ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
Missouri
|
|
44-0324630
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
No. 1 Leggett Road
Carthage, Missouri
|
|
64836
|
(Address of principal executive offices)
|
|
(Zip code)
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Title of Each Class
|
|
Name of each exchange on
which registered
|
Common Stock, $.01 par value
|
|
New York Stock Exchange
|
Large accelerated filer
|
ý
|
|
Accelerated filer
¨
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Non-accelerated filer
|
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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Page
Number
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Supp. Item.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
|
uncertainty of the financial performance of ECS and the Company following completion of the ECS acquisition;
|
•
|
failure to realize the anticipated benefits of the ECS acquisition, including as a result of delay in integrating the businesses of ECS;
|
•
|
difficulties and delays in achieving revenue synergies of ECS;
|
•
|
inability to retain key personnel and maintain relationships with customers and suppliers of ECS;
|
•
|
inability to “deleverage” after the ECS closing in the expected timeframe, due to increases or decreases in our capital needs, which may vary depending on a variety of factors, including, without limitation, any acquisition or divestiture activity and our working capital needs, market conditions, and alternative capital market opportunities, including, without limitation, the relative attractiveness of longer-term debt or equity financing;
|
•
|
the Company's and ECS’s ability to achieve their respective short-term and longer-term operating targets;
|
•
|
inability to comply with the restrictive covenants in our credit agreement that may limit our operational flexibility and our ability to pay our debt when it comes due;
|
•
|
market and other factors or conditions that reduce or eliminate the Company’s ability to obtain long-term debt financing;
|
•
|
factors that could affect the industries or markets in which we participate, such as growth rates, market demand for our products, and opportunities in those industries;
|
•
|
adverse changes in consumer confidence, housing turnover, employment levels, interest rates, trends in capital spending and the like;
|
•
|
factors that could impact raw materials and other costs, including the availability and pricing of steel scrap and rod, chemicals and other raw materials, the availability of labor, wage rates and energy costs;
|
•
|
our ability to pass along raw material cost increases through increased selling prices;
|
•
|
price and product competition from foreign (particularly Asian and European) and domestic competitors;
|
•
|
our ability to maintain profit margins if our customers change the quantity and mix of our components in their finished goods;
|
•
|
our ability to maintain and grow the profitability of acquired companies;
|
•
|
adverse changes in foreign currency, customs, shipping rates, political risk, and U.S. or foreign laws, regulations or legal systems (including tax law changes);
|
•
|
our ability to realize deferred tax assets on our balance sheet;
|
•
|
tariffs imposed by the U.S. government that result in increased costs of imported raw materials and products that we purchase;
|
•
|
our ability to maintain the proper functioning of our internal business processes and information systems through technology failures or otherwise;
|
•
|
our ability to avoid modification or interruption of our information systems through cybersecurity breaches;
|
•
|
a decline in the long-term outlook for any of our reporting units or assets that could result in impairment;
|
•
|
the loss of one or more of our significant customers;
|
•
|
our ability to collect customer debts due to bankruptcy, financial difficulties or insolvency;
|
•
|
our borrowing costs and access to liquidity resulting from credit rating changes;
|
•
|
business disruptions to our steel rod mill;
|
•
|
risks related to operating in foreign countries, including, without limitation, credit risks, increased customs and shipping rates, disruptions related to the availability of electricity and transportation during times of crisis or war, and political instability in certain countries;
|
•
|
uncertainty related to the governing trade provisions between the United States, Mexico and Canada;
|
•
|
risks relating to the United Kingdom’s referendum, which called for its exit from the European Union (commonly known as “Brexit”);
|
•
|
the amount and timing of share repurchases; and
|
•
|
litigation accruals related to various contingencies including antitrust, intellectual property, product liability and warranty, taxation, environmental and workers’ compensation expense.
|
BEDDING GROUP
|
U.S. Spring
|
International Spring
|
Specialty Foam
1
|
|
FABRIC & FLOORING PRODUCTS GROUP
|
Fabric Converting
|
Geo Components
|
Flooring Products
|
|
MACHINERY GROUP
|
Machinery
|
|
•
|
|
Innersprings (sets of steel coils, bound together, that form the core of a mattress)
|
|
•
|
|
Proprietary specialty foam for use primarily in bedding and furniture
|
|
•
|
|
Private-label finished mattresses, often sold compressed
|
|
•
|
|
Wire forms for mattress foundations
|
|
•
|
|
Machines that we use to shape wire into various types of springs
|
|
•
|
|
Structural fabrics for mattresses, residential furniture and industrial uses
|
|
•
|
|
Carpet cushion and hard surface flooring underlayment (made from bonded scrap foam, fiber, rubber and prime foam)
|
|
•
|
|
Geo components (synthetic fabrics and various other products used in ground stabilization, drainage protection, erosion and weed control)
|
|
•
|
|
Quilting machines for mattress covers
|
|
•
|
|
Industrial sewing/finishing machines
|
|
•
|
|
Conveyor lines
|
|
•
|
|
Mattress packaging and glue-drying equipment
|
|
•
|
|
Manufacturers of finished bedding (mattresses and foundations)
|
|
•
|
|
Bedding brands and mattress retailers
|
|
•
|
|
Flooring retailers and distributors
|
|
•
|
|
Contractors, landscapers, road construction companies, and government agencies using geo components
|
|
•
|
|
Manufacturers of upholstered furniture, packaging, filtration and draperies
|
WIRE GROUP
|
Drawn Wire
|
Steel Rod
|
|
•
|
|
Drawn wire
|
|
•
|
|
Steel rod
|
|
•
|
|
Bedding and furniture components
|
|
•
|
|
Automotive seat suspension systems
|
|
•
|
|
Mechanical spring manufacturers
|
|
•
|
|
Wire distributors
|
|
•
|
|
Packaging and baling companies
|
HOME FURNITURE GROUP
|
Home Furniture
|
|
WORK FURNITURE GROUP
|
Work Furniture
|
|
CONSUMER PRODUCTS GROUP
|
Consumer Products
|
|
•
|
|
Steel mechanisms and motion hardware (enabling furniture to recline, tilt, swivel, rock and elevate) for reclining chairs, sofas, sleeper sofas and lift chairs
|
|
•
|
|
Springs and seat suspensions for chairs, sofas and loveseats
|
|
•
|
|
Components and private-label finished goods for collaborative soft seating
|
|
•
|
|
Bases, columns, back rests, casters and frames for office chairs, and control devices that allow chairs to tilt, swivel and elevate
|
|
•
|
|
Adjustable beds
|
|
•
|
|
Fashion beds and bed frames
|
|
•
|
|
Manufacturers of upholstered furniture
|
|
•
|
|
Office furniture manufacturers
|
|
•
|
|
Mattress and furniture retailers
|
|
•
|
|
Department stores and big box retailers
|
|
•
|
|
E-commerce retailers
|
AUTOMOTIVE GROUP
|
Automotive
|
|
AEROSPACE PRODUCTS GROUP
|
Aerospace Products
|
|
HYDRAULIC CYLINDERS GROUP
|
Hydraulic Cylinders
|
|
•
|
|
Mechanical and pneumatic lumbar support and massage systems for automotive seating
|
|
•
|
|
Seat suspension systems
|
|
•
|
|
Motors and actuators, used in a wide variety of vehicle power features
|
|
•
|
|
Cables
|
|
•
|
|
Titanium, nickel and stainless-steel tubing, formed tube and tube assemblies, primarily used in fluid conveyance systems
|
|
•
|
|
Engineered hydraulic cylinders
|
|
•
|
|
Automobile OEMs and Tier 1 suppliers
|
|
•
|
|
Aerospace suppliers
|
|
•
|
|
Mobile equipment OEMs, primarily serving material handling and construction markets
|
•
|
Innersprings for mattresses
|
•
|
Lumbar and seat suspension systems for automotive seating and actuators for automotive applications
|
•
|
Seamless and welded tubing and fabricated assemblies for aerospace applications
|
•
|
Select lines of private-label finished furniture
|
•
|
Machinery and equipment designed to manufacture innersprings for mattresses
|
•
|
Lumbar and seat suspension systems for automotive seating and actuators for automotive applications
|
•
|
Cables, motors, and actuators for automotive applications
|
•
|
Recliner mechanisms and bases for upholstered furniture
|
•
|
Innersprings for mattresses
|
•
|
Work furniture components, including chair bases and casters
|
•
|
Lumbar supports for automotive seats
|
•
|
Fabricated wire for the furniture and automotive industries
|
•
|
Work furniture chair controls and bases
|
•
|
Lumbar and seat suspension systems for automotive seating
|
•
|
Adjustable beds
|
•
|
Innersprings and fabricated wire for the bedding industry
|
•
|
Select lines of private-label finished furniture
|
|
Residential
Products |
Industrial
Products |
Furniture
Products |
Specialized
Products |
North America
|
|
|
|
|
Canada
|
n
|
|
n
|
n
|
Mexico
|
n
|
n
|
n
|
n
|
United States
|
n
|
n
|
n
|
n
|
Europe
|
|
|
|
|
Austria
|
|
|
|
n
|
Belgium
|
|
|
|
n
|
Croatia
|
n
|
|
|
|
Denmark
|
n
|
|
|
|
France
|
|
|
|
n
|
Hungary
|
|
|
|
n
|
Italy
|
n
|
|
|
|
Poland
|
|
|
n
|
|
Switzerland
|
n
|
|
|
|
United Kingdom
|
n
|
|
|
n
|
South America
|
|
|
|
|
Brazil
|
n
|
|
|
|
Asia
|
|
|
|
|
China
|
n
|
|
n
|
n
|
India
|
|
|
|
n
|
South Korea
|
|
|
|
n
|
Africa
|
|
|
|
|
South Africa
|
n
|
|
|
|
Product Line
|
2018
|
|
2017
|
|
2016
|
|||||
Bedding Group
|
21
|
%
|
|
21
|
|
%
|
|
22
|
|
%
|
Automotive Group
|
19
|
|
|
20
|
|
|
|
19
|
|
|
Fabric & Flooring Products Group
|
17
|
|
|
18
|
|
|
|
18
|
|
|
Work Furniture Group
|
7
|
|
|
7
|
|
|
|
7
|
|
|
Consumer Products Group
|
11
|
|
|
10
|
|
|
|
8
|
|
|
Home Furniture Group
|
9
|
|
|
10
|
|
|
|
11
|
|
|
Wire Group
1
|
9
|
|
|
7
|
|
|
|
8
|
|
|
Aerospace Products Group
|
4
|
|
|
4
|
|
|
|
3
|
|
|
Hydraulic Cylinders Group
2
|
2
|
|
|
—
|
|
|
|
—
|
|
|
Machinery Group
|
1
|
|
|
2
|
|
|
2
|
|
||
Commercial Vehicle Products Group
3
|
—
|
|
|
1
|
|
|
2
|
|
•
|
Various types of steel, including scrap, rod, wire, sheet and stainless
|
•
|
Chemicals used in foam production
|
•
|
Foam scrap
|
•
|
Woven and non-woven fabrics
|
•
|
Titanium and nickel-based alloys and other high strength metals
|
•
|
Innersprings and foundations for mattresses
|
•
|
Springs and seat suspensions for chairs and sofas
|
•
|
Automotive seating suspension systems
|
•
|
ComfortCore
®
,
Mira-Coil
®
,
VertiCoil
®
,
Quantum
®
,
Nanocoil
®
,
Softech
®
,
Lura-Flex ® , Superlastic ® and Active Support Technology ® (mattress innersprings) |
•
|
Energex
®
Coolflow
®
(specialty foam products)
|
•
|
Semi-Flex
®
(box spring components and foundations)
|
•
|
Spuhl
®
(mattress innerspring manufacturing machines)
|
•
|
Wall Hugger
®
(recliner chair mechanisms)
|
•
|
Super Sagless
®
(motion and sofa sleeper mechanisms)
|
•
|
No-Sag
®
(wire forms used in seating)
|
•
|
LPSense
®
(capacitive sensing)
|
•
|
Hanes
®
(fabric materials)
|
•
|
Schukra
®
, Pullmaflex
®
and
Flex-O-Lator
®
(automotive seating products)
|
•
|
Gribetz
®
and
Porter
®
(quilting and sewing machines)
|
•
|
Bedding components
|
•
|
Automotive seat support and lumbar systems
|
•
|
Specialty bedding foams and private-label finished mattresses
|
•
|
Components for home furniture and work furniture
|
•
|
Flooring underlayment
|
•
|
Adjustable beds
|
•
|
High-carbon drawn steel wire
|
•
|
Bedding industry machinery
|
•
|
Credit risks
|
•
|
Increased costs due to tariffs, customs and shipping rates
|
•
|
Potential problems obtaining raw materials, and disruptions related to the availability of electricity and transportation during times of crisis or war
|
•
|
Inconsistent interpretation and enforcement, at times, of foreign tax laws and regulations, and capital requirements
|
•
|
Political instability in certain countries
|
|
|
Company-
Wide |
|
Subtotals by Segment
|
||||||
Manufacturing Locations
|
|
Residential
Products |
|
Industrial
Products |
|
Furniture
Products |
|
Specialized
Products |
||
United States
|
|
75
|
|
41
|
|
5
|
|
23
|
|
6
|
China
|
|
17
|
|
2
|
|
—
|
|
5
|
|
10
|
Europe
|
|
15
|
|
6
|
|
—
|
|
1
|
|
8
|
Canada
|
|
8
|
|
3
|
|
—
|
|
2
|
|
3
|
Mexico
|
|
8
|
|
3
|
|
1
|
|
2
|
|
2
|
Other
|
|
6
|
|
3
|
|
—
|
|
—
|
|
3
|
Total
|
|
129
|
|
58
|
|
6
|
|
33
|
|
32
|
|
|
Company-
Wide |
|
Subtotals by Segment
|
||||||
Manufacturing Locations
|
|
Residential
Products |
|
Industrial
Products |
|
Furniture
Products |
|
Specialized
Products |
||
Owned
|
|
69
|
|
34
|
|
6
|
|
17
|
|
12
|
Leased
|
|
60
|
|
24
|
|
—
|
|
16
|
|
20
|
Total
|
|
129
|
|
58
|
|
6
|
|
33
|
|
32
|
Name
|
|
Age
|
|
Position
|
Karl G. Glassman
|
|
60
|
|
President and Chief Executive Officer
|
Matthew C. Flanigan
|
|
57
|
|
Executive Vice President and Chief Financial Officer
|
J. Mitchell Dolloff
|
|
53
|
|
Executive Vice President and Chief Operating Officer, President
—
Specialized Products & Furniture Products
|
Perry E. Davis
|
|
59
|
|
Executive Vice President, President
—
Residential Products & Industrial Products
|
Scott S. Douglas
|
|
59
|
|
Senior Vice President, General Counsel & Secretary
|
Russell J. Iorio
|
|
49
|
|
Senior Vice President, Corporate Development
|
Susan R. McCoy
|
|
54
|
|
Senior Vice President, Investor Relations
|
Tammy M. Trent
|
|
52
|
|
Senior Vice President, Chief Accounting Officer
|
|
Price Range
1
|
|
Volume of
Shares Traded
1
(in Millions)
|
|
Dividend
Declared
|
|||||||||
|
High
|
|
Low
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|||||||
First Quarter
|
$
|
49.88
|
|
|
$
|
41.25
|
|
|
94.7
|
|
|
$
|
0.36
|
|
Second Quarter
|
45.39
|
|
|
39.57
|
|
|
78.8
|
|
|
0.38
|
|
|||
Third Quarter
|
46.71
|
|
|
42.19
|
|
|
67.2
|
|
|
0.38
|
|
|||
Fourth Quarter
|
44.22
|
|
|
33.48
|
|
|
93.7
|
|
|
0.38
|
|
|||
For the Year
|
$
|
49.88
|
|
|
$
|
33.48
|
|
|
334.4
|
|
|
$
|
1.50
|
|
2017
|
|
|
|
|
|
|
|
|||||||
First Quarter
|
$
|
50.89
|
|
|
$
|
46.24
|
|
|
61.1
|
|
|
$
|
0.34
|
|
Second Quarter
|
54.97
|
|
|
49.92
|
|
|
59.9
|
|
|
0.36
|
|
|||
Third Quarter
|
53.96
|
|
|
43.17
|
|
|
59.9
|
|
|
0.36
|
|
|||
Fourth Quarter
|
51.99
|
|
|
44.76
|
|
|
58.2
|
|
|
0.36
|
|
|||
For the Year
|
$
|
54.97
|
|
|
$
|
43.17
|
|
|
239.1
|
|
|
$
|
1.42
|
|
Period
|
|
Total Number of
Shares Purchased
1
|
|
Average
Price
Paid per
Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
2
|
|
Maximum Number of
Shares that May Yet
Be Purchased Under the
Plans or Programs
2
|
|||||
October 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,572,661
|
|
November 2018
|
|
3,671
|
|
|
$
|
37.48
|
|
|
—
|
|
|
7,572,661
|
|
December 2018
|
|
462
|
|
|
$
|
36.19
|
|
|
—
|
|
|
7,572,661
|
|
Total
|
|
4,133
|
|
|
$
|
37.34
|
|
|
—
|
|
|
|
(Unaudited)
|
2018
1
|
|
2017
2
|
|
2016
3
|
|
2015
4
|
|
2014
5
|
||||||||||
(Dollar amounts in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
||||||||||
Summary of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales from Continuing Operations
|
$
|
4,270
|
|
|
$
|
3,944
|
|
|
$
|
3,750
|
|
|
$
|
3,917
|
|
|
$
|
3,782
|
|
Earnings from Continuing Operations
|
306
|
|
|
294
|
|
|
367
|
|
|
328
|
|
|
225
|
|
|||||
(Earnings) Attributable to Noncontrolling Interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|||||
Earnings (loss) from Discontinued Operations, net of tax
|
—
|
|
|
(1
|
)
|
|
19
|
|
|
1
|
|
|
(124
|
)
|
|||||
Net Earnings attributable to Leggett & Platt, Inc. common shareholders
|
306
|
|
|
293
|
|
|
386
|
|
|
325
|
|
|
98
|
|
|||||
Earnings per share from Continuing Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
2.28
|
|
|
2.16
|
|
|
2.66
|
|
|
2.30
|
|
|
1.57
|
|
|||||
Diluted
|
2.26
|
|
|
2.14
|
|
|
2.62
|
|
|
2.27
|
|
|
1.55
|
|
|||||
Earnings (Loss) per share from Discontinued Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
—
|
|
|
(.01
|
)
|
|
.14
|
|
|
.01
|
|
|
(.88
|
)
|
|||||
Diluted
|
—
|
|
|
(.01
|
)
|
|
.14
|
|
|
.01
|
|
|
(.87
|
)
|
|||||
Net Earnings (Loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
2.28
|
|
|
2.15
|
|
|
2.80
|
|
|
2.31
|
|
|
.69
|
|
|||||
Diluted
|
2.26
|
|
|
2.13
|
|
|
2.76
|
|
|
2.28
|
|
|
.68
|
|
|||||
Cash Dividends declared per share
|
1.50
|
|
|
1.42
|
|
|
1.34
|
|
|
1.26
|
|
|
1.22
|
|
|||||
Summary of Financial Position
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Assets
|
$
|
3,382
|
|
|
$
|
3,551
|
|
|
$
|
2,984
|
|
|
$
|
2,964
|
|
|
$
|
3,136
|
|
Long-term Debt, including capital leases
|
$
|
1,168
|
|
|
$
|
1,098
|
|
|
$
|
956
|
|
|
$
|
942
|
|
|
$
|
762
|
|
1
|
Earnings from Continuing Operations for 2018 includes a $14 million charge for restructuring; $12 million charge for note impairment; $6 million charge for ECS transaction costs; and a $2 million benefit associated with TCJA.
|
2
|
Earnings from Continuing Operations for 2017 includes a $50 million charge associated with the TCJA; $13 million of net gains on sales of a business and real estate; an $8 million tax benefit from a divestiture; a $10 million pension settlement charge; and a $3 million charge for an impairment of a wire business.
|
3
|
Earnings from Continuing Operations for 2016 includes $16 million of gains on sales of businesses; a $3 million goodwill impairment charge; and a $5 million gain on a foam litigation settlement. Discontinued operations primarily consists of a gain on a foam litigation settlement.
|
4
|
Earnings from Continuing Operations for 2015 includes $4 million of impairments; $3 million associated with litigation accruals; and an $8 million pension settlement charge.
|
5
|
Earnings from Continuing Operations for 2014 includes $33 million associated with litigation accruals. Discontinued Operations includes the following items: $93 million goodwill impairment; $5 million loss on the sale of the majority of our Store Fixtures unit; and $22 million associated with litigation accruals.
|
|
|
Current Targets
|
Revenue Growth
|
|
6-9%
|
Margin Increase
|
|
1%
|
Dividend Yield
|
|
3%
|
Stock Buyback
|
|
1%
|
Total Shareholder Return
|
|
11-14%
|
(Dollar amounts in millions, except per share data)
|
Amount
|
|
%
1
|
|||
Net sales:
|
|
|
|
|||
Year ended December 31, 2017
|
$
|
3,944
|
|
|
|
|
Divestitures
|
(25
|
)
|
|
(1
|
)%
|
|
2017 sales excluding divestitures
|
3,919
|
|
|
|
||
Approximate volume gains
|
99
|
|
|
3
|
%
|
|
Approximate raw material-related inflation and currency impact
|
145
|
|
|
3
|
%
|
|
Same location sales
|
244
|
|
|
6
|
%
|
|
Acquisition sales growth
|
107
|
|
|
3
|
%
|
|
Year ended December 31, 2018
|
$
|
4,270
|
|
|
8
|
%
|
Earnings from continuing operations:
|
|
|
|
|||
(Dollar amounts, net of tax)
|
|
|
|
|||
Year ended December 31, 2017
|
$
|
294
|
|
|
|
|
Restructuring-related charges
|
(14
|
)
|
|
|
||
Note impairment
|
(12
|
)
|
|
|
||
ECS transaction costs
|
(6
|
)
|
|
|
||
TCJA impact
|
2
|
|
|
|
||
Non-recurrence of TCJA impact, net
|
50
|
|
|
|
||
Non-recurrence of pension settlement charge
|
10
|
|
|
|
||
Non-recurrence of real estate gain
|
(15
|
)
|
|
|
||
Non-recurrence of divestiture tax benefit
|
(8
|
)
|
|
|
||
Non-recurrence of divestiture loss
|
2
|
|
|
|
||
Non-recurrence of impairment of small operation
|
3
|
|
|
|
||
Other items offset
|
—
|
|
|
|
||
Year ended December 31, 2018
|
$
|
306
|
|
|
|
|
Earnings Per Diluted Share (continuing operations)—2017
|
$
|
2.14
|
|
|
|
|
Earnings Per Diluted Share (continuing operations)—2018
|
$
|
2.26
|
|
|
|
|
Year Ended December 31
|
||||
|
2018
|
|
2017
|
||
Statutory federal income tax rate
|
21.0
|
%
|
|
35.0
|
%
|
Increases (decreases) in rate resulting from:
|
|
|
|
||
State taxes, net of federal benefit
|
.9
|
|
|
.9
|
|
Tax effect of foreign operations
|
—
|
|
|
(8.8
|
)
|
Current and deferred foreign withholding taxes
|
3.8
|
|
|
3.6
|
|
Deemed repatriation of foreign earnings
|
(.3
|
)
|
|
15.6
|
|
Deferred tax revaluation
|
(.1
|
)
|
|
(6.0
|
)
|
Stock-based compensation
|
(.8
|
)
|
|
(2.0
|
)
|
Tax benefit for outside basis in subsidiary
|
—
|
|
|
(1.8
|
)
|
Change in valuation allowance
|
(2.0
|
)
|
|
(.4
|
)
|
Change in uncertain tax positions, net
|
(.3
|
)
|
|
(.6
|
)
|
Domestic production activities deduction
|
—
|
|
|
(1.2
|
)
|
Other permanent differences, net
|
(1.4
|
)
|
|
(1.6
|
)
|
Other, net
|
(.4
|
)
|
|
(.7
|
)
|
Effective tax rate
|
20.4
|
%
|
|
32.0
|
%
|
(Dollar amounts in millions)
|
2018
|
|
2017
|
|
Change in Sales
|
|
% Change
Same Location
|
|
|
|||||||||||
$
|
|
%
|
|
Sales
1
|
||||||||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential Products
|
$
|
1,721
|
|
|
$
|
1,639
|
|
|
$
|
82
|
|
|
5
|
%
|
|
4
|
%
|
|
|
|
Industrial Products
|
662
|
|
|
546
|
|
|
116
|
|
|
21
|
%
|
|
21
|
%
|
|
|
||||
Furniture Products
|
1,156
|
|
|
1,113
|
|
|
43
|
|
|
4
|
%
|
|
4
|
%
|
|
|
||||
Specialized Products
|
1,059
|
|
|
943
|
|
|
116
|
|
|
12
|
%
|
|
6
|
%
|
|
|
||||
Total segment sales
|
4,598
|
|
|
4,241
|
|
|
357
|
|
|
|
|
|
|
|
||||||
Intersegment sales elimination
|
(328
|
)
|
|
(297
|
)
|
|
(31
|
)
|
|
|
|
|
|
|
||||||
Trade sales
|
$
|
4,270
|
|
|
$
|
3,944
|
|
|
$
|
326
|
|
|
8
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change in EBIT
|
|
EBIT Margins
2
|
|||||||||||||
$
|
|
%
|
|
2018
|
|
2017
|
||||||||||||||
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential Products
|
$
|
133
|
|
|
$
|
184
|
|
|
$
|
(51
|
)
|
|
(28
|
)%
|
|
7.7
|
%
|
|
11.2
|
%
|
Industrial Products
|
68
|
|
|
21
|
|
|
47
|
|
|
226
|
%
|
|
10.3
|
%
|
|
3.8
|
%
|
|||
Furniture Products
|
50
|
|
|
81
|
|
|
(31
|
)
|
|
(39
|
)%
|
|
4.3
|
%
|
|
7.3
|
%
|
|||
Specialized Products
|
189
|
|
|
196
|
|
|
(7
|
)
|
|
(3
|
)%
|
|
17.8
|
%
|
|
20.8
|
%
|
|||
Intersegment eliminations & other
|
(3
|
)
|
|
1
|
|
|
(4
|
)
|
|
|
|
|
|
|
||||||
Pension settlement charge
|
—
|
|
|
(15
|
)
|
|
15
|
|
|
|
|
|
|
|
||||||
Total EBIT
|
$
|
437
|
|
|
$
|
468
|
|
|
$
|
(31
|
)
|
|
(7
|
)%
|
|
10.2
|
%
|
|
11.9
|
%
|
(Dollar amounts in millions, except per share data)
|
Amount
|
|
%
1
|
|||
Net sales:
|
|
|
|
|||
Year ended December 31, 2016
|
$
|
3,750
|
|
|
|
|
Divestitures
|
(78
|
)
|
|
(2
|
)%
|
|
2016 sales excluding divestitures
|
3,672
|
|
|
|
||
Approximate volume gains
|
142
|
|
|
4
|
%
|
|
Approximate raw material-related deflation and currency impact
|
65
|
|
|
2
|
%
|
|
Same location sales
|
207
|
|
|
6
|
%
|
|
Acquisition sales growth
|
65
|
|
|
2
|
%
|
|
Year ended December 31, 2017
|
$
|
3,944
|
|
|
5
|
%
|
Earnings from continuing operations:
|
|
|
|
|||
(Dollar amounts, net of tax)
|
|
|
|
|||
Year ended December 31, 2016
|
$
|
367
|
|
|
|
|
TCJA impact, net
|
(50
|
)
|
|
|
||
Pension settlement charge
|
(10
|
)
|
|
|
||
Real estate gain
|
15
|
|
|
|
||
Divestiture tax benefit
|
8
|
|
|
|
||
Divestiture loss
|
(2
|
)
|
|
|
||
Impairment of small operation
|
(3
|
)
|
|
|
||
Non-recurrence of divestiture gains
|
(17
|
)
|
|
|
||
Non-recurrence of litigation settlement gain
|
(5
|
)
|
|
|
||
Other, including higher steel costs (and LIFO expense),
|
|
|
|
|||
partially offset by higher volume and lower income taxes
|
(9
|
)
|
|
|
||
Year ended December 31, 2017
|
$
|
294
|
|
|
|
|
Earnings Per Diluted Share (continuing operations)—2016
|
$
|
2.62
|
|
|
|
|
Earnings Per Diluted Share (continuing operations)—2017
|
$
|
2.14
|
|
|
|
(Dollar amounts in millions)
|
2017
|
|
2016
|
|
Change in Sales
|
|
% Change
Same Location
|
|
|
|||||||||||
$
|
|
%
|
|
Sales
1
|
||||||||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential Products
|
$
|
1,639
|
|
|
$
|
1,589
|
|
|
$
|
50
|
|
|
3
|
%
|
|
—
|
%
|
|
|
|
Industrial Products
|
546
|
|
|
583
|
|
|
(37
|
)
|
|
(6
|
)%
|
|
—
|
%
|
|
|
||||
Furniture Products
|
1,113
|
|
|
1,048
|
|
|
65
|
|
|
6
|
%
|
|
5
|
%
|
|
|
||||
Specialized Products
|
943
|
|
|
906
|
|
|
37
|
|
|
4
|
%
|
|
8
|
%
|
|
|
||||
Total segment sales
|
4,241
|
|
|
4,126
|
|
|
115
|
|
|
|
|
|
|
|
||||||
Intersegment sales elimination
|
(297
|
)
|
|
(376
|
)
|
|
79
|
|
|
|
|
|
|
|
||||||
Trade sales
|
$
|
3,944
|
|
|
$
|
3,750
|
|
|
$
|
194
|
|
|
5
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change in EBIT
|
|
EBIT Margins
2
|
|||||||||||||
$
|
|
%
|
|
2017
|
|
2016
|
||||||||||||||
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential Products
|
$
|
184
|
|
|
$
|
168
|
|
|
$
|
16
|
|
|
10
|
%
|
|
11.2
|
%
|
|
10.5
|
%
|
Industrial Products
|
21
|
|
|
65
|
|
|
(44
|
)
|
|
(68
|
)%
|
|
3.8
|
%
|
|
11.2
|
%
|
|||
Furniture Products
|
81
|
|
|
107
|
|
|
(26
|
)
|
|
(24
|
)%
|
|
7.3
|
%
|
|
10.2
|
%
|
|||
Specialized Products
|
196
|
|
|
181
|
|
|
15
|
|
|
8
|
%
|
|
20.8
|
%
|
|
20.0
|
%
|
|||
Pension settlement charge
|
1
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
||||||
Intersegment eliminations & other
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
|
|
|
|
|
||||||
Total EBIT
|
$
|
468
|
|
|
$
|
522
|
|
|
$
|
(54
|
)
|
|
(10
|
)%
|
|
11.9
|
%
|
|
13.9
|
%
|
(Dollar amounts in millions)
|
2018
|
|
2017
|
||||
Current assets
|
$
|
1,525
|
|
|
$
|
1,767
|
|
Current liabilities
|
816
|
|
|
976
|
|
||
Working capital
|
709
|
|
|
791
|
|
||
Cash and cash equivalents
|
268
|
|
|
526
|
|
||
Current debt maturities
|
1
|
|
|
154
|
|
||
Adjusted working capital
|
$
|
442
|
|
|
$
|
419
|
|
Annualized sales
1
|
$
|
4,188
|
|
|
$
|
3,936
|
|
Working capital as a percent of annualized sales
|
16.9
|
%
|
|
20.1
|
%
|
||
Adjusted working capital as a percent of annualized sales
|
10.6
|
%
|
|
10.6
|
%
|
|
Amount (in millions)
|
|
|
Days
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Trade Receivables
|
$
|
545
|
|
|
$
|
522
|
|
|
$
|
451
|
|
|
DSO
1
|
46
|
|
45
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Inventories
|
$
|
634
|
|
|
$
|
571
|
|
|
$
|
520
|
|
|
DIO
2, 4
|
65
|
|
65
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts Payable
|
$
|
465
|
|
|
$
|
430
|
|
|
$
|
351
|
|
|
DPO
3, 4
|
48
|
|
47
|
|
42
|
1
|
Days sales outstanding: ((beginning of year trade receivables + end of period trade receivables) ÷ 2) ÷ (net trade sales ÷ number of days in the period).
|
2
|
Days inventory on hand: ((beginning of year inventory + end of period inventory) ÷ 2) ÷ (cost of goods sold ÷ number of days in the period).
|
3
|
Days payables outstanding: ((beginning of year accounts payable + end of period accounts payable) ÷ 2) ÷ (cost of goods sold ÷ number of days in the period).
|
4
|
2017 ratios have been retrospectively adjusted to reflect the adoption of ASU 2017-07 that resulted in reclassifications between "Cost of goods sold" and "Selling and administrative expenses" into "Other expense (income), net". For further discussion see
Note A to the Consolidated Financial Statements
on page
72
.
|
(Dollar amounts in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Total debt excluding revolving credit/commercial paper
|
$
|
1,099
|
|
|
$
|
1,252
|
|
|
$
|
764
|
|
Less: Current maturities of long-term debt
|
1
|
|
|
154
|
|
|
4
|
|
|||
Scheduled maturities of long-term debt
|
1,098
|
|
|
1,098
|
|
|
760
|
|
|||
Average interest rates
1
|
3.6
|
%
|
|
3.6
|
%
|
|
3.7
|
%
|
|||
Average maturities in years
1
|
6.7
|
|
|
6.9
|
|
|
5.8
|
|
|||
Revolving credit/commercial paper
|
70
|
|
|
—
|
|
|
196
|
|
|||
Average interest rate on year-end balance
|
2.6
|
%
|
|
—
|
%
|
|
1.0
|
%
|
|||
Average interest rate during the year
|
2.4
|
%
|
|
1.4
|
%
|
|
.8
|
%
|
|||
Total long-term debt
|
1,168
|
|
|
1,098
|
|
|
956
|
|
|||
Deferred income taxes and other liabilities
|
241
|
|
|
286
|
|
|
227
|
|
|||
Equity
|
1,158
|
|
|
1,191
|
|
|
1,094
|
|
|||
Total capitalization
|
$
|
2,567
|
|
|
$
|
2,575
|
|
|
$
|
2,277
|
|
Unused committed credit:
2
|
|
|
|
|
|
||||||
Long-term
|
$
|
730
|
|
|
$
|
800
|
|
|
$
|
554
|
|
Short-term
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total unused committed credit
|
$
|
730
|
|
|
$
|
800
|
|
|
$
|
554
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
268
|
|
|
$
|
526
|
|
|
$
|
282
|
|
1
|
These rates include current maturities, but exclude commercial paper to reflect the averages of outstanding debt with scheduled maturities. The rates also include amortization of interest rate swaps.
|
2
|
The unused credit amount is based upon our revolving credit facility and commercial paper program which, at the end of 2016, had $750 million of borrowing capacity. The credit facility was amended in the fourth quarter of 2017 to increase the borrowing capacity to $800 million and the commercial paper program was increased to a corresponding amount. In January 2019, we expanded the borrowing capacity under our revolving credit facility from $800 million to $1.2 billion and correspondingly increased permitted borrowings under our commercial paper program primarily to finance the ECS transaction.
|
(Dollar amounts in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Total program authorized
|
$
|
800
|
|
|
$
|
800
|
|
|
$
|
750
|
|
Commercial paper outstanding (classified as long-term debt)
|
70
|
|
|
—
|
|
|
196
|
|
|||
Letters of credit issued under the credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total program usage
|
70
|
|
|
—
|
|
|
196
|
|
|||
Total program available
|
$
|
730
|
|
|
$
|
800
|
|
|
$
|
554
|
|
|
|
|
Payments Due by Period
5
|
||||||||||||||||
Contractual Obligations
|
Total
|
|
Less
Than 1
Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More
Than 5
Years
|
||||||||||
(Dollar amounts in millions)
|
|
|
|
||||||||||||||||
Long-term debt
¹
|
$
|
1,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
369
|
|
|
$
|
795
|
|
Capitalized leases
|
5
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|||||
Operating leases
|
144
|
|
|
36
|
|
|
57
|
|
|
33
|
|
|
18
|
|
|||||
Purchase obligations
²
|
1,642
|
|
|
1,627
|
|
|
13
|
|
|
2
|
|
|
—
|
|
|||||
Interest payments
³
|
264
|
|
|
39
|
|
|
79
|
|
|
65
|
|
|
81
|
|
|||||
Deferred income taxes
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|||||
Other obligations (including pensions and net reserves for tax contingencies)
4
|
156
|
|
|
1
|
|
|
14
|
|
|
8
|
|
|
133
|
|
|||||
Total contractual cash obligations
|
$
|
3,461
|
|
|
$
|
1,704
|
|
|
$
|
165
|
|
|
$
|
479
|
|
|
$
|
1,113
|
|
1
|
The long-term debt payment schedule presented above could be accelerated if we were not able to make the principal and interest payments when due. This does not include $1.25 billion of additional borrowings primarily related to the January 16, 2019 ECS acquisition (as discussed on page
46
). We expect to focus on deleveraging by temporarily limiting share repurchases, reducing other acquisition spending, and using operating cash flow to repay debt.
|
2
|
Purchase obligations primarily include open short-term (30-120 days) purchase orders that arise in the normal course of operating our facilities.
|
3
|
Interest payments assume debt outstanding remains constant with amounts at December 31, 2018 and at rates in effect at the end of the year. This does not include incremental annual interest that will be incurred on the $1.25 billion of additional borrowings primarily related to the ECS acquisition.
|
4
|
Other obligations include our net reserves for tax contingencies in the "More Than 5 Years" column because these obligations are long-term in nature and actual payment dates cannot be specifically determined. Other obligations also include a $32 million long-term deemed repatriation tax payable and our current estimate of $1 million for minimum contributions to defined benefit pension plans.
|
5
|
Less Than 1 Year (due in 2019), 1-3 Years (due in 2020 and 2021), 3-5 Years (due in 2022 and 2023) and More Than 5 Years (due in 2024 and beyond).
|
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Goodwill
|
|
|
|
|
Goodwill is assessed for impairment annually as of June 30 and as triggering events occur.
|
|
Goodwill is evaluated annually for impairment as of June 30 using either a quantitative or qualitative analysis at the reporting unit level, which is one level below our operating segments:
(a) The qualitative assessment begins with determination of whether it is more likely than not that a reporting unit's fair value is less than its carrying value before applying a two-step goodwill impairment model.
(b) The quantitative analysis utilizes a two-step goodwill impairment model.
Judgment is required in the two-step model. We estimate fair value using a combination of:
(a) A discounted cash flow model that contains uncertainties related to the forecast of future results, as many outside economic and competitive factors can influence future performance. Margins, sales growth, and discount rates are the most critical estimates in determining enterprise values using the cash flow model.
(b) The market approach using price to earnings ratios for comparable publicly traded companies that operate in the same or similar industry and with characteristics similar to the reporting unit. Judgment is required to determine the appropriate price to earnings ratio.
|
|
The June 2018 review indicated no goodwill impairments. At December 31, 2018, we had $834 million of goodwill.
We recognized goodwill impairments of less than $5 million in 2017 and 2016 associated with the exit of a few small businesses that were evaluated for impairment when they were classified as held for sale.
Information regarding material assumptions used to determine if a goodwill impairment exists can be found in Note D to the Consolidated Financial Statements on page 82.
We conduct impairment testing based on our current business strategy in light of present industry and economic conditions, as well as future expectations. If we are not able to achieve projected performance levels, future impairments could be possible.
|
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Other Long-lived Assets
|
|
|
|
|
Other long-lived assets are tested for recoverability at year-end and whenever events or circumstances indicate the carrying value may not be recoverable.
For other long-lived assets we estimate fair value at the lowest level where cash flows can be measured (usually at a branch level).
|
|
Impairments of other long-lived assets usually occur when major restructuring activities take place, or we decide to discontinue product lines completely.
Our impairment assessments have uncertainties because they require estimates of future cash flows to determine if undiscounted cash flows are sufficient to recover carrying values of these assets.
For assets where future cash flows are not expected to recover carrying value, fair value is estimated which requires an estimate of market value based upon asset appraisals for like assets.
|
|
These impairments are unpredictable. Impairments did not exceed $6 million per year in any of the last three years.
At December 31, 2018, net property, plant and equipment was $729 million and net intangible assets other than goodwill was $179 million.
|
Inventory Reserves
|
|
|
|
|
We reduce the carrying value of inventories to reflect an estimate of net realizable value for slow-moving (i.e., not selling very quickly) and obsolete inventory.
Generally a reserve is required when we have more than one-year's supply of the product.
The calculation also uses an estimate of the ultimate recoverability of items identified as slow-moving based upon historical experience.
If we have had no sales of a given product for 12 months, those items are generally deemed to be obsolete with no value and are written down completely.
Finally, costs for approximately 50% of our inventories (consisting primarily of our domestic steel related inventories) are determined using the last-in, first-out (LIFO) method, which produces a cost that is lower than net realizable value.
|
|
Our inventory reserve contains uncertainties because the calculation requires management to make assumptions about the value of products that are obsolete or slow-moving.
Changes in customer behavior and requirements can cause inventory to become obsolete or slow-moving. Restructuring activity and decisions to narrow product offerings also impact the estimated net realizable value of inventories.
|
|
At December 31, 2018, the reserve for obsolete and slow-moving inventory was $27 million (approximately 4% of inventories). This is consistent with the reserves at December 31, 2017 and 2016, representing approximately 5% of inventories.
Additions to inventory reserves in 2018 were $10 million, which was slightly higher than our $8 million three-year average. This increase is primarily associated with the 2018 Restructuring Plan as discussed in
Note F to the Consolidated Financial Statements
on page 86, and we do not expect significant changes in our historical obsolescence levels.
|
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Workers’ Compensation
|
|
|
|
|
We are substantially self-insured for costs related to workers’ compensation, and this requires us to estimate the liability associated with this obligation.
|
|
Our estimates of self-insured reserves contain uncertainties regarding the potential amounts we might have to pay. We consider a number of factors, including historical claim experience, demographic factors, and potential recoveries from third party insurance carriers.
|
|
Over the past five years, we have incurred, on average, $8 million annually for costs associated with workers’ compensation. Average year-to-year variation over the past five years has been approximately $1 million. At December 31, 2018, we had accrued $33 million to cover future self-insurance liabilities.
|
Credit Losses
|
|
|
|
|
For accounts and notes receivable, we estimate a bad debt reserve for the amount that will ultimately be uncollectible.
When we become aware of a specific customer’s potential inability to pay, we record a bad debt reserve for the amount we believe may not be collectible.
|
|
Our bad debt reserve contains uncertainties because it requires management to estimate the amount uncollectible based upon an evaluation of several factors such as the length of time that receivables are past due, the financial health of the customer, industry and macroeconomic considerations, and historical loss experience.
Our customers are diverse and many are small-to-medium sized companies, with some being highly leveraged. Bankruptcy can occur with some of these customers relatively quickly and with little warning.
In cases where a customer’s payment performance or financial condition begins to deteriorate, we tighten our credit limits and terms and make appropriate reserves when deemed necessary. Certain of our customers have from time to time experienced bankruptcy, insolvency and/or an inability to pay their debts to us as they come due. If our customers suffer significant financial difficulty, they may be unable to pay their debts to us timely or at all, they may reject their contractual obligations to us under bankruptcy laws or otherwise, or we may have to negotiate significant discounts and/or extend financing terms with these customers.
|
|
A significant change in the financial status of a large customer could impact our estimates.
We believe we have established adequate reserves on our riskier customer accounts. Although we recorded a $16 million reserve ($15 million on a note receivable and $1 million for a trade accounts receivable) for a customer in our Residential Products segment that is experiencing financial difficulty and liquidity problems, we have experienced favorable trends in the number of trade accounts receivable monitored for possible loss or written off in the last few years.
The average annual amount of bad debt expense associated with customer trade accounts receivable was less than $2 million (significantly less than 1% of annual net sales) over the last three years. At December 31, 2018, our allowances for doubtful trade accounts receivable were $5 million (about 1% of our trade receivables of $552 million).
|
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Pension Accounting
|
|
|
|
|
For our pension plans, we must estimate the cost of benefits to be provided (well into the future) and the current value of those benefit obligations.
In 2017, we completed an annuity purchase transaction for pensioners that were currently receiving a small monthly benefit. Please see
Note N to our Consolidated Financial Statements
on page 103.
|
|
The pension liability calculation contains uncertainties because it requires management's judgment. Significant assumptions used to measure our pension liabilities and pension expense annually include:
- the discount rate used to calculate the present value of future benefits
- an estimate of expected return on pension assets based upon the mix of investments held (bonds and equities)
- certain employee-related factors, such as turnover, retirement age and mortality. Mortality assumptions represent our best estimate of the duration of future benefit payments at the measurement date. These estimates are based on each plans' demographics and other relevant facts and circumstances
- the rate of salary increases where benefits are based on earnings
|
|
Each 25 basis point decrease in the discount rate increases pension expense by $.4 million and increases the plans’ benefit obligation by $6.8 million.
A 25 basis point reduction in the expected return on assets would increase pension expense by $.4 million, but have no effect on the plans’ funded status. Assuming a long-term investment horizon, we do not expect a material change to the return on asset assumption.
|
Contingencies
|
|
|
|
|
We evaluate various legal, environmental, and other potential claims against us to determine if an accrual or disclosure of the contingency is appropriate. If it is probable that an ultimate loss will be incurred and reasonably estimable, we accrue a liability for the estimate of the loss.
|
|
Our disclosure and accrual of loss contingencies (i.e., losses that may or may not occur) contain uncertainties because they are based on our assessment of the probability that the expenses will actually occur, and our reasonable estimate of the likely cost. Our estimates and judgments are subjective and can involve matters in litigation, the results of which are generally unpredictable.
|
|
Legal contingencies are related to numerous lawsuits and claims described in
Note U to the Consolidated Financial Statements
on page 119.
During the three-year period ended December 31, 2018, we recorded expense of $13 million ($9 million for continuing operations and $4 million in discontinued operations).
There were no material uninsured individual claims during the three-year period ending December 31, 2018.
|
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Income Taxes
|
|
|
|
|
In the ordinary course of business, we must make estimates of the tax treatment of many transactions, even though the ultimate tax outcome may remain uncertain for some time. These estimates become part of the annual income tax expense reported in our financial statements. Subsequent to year end, we finalize our tax analysis and file income tax returns. Tax authorities periodically audit these income tax returns and examine our tax filing positions, including (among other things) the timing and amounts of deductions, and the allocation of income among tax jurisdictions. If necessary, we adjust income tax expense in our financial statements in the periods in which the actual outcome becomes more certain.
|
|
Our tax liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures related to our various filing positions.
Our effective tax rate is also impacted by changes in tax laws, the current mix of earnings by taxing jurisdiction, and the results of current tax audits and assessments. In December 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (TCJA), which resulted in significant changes to U.S. federal income tax law affecting the Company. Current and expected impacts are based on our current knowledge of the legislation and other authoritative guidance which has been issued, including proposed regulations.
At December 31, 2018 and 2017, we had $14 million and $11 million, respectively, of net deferred tax assets on our balance sheet primarily related to net operating losses and other tax carryforwards. The ultimate realization of these deferred tax assets is dependent upon the amount, source, and timing of future taxable income. In cases where we believe it is more likely than not that we may not realize the future potential tax benefits, we establish a valuation allowance against them. |
|
Changes in U.S. and foreign tax laws could impact assumptions related to the repatriation of certain foreign earnings.
Audits by various taxing authorities continue as governments look for ways to raise additional revenue. Based upon past audit experience, we do not expect any material changes to our tax liability as a result of this audit activity; however, we could incur additional tax expense if we have audit adjustments higher than recent historical experience.
The likelihood of recovery of net operating losses and other tax carryforwards has been closely evaluated and is based upon such factors as the time remaining before expiration, viable tax planning strategies, and future taxable earnings expectations. We believe that appropriate valuation allowances have been recorded as necessary. However, if earnings expectations or other assumptions change such that additional valuation allowances are required, we could incur additional tax expense. Likewise, if fewer valuation allowances are needed, we could incur reduced tax expense. |
Description
|
|
Judgments and
Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Acquisitions
|
|
|
|
|
When acquisitions occur, we value the assets acquired, liabilities assumed, and any non-controlling interest in acquired companies at estimated acquisition date fair values. Goodwill is measured as the excess amount of consideration transferred, compared to fair value of the assets acquired and the liabilities assumed. Our estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain.
|
|
The purchase price allocation for business acquisitions contains uncertainties because it requires management's judgment. Determining fair value of identifiable assets, particularly intangibles, require management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Determining fair values for these items require significant judgment and includes a variety of methods and models that utilize significant Level 3 inputs as discussed in
Note R to the Consolidated Financial Statements
on page 113.
|
|
In 2018, we acquired three businesses for total consideration of $109 million.
As discussed in
Note V to the Consolidated Financial Statements
on page 121, on January 16, 2019, we completed the acquisition of Elite Comfort Solutions, Inc. (ECS) for cash consideration of approximately $1.25 billion.
The judgments made in determining the estimated fair value assigned to the assets acquired, as well as the estimated life of the assets, can materially impact net income in periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in the future. We regularly review for impairments. Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results.
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Litigation contingency accrual - Beginning of period
|
$
|
.4
|
|
|
$
|
3.2
|
|
|
$
|
8.1
|
|
Adjustment to accruals - expense - Continuing operations
|
1.8
|
|
|
.6
|
|
|
7.1
|
|
|||
Adjustment to accruals - expense - Discontinued operations
|
—
|
|
|
1.6
|
|
|
2.0
|
|
|||
Cash payments
|
(.3
|
)
|
|
(5.0
|
)
|
|
(14.0
|
)
|
|||
Litigation contingency accrual - End of period
|
$
|
1.9
|
|
|
$
|
.4
|
|
|
$
|
3.2
|
|
Long-term debt as of December 31,
|
Scheduled Maturity Date
|
|
|
|
|
||||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
2018
|
|
2017
|
|||||||||||||||
Principal fixed rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300.0
|
|
|
$
|
—
|
|
|
$
|
800.0
|
|
|
$1,100.0
|
|
$1,250.0
|
||
Average stated interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
3.40
|
%
|
|
—
|
|
|
3.61
|
%
|
|
3.55
|
%
|
|
3.66
|
%
|
||||||
Principal variable rate debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
3.8
|
|
|
6.2
|
|
||||||
Average interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.89
|
%
|
|
1.89
|
%
|
|
1.25
|
%
|
||||||
Unamortized discounts and deferred loan costs
|
|
|
|
|
|
|
|
|
|
|
|
|
(10.1
|
)
|
|
(10.9
|
)
|
||||||||||||
Commercial Paper
1
|
|
|
|
|
|
|
|
|
|
|
|
|
70.0
|
|
|
—
|
|
||||||||||||
Miscellaneous debt, primarily capitalized leases
|
|
|
|
|
|
|
|
|
|
|
|
|
5.3
|
|
|
6.4
|
|
||||||||||||
Total debt
|
|
|
|
|
|
|
|
|
|
|
|
|
1,169.0
|
|
|
1,251.7
|
|
||||||||||||
Less: current maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
1.2
|
|
|
153.8
|
|
||||||||||||
Total long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,167.8
|
|
$1,097.9
|
1
|
The weighted average interest rate on the balance of commercial paper outstanding at the year ended December 31, 2018 was 2.6%. The weighted average interest rate for the average commercial paper outstanding during the years ended December 31, 2018 and 2017 was 2.4% and 1.4%, respectively. Commercial paper is supported by an $800 revolving credit facility which terminates in 2022. In January 2019, we increased the borrowing capacity under the revolving facility from $800 to $1,200, added a five-year $500 term loan facility, and extended the term from 2022 to 2024. After completing the ECS acquisition in January 2019 (discussed in
Note V to our Consolidated Financial Statements
), our debt levels have increased as expected.
|
Functional Currency (amounts in millions)
|
|
2018
|
|
2017
|
||||
European Currencies
|
|
$
|
331.5
|
|
|
$
|
364.3
|
|
Chinese Renminbi
|
|
299.0
|
|
|
381.1
|
|
||
Canadian Dollar
|
|
203.2
|
|
|
260.0
|
|
||
Mexican Peso
|
|
31.3
|
|
|
29.1
|
|
||
Other
|
|
63.4
|
|
|
50.4
|
|
||
Total
|
|
$
|
928.4
|
|
|
$
|
1,084.9
|
|
|
Page No.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Leggett & Platt;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of Leggett & Platt are being made only in accordance with authorizations of management and directors of Leggett & Platt; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Leggett & Platt assets that could have a material effect on the financial statements.
|
/s/ KARL G. GLASSMAN
|
|
/s/ MATTHEW C. FLANIGAN
|
Karl G. Glassman
President and Chief Executive Officer
|
|
Matthew C. Flanigan
Executive Vice President and Chief Financial Officer
|
|
|
|
February 27, 2019
|
|
February 27, 2019
|
|
|||||||||||
|
Year Ended December 31
|
||||||||||
(Amounts in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
4,269.5
|
|
|
$
|
3,943.8
|
|
|
$
|
3,749.9
|
|
Cost of goods sold
|
3,380.8
|
|
|
3,061.4
|
|
|
2,848.2
|
|
|||
Gross profit
|
888.7
|
|
|
882.4
|
|
|
901.7
|
|
|||
Selling and administrative expenses
|
425.1
|
|
|
400.5
|
|
|
395.7
|
|
|||
Amortization of intangibles
|
20.5
|
|
|
20.7
|
|
|
19.9
|
|
|||
Impairments
|
5.4
|
|
|
4.9
|
|
|
4.1
|
|
|||
Gain on sale of assets and businesses
|
(1.9
|
)
|
|
(24.2
|
)
|
|
(37.6
|
)
|
|||
Other expense (income), net
|
2.7
|
|
|
12.6
|
|
|
(2.4
|
)
|
|||
Earnings from continuing operations before interest and income taxes
|
436.9
|
|
|
467.9
|
|
|
522.0
|
|
|||
Interest expense
|
60.9
|
|
|
43.5
|
|
|
38.8
|
|
|||
Interest income
|
8.4
|
|
|
7.6
|
|
|
3.9
|
|
|||
Earnings from continuing operations before income taxes
|
384.4
|
|
|
432.0
|
|
|
487.1
|
|
|||
Income taxes
|
78.3
|
|
|
138.4
|
|
|
120.0
|
|
|||
Earnings from continuing operations
|
306.1
|
|
|
293.6
|
|
|
367.1
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
|
(.9
|
)
|
|
19.1
|
|
|||
Net earnings
|
306.1
|
|
|
292.7
|
|
|
386.2
|
|
|||
(Earnings) attributable to noncontrolling interest, net of tax
|
(.2
|
)
|
|
(.1
|
)
|
|
(.4
|
)
|
|||
Net earnings attributable to Leggett & Platt, Inc. common shareholders
|
$
|
305.9
|
|
|
$
|
292.6
|
|
|
$
|
385.8
|
|
Earnings per share from continuing operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
||||||
Basic
|
$
|
2.28
|
|
|
$
|
2.16
|
|
|
$
|
2.66
|
|
Diluted
|
$
|
2.26
|
|
|
$
|
2.14
|
|
|
$
|
2.62
|
|
Earnings (loss) per share from discontinued operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
||||||
Basic
|
$
|
—
|
|
|
$
|
(.01
|
)
|
|
$
|
.14
|
|
Diluted
|
$
|
—
|
|
|
$
|
(.01
|
)
|
|
$
|
.14
|
|
Net earnings per share attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
||||||
Basic
|
$
|
2.28
|
|
|
$
|
2.15
|
|
|
$
|
2.80
|
|
Diluted
|
$
|
2.26
|
|
|
$
|
2.13
|
|
|
$
|
2.76
|
|
|
Year Ended December 31
|
||||||||||
(Amounts in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings
|
$
|
306.1
|
|
|
$
|
292.7
|
|
|
$
|
386.2
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, including acquisition of non-controlling interest
|
(67.0
|
)
|
|
79.1
|
|
|
(33.9
|
)
|
|||
Cash flow hedges
|
(.3
|
)
|
|
6.3
|
|
|
10.4
|
|
|||
Defined benefit pension plans
|
(.8
|
)
|
|
18.7
|
|
|
.9
|
|
|||
Other comprehensive (loss) income
|
(68.1
|
)
|
|
104.1
|
|
|
(22.6
|
)
|
|||
Comprehensive income
|
238.0
|
|
|
396.8
|
|
|
363.6
|
|
|||
Less: comprehensive (income) attributable to noncontrolling interest
|
(.2
|
)
|
|
(.1
|
)
|
|
(.3
|
)
|
|||
Comprehensive income attributable to Leggett & Platt, Inc.
|
$
|
237.8
|
|
|
$
|
396.7
|
|
|
$
|
363.3
|
|
|
December 31
|
||||||
(Amounts in millions, except per share data)
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
268.1
|
|
|
$
|
526.1
|
|
Trade receivables, net
|
545.3
|
|
|
522.3
|
|
||
Other receivables, net
|
26.3
|
|
|
72.8
|
|
||
Total receivables, net
|
571.6
|
|
|
595.1
|
|
||
Inventories
|
|
|
|
||||
Finished goods
|
331.6
|
|
|
285.6
|
|
||
Work in process
|
49.6
|
|
|
53.0
|
|
||
Raw materials and supplies
|
334.9
|
|
|
283.4
|
|
||
LIFO reserve
|
(82.2
|
)
|
|
(50.9
|
)
|
||
Total inventories, net
|
633.9
|
|
|
571.1
|
|
||
Prepaid expenses and other current assets
|
51.0
|
|
|
74.2
|
|
||
Total current assets
|
1,524.6
|
|
|
1,766.5
|
|
||
Property, Plant and Equipment—at cost
|
|
|
|
||||
Machinery and equipment
|
1,281.7
|
|
|
1,210.6
|
|
||
Buildings and other
|
656.8
|
|
|
626.0
|
|
||
Land
|
42.4
|
|
|
40.6
|
|
||
Total property, plant and equipment
|
1,980.9
|
|
|
1,877.2
|
|
||
Less accumulated depreciation
|
1,252.4
|
|
|
1,213.3
|
|
||
Net property, plant and equipment
|
728.5
|
|
|
663.9
|
|
||
Other Assets
|
|
|
|
||||
Goodwill
|
833.8
|
|
|
822.2
|
|
||
Other intangibles, net
|
178.7
|
|
|
169.1
|
|
||
Sundry
|
116.4
|
|
|
129.1
|
|
||
Total other assets
|
1,128.9
|
|
|
1,120.4
|
|
||
TOTAL ASSETS
|
$
|
3,382.0
|
|
|
$
|
3,550.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
1.2
|
|
|
$
|
153.8
|
|
Accounts payable
|
465.4
|
|
|
430.3
|
|
||
Accrued expenses
|
262.7
|
|
|
303.4
|
|
||
Other current liabilities
|
86.4
|
|
|
88.7
|
|
||
Total current liabilities
|
815.7
|
|
|
976.2
|
|
||
Long-term Liabilities
|
|
|
|
||||
Long-term debt
|
1,167.8
|
|
|
1,097.9
|
|
||
Other long-term liabilities
|
155.3
|
|
|
202.9
|
|
||
Deferred income taxes
|
85.6
|
|
|
83.0
|
|
||
Total long-term liabilities
|
1,408.7
|
|
|
1,383.8
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Capital stock: Preferred stock—authorized, 100.0 shares; none issued; Common stock—authorized, 600.0 shares of $.01 par value; 198.8 shares issued
|
2.0
|
|
|
2.0
|
|
||
Additional contributed capital
|
527.1
|
|
|
514.7
|
|
||
Retained earnings
|
2,613.8
|
|
|
2,511.3
|
|
||
Accumulated other comprehensive (loss)
|
(77.6
|
)
|
|
(9.5
|
)
|
||
Less treasury stock—at cost (68.3 and 66.9 shares at December 31, 2018 and 2017, respectively)
|
(1,908.3
|
)
|
|
(1,828.3
|
)
|
||
Total Leggett & Platt, Inc. equity
|
1,157.0
|
|
|
1,190.2
|
|
||
Noncontrolling interest
|
.6
|
|
|
.6
|
|
||
Total equity
|
1,157.6
|
|
|
1,190.8
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
3,382.0
|
|
|
$
|
3,550.8
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
|
|
Year Ended December 31
|
||||||||||
(Amounts in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
306.1
|
|
|
$
|
292.7
|
|
|
$
|
386.2
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
104.3
|
|
|
95.3
|
|
|
86.8
|
|
|||
Amortization of intangibles and debt issuance costs
|
31.8
|
|
|
30.6
|
|
|
28.6
|
|
|||
Impairments
|
5.4
|
|
|
4.9
|
|
|
4.1
|
|
|||
Provision for losses on accounts and notes receivable
|
16.7
|
|
|
.8
|
|
|
1.6
|
|
|||
Writedown of inventories
|
10.3
|
|
|
4.9
|
|
|
8.9
|
|
|||
Net gain from sales of assets and businesses
|
(2.1
|
)
|
|
(24.4
|
)
|
|
(38.5
|
)
|
|||
Deemed repatriation tax payable
|
(1.3
|
)
|
|
67.3
|
|
|
—
|
|
|||
Deferred income tax (benefit) expense
|
(3.2
|
)
|
|
16.6
|
|
|
17.6
|
|
|||
Stock-based compensation
|
35.5
|
|
|
36.6
|
|
|
37.1
|
|
|||
Pension (benefit) expense, net of contributions
|
(19.2
|
)
|
|
7.1
|
|
|
(2.2
|
)
|
|||
Other, net
|
2.0
|
|
|
(8.5
|
)
|
|
7.3
|
|
|||
Increases/decreases in, excluding effects from acquisitions and divestitures:
|
|
|
|
|
|
||||||
Accounts and other receivables
|
(25.8
|
)
|
|
(40.6
|
)
|
|
3.4
|
|
|||
Inventories
|
(54.3
|
)
|
|
(48.1
|
)
|
|
(33.3
|
)
|
|||
Other current assets
|
(1.9
|
)
|
|
(36.8
|
)
|
|
(2.1
|
)
|
|||
Accounts payable
|
36.2
|
|
|
58.8
|
|
|
50.8
|
|
|||
Accrued expenses and other current liabilities
|
(.2
|
)
|
|
(13.5
|
)
|
|
(3.7
|
)
|
|||
Net Cash Provided by Operating Activities
|
440.3
|
|
|
443.7
|
|
|
552.6
|
|
|||
Investing Activities
|
|
|
|
|
|
|
|||||
Additions to property, plant and equipment
|
(159.6
|
)
|
|
(159.4
|
)
|
|
(124.0
|
)
|
|||
Purchases of companies, net of cash acquired
|
(109.2
|
)
|
|
(39.1
|
)
|
|
(29.5
|
)
|
|||
Proceeds from sales of assets and businesses
|
4.9
|
|
|
45.2
|
|
|
86.1
|
|
|||
Advance of non-trade note receivable
|
—
|
|
|
—
|
|
|
(24.6
|
)
|
|||
Other, net
|
(13.9
|
)
|
|
(11.7
|
)
|
|
(10.0
|
)
|
|||
Net Cash Used for Investing Activities
|
(277.8
|
)
|
|
(165.0
|
)
|
|
(102.0
|
)
|
|||
Financing Activities
|
|
|
|
|
|
|
|||||
Additions to long-term debt
|
—
|
|
|
493.4
|
|
|
.4
|
|
|||
Payments on long-term debt
|
(155.4
|
)
|
|
(9.2
|
)
|
|
(5.4
|
)
|
|||
Change in commercial paper and short-term debt
|
69.6
|
|
|
(202.7
|
)
|
|
11.5
|
|
|||
Dividends paid
|
(193.7
|
)
|
|
(185.6
|
)
|
|
(177.4
|
)
|
|||
Issuances of common stock
|
4.8
|
|
|
2.6
|
|
|
4.9
|
|
|||
Purchases of common stock
|
(112.4
|
)
|
|
(157.6
|
)
|
|
(198.0
|
)
|
|||
Purchase of remaining interest in noncontrolling interest
|
—
|
|
|
(2.6
|
)
|
|
(35.2
|
)
|
|||
Additional consideration paid for acquisitions
|
(9.3
|
)
|
|
(2.2
|
)
|
|
(.5
|
)
|
|||
Other, net
|
(.5
|
)
|
|
(.6
|
)
|
|
(2.5
|
)
|
|||
Net Cash Used for Financing Activities
|
(396.9
|
)
|
|
(64.5
|
)
|
|
(402.2
|
)
|
|||
Effect of Exchange Rate Changes on Cash
|
(23.6
|
)
|
|
30.0
|
|
|
(19.7
|
)
|
|||
(Decrease) Increase in Cash and Cash Equivalents
|
(258.0
|
)
|
|
244.2
|
|
|
28.7
|
|
|||
Cash and Cash Equivalents—Beginning of Year
|
526.1
|
|
|
281.9
|
|
|
253.2
|
|
|||
Cash and Cash Equivalents—End of Year
|
$
|
268.1
|
|
|
$
|
526.1
|
|
|
$
|
281.9
|
|
Supplemental Information
|
|
|
|
|
|
||||||
Interest paid (net of amounts capitalized)
|
$
|
61.8
|
|
|
$
|
40.1
|
|
|
$
|
37.5
|
|
Income taxes paid
|
92.8
|
|
|
90.6
|
|
|
112.3
|
|
|||
Common stock issued for acquired companies
|
—
|
|
|
11.8
|
|
|
—
|
|
|||
Property, plant and equipment acquired through capital leases
|
1.9
|
|
|
2.4
|
|
|
4.7
|
|
|||
Capital expenditures in accounts payable
|
6.7
|
|
|
6.7
|
|
|
5.1
|
|
|||
Prepaid income taxes and taxes receivable applied against the deemed repatriation tax liability
|
28.4
|
|
|
—
|
|
|
—
|
|
(Amounts in millions, except
per share data)
|
Common Stock
|
|
Additional
Contributed
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury Stock
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
Balance, December 31, 2015
|
198.8
|
|
|
$
|
2.0
|
|
|
$
|
529.5
|
|
|
$
|
2,209.2
|
|
|
$
|
(91.1
|
)
|
|
(63.2
|
)
|
|
$
|
(1,564.0
|
)
|
|
$
|
12.1
|
|
|
$
|
1,097.7
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
386.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
386.2
|
|
|||||||
(Earnings) attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
|
—
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
5.1
|
|
|
(184.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179.4
|
)
|
|||||||
Dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
|||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
(210.9
|
)
|
|
—
|
|
|
(210.9
|
)
|
|||||||
Treasury stock issued
|
—
|
|
|
—
|
|
|
(25.4
|
)
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
61.4
|
|
|
—
|
|
|
36.0
|
|
|||||||
Other comprehensive (loss), net of tax (See
Note Q
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23.5
|
)
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
(23.6
|
)
|
|||||||
Stock-based compensation, net of tax
|
—
|
|
|
—
|
|
|
24.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.9
|
|
|||||||
Purchase of remaining interest in noncontrolling interest
|
—
|
|
|
—
|
|
|
(27.9
|
)
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
|
(35.3
|
)
|
|||||||
Balance, December 31, 2016
|
198.8
|
|
|
$
|
2.0
|
|
|
$
|
506.2
|
|
|
$
|
2,410.5
|
|
|
$
|
(113.6
|
)
|
|
(65.3
|
)
|
|
$
|
(1,713.5
|
)
|
|
$
|
2.4
|
|
|
$
|
1,094.0
|
|
Effect of accounting change on prior years
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|||||||
Adjusted beginning balance, January 1, 2017
|
198.8
|
|
|
2.0
|
|
|
506.2
|
|
|
2,411.6
|
|
|
(113.6
|
)
|
|
(65.3
|
)
|
|
(1,713.5
|
)
|
|
2.4
|
|
|
1,095.1
|
|
|||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
292.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292.7
|
|
|||||||
(Earnings) attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
5.2
|
|
|
(192.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187.7
|
)
|
|||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
(162.1
|
)
|
|
—
|
|
|
(162.1
|
)
|
|||||||
Treasury stock issued
|
—
|
|
|
—
|
|
|
(16.1
|
)
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
47.3
|
|
|
—
|
|
|
31.2
|
|
|||||||
Other comprehensive income, net of tax (See
Note Q
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103.7
|
|
|||||||
Stock-based compensation, net of tax
|
—
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|||||||
Purchase of remaining interest in noncontrolling interest
|
—
|
|
|
—
|
|
|
(.6
|
)
|
|
—
|
|
|
.4
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
(2.6
|
)
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
.5
|
|
|||||||
Balance, December 31, 2017
|
198.8
|
|
|
$
|
2.0
|
|
|
$
|
514.7
|
|
|
$
|
2,511.3
|
|
|
$
|
(9.5
|
)
|
|
(66.9
|
)
|
|
$
|
(1,828.3
|
)
|
|
$
|
.6
|
|
|
$
|
1,190.8
|
|
Effect of accounting change on prior years (See
Note A
)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|||||||
Adjusted beginning balance, January 1, 2018
|
198.8
|
|
|
2.0
|
|
|
514.7
|
|
|
2,509.0
|
|
|
(9.5
|
)
|
|
(66.9
|
)
|
|
(1,828.3
|
)
|
|
.6
|
|
|
1,188.5
|
|
|||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
306.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
306.1
|
|
|||||||
(Earnings) attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.2
|
|
|
—
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
5.3
|
|
|
(201.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(195.8
|
)
|
|||||||
Dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|
(.2
|
)
|
|||||||
Treasury stock purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
(113.6
|
)
|
|
—
|
|
|
(113.6
|
)
|
|||||||
Treasury stock issued
|
—
|
|
|
—
|
|
|
(16.6
|
)
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
33.6
|
|
|
—
|
|
|
17.0
|
|
|||||||
Other comprehensive (loss), net of tax (See
Note Q
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68.1
|
)
|
|||||||
Stock-based compensation, net of tax
|
—
|
|
|
—
|
|
|
23.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|||||||
Balance, December 31, 2018
|
198.8
|
|
|
$
|
2.0
|
|
|
$
|
527.1
|
|
|
$
|
2,613.8
|
|
|
$
|
(77.6
|
)
|
|
(68.3
|
)
|
|
$
|
(1,908.3
|
)
|
|
$
|
.6
|
|
|
$
|
1,157.6
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
$
|
50.9
|
|
|
$
|
33.8
|
|
|
$
|
22.6
|
|
LIFO expense
|
31.3
|
|
|
18.6
|
|
|
10.5
|
|
|||
Allocated to divested businesses
|
—
|
|
|
(1.5
|
)
|
|
.7
|
|
|||
Balance, end of year
|
$
|
82.2
|
|
|
$
|
50.9
|
|
|
$
|
33.8
|
|
•
|
The qualitative assessment begins with determination of whether it is more likely than not that a reporting unit's fair value is less than its carrying value before applying a two-step goodwill impairment model. If after such an assessment, with regard to each reporting unit, we conclude that the goodwill of a reporting unit is not impaired, then no further action is required (commonly referred to as the Step Zero Analysis approach).
|
•
|
The quantitative analysis utilizes a two-step goodwill impairment model.
|
|
Useful Life Range
|
|
Weighted
Average Life
|
Other intangible assets
|
1-40 years
|
|
14 years
|
•
|
On January 1, 2018, we adopted ASU 2014-09 "Revenue from Contracts with Customers" (Topic 606) as discussed in
Note B
.
|
•
|
ASU 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”: This ASU requires employers to disaggregate the service cost from other components of net periodic benefit costs and to disclose the income statement line item in which each component is included. This guidance requires service costs to be reported in the same line item as other compensation costs, and the other components of net periodic benefit costs (which include interest costs, expected return on plan assets and actuarial gains and losses) to be reported outside of operating income. We adopted this guidance on January 1, 2018. Application was required on a retrospective basis and resulted in a reclassification of
$17.4
and
$2.9
of expense from “Cost of goods sold” and “Selling and administrative expenses” into “Other expense (income), net” for the years ended December 31, 2017 and 2016, respectively. Refer to
Note N
for further information.
|
•
|
ASU 2018-05 “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118” (SAB 118): This ASU allows SEC registrants to record provisional amounts in earnings due to the complexities involved in accounting for the enactment of the Tax Cuts and Jobs Act (TCJA). We recognized the estimated income tax effects of the TCJA in accordance with SAB 118. Refer to
Note O
for further information.
|
•
|
ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”: We adopted this guidance on January 1, 2018, and it did not materially impact our financial statements.
|
•
|
ASU 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”: This ASU provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recorded. We have elected not to reclassify the stranded tax effects within accumulated other comprehensive income.
|
•
|
ASU 2016-02 “Leases” (Topic 842): Requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. In July 2018, the FASB issued ASU 2018-11, which provides entities with a new transition method where comparative periods presented in financial statements in the period of adoption will not need to be restated. Under the new transition method, an entity initially applies the provisions of Topic 842 at the adoption date, versus at the beginning of the earliest period presented, and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We elected this transition method at our adoption date of January 1, 2019. We also elected the practical expedients not to reassess (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. We also elected an additional practical expedient to use hindsight when determining lease term.
|
•
|
ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”: This ASU is intended to simplify and clarify the accounting and disclosure requirements for hedging activities by more closely aligning the results of cash flow and fair value hedge accounting with the risk management activities of an entity. The amendments in this ASU are effective January 1, 2019. We are currently evaluating the effect of the ASU on our results of operations, financial condition and cash flows.
|
•
|
ASU 2017-04 "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment": This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this ASU, the annual goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value up to the total amount of goodwill for the reporting unit. This ASU will be effective January 1, 2020, with early adoption permitted. We are currently evaluating this guidance, and do not expect it to materially impact our future financial statements.
|
•
|
ASU 2016-13 “Financial Instruments—Credit Losses” (Topic 326): This ASU is effective January 1, 2020 and amends the impairment model by requiring a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments including trade receivables. We are currently evaluating this guidance. However, we do not expect it to materially impact our future financial statements.
|
•
|
ASU 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”: This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU will be effective January 1, 2020, with early adoption permitted. We are currently evaluating this guidance.
|
|
Balance at December 31, 2017 as Previously Reported
|
|
Topic 606 Adjustments
|
|
Balance at January 1, 2018
|
||||||
Current assets
|
$
|
1,766.5
|
|
|
$
|
—
|
|
|
$
|
1,766.5
|
|
Net property, plant and equipment
|
663.9
|
|
|
—
|
|
|
663.9
|
|
|||
Other assets
1
|
1,120.4
|
|
|
.7
|
|
|
1,121.1
|
|
|||
Total assets
|
$
|
3,550.8
|
|
|
$
|
.7
|
|
|
$
|
3,551.5
|
|
|
|
|
|
|
|
||||||
Other current liabilities
2
|
$
|
88.7
|
|
|
$
|
3.0
|
|
|
$
|
91.7
|
|
All other current liabilities
|
887.5
|
|
|
—
|
|
|
887.5
|
|
|||
Long-term liabilities
|
1,383.8
|
|
|
—
|
|
|
1,383.8
|
|
|||
Retained earnings
|
2,511.3
|
|
|
(2.3
|
)
|
|
2,509.0
|
|
|||
Other equity
|
(1,320.5
|
)
|
|
—
|
|
|
(1,320.5
|
)
|
|||
Total liabilities and equity
|
$
|
3,550.8
|
|
|
$
|
.7
|
|
|
$
|
3,551.5
|
|
|
Year ended December 31, 2018
|
||||||||||
|
Amounts as Reported
|
|
Topic 606 Adjustments
|
|
Amounts Without Adoption of Topic 606
|
||||||
Net sales
3
|
$
|
4,269.5
|
|
|
$
|
14.0
|
|
|
$
|
4,283.5
|
|
Cost of goods sold
3
|
3,380.8
|
|
|
13.6
|
|
|
3,394.4
|
|
|||
Gross profit
|
888.7
|
|
|
.4
|
|
|
889.1
|
|
|||
Selling and administrative expenses
|
425.1
|
|
|
—
|
|
|
425.1
|
|
|||
All other
|
26.7
|
|
|
—
|
|
|
26.7
|
|
|||
Earnings from continuing operations before interest and income taxes
|
436.9
|
|
|
.4
|
|
|
437.3
|
|
|||
Net interest expense
|
52.5
|
|
|
—
|
|
|
52.5
|
|
|||
Income taxes
|
78.3
|
|
|
.1
|
|
|
78.4
|
|
|||
(Earnings) attributable to noncontrolling interest, net of tax
|
(.2
|
)
|
|
—
|
|
|
(.2
|
)
|
|||
Net earnings
|
$
|
305.9
|
|
|
$
|
.3
|
|
|
$
|
306.2
|
|
|
December 31, 2018
|
||||||||||
|
Amounts as Reported
|
|
Topic 606 Adjustments
|
|
Amounts Without Adoption of Topic 606
|
||||||
Current assets
|
$
|
1,524.6
|
|
|
$
|
—
|
|
|
$
|
1,524.6
|
|
Net property, plant and equipment
|
728.5
|
|
|
—
|
|
|
728.5
|
|
|||
Other assets
|
1,128.9
|
|
|
(.7
|
)
|
|
1,128.2
|
|
|||
Total assets
|
$
|
3,382.0
|
|
|
$
|
(.7
|
)
|
|
$
|
3,381.3
|
|
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
86.4
|
|
|
$
|
(2.9
|
)
|
|
$
|
83.5
|
|
All other current liabilities
|
729.3
|
|
|
—
|
|
|
729.3
|
|
|||
Long-term liabilities
|
1,408.7
|
|
|
—
|
|
|
1,408.7
|
|
|||
Retained earnings
|
2,613.8
|
|
|
2.2
|
|
|
2,616.0
|
|
|||
Other equity
|
(1,456.2
|
)
|
|
—
|
|
|
(1,456.2
|
)
|
|||
Total liabilities and equity
|
$
|
3,382.0
|
|
|
$
|
(.7
|
)
|
|
$
|
3,381.3
|
|
•
|
An estimated refund liability and a corresponding reduction to revenue based on historical returns experience.
|
•
|
An asset and a corresponding reduction to cost of sales for our right to recover products from customers upon settling the refund liability. We reduce the carrying amount of these assets by estimates of costs associated with the recovery and any additional expected reduction in value.
|
•
|
The existence of a significant financing component—
We expect that at contract inception, the time period between when we transfer a promised good to our customer and our receipt of payment from that customer for that good will be one year or less (our typical trade terms are 30 to 60 days for U.S. customers and up to 90 days for our international customers).
|
•
|
Costs of obtaining a contract—We generally expense costs of obtaining a contract because the amortization period would be one year or less.
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Residential Products
|
|
|
|
|
|
||||||
Bedding group
|
$
|
905.1
|
|
|
$
|
837.2
|
|
|
$
|
831.8
|
|
Fabric & Flooring Products group
1
|
735.8
|
|
|
720.1
|
|
|
666.8
|
|
|||
Machinery group
|
62.8
|
|
|
62.9
|
|
|
72.8
|
|
|||
|
1,703.7
|
|
|
1,620.2
|
|
|
1,571.4
|
|
|||
Industrial Products
|
|
|
|
|
|
||||||
Wire group
2
|
367.4
|
|
|
291.7
|
|
|
289.4
|
|
|||
|
367.4
|
|
|
291.7
|
|
|
289.4
|
|
|||
Furniture Products
|
|
|
|
|
|
||||||
Consumer Products group
|
460.2
|
|
|
413.3
|
|
|
327.2
|
|
|||
Home Furniture group
|
388.6
|
|
|
410.2
|
|
|
413.3
|
|
|||
Work Furniture group
|
293.3
|
|
|
272.9
|
|
|
248.8
|
|
|||
|
1,142.1
|
|
|
1,096.4
|
|
|
989.3
|
|
|||
Specialized Products
|
|
|
|
|
|
||||||
Automotive group
|
823.3
|
|
|
772.5
|
|
|
695.0
|
|
|||
Aerospace Products group
|
148.9
|
|
|
137.9
|
|
|
129.7
|
|
|||
Hydraulic Cylinders group
3
|
84.1
|
|
|
—
|
|
|
—
|
|
|||
Commercial Vehicle Products (CVP) group
4
|
—
|
|
|
25.1
|
|
|
75.1
|
|
|||
|
1,056.3
|
|
|
935.5
|
|
|
899.8
|
|
|||
|
$
|
4,269.5
|
|
|
$
|
3,943.8
|
|
|
$
|
3,749.9
|
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings (loss) before interest and income taxes (EBIT)
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
30.1
|
|
Income tax (expense) benefit
|
—
|
|
|
.5
|
|
|
(11.0
|
)
|
|||
Earnings (loss) from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
(.9
|
)
|
|
$
|
19.1
|
|
|
Date
|
|
Year Ended
|
||||||||||
|
Divested
|
|
2018
|
|
2017
|
|
2016
|
||||||
Trade Sales
|
|
|
|
|
|
|
|
||||||
Residential Products - Machinery operation
|
Fourth quarter 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
Industrial Products - Wire operations
|
Second and fourth quarters 2016
|
|
—
|
|
|
—
|
|
|
38.0
|
|
|||
Specialized Products - CVP operations
|
Third quarter 2017 and second quarter 2016
|
|
—
|
|
|
25.1
|
|
|
75.0
|
|
|||
Total Trade Sales
|
|
|
$
|
—
|
|
|
$
|
25.1
|
|
|
$
|
116.1
|
|
EBIT
|
|
|
|
|
|
|
|
||||||
Residential Products - Machinery operation
|
Fourth quarter 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(.3
|
)
|
Industrial Products - Wire operations
|
Second and fourth quarters 2016
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|||
Specialized Products - CVP operations
|
Third quarter 2017 and second quarter 2016
|
|
—
|
|
|
(2.3
|
)
|
|
5.9
|
|
|||
Total EBIT
|
|
|
$
|
—
|
|
|
$
|
(2.3
|
)
|
|
$
|
7.4
|
|
•
|
In 2017, we realized a pretax loss of
$3.3
related to the sale of our remaining CVP operation. We also completed the sale of real estate formerly associated with this operation, realizing a pretax gain of
$23.4
.
|
•
|
In 2016, we realized gains of
$21.2
and
$11.2
related to the sale of the wire operations and a CVP operation, respectively. No other material gains or losses were realized on the sale of other businesses.
|
|
Year Ended
|
||||||||||||||||||||||||||||||||||
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
|
|
|
2016
|
|
|
||||||||||||||||||
|
Goodwill Impairment
|
|
Other Long-Lived Asset Impairments
|
|
Total Impairments
|
|
Goodwill Impairment
|
|
Other Long-Lived Asset Impairments
|
|
Total Impairments
|
|
Goodwill Impairment
|
|
Other Long-Lived Asset Impairments
|
|
Total Impairments
|
||||||||||||||||||
Residential Products
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.4
|
|
|
$
|
.4
|
|
Industrial Products
|
—
|
|
|
.3
|
|
|
.3
|
|
|
1.3
|
|
|
3.6
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Furniture Products
|
—
|
|
|
5.1
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Specialized Products
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|||||||||
Total impairment charges
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
5.4
|
|
|
$
|
1.3
|
|
|
$
|
3.6
|
|
|
$
|
4.9
|
|
|
$
|
3.7
|
|
|
$
|
.4
|
|
|
$
|
4.1
|
|
Fair Value over Carrying Value divided by Carrying Value
|
|
December 31, 2018 Goodwill Value
|
|
10-year
Compound Annual Growth Rate Range for Sales |
|
Terminal
Values Long- term Growth Rate for Debt-Free Cash Flow |
|
Discount Rate
Ranges |
|||
Less than 100%
1
|
|
$
|
180.7
|
|
|
4.7% - 5.2%
|
|
3.0
|
%
|
|
9.0% - 9.5%
|
101% - 300%
|
|
502.5
|
|
|
1.8% - 5.0%
|
|
3.0
|
%
|
|
8.5% - 10.0%
|
|
301% - 600%
|
|
150.6
|
|
|
5.7% - 12.4%
|
|
3.0
|
%
|
|
9.0% - 10.0%
|
|
|
|
$
|
833.8
|
|
|
1.8% - 12.4%
|
|
3.0
|
%
|
|
8.5% - 10.0%
|
|
Residential
Products
|
|
Industrial
Products
|
|
Furniture
Products
|
|
Specialized
Products
|
|
Total
|
||||||||||
Net goodwill as of January 1, 2017
|
$
|
352.8
|
|
|
$
|
71.9
|
|
|
$
|
187.9
|
|
|
$
|
178.7
|
|
|
$
|
791.3
|
|
Additions for current year acquisitions
|
7.6
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
11.5
|
|
|||||
Adjustments to prior year acquisitions
|
.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
.8
|
|
|||||
Impairment charge
1
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||||
Foreign currency translation adjustment
|
7.0
|
|
|
.2
|
|
|
4.4
|
|
|
8.3
|
|
|
19.9
|
|
|||||
Net goodwill as of December 31, 2017
|
368.2
|
|
|
70.8
|
|
|
196.2
|
|
|
187.0
|
|
|
822.2
|
|
|||||
Additions for current year acquisitions
|
1.3
|
|
|
—
|
|
|
—
|
|
|
26.8
|
|
|
28.1
|
|
|||||
Adjustments to prior year acquisitions
|
(.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|||||
Impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency translation adjustment
|
(5.8
|
)
|
|
(.1
|
)
|
|
(3.1
|
)
|
|
(7.3
|
)
|
|
(16.3
|
)
|
|||||
Net goodwill as of December 31, 2018
|
$
|
363.5
|
|
|
$
|
70.7
|
|
|
$
|
193.1
|
|
|
$
|
206.5
|
|
|
$
|
833.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net goodwill as of December 31, 2018 is comprised of:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross goodwill
|
$
|
363.5
|
|
|
$
|
76.1
|
|
|
$
|
443.7
|
|
|
$
|
273.2
|
|
|
$
|
1,156.5
|
|
Accumulated impairment losses
|
—
|
|
|
(5.4
|
)
|
|
(250.6
|
)
|
|
(66.7
|
)
|
|
(322.7
|
)
|
|||||
Net goodwill as of December 31, 2018
|
$
|
363.5
|
|
|
$
|
70.7
|
|
|
$
|
193.1
|
|
|
$
|
206.5
|
|
|
$
|
833.8
|
|
|
Debt
Issuance
Costs
|
|
Patents
and
Trademarks
|
|
Non-compete
Agreements
|
|
Customer- Related Intangibles
|
|
Supply
Agreements
and Other
|
|
Total
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross carrying amount
|
$
|
4.9
|
|
|
$
|
65.8
|
|
|
$
|
15.8
|
|
|
$
|
212.5
|
|
|
$
|
41.4
|
|
|
$
|
340.4
|
|
Accumulated amortization
|
2.3
|
|
|
31.3
|
|
|
8.6
|
|
|
98.8
|
|
|
20.7
|
|
|
161.7
|
|
||||||
Net other intangibles as of December 31, 2018
|
$
|
2.6
|
|
|
$
|
34.5
|
|
|
$
|
7.2
|
|
|
$
|
113.7
|
|
|
$
|
20.7
|
|
|
$
|
178.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquired during 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired related to business acquisitions
|
$
|
—
|
|
|
$
|
2.7
|
|
|
$
|
1.9
|
|
|
$
|
19.4
|
|
|
$
|
4.9
|
|
|
$
|
28.9
|
|
Acquired outside business acquisitions
|
1.3
|
|
|
1.3
|
|
|
.6
|
|
|
—
|
|
|
10.7
|
|
|
13.9
|
|
||||||
Total acquired in 2018
|
$
|
1.3
|
|
|
$
|
4.0
|
|
|
$
|
2.5
|
|
|
$
|
19.4
|
|
|
$
|
15.6
|
|
|
$
|
42.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average amortization period in years for items acquired in 2018
|
5.0
|
|
|
16.5
|
|
|
4.5
|
|
|
14.4
|
|
|
7.3
|
|
|
11.6
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross carrying amount
|
$
|
3.7
|
|
|
$
|
65.3
|
|
|
$
|
14.2
|
|
|
$
|
210.1
|
|
|
$
|
27.5
|
|
|
$
|
320.8
|
|
Accumulated amortization
|
1.9
|
|
|
30.9
|
|
|
6.7
|
|
|
96.9
|
|
|
15.3
|
|
|
151.7
|
|
||||||
Net other intangibles as of December 31, 2017
|
$
|
1.8
|
|
|
$
|
34.4
|
|
|
$
|
7.5
|
|
|
$
|
113.2
|
|
|
$
|
12.2
|
|
|
$
|
169.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired during 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired related to business acquisitions
|
$
|
—
|
|
|
$
|
8.7
|
|
|
$
|
.4
|
|
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
20.3
|
|
Acquired outside business acquisitions
|
.6
|
|
|
1.4
|
|
|
—
|
|
|
.2
|
|
|
4.5
|
|
|
6.7
|
|
||||||
Total acquired in 2017
|
$
|
.6
|
|
|
$
|
10.1
|
|
|
$
|
.4
|
|
|
$
|
11.4
|
|
|
$
|
4.5
|
|
|
$
|
27.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average amortization period in years for items acquired in 2017
|
5.0
|
|
|
2.7
|
|
|
6.9
|
|
|
16.4
|
|
|
3.0
|
|
|
8.6
|
|
|
Total Amount Expected to be Incurred
|
|
Total Amount Incurred in 2018
|
||||
Restructuring and restructuring-related
|
$
|
27.9
|
|
|
$
|
11.2
|
|
Impairment costs associated with this plan as discussed in
Note D
|
5.1
|
|
|
5.1
|
|
||
|
$
|
33.0
|
|
|
$
|
16.3
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Charged to other expense (income),net:
|
|
|
|
|
|
||||||
Severance and other restructuring costs
|
$
|
7.8
|
|
|
$
|
.8
|
|
|
$
|
.8
|
|
Charged to cost of goods sold:
|
|
|
|
|
|
||||||
Inventory obsolescence and other
|
4.6
|
|
|
.5
|
|
|
—
|
|
|||
Total restructuring and restructuring-related costs
|
$
|
12.4
|
|
|
$
|
1.3
|
|
|
$
|
.8
|
|
Amount of total that represents cash charges
|
$
|
7.8
|
|
|
$
|
.8
|
|
|
$
|
.8
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Residential Products
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
.2
|
|
Industrial Products
|
.2
|
|
|
.8
|
|
|
—
|
|
|||
Furniture Products
|
10.8
|
|
|
.5
|
|
|
.2
|
|
|||
Specialized Products
|
—
|
|
|
—
|
|
|
.4
|
|
|||
Total
|
$
|
12.4
|
|
|
$
|
1.3
|
|
|
$
|
.8
|
|
|
Balance at December 31, 2016
|
|
Add: 2017 Charges
|
|
Less: 2017 Payments
|
|
Balance at December 31, 2017
|
|
Add: 2018 Charges
|
|
Less: 2018 Payments
|
|
Balance at December 31, 2018
|
||||||||||||||
Termination benefits
|
$
|
—
|
|
|
$
|
.5
|
|
|
$
|
.2
|
|
|
$
|
.3
|
|
|
$
|
7.3
|
|
|
$
|
1.0
|
|
|
$
|
6.6
|
|
Other restructuring costs
|
.5
|
|
|
.3
|
|
|
.3
|
|
|
.5
|
|
|
.5
|
|
|
.4
|
|
|
.6
|
|
|||||||
|
$
|
.5
|
|
|
$
|
.8
|
|
|
$
|
.5
|
|
|
$
|
.8
|
|
|
$
|
7.8
|
|
|
$
|
1.4
|
|
|
$
|
7.2
|
|
•
|
Residential Products:
This segment supplies a variety of components and machinery used by bedding manufacturers in the production and assembly of their finished products. We also produce or distribute flooring underlayment, fabric, and geo components.
|
•
|
Industrial Products:
This segment primarily supplies steel rod and drawn steel wire to our other operations and to external customers. Our customers use this wire to make mechanical springs and many other end products.
|
•
|
Furniture Products:
This segment supplies a wide range of components for residential and work furniture manufacturers, as well as select lines of private-label finished furniture, adjustable bed bases, fashion beds, and bed frames.
|
•
|
Specialized Products:
This segment supplies lumbar support systems, seat suspension systems, motors and actuators, and control cables used by automotive manufacturers. We also produce and distribute tubing and tube assemblies for the aerospace industry and engineered hydraulic cylinders used in the material-handling and construction industries.
|
|
Year Ended December 31
|
||||||||||||||
|
Trade
2
Sales
|
|
Inter-
Segment
Sales
|
|
Total Segment
Sales
|
|
EBIT
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
1,703.7
|
|
|
$
|
17.1
|
|
|
$
|
1,720.8
|
|
|
$
|
132.8
|
|
Industrial Products
|
367.4
|
|
|
295.0
|
|
|
662.4
|
|
|
68.4
|
|
||||
Furniture Products
|
1,142.1
|
|
|
13.8
|
|
|
1,155.9
|
|
|
49.6
|
|
||||
Specialized Products
|
1,056.3
|
|
|
2.7
|
|
|
1,059.0
|
|
|
189.0
|
|
||||
Intersegment eliminations and other
|
|
|
|
|
|
|
(2.9
|
)
|
|||||||
|
$
|
4,269.5
|
|
|
$
|
328.6
|
|
|
$
|
4,598.1
|
|
|
$
|
436.9
|
|
2017
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
1,620.2
|
|
|
$
|
18.6
|
|
|
$
|
1,638.8
|
|
|
$
|
184.0
|
|
Industrial Products
|
291.7
|
|
|
253.9
|
|
|
545.6
|
|
|
21.0
|
|
||||
Furniture Products
|
1,096.4
|
|
|
16.8
|
|
|
1,113.2
|
|
|
81.5
|
|
||||
Specialized Products
|
935.5
|
|
|
7.1
|
|
|
942.6
|
|
|
195.6
|
|
||||
Intersegment eliminations and other
1
|
|
|
|
|
|
|
(14.2
|
)
|
|||||||
|
$
|
3,943.8
|
|
|
$
|
296.4
|
|
|
$
|
4,240.2
|
|
|
$
|
467.9
|
|
2016
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
1,571.4
|
|
|
$
|
17.2
|
|
|
$
|
1,588.6
|
|
|
$
|
167.5
|
|
Industrial Products
|
289.4
|
|
|
293.1
|
|
|
582.5
|
|
|
65.3
|
|
||||
Furniture Products
|
989.3
|
|
|
59.3
|
|
|
1,048.6
|
|
|
106.6
|
|
||||
Specialized Products
|
899.8
|
|
|
6.5
|
|
|
906.3
|
|
|
181.4
|
|
||||
Intersegment eliminations and other
|
|
|
|
|
|
|
1.2
|
|
|||||||
|
$
|
3,749.9
|
|
|
$
|
376.1
|
|
|
$
|
4,126.0
|
|
|
$
|
522.0
|
|
|
Year Ended December 31
|
||||||||||||||
|
Assets
|
|
Additions
to
Property,
Plant and
Equipment
|
|
Acquired
Companies’
Long-Lived
Assets
|
|
Depreciation
And
Amortization
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
609.4
|
|
|
$
|
48.0
|
|
|
$
|
6.0
|
|
|
$
|
46.6
|
|
Industrial Products
|
163.8
|
|
|
9.6
|
|
|
—
|
|
|
10.3
|
|
||||
Furniture Products
|
279.8
|
|
|
19.7
|
|
|
—
|
|
|
17.4
|
|
||||
Specialized Products
|
342.5
|
|
|
45.0
|
|
|
79.4
|
|
|
39.0
|
|
||||
Average current liabilities included in segment numbers above
|
661.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unallocated assets and other
1
|
1,278.0
|
|
|
37.3
|
|
|
—
|
|
|
22.8
|
|
||||
Difference between average assets and year-end balance sheet
|
46.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
3,382.0
|
|
|
$
|
159.6
|
|
|
$
|
85.4
|
|
|
$
|
136.1
|
|
2017
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
554.6
|
|
|
$
|
60.5
|
|
|
$
|
33.6
|
|
|
$
|
45.8
|
|
Industrial Products
|
150.0
|
|
|
14.3
|
|
|
—
|
|
|
10.2
|
|
||||
Furniture Products
|
245.7
|
|
|
20.2
|
|
|
14.3
|
|
|
16.2
|
|
||||
Specialized Products
|
271.7
|
|
|
51.7
|
|
|
—
|
|
|
31.2
|
|
||||
Average current liabilities included in segment numbers above
|
557.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unallocated assets and other
1
|
1,693.1
|
|
|
12.7
|
|
|
—
|
|
|
22.5
|
|
||||
Difference between average assets and year-end balance sheet
|
78.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
3,550.8
|
|
|
$
|
159.4
|
|
|
$
|
47.9
|
|
|
$
|
125.9
|
|
2016
|
|
|
|
|
|
|
|
||||||||
Residential Products
|
$
|
527.2
|
|
|
$
|
32.4
|
|
|
$
|
11.2
|
|
|
$
|
42.9
|
|
Industrial Products
|
147.4
|
|
|
10.1
|
|
|
—
|
|
|
11.8
|
|
||||
Furniture Products
|
219.4
|
|
|
16.6
|
|
|
—
|
|
|
14.4
|
|
||||
Specialized Products
|
248.7
|
|
|
42.2
|
|
|
13.7
|
|
|
29.7
|
|
||||
Average current liabilities included in segment numbers above
|
495.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unallocated assets and other
1
|
1,378.5
|
|
|
22.7
|
|
|
—
|
|
|
16.6
|
|
||||
Difference between average assets and year-end balance sheet
|
(33.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
2,984.1
|
|
|
$
|
124.0
|
|
|
$
|
24.9
|
|
|
$
|
115.4
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Trade sales
|
|
|
|
|
|
||||||
Foreign sales
|
|
|
|
|
|
||||||
Europe
|
$
|
525.6
|
|
|
$
|
475.3
|
|
|
$
|
445.2
|
|
China
|
494.7
|
|
|
481.6
|
|
|
420.0
|
|
|||
Canada
|
286.8
|
|
|
265.1
|
|
|
215.1
|
|
|||
Mexico
|
186.1
|
|
|
148.5
|
|
|
132.8
|
|
|||
Other
|
94.8
|
|
|
85.5
|
|
|
69.4
|
|
|||
Total foreign sales
|
1,588.0
|
|
|
1,456.0
|
|
|
1,282.5
|
|
|||
United States
|
2,681.5
|
|
|
2,487.8
|
|
|
2,467.4
|
|
|||
Total trade sales
|
$
|
4,269.5
|
|
|
$
|
3,943.8
|
|
|
$
|
3,749.9
|
|
|
|
|
|
|
|
||||||
Tangible long-lived assets
|
|
|
|
|
|
||||||
Foreign tangible long-lived assets
|
|
|
|
|
|
||||||
Europe
|
$
|
167.6
|
|
|
$
|
157.4
|
|
|
$
|
128.6
|
|
China
|
55.5
|
|
|
54.7
|
|
|
45.5
|
|
|||
Canada
|
38.0
|
|
|
39.9
|
|
|
29.6
|
|
|||
Mexico
|
10.1
|
|
|
6.5
|
|
|
6.3
|
|
|||
Other
|
16.0
|
|
|
13.0
|
|
|
12.7
|
|
|||
Total foreign tangible long-lived assets
|
287.2
|
|
|
271.5
|
|
|
222.7
|
|
|||
United States
|
441.3
|
|
|
392.4
|
|
|
342.8
|
|
|||
Total tangible long-lived assets
|
$
|
728.5
|
|
|
$
|
663.9
|
|
|
$
|
565.5
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings:
|
|
|
|
|
|
||||||
Earnings from continuing operations
|
$
|
306.1
|
|
|
$
|
293.6
|
|
|
$
|
367.1
|
|
(Earnings) attributable to noncontrolling interest, net of tax
|
(.2
|
)
|
|
(.1
|
)
|
|
(.4
|
)
|
|||
Net earnings from continuing operations attributable to Leggett & Platt common shareholders
|
305.9
|
|
|
293.5
|
|
|
366.7
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
|
(.9
|
)
|
|
19.1
|
|
|||
Net earnings attributable to Leggett & Platt common shareholders
|
$
|
305.9
|
|
|
$
|
292.6
|
|
|
$
|
385.8
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares (in millions):
|
|
|
|
|
|
||||||
Weighted average number of common shares used in basic EPS
|
134.3
|
|
|
136.0
|
|
|
137.9
|
|
|||
Dilutive effect of equity-based compensation
|
.9
|
|
|
1.3
|
|
|
2.1
|
|
|||
Weighted average number of common shares and dilutive potential common shares used in diluted EPS
|
135.2
|
|
|
137.3
|
|
|
140.0
|
|
|||
|
|
|
|
|
|
||||||
Basic and Diluted EPS:
|
|
|
|
|
|
||||||
Basic EPS attributable to Leggett & Platt common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.28
|
|
|
$
|
2.16
|
|
|
$
|
2.66
|
|
Discontinued operations
|
—
|
|
|
(.01
|
)
|
|
.14
|
|
|||
Basic EPS attributable to Leggett & Platt common shareholders
|
$
|
2.28
|
|
|
$
|
2.15
|
|
|
$
|
2.80
|
|
Diluted EPS attributable to Leggett & Platt common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.26
|
|
|
$
|
2.14
|
|
|
$
|
2.62
|
|
Discontinued operations
|
—
|
|
|
(.01
|
)
|
|
.14
|
|
|||
Diluted EPS attributable to Leggett & Platt common shareholders
|
$
|
2.26
|
|
|
$
|
2.13
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
||||||
Other information:
|
|
|
|
|
|
||||||
Anti-dilutive shares excluded from diluted EPS computation
|
.1
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends declared per share
|
$
|
1.50
|
|
|
$
|
1.42
|
|
|
$
|
1.34
|
|
|
2018
|
|
2017
|
||||||||||||
|
Current
|
|
Long-term
|
|
Current
|
|
Long-term
|
||||||||
Trade accounts receivable
1
|
$
|
548.8
|
|
|
$
|
—
|
|
|
$
|
526.1
|
|
|
$
|
—
|
|
Trade notes receivable
|
1.7
|
|
|
1.4
|
|
|
1.0
|
|
|
1.2
|
|
||||
Total trade receivables
|
550.5
|
|
|
1.4
|
|
|
527.1
|
|
|
1.2
|
|
||||
Other notes receivable
1
|
—
|
|
|
24.2
|
|
|
—
|
|
|
24.7
|
|
||||
Insurance receivables
2
|
1.3
|
|
|
—
|
|
|
43.0
|
|
|
—
|
|
||||
Taxes receivable, including income taxes
|
12.9
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
||||
Other receivables
|
12.1
|
|
|
—
|
|
|
14.8
|
|
|
—
|
|
||||
Subtotal other receivables
|
26.3
|
|
|
24.2
|
|
|
72.8
|
|
|
24.7
|
|
||||
Total trade and other receivables
|
576.8
|
|
|
25.6
|
|
|
599.9
|
|
|
25.9
|
|
||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Trade accounts receivable
1
|
(5.2
|
)
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
||||
Trade notes receivable
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
(.1
|
)
|
||||
Total trade receivables
|
(5.2
|
)
|
|
—
|
|
|
(4.8
|
)
|
|
(.1
|
)
|
||||
Other notes receivable
1
|
—
|
|
|
(15.0
|
)
|
|
—
|
|
|
—
|
|
||||
Total allowance for doubtful accounts
|
(5.2
|
)
|
|
(15.0
|
)
|
|
(4.8
|
)
|
|
(.1
|
)
|
||||
Total net receivables
|
$
|
571.6
|
|
|
$
|
10.6
|
|
|
$
|
595.1
|
|
|
$
|
25.8
|
|
|
Balance at December 31, 2016
|
|
Add: Charges
|
|
Less: Net Charge-offs, (Recoveries)
|
|
Balance at December 31, 2017
|
|
Add:
Charges |
|
Less: Net
Charge-offs, (Recoveries) |
|
Balance at December 31, 2018
|
||||||||||||||
Trade accounts receivable
|
$
|
7.1
|
|
|
$
|
.9
|
|
|
$
|
3.3
|
|
|
$
|
4.7
|
|
|
$
|
1.9
|
|
|
$
|
1.4
|
|
|
$
|
5.2
|
|
Trade notes receivable
|
.3
|
|
|
(.1
|
)
|
|
—
|
|
|
.2
|
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
|||||||
Total trade receivables
|
7.4
|
|
|
.8
|
|
|
3.3
|
|
|
4.9
|
|
|
1.7
|
|
|
1.4
|
|
|
5.2
|
|
|||||||
Other notes receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|||||||
Total allowance for doubtful accounts
|
$
|
7.4
|
|
|
$
|
.8
|
|
|
$
|
3.3
|
|
|
$
|
4.9
|
|
|
$
|
16.7
|
|
|
$
|
1.4
|
|
|
$
|
20.2
|
|
|
2018
|
|
2017
|
||||
Prepaid expenses and other current assets
|
|
|
|
||||
Prepaid income taxes
|
$
|
5.6
|
|
|
$
|
28.5
|
|
Other
|
45.4
|
|
|
45.7
|
|
||
|
$
|
51.0
|
|
|
$
|
74.2
|
|
Sundry assets
|
|
|
|
||||
Deferred taxes (see
Note O
)
|
$
|
20.2
|
|
|
$
|
21.4
|
|
Diversified investments associated with stock-based compensation plans (see
Note M
)
|
30.4
|
|
|
31.6
|
|
||
Investment in associated companies
|
7.1
|
|
|
7.1
|
|
||
Pension plan assets (see
Note N
)
|
1.6
|
|
|
2.2
|
|
||
Brazilian VAT deposits (see
Note U
)
|
13.9
|
|
|
12.2
|
|
||
Net long-term notes receivable (see
Note I
)
|
10.6
|
|
|
25.8
|
|
||
Other
|
32.6
|
|
|
28.8
|
|
||
|
$
|
116.4
|
|
|
$
|
129.1
|
|
Accrued expenses
|
|
|
|
||||
Litigation contingency accruals (see
Note U
)
|
$
|
1.9
|
|
|
$
|
.4
|
|
Wages and commissions payable
|
71.5
|
|
|
70.6
|
|
||
Workers’ compensation, vehicle-related and product liability, medical/disability
1
|
49.2
|
|
|
90.3
|
|
||
Sales promotions
|
48.3
|
|
|
47.2
|
|
||
Liabilities associated with stock-based compensation plans (see
Note M
)
|
12.2
|
|
|
15.7
|
|
||
Accrued interest
|
7.9
|
|
|
10.9
|
|
||
General taxes, excluding income taxes
|
16.3
|
|
|
19.1
|
|
||
Environmental reserves
|
2.9
|
|
|
3.0
|
|
||
Other
|
52.5
|
|
|
46.2
|
|
||
|
$
|
262.7
|
|
|
$
|
303.4
|
|
Other current liabilities
|
|
|
|
||||
Dividends payable
|
$
|
49.6
|
|
|
$
|
47.5
|
|
Customer deposits
|
11.8
|
|
|
12.7
|
|
||
Sales tax payable
|
3.9
|
|
|
4.0
|
|
||
Derivative financial instruments (see
Note T
)
|
4.5
|
|
|
1.8
|
|
||
Liabilities associated with stock-based compensation plans (see
Note M
)
|
2.3
|
|
|
2.4
|
|
||
Outstanding checks in excess of book balances
|
10.6
|
|
|
11.0
|
|
||
Other
|
3.7
|
|
|
9.3
|
|
||
|
$
|
86.4
|
|
|
$
|
88.7
|
|
Other long-term liabilities
|
|
|
|
||||
Liability for pension benefits (see
Note N
)
|
$
|
39.2
|
|
|
$
|
57.6
|
|
Liabilities associated with stock-based compensation plans (see
Note M
)
|
34.6
|
|
|
36.4
|
|
||
Deemed repatriation tax payable (see
Note O
)
|
32.2
|
|
|
61.9
|
|
||
Net reserves for tax contingencies
|
10.3
|
|
|
12.3
|
|
||
Deferred compensation (see
Note M
)
|
17.6
|
|
|
17.1
|
|
||
Other
|
21.4
|
|
|
17.6
|
|
||
|
$
|
155.3
|
|
|
$
|
202.9
|
|
|
2018
|
|
2017
|
|||||||||||||||
|
Year-end Interest
Rate
|
|
Due Date
Through
|
|
Balance
|
|
Year-end Interest
Rate
|
|
Due Date
Through
|
|
Balance
|
|||||||
Senior Notes
|
—
|
%
|
|
—
|
|
|
$
|
—
|
|
|
4.4
|
%
|
|
2018
|
|
$
|
150.0
|
|
Senior Notes
1
|
3.4
|
%
|
|
2022
|
|
|
300.0
|
|
|
3.4
|
%
|
|
2022
|
|
300.0
|
|
||
Senior Notes
1
|
3.8
|
%
|
|
2024
|
|
|
300.0
|
|
|
3.8
|
%
|
|
2024
|
|
300.0
|
|
||
Senior Notes
1
|
3.5
|
%
|
|
2027
|
|
|
500.0
|
|
|
3.5
|
%
|
|
2027
|
|
500.0
|
|
||
Industrial development bonds, principally variable interest rates
|
1.9
|
%
|
|
2030
|
|
|
3.8
|
|
|
1.3
|
%
|
|
2030
|
|
6.2
|
|
||
Commercial paper
2
|
2.6
|
%
|
|
2022
|
|
|
70.0
|
|
|
—
|
|
|
2022
|
|
—
|
|
||
Capitalized leases (primarily machinery, vehicles and office equipment)
|
|
|
|
|
4.7
|
|
|
|
|
|
|
5.7
|
|
|||||
Other, partially secured
|
|
|
|
|
.6
|
|
|
|
|
|
|
.7
|
|
|||||
Unamortized discounts and deferred loan cost
|
|
|
|
|
|
(10.1
|
)
|
|
|
|
|
|
(10.9
|
)
|
||||
Total debt
|
|
|
|
|
1,169.0
|
|
|
|
|
|
|
1,251.7
|
|
|||||
Less: current maturities
|
|
|
|
|
1.2
|
|
|
|
|
|
|
153.8
|
|
|||||
Total long-term debt
|
|
|
|
|
$
|
1,167.8
|
|
|
|
|
|
|
$
|
1,097.9
|
|
|
2018
|
|
2017
|
||||
Total program authorized
|
$
|
800.0
|
|
|
$
|
800.0
|
|
|
|
|
|
||||
Commercial paper outstanding (classified as long-term debt)
|
(70.0
|
)
|
|
—
|
|
||
Letters of credit issued under the credit facility
|
—
|
|
|
—
|
|
||
Total program usage
|
(70.0
|
)
|
|
—
|
|
||
Total program available
|
$
|
730.0
|
|
|
$
|
800.0
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Continuing operations
|
$
|
52.1
|
|
|
$
|
51.3
|
|
|
$
|
51.2
|
|
|
Shares Available for Issuance
|
|
Maximum Number of Authorized Shares
|
||
Unexercised options
|
1.6
|
|
|
1.6
|
|
Outstanding stock units—vested
|
3.6
|
|
|
7.9
|
|
Outstanding stock units—unvested
|
.8
|
|
|
2.3
|
|
Available for grant
|
7.6
|
|
|
7.6
|
|
Authorized for issuance at December 31, 2018
|
13.6
|
|
|
19.4
|
|
|
Year Ended December 31
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
To Be Settled With Stock
|
|
To Be Settled In Cash
|
|
To Be Settled With Stock
|
|
To Be Settled In Cash
|
|
To Be Settled With Stock
|
|
To Be Settled In Cash
|
||||||||||||
Options
1
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of the grant date fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
Cash payments in lieu of options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||||
Stock-based retirement plans contributions
2
|
5.6
|
|
|
1.0
|
|
|
5.5
|
|
|
1.2
|
|
|
6.7
|
|
|
1.3
|
|
||||||
Discounts on various stock awards:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred Stock Compensation Program
1
|
1.9
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
||||||
Stock-based retirement plans
2
|
1.3
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||||
Discount Stock Plan
6
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||||
Performance Stock Unit (PSU) awards
3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2018 PSU - TSR based
3A
|
1.2
|
|
|
.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2018 PSU - EBIT CAGR based
3B
|
2.9
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2017 and prior PSU awards
3C
|
3.6
|
|
|
(1.3
|
)
|
|
5.4
|
|
|
(1.4
|
)
|
|
4.8
|
|
|
6.5
|
|
||||||
Profitable Growth Incentive (PGI) awards
4
|
.9
|
|
|
.9
|
|
|
1.4
|
|
|
1.4
|
|
|
1.4
|
|
|
1.0
|
|
||||||
Restricted Stock Units (RSU) awards
5
|
2.1
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||||
Other, primarily non-employee directors restricted stock
|
.9
|
|
|
—
|
|
|
.9
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||||
Total stock-related compensation expense
|
21.5
|
|
|
$
|
3.9
|
|
|
20.3
|
|
|
$
|
1.2
|
|
|
22.2
|
|
|
$
|
9.8
|
|
|||
Employee contributions for above stock plans
|
14.0
|
|
|
|
|
16.3
|
|
|
|
|
14.9
|
|
|
|
|||||||||
Total stock-based compensation
|
$
|
35.5
|
|
|
|
|
$
|
36.6
|
|
|
|
|
$
|
37.1
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax benefits on stock-based compensation expense
|
$
|
5.1
|
|
|
|
|
$
|
7.3
|
|
|
|
|
$
|
8.1
|
|
|
|
||||||
Tax benefits on stock-based compensation payments (As discussed below, we elected to pay selected awards in cash during 2018)
|
3.9
|
|
|
|
|
9.9
|
|
|
|
|
18.2
|
|
|
|
|||||||||
Total tax benefits associated with stock-based compensation
|
$
|
9.0
|
|
|
|
|
$
|
17.2
|
|
|
|
|
$
|
26.3
|
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
Current
|
|
Long-term
|
|
Total
|
|
Current
|
|
Long-term
|
|
Total
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diversified investments associated with the Executive Stock Unit Program
2
|
$
|
2.3
|
|
|
$
|
30.4
|
|
|
$
|
32.7
|
|
|
$
|
2.4
|
|
|
$
|
31.6
|
|
|
$
|
34.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Executive Stock Unit Program
2
|
$
|
2.3
|
|
|
$
|
31.4
|
|
|
$
|
33.7
|
|
|
$
|
2.4
|
|
|
$
|
32.0
|
|
|
$
|
34.4
|
|
Performance Stock Unit award
3
|
.6
|
|
|
3.2
|
|
|
3.8
|
|
|
6.7
|
|
|
1.9
|
|
|
8.6
|
|
||||||
Profitable Growth Incentive award
4
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|
2.0
|
|
|
2.5
|
|
|
4.5
|
|
||||||
Other - primarily timing differences between employee withholdings and related employer contributions to be submitted to various plans' trust accounts
|
7.4
|
|
|
—
|
|
|
7.4
|
|
|
7.0
|
|
|
—
|
|
|
7.0
|
|
||||||
Total liabilities associated with stock-based compensation
|
$
|
14.6
|
|
|
$
|
34.6
|
|
|
$
|
49.2
|
|
|
$
|
18.1
|
|
|
$
|
36.4
|
|
|
$
|
54.5
|
|
•
|
On a discretionary basis to a broad group of employees
|
•
|
In conjunction with our Deferred Compensation Program
|
•
|
As compensation to outside directors
|
•
|
Stock options under this program are granted in the last month of the year prior to the year the compensation is earned. The number of options granted equals the deferred compensation times
five
, divided by the stock’s market price on the date of grant. The option has a
10
-year term. It vests as the associated compensation is earned and becomes exercisable beginning
15 months
after the grant date. Stock is issued when the option is exercised.
|
•
|
Deferred stock units (DSU) under this program are acquired every
two
weeks (when the compensation would have otherwise been paid) at a
20%
discount to the market price of our common stock on each acquisition date, and they vest immediately. Expense is recorded as the compensation is earned. Stock units earn dividends at the same rate as cash dividends paid on our common stock. These dividends are used to acquire stock units at a
20%
discount. Stock units are converted to common stock and distributed
|
•
|
Interest-bearing cash deferrals under this program are reported in Other long-term liabilities on the balance sheet and are disclosed in
Note J
.
|
|
Options
|
|
Units
|
|
Cash
|
||||||
Aggregate amount of compensation deferred during 2018
|
$
|
.4
|
|
|
$
|
7.7
|
|
|
$
|
.5
|
|
|
Total Stock
Options
|
|
Weighted
Average
Exercise
Price per
Share
|
|
Weighted
Average
Remaining
Contractual
Life in Years
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2017
|
1.9
|
|
|
$
|
24.08
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(.3
|
)
|
|
17.92
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
1.6
|
|
|
$
|
25.43
|
|
|
2.9
|
|
$
|
17.8
|
|
Vested or expected to vest
|
1.6
|
|
|
$
|
25.43
|
|
|
2.9
|
|
$
|
17.8
|
|
Exercisable (vested) at December 31, 2018
|
1.5
|
|
|
$
|
25.12
|
|
|
2.8
|
|
$
|
17.8
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Total intrinsic value of stock options exercised
|
$
|
8.8
|
|
|
$
|
11.7
|
|
|
$
|
27.7
|
|
Cash received from stock options exercised
|
4.8
|
|
|
2.6
|
|
|
4.9
|
|
|||
Total fair value of stock options vested
|
.8
|
|
|
1.2
|
|
|
.1
|
|
|
|
Year Ended December 31
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Aggregate grant date fair value
|
|
$ <.1
|
|
$ <.1
|
|
$
|
1.4
|
|
||||
Weighted-average per share grant date fair value
|
|
$
|
6.47
|
|
|
$
|
9.21
|
|
|
$
|
10.79
|
|
Risk-free interest rate
|
|
2.3
|
%
|
|
2.3
|
%
|
|
2.2
|
%
|
|||
Expected life in years
|
|
6.0
|
|
|
6.0
|
|
|
7.9
|
|
|||
Expected volatility (over expected life)
|
|
19.4
|
%
|
|
19.8
|
%
|
|
30.0
|
%
|
|||
Expected dividend yield (over expected life)
|
|
3.1
|
%
|
|
3.1
|
%
|
|
3.0
|
%
|
|
SBP
2018 |
|
ESUP
2018 |
||||
Employee contributions
|
$
|
3.2
|
|
|
$
|
3.8
|
|
Less diversified contributions
|
.7
|
|
|
—
|
|
||
Total employee stock contributions
|
$
|
2.5
|
|
|
$
|
3.8
|
|
Employer premium contribution to diversified investment accounts
|
|
|
|
$
|
.7
|
|
|
Shares purchased by employees and company match
|
.1
|
|
|
|
•
|
A service requirement—Awards generally “cliff” vest
three
years following the grant date; and
|
•
|
A market condition—Awards are based on our TSR as compared to the TSR of a group of peer companies. The peer group consists of all the companies in the Industrial, Materials and Consumer Discretionary sectors of the S&P 500 and S&P Midcap 400 (approximately
320
companies). Participants will earn from
0%
to
200%
of the base award depending upon how our TSR ranks within the peer group at the end of the
three
-year performance period.
|
•
|
A service requirement—Awards generally “cliff” vest
three
years following the grant date; and
|
•
|
A performance condition—Awards are based on achieving specified EBIT CAGR performance targets for our or the applicable segment's EBIT during the third year of the performance period compared to the EBIT during the fiscal year immediately preceding the performance period. Participants will earn from
0%
to
200%
of the base award.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Total shares base award
|
.1
|
|
|
.1
|
|
|
.1
|
|
|||
Grant date per share fair value
|
$
|
42.60
|
|
|
$
|
50.75
|
|
|
$
|
40.16
|
|
Risk-free interest rate
|
2.4
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
|||
Expected life in years
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
|||
Expected volatility (over expected life)
|
19.9
|
%
|
|
19.5
|
%
|
|
19.2
|
%
|
|||
Expected dividend yield (over expected life)
|
3.3
|
%
|
|
2.8
|
%
|
|
3.1
|
%
|
Three-Year Performance Cycle
|
||||||||||||||
Award Year
|
|
Completion Date
|
|
TSR Performance
Relative to the Peer Group (1%=Best)
|
|
Payout as a
Percent of the
Base Award
|
|
Number of Shares
Distributed
|
|
Cash Portion
|
|
Distribution Date
|
||
2014
|
|
December 31, 2016
|
|
10
|
|
175.0%
|
|
.4 million
|
|
$
|
9.8
|
|
|
First quarter 2017
|
2015
|
|
December 31, 2017
|
|
57
|
|
61.0%
|
|
—
|
|
$
|
6.9
|
|
|
First quarter 2018
|
2016
|
|
December 31, 2018
|
|
78
|
|
—%
|
|
—
|
|
$
|
—
|
|
|
First quarter 2019
|
Two-Year Performance Cycle
|
||||||||||||
Award Year
|
|
Completion Date
|
|
Average Payout as a Percent of the Base Award
|
|
Estimated Number of Shares
|
|
Cash Portion
|
|
Expected Distribution Date
|
||
2015
|
|
December 31, 2016
|
|
36.0%
|
|
< .1 million
|
|
$
|
.8
|
|
|
First quarter 2017
|
2016
|
|
December 31, 2017
|
|
44.0%
|
|
—
|
|
$
|
2.0
|
|
|
First quarter 2018
|
2017
|
|
December 31, 2018
|
|
155.0%
|
|
< .1 million
|
|
$
|
2.2
|
|
|
First quarter 2019
|
•
|
Annual awards to selected managers;
|
•
|
On a discretionary basis to selected employees; and
|
•
|
As compensation for outside directors
|
|
DSU
|
|
ESUP
|
|
PSU*
|
|
RSU
|
|
PGI**
|
|
Total Units
|
|
Weighted
Average
Grant Date
Fair Value
per Unit
|
|
Aggregate
Intrinsic
Value
|
||||||||||
Unvested at December 31, 2017
|
—
|
|
|
—
|
|
|
.4
|
|
|
.1
|
|
|
.1
|
|
|
.6
|
|
|
$
|
19.56
|
|
|
|
||
Granted based on current service
|
.2
|
|
|
.2
|
|
|
—
|
|
|
.1
|
|
|
—
|
|
|
.5
|
|
|
42.71
|
|
|
|
|||
Granted based on future conditions
|
—
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
27.48
|
|
|
|
|||
Vested
|
(.2
|
)
|
|
(.2
|
)
|
|
—
|
|
|
(.1
|
)
|
|
(.1
|
)
|
|
(.6
|
)
|
|
42.01
|
|
|
|
|||
Difference between maximum and actual payout
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|
—
|
|
|
—
|
|
|
(.2
|
)
|
|
—
|
|
|
|
|||
Unvested at December 31, 2018
|
—
|
|
|
—
|
|
|
.7
|
|
|
.1
|
|
|
—
|
|
|
.8
|
|
|
$
|
38.43
|
|
|
$
|
28.2
|
|
Fully vested shares available for issuance at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
3.6
|
|
|
|
|
$
|
131.8
|
|
*
|
PSU awards are presented at maximum payout (2017 award at
175%
and 2018 award at
200%
)
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Total intrinsic value of vested stock units converted to common stock
|
$
|
12.1
|
|
|
$
|
22.7
|
|
|
$
|
24.8
|
|
Average 2018 purchase price per share (net of discount)
|
$
|
35.77
|
|
2018 number of shares purchased by employees
|
.2
|
|
|
Shares purchased since inception in 1982
|
23.2
|
|
|
Maximum shares under the plan
|
27.0
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Change in benefit obligation
|
|
|
|
|
|
||||||
Benefit obligation, beginning of period
|
$
|
241.5
|
|
|
$
|
293.0
|
|
|
$
|
290.3
|
|
Service cost
|
3.9
|
|
|
4.6
|
|
|
4.4
|
|
|||
Interest cost
|
8.0
|
|
|
10.9
|
|
|
11.3
|
|
|||
Plan participants’ contributions
|
.5
|
|
|
.7
|
|
|
.7
|
|
|||
Actuarial (gain) loss
|
(20.3
|
)
|
|
4.0
|
|
|
9.8
|
|
|||
Benefits paid
|
(13.4
|
)
|
|
(15.2
|
)
|
|
(19.1
|
)
|
|||
Plan amendments
|
1.9
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
(59.8
|
)
|
|
—
|
|
|||
Foreign currency exchange rate changes
|
(2.3
|
)
|
|
3.3
|
|
|
(4.4
|
)
|
|||
Benefit obligation, end of period
1
|
219.8
|
|
|
241.5
|
|
|
293.0
|
|
|||
Change in plan assets
|
|
|
|
|
|
||||||
Fair value of plan assets, beginning of period
|
185.7
|
|
|
214.1
|
|
|
207.5
|
|
|||
Actual (loss) return on plan assets
|
(10.6
|
)
|
|
28.3
|
|
|
18.9
|
|
|||
Employer contributions
|
21.8
|
|
|
14.9
|
|
|
9.8
|
|
|||
Plan participants’ contributions
|
.5
|
|
|
.7
|
|
|
.7
|
|
|||
Benefits paid
|
(13.4
|
)
|
|
(15.2
|
)
|
|
(19.1
|
)
|
|||
Settlements
|
—
|
|
|
(59.8
|
)
|
|
—
|
|
|||
Foreign currency exchange rate changes
|
(2.2
|
)
|
|
2.7
|
|
|
(3.7
|
)
|
|||
Fair value of plan assets, end of period
|
181.8
|
|
|
185.7
|
|
|
214.1
|
|
|||
Net funded status
|
$
|
(38.0
|
)
|
|
$
|
(55.8
|
)
|
|
$
|
(78.9
|
)
|
Funded status recognized in the Consolidated Balance Sheets
|
|
|
|
|
|
||||||
Other assets—sundry
|
$
|
1.6
|
|
|
$
|
2.2
|
|
|
$
|
1.1
|
|
Other current liabilities
|
(.4
|
)
|
|
(.4
|
)
|
|
(.4
|
)
|
|||
Other long-term liabilities
|
(39.2
|
)
|
|
(57.6
|
)
|
|
(79.6
|
)
|
|||
Net funded status
|
$
|
(38.0
|
)
|
|
$
|
(55.8
|
)
|
|
$
|
(78.9
|
)
|
|
|
|
December 31, 2017
|
|
2018
Amortization |
|
2018
Net Actuarial loss |
|
2018
Foreign currency exchange rates change |
|
2018
Income tax change |
|
December 31, 2018
|
||||||||||||
Net loss (gain) (before tax)
|
$
|
53.6
|
|
|
$
|
(2.6
|
)
|
|
$
|
4.2
|
|
|
$
|
(.5
|
)
|
|
$
|
—
|
|
|
$
|
54.7
|
|
Deferred income taxes
|
(15.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(.3
|
)
|
|
(15.4
|
)
|
||||||
Accumulated other comprehensive income (loss) (net of tax)
|
$
|
38.5
|
|
|
$
|
(2.6
|
)
|
|
$
|
4.2
|
|
|
$
|
(.5
|
)
|
|
$
|
(.3
|
)
|
|
$
|
39.3
|
|
Net loss
|
$
|
2.8
|
|
Net prior service cost
|
.2
|
|
|
Total expected to be recognized in 2019
|
$
|
3.0
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
(3.9
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(4.4
|
)
|
Interest cost
|
(8.0
|
)
|
|
(10.9
|
)
|
|
(11.3
|
)
|
|||
Expected return on plan assets
|
11.9
|
|
|
13.4
|
|
|
12.9
|
|
|||
Recognized net actuarial loss
|
(2.6
|
)
|
|
(4.6
|
)
|
|
(4.5
|
)
|
|||
Settlements
|
—
|
|
|
(15.3
|
)
|
|
—
|
|
|||
Net pension expense
|
$
|
(2.6
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
(7.3
|
)
|
Weighted average assumptions for pension costs:
|
|
|
|
|
|
||||||
Discount rate used in net pension costs
|
3.4
|
%
|
|
3.8
|
%
|
|
4.1
|
%
|
|||
Rate of compensation increase used in pension costs
|
3.0
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|||
Expected return on plan assets
|
6.4
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
|||
Weighted average assumptions for benefit obligation:
|
|
|
|
|
|
||||||
Discount rate used in benefit obligation
|
3.9
|
%
|
|
3.4
|
%
|
|
3.8
|
%
|
|||
Rate of compensation increase used in benefit obligation
|
3.0
|
%
|
|
3.0
|
%
|
|
3.5
|
%
|
•
|
Level 1: Quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2: Other significant inputs observable either directly or indirectly (including quoted prices for similar securities, interest rates, yield curves, credit risk, etc.).
|
•
|
Level 3: Unobservable inputs that are not corroborated by market data.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV
1
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets Measured at NAV
1
|
|
Total
|
||||||||||||||||||||
Mutual and pooled funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Fixed income
|
$
|
41.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41.8
|
|
|
$
|
38.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38.2
|
|
Equities
|
96.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96.8
|
|
|
103.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103.2
|
|
||||||||||
Stable value funds
|
—
|
|
|
29.5
|
|
|
—
|
|
|
—
|
|
|
29.5
|
|
|
—
|
|
|
25.8
|
|
|
—
|
|
|
—
|
|
|
25.8
|
|
||||||||||
Money market funds, cash and other
|
—
|
|
|
—
|
|
|
—
|
|
|
13.7
|
|
|
13.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.5
|
|
|
18.5
|
|
||||||||||
Total investments at fair value
|
$
|
138.6
|
|
|
$
|
29.5
|
|
|
$
|
—
|
|
|
$
|
13.7
|
|
|
$
|
181.8
|
|
|
$
|
141.4
|
|
|
$
|
25.8
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
|
$
|
185.7
|
|
|
2018
|
|
2017
|
||
Asset Category
|
|
|
|
||
Equity securities
|
53
|
%
|
|
55
|
%
|
Debt securities
|
23
|
|
|
21
|
|
Stable value funds
|
16
|
|
|
14
|
|
Other, including cash
|
8
|
|
|
10
|
|
Total
|
100
|
%
|
|
100
|
%
|
•
|
U.S. Total Stock Market Index: Large-, mid-, and small-cap equity diversified across growth and value styles.
|
•
|
U.S. Large-Cap Index: Large-cap equity diversified across growth and value styles.
|
•
|
U.S. Small-Cap Index: Small-cap equity diversified across growth and value styles.
|
•
|
World ex US Index: International equity; broad exposure across developed and emerging non-U.S. equity markets around the world.
|
•
|
Long-term Bond Index: Diversified exposure to the long-term, investment-grade U.S. bond market.
|
•
|
Extended Duration Treasury Index: Diversified exposure to U.S. treasuries with maturities of
20
-
30
years.
|
2019
|
$
|
12.4
|
|
2020
|
13.0
|
|
|
2021
|
13.8
|
|
|
2022
|
14.1
|
|
|
2023
|
14.3
|
|
|
2024-2028
|
69.9
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Defined contribution plans
|
$
|
6.3
|
|
|
$
|
6.3
|
|
|
$
|
6.1
|
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic
|
$
|
149.1
|
|
|
$
|
188.6
|
|
|
$
|
267.7
|
|
Foreign
|
235.3
|
|
|
243.4
|
|
|
219.4
|
|
|||
|
$
|
384.4
|
|
|
$
|
432.0
|
|
|
$
|
487.1
|
|
|
Year Ended December 31
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Statutory federal income tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increases (decreases) in rate resulting from:
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
.9
|
|
|
.9
|
|
|
.9
|
|
Tax effect of foreign operations
|
—
|
|
|
(8.8
|
)
|
|
(6.4
|
)
|
Current and deferred foreign withholding taxes
|
3.8
|
|
|
3.6
|
|
|
.9
|
|
Deemed repatriation of foreign earnings
|
(.3
|
)
|
|
15.6
|
|
|
—
|
|
Deferred tax revaluation
|
(.1
|
)
|
|
(6.0
|
)
|
|
—
|
|
Stock-based compensation
|
(.8
|
)
|
|
(2.0
|
)
|
|
(3.4
|
)
|
Tax benefit for outside basis in subsidiary
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
Change in valuation allowance
|
(2.0
|
)
|
|
(.4
|
)
|
|
.2
|
|
Change in uncertain tax positions, net
|
(.3
|
)
|
|
(.6
|
)
|
|
(.6
|
)
|
Domestic production activities deduction
|
—
|
|
|
(1.2
|
)
|
|
(1.2
|
)
|
Other permanent differences, net
|
(1.4
|
)
|
|
(1.6
|
)
|
|
(.6
|
)
|
Other, net
|
(.4
|
)
|
|
(.7
|
)
|
|
(.2
|
)
|
Effective tax rate
|
20.4
|
%
|
|
32.0
|
%
|
|
24.6
|
%
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gross unrecognized tax benefits, January 1
|
$
|
10.1
|
|
|
$
|
12.1
|
|
|
$
|
15.5
|
|
Gross increases—tax positions in prior periods
|
—
|
|
|
.1
|
|
|
.3
|
|
|||
Gross decreases—tax positions in prior periods
|
(.5
|
)
|
|
(.4
|
)
|
|
(1.0
|
)
|
|||
Gross increases—current period tax positions
|
1.3
|
|
|
1.5
|
|
|
1.1
|
|
|||
Change due to exchange rate fluctuations
|
(.2
|
)
|
|
.3
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
(.9
|
)
|
|
(.9
|
)
|
|||
Lapse of statute of limitations
|
(2.5
|
)
|
|
(2.6
|
)
|
|
(2.9
|
)
|
|||
Gross unrecognized tax benefits, December 31
|
8.2
|
|
|
10.1
|
|
|
12.1
|
|
|||
Interest
|
2.4
|
|
|
3.0
|
|
|
4.0
|
|
|||
Penalties
|
.4
|
|
|
.5
|
|
|
.6
|
|
|||
Total gross unrecognized tax benefits, December 31
|
$
|
11.0
|
|
|
$
|
13.6
|
|
|
$
|
16.7
|
|
|
December 31
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Property, plant and equipment
|
$
|
19.7
|
|
|
$
|
(67.8
|
)
|
|
$
|
19.8
|
|
|
$
|
(53.5
|
)
|
Inventories
|
2.1
|
|
|
(10.3
|
)
|
|
1.9
|
|
|
(14.0
|
)
|
||||
Accrued expenses
|
60.3
|
|
|
(.1
|
)
|
|
59.1
|
|
|
(.2
|
)
|
||||
Net operating losses and other tax carryforwards
|
27.2
|
|
|
—
|
|
|
35.0
|
|
|
—
|
|
||||
Pension cost and other post-retirement benefits
|
13.4
|
|
|
(.6
|
)
|
|
11.9
|
|
|
(.6
|
)
|
||||
Intangible assets
|
.4
|
|
|
(84.6
|
)
|
|
1.2
|
|
|
(77.3
|
)
|
||||
Derivative financial instruments
|
5.0
|
|
|
(1.3
|
)
|
|
5.3
|
|
|
(1.7
|
)
|
||||
Tax on undistributed earnings (primarily from Canada and China)
|
—
|
|
|
(18.8
|
)
|
|
—
|
|
|
(21.4
|
)
|
||||
Uncertain tax positions
|
2.4
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
Other
|
6.9
|
|
|
(6.1
|
)
|
|
.7
|
|
|
(7.1
|
)
|
||||
Gross deferred tax assets (liabilities)
|
137.4
|
|
|
(189.6
|
)
|
|
138.4
|
|
|
(175.8
|
)
|
||||
Valuation allowance
|
(13.2
|
)
|
|
—
|
|
|
(24.2
|
)
|
|
—
|
|
||||
Total deferred taxes
|
$
|
124.2
|
|
|
$
|
(189.6
|
)
|
|
$
|
114.2
|
|
|
$
|
(175.8
|
)
|
Net deferred tax (liability) asset
|
|
|
$
|
(65.4
|
)
|
|
|
|
$
|
(61.6
|
)
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
Sundry
|
$
|
20.2
|
|
|
$
|
21.4
|
|
Deferred income taxes
|
(85.6
|
)
|
|
(83.0
|
)
|
||
|
$
|
(65.4
|
)
|
|
$
|
(61.6
|
)
|
•
|
The reduction of
$7.8
in our "Net operating losses and other tax carryforwards" deferred tax asset relates primarily to the
2018
anticipated utilization of U.S. state and Canadian net operating losses during the year;
|
•
|
The decrease of
$11.0
in our valuation allowance relates primarily to the anticipated future utilization of U.S. state net operating losses; and
|
•
|
The increase of
$14.3
in our deferred tax liability associated with property, plant, and equipment relates primarily to accelerated bonus depreciation resulting from TCJA.
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Restructuring charges (See
Note F
)
|
$
|
7.8
|
|
|
$
|
.8
|
|
|
$
|
.8
|
|
Currency loss (gain)
|
.8
|
|
|
1.5
|
|
|
(2.1
|
)
|
|||
Royalty expense (income)
|
.5
|
|
|
—
|
|
|
(.3
|
)
|
|||
Loss (gain) from diversified investments associated with Executive Stock Unit Program (See
Note M
)
|
1.9
|
|
|
(4.5
|
)
|
|
(2.2
|
)
|
|||
Non-service pension (income) expense (See
Note N
)
|
(1.3
|
)
|
|
17.4
|
|
|
2.9
|
|
|||
Other income
|
(7.0
|
)
|
|
(2.6
|
)
|
|
(1.5
|
)
|
|||
|
$
|
2.7
|
|
|
$
|
12.6
|
|
|
$
|
(2.4
|
)
|
|
Foreign
Currency
Translation
Adjustments
|
|
Cash
Flow
Hedges
|
|
Defined
Benefit
Pension
Plans
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
Balance at January 1, 2016
|
$
|
(4.8
|
)
|
|
$
|
(28.2
|
)
|
|
$
|
(58.1
|
)
|
|
$
|
(91.1
|
)
|
Other comprehensive (loss)
|
(33.2
|
)
|
|
(.9
|
)
|
|
(3.0
|
)
|
|
(37.1
|
)
|
||||
Reclassifications, pretax
1
|
(1.7
|
)
|
|
15.3
|
|
|
4.5
|
|
|
18.1
|
|
||||
Income tax effect
|
—
|
|
|
(4.0
|
)
|
|
(.6
|
)
|
|
(4.6
|
)
|
||||
Attributable to noncontrolling interest
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
||||
Balance at December 31, 2016
|
(38.6
|
)
|
|
(17.8
|
)
|
|
(57.2
|
)
|
|
(113.6
|
)
|
||||
Other comprehensive income
|
78.7
|
|
|
1.6
|
|
|
10.2
|
|
|
90.5
|
|
||||
Reclassifications, pretax
2
|
—
|
|
|
7.2
|
|
|
19.9
|
|
|
27.1
|
|
||||
Income tax effect
|
—
|
|
|
(2.5
|
)
|
|
(11.4
|
)
|
|
(13.9
|
)
|
||||
Attributable to noncontrolling interest
|
.4
|
|
|
—
|
|
|
—
|
|
|
.4
|
|
||||
Balance at December 31, 2017
|
40.5
|
|
|
(11.5
|
)
|
|
(38.5
|
)
|
|
(9.5
|
)
|
||||
Other comprehensive (loss)
|
(67.0
|
)
|
|
(3.1
|
)
|
|
(3.7
|
)
|
|
(73.8
|
)
|
||||
Reclassifications, pretax
3
|
—
|
|
|
2.8
|
|
|
2.6
|
|
|
5.4
|
|
||||
Income tax effect
|
—
|
|
|
—
|
|
|
.3
|
|
|
.3
|
|
||||
Attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2018
|
$
|
(26.5
|
)
|
|
$
|
(11.8
|
)
|
|
$
|
(39.3
|
)
|
|
$
|
(77.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
1
2016 pretax reclassifications are comprised of:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
10.6
|
|
|
$
|
—
|
|
|
$
|
10.6
|
|
Cost of goods sold; selling and administrative expenses
|
—
|
|
|
.5
|
|
|
—
|
|
|
.5
|
|
||||
Interest expense
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||
Other (income) expense, net
|
(1.7
|
)
|
|
—
|
|
|
4.5
|
|
|
2.8
|
|
||||
Total 2016 reclassifications, pretax
|
$
|
(1.7
|
)
|
|
$
|
15.3
|
|
|
$
|
4.5
|
|
|
$
|
18.1
|
|
|
|
|
|
|
|
|
|
||||||||
2
2017 pretax reclassifications are comprised of:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
Cost of goods sold; selling and administrative expenses
|
—
|
|
|
.7
|
|
|
—
|
|
|
.7
|
|
||||
Interest expense
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||
Other (income) expense, net
|
—
|
|
|
—
|
|
|
19.9
|
|
|
19.9
|
|
||||
Total 2017 reclassifications, pretax
|
$
|
—
|
|
|
$
|
7.2
|
|
|
$
|
19.9
|
|
|
$
|
27.1
|
|
|
|
|
|
|
|
|
|
||||||||
3
2018 pretax reclassifications are comprised of:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
|
$
|
(2.6
|
)
|
Cost of goods sold; selling and administrative expenses
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||
Interest expense
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
||||
Other (income) expense, net
|
—
|
|
|
—
|
|
|
2.6
|
|
|
2.6
|
|
||||
Total 2018 reclassifications, pretax
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
2.6
|
|
|
$
|
5.4
|
|
•
|
Level 1: Quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Short-term investments in this category are valued using discounted cash flow techniques with all significant inputs derived from or corroborated by observable market data. Derivative assets and liabilities in this category are valued using models that consider various assumptions and information from market-corroborated sources. The models used are primarily industry-standard models that consider items such as quoted prices, market interest rate curves applicable to the instruments being valued as of the end of each period, discounted cash flows, volatility factors, current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.
|
•
|
Level 3: Unobservable inputs that are not corroborated by market data.
|
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Bank time deposits with original maturities of three months or less
|
$
|
—
|
|
|
$
|
159.1
|
|
|
$
|
—
|
|
|
$
|
159.1
|
|
Derivative assets
1
(see
Note T
)
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Diversified investments associated with the ESUP
1
(see
Note M
)
|
32.7
|
|
|
—
|
|
|
—
|
|
|
32.7
|
|
||||
Total assets
|
$
|
32.7
|
|
|
$
|
160.3
|
|
|
$
|
—
|
|
|
$
|
193.0
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
1
(see
Note T
)
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
Liabilities associated with the ESUP
1
(see
Note M
)
|
33.7
|
|
|
—
|
|
|
—
|
|
|
33.7
|
|
||||
Total liabilities
|
$
|
33.7
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
38.4
|
|
|
As of December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Bank time deposits with original maturities of three months or less
|
$
|
—
|
|
|
$
|
236.4
|
|
|
$
|
—
|
|
|
$
|
236.4
|
|
Derivative assets
1
(see
Note T
)
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
||||
Diversified investments associated with the ESUP
1
(see
Note M
)
|
34.0
|
|
|
—
|
|
|
—
|
|
|
34.0
|
|
||||
Total assets
|
$
|
34.0
|
|
|
$
|
240.3
|
|
|
$
|
—
|
|
|
$
|
274.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
1
(see
Note T
)
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
Liabilities associated with the ESUP
1
(see
Note M
)
|
34.4
|
|
|
—
|
|
|
—
|
|
|
34.4
|
|
||||
Total liabilities
|
$
|
34.4
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
36.3
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Accounts receivable
|
$
|
19.6
|
|
|
$
|
10.5
|
|
|
$
|
5.3
|
|
Inventory
|
26.2
|
|
|
6.2
|
|
|
5.8
|
|
|||
Property, plant and equipment
|
28.2
|
|
|
15.7
|
|
|
3.7
|
|
|||
Goodwill (see
Note E
)
|
28.1
|
|
|
11.5
|
|
|
8.7
|
|
|||
Other intangible assets (see
Note E
)
|
28.9
|
|
|
20.3
|
|
|
12.3
|
|
|||
Other current and long-term assets
|
.8
|
|
|
.8
|
|
|
—
|
|
|||
Current liabilities
|
(11.9
|
)
|
|
(4.6
|
)
|
|
(4.2
|
)
|
|||
Long-term liabilities
|
(10.7
|
)
|
|
(6.3
|
)
|
|
(.5
|
)
|
|||
Non-controlling interest
|
—
|
|
|
(.5
|
)
|
|
—
|
|
|||
Fair value of net identifiable assets
|
109.2
|
|
53.6
|
|
|
31.1
|
|
||||
Less: Additional consideration payable
|
—
|
|
|
2.7
|
|
|
1.6
|
|
|||
Less: Common stock issued for acquired companies
|
—
|
|
|
11.8
|
|
|
—
|
|
|||
Net cash consideration
|
$
|
109.2
|
|
|
$
|
39.1
|
|
|
$
|
29.5
|
|
Year Ended
|
|
Number of
Acquisitions
|
|
Segment
|
|
Product/Service
|
December 31, 2018
|
|
3
|
|
Residential Products;
Specialized Products
|
|
Manufacturer and distributor of home and garden products; Manufacturer and distributor of silt fence; Engineered hydraulic cylinders
|
December 31, 2017
|
|
3
|
|
Residential Products;
Furniture Products
|
|
Distributor and installer of geosynthetic products; Flooring products; Surface-critical bent tube components
|
December 31, 2016
|
|
3
|
|
Residential Products;
Specialized Products
|
|
Distributor of geosynthetic products; Innersprings; Fabricated aerospace tubing and pipe assemblies
|
•
|
Precision Hydraulic Cylinders (PHC), a leading global manufacturer of engineered hydraulic cylinders primarily for the materials handling market. The purchase price was
$87.5
and added
$26.8
of goodwill. PHC serves a market of mainly large OEM customers utilizing highly engineered components with long product life-cycles that represent a small part of the end product’s cost. PHC represents a new growth platform and formed a new business group titled Hydraulic Cylinders within the Specialized Products segment.
|
•
|
A manufacturer and distributor of innovative home and garden products found at most major retailers for
$19.1
. This acquisition provides a solid foundation on which to continue growing our retail market presence in our Geo Components business unit.
|
•
|
A manufacturer and distributor of silt fence, a core product for our Geo Components business unit, for
$2.6
.
|
•
|
A distributor and installer of geosynthetic products, expanding the geographic scope and capabilities of our Geo Components business.
|
•
|
A manufacturer of surface-critical bent tube components in support of the private-label finished seating strategy in our Work Furniture business.
|
•
|
A carpet underlay manufacturer, providing additional production capacity in our Flooring Products business.
|
•
|
A U.S. manufacturer of aerospace tube assemblies, expanding our tube forming and fabrication capabilities and adding precision machining to our aerospace platform.
|
•
|
A distributor of geosynthetic products.
|
•
|
A South African producer of mattress innersprings.
|
|
|
Expiring at various dates through:
|
|
Total USD
Equivalent
Notional
Amount
|
|
As of December 31, 2018
|
||||||||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
Assets
|
|
Liabilities
|
|||||||||||||||||
|
Other Current
Assets
|
|
Sundry
|
|
Other Current
Liabilities
|
|
Other Long-Term
Liabilities
|
|||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Future USD sales/purchases of Canadian, Chinese, European, South Korean, Swiss and UK subsidiaries
|
|
Jun 2020
|
|
$
|
164.7
|
|
|
$
|
.5
|
|
|
$
|
.1
|
|
|
$
|
3.8
|
|
|
$
|
.2
|
|
Future MXN purchases of a USD subsidiary
|
|
Jun 2019
|
|
7.9
|
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Future EUR Sales of Chinese and UK subsidiaries
|
|
Jun 2020
|
|
32.3
|
|
|
.2
|
|
|
.1
|
|
|
.1
|
|
|
—
|
|
|||||
Total cash flow hedges
|
|
|
|
|
|
.8
|
|
|
.2
|
|
|
3.9
|
|
|
.2
|
|
||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany and third party receivables and payables exposed to multiple currencies (DKK, EUR, MXN, USD and ZAR) in various countries (CAD, CHF, CNY, EUR, GBP, PLN and USD)
|
|
Dec 2019
|
|
65.8
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
||||||
Total fair value hedges
|
|
|
|
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-deliverable hedges (EUR and USD) exposed to the CNY
|
|
Dec 2019
|
|
23.6
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
|
|
.1
|
|
|
—
|
|
|
.3
|
|
|
—
|
|
||||||
Total derivatives
|
|
|
|
|
|
$
|
1.0
|
|
|
$
|
.2
|
|
|
$
|
4.5
|
|
|
$
|
.2
|
|
|
|
Expiring at various dates through:
|
|
Total USD
Equivalent
Notional
Amount
|
|
As of December 31, 2017
|
||||||||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
Assets
|
|
Liabilities
|
|||||||||||||||||
|
Other Current
Assets
|
|
Sundry
|
|
Other Current
Liabilities
|
|
Other Long-Term
Liabilities
|
|||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Future USD sales/purchases of Canadian, Chinese, European, South Korean and Swiss subsidiaries
|
|
Mar 2019
|
|
$
|
158.1
|
|
|
$
|
2.2
|
|
|
$
|
.2
|
|
|
$
|
.5
|
|
|
$
|
—
|
|
Future MXN purchases of a USD subsidiary
|
|
Mar 2019
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
|||||
Future JPY sales of Chinese subsidiary
|
|
Dec 2018
|
|
11.2
|
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Future DKK sales of Polish subsidiary
|
|
Dec 2018
|
|
16.0
|
|
.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Future EUR Sales of Chinese, Swiss and UK subsidiaries
|
|
Mar 2019
|
|
38.8
|
|
—
|
|
|
—
|
|
|
.3
|
|
|
.1
|
|
||||||
Total cash flow hedges
|
|
|
|
|
|
2.9
|
|
|
.2
|
|
|
1.3
|
|
|
.1
|
|
||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany and third party receivables and payables exposed to multiple currencies (DKK, EUR, USD and ZAR) in various countries (CAD, CHF, EUR and USD)
|
|
Dec 2018
|
|
35.9
|
|
.2
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
||||||
Total fair value hedges
|
|
|
|
|
|
.2
|
|
|
—
|
|
|
.5
|
|
|
—
|
|
||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-deliverable hedges (EUR and JPY) exposed to the CNY
|
|
Nov 2018
|
|
17.0
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Hedge of USD Receivable on CAD Subsidiary
|
|
Jan 2018
|
|
19.0
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
|
|
.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivatives
|
|
|
|
|
|
$
|
3.7
|
|
|
$
|
.2
|
|
|
$
|
1.8
|
|
|
$
|
.1
|
|
|
|
Income Statement Caption
|
|
Amount of (Gain) Loss
Recorded in Income
for the Year Ended
December 31
|
||||||||||
Derivatives Designated as Hedging Instruments
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Interest rate cash flow hedges
|
|
Interest expense
|
|
$
|
4.3
|
|
|
$
|
4.2
|
|
|
$
|
4.2
|
|
Currency cash flow hedges
|
|
Net sales
|
|
(2.0
|
)
|
|
(1.4
|
)
|
|
10.8
|
|
|||
Currency cash flow hedges
|
|
Cost of goods sold
|
|
.4
|
|
|
.4
|
|
|
1.1
|
|
|||
Currency cash flow hedges
|
|
Other expense (income), net
|
|
—
|
|
|
.6
|
|
|
.4
|
|
|||
Total cash flow hedges
|
|
|
|
2.7
|
|
|
3.8
|
|
|
16.5
|
|
|||
Fair value hedges
|
|
Other expense (income), net
|
|
1.2
|
|
|
(.2
|
)
|
|
(1.3
|
)
|
|||
Derivatives Not Designated as Hedging Instruments
|
|
Other expense (income), net
|
|
(1.6
|
)
|
|
(1.7
|
)
|
|
(.1
|
)
|
|||
Total derivative instruments
|
|
|
|
$
|
2.3
|
|
|
$
|
1.9
|
|
|
$
|
15.1
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Litigation contingency accrual - Beginning of period
|
$
|
.4
|
|
|
$
|
3.2
|
|
|
$
|
8.1
|
|
Adjustment to accruals - expense - Continuing operations
|
1.8
|
|
|
.6
|
|
|
7.1
|
|
|||
Adjustment to accruals - expense - Discontinued operations
|
—
|
|
|
1.6
|
|
|
2.0
|
|
|||
Cash payments
|
(.3
|
)
|
|
(5.0
|
)
|
|
(14.0
|
)
|
|||
Litigation contingency accrual - End of period
|
$
|
1.9
|
|
|
$
|
.4
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31
(Amounts in millions, except per share data)
|
First
|
|
Second
|
|
Third
1,3
|
|
Fourth
2,4
|
|
Total
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,028.8
|
|
|
$
|
1,102.5
|
|
|
$
|
1,091.5
|
|
|
$
|
1,046.7
|
|
|
$
|
4,269.5
|
|
Gross profit
|
217.4
|
|
|
231.0
|
|
|
227.1
|
|
|
213.2
|
|
|
888.7
|
|
|||||
Earnings from continuing operations before income taxes
|
95.4
|
|
|
107.5
|
|
|
113.3
|
|
|
68.2
|
|
|
384.4
|
|
|||||
Earnings from continuing operations
|
$
|
77.9
|
|
|
$
|
85.1
|
|
|
$
|
90.0
|
|
|
$
|
53.1
|
|
|
$
|
306.1
|
|
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings
|
77.9
|
|
|
85.1
|
|
|
90.0
|
|
|
53.1
|
|
|
306.1
|
|
|||||
(Earnings) attributable to noncontrolling interest, net of tax
|
—
|
|
|
(.1
|
)
|
|
—
|
|
|
(.1
|
)
|
|
(.2
|
)
|
|||||
Net earnings attributable to Leggett & Platt, Inc. common shareholders
|
$
|
77.9
|
|
|
$
|
85.0
|
|
|
$
|
90.0
|
|
|
$
|
53.0
|
|
|
$
|
305.9
|
|
Earnings per share from continuing operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
.58
|
|
|
$
|
.63
|
|
|
$
|
.67
|
|
|
$
|
.40
|
|
|
$
|
2.28
|
|
Diluted
|
$
|
.57
|
|
|
$
|
.63
|
|
|
$
|
.67
|
|
|
$
|
.39
|
|
|
$
|
2.26
|
|
Earnings (loss) per share from discontinued operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net earnings per share attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
.58
|
|
|
$
|
.63
|
|
|
$
|
.67
|
|
|
$
|
.40
|
|
|
$
|
2.28
|
|
Diluted
|
$
|
.57
|
|
|
$
|
.63
|
|
|
$
|
.67
|
|
|
$
|
.39
|
|
|
$
|
2.26
|
|
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
960.3
|
|
|
$
|
989.3
|
|
|
$
|
1,009.7
|
|
|
$
|
984.5
|
|
|
$
|
3,943.8
|
|
Gross profit
|
226.7
|
|
|
230.7
|
|
|
216.5
|
|
|
208.5
|
|
|
882.4
|
|
|||||
Earnings from continuing operations before income taxes
|
107.3
|
|
|
113.4
|
|
|
100.7
|
|
|
110.6
|
|
|
432.0
|
|
|||||
Earnings from continuing operations
|
$
|
86.1
|
|
|
$
|
87.6
|
|
|
$
|
83.5
|
|
|
$
|
36.4
|
|
|
$
|
293.6
|
|
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(.9
|
)
|
|
—
|
|
|
(.9
|
)
|
|||||
Net earnings
|
86.1
|
|
|
87.6
|
|
|
82.6
|
|
|
36.4
|
|
|
292.7
|
|
|||||
(Earnings) attributable to noncontrolling interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(.1
|
)
|
|
(.1
|
)
|
|||||
Net earnings attributable to Leggett & Platt, Inc. common shareholders
|
$
|
86.1
|
|
|
$
|
87.6
|
|
|
$
|
82.6
|
|
|
$
|
36.3
|
|
|
$
|
292.6
|
|
Earnings per share from continuing operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
.63
|
|
|
$
|
.64
|
|
|
$
|
.62
|
|
|
$
|
.27
|
|
|
$
|
2.16
|
|
Diluted
|
$
|
.62
|
|
|
$
|
.64
|
|
|
$
|
.61
|
|
|
$
|
.27
|
|
|
$
|
2.14
|
|
Earnings (loss) per share from discontinued operations attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(.01
|
)
|
|
$
|
—
|
|
|
$
|
(.01
|
)
|
Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(.01
|
)
|
|
$
|
—
|
|
|
$
|
(.01
|
)
|
Net earnings per share attributable to Leggett & Platt, Inc. common shareholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
.63
|
|
|
$
|
.64
|
|
|
$
|
.61
|
|
|
$
|
.27
|
|
|
$
|
2.15
|
|
Diluted
|
$
|
.62
|
|
|
$
|
.64
|
|
|
$
|
.60
|
|
|
$
|
.27
|
|
|
$
|
2.13
|
|
1
|
Third quarter 2018 Earnings from continuing operations include a
$2
benefit associated with the TCJA (
Note O
)
|
2
|
3
|
4
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
Description
|
Balance
at
Beginning
of Period
|
|
Additions
(Credited)
to Cost
and
Expenses
|
|
Deductions
|
|
Balance
at End of
Period
|
||||||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful receivables
|
$
|
4.9
|
|
|
$
|
16.7
|
|
|
$
|
1.4
|
|
1
|
$
|
20.2
|
|
Excess and obsolete inventory reserve, LIFO basis
|
$
|
26.4
|
|
|
$
|
10.3
|
|
|
$
|
9.6
|
|
|
$
|
27.1
|
|
Tax valuation allowance
|
$
|
24.2
|
|
|
$
|
(7.8
|
)
|
|
$
|
3.2
|
|
|
$
|
13.2
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful receivables
|
$
|
7.4
|
|
|
$
|
.8
|
|
|
$
|
3.3
|
|
1
|
$
|
4.9
|
|
Excess and obsolete inventory reserve, LIFO basis
|
$
|
27.1
|
|
|
$
|
4.9
|
|
|
$
|
5.6
|
|
|
$
|
26.4
|
|
Tax valuation allowance
|
$
|
22.9
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful receivables
|
$
|
9.9
|
|
|
$
|
1.6
|
|
|
$
|
4.1
|
|
1
|
$
|
7.4
|
|
Excess and obsolete inventory reserve, LIFO basis
|
$
|
24.7
|
|
|
$
|
8.9
|
|
|
$
|
6.5
|
|
|
$
|
27.1
|
|
Tax valuation allowance
|
$
|
26.6
|
|
|
$
|
.8
|
|
|
$
|
4.5
|
|
|
$
|
22.9
|
|
1
|
Uncollectible accounts charged off, net of recoveries.
|
Exhibit No.
|
|
Document Description
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.2.1
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.3.1
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
Exhibit No.
|
|
Document Description
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
10.6*
|
|
|
|
|
|
10.7*
|
|
|
|
|
|
10.8*
|
|
|
|
|
|
10.9*
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
10.10.1*
|
|
|
|
|
|
10.10.2*
|
|
|
|
|
|
Exhibit No.
|
|
Document Description
|
|
|
|
10.10.3*
|
|
|
|
|
|
10.10.4*
|
|
|
|
|
|
10.10.5*
|
|
|
|
|
|
10.10.6*
|
|
|
|
|
|
10.10.7*
|
|
|
|
|
|
10.10.8*
|
|
|
|
|
|
10.10.9*
|
|
|
|
|
|
10.10.10*
|
|
|
|
|
|
10.10.11*
|
|
|
|
|
|
10.10.12*
|
|
|
|
|
|
10.10.13*
|
|
|
|
|
|
10.11*
|
|
|
|
|
|
10.11.1*
|
|
|
|
|
|
Exhibit No.
|
|
Document Description
|
|
|
|
10.11.2*
|
|
|
|
|
|
10.12*
|
|
|
|
|
|
10.13*
|
|
|
|
|
|
10.14*
|
|
|
|
|
|
10.15*
|
|
|
|
|
|
10.16*
|
|
|
|
|
|
10.17*
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
21**
|
|
|
|
|
|
23**
|
|
Exhibit No.
|
|
Document Description
|
|
|
|
|
|
|
24**
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS***
|
|
XBRL Instance Document.
|
|
|
|
101.SCH***
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL***
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF***
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB***
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE***
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
*
|
Denotes management contract or compensatory plan or arrangement.
|
**
|
Denotes filed or furnished herewith.
|
***
|
Exhibit 101 to this report includes the following formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for each year in the three year period ended
December 31, 2018
; (ii) Consolidated Statements of Comprehensive Income (Loss) for each year in the three year period ended
December 31, 2018
; (iii) Consolidated Balance Sheets at
December 31, 2018
and
December 31, 2017
; (iv) Consolidated Statements of Cash Flows for each year in the three year period ended
December 31, 2018
; (v) Consolidated Statements of Changes in Equity for each year in the three year period ended
December 31, 2018
; and (vi) Notes to Consolidated Financial Statements.
|
|
LEGGETT & PLATT, INCORPORATED
|
|
|
|
|
|
By:
|
/s/ K
ARL
G. G
LASSMAN
|
|
|
Karl G. Glassman
|
|
|
President and Chief Executive Officer
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
(a) Principal Executive Officer:
|
|
|
|
|
|
|
|
||
/s/ K
ARL
G. G
LASSMAN
|
|
President and Chief Executive Officer and Director
|
|
February 27, 2019
|
Karl G. Glassman
|
|
|
||
|
|
|
||
(b) Principal Financial Officer:
|
|
|
|
|
|
|
|
||
/
S
/ M
ATTHEW
C. F
LANIGAN
|
|
Executive Vice President, Chief Financial Officer and Director
|
|
February 27, 2019
|
Matthew C. Flanigan
|
|
|
||
|
|
|
||
(c) Principal Accounting Officer:
|
|
|
|
|
|
|
|
||
/
S
/ T
AMMY
M. T
RENT
|
|
Senior Vice President and Chief Accounting Officer
|
|
February 27, 2019
|
Tammy M. Trent
|
|
|
||
|
|
|
||
(d) Directors:
|
|
|
|
|
|
|
|
||
R
OBERT
E. B
RUNNER*
|
|
Director
|
|
|
Robert E. Brunner
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
R. T
ED
E
NLOE
, III*
|
|
Director
|
|
|
R. Ted Enloe, III
|
|
|
|
|
|
|
|
||
M
ANUEL
A. F
ERNANDEZ
*
|
|
Director
|
|
|
Manuel A. Fernandez
|
|
|
|
|
|
|
|
||
J
OSEPH
W. M
C
C
LANATHAN
*
|
|
Director
|
|
|
Joseph W. McClanathan
|
|
|
|
|
|
|
|
|
|
S
RIKANTH
P
ADMANABHAN
*
|
|
Director
|
|
|
Srikanth Padmanabhan
|
|
|
|
|
|
|
|
|
|
J
UDY
C. O
DOM
*
|
|
Director
|
|
|
Judy C. Odom
|
|
|
|
|
|
|
|
|
|
P
HOEBE
A. W
OOD
*
|
|
Director
|
|
|
Phoebe A. Wood
|
|
|
|
|
*By:
|
/s/ S
COTT
S. D
OUGLAS
|
|
|
|
Scott S. Douglas
|
|
February 27, 2019
|
|
Attorney-in-Fact
Under Power-of-Attorney
dated
|
|
|
|
February 26, 2019
|
|
|
|
||
|
|
|
/s/ R
OBERT
E. B
RUNNER
|
|
/s/ J
OSEPH
W. M
C
C
LANATHAN
|
Robert E. Brunner
|
|
Joseph W. McClanathan
|
|
|
|
/s/ R. T
ED
E
NLOE
, III
|
|
/s/ J
UDY
C. O
DOM
|
R. Ted Enloe, III
|
|
Judy C. Odom
|
|
|
|
/s/ M
ANUEL
A. F
ERNANDEZ
|
|
/s/ S
RIKANTH
P
ADMANABHAN
|
Manuel A. Fernandez
|
|
Srikanth Padmanabhan
|
|
|
|
/s/ M
ATTHEW
C. F
LANIGAN
|
|
/s/ P
HOEBE
A. W
OOD
|
Matthew C. Flanigan
|
|
Phoebe A. Wood
|
|
|
|
/s/ K
ARL
G. G
LASSMAN
|
|
|
Karl G. Glassman
|
|
|
1.
|
I have reviewed this report on Form 10-K of Leggett & Platt, Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 27, 2019
|
/s/ K
ARL
G. G
LASSMAN
|
|
|
Karl G. Glassman
|
|
|
President and Chief Executive Officer
|
|
|
Leggett & Platt, Incorporated
|
1.
|
I have reviewed this report on Form 10-K of Leggett & Platt, Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 27, 2019
|
/s/ M
ATTHEW
C. F
LANIGAN
|
|
|
Matthew C. Flanigan
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Leggett & Platt, Incorporated
|
/s/ K
ARL
G. G
LASSMAN
|
Karl G. Glassman
|
President and Chief Executive Officer
|
/s/ M
ATTHEW
C. F
LANIGAN
|
Matthew C. Flanigan
|
Executive Vice President and Chief Financial Officer
|