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•	uncertainty of the financial performance of ECS and the Company following completion of the ECS acquisition;

•	failure to realize the anticipated benefits of the ECS acquisition, including as a result of delay in integrating the businesses of ECS;

•	difficulties and delays in achieving revenue synergies of ECS;

•	inability to retain key personnel and maintain relationships with customers and suppliers of ECS;

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inability to “deleverage” after the ECS closing in the expected timeframe, due to increases or decreases in our capital needs, which may vary depending on a variety of factors, including, without limitation, any acquisition or divestiture activity and our working capital needs, market conditions, and alternative capital market opportunities, including, without limitation, the relative attractiveness of longer-term debt or equity financing;

•	the Company's and ECS’s ability to achieve their respective short-term and longer-term operating targets;

•	inability to comply with the restrictive covenants in our credit agreement that may limit our operational flexibility and our ability to pay our debt when it comes due;

•	market and other factors or conditions that reduce or eliminate the Company’s ability to obtain long-term debt financing;

•	factors that could affect the industries or markets in which we participate, such as growth rates, market demand for our products, and opportunities in those industries;

•	adverse changes in consumer confidence, housing turnover, employment levels, interest rates, trends in capital spending and the like;

•	factors that could impact raw materials and other costs, including the availability and pricing of steel scrap and rod, chemicals and other raw materials, the availability of labor, wage rates and energy costs;

•	our ability to pass along raw material cost increases through increased selling prices;

•	price and product competition from foreign (particularly Asian and European) and domestic competitors;

•	our ability to maintain profit margins if our customers change the quantity and mix of our components in their finished goods;

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•	our ability to maintain and grow the profitability of acquired companies;

•	adverse changes in foreign currency, customs, shipping rates, political risk, and U.S. or foreign laws, regulations or legal systems (including tax law changes);

•	our ability to realize deferred tax assets on our balance sheet;

•	tariffs imposed by the U.S. government that result in increased costs of imported raw materials and products that we purchase;

•	our ability to maintain the proper functioning of our internal business processes and information systems through technology failures or otherwise;

•	our ability to avoid modification or interruption of our information systems through cybersecurity breaches;

•	a decline in the long-term outlook for any of our reporting units or assets that could result in impairment;

•	the loss of one or more of our significant customers;

•	our ability to collect customer debts due to bankruptcy, financial difficulties or insolvency;

•	our borrowing costs and access to liquidity resulting from credit rating changes;

•	business disruptions to our steel rod mill;

•	risks related to operating in foreign countries, including, without limitation, credit risks, increased customs and shipping rates, disruptions related to the availability of electricity and transportation during times of crisis or war, and political instability in certain countries;

•	uncertainty related to the governing trade provisions between the United States, Mexico and Canada;

•	risks relating to the United Kingdom’s referendum, which called for its exit from the European Union (commonly known as “Brexit”);

•	the amount and timing of share repurchases; and

•	litigation accruals related to various contingencies including antitrust, intellectual property, product liability and warranty, taxation, environmental and workers’ compensation expense.

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1	Earnings from Continuing Operations for 2018 includes a $14 million charge for restructuring; $12 million charge for note impairment; $6 million charge for ECS transaction costs; and a $2 million benefit associated with TCJA.

2	Earnings from Continuing Operations for 2017 includes a $50 million charge associated with the TCJA; $13 million of net gains on sales of a business and real estate; an $8 million tax benefit from a divestiture; a $10 million pension settlement charge; and a $3 million charge for an impairment of a wire business.

3	Earnings from Continuing Operations for 2016 includes $16 million of gains on sales of businesses; a $3 million goodwill impairment charge; and a $5 million gain on a foam litigation settlement. Discontinued operations primarily consists of a gain on a foam litigation settlement.

4	Earnings from Continuing Operations for 2015 includes $4 million of impairments; $3 million associated with litigation accruals; and an $8 million pension settlement charge.

5	Earnings from Continuing Operations for 2014 includes $33 million associated with litigation accruals. Discontinued Operations includes the following items: $93 million goodwill impairment; $5 million loss on the sale of the majority of our Store Fixtures unit; and $22 million associated with litigation accruals.

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1	Days sales outstanding: ((beginning of year trade receivables + end of period trade receivables) ÷ 2) ÷ (net trade sales ÷ number of days in the period).

2	Days inventory on hand: ((beginning of year inventory + end of period inventory) ÷ 2) ÷ (cost of goods sold ÷ number of days in the period).

3	Days payables outstanding: ((beginning of year accounts payable + end of period accounts payable) ÷ 2) ÷ (cost of goods sold ÷ number of days in the period).

4	2017 ratios have been retrospectively adjusted to reflect the adoption of ASU 2017-07 that resulted in reclassifications between "Cost of goods sold" and "Selling and administrative expenses" into "Other expense (income), net". For further discussion see Note A to the Consolidated Financial Statements on page 72.

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1	These rates include current maturities, but exclude commercial paper to reflect the averages of outstanding debt with scheduled maturities. The rates also include amortization of interest rate swaps.

2

The unused credit amount is based upon our revolving credit facility and commercial paper program which, at the end of 2016, had $750 million of borrowing capacity. The credit facility was amended in the fourth quarter of 2017 to increase the borrowing capacity to $800 million and the commercial paper program was increased to a corresponding amount. In January 2019, we expanded the borrowing capacity under our revolving credit facility from $800 million to $1.2 billion and correspondingly increased permitted borrowings under our commercial paper program primarily to finance the ECS transaction.

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1

The long-term debt payment schedule presented above could be accelerated if we were not able to make the principal and interest payments when due. This does not include $1.25 billion of additional borrowings primarily related to the January 16, 2019 ECS acquisition (as discussed on page 46). We expect to focus on deleveraging by temporarily limiting share repurchases, reducing other acquisition spending, and using operating cash flow to repay debt.

2	Purchase obligations primarily include open short-term (30-120 days) purchase orders that arise in the normal course of operating our facilities.

3	Interest payments assume debt outstanding remains constant with amounts at December 31, 2018 and at rates in effect at the end of the year. This does not include incremental annual interest that will be incurred on the $1.25 billion of additional borrowings primarily related to the ECS acquisition.

4	Other obligations include our net reserves for tax contingencies in the "More Than 5 Years" column because these obligations are long-term in nature and actual payment dates cannot be specifically determined. Other obligations also include a $32 million long-term deemed repatriation tax payable and our current estimate of $1 million for minimum contributions to defined benefit pension plans.

5	Less Than 1 Year (due in 2019), 1-3 Years (due in 2020 and 2021), 3-5 Years (due in 2022 and 2023) and More Than 5 Years (due in 2024 and beyond).

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1

The weighted average interest rate on the balance of commercial paper outstanding at the year ended December 31, 2018 was 2.6%.  The weighted average interest rate for the average commercial paper outstanding during the years ended December 31, 2018 and 2017 was 2.4% and 1.4%, respectively. Commercial paper is supported by an $800 revolving credit facility which terminates in 2022. In January 2019, we increased the borrowing capacity under the revolving facility from $800 to $1,200, added a five-year $500 term loan facility, and extended the term from 2022 to 2024. After completing the ECS acquisition in January 2019 (discussed in Note V to our Consolidated Financial Statements), our debt levels have increased as expected.

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•	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Leggett & Platt;

•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of Leggett & Platt are being made only in accordance with authorizations of management and directors of Leggett & Platt; and

•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Leggett & Platt assets that could have a material effect on the financial statements.

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•

The qualitative assessment begins with determination of whether it is more likely than not that a reporting unit's fair value is less than its carrying value before applying a two-step goodwill impairment model. If after such an assessment, with regard to each reporting unit, we conclude that the goodwill of a reporting unit is not impaired, then no further action is required (commonly referred to as the Step Zero Analysis approach).

•	The quantitative analysis utilizes a two-step goodwill impairment model.

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•	On January 1, 2018, we adopted ASU 2014-09 "Revenue from Contracts with Customers" (Topic 606) as discussed in Note B.

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ASU 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”:  This ASU requires employers to disaggregate the service cost from other components of net periodic benefit costs and to disclose the income statement line item in which each component is included.  This guidance requires service costs to be reported in the same line item as other compensation costs, and the other components of net periodic benefit costs (which include interest costs, expected return on plan assets and actuarial gains and losses) to be reported outside of operating income. We adopted this guidance on January 1, 2018.  Application was required on a retrospective basis and resulted in a reclassification of $17.4 and $2.9 of expense from “Cost of goods sold” and “Selling and administrative expenses” into “Other expense (income), net” for the years ended December 31, 2017 and 2016, respectively.  Refer to Note N for further information.

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ASU 2018-05 “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118” (SAB 118):  This ASU allows SEC registrants to record provisional amounts in earnings due to the complexities involved in accounting for the enactment of the Tax Cuts and Jobs Act (TCJA). We recognized the estimated income tax effects of the TCJA in accordance with SAB 118. Refer to Note O for further information.

•	ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”:  We adopted this guidance on January 1, 2018, and it did not materially impact our financial statements.

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ASU 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”: This ASU provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recorded.  We have elected not to reclassify the stranded tax effects within accumulated other comprehensive income.

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ASU 2016-02 “Leases” (Topic 842): Requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. In July 2018, the FASB issued ASU 2018-11, which provides entities with a new transition method where comparative periods presented in financial statements in the period of adoption will not need to be restated.  Under the new transition method, an entity initially applies the provisions of Topic 842 at the adoption date, versus at the beginning of the earliest period presented, and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.  We elected this transition method at our adoption date of January 1, 2019.  We also elected the practical expedients not to reassess (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. We also elected an additional practical expedient to use hindsight when determining lease term.

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ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”: This ASU is intended to simplify and clarify the accounting and disclosure requirements for hedging activities by more closely aligning the results of cash flow and fair value hedge accounting with the risk management activities of an entity. The amendments in this ASU are effective January 1, 2019. We are currently evaluating the effect of the ASU on our results of operations, financial condition and cash flows.

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ASU 2017-04 "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment": This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this ASU, the annual goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value up to the total amount of goodwill for the reporting unit. This ASU will be effective January 1, 2020, with early adoption permitted. We are currently evaluating this guidance, and do not expect it to materially impact our future financial statements.

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ASU 2016-13 “Financial Instruments—Credit Losses” (Topic 326): This ASU is effective January 1, 2020 and amends the impairment model by requiring a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments including trade receivables. We are currently evaluating this guidance. However, we do not expect it to materially impact our future financial statements.

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ASU 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)”:  This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.  This ASU will be effective January 1, 2020, with early adoption permitted.  We are currently evaluating this guidance.

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•	An estimated refund liability and a corresponding reduction to revenue based on historical returns experience.

•	An asset and a corresponding reduction to cost of sales for our right to recover products from customers upon settling the refund liability. We reduce the carrying amount of these assets by estimates of costs associated with the recovery and any additional expected reduction in value.

•	The existence of a significant financing component—We expect that at contract inception, the time period between when we transfer a promised good to our customer and our receipt of payment from that customer for that good will be one year or less (our typical trade terms are 30 to 60 days for U.S. customers and up to 90 days for our international customers).

•	Costs of obtaining a contract—We generally expense costs of obtaining a contract because the amortization period would be one year or less.

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•	In 2017, we realized a pretax loss of $3.3 related to the sale of our remaining CVP operation. We also completed the sale of real estate formerly associated with this operation, realizing a pretax gain of $23.4.

•	In 2016, we realized gains of $21.2 and $11.2 related to the sale of the wire operations and a CVP operation, respectively. No other material gains or losses were realized on the sale of other businesses.

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•	Residential Products: This segment supplies a variety of components and machinery used by bedding manufacturers in the production and assembly of their finished products. We also produce or distribute flooring underlayment, fabric, and geo components.

•	Industrial Products: This segment primarily supplies steel rod and drawn steel wire to our other operations and to external customers. Our customers use this wire to make mechanical springs and many other end products.

•	Furniture Products: This segment supplies a wide range of components for residential and work furniture manufacturers, as well as select lines of private-label finished furniture, adjustable bed bases, fashion beds, and bed frames.

•	Specialized Products: This segment supplies lumbar support systems, seat suspension systems, motors and actuators, and control cables used by automotive manufacturers. We also produce and distribute tubing and tube assemblies for the aerospace industry and engineered hydraulic cylinders used in the material-handling and construction industries.

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•	On a discretionary basis to a broad group of employees

•	In conjunction with our Deferred Compensation Program

•	As compensation to outside directors

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Stock options under this program are granted in the last month of the year prior to the year the compensation is earned. The number of options granted equals the deferred compensation times five, divided by the stock’s market price on the date of grant. The option has a 10-year term. It vests as the associated compensation is earned and becomes exercisable beginning 15 months after the grant date. Stock is issued when the option is exercised.

•

Deferred stock units (DSU) under this program are acquired every two weeks (when the compensation would have otherwise been paid) at a 20% discount to the market price of our common stock on each acquisition date, and they vest immediately. Expense is recorded as the compensation is earned. Stock units earn dividends at the same rate as cash dividends paid on our common stock. These dividends are used to acquire stock units at a 20% discount. Stock units are converted to common stock and distributed

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•	Interest-bearing cash deferrals under this program are reported in Other long-term liabilities on the balance sheet and are disclosed in Note J.

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•	A service requirement—Awards generally “cliff” vest three years following the grant date; and

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A market condition—Awards are based on our TSR 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 200% of the base award depending upon how our TSR ranks within the peer group at the end of the three-year performance period.

•	A service requirement—Awards generally “cliff” vest three years following the grant date; and

•	A performance condition—Awards are based on achieving specified EBIT CAGR performance targets for our or the applicable segment's EBIT during the third year of the performance period compared to the EBIT during the fiscal year immediately preceding the performance period. Participants will earn from 0% to 200% of the base award.

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•	Annual awards to selected managers;

•	On a discretionary basis to selected employees; and

•	As compensation for outside directors

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*	PSU awards are presented at maximum payout (2017 award at 175% and 2018 award at 200%)

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•	Level 1: Quoted prices for identical assets or liabilities in active markets.

•	Level 2: Other significant inputs observable either directly or indirectly (including quoted prices for similar securities, interest rates, yield curves, credit risk, etc.).

•	Level 3: Unobservable inputs that are not corroborated by market data.

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•	U.S. Total Stock Market Index: Large-, mid-, and small-cap equity diversified across growth and value styles.

•	U.S. Large-Cap Index: Large-cap equity diversified across growth and value styles.

•	U.S. Small-Cap Index: Small-cap equity diversified across growth and value styles.

•	World ex US Index: International equity; broad exposure across developed and emerging non-U.S. equity markets around the world.

•	Long-term Bond Index: Diversified exposure to the long-term, investment-grade U.S. bond market.

•	Extended Duration Treasury Index: Diversified exposure to U.S. treasuries with maturities of 20-30 years.

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•	The reduction of $7.8 in our "Net operating losses and other tax carryforwards" deferred tax asset relates primarily to the 2018 anticipated utilization of U.S. state and Canadian net operating losses during the year;

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•	The decrease of $11.0 in our valuation allowance relates primarily to the anticipated future utilization of U.S. state net operating losses; and

•	The increase of $14.3 in our deferred tax liability associated with property, plant, and equipment relates primarily to accelerated bonus depreciation resulting from TCJA.

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•	Level 1: Quoted prices for identical assets or liabilities in active markets.

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Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Short-term investments in this category are valued using discounted cash flow techniques with all significant inputs derived from or corroborated by observable market data. Derivative assets and liabilities in this category are valued using models that consider various assumptions and information from market-corroborated sources. The models used are primarily industry-standard models that consider items such as quoted prices, market interest rate curves applicable to the instruments being valued as of the end of each period, discounted cash flows, volatility factors, current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

•	Level 3: Unobservable inputs that are not corroborated by market data.

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Precision Hydraulic Cylinders (PHC), a leading global manufacturer of engineered hydraulic cylinders primarily for the materials handling market. The purchase price was $87.5 and added $26.8 of goodwill. PHC serves a market of mainly large OEM customers utilizing highly engineered components with long product life-cycles that represent a small part of the end product’s cost. PHC represents a new growth platform and formed a new business group titled Hydraulic Cylinders within the Specialized Products segment.

•	A manufacturer and distributor of innovative home and garden products found at most major retailers for $19.1. This acquisition provides a solid foundation on which to continue growing our retail market presence in our Geo Components business unit.

•	A manufacturer and distributor of silt fence, a core product for our Geo Components business unit, for $2.6.

•	A distributor and installer of geosynthetic products, expanding the geographic scope and capabilities of our Geo Components business.

•	A manufacturer of surface-critical bent tube components in support of the private-label finished seating strategy in our Work Furniture business.

•	A carpet underlay manufacturer, providing additional production capacity in our Flooring Products business.

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•	A U.S. manufacturer of aerospace tube assemblies, expanding our tube forming and fabrication capabilities and adding precision machining to our aerospace platform.

•	A distributor of geosynthetic products.

•	A South African producer of mattress innersprings.

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1	Third quarter 2018 Earnings from continuing operations include a $2 benefit associated with the TCJA (Note O)

2	Fourth quarter 2018 Earnings from continuing operations include a charge of $16 for restructuring (Note F); $16 charge for a customer receivable impairment (Note I); $7 charge for ECS acquisition transaction costs (Note V)

3	Third quarter 2017 Earnings from continuing operations include a charge of $5 associated with a small Wire Products business impairment (Note D); $3 charge associated with the sale of a business (Note C)

4	Fourth quarter 2017 Earnings from continuing operations include a gain of $23 associated with the sale of real estate (Note C); $15 pension settlement charge (Note N); $50 charge associated with the TCJA (Note O)

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1	Uncollectible accounts charged off, net of recoveries.

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*	Denotes management contract or compensatory plan or arrangement.

**	Denotes filed or furnished herewith.

***

Exhibit 101 to this report includes the following formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for each year in the three year period ended December 31, 2018; (ii) Consolidated Statements of Comprehensive Income (Loss) for each year in the three year period ended December 31, 2018; (iii) Consolidated Balance Sheets at December 31, 2018 and December 31, 2017; (iv) Consolidated Statements of Cash Flows for each year in the three year period ended December 31, 2018; (v) Consolidated Statements of Changes in Equity for each year in the three year period ended December 31, 2018; and (vi) Notes to Consolidated Financial Statements.

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