10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549 

FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 1-5794

Masco Corporation

(Exact name of Registrant as Specified in its Charter)

Delaware	38-1794485
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

17450 College Parkway,	Livonia,	Michigan	48152
(Address of Principal Executive Offices)			(Zip Code)

(313) 274-7400

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1.00 par value	MAS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒ Yes   ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☒ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

    ☐ Yes   ☒ No

    Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 

Class	Shares Outstanding at September 30, 2021
Common stock, par value $1.00 per share	244,087,493

MASCO CORPORATION

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets — as of September 30, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	4
	Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6.	Exhibits	31
	Signature	32

MASCO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

September 30, 2021 and December 31, 2020

(In Millions, Except Share Data)

	September 30, 2021		December 31, 2020
ASSETS
Current Assets:
Cash and cash investments	$	854	$	1,326
Receivables	1,330		1,138
Prepaid expenses and other	113		149
Inventories:
Finished goods	642		552
Raw material	357		242
Work in process	108		82
	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
Commitments and contingencies (Note P)
Redeemable noncontrolling interest	25		—
EQUITY
Masco Corporation's shareholders' equity:
Common shares, par value $1 per share   Authorized shares: 1,400,000,000;   Issued and outstanding: 2021 – 243,500,000; 2020 – 258,200,000	243		258
Preferred shares authorized: 1,000,000;   Issued and outstanding: 2021 and 2020 – None	—		—
Paid-in capital	—		—
Retained (deficit) earnings	(595)		79
Accumulated other comprehensive income (loss)	226		(142)
Total Masco Corporation's shareholders' (deficit) equity	(126)		195
Noncontrolling interest	227		226
Total equity	101		421
Total liabilities and equity	$	5,595	$	5,777

See notes to condensed consolidated financial statements.

1

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

For the Three and Nine Months Ended September 30, 2021 and 2020

(In Millions, Except Per Common Share Data)

	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 income (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:
Basic:
Income from continuing operations	$	0.89	$	1.05	$	1.08	$	2.31
Income from discontinued operations, net	—		—		—		1.54
Net income	$	0.89	$	1.05	$	1.08	$	3.85
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
Amounts attributable to Masco Corporation:
Income from continuing operations	$	220	$	275	$	278	$	618
Income from discontinued operations, net	—		—		—		411
Net income	$	220	$	275	$	278	$	1,029

See notes to condensed consolidated financial statements.

2

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

For the Three and Nine Months Ended September 30, 2021 and 2020

(In Millions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
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
Other comprehensive (loss) income, net of tax (Note L):
Cumulative translation adjustment	$	(20)	$	32	$	(19)	$	15
Interest rate swaps	—		—		7		1
Pension and other post-retirement benefits	2		5		365		15
Other comprehensive (loss) income, net of tax	(18)		37		353		31
Less: Other comprehensive (loss) income attributable to noncontrolling interest	(5)		9		(15)		8
Other comprehensive (loss) income attributable to Masco Corporation	$	(13)	$	28	$	368	$	23
Total comprehensive income	$	221	$	330	$	691	$	1,096
Less: Total comprehensive income attributable to noncontrolling interest	14		27		45		44
Total comprehensive income attributable to Masco Corporation	$	207	$	303	$	646	$	1,052

See notes to condensed consolidated financial statements.

3

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

For the Nine Months Ended September 30, 2021 and 2020

(In Millions) 

	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by operations	$	904	$	590
Increase in receivables	(219)		(294)
Increase in inventories	(237)		(66)
Increase in accounts payable and accrued liabilities, net	147		343
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
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

See notes to condensed consolidated financial statements.

4

MASCO CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

For the Three and Nine Months Ended September 30, 2021 and 2020

(In Millions, Except Per Common Share Data)

	Total		Common Shares ($1 par value)		Paid-In Capital		Retained (Deficit) Earnings		Accumulated Other Comprehensive  (Loss) Income		Noncontrolling Interest
Balance, January 1, 2020	$	(56)	$	276	$	—	$	(332)	$	(179)	$	179
Cumulative effect of adoption of new credit loss standard	(1)		—		—		(1)		—		—
Adjusted balance, January 1, 2020	$	(57)	$	276	$	—	$	(333)	$	(179)	$	179
Total comprehensive income (loss)	514		—		—		530		(20)		4
Shares issued	11		1		10		—		—		—
Shares retired:
Repurchased	(602)		(14)		(28)		(560)		—		—
Surrendered (non-cash)	(13)		—		—		(13)		—		—
Cash dividends declared	(36)		—		—		(36)		—		—
Stock-based compensation	18		—		18		—		—		—
Balance, March 31, 2020	$	(165)	$	263	$	—	$	(412)	$	(199)	$	183
Total comprehensive income	252		—		—		224		15		13
Shares retired:
Repurchased	—		(3)		3		—		—		—
Cash dividends declared	(35)		—		—		(35)		—		—
Dividends paid to noncontrolling interest	(23)		—		—		—		—		(23)
Stock-based compensation	8		—		8		—		—		—
Balance, June 30, 2020	$	37	$	260	$	11	$	(223)	$	(184)	$	173
Total comprehensive income	330		—		—		275		28		27
Shares issued	3		1		2		—		—		—
Cash dividends declared	(37)		—		—		(37)		—		—
Stock-based compensation	8		—		8		—		—		—
Balance, September 30, 2020	$	341	$	261	$	21	$	15	$	(156)	$	200

5

MASCO CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Concluded)

For the Three and Nine Months Ended September 30, 2021 and 2020

(In Millions, Except Per Common Share Data)

	Total		Common Shares ($1 par value)		Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive  (Loss) Income		Noncontrolling Interest
Balance, January 1, 2021	$	421	$	258	$	—	$	79	$	(142)	$	226
Total comprehensive income (loss)	90		—		—		94		(12)		8
Shares issued	—		1		(1)		—		—		—
Shares retired:
Repurchased	(303)		(6)		(27)		(270)		—		—
Surrendered (non-cash)	(13)		—		—		(13)		—		—
Redeemable noncontrolling interest - redemption adjustment	(6)		—		—		(6)		—		—
Stock-based compensation	28		—		28		—		—		—
Balance, March 31, 2021	$	217	$	253	$	—	$	(116)	$	(154)	$	234
Total comprehensive income (loss)	380		—		—		(36)		393		23
Shares retired:
Repurchased	(447)		(6)		(12)		(429)		—		—
Cash dividends declared	(59)		—		—		(59)		—		—
Dividends paid to noncontrolling interest	(43)		—		—		—		—		(43)
Stock-based compensation	12		—		12		—		—		—
Balance, June 30, 2021	$	60	$	247	$	—	$	(640)	$	239	$	214
Total comprehensive income (loss)	220		—		—		220		(13)		13
Shares retired:
Repurchased	(128)		(4)		(8)		(116)		—		—
Cash dividends declared	(59)		—		—		(59)		—		—
Stock-based compensation	8		—		8		—		—		—
Balance, September 30, 2021	$	101	$	243	$	—	$	(595)	$	226	$	227

See notes to condensed consolidated financial statements.

6

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

A. ACCOUNTING POLICIES

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at September 30, 2021, our results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020, cash flows for the nine months ended September 30, 2021 and 2020 and changes in shareholders' equity for the three and nine months ended September 30, 2021 and 2020. The condensed consolidated balance sheet at December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America.

Recently Adopted Accounting Pronouncements. In January 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-01, "Investments—Equity Securities (Topic 321)," "Investments—Equity Method and Joint Ventures (Topic 323)," and "Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815," which clarifies that an entity should consider observable transactions when either applying or discontinuing the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321. ASU 2020-01 clarifies that for certain forward contracts or purchased options to acquire investments, an entity should not consider whether, upon settlement of the forward contract or exercise of the purchased option, the underlying securities would be accounted for under the equity method or the fair value option. We adopted ASU 2020-01 prospectively beginning on January 1, 2021. The adoption of the standard did not have a material effect on our financial position or results of operations.

Recently Issued Accounting Pronouncements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. ASU 2020-06 is effective for us for annual periods beginning January 1, 2022. We are currently reviewing the provisions of this pronouncement and the impact, if any, the adoption of this guidance has on our financial position or results of operations. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

B. ACQUISITIONS

In the third quarter of 2021, we acquired all of the share capital of Steamist, Inc. ("Steamist") for approximately $56 million in cash. This amount is subject to working capital and other adjustments. Steamist is a manufacturer of residential steam bath products that are complementary to many of our plumbing products. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $31 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 11 years. We also recognized $29 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

In the first quarter of 2021, we acquired a 75.1% equity interest in Easy Sanitary Solutions B.V. ("ESS"), for approximately €47 million ($58 million), including $52 million of cash and $6 million of debt that will be paid out over two years less any pending or settled indemnity matters. These amounts are subject to working capital and other adjustments. The cash payment was made to a third-party notary on December 29, 2020 for the acquisition of this equity interest in advance of the transaction closing on January 4, 2021. ESS is a manufacturer of shower channel drains and offers a wide range of products for barrier-free showering and bathroom wall niches. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $32 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 10 years. We also recognized $35 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

The remaining 24.9% equity interest in ESS is subject to a call and put option that is exercisable by us or the sellers, respectively, any time after December 31, 2023. The redemption value of the call and put option is the same and based on a floating EBITDA value. The call and put options were determined to be embedded within the redeemable noncontrolling interest and were recorded as temporary equity in the condensed consolidated balance sheet at September 30, 2021. We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained (deficit) earnings.

7

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

B. ACQUISITIONS (Concluded)

In the fourth quarter of 2020, we acquired substantially all of the net assets of Kraus USA Inc. ("Kraus"), a designer and distributor of sinks, faucets and accessories for the kitchen and bathroom, for approximately $103 million and an additional cash payment of up to $50 million to be paid in 2023, contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $8 million. Refer to Note G for additional information regarding the subsequent remeasurement of the contingent consideration liability. This business expands our product offerings to our customers and our online presence under the Kraus brand. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $25 million of indefinite-lived intangible assets, which is related to trademarks, and $49 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 10 years. We also recognized $20 million of goodwill, which is generally tax deductible, and is related primarily to the expected synergies from combining the operations into our business. During the first quarter of 2021, we revised the allocation of the purchase price to certain identifiable assets and liabilities based on analysis of information as of the acquisition date, which resulted in a $1 million decrease to goodwill. The working capital adjustments were finalized with the seller in the second quarter of 2021, resulting in no significant changes.

In the fourth quarter of 2020, we acquired substantially all of the net assets of Work Tools International Inc. and Elder & Jenks, LLC (collectively, "Work Tools") for approximately $53 million, including $48 million of cash and $5 million of debt that will be paid out in 18 months less any pending or settled indemnity matters. Work Tools expands our product offering to our customers as it is a leading manufacturer of high-quality precision painting tools and accessories including brushes, rollers and mini rollers for DIY and professionals. This business is included in our Decorative Architectural Products segment. In connection with this acquisition, we recognized $7 million of indefinite-lived intangible assets, which is related to trademarks, and $27 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 12 years. We also recognized $7 million of goodwill, which is generally tax deductible, and is related primarily to the expected synergies from combining the operations into our business. The working capital adjustments were finalized with the seller in the first quarter of 2021, resulting in no significant changes.

In the first quarter of 2020, we acquired all of the share capital of SmarTap A.Y Ltd. ("SmarTap") for approximately $24 million in cash. SmarTap is a developer of a smart bathing system that monitors and controls the temperature and flow of water. This acquisition provides an adaptable solution for a wide range of products as it is compatible with showerheads, hand showers, spouts and shower jets. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $10 million of definite-lived intangible assets, primarily related to technology, which is being amortized on a straight-line basis over a weighted average amortization period of 5 years. We also recognized $14 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

8

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

C. DIVESTITURES

On May 31, 2021, we completed the divestiture of our Hüppe GmbH ("Hüppe") business, a manufacturer of shower enclosures and shower trays. In connection with the divestiture, we recognized a loss of $18 million for the nine months ended September 30, 2021, which is included in other, net in our condensed consolidated statements of operations. This loss resulted primarily from the recognition of $23 million of currency translation losses that were previously included within accumulated other comprehensive income (loss). The sale of Hüppe does not represent a strategic shift that will have a major effect on our operations and financial results and therefore was not presented as discontinued operations. Prior to the divestiture, the results of the business were included in our Plumbing Products segment.

On November 6, 2019, we completed the divestiture of our Milgard Windows and Doors business ("Milgard"), a manufacturer and distributor of windows and doors for proceeds of approximately $720 million, net of cash disposed. During the nine months ended September 30, 2020, a $17 million pre-tax post-closing adjustment related to the finalization of working capital items was recorded to income from discontinued operations, net in the condensed consolidated statements of operations, as a gain on the divestiture of Milgard. Of the $17 million, we received $15 million in cash as of September 30, 2020, which is presented in investing activities on the condensed consolidated statement of cash flow as proceeds from disposition of businesses, net of cash disposed. The remaining $2 million was received in two monthly installments throughout the remainder of 2020.

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 nine months ended September 30, 2020, which is included in income from discontinued operations, net in the condensed consolidated statement of operations.

As the sale of Milgard and Cabinetry represented a strategic shift having a major effect on our operations and financial results, these businesses were presented in discontinued operations separate from continuing operations for the nine months ended September 30, 2020, as applicable. There was no activity for the three months ended September 30, 2021 and 2020.

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

	Nine Months Ended September 30,
	2021		2020
Net sales	$	—	$	101
Cost of sales	—		78
Gross profit	—		23
Selling, general and administrative expenses	—		31
(Loss) from discontinued operations	—		(8)
Gain on disposal of discontinued operations	—		602
Income before income tax	—		594
Income tax expense	—		(183)
Income from discontinued operations, net	$	—	$	411

9

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

D. REVENUE

Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions:

	Three Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	878	$	875	$	1,753
International, principally Europe	451		—		451
Total	$	1,329	$	875	$	2,204

	Nine Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	2,553	$	2,446	$	4,999
International, principally Europe	1,354		—		1,354
Total	$	3,907	$	2,446	$	6,353

	Three Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	757	$	842	$	1,599
International, principally Europe	384		—		384
Total	$	1,141	$	842	$	1,983

	Nine Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	1,973	$	2,364	$	4,337
International, principally Europe	991		—		991
Total	$	2,964	$	2,364	$	5,328

Our contract asset balance was $1 million and $2 million at September 30, 2021 and December 31, 2020, respectively. Our contract liability balance was $24 million and $62 million at September 30, 2021 and December 31, 2020, respectively.

We reversed $1 million and $6 million of revenue for the three months ended September 30, 2021 and 2020, respectively, related to performance obligations settled in previous quarters of the same year. We recognized $3 million and $7 million of revenue for the three and nine months ended September 30, 2021, respectively, and $1 million and $6 million of revenue for the three and nine months ended September 30, 2020, respectively, related to performance obligations settled in previous years.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

D. REVENUE (Concluded)

Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	7	$	5
Provision for expected credit losses during the period	1		3
Write-offs charged against the allowance	(1)		(2)
Recoveries of amounts previously written off	1		1
Other (A)	(1)		—
Balance at end of period	$	7	$	7

(A)    As a result of Hüppe being divested in May 2021, $1 million for the nine months ended September 30, 2021 was removed from allowance for credit losses.

E. DEPRECIATION AND AMORTIZATION

 Depreciation and amortization expense was $114 million and $99 million for the nine months ended September 30, 2021 and 2020, respectively.

F. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at September 30, 2021, by segment, was as follows, in millions:

	Gross Goodwill At September 30, 2021		Accumulated Impairment Losses		Net Goodwill At September 30, 2021
Plumbing Products (A)	$	627	$	(301)	$	326
Decorative Architectural Products	366		(75)		291
Total	$	993	$	(376)	$	617

(A)    As a result of Hüppe being divested in May 2021, both gross goodwill and accumulated impairment losses for the Plumbing Products segment were reduced by $39 million.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2021, by segment, were as follows, in millions: 

	Gross Goodwill At December 31, 2020		Accumulated Impairment Losses		Net Goodwill At December 31, 2020		Acquisitions		Other (B)		Net Goodwill At September 30, 2021
Plumbing Products	$	613	$	(340)	$	273	$	63	$	(10)	$	326
Decorative Architectural Products	365		(75)		290		1		—		291
Total	$	978	$	(415)	$	563	$	64	$	(10)	$	617

(B)    Other consists of the effect of foreign currency translation.

The carrying value of our other indefinite-lived intangible assets was $109 million at both September 30, 2021 and December 31, 2020 and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $286 million (net of accumulated amortization of $70 million) and $248 million (net of accumulated amortization of $73 million) at September 30, 2021 and December 31, 2020, respectively, and principally included customer relationships. The increase in our definite-lived intangible assets is primarily a result of our acquisitions of Steamist and ESS.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

G. FAIR VALUE OF FINANCIAL INVESTMENTS

Preferred Stock of ACProducts Holding, Inc. As described in Note C, in conjunction with our divestiture of Cabinetry, we received preferred stock of ACProducts Holding, Inc., the holding company of the buyer, with a liquidation preference of $150 million. We did not have the ability to exercise significant influence, and the fair value of this security was not readily available. We elected to measure this investment at cost (less impairment, if any) adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer for subsequent measurements of fair value. As the preferred stock was received in conjunction with the sale of Cabinetry, we determined the cost to be the fair value of the preferred stock at the time of sale, which was determined to be $136 million and was included in other assets in our condensed consolidated balance sheet.

In May 2021, we received, in cash, $166 million for the redemption of the preferred stock, including all accrued but unpaid dividends, and recognized a gain of $14 million which was included within other, net in our condensed consolidated statements of operations.

Prior to the redemption, dividends earned on this investment were included within other, net in our condensed consolidated statements of operations with a corresponding increase to our basis in the investment. We had dividend income of $6 million for the nine months ended September 30, 2021, and $3 million and $7 million for the three and nine months ended September 30, 2020, respectively. The preferred stock was reported at the carrying value of $146 million in other assets in our condensed consolidated balance sheet at December 31, 2020.

Kraus Acquisition Contingent Consideration. As described in Note B, we may be obligated to pay up to an additional $50 million in 2023 for the Kraus acquisition contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. The measurement of the liability for contingent consideration is based on significant inputs that are not observable in the market, and is therefore classified as Level 3 inputs. Examples of utilized unobservable inputs are estimated future revenues and earnings of the acquired business and an applicable discount rate. The estimate of the liability may fluctuate if there are changes in the forecast of the acquired business' future revenues and earnings, as a result of actual levels achieved, or in the discount rate used to determine the present value of contingent future cash flows. All subsequent remeasurements from the initial estimate at the time of acquisition are recorded in other, net in our condensed consolidated statement of operations, as described in Note N. The fair value of the liability was estimated to be $22 million and $8 million as of September 30, 2021 and December 31, 2020, respectively, using probability weighted discounted cash flows and a discount rate that reflects the uncertainty surrounding the expected outcomes, which we believe is appropriate and representative of a market participant assumption.

Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. The aggregate estimated market value of our short-term and long-term debt at September 30, 2021 was approximately $3.2 billion, compared with the aggregate carrying value of $3.0 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2020 was approximately $3.3 billion, compared with the aggregate carrying value of $2.8 billion.

H. WARRANTY LIABILITY

Changes in our warranty liability were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	83	$	84
Accruals for warranties issued during the period	28		34
Accruals related to pre-existing warranties	1		(3)
Settlements made (in cash or kind) during the period	(23)		(33)
Other, net (including currency translation and acquisitions)	(2)		1
Balance at end of period	$	87	$	83

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

I. DEBT

On March 4, 2021, we issued $600 million of 1.500% Notes due February 15, 2028, $600 million of 2.000% Notes due February 15, 2031 and $300 million of 3.125% Notes due February 15, 2051. We received proceeds of $1,495 million, net of discount, for the issuance of these Notes. The Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On March 22, 2021, proceeds from the debt issuances, together with cash on hand, were used to repay and early retire our $326 million 5.950% Notes due March 15, 2022, $500 million 4.450% Notes due April 1, 2025, and $500 million 4.375% Notes due April 1, 2026. In connection with these early retirements, we incurred a loss on debt extinguishment of $168 million for the nine months ended September 30, 2021, which was recorded as interest expense in the condensed consolidated statement of operations.

On September 18, 2020, we issued $300 million of 2.000% Notes due October 1, 2030 (the "2030 Notes") and received proceeds of $300 million, net of discount, for the issuance of the 2030 Notes. Also on September 18, 2020, we issued an incremental $100 million of our existing 4.500% Notes due May 15, 2047 (the "2047 Notes") and received proceeds of $119 million, including a premium, for the issuance of the 2047 Notes. The incremental $100 million will form a single series with the existing $300 million of 4.500% Notes due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On September 29, 2020, proceeds from the debt issuances were used to repay and early retire our $400 million 3.500% Notes due April 1, 2021. In connection with this early retirement, we incurred a loss on debt extinguishment of $6 million for the three and nine months ended September 30, 2020, which was recorded as interest expense in the condensed consolidated statement of operations.

On March 13, 2019, we entered into a credit agreement (the “Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of March 13, 2024. Under the Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders.

The Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries, in U.S. dollars, European euros, British Pounds Sterling, Canadian dollars and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to $500 million, equivalent. We can also borrow swingline loans up to $100 million and obtain letters of credit of up to $25 million; outstanding letters of credit under the Credit Agreement reduce our borrowing capacity. At September 30, 2021, we had no outstanding standby letters of credit under the Credit Agreement.

Revolving credit loans bear interest under the Credit Agreement, at our option, at (A) a rate per annum equal to the greater of (i) the JPMorgan Chase Bank, N.A. prime rate, (ii) the Federal Reserve Bank of New York effective rate plus 0.50% and (iii) if available, adjusted LIBO Rate plus 1.0% (the "Alternative Base Rate"); plus an applicable margin based upon our then-applicable corporate credit ratings; or (B) if available, adjusted LIBO Rate plus an applicable margin based upon our then-applicable corporate credit ratings. The foreign currency revolving credit loans bear interest at a rate equal to adjusted LIBO Rate, if available, plus an applicable margin based upon our then-applicable corporate credit ratings.

The Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.

In order for us to borrow under the Credit Agreement, there must not be any default in our covenants in the Credit Agreement (i.e., in addition to the two financial covenants, principally limitations on subsidiary debt, negative pledge restrictions, legal compliance requirements and maintenance of properties and insurance) and our representations and warranties in the Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2018, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and no borrowings were outstanding at September 30, 2021. 

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MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

J. STOCK-BASED COMPENSATION

Our 2014 Long Term Stock Incentive Plan provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At September 30, 2021, outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units, performance restricted stock units and phantom stock awards.

Pre-tax compensation expense included in income from continuing operations for these stock-based incentives was as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Long-term stock awards	$	2	$	4	$	8	$	11
Stock options	1		1		6		6
Restricted stock units	3		1		26		12
Performance restricted stock units	2		2		8		3
Phantom stock awards	1		1		3		3
Total	$	9	$	9	$	51	$	35

Long-Term Stock Awards. Prior to the amendment of our 2014 Long Term Stock Incentive Plan in December 2019, we granted long-term stock awards to our key employees and non-employee Directors. We did not grant shares of long-term stock awards in the nine months ended September 30, 2021 and 2020.

Our long-term stock award activity was as follows, shares in millions: 

	Nine Months Ended September 30,
	2021		2020
Unvested stock award shares at January 1	1		2
Weighted average grant date fair value	$	36	$	34
Stock award shares vested	—		1
Weighted average grant date fair value	$	34	$	32
Stock award shares forfeited	—		—
Weighted average grant date fair value	$	37	$	35
Unvested stock award shares at September 30	1		1
Weighted average grant date fair value	$	37	$	36

At September 30, 2021 and 2020, there was $12 million and $25 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of two years at both September 30, 2021 and 2020.

The total market value (at the vesting date) of stock award shares which vested was $28 million and $31 million during the nine months ended September 30, 2021 and 2020, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

J. STOCK-BASED COMPENSATION (Continued)

Stock Options. Stock options are granted to certain key employees.

We granted 331,970 shares of stock options in the nine months ended September 30, 2021 with a grant date weighted average exercise price of approximately $56 per share.

Our stock option activity was as follows, shares in millions: 

		Nine Months Ended September 30,
		2021		2020
Option shares outstanding, January 1		2		3
Weighted average exercise price	$	33	$	27
Option shares granted		1		1
Weighted average exercise price	$	56	$	48
Option shares exercised		—		1
Aggregate intrinsic value on date of exercise (A)	$	1 million	$	29 million
Weighted average exercise price	$	20	$	17
Option shares forfeited		—		—
Weighted average exercise price	$	11	$	42
Option shares outstanding, September 30		3		3
Weighted average exercise price	$	36	$	34
Weighted average remaining option term (in years)		6		7
Option shares vested and expected to vest, September 30		3		2
Weighted average exercise price	$	36	$	33
Aggregate intrinsic value (A)	$	53 million	$	54 million
Weighted average remaining option term (in years)		6		7
Option shares exercisable (vested), September 30		2		1
Weighted average exercise price	$	30	$	28
Aggregate intrinsic value (A)	$	43 million	$	35 million
Weighted average remaining option term (in years)		5		5

(A)    Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares.

At September 30, 2021 and 2020, there was $4 million and $7 million, respectively, of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of two years and three years at September 30, 2021 and 2020, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

J. STOCK-BASED COMPENSATION (Concluded)

The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows: 

	Nine Months Ended September 30,
	2021			2020
Weighted average grant date fair value	$	13.61		$	10.67
Risk-free interest rate	0.75		%	1.53		%
Dividend yield	1.67		%	1.14		%
Volatility factor	30.00		%	24.00		%
Expected option life	6 years			6 years

Restricted Stock Units. Restricted stock units are granted to our key employees and non-employee Directors. These grants did not cause net share dilution due to our practice of repurchasing and retiring an equal number of shares in the open market.

We granted 662,980 restricted stock units in the nine months ended September 30, 2021 with a weighted average grant date fair value of $57 per share. In the nine months ended September 30, 2021, 141,461 shares were issued and 15,487 restricted stock units were forfeited. During the nine months ended September 30, 2020, we granted 437,170 restricted stock units with a grant date fair value of approximately $47 per share and 7,930 restricted stock units were forfeited.

At September 30, 2021 and 2020, there was $18 million and $8 million, respectively, of unrecognized compensation expense related to unvested restricted stock units; such units had a weighted average remaining vesting period of two years at both September 30, 2021 and 2020.

The total market value (at the vesting date) of restricted stock units which vested was $8 million during the nine months ended September 30, 2021.

Performance Restricted Stock Units. Under our Long Term Incentive Program, we grant performance restricted stock units to certain senior executives. These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement of specified performance metrics established by our Compensation Committee over a three-year performance period and the recipient's continued employment through the share award date.

During the nine months ended September 30, 2021, we granted 85,360 performance restricted stock units with a grant date fair value of approximately $53 per share and 104,757 shares were issued. During the nine months ended September 30, 2020, we granted 133,390 performance restricted stock units with a grant date fair value of approximately $34 per share and 151,724 shares were issued. No performance restricted stock units were forfeited during the nine months ended September 30, 2021 and 2020.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

K. EMPLOYEE RETIREMENT PLANS

Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our condensed consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 

	Three Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	1	$	—	$	1	$	—
Interest cost	1		2		5		2
Expected return on plan assets	(1)		—		(6)		—
Amortization of net loss	2		—		7		—
Net periodic pension cost	$	3	$	2	$	7	$	2

	Nine Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	3	$	—	$	2	$	—
Interest cost	14		3		18		4
Expected return on plan assets	(8)		—		(17)		—
Settlement loss	406		—		—		—
Amortization of net loss	13		2		18		2
Net periodic pension cost	$	428	$	5	$	21	$	6

As of January 1, 2010, substantially all of our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals. In December 2019, our Board of Directors approved the termination of our qualified domestic defined-benefit pension plans. In the second quarter of 2021, we settled these plans and made a final contribution of $101 million. The settlement loss included $447 million of pre-tax actuarial losses that were reclassified out of accumulated other comprehensive income (loss) during the nine months ended September 30, 2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

L. RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The reclassifications from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations were as follows, in millions: 

	Amounts Reclassified
Accumulated Other Comprehensive (Income) Loss	Three Months Ended September 30,				Nine Months Ended September 30,				Statement of Operations Line Item
	2021		2020		2021		2020
Settlement and amortization of defined-benefit pension and other post-retirement benefits (A):
Actuarial losses, net	$	2	$	7	$	18	$	20	Other, net
Settlement loss	—		—		447		—
Tax (benefit)	—		(2)		(100)		(5)
Net of tax	$	2	$	5	$	365	$	15
Interest rate swaps (B)	$	—	$	—	$	2	$	1	Interest expense
Tax expense	—		—		5		—
Net of tax	$	—	$	—	$	7	$	1

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $447 million of pre-tax actuarial losses from accumulated other comprehensive income (loss) and $96 million of income tax benefit, which included $11 million of related disproportionate tax expense. Additionally, the amortization of defined-benefit pension and post-retirement benefits included $3 million, net of tax, due to the disposition of pension plans in connection with the divestiture of Hüppe.

(B)    Upon full repayment and retirement of the 5.950% Notes due March 15, 2022 in the first quarter of 2021, we recognized the remaining interest rate swap loss and related disproportionate tax expense.

In addition to the above amounts, we reclassified $23 million of currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the divestiture of Hüppe in the second quarter of 2021. Also, we reclassified $14 million of deferred currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the disposition of our UK Window Group business in the third quarter of 2020.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

M. SEGMENT INFORMATION

Information by segment and geographic area was as follows, in millions: 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021		2020		2021		2020		2021		2020		2021		2020
	Net Sales (A)				Operating Profit				Net Sales (A)				Operating Profit
Operations by segment:
Plumbing Products	$	1,329	$	1,141	$	248	$	271	$	3,907	$	2,964	$	773	$	583
Decorative Architectural Products	875		842		166		179		2,446		2,364		496		475
Total	$	2,204	$	1,983	$	414	$	450	$	6,353	$	5,328	$	1,269	$	1,058
Operations by geographic area:
North America	$	1,753	$	1,599	$	332	$	368	$	4,999	$	4,337	$	1,010	$	899
International, principally Europe	451		384		82		82		1,354		991		259		159
Total	$	2,204	$	1,983	414		450		$	6,353	$	5,328	1,269		1,058
General corporate expense, net					(29)		(26)						(82)		(70)
Operating profit					385		424						1,187		988
Other income (expense), net					(43)		(44)						(691)		(132)
Income from continuing operations before income taxes					$	342	$	380					$	496	$	856

(A)    Inter-segment sales were not material.

N. OTHER INCOME (EXPENSE), NET

Other, net, which is included in other income (expense), net, was as follows, in millions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Loss on sale of business	$	—	$	—	$	(18)	$	—
Income from cash and cash investments	—		—		—		2
Equity investment income, net	5		1		7		1
Foreign currency transaction (losses) gains	(4)		1		(2)		(6)
Net periodic pension and post-retirement benefit cost (A)	(4)		(9)		(430)		(25)
Gain on preferred stock redemption	—		—		14		—
Contingent consideration (B)	(14)		—		(14)		—
Dividend income	—		3		6		7
Other items, net	—		—		(1)		(1)
Total other, net	$	(17)	$	(4)	$	(438)	$	(22)

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $406 million of additional pension expense. Refer to Note K for additional information.

(B)    In the third quarter of 2021, we recognized $14 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note G for additional information.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

O. INCOME PER COMMON SHARE

Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator (basic and diluted):
Income from continuing operations	$	220	$	275	$	278	$	618
Less: Allocation to redeemable noncontrolling interest	—		—		6		—
Less: Allocation to unvested restricted stock awards	1		1		1		5
Income from continuing operations attributable to common shareholders	219		274		271		613
Income from discontinued operations, net	—		—		—		411
Less: Allocation to unvested restricted stock awards	—		—		—		3
Income from discontinued operations, net attributable to common shareholders	—		—		—		408
Net income attributable to common shareholders	$	219	$	274	$	271	$	1,021
Denominator:
Basic common shares (based upon weighted average)	246		261		251		265
Add: Stock option dilution	1		—		2		1
Diluted common shares	247		261		253		266

For the three and nine months ended September 30, 2021 and 2020, we allocated dividends and undistributed earnings to the unvested restricted stock awards.

Additionally, 70,000 and 285,000 common shares for the three and nine months ended September 30, 2021, respectively, and 106,000 and 685,000 common shares for the three and nine months ended September 30, 2020, respectively, related to stock options were excluded from the computation of diluted income per common share due to their antidilutive effect.

Effective February 10, 2021, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2019. We repurchased and retired 15.2 million shares of our common stock in the nine months ended September 30, 2021 for approximately $878 million. This included 0.7 million shares to offset the dilutive impact of restricted stock units granted in the nine months ended September 30, 2021. At September 30, 2021, we had $1.3 billion remaining under the 2021 authorization.

On the basis of amounts paid (declared), cash dividends per common share were $0.235 ($0.235) and $0.610 ($0.470) for the three and nine months ended September 30, 2021, respectively, and $0.135 ($0.140) and $0.405 ($0.410) for the three and nine months ended September 30, 2020, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Concluded)

P. OTHER COMMITMENTS AND CONTINGENCIES

We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: competition, product liability, employment, warranty, advertising, contract, personal injury, environmental, intellectual property and insurance coverage. We believe we have adequate defenses in these matters. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety matters would have a material adverse effect on us is remote. However, there is no assurance that we will prevail in these matters, and we could, in the future, incur judgments or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations.

Q. INCOME TAXES

Our effective tax rate of 30 percent and 32 percent for the three and nine months ended September 30, 2021 was impacted by $10 million and $15 million of income tax expense, respectively, due to losses providing no tax benefit in certain jurisdictions from the termination of our qualified domestic defined-benefit pension plans and a business divestiture. The tax rate in the nine-month period also includes a $16 million income tax expense from the elimination of disproportionate tax effects from accumulated other comprehensive income (loss) relating to our interest rate swap following the retirement of the related debt, and the termination of our qualified domestic defined-benefit pension plans.

Our effective tax rate of 23 percent and 24 percent for the three and nine months ended September 30, 2020 was impacted by a $10 million and $13 million reduction in income tax expense, respectively, resulting from IRS guidance released during the third quarter of 2020 that allows us to exclude certain high-taxed foreign income from the U.S. tax effects on Global Intangible Low-Taxed Income.

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Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIRD QUARTER 2021 AND THE FIRST NINE MONTHS 2021 VERSUS
THIRD QUARTER 2020 AND THE FIRST NINE MONTHS 2020

SALES AND OPERATIONS

The following table sets forth our net sales and operating profit by business segment and geographic area, dollars in millions:

	Three Months Ended September 30,				Percent Change
	2021		2020		2021	vs.	2020
Net Sales:
Plumbing Products	$	1,329	$	1,141	16			%
Decorative Architectural Products	875		842		4			%
Total	$	2,204	$	1,983	11			%
North America	$	1,753	$	1,599	10			%
International, principally Europe	451		384		17			%
Total	$	2,204	$	1,983	11			%

	Nine Months Ended September 30,				Percent Change
	2021		2020		2021	vs.	2020
Net Sales:
Plumbing Products	$	3,907	$	2,964	32			%
Decorative Architectural Products	2,446		2,364		3			%
Total	$	6,353	$	5,328	19			%
North America	$	4,999	$	4,337	15			%
International, principally Europe	1,354		991		37			%
Total	$	6,353	$	5,328	19			%

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating Profit: (A)
Plumbing Products	$	248	$	271	$	773	$	583
Decorative Architectural Products	166		179		496		475
Total	$	414	$	450	$	1,269	$	1,058
North America	$	332	$	368	$	1,010	$	899
International, principally Europe	82		82		259		159
Total	414		450		1,269		1,058
General corporate expense, net	(29)		(26)		(82)		(70)
Operating profit	$	385	$	424	$	1,187	$	988

(A)    Before general corporate expense, net; see Note M to the condensed consolidated financial statements.

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We report our financial results in accordance with generally accepted accounting principles ("GAAP") in the United States of America. However, we believe that certain non-GAAP performance measures and ratios used in managing the business may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, our reported results under GAAP.

The following discussion of consolidated results of operations and segment and geographic results refers to the three and nine months ended September 30, 2021 compared to the same periods of 2020.

NET SALES

Net sales increased 11 percent and 19 percent for the three and nine months ended September 30, 2021, respectively. Excluding acquisitions, divestitures and the effect of currency translation, net sales increased nine percent and 15 percent for the three and nine months ended September 30, 2021, respectively. The following table reconciles reported net sales to net sales, excluding acquisitions, divestitures and the effect of currency translation, in millions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net sales, as reported	$	2,204	$	1,983	$	6,353	$	5,328
Acquisitions	(59)		—		(170)		—
Divestitures	—		(19)		—		(25)
Net sales, excluding acquisitions and divestitures	2,145		1,964		6,183		5,303
Currency translation	(14)		—		(104)		—
Net sales, excluding acquisitions, divestitures and the effect of currency translation	$	2,131	$	1,964	$	6,079	$	5,303

North American net sales increased 10 percent for the three months ended September 30, 2021. Higher sales volume of plumbing products as well as favorable net selling prices of paints and other coating products and plumbing products and to a lesser extent builders' hardware products, in aggregate, increased sales by nine percent. The acquisitions of Kraus, Work Tools and Steamist increased sales by three percent. Such increases were partially offset by lower sales volume of builders' hardware, lighting and paints and other coating products, which in aggregate decreased sales by two percent. North American net sales increased 15 percent for the nine months ended September 30, 2021. Higher sales volume of plumbing products, and to a lesser extent, higher net selling prices of paints and other coating products and plumbing products, in aggregate, increased sales by 12 percent. The acquisitions of Kraus, Work Tools and Steamist increased sales by three percent and favorable currency translation increased sales by one percent. Such increases were slightly offset by lower sales volume of paints and other coating products, which decreased sales by one percent.

International net sales increased 17 percent and 37 percent for the three and nine months ended September 30, 2021, respectively. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased 15 percent and 29 percent for the three and nine months ended September 30, 2021, respectively. Higher sales volume and, to a lesser extent, favorable sales mix and net selling prices of plumbing products increased sales by 17 percent and 28 percent for the three and nine months ended September 30, 2021, respectively. The acquisition of ESS increased sales by three percent for both the three and nine months ended September 30, 2021. These increases were slightly offset by the divestiture of Hüppe which decreased sales by five percent and three percent for the three and nine months ended September 30, 2021, respectively.

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Net sales in the Plumbing Products segment increased 16 percent and 32 percent for the three and nine months ended September 30, 2021, respectively. Higher sales volume increased sales by nine percent and 22 percent, and favorable net selling prices increased sales by four percent and two percent for the three and nine months ended September 30, 2021, respectively, and favorable sales mix increased sales by two percent for the nine months ended September 30, 2021. The acquisitions of Kraus, ESS and Steamist increased sales by four percent and five percent for the three and nine months ended September 30, 2021, respectively. Favorable foreign currency translation increased sales by one percent and three percent for the three and nine months ended September 30, 2021, respectively. These increases were slightly offset by the divestiture of Hüppe which decreased sales by two percent and one percent for the three and nine months ended September 30, 2021, respectively.

Net sales in the Decorative Architectural Products segment increased four percent for the three months ended September 30, 2021 primarily due to favorable net selling prices of paints and other coating products and to a lesser extent builders' hardware and lighting products. Such increases were partially offset by lower sales volume of builders' hardware, lighting and paints and other coating products. Net sales in the Decorative Architectural Products segment increased three percent for the nine months ended September 30, 2021 due to favorable net selling prices of paints and other coating products and to a lesser extent higher sales volume of builders' hardware products. Such increases were partially offset by lower sales volume of paints and other coating products. The Work Tools acquisition increased sales by one percent for both periods.

OPERATING PROFIT

Our gross profit margin was 34.2 percent and 35.3 percent for the three and nine months ended September 30, 2021, respectively, compared to 37.9 percent and 36.2 percent for the comparable period of 2020. Gross profit margins for the three and nine months ended September 30, 2021 were negatively impacted by increased commodity and transportation costs. This decline was partially offset by increased sales volume, higher net selling prices and cost savings initiatives as well as favorable sales mix for the nine month period.

Selling, general and administrative expenses, as a percentage of sales, was 16.7 percent and 16.6 percent for the three and nine months ended September 30, 2021, respectively, compared to 16.5 percent and 17.6 percent for the comparable period of 2020. Selling, general and administrative expenses for the three months ended September 30, 2021 were negatively impacted by increased other expenses (such as marketing costs, labor costs and travel and entertainment costs), partially offset by the leverage of fixed expenses due primarily to increased sales volume. Selling, general and administrative expenses for the nine months ended September 30, 2021 were positively impacted by leverage of fixed expenses due primarily to increased sales volume and cost savings initiatives.

Operating profit in the Plumbing Products segment for the three months ended September 30, 2021 was negatively impacted by increased commodity, transportation and marketing costs as well as increased labor costs. These negative impacts were partially offset by higher net selling prices and increased sales volume. Operating profit in the Plumbing Products segment for the nine months ended September 30, 2021 was positively impacted by increased sales volume, higher net selling prices, favorable sales mix, cost savings initiatives and a positive currency impact. These positive impacts were partially offset by increased commodity costs, transportation costs and labor costs.

Operating profit in the Decorative Architectural Products segment for the three months ended September 30, 2021 was negatively impacted by increased commodity costs, lower sales volume and higher transportation and marketing costs. These negative impacts were partially offset by higher net selling prices, and to a lesser extent, favorable sales mix. Operating profit in the Decorative Architectural Products segment for the nine months ended September 30, 2021 benefited primarily from higher net selling prices, cost savings initiatives, favorable sales mix and lower fixed expenses in our lighting business. These positive impacts were partially offset by increased commodity costs, lower sales volume and higher transportation costs.

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OTHER INCOME (EXPENSE), NET

Interest expense for the three and nine months ended September 30, 2021 was $26 million and $253 million, respectively, compared to $40 million and $110 million for the three and nine months ended September 30, 2020, respectively. The decrease in interest expense for the three months ended September 30, 2021 as compared to the same period in the prior year is due to interest savings related to debt refinancing in the first quarter of 2021 and the absence of the loss on debt extinguishment recorded in connection with the early retirement of debt in the third quarter of 2020. The increase in interest expense for the nine months ended September 30, 2021 as compared to the same period in the prior year is primarily due to the $168 million loss on debt extinguishment which was recorded as additional interest expense in connection with the early retirement of debt in the first quarter of 2021.

Other, net, for the three and nine months ended September 30, 2021 was $17 million and $438 million, respectively, compared to $4 million and $22 million for the three and nine months ended September 30, 2020, respectively. Other, net, for the three and nine months ended September 30, 2021 included $4 million and $430 million of net periodic pension and post-retirement benefit cost, respectively, which includes $406 million of settlement loss related to the termination of our qualified domestic defined-benefit pension plans for the nine months ended September 30, 2021. Additionally, other, net included a loss of $18 million related to the divestiture of Hüppe for the nine months ended September 30, 2021 and $14 million expense from the revaluation of contingent consideration related to a prior acquisition for the three and nine months ended September 30, 2021. These amounts were partially offset by a $14 million gain recognized on the redemption of the preferred stock of ACProducts Holding, Inc. and $6 million of related dividend income for the nine months ended September 30, 2021, and $5 million and $7 million of earnings related to equity method investments for the three and nine months ended September 30, 2021, respectively.

Other, net, for the three and nine months ended September 30, 2020 included $9 million and $25 million, respectively, of net periodic pension and post-retirement benefit cost and $3 million and $7 million, respectively, of dividend income related to preferred stock of ACProducts Holding, Inc. Other, net for the three and nine months ended September 30, 2020 also included $1 million of foreign currency transaction gains and $6 million of foreign currency transaction losses, respectively.

INCOME TAXES

Our effective tax rate of 30 percent and 32 percent for the three and nine months ended September 30, 2021, respectively, was higher than our normalized tax rate of 25 percent. The increase in the rate was primarily due to an additional $10 million and $15 million of income tax expense in the three and nine months ended September 30, 2021, respectively, due to losses providing no tax benefit in certain jurisdictions from the termination of our qualified domestic defined-benefit pension plans and a business divestiture. The nine-month rate was also impacted by a $16 million income tax expense from the elimination of disproportionate tax effects from accumulated other comprehensive income (loss) relating to our interest rate swap following the retirement of the related debt, and the termination of our qualified domestic defined-benefit pension plans.

Our effective tax rate was 23 percent and 24 percent for the three and nine months ended September 30, 2020, respectively. Our tax rates were lower than our normalized tax rate of 25 percent due primarily to a $6 million reduction in income tax expense in both periods, resulting from IRS guidance released during the third quarter of 2020, that allows us to exclude certain high-taxed foreign income from the U.S. tax effects on Global Intangible Low-taxed Income. Also, our effective tax rate for the nine-month period was lower than our normalized tax rate due to an additional $5 million income tax benefit on stock-based compensation.

INCOME AND INCOME PER COMMON SHARE FROM CONTINUING OPERATIONS — ATTRIBUTABLE TO MASCO CORPORATION

Income from continuing operations for the three and nine months ended September 30, 2021 was $220 million and $278 million, respectively, compared to $275 million and $618 million for the comparable periods of 2020. Diluted income per common share from continuing operations for the three and nine months ended September 30, 2021 was $0.89 and $1.07, respectively, per common share, compared with $1.05 and $2.31, respectively, per common share for the comparable periods of 2020.

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OTHER FINANCIAL INFORMATION

Our current ratio was 1.8 to 1 at both September 30, 2021 and December 31, 2020.

For the nine months ended September 30, 2021, net cash provided by operating activities was $595 million. Our cash flows from operations benefited from higher operating profit, offset by changes in working capital and pension contributions related to the settlement of our qualified domestic defined-benefit pension plans.

For the nine months ended September 30, 2021, net cash used for financing activities was $1,095 million, primarily due to $1,326 million for the early retirement of our 5.950% Notes due March 15, 2022, 4.450% Notes due April 1, 2025, and 4.375% Notes due April 1, 2026 and $160 million of related debt extinguishment costs. Net cash used for financing activities was also impacted by $878 million for the repurchase and retirement of our common stock (including 0.7 million shares repurchased to offset the dilutive impact of restricted stock units granted in 2021), $154 million for the payment of cash dividends, $43 million for dividends paid to noncontrolling interest and $14 million for employee withholding taxes paid on stock-based compensation. These uses of cash were partially offset by proceeds, net of issuance costs, of $1,481 million due to the issuances of $600 million of 1.500% Notes due February 15, 2028, $600 million of 2.000% Notes due February 15, 2031 and $300 million of 3.125% Notes due February 15, 2051.

For the nine months ended September 30, 2021, net cash provided by investing activities was $43 million, primarily due to the $166 million received, in cash, for the redemption of the preferred stock of ACProducts Holding Inc., partially offset by $82 million of capital expenditures and $56 million for the acquisition of Steamist, Inc.

Our cash and cash investments were $854 million and $1.3 billion at September 30, 2021 and December 31, 2020, respectively. Our cash and cash investments consist of overnight interest-bearing money market demand accounts, time deposit accounts and money market mutual funds containing government securities and treasury obligations.

Of the $854 million and $1.3 billion of cash and cash investments held at September 30, 2021 and December 31, 2020, $465 million and $385 million, respectively, was held in our foreign subsidiaries. If these funds were needed for our operations in the U.S., their repatriation into the U.S. would not result in significant additional U.S. income tax or foreign withholding tax, as we have recorded such taxes on substantially all undistributed foreign earnings, except for those that are legally restricted.

On March 4, 2021, we issued $600 million of 1.500% Notes due February 15, 2028, $600 million of 2.000% Notes due February 15, 2031 and $300 million of 3.125% Notes due February 15, 2051. We received proceeds of $1,495 million, net of discount, for the issuance of these Notes. The Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On March 22, 2021, proceeds from the debt issuances, together with cash on hand, were used to repay and early retire our $326 million 5.950% Notes due March 15, 2022, $500 million 4.450% Notes due April 1, 2025, and $500 million 4.375% Notes due April 1, 2026. In connection with these early retirements, we incurred a loss on debt extinguishment of $168 million, which was recorded as interest expense for the nine months ended September 30, 2021.

On September 18, 2020, we issued $300 million of 2.000% Notes due October 1, 2030 and received proceeds of $300 million, net of discount, for the issuance of the 2030 Notes. Also on September 18, 2020, we issued an incremental $100 million on our existing 4.500% Notes due May 15, 2047 and received proceeds of $119 million, including a premium, for the issuance of the 2047 Notes. The incremental $100 million will form a single series with the existing $300 million of 4.500% Notes due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On September 29, 2020, proceeds from the debt issuances were used to repay and early retire our $400 million 3.500% Notes due April 1, 2021. In connection with this early retirement, we incurred a loss on debt extinguishment of $6 million, which was recorded as interest expense for the three and nine months ended September 30, 2020.

On March 13, 2019, we entered into a credit agreement (the "Credit Agreement") with an aggregate commitment of $1.0 billion and a maturity date of March 13, 2024. Under the Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders. See Note I to the condensed consolidated financial statements.

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The Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.  We were in compliance with all covenants and no borrowings were outstanding under our Credit Agreement at September 30, 2021.

As part of our ongoing efforts to improve our cash flow and related liquidity, we work with suppliers to optimize our terms and conditions, including extending payment terms. We also facilitate a voluntary supply chain finance program (the "program") to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. A third party administers the program; our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether the supplier sells its receivable to a financial institution. We do not enter into agreements with any of the participating financial institutions in connection with the program. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the program.

All outstanding payments owed under the program are recorded within accounts payable in our condensed consolidated balance sheets. The amounts owed to participating financial institutions under the program and included in accounts payable for our continuing operations were $45 million at both September 30, 2021 and December 31, 2020. We account for all payments made under the program as a reduction to our cash flows from operations and reported within our increase in accounts payable and accrued liabilities, net, line within our condensed consolidated statements of cash flows. The amounts settled through the program and paid to participating financial institutions were $170 million and $97 million for our continuing operations during the nine months ended September 30, 2021 and 2020, respectively. A downgrade in our credit rating or changes in the financial markets could limit the financial institutions’ willingness to commit funds to, and participate in, the program. We do not believe such risk would have a material impact on our working capital or cash flows, as substantially all of our payments are made outside of the program.

We believe that our present cash balance, cash flows from operations, and borrowing availability under our Credit Agreement are sufficient to fund our near-term working capital and other investment needs. We believe that our longer-term working capital and other general corporate requirements will be satisfied through cash flows from operations and, to the extent necessary, from bank borrowings and future financial market activities.

COVID-19 IMPACT AND GENERAL BUSINESS CONDITIONS

During 2020, certain aspects of our businesses were adversely affected by the COVID-19 pandemic. Many, but not all, of our businesses remained operating because the products we provide are critical to infrastructure sectors and day-to-day operations of homes and businesses in our communities as defined by applicable local orders. Operational activity that was previously slowed at certain of our facilities as a result of the pandemic and governmental orders, largely resumed normal capacity by the third quarter of 2020. This has enabled us to progress on fulfilling production backorders that developed, as well as to meet current consumer demand, which has continued to be strong in the first nine months of 2021.

We continue to be committed to the safety and well-being of our employees during this time, and, led by our cross-functional Infectious Illness Response Team, we are employing best practices and following guidance from the World Health Organization, the Centers for Disease Control and Prevention and local authorities.

Finally, we are experiencing and expect to continue to experience higher commodity and transportation costs, and supply chain disruptions, particularly disruptions related to our ability to source products, components and raw materials. We are also experiencing and expect to continue to experience labor cost inflation and constraints in hiring qualified employees. We plan to offset the potential unfavorable impact of these items with productivity improvement and other initiatives.

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OUTLOOK FOR THE COMPANY

We continue to execute our strategies of leveraging our strong brand portfolio, industry-leading positions and the Masco Operating System, our methodology to drive growth and productivity, to create long-term shareholder value. We remain confident in the fundamentals of our business and long-term strategy. We believe that our strong financial position and cash flow generation, together with our investments in our industry-leading branded building products, our continued focus on innovation and disciplined capital allocation, will allow us to drive long-term growth and create value for our shareholders.

FORWARD-LOOKING STATEMENTS

This report 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 to a lesser extent, new home construction, our ability to maintain our strong brands and reputation and to develop innovative products, our ability to maintain our competitive position in our industries, our reliance on key customers, the length and severity of the ongoing COVID-19 pandemic, including its impact on domestic and international economic activity, consumer confidence, our production capabilities, our employees and our supply chain, the cost and availability of materials and the imposition of tariffs, our dependence on third-party suppliers, risks associated with our international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, 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 and diverse 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 other filings we make with the Securities and Exchange Commission.  The forward-looking statements in this report speak only as of the date of this report. 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.

28

MASCO CORPORATION

Item 4.

CONTROLS AND PROCEDURES

a.     Evaluation of Disclosure Controls and Procedures.

The Company’s principal executive officer and principal financial officer have concluded, based on an evaluation of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15 that, as of September 30, 2021, the Company's disclosure controls and procedures were effective.

b.     Changes in Internal Control over Financial Reporting.

In connection with the evaluation of the Company's internal control over financial reporting that occurred during the quarter ended September 30, 2021, which is required under the Securities Exchange Act of 1934 by paragraph (d) of Exchange Rules 13a-15 or 15d-15 (as defined in paragraph (f) of Rule 13a-15), management determined that there was no change that materially affected or is reasonably likely to materially affect internal control over financial reporting.

29

MASCO CORPORATION

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings involving us is set forth in Note P to our condensed consolidated financial statements included in Part I, Item 1 of this Report and is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes to the risk factors of the Company set forth in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding the repurchase of our common stock for the three months ended September 30, 2021 under the 2021 share repurchase authorization: 

Period	Total Number  Of Shares Purchased	Average Price Paid Per Common Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans or Programs	Maximum Value Of Shares That May Yet Be Purchased Under The Plans Or Programs
7/1/21 - 7/31/21 (A)	919,664	$	—	919,664	$	1,404,421,924
8/1/21 - 8/31/21	798,780	$	61.07	798,780	$	1,355,640,528
9/1/21 - 9/30/21	1,354,032	$	58.48	1,354,032	$	1,276,454,529
Total for the quarter	3,072,476	$	41.65	3,072,476	$	1,276,454,529

(A)    In June 2021, we entered into an accelerated stock repurchase transaction whereby we agreed to repurchase a total of $350 million of our common stock with an initial delivery of 5.1 million shares. This transaction was completed in July 2021, at which time we received, at no additional cost, 0.9 million additional shares of our common stock resulting from changes in the volume weighted average stock price of our common stock over the term of the transaction, less a discount.

30

MASCO CORPORATION

PART II.  OTHER INFORMATION, Continued

Item 6. Exhibits 

31a	–	Certification by Chief Executive Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
31b	–	Certification by Chief Financial Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
32	–	Certification Required by Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code
101	–	The following financial information from Masco Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements.
104	–	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

31

MASCO CORPORATION

PART II.  OTHER INFORMATION, Concluded

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

MASCO CORPORATION
By:	/s/ John G. Sznewajs
Name:	John G. Sznewajs
Title:	Vice President, Chief Financial Officer

October 27, 2021

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EX-31.A

Exhibit 31a

MASCO CORPORATION

Certification Required by Rule 13a-14(a) or 15d-14(a)

of the Securities Exchange Act of 1934

I, Keith J. Allman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Masco Corporation ("the registrant");

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 27, 2021	By:	/s/ Keith J. Allman
			Keith J. Allman
			President and Chief Executive Officer

1

EX-31.B

Exhibit 31b

MASCO CORPORATION

Certification Required by Rule 13a-14(a) or 15d-14(a)

of the Securities Exchange Act of 1934

I, John G. Sznewajs, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Masco Corporation ("the registrant");

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 27, 2021	By:	/s/ John G. Sznewajs
			John G. Sznewajs
			Vice President, Chief Financial Officer

1

EX-32

Exhibit 32

MASCO CORPORATION

Certification Required by Rule 13a-14(b) or 15d-14(b)

of the Securities Exchange Act of 1934 and

Section 1350 of Chapter 63 of Title 18 of the

United States Code

    The certification set forth below is being submitted in connection with the Masco Corporation Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

    Keith J. Allman, the President and Chief Executive Officer, and John G. Sznewajs, the Vice President, Chief Financial Officer, of Masco Corporation, each certifies that, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of Masco Corporation.

Date:	October 27, 2021	/s/ Keith J. Allman
		Keith J. Allman
		President and Chief Executive Officer
Date:	October 27, 2021	/s/ John G. Sznewajs
		John G. Sznewajs
		Vice President, Chief Financial Officer

1

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Cover Page	9 Months Ended
	Sep. 30, 2021 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	1-5794
Entity Registrant Name	Masco Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	38-1794485
Entity Address, Address Line One	17450 College Parkway,
Entity Address, City or Town	Livonia,
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48152
City Area Code	313
Local Phone Number	274-7400
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	MAS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	244,087,493
Entity Central Index Key	0000062996
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash and cash investments	$ 854	$ 1,326
Receivables	1,330	1,138
Prepaid expenses and other	113	149
Inventories:
Finished goods	642	552
Raw material	357	242
Work in process	108	82
Total 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
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
Commitments and contingencies (Note P)
Redeemable Noncontrolling Interest, Equity, Redemption Value	25	0
Masco Corporation's shareholders' equity:
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2021 – 243,500,000; 2020 – 258,200,000	243	258
Preferred shares authorized: 1,000,000; Issued and outstanding: 2021 and 2020 – None	0	0
Paid-in capital	0	0
Retained (deficit) earnings	(595)	79
Accumulated other comprehensive income (loss)	226	(142)
Total Masco Corporation's shareholders' (deficit) equity	(126)	195
Noncontrolling interest	227	226
Total equity	101	421
Total liabilities and equity	$ 5,595	$ 5,777

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common share, par value (in dollars per share)	$ 1	$ 1
Common shares, shares authorized (in shares)	1,400,000,000	1,400,000,000
Common shares, shares issued (in shares)	243,500,000	258,200,000
Common shares, shares outstanding (in shares)	243,500,000	258,200,000
Preferred shares, shares authorized (in shares)	1,000,000	1,000,000
Preferred shares, shares issued (in shares)	0	0
Preferred shares, shares outstanding (in shares)	0	0

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
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 income (expense), net:
Interest expense	(26)	(40)	(253)	(110)
Other, net	(17)	(4)	(438)	(22)
Total other income (expense), net	(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	0	0	0	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
Basic:
Income from continuing operations (in dollars per share)	$ 0.89	$ 1.05	$ 1.08	$ 2.31
(Loss) income from discontinued operations, net (in dollars per share)	0	0	0	1.54
Net income (in dollars per share)	0.89	1.05	1.08	3.85
Diluted:
Income from continuing operations (in dollars per share)	0.89	1.05	1.07	2.31
(Loss) income from discontinued operations, net (in dollars per share)	0	0	0	1.54
Net income (in dollars per share)	$ 0.89	$ 1.05	$ 1.07	$ 3.85
Amounts attributable to Masco Corporation:
Income from continuing operations	$ 220	$ 275	$ 278	$ 618
Income from discontinued operations, net	$ 0	$ 0	$ 0	$ 411

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
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
Other comprehensive (loss) income, net of tax (Note L):
Cumulative translation adjustment	(20)	32	(19)	15
Interest rate swaps	0	0	7	1
Pension and other post-retirement benefits	2	5	365	15
Other comprehensive (loss) income, net of tax	(18)	37	353	31
Less: Other comprehensive (loss) income attributable to noncontrolling interest	(5)	9	(15)	8
Other comprehensive (loss) income attributable to Masco Corporation	(13)	28	368	23
Total comprehensive income	221	330	691	1,096
Less: Total comprehensive income attributable to noncontrolling interest	14	27	45	44
Total comprehensive income attributable to Masco Corporation	$ 207	$ 303	$ 646	$ 1,052

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by operations	$ 904	$ 590
Increase in receivables	(219)	(294)
Increase in inventories	(237)	(66)
Increase in accounts payable and accrued liabilities, net	147	343
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
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

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Shares ($1 par value)	Common Shares ($1 par value) Cumulative Effect, Period of Adoption, Adjustment	Paid-In Capital	Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	Retained (Deficit) Earnings	Retained (Deficit) Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive (Loss) Income	Accumulated Other Comprehensive (Loss) Income Cumulative Effect, Period of Adoption, Adjustment	Noncontrolling Interest	Noncontrolling Interest Cumulative Effect, Period of Adoption, Adjustment
Balance at Dec. 31, 2019	$ (56)	$ (57)	$ 276	$ 276	$ 0	$ 0	$ (332)	$ (333)	$ (179)	$ (179)	$ 179	$ 179
Balance (Accounting Standards Update 2016-13) at Dec. 31, 2019		(1)						(1)
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	514						530		(20)		4
Shares issued	11		1		10
Shares retired:
Repurchased	(602)		(14)		(28)		(560)
Surrendered (non-cash)	(13)						(13)
Cash dividends declared	(36)						(36)
Stock-based compensation	18				18
Balance at Mar. 31, 2020	(165)		263		0		(412)		(199)		183
Balance at Dec. 31, 2019	(56)	(57)	276	$ 276	0	$ 0	(332)	(333)	(179)	$ (179)	179	$ 179
Balance (Accounting Standards Update 2016-13) at Dec. 31, 2019		$ (1)						$ (1)
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	1,096
Shares retired:
Noncontrolling Interest, Change in Redemption Value	0
Balance at Sep. 30, 2020	341		261		21		15		(156)		200
Balance at Mar. 31, 2020	(165)		263		0		(412)		(199)		183
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	252						224		15		13
Shares retired:
Repurchased	0		(3)		3
Cash dividends declared	(35)						(35)
Stock-based compensation	8				8
Balance at Jun. 30, 2020	37		260		11		(223)		(184)		173
Shares retired:
Dividends paid to noncontrolling interest	(23)										(23)
Total comprehensive income	330						275		28		27
Shares issued	3		1		2
Cash dividends declared	(37)						(37)
Noncontrolling Interest, Change in Redemption Value	0
Stock-based compensation	8				8
Balance at Sep. 30, 2020	$ 341		261		21		15		(156)		200
Shares retired:
Common share, par value (in dollars per share)	$ 1
Common share, par value (in dollars per share)	$ 1
Balance at Dec. 31, 2020	$ 421		258		0		79		(142)		226
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	90						94		(12)		8
Shares issued	0		1		(1)
Shares retired:
Repurchased	(303)		(6)		(27)		(270)
Surrendered (non-cash)	(13)						(13)
Noncontrolling Interest, Change in Redemption Value	(6)						(6)
Stock-based compensation	28				28
Balance at Mar. 31, 2021	217		253		0		(116)		(154)		234
Balance at Dec. 31, 2020	421		258		0		79		(142)		226
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	691
Shares retired:
Noncontrolling Interest, Change in Redemption Value	(6)
Balance at Sep. 30, 2021	101		243		0		(595)		226		227
Balance at Mar. 31, 2021	217		253		0		(116)		(154)		234
Increase (Decrease) in Stockholders' Equity
Total comprehensive income	380						(36)		393		23
Shares retired:
Repurchased	(447)		(6)		(12)		(429)
Cash dividends declared	(59)						(59)
Stock-based compensation	12				12
Balance at Jun. 30, 2021	60		247		0		(640)		239		214
Shares retired:
Dividends paid to noncontrolling interest	(43)										(43)
Total comprehensive income	221
Total comprehensive income (loss)	220						220		(13)		13
Repurchased	(128)		(4)		(8)		(116)
Cash dividends declared	(59)						(59)
Noncontrolling Interest, Change in Redemption Value	0
Stock-based compensation	8				8
Balance at Sep. 30, 2021	$ 101		$ 243		$ 0		$ (595)		$ 226		$ 227
Shares retired:
Common share, par value (in dollars per share)	$ 1

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Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Accounting Policies

ACCOUNTING POLICIES

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at September 30, 2021, our results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020, cash flows for the nine months ended September 30, 2021 and 2020 and changes in shareholders' equity for the three and nine months ended September 30, 2021 and 2020. The condensed consolidated balance sheet at December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America.

Recently Adopted Accounting Pronouncements. In January 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-01, "Investments—Equity Securities (Topic 321)," "Investments—Equity Method and Joint Ventures (Topic 323)," and "Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815," which clarifies that an entity should consider observable transactions when either applying or discontinuing the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321. ASU 2020-01 clarifies that for certain forward contracts or purchased options to acquire investments, an entity should not consider whether, upon settlement of the forward contract or exercise of the purchased option, the underlying securities would be accounted for under the equity method or the fair value option. We adopted ASU 2020-01 prospectively beginning on January 1, 2021. The adoption of the standard did not have a material effect on our financial position or results of operations.

Recently Issued Accounting Pronouncements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. ASU 2020-06 is effective for us for annual periods beginning January 1, 2022. We are currently reviewing the provisions of this pronouncement and the impact, if any, the adoption of this guidance has on our financial position or results of operations. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

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Acquisitions

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

In the third quarter of 2021, we acquired all of the share capital of Steamist, Inc. ("Steamist") for approximately $56 million in cash. This amount is subject to working capital and other adjustments. Steamist is a manufacturer of residential steam bath products that are complementary to many of our plumbing products. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $31 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 11 years. We also recognized $29 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

In the first quarter of 2021, we acquired a 75.1% equity interest in Easy Sanitary Solutions B.V. ("ESS"), for approximately €47 million ($58 million), including $52 million of cash and $6 million of debt that will be paid out over two years less any pending or settled indemnity matters. These amounts are subject to working capital and other adjustments. The cash payment was made to a third-party notary on December 29, 2020 for the acquisition of this equity interest in advance of the transaction closing on January 4, 2021. ESS is a manufacturer of shower channel drains and offers a wide range of products for barrier-free showering and bathroom wall niches. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $32 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 10 years. We also recognized $35 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

The remaining 24.9% equity interest in ESS is subject to a call and put option that is exercisable by us or the sellers, respectively, any time after December 31, 2023. The redemption value of the call and put option is the same and based on a floating EBITDA value. The call and put options were determined to be embedded within the redeemable noncontrolling interest and were recorded as temporary equity in the condensed consolidated balance sheet at September 30, 2021. We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained (deficit) earnings.

B. ACQUISITIONS (Concluded)

In the fourth quarter of 2020, we acquired substantially all of the net assets of Kraus USA Inc. ("Kraus"), a designer and distributor of sinks, faucets and accessories for the kitchen and bathroom, for approximately $103 million and an additional cash payment of up to $50 million to be paid in 2023, contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $8 million. Refer to Note G for additional information regarding the subsequent remeasurement of the contingent consideration liability. This business expands our product offerings to our customers and our online presence under the Kraus brand. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $25 million of indefinite-lived intangible assets, which is related to trademarks, and $49 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 10 years. We also recognized $20 million of goodwill, which is generally tax deductible, and is related primarily to the expected synergies from combining the operations into our business. During the first quarter of 2021, we revised the allocation of the purchase price to certain identifiable assets and liabilities based on analysis of information as of the acquisition date, which resulted in a $1 million decrease to goodwill. The working capital adjustments were finalized with the seller in the second quarter of 2021, resulting in no significant changes.

In the fourth quarter of 2020, we acquired substantially all of the net assets of Work Tools International Inc. and Elder & Jenks, LLC (collectively, "Work Tools") for approximately $53 million, including $48 million of cash and $5 million of debt that will be paid out in 18 months less any pending or settled indemnity matters. Work Tools expands our product offering to our customers as it is a leading manufacturer of high-quality precision painting tools and accessories including brushes, rollers and mini rollers for DIY and professionals. This business is included in our Decorative Architectural Products segment. In connection with this acquisition, we recognized $7 million of indefinite-lived intangible assets, which is related to trademarks, and $27 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 12 years. We also recognized $7 million of goodwill, which is generally tax deductible, and is related primarily to the expected synergies from combining the operations into our business. The working capital adjustments were finalized with the seller in the first quarter of 2021, resulting in no significant changes.

In the first quarter of 2020, we acquired all of the share capital of SmarTap A.Y Ltd. ("SmarTap") for approximately $24 million in cash. SmarTap is a developer of a smart bathing system that monitors and controls the temperature and flow of water. This acquisition provides an adaptable solution for a wide range of products as it is compatible with showerheads, hand showers, spouts and shower jets. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $10 million of definite-lived intangible assets, primarily related to technology, which is being amortized on a straight-line basis over a weighted average amortization period of 5 years. We also recognized $14 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business.

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Divestitures

9 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

DIVESTITURES

On May 31, 2021, we completed the divestiture of our Hüppe GmbH ("Hüppe") business, a manufacturer of shower enclosures and shower trays. In connection with the divestiture, we recognized a loss of $18 million for the nine months ended September 30, 2021, which is included in other, net in our condensed consolidated statements of operations. This loss resulted primarily from the recognition of $23 million of currency translation losses that were previously included within accumulated other comprehensive income (loss). The sale of Hüppe does not represent a strategic shift that will have a major effect on our operations and financial results and therefore was not presented as discontinued operations. Prior to the divestiture, the results of the business were included in our Plumbing Products segment.

On November 6, 2019, we completed the divestiture of our Milgard Windows and Doors business ("Milgard"), a manufacturer and distributor of windows and doors for proceeds of approximately $720 million, net of cash disposed. During the nine months ended September 30, 2020, a $17 million pre-tax post-closing adjustment related to the finalization of working capital items was recorded to income from discontinued operations, net in the condensed consolidated statements of operations, as a gain on the divestiture of Milgard. Of the $17 million, we received $15 million in cash as of September 30, 2020, which is presented in investing activities on the condensed consolidated statement of cash flow as proceeds from disposition of businesses, net of cash disposed. The remaining $2 million was received in two monthly installments throughout the remainder of 2020.

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 nine months ended September 30, 2020, which is included in income from discontinued operations, net in the condensed consolidated statement of operations.

As the sale of Milgard and Cabinetry represented a strategic shift having a major effect on our operations and financial results, these businesses were presented in discontinued operations separate from continuing operations for the nine months ended September 30, 2020, as applicable. There was no activity for the three months ended September 30, 2021 and 2020.

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

	Nine Months Ended September 30,
	2021		2020
Net sales	$	—	$	101
Cost of sales	—		78
Gross profit	—		23
Selling, general and administrative expenses	—		31
(Loss) from discontinued operations	—		(8)
Gain on disposal of discontinued operations	—		602
Income before income tax	—		594
Income tax expense	—		(183)
Income from discontinued operations, net	$	—	$	411

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Revenue

9 Months Ended

Sep. 30, 2021

Revenues [Abstract]

Revenue

REVENUE

Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions:

	Three Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	878	$	875	$	1,753
International, principally Europe	451		—		451
Total	$	1,329	$	875	$	2,204

	Nine Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	2,553	$	2,446	$	4,999
International, principally Europe	1,354		—		1,354
Total	$	3,907	$	2,446	$	6,353

	Three Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	757	$	842	$	1,599
International, principally Europe	384		—		384
Total	$	1,141	$	842	$	1,983

	Nine Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	1,973	$	2,364	$	4,337
International, principally Europe	991		—		991
Total	$	2,964	$	2,364	$	5,328

Our contract asset balance was $1 million and $2 million at September 30, 2021 and December 31, 2020, respectively. Our contract liability balance was $24 million and $62 million at September 30, 2021 and December 31, 2020, respectively.

We reversed $1 million and $6 million of revenue for the three months ended September 30, 2021 and 2020, respectively, related to performance obligations settled in previous quarters of the same year. We recognized $3 million and $7 million of revenue for the three and nine months ended September 30, 2021, respectively, and $1 million and $6 million of revenue for the three and nine months ended September 30, 2020, respectively, related to performance obligations settled in previous years.

D. REVENUE (Concluded)

Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	7	$	5
Provision for expected credit losses during the period	1		3
Write-offs charged against the allowance	(1)		(2)
Recoveries of amounts previously written off	1		1
Other (A)	(1)		—
Balance at end of period	$	7	$	7

(A)    As a result of Hüppe being divested in May 2021, $1 million for the nine months ended September 30, 2021 was removed from allowance for credit losses.

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Depreciation and Amortization	9 Months Ended
	Sep. 30, 2021
Depreciation, Depletion and Amortization [Abstract]
Depreciation and Amortization	DEPRECIATION AND AMORTIZATION Depreciation and amortization expense was $114 million and $99 million for the nine months ended September 30, 2021 and 2020, respectively.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at September 30, 2021, by segment, was as follows, in millions:

	Gross Goodwill At September 30, 2021		Accumulated Impairment Losses		Net Goodwill At September 30, 2021
Plumbing Products (A)	$	627	$	(301)	$	326
Decorative Architectural Products	366		(75)		291
Total	$	993	$	(376)	$	617

(A)    As a result of Hüppe being divested in May 2021, both gross goodwill and accumulated impairment losses for the Plumbing Products segment were reduced by $39 million.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2021, by segment, were as follows, in millions: 

	Gross Goodwill At December 31, 2020		Accumulated Impairment Losses		Net Goodwill At December 31, 2020		Acquisitions		Other (B)		Net Goodwill At September 30, 2021
Plumbing Products	$	613	$	(340)	$	273	$	63	$	(10)	$	326
Decorative Architectural Products	365		(75)		290		1		—		291
Total	$	978	$	(415)	$	563	$	64	$	(10)	$	617

(B)    Other consists of the effect of foreign currency translation.

The carrying value of our other indefinite-lived intangible assets was $109 million at both September 30, 2021 and December 31, 2020 and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $286 million (net of accumulated amortization of $70 million) and $248 million (net of accumulated amortization of $73 million) at September 30, 2021 and December 31, 2020, respectively, and principally included customer relationships. The increase in our definite-lived intangible assets is primarily a result of our acquisitions of Steamist and ESS.

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Fair Value of Financial Investments

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Of Financial Investments

FAIR VALUE OF FINANCIAL INVESTMENTS

Preferred Stock of ACProducts Holding, Inc. As described in Note C, in conjunction with our divestiture of Cabinetry, we received preferred stock of ACProducts Holding, Inc., the holding company of the buyer, with a liquidation preference of $150 million. We did not have the ability to exercise significant influence, and the fair value of this security was not readily available. We elected to measure this investment at cost (less impairment, if any) adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer for subsequent measurements of fair value. As the preferred stock was received in conjunction with the sale of Cabinetry, we determined the cost to be the fair value of the preferred stock at the time of sale, which was determined to be $136 million and was included in other assets in our condensed consolidated balance sheet.

In May 2021, we received, in cash, $166 million for the redemption of the preferred stock, including all accrued but unpaid dividends, and recognized a gain of $14 million which was included within other, net in our condensed consolidated statements of operations.

Prior to the redemption, dividends earned on this investment were included within other, net in our condensed consolidated statements of operations with a corresponding increase to our basis in the investment. We had dividend income of $6 million for the nine months ended September 30, 2021, and $3 million and $7 million for the three and nine months ended September 30, 2020, respectively. The preferred stock was reported at the carrying value of $146 million in other assets in our condensed consolidated balance sheet at December 31, 2020.

Kraus Acquisition Contingent Consideration. As described in Note B, we may be obligated to pay up to an additional $50 million in 2023 for the Kraus acquisition contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. The measurement of the liability for contingent consideration is based on significant inputs that are not observable in the market, and is therefore classified as Level 3 inputs. Examples of utilized unobservable inputs are estimated future revenues and earnings of the acquired business and an applicable discount rate. The estimate of the liability may fluctuate if there are changes in the forecast of the acquired business' future revenues and earnings, as a result of actual levels achieved, or in the discount rate used to determine the present value of contingent future cash flows. All subsequent remeasurements from the initial estimate at the time of acquisition are recorded in other, net in our condensed consolidated statement of operations, as described in Note N. The fair value of the liability was estimated to be $22 million and $8 million as of September 30, 2021 and December 31, 2020, respectively, using probability weighted discounted cash flows and a discount rate that reflects the uncertainty surrounding the expected outcomes, which we believe is appropriate and representative of a market participant assumption.

Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. The aggregate estimated market value of our short-term and long-term debt at September 30, 2021 was approximately $3.2 billion, compared with the aggregate carrying value of $3.0 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2020 was approximately $3.3 billion, compared with the aggregate carrying value of $2.8 billion.

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Warranty Liability

9 Months Ended

Sep. 30, 2021

Product Warranties Disclosures [Abstract]

Warranty Liability

WARRANTY LIABILITY

Changes in our warranty liability were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	83	$	84
Accruals for warranties issued during the period	28		34
Accruals related to pre-existing warranties	1		(3)
Settlements made (in cash or kind) during the period	(23)		(33)
Other, net (including currency translation and acquisitions)	(2)		1
Balance at end of period	$	87	$	83

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Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

DEBT

On March 4, 2021, we issued $600 million of 1.500% Notes due February 15, 2028, $600 million of 2.000% Notes due February 15, 2031 and $300 million of 3.125% Notes due February 15, 2051. We received proceeds of $1,495 million, net of discount, for the issuance of these Notes. The Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On March 22, 2021, proceeds from the debt issuances, together with cash on hand, were used to repay and early retire our $326 million 5.950% Notes due March 15, 2022, $500 million 4.450% Notes due April 1, 2025, and $500 million 4.375% Notes due April 1, 2026. In connection with these early retirements, we incurred a loss on debt extinguishment of $168 million for the nine months ended September 30, 2021, which was recorded as interest expense in the condensed consolidated statement of operations.

On September 18, 2020, we issued $300 million of 2.000% Notes due October 1, 2030 (the "2030 Notes") and received proceeds of $300 million, net of discount, for the issuance of the 2030 Notes. Also on September 18, 2020, we issued an incremental $100 million of our existing 4.500% Notes due May 15, 2047 (the "2047 Notes") and received proceeds of $119 million, including a premium, for the issuance of the 2047 Notes. The incremental $100 million will form a single series with the existing $300 million of 4.500% Notes due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On September 29, 2020, proceeds from the debt issuances were used to repay and early retire our $400 million 3.500% Notes due April 1, 2021. In connection with this early retirement, we incurred a loss on debt extinguishment of $6 million for the three and nine months ended September 30, 2020, which was recorded as interest expense in the condensed consolidated statement of operations.

On March 13, 2019, we entered into a credit agreement (the “Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of March 13, 2024. Under the Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders.

The Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries, in U.S. dollars, European euros, British Pounds Sterling, Canadian dollars and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to $500 million, equivalent. We can also borrow swingline loans up to $100 million and obtain letters of credit of up to $25 million; outstanding letters of credit under the Credit Agreement reduce our borrowing capacity. At September 30, 2021, we had no outstanding standby letters of credit under the Credit Agreement.

Revolving credit loans bear interest under the Credit Agreement, at our option, at (A) a rate per annum equal to the greater of (i) the JPMorgan Chase Bank, N.A. prime rate, (ii) the Federal Reserve Bank of New York effective rate plus 0.50% and (iii) if available, adjusted LIBO Rate plus 1.0% (the "Alternative Base Rate"); plus an applicable margin based upon our then-applicable corporate credit ratings; or (B) if available, adjusted LIBO Rate plus an applicable margin based upon our then-applicable corporate credit ratings. The foreign currency revolving credit loans bear interest at a rate equal to adjusted LIBO Rate, if available, plus an applicable margin based upon our then-applicable corporate credit ratings.

The Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.

In order for us to borrow under the Credit Agreement, there must not be any default in our covenants in the Credit Agreement (i.e., in addition to the two financial covenants, principally limitations on subsidiary debt, negative pledge restrictions, legal compliance requirements and maintenance of properties and insurance) and our representations and warranties in the Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2018, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and no borrowings were outstanding at September 30, 2021.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Our 2014 Long Term Stock Incentive Plan provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At September 30, 2021, outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units, performance restricted stock units and phantom stock awards.

Pre-tax compensation expense included in income from continuing operations for these stock-based incentives was as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Long-term stock awards	$	2	$	4	$	8	$	11
Stock options	1		1		6		6
Restricted stock units	3		1		26		12
Performance restricted stock units	2		2		8		3
Phantom stock awards	1		1		3		3
Total	$	9	$	9	$	51	$	35

Long-Term Stock Awards. Prior to the amendment of our 2014 Long Term Stock Incentive Plan in December 2019, we granted long-term stock awards to our key employees and non-employee Directors. We did not grant shares of long-term stock awards in the nine months ended September 30, 2021 and 2020.

Our long-term stock award activity was as follows, shares in millions: 

	Nine Months Ended September 30,
	2021		2020
Unvested stock award shares at January 1	1		2
Weighted average grant date fair value	$	36	$	34
Stock award shares vested	—		1
Weighted average grant date fair value	$	34	$	32
Stock award shares forfeited	—		—
Weighted average grant date fair value	$	37	$	35
Unvested stock award shares at September 30	1		1
Weighted average grant date fair value	$	37	$	36

At September 30, 2021 and 2020, there was $12 million and $25 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of two years at both September 30, 2021 and 2020.

The total market value (at the vesting date) of stock award shares which vested was $28 million and $31 million during the nine months ended September 30, 2021 and 2020, respectively.

J. STOCK-BASED COMPENSATION (Continued)

Stock Options. Stock options are granted to certain key employees.

We granted 331,970 shares of stock options in the nine months ended September 30, 2021 with a grant date weighted average exercise price of approximately $56 per share.

Our stock option activity was as follows, shares in millions: 

		Nine Months Ended September 30,
		2021		2020
Option shares outstanding, January 1		2		3
Weighted average exercise price	$	33	$	27
Option shares granted		1		1
Weighted average exercise price	$	56	$	48
Option shares exercised		—		1
Aggregate intrinsic value on date of exercise (A)	$	1 million	$	29 million
Weighted average exercise price	$	20	$	17
Option shares forfeited		—		—
Weighted average exercise price	$	11	$	42
Option shares outstanding, September 30		3		3
Weighted average exercise price	$	36	$	34
Weighted average remaining option term (in years)		6		7
Option shares vested and expected to vest, September 30		3		2
Weighted average exercise price	$	36	$	33
Aggregate intrinsic value (A)	$	53 million	$	54 million
Weighted average remaining option term (in years)		6		7
Option shares exercisable (vested), September 30		2		1
Weighted average exercise price	$	30	$	28
Aggregate intrinsic value (A)	$	43 million	$	35 million
Weighted average remaining option term (in years)		5		5

(A)    Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares.

At September 30, 2021 and 2020, there was $4 million and $7 million, respectively, of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of two years and three years at September 30, 2021 and 2020, respectively.

J. STOCK-BASED COMPENSATION (Concluded)

The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows: 

	Nine Months Ended September 30,
	2021			2020
Weighted average grant date fair value	$	13.61		$	10.67
Risk-free interest rate	0.75		%	1.53		%
Dividend yield	1.67		%	1.14		%
Volatility factor	30.00		%	24.00		%
Expected option life	6 years			6 years

Restricted Stock Units. Restricted stock units are granted to our key employees and non-employee Directors. These grants did not cause net share dilution due to our practice of repurchasing and retiring an equal number of shares in the open market.

We granted 662,980 restricted stock units in the nine months ended September 30, 2021 with a weighted average grant date fair value of $57 per share. In the nine months ended September 30, 2021, 141,461 shares were issued and 15,487 restricted stock units were forfeited. During the nine months ended September 30, 2020, we granted 437,170 restricted stock units with a grant date fair value of approximately $47 per share and 7,930 restricted stock units were forfeited.

At September 30, 2021 and 2020, there was $18 million and $8 million, respectively, of unrecognized compensation expense related to unvested restricted stock units; such units had a weighted average remaining vesting period of two years at both September 30, 2021 and 2020.

The total market value (at the vesting date) of restricted stock units which vested was $8 million during the nine months ended September 30, 2021.

Performance Restricted Stock Units. Under our Long Term Incentive Program, we grant performance restricted stock units to certain senior executives. These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement of specified performance metrics established by our Compensation Committee over a three-year performance period and the recipient's continued employment through the share award date.

During the nine months ended September 30, 2021, we granted 85,360 performance restricted stock units with a grant date fair value of approximately $53 per share and 104,757 shares were issued. During the nine months ended September 30, 2020, we granted 133,390 performance restricted stock units with a grant date fair value of approximately $34 per share and 151,724 shares were issued. No performance restricted stock units were forfeited during the nine months ended September 30, 2021 and 2020.

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Employee Retirement Plans

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Employee Retirement Plans

EMPLOYEE RETIREMENT PLANS

Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our condensed consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 

	Three Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	1	$	—	$	1	$	—
Interest cost	1		2		5		2
Expected return on plan assets	(1)		—		(6)		—
Amortization of net loss	2		—		7		—
Net periodic pension cost	$	3	$	2	$	7	$	2

	Nine Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	3	$	—	$	2	$	—
Interest cost	14		3		18		4
Expected return on plan assets	(8)		—		(17)		—
Settlement loss	406		—		—		—
Amortization of net loss	13		2		18		2
Net periodic pension cost	$	428	$	5	$	21	$	6

As of January 1, 2010, substantially all of our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals. In December 2019, our Board of Directors approved the termination of our qualified domestic defined-benefit pension plans. In the second quarter of 2021, we settled these plans and made a final contribution of $101 million. The settlement loss included $447 million of pre-tax actuarial losses that were reclassified out of accumulated other comprehensive income (loss) during the nine months ended September 30, 2021.

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Reclassifications From Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2021

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Reclassifications From Accumulated Other Comprehensive Income (Loss)

RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The reclassifications from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations were as follows, in millions: 

	Amounts Reclassified
Accumulated Other Comprehensive (Income) Loss	Three Months Ended September 30,				Nine Months Ended September 30,				Statement of Operations Line Item
	2021		2020		2021		2020
Settlement and amortization of defined-benefit pension and other post-retirement benefits (A):
Actuarial losses, net	$	2	$	7	$	18	$	20	Other, net
Settlement loss	—		—		447		—
Tax (benefit)	—		(2)		(100)		(5)
Net of tax	$	2	$	5	$	365	$	15
Interest rate swaps (B)	$	—	$	—	$	2	$	1	Interest expense
Tax expense	—		—		5		—
Net of tax	$	—	$	—	$	7	$	1

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $447 million of pre-tax actuarial losses from accumulated other comprehensive income (loss) and $96 million of income tax benefit, which included $11 million of related disproportionate tax expense. Additionally, the amortization of defined-benefit pension and post-retirement benefits included $3 million, net of tax, due to the disposition of pension plans in connection with the divestiture of Hüppe.

(B)    Upon full repayment and retirement of the 5.950% Notes due March 15, 2022 in the first quarter of 2021, we recognized the remaining interest rate swap loss and related disproportionate tax expense.

In addition to the above amounts, we reclassified $23 million of currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the divestiture of Hüppe in the second quarter of 2021. Also, we reclassified $14 million of deferred currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the disposition of our UK Window Group business in the third quarter of 2020.

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Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

Information by segment and geographic area was as follows, in millions: 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021		2020		2021		2020		2021		2020		2021		2020
	Net Sales (A)				Operating Profit				Net Sales (A)				Operating Profit
Operations by segment:
Plumbing Products	$	1,329	$	1,141	$	248	$	271	$	3,907	$	2,964	$	773	$	583
Decorative Architectural Products	875		842		166		179		2,446		2,364		496		475
Total	$	2,204	$	1,983	$	414	$	450	$	6,353	$	5,328	$	1,269	$	1,058
Operations by geographic area:
North America	$	1,753	$	1,599	$	332	$	368	$	4,999	$	4,337	$	1,010	$	899
International, principally Europe	451		384		82		82		1,354		991		259		159
Total	$	2,204	$	1,983	414		450		$	6,353	$	5,328	1,269		1,058
General corporate expense, net					(29)		(26)						(82)		(70)
Operating profit					385		424						1,187		988
Other income (expense), net					(43)		(44)						(691)		(132)
Income from continuing operations before income taxes					$	342	$	380					$	496	$	856

(A)    Inter-segment sales were not material.

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Other Income (Expense), Net

9 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Other Income (Expense), Net

OTHER INCOME (EXPENSE), NET

Other, net, which is included in other income (expense), net, was as follows, in millions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Loss on sale of business	$	—	$	—	$	(18)	$	—
Income from cash and cash investments	—		—		—		2
Equity investment income, net	5		1		7		1
Foreign currency transaction (losses) gains	(4)		1		(2)		(6)
Net periodic pension and post-retirement benefit cost (A)	(4)		(9)		(430)		(25)
Gain on preferred stock redemption	—		—		14		—
Contingent consideration (B)	(14)		—		(14)		—
Dividend income	—		3		6		7
Other items, net	—		—		(1)		(1)
Total other, net	$	(17)	$	(4)	$	(438)	$	(22)

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $406 million of additional pension expense. Refer to Note K for additional information.

(B)    In the third quarter of 2021, we recognized $14 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note G for additional information.

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Income Per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Income Per Common Share

INCOME PER COMMON SHARE

Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator (basic and diluted):
Income from continuing operations	$	220	$	275	$	278	$	618
Less: Allocation to redeemable noncontrolling interest	—		—		6		—
Less: Allocation to unvested restricted stock awards	1		1		1		5
Income from continuing operations attributable to common shareholders	219		274		271		613
Income from discontinued operations, net	—		—		—		411
Less: Allocation to unvested restricted stock awards	—		—		—		3
Income from discontinued operations, net attributable to common shareholders	—		—		—		408
Net income attributable to common shareholders	$	219	$	274	$	271	$	1,021
Denominator:
Basic common shares (based upon weighted average)	246		261		251		265
Add: Stock option dilution	1		—		2		1
Diluted common shares	247		261		253		266

For the three and nine months ended September 30, 2021 and 2020, we allocated dividends and undistributed earnings to the unvested restricted stock awards.

Additionally, 70,000 and 285,000 common shares for the three and nine months ended September 30, 2021, respectively, and 106,000 and 685,000 common shares for the three and nine months ended September 30, 2020, respectively, related to stock options were excluded from the computation of diluted income per common share due to their antidilutive effect.

Effective February 10, 2021, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2019. We repurchased and retired 15.2 million shares of our common stock in the nine months ended September 30, 2021 for approximately $878 million. This included 0.7 million shares to offset the dilutive impact of restricted stock units granted in the nine months ended September 30, 2021. At September 30, 2021, we had $1.3 billion remaining under the 2021 authorization.

On the basis of amounts paid (declared), cash dividends per common share were $0.235 ($0.235) and $0.610 ($0.470) for the three and nine months ended September 30, 2021, respectively, and $0.135 ($0.140) and $0.405 ($0.410) for the three and nine months ended September 30, 2020, respectively.

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Other Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Other Commitments and Contingencies

OTHER COMMITMENTS AND CONTINGENCIES

We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: competition, product liability, employment, warranty, advertising, contract, personal injury, environmental, intellectual property and insurance coverage. We believe we have adequate defenses in these matters. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety matters would have a material adverse effect on us is remote. However, there is no assurance that we will prevail in these matters, and we could, in the future, incur judgments or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations.

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Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Our effective tax rate of 30 percent and 32 percent for the three and nine months ended September 30, 2021 was impacted by $10 million and $15 million of income tax expense, respectively, due to losses providing no tax benefit in certain jurisdictions from the termination of our qualified domestic defined-benefit pension plans and a business divestiture. The tax rate in the nine-month period also includes a $16 million income tax expense from the elimination of disproportionate tax effects from accumulated other comprehensive income (loss) relating to our interest rate swap following the retirement of the related debt, and the termination of our qualified domestic defined-benefit pension plans.

Our effective tax rate of 23 percent and 24 percent for the three and nine months ended September 30, 2020 was impacted by a $10 million and $13 million reduction in income tax expense, respectively, resulting from IRS guidance released during the third quarter of 2020 that allows us to exclude certain high-taxed foreign income from the U.S. tax effects on Global Intangible Low-Taxed Income.

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Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements. In January 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-01, "Investments—Equity Securities (Topic 321)," "Investments—Equity Method and Joint Ventures (Topic 323)," and "Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815," which clarifies that an entity should consider observable transactions when either applying or discontinuing the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321. ASU 2020-01 clarifies that for certain forward contracts or purchased options to acquire investments, an entity should not consider whether, upon settlement of the forward contract or exercise of the purchased option, the underlying securities would be accounted for under the equity method or the fair value option. We adopted ASU 2020-01 prospectively beginning on January 1, 2021. The adoption of the standard did not have a material effect on our financial position or results of operations.

Recently Issued Accounting Pronouncements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. ASU 2020-06 is effective for us for annual periods beginning January 1, 2022. We are currently reviewing the provisions of this pronouncement and the impact, if any, the adoption of this guidance has on our financial position or results of operations. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

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Divestitures (Tables)

9 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

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

	Nine Months Ended September 30,
	2021		2020
Net sales	$	—	$	101
Cost of sales	—		78
Gross profit	—		23
Selling, general and administrative expenses	—		31
(Loss) from discontinued operations	—		(8)
Gain on disposal of discontinued operations	—		602
Income before income tax	—		594
Income tax expense	—		(183)
Income from discontinued operations, net	$	—	$	411

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Revenue (Tables)

9 Months Ended

Sep. 30, 2021

Revenues [Abstract]

Disaggregation of Revenue

Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions:

	Three Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	878	$	875	$	1,753
International, principally Europe	451		—		451
Total	$	1,329	$	875	$	2,204

	Nine Months Ended September 30, 2021
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	2,553	$	2,446	$	4,999
International, principally Europe	1,354		—		1,354
Total	$	3,907	$	2,446	$	6,353

	Three Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	757	$	842	$	1,599
International, principally Europe	384		—		384
Total	$	1,141	$	842	$	1,983

	Nine Months Ended September 30, 2020
	Plumbing Products		Decorative Architectural Products		Total
Primary geographic markets:
North America	$	1,973	$	2,364	$	4,337
International, principally Europe	991		—		991
Total	$	2,964	$	2,364	$	5,328

Financing Receivable, Allowance for Credit Loss

Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	7	$	5
Provision for expected credit losses during the period	1		3
Write-offs charged against the allowance	(1)		(2)
Recoveries of amounts previously written off	1		1
Other (A)	(1)		—
Balance at end of period	$	7	$	7

(A)    As a result of Hüppe being divested in May 2021, $1 million for the nine months ended September 30, 2021 was removed from allowance for credit losses.

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of changes in carrying amount of goodwill

Goodwill at September 30, 2021, by segment, was as follows, in millions:

	Gross Goodwill At September 30, 2021		Accumulated Impairment Losses		Net Goodwill At September 30, 2021
Plumbing Products (A)	$	627	$	(301)	$	326
Decorative Architectural Products	366		(75)		291
Total	$	993	$	(376)	$	617

(A)    As a result of Hüppe being divested in May 2021, both gross goodwill and accumulated impairment losses for the Plumbing Products segment were reduced by $39 million.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2021, by segment, were as follows, in millions: 

	Gross Goodwill At December 31, 2020		Accumulated Impairment Losses		Net Goodwill At December 31, 2020		Acquisitions		Other (B)		Net Goodwill At September 30, 2021
Plumbing Products	$	613	$	(340)	$	273	$	63	$	(10)	$	326
Decorative Architectural Products	365		(75)		290		1		—		291
Total	$	978	$	(415)	$	563	$	64	$	(10)	$	617

(B)    Other consists of the effect of foreign currency translation.

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Warranty Liability (Tables)

9 Months Ended

Sep. 30, 2021

Product Warranties Disclosures [Abstract]

Schedule of changes in the Company's warranty liability

Changes in our warranty liability were as follows, in millions: 

	Nine Months Ended September 30, 2021		Twelve Months Ended December 31, 2020
Balance at January 1	$	83	$	84
Accruals for warranties issued during the period	28		34
Accruals related to pre-existing warranties	1		(3)
Settlements made (in cash or kind) during the period	(23)		(33)
Other, net (including currency translation and acquisitions)	(2)		1
Balance at end of period	$	87	$	83

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Schedule of pre-tax compensation expense and the related income tax benefit for these stock-based incentives

Pre-tax compensation expense included in income from continuing operations for these stock-based incentives was as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Long-term stock awards	$	2	$	4	$	8	$	11
Stock options	1		1		6		6
Restricted stock units	3		1		26		12
Performance restricted stock units	2		2		8		3
Phantom stock awards	1		1		3		3
Total	$	9	$	9	$	51	$	35

Schedule of the Company's long-term stock award activity

Our long-term stock award activity was as follows, shares in millions: 

	Nine Months Ended September 30,
	2021		2020
Unvested stock award shares at January 1	1		2
Weighted average grant date fair value	$	36	$	34
Stock award shares vested	—		1
Weighted average grant date fair value	$	34	$	32
Stock award shares forfeited	—		—
Weighted average grant date fair value	$	37	$	35
Unvested stock award shares at September 30	1		1
Weighted average grant date fair value	$	37	$	36

Schedule of the Company's stock option activity

Our stock option activity was as follows, shares in millions: 

		Nine Months Ended September 30,
		2021		2020
Option shares outstanding, January 1		2		3
Weighted average exercise price	$	33	$	27
Option shares granted		1		1
Weighted average exercise price	$	56	$	48
Option shares exercised		—		1
Aggregate intrinsic value on date of exercise (A)	$	1 million	$	29 million
Weighted average exercise price	$	20	$	17
Option shares forfeited		—		—
Weighted average exercise price	$	11	$	42
Option shares outstanding, September 30		3		3
Weighted average exercise price	$	36	$	34
Weighted average remaining option term (in years)		6		7
Option shares vested and expected to vest, September 30		3		2
Weighted average exercise price	$	36	$	33
Aggregate intrinsic value (A)	$	53 million	$	54 million
Weighted average remaining option term (in years)		6		7
Option shares exercisable (vested), September 30		2		1
Weighted average exercise price	$	30	$	28
Aggregate intrinsic value (A)	$	43 million	$	35 million
Weighted average remaining option term (in years)		5		5

(A)    Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares.

Schedule of weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model

The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows: 

	Nine Months Ended September 30,
	2021			2020
Weighted average grant date fair value	$	13.61		$	10.67
Risk-free interest rate	0.75		%	1.53		%
Dividend yield	1.67		%	1.14		%
Volatility factor	30.00		%	24.00		%
Expected option life	6 years			6 years

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Employee Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Schedule of net periodic pension cost for the Company's defined-benefit pension plans

Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our condensed consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 

	Three Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	1	$	—	$	1	$	—
Interest cost	1		2		5		2
Expected return on plan assets	(1)		—		(6)		—
Amortization of net loss	2		—		7		—
Net periodic pension cost	$	3	$	2	$	7	$	2

	Nine Months Ended September 30,
	2021				2020
	Qualified		Non-Qualified		Qualified		Non-Qualified
Service cost	$	3	$	—	$	2	$	—
Interest cost	14		3		18		4
Expected return on plan assets	(8)		—		(17)		—
Settlement loss	406		—		—		—
Amortization of net loss	13		2		18		2
Net periodic pension cost	$	428	$	5	$	21	$	6

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Reclassifications From Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2021

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations

The reclassifications from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations were as follows, in millions: 

	Amounts Reclassified
Accumulated Other Comprehensive (Income) Loss	Three Months Ended September 30,				Nine Months Ended September 30,				Statement of Operations Line Item
	2021		2020		2021		2020
Settlement and amortization of defined-benefit pension and other post-retirement benefits (A):
Actuarial losses, net	$	2	$	7	$	18	$	20	Other, net
Settlement loss	—		—		447		—
Tax (benefit)	—		(2)		(100)		(5)
Net of tax	$	2	$	5	$	365	$	15
Interest rate swaps (B)	$	—	$	—	$	2	$	1	Interest expense
Tax expense	—		—		5		—
Net of tax	$	—	$	—	$	7	$	1

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $447 million of pre-tax actuarial losses from accumulated other comprehensive income (loss) and $96 million of income tax benefit, which included $11 million of related disproportionate tax expense. Additionally, the amortization of defined-benefit pension and post-retirement benefits included $3 million, net of tax, due to the disposition of pension plans in connection with the divestiture of Hüppe.

(B)    Upon full repayment and retirement of the 5.950% Notes due March 15, 2022 in the first quarter of 2021, we recognized the remaining interest rate swap loss and related disproportionate tax expense.

In addition to the above amounts, we reclassified $23 million of currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the divestiture of Hüppe in the second quarter of 2021. Also, we reclassified $14 million of deferred currency translation losses from accumulated other comprehensive income (loss) to the condensed consolidated statement of operations in conjunction with the disposition of our UK Window Group business in the third quarter of 2020.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Schedule of information by segment and geographic area

Information by segment and geographic area was as follows, in millions: 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021		2020		2021		2020		2021		2020		2021		2020
	Net Sales (A)				Operating Profit				Net Sales (A)				Operating Profit
Operations by segment:
Plumbing Products	$	1,329	$	1,141	$	248	$	271	$	3,907	$	2,964	$	773	$	583
Decorative Architectural Products	875		842		166		179		2,446		2,364		496		475
Total	$	2,204	$	1,983	$	414	$	450	$	6,353	$	5,328	$	1,269	$	1,058
Operations by geographic area:
North America	$	1,753	$	1,599	$	332	$	368	$	4,999	$	4,337	$	1,010	$	899
International, principally Europe	451		384		82		82		1,354		991		259		159
Total	$	2,204	$	1,983	414		450		$	6,353	$	5,328	1,269		1,058
General corporate expense, net					(29)		(26)						(82)		(70)
Operating profit					385		424						1,187		988
Other income (expense), net					(43)		(44)						(691)		(132)
Income from continuing operations before income taxes					$	342	$	380					$	496	$	856

(A)    Inter-segment sales were not material.

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Other Income (Expense), Net (Tables)

9 Months Ended

Sep. 30, 2021

Other Income and Expenses [Abstract]

Schedule of components of other, net, which is included in other income (expense), net

Other, net, which is included in other income (expense), net, was as follows, in millions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Loss on sale of business	$	—	$	—	$	(18)	$	—
Income from cash and cash investments	—		—		—		2
Equity investment income, net	5		1		7		1
Foreign currency transaction (losses) gains	(4)		1		(2)		(6)
Net periodic pension and post-retirement benefit cost (A)	(4)		(9)		(430)		(25)
Gain on preferred stock redemption	—		—		14		—
Contingent consideration (B)	(14)		—		(14)		—
Dividend income	—		3		6		7
Other items, net	—		—		(1)		(1)
Total other, net	$	(17)	$	(4)	$	(438)	$	(22)

(A)    In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $406 million of additional pension expense. Refer to Note K for additional information.

(B)    In the third quarter of 2021, we recognized $14 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note G for additional information.

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Income Per Common Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share

Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator (basic and diluted):
Income from continuing operations	$	220	$	275	$	278	$	618
Less: Allocation to redeemable noncontrolling interest	—		—		6		—
Less: Allocation to unvested restricted stock awards	1		1		1		5
Income from continuing operations attributable to common shareholders	219		274		271		613
Income from discontinued operations, net	—		—		—		411
Less: Allocation to unvested restricted stock awards	—		—		—		3
Income from discontinued operations, net attributable to common shareholders	—		—		—		408
Net income attributable to common shareholders	$	219	$	274	$	271	$	1,021
Denominator:
Basic common shares (based upon weighted average)	246		261		251		265
Add: Stock option dilution	1		—		2		1
Diluted common shares	247		261		253		266

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Acquisitions (Details) € in Millions, $ in Millions	3 Months Ended					9 Months Ended
	Sep. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 EUR (€)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2021 USD ($)	Jan. 04, 2021
Business Acquisition [Line Items]
Goodwill, acquired during period						$ 64
Easy Sanitary Solutions B.V.
Business Acquisition [Line Items]
Ownership percentage by noncontrolling owners							24.90%
SmarTap
Business Acquisition [Line Items]
Payments to acquire businesses					$ 24
Finite-lived intangible assets acquired					10
Goodwill, acquired during period					$ 14
Weighted average useful life (in years)					5 years
Easy Sanitary Solutions B.V.
Business Acquisition [Line Items]
Percentage of voting interests acquired							75.10%
Business combination, consideration transferred		$ 58	€ 47
Payments to acquire businesses		52
Liabilities incurred from acquisition		$ 6
Payment period of liabilities incurred from acquisition		2 years	2 years
Finite-lived intangible assets acquired		$ 32
Goodwill, acquired during period		$ 35
Weighted average useful life (in years)		10 years	10 years
Kraus USA Inc
Business Acquisition [Line Items]
Payments to acquire businesses				$ 103
Finite-lived intangible assets acquired				49
Goodwill, acquired during period				20
Payments for asset acquisition, contingent				50
Business combination, contingent consideration, liability				8
Indefinite-lived intangible assets acquired				$ 25
Weighted average useful life (in years)				10 years
Decrease to goodwill		$ 1
Work Tools International Inc and Elder & Jenks LLC
Business Acquisition [Line Items]
Business combination, consideration transferred				$ 53
Payments to acquire businesses				48
Liabilities incurred from acquisition				$ 5
Payment period of liabilities incurred from acquisition				18 months
Finite-lived intangible assets acquired				$ 27
Goodwill, acquired during period				7
Indefinite-lived intangible assets acquired				$ 7
Weighted average useful life (in years)				12 years
Decrease to goodwill		$ 0
Steamist, Inc.
Business Acquisition [Line Items]
Payments to acquire businesses	$ 56
Finite-lived intangible assets acquired	31
Goodwill, acquired during period	$ 29
Weighted average useful life (in years)	11 years

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Divestitures - Hüppe (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, not discontinued operation, gain (loss) on disposal	$ 0	$ 0	$ 18	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, not discontinued operation, currency translation gain (loss)			23
Hüppe | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, not discontinued operation, gain (loss) on disposal			$ 18

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Divestitures - Narrative (Details) $ in Millions			9 Months Ended
	Feb. 18, 2020 USD ($)	Nov. 06, 2019 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($) installment
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Businesses, net of cash disposed			$ 5	$ 868
Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on disposal of discontinued operations			0	602
Income before income tax, discontinued operations			$ 0	594
Masco Cabinetry | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Businesses, net of cash disposed	$ 989
Proceeds from divestiture	853
Gain (loss) on disposition of business				$ 585
Milgard
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of installments | installment				2
Milgard | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Businesses, net of cash disposed		$ 720		$ 15
Gain on disposal of discontinued operations				17
Short term receivable from divestiture of businesses, payable in five monthly installments				$ 2
ACProducts Preferred Stock | Masco Cabinetry | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of businesses	$ 136

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Divestitures - Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income from discontinued operations, net	$ 0	$ 0	$ 0	$ 411
Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales			0	101
Cost of sales			0	78
Gross profit			0	23
Selling, general and administrative expenses			0	31
(Loss) from discontinued operations			0	(8)
Gain on disposal of discontinued operations			0	602
Income before income tax			0	594
Income tax expense			0	(183)
Income from discontinued operations, net			$ 0	$ 411

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 2,204	$ 1,983	$ 6,353	$ 5,328
Contract with customer, asset, gross, current	1		1		$ 2
Contract with customer, liability	24		24		62
Contract with customer, liability, revenue recognized	1	6
Performance obligation satisfied in previous period	3	1	7	6
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at January 1			7	5	5
Provision for expected credit losses during the period			1		3
Write-offs charged against the allowance			(1)		(2)
Recoveries of amounts previously written off			1		1
Other			1		0
Balance at end of period	7		7		$ 7
Hüppe
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Other			1
Plumbing Products (A)
Disaggregation of Revenue [Line Items]
Net sales	1,329	1,141	3,907	2,964
Decorative Architectural Products
Disaggregation of Revenue [Line Items]
Net sales	875	842	2,446	2,364
North America
Disaggregation of Revenue [Line Items]
Net sales	1,753	1,599	4,999	4,337
North America | Plumbing Products (A)
Disaggregation of Revenue [Line Items]
Net sales	878	757	2,553	1,973
North America | Decorative Architectural Products
Disaggregation of Revenue [Line Items]
Net sales	875	842	2,446	2,364
International, principally Europe
Disaggregation of Revenue [Line Items]
Net sales	451	384	1,354	991
International, principally Europe | Plumbing Products (A)
Disaggregation of Revenue [Line Items]
Net sales	451	384	1,354	991
International, principally Europe | Decorative Architectural Products
Disaggregation of Revenue [Line Items]
Net sales	$ 0	$ 0	$ 0	$ 0

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Depreciation and Amortization (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Depreciation, Depletion and Amortization [Abstract]
Depreciation and amortization expense	$ 114	$ 99

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Goodwill and Other Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2021
Goodwill [Line Items]
Gross goodwill		$ 978	$ 993
Accumulated Impairment Losses		(415)	(376)
Net goodwill		563	617
Goodwill [Roll Forward]
Gross goodwill		978	993
Accumulated Impairment Losses		(415)	(376)
Goodwill, beginning balance			563
Acquisitions			64
Other			(10)
Goodwill, ending balance		563	617
Goodwill, Written off Related to Sale of Business Unit	$ 39
Plumbing Products (A)
Goodwill [Line Items]
Gross goodwill		613	627
Accumulated Impairment Losses		(340)	(301)
Net goodwill		273	326
Goodwill [Roll Forward]
Gross goodwill		613	627
Accumulated Impairment Losses		(340)	(301)
Goodwill, beginning balance			273
Acquisitions			63
Other			(10)
Goodwill, ending balance		273	326
Decorative Architectural Products
Goodwill [Line Items]
Gross goodwill		365	366
Accumulated Impairment Losses		(75)	(75)
Net goodwill		290	291
Goodwill [Roll Forward]
Gross goodwill		365	366
Accumulated Impairment Losses		(75)	(75)
Goodwill, beginning balance			290
Acquisitions			1
Other			0
Goodwill, ending balance		$ 290	$ 291

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Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Goodwill [Line Items]
Other indefinite-lived intangible assets	$ 109	$ 109
Carrying value of definite-lived intangible assets	286	248
Accumulated amortization	$ 70	$ 73

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Fair Value of Financial Investments (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended			9 Months Ended
	May 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Feb. 18, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Proceeds from redemption of preferred stock	$ 166
Gain on preferred stock redemption	$ 14	$ 0		$ 0	$ 14	$ 0
Dividend income		0		$ 3	6	$ 7
Kraus USA Inc
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Payments for asset acquisition, contingent			$ 50
Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated market value of long-term and short-term debt		3,200	3,300		3,200
Carrying Value Reported Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Aggregate carrying value of long-term and short-term debt		3,000	2,800		3,000
Carrying Value Reported Value Measurement | Kraus USA Inc | Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Asset acquisition, contingent liability, fair value disclosure		22	8		22
ACProducts Preferred Stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, fair value disclosure							$ 136
ACProducts Preferred Stock | Other Assets
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments			$ 146
ACProducts Holding, Inc
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Preferred stock, liquidation preference, value		$ 150			$ 150

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Warranty Liability (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Balance at the beginning of the period	$ 83	$ 84
Accruals for warranties issued during the period	28	34
Accruals related to pre-existing warranties	1	(3)
Settlements made (in cash or kind) during the period	(23)	(33)
Other, net (including currency translation and acquisitions)	(2)	1
Balance at the end of the period	$ 87	$ 83

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Debt (Details) - USD ($)						3 Months Ended	9 Months Ended
	Mar. 22, 2021	Mar. 04, 2021	Sep. 29, 2020	Sep. 18, 2020	Mar. 13, 2019	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2019
Debt
Proceeds from issuance of debt		$ 1,495,000,000
Repayments of notes payable							$ 1,326,000,000	$ 400,000,000
Gain (loss) on extinguishment of debt						$ 6,000,000	168,000,000	$ 6,000,000
Credit Agreement dated March 13, 2019
Debt
Borrowing capacity, maximum					$ 1,000,000,000
Increase in maximum borrowing capacity					$ 500,000,000
Maximum net leverage ratio					4.0
Minimum interest coverage ratio					2.5
Borrowings outstanding							0
Credit Agreement dated March 13, 2019 | Federal funds effective rate
Debt
Interest rate, basis spread (as a percent)					0.50%
Credit Agreement dated March 13, 2019 | Libor rate
Debt
Interest rate, basis spread (as a percent)					1.00%
Credit Agreement dated March 13, 2019 | Revolver
Debt
Borrowing capacity, maximum					$ 500,000,000
Credit Agreement dated March 13, 2019 | Swingline loans
Debt
Borrowing capacity, maximum					100,000,000
Credit Agreement dated March 13, 2019 | Letters of credit
Debt
Borrowing capacity, maximum					$ 25,000,000
Letters of credit outstanding, amount							$ 0
1.5 Notes and Debentures Due February 15, 2028
Debt
Long-term debt, gross		$ 600,000,000
Debt instrument stated interest rate		1.50%
2.0% Notes and Debentures Due February 15, 2031
Debt
Long-term debt, gross		$ 600,000,000
Debt instrument stated interest rate		2.00%
3.125 Notes and Debentures Due February 15, 2051
Debt
Long-term debt, gross		$ 300,000,000
Debt instrument stated interest rate		3.125%
5.95 Notes and Debentures Due March 15, 2022
Debt
Debt instrument stated interest rate	5.95%
Repayments of notes payable	$ 326,000,000
4.45 Notes and Debentures Due April 1, 2025
Debt
Debt instrument stated interest rate	4.45%
Repayments of notes payable	$ 500,000,000
4.375 Notes and Debentures Due April 1, 2026
Debt
Debt instrument stated interest rate	4.375%
Repayments of notes payable	$ 500,000,000
2.0 Notes and Debentures Due October 1 2030 [Member]
Debt
Long-term debt, gross				$ 300,000,000
Debt instrument stated interest rate				2.00%
Proceeds from issuance of debt				$ 300,000,000
4.5 Notes and Debentures Due May 15 2047 [Member]
Debt
Long-term debt, gross				$ 100,000,000					$ 300,000,000
Debt instrument stated interest rate				4.50%					4.50%
Proceeds from issuance of debt				$ 119,000,000
3.5 Notes and Debentures Due April 1 2021 [Member]
Debt
Debt instrument stated interest rate			3.50%
Repayments of notes payable			$ 400,000,000

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Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Stock-based compensation
Pre-tax compensation expense	$ 9	$ 9	$ 51	$ 35
Long-term stock awards
Stock-based compensation
Pre-tax compensation expense	2	4	8	11
Stock options
Stock-based compensation
Pre-tax compensation expense	1	1	6	6
Restricted stock units
Stock-based compensation
Pre-tax compensation expense	3	1	26	12
Performance Restricted Stock Units
Stock-based compensation
Pre-tax compensation expense	2	2	8	3
Phantom stock awards
Stock-based compensation
Pre-tax compensation expense	$ 1	$ 1	$ 3	$ 3

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Stock-Based Compensation - Long-Term Stock Award (Details) - Long-term stock awards - USD ($) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Unvested stock award shares
Balance at the beginning of the period (in shares)	1	2
Vested (in shares)	0	1
Forfeited (in shares)	0	0
Balance at the end of the period (in shares)	1	1
Weighted average grant date fair value
Balance at the beginning of the period (in dollars per share)	$ 36	$ 34
Vested (in dollars per share)	34	32
Forfeited (in dollars per share)	37	35
Balance at the end of the period (in dollars per share)	$ 37	$ 36
Additional disclosures
Total unrecognized compensation expense	$ 12	$ 25
Weighted average remaining vesting period	2 years	2 years
Total market value (at the vesting date) of stock award shares	$ 28	$ 31

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Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Stock Options
Grant date intrinsic value (in dollars per share)	$ 56
Shares
Granted (in shares)	331,970
Stock options
Shares
Outstanding at the beginning of the period (in shares)	2,000,000	3,000,000
Granted (in shares)	1,000,000	1,000,000
Exercised (in shares)	0	1,000,000
Forfeited (in shares)	0	0
Outstanding at the end of the period (in shares)	3,000,000	3,000,000
Vested and expected to vest at the end of the period (in shares)	3,000,000	2,000,000
Exercisable at the end of the period (in shares)	2,000,000	1,000,000
Weighted average exercise price
Outstanding at the beginning of the period (in dollars per share)	$ 33	$ 27
Granted (in dollars per share)	56	48
Exercised (in dollars per share)	20	17
Forfeited (in dollars per share)	11	42
Outstanding at the end of the period (in dollars per share)	36	34
Vested and expected to vest at the end of the period (in dollars per share)	36	33
Exercisable at the end of the period (in dollars per share)	$ 30	$ 28
Aggregate intrinsic value
Exercised	$ 1	$ 29
Vested and expected to vest at the end of the period	53	54
Exercisable at the end of the period	$ 43	$ 35
Weighted average remaining option term
Outstanding at the end of the period	6 years	7 years
Vested and expected to vest at the end of the period	6 years	7 years
Exercisable at the end of the period	5 years	5 years
Additional disclosures
Total unrecognized compensation expense	$ 4	$ 7
Weighted average remaining vesting period	2 years	3 years

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Stock-Based Compensation - Option Pricing Assumptions and Estimates (Details) - Stock options - $ / shares	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Stock Options
Weighted average grant date fair value (in dollars per share)	$ 13.61	$ 10.67
Risk-free interest rate (as a percent)	0.75%	1.53%
Dividend yield (as a percent)	1.67%	1.14%
Volatility factor (as a percent)	30.00%	24.00%
Expected option life	6 years	6 years

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Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Restricted stock units
Stock-based compensation
Granted (in shares)	662,980	437,170
Shares issued in period (in shares)	141,461
Forfeited (in shares)	15,487	7,930
Granted (in dollars per share)	$ 57	$ 47
Unrecognized compensation expense	$ 18	$ 8
Weighted average remaining vesting period	2 years	2 years
Total market value (at the vesting date) of stock award shares	$ 8
Stock options
Stock-based compensation
Weighted average remaining vesting period	2 years	3 years
Performance Restricted Stock Units
Stock-based compensation
Period for recognition	3 years
LTIP Program | Performance Restricted Stock Units
Stock-based compensation
Granted (in shares)	85,360	133,390
Shares issued in period (in shares)	104,757	151,724
Forfeited (in shares)	0	0
Granted (in dollars per share)	$ 53	$ 34

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Employee Retirement Plans - Schedule of Net Periodic Pension Cost (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Qualified Plan
Net periodic pension cost for the company's defined-benefit pension plans
Service cost	$ 1		$ 1	$ 3	$ 2
Interest cost	1		5	14	18
Expected return on plan assets	(1)		(6)	(8)	(17)
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement		$ 406		406	0
Amortization of net loss	2		7	13	18
Net periodic pension cost	3		7	428	21
Nonqualified Plan
Net periodic pension cost for the company's defined-benefit pension plans
Service cost	0		0	0	0
Interest cost	2		2	3	4
Expected return on plan assets	0		0	0	0
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement				0	0
Amortization of net loss	0		0	2	2
Net periodic pension cost	$ 2		$ 2	$ 5	$ 6

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Employee Retirement Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2021	Sep. 30, 2021
Employee Retirement Plans
Defined benefit plan, benefit obligation, payment for settlement	$ 101
Reclassification out of Accumulated Other Comprehensive Income
Employee Retirement Plans
Defined benefit plan actuarial loss		$ 447

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Reclassifications From Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Mar. 22, 2021
Reclassifications from accumulated other comprehensive (loss) income
Other, net	$ 43		$ 44	$ 691	$ 132
Tax (benefit)	(103)		(87)	(158)	(202)
Reclassifications, after tax	(239)		(293)	(338)	(1,065)
Interest expense	26		40	253	110
Disproportionate tax expense		$ 11
5.95 Notes and Debentures Due March 15, 2022
Reclassifications from accumulated other comprehensive (loss) income
Debt instrument stated interest rate						5.95%
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest
Reclassifications from accumulated other comprehensive (loss) income
Defined benefit plan actuarial loss			0	447	0
Reclassification out of Accumulated Other Comprehensive Income
Reclassifications from accumulated other comprehensive (loss) income
Defined benefit plan actuarial loss				447
Tax (benefit)		96
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest
Reclassifications from accumulated other comprehensive (loss) income
Other, net	2		7	18	20
Defined benefit plan actuarial loss	0	447
Tax (benefit)	0		2	100	5
Reclassifications, after tax	2		5	365	15
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest
Reclassifications from accumulated other comprehensive (loss) income
Tax (benefit)	0		0	(5)	0
Reclassifications, after tax	0		0	(7)	(1)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | Interest Rate Swap
Reclassifications from accumulated other comprehensive (loss) income
Interest expense	$ 0		$ 0	2	1
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Foreign Currency Adjustment Attributable to Parent | Hüppe
Reclassifications from accumulated other comprehensive (loss) income
Other, net		$ (23)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Foreign Currency Adjustment Attributable to Parent | UK Window Group
Reclassifications from accumulated other comprehensive (loss) income
Other, net					$ (14)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Hüppe
Reclassifications from accumulated other comprehensive (loss) income
Other, net				$ (3)

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Information
Net sales	$ 2,204	$ 1,983	$ 6,353	$ 5,328
Operating Profit	385	424	1,187	988
Other income (expense), net	(43)	(44)	(691)	(132)
Income from continuing operations before income taxes	342	380	496	856
North America
Segment Information
Net sales	1,753	1,599	4,999	4,337
International, principally Europe
Segment Information
Net sales	451	384	1,354	991
Plumbing Products (A)
Segment Information
Net sales	1,329	1,141	3,907	2,964
Plumbing Products (A) | North America
Segment Information
Net sales	878	757	2,553	1,973
Plumbing Products (A) | International, principally Europe
Segment Information
Net sales	451	384	1,354	991
Decorative Architectural Products
Segment Information
Net sales	875	842	2,446	2,364
Decorative Architectural Products | North America
Segment Information
Net sales	875	842	2,446	2,364
Decorative Architectural Products | International, principally Europe
Segment Information
Net sales	0	0	0	0
Operating Segments
Segment Information
Net sales	2,204	1,983	6,353	5,328
Operating Profit	414	450	1,269	1,058
Operating Segments | Plumbing Products (A)
Segment Information
Net sales	1,329	1,141	3,907	2,964
Operating Profit	248	271	773	583
Operating Segments | Decorative Architectural Products
Segment Information
Net sales	875	842	2,446	2,364
Operating Profit	166	179	496	475
Geographic Areas
Segment Information
Net sales	2,204	1,983	6,353	5,328
Operating Profit	414	450	1,269	1,058
Geographic Areas | North America
Segment Information
Net sales	1,753	1,599	4,999	4,337
Operating Profit	332	368	1,010	899
Geographic Areas | International, principally Europe
Segment Information
Net sales	451	384	1,354	991
Operating Profit	82	82	259	159
Corporate, Non-Segment
Segment Information
General corporate expense, net	$ (29)	$ (26)	$ (82)	$ (70)

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Other Income (Expense), Net (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Other Income and Expenses [Abstract]
Loss on sale of business		$ 0	$ 0	$ (18)	$ 0
Income from cash and cash investments		0	0	0	2
Equity investment income, net		5	1	7	1
Foreign currency transaction (losses) gains		(4)	1	(2)	(6)
Net periodic pension and post-retirement benefit cost (A)		(4)	(9)	(430)	(25)
Gain on preferred stock redemption	$ 14	0	0	14	0
Contingent consideration		(14)	0	(14)	0
Dividend income		0	3	6	7
Other items, net		0	0	(1)	(1)
Total other, net		$ (17)	$ (4)	$ (438)	$ (22)

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Other Income (Expense), Net - Footnote (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Qualified Plan
Employee Retirement Plans
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement	$ 406	$ 406	$ 0

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Income Per Common Share (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator (basic and diluted):
Income from continuing operations	$ 220		$ 275	$ 278	$ 618
Less: Allocation to redeemable noncontrolling interest	0	$ 6	0	6	0
Less: Allocation to unvested restricted stock awards	1		1	1	5
Income from continuing operations attributable to common shareholders	219		274	271	613
Income from discontinued operations, net	0		0	0	411
Less: Allocation to unvested restricted stock awards	0		0	0	3
Income from discontinued operations, net attributable to common shareholders	0		0	0	408
Net income attributable to common shareholders	$ 219		$ 274	$ 271	$ 1,021
Denominator:
Basic common shares (based upon weighted average) (in shares)	246		261	251	265
Add: Stock option dilution (in shares)	1		0	2	1
Diluted common shares (in shares)	247		261	253	266

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Income Per Common Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Feb. 10, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Amount authorized for repurchase					$ 2,000
Stock repurchased during period (in shares)			15,200,000
Payments for repurchase of common stock			$ 878	$ 602
Remaining authorized repurchase amount	$ 1,300		$ 1,300
Dividends
Cash dividends per common share paid (in dollars per share)	$ 0.235	$ 0.135	$ 0.610	$ 0.405
Cash dividends per common share declared (in dollars per share)	$ 0.235	$ 0.140	$ 0.470	$ 0.410
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive effect on computation of diluted earnings per common share (in shares)	70,000	106,000	285,000	685,000
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock repurchased and retired during period to offset dilutive impact of awards granted (in shares)			700,000

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Tax (benefit)	$ 103	$ 87	$ 158	$ 202
Income from continuing operations before income taxes	$ 342	$ 380	$ 496	$ 856
Effective tax rate (as a percent)	30.00%	23.00%	32.00%	24.00%
Income tax expense, elimination of disproportionate tax			$ 16
Reduction in income tax expense		$ 10		$ 13
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount	$ 10		$ 15