EX-99 2 a8-kexhibit99063019.htm EXHIBIT 99 Exhibit


Exhibit 99
 mascoa11.jpg                                            
 
MASCO CORPORATION REPORTS SECOND QUARTER 2019 RESULTS

Key Results

•
Sales decreased 1 percent to $2.3 billion; in local currency, sales matched prior year
•
Operating profit for the quarter increased 9 percent to $392 million; adjusted operating profit increased 5 percent to $399 million
•
Earnings per share increased 21 percent to $0.82 per share; adjusted earnings per share increased 16 percent to $0.88 per share
•
Updating 2019 anticipated earnings per share to be in the range of $2.51 - $2.61 per share, and on an adjusted basis, to be in the range of $2.62 - $2.72 per share, compared to a previous range of $2.60 - $2.80
•
Board announces intent to increase annual dividend by $.06 per share to $.54 per share, beginning in the fourth quarter

LIVONIA, Mich. (July 25, 2019) - Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its second quarter results.

“We delivered operating profit growth and margin expansion across all segments in the quarter,” said Masco President and CEO, Keith Allman. “This performance was achieved through disciplined pricing actions and cost control, which more than offset lower volumes. We continued our focus on creating shareholder value and returned $202 million to shareholders through share repurchases and dividends during the quarter.”

2019 Second Quarter Commentary

•
On a reported basis, compared to second quarter 2018:
•
Net sales decreased 1 percent to $2.3 billion; in local currency, net sales matched prior year
•
In local currency, North American sales increased 1 percent and international sales decreased 4 percent
•
Gross margins increased 170 basis points to 34.4 percent from 32.7 percent
•
Operating profit increased 9 percent to $392 million
•
Operating margins increased 160 basis points to 17.2 percent from 15.6 percent
•
Net income increased to $0.82 per share, compared to $0.68 per share
•
Compared to second quarter 2018, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:
•
Gross margins increased 90 basis points to 34.5 percent compared to 33.6 percent
•
Operating profit increased 5 percent to $399 million from $380 million
•
Operating margins increased 100 basis points to 17.5 percent compared to 16.5 percent
•
Net income increased to $0.88 per share, compared to $0.76 per share
•
Liquidity at the end of the second quarter was $325 million
•
Repurchased 4.3 million shares in the quarter

2019 Second Quarter Operating Segment Results

•
Plumbing Products’ net sales decreased 2 percent (flat excluding the impact of foreign currency) due to lower volume and currency, partially offset by pricing
•
Decorative Architectural Products’ net sales increased 3 percent due to growth in paints and other coating products
•
Cabinetry Products’ net sales decreased 6 percent due to lower volume, partially offset by pricing
•
Windows and Other Specialty Products’ net sales decreased 3 percent due to lower volume, partially offset by favorable mix in North America and pricing

“We are pleased with how we have navigated through a dynamic first half of 2019, and believe we are well positioned to execute on our plans in the second half of the year,” said Allman. “We anticipate adjusted earnings per share to be in the range of $2.62 - $2.72. Additionally, our Board demonstrated confidence in our future by announcing its intention to raise our annual dividend 13% to $0.54 per share beginning in the fourth quarter.”











1


About Masco

Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes Behr® paint; Delta® and Hansgrohe® faucets, bath and shower fixtures; KraftMaid® and Merillat® cabinets; Milgard® windows and doors; Kichler® decorative and outdoor lighting; and HotSpring® spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders. For more information about Masco Corporation, visit www.masco.com.

The 2019 second quarter supplemental material, including a presentation in PDF format, is available on Masco’s website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Thursday, July 25, 2019 at 8:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (855) 226-2726 (855-22MASCO) and from outside the U.S. at (706) 679-3614. Please use the conference identification number 6594856. The conference call will be webcast simultaneously and in its entirety through Masco’s website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on Masco’s website.

A replay of the call will be available on Masco’s website or by phone by dialing (855) 859-2056 and from outside the U.S. at (404) 537-3406. Please use the conference identification number 6594856. The telephone replay will be available approximately two hours after the end of the call and continue through August 25, 2019.

Safe Harbor Statement

This press release contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.

Our future performance may be affected by the levels of residential repair and remodel activity and new home construction, our ability to maintain our strong brands and reputation and to develop new products, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of raw materials and increasing tariffs, our dependence on third-party suppliers, risks associated with international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, including the potential divestitures of our Cabinetry and Windows businesses, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented personnel, risks associated with our reliance on information systems and technology, and our ability to achieve the anticipated benefits from our investments in new technology. These and other factors are discussed in detail in Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

Investor Contact

David Chaika
Vice President, Treasurer and Investor Relations    
313.792.5500
david_chaika@mascohq.com
# # #

2
MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(in millions, except per common share data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net sales
$
2,275

 
$
2,297

 
$
4,183

 
$
4,217

Cost of sales
1,493

 
1,547

 
2,802

 
2,848

Gross profit
782

 
750

 
1,381

 
1,369

 
 
 
 
 
 
 
 
Selling, general and administrative expenses
390

 
392

 
762

 
767

Impairment charges for goodwill and other intangible assets
—

 
—

 
16

 
—

Operating profit
392

 
358

 
603

 
602

 
 
 
 
 
 
 
 
Other income (expense), net:
 
 
 
 
 
 
 
Interest expense
(41
)
 
(38
)
 
(80
)
 
(79
)
Other, net
(4
)
 
(8
)
 
(8
)
 
(11
)
 
(45
)
 
(46
)
 
(88
)
 
(90
)
Income before income taxes
347

 
312

 
515

 
512

 
 
 
 
 
 
 
 
Income tax expense
95

 
88

 
136

 
127

Net income
252

 
224

 
379

 
385

 
 
 
 
 
 
 
 
Less: Net income attributable to noncontrolling interest
12

 
13

 
23

 
25

Net income attributable to Masco Corporation
$
240

 
$
211

 
$
356

 
$
360

 
 
 
 
 
 
 
 
Income per common share attributable to Masco Corporation (diluted):
 

 
 

 
 

 
 

Net income
$
0.82

 
$
0.68

 
$
1.21

 
$
1.15

 
 
 
 
 
 
 
 
Average diluted common shares outstanding
290

 
309

 
292

 
311

 
 
 
 
 
 
 
 
 
Historical information is available on our website.


3
MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(dollars in millions)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019

2018
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,275

 
$
2,297

 
$
4,183

 
$
4,217

 
 
 
 
 
 
 
 
Gross profit, as reported
$
782

 
$
750

 
$
1,381

 
$
1,369

Rationalization charges
2

 
2

 
2

 
3

Kichler inventory step up adjustment
—

 
20

 
—

 
25

Gross profit, as adjusted
$
784

 
$
772

 
$
1,383

 
$
1,397

 
 
 
 
 
 
 
 
Gross margin, as reported
34.4
%
 
32.7
%

33.0
%

32.5
%
Gross margin, as adjusted
34.5
%
 
33.6
%

33.1
%

33.1
%
 
 
 
 
 
 
 
 
Selling, general and administrative expenses, as reported
$
390

 
$
392

 
$
762

 
$
767

Professional fees related to potential divestitures
5

 
—

 
8

 
—

Selling, general and administrative expenses, as adjusted
$
385

 
$
392

 
$
754

 
$
767

 
 
 
 
 
 
 
 
Selling, general and administrative expenses as percent of net sales, as reported
17.1
%
 
17.1
%

18.2
%

18.2
%
Selling, general and administrative expenses as percent of net sales, as adjusted
16.9
%
 
17.1
%
 
18.0
%
 
18.2
%
 
 
 
 
 
 
 
 
Operating profit, as reported
$
392

 
$
358

 
$
603

 
$
602

Rationalization charges
2

 
2

 
2

 
3

Kichler inventory step up adjustment
—

 
20

 
—

 
25

Impairment charges for goodwill and other intangible assets
—

 
—

 
16

 
—

Professional fees related to potential divestitures
5

 
—

 
8

 
—

Operating profit, as adjusted
$
399

 
$
380


$
629


$
630

 
 
 
 
 
 
 
 
Operating margin, as reported
17.2
%
 
15.6
%

14.4
%

14.3
%
Operating margin, as adjusted
17.5
%
 
16.5
%

15.0
%

14.9
%

Historical information is available on our website.

4
MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(in millions, except per common share data)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Income Per Common Share Reconciliations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes, as reported
$
347

 
$
312

 
$
515

 
$
512

Rationalization charges
2

 
2

 
2

 
3

Kichler inventory step up adjustment
—

 
20

 
—

 
25

Impairment charges for goodwill and other intangible assets
—

 
—

 
16

 
—

Professional fees related to potential divestitures
5

 
—

 
8

 
—

(Earnings) from equity investments, net
—

 
(2
)
 
—

 
(2
)
Income before income taxes, as adjusted
354

 
332

 
541

 
538

Tax at 25% rate
(88
)
 
(83
)
 
(135
)
 
(135
)
Less: Net income attributable to noncontrolling interest
12

 
13

 
23

 
25

Net income, as adjusted
$
254

 
$
236

 
$
383

 
$
378

 
 
 
 
 
 
 
 
Net income per common share, as adjusted
$
0.88


$
0.76

 
$
1.31

 
$
1.22

 
 
 
 
 
 
 
 
Average diluted common shares outstanding
290

 
309

 
292

 
311


Outlook for the Twelve Months Ended December 31, 2019
 
Twelve Months Ended December 31, 2019
 
Low End
 
High End
Income Per Common Share Outlook
 
 
 
 
 
 
 
Net income per common share
$
2.51

 
$
2.61

Rationalization charges
0.02

 
0.02

Impairment charges for goodwill and other intangible assets
0.04

 
0.04

Professional fees related to potential divestitures
0.03

 
0.03

Allocation to participating securities per share (1)
0.02

 
0.02

Net income per common share, as adjusted
$
2.62

 
$
2.72


(1) Represents the impact of distributed dividends and undistributed earnings to unvested restricted stock awards in accordance with the two-class method of calculating earnings per share.

Historical information is available on our website.


5
MASCO CORPORATION
Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited
June 30, 2019 and December 31, 2018

(dollars in millions)
 
June 30, 2019
 
December 31, 2018
Balance Sheet
 

 
 

Assets
 

 
 

Current Assets:
 

 
 

Cash and cash investments
$
325

 
$
559

Receivables
1,423

 
1,153

Inventories
975

 
946

Prepaid expenses and other
120

 
108

Total Current Assets
2,843

 
2,766

 
 
 
 
Property and equipment, net
1,212

 
1,223

Operating lease right-of-use assets
228

 
—

Goodwill
891

 
898

Other intangible assets, net
387

 
406

Other assets
92

 
100

Total Assets
$
5,653

 
$
5,393

 
 
 
 
Liabilities
 

 
 

Current Liabilities:
 

 
 

Accounts payable
$
1,023

 
$
926

Notes payable
231

 
8

Accrued liabilities
699

 
750

Total Current Liabilities
1,953

 
1,684

 
 
 
 
Long-term debt
2,771

 
2,971

Other liabilities
858

 
669

Total Liabilities
5,582

 
5,324

 
 
 
 
Equity
71

 
69

Total Liabilities and Equity
$
5,653

 
$
5,393

 
 
As of June 30,
 
2019
 
2018
Other Financial Data
 

 
 

Working Capital Days
 

 
 

Receivable days
54

 
56

Inventory days
67

 
70

Payable days
72

 
72

Working capital
$
1,375

 
$
1,368

Working capital as a % of sales (LTM)
16.5
%
 
17.1
%
 
Historical information is available on our website.

6
MASCO CORPORATION
Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited
For the Six Months Ended June 30, 2019 and 2018

(dollars in millions)
 
Six Months Ended June 30,
 
2019
 
2018
Cash Flows From (For) Operating Activities:
 

 
 

Cash provided by operating activities
$
510

 
$
499

Working capital changes
(297
)
 
(206
)
Net cash from operating activities
213

 
293

 
 
 
 
Cash Flows From (For) Financing Activities:
 

 
 

Retirement of notes
—

 
(114
)
Purchase of Company common stock
(289
)
 
(265
)
Cash dividends paid
(70
)
 
(65
)
Dividends paid to noncontrolling interest
(42
)
 
(89
)
Proceeds from the exercise of stock options
13

 
—

Employee withholding taxes paid on stock-based compensation
(16
)
 
(33
)
Increase (decrease) in debt, net
20

 
(1
)
Credit Agreement and other financing costs
(2
)
 
—

Net cash for financing activities
(386
)
 
(567
)
 
 
 
 
Cash Flows From (For) Investing Activities:
 

 
 

Capital expenditures
(71
)
 
(103
)
Acquisition of business, net of cash acquired
—

 
(548
)
Other, net
8

 
107

Net cash for investing activities
(63
)
 
(544
)
 
 
 
 
Effect of exchange rate changes on cash and cash investments
2

 
8

 
 
 
 
Cash and Cash Investments:
 

 
 

Decrease for the period
(234
)
 
(810
)
At January 1
559

 
1,194

At June 30
$
325

 
$
384

 
 
As of June 30,
 
2019
 
2018
Liquidity
 

 
 

Cash and cash investments
$
325

 
$
384

 
Historical information is available on our website.


7
MASCO CORPORATION
Segment Data - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(dollars in millions)
 
Three Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Plumbing Products
 

 
 

 
 

 
 
 
 
 
 
Net sales
$
1,012

 
$
1,032

 
(2
)%
 
$
1,952

 
$
2,003

 
(3
)%
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported
$
198

 
$
194

 
 

 
$
351

 
$
357

 
 
Operating margin, as reported
19.6
%
 
18.8
%




18.0
%

17.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rationalization charges
2

 
1

 
 

 
2

 
2

 
 
Accelerated depreciation related to rationalization activity
—

 
1

 
 
 
—

 
1

 
 
Operating profit, as adjusted
200

 
196





353


360

 
 
Operating margin, as adjusted
19.8
%
 
19.0
%




18.1
%

18.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
20

 
18

 
 

 
39

 
36

 
 
EBITDA, as adjusted
$
220

 
$
214





$
392


$
396

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Decorative Architectural Products
 

 
 

 
 

 
 
 
 
 
 
Net sales
$
827

 
$
806

 
3
 %
 
$
1,400

 
$
1,351

 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported
$
173

 
$
145

 
 
 
$
246

 
$
234

 
 
Operating margin, as reported
20.9
%

18.0
%




17.6
%

17.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kichler inventory step up adjustment
—

 
20

 
 
 
—

 
25

 
 
Impairment charge for other intangible assets
—

 
—

 
 
 
9

 
—

 
 
Operating profit, as adjusted
173

 
165





255


259

 
 
Operating margin, as adjusted
20.9
%
 
20.5
%




18.2
%

19.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
10

 
10

 
 

 
20

 
15

 
 
EBITDA, as adjusted
$
183

 
$
175





$
275


$
274

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cabinetry Products
 

 
 

 
 

 
 
 
 
 
 
Net sales
$
251

 
$
268

 
(6
)%
 
$
488

 
$
485

 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported
$
33

 
$
33

 
 

 
$
53

 
$
39

 
 
Operating margin, as reported
13.1
%

12.3
%




10.9
%

8.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Professional fees related to potential divestitures
1

 
—

 
 

 
3

 
—

 
 
Operating profit, as adjusted
34

 
33





56


39

 
 
Operating margin, as adjusted
13.5
%
 
12.3
%




11.5
%

8.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
4

 
4

 
 

 
7

 
7

 
 
EBITDA, as adjusted
$
38

 
$
37





$
63


$
46

 
 
 
Historical information is available on our website.

8
MASCO CORPORATION
Segment Data - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(dollars in millions)
 
Three Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Windows and Other Specialty Products
 

 
 

 
 

 
 
 
 
 
 

Net sales
$
185

 
$
191

 
(3
)%
 
$
343

 
$
378

 
(9
)%
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit (loss), as reported
$
7

 
$
8

 
 

 
$
(4
)
 
$
12

 
 

Operating margin, as reported
3.8
%

4.2
%




(1.2
)%

3.2
%
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Impairment charge for goodwill
—

 
—

 
 
 
7

 
—

 
 
Professional fees related to potential divestitures
4

 
—

 
 
 
5

 
—

 
 
Operating profit, as adjusted
11

 
8





8


12

 


Operating margin, as adjusted
5.9
%
 
4.2
%
 


 
2.3
 %
 
3.2
%
 


 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
5

 
5

 
 

 
11

 
11

 
 

EBITDA, as adjusted
$
16

 
$
13





$
19


$
23


 

 
 
 
 
 
 
 
 
 
 
 
 
Total
 

 
 

 
 

 
 
 
 
 
 

Net sales
$
2,275

 
$
2,297

 
(1
)%
 
$
4,183

 
$
4,217

 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported - segment
$
411

 
$
380

 
 

 
$
646

 
$
642

 
 

General corporate expense, net
(19
)
 
(22
)
 
 

 
(43
)
 
(40
)
 
 

Operating profit, as reported
392

 
358





603


602

 
 

Operating margin, as reported
17.2
%
 
15.6
%




14.4
 %

14.3
%
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Rationalization charges - segment
2

 
1

 
 

 
2

 
2

 
 

Accelerated depreciation related to rationalization activity - segment
—

 
1

 
 
 
—

 
1

 
 
Kichler inventory step up adjustment
—

 
20

 
 

 
—

 
25

 
 

Impairment charges for goodwill and other intangible assets
—

 
—

 
 
 
16

 
—

 
 
Professional fees related to potential divestitures
5

 
—

 
 
 
8

 
—

 
 
Operating profit, as adjusted
399

 
380

 
 
 
629


630

 
 
Operating margin, as adjusted
17.5
%
 
16.5
%




15.0
 %

14.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization - segment
39

 
37

 
 

 
77

 
69

 
 

Depreciation and amortization - non-operating
3

 
2

 
 

 
5

 
4

 
 

EBITDA, as adjusted
$
441

 
$
419





$
711


$
703

 
 

 
Historical information is available on our website.


9
MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

(dollars in millions)
 
Three Months Ended June 30,



Six Months Ended June 30,


 
2019

2018

Change

2019

2018

Change
North American
 

 
 

 
 

 
 

 
 

 
 
Net sales
$
1,891

 
$
1,872

 
1
 %
 
$
3,426

 
$
3,388

 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported
$
364

 
$
323

 
 

 
$
566

 
$
541

 
 
Operating margin, as reported
19.2
%
 
17.3
%




16.5
%

16.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rationalization charges
2

 
1

 
 

 
2

 
2

 
 
Accelerated depreciation related to rationalization activity
—

 
1

 
 
 
—

 
1

 
 
Kichler inventory step up adjustment
—

 
20

 
 

 
—

 
25

 
 
Impairment charge for other intangible assets
—

 
—

 
 
 
9

 
—

 
 
Professional fees related to potential divestitures
3

 
—

 
 
 
6

 
—

 
 
Operating profit, as adjusted
369

 
345





583


569

 
 
Operating margin, as adjusted
19.5
%
 
18.4
%




17.0
%

16.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
29

 
27

 
 

 
56

 
48

 
 
EBITDA, as adjusted
$
398

 
$
372





$
639


$
617

 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 

 
 

 
 

 
 

 
 

 
 
Net sales
$
384

 
$
425

 
(10
)%
 
$
757

 
$
829

 
(9
)%
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported
$
47

 
$
57

 
 

 
$
80

 
$
101

 
 
Operating margin, as reported
12.2
%
 
13.4
%




10.6
%

12.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charge for goodwill
—

 
—

 
 
 
7

 
—

 
 
Professional fees related to potential divestitures
2

 
—

 
 
 
2

 
—

 
 
Operating profit, as adjusted
49

 
57





89


101

 
 
Operating margin, as adjusted
12.8
%
 
13.4
%




11.8
%

12.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
10

 
10

 
 

 
21

 
21

 
 
EBITDA, as adjusted
$
59

 
$
67





$
110


$
122

 
 

Historical information is available on our website.

 
 
 
 
 
 
 
 
 
 

10
MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Six Months Ended June 30, 2019 and 2018

 
 
 
 
 
 
 
 
 
(dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
 
 
2019
 
2018
 
Change
 
2019
 
2018
 
Change
Total
 

 
 

 
 

 
 

 
 

 
 
Net sales
$
2,275

 
$
2,297

 
(1
)%
 
$
4,183

 
$
4,217

 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
Operating profit, as reported - segment
$
411

 
$
380

 
 

 
$
646

 
$
642

 
 
General corporate expense, net
(19
)
 
(22
)
 
 

 
(43
)
 
(40
)
 
 
Operating profit, as reported
392

 
358





603


602

 
 
Operating margin, as reported
17.2
%
 
15.6
%




14.4
%

14.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rationalization charges - segment
2

 
1

 
 

 
2

 
2

 
 
Accelerated depreciation related to rationalization activity
—

 
1

 
 
 
—

 
1

 
 
Kichler inventory step up adjustment
—

 
20

 
 

 
—

 
25

 
 
Impairment charges for goodwill and other intangible assets
—

 
—

 
 
 
16

 
—

 
 
Professional fees related to potential divestitures
5

 
—

 
 
 
8

 
—

 
 
Operating profit, as adjusted
399

 
380





629


630

 
 
Operating margin, as adjusted
17.5
%
 
16.5
%




15.0
%

14.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization - segment
39

 
37

 
 

 
77

 
69

 
 
Depreciation and amortization - non-operating
3

 
2

 
 

 
5

 
4

 
 
EBITDA, as adjusted
$
441

 
$
419

 
 

 
$
711

 
$
703

 
 

Historical information is available on our website.



11