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Fortune Brands Home & Security Grows Sales and Profit in Third Quarter, Raises Annual Outlook for EPS

  Fortune Brands Home & Security Grows Sales and Profit in Third Quarter,
  Raises Annual Outlook for EPS

Highlights:

  *Q3 2012 net sales increase 7 percent year-over-year to $909 million
  *Diluted EPS $0.24, diluted EPS before charges/gains increases 45 percent
    to $0.29 vs. $0.20 in prior-year quarter
  *Company raises full-year 2012 outlook for diluted EPS before charges/gains
    to $0.86 - $0.88

Business Wire

DEERFIELD, Ill. -- October 23, 2012

Fortune Brands Home & Security, Inc. (NYSE: FBHS), an industry-leading home
and security products company, today announced results for the third quarter
of 2012.

Net sales were $909 million, an increase of 7 percent over the third quarter
of 2011. Diluted earnings per share were $0.24 vs. $0.01 in the prior year
quarter. Net charges were $0.14 lower than the third quarter of 2011.

Diluted EPS before charges/gains was $0.29 vs. $0.20 in the prior year
quarter, a 45 percent increase.

Operating income was $60.6 million, an increase of $39.8 million over the
prior-year quarter. Operating income before charges/gains was $72.9 million,
up 34 percent year-over-year.

“We had another very good quarter. We had broad strength in our businesses as
expected, with sales growth in each of our segments,” said Chris Klein, chief
executive officer, Fortune Brands Home & Security, Inc. “We achieved this
success as the market for our products continued to improve, with double-digit
growth in new housing construction and moderate improvement in spending for
home repairs and remodeling.”

For each segment in the third quarter 2012, compared to the prior-year
quarter:

  *Kitchen & Bath Cabinetry net sales were up 6 percent, with operating
    income of $1.5 million vs. $7.8 million, and operating income before
    charges/gains of $13.1 million, up 64 percent. Growth came from product
    line expansion amid strength in new construction as well as a more modest
    pick-up in remodeling activity.
  *Plumbing & Accessories net sales were up 12 percent, with gains continuing
    in the U.S. wholesale business, as well as success in international
    markets, especially China.
  *Advanced Material Windows & Door Systems net sales were up 7 percent, with
    operating income of $9.2 million, up from a loss of $0.3 million, and
    operating income before charges/gains increasing to $6.2 million, up from
    $1.9 million, primarily on door sales growth in the wholesale channel.
  *Security & Storage net sales were up 2 percent, with security product
    sales growing at a mid-single-digit rate driven by growth in U.S. retail
    and global safety products.

“Our Cabinet sales grew nicely in the quarter, and our continued discipline on
promotions coupled with our improving supply chain efficiencies resulted in a
sharp year-over-year increase in operating income before charges/gains. Our
Plumbing segment continued to capitalize on strength in the new construction
market, thanks to our market-leading share with builders and wholesalers.
Windows & Door segment sales benefited from the broadening of our distribution
in doors and our strength in new construction, and profits improved as
expected. Broader product placement, innovation and continued demand for
global safety solutions led to gains in the Security & Storage segment,” Klein
said.

“This was another successful quarter for us. Our results reflect the growth in
new construction, thanks to the work we’ve done over the last several years to
position ourselves for a recovering market. Our teams are executing well and
delivering results that are meeting or exceeding expectations we laid out for
ourselves one year ago when we spun off from Fortune Brands. It has been an
exciting first year as an independent company, and we believe our solid
capital structure, strong brands, compelling product innovation and
operational excellence will enable us to perform well in the future,” Klein
said.

“We improved upon our sound balance sheet,” said Lee Wyatt, senior vice
president and chief financial officer. “As of September 30, 2012, cash was
$216 million, and debt was down to $345 million with nothing outstanding on
our $650 million revolving credit facility. Our net debt-to-EBITDA before
charges/gains ratio is 0.4 times.”

Company Raises EPS Outlook for 2012

For the full year, the Company’s assumption for the growth rate of the market
for its U.S. home products remains mid-single digits, as new construction
continued to show strength in the third quarter. At the same time, there was a
more modest increase in repair & remodel business. The Company continues to
expect its full-year 2012 net sales to increase at a high-single-digit rate.

“As we indicated last quarter, we expect our full-year sales to grow high
single digits, but based on continuing unevenness in repair & remodel and due
to our disciplined approach to pursuing sales growth that is also profitable,
we believe our results will be in the lower end of that range,” Klein said.

The Company is raising its full-year 2012 outlook for diluted EPS before
charges/gains to $0.86 - $0.88. This targeted range compares to 2011 diluted
EPS before charges/gains of $0.60.

“Our results in 2012 show that we can pursue and secure profitable business,
and we plan to continue this momentum for the rest of the year and beyond. We
remain confident in our ability to deliver on our outlook and outperform the
market no matter the pace of the recovery,” Klein said.

The Company increased its free cash flow outlook for 2012 to be in excess of
$275 million. “Our balance sheet and free cash flow continue to strengthen,
helping to provide future opportunities to drive incremental returns for
shareholders,” Wyatt said.

About Fortune Brands Home & Security, Inc.

Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield,
Ill., creates products and services that help fulfill the dreams of homeowners
and help people feel more secure. The Company’s trusted brands include Master
Lock security products, MasterBrand cabinets, Moen faucets, Simonton windows
and Therma-Tru entry door systems. FBHS holds market leadership positions in
all of its segments. The Company’s more than 16,000 associates generated more
than $3.3 billion in net sales in 2011. FBHS is part of the S&P MidCap 400
Index. For more information, please visit www.FBHS.com.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains certain “forward-looking statements” regarding
business strategies, market potential, future financial performance and other
matters. Statements preceded by, followed by or that otherwise include the
words “believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” “plans,” “outlook,” and similar expressions or future or
conditional verbs such as “will,” “should,” “would,” “may” and “could” are
generally forward-looking in nature and not historical facts. Where, in any
forward-looking statement, we express an expectation or belief as to future
results or events, such expectation or belief is based on the current plans
and expectations of our management. Although we believe that these statements
are based on reasonable assumptions, they are subject to numerous factors,
risks and uncertainties that could cause actual outcomes and results to be
materially different from those indicated in such statements. These factors
include those in Item 1A of our Annual Report on Form 10-K, filed with the
Securities and Exchange Commission. The forward-looking statements included in
this release are made as of the date hereof, and except as required by law, we
undertake no obligation to update, amend or clarify any forward-looking
statements to reflect events, new information or circumstances occurring after
the date hereof.

Use of non-GAAP financial information

This press release includes measures not derived in accordance with generally
accepted accounting principles (“GAAP”), such as diluted earnings per share
before charges/gains, net charges, net debt-to-EBITDA before charges/gains
ratio, operating income before charges/gains, and free cash flow. These
measures should not be considered in isolation or as a substitute for any
measure derived in accordance with GAAP and may also be inconsistent with
similar measures presented by other companies. Reconciliations of these
measures to the most closely comparable GAAP measures, and reasons for the
Company’s use of these measures, are presented in the attached pages.

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions, except per share amounts)
(Unaudited)
                                                                            
                                                                                    
                                                                           
                      Three Months Ended September      Nine Months Ended September 30,
                      30,
                      2012       2011       %         2012         2011         %
                                              Change                                Change
  Net Sales (GAAP)                                                         
  Kitchen & Bath      $ 329.7     $ 310.7     6.1       $ 987.1       $ 954.6       3.4
  Cabinetry
  Plumbing &            278.2       249.1     11.7        804.2         704.7       14.1
  Accessories
  Advanced Material
  Windows & Door        158.4       148.2     6.9         431.4         399.2       8.1
  Systems
  Security &           142.8    140.0   2.0       420.5      394.0     6.7  
  Storage
  Total Net Sales     $ 909.1   $ 848.0   7.2      $ 2,643.2   $ 2,452.5   7.8  
                                                                                    
  Operating Income
  (Loss) Before                                                            
  Charges/Gains^(a)
  Kitchen & Bath      $ 13.1      $ 8.0       63.8      $ 27.7        $ 21.5        28.8
  Cabinetry
  Plumbing &            48.5        38.7      25.3        127.5         98.8        29.0
  Accessories
  Advanced Material
  Windows & Door        6.2         1.9       226.3       (0.1    )     (6.7    )   98.5
  Systems
  Security &            20.8        20.0      4.0         53.7          45.7        17.5
  Storage
  Corporate expense    (15.7 )   (14.4 )  (9.0  )    (42.3   )   (40.4   )  (4.7 )
  Total Operating
  Income Before       $ 72.9    $ 54.2    34.5     $ 166.5     $ 118.9     40.0 
  Charges/Gains
                                                                                    
  Earnings Per
  Share Before                                                             
  Charges/Gains^(b)
  Diluted             $ 0.29    $ 0.20    45.0     $ 0.66      $ 0.44      50.0 
                                                                                    
                                                                           
  EBITDA Before       $ 96.0    $ 77.5    23.9     $ 236.4     $ 191.9     23.2 
  Charges/Gains^(c)
                                                                                         

(a) Operating income (loss) before charges/gains is operating income derived
in accordance with U.S. generally accepted accounting principles ("GAAP")
including estimated incremental standalone corporate expenses for 2011 periods
and excluding restructuring and other charges, business separation costs,
income from a contingent acquisition consideration adjustment and the impact
of income and expense from actuarial gains or losses associated with our
defined benefit plans. Operating income (loss) before charges/gains is a
measure not derived in accordance with GAAP. Management uses this measure to
determine the returns generated by FBHS and to evaluate and identify
cost-reduction initiatives. Management believes this measure provides
investors with helpful supplemental information regarding the underlying
performance of the Company from period to period. This measure may be
inconsistent with similar measures presented by other companies. A
reconciliation to operating income, the most comparable GAAP measure, is
included in subsequent tables.

(b) Diluted EPS before charges/gains is net income calculated on a diluted
per-share basis excluding restructuring and other charges, income from a
contingent acquisition consideration adjustment, and the impact of income and
expense from actuarial gains or losses associated with our defined benefit
plans. Diluted EPS before charges/gains for the three and nine months ended
September 30, 2011 have also been adjusted to reflect an adjusted pro forma
effective tax rate of 35%, capital structure changes that reflect the
borrowing arrangements and debt level of the Company as of October 4, 2011,
the 1:1 share distribution resulting from the spin-off of the Company from
Fortune Brands, Inc., estimated incremental standalone corporate expenses for
2011 periods and business separation costs. Diluted EPS before charges/gains
is a measure not derived in accordance with GAAP. Management uses this measure
to evaluate the overall performance of the Company and believes this measure
provides investors with helpful supplemental information regarding the
underlying performance of the Company from period to period. This measure may
be inconsistent with similar measures presented by other companies. A
reconciliation to diluted EPS, the most closely comparable GAAP measure, is
included in subsequent tables.
                                        
(c) EBITDA before charges/gains is net income derived in accordance with GAAP
including estimated incremental standalone corporate expenses for 2011 periods
and excluding restructuring and other charges, income from a contingent
acquisition consideration adjustment, business separation costs, the impact of
income and expense from actuarial gains or losses associated with our defined
benefit plans, depreciation, amortization of intangible assets, related party
interest expense, net, external interest expense, and income taxes. EBITDA
before charges/gains is a measure not derived in accordance with GAAP.
Management uses this measure to assess returns generated by FBHS. Management
believes this measure provides investors with helpful supplemental information
about the Company's ability to fund internal growth, make acquisitions and
repay debt and related interest. This measure may be inconsistent with similar
measures presented by other companies. A reconciliation to net income, the
most closely comparable GAAP measure, is included in subsequent tables.

                                                              
FORTUNE BRANDS HOME & SECURITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (GAAP)
(In millions)
(Unaudited)
                                                                  
                                                                 
                                                  September 30,   December 31,
                                                  2012            2011
                                                                  
  Assets
  Current assets                                                 
  Cash and cash equivalents                       $   216.1       $   120.8
  Accounts receivable, net                            407.1           346.1
  Inventories                                         392.3           336.3
  Other current assets                               122.9          150.3
  Total current assets                                1,138.4         953.5
                                                                  
  Property, plant and equipment, net                  497.8           525.8
  Goodwill resulting from business acquisitions       1,368.4         1,366.6
  Other intangible assets, net of accumulated         698.1           702.9
  amortization
  Other assets                                       81.8           89.1
  Total assets                                    $   3,784.5     $   3,637.9
                                                                  
                                                                  
  Liabilities and Equity
  Current liabilities                                            
  Notes payable to banks                          $   5.3         $   3.8
  Current portion of long-term debt                   -               17.5
  Accounts payable                                    253.5           260.7
  Other current liabilities                          339.0          315.8
  Total current liabilities                           597.8           597.8
                                                                  
  Long-term debt                                      339.3           389.3
  Deferred income taxes                               205.0           204.1
  Accrued defined benefit plans                       229.9           248.2
  Other non-current liabilities                      78.2           74.0
  Total liabilities                                   1,450.2         1,513.4
                                                                  
  Stockholders' equity                                2,330.9         2,120.8
  Noncontrolling interests                           3.4            3.7
  Total equity                                       2,334.3        2,124.5
  Total liabilities and equity                    $   3,784.5     $   3,637.9

                                                                  
FORTUNE BRANDS HOME & SECURITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                                                                         
                                                                         
                                           
                           Nine Months Ended September 30,
                           2012             2011
  Operating Activities                     
  Net Income               $   101.1         $  36.3
  Depreciation and             79.0             76.0
  amortization
  Deferred income              5.6              3.4
  taxes
  Other noncash items          17.4             11.8
  Changes in assets           (83.7   )      (104.5  )
  and liabilities, net
  Net cash provided by     $   119.4       $  23.0    
  operating activities
                                                                         
  Investing Activities                     
  Capital
  expenditures, net of     $   (33.4   )     $  (38.0   )
  proceeds from asset
  sales
  Acquisitions, net of         -                (6.0    )
  cash acquired
  Other investing             (5.0    )      -       
  activities
  Net cash used in         $   (38.4   )    $  (44.0   )
  investing activities
                                           
  Net cash provided by     $   11.2        $  88.9    
  financing activities
                                                                         
                                           
  Effect of foreign
  exchange rate               3.1           (1.0    )
  changes on cash
                                           
  Net increase in cash     $   95.3          $  66.9
  and cash equivalents
  Cash and cash
  equivalents at              120.8         60.7    
  beginning of period
  Cash and cash
  equivalents at end       $   216.1       $  127.6   
  of period
                                                                         
                                                                         
                                                                   
  FREE CASH FLOW           Nine Months Ended September 30,  2012 Full Year
                           2012             2011           Target
                                                                         
  Free Cash Flow ^(a)      $   166.6         $  (15.0   )    In excess   $ 275
                                                             of
  Add:
  Capital expenditures         46.0             41.4                       80
  Less:
  Proceeds from the            12.6             3.4                        15
  sale of assets
  Proceeds from the
  exercise of stock           80.6          -                     85
  options
  Cash Flow From           $   119.4       $  23.0       In excess  $ 255
  Operations (GAAP)                                          of

(a) Free cash flow is cash flow from operations calculated in accordance with
GAAP less net capital expenditures (capital expenditures less proceeds from
the sale of assets including property, plant and equipment) plus proceeds from
the exercise of stock options. Free cash flow is a measure not derived in
accordance with GAAP. Management believes that free cash flow provides
investors with helpful supplemental information about the Company's ability to
fund internal growth, make acquisitions, repay debt and related interest, pay
dividends and repurchase common stock. This measure may be inconsistent with
similar measures presented by other companies.

                                                                           
FORTUNE BRANDS HOME & SECURITY, INC.
CONSOLIDATED STATEMENT OF INCOME (GAAP)
(In millions, except per share amounts)
(Unaudited)
                                                                          
                    Three Months Ended September 30,     Nine Months Ended September 30,
                    2012       2011       % Change     2012         2011       % Change
                                                                          
  Net Sales         $ 909.1   $ 848.0   7.2         $ 2,643.2   $ 2,452.5  7.8     
                                                                                   
  Cost of             606.8       592.2     2.5            1,776.7       1,695.1   4.8
  products sold
                                                                                   
  Selling,
  general
  and
  administrative      236.2       228.0     3.6            699.6         648.4     7.9
  expenses
                                                                                   
  Amortization of
  intangible          2.4         3.5       (31.4    )     8.6           11.0      (21.8   )
  assets
                                                                                   
  Restructuring       3.1         1.1       181.8          4.1           1.8       127.8
  charges
                                                                                   
  Business
  separation          -           2.4       (100.0   )     -             2.4       (100.0  )
  costs
                                                                          
  Operating          60.6     20.8    191.3        154.2      93.8     64.4    
  Income
                                                                                   
  Related party
  interest            -           0.2       (100.0   )     -             23.2      (100.0  )
  expense, net
                                                                                   
  External
  interest            2.0         (0.1  )   (4,100.0 )     6.6           0.2       2,673.1
  expense
  (income)
                                                                                   
  Other (income)      (0.8  )     1.8       (143.5   )     (0.6    )     1.9       (131.3  )
  expense, net
                                                                          
  Income before      59.4     18.9    215.0        148.2      68.5     116.5   
  income taxes
                                                                                   
  Income tax          19.2        16.4      17.1           47.1          32.2      46.3
  provision
                                                                          
  Net Income        $ 40.2    $ 2.5     1,532.8     $ 101.1     $ 36.3     178.8   
                                                                                   
  Less:
  Noncontrolling      0.2         0.3       (33.3    )     0.8           0.9       (11.1   )
  interests
                                                                          
  Net Income
  attributable to
  Fortune Brands    $ 40.0    $ 2.2     1,750.1     $ 100.3     $ 35.4     183.6   
  Home & Security
                                                                                   
  Earnings Per
  Common Share,                                                           
  Diluted^(a):
  Net Income        $ 0.24    $ 0.01    2,300.0     $ 0.61      $ 0.23     165.2   
                                                                          
  Diluted Average
  Shares             167.0    155.1   7.7          165.1      155.1    6.5     
  Outstanding^(a)
                                                                                           

(a) Diluted earnings per common share and the average number of shares of
common stock outstanding in the three and nine months ended September 30, 2011
were retrospectively restated adjusting the number of shares of Fortune Brands
Home & Security, Inc. common stock using the number of shares of common stock
outstanding as of September 27, 2011. In the periods prior to the spin-off of
Fortune Brands Home & Security, Inc. from Fortune Brands, Inc., the same
number of shares was used to calculate diluted earnings per share since no
Fortune Brands Home & Security, Inc. stock-based awards were outstanding at
that time.

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions, except per share amounts)
(Unaudited)
                                                                              
                                                                                      
                                                                             
                      Three Months Ended September 30,    Nine Months Ended September 30,
                      2012       2011       % Change    2012         2011         % Change
  Net Sales (GAAP)                                                           
  Kitchen & Bath      $ 329.7     $ 310.7     6.1         $ 987.1       $ 954.6       3.4
  Cabinetry
  Plumbing &            278.2       249.1     11.7          804.2         704.7       14.1
  Accessories
  Advanced Material
  Windows & Door        158.4       148.2     6.9           431.4         399.2       8.1
  Systems
  Security &           142.8    140.0   2.0         420.5      394.0     6.7    
  Storage
  Total Net Sales     $ 909.1   $ 848.0   7.2        $ 2,643.2   $ 2,452.5   7.8    
                                                                                      
  Operating Income                                                           
  (Loss)
  Kitchen & Bath      $ 1.5       $ 7.8       (80.8   )   $ 14.1        $ 20.9        (32.5  )
  Cabinetry
  Plumbing &            48.5        38.6      25.6          127.5         98.9        28.9
  Accessories
  Advanced Material
  Windows & Door        9.2         (0.3  )   3,166.7       4.4           (9.6    )   145.8
  Systems
  Security &            20.8        20.0      4.0           54.2          45.7        18.6
  Storage
  Corporate            (19.4 )   (45.3 )  57.2        (46.0   )   (62.1   )  25.9   
  Expenses^(a)
  Total Operating     $ 60.6    $ 20.8    191.3      $ 154.2     $ 93.8      64.4   
  Income (GAAP)
                                                                                      
  OPERATING INCOME
  (LOSS) BEFORE
  CHARGES/GAINS
  RECONCILIATION
                                                                                      
  Operating Income
  (Loss) Before                                                              
  Charges/Gains^(b)
  Kitchen & Bath      $ 13.1      $ 8.0       63.8        $ 27.7        $ 21.5        28.8
  Cabinetry
  Plumbing &            48.5        38.7      25.3          127.5         98.8        29.0
  Accessories
  Advanced Material
  Windows & Door        6.2         1.9       226.3         (0.1    )     (6.7    )   98.5
  Systems
  Security &            20.8        20.0      4.0           53.7          45.7        17.5
  Storage
  Corporate            (15.7 )   (14.4 )  (9.0    )    (42.3   )   (40.4   )  (4.7   )
  expenses
                                                                                      
  Total Operating
  Income Before        72.9     54.2    34.5        166.5      118.9     40.0   
  Charges/Gains
  Restructuring and     (8.6  )     (2.5  )   (242.6  )     (10.6   )     (3.4    )   (211.4 )
  other charges^(c)
  Contingent
  acquisition           -           -         -             2.0           -           100.0
  consideration
  adjustment ^(d)
  Standalone
  corporate             -           3.8       (100.0  )     -             13.8        (100.0 )
  costs^(e)
  Business
  separation costs      -           (2.4  )   100.0         -             (2.4    )   100.0
  ^(f)
  Defined benefit
  plan actuarial       (3.7  )   (32.3 )  88.5        (3.7    )   (33.1   )  88.8   
  losses ^(g)
  Total Operating     $ 60.6    $ 20.8    191.3      $ 154.2     $ 93.8      64.4   
  Income (GAAP)
                                                                                             

(a) For 2011, corporate expenses include allocations of certain Fortune
Brands, Inc. general corporate expenses incurred directly by Fortune Brands,
Inc. These allocated expenses include costs associated with legal, finance,
treasury, accounting, internal audit and general management services. They
also include the components of defined benefit plan expense other than service
cost including actuarial gains and losses.
                          
(b) Operating income (loss) before charges/gains is operating income derived
in accordance with GAAP including estimated incremental standalone corporate
expenses for 2011 periods and excluding restructuring and other charges,
business separation costs, income from a contingent acquisition consideration
adjustment and the impact of income and expense from actuarial gains or losses
associated with our defined benefit plans. Operating income (loss) before
charges/gains is a measure not derived in accordance with GAAP. Management
uses this measure to determine the returns generated by FBHS and to evaluate
and identify cost-reduction initiatives. Management believes this measure
provides investors with helpful supplemental information regarding the
underlying performance of the Company from period to period. This measure may
be inconsistent with similar measures presented by other companies.
                                                     
(c) Restructuring charges are costs incurred to implement significant cost
reduction initiatives and include workforce reduction costs; "other charges"
represent charges directly related to restructuring initiatives that cannot be
reported as restructuring under GAAP. Such costs may include losses on
disposal of inventories, trade receivables allowances from exiting product
lines and accelerated depreciation resulting from the closure of facilities
and gains or losses associated with the sale of closed facilities.
                                                     
(d) Represents gain attributable to reduction of estimated liability for
contingent consideration associated with a business acquisition.
                                                     
(e) The Company estimates that it would have incurred $3.8 million and $13.8
million of incremental corporate expenses if it had functioned as an
independent standalone public company for the three months and nine months
ended September 30, 2011.
                                                     
(f) Business separation costs are costs related to non-cash non-recurring
costs associated with the modification of share-based compensation awards as a
result of the spin-off of FBHS from Fortune Brands, Inc.
                                                     
(g) Represents actuarial losses associated with our defined benefit plans.


DILUTED EPS BEFORE CHARGES/GAINS RECONCILIATION
Diluted EPS before charges/gains is net income calculated on a diluted
per-share basis excluding restructuring and other charges, income from a
contingent acquisition consideration adjustment, and the impact of income and
expense from actuarial gains or losses associated with our defined benefit
plans. Diluted EPS before charges/gains for the three and nine months ended
September 30, 2011 have also been adjusted to reflect an adjusted pro forma
effective tax rate of 35%, capital structure changes that reflect the
borrowing arrangements and debt level of the Company as of October 4, 2011,
the 1:1 share distribution resulting from the spin-off of the Company from
Fortune Brands, Inc., estimated incremental standalone corporate expenses, and
business separation costs. Diluted EPS before charges/gains is a measure not
derived in accordance with GAAP. Management uses this measure to evaluate the
overall performance of the Company and believes this measure provides
investors with helpful supplemental information regarding the underlying
performance of the Company from period to period. This measure may be
inconsistent with similar measures presented by other companies.
                                        
For the third quarter of 2012, diluted EPS before charges/gains is net income
calculated on a diluted per-share basis excluding $8.6 million ($5.7 million
after tax or $0.04 per diluted share) of restructuring and other charges and
the impact of income and expense from actuarial gains or losses associated
with our defined benefit plans of $3.7 million ($2.4 million after tax or
$0.01 per diluted share).
                                        
For the nine months ended September 30, 2012, diluted EPS before charges/gains
is net income calculated on a diluted per-share basis excluding $10.6 million
($7.0 million after tax or $0.04 per diluted share) of restructuring and other
charges, income from a contingent acquisition consideration adjustment of $2.0
million ($1.3 million after tax) and the impact of income and expense from
actuarial gains or losses associated with our defined benefit plans of $3.7
million ($2.4 million after tax or $0.01 per diluted share).
                                        
For the third quarter of 2011, diluted EPS before charges/gains is net income
calculated on a diluted per-share basis adjusted to reflect estimated
incremental standalone corporate costs of $3.8 million ($2.4 million after tax
or $0.01 per diluted share), capital structure changes of $2.9 million ($1.8
million after tax or $0.01 per diluted share) and an adjusted pro forma tax
rate adjustment of $10.3 million ($0.06 per diluted share), and excludes $2.5
million ($1.6 million after tax or $0.01 per diluted share) of restructuring
and other charges, business separation costs of $2.4 million ($1.7 million
after tax or $0.01 per diluted share) and the impact of income and expense
from actuarial gains or losses associated with our defined benefit plans of
$32.3 million ($20.2 million after tax or $0.13 per diluted share).
                                        
For the nine months ended September 30, 2011, diluted EPS before charges/gains
is net income calculated on a diluted per-share basis adjusted to reflect
estimated incremental standalone corporate costs of $13.8 million ($8.6
million after tax or $0.05 per diluted share), capital structure changes of
$14.4 million ($8.9 million after tax or $0.06 per diluted share) and an
adjusted pro forma tax rate adjustment of $8.9 million ($0.06 per diluted
share), and excludes $3.4 million ($2.3 million after tax or $0.01 per diluted
share) of restructuring and other charges, business separation costs of $2.4
million ($1.7 million after tax or $0.01 per diluted share) and the impact of
income and expense from actuarial gains or losses associated with our defined
benefit plans of $33.1 million ($20.7 million after tax or $0.13 per diluted
share).

                                                                     
                                                                   
                Three Months Ended September 30,    Nine Months Ended September 30,
                2012       2011       % Change    2012       2011       % Change
                                                                   
Earnings Per
Common Share
- Diluted
EPS Before      $ 0.29      $ 0.20      45.0        $ 0.66      $ 0.44      50.0
Charges/Gains
                                                                            
Restructuring
and other         (0.04 )     (0.01 )   (300.0  )     (0.04 )     (0.01 )   (300.0 )
charges
Contingent
acquisition       -           -         -             -           -         -
consideration
adjustment
Standalone
corporate         -           0.01      (100.0  )     -           0.05      (100.0 )
costs
Capital
structure         -           0.01      (100.0  )     -           (0.06 )   100.0
change
Business
separation        -           (0.01 )   100.0         -           (0.01 )   100.0
costs
Adjusted pro
forma tax         -           (0.06 )   100.0         -           (0.06 )   100.0
rate
adjustment
Defined
benefit plan      (0.01 )     (0.13 )   92.3          (0.01 )     (0.13 )   92.3
actuarial
losses
Impact of
adjusted pro
forma diluted    -        -       -           -        0.01    (100.0 )
shares
outstanding
                                                                            
Diluted EPS     $ 0.24    $ 0.01    2,300.0    $ 0.61    $ 0.23    165.2  
(GAAP)


RECONCILIATION OF FULL YEAR 2012 EARNINGS GUIDANCE TO GAAP
                                        
For the full year, the Company is targeting diluted EPS before charges/gains
to be in the range of $0.86 to $0.88 per share. On a GAAP basis, the Company
is targeting diluted EPS to be in the range of $0.80 to $0.83 per share. In
addition, on a GAAP basis, based on current relevant interest rate benchmarks
and year-to-date pension asset returns the Company may incur additional
defined benefit plan net actuarial losses in the range of $0.10 to $0.15 per
share in the fourth quarter of 2012 due to declining discount rates since
December 31, 2011, the last remeasurement date. Any actuarial loss will be
based upon spot discount rates as of December 31, 2012 and our full year 2012
pension asset returns and may differ materially from this estimate. A 25 basis
point change in our discount rate impacts our defined benefit liabilities by
approximately $25 million.

FORTUNE BRANDS HOME & SECURITY, INC.
(In millions, except per share amounts)
(Unaudited)

2011 DILUTED EPS BEFORE CHARGES/GAINS RECONCILIATION
For the year ended December 31, 2011, diluted EPS before charges/gains is net
income (loss) calculated on a diluted per-share basis adjusted to reflect the
actual number of diluted shares of the Company as of December 31, 2011 of
160.7 million, estimated incremental standalone corporate costs of $13.8
million ($8.6 million after tax or $0.05 per diluted share), an adjusted pro
forma effective tax rate adjustment of $12.0 million ($0.07 per share) to
reflect an effective tax rate of 35%, capital structure changes that reflect
the borrowing arrangements and debt level of the Company as of October 4, 2011
of $14.4 million ($8.9 million after tax or $0.06 per diluted share), and
excludes restructuring and other charges of $20.0 million ($12.5 million after
tax or $0.08 per diluted share), business separation costs of $2.4 million
($1.7 million after tax or $0.01 per diluted share), asset impairment charges
of $90.0 million ($55.3 million after tax or $0.35 per diluted share) and the
impact of income and expenses from actuarial gains or losses associated with
our defined benefit plans of $80.0 million ($49.9 million after tax or $0.31
per diluted share).
                                        
Diluted EPS before charges/gains is a measure not derived in accordance with
GAAP. Management uses this measure to evaluate the overall performance of the
Company and believes this measure provides investors with helpful supplemental
information regarding the underlying performance of the Company from period to
period. This measure may be inconsistent with similar measures presented by
other companies.

                                                                     
                 Twelve Months Ended
                 December 31, 2011
Earnings Per
Common Share -             
Diluted
EPS Before       $ 0.60
Charges/Gains
                                                                              
Restructuring
and other        (0.08               )
charges
Standalone
corporate        0.05
costs
Capital
structure        (0.06               )
change
Business
separation       (0.01               )
costs
Adjusted pro
forma tax rate   (0.07               )
adjustment
Asset
impairment       (0.35               )
charges
Defined
benefit plan                   (0.31 )
actuarial
losses
                 
Diluted EPS      $ (0.23             )
(GAAP)
                                                                              
                                                                              
                                                                              
RECONCILIATION
OF EBITDA
BEFORE
CHARGES/GAINS
TO GAAP NET
INCOME
                                                                     
                 Three Months Ended September 30,     Nine Months Ended September 30,
                 2012       2011       % Change     2012       2011       % Change
                                                                     
EBITDA BEFORE    $ 96.0    $ 77.5    23.9        $ 236.4   $ 191.9   23.2     
CHARGES/GAINS
                                                                     
Depreciation     $ (19.9 )   $ (21.6 )   7.9          $ (60.7 )   $ (63.9 )   5.0
^(a)
Amortization
of intangible      (2.4  )     (3.5  )   31.4           (8.6  )     (11.0 )   21.8
assets
Restructuring
and other          (8.6  )     (2.5  )   (242.6   )     (10.6 )     (3.4  )   (211.4   )
charges
Contingent
acquisition        -           -         -              2.0         -         100.0
consideration
adjustment
Business
separation         -           (2.4  )   100.0          -           (2.4  )   100.0
costs
Related party
interest           -           (0.2  )   100.0          -           (23.2 )   100.0
expense, net
External
interest           (2.0  )     0.1       (4,100.0 )     (6.6  )     (0.2  )   (2,673.1 )
expense
(income)
Standalone
corporate          -           3.8       (100.0   )     -           13.8      (100.0   )
expenses
Defined
benefit plan       (3.7  )     (32.3 )   88.5           (3.7  )     (33.1 )   88.8
actuarial
losses
Income tax        (19.2 )   (16.4 )  (17.1    )    (47.1 )   (32.2 )  (46.3    )
provision
                                                                     
Net Income       $ 40.2      $ 2.5       1,532.8      $ 101.1     $ 36.3      178.8
Noncontrolling    (0.2  )   (0.3  )  33.3         (0.8  )   (0.9  )  11.1     
interests
Net income
attributable     $ 40.0    $ 2.2     1,750.1     $ 100.3   $ 35.4    183.6    
to Home &
Security


EBITDA before charges/gains is net income derived in accordance with GAAP
including estimated incremental standalone corporate expenses for 2011 periods
and excluding restructuring and other charges, income from a contingent
acquisition consideration adjustment, business separation costs, the impact of
income and expense from actuarial gains or losses associated with our defined
benefit plans, depreciation, amortization of intangible assets, related party
interest expense, net, external interest expense (income), and income taxes.
EBITDA before charges/gains is a measure not derived in accordance with GAAP.
Management uses this measure to assess returns generated by FBHS. Management
believes this measure provides investors with helpful supplemental information
about the Company's ability to fund internal growth, make acquisitions and
repay debt and related interest. This measure may be inconsistent with similar
measures presented by other companies.
                                        
(a) Depreciation excludes accelerated depreciation of $9.2 million and $9.7
million for the three and nine months ended September 30, 2012, respectively,
and $1.1 million for the three and nine months ended September 30, 2011.
Accelerated depreciation is included in restructuring and other charges.

                                                                                                 
FORTUNE BRANDS HOME & SECURITY, INC.
Reconciliation of Income Statement - GAAP to Before Charges/Gains Information
Three Months Ended September 30,
$ in millions, except per share amounts
(unaudited)
                                                                                         
                              Before Charges/Gains adjustments                                               
                                                                                           
                                                                         Defined
                               Restructuring   Standalone   Business     benefit     Capital     Pro forma    Before
                                                                         plan
                 GAAP          and other       corporate    separation   actuarial   structure   tax rate     Charges/Gains
                 (unaudited)   charges        costs       costs       losses     change     adjustment   (Non-GAAP)
                                                                                         
2012             THIRD QUARTER
                                                                                                              
Net Sales        $  909.1      -               -            -            -           -           -
                                                                                                              
Cost of             606.8      (5.5     )      -            -            (1.5   )    -           -
products sold
Selling,
general &           236.2      -               -            -            (2.2   )    -           -
administrative
expenses
Amortization
of intangible       2.4        -               -            -            -           -           -
assets
Restructuring      3.1       (3.1     )     -          -          -         -         -       
charges
                                                                                                              
Operating           60.6       8.6             -            -            3.7         -           -                 72.9
Income
                                                                                                              
External
interest            2.0        -               -            -            -           -           -
expense
Other income,      (0.8   )   -             -          -          -         -         -       
net
Income before       59.4       8.6             -            -            3.7         -           -                 71.7
income taxes
                                                                                                              
Income taxes       19.2      2.9           -          -          1.3       -         -       
                                                                                                              
Net Income       $  40.2      5.7           -          -          2.4       -         -                48.3
                                                                                                              
Less:
Noncontrolling     0.2       -             -          -          -         -         -       
interests
                                                                                                              
Net Income
attributable
to Fortune       $  40.0      5.7           -          -          2.4       -         -                48.1
Brands Home &
Security, Inc.
                                                                                                              
Average
Diluted Shares      167.0                                                                                          167.0
Outstanding
                                                                                                              
Diluted EPS         0.24                                                                                           0.29

2011
                                                                                                              
Net Sales        $  848.0      -               -            -            -           -           -
                                                                                                              
Cost of             592.2      (1.4     )      -            -            (17.0  )    -           -
products sold
Selling,
general &           228.0      -               3.8          -            (15.3  )    -           -
administrative
expenses
Amortization
of intangible       3.5        -               -            -            -           -           -
assets
Restructuring       1.1        (1.1     )      -            -            -           -           -
charges
Business
separation         2.4       -             -          (2.4    )   -         -         -       
costs
                                                                                                              
Operating           20.8       2.5             (3.8   )     2.4          32.3        -           -                 54.2
Income
                                                                                                              
Related party
interest            0.2        -               -            -            -           2.9         -
expense, net
External
interest            (0.1   )   -               -            -            -           -           -
income
Other expense,     1.8       -             -          -          -         -         -       
net
Income before       18.9       2.5             (3.8   )     2.4          32.3        (2.9   )    -                 49.4
income taxes
                                                                                                              
Income taxes       16.4      0.9           (1.4   )    0.7        12.1      (1.1   )   (10.3   )
                                                                                                              
Net Income       $  2.5       1.6           (2.4   )    1.7        20.2      (1.8   )   10.3        $    32.1
                                                                                                              
Less:
Noncontrolling     0.3       -             -          -          -         -         -       
interests
                                                                                                              
Net Income
attributable
to Fortune       $  2.2       1.6           (2.4   )    1.7        20.2      (1.8   )   10.3        $    31.8
Brands Home &
Security, Inc.
                                                                                                              
Average
Diluted Shares      155.1                                                                                          159.4
Outstanding
                                                                                                              
Diluted EPS         0.01                                                                                           0.20

                                                                                              
FORTUNE BRANDS HOME & SECURITY, INC.
Reconciliation of Income Statement - GAAP to Before Charges/Gains Information
Nine Months Ended September 30,
$ in millions, except per share amounts
(unaudited)
                                                                                                           
                              Before Charges/Gains adjustments                                                               
                                                                                                          
                                               Contingent                                Defined
                               Restructuring   acquisition     Standalone   Business     benefit     Capital     Pro forma    Before
                                                                                         plan
                 GAAP          and other       consideration   corporate    separation   actuarial   structure   tax rate     Charges/Gains
                 (unaudited)   charges        adjustment     costs       costs       losses     change     adjustment   (Non-GAAP)
                                                                                             
2012             YEAR TO DATE
                                                                                                                              
Net Sales        $ 2,643.2     -               -               -            -            -           -           -
                                                                                                                              
Cost of            1,776.7     (6.5     )      -               -            -            (1.5   )    -           -
products sold
Selling,
general &          699.6       -               2.0             -            -            (2.2   )    -           -
administrative
expenses
Amortization
of intangible      8.6         -               -               -            -            -           -           -
assets
Restructuring     4.1        (4.1     )     -             -          -          -         -         -       
charges
                                                                                                                              
Operating          154.2       10.6            (2.0      )     -            -            3.7         -           -                 166.5
Income
                                                                                                                              
External
interest           6.6         -               -               -            -            -           -           -
expense
Other income,     (0.6    )   -             -             -          -          -         -         -       
net
Income before      148.2       10.6            (2.0      )     -            -            3.7         -           -                 160.5
income taxes
                                                                                                                              
Income taxes      47.1       3.6           (0.7      )    -          -          1.3       -         -       
                                                                                                                              
Net Income       $ 101.1      7.0           (1.3      )    -          -          2.4       -         -           $    109.2
                                                                                                                              
Less:
Noncontrolling    0.8        -             -             -          -          -         -         -       
interests
                                                                                                                              
Net Income
attributable
to Fortune
Brands Home &    $ 100.3      7.0           (1.3      )    -          -          2.4       -         -           $    108.4
Security, Inc.
                                                                                                                              
Average
Diluted Shares     165.1                                                                                                           165.1
Outstanding
                                                                                                                              
Diluted EPS        0.61                                                                                                           0.66
                                                                                                                              

2011
                                                                                                                              
Net Sales        $ 2,452.5     -               -               -            -            -           -           -
                                                                                                                              
Cost of            1,695.1     (1.6     )      -               -            -            (17.1  )    -           -
products sold
Selling,
general &          648.4       -               -               13.8         -            (16.0  )    -           -
administrative
expenses
Amortization
of intangible      11.0        -               -               -            -            -           -           -
assets
Restructuring      1.8         (1.8     )      -               -            -            -           -           -
charges
Business
separation        2.4        -             -             -          (2.4    )   -         -         -       
costs
                                                                                                                              
Operating          93.8        3.4             -               (13.8   )    2.4          33.1        -           -                 118.9
Income
                                                                                                                              
Related party
interest           23.2        -               -               -            -            -           (14.4  )    -
expense, net
External
interest           0.2         -               -               -            -            -           -           -
expense
Other expense,    1.9        -             -             -          -          -         -         -       
net
Income before      68.5        3.4             -               (13.8   )    2.4          33.1        14.4        -                 108.0
income taxes
                                                                                                                              
Income taxes      32.2       1.1           -             (5.2    )   0.7        12.4      5.5       (8.9    )
                                                                                                                              
Net Income       $ 36.3       2.3           -             (8.6    )   1.7        20.7      8.9       8.9         $    70.2
                                                                                                                              
Less:
Noncontrolling    0.9        -             -             -          -          -         -         -       
interests
                                                                                                                              
Net Income
attributable
to Fortune
Brands Home &    $ 35.4       2.3           -             (8.6    )   1.7        20.7      8.9       8.9         $    69.3
Security, Inc.
                                                                                                                              
Average
Diluted Shares     155.1                                                                                                           158.9
Outstanding
                                                                                                                              
Diluted EPS        0.23                                                                                                            0.44

                                                              
  FORTUNE BRANDS HOME & SECURITY, INC.
  RECONCILIATION OF SEGMENT OPERATING INCOME BEFORE CHARGES/GAINS TO GAAP
  OPERATING INCOME (LOSS)
  (In millions)
  (unaudited)
                                                              
                           For the three month period ended
                           September 30,   September
                           2012           30,          $ change  % change
                                           2011
  KITCHEN & BATH                                              
  CABINETRY
  Operating income
  before                   $   13.1        $  8.0        $ 5.1      63.8
  charges/gains^(a)
  Restructuring charges        (2.6   )       (0.4  )      (2.2 )   (558.2   )
  Other charges ^(b)
  Cost of products sold       (9.0   )     0.2       (9.2 )  (5,272.4 )
  Operating income         $   1.5       $  7.8      $ (6.3 )  (80.8    )
  (GAAP)
                                                                    
  ADVANCED MATERIAL                                           
  WINDOWS & DOOR SYSTEMS
  Operating income
  before                   $   6.2         $  1.9        $ 4.3      226.3
  charges/gains^(a)
  Restructuring charges        (0.5   )       (0.7  )      0.2      29.5
  Other charges ^(b)
  Cost of products sold       3.5         (1.5  )    5.0    337.8    
  Operating income         $   9.2       $  (0.3  )   $ 9.5    3,166.7  
  (loss) (GAAP)


  (a) Operating income before charges/gains is operating income derived in
  accordance with GAAP excluding restructuring and other charges. Operating
  income before charges/gains is a measure not derived in accordance with
  GAAP. Management uses this measure to determine the returns generated by
  FBHS and to evaluate and identify cost-reduction initiatives. Management
  believes this measure provides investors with helpful supplemental
  information regarding the underlying performance of the Company from period
  to period. This measure may be inconsistent with similar measures presented
  by other companies.
  
  (b) Other charges represents charges directly related to restructuring
  initiatives that cannot be reported as restructuring under GAAP. Such costs
  may include losses on disposal of inventories, trade receivables allowances
  from exiting product lines and accelerated depreciation resulting from the
  closure of facilities and gains or losses associated with the sale of closed
  facilities.

Contact:

Fortune Brands Home & Security, Inc.
MEDIA CONTACT:
Gary Ross
847-484-4456
gary.ross@FBHS.com
or
INVESTOR CONTACT:
Brian Lantz
847-484-4574
brian.lantz@FBHS.com
 
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