(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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | $ | 6,353 | $ | 5,328 | |||||||||||||||
Cost of sales | 1,451 | 1,231 | 4,109 | 3,401 | |||||||||||||||||||
Gross profit | 753 | 752 | 2,244 | 1,927 | |||||||||||||||||||
Selling, general and administrative expenses | 368 | 328 | 1,057 | 939 | |||||||||||||||||||
Operating profit | 385 | 424 | 1,187 | 988 | |||||||||||||||||||
Other expense, net: | |||||||||||||||||||||||
Interest expense | (26) | (40) | (253) | (110) | |||||||||||||||||||
Other, net | (17) | (4) | (438) | (22) | |||||||||||||||||||
(43) | (44) | (691) | (132) | ||||||||||||||||||||
Income from continuing operations before income taxes | 342 | 380 | 496 | 856 | |||||||||||||||||||
Income tax expense | 103 | 87 | 158 | 202 | |||||||||||||||||||
Income from continuing operations | 239 | 293 | 338 | 654 | |||||||||||||||||||
Income from discontinued operations, net | — | — | — | 411 | |||||||||||||||||||
Net income | 239 | 293 | 338 | 1,065 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest | 19 | 18 | 60 | 36 | |||||||||||||||||||
Net income attributable to Masco Corporation | $ | 220 | $ | 275 | $ | 278 | $ | 1,029 | |||||||||||||||
Income per common share attributable to Masco Corporation (diluted): | |||||||||||||||||||||||
Income from continuing operations | $ | 0.89 | $ | 1.05 | $ | 1.07 | $ | 2.31 | |||||||||||||||
Income from discontinued operations, net | — | — | — | 1.54 | |||||||||||||||||||
Net income | $ | 0.89 | $ | 1.05 | $ | 1.07 | $ | 3.85 | |||||||||||||||
Average diluted common shares outstanding | 247 | 261 | 253 | 266 | |||||||||||||||||||
Amounts attributable to Masco Corporation: | |||||||||||||||||||||||
Income from continuing operations | $ | 220 | $ | 275 | $ | 278 | $ | 618 | |||||||||||||||
Income from discontinued operations, net | — | — | — | 411 | |||||||||||||||||||
Net income attributable to Masco Corporation | $ | 220 | $ | 275 | $ | 278 | $ | 1,029 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations | |||||||||||||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | $ | 6,353 | $ | 5,328 | |||||||||||||||
Gross profit, as reported | $ | 753 | $ | 752 | $ | 2,244 | $ | 1,927 | |||||||||||||||
Rationalization charges | — | 1 | 2 | 7 | |||||||||||||||||||
Gross profit, as adjusted | $ | 753 | $ | 753 | $ | 2,246 | $ | 1,934 | |||||||||||||||
Gross margin, as reported | 34.2 | % | 37.9 | % | 35.3 | % | 36.2 | % | |||||||||||||||
Gross margin, as adjusted | 34.2 | % | 38.0 | % | 35.4 | % | 36.3 | % | |||||||||||||||
Selling, general and administrative expenses, as reported | $ | 368 | $ | 328 | $ | 1,057 | $ | 939 | |||||||||||||||
Rationalization charges | — | — | — | 2 | |||||||||||||||||||
Selling, general and administrative expenses, as adjusted | $ | 368 | $ | 328 | $ | 1,057 | $ | 937 | |||||||||||||||
Selling, general and administrative expenses as percent of net sales, as reported | 16.7 | % | 16.5 | % | 16.6 | % | 17.6 | % | |||||||||||||||
Selling, general and administrative expenses as percent of net sales, as adjusted | 16.7 | % | 16.5 | % | 16.6 | % | 17.6 | % | |||||||||||||||
Operating profit, as reported | $ | 385 | $ | 424 | $ | 1,187 | $ | 988 | |||||||||||||||
Rationalization charges | — | 1 | 2 | 9 | |||||||||||||||||||
Operating profit, as adjusted | $ | 385 | $ | 425 | $ | 1,189 | $ | 997 | |||||||||||||||
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % | |||||||||||||||
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Income Per Common Share Reconciliations | |||||||||||||||||||||||
Income from continuing operations before income taxes, as reported | $ | 342 | $ | 380 | $ | 496 | $ | 856 | |||||||||||||||
Rationalization charges | — | 1 | 2 | 9 | |||||||||||||||||||
Pension costs associated with terminated plans | — | 6 | 422 | 17 | |||||||||||||||||||
Fair value adjustment to contingent earnout obligation | 14 | — | 14 | — | |||||||||||||||||||
Loss on sale of business | — | — | 18 | — | |||||||||||||||||||
(Gain) on preferred stock redemption | — | — | (14) | — | |||||||||||||||||||
(Earnings) from equity investments, net | (5) | (1) | (7) | (1) | |||||||||||||||||||
Loss on extinguishment of debt | — | 6 | 168 | 6 | |||||||||||||||||||
Income from continuing operations before income taxes, as adjusted | 351 | 392 | 1,099 | 887 | |||||||||||||||||||
Tax at 25% rate | (88) | (98) | (275) | (222) | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest | 19 | 18 | 60 | 36 | |||||||||||||||||||
Income from continuing operations, as adjusted | $ | 244 | $ | 276 | $ | 764 | $ | 629 | |||||||||||||||
Income from continuing operations per common share, as adjusted | $ | 0.99 | $ | 1.06 | $ | 3.02 | $ | 2.36 | |||||||||||||||
Average diluted common shares outstanding | 247 | 261 | 253 | 266 |
Twelve Months Ended December 31, 2021 | |||||||||||
Low End | High End | ||||||||||
Income Per Common Share Outlook | |||||||||||
Income from continuing operations per common share | $ | 1.67 | $ | 1.73 | |||||||
Rationalization charges | 0.01 | 0.01 | |||||||||
Pension costs associated with terminated plans (1) | 1.32 | 1.32 | |||||||||
Fair value adjustment to contingent earnout obligation (2) | 0.04 | 0.04 | |||||||||
Loss on sale of business | 0.05 | 0.05 | |||||||||
(Gain) on preferred stock redemption | (0.04) | (0.04) | |||||||||
(Earnings) from equity investments, net | (0.02) | (0.02) | |||||||||
Loss on extinguishment of debt | 0.53 | 0.53 | |||||||||
Losses providing no tax benefit (3) | 0.08 | 0.08 | |||||||||
Allocation to participating securities per share (4) | 0.03 | 0.03 | |||||||||
Income from continuing operations per common share, as adjusted | $ | 3.67 | $ | 3.73 |
September 30, 2021 | December 31, 2020 | ||||||||||
Balance Sheet | |||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash investments | $ | 854 | $ | 1,326 | |||||||
Receivables | 1,330 | 1,138 | |||||||||
Prepaid expenses and other | 113 | 149 | |||||||||
Inventories | 1,107 | 876 | |||||||||
Total Current Assets | 3,404 | 3,489 | |||||||||
Property and equipment, net | 887 | 908 | |||||||||
Operating lease right-of-use assets | 171 | 166 | |||||||||
Goodwill | 617 | 563 | |||||||||
Other intangible assets, net | 395 | 357 | |||||||||
Other assets | 121 | 294 | |||||||||
Total Assets | $ | 5,595 | $ | 5,777 | |||||||
Liabilities | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 1,037 | $ | 893 | |||||||
Notes payable | 10 | 3 | |||||||||
Accrued liabilities | 832 | 1,038 | |||||||||
Total Current Liabilities | 1,879 | 1,934 | |||||||||
Long-term debt | 2,950 | 2,792 | |||||||||
Noncurrent operating lease liabilities | 155 | 149 | |||||||||
Other liabilities | 485 | 481 | |||||||||
Total Liabilities | 5,469 | 5,356 | |||||||||
Redeemable noncontrolling interest | 25 | — | |||||||||
Equity | 101 | 421 | |||||||||
Total Liabilities and Equity | $ | 5,595 | $ | 5,777 |
As of September 30, | |||||||||||
2021 | 2020 | ||||||||||
Other Financial Data | |||||||||||
Working Capital Days | |||||||||||
Receivable days | 51 | 55 | |||||||||
Inventory days | 80 | 70 | |||||||||
Payable days | 65 | 74 | |||||||||
Working capital | $ | 1,400 | $ | 1,140 | |||||||
Working capital as a % of sales (LTM) | 17.0 | % | 16.4 | % |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash Flows From (For) Operating Activities: | |||||||||||
Cash provided by operating activities | $ | 904 | $ | 590 | |||||||
Working capital changes | (309) | (17) | |||||||||
Net cash from operating activities | 595 | 573 | |||||||||
Cash Flows From (For) Financing Activities: | |||||||||||
Retirement of notes | (1,326) | (400) | |||||||||
Purchase of Company common stock | (878) | (602) | |||||||||
Cash dividends paid | (154) | (108) | |||||||||
Dividends paid to noncontrolling interest | (43) | (23) | |||||||||
Issuance of notes, net of issuance costs | 1,481 | 415 | |||||||||
Debt extinguishment costs | (160) | (5) | |||||||||
Proceeds from the exercise of stock options | 1 | 26 | |||||||||
Employee withholding taxes paid on stock-based compensation | (14) | (25) | |||||||||
(Decrease) increase in debt, net | (2) | 1 | |||||||||
Net cash for financing activities | (1,095) | (721) | |||||||||
Cash Flows From (For) Investing Activities: | |||||||||||
Capital expenditures | (82) | (72) | |||||||||
Acquisition of businesses, net of cash acquired | (57) | (24) | |||||||||
Proceeds from disposition of businesses, net of cash disposed | 5 | 868 | |||||||||
Proceeds from disposition of other financial investments | 170 | 2 | |||||||||
Other, net | 7 | (4) | |||||||||
Net cash from investing activities | 43 | 770 | |||||||||
Effect of exchange rate changes on cash and cash investments | (15) | 7 | |||||||||
Cash and Cash Investments: | |||||||||||
(Decrease) increase for the period | (472) | 629 | |||||||||
At January 1 | 1,326 | 697 | |||||||||
At September 30 | $ | 854 | $ | 1,326 |
As of September 30, | |||||||||||
2021 | 2020 | ||||||||||
Liquidity | |||||||||||
Cash and cash investments | $ | 854 | $ | 1,326 | |||||||
Revolver availability | 1,000 | 1,000 | |||||||||
Total Liquidity | $ | 1,854 | $ | 2,326 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||
Plumbing Products | |||||||||||||||||||||||||||||||||||
Net sales | $ | 1,329 | $ | 1,141 | 16 | % | $ | 3,907 | $ | 2,964 | 32 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 248 | $ | 271 | $ | 773 | $ | 583 | |||||||||||||||||||||||||||
Operating margin, as reported | 18.7 | % | 23.8 | % | 19.8 | % | 19.7 | % | |||||||||||||||||||||||||||
Rationalization charges | — | — | 2 | 5 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | — | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 248 | 271 | 775 | 589 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 18.7 | % | 23.8 | % | 19.8 | % | 19.9 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 26 | 21 | 76 | 61 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 274 | $ | 292 | $ | 851 | $ | 650 | |||||||||||||||||||||||||||
Decorative Architectural Products | |||||||||||||||||||||||||||||||||||
Net sales | $ | 875 | $ | 842 | 4 | % | $ | 2,446 | $ | 2,364 | 3 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 166 | $ | 179 | $ | 496 | $ | 475 | |||||||||||||||||||||||||||
Operating margin, as reported | 19.0 | % | 21.3 | % | 20.3 | % | 20.1 | % | |||||||||||||||||||||||||||
Rationalization charges | — | 1 | — | 3 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 166 | 180 | 496 | 478 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 19.0 | % | 21.4 | % | 20.3 | % | 20.2 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 8 | 10 | 27 | 31 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 174 | $ | 190 | $ | 523 | $ | 509 | |||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | 11 | % | $ | 6,353 | $ | 5,328 | 19 | % | |||||||||||||||||||||||
Operating profit, as reported - segment | $ | 414 | $ | 450 | $ | 1,269 | $ | 1,058 | |||||||||||||||||||||||||||
General corporate expense, net | (29) | (26) | (82) | (70) | |||||||||||||||||||||||||||||||
Operating profit, as reported | 385 | 424 | 1,187 | 988 | |||||||||||||||||||||||||||||||
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % | |||||||||||||||||||||||||||
Rationalization charges - segment | — | 1 | 2 | 8 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity - segment | — | — | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 385 | 425 | 1,189 | 997 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % | |||||||||||||||||||||||||||
Depreciation and amortization - segment | 34 | 31 | 103 | 92 | |||||||||||||||||||||||||||||||
Depreciation and amortization - non-operating | 2 | 2 | 11 | 6 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 421 | $ | 458 | $ | 1,303 | $ | 1,095 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||
North American | |||||||||||||||||||||||||||||||||||
Net sales | $ | 1,753 | $ | 1,599 | 10 | % | $ | 4,999 | $ | 4,337 | 15 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 332 | $ | 368 | $ | 1,010 | $ | 899 | |||||||||||||||||||||||||||
Operating margin, as reported | 18.9 | % | 23.0 | % | 20.2 | % | 20.7 | % | |||||||||||||||||||||||||||
Rationalization charges | — | 1 | 2 | 8 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | — | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 332 | 369 | 1,012 | 908 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 18.9 | % | 23.1 | % | 20.2 | % | 20.9 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 22 | 21 | 66 | 60 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 354 | $ | 390 | $ | 1,078 | $ | 968 | |||||||||||||||||||||||||||
International | |||||||||||||||||||||||||||||||||||
Net sales | $ | 451 | $ | 384 | 17 | % | $ | 1,354 | $ | 991 | 37 | % | |||||||||||||||||||||||
Operating profit, as reported | $ | 82 | $ | 82 | $ | 259 | $ | 159 | |||||||||||||||||||||||||||
Operating margin, as reported | 18.2 | % | 21.4 | % | 19.1 | % | 16.0 | % | |||||||||||||||||||||||||||
Depreciation and amortization | 12 | 10 | 37 | 32 | |||||||||||||||||||||||||||||||
EBITDA | $ | 94 | $ | 92 | $ | 296 | $ | 191 | |||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | 11 | % | $ | 6,353 | $ | 5,328 | 19 | % | |||||||||||||||||||||||
Operating profit, as reported - segment | $ | 414 | $ | 450 | $ | 1,269 | $ | 1,058 | |||||||||||||||||||||||||||
General corporate expense, net | (29) | (26) | (82) | (70) | |||||||||||||||||||||||||||||||
Operating profit, as reported | 385 | 424 | 1,187 | 988 | |||||||||||||||||||||||||||||||
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % | |||||||||||||||||||||||||||
Rationalization charges - segment | — | 1 | 2 | 8 | |||||||||||||||||||||||||||||||
Accelerated depreciation related to rationalization activity | — | — | — | 1 | |||||||||||||||||||||||||||||||
Operating profit, as adjusted | 385 | 425 | 1,189 | 997 | |||||||||||||||||||||||||||||||
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % | |||||||||||||||||||||||||||
Depreciation and amortization - segment | 34 | 31 | 103 | 92 | |||||||||||||||||||||||||||||||
Depreciation and amortization - non-operating | 2 | 2 | 11 | 6 | |||||||||||||||||||||||||||||||
EBITDA, as adjusted | $ | 421 | $ | 458 | $ | 1,303 | $ | 1,095 |
&%P+S$N,"\ /#]X
M<&%C:V5T(&)E9VEN/2?ON[\G(&ED/2=7-4TP37!#96AI2'IR95-Z3E1C>FMC
M.60G/SX-"CQX.GAM<&UE=&$@>&UL;G,Z>#TB861O8F4Z;G,Z;65T82\B('@Z
M>&UP=&L](EA-4"!T;V]L:VET(#,N,"TR."P@9G)A;65W;W)K(#$N-B(^#0H)
M/')D9CI21$8@>&UL;G,ZE&![)GD5DD5[>&)ID&5[^4IRCMI\DR]C
MCC5]?@I^D!]_P,LZFN*$_;=FF".#YZ,!E9F"_(WZDTV"2W@KD4.!V&%\CW6!
MFDE^C?>!@2YYC5>!XPG/CIN#",G3F=^.K;8DSB^YJK"@11RSJ#&39P;(I4:$E@ @QR
M .8?=G!S&- ;=TMS\;F >!]TS*(J>.IUKXHD>;)VH7%C>G]WHU>&>T]XGSLO
M?#%YEA:=?2%YZ.0/=(=^:,YK=8E^&[?Z=GQ]Y:#+=V5]RHC=>$M]S7 N>3-]
MY%9;>A5]^3H'>N]^$A4@>U1]P>(Q