10-Q


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q 
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from             to
Commission File Number 001-07845
LEGGETT & PLATT, INCORPORATED
(Exact name of registrant as specified in its charter)
 
Missouri
 
44-0324630
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
No. 1 Leggett Road
Carthage, Missouri
 
64836
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code (417) 358-8131
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ý     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes   ý     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
ý
  
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨  (Do not check if a smaller reporting company)
  
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ¨     No   ý
Common stock outstanding as of October 23, 2015: 136,095,709




PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LEGGETT & PLATT, INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Amounts in millions)
September 30,
2015
 
December 31,
2014
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
251.2

 
$
332.8

Trade receivables, net
486.8

 
470.4

Other receivables, net
42.8

 
52.9

Total receivables, net
529.6

 
523.3

Inventories
 
 
 
Finished goods
252.8

 
251.9

Work in process
41.6

 
55.5

Raw materials and supplies
255.4

 
247.0

LIFO reserve
(45.2
)
 
(73.0
)
Total inventories, net
504.6

 
481.4

Other current assets
94.3

 
91.8

Total current assets
1,379.7

 
1,429.3

PROPERTY, PLANT AND EQUIPMENT—AT COST
 
 
 
Machinery and equipment
1,105.1

 
1,151.4

Buildings and other
551.6

 
551.1

Land
40.9

 
40.1

Total property, plant and equipment
1,697.6

 
1,742.6

Less accumulated depreciation
1,153.9

 
1,193.8

Net property, plant and equipment
543.7

 
548.8

OTHER ASSETS
 
 
 
Goodwill
815.4

 
829.4

Other intangibles, less accumulated amortization of $139.8 and $129.7 as of September 30, 2015 and December 31, 2014, respectively
200.3

 
204.7

Sundry
127.1

 
128.4

Total other assets
1,142.8

 
1,162.5

TOTAL ASSETS
$
3,066.2

 
$
3,140.6

CURRENT LIABILITIES
 
 
 
Current maturities of long-term debt
$
3.4

 
$
201.7

Accounts payable
343.5

 
369.8

Accrued expenses
312.7

 
337.6

Other current liabilities
91.4

 
83.1

Total current liabilities
751.0

 
992.2

LONG-TERM LIABILITIES
 
 
 
Long-term debt
989.1

 
766.7

Other long-term liabilities
179.9

 
185.0

Deferred income taxes
45.8

 
41.8

Total long-term liabilities
1,214.8

 
993.5

COMMITMENTS AND CONTINGENCIES

 

EQUITY
 
 
 
Common stock
2.0

 
2.0

Additional contributed capital
521.2

 
502.4

Retained earnings
2,173.4

 
2,061.3

Accumulated other comprehensive loss
(68.4
)
 
(2.6
)
Treasury stock
(1,538.8
)
 
(1,416.6
)
Total Leggett & Platt, Inc. equity
1,089.4

 
1,146.5

Noncontrolling interest
11.0

 
8.4

Total equity
1,100.4

 
1,154.9

TOTAL LIABILITIES AND EQUITY
$
3,066.2

 
$
3,140.6

See accompanying notes to consolidated condensed financial statements.

2


LEGGETT & PLATT, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
Nine Months Ended
 
Three Months Ended
 
September 30,
 
September 30,
(Amounts in millions, except per share data)
2015
 
2014
 
2015
 
2014
Net sales
$
2,972.6

 
$
2,829.0

 
$
1,009.1

 
$
997.4

Cost of goods sold
2,283.0

 
2,242.4

 
768.0

 
788.3

Gross profit
689.6

 
586.6

 
241.1

 
209.1

Selling and administrative expenses
301.0

 
317.6

 
96.9

 
131.4

Amortization of intangibles
15.6

 
14.5

 
5.2

 
4.9

Goodwill impairment
4.1

 
—

 
—

 
—

Other (income) expense, net
(3.5
)
 
(8.9
)
 
(2.5
)
 
(2.6
)
Earnings from continuing operations before interest and income taxes
372.4

 
263.4

 
141.5

 
75.4

Interest expense
32.5

 
31.2

 
10.3

 
10.4

Interest income
3.4

 
4.3

 
1.1

 
1.5

Earnings from continuing operations before income taxes
343.3

 
236.5

 
132.3

 
66.5

Income taxes
97.1

 
57.5

 
36.1

 
13.1

Earnings from continuing operations
246.2

 
179.0

 
96.2

 
53.4

Earnings (loss) from discontinued operations, net of tax
1.2

 
(99.4
)
 
(.1
)
 
(4.4
)
Net earnings
247.4

 
79.6

 
96.1

 
49.0

(Earnings) attributable to noncontrolling interest, net of tax
(2.8
)
 
(2.2
)
 
(.9
)
 
(.8
)
Net earnings attributable to Leggett & Platt, Inc. common shareholders
$
244.6

 
$
77.4

 
$
95.2

 
$
48.2

Earnings per share from continuing operations attributable to Leggett & Platt, Inc. common shareholders
 
 
 
 
 
 
 
Basic
$
1.72

 
$
1.25

 
$
.68

 
$
.37

Diluted
$
1.70

 
$
1.23

 
$
.67

 
$
.37

Earnings (loss) per share from discontinued operations attributable to Leggett & Platt, Inc. common shareholders
 
 
 
 
 
 
 
Basic
$
.01

 
$
(.70
)
 
$
—

 
$
(.03
)
Diluted
$
.01

 
$
(.69
)
 
$
—

 
$
(.03
)
Net earnings per share attributable to Leggett & Platt, Inc. common shareholders
 
 
 
 
 
 
 
Basic
$
1.73

 
$
.55

 
$
.68

 
$
.34

Diluted
$
1.71

 
$
.54

 
$
.67

 
$
.34

 
 
 
 
 
 
 
 
Cash dividends declared per share
$
.94

 
$
.91

 
$
.32

 
$
.31

 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
Basic
141.3

 
141.5

 
140.4

 
140.8

Diluted
143.2

 
143.2

 
142.5

 
142.5

See accompanying notes to consolidated condensed financial statements.

3


LEGGETT & PLATT, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
 
Nine Months Ended
 
Three Months Ended
 
September 30,
 
September 30,
(Amounts in millions)
2015
 
2014
 
2015
 
2014
Net earnings
$
247.4

 
$
79.6

 
$
96.1

 
$
49.0

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustments
(63.9
)
 
(38.0
)
 
(28.9
)
 
(33.7
)
Cash flow hedges
(4.8
)
 
3.0

 
(4.4
)
 
1.2

Defined benefit pension plans
2.7

 
1.3

 
.9

 
.6

Other comprehensive (loss) income
(66.0
)
 
(33.7
)
 
(32.4
)
 
(31.9
)
Comprehensive income
181.4

 
45.9

 
63.7

 
17.1

Less: comprehensive (income) attributable to noncontrolling interest
(2.6
)
 
(2.2
)
 
(.6
)
 
(1.0
)
Comprehensive income attributable to Leggett & Platt, Inc.
$
178.8

 
$
43.7

 
$
63.1

 
$
16.1

See accompanying notes to consolidated condensed financial statements.

4

LEGGETT & PLATT, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Nine Months Ended September 30,
(Amounts in millions)
2015
 
2014
OPERATING ACTIVITIES
 
 
 
Net earnings
$
247.4

 
$
79.6

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation
62.7

 
67.0

Amortization of intangibles and debt issuance costs
22.3

 
20.6

Provision for losses on accounts and notes receivable
2.9

 
4.1

Writedown of inventories
6.5

 
7.2

Goodwill impairment
4.1

 
108.0

Long-lived asset impairments
2.4

 
1.1

Net gain from sales of assets and businesses
(5.1
)
 
(4.8
)
Deferred income tax expense (benefit)
6.4

 
(22.1
)
Stock-based compensation
33.5

 
29.7

Excess tax benefits from stock-based compensation
(14.8
)
 
(5.2
)
Other, net
(.8
)
 
(10.4
)
Increases/decreases in, excluding effects from acquisitions and divestitures:
 
 
 
Accounts and other receivables
(25.4
)
 
(155.2
)
Inventories
(42.0
)
 
(6.2
)
Other current assets
2.1

 
.3

Accounts payable
(22.0
)
 
35.1

Accrued expenses and other current liabilities
(23.4
)
 
66.9

NET CASH PROVIDED BY OPERATING ACTIVITIES
256.8

 
215.7

INVESTING ACTIVITIES
 
 
 
Additions to property, plant and equipment
(78.5
)
 
(63.0
)
Purchases of companies, net of cash acquired
(11.1
)
 
(70.2
)
Proceeds from sales of assets and businesses
17.8

 
12.0

Other, net
(4.9
)
 
(15.8
)
NET CASH USED FOR INVESTING ACTIVITIES
(76.7
)
 
(137.0
)
FINANCING ACTIVITIES
 
 
 
Payments on long-term debt
(204.5
)
 
(7.4
)
Additions to long-term debt
.4

 
.1

Change in commercial paper and short-term debt
229.3

 
140.1

Dividends paid
(128.0
)
 
(124.9
)
Issuances of common stock
7.1

 
16.5

Purchases of common stock
(162.5
)
 
(129.0
)
Excess tax benefits from stock-based compensation
14.8

 
5.2

Other, net
(6.8
)
 
(.9
)
NET CASH USED FOR FINANCING ACTIVITIES
(250.2
)
 
(100.3
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(11.5
)
 
(8.2
)
DECREASE IN CASH AND CASH EQUIVALENTS
(81.6
)
 
(29.8
)
CASH AND CASH EQUIVALENTS—January 1,
332.8

 
272.7

CASH AND CASH EQUIVALENTS—September 30,
$
251.2

 
$
242.9

See accompanying notes to consolidated condensed financial statements.






5


LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in millions, except per share data)
1. INTERIM PRESENTATION
The interim financial statements of Leggett & Platt, Incorporated (“we”, “us” or “our”) included herein have not been audited by an independent registered public accounting firm. The statements include all adjustments, including normal recurring accruals, which management considers necessary for a fair presentation of our financial position and operating results for the periods presented. We have prepared the statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of results to be expected for an entire year.
The December 31, 2014 financial position data included herein was derived from the audited consolidated financial statements included in Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). For further information, refer to the financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2014.
Reclassifications
Certain reclassifications have been made to the prior year's information in the Consolidated Condensed Financial Statements and related notes to conform to the third quarter 2015 presentation. The first reclassification was a result of changes in our management organizational structure and related internal reporting (See Note 4 - Segment Information); The final was for a small balance sheet reclassification between Machinery and Equipment and Goodwill associated with a measurement period adjustment related to an acquisition.
2. NEW ACCOUNTING GUIDANCE
In May 2014, the Financial Accounting Standards Board (FASB) issued new authoritative literature, Revenue from Contracts with Customers, which supersedes much of the existing authoritative literature for revenue recognition. This guidance will be effective January 1, 2018. We are evaluating the newly issued guidance and the impact on our future financial statements.
The FASB has issued accounting guidance, in addition to the issuance discussed above, effective for current and future periods. This guidance did not have a material impact on our current financial statements, and we do not believe it will have a material impact on our future financial statements.
3. INVENTORIES
About 50% of our inventories are valued using the Last-In, First-Out (LIFO) cost method and the remainder using the First-In, First-Out (FIFO) cost method. We calculate our LIFO reserve (the excess of FIFO cost over LIFO cost) on an annual basis. During interim periods, we estimate the current year annual change in the LIFO reserve (i.e., the annual LIFO expense or benefit) and allocate that change ratably to the four quarters. Because accurately predicting inventory prices for the year is difficult, the change in the LIFO reserve for the full year could be significantly different from the amount currently estimated. In addition, a variation in expected ending inventory levels could also impact total change in the LIFO reserve for the year. Any change in the annual LIFO estimate will be reflected in the fourth quarter.
The following table contains the LIFO benefit (expense) included in continuing operations for each of the periods presented.
 
 
Nine Months Ended September 30,
 
Three Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
LIFO benefit (expense)
$
23.3

 
$
(1.6
)
 
$
13.3

 
$
(1.2
)




6
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


4. SEGMENT INFORMATION
Our reportable segments are the same as our operating segments, which also correspond with our management organizational structure. Because of the November 2014 divestiture of the majority of the Store Fixtures business unit (formerly in the Commercial Products segment) along with the retirement of the Senior Operating Vice President of the Industrial Materials segment, our management organizational structure and all related internal reporting changed during the first quarter of 2015. As a result, the composition of our four reportable segments changed to reflect the new structure beginning in the first quarter of 2015. The segment changes include: (i) the Adjustable Bed and Fashion Bed (formerly named Consumer Products) business units moved from Residential Furnishings to Commercial Products; (ii) the Aerospace Products business unit moved from Industrial Materials to Specialized Products; and (iii) the Spuhl machinery division moved from Specialized Products to Residential Furnishings. These segment changes were retrospectively applied to all prior periods presented.
We have four operating segments that supply a wide range of products:
•
Residential Furnishings—components for bedding and furniture, fabric and carpet cushion
•
Commercial Products—components for office and institutional furnishings, adjustable beds and consumer products
•
Industrial Materials—drawn steel wire, fabricated wire products, steel rod and welded steel tubing
•
Specialized Products—automotive seating components, tubing and sub-assemblies for the aerospace industry, specialized machinery and equipment, and commercial vehicle interiors
Each reportable segment has a senior operating vice-president that reports to the chief operating officer. The chief operating officer in turn reports directly to the chief operating decision maker. The operating results and financial information reported through the segment structure are regularly reviewed and used by the chief operating decision maker to evaluate segment performance, allocate overall resources and determine management incentive compensation.
 
Separately, we also utilize a role-based approach (Grow, Core, Fix or Divest) as a supplemental management tool to ensure capital (which is a subset of the overall resources referred to above) is efficiently allocated within the reportable segment structure.
The accounting principles used in the preparation of the segment information are the same as those used for the consolidated financial statements, except that the segment assets and income reflect the FIFO basis of accounting for inventory. Certain inventories are accounted for using the LIFO basis in the consolidated financial statements. We evaluate performance based on earnings from operations before interest and income taxes (EBIT). Intersegment sales are made primarily at prices that approximate market-based selling prices. Centrally incurred costs are allocated to the segments based on estimates of services used by the segment. Certain of our general and administrative costs and miscellaneous corporate income and expenses are allocated to the segments based on sales. These allocated corporate costs include depreciation and other costs and income related to assets that are not allocated or otherwise included in the segment assets.
A summary of segment results from continuing operations are shown in the following tables.
 
External
Sales
 
Inter-
Segment
Sales
 
Total
Sales
 
EBIT
Three Months Ended September 30, 2015
 
 
 
 
 
 
 
Residential Furnishings
$
527.0

 
$
16.6

 
$
543.6

 
$
58.2

Commercial Products
150.2

 
20.9

 
171.1

 
14.5

Industrial Materials
102.9

 
63.8

 
166.7

 
15.2

Specialized Products
229.0

 
10.8

 
239.8

 
38.0

Intersegment eliminations and other
 
 
 
 
 
 
2.3

Change in LIFO reserve
 
 
 
 
 
 
13.3

 
$
1,009.1

 
$
112.1

 
$
1,121.2

 
$
141.5

Three Months Ended September 30, 2014
 
 
 
 
 
Residential Furnishings
$
532.4

 
$
17.0

 
$
549.4

 
$
25.4

Commercial Products
123.7

 
12.5

 
136.2

 
9.5

Industrial Materials
121.8

 
72.9

 
194.7

 
13.6

Specialized Products
219.5

 
8.9

 
228.4

 
29.1

Intersegment eliminations and other
 
 
 
 
 
 
(1.0
)
Change in LIFO reserve
 
 
 
 
 
 
(1.2
)
 
$
997.4

 
$
111.3

 
$
1,108.7

 
$
75.4


7
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


 
External
Sales
 
Inter-
Segment
Sales
 
Total
Sales
 
EBIT
Nine Months Ended September 30, 2015
 
 
 
 
 
 
 
Residential Furnishings
$
1,560.9

 
$
52.1

 
$
1,613.0

 
$
161.5

Commercial Products
409.1

 
62.5

 
471.6

 
33.3

Industrial Materials
321.2

 
210.2

 
531.4

 
38.0

Specialized Products
681.4

 
30.1

 
711.5

 
115.0

Intersegment eliminations and other
 
 
 
 
 
 
1.3

Change in LIFO reserve
 
 
 
 
 
 
23.3

 
$
2,972.6

 
$
354.9

 
$
3,327.5

 
$
372.4

Nine Months Ended September 30, 2014
 
 
 
 
 
Residential Furnishings
$
1,440.1

 
$
49.6

 
$
1,489.7

 
$
121.8

Commercial Products
347.8

 
29.3

 
377.1

 
22.8

Industrial Materials
378.6

 
187.0

 
565.6

 
30.3

Specialized Products
662.5

 
24.3

 
686.8

 
93.1

Intersegment eliminations and other
 
 
 
 
 
 
(3.0
)
Change in LIFO reserve
 
 
 
 
 
 
(1.6
)
 
$2,829.0
 
$
290.2

 
$
3,119.2

 
$
263.4

Average assets for our segments are shown in the table below and reflect the basis for return measures used by management to evaluate segment performance. These segment totals include working capital (all current assets and current liabilities) plus net property, plant and equipment. Segment assets for all years are reflected at their estimated average for the periods presented. 
 
September 30,
2015
 
December 31,
2014
Residential Furnishings
$
635.9

 
$
588.1

Commercial Products
106.7

 
96.2

Industrial Materials
185.7

 
200.9

Specialized Products
259.1

 
261.2

Other (1)
7.2

 
68.0

Average current liabilities included in segment numbers above
524.5

 
520.8

Unallocated assets (2)
1,369.6

 
1,470.4

Difference between average assets and period-end balance sheet
(22.5
)
 
(65.0
)
Total assets
$
3,066.2

 
$
3,140.6

 
(1)
Businesses sold or classified as discontinued operations.
(2)
Unallocated assets consist primarily of goodwill, other intangibles, cash and deferred tax assets.
















8
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 



5. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
 
During 2014 we engaged an investment banker and began exploring strategic alternatives regarding the Store Fixtures reporting unit, including the possibility of divestiture of this business. Activity related to Store Fixtures is:
•
During the third quarter of 2014, all of the criteria to classify this unit as held for sale and discontinued operations were met. Store Fixtures was previously part of the Commercial Products segment.
•
During the fourth quarter of 2014, we sold the majority of the Store Fixtures reporting unit for total consideration of $59.2 and recorded an after-tax loss of $4.7.
•
During the second quarter 2015 we sold our metal store fixtures operation in China, and recorded an after-tax gain of $2.9.
•
We have one remaining small Store Fixtures business, and we are actively pursuing the sale of this business.

The table below includes activity related to these operations:
 
Nine Months Ended September 30,
 
Three Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
External sales:
 
 
 
 
 
 
 
Commercial Products - Store Fixtures
$
17.1

 
$
146.7

 
$
4.8

 
$
57.6

 
 
 
 
 
 
 
 
Earnings (loss):
 
 
 
 
 
 
 
Commercial Products - Store Fixtures (1)
3.2

 
(110.5
)
 
(.1
)
 
1.9

Subsequent activity related to previous divestitures (2)
(1.5
)
 
(8.3
)
 
—

 
(8.3
)
Earnings (loss) before interest and income taxes
1.7

 
(118.8
)
 
(.1
)
 
(6.4
)
Income tax (expense) benefit
(.5
)
 
19.4

 
—

 
2.0

Earnings (loss) from discontinued operations, net of tax
$
1.2

 
$
(99.4
)
 
$
(.1
)
 
$
(4.4
)

(1) This includes goodwill impairment charges of $108.0 as discussed in Note 6.

(2) Subsequent activity for businesses divested in prior years has been reported as discontinued operations in the table above, including a third quarter 2014 antitrust litigation settlement of $8.3 associated with our former Prime Foam Products unit. This unit was sold in March 2007 and was previously a part of the Residential Furnishings segment.


9
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 



The major classes of assets and liabilities held for sale included in the Consolidated Condensed Balance Sheets were as follows:
 
September 30, 2015
 
December 31, 2014
Current assets associated with discontinued operations:
 
 
 
Trade receivables, net
$
5.7

 
$
7.0

Other receivables, net
—

 
.3

Inventories, net
.8

 
3.0

Other current assets
.1

 
.1

Total current assets held for sale associated with discontinued operations
6.6

 
10.4

Current assets held for sale not associated with discontinued operations (1)
21.2

 
—

Total current assets held for sale (included in "Other current assets")
27.8

 
10.4

Non-current assets associated with discontinued operations:
 
 
 
Property, plant and equipment, net
.2

 
5.2

Other intangibles, net
—

 
.6

Sundry
—

 
1.4

Total non-current assets held for sale associated with discontinued operations
.2

 
7.2

Non-current assets held for sale not associated with discontinued operations (1) (2)
22.1

 
15.2

Total non-current assets held for sale (included in "Sundry")
22.3

 
22.4

Total assets held for sale
50.1

 
32.8

Current liabilities associated with discontinued operations:
 
 
 
Accounts payable
.9

 
3.7

Accrued expenses
.7

 
1.5

Other current liabilities
.3

 
.3

Total current liabilities held for sale associated with discontinued operations
1.9

 
5.5

Total current liabilities held for sale not associated with discontinued operations (1)
6.2

 
—

Total current liabilities held for sale (included in "Other current liabilities")
8.1

 
5.5

Long term liabilities associated with discontinued operations:
 
 
 
Deferred income tax (included in "Other long-term liabilities")
—

 
.1

Total liabilities held for sale
8.1

 
5.6

 
 
 
 
Net assets held for sale
$
42.0

 
$
27.2


(1) The Steel Tubing business reached held for sale status in the first quarter of 2015, but did not qualify for discontinued
operations treatment.
(2) This table includes $8.5 and $15.2 of property, plant and equipment held for sale at September 30, 2015, and December 31,
2014, respectively, primarily associated with the closings of various operations and prior year restructurings.

Net assets held for sale by segment were as follows:
 
September 30, 2015
 
December 31, 2014
 
Assets
 
Liabilities
 
Net Assets
 
Assets
 
Liabilities
 
Net Assets
Residential Furnishings
$
1.5

 
$
—

 
$
1.5

 
$
4.1

 
$
—

 
$
4.1

Commercial Products
10.9

 
1.9

 
9.0

 
20.1

 
5.6

 
14.5

Industrial Materials
37.7

 
6.2

 
31.5

 
3.4

 
—

 
3.4

Specialized Products
—

 
—

 
—

 
5.2

 
—

 
5.2

 
$
50.1

 
$
8.1

 
$
42.0

 
$
32.8

 
$
5.6

 
$
27.2






10
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


6. IMPAIRMENT CHARGES

Pre-tax impact of impairment charges is summarized in the following table.

Other long-lived asset impairments are reported in "Other (income) expense, net." Charges associated with discontinued operations are reported on the Statements of Operations in “Earnings (loss) from discontinued operations, net of tax.”
 
Nine Months Ended September 30,
 
Three Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
 
Goodwill
 
Other Long-Lived Assets
 
Goodwill
 
Other Long-Lived Assets
 
Goodwill
 
Other Long-Lived Assets
 
Goodwill
 
Other Long-Lived Assets
Continuing operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Furnishings
$
—

 
$
.2

 
$
—

 
$
1.0

 
$
—

 
$
—

 
$
—

 
$
—

Industrial Materials - Steel Tubing
4.1

 
1.4

 
—

 
—

 
—

 
—

 
—

 
—

Specialized Products - Commercial Vehicles Products Group
—

 
.6

 
—

 
—

 
—

 
—

 
—

 
—

Total continuing operations
4.1

 
2.2

 
—

 
1.0

 
—

 
—

 
—

 
—

Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Products - Store Fixtures
—

 
—

 
108.0

 
—

 
—

 
—

 
—

 
—

Subsequent activity related to previous divestitures
—

 
.2

 
—

 
.1

 
—

 
—

 
—

 
—

Total discontinued operations
—

 
.2


108.0

 
.1

 
—

 
—

 
—

 
—

Total impairment charges
$
4.1

 
$
2.4

 
$
108.0

 
$
1.1

 
$
—

 
$
—

 
$
—

 
$
—


Other Long-Lived Assets
 
We test other long-lived assets for recoverability at year-end and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Fair value and the resulting impairment charges noted above were based primarily upon offers from potential buyers or third party estimates of fair value less selling costs.
 
2015 Goodwill Impairment Review

Goodwill is required to be tested for impairment at least once a year and as triggering events may occur. We perform our annual goodwill impairment review in the second quarter of each year. The 2015 goodwill impairment review indicated no goodwill impairments.

As discussed in Note 4, our internal management organizational structure and all related internal reporting changed during the first quarter of 2015. We reassigned the assets and liabilities of the reporting units affected, and also reassigned goodwill using a relative fair value approach for our first quarter 2015 reporting. We performed the 2015 impairment test utilizing the revised structure.

The Steel Tubing unit met the held for sale criteria during the first quarter of 2015. Because fair value less costs to sell had fallen below recorded book value, we fully impaired this unit's goodwill and incurred a $4.1 goodwill impairment charge in the first quarter of 2015.
 
The fair values of reporting units in relation to their respective carrying values and significant assumptions used in the second quarter 2015 review are presented in the table below.

11
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


Excess of Fair Value over Carrying Value as a Percentage of Fair Value
September 30, 2015
Goodwill Value
 
10-year
Compound
Annual Growth
Rate Range for Sales
 
Terminal
Values Long-
term Growth
Rate for Debt-Free Cash Flow
 
Discount  Rate
Ranges
< 25%
$
—

 
—

 
—

 
—

25% - 49%
—

 
—

 
—

 
—

50% - 74%
594.3

 
.6% - 7.0%

 
3.0
%
 
8.0% - 12.5%

75%+
221.1

 
3.1% - 10.9%

 
3.0
%
 
8.0% - 9.0%

 
$
815.4

 
.6% - 10.9%

 
3.0
%
 
8.0% - 12.5%


2014 Goodwill Impairment Reviews
 
After completing our annual goodwill impairment review in June 2014, we concluded on July 14, 2014 that a goodwill impairment charge was required for one reporting unit, Store Fixtures which was reported in discontinued operations, and was previously part of the Commercial Products segment.

The Store Fixtures reporting unit was dependent upon capital spending by retailers on both new stores and remodeling of existing stores. Because of the seasonal nature of the fixture & display industry (where revenue and profitability are typically expected to increase in the second and third quarters assuming the normal historical pattern of heavy shipments during these months) we reasonably anticipated being awarded significant customer orders in the second quarter of 2014. However, as the second quarter progressed, anticipated orders did not materialize and the Store Fixtures business deteriorated, with declines most pronounced in May and June. Taking these developments into account, we lowered our projection of future margins and growth rates (from 4.8% in prior year's review to .5% in the current year for 10-year compound annual growth rate for EBIT plus depreciation and amortization) and increased the discount rate from 10.5% to 12%, causing fair value to fall below carrying value. The lower expectations of future revenue and profitability were due to reduced overall market demand for the shelving, counters, showcases and garment racks as many retailers are reducing their investments in traditional store space and focusing more on e-commerce initiatives.
Because the fair value of the Store Fixtures reporting unit had fallen below recorded book values, we performed the second step of the test which requires a fair value assessment of all assets and liabilities of the reporting unit to calculate an implied goodwill amount. This resulted in a $108.0 goodwill impairment charge that was recorded in the second quarter of 2014. This charge reflected the complete impairment of all goodwill associated with the Store Fixtures reporting unit. The majority of the Store Fixtures business was divested in November 2014.

As a result of the above circumstances, we also determined a triggering event had occurred in the second quarter to test other long-lived assets which were evaluated for impairment under the held for use model. No long-lived asset impairments (excluding goodwill) were indicated during the review. During the third quarter of 2014, all of the criteria to classify this unit as held for sale and discontinued operations were met as discussed in Note 5.





















12
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


7. EARNINGS PER SHARE

Basic and diluted earnings per share were calculated as follows:

 
Nine Months Ended 
 September 30,
 
Three Months Ended 
 September 30,
 
2015
 
2014
 
2015
 
2014
Earnings:
 
 
 
 
 
 
 
Earnings from continuing operations
$
246.2

 
$
179.0

 
$
96.2

 
$
53.4

(Earnings) attributable to noncontrolling interest, net of tax
(2.8
)
 
(2.2
)
 
(.9
)
 
(.8
)
Net earnings from continuing operations attributable to Leggett & Platt, Inc. common shareholders
243.4

 
176.8

 
95.3

 
52.6

Earnings (loss) from discontinued operations, net of tax
1.2

 
(99.4
)
 
(.1
)
 
(4.4
)
Net earnings attributable to Leggett & Platt, Inc. common shareholders
$
244.6

 
$
77.4

 
$
95.2

 
$
48.2

 
 
 
 
 
 
 
 
Weighted average number of shares (in millions):
 
 
 
 
 
 
 
Weighted average number of common shares used in basic EPS
141.3

 
141.5

 
140.4

 
140.8

Dilutive effect of equity-based compensation
1.9

 
1.7

 
2.1

 
1.7

Weighted average number of common shares and dilutive potential common shares used in diluted EPS
143.2

 
143.2

 
142.5

 
142.5

 
 
 
 
 
 
 
 
Basic and Diluted EPS:
 
 
 
 
 
 
 
Basic EPS attributable to Leggett & Platt, Inc. common shareholders
 
 
 
 
 
 
 
Continuing operations
$
1.72

 
$
1.25

 
$
.68

 
$
.37

Discontinued operations
.01

 
(.70
)
 
—

 
(.03
)
Basic EPS attributable to Leggett & Platt, Inc. common shareholders
$
1.73

 
$
.55

 
$
.68

 
$
.34

Diluted EPS attributable to Leggett & Platt, Inc. common shareholders
 
 
 
 
 
 
 
Continuing operations
$
1.70

 
$
1.23

 
$
.67

 
$
.37

Discontinued operations
.01

 
(.69
)
 
—

 
(.03
)
Diluted EPS attributable to Leggett & Platt, Inc. common shareholders
$
1.71

 
$
.54

 
$
.67

 
$
.34

 
 
 
 
 
 
 
 
Other information:
 
 
 
 
 
 
 
Anti-dilutive shares excluded from diluted EPS computation
—

 
—

 
—

 
—























13
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


8. ACCOUNTS AND OTHER RECEIVABLES
Accounts and other receivables consisted of the following:
 
 
September 30, 2015
 
December 31, 2014
 
Current
 
Long-term
 
Current
 
Long-term
Trade accounts receivable
$
496.4

 
$
—

 
$
484.0

 
$
—

Trade notes receivable
.4

 
.4

 
1.1

 
2.9

Total trade receivables
496.8

 
.4

 
485.1

 
2.9

Other notes receivable:
 
 
 
 
 
 
 
Notes received as partial payment for divestitures
—

 
—

 
.9

 
—

Other
—

 
.4

 
—

 
3.3

Income tax receivables
6.9

 
—

 
14.0

 
—

Other receivables
35.9

 
—

 
38.0

 
—

Subtotal other receivables
42.8

 
.4

 
52.9

 
3.3

Total trade and other receivables
539.6

 
.8

 
538.0

 
6.2

Allowance for doubtful accounts:
 
 
 
 
 
 
 
Trade accounts receivable
(10.0
)
 
—

 
(14.7
)
 
—

Trade notes receivable
—

 
(.2
)
 
—

 
(2.1
)
Total trade receivables
(10.0
)
 
(.2
)
 
(14.7
)
 
(2.1
)
Other notes receivable
—

 
(.4
)
 
—

 
(.4
)
Total allowance for doubtful accounts
(10.0
)
 
(.6
)
 
(14.7
)
 
(2.5
)
Total net receivables
$
529.6

 
$
.2

 
$
523.3

 
$
3.7

Notes that were past due more than 90 days or had been placed on non-accrual status were not significant for the periods presented.
Activity related to the allowance for doubtful accounts is reflected below:
 
 
Balance at December 31, 2014
 
2015
Charges
 
2015
Charge-
offs,
Net of
Recoveries
 
Balance at September 30, 2015
Trade accounts receivable
$
14.7

 
$
2.7

 
$
7.4

 
$
10.0

Trade notes receivable
2.1

 
.2

 
2.1

 
.2

Total trade receivables
16.8

 
2.9

 
9.5

 
10.2

Other notes receivable
.4

 
—

 
—

 
.4

Total allowance for doubtful accounts
$
17.2

 
$
2.9

 
$
9.5

 
$
10.6


    













14
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


9. STOCK-BASED COMPENSATION
The following table recaps the components of stock-based and stock-related compensation for each period presented:
 
 
Nine Months Ended 
 September 30, 2015
 
Nine Months Ended 
 September 30, 2014
 
To be settled with stock
 
To be settled in cash
 
To be settled with stock
 
To be settled in cash
Options:
 
 
 
 
 
 
 
         Amortization of the grant date fair value
$
.2

 
$
—

 
$
.6

 
$
—

         Cash payments in lieu of options
—

 
1.0

 
—

 
.8

Stock-based retirement plans contributions
5.5

 
1.0

 
4.7

 
1.2

Discounts on various stock awards:

 
 
 

 
 
Deferred Stock Compensation Program
1.5

 
—

 
1.7

 
—

Stock-based retirement plans
1.1

 
—

 
1.5

 
—

Discount Stock Plan
.8

 
—

 
.7

 
—

Performance Stock Unit awards (1)
5.5

 
6.9

 
4.7

 
3.7

Restricted Stock Unit awards
2.6

 
—

 
2.5

 
—

Profitable Growth Incentive awards (2)
4.9

 
4.7

 
1.3

 
1.3

Other, primarily non-employee directors restricted stock
.9

 
—

 
.9

 
—

Total stock-related compensation expense
23.0

 
$
13.6

 
18.6

 
$
7.0

Employee contributions for above stock plans
10.5

 
 
 
11.1

 
 
Total stock-based compensation
$
33.5

 
 
 
$
29.7

 
 
Recognized tax benefits on stock-based compensation expense
$
8.8

 
 
 
$
7.1

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended 
 
September 30, 2015
 
September 30, 2014
 
To be settled with stock
 
To be settled in cash
 
To be settled with stock
 
To be settled in cash
Options:
 
 
 
 
 
 
 
         Amortization of the grant date fair value
$
—

 
$
—

 
$
.2

 
$
—

         Cash payments in lieu of options
—

 
—

 
—

 
(.1
)
Stock-based retirement plans contributions
1.6

 
.3

 
1.4

 
.4

Discounts on various stock awards:
 
 
 
 
 
 
 
Deferred Stock Compensation Program
.4

 
—

 
.4

 
—

Stock-based retirement plans
.4

 
—

 
.3

 
—

Discount Stock Plan
.3

 
—

 
.2

 
—

Performance Stock Unit awards (1)
2.2

 
1.1

 
1.6

 
1.3

Restricted Stock Unit awards
.9

 
—

 
.8

 
—

Profitable Growth Incentive awards (2)
1.0

 
1.0

 
.5

 
.5

Other, primarily non-employee directors restricted stock
.2

 
—

 
.3

 
—

Total stock-related compensation expense
7.0

 
$
2.4

 
5.7

 
$
2.1

Employee contributions for above stock plans
3.1

 
 
 
3.8

 
 
Total stock-based compensation
$
10.1

 
 
 
$
9.5

 
 
Recognized tax benefits on stock-based compensation expense
$
2.7

 
 
 
$
2.2

 
 
 

Included below is the activity in our most significant stock-based plans:




15
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


(1) Performance Stock Unit Awards
We grant Performance Stock Unit (PSU) awards in the first quarter of each year to selected officers and other key managers. These awards contain the following conditions:

•
A service requirement—Awards generally “cliff” vest three years following the grant date; and
•
A market condition—Awards are based on our Total Shareholder Return [TSR = (Change in Stock Price + Dividends) / Beginning Stock Price] as compared to the TSR of a group of peer companies. The peer group consists of all the companies in the Industrial, Materials and Consumer Discretionary sectors of the S&P 500 and S&P Midcap 400 (approximately 320 companies). Participants will earn from 0% to 175% of the base award depending upon how our Total Shareholder Return ranks within the peer group at the end of the 3-year performance period.
Grant date fair values are calculated using a Monte Carlo simulation of stock and volatility data for Leggett and each of the comparator companies. Grant date fair values are amortized using the straight-line method over the three-year vesting period.
Below is a summary of the number of shares and related grant date fair value of PSU’s for the periods presented.
 
Nine Months Ended September 30,
 
2015
 
2014
Total shares base award
.2

 
.2

Grant date per share fair value
$
42.22

 
$
30.45

Risk-free interest rate
1.1
%
 
.8
%
Expected life in years
3.0

 
3.0

Expected volatility (over expected life)
19.8
%
 
25.9
%
Expected dividend yield (over expected life)
2.9
%
 
3.9
%
Three-Year Performance Cycle
Award Year
 
Completion Date
 
TSR Performance
Relative to the  Peer Group (1%=Best)
 
Payout as a
Percent of the
Base Award
 
Number of Shares
Distributed
 
Cash Portion
 
Distribution Date
2011
 
December 31, 2013
 
55th percentile
 
64.2%
 
.2 million
 
$
2.7

 
January 2014
2012
 
December 31, 2014
 
30th percentile
 
157.0%
 
.4 million
 
9.9

 
January 2015

For outstanding awards, we intend to pay 65% in shares of our common stock, although we reserve the right to pay up to 100% in cash. The additional amount that represents 35% of the award will be settled in cash, and is recorded as a liability and adjusted to fair value at each reporting period.

(2) Profitable Growth Incentive Awards

Starting in 2013, certain key management employees participated in a new Profitable Growth Incentive (PGI) program in lieu of the annual option grant. The PGI awards are issued as growth performance stock units (GPSUs). The GPSUs vest (0% to 250%) at the end of a two-year performance period. Vesting is based on the Company's or applicable profit center's revenue growth (adjusted by a GDP factor when applicable) and EBITDA margin at the end of a two-year performance period. The 2015 and 2014 base target PGI awards were each .1 shares. If earned, we intend to pay half in shares of our common stock and half in cash, although we reserve the right to pay up to 100% in cash. Both components are adjusted to fair value at each reporting period.

Two-Year Performance Cycle
Award Year
 
Completion Date
 
Average Payout as a
Percent of the
Base Award
 
Number of  Shares
Distributed
 
Cash Portion
 
Distribution Date
2013
 
December 31, 2014
 
127.0%
 
.1 million
 
$
3.5

 
February 2015


16
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


10. ACQUISITIONS
The following table contains the estimated fair values (using inputs as discussed in Note 13) of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions during the periods presented, and any additional consideration paid for prior years’ acquisitions. We are finalizing all the information required to complete the purchase price allocations related to certain recent acquisitions and do not anticipate any material modifications.
 
Nine Months Ended September 30,
 
2015
 
2014
Accounts receivable
$
3.7

 
$
7.6

Inventory
4.8

 
16.6

Property, plant and equipment
2.3

 
18.0

Goodwill (1)
8.3

 
21.1

Other intangible assets
14.7

 
18.2

Other current and long-term assets
.1

 
4.1

Current liabilities
(11.2
)
 
(11.6
)
Long-term liabilities
(10.4
)
 
(2.7
)
Additional consideration received for prior years’ acquisitions
(1.2
)
 
—

Fair value of net identifiable assets
11.1

 
71.3

Less: Non-cash consideration
—

 
1.1

Net cash consideration
$
11.1

 
$
70.2


(1) Goodwill associated with the 2015 and 2014 acquisitions are expected to provide an income tax benefit.

The following table summarizes acquisitions for the periods presented.
Nine Months Ended
 
Number of Acquisitions
 
Segment
 
Product/Service
September 30, 2015
 
1
 
Commercial Products
 
Upholstered office furniture
September 30, 2014
 
5
 
Residential Furnishings
 
Innersprings; Home furniture components; Geotextile products; Fabric converting for furniture and bedding; Foam carpet underlay
In March 2015, we acquired a 70% interest in a European private-label manufacturer of high-end upholstered furniture for office, commercial and other settings for a purchase price of $22.7. This business, which is included in the Work Furniture Group of our Commercial Products segment, is complementary to our North American private-label operation and allows us to support our Work Furniture customers as they expand globally. We will acquire the remaining 30% over the next five years, per the terms of the agreement, and have recorded a long-term liability of $10.7 for the future payments. Future payments are based upon a calculation that incorporates future EBIT plus depreciation and amortization. The recorded liability is based upon estimates and may fluctuate significantly until the 2018 and 2020 payment dates. Fluctuations in this liability will be reflected in interest income or expense on the Consolidated Condensed Statement of Operations.
On June 30, 2014, we acquired Tempur Sealy's three U.S. innerspring component production facilities for a purchase price of $44.5. Factors contributing to the recognition of $17.8 in goodwill from the acquisition included: additional production that enhances economies of scale; benefits from our vertical integration in steel rod and wire; and the optimization of manufacturing across a broad asset base.

The results of operations of the above acquired companies have been included in the consolidated financial statements since the dates of acquisition. The unaudited pro forma consolidated net sales, net earnings and earnings per share as though the 2015 and 2014 acquisitions had occurred on January 1 of each year presented are not materially different from the amounts reflected in the accompanying financial statements. Certain of our acquisition agreements provide for additional consideration to be paid in cash at a later date and are recorded as a liability at the acquisition date. At September 30, 2015, there was no substantial remaining consideration payable other than the liability discussed above.

17
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


11. EMPLOYEE BENEFIT PLANS
The following table provides interim information as to our domestic and foreign defined benefit pension plans. Expected 2015 employer contributions are not significantly different than the $1.9 previously reported at December 31, 2014.
 
 
Nine Months Ended 
 September 30,
 
Three Months Ended  September 30,
 
2015
 
2014
 
2015
 
2014
Components of net pension expense
 
 
 
 
 
 
 
Service cost
$
3.1

 
$
2.3

 
$
1.2

 
$
.8

Interest cost
9.7

 
9.5

 
3.1

 
3.1

Expected return on plan assets
(12.4
)
 
(11.7
)
 
(4.1
)
 
(3.9
)
Recognized net actuarial loss
4.2

 
2.3

 
1.2

 
.7

Net pension expense
$
4.6

 
$
2.4

 
$
1.4

 
$
.7



12. STATEMENT OF CHANGES IN EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME
 
Nine Months Ended September 30, 2015
 
Total
Equity
 
Retained
Earnings
 
Common
Stock &
Additional
Contributed
Capital
 
Treasury
Stock
 
Noncontrolling
Interest
 
Accumulated
Other
Comprehensive
Income
Beginning balance, January 1, 2015
$
1,154.9

 
$
2,061.3

 
$
504.4

 
$
(1,416.6
)
 
$
8.4

 
$
(2.6
)
Net earnings
247.4

 
247.4

 
—

 
—

 
—

 
—

(Earnings) loss attributable to noncontrolling interest, net of tax
—

 
(2.8
)
 
—

 
—

 
2.8

 
—

Dividends declared
(128.9
)
 
(132.5
)
 
3.6

 
—

 
—

 
—

Treasury stock purchased
(168.4
)
 
—

 
—

 
(168.4
)
 
—

 
—

Treasury stock issued
25.5

 
—

 
(20.7
)
 
46.2

 
—

 
—

Foreign currency translation adjustments
(63.9
)
 
—

 
—

 
—

 
(.2
)
 
(63.7
)
Cash flow hedges, net of tax
(4.8
)
 
—

 
—

 
—

 
—

 
(4.8
)
Defined benefit pension plans, net of tax
2.7

 
—

 
—

 
—

 
—

 
2.7

Stock options and benefit plan transactions, net of tax
35.9

 
—

 
35.9

 
—

 
—

 
—

Ending balance, September 30, 2015
$
1,100.4

 
$
2,173.4

 
$
523.2

 
$
(1,538.8
)
 
$
11.0

 
$
(68.4
)
 

18
LEGGETT & PLATT, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS—(Continued)
(Unaudited)
 


 
Nine Months Ended September 30, 2014
 
Total
Equity
 
Retained
Earnings
 
Common
Stock &
Additional
Contributed
Capital
 
Treasury
Stock
 
Noncontrolling
Interest
 
Accumulated
Other
Comprehensive
Income
Beginning balance, January 1, 2014
$
1,399.2

 
$
2,136.4

 
$
481.1

 
$
(1,320.7
)
 
$
7.9

 
$
94.5

Net earnings
79.6

 
79.6

 
—

 
—

 
—

 
—

(Earnings) loss attributable to noncontrolling interest, net of tax
—

 
(2.2
)
 
—

 
—

 
2.2

 
—

Dividends declared
(125.4
)
 
(129.0
)
 
3.6

 
—

 
—

 
—

Treasury stock purchased
(152.2
)
 
—

 
—

 
(152.2
)
 
—

 
—

Treasury stock issued
53.2

 
—

 
(12.6
)
 
65.8

 
—

 
—

Foreign currency translation adjustments
(38.0
)
 
—

 
—

 
—

 
—

 
(38.0
)
Cash flow hedges, net of tax
3.0

 
—

 
—

 
—

 
—

 
3.0

Defined benefit pension plans, net of tax
1.3

 
—

 
—

 
—

 
—

 
1.3

Stock options and benefit plan transactions, net of tax
7.9

 
—

 
7.9

 
—

 
—

 
—

Ending balance, September 30, 2014
$
1,228.6

 
$
2,084.8

 
$
480.0

 
$
(1,407.1
)
 
$
10.1

 
$
60.8