Divestitures

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

DIVESTITURES

In March 2021, we entered into a definitive agreement to sell Hüppe GmbH ("Hüppe"), a manufacturer of shower enclosures and shower trays. The closing of the sale is expected during the second quarter of 2021, subject to customary closing conditions and regulatory approval. We determined that the assets and liabilities for Hüppe met the held for sale criteria. Accordingly, Hüppe's assets and liabilities were classified in the condensed consolidated balance sheet at March 31, 2021 as assets held for sale or liabilities held for sale. Additionally, we ceased recording depreciation and amortization for the held for sale assets upon meeting the held for sale criteria. The sale of Hüppe does not represent a strategic shift that will have a major effect on our operations and financial results so it was not presented as discontinued operations. This business is included in our Plumbing Products segment.

The carrying amount of major classes of assets and liabilities included as part of Hüppe being reported as held for sale, were as follows, in millions:

	March 31, 2021
Cash and cash investments	$	2
Receivables	7
Prepaid expenses and other	1
Inventories	8
Property and equipment, net	7
Operating lease right-of-use assets	2
Total assets classified as held for sale	$	27
Accounts payable	$	7
Accrued liabilities	7
Noncurrent operating lease liabilities	1
Other liabilities	13
Total liabilities classified as held for sale	$	28

C. DIVESTITURES (Concluded)

On November 14, 2019, we entered into a definitive agreement to sell Masco Cabinetry LLC ("Cabinetry"), a manufacturer of cabinetry products. We completed the divestiture of Cabinetry on February 18, 2020 for proceeds of approximately $989 million, including $853 million, net of cash disposed. The remaining $136 million was accounted for as preferred stock issued by a holding company of the buyer; refer to Note G for additional information. In connection with the sale, we recognized a gain on the divestiture of $585 million for the three months ended March 31, 2020, which is included in income from discontinued operations, net in the condensed consolidated statement of operations.

As the sale of Cabinetry represented a strategic shift having a major effect on our operations and financial results, the business was presented in discontinued operations separate from continuing operations for the three months ended March 31, 2020.

The major classes of line items constituting income from discontinued operations, net, in millions:

	Three Months Ended March 31,
	2021		2020
Net sales	$	—	$	101
Cost of sales	—		78
Gross profit	—		23
Selling, general and administrative expenses	—		32
(Loss) from discontinued operations	—		(9)
Gain on disposal of discontinued operations	—		585
Income before income tax	—		576
Income tax expense	—		(179)
Income from discontinued operations, net	$	—	$	397