DISCUSSION AND ANALYSIS BY THE MANAGEMENT OF


FINANCIAL SITUATION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and the notes thereto, which are included in
this report, as well as our audited consolidated financial statements for the
year ended December 31, 2020, which are included in our Annual Report on Form
10-K for the year ended December 31, 2020.

This discussion contains forward-looking statements that are made pursuant to
the safe harbor provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), regarding our business, operations or financial condition in
addition to statements regarding our general business strategies, market
potential, future financial performance, the potential of our brands and other
matters, expected capital spending, expected pension contributions, the
anticipated impact of supply chain, labor and transportation constraints, a
volatile global supply chain environment as well as increased rates of
inflation, unfavorable fluctuations in foreign exchange rates and the ongoing
costs of tariffs, the anticipated impact of recently issued accounting standards
on our financial statements, planned business strategies, anticipated market
potential, future financial performance, impact of acquisitions and other
matters including the expected or potential impact of the novel coronavirus
("COVID-19") pandemic. Statements preceded by, followed by or that otherwise
include the words "believes," "expects," "anticipates," "intends," "projects,"
"estimates," "plans" and similar expressions or future or conditional verbs such
as "will," "should," "would," "may" and "could" are generally forward-looking in
nature and not historical facts. Where, in any forward-looking statement, we
express an expectation or belief as to future results or events, such
expectation or belief is based on current expectations, estimates, assumptions
and projections about our industry, business and future financial results,
available at the time this report is filed with the Securities and Exchange
Commission. Our actual results could differ materially from the results
contemplated by these forward-looking statements due to a number of factors,
including but not limited to: (i) our reliance on the North American home
improvement, repair and remodel and new home construction activity levels, and
the North American and global economies generally, (ii) the competitive nature
of consumer and trade brand businesses, (iii) our ability to develop new
products or processes and improve existing products and processes, (iv) our
reliance on key customers and suppliers, including wholesale distributors and
dealers, (v) risks associated with our ability to improve organizational
productivity and global supply chain efficiency and flexibility, (vi) risks
associated with global commodity and energy availability and price volatility,
as well as the possibility of sustained inflation, (vii) risks associated with
doing business globally, including changes in trade-related tariffs and risks
with uncertain trade environments, (viii) changes in government and industry
regulatory standards, (ix) risks associated with the disruption of operations,
(x) our inability to obtain raw materials and finished goods in a timely and
cost-effective manner, (xi) impairments in the carrying value of goodwill or
other acquired intangible assets, (xii) delays or outages in our information
technology system or computer networks, (xiii) risk of increases in our defined
benefit-related costs and funding requirements, (xiv) the uncertainties relating
to the impact of COVID-19 on the Company's business, financial performance and
operating results, (xv) risks associated with entering into potential strategic
acquisitions and integrating acquired property, (xvi) future tax law changes or
the interpretation of existing tax laws, (xvii) our ability to secure and
protect our intellectual property rights, (xviii) our ability to attract and
retain qualified personnel and other labor constraints, (xix) potential
liabilities and costs from claims and litigation, and (xx) our ability to access
the capital markets on terms acceptable to us. These and other factors are
discussed in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K
for the year ended December 31, 2020. We undertake no obligation to, and
expressly disclaim any such obligation to, update or clarify 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.



                                       21

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PREVIEW

References to "Fortune Brands," "the Company," "we," "our" and "us" refer to
Fortune Brands Home & Security, Inc. and its consolidated subsidiaries as a
whole, unless the context otherwise requires. The Company is a leading home and
security products company with a portfolio of leading branded products used for
residential home repair, remodeling, new construction and security applications.

We believe that the Company has certain competitive advantages including
market-leading brands, a diversified mix of channels, lean and flexible supply
chains, a decentralized business model and a strong capital structure, as well
as a tradition of strong innovation and customer service. We believe these
long-held strengths will enable us to compete effectively and continue to focus
on outperforming our markets in growth, profitability and returns in order to
drive increased shareholder 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 believe that in the long term our best opportunities are to invest in profitable organic growth initiatives. We also believe we have the potential to generate further growth by leveraging our cash flow and balance sheet strength by pursuing accretive strategic acquisitions, non-controlling interests and joint ventures, and by returning assets. liquidity to shareholders through a combination of dividends and share buybacks. as explained in more detail under “Liquidity and capital resources” below.

The U.S. market for our products primarily consists of spending on both new home
construction and repair and remodel activities within existing homes, with a
substantial majority of the markets we serve consisting of repair and remodel
spending. We believe the market for our home products in the U.S. will continue
to grow due to demographics that support long-term sustainable housing growth as
well as an underbuilt housing supply and an aged housing stock requiring repair
and remodel investments. We believe that these market conditions will result in
even more elongated demand for our products. Growth in the U.S. market for our
products will largely depend on consumer confidence, employment, home prices,
stable mortgage rates and credit availability.

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
increased rates of inflation, unfavorable fluctuations in foreign exchange rates
and the ongoing costs of tariffs. We continue to manage these challenges and are
diligently working to offset potential unfavorable impacts of these items
through continuous productivity improvement initiatives and price increases.

In January 2021, we obtained control of and began consolidating Flo
Technologies, Inc. ("Flo") in our Plumbing segment results. Flo is a U.S.
manufacturer of comprehensive water monitoring and shut-off systems with leak
detection technologies. During 2020, we applied the equity method of accounting
to our investment in Flo as the minority shareholders had substantive
participating rights which precluded consolidation. The fair value allocated to
assets acquired and liabilities assumed as of January 1, 2021 was $87.8 million,
net of cash acquired of $9.7 million.

In December 2020, we acquired 100% of the outstanding equity of Larson
Manufacturing, the North American market leading brand of storm, screen and
security doors ("Larson"). Larson also sells related outdoor living products
including retractable screens and porch windows. The Company completed the
acquisition for a total purchase price, excluding expected tax benefits, of
approximately $717.5 million, net of cash acquired. The results of operations
are included in the Outdoors & Security segment.



                                       22

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RESULTS OF OPERATIONS

Nine Months Ended September 30, 2021 Compared To Nine Months Ended September 30,
2020

                                            Net Sales
                                                          % Change
                                                          vs. Prior
(In millions)                2021          2020             Year
Plumbing                   $ 2,057.6     $ 1,564.4            31.5   %
Outdoors & Security          1,525.4       1,052.7            44.9
Cabinets                     2,110.4       1,813.5            16.4
Net sales                  $ 5,693.4     $ 4,430.6            28.5   %

                                     Operating Income (Loss)
                                                        % Change
                                                        vs. Prior
                             2021          2020           Year
Plumbing                   $   483.3     $   330.6            46.2   %
Outdoors & Security            211.7         143.5            47.5
Cabinets                       214.2         163.1            31.3
Less: Corporate expenses       (79.3 )       (69.0 )         (14.9 )
Operating income           $   829.9     $   568.2            46.1   %




The following discussion of consolidated results of operations and segment
results refers to the nine months ended September 30, 2021 compared to the nine
months ended September 30, 2020. Consolidated results of operations should be
read in conjunction with segment results of operations.

Net sales

Net sales increased by $1,262.8 million, or 28.5%, due to higher sales volume
including the favorable comparison to 2020 when our volumes were impacted by the
COVID-19 pandemic, the benefit from the Larson acquisition ($316.0 million),
price increases to help mitigate the impact of cumulative commodity and
transportation cost increases and favorable mix, as well as favorable foreign
exchange of approximately $51 million. These benefits were partially offset by
higher promotion and rebate costs.

Cost of products sold

Cost of products sold increased by $763.3 million, or 26.6%, due to higher net
sales, the impact of the Larson acquisition including higher amortization of the
acquisition related inventory fair value adjustment ($3.4 million in 2021),
commodity cost inflation, product mix, labor inflation, and higher tariffs,
partially offset by the benefit from manufacturing productivity improvements.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $ 247.9 million, or 27.0%, due to higher costs related to employees, transportation and advertising.

Amortization of intangible assets

Amortization of intangible assets increased by $ 17.4 million mainly due to the acquisition of Larson in our Outdoors & Security segment and the consolidation in 2021 of Flo in our Plumbing segment.

Asset impairment charges

Asset impairment charges of $ 22.5 million in 2020 related to indefinite life trade names within our Plumbing and Cabinets segments.

Restructuring costs

Restructuring charges of $11.5 million in the nine months ended September 30,
2021 largely related to severance costs associated with the relocation of
manufacturing facilities within our Outdoors & Security and Cabinets segments.
Restructuring charges of $16.5 million in the nine months ended September 30,
2020 largely related to headcount actions associated with COVID-19-related
reductions in demand across all segments and costs associated with changes in
our manufacturing process within our Plumbing segment.





                                       23
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS (Continued)

Operating result

Operating income increased by $261.7 million, or 46.1%, primarily due to higher
net sales, the benefit from the Larson acquisition, manufacturing productivity
improvements and the absence of the 2020 asset impairment charges, as well as
favorable foreign exchange of approximately $16 million. These benefits were
partially offset by higher employee-related, commodity, transportation, and
advertising costs, higher amortization of intangible assets, higher promotion
and rebate costs and higher tariffs.

Interest charges

Interest expense has decreased $ 1.2 million To $ 63.2 million due to lower average interest rates, partially offset by higher average borrowing.

Other expenses (income), net

Other expense, net, of $0.7 million in the nine months ended September 30, 2021,
included foreign currency adjustments, net of hedges, and a non-cash loss of
$4.5 million related to the remeasurement of our investment in Flo immediately
prior to consolidation, partially offset by defined benefit plan and interest
income. Other income, net was $13.4 million in the nine months ended September
30, 2020, primarily due to gains of $11.0 million related to our January 2020
investment in Flo.

Income taxes

The effective income tax rates for the nine months ended September 30, 2021 and
2020 were 22.0% and 23.5%, respectively. The effective income tax rate in 2021
was favorably impacted by a benefit related to decreases in uncertain tax
positions and a benefit related to share-based compensation.

Net income attributable to Fortune Brands

Net income attributable to Fortune Brands was $597.1 million in the nine months
ended September 30, 2021 compared to $389.5 million in the nine months ended
September 30, 2020. The increase was primarily due to higher operating income,
lower equity in losses of affiliate and lower interest expense, partly offset by
higher income tax expenses and higher other expense.

Results by segment

Plumbing

Net sales increased by $493.2 million, or 31.5%, due to higher sales volume
across all brands and markets, including showroom customers whose locations were
negatively impacted in 2020 by the COVID-19 pandemic, and price increases to
help mitigate the impact of cumulative commodity and transportation cost
increases, as well as favorable foreign exchange of approximately $46 million.
These benefits were partially offset by higher sales rebate costs.

Operating income increased by $152.7 million, or 46.2%, due to higher net sales,
the absence of the 2020 asset impairment charge ($13.0 million), the benefit
from manufacturing productivity improvements and favorable mix, as well as
favorable foreign exchange of approximately $17 million. These benefits were
partially offset by the impact of higher employee-related, advertising, freight,
tariffs, commodity and rebate costs.

Exterior and security

Net sales increased by $472.7 million, or 44.9%, due to the benefit from the
Larson acquisition ($316.0 million), higher sales volume including the favorable
comparison to 2020 when our volumes were impacted by the COVID-19 pandemic,
price increases to help mitigate the impact of cumulative commodity and
transportation cost increases, favorable product mix and lower rebates due to
timing of sales in 2021 versus prior year period, as well as favorable foreign
exchange of approximately $1 million.

Operating income increased by $68.2 million, or 47.5%, due to higher net sales,
the benefit from the Larson acquisition and manufacturing productivity
improvements. These benefits were partially offset by commodity cost inflation,
higher freight and employee-related costs and higher restructuring charges, as
well as unfavorable foreign exchange of approximately $1 million.

Wardrobes

Net sales increased by $296.9 million, or 16.4%, due to higher sales volume in
both our make-to-order and stock products, including the favorable comparison to
2020 when our volumes were impacted by the COVID-19 pandemic, favorable mix and
price increases to help mitigate the impact of cumulative commodity and
transportation cost increases, as well as favorable foreign exchange of
approximately $4 million.



                                       24
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS (Continued)

Operating income increased by $51.1 million, or 31.3%, due to higher net sales,
the benefit from manufacturing productivity improvements, the absence of the
2020 asset impairment charge ($9.5 million) and lower tariff, advertising and
restructuring costs. These factors were partly offset by higher freight costs,
commodity cost inflation and higher employee-related costs.

Business

Corporate spending increased by $ 10.3 million, or 14.9%, due to higher personnel and consulting costs.



Three Months Ended September 30, 2021 Compared To Three Months Ended September
30, 2020

                                          Net Sales
                                                         % Change
                                                        vs. Prior
(In millions)                2021          2020            Year
Plumbing                   $   741.4     $   590.6         25.5   %
Outdoors & Security            528.4         406.7         29.9
Cabinets                       716.5         654.8          9.4
Net sales                  $ 1,986.3     $ 1,652.1         20.2   %

                                   Operating Income (Loss)
                                                         % Change
                                                        vs. Prior
                             2021          2020            Year
Plumbing                   $   166.5     $   116.6         42.8   %
Outdoors & Security             80.4          66.8         20.4
Cabinets                        67.2          82.1        (18.1 )
Less: Corporate expenses       (27.5 )       (25.3 )       (8.7 )
Operating income           $   286.6     $   240.2         19.3   %



The following analysis of consolidated operating results and segment results relates to the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The consolidated operating results should be read in conjunction with the segment operating results.

Net sales

Net sales increased by $334.2 million, or 20.2%, due to higher sales volume, the
benefit from the Larson acquisition ($99.1 million), price increases to help
mitigate the impact of cumulative commodity and transportation cost increases,
lower promotion and rebate costs due to the timing of sales in 2021 versus prior
year period, as well as favorable foreign exchange of approximately $16 million.

Cost of products sold

Cost of products sold increased by $208.5 million, or 19.5%, due to the impact
of the Larson acquisition, higher net sales, commodity cost inflation, higher
employee-related costs and higher tariffs, partially offset by favorable mix.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $ 71.9 million, or 21.9%, due to higher transportation, advertising and personnel costs.

Amortization of intangible assets

Amortization of intangible assets increased by $5.4 million primarily due to the
Larson acquisition in our Outdoors & Security segment and the 2021 consolidation
of Flo in our Plumbing segment.

Restructuring costs

Restructuring charges of $3.6 million in the three months ended September 30,
2021 largely related to severance costs associated with headcount actions within
our Outdoors & Security and Cabinets segments. Restructuring charges of $1.6
million in the three months ended September 30, 2020 largely related to
headcount actions associated with COVID-19-related reductions in demand across
all segments and other costs associated with changes in our manufacturing
process within our Plumbing segment, partially offset by a credit related to
severance costs and the cancellation of a previously approved restructuring
action in our Cabinets segment.



                                       25

--------------------------------------------------------------------------------

RESULTS OF OPERATIONS (Continued)

Operating result

Operating income increased by $46.4 million, or 19.3%, primarily due to higher
net sales, the benefit from the Larson acquisition, manufacturing productivity
improvements and favorable mix, as well as favorable foreign exchange of
approximately $5 million. These benefits were partially offset by higher
commodity, transportation, employee-related and advertising costs, higher
amortization of intangible assets and higher tariff costs.

Interest charges

Interest expense increased by $ 0.5 million To $ 20.6 million due to higher average borrowings, partially offset by lower average interest rates.

Other income, net

Other income, net was $1.3 million in the three months ended September 30, 2021,
compared to $2.1 million in the three months ended September 30, 2020. The
decrease in other income, net is primarily due unfavorable foreign currency
adjustments, net of hedges, partially offset by higher defined benefit income in
the quarter ($1.4 million increase).

Income taxes

The effective tax rates for the three months ended September 30, 2021 and 2020 were 24.4% and 24.3% respectively.

Net income attributable to Fortune Brands

Net income attributable to Fortune Brands was $202.1 million in the three months
ended September 30, 2021 compared to $164.6 million in the three months ended
September 30, 2020. The increase was primarily due to higher operating income
and lower equity in losses of affiliate, partly offset by higher income tax
expenses, lower other income and higher interest expense.

Results by segment

Plumbing

Net sales increased by $150.8 million, or 25.5%, due to higher sales volume
across all brands and markets, price increases to help mitigate the impact of
cumulative commodity and transportation cost increases and lower sales rebate
costs due to timing of sales in 2021 versus prior year period, as well as
favorable foreign exchange of approximately $15 million.

Operating income increased by $49.9 million, or 42.8%, due to higher net sales,
favorable mix, lower restructuring costs and the benefit from manufacturing
productivity improvements, as well as favorable foreign exchange of
approximately $6 million. These benefits were partially offset by the impact of
higher employee-related costs, commodity cost inflation, advertising costs,
tariffs, and freight costs.

Exterior and security

Net sales increased by $121.7 million, or 29.9%, due to the benefit from the
Larson acquisition ($99.1 million) and price increases to help mitigate the
impact of cumulative commodity and transportation cost increases. These benefits
were partially offset by unfavorable product mix due to material availability.

Operating income increased by $13.6 million, or 20.4%, due to higher net sales,
the benefit from the Larson acquisition and lower employee-related costs. These
benefits were partially offset by commodity cost inflation and higher freight
and restructuring costs, as well as unfavorable foreign exchange of
approximately $1 million.

Wardrobes

Net sales increased by $61.7 million, or 9.4%, due to price increases to help
mitigate the impact of cumulative commodity and transportation cost increases,
higher sales volume in both our make-to-order and stock products and favorable
mix, as well as favorable foreign exchange of approximately $2 million.

Operating income decreased by $14.9 million, or 18.1%, due to higher freight
costs, commodity cost inflation and higher restructuring costs. These factors
were partly offset by higher net sales, the benefit from manufacturing
productivity improvements and lower tariff costs.

Business

Corporate spending increased by $ 2.2 million, or 8.7%, due to higher consultancy and personnel costs.



                                       26

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LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are cash on hand, cash flows from operating
activities, cash borrowed under our credit facilities and cash from debt
issuances in the capital markets. Our operating income is generated by our
subsidiaries. We believe our operating cash flows, including funds available
under our credit facilities and access to capital markets, provide sufficient
liquidity to support the Company's liquidity and financing needs, which are to
support working capital requirements, fund capital expenditures and service
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.

Our cash flows from operations, borrowing availability and overall liquidity are
subject to certain risks and uncertainties, including those described in the
section of our Annual Report on Form 10-K for the year-ended December 31, 2020
entitled "Item 1A. Risk Factors." In addition, we cannot predict whether or when
we may enter into acquisitions, joint ventures or dispositions, 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.

Long-term debt

At September 30, 2021, the Company had aggregate outstanding notes in the amount
of $1.8 billion, with varying maturities (the "Notes"). The Notes are unsecured
senior obligations of the Company. The following table provides a summary of the
Company's outstanding Notes, including the net carrying value of the Notes, net
of underwriting commissions, price discounts and debt issuance costs as of
September 30, 2021 and December 31, 2020:



                                                                                 Net Carrying Value
                           Principal      Issuance Date    Maturity Date     September       December 31,
(in millions)                Amount                                           30, 2021           2020
4.000% Senior Notes        $    500.0       June 2015        June 2025      $      497.2     $      496.6
4.000% Senior Notes (the
"2018 Notes")                   600.0     September 2018   September 2023          597.9            597.1
3.250% Senior Notes (the
"2019 Notes")                   700.0     September 2019   September 2029          694.0            693.5
Total Senior Notes         $  1,800.0                                       $    1,789.1     $    1,787.2


Credit Facilities

In April 2020, the Company entered into a 364-day, supplemental $400 million
revolving credit facility (the "2020 Revolving Credit Agreement"). This
supplemental facility was never utilized by the Company prior to its expiration
in April 2021.



In September 2019, the Company entered into a second amended and restated $1.25
billion revolving credit facility (the "2019 Revolving Credit Agreement"), and
borrowings thereunder will be used for general corporate purposes. The terms and
conditions of the 2019 Revolving Credit Agreement, including the total
commitment amount, essentially remained the same as under the previous credit
agreement, except that the maturity date was extended to September 2024.
Interest rates under the 2019 Revolving Credit Agreement are variable based on
LIBOR at the time of the borrowing and the Company's long-term credit rating and
can range from LIBOR + 0.91% to LIBOR + 1.4%. On September 30, 2021 and December
31, 2020 our outstanding borrowings under this facility were $840.0 million and
$785.0 million, respectively. This facility is included in long-term debt in the
condensed consolidated balance sheets. As of September 30, 2021, we were in
compliance with all covenants under this facility.

Species and seasonality

On September 30, 2021, we had cash and cash equivalents of $460.7 million, of
which $404.1 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. The repatriation of
non-U.S. cash balances from certain subsidiaries could have adverse tax
consequences as we may be required to pay and record tax expense on those funds
that are repatriated.

Our operating cash flows are significantly impacted by the seasonality of our
business. We typically generate most of our operating cash flow in the third and
fourth quarters of each year. We use operating cash in the first quarter of the
year.

We believe that our current cash position, cash flow generated from operations,
and amounts available under our revolving credit facility should be sufficient
for our operating requirements and enable us to fund our capital expenditures,
dividend payments, and any required long-term debt payments. In addition, we
believe that we have the ability to obtain alternative sources of financing if
required.



                                       27
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Share buybacks and dividends

In the first nine months of 2021, we repurchased 2.9 million shares of our
outstanding common stock under the Company's 2020 share repurchase program for
$270.1 million. On July 23, 2021, our Board of Directors authorized the
repurchase of up to an additional $400 million of shares of our common stock
over the two years ending July 23, 2023. As of September 30, 2021, the Company's
total remaining share repurchase authorization under its 2020 and 2021 share
repurchase programs was approximately $592.4 million. The share repurchase
programs do not obligate the Company to repurchase any specific dollar amount or
number of shares and may be suspended or discontinued at any time.

In the first nine months of 2021, we paid dividends in the amount of $107.9
million to the Company's shareholders. Our Board of Directors will continue to
evaluate dividend payment opportunities on a quarterly basis. There can be no
assurance as to when and if future dividends will be paid, and at what level,
because the payment of dividends is dependent on our financial condition,
results of operations, cash flows, capital requirements and other factors deemed
relevant by our Board of Directors. There are no restrictions on the ability of
our subsidiaries to pay dividends or make other distributions to Fortune Brands.

Acquisitions

We periodically review our brand portfolio and assess potential strategic transactions and other capital initiatives to increase shareholder value.

In January 2021, we obtained control of and began consolidating Flo in our
Plumbing segment results. Flo is a U.S. manufacturer of comprehensive water
monitoring and shut-off systems with leak detection technologies. During 2020,
we applied the equity method of accounting to our investment in Flo as the
minority shareholders had substantive participating rights which precluded
consolidation. The fair value allocated to assets acquired and liabilities
assumed as of January 1, 2021 was $87.8 million, net of cash acquired of $9.7
million.

In December 2020, we acquired 100% of the outstanding equity interests of
Larson, the North American market leading brand of storm, screen and security
doors. Larson also sells related outdoor living products including retractable
screens and porch windows. The Company completed the acquisition for a total
purchase price, excluding expected tax benefits, of approximately $717.5
million, net of cash acquired. The results of operations are included in the
Outdoors & Security segment.

Cash Flows

Below is a summary of cash flows for the nine months ended September 30, 2021
and 2020.



                                                    Nine Months Ended
(In millions)                                         September 30,
                                                    2021          2020

Net cash flow generated by operating activities $ 430.8 $ 506.8
Net cash used in investing activities

                (106.1 )     (124.1 )
Net cash used in financing activities                (285.1 )     (308.8 )

Effect of exchange rate changes on cash 1.0 1.9 Net increase in cash and cash equivalents $ 40.6 $ 75.8




Net cash provided by operating activities was $430.8 million in the nine months
ended September 30, 2021, compared to net cash provided by operating activities
of $506.8 million in the nine months ended September 30, 2020. The decrease in
cash provided of $76.0 million was primarily due to higher increases in accounts
receivable associated with our sales growth, and our planned increase in
inventory to mitigate the impact of an uncertain and volatile global supply
chain environment. These factors were partially offset by higher accounts
payable and higher net income.



Net cash used in investing activities was $106.1 million in the nine months
ended September 30, 2021, compared to net cash used in investing activities of
$124.1 million in the nine months ended September 30, 2020. The decrease in cash
used of $18.0 million in 2021 was primarily due to the acquisition of additional
shares of Flo in January and April 2020 ($59.4 million) and the cash acquired
during the consolidation of Flo in January 2021, partially offset by higher
capital expenditures.



Net cash used in financing activities was $285.1 million in the nine months
ended September 30, 2021, compared to cash used in financing activities of
$308.8 million in the nine months ended September 30, 2020. The decrease in cash
used of $23.7 million was primarily due to higher net borrowings in 2021
compared to 2020 ($155.0 million increase), partially offset by higher share
repurchases in 2021 compared to 2020 ($102.9 million increase), and $23.4
decrease in the proceeds from the exercise of stock options and higher dividends
to shareholders ($8.0 million increase).





                                       28
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Pension Plans

Subsidiaries of Fortune Brands sponsor their respective defined benefit pension
plans that are funded by a portfolio of investments maintained within our
benefit plan trust. As of December 31, 2020, the fair value of our total pension
plan assets was $784.9 million, representing 84% of the accumulated benefit
obligation liability. During the nine months ended September 30, 2021, we made
pension contributions of approximately $21 million. For the foreseeable future,
we believe that we have sufficient liquidity to meet the minimum funding that
may be required by the Pension Protection Act of 2006.

Exchange

We have operations in various foreign countries, mainly Canada, China,
Mexico, the UK, France, Australia, Japan and South Africa. Therefore, changes in the value of the relevant currencies affect our financial statements when converted into we dollars.

RECENTLY ISSUED ACCOUNTING STANDARDS

The adoption of recent accounting standards, as discussed in Note 2, "Recently
Issued Accounting Standards," to our Consolidated Financial Statements, has not
had and is not expected to have a significant impact on our revenue, earnings or
liquidity.

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