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What changed in Fortune Brands Innovations, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fortune Brands Innovations, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+262 added−279 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-25)

Top changes in Fortune Brands Innovations, Inc.'s 2025 10-K

262 paragraphs added · 279 removed · 207 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

75 edited+12 added−24 removed118 unchanged
Biggest changeIndemnities that MasterBrand is required to provide to us are not subject to any cap and may be significant and could negatively impact our business. Third parties could also seek to hold us responsible for any of the liabilities that MasterBrand has agreed to retain.
Biggest changePursuant to the Separation and Distribution Agreement and certain other agreements with MasterBrand related to the Separation, each party has agreed to indemnify the other for certain liabilities, in each case for uncapped amounts. Indemnities that MasterBrand is required to provide to us are not subject to any cap and may be significant and could negatively impact our business.
Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations for our business, operations, financial performance or financial condition, in addition to statements regarding our expectations for the markets in which we operate, general business strategies, expected impacts from recently-announced organizational and leadership changes, the market potential of our brands, trends in the housing market, the potential impact of costs, including material and labor costs, the potential impact of inflation, expected capital spending, expected pension contributions, the expected impact of acquisitions, dispositions and other strategic transactions including the expected benefits and costs of the spin-off of MasterBrand, Inc. and the tax-free nature of the spin-off transaction, the anticipated effects of recently issued accounting standards on our financial statements, and other matters that are not historical in nature.
Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations for our business, operations, financial performance or financial condition, in addition to statements regarding our expectations for the markets in which we operate, general business strategies, expected impacts from recently-announced organizational and leadership changes, the market potential of our brands, trends in the housing market, the potential impact of costs, including material and labor costs, the potential impact of inflation, expected capital spending, expected pension contributions, the expected effects of acquisitions, dispositions and other strategic transactions including the expected benefits and costs of the spin-off of MasterBrand, Inc. and the tax-free nature of the spin-off transaction, the anticipated effects of recently issued accounting standards on our financial statements, and other matters that are not historical in nature.
We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile global supply chain environment, as well as sustained elevated rates of inflation, fluctuating interest rates, unfavorable fluctuations in foreign exchange rates and new, ongoing, expanded or retaliatory tariffs, all of which have increased, and may further increase, our costs.
We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile global supply 9 chain environment, as well as sustained elevated rates of inflation, fluctuating interest rates, unfavorable fluctuations in foreign exchange rates and new, ongoing, expanded or retaliatory tariffs, all of which have increased, and may further increase, our costs.
Our businesses may implement digital systems and technologies, enterprise resource planning systems or new applications to replace outdated systems and to operate more efficiently, but we may not be able to successfully implement these projects without experiencing difficulties, expected benefits might not be realized or the costs of implementation might outweigh the benefits realized.
Our businesses may implement digital systems and technologies, enterprise resource planning systems or new applications to replace outdated systems and to 10 operate more efficiently, but we may not be able to successfully implement these projects without experiencing difficulties, expected benefits might not be realized or the costs of implementation might outweigh the benefits realized.
Those housing markets are sensitive to changes in economic conditions and other factors, such as the level of employment, access to and the cost of labor, consumer confidence, demographic changes, consumer income, government tax programs, availability of financing, inflation and interest rate levels.
Those housing markets are sensitive to changes in economic conditions and other factors, such as the level of employment, access to and the cost of labor, consumer confidence, demographic changes, consumer income, government policies and tax programs, availability of financing, inflation and interest rate levels.
As part of the Company’s ongoing reorganization and consolidation efforts to align our business unit-led operating model under one simplified executive leadership team, we expect to continue to prioritize activities that are core to brand, innovation, and channel . 2 • Global Supply Chain Excellence - Leveraging our robust, global supply chain to strategically drive scale efficiencies with cutting-edge capabilities. • Digital Transformation - Supporting our products of the future with best-in-class services, technology, data and analytics and using data science to unlock valuable consumer and business insights.
As part of our reorganization and consolidation efforts to align our business unit-led operating model under one simplified executive leadership team, we expect to continue to prioritize activities that are core to brand, innovation, and channel . 2 • Global Supply Chain Excellence - Leveraging our robust, global supply chain to strategically drive scale efficiencies with cutting-edge capabilities. • Digital Transformation - Supporting our products of the future with best-in-class services, technology, data and analytics and using data science to unlock valuable consumer and business insights.
Our Water segment manufactures or assembles and sells faucets, accessories, kitchen sinks and waste disposals, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, Schaub and SpringWell brands. Although this segment sells products principally in the U.S., China and Canada, this segment also sells in Europe, Mexico, Southeast Asia and South America.
Our Water segment manufactures or assembles and sells faucets, accessories, luxury hardware, kitchen sinks and waste disposals, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, Schaub and SpringWell brands. Although this segment sells products principally in the U.S., China and Canada, this segment also sells in Europe, Mexico, Southeast Asia and South America.
Unauthorized use of these intellectual property rights or other loss of our intellectual property competitive position may not only erode sales of our products but also cause us to incur substantial significant damage to our brand name and reputation, interfere with our ability to effectively represent the Company to our customers, contractors and suppliers, and increase litigation costs.
Unauthorized use of these intellectual property rights or other loss of our intellectual property competitive position may not only erode sales of our products but also cause us to incur substantial significant damage to our brand name and reputation, interfere with our ability to effectively represent us to our customers, contractors and suppliers, and increase litigation costs.
However, laws and regulations may be changed, accelerated or adopted in a manner that could impose significant operational restrictions and compliance requirements upon us and that could negatively impact our operating results and financial condition. Available Information. The Company’s website address is www.FBIN.com.
However, laws and regulations may be changed, accelerated or adopted in a manner that could impose significant operational restrictions and compliance requirements upon us and that could negatively impact our operating results and financial condition. Available Information. Our website address is www.FBIN.com.
Failure to achieve the desired level of quality, capacity or cost reductions could impair our results of operations, cash flows and financial condition. Risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, could adversely affect our results of operations, cash flows and financial condition.
In addition, failure to achieve the desired level of quality, capacity or cost reductions could impair our results of operations, cash flows and financial condition. Risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, could adversely affect our results of operations, cash flows and financial condition.
Health and Safety Safety is a critical element to Fortune Brands’ growth strategy, integral to Company culture and one of our core values. Our Employee Safety & Environmental Stewardship Principles set standards for how we maintain a safe work environment and guides our business operations.
Health and Safety Safety is a critical element to our growth strategy, integral to Company culture and one of our core values. Our Employee Safety & Environmental Stewardship Principles set standards for how we maintain a safe work environment and guides our business operations.
The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available free of charge on the Company’s website as soon as reasonably practicable after the reports are filed or furnished electronically with the SEC.
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available free of charge on our website as soon as reasonably practicable after the reports are filed or furnished electronically with the SEC.
These matters may include contract disputes, intellectual property disputes, product recalls, personal injury claims, construction defects and home warranty claims, warranty disputes, other types of consumer litigation, environmental claims or proceedings, other tort claims, employment and tax matters, and other proceedings and litigation, including class actions.
These matters may include contract disputes, intellectual property disputes, data privacy disputes, product recalls, personal injury claims, construction defects and home warranty claims, warranty disputes, other types of consumer litigation, environmental claims or proceedings, other tort claims, employment and tax matters, and other proceedings and litigation, including class actions.
We continue to grow our competencies in these areas, allowing each of our businesses to focus on opportunities for revenue growth and margin improvement, no matter the market environment. Driving value through talent. The Company has built a talented and inclusive leadership team that is well positioned to continue to execute on our transformation to a more aligned operating model.
We continue to grow our competencies in these areas, allowing each of our businesses to focus on opportunities for revenue growth and margin improvement, no matter the market environment. Driving value through talent. We have built a talented and inclusive leadership team that is well positioned to continue to execute on our transformation to a more aligned operating model.
There can be no assurance that our efforts to assess possible third-party intellectual property rights will ensure the Company’s ability to manufacture, distribute, market or sell in any given country or territory.
There can be no assurance that our efforts to assess possible third-party intellectual property rights will ensure our ability to manufacture, distribute, market or sell in any given country or territory.
This helps drive our best-in-class programs designed to reinforce positive behaviors, to empower our employees to actively take part in maintaining a safe work environment, to heighten awareness and to mitigate risk on critical safety components. Within each of our manufacturing and distribution facilities, we have site-specific safety and environmental plans designed to reduce risk.
This helps drive our key programs designed to reinforce positive behaviors, to empower our employees to actively take part in maintaining a safe work environment, to heighten awareness and to mitigate risk on critical safety components. Within each of our manufacturing and distribution facilities, we have site-specific safety and environmental plans designed to reduce risk.
The Company will need to respond to any new laws and regulations as well as to consumer, investor and business preferences resulting from climate change concerns and a broader societal transition to a lower-carbon economy, which may increase our operational complexity and result in costs to us in order to comply with any new laws, regulations or preferences.
We will need to respond to any new laws and regulations as well as to consumer, investor and business preferences resulting from climate change concerns and a broader societal transition to a lower-carbon economy, which may increase our operational complexity and result in costs to us in order to comply with any new laws, regulations or preferences.
The creation, development, advancement and implementation of new technologies such as internet of things, 5G data networks, artificial intelligence, data analytics, 3-D printing, robotics, sensor technology, data storage, automation technologies and augmented reality, amongst others, has impacted and may continue to impact our processes, products and services.
The creation, development, advancement and implementation of new technologies such as internet of things, 5G data networks, artificial intelligence, data analytics, 3-D printing, robotics, sensor technology, data storage, automation technologies and augmented reality, amongst others, have impacted and may continue to impact our processes, products, operations and services.
Import tariffs, including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries, could potentially lead to further increases in prices of raw materials or components which are critical to our business.
Import tariffs, including existing or potential U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries, could potentially lead to further increases in prices of raw materials or components which are critical to our business.
Security threats, including cyber attacks, security breaches, power outages, system failures, malware, ransomware, worms, Trojan horses, spyware, adware, rogue software and other attacks, are becoming increasingly sophisticated, frequent and adaptive, which increases the difficulty of detecting and successfully defending against them.
Security threats, including cyber attacks, artificial intelligence assisted cyber attacks, security breaches, power outages, system failures, malware, ransomware, worms, Trojan horses, spyware, adware, rogue software and other attacks, are becoming increasingly sophisticated, frequent and adaptive, which increases the difficulty of detecting and successfully defending against them.
We could be adversely affected by higher manufacturing costs and international trade regulations, including, tariffs (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries), duties and antidumping penalties.
We could be adversely affected by higher manufacturing costs and international trade regulations, including, tariffs (including existing and potential U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries), duties and antidumping penalties.
The segment primarily sells to locksmiths, industrial and institutional users, residential and multi-family housing hardware and service providers, third-party integrators, and original equipment manufacturers. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 16% of the net sales of the Security segment in 2024. Master Lock, American Lock, Yale and August compete s with Abus, W.H.
The segment primarily sells to locksmiths, industrial and institutional users, residential and multi-family housing hardware and service providers, third-party integrators, and original equipment manufacturers. In aggregate, sales to The Home Depot and Lowe’s comprised approximately 18% of the net sales of the Security segment in 2025. Master Lock, American Lock, Yale and August compete s with Abus, W.H.
We hold U.S. and foreign patents covering various features used in products sold within all of our business segments. Although each of our segments relies on a number of patents and patent groups that, in the aggregate, provide important protections to the Company, no single patent or patent group is material to any of the Company’s segments. Human capital resources.
We hold U.S. and foreign patents covering various features used in products sold within all of our business segments. Although each of our segments relies on a number of patents and patent groups that, in the aggregate, provide important protections to us, no single patent or patent group is material to any of our segments. 4 Human capital resources.
Our segments compete on the basis of innovation, fashion, quality, price, service and responsiveness to distributor, retailer and installer needs, as well as end-user consumer preferences. Our markets are very competitive. Approximately 17% of 2024 net sales were to international markets, and sales to two of the Company’s customers, Lowe’s Companies, Inc. (“Lowe’s”) and The Home Depot, Inc.
Our segments compete on the basis of innovation, fashion, quality, price, service and responsiveness to distributor, retailer and installer needs, as well as end-user consumer preferences. Our markets are very competitive. Approximately 16% of 2025 net sales were to international markets, and sales to two of the Company’s customers, Lowe’s Companies, Inc. (“Lowe’s”) and The Home Depot, Inc.
Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in dilution in earnings per share and return on capital. Impairment charges could have a material adverse effect on the Company’s financial results.
Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in dilution in earnings per share and return on capital. Impairment charges could have a material adverse effect on our financial results.
The Company also makes a significant investment in assessing our talent against the jobs both in the near term and the future and ensuring our leaders are prepared for greater levels of responsibility and can successfully transition into new roles. Succession planning for critical roles is an important part of our talent program.
We also make a significant investment in assessing our talent against the jobs both in the near term and the future and ensuring our leaders are prepared for greater levels of responsibility and can successfully transition into new roles. Succession planning for critical roles is an important part of our talent program.
In aggregate, sales to The Home Depot and Lowe’s comprised approximately 19% of net sales of the Water segment in 2024. This segment’s chief competitors include Masco, Kohler, LIXIL Group, InSinkErator (owned by Whirlpool Corporation), Huida, Hgill, and Jomoo and imported private-label brands. 3 Outdoors.
In aggregate, sales to The Home Depot and Lowe’s comprised approximately 21% of net sales of the Water segment in 2025. This segment’s chief competitors include Masco, Kohler, LIXIL Group, InSinkErator (owned by Whirlpool Corporation), Huida, Hgill, and Jomoo and imported private-label brands. 3 Outdoors.
We also endeavor to create a culture where doing the right thing is embedded in the way we conduct business. Fortune Brands does this through the programs summarized below, and the objectives and related risks of each is overseen by our Board of Directors or its committees.
We also endeavor to create a culture where doing the right thing is embedded in the way we conduct business. We do this through the programs summarized below, and the objectives and related risks of each is overseen by our Board of Directors or its committees.
Approximately 24% of 2024 net sales were to international markets. This segment sells directly through its own sales force and indirectly through independent manufacturer's representatives, primarily to wholesalers, home centers and mass merchandisers. This segment is increasingly investing in and developing digital products and “smart” home capabilities.
Approximately 22% of 2025 net sales were to international markets. This segment sells directly through its own sales force and indirectly through independent manufacturer's representatives, primarily to wholesalers, home centers and mass merchandisers. This segment is increasingly investing in and developing digital products and “smart” home capabilities.
To attract and retain superior talent at all levels of the Company, our total rewards are designed to be market competitive, align employee incentives with Company performance and support our employees across many aspects of their lives. We have a strong pay-for-performance culture that is supported by incentive programs that take into consideration business results and employee performance.
To attract and retain superior talent at all levels, our total rewards are designed to be market competitive, align associate incentives with our performance and support our associates across many aspects of their lives. We have a strong pay-for-performance culture that is supported by incentive programs that take into consideration business results and associate performance.
We continue to look for ways to improve our ESG programs and practices by focusing on meaningful initiatives like water conservation, material conversion and safety. Business Segments We have three business segments: Water, Outdoors and Security.
We continue to look for ways to improve our ESG programs and practices by focusing on meaningful initiatives like water conservation, material conversion and safety. Business Segments We have three business segments: Water Innovations (herein referred to as "Water"), Outdoors and Security.
Volatility in the prices of commodities and energy used in making and distributing our products impacts the cost of manufacturing our products. Segment Raw Materials Water Brass, zinc, resins, stainless steel and aluminum Outdoors Wood, aluminum, steel, plastics, resins, glass, vinyl and insulating foam Security Steel, zinc, brass and resins Intellectual property.
Volatility in the prices of commodities, including as a result of inflation, and energy used in making and distributing our products impacts the cost of manufacturing our products. Segment Raw Materials Water Brass, zinc, resins, stainless steel and aluminum Outdoors Wood, aluminum, steel, plastics, resins, glass, vinyl and insulating foam Security Steel, zinc, brass and resins Intellectual property.
Through a continued commitment to improve our safety performance, we have historically been successful in reducing the number of injuries sustained by our employees. Two of our primary safety measures are the Total Recordable Incidence Rate ("TRIR") and Lost Time Rate ("LTR").
Through a continued commitment to improve our safety performance, we have historically been successful in reducing the number of injuries sustained by our employees although in 2025 our rates increased slightly. Two of our primary safety measures are the Total Recordable Incidence Rate ("TRIR") and Lost Time Rate ("LTR").
If the Separation ultimately is determined to be taxable, the Company could recognize gains in an amount generally equal to the excess of the fair market value of the assets of MasterBrand (determined based on the fair market value of the common stock distributed to Fortune Brands' stockholders on the date of the Separation) over MasterBrand’s tax basis in such assets.
If the Separation ultimately is determined to be taxable, we could recognize gains in an amount generally equal to the excess of the fair market value of the assets of MasterBrand (determined based on the fair market value of the common stock distributed to our stockholders on the date of the Separation) over MasterBrand’s tax basis in such assets.
We invest in our teams and develop our associates to become the next generation of leaders to fuel innovation and drive Company growth. The Company also endeavors to create a home for all that keeps our employees safe, treats them with dignity and respect, and fosters a culture of performance.
We believe our associates are the key to our success. We invest in our teams and develop our associates to become the next generation of leaders to fuel innovation and drive Company growth. We also endeavor to create a home for all that keeps our employees safe, treats them with dignity and respect, and fosters a culture of performance.
This segment sells products principally in the U.S., Canada, Europe, Central America, Japan and Australia. Approximately 23% of 2024 net sales of the Security segment were to international markets.
This segment sells products principally in the U.S., Canada, Europe, Central America, Japan and Australia. Approximately 22% of 2025 net sales of the Security segment were to international markets.
These efforts will result in certain restructuring cash and non-cash charges and also may not yield the desired results and may have unexpected consequences, including the potential for increased employee transition costs or difficulty retaining key employees, including as a result of market pressures or a reluctance to relocate to a new geographic area, and difficulties in identifying, or negotiating terms with, potential assignees or subtenants for existing leased office space.
Nevertheless, these efforts may not yield the desired results and may have unexpected consequences, including the potential for increased employee transition costs or difficulty retaining key employees, including as a result of market pressures or a reluctance to relocate to a new geographic area, and difficulties in identifying, or negotiating terms with, potential assignees or subtenants for existing leased office space.
Significant expenditures and commitment of time by management, employees and outside advisors is involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk management and performance, and we may undertake additional costs to control, assess and report on ESG metrics as the nature, scope and complexity of ESG reporting, diligence and disclosure requirements or expectations may continue to expand.
Significant expenditures and commitment of time by management, employees and outside advisors is involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk management and performance, and we may undertake additional costs to control, assess and report on ESG metrics as the nature, cost, scope and complexity of ESG reporting, particularly given inconsistency in state and local, federal, and international laws, diligence and disclosure requirements or expectations may continue to expand.
We understand our most critical roles that serve as points of leverage to deliver value and place our best people in those roles, while attracting new talent and capabilities in support of continuous improvement in all we do. Fortune Brands uses performance management programs to support a high-performance culture, strengthening our employee engagement and helping to retain our top talent.
We understand our most critical roles that serve as points of leverage to deliver value and place our best people in those roles, while attracting new talent and capabilities in support of continuous improvement in all we do. Our performance management programs support a high-performance culture by reinforcing accountability, recognizing excellence, strengthening employee engagement, and helping retain top talent.
The Fortune Brands Advantage currently consists of four critical pillars: • Category Management - Partnering with our channel partners to drive optimal performance and best serve our consumers through actionable category insights. • Business Simplification - Simplifying workstreams to be even more efficient.
The Fortune Brands Advantage currently consists of four critical pillars: • Category Management - Partnering with our channel partners to drive optimal performance and best serve our consumers through actionable category insights. • Business Simplification - Simplifying workstreams to be even more efficient and prioritizing activities that are core to brand, innovation and channel.
In aggregate, sales to The Home Depot and Lowe’s comprised approximately 26% of net sales of the Outdoors segment in 2024. Therma-Tru, Larson, Fiberon, Fypon and Solar Innovations compete with Masonite, JELD-WEN, Andersen, Trex, Azek, Plastpro, Pella, and various regional and local suppliers. Security.
In aggregate, sales to The Home Depot and Lowe’s comprised approximately 28% of net sales of the Outdoors segment in 2025. Therma-Tru, Larson, Fiberon, Fypon and Solar Innovations compete with Masonite, JELD-WEN, Andersen, Trex, James Hardie, Plastpro, Pella, and various regional and local suppliers. Security.
ONE Home, our ESG programs and initiatives throughout the Company, is a holistic program focused on the areas where we can make the most impact and where our efforts tie to a larger business opportunity for the Company.
ONE Home, which is comprised of our ESG programs and initiatives throughout our organization, is a holistic program focused on the areas where we can make the most impact and where our efforts tie to a larger business opportunity for us.
The integration of any such new technologies into our business may also require the development of new processes, including those designed to oversee the implementation of such new technologies. The integration of any such new technologies into our business, even if successful, may require significant financial and operational resources.
The integration of any such new technologies into our business may also require the development of new processes, including those designed to oversee the implementation of such new technologies, and may require significant financial and operational resources. Even if successfully implemented, such technologies may not deliver the anticipated benefits.
We may be subject to breaches of our information technology systems, breaches of third-party information technology systems that we use or other cybersecurity incidents, which could damage our reputation and consumer relationships.
We may experience delays or outages in our information technology systems and computer networks and the third-party information technology systems and computer networks that we use. We may be subject to breaches of our information technology systems, breaches of third-party information technology systems that we use or other cybersecurity incidents, which could damage our reputation and consumer relationships.
U.S. single-family and multi-family new home construction activity generally increased from their 2023 level while U.S. repair and remodel activities generally declined from their 2023 level. We operate in very competitive consumer and trade brand categories. The markets in which we operate are very competitive.
U.S. single-family and multi-family new home construction activity and U.S. repair and remodel activities all contracted from their 2024 level. We operate in very competitive consumer and trade brand categories. The markets in which we operate are very competitive.
We sell our products through a wide array of sales channels, including kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors, “do-it-yourself” remodeling-oriented home centers, showrooms, direct to consumer, e-commerce and other retail outlets.
We sell our products through a wide array of sales channels, including kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors, “do-it-yourself” remodeling-oriented home centers, showrooms, direct to consumer, e-commerce and other retail outlets. Our Strategy Building on leading business and brand positions in attractive growth and return categories .
As of December 28, 2024, Fortune Brands had more than 11,000 full-time and part-time employees worldwide (excluding contract workers). Approximately 58% of our workforce is composed of hourly production and distribution associates and the remaining population is composed of associates in an office role. We have no associates in the U.S. working under collective bargaining agreements .
As of December 27, 2025, we had approximately 10,000 full-time and part-time employees worldwide (excluding contract workers). Approximately 59% of our workforce is composed of hourly production and distribution associates and the remaining population is composed of associates in an office role. We have no associates in the U.S. working under collective bargaining agreements.
In addition, our new operating model may not yield the intended results, and may have unexpected consequences, which could negatively affect our business and results of operations and make it more difficult for us to execute on our strategic plans. We also recently announced certain organizational and leadership changes designed to drive accelerated growth.
In addition, our new operating model may not yield the intended results, and may have unexpected consequences, which could negatively affect our business and results of operations and make it more difficult for us to execute on our strategic plans.
The Company also has an Environmental, Health & Safety network composed of representatives from across the Company’s businesses that shares best practices and implements environmental, health and safety strategy.
We also have an Environmental, Health & Safety network composed of representatives from across our businesses that shares best practices and implements environmental, health and safety strategy.
Any amounts that we may be required to pay pursuant to these indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business.
Third parties could also seek to hold us responsible for any of the liabilities that MasterBrand has agreed to retain. Any amounts that we may be required to pay pursuant to these indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business.
While we may use derivative contracts to limit our short-term exposure to commodity price volatility, the commodity exposures under these contracts could still be material to our results of operations, cash flows and financial condition.
While we may use derivative contracts to limit our short-term exposure to commodity price volatility, the commodity exposures under these contracts could still be material to our results of operations, cash flows and financial condition. In addition, in periods of declining commodity prices, these derivative contracts may have the short-term effect of increasing our expenditures for these raw materials.
We also may face potential governmental enforcement actions, private litigation and other challenges or criticism challenging our ESG and sustainability goals, or our disclosure of those goals and our metrics for measuring achievement of them, which may increase our costs of compliance or adversely affect our reputation, business and results of operations.
We also may face potential governmental enforcement actions, private litigation and other challenges or criticism challenging our ESG and sustainability goals, or our disclosure of those goals and our metrics for measuring achievement of them, which may increase our costs of compliance or adversely affect our reputation, business and results of operations. 15 In connection with the Separation, the Company and MasterBrand have agreed to indemnify each other for certain liabilities.
Further, MasterBrand’s indemnities may not be sufficient to hold the Company harmless from the full amount of liabilities for which MasterBrand has been allocated responsibility, and MasterBrand may not be able to satisfy its indemnification obligations in the future.
If we are required to indemnify MasterBrand, our financial results could be negatively impacted. Further, MasterBrand’s indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which MasterBrand has been allocated responsibility, and MasterBrand may not be able to satisfy its indemnification obligations in the future.
(“The Home Depot”), accounted for 11% and 10% of the Company’s net sales, respectively, in 2024. Sales to all U.S. home centers in the aggregate were approximately 24% of net sales in 2024. In 2024, sales to our top ten customers represented approximately 48% of total sales. Water.
(“The Home Depot”), each accounted for 11% of our net sales in 2025. Sales to all U.S. home centers in the aggregate were approximately 26% of net sales in 2025. In 2025, sales to our top ten customers represented approximately 52% of total sales. Water.
We believe that attracting and retaining talented employees from a variety of backgrounds will enable us to be more innovative and responsive to consumer needs and deliver strong performance and growth. The Company has a cross-functional inclusive culture council, which sets priorities and initiatives.
We believe that attracting and retaining talented employees from a variety of backgrounds will enable us to be more innovative and responsive to consumer needs and deliver strong performance and growth.
The Company reinforces fair, equitable, and effective practices across our entire organization through training, enterprise-wide Employee Resource Groups, which are open to all associates and which span a variety of associate groups, and partnerships with external groups.
We reinforce fair, equitable, and effective practices across our entire organization through training, Employee Resource Groups, which are open to U.S.-based associates, and which span a variety of associate groups, and partnerships with external organizations.
Low unemployment rates in the U.S., rising wages and competition for attracting and retaining qualified talent could result in the failure to attract, motivate and retain personnel.
Tight labor markets in certain U.S. regions or functions, rising wages and competition for attracting and retaining qualified talent could result in the failure to attract, motivate and retain personnel.
If environmental laws or regulations are either changed or adopted and impose significant operational restrictions and compliance requirements on us, they may have a material adverse effect on our business, access to credit, capital expenditures, operating results and financial condition. 13 Potential liabilities and costs from claims and litigation could adversely affect our results of operations, cash flows and financial condition.
If environmental laws or regulations are either changed or adopted and impose significant operational restrictions and compliance requirements on us, they may have a material adverse effect on our business, access to credit, capital expenditures, operating results and financial condition. Environmental, social and governance matters may adversely impact our business and reputation.
In addition, the Company could recognize gains in an amount equal to the excess of the fair market value of the MasterBrand common stock distributed to Fortune Brands' stockholders on the date of the Separation over Fortune Brands’ tax basis in such MasterBrand common stock.
In addition, we could recognize gains in an amount equal to the excess of the fair market value of the MasterBrand common stock distributed to our stockholders on the date of the Separation over our tax basis in such MasterBrand common stock. Furthermore, we could incur significant tax indemnification obligations under the Tax Allocation Agreement related to the Separation.
Creating a Culture of Inclusion and Respect for All At our Company, we believe that embracing a variety of perspectives helps drive business results.
Creating a Culture of Inclusion and Respect for All At our Company, we believe that embracing a variety of perspectives helps drive business results. By valuing and integrating diverse viewpoints with respect, we believe we can foster innovation and achieve superior performance.
We have many patents, trademarks, brand names, trade names and trade secrets that, in the aggregate, are important to our business.
Our inability to secure and protect our intellectual property rights could negatively impact revenues and brand reputation. We have many patents, trademarks, brand names, trade names and trade secrets that, in the aggregate, are important to our business.
In addition, our recently announced organizational and leadership changes could result in difficulty retaining key employees, including as a result of market pressures or a reluctance to relocate to a new geographic area. Climate change and related impacts, including legislative and regulatory initiatives, could adversely affect our business and results of operations.
In addition, our announced organizational and leadership changes could result in difficulty retaining key employees, including as a result of market pressures or a reluctance to relocate to a new geographic area. Potential liabilities and costs from claims and litigation could adversely affect our results of operations, cash flows and financial condition.
In light of the increased focus on and public debate surrounding ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet stakeholder expectations as to our proper role. Any failure or perceived failure by us in this regard could adversely impact our business and reputation.
In light of the increased focus on and public debate surrounding ESG matters, including unpredictable changes in legislation, government regulations, and policies of increasing complexity and numerosity, there can be no certainty that we will manage such issues successfully, or that we will successfully meet stakeholder expectations as to our proper role.
Furthermore, market demand may decline as a result of consumer preferences trending away from our categories or trending down within our brands or product categories, which could adversely impact our results of operations, cash flows and financial condition. 7 In connection with the Separation, we shifted from a decentralized structure with separate businesses to a more aligned business unit-led operating model that prioritizes activities that are core to brand, innovation, and channel, among other changes.
Furthermore, market demand may decline as a result of consumer preferences trending away from our categories or trending down within our brands or product categories, which could adversely impact our results of operations, cash flows and financial condition. 7 In connection with the separation of our Cabinets business, MasterBrand, Inc.
By valuing and integrating diverse viewpoints with respect, we believe we can foster innovation and achieve superior performance. 5 We continue to take measured actions that create an inclusive culture, that increase engagement of associates from a variety of backgrounds and that are reflective of our consumers and communities.
We continue to take measured actions that foster and build upon our inclusive culture, that increase engagement of associates from a variety of backgrounds, and that are reflective of our consumers and communities.
Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty may not be covered by insurance and for some matters, such as class actions, no insurance may be available on attractive terms.
Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty may not be covered by insurance and for some matters, such as class actions, no insurance may be available on attractive terms. 13 We are also subject to product safety regulations, recalls and direct claims for product liability that can result in significant liability and, regardless of the ultimate outcome, can be costly to defend or injurious to our brand and reputation.
Furthermore, others may assert intellectual property infringement claims against us or our customers, which may require us to incur significant expense to defend such litigation or indemnify our customers. Environmental, social and governance matters may adversely impact our business and reputation.
Furthermore, others may assert intellectual property infringement claims against us or our customers, which may require us to incur significant expense to defend such litigation or indemnify our customers. 14 Climate change and related impacts, including legislative and regulatory initiatives, could adversely affect our business and results of operations.
Talent Development and Succession We aim to inspire and equip our associates to be successful in their current roles within the organization and help them to develop the skills to build on opportunities to grow their careers.
People leaders participate in inclusion-focused learning programs, and we conduct engagement surveys twice a year to foster our commitment to employee engagement and feedback, to drive meaningful action and improvement in our culture. 5 Talent Development and Succession We aim to inspire and equip our associates to be successful in their current roles within the organization and help them to develop the skills to build on opportunities to grow their careers.
Actual or perceived breaches and breakdowns affecting our information technology systems or protected data, including as a result of external actors or employee error or malfeasance, could have an adverse effect on our business strategy, results of operations, cash flows, financial condition, reputation and consumer relationships. 10 In addition, the domestic and international regulatory environment related to solicitation, information security, collection and data privacy is increasingly rigorous and complex, with new and rapidly changing requirements applicable to our business, which are sometimes contradictory, and which may require changes to our business practices.
Actual or perceived breaches and breakdowns affecting our information technology systems or protected data, including as a result of external actors or employee error or malfeasance, could have an adverse effect on our business strategy, results of operations, cash flows, financial condition, reputation and consumer relationships.
Future settlements of income tax audits may have a material adverse effect on earnings between the period of initial recognition of tax estimates in our financial statements and the point of ultimate tax audit settlement. 14 Our inability to secure and protect our intellectual property rights could negatively impact revenues and brand reputation.
As a result, the ultimate outcome from any audit could be materially different from amounts reflected in our income tax provisions and accruals. Future settlements of income tax audits may have a material adverse effect on earnings between the period of initial recognition of tax estimates in our financial statements and the point of ultimate tax audit settlement.
We also offer a range of benefits including retirement savings plans, comprehensive healthcare and mental-health benefits including medical, dental and vision coverage, health savings and spending accounts, and employee assistance services.
We also offer a range of benefits including retirement savings plans, comprehensive healthcare and mental-health benefits including medical, dental and vision coverage, health savings and spending accounts, and numerous programs introduced over the past year to help associates access care as well as remove barriers to care.
If we fail to compete with our peers in effectively integrating these or other new technologies into our business, or fail to guard against new competitors disrupting our business using such technologies, such failure may adversely affect our business and results of operations. 8 Operational and Sourcing Risks Risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility could adversely affect our results of operations, cash flows and financial condition.
If we fail to compete with our peers in effectively adopting, deploying or integrating these or other new technologies into our business, or fail to guard against new competitors disrupting our business through the more effective use of such technologies, our competitive position, results of operations, cash flows and financial condition could be adversely affected.
Attracting and Retaining Superior Talent Fortune Brands is committed to investing in the physical, emotional and financial well-being of our employees, and we believe that this is a critical component of our business strategy.
For 2025 our TRIR was 1.02, compared to 0.98 in 2024 and our LTR was 0.34 in 2025 versus 0.31 in 2024. Attracting and Retaining Superior Talent We are committed to investing in the overall well-being of our associates, and we believe that this is a critical component of our business strategy.
In addition, developing and acting on ESG initiatives, including collecting, measuring and reporting related data, can be costly, difficult and time consuming.
Stakeholders are increasingly scrutinizing ESG practices, and their expectations are diverse and rapidly changing. Any failure or perceived failure by us in this regard could adversely impact our business and reputation. In addition, developing, compiling and acting on ESG initiatives and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming.
Failure to achieve these benefits could adversely impact our results of operations, cash flows, financial condition and stock price.
Operational and Sourcing Risks Risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility could adversely affect our results of operations, cash flows and financial condition.
Removed
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, including but not limited to those listed in the section below entitled “Risk Factors.” We undertake no obligation to, and expressly disclaim any such obligation to, update, amend, clarify or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law.
Added
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, including but not limited to: (i) our reliance on the North American and Chinese home improvement, repair and remodel and new home construction activity levels, (ii) the housing market, downward changes in the general economy, unfavorable interest rates or other business conditions, (iii) the competitive nature of consumer and trade brand businesses, (iv) our ability to execute on our strategic plans and the effectiveness of our strategies in the face of business competition, (v) our reliance on key customers and suppliers, including wholesale distributors and dealers and retailers, (vi) risks relating to rapidly evolving technological change, (vii) risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility, (viii) risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, (ix) delays or outages in our information technology systems or computer networks or breaches of our information technology systems or other cybersecurity incidents, (x) risks associated with doing business globally, including changes in trade-related tariffs (including recent U.S. tariffs announced or imposed on China, Canada, Mexico and other countries and any reciprocal actions taken by such countries) and risks with uncertain trade environments, (xi) risks associated with the disruption of operations, including as a result of severe weather events, (xii) our inability to obtain raw materials and finished goods in a timely and cost-effective manner, (xiii) risks associated with strategic acquisitions, divestitures and joint ventures, including difficulties integrating acquired companies and the inability to achieve the expected financial results and benefits of transactions, (xiv) impairments in the carrying value of goodwill or other acquired intangible assets, (xv) risks of increases in our defined benefit-related costs and funding requirements, (xvi) our ability to attract and retain qualified personnel and other labor constraints, (xvii) the effect of climate change and the impact of related changes in government regulations and consumer preferences, (xviii) risks associated with environmental, social and governance matters, (xix) potential liabilities and costs from claims and litigation, (xx) changes in government and industry regulatory standards, (xxi) future tax law changes or the interpretation of existing tax laws, and (xxii) our ability to secure and protect our intellectual property rights, as well as those listed in the section below entitled “Risk Factors.” We undertake no obligation to, and expressly disclaim any such obligation to, update, amend, clarify or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law. 1 Unless the context otherwise requires, references in this Annual Report on Form 10-K to “Fortune Brands,” the “Company,” “we,” “our” or “us” refer to Fortune Brands Innovations, Inc. and its consolidated subsidiaries.
Removed
Unless the context otherwise requires, references in this Annual Report on Form 10-K to “Fortune Brands,” the “Company,” “we,” “our” or “us” refer to Fortune Brands Innovations, Inc. and its consolidated subsidiaries. Our Company We are a leading innovation company whose purpose is to elevate every life by transforming spaces into havens.
Added
Our Company We are an industry leading home, security and digital products company whose purpose is to elevate every life by transforming spaces into havens.
Removed
On January 19, 2023, the Board of Directors of the Company approved a change to the Company’s fiscal year end from December 31 to a 52- or 53-week fiscal year ending on the Saturday closest but not subsequent to December 31 of each year, effective as of the commencement of the Company’s fiscal year on January 1, 2023.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn 2024, the CIO reported to the full Board of Directors on the Company's cybersecurity programs and risk mitigation efforts. 17 As part of the above processes, we engage with assessors, consultants, auditors and other third parties, including by (i) engaging third-party managed security services to assist with the operation of certain aspects of our cybersecurity program, (ii) engaging security assessment services to provide assessments on our cybersecurity program, (iii) engaging an incident response retainer service to provide timely cyber incident response support and digital forensics analysis services, (iv) engaging risk monitoring services to help identify emerging cybersecurity risks, and (v) engaging with other information technology and legal subject matter experts to review our cybersecurity program to help identify areas for continued focus, improvement, and/or compliance.
Biggest changeAs part of the above processes, we engage with assessors, consultants, auditors and other third parties, including by (i) engaging third-party managed security services to assist with the operation of certain aspects of our cybersecurity program, (ii) engaging security assessment services to provide assessments on our 17 cybersecurity program, (iii) engaging an incident response retainer service to provide timely cyber incident response support and digital forensics analysis services, (iv) engaging risk monitoring services to help identify emerging cybersecurity risks, and (v) engaging with other information technology and legal subject matter experts to review our cybersecurity program to help identify areas for continued focus, improvement, and/or compliance.
Our CIO is responsible for leading our technology organization across our global portfolio, which includes ERP, commercial, supply chain, and product development technologies, enterprise architecture, infrastructure, cyber security, technical operations, end-user services, and finance and human resources systems. Our current interi m CIO has over 30 years of experience in information technology matters.
Our CIO is responsible for leading our technology organization across our global portfolio, which includes ERP, commercial, supply chain, and product development technologies, enterprise architecture, infrastructure, cyber security, technical operations, end-user services, and finance and human resources systems. Our current interim CIO has over 30 years of experience in information technology matters.
The Company maintains an incident response plan. Our incident response plan coordinates the actions we take to prepare for, detect, respond to, and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to address potentially applicable legal obligations and mitigate brand and reputational damage .
We maintain an incident response plan. Our incident response plan coordinates the actions we take to prepare for, detect, respond to, and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to address potentially applicable legal obligations and mitigate brand and reputational damage .
Cybersecurity-related risks are assessed as part of the enterprise risk management program. The Audit Committee is responsible for overseeing the Company’s enterprise risk management program. The Audit Committee also oversees the Company's information technology systems and controls, including the cybersecurity program and related risks.
Cybersecurity-related risks are assessed as part of the enterprise risk management program. The Audit Committee is responsible for overseeing our enterprise risk management program. The Audit Committee also oversees our information technology systems and controls, including the cybersecurity program and related risks.
Our cybersecurity program encompasses the following key capabilities: 24x7 security monitoring, next-generation network security, advanced email and endpoint security, a dedicated enterprise cybersecurity team, third-party managed security services, third-party security assessment services, incident response retainer services, and external risk monitoring services. The Company also maintains cybersecurity risk insurance coverage to defray the costs of potential information security breaches.
Our cybersecurity program encompasses the following key capabilities: 24x7 security monitoring, next-generation network security, advanced email and endpoint security, a dedicated enterprise cybersecurity team, third-party managed security services, third-party security assessment services, incident response retainer services, and external risk monitoring services. We also maintain cybersecurity risk insurance coverage to defray the costs of potential information security breaches.
Our Senior Director of Enterprise Cybersecurity has over 30 years of expanding leadership experience in information technology and 18 years of experience in information security leading and developing security programs. Our CIO provides regul ar updates on cybersecurity matters to our senior executives.
Our Senior Director of Enterprise Cybersecurity has over 30 years of expanding leadership experience in information technology and 18 years of experience in information security leading and developing security programs. Our CIO provides regular updates on cybersecurity matters to our senior executives.
Item 1C. Cybersecurity. The Company has an enterprise-wide cybersecurity program that is informed by the U.S. Department of Commerce National Institute of Standards and Technology Cybersecurity Framework.
Item 1C. Cybersecurity. We have an enterprise-wide cybersecurity program that is informed by the U.S. Department of Commerce National Institute of Standards and Technology Cybersecurity Framework.
During such updates, the CIO generally covers topics such as data security positions, results from third-party assessments, our incident response plan, and any material cybersecurity threats and developments.
During such updates, the CIO generally covers topics such as data security positions, results from third-party assessments, our incident response plan, and any material cybersecurity threats and developments. In 2025, the CIO reported to the full Board of Directors on our cybersecurity programs and risk mitigation efforts.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSegment Manufacturing Facilities Distribution Centers and Warehouses Owned Leased Total Owned Leased Total Water 7 5 12 1 17 18 Outdoors 11 2 13 2 10 12 Security 3 — 3 1 7 8 Totals 21 7 28 4 34 38 We are of the opinion that the properties are suitable to our respective businesses and have production capacities adequate to meet the current needs of our businesses. 18
Biggest changeSegment Manufacturing Facilities Distribution Centers and Warehouses Owned Leased Total Owned Leased Total Water 8 6 14 2 15 17 Outdoors 11 1 12 2 8 10 Security 3 1 4 1 6 7 Totals 22 8 30 5 29 34 We are of the opinion that the properties are suitable to our respective businesses and have production capacities adequate to meet the current needs of our businesses.
Item 2. P roperties. Our principal executive office is located in Deerfield, Illinois. We operate 14 U.S. manufacturing facilities in 7 states and have 14 manufacturing facilities in international locations (4 in Mexico, 3 in Europe, 4 in Africa, 2 in Asia and 1 in Canada).
Item 2. P roperties. Our principal executive office is located in Deerfield, Illinois. We operate 14 U.S. manufacturing facilities in 8 states and have 16 manufacturing facilities in international locations (4 in Mexico, 5 in Europe, 3 in Africa, 3 in Asia and 1 in Canada).
In addition, we have 38 distribution centers and warehouses worldwide, of which 34 are leased. Some of our facilities are considered to be multi-use and have been included in more than one facility category. The following table provides additional information with respect to these properties.
In addition, we have 34 distribution centers and warehouses worldwide, of which 29 are leased. The following table provides additional information with respect to these properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company’s results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote.
Biggest changeWe believe that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly, we believe the likelihood of material loss is remote. 18
Item 3. Lega l Proceedings. The Company is a defendant in lawsuits that are ordinary, routine litigation matters incidental to its businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company.
Item 3. Lega l Proceedings. We are a defendant in lawsuits that are ordinary, routine litigation matters incidental to our businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeDonoghue has served as Executive Vice President, Chief Legal Officer & Corporate Secretary of Fortune Brands since December 2021. Ms. Donoghue served as Vice President & Deputy General Counsel of Baxter International Inc., a healthcare company, from November 2018 to December 2021. Prior to that, Ms.
Biggest changeDonoghue served as Vice President & Deputy General Counsel of Baxter International Inc., a healthcare company, from November 2018 to December 2021. Prior to that, Ms. Donoghue held various positions as a legal advisor at Walgreen Co., including most recently as Vice President, Corporate and M&A Legal. John D.
Mr. Lee served as Senior Vice President, Global Growth & Development of the Water Innovations segment from July 2016 to January 2020. Matthew E. Novak has served as Executive Vice President and Chief Supply Chain Officer of Fortune Brands since February 2025. Mr. Novak served as Vice President, Global Logistics and Customer Service from October 2022 to February 2025.
Lee served as Senior Vice President, Global Growth & Development of the Water Innovations segment from July 2016 to January 2020. Matthew E. Novak has served as Executive Vice President and Chief Supply Chain Officer of Fortune Brands since February 2025. Mr. Novak served as Vice President, Global Logistics and Customer Service from October 2022 to February 2025.
Prior to that, she served in various roles at Pfizer Inc., a research-based, global biopharmaceutical company, from September 2015 to March 2021, including most recently as the Vice President of Human Resources from November 2018 to March 2021. 19 PART II
Prior to that, she served in various roles at Pfizer Inc., a global biopharmaceutical company, from September 2015 to March 2021, including most recently as the Vice President of Human Resources from November 2018 to March 2021. 19 PART II
Donoghue 46 Executive Vice President, Chief Legal Officer & Corporate Secretary John D. Lee 52 Executive Vice President, Chief Growth and Digital Officer Matthew E. Novak 50 Executive Vice President and Chief Supply Chain Officer Kristin E. Papesh 50 Executive Vice President and Chief Human Resources Officer Nicholas I. Fink has served as Chief Executive Officer since January 2020.
Donoghue 47 Executive Vice President, Chief Legal Officer & Corporate Secretary John D. Lee 53 Executive Vice President, Chief Digital and Innovation Officer Matthew E. Novak 51 Executive Vice President and Chief Supply Chain Officer Kristin E. Papesh 51 Executive Vice President and Chief Human Resources Officer Nicholas I. Fink has served as Chief Executive Officer since January 2020.
Item 4. Mine Sa fety Disclosures. Not applicable. Infor mation about our current Executive Officers As of the date of this filing, our executive officers are: Name Age Position Nicholas I. Fink 50 Chief Executive Officer David V. Barry 43 Executive Vice President and Chief Financial Officer and President, Security and Connected Products Hiranda S.
Item 4. Mine Sa fety Disclosures. Not applicable. Infor mation about our current Executive Officers As of the date of this filing, our executive officers are: Name Age Position Nicholas I. Fink 51 Chief Executive Officer Jonathan H. Baksht 51 Executive Vice President and Chief Financial Officer Hiranda S.
From March 2019 to January 2020, Mr. Fink served as President and Chief Operating Officer of Fortune Brands. From July 2016 to March 2019, Mr. Fink served as President of the Company’s Water Innovations business. David V.
From March 2019 to January 2020, Mr. Fink served as President and Chief Operating Officer of Fortune Brands. From July 2016 to March 2019, Mr. Fink served as President of our Water Innovations business. Jonathan H. Baksht has served as Executive Vice President and Chief Financial Officer since May 2025. Mr.
Donoghue held various positions as a legal advisor at Walgreen Co., including most recently as Vice President, Corporate and M&A Legal. John D. Lee has served as Executive Vice President, Chief Growth and Digital Officer of Fortune Brands since May 2023. From January 2020 to May 2023, Mr. Lee served as Executive Vice President, Chief Strategy & Global Growth Officer.
Lee has served as Executive Vice President, Chief Digital and Innovation Officer of Fortune Brands since July 2025. From May 2023 to July 2025, Mr. Lee served as Executive Vice President, Chief Growth and Digital Officer. From January 2020 to May 2023, Mr. Lee served as Executive Vice President, Chief Strategy & Global Growth Officer. Mr.
Removed
Barry has served as Executive Vice President and Chief Financial Officer since March 2023 and as President, Security and Connected Products, since January 2025. Mr. Barry will continue in his role as Executive Vice President and Chief Financial Officer until a new Chief Financial Officer is appointed.
Added
Baksht served as Chief Financial Officer of Pactiv Evergreen Inc. from May 2022 to May 2025. Prior to that, Mr. Baksht held various positions at Valaris Limited, ("Valaris"), including most recently as Chief Financial Officer from November 2015 until September 2021.
Removed
He also served as the Company's principal accounting officer from January 29, 2024 until March 1, 2024. From April 2021 to March 2023, Mr. Barry served as Senior Vice President of Finance and Investor Relations. From 2017 to 2021, he was Chief Financial Officer and Senior Vice President for the Water Innovations segment. Hiranda S.
Added
On August 19, 2020, Valaris filed for a Chapter 11 financial restructuring in the United States Bankruptcy Court for the Southern District of Texas. Valaris emerged from bankruptcy on May 1, 2021. Hiranda S. Donoghue has served as Executive Vice President, Chief Legal Officer & Corporate Secretary of Fortune Brands since December 2021. Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Below are the repurchases of common stock by the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) for the thirteen weeks ended December 28, 2024: Thirteen Weeks Ended December 28, 2024 Total number of shares purchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Approximate dollar value of shares that may yet be purchased under the plans or programs (a) September 29 – October 26 — $ — — $ 534,394,909 October 27 – November 23 664,046 75.3 664,046 484,394,911 November 24 – December 28 — — — 484,394,911 Total 664,046 $ 75.3 664,046 (a) Information on the Company’s share repurchase program in effect during the period covered by the table above follows: Authorization date Announcement date Authorization amount of shares of outstanding common stock Expiration date January 29, 2024 January 29, 2024 $650,000,000 January 29, 2026 On February 7, 2025, the Company announced that on February 4, 2025, Company's Board of Directors authorized the repurchase of up to $1 billion of shares of the Company’s outstanding common stock over the next two years on the open market or in privately negotiated transactions or otherwise (including pursuant to a Rule 10b5-1 trading plan, block trades and accelerated share repurchase transactions), in accordance with applicable securities laws.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Below are the repurchases of common stock by us or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) for the thirteen weeks ended December 27, 2025: Thirteen Weeks Ended December 27, 2025 Total number of shares purchased (a) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Approximate dollar value of shares that may yet be purchased under the plans or programs (a) September 28 – October 25 — $ — — $ 837,245,452 October 26 – November 22 200,512 49.9 200,512 827,245,493 November 23 – December 27 — — — 827,245,493 Total 200,512 $ 49.9 200,512 $ 827,245,493 (a) Information on our share repurchase program in effect during the period covered by the table above follows: Authorization date Announcement date Authorization amount Expiration date February 4, 2025 February 6, 2025 $1,000,000,000 February 4, 2027 20 Stock Performance The above graph compares the relative performance of our common stock, the S&P MidCap 400 Index and S&P MidCap 400 Consumer Durables Index.
The source of our unconsolidated revenues and funds is dividends and other payments from our subsidiary businesses. Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company.
The source of our unconsolidated revenues and funds is dividends and other payments from our subsidiary businesses. Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to us.
The foregoing performance graph is being furnished as part of this Annual Report on Form 10-K solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our stockholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any filings by the Company under the Securities Act or the Exchange Act.
The foregoing performance graph is being furnished as part of this Annual Report on Form 10-K solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish our stockholders with such information, and therefore, shall not be deemed to be filed or incorporated by reference into any of our filings under the Securities Act or the Exchange Act. Item 6.
In December 2024, our Board of Directors announced a quarterly cash dividend payable to stockholders of $0.25 per share of our common stock. Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis.
In December 2025, our Board of Directors announced a quarterly cash dividend payable to stockholders of $0.26 per share of our common stock. Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis.
On February 7, 2025, there were 6,745 record holders of the Company’s common stock, par value $0.01 per share. A substantially greater number of holders of the Company’s common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers or other financial institutions.
On February 6, 2026, there were 6,306 record holders of our common stock, par value $0.01 per share. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers or other financial institutions.
This graph assumes $100 was invested in the stock or the index on December 31, 2019 and also assumes the reinvestment of dividends, including the effect of the Separation.
This graph covers the period from December 31, 2020 through December 27, 2025. This graph assumes $100 was invested in the stock or the index on December 31, 2020 and also assumes the reinvestment of dividends, including the effect of the Separation.
Removed
The new $1 billion share repurchase authorization replaced the authorization described above, effective on February 4, 2025, that otherwise would have expired on January 29, 2026. The new purchases, if made, will occur from time to time depending on market conditions.
Removed
The newly announced share repurchase authorization does not obligate the Company to repurchase any dollar amount or number of shares of common stock.
Removed
The authorization is in effect until February 4, 2027, and may be suspended or discontinued at any time. 20 Stock Performance The above graph compares the relative performance of our common stock, the S&P MidCap 400 Index and S&P MidCap 400 Consumer Durables Index. This graph covers the period from December 31, 2019 through December 28, 2024.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved . 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 22 Results of Operations . 24 Liquidity and Capital Resources. 30 Critical Accounting Estimates. 35 Item 7A. Quantitative and Qualitative Disclosures about Market Risk. 41 Item 8. Financial Statements and Supplementary Data. 42 Notes to Consolidated Financial Statements . 51
Biggest changeItem 6. Reserved . 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 22 Results of Operations . 24 Liquidity and Capital Resources. 29 Critical Accounting Estimates. 34 Item 7A. Quantitative and Qualitative Disclosures about Market Risk. 40 Item 8. Financial Statements and Supplementary Data. 41 Notes to Consolidated Financial Statements . 50

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn 2022, financial results included: • restructuring and other charges of $26.8 million largely related to severance, asset impairment and other costs associated with plant closures and headcount actions across all segments, net of a gain on the sale of a previously closed manufacturing facility within our Outdoors segment of approximately $6 million; and • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2021 of approximately $41 million on net sales and approximately $12 million on both operating income and net income. 2024 Compared to 2023 Total Fortune Brands Net sales Net sales decreased by $17.2 million, or 0.4%, primarily due to lower sales in our international markets ($136.7 million), higher customer sales incentives and unfavorable foreign exchange ($6.9 million), partially offset by the benefit from the acquisitions of SpringWell and the Acquired Businesses ($176.5 million).
Biggest changeIn 2025, financial results included: • restructuring and restructuring-related charges of $109.1 million are primarily attributable to costs associated with the decision to consolidate our U.S. regional offices into one campus headquarters and our related organizational and personnel changes, a product-line rationalization within our Outdoors segment, and plant closures in all our segments; • asset impairment charges of $53.6 million related to the impairment of certain assets held-for-sale within our Outdoors and Water segments; 24 • charges of $21.1 million related to a fire in a portion of a manufacturing facility within the Outdoors segment; and • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2024 of approximately $2.3 million on net sales and approximately $0.2 million on both operating income and net income.
Other expense (income), net Other expense (income), net, was expense of $11.9 million in 2024, compared to income of $19.5 million in 2023. The decrease in other income, net is primarily due to higher net periodic benefit expense, a decrease in foreign currency transaction income and lower interest income.
Other (income) expense, net Other (income) expense, net, was expense of $11.9 million in 2024, compared to income of $19.5 million in 2023. The decrease in other (income) expense, net is primarily due to higher net periodic benefit expense, a decrease in foreign currency transaction income and lower interest income.
Risk Factors.” In addition, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, repurchase shares of our common stock under our share repurchase program or pay dividends, or what impact any such transactions could have on our results of operations, cash flows or financial condition, whether as a result of the issuance of debt or equity securities or otherwise.
Risk Factors.” In addition, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, repurchase shares of our common stock under our share repurchase program or pay dividends, or what impact any such 29 transactions could have on our results of operations, cash flows or financial condition, whether as a result of the issuance of debt or equity securities or otherwise.
We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration the Company will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer.
We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration we will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer.
All Transferred Participants continued to receive their benefits from the Plans until January 1, 2025, at which time the insurance company began paying and administering the retirement benefits of the Transferred Participants. The transactions resulted in no changes to the amount of the benefits payable to the Transferred Participants.
All Transferred Participants continued to receive their benefits from the Pension Plans until January 1, 2025, at which time the insurance company began paying and administering the retirement benefits of the Transferred Participants. The transactions resulted in no changes to the amount of the benefits payable to the Transferred Participants.
We are focused on outperforming our markets in growth, profitability and returns in order to drive increased stockholder value. We believe the Company’s track record reflects the long-term attractiveness and potential of the categories we serve and our leading brands.
We are focused on outperforming our markets in growth, profitability and returns in order to drive increased stockholder value. We believe our track record reflects the long-term attractiveness and potential of the categories we serve and our leading brands.
Income from continuing operations, net of tax Income from continuing operations, net of income taxes, increased by $66.4 million, or 16.4%, due to higher operating income, partly offset by higher interest expense, higher income tax expense and lower other income, net. 26 Results By Segment Water Net sales increased by $2.4 million, or 0.1%, primarily due to the benefit from the acquisitions of SpringWell and the Emtek and Schaub Business ($152.5 million), partially offset by lower organic sales volume (including sales volume declines within our China business of approximately $100.5 million), higher customer sales incentives and unfavorable foreign exchange ($6.0 million).
Income from continuing operations, net of tax Income from continuing operations, net of income taxes, increased by $66.4 million, or 16.4%, due to higher operating income, partly offset by higher interest expense, higher income tax expense and lower other income, net. 28 Results By Segment Water Net sales increased by $2.4 million, or 0.1%, primarily due to the benefit from the acquisitions of SpringWell and the Emtek and Schaub Business ($152.5 million), partially offset by lower organic sales volume (including sales volume declines within our China business of approximately $100.5 million), higher customer sales incentives and unfavorable foreign exchange ($6.0 million).
These assumptions represent level 3 inputs of the fair value hierarchy (refer to Note 10, "Fair Value Measurements," of the Notes to consolidated financial statements in Item 8 of this Annual Report on Form 10-K ).
These assumptions represent level 3 inputs of the fair value hierarchy (refer to Note 9, "Fair Value Measurements," of the Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K ).
All other benefit accruals under our defined benefit pension plans were frozen as of, or prior to, December 31, 2016. 38 We recognize changes in the net actuarial gains or losses in other income, net to the extent they exceed 10 percent of the greater of the fair value of pension plan assets or projected benefit obligation for each plan (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each fiscal year.
All other benefit accruals under our defined benefit pension plans were frozen as of, or prior to, December 31, 2016. 37 We recognize changes in the net actuarial gains or losses in other income, net to the extent they exceed 10 percent of the greater of the fair value of pension plan assets or projected benefit obligation for each plan (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each fiscal year.
Volume allowances are accrued based on management’s estimates of customer volume achievement and other factors incorporated into customer agreements, such as new products, store sell-through, merchandising support, levels of returns and customer training. Management periodically reviews accruals for these rebates and allowances, and adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). 40
Volume allowances are accrued based on management’s estimates of customer volume achievement and other factors incorporated into customer agreements, such as new products, store sell-through, merchandising support, levels of returns and customer training. Management periodically reviews accruals for these rebates and allowances, and adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). 39
A 25 basis point change in the long-term rate of return on plan assets used in accounting for our pension plans would have a $0.4 million impact on pension expense. In addition, if required, actuarial gains and losses will be recorded in accordance with our defined benefit plan accounting method as previously described.
A 25 basis point change in the long-term rate of return on plan assets used in accounting for our pension plans would have a $0.1 million impact on pension expense. In addition, if required, actuarial gains and losses will be recorded in accordance with our defined benefit plan accounting method as previously described.
We believe the policies discussed below are the Company’s critical accounting policies as they include the more significant, subjective and complex judgments and estimates made when preparing our consolidated financial statements. 35 Inventories Inventory provisions are recorded to reduce inventory to the net realizable dollar value for obsolete or slow-moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions, inventory levels and turns, product spoilage and specific identification of items, such as product discontinuance, engineering/material changes, or regulatory-related changes.
We believe the policies discussed below are our critical accounting policies as they include the more significant, subjective and complex judgments and estimates made when preparing our consolidated financial statements. 34 Inventories Inventory provisions are recorded to reduce inventory to the net realizable dollar value for obsolete or slow-moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions, inventory levels and turns, product spoilage and specific identification of items, such as product discontinuance, engineering/material changes, or regulatory-related changes.
The maturity date of the facility is August 2027. Interest rates under the 2022 Revolving Credit Agreement are variable based on the Secured Overnight Financing Rate (“SOFR”) at the time of the borrowing and the Company’s long-term credit rating and can range from SOFR + 1.02% to SOFR + 1.525%.
The maturity date of the facility is August 2027. Interest rates under the 2022 Revolving Credit Agreement are variable based on the Secured Overnight Financing Rate (“SOFR”) at the time of the borrowing and our long-term credit rating and can range from SOFR + 1.02% to SOFR + 1.525%.
Certain of our tradenames have been assigned an indefinite life as we currently anticipate that these tradenames will contribute cash flows to the Company indefinitely. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate.
Certain of our tradenames have been assigned an indefinite life as we currently anticipate that these tradenames will contribute cash flows to us indefinitely. Indefinite-lived intangible assets are not amortized, but are evaluated at least annually to determine whether the indefinite useful life is appropriate.
We believe our cash on hand, operating cash flows, funds available under the credit facility and access to capital markets, provide sufficient liquidity to support the Company’s working capital requirements, capital expenditures, other contractual commitments and service of indebtedness, as well as to finance acquisitions, repurchase shares of our common stock and pay dividends to stockholders, as the Board of Directors deems appropriate, both for the 12-month period following the 2024 fiscal year, and in the long-term.
We believe our cash on hand, operating cash flows, funds available under the credit facility and access to capital markets, provide sufficient liquidity to support the our working capital requirements, capital expenditures, other contractual commitments and service of indebtedness, as well as to finance acquisitions, repurchase shares of our common stock and pay dividends to stockholders, as the Board of Directors deems appropriate, both for the 12-month period following the 2025 fiscal year, and in the long-term.
We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile geopolitical environment, as well as sustained elevated rates of inflation, fluctuating interest rates, unfavorable fluctuations in foreign exchange rates and the ongoing and potentially worsening costs of tariffs (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries).
We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile geopolitical environment, as well as sustained elevated rates of inflation, fluctuating interest rates, unfavorable fluctuations in foreign exchange rates and the ongoing and potentially worsening costs of tariffs (including existing and potential U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries).
The 2023 effective income tax rate was unfavorably impacted by state and local income taxes and foreign income taxed at higher rates. This expense was offset by favorable benefits for the release of uncertain tax positions of statute of limitations lapses and federal tax credits.
The 2023 effective income tax rate was unfavorably impacted by state and local income taxes and foreign income taxed at higher rates. This expense was offset by favorable benefits for the release of uncertain tax positions due to statute of limitations lapses and federal tax credits.
This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at December 28, 2024, as well as a discussion of our ability to fund our future commitments and ongoing operating activities through internal and external sources of capital. • Critical Accounting Estimates: This section identifies and summarizes those accounting policies that significantly impact our reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application.
This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at December 27, 2025, as well as a discussion of our ability to fund our future commitments and ongoing operating activities through internal and external sources of capital. • Critical Accounting Estimates: This section identifies and summarizes those accounting policies that significantly impact our reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application.
Amortization of intangible assets Amortization of intangible assets increased by $11.0 million, primarily due to the acquisitions of SpringWell and the Acquired Businesses. 25 Restructuring charges Restructuring charges of $16.2 million in 2024 are largely related to a product-line rationalization within our Outdoors segment, the previously announced closure of a manufacturing facility within our Security segment, and headcount actions across all segments.
Amortization of intangible assets Amortization of intangible assets increased by $11.0 million, primarily due to the acquisitions of SpringWell and the Acquired Businesses. Restructuring charges Restructuring charges of $16.2 million in 2024 are largely related to a product-line rationalization within our Outdoors segment, the closure of a manufacturing facility within our Security segment, and headcount actions across all segments.
Principal currencies hedged include the Canadian dollar, the Mexican peso, the British pound, Chinese yuan and the South African rand. We regularly monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. For additional information on this risk, see Item 7A.
Principal currencies that are usually hedged include the Canadian dollar, the Mexican peso, the British pound, Chinese yuan and the South African rand. We regularly monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. For additional information on this risk, see Item 7A.
Impairment losses are recorded to the extent that the carrying value of the reporting unit exceeds its fair value. The Company’s reporting units are operating segments, or one level below operating segments when appropriate. 36 To evaluate the recoverability of goodwill, we first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired.
Impairment losses are recorded to the extent that the carrying value of the reporting unit exceeds its fair value. Our reporting units are operating segments, or one level below operating segments when appropriate. To evaluate the recoverability of goodwill, we first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired.
Under the 2022 Revolving Credit Agreement, the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments.
Under the 2022 Revolving Credit Agreement, we are required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments.
See Note 6, "Goodwill and Intangible Assets," of the Notes to consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information.
See Note 5, "Goodwill and Intangible Assets," of the Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for additional information.
Pension Plans During the fourth quarter of 2024, the Company entered into two agreements with an insurance company to purchase group annuity contracts and transferred $266.6 million of pension plan obligations and related assets of two of its defined benefit pension plans, the MasterLock Pension Plan and Moen Incorporated Pension Plan (collectively, the "Plans").
During the fourth quarter of 2024, we entered into two agreements with an insurance company to purchase group annuity contracts and transferred $266.6 million of pension plan obligations and related assets of two of our defined benefit pension plans, the MasterLock Pension Plan and Moen Incorporated Pension Plan (collectively, the "Pension Plans" ).
The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.
The share repurchase program does not obligate us to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.
Significant actuarial losses in future periods would be expected if discount rates decline, actual returns on plan assets are lower than our expected return, or a combination of both occurs. 39 A 25 basis point change in our discount rate assumption would lead to an increase or decrease in our pension and postretirement liability of approximately $6 million.
Significant actuarial losses in future periods would be expected if discount rates decline, actual returns on plan assets are lower than our expected return, or a combination of both occurs. 38 A 25 basis point change in our discount rate assumption would lead to an increase or decrease in our pension and postretirement liability of approximately $4 million.
MD&A is organized as follows: • Recent Developments: This section provides a summary of noteworthy recent developments in the most recently completed fiscal year in the operation of the business, including acquisition activity. • Overview: This section provides a general description of our business and a discussion of management’s general outlook regarding market demand, our competitive position and product innovation, as well as additional recent developments we believe are important to understanding our results of operations and financial condition or in understanding anticipated future trends. • Basis of Presentation: This section provides a discussion of the basis on which our consolidated financial statements were prepared. • Results of Operations: This section provides an analysis of our results of operations for the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022. • Liquidity and Capital Resources: This section provides a discussion of our financial condition as of December 28, 2024 and an analysis of our cash flows for each of the three years ended December 28, 2024, December 30, 2023 and December 31, 2022.
MD&A is organized as follows: • Recent Developments: This section provides a summary of noteworthy recent developments in the most recently completed fiscal year in the operation of the business. • Overview: This section provides a general description of our business and a discussion of management’s general outlook regarding market demand, our competitive position and product innovation, as well as additional recent developments we believe are important to understanding our results of operations and financial condition or in understanding anticipated future trends. • Basis of Presentation: This section provides a discussion of the basis on which our consolidated financial statements were prepared. • Results of Operations: This section provides an analysis of our results of operations for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023. • Liquidity and Capital Resources: This section provides a discussion of our financial condition as of December 27, 2025 and an analysis of our cash flows for each of the three years ended December 27, 2025, December 28, 2024 and December 30, 2023.
We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of December 28, 2024 and December 30, 2023, of which there were no outstanding balances as of December 28, 2024 and December 30, 2023.
We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of December 27, 2025 and December 28, 2024, of which there were no outstanding balances as of December 27, 2025 and December 28, 2024.
In our debt agreements, there are normal and customary events of default which would permit the lenders to accelerate the debt if not cured, in certain cases within applicable grace periods, such as failure to pay principal or interest when due or a change in control of the Company. There were no events of default as of December 28, 2024.
In our debt agreements, there are normal and customary events of default which would permit the lenders to accelerate the debt if not cured, in certain cases within applicable grace periods, such as failure to pay principal or interest when due or a change in control of the Company. There were no events of default as of December 27, 2025.
The Company’s 2022 Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, and as such, borrowings under the Commercial Paper Program are included in Long-term debt in the condensed consolidated balance sheets.
Our 2022 Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, as amended, and as such, borrowings under the Commercial Paper Program are included in Long-term debt in the condensed consolidated balance sheets.
A 50 basis point change in the discount rate or long-term revenue growth rate assumptions, or a decrease in multiple of 1.0 in the EBITDA multiple assumption, during the year ended December 28, 2024 would not have resulted in an impairment being recognized when estimating the fair value of our reporting unit goodwill.
A 50 basis point change in the discount rate or long-term revenue growth rate assumptions, or a decrease in multiple of 1.0 in the EBITDA multiple assumption, during the year ended December 27, 2025 would not have resulted in an impairment being recognized when estimating the fair value of our reporting unit goodwill.
Similar to foreign currency translation adjustments, these changes in fair value are recognized in earnings only when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity. Deferred currency gains (losses) of $(0.4) million, $5.2 million and $4.7 million (before tax impact) were reclassified into earnings for 2024, 2023 and 2022, respectively.
Similar to foreign currency translation adjustments, these changes in fair value are recognized in earnings only when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity. Deferred currency gains (losses) of $1.3 million, $(0.4) million and $5.2 million (before tax impact) were reclassified into earnings for 2025, 2024 and 2023, respectively.
In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the consolidated statement of income and consolidated balance sheet in the period in which such changes occur.
In future periods, changes in facts, circumstances, and new information may require us to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in the Consolidated Statements of Income and Consolidated Balance Sheets in the period in which such changes occur.
Below is a table showing pre-tax pension and postretirement expenses, including the impact of actuarial gains and losses (which includes settlement losses): (In millions) 2024 2023 Total pension cost $ 11.6 $ 0.7 Actuarial loss component of cost above 18.5 2.0 Total postretirement cost (income) 0.6 (1.7 ) Actuarial (gain) component of cost (income) above (0.3 ) (2.6 ) Discount rates in 2024 used to determine benefit obligations increased by an average of 70 basis points for pension benefits.
Below is a table showing pre-tax pension and postretirement expenses, including the impact of actuarial gains and losses (which includes settlement losses): (In millions) 2025 2024 Total pension cost $ 0.7 $ 11.6 Actuarial loss component of cost above — 18.5 Total postretirement cost (income) 0.1 0.6 Actuarial (gain) component of cost (income) above (0.3 ) (0.3 ) Discount rates in 2025 used to determine benefit obligations decreased by an average of 80 basis points for pension benefits.
Long-Term Debt In September 2023, we repaid all $600 million in aggregate principal of our 2023 4.000% senior unsecured notes at their maturity date in September 2023 using cash on hand. In June 2023, the Company issued $600 million in aggregate principal 5.875% senior unsecured notes maturing in 2033 in a registered public offering.
In September 2023, we repaid all $600 million in aggregate principal of our 2023 4.000% senior unsecured notes at their maturity date in September 2023 using cash on hand. In June 2023, we issued $600 million in aggregate principal 5.875% senior unsecured notes maturing in 2033 in a registered public offering.
Shares may be repurchased on the open market, in privately negotiated transactions or otherwise (including pursuant to a Rule 10b5-1 trading plan, block trades and accelerated share repurchase transactions), in accordance with applicable securities laws. Dividends In 2024, we paid dividends in the amount of $119.6 million to the Company’s stockholders.
Shares may be repurchased on the open market, in privately negotiated transactions or otherwise (including pursuant to a Rule 10b5-1 trading plan, block trades and accelerated share repurchase transactions), in accordance with applicable securities laws. Dividends In 2025, we paid dividends in the amount of $120.6 million to our stockholders.
Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the 2022 Revolving Credit Agreement, not to exceed $1.25 billion. The Company expects to use any issuances under the Commercial Paper Program for general corporate purposes.
Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the 2022 Revolving Credit Agreement, as amended, not to exceed $1.25 billion. We expect to use any issuances under the Commercial Paper Program for general corporate purposes.
For the indefinite-lived tradenames tested quantitatively in 2024, a 50 basis point change in the royalty rate assumption would result in an impairment of those tradenames of approximately $8 million; a 50 basis point change in the discount rate assumption would result in an impairment of approximately $2 million; and a 50 basis point change in the long-term revenue growth rate assumption would result in an impairment of approximately $2 million.
For the indefinite-lived tradenames tested quantitatively in 2025, a 50 basis point change in the royalty rate assumption would result in an impairment of those tradenames of approximately $3.5 million; a 50 basis point change in the discount rate assumption would result in an impairment of approximately $2.1 million; and a 50 basis point change in the long-term revenue growth rate assumption would result in an impairment of approximately $1.8 million.
The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return. The weighted-average long-term expected rate of return on pension plan assets for the years ended December 28, 2024 and December 30, 2023 was 7.3% and 6.1%, respectively.
The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return. The weighted-average long-term expected rate of return on pension plan assets for the years ended December 27, 2025 and December 28, 2024 was 6.2% and 7.3%, respectively.
The results of SpringWell are reported as part of the Water segment. We have not included pro forma financial information as the transaction is immaterial to our condensed consolidated statements of comprehensive income. The fair value allocated to assets acquired and liabilities assumed as of February 29, 2024, was $105.6 million, which includes $85.2 million of goodwill.
We have not included pro forma financial information as the transaction is immaterial to our condensed consolidated statements of comprehensive income. The fair value allocated to assets acquired and liabilities assumed as of February 29, 2024, was $105.6 million, which includes $85.2 million of goodwill.
Defined Benefit Plans We have a number of pension plans in the United States, covering many of the Company’s employees. In addition, the Company provides postretirement health care and life insurance benefits to certain retirees. Service cost for 2024 relates to benefit accruals for an hourly Union group within the defined benefit plan for our Security segment.
Defined Benefit Plans We have a number of pension plans in the United States, covering certain employees. In addition, we provide postretirement health care and life insurance benefits to certain retirees. Service cost for 2025 relates to benefit accruals for an hourly Union group within the defined benefit plan for our Security segment.
During the three fiscal years ended December 28, 2024, our net sales declined at a compounded annual rate of 1.4% reflecting the contraction of the U.S. home products market and a decline in demand in our international markets, partially offset by an increase in sales resulting from acquisitions.
During the three fiscal years ended December 27, 2025, our net sales declined at a compounded annual rate of 1.9% reflecting the contraction of the U.S. home products market and a decline in demand in our 23 international markets, partially offset by an increase in sales resulting from acquisitions.
In addition, the Company's ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. There were no outstanding borrowings under this facility as of December 28, 2024 or December 30, 2023. As of December 28, 2024, we were in compliance with all covenants under this facility.
In addition, our ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. There were no outstanding borrowings under this facility as of December 27, 2025 or December 28, 2024. As of December 27, 2025, we were in compliance with all covenants under this facility.
These included restructuring and other charges, asset impairment charges, transaction expenses and the impact of changes in foreign currency exchange rates. 24 In 2024, financial results included: • restructuring and other charges of $41.3 million largely related to costs associated with a product line rationalization within our Outdoors segment, the previously announced closure of a manufacturing facility within our Security segment and headcount actions across all segments; and • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2023 of approximately $7 million on net sales and approximately $2 million on both operating income and net income.
In 2024, financial results included: • restructuring and restructuring-related other charges of $41.3 million largely related to costs associated with a product line rationalization within our Outdoors segment, the closure of a manufacturing facility within our Security segment and headcount actions across all segments; and • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2024 of approximately $7 million on net sales and approximately $2 million on both operating income and net income.
Cash and Seasonality In 2024, we invested approximately $60 million in incremental capacity to support long-term growth potential and new products inclusive of cost reduction and productivity initiatives. We expect capital spending in 2025 to be in the range of $100 million to $140 million.
Cash and Seasonality In 2025, we invested approximately $57 million in incremental capacity to support long-term growth potential and new products inclusive of cost reduction and productivity initiatives. We expect capital spending in 2026 to be in the range of $110 million to $140 million.
Debt payments due during the next five years as of December 28, 2024 are $500 million in 2025, zero in 2026, zero in 2027, zero in 2028, $700 million in 2029 and $1,500 million in 2030 and beyond.
Debt payments due during the next five years as of December 27, 2025 are zero in 2026, $370 million in 2027, zero in 2028, $700 million in 2029, zero in 2030, and $1,500 million in 2031 and beyond.
The following table provides a summary of the Company’s outstanding Notes, including the carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of December 28, 2024 and December 30, 2023: (in millions) Net Carrying Value Coupon Rate Principal Amount Issuance Date Maturity Date December 28, 2024 December 30, 2023 4.000% Senior Notes $ 500.0 June 2015 June 2025 $ 499.6 $ 498.9 3.250% Senior Notes $ 700.0 September 2019 September 2029 696.5 695.7 4.000% Senior Notes $ 450.0 March 2022 March 2032 446.7 446.2 4.500% Senior Notes $ 450.0 March 2022 March 2052 436.4 435.9 5.875% Senior Notes $ 600.0 June 2023 June 2033 594.1 593.4 Total Senior Notes $ 2,673.3 $ 2,670.1 Less: current portion 499.6 — Total long-term debt $ 2,173.7 $ 2,670.1 Credit Facilities In August 2022, the Company entered into a third amended and restated $1.25 billion revolving credit facility (the “2022 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes.
The following table provides a summary of our outstanding Notes, including the carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of December 27, 2025 and December 28, 2024: (in millions) Net Carrying Value Coupon Rate Principal Amount Issuance Date Maturity Date December 27, 2025 December 28, 2024 4.000% Senior Notes $ 500.0 June 2015 June 2025 $ — $ 499.6 3.250% Senior Notes $ 700.0 September 2019 September 2029 697.2 696.5 4.000% Senior Notes $ 450.0 March 2022 March 2032 447.2 446.7 4.500% Senior Notes $ 450.0 March 2022 March 2052 436.9 436.4 5.875% Senior Notes $ 600.0 June 2023 June 2033 594.8 594.1 Total Senior Notes $ 2,176.1 $ 2,673.3 Commercial Paper 368.8 — Total Debt $ 2,544.9 $ 2,673.3 Less: current portion — 499.6 Total long-term debt $ 2,544.9 $ 2,173.7 Credit Facilities In August 2022, we entered into a third amended and restated $1.25 billion revolving credit facility (the “2022 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes.
The weighted-average discount rate for defined benefit liabilities as of December 28, 2024 December 30, 2023 was 5.7% and 5.0%, respectively. For the postretirement benefits obligation, our health care trend rate assumption is based on historical cost increases and expectations for long-term increases.
The weighted-average discount rate for defined benefit liabilities as of December 27, 2025 and December 28, 2024 was 4.9% and 5.7%, respectively. For the postretirement benefits obligation, our health care trend rate assumption is based on historical cost increases and expectations for long-term increases.
The assumptions used to estimate the fair values of the goodwill related to continuing operations tested quantitatively during the year ended December 28, 2024 were as follows: Unobservable Input 2024 Discount rate 10.8 % Long-term revenue growth rates (a) 3.0 % EBITDA multiple 14.0 (a) Selected long-term revenue growth rate for the goodwill that was tested quantitatively.
The assumptions used to estimate the fair values of the goodwill related to continuing operations tested quantitatively during the year ended December 27, 2025 were as follows: Unobservable Input 2025 Discount rate 11.8 % Long-term revenue growth rates (a) 3.0 % EBITDA multiple 9.3 (a) Selected long-term revenue growth rate for the goodwill that was tested quantitatively.
As of December 30, 2023, for postretirement medical and prescription drugs in the next year, our assumption was an assumed rate of increase of 7.3% for pre-65 retirees and 6.9% for post-65 retirees, declining until reaching an ultimate assumed rate of increase of 4.5% per year in 2033.
As of December 27, 2025, for postretirement medical and prescription drugs in the next year, our assumption was an assumed rate of increase of 6.9% for pre-65 retirees and 7.4% for post-65 retirees, declining until reaching an ultimate assumed rate of increase of 4.5% per year in 2035.
Subsidiaries of Fortune Brands sponsor their respective defined benefit pension plans, related to our continuing operations, that are funded by a portfolio of investments maintained within our benefit plan trust. We made no pension contributions to our qualified pension plans in 2024 and made voluntary contributions of $4.0 million and $9.0 million in 2023 and 2022, respectively.
Our subsidiaries sponsor their respective defined benefit pension plans, related to our continuing operations, that are funded by a portfolio of investments maintained within our benefit plan trust. We made no pension contributions to our qualified pension plans in 2025 or 2024 and made a voluntary contribution of $4.0 million in 2023.
The pre-tax recognition of actuarial losses (gains) was $18.2 million and $(0.6) million in 2024 and 2023, respectively. The total unrecognized net actuarial losses in accumulated other comprehensive income for all defined benefit plans were $12.3 million as of December 28, 2024, compared to $35.8 million as of December 30, 2023.
The pre-tax recognition of actuarial losses was $0.3 million and $18.2 million in 2025 and 2024, respectively. The total unrecognized net actuarial losses in accumulated other comprehensive income for all defined benefit plans were $11.6 million as of December 27, 2025, compared to $12.3 million as of December 28, 2024.
Other corporate commercial commitments include standby letters of credit of $20.2 million, in the aggregate, all of which expire in less than one year, and surety bonds of $25.5 million, the majority of which matures in less than two years. These contingent commitments are not expected to have a significant impact on our liquidity.
Other corporate commercial 33 commitments include standby letters of credit of $18.6 million, in the aggregate, all of which expire in less than one year, and surety bonds of $42.3 million, the majority of which matures in less than two years. These contingent commitments are not expected to have a significant impact on our liquidity.
Discount rates for 2024 postretirement benefits increased by an average of 110 basis points . Discount rates in 2023 used to determine benefit obligations decreased by an average of 20 basis points for pension benefits. Discount rates for 2023 postretirement benefits increased an average of 20 basis points.
Discount rates for 2025 postretirement benefits decreased by an average of 60 basis points . Discount rates in 2024 used to determine benefit obligations increased by an average of 70 basis points for pension benefits. Discount rates for 2024 postretirement benefits increased an average of 110 basis points.
Selling, general and administrative expenses Selling, general and administrative expenses increased by $70.7 million, or 6.1%, primarily due to the acquisitions of SpringWell and the Acquired Businesses, higher advertising and marketing costs, higher headcount-related costs and higher distribution expenses.
These factors were partially offset by the impact of the acquisitions of SpringWell and the Acquired Businesses. 27 Selling, general and administrative expenses Selling, general and administrative expenses increased by $70.7 million, or 6.1%, primarily due to the acquisitions of SpringWell and the Acquired Businesses, higher advertising and marketing costs, higher headcount-related costs and higher distribution expenses.
Based on foreign exchange rates as of December 28, 2024, we estimate that $12.5 million of net derivative gains included in accumulated other comprehensive income ("AOCI") as of December 28, 2024, will be reclassified to earnings within the next twelve months.
Based on foreign exchange rates as of December 27, 2025, we estimate that $11.3 million of net derivative gains included in accumulated other comprehensive income ("AOCI") as of December 27, 2025, will be reclassified to earnings within the next twelve months.
Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars. Contractual Obligations and Other Commercial Commitments The following summarizes our contractual obligations and commitments as of December 28, 2024. Purchase obligations were $545.1 million, of which $522.4 million is due within one year.
Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars. Contractual Obligations and Other Commercial Commitments The following summarizes our contractual obligations and commitments as of December 27, 2025. Purchase obligations were $456.1 million, of which $429.9 million is due within one year.
The weighted-average interest rates on these borrowings were zero in 2024 and 2023. 31 Commercial Paper The Company operates a commercial paper program (the “Commercial Paper Program”) pursuant to which the Company may issue unsecured commercial paper notes.
The weighted-average interest rates on these borrowings were zero in 2025 and 2024. Commercial Paper We operate a commercial paper program (the “Commercial Paper Program”) pursuant to which we may issue unsecured commercial paper notes.
The assumptions used to estimate the fair values of the tradenames tested quantitatively during the year ended December 28, 2024 were as follows: 2024 Unobservable Input Minimum Maximum Weighted Average (a) Discount rates 11.0 % 15.0 % 12.6 % Royalty rates (b) 2.5 % 4.0 % 3.5 % Long-term revenue growth rates (c) 2.5 % 3.0 % 2.6 % (a) Weighted by the relative fair value of the tradenames that were tested quantitatively.
The assumptions used to estimate the fair values of the tradenames tested quantitatively during the year ended December 27, 2025 were as follows: 2025 Unobservable Input Minimum Maximum Weighted Average (a) Discount rates 12.0 % 14.5 % 13.9 % Royalty rates (b) 2.5 % 3.5 % 2.8 % Long-term revenue growth rates (c) 3.0 % 3.0 % 3.0 % (a) Weighted by the relative fair value of the tradenames that were tested quantitatively.
(In millions) 2024 2023 2022 Net cash provided by operating activities $ 667.8 $ 1,055.8 $ 566.3 Net cash used in investing activities (302.9 ) (1,037.8 ) (455.5 ) Net cash (used in) provided by financing activities (363.4 ) (271.3 ) 72.5 Effect of foreign exchange rate changes on cash (11.5 ) 0.5 (11.1 ) Net (decrease) increase in cash, cash equivalents and restricted cash $ (10.0 ) $ (252.8 ) $ 172.2 Net cash provided by operating activities was $667.8 million in 2024, compared to $1,055.8 million in 2023.
(In millions) 2025 2024 2023 Net cash provided by operating activities $ 478.6 $ 667.8 $ 1,055.8 Net cash used in investing activities (104.9 ) (302.9 ) (1,037.8 ) Net cash used in financing activities (503.3 ) (363.4 ) (271.3 ) Effect of foreign exchange rate changes on cash 11.5 (11.5 ) 0.5 Net decrease in cash, cash equivalents and restricted cash $ (118.1 ) $ (10.0 ) $ (252.8 ) Net cash provided by operating activities was $478.6 million in 2025, compared to $667.8 million in 2024.
Cost of products sold Cost of products sold decreased by $172.1 million, or 6.3%, primarily due to raw material deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies. These factors were partially offset by the impact of the acquisitions of SpringWell and the Acquired Businesses.
Cost of products sold Cost of products sold decreased by $172.1 million, or 6.3%, primarily due to raw material deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies.
Interest payments due during the next five years as of December 28, 2024 are $106.3 million in 2025, $192.5 million in 2026 through 2027, $192.5 million in 2028 through 2029 and $624.0 million in 2030 and beyond. Foreign Currency Risk Certain anticipated transactions, assets and liabilities are exposed to foreign currency risk.
Interest payments due during the next five years as of December 27, 2025 are $96.3 million in 2026, $192.5 million in 2027 through 2028, $169.8 million in 2029 through 2030 and $550.5 million in 2031 and beyond. Foreign Currency Risk Certain anticipated transactions, assets and liabilities are exposed to foreign currency risk.
On December 28, 2024, we had cash and cash equivalents $381.1 million, of which $335.4 million was held at non-U.S. subsidiaries. We manage our global cash requirements considering (i) available funds among the subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.
As of December 27, 2025, we had cash and cash equivalents of $264.0 million, of which $234.9 million was held at non-U.S. subsidiaries. We manage our global cash requirements considering (i) available funds among the subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.
Our actual gain on plan assets in 2024 was 0.3% compared to an actuarial assumption of an average 7.3% expected return. Our actual gain on plan assets in 2023 was 10.0% c ompared to an actuarial assumption of an average 6.1 % expected return.
Our actual gain on plan assets in 2025 was 0.4% compared to an actuarial assumption of an average 6.2% expected return. Our actual gain on plan assets in 2024 was 0.3% compared to an actuarial assumption of an average 7.3% expected return.
We measure the fair value of identifiable intangible assets upon acquisition and we review for impairment annually in the fourth quarter and whenever market or business events indicate there may be a potential impairment of that intangible.
We measure the fair value of identifiable intangible assets upon acquisition and we review for impairment annually in the 36 fourth quarter and whenever market or business events indicate there may be a potential impairment of that intangible. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value.
In accordance with this policy, our inventory provision was $69.3 million and $75.8 million as of December 28, 2024 and December 30, 2023, respectively.
In accordance with this policy, our inventory provision was $89.9 million and $69.3 million as of December 27, 2025 and December 28, 2024, respectively.
The decrease in net cash used in investing activities of $734.9 million from 2023 to 2024 reflects the net cash paid for the acquisition of the Acquired Businesses of $784.1 million in 2023, as compared to the acquisition of SpringWell for $105.6 million in 2024, as well as a decrease in capital expenditures of $63.2 million.
The decrease in net cash used in investing activities of $198.0 million from 2024 to 2025 reflects the absence of acquisition-related outflows in 2025 and lower capital expenditures in 2025 as compared to 2024.The decrease in net cash used in investing activities of $734.9 million from 2023 to 2024 reflects the net cash paid for the acquisition of SpringWell for $105.6 million in 2024, as compared to the acquisition of the Acquired Businesses of $784.1 million in 2023, as well as a decrease in capital expenditures of $63.2 million. 32 Net cash used in financing activities was $503.3 million in 2025 compared to $363.4 million in 2024.
In 2023, financial results included: • restructuring and other charges of $54.2 million largely related to costs associated with the closure of a manufacturing facility within our Security segment and headcount actions across all segments; • asset impairment charges of $33.5 million related to the impairment of two indefinite-lived tradenames within our Outdoors segment, which were primarily the result of a decline in forecasted sales; • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2022 of approximately $24 million on net sales and approximately $7.9 million on both operating income and net income; and • transaction expenses related to the acquisition of the Acquired Businesses of $19.7 million.
In 2023, financial results included: • restructuring and restructuring-related charges of $54.2 million largely related to costs associated with the closure of a manufacturing facility within our Security segment and headcount actions across all segments; • asset impairment charges of $33.5 million related to the impairment of two indefinite-lived tradenames within our Outdoors segment, which were primarily the result of a decline in forecasted sales; • the impact of foreign exchange primarily due to movement in the Canadian dollar, Mexican peso, British pound and Chinese yuan, which had an unfavorable impact compared to 2022 of approximately $24 million on net sales and approximately $7.9 million on both operating income and net income; and • transaction expenses of $19.7 million related to the acquisition of the Emtek and Schaub premium and luxury door and cabinet hardware business (the "Emtek and Schaub Business") and the U.S. and Canadian Yale and August residential smart locks business (the "Yale and August Business", and, collectively with the Emtek and Schaub Business, the "Acquired Businesses") from ASSA ABLOY, Inc. and its affiliates ("ASSA"). 2025 Compared to 2024 Total Fortune Brands Net sales Net sales decreased by $145.8 million, or 3.2%, primarily due to sales volume decreases in China of $87.8 million.
Results of Operations The discussion of consolidated results of operations should be read in conjunction with the discussion of segment results of operations and our financial statements and notes thereto included in this Annual Report on Form 10-K.
Results of Operations The discussion of consolidated results of operations should be read in conjunction with the discussion of segment results of operations and our financial statements and notes thereto included in this Annual Report on Form 10-K. All amounts, percentages and disclosures for all periods presented reflect only our continuing operations unless otherwise noted.
(In millions) 2024 % change 2023 % change 2022 Net sales: Water $ 2,564.6 0.1 % $ 2,562.2 (0.3 )% $ 2,570.2 Outdoors 1,350.1 0.7 1,341.1 (11.6 ) 1,517.4 Security 694.3 (4.0 ) 722.9 13.8 635.4 Total net sales $ 4,609.0 (0.4 )% $ 4,626.2 (2.0 )% $ 4,723.0 Operating income: Water $ 595.1 3.6 % $ 574.3 (6.6 )% $ 614.6 Outdoors 198.0 48.3 133.5 (31.3 ) 194.2 Security 100.4 60.9 62.4 (34.6 ) 95.4 Corporate (155.6 ) 0.2 (155.3 ) 19.6 (129.9 ) Total operating income $ 737.9 20.0 % $ 614.9 (20.6 )% $ 774.3 Certain items had a significant impact on our results in 2024, 2023 and 2022.
(In millions) 2025 % change 2024 % change 2023 Net sales: Water $ 2,447.6 (4.6 )% $ 2,564.6 0.1 % $ 2,562.2 Outdoors 1,323.0 (2.0 ) 1,350.1 0.7 1,341.1 Security 692.6 (0.2 ) 694.3 (4.0 ) 722.9 Total net sales $ 4,463.2 (3.2 )% $ 4,609.0 (0.4 )% $ 4,626.2 Operating income: Water $ 542.2 (8.9 )% $ 595.1 3.6 % $ 574.3 Outdoors 83.5 (57.8 ) 198.0 48.3 133.5 Security 79.9 (20.4 ) 100.4 60.9 62.4 Corporate (189.5 ) 21.8 (155.6 ) 0.2 (155.3 ) Total operating income $ 516.1 (30.1 )% $ 737.9 20.0 % $ 614.9 Certain items had a significant impact on our results in 2025, 2024 and 2023.
In 2025, we do not expect to make any pension contributions. As of December 28, 2024, the fair value of our total pension plan assets was $177.1 million, representing funding of about 95% of the accumulated qualified benefit obligation liability.
We expect to make discretionary pension contributions of approximately $5 million to $12 million in 2026. As of December 27, 2025, the fair value of our total pension plan assets was $188.3 million, representing funding of about 95% of the accumulated qualified benefit obligation liability.
If this comparison indicates that there is an impairment, the amount of the impairment is calculated based on fair value. Fair value is estimated primarily using discounted expected future cash flows on a market-participant basis. No material impairments related to long-lived assets were recorded in 2024, 2023 or 2022.
If this comparison indicates that there is an impairment, the amount of the impairment is calculated based on fair value. Fair value is estimated primarily using discounted expected future cash flows on a market-participant basis.
If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test. We measure fair value of our indefinite-lived tradenames using the relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party.
We measure fair value of our indefinite-lived tradenames using the relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party.
Purchase obligations include contracts for raw materials and finished goods purchases, selling and administrative services, and capital expenditures. Total lease payments under non-cancellable operating leases as of December 28, 2024 were $38.6 million in 2025, $33.7 million in 2026, $26.0 million in 2027, $21.0 million in 2028, $16.6 million in 2029 and $44.7 million thereafter.
Purchase obligations include contracts for raw materials and finished goods purchases, selling and administrative services, and capital expenditures. Total lease payments under non-cancellable operating leases as of December 27, 2025 were $37.3 million in 2026, $41.2 million in 2027, $37.5 million in 2028, $31.8 million in 2029, $28.8 million in 2030 and $195.3 million thereafter.
Overview The Company is a leading innovation company focused on creating smarter, safer and more beautiful homes and lives that is focused on the design, manufacture and sale of market-leading branded products in the following categories: plumbing and accessories, including digital water products, entry door and storm door systems, security and safety products, and outdoor performance materials used in decking and railing products. 22 For the year ended December 28, 2024, net sales based on country of destination were: (In millions) United States $ 3,809.0 83 % Canada 344.5 7 China 233.6 5 Other international 221.9 5 Total $ 4,609.0 100 % We believe that the Company has certain competitive advantages including market-leading brands, a diversified mix of channels, lean and flexible supply chains and a strong capital structure, as well as a tradition of strong innovation and customer service.
Overview We are an industry leading home, security and digital products company whose purpose is to elevate every life by transforming spaces into havens that is focused on the design, manufacture and sale of market-leading branded products in the following categories: plumbing and accessories, including digital water products, entry door and storm door systems, security and safety products, and outdoor performance materials used in decking and railing products. 22 For the year ended December 27, 2025, net sales based on country of destination were: (In millions) United States $ 3,742.1 84 % Canada 344.1 8 China 147.2 3 Other international 229.8 5 Total $ 4,463.2 100 % We believe that we have certain competitive advantages including market-leading brands, a diversified mix of channels, lean and flexible supply chains and a strong capital structure, as well as a tradition of strong innovation and customer service.
The 2022 effective income tax rate was unfavorably impacted by state and local income taxes, foreign income taxed at higher rates, as well as non-deductible executive compensation. This expense was offset by favorable benefits for the release of certain uncertain tax positions, primarily related to audit closures and statute of limitations lapses, share-based compensation, and a valuation allowance decrease.
The 2024 effective income tax rate was unfavorably impacted by state and local income taxes, foreign income taxed at higher rates, as well as non-deductible executive compensation, partially offset by favorable benefits related to a valuation allowance release and decreases in uncertain tax positions and tax credits.
Share Repurchases In 2024, we repurchased 3.3 million shares of our outstanding common stock under the Company’s share repurchase programs for $240.4 million. As of December 28, 2024, the Company’s total remaining share repurchase authorization under the then current program was approximately $484.4 million.
Share Repurchases In 2025, we repurchased 4.0 million shares of our outstanding common stock under our share repurchase programs for $247.8 million. As of December 27, 2025, our total remaining share repurchase authorization under the program was approximately $827.2 million.
Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. 37 We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Qualitative factors include changes in volume, customers and the industry.
We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Qualitative factors include changes in volume, customers and the industry. If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test.
Due to the uncertainty of the timing of settlement with taxing authorities, we are unable to make reasonably reliable estimates of the period of cash settlement of unrecognized tax benefits.
Due to the uncertainty of the timing of settlement with taxing authorities, we are unable to make reasonably reliable estimates of the period of cash settlement of unrecognized tax benefits. Therefore, $21.1 million of unrecognized tax benefits as of December 27, 2025 have been excluded from the paragraph above.
Operating income grew at a compounded annual rate of 9.1% with consolidated operating margins ranging between 16% and 17% from 2022 to 2024.
Operating income declined at a compounded annual rate of 12.6% with consolidated operating margins ranging between 12% and 16% from 2023 to 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−0 removed6 unchanged
Biggest changeWe do not enter into derivatives or other financial instruments for trading or speculative purposes. We enter into financial instruments to manage and reduce the impact of changes in foreign currency exchange rates and commodity prices. The counterparties are major financial institutions. Interest Rate Risk The Company did not have any external variable rate borrowings as of December 28, 2024.
Biggest changeWe do not enter into derivatives or other financial instruments for trading or speculative purposes. We enter into financial instruments to manage and reduce the impact of changes in foreign currency exchange rates and commodity prices. The counterparties are major financial institutions. Interest Rate Risk We had $368.8 million of external variable rate borrowings as of December 27, 2025.
From time to time, we use derivative contracts to manage our exposure to commodity price volatility. 41
From time to time, we use derivative contracts to manage our exposure to commodity price volatility. 40
The estimated maximum one-day loss in the fair value of the Company’s foreign currency exchange contracts using the VAR model was $1.4 million at December 28, 2024. The 95% confidence interval signifies our degree of confidence that actual losses under foreign exchange contracts would not exceed the estimated losses.
The estimated maximum one-day loss in the fair value of our foreign currency exchange contracts using the VAR model was $1.7 million at December 27, 2025. The 95% confidence interval signifies our degree of confidence that actual losses under foreign exchange contracts would not exceed the estimated losses.
Added
A hypothetical 100 basis point change in interest rates affecting our external variable rate borrowings as of December 27, 2025 would increase annual pre-tax interest expense by $3.7 million.

Other FBIN 10-K year-over-year comparisons