] | ||
Line of credit facility, average year-end interest rate | 2.40% | 3.40% |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Line of credit facility, average year-end interest rate | 2.20% | 2.70% |
Term Notes With Insurance Companies | ||
Debt Instrument [Line Items] | ||
Line of credit facility, average year-end interest rate | 3.30% | 3.30% |
Debt instrument maturity | 2029 | 2034 |
Revolving Credit Agreement Borrowings | ||
Debt Instrument [Line Items] | ||
Line of credit facility, average year-end interest rate | 2.80% | 3.50% |
Debt - Additional Information (
Debt - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)Banks | |
Debt Instrument [Line Items] | |
Multi-currency revolving credit agreement | $ 500 |
Number of banks involved in multi-year multi-currency revolving credit agreement | Banks | 9 |
Revolving credit facility, expiration date | Dec. 15, 2021 |
Multi-currency revolving credit agreement, maximum amount | $ 700 |
Schedule of Maturities of Long
Schedule of Maturities of Long Term Debt (Detail) $ in Millions | Dec. 31, 2019USD ($) |
Debt And Lease Commitments [Abstract] | |
2020 | $ 6.8 |
2021 | 170.8 |
2022 | 6.8 |
2023 | 10 |
2024 | $ 10 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock based compensation cost recognized | $ 13.3 | $ 10.1 | $ 9.9 | |||||
Stock option compensation expense recognized | $ 6.4 | $ 4.4 | $ 4.7 | |||||
Weighted-average fair value per option at the date of grant | $ 10.83 | $ 14.80 | $ 13.04 | |||||
Number of Options, outstanding | 2,728,350 | [1] | 2,432,689 | [1] | 2,263,126 | [1] | 2,664,333 | |
Number of options, exercisable at end of period | [2] | 1,820,743 | 1,665,184 | 1,387,259 | ||||
intrinsic value of options exercised | $ 7.7 | $ 6.8 | $ 29.1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years | 7 years | 7 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 34.2 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years | 6 years | 6 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 34.2 | |||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | 3 years | 3 years | |||||
Stock Appreciation Rights (SARs) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Number of Options, outstanding | 14,880 | 16,170 | 23,660 | |||||
Number of options, exercisable at end of period | 15,774 | |||||||
Restricted Stock And Share Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of Units - Granted | 140,102 | 106,581 | 107,853 | |||||
Value of share units at the date of issuance | $ 6.9 | $ 6.6 | $ 5.4 | |||||
Share based compensation expense attributable to share units | $ 6.9 | $ 5.7 | $ 5.2 | |||||
A.O. Smith Combined Compensation Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for granting of options, restricted stock or share units | 1,855,560 | |||||||
[1] | The weighted average remaining contractual life of options outstanding was 7 years at December 31, 2019, December 31, 2018, and December 31, 2017. The aggregate intrinsic value of options outstanding at December 31, 2019 was $34.2 million. | |||||||
[2] | The weighted average remaining contractual life of options exercisable was 6 years at December 31, 2019, December 31, 2018 and, December 31, 2017. The aggregate intrinsic value of options exercisable at December 31, 2019 was $34.2 million. |
Changes in Option Awards All of
Changes in Option Awards All of Which Related to Common Stock (Detail) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-Avg. Per Share Exercise Price, beginning period | $ 33.05 | [1] | $ 27.73 | [1] | $ 21.69 | |
Weighted-Avg. Per Share Exercise Price - Granted | 49.49 | 61.62 | 50.16 | |||
Weighted-Avg. Per Share Exercise Price - Exercised | [2] | 18.55 | 22.93 | 16.93 | ||
Weighted-Avg. Per Share Exercise Price - Forfeited | 54.02 | 47.95 | 37.46 | |||
Weighted-Avg. Per Share Exercise Price, ending period | [1] | 37.64 | 33.05 | 27.73 | ||
Weighted-Average Per Share Exercise Price, Exercisable | [3] | $ 30.07 | $ 24.52 | $ 20.48 | ||
Number of Options Outstanding, Beginning Balance | 2,432,689 | [1] | 2,263,126 | [1] | 2,664,333 | |
Number of Options, Granted | 557,045 | 373,220 | 358,150 | |||
Number of Options, Exercised | [2] | (249,840) | (176,302) | (752,603) | ||
Number of Options, Forfeited | (11,544) | (27,355) | (6,754) | |||
Number of Options Outstanding, Ending Balance | [1] | 2,728,350 | 2,432,689 | 2,263,126 | ||
Number of Options, Exercisable at End of Period | [3] | 1,820,743 | 1,665,184 | 1,387,259 | ||
[1] | The weighted average remaining contractual life of options outstanding was 7 years at December 31, 2019, December 31, 2018, and December 31, 2017. The aggregate intrinsic value of options outstanding at December 31, 2019 was $34.2 million. | |||||
[2] | The total intrinsic value of options exercised in 2019, 2018 and 2017 was $7.7 million, $6.8 million and $29.1 million, respectively. | |||||
[3] | The weighted average remaining contractual life of options exercisable was 6 years at December 31, 2019, December 31, 2018 and, December 31, 2017. The aggregate intrinsic value of options exercisable at December 31, 2019 was $34.2 million. |
Nonvested Stock Options (Detail
Nonvested Stock Options (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Nonvested options at beginning of year (Shares) | 767,505 | ||
Granted (Shares) | 557,045 | 373,220 | 358,150 |
Vested (Shares) | (408,648) | ||
Forfeited (Shares) | (8,295) | ||
Nonvested options at end of year (Shares) | 907,607 | 767,505 | |
Nonvested options at beginning of year (Weighted Avg. Exercise Price) | $ 51.55 | ||
Granted (Weighted Avg. Exercise Price) | 49.49 | $ 61.62 | $ 50.16 |
Vested (Weighted Avg. Exercise Price) | 45.87 | ||
Forfeited (Weighted Avg. Exercise Price) | 53.88 | ||
Nonvested options at end of year (Weighted Avg. Exercise Price) | $ 52.82 | $ 51.55 |
Schedule of Weighted-Average Fa
Schedule of Weighted-Average Fair Value per Option at Date of Grant (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Based Compensation [Abstract] | |||
Expected life (years) | 5 years 6 months | 5 years 8 months 12 days | 5 years 8 months 12 days |
Risk-free interest rate | 2.70% | 2.90% | 2.40% |
Dividend yield | 1.60% | 1.00% | 1.00% |
Expected volatility | 22.80% | 22.10% | 26.50% |
Summary of Share Unit Activity
Summary of Share Unit Activity Under Plan (Detail) - Restricted Stock And Share Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Units Issued and unvested, Beginning of Period | 379,601 | ||
Number of Units - Granted | 140,102 | 106,581 | 107,853 |
Number of Units - Vested | (147,642) | ||
Number of Units - Forfeited/cancelled | (5,959) | ||
Number of Units Issued and unvested, End of Period | 366,102 | 379,601 | |
Weighted-Average Grant Date Value, Beginning of Period | $ 42.93 | ||
Weighted-Average Grant Date Value - Granted | 49.44 | ||
Weighted-Average Grant Date Value - Vested | 31.35 | ||
Weighted-Average Grant Date Value - Forfeited/cancelled | 55.48 | ||
Weighted-Average Grant Date Value, End of Period | $ 49.92 | $ 42.93 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Trading Activity, Gains and Losses, Net [Line Items] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ (1.3) | $ (38.4) | $ 52.7 |
Net Investment Hedging [Member] | Non-US [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | $ 7.4 | |
Derivative, Notional Amount | $ 100 | ||
Commodity Futures Contracts | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Reclassification period for effective portion of contract, in years | 1 year |
Schedule of Summary by Currency
Schedule of Summary by Currency of Foreign Currency Forward Contracts (Detail) - Foreign currency forward contracts - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Buy | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | $ 54.6 | $ 59.8 |
Buy | Euro | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 36 | 32 |
Buy | Mexican peso | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 18.6 | 27.8 |
Sell | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 51 | 1 |
Sell | British pound | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | 1.3 | $ 1 |
Sell | Canadian dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contractual amounts of foreign currency forward contracts | $ 49.7 |
Impact of Derivative Contracts
Impact of Derivative Contracts on Company's Financial Statements (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, total | $ 6.9 | $ 7.5 |
Designated as Hedging Instrument | Foreign Currency Contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, assets | 8.4 | 3.9 |
Designated as Hedging Instrument | Foreign Currency Contracts | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, liabilities | (1.5) | (0.6) |
Designated as Hedging Instrument | Foreign Currency Contracts | Other Noncurrent Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, assets | 5.1 | |
Designated as Hedging Instrument | Commodities Contracts | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative instruments, assets | ||
Fair value of derivative instruments, liabilities | $ (0.9) |
Schedule of Effect of Derivativ
Schedule of Effect of Derivatives Instruments on Consolidated Statement of Earnings (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Amount of gain (loss) recognized in other comprehensive loss on derivatives | $ (0.3) | $ 0.7 |
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings | (1.7) | 0.6 |
Foreign Currency Contracts | ||
Derivative [Line Items] | ||
Amount of gain (loss) recognized in other comprehensive loss on derivatives | 0.2 | 1.8 |
Foreign Currency Contracts | Cost Of Products Sold | ||
Derivative [Line Items] | ||
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings | (0.2) | 0.3 |
Commodities Contracts | ||
Derivative [Line Items] | ||
Amount of gain (loss) recognized in other comprehensive loss on derivatives | (0.5) | (1.1) |
Commodities Contracts | Cost Of Products Sold | ||
Derivative [Line Items] | ||
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings | $ (1.5) | $ 0.3 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||||
Corporate income tax rate | 21.00% | 21.00% | 35.00% | ||
Provisional Income tax expense | $ 6.7 | $ 81.8 | $ 0 | $ 81.8 | |
Income tax expense related to one time mandatory tax | 83.5 | ||||
Income tax expense due to tax rate reform | $ 1.7 | ||||
Total taxes paid | $ 116.6 | $ 116.4 | $ 131.1 | ||
Cash and cash equivalents and marketable securities were held by foreign subsidiaries | 548.6 | ||||
Unrecognized tax benefits that would affect the effective tax rate, if recognized | 0.8 | ||||
Anticipated decrease in unrecognized tax benefits | $ 0 | ||||
State and local | Earliest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2002 | ||||
State and local | Latest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2019 | ||||
Non-U.S. | Earliest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2013 | ||||
Non-U.S. | Latest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2019 | ||||
U.S. federal | Earliest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2016 | ||||
U.S. federal | Latest Tax Year | |||||
Income Tax Contingency [Line Items] | |||||
Income tax examinations, years under examination | 2019 | ||||
Discontinued Operations | |||||
Income Tax Contingency [Line Items] | |||||
Additional income tax accrual | $ 20.8 |
Stockholders Equity - Additiona
Stockholders Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Stockholders Equity [Line Items] | ||||
Preferred stock, shares authorized | 3,000,000 | |||
Preferred stock, par value | $ 1 | |||
Dividends paid | $ 0.90 | $ 0.76 | $ 0.56 | |
Stock repurchase program number of shares authorized to repurchase | 3,000,000 | |||
Shares repurchased | 6,113,038 | 3,797,800 | 2,533,350 | |
Shares repurchased, price per share | $ 47.06 | |||
Shares repurchased, value | $ 287.7 | $ 202.6 | $ 139.1 | |
Remaining authorization stock repurchase | 2,962,215 | |||
Common Class A | ||||
Stockholders Equity [Line Items] | ||||
Common Stock, shares authorized | 27,000,000 | |||
Common stock, par value | $ 5 | |||
Shares converted into Common Stock | 10,442 | 48,232 | 73,792 | |
Treasury stock, number of shares held | 130,380 | 130,380 | ||
Common Stock | ||||
Stockholders Equity [Line Items] | ||||
Common Stock, shares authorized | 240,000,000 | |||
Common stock, par value | $ 1 | |||
Treasury stock, number of shares held | 28,205,806 | 22,418,066 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | $ 1,717 | $ 1,644.9 | |
Balance | 1,666.8 | 1,717 | |
Cumulative foreign currency translation | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (64.9) | (26.5) | |
Other comprehensive gain (loss) before reclassifications | (1.3) | (38.4) | |
Balance | (66.2) | (64.9) | |
Unrealized net gain on cash flow derivatives | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (0.7) | (0.9) | |
Other comprehensive gain (loss) 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 | 0.2 | (0.7) | |
Pension liability | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (285.2) | (272.1) | |
Other comprehensive gain (loss) before reclassifications | (9.5) | (27) | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 12.4 | 13.9 |
Balance | (282.3) | (285.2) | |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (350.8) | (299.5) | |
Balance | $ (348.3) | $ (350.8) | |
[1] | Amounts reclassified from accumulated other comprehensive loss: 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 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss by Component (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Unrealized net gain on cash flow derivatives | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
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) | |
Pension liability | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassification, before income tax benefit | 16.3 | 18.5 | |
Tax (benefit) provision | (3.9) | (4.6) | |
Reclassification net of tax | [1] | 12.4 | 13.9 |
Actuarial losses | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassification, before income tax benefit | [2] | 16.8 | 19 |
Prior year service cost | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassification, before income tax benefit | [2] | $ (0.5) | $ (0.5) |
[1] | Amounts reclassified from accumulated other comprehensive loss: 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 | ||
[2] | These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13 “Pensions and Other Post-retirement Benefits” for additional details. |
Pensions and Other Post-retirem
Pensions and Other Post-retirement Benefits - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage match of the first one percent of contributions made by participating employees | 100.00% | |
Percentage Match Of The Next Five Percent Of Contributions Made By Participating Employees | 50.00% | |
Medical and life insurance maximum participant coverage age, in years | 65 years | |
Other comprehensive gain(loss) as a result of after tax adjustments for additional minimum pension liability | $ 2.9 | $ 13.1 |
Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation to equity managers | 30.00% | |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation to equity managers | 60.00% | |
Ten Year Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Number of historical years for which compounded annualized returns is considered | 10 years | |
Compounded annualized return of pension plan | 9.20% | |
Twenty Five Year Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Compounded annualized return of pension plan | 9.30% | |
Pension Plans, Defined Benefit | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated net actuarial gain that will be amortized from accumulated other comprehensive loss into net periodic benefit cost | $ 19.8 | |
Estimated net prior service cost that will be amortized from accumulated other comprehensive loss into net periodic benefit cost | (0.5) | |
Post-Retirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated net actuarial gain that will be amortized from accumulated other comprehensive loss into net periodic benefit cost | 0 | |
Estimated net prior service cost that will be amortized from accumulated other comprehensive loss into net periodic benefit cost | $ (0.3) |
Schedule of Changes in Benefit
Schedule of Changes in Benefit Obligations, Plan Assets and Funded Status of Defined Benefit Pension and Post-Retirement Benefit Plans (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Change in fair value of plan assets | ||||
Plan assets at beginning of year | $ 775.3 | |||
Plan assets at end of year | 828.9 | $ 775.3 | ||
Net pension liability at end of year | (0.2) | (0.2) | ||
Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligation (ABO) at December 31 | 868.7 | 833 | ||
Change in projected benefit obligations (PBO) | ||||
PBO at beginning of year | (833.8) | (922.7) | ||
Service cost | (1.6) | (2) | $ (1.8) | |
Interest cost | (31.6) | (28.9) | (30) | |
Actuarial (loss) gain including assumption changes | (98.6) | 61.2 | ||
Benefits paid | 96.3 | 58.6 | ||
PBO at end of year | (869.3) | (833.8) | (922.7) | |
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 | ||
Benefits paid | (96.3) | (58.6) | ||
Plan assets at end of year | 832.4 | 777.5 | 874.8 | |
Funded status | (36.9) | (56.3) | ||
Current liabilities | (9.3) | (7.1) | ||
Non-current liabilities | (27.6) | (49.2) | ||
Net pension liability at end of year | [1] | (36.9) | (56.3) | |
Net actuarial loss (gain) | 463.1 | 468.9 | ||
Prior service cost | 0.5 | |||
Total recognized in accumulated other comprehensive loss | 463.6 | 468.9 | ||
Post-Retirement Benefits | ||||
Change in projected benefit obligations (PBO) | ||||
PBO at beginning of year | (7) | (7.6) | ||
Service cost | (0.1) | (0.2) | (0.1) | |
Interest cost | (0.3) | (0.3) | (0.3) | |
Participant contributions | (0.1) | (0.1) | ||
Actuarial (loss) gain including assumption changes | (1.2) | 0.6 | ||
Benefits paid | 0.7 | 0.6 | ||
PBO at end of year | (8) | (7) | $ (7.6) | |
Change in fair value of plan assets | ||||
Contribution by the company | 0.5 | 0.5 | ||
Participant contributions | 0.1 | 0.1 | ||
Benefits paid | (0.6) | (0.6) | ||
Funded status | (8) | (7) | ||
Current liabilities | (0.5) | (0.5) | ||
Non-current liabilities | (7.5) | (6.5) | ||
Net pension liability at end of year | (8) | (7) | ||
Net actuarial loss (gain) | (0.2) | (1.4) | ||
Prior service cost | (1.8) | (2.2) | ||
Total recognized in accumulated other comprehensive loss | $ (2) | $ (3.6) | ||
[1] | In addition, the Company has a liability for a foreign pension plan of $0.2 million at December 31, 2019 and 2018. |
Schedule of Changes in Benefi_2
Schedule of Changes in Benefit Obligations, Plan Assets and Funded Status of Defined Benefit Pension and Post-Retirement Benefit Plans (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Liability on foreign pension plan | $ 0.2 | $ 0.2 |
Components of Company's Net Pen
Components of Company's Net Pension Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and Other Postretirement Benefits Disclosure [Line Items] | |||
Total recognized in other comprehensive loss | $ (2.9) | $ 13.1 | $ (12.1) |
Pension Plans, Defined Benefit | |||
Pension and Other Postretirement Benefits Disclosure [Line Items] | |||
Service cost | 1.6 | 2 | 1.8 |
Interest cost | 31.6 | 28.9 | 30 |
Expected return on plan assets | (57.3) | (58.1) | (58.4) |
Net actuarial loss (gain) | 16.8 | 19 | 17.9 |
Prior service cost | (0.5) | (0.5) | (0.4) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | (7.8) | (8.7) | (9.1) |
Curtailment and other one-time charges | 1.6 | 0 | 0 |
Various U.S. defined contribution plans cost | 13.3 | 12.2 | 12 |
Defined Benefit Plan And Defined Contribution Plan Periodic Benefit Cost, Total | 7.1 | 3.5 | 2.9 |
Other changes in plan assets and projected benefit obligation recognized in other comprehensive loss Net actuarial (gain) loss | 12.6 | 36.1 | (3.8) |
Amortization of net actuarial (loss) gain | (18.4) | (19) | (17.9) |
Amortization of prior service cost | 0.5 | 0.5 | 0.5 |
Total recognized in other comprehensive loss | (5.3) | 17.6 | (21.2) |
Total recognized in net periodic (benefit) cost and other comprehensive loss | (11.5) | 8.9 | (30.3) |
Post-Retirement Benefits | |||
Pension and Other Postretirement Benefits Disclosure [Line Items] | |||
Service cost | 0.1 | 0.2 | 0.1 |
Interest cost | 0.3 | 0.3 | 0.3 |
Expected return on plan assets | 0 | 0 | 0 |
Net actuarial loss (gain) | 0 | 0 | (0.1) |
Prior service cost | (0.4) | (0.4) | (0.4) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 0 | 0 | (0.1) |
Other changes in plan assets and projected benefit obligation recognized in other comprehensive loss Net actuarial (gain) loss | 1.2 | (0.6) | 1.1 |
Amortization of net actuarial (loss) gain | 0 | 0 | 0.1 |
Amortization of prior service cost | 0.4 | 0.4 | 0.4 |
Total recognized in other comprehensive loss | 1.6 | (0.2) | 1.6 |
Total recognized in net periodic (benefit) cost and other comprehensive loss | $ 1.6 | $ (0.2) | $ 1.5 |
Actuarial Assumptions Used to D
Actuarial Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2019 | Dec. 31, 2018 |
Pension Plans, Defined Benefit | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.18% | 4.32% |
Post-Retirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.40% | 4.46% |
Assumptions Used to Determine N
Assumptions Used to Determine Net Periodic Benefit Cost (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plans, Defined Benefit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.32% | 3.65% | 4.15% |
Expected long-term return on plan assets | 7.15% | 7.15% | 7.50% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Post-Retirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.45% | 3.79% | 4.40% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Health Care Cost Trend Rates (D
Health Care Cost Trend Rates (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pension And Other Post-Retirement Benefits | ||
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 |
Weighted Asset Allocations by A
Weighted Asset Allocations by Asset Category (Detail) | Dec. 31, 2019 | Dec. 31, 2018 |
Pension And Other Post-Retirement Benefits | ||
Average Assets Allocation | 100.00% | 100.00% |
Equity Securities | ||
Pension And Other Post-Retirement Benefits | ||
Average Assets Allocation | 42.00% | 40.00% |
Debt Securities | ||
Pension And Other Post-Retirement Benefits | ||
Average Assets Allocation | 47.00% | 48.00% |
Real estate | ||
Pension And Other Post-Retirement Benefits | ||
Average Assets Allocation | 10.00% | 10.00% |
Private equity | ||
Pension And Other Post-Retirement Benefits | ||
Average Assets Allocation | 1.00% | 2.00% |
Fair Value Measurement of Plan
Fair Value Measurement of Plan Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | $ 828.9 | $ 775.3 | |
Non-investment plan assets | 3.4 | 2.2 | |
Total plan assets | 832.3 | 777.5 | |
Short-term Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 14.6 | 14.4 | |
Equity Securities | Commingled Equity Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 113.4 | 104.3 | |
Equity Securities | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 127 | 125.6 | |
Fixed Income Securities | Option [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | (10.8) | ||
Fixed Income Securities | Other Fixed Income Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 225.1 | 185.8 | |
Fixed Income Securities | Commingled Fixed Income Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 114 | 92 | |
Fixed Income Securities | US Treasury Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 49.8 | 86 | |
Other Investments | Private equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 8.6 | 13.2 | |
Other Investments | Mutual Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 104.9 | 73.6 | |
Other Investments | Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 82.3 | 80.4 | |
Quoted Prices In Active Markets For Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 179.6 | 211.6 | |
Quoted Prices In Active Markets For Identical Assets (Level 1) | Short-term Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 2.8 | ||
Quoted Prices In Active Markets For Identical Assets (Level 1) | Equity Securities | Common Stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 127 | 125.6 | |
Quoted Prices In Active Markets For Identical Assets (Level 1) | Fixed Income Securities | US Treasury Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 49.8 | 86 | |
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 558.4 | 470.1 | |
Significant Other Observable Inputs (Level 2) | Short-term Investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 11.8 | 14.4 | |
Significant Other Observable Inputs (Level 2) | Equity Securities | Commingled Equity Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 113.4 | 104.3 | |
Significant Other Observable Inputs (Level 2) | Fixed Income Securities | Option [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | (10.8) | ||
Significant Other Observable Inputs (Level 2) | Fixed Income Securities | Other Fixed Income Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 225.1 | 185.8 | |
Significant Other Observable Inputs (Level 2) | Fixed Income Securities | Commingled Fixed Income Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 114 | 92 | |
Significant Other Observable Inputs (Level 2) | Other Investments | Mutual Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 104.9 | 73.6 | |
Significant Non-observable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 90.9 | 93.6 | $ 98.7 |
Significant Non-observable Inputs (Level 3) | Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 82.3 | 80.4 | $ 77.8 |
Significant Non-observable Inputs (Level 3) | Other Investments | Private equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | 8.6 | 13.2 | |
Significant Non-observable Inputs (Level 3) | Other Investments | Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total fair value of plan asset investments | $ 82.3 | $ 80.4 |
Reconciliation of Fair Value Me
Reconciliation of Fair Value Measurements Using Significant Unobservable Inputs (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at beginning of year | $ 775.3 | |
Plan assets at end of year | 828.9 | $ 775.3 |
Significant Non-observable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at beginning of year | 93.6 | 98.7 |
Relating to assets still held at the reporting date | 1.9 | 2.3 |
Relating to assets sold during the period | (1.4) | (0.8) |
Purchases, sales and settlements | (3.2) | (6.6) |
Plan assets at end of year | 90.9 | 93.6 |
Real estate funds | Significant Non-observable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at beginning of year | 80.4 | 77.8 |
Relating to assets still held at the reporting date | 1.9 | 2.6 |
Plan assets at end of year | 82.3 | 80.4 |
Private equity | Significant Non-observable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at beginning of year | 13.2 | 20.9 |
Relating to assets still held at the reporting date | (0.3) | |
Relating to assets sold during the period | (1.4) | (0.8) |
Purchases, sales and settlements | (3.2) | (6.6) |
Plan assets at end of year | $ 8.6 | $ 13.2 |
Estimated Future Payments (Deta
Estimated Future Payments (Detail) $ in Millions | Dec. 31, 2019USD ($) |
Pension Plans, Defined Benefit | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 66.8 |
2021 | 57.7 |
2022 | 57.1 |
2023 | 56.2 |
2024 | 55.4 |
2025 - 2029 | 270.9 |
Post-Retirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 0.5 |
2021 | 0.5 |
2022 | 0.5 |
2023 | 0.5 |
2024 | 0.5 |
2025 - 2029 | $ 2.3 |
Components of Provision for Inc
Components of Provision for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Taxes | ||||
Current, Federal | $ 66.4 | $ 60.1 | $ 148 | |
Current, State | 14.8 | 15.6 | 9.4 | |
Current, International | 19.9 | 38.6 | 43.8 | |
Deferred, Federal | 0.4 | (1.7) | 23.5 | |
Deferred, State | 1.8 | 1.5 | 5.8 | |
Deferred, International | (1.2) | (0.5) | (6.2) | |
Provision for income taxes | [1] | $ 102.1 | $ 113.6 | $ 224.3 |
[1] | In 2017, the Company recorded a one-time charge of $81.8 million associated with U.S. Tax Reform, primarily related to the repatriation of undistributed foreign earnings. For additional information, see Note 15 “Income Taxes.” |
Difference Between Provision Fo
Difference Between Provision For Income Taxes And U.S. Federal Statutory Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Provision at U.S. federal statutory rate | 21.00% | 21.00% | 35.00% |
State taxes, net of federal benefit | 2.80% | 2.40% | 1.90% |
U.S. manufacturing credit | (1.40%) | ||
Research tax credits | (0.40%) | (0.50%) | (0.30%) |
Excess tax benefit on stock compensation | (0.50%) | (0.40%) | (2.20%) |
Other | (0.40%) | (0.90%) | 0.80% |
Effective Income Tax Rate Continuing Operations Excluding Change in Tax Rate, Total | 21.60% | 20.40% | 27.40% |
U.S. Tax Cuts & Jobs Act (U.S. Tax Reform) | 15.70% | ||
Effective Income Tax Rate Reconciliation, Percent, Total | 21.60% | 20.40% | 43.10% |
State Administration of Taxation, China | |||
Income Taxes | |||
International income tax rate differential | (1.30%) | (2.30%) | (6.50%) |
Other | |||
Income Taxes | |||
International income tax rate differential | 0.40% | 1.10% | 0.10% |
Components of Earning Before In
Components of Earning Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Income Before Income Tax [Line Items] | |||
U.S. | $ 400.3 | $ 376 | $ 329.9 |
International | 71.8 | 181.8 | 190.9 |
Earnings before provision for income taxes | $ 472.1 | $ 557.8 | $ 520.8 |
Tax Effects of Temporary Differ
Tax Effects of Temporary Differences of Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Component Of Net Income Tax Assets And Liabilities [Line Items] | ||
Employee benefits, Assets | $ 27.3 | $ 32.5 |
Product liability and warranties, Assets | 39.7 | 42.5 |
Inventories, Assets | ||
Accounts receivable, Assets | 16.3 | 18.3 |
Property, plant and equipment, Assets | ||
Intangibles, Assets | ||
Environmental, Assets | 1.9 | 2.1 |
Undistributed foreign earnings, Assets | ||
Tax loss and credit carryovers, Assets | 15.2 | 17.5 |
All other, Assets | 7.7 | 4 |
Valuation allowance, Assets | (11.9) | (13.1) |
Assets | 96.2 | 103.8 |
Employee benefits, Liabilities | ||
Product liability and warranties, Liabilities | ||
Inventories, Liabilities | 0.3 | 0.6 |
Accounts receivable, Liabilities | ||
Property, plant and equipment, Liabilities | 34.9 | 36.3 |
Intangibles, Liabilities | 61.3 | 57.3 |
Environmental, Liabilities | ||
Undistributed foreign earnings, Liabilities | 20.8 | 28.9 |
Tax loss and credit carryovers, Liabilities | ||
All other, Liabilities | ||
Valuation allowance, Liabilities | ||
All other, Liabilities | 117.3 | 123.1 |
Net liability | $ 21.1 | $ 19.3 |
Reconciliation of Tax Loss Carr
Reconciliation of Tax Loss Carryovers, Credit Carryovers and Valuation Allowances (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Net Operating Losses and Tax Credits, Beginning balance | $ 17.5 | $ 19.8 | |
Net Operating Losses and Tax Credits, Reductions | (2.3) | (2.3) | |
Net Operating Losses and Tax Credits, Ending balance | 15.2 | 17.5 | $ 19.8 |
Balance at Beginning of Year | 13.1 | ||
Balance at End of Year | 11.9 | 13.1 | |
Valuation Allowance For Deferred Tax Assets | |||
Income Taxes | |||
Balance at Beginning of Year | 13.1 | 15 | |
Valuation Allowances, Reductions | (1.2) | (1.9) | 0 |
Balance at End of Year | $ 11.9 | $ 13.1 | $ 15 |
Reconciliation of Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
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 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies [Line Items] | ||
Product liability insurance for individual losses in excess of accrual amount | $ 125,000,000 | $ 125,000,000 |
Amounts in excess to be covered by third party insurance | 7,500,000 | 7,500,000 |
Distributor Rebate Accruals | 14,100,000 | 25,100,000 |
Repurchase Of Inventory [Member] | ||
Commitments and Contingencies [Line Items] | ||
Default In outstanding loans | $ 23,100,000 | $ 75,800,000 |
Schedule of Segment Earnings (D
Schedule of Segment Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | $ 750.9 | $ 728.2 | $ 765.4 | $ 748.2 | $ 812.5 | $ 754.1 | $ 833.3 | $ 788 | $ 2,992.7 | $ 3,187.9 | $ 2,996.7 | |
Segment earnings | 529.1 | 613.4 | 577.9 | |||||||||
Other income (expense) | 18 | 21.2 | 21.3 | |||||||||
Interest expense | (11) | (8.4) | (10.1) | |||||||||
Earnings before provision for income taxes | 472.1 | 557.8 | 520.8 | |||||||||
Provision for income taxes | [1] | (102.1) | (113.6) | (224.3) | ||||||||
Net earnings | $ 91.3 | $ 87.3 | $ 102.1 | $ 89.3 | $ 126.3 | $ 104.6 | $ 114.5 | $ 98.8 | 370 | 444.2 | 296.5 | |
Inter-segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | (26.6) | (30.4) | (24.4) | |||||||||
Corporate | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Other income (expense) | (46) | (47.2) | (47) | |||||||||
North America | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | [2] | 2,083.5 | 2,044.7 | 1,904.8 | ||||||||
Segment earnings | [2] | 488.9 | 464.1 | 428.6 | ||||||||
Rest of World | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 935.8 | 1,173.6 | 1,116.3 | |||||||||
Segment earnings | $ 40.2 | $ 149.3 | $ 149.3 | |||||||||
[1] | In 2017, the Company recorded a one-time charge of $81.8 million associated with U.S. Tax Reform, primarily related to the repatriation of undistributed foreign earnings. For additional information, see Note 15 “Income Taxes.” | |||||||||||
[2] | In 2018, the Company recognized $6.7 million of restructuring and impairment expenses in connection with the move of manufacturing operations from our Renton, Washington facility to other U.S. facilities. For additional information, see Note 5 “Restructuring and Impairment Expenses.” |
Operations by Segment - Additio
Operations by Segment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Sales to a largest customer | $ 750.9 | $ 728.2 | $ 765.4 | $ 748.2 | $ 812.5 | $ 754.1 | $ 833.3 | $ 788 | $ 2,992.7 | $ 3,187.9 | $ 2,996.7 |
Restructuring, Settlement and Impairment Provisions | 6.7 | ||||||||||
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | 81.8 | ||||||||||
North America | Geographic Concentration Risk | Customer one | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to a largest customer | 421.1 | 425.3 | 361.4 | ||||||||
North America | Geographic Concentration Risk | Customer Two | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to a largest customer | $ 378.9 | $ 355.6 | $ 335.2 | ||||||||
North America | Sales Revenue, Net | Geographic Concentration Risk | Customer one | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 14.00% | 13.00% | 12.00% | ||||||||
North America | Sales Revenue, Net | Geographic Concentration Risk | Customer Two | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 13.00% | 11.00% | 11.00% |
Assets, Depreciation And Capita
Assets, Depreciation And Capital Expenditure By Segment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 3,058 | $ 3,071.5 | $ 3,197.4 |
Depreciation and amortization | 78.3 | 71.9 | 70.1 |
Capital expenditures | 64.4 | 85.2 | 94.2 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 606.1 | 696.3 | 863.4 |
Depreciation and amortization | 1.1 | 1.2 | 1.2 |
Capital expenditures | 0.9 | 7.1 | 0.5 |
North America | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 1,742.8 | 1,653.6 | 1,592.6 |
Depreciation and amortization | 49.3 | 45.5 | 45.1 |
Capital expenditures | 47.6 | 45.8 | 38.5 |
Rest of World | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 709.1 | 721.6 | 741.4 |
Depreciation and amortization | 27.9 | 25.2 | 23.8 |
Capital expenditures | $ 15.9 | $ 32.3 | $ 55.2 |
Net Sales and Long-Lived Assets
Net Sales and Long-Lived Assets by Geographic Location (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | $ 673.2 | $ 625.9 | $ 673.2 | $ 625.9 | $ 604.1 | ||||||
Net sales | 750.9 | $ 728.2 | $ 765.4 | $ 748.2 | 812.5 | $ 754.1 | $ 833.3 | $ 788 | 2,992.7 | 3,187.9 | 2,996.7 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | 360.2 | 327.3 | 360.2 | 327.3 | 303 | ||||||
Net sales | 1,868.7 | 1,820.8 | 1,698.1 | ||||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | 266.7 | 252.6 | 266.7 | 252.6 | 250.8 | ||||||
Net sales | 825.4 | 1,071.2 | 1,034.9 | ||||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | 4.2 | 3.1 | 4.2 | 3.1 | 3.2 | ||||||
Net sales | 168.5 | 175 | 163.7 | ||||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | $ 42.1 | $ 42.9 | 42.1 | 42.9 | 47.1 | ||||||
Net sales | $ 130.1 | $ 120.9 | $ 100 |
Quarterly Financial Information
Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information [Line Items] | |||||||||||
Net sales | $ 750.9 | $ 728.2 | $ 765.4 | $ 748.2 | $ 812.5 | $ 754.1 | $ 833.3 | $ 788 | $ 2,992.7 | $ 3,187.9 | $ 2,996.7 |
Gross profit | 295 | 284.2 | 308.7 | 292.8 | 337 | 306 | 341 | 321.5 | 1,180.7 | 1,305.5 | 1,232.4 |
Net earnings | $ 91.3 | $ 87.3 | $ 102.1 | $ 89.3 | $ 126.3 | $ 104.6 | $ 114.5 | $ 98.8 | $ 370 | $ 444.2 | $ 296.5 |
Basic earnings per share | $ 0.56 | $ 0.53 | $ 0.61 | $ 0.53 | $ 0.75 | $ 0.61 | $ 0.67 | $ 0.58 | $ 2.24 | $ 2.60 | $ 1.72 |
Diluted earnings per share | 0.56 | 0.53 | 0.61 | 0.53 | 0.74 | 0.61 | 0.66 | 0.57 | $ 2.22 | $ 2.58 | $ 1.70 |
Common dividends declared | $ 0.24 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.18 | $ 0.18 | $ 0.18 |
Quarterly Results of Operatio_3
Quarterly Results of Operations - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information [Line Items] | ||||
Provisional Income tax expense | $ 6.7 | $ 81.8 | $ 0 | $ 81.8 |
Income tax expense, reduce after tax earnings | $ 5 | |||
Income tax expense, reduce after tax earnings per share | $ 0.03 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowance For Trade And Notes Receivable | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 6.4 | $ 5.3 | $ 6.3 |
Charged to Costs and Expenses | 0.3 | 1.5 | 0 |
Acquisition of Businesses | 0 | 0 | 0.2 |
Deductions | (0.1) | (0.4) | (1.2) |
Balance at End of Year | 6.6 | 6.4 | 5.3 |
Valuation Allowance For Deferred Tax Assets | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 13.1 | 15 | 13.1 |
Charged to Costs and Expenses | 0 | 0 | 1.9 |
Acquisition of Businesses | 0 | 0 | 0 |
Deductions | (1.2) | (1.9) | 0 |
Balance at End of Year | $ 11.9 | $ 13.1 | $ 15 |