Fortune Brands Innovations, Inc. · NYSE:FBIN
Fortune Brands Innovations — Fortune Brands Home & Security — Corporate Update (February 2012)
8 slides from Fortune Brands Innovations's corporate update, Feb 22, 2012
Slide 1: Defined Benefit Plan Accounting Change
Exhibit 99.2 Fortune Brands Home & Security, Inc. Defined Benefit Plan Accounting Change February 22, 2012 This document contains certain “forward-looking statements” regarding the rate of return on plan assets and other matters. Statements preceded by, followed by or that otherwise include the word
Slide 2: Defined Benefit Plan Accounting Change
Defined Benefit Plan Accounting Change The Company’s U.S. subsidiaries maintain a number of defined benefit pension and other post retirement benefit plans (collectively, “the Plans”). This document summarizes key aspects of the Company’s change in accounting for the Plans. Additional disclosures an
Slide 3: Defined Benefit Plan Accounting Change (Continued)
Defined Benefit Plan Accounting Change (Continued) This accounting change has no impact on: – Cash flow – Pension and postretirement liabilities – Pension funding requirements – Financial covenant compliance in the Company’s lending arrangements Under the new method, the Company will refer to actuar
Slide 4: Financial Reporting Impact
Financial Reporting Impact For the Year Ended December 31, $ millions Old Method New Method 2010 2011 2010 2011 (1) On-going Expense $ 7.2 $ 5.8 $ 12.1 $ 8.2 Loss Amortization 11.5 16.7 - - Curtailments/Settlements 1.3 1.8 0.9 1.8 (3) AGL Adjustments - - (3.5) 80.0 Total Defined Benefit Plan Expense
Slide 5: Pension Funding Status
Pension Funding Status As of December 31, The change in accounting method has no $ millions 2010 2011 impact on the funded status of the pension Plans. Projected Benefit Obligation $ 557.3 $ 639.5 Fair Value of Plan Assets (503.9) (477.9) The Company estimates approximately Funded Status $ (53.4) $
Slide 6: Appendix
Appendix Fortune Brands Home &Security 6
Slide 7: Explanation of Changes in Accounting
Explanation of Changes in Accounting Cost Old Method New Method Component Service Cost Record present value of future pension benefits No change earned in the current period Interest Cost Record interest on the projected benefit No change obligation based on rate on a current AA corporate bond yield
Slide 8: Glossary of Terms
Glossary of Terms Term Definition Actuarial gains/losses A change in the value of either the projected benefit obligation or the plan assets resulting from experience different from that assumed or from a change in an actuarial assumption. AGL adjustments Under the Company’s new accounting method, a
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