(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
MASCO CORPORATION | ||||||||
By: | /s/ John G. Sznewajs | |||||||
Name: | John G. Sznewajs | |||||||
Title: | Vice President, Chief Financial Officer | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net sales | $ | 2,179 | $ | 1,764 | $ | 4,149 | $ | 3,345 | |||||||||||||||
Cost of sales | 1,388 | 1,136 | 2,658 | 2,170 | |||||||||||||||||||
Gross profit | 791 | 628 | 1,491 | 1,175 | |||||||||||||||||||
Selling, general and administrative expenses | 354 | 289 | 689 | 611 | |||||||||||||||||||
Operating profit | 437 | 339 | 802 | 564 | |||||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||
Interest expense | (25) | (35) | (227) | (70) | |||||||||||||||||||
Other, net | (415) | (2) | (421) | (18) | |||||||||||||||||||
(440) | (37) | (648) | (88) | ||||||||||||||||||||
(Loss) income from continuing operations before income taxes | (3) | 302 | 154 | 476 | |||||||||||||||||||
Income tax expense | 12 | 82 | 55 | 115 | |||||||||||||||||||
(Loss) income from continuing operations | (15) | 220 | 99 | 361 | |||||||||||||||||||
Income from discontinued operations, net | — | 14 | — | 411 | |||||||||||||||||||
Net (loss) income | (15) | 234 | 99 | 772 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest | 21 | 10 | 41 | 18 | |||||||||||||||||||
Net (loss) income attributable to Masco Corporation | $ | (36) | $ | 224 | $ | 58 | $ | 754 | |||||||||||||||
(Loss) income per common share attributable to Masco Corporation (diluted): | |||||||||||||||||||||||
(Loss) income from continuing operations | $ | (0.14) | $ | 0.80 | $ | 0.20 | $ | 1.27 | |||||||||||||||
Income from discontinued operations, net | — | 0.05 | — | 1.53 | |||||||||||||||||||
Net (loss) income | $ | (0.14) | $ | 0.85 | $ | 0.20 | $ | 2.80 | |||||||||||||||
Average diluted common shares outstanding | 252 | 263 | 256 | 268 | |||||||||||||||||||
Amounts attributable to Masco Corporation: | |||||||||||||||||||||||
(Loss) income from continuing operations | $ | (36) | $ | 210 | $ | 58 | $ | 343 | |||||||||||||||
Income from discontinued operations, net | — | 14 | — | 411 | |||||||||||||||||||
Net (loss) income attributable to Masco Corporation | $ | (36) | $ | 224 | $ | 58 | $ | 754 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations | |||||||||||||||||||||||
Net sales | $ | 2,179 | $ | 1,764 | $ | 4,149 | $ | 3,345 | |||||||||||||||
Gross profit, as reported | $ | 791 | $ | 628 | $ | 1,491 | $ | 1,175 | |||||||||||||||
Rationalization charges | 1 | 3 | 2 | 6 | |||||||||||||||||||
Gross profit, as adjusted | $ | 792 | $ | 631 | $ | 1,493 | $ | 1,181 | |||||||||||||||
Gross margin, as reported | 36.3 | % | 35.6 | % | 35.9 | % | 35.1 | % | |||||||||||||||
Gross margin, as adjusted | 36.3 | % | 35.8 | % | 36.0 | % | 35.3 | % | |||||||||||||||
Selling, general and administrative expenses, as reported | $ | 354 | $ | 289 | $ | 689 | $ | 611 | |||||||||||||||
Rationalization charges | — | 2 | — | 2 | |||||||||||||||||||
Selling, general and administrative expenses, as adjusted | $ | 354 | $ | 287 | $ | 689 | $ | 609 | |||||||||||||||
Selling, general and administrative expenses as percent of net sales, as reported | 16.2 | % | 16.4 | % | 16.6 | % | 18.3 | % | |||||||||||||||
Selling, general and administrative expenses as percent of net sales, as adjusted | 16.2 | % | 16.3 | % | 16.6 | % | 18.2 | % | |||||||||||||||
Operating profit, as reported | $ | 437 | $ | 339 | $ | 802 | $ | 564 | |||||||||||||||
Rationalization charges | 1 | 5 | 2 | 8 | |||||||||||||||||||
Operating profit, as adjusted | $ | 438 | $ | 344 | $ | 804 | $ | 572 | |||||||||||||||
Operating margin, as reported | 20.1 | % | 19.2 | % | 19.3 | % | 16.9 | % | |||||||||||||||
Operating margin, as adjusted | 20.1 | % | 19.5 | % | 19.4 | % | 17.1 | % | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Income Per Common Share Reconciliations | |||||||||||||||||||||||
(Loss) income from continuing operations before income taxes, as reported | $ | (3) | $ | 302 | $ | 154 | $ | 476 | |||||||||||||||
Rationalization charges | 1 | 5 | 2 | 8 | |||||||||||||||||||
Pension costs associated with terminated plans | 413 | 5 | 422 | 11 | |||||||||||||||||||
Loss on sale of business | 18 | — | 18 | — | |||||||||||||||||||
(Gain) on preferred stock redemption | (14) | — | (14) | — | |||||||||||||||||||
(Earnings) from equity investments, net | — | — | (2) | — | |||||||||||||||||||
Loss on extinguishment of debt | — | — | 168 | — | |||||||||||||||||||
Income from continuing operations before income taxes, as adjusted | 415 | 312 | 748 | 495 | |||||||||||||||||||
Tax at 25% rate | (104) | (78) | (187) | (124) | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest | 21 | 10 | 41 | 18 | |||||||||||||||||||
Income from continuing operations, as adjusted | $ | 290 | $ | 224 | $ | 520 | $ | 353 | |||||||||||||||
Income from continuing operations per common share, as adjusted | $ | 1.14 | $ | 0.85 | $ | 2.03 | $ | 1.32 | |||||||||||||||
Average diluted common shares outstanding, as reported | 252 | 263 | 256 | 268 | |||||||||||||||||||
Stock option dilution (1) | 2 | — | — | — | |||||||||||||||||||
Average diluted common shares outstanding, as adjusted | 254 | 263 | 256 | 268 |
Twelve Months Ended December 31, 2021 | |||||||||||
Low End | High End | ||||||||||
Income Per Common Share Outlook | |||||||||||
Income from continuing operations per common share | $ | 1.74 | $ | 1.84 | |||||||
Rationalization charges | 0.02 | 0.02 | |||||||||
Pension costs associated with terminated plans (1) | 1.32 | 1.32 | |||||||||
Loss on sale of business | 0.05 | 0.05 | |||||||||
(Gain) on preferred stock redemption | (0.04) | (0.04) | |||||||||
Loss on extinguishment of debt | 0.53 | 0.53 | |||||||||
Allocation to participating securities per share (2) | 0.03 | 0.03 | |||||||||
Income from continuing operations per common share, as adjusted | $ | 3.65 | $ | 3.75 |
June 30, 2021 | December 31, 2020 | ||||||||||
Balance Sheet | |||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash investments | $ | 769 | $ | 1,326 | |||||||
Receivables | 1,352 | 1,138 | |||||||||
Prepaid expenses and other | 117 | 149 | |||||||||
Inventories | 1,021 | 876 | |||||||||
Total Current Assets | 3,259 | 3,489 | |||||||||
Property and equipment, net | 896 | 908 | |||||||||
Operating lease right-of-use assets | 169 | 166 | |||||||||
Goodwill | 592 | 563 | |||||||||
Other intangible assets, net | 372 | 357 | |||||||||
Other assets | 135 | 294 | |||||||||
Total Assets | $ | 5,423 | $ | 5,777 | |||||||
Liabilities | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 1,021 | $ | 893 | |||||||
Notes payable | 10 | 3 | |||||||||
Accrued liabilities | 747 | 1,038 | |||||||||
Total Current Liabilities | 1,778 | 1,934 | |||||||||
Long-term debt | 2,950 | 2,792 | |||||||||
Noncurrent operating lease liabilities | 152 | 149 | |||||||||
Other liabilities | 458 | 481 | |||||||||
Total Liabilities | 5,338 | 5,356 | |||||||||
Redeemable noncontrolling interest | 25 | — | |||||||||
Equity | 60 | 421 | |||||||||
Total Liabilities and Equity | $ | 5,423 | $ | 5,777 |
As of June 30, | |||||||||||
2021 | 2020 | ||||||||||
Other Financial Data | |||||||||||
Working Capital Days | |||||||||||
Receivable days | 53 | 58 | |||||||||
Inventory days | 77 | 66 | |||||||||
Payable days | 69 | 74 | |||||||||
Working capital | $ | 1,352 | $ | 1,213 | |||||||
Working capital as a % of sales (LTM) (1) | 16.9 | % | 18.1 | % |
Six Months Ended June 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash Flows From (For) Operating Activities: | |||||||||||
Cash provided by operating activities | $ | 610 | $ | 283 | |||||||
Working capital changes | (371) | 7 | |||||||||
Net cash from operating activities | 239 | 290 | |||||||||
Cash Flows From (For) Financing Activities: | |||||||||||
Retirement of notes | (1,326) | — | |||||||||
Purchase of Company common stock | (750) | (602) | |||||||||
Cash dividends paid | (96) | (73) | |||||||||
Dividends paid to noncontrolling interest | (43) | (23) | |||||||||
Issuance of notes, net of issuance costs | 1,481 | — | |||||||||
Debt extinguishment costs | (160) | — | |||||||||
Proceeds from the exercise of stock options | 1 | 21 | |||||||||
Employee withholding taxes paid on stock-based compensation | (14) | (22) | |||||||||
(Decrease) increase in debt, net | (2) | 5 | |||||||||
Net cash for financing activities | (909) | (694) | |||||||||
Cash Flows From (For) Investing Activities: | |||||||||||
Capital expenditures | (53) | (45) | |||||||||
Acquisition of businesses, net of cash acquired | (1) | (24) | |||||||||
Proceeds from disposition of businesses, net of cash disposed | 5 | 865 | |||||||||
Proceeds from disposition of other financial investments | 168 | 1 | |||||||||
Other, net | 3 | 2 | |||||||||
Net cash from investing activities | 122 | 799 | |||||||||
Effect of exchange rate changes on cash and cash investments | (9) | (3) | |||||||||
Cash and Cash Investments: | |||||||||||
(Decrease) increase for the period | (557) | 392 | |||||||||
At January 1 | 1,326 | 697 | |||||||||
At June 30 | $ | 769 | $ | 1,089 |
As of June 30, | |||||||||||
2021 | 2020 | ||||||||||
Liquidity | |||||||||||
Cash and cash investments | $ | 769 | $ | 1,089 | |||||||
Revolver availability | 1,000 | 1,000 | |||||||||
Total Liquidity | $ | 1,769 | $ | 2,089 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||
Plumbing Products | |||||||||||||||||||||||||||||||||||
Net sales | $ | 1,329 | $ | 868 | 53 | % | $ | 2,578 | $ | 1,823 | 41 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 273 | $ | 155 | $ | 525 | $ | 312 | |||||||||||||||||||||||||||
Operating margin, as reported | 20.5 | % | 17.9 | % | 20.4 | % | 17.1 | % | |||||||||||||||||||||||||||
Rationalization charges | 1 | 3 | 2 | 5 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | 1 | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 274 | 159 | 527 | 318 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 20.6 | % | 18.3 | % | 20.4 | % | 17.4 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 24 | 20 | 50 | 40 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 298 | $ | 179 | $ | 577 | $ | 358 | |||||||||||||||||||||||||||
Decorative Architectural Products | |||||||||||||||||||||||||||||||||||
Net sales | $ | 850 | $ | 896 | (5) | % | $ | 1,571 | $ | 1,522 | 3 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 188 | $ | 201 | $ | 330 | $ | 296 | |||||||||||||||||||||||||||
Operating margin, as reported | 22.1 | % | 22.4 | % | 21.0 | % | 19.4 | % | |||||||||||||||||||||||||||
Rationalization charges | — | 1 | — | 2 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 188 | 202 | 330 | 298 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 22.1 | % | 22.5 | % | 21.0 | % | 19.6 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 9 | 10 | 19 | 21 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 197 | $ | 212 | $ | 349 | $ | 319 | |||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 2,179 | $ | 1,764 | 24 | % | $ | 4,149 | $ | 3,345 | 24 | % | |||||||||||||||||||||||
Operating profit, as reported - segment | $ | 461 | $ | 356 | $ | 855 | $ | 608 | |||||||||||||||||||||||||||
General corporate expense, net | (24) | (17) | (53) | (44) | |||||||||||||||||||||||||||||||
Operating profit, as reported | 437 | 339 | 802 | 564 | |||||||||||||||||||||||||||||||
Operating margin, as reported | 20.1 | % | 19.2 | % | 19.3 | % | 16.9 | % | |||||||||||||||||||||||||||
Rationalization charges - segment | 1 | 4 | 2 | 7 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity - segment | — | 1 | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 438 | 344 | 804 | 572 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 20.1 | % | 19.5 | % | 19.4 | % | 17.1 | % | |||||||||||||||||||||||||||
Depreciation and amortization - segment | 33 | 30 | 69 | 61 | |||||||||||||||||||||||||||||||
Depreciation and amortization - non-operating | 2 | 2 | 9 | 4 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 473 | $ | 376 | $ | 882 | $ | 637 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||
North American | |||||||||||||||||||||||||||||||||||
Net sales | $ | 1,717 | $ | 1,480 | 16 | % | $ | 3,246 | $ | 2,738 | 19 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 370 | $ | 321 | $ | 678 | $ | 531 | |||||||||||||||||||||||||||
Operating margin, as reported | 21.5 | % | 21.7 | % | 20.9 | % | 19.4 | % | |||||||||||||||||||||||||||
Rationalization charges | 1 | 4 | 2 | 7 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | 1 | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 371 | 326 | 680 | 539 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 21.6 | % | 22.0 | % | 20.9 | % | 19.7 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 21 | 19 | 44 | 39 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 392 | $ | 345 | $ | 724 | $ | 578 | |||||||||||||||||||||||||||
International | |||||||||||||||||||||||||||||||||||
Net sales | $ | 462 | $ | 284 | 63 | % | $ | 903 | $ | 607 | 49 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 91 | $ | 35 | $ | 177 | $ | 77 | |||||||||||||||||||||||||||
Operating margin, as reported | 19.7 | % | 12.3 | % | 19.6 | % | 12.7 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 12 | 11 | 25 | 22 | |||||||||||||||||||||||||||||||
EBITDA | $ | 103 | $ | 46 | $ | 202 | $ | 99 | |||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 2,179 | $ | 1,764 | 24 | % | $ | 4,149 | $ | 3,345 | 24 | % | |||||||||||||||||||||||
Operating profit, as reported - segment | $ | 461 | $ | 356 | $ | 855 | $ | 608 | |||||||||||||||||||||||||||
General corporate expense, net | (24) | (17) | (53) | (44) | |||||||||||||||||||||||||||||||
Operating profit, as reported | 437 | 339 | 802 | 564 | |||||||||||||||||||||||||||||||
Operating margin, as reported | 20.1 | % | 19.2 | % | 19.3 | % | 16.9 | % | |||||||||||||||||||||||||||
Rationalization charges - segment | 1 | 4 | 2 | 7 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | 1 | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 438 | 344 | 804 | 572 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 20.1 | % | 19.5 | % | 19.4 | % | 17.1 | % | |||||||||||||||||||||||||||
Depreciation and amortization - segment | 33 | 30 | 69 | 61 | |||||||||||||||||||||||||||||||
Depreciation and amortization - non-operating | 2 | 2 | 9 | 4 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 473 | $ | 376 | $ | 882 | $ | 637 |
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