Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,053,334,100 | ||
Entity Common Stock, Shares Outstanding | 257,142,348 | ||
Documents Incorporated by Reference | Portions of the Registrant's definitive Proxy Statement to be filed for its 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0000062996 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash investments | $ 1,326 | $ 697 |
Receivables | 1,138 | 997 |
Inventories | 876 | 754 |
Prepaid expenses and other | 149 | 90 |
Assets held for sale | 0 | 173 |
Total current assets | 3,489 | 2,711 |
Property and equipment, net | 908 | 878 |
Goodwill | 563 | 509 |
Other intangible assets, net | 357 | 259 |
Operating lease right-of-use assets | 166 | 176 |
Other assets | 294 | 139 |
Assets held for sale | 0 | 355 |
Total assets | 5,777 | 5,027 |
Current Liabilities: | ||
Accounts payable | 893 | 697 |
Notes payable | 3 | 2 |
Accrued liabilities | 1,038 | 700 |
Liabilities held for sale | 0 | 149 |
Total current liabilities | 1,934 | 1,548 |
Long-term debt | 2,792 | 2,771 |
Noncurrent operating lease liabilities | 149 | 162 |
Other liabilities | 481 | 589 |
Liabilities held for sale | 0 | 13 |
Total liabilities | 5,356 | 5,083 |
Commitments and contingencies (Note U) | ||
Masco Corporation's shareholders' equity | ||
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2020 – 258,200,000; 2019 – 275,600,000 | 258 | 276 |
Preferred shares authorized: 1,000,000; Issued and outstanding: 2020 and 2019 – None | 0 | 0 |
Paid-in capital | 0 | 0 |
Retained earnings (deficit) | 79 | (332) |
Accumulated other comprehensive loss | (142) | (179) |
Total Masco Corporation's shareholders' equity (deficit) | 195 | (235) |
Noncontrolling interest | 226 | 179 |
Total equity | 421 | (56) |
Total liabilities and equity | $ 5,777 | $ 5,027 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares, 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) | 258,200,000 | 275,600,000 |
Common shares, shares outstanding (in shares) | 258,200,000 | 275,600,000 |
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 7,188 | $ 6,707 | $ 6,654 |
Cost of sales | 4,601 | 4,336 | 4,327 |
Gross profit | 2,587 | 2,371 | 2,327 |
Selling, general and administrative expenses | 1,292 | 1,274 | 1,250 |
Impairment charge for other intangible assets | 0 | 9 | 0 |
Operating profit | 1,295 | 1,088 | 1,077 |
Other income (expense), net: | |||
Interest expense | (144) | (159) | (156) |
Other, net | (20) | (15) | (14) |
Other income (expense), net | (164) | (174) | (170) |
Income from continuing operations before income taxes | 1,131 | 914 | 907 |
Income tax expense | 269 | 230 | 221 |
Income from continuing operations | 862 | 684 | 686 |
Income from discontinued operations, net | 414 | 296 | 98 |
Net income | 1,276 | 980 | 784 |
Less: Net income attributable to noncontrolling interest | 52 | 45 | 50 |
Net income attributable to Masco Corporation | $ 1,224 | $ 935 | $ 734 |
Basic: | |||
Income from continuing operations (in dollars per share) | $ 3.05 | $ 2.21 | $ 2.06 |
Income from discontinued operations, net (in dollars per share) | 1.55 | 1.03 | 0.32 |
Net income, basic (in dollars per share) | 4.60 | 3.24 | 2.38 |
Diluted: | |||
Income from continuing operations (in dollars per share) | 3.04 | 2.20 | 2.05 |
Income from discontinued operations, net (in dollars per share) | 1.55 | 1.02 | 0.32 |
Net income, diluted (in dollars per share) | $ 4.59 | $ 3.22 | $ 2.37 |
Amounts attributable to Masco Corporation: | |||
Income from continuing operations | $ 810 | $ 639 | $ 636 |
Income from discontinued operations, net | $ 414 | $ 296 | $ 98 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,276 | $ 980 | $ 784 |
Less: Net income attributable to noncontrolling interest | 52 | 45 | 50 |
Net income attributable to Masco Corporation | 1,224 | 935 | 734 |
Other comprehensive income (loss), net of tax (Note P): | |||
Cumulative translation adjustment | 72 | 6 | (31) |
Interest rate swaps | 1 | 2 | 2 |
Pension and other post-retirement benefits | (18) | (64) | 9 |
Other comprehensive income (loss), net of tax | 55 | (56) | (20) |
Less: Other comprehensive income (loss) attributable to the noncontrolling interest: | |||
Cumulative translation adjustment | 20 | (1) | (15) |
Pension and other post-retirement benefits | (2) | (3) | (2) |
Less: Other comprehensive (loss) income attributable to noncontrolling interest | 18 | (4) | (17) |
Other comprehensive income (loss) attributable to Masco Corporation | 37 | (52) | (3) |
Total comprehensive income | 1,331 | 924 | 764 |
Less: Total comprehensive income attributable to noncontrolling interest | 70 | 41 | 33 |
Total comprehensive income attributable to Masco Corporation | $ 1,261 | $ 883 | $ 731 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | |||
Net income | $ 1,276 | $ 980 | $ 784 |
Depreciation and amortization | 133 | 159 | 156 |
Display amortization | 2 | 12 | 21 |
Deferred income taxes | (3) | (41) | 4 |
Employee withholding taxes paid on stock-based compensation | 25 | 23 | 42 |
Gain on disposition of investments, net | (3) | (1) | (4) |
Gain on disposition of businesses, net | (602) | (298) | 0 |
Pension and other post-retirement benefits | (32) | (45) | (47) |
Impairment of goodwill and other intangible assets | 0 | 16 | 0 |
Stock-based compensation | 45 | 35 | 27 |
Dividends paid-in-kind | (10) | 0 | 0 |
Increase in receivables | (141) | (37) | (46) |
(Increase) decrease in inventories | (89) | 58 | (11) |
Increase (decrease) in accounts payable and accrued liabilities, net | 332 | (27) | 108 |
Other, net | 20 | (1) | (2) |
Net cash from operating activities | 953 | 833 | 1,032 |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | |||
Retirement of notes | (400) | (201) | (114) |
Purchase of Company common stock | (727) | (896) | (654) |
Cash dividends paid | (145) | (144) | (134) |
Dividends paid to noncontrolling interest | (23) | (42) | (89) |
Issuance of notes, net of issuance costs | 415 | 0 | 0 |
Debt extinguishment costs | (5) | (2) | 0 |
Proceeds from the exercise of stock options | 26 | 27 | 14 |
Employee withholding taxes paid on stock-based compensation | 25 | 23 | 42 |
Payment of debt | (2) | (8) | (1) |
Credit Agreement and other financing costs | 0 | (2) | 0 |
Net cash for financing activities | (886) | (1,291) | (1,020) |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | |||
Capital expenditures | (114) | (162) | (219) |
Acquisition of businesses, net of cash acquired | (227) | 0 | (549) |
Proceeds from disposition of: | |||
Businesses, net of cash disposed | 870 | 722 | 0 |
Short-term bank deposits | 0 | 0 | 108 |
Property and equipment | 1 | 34 | 14 |
Other financial investments | 3 | 1 | 5 |
Other, net | (2) | (13) | (10) |
Net cash from (for) investing activities | 531 | 582 | (651) |
Effect of exchange rate changes on cash and cash investments | 31 | 14 | 4 |
CASH AND CASH INVESTMENTS: | |||
Increase (decrease) for the year | 629 | 138 | (635) |
At January 1 | 697 | 559 | 1,194 |
At December 31 | $ 1,326 | $ 697 | $ 559 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect Period of Adoption Adjusted Balance | Common Shares ($1 par value) | Common Shares ($1 par value)Cumulative Effect Period of Adoption Adjusted Balance | Paid-In Capital | Paid-In CapitalCumulative Effect Period of Adoption Adjusted Balance | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit)Cumulative Effect Period of Adoption Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect Period of Adoption Adjusted Balance | Noncontrolling Interest | Noncontrolling InterestCumulative Effect Period of Adoption Adjusted Balance |
Balance at Dec. 31, 2017 | $ 183 | $ 310 | $ 0 | $ (298) | $ (65) | $ 236 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Reclassification of disproportionate tax effects (Refer to Note P) | 0 | 59 | (59) | |||||||||||
Total comprehensive income (loss) | 764 | 734 | (3) | 33 | ||||||||||
Shares issued | (9) | 3 | (4) | (8) | ||||||||||
Shares retired: | ||||||||||||||
Repurchased | (654) | (19) | (26) | (609) | ||||||||||
Surrendered (non-cash) | (19) | (19) | ||||||||||||
Cash dividends declared | (137) | (137) | ||||||||||||
Dividends paid to noncontrolling interest | (89) | (89) | ||||||||||||
Stock-based compensation | 30 | 30 | ||||||||||||
Balance at Dec. 31, 2018 | 69 | 294 | 0 | (278) | (127) | 180 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Total comprehensive income (loss) | 924 | 935 | (52) | 41 | ||||||||||
Shares issued | 15 | 3 | 12 | |||||||||||
Shares retired: | ||||||||||||||
Repurchased | (896) | (20) | (42) | (834) | ||||||||||
Surrendered (non-cash) | (10) | (1) | (9) | |||||||||||
Cash dividends declared | (146) | (146) | ||||||||||||
Dividends paid to noncontrolling interest | (42) | (42) | ||||||||||||
Stock-based compensation | 30 | 30 | ||||||||||||
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 (loss) | 1,331 | 1,224 | 37 | 70 | ||||||||||
Shares issued | 14 | 2 | 12 | |||||||||||
Shares retired: | ||||||||||||||
Repurchased | (727) | (19) | (53) | (655) | ||||||||||
Surrendered (non-cash) | (14) | (1) | (13) | |||||||||||
Cash dividends declared | (144) | (144) | ||||||||||||
Dividends paid to noncontrolling interest | (23) | (23) | ||||||||||||
Stock-based compensation | 41 | 41 | ||||||||||||
Balance at Dec. 31, 2020 | $ 421 | $ 258 | $ 0 | $ 79 | $ (142) | $ 226 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Stockholders' Equity [Abstract] | |||
Common shares, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES Principles of Consolidation. The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. We consolidate the assets, liabilities and results of operations of variable interest entities for which we are the primary beneficiary. Use of Estimates and Assumptions in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted ("GAAP") in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. Revenue Recognition. We recognize revenue as control of our products is transferred to our customers, which is generally at the time of shipment or upon delivery based on the contractual terms with our customers. Our customers' payment terms generally range from 30 to 65 days of fulfilling our performance obligations and recognizing revenue. We provide customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. These customer programs and incentives are considered variable consideration. We include in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume for ecasts as it relates to our volume-based incentives. This determination is updated each reporting period. Certain product sales include a right of return. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund liability. We additionally record an asset, based on historical experience, for the amount of product we expect to return to inventory as a result of the return, which is recorded in prepaid expenses and other in the consolidated balance sheets. We consider shipping and handling activities performed by us as activities to fulfill the sales of our products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. We capitalize incremental costs of obtaining a contract and expense the costs on a straight-line basis over the contractual period if the cost is recoverable, the cost would not have been incurred without the contract and the term of the contract is greater than one year; otherwise, we expense the amounts as incurred. We do not adjust the promised amount of consideration for the effects of a financing component if the period between when we transfer our products or services and when our customers pay for our products or services is expected to be one year or less. Customer Displays. In-store displays that are owned by us and used to market our products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three Foreign Currency. The financial statements of our foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet dates. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive loss component of shareholders' equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of operations in other income (expense), net. Cash and Cash Investments. We consider all highly liquid investments with an initial maturity of three months or less to be cash and cash investments. A. ACCOUNTING POLICIES (Continued) Receivables. We do business with a number of customers, including certain home center retailers. We monitor our exposure for credit losses on customer receivable balances and other financial investments measured at amortized cost and the credit worthiness of customers on an on-going basis, including requiring the completion of credit applications and performing periodic reviews of our open accounts receivable. We record allowances for doubtful accounts for estimated losses resulting from the inability of our customers to fulfill their required payment obligation to us. Allowances are estimated based upon specific customer balances, where a risk of loss has been identified, and also include a provision for losses based upon historical collection experience and write-off activity as well as reasonable and supportable forecast information that considers macro-economic factors and industry-specific trends associated with our businesses, among others. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $48 million and $36 million at December 31, 2020 and 2019, respectively. Our receivables balances are generally due in less than one year. Property and Equipment. Property and equipment, including significant improvements to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Maintenance and repair costs are charged against earnings as incurred. We review our property and equipment as events occur or circumstances change that would more likely than not reduce the fair value of the property and equipment below its carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, we evaluate the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. Depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, computer hardware and software, 17 to 33 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense, including discontinued operations, was $105 million in 2020 and $132 million in both 2019 and 2018. Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets (“ROU assets”), accrued liabilities and noncurrent operating lease liabilities on our consolidated balance sheet. Finance lease ROU assets are included in property and equipment, net, notes payable, and long-term debt on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the duration of the lease term while lease liabilities represent our obligation to make lease payments in exchange for the right to use an underlying asset. ROU assets and lease liabilities are measured based on the present value of fixed lease payments over the lease term at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and initial direct costs incurred, and is reduced by any lease incentives received. We review our ROU assets as events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values. If the carrying amount of the ROU asset is not recoverable from its undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate on the commencement date of the lease as the discount rate in determining the present value of future lease payments. We determine the incremental borrowing rate for each lease by using the current yields of our uncollateralized, publicly traded debts with maturity periods similar to the respective lease term, adjusted to a collateralized basis based on third-party data. Our lease terms may include options to extend or terminate the lease when there are relevant economic incentives present that make it reasonably certain that we will exercise that option. We account for any non-lease components separately from lease components. A. ACCOUNTING POLICIES (Continued) For operating leases, lease expense for future fixed lease payments is recognized on a straight-line basis over the lease term. For finance leases, lease expense for future fixed lease payments is recognized using the effective interest rate method over the lease term. Variable lease payments are recognized as lease expense in the period incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Goodwill and Other Intangible Assets. We perform our annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We have defined our reporting units and completed the impairment testing of goodwill at the operating segment level. Our operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. We compare the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs), and requires us to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Our judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, we rely on internally generated five-year forecasts for sales and operating profits, and, currently, a two percent to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. For 2020, we utilized a weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. Based upon our assessment of the risks impacting each of our businesses, we applied a risk premium to increase the discount rate to a range of 10.0 percent to 12.0 percent for our reporting units. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized to the extent that a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit. We review our other indefinite-lived intangible assets for impairment annually in the fourth quarter, or as events occur or circumstances change that indicate the assets may be impaired without regard to the business unit. Potential impairment is identified by comparing the fair value of an other indefinite-lived intangible asset to its carrying value. We utilize a relief-from-royalty model to estimate the fair value of other indefinite-lived intangible assets. We consider the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term. We also consider the profitability of the business, among other factors, to determine the royalty rate for use in the impairment assessment. We utilize our weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2020, based upon our assessment of the risks impacting each of our businesses and the nature of the trade name, we applied a risk premium to increase the discount rate to a range of 11.0 percent to 12.5 percent for our other indefinite-lived intangible assets. While we believe that the estimates and assumptions underlying the valuation methodologies are reasonable, different estimates and assumptions could result in different outcomes. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We review our intangible assets with finite useful lives as events occur or circumstances change that would more likely than not reduce the fair value of the assets below its carrying amount. If the carrying amount of the assets is not recoverable from the undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. We evaluate the remaining useful lives of amortizable intangible assets at each reporting period to determine whether events or circumstances warrant a revision to the remaining periods of amortization. Refer to Note H for additional information regarding goodwill and other intangible assets. A. ACCOUNTING POLICIES (Continued) Acquisitions. In accordance with accounting guidance for the provisions in Financial Accounting Standards Board ("FASB") ASC 805, "Business Combinations," we allocate the purchase price of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. In addition, any contingent consideration is fair valued as of the date of the acquisition and is recorded as part of the purchase price. This estimate is updated in future periods and any changes in the estimate, which are not considered an adjustment to the purchase price, are recorded in our consolidated statements of operations. We use all available information to estimate fair values. We typically engage external valuation specialists to assist in the fair value determination of identifiable intangible assets and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain more information regarding assets acquired and liabilities assumed based on facts and circumstances that existed as of the acquisition date. Our purchase price allocation methodology contains uncertainties because it requires us to make assumptions and to apply judgment to estimate the fair value of acquired assets and assumed liabilities. We estimate the fair value of assets and liabilities based upon the carrying value of the acquired assets and assumed liabilities and widely accepted valuation techniques, including discounted cash flows. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies. Other estimates used in determining fair value include, but are not limited to, future cash flows or income related to intangibles, market rate assumptions and appropriate discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but that are inherently uncertain, and therefore, may not be realized. Accordingly, there can be no assurance that the estimates, assumptions, and values reflected in the valuations will be realized, and actual results could vary materially. Refer to Note B for additional information regarding acquisitions. Fair Value Accounting. We use derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates, and occasionally from changes in commodity costs and interest rate exposures. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value, netted by counterparty, where the right of offset exists. The gain or loss is recognized in determining current earnings during the period of the change in fair value. We currently do not have any derivative instruments for which we have designated hedge accounting. Refer to Note I for additional information regarding fair value of financial instruments. Warranty. We offer limited warranties on certain products with warranty periods ranging up to the lifetime of the product to the original consumer purchaser. At the time of sale, we accrue a warranty liability for the estimated future cost to provide products, parts or services to repair or replace products to satisfy our warranty obligations. Our estimate of future costs to service our warranty obligations is based upon the information available and includes a number of factors, such as the warranty coverage, the warranty period, historical experience specific to the nature, frequency and average cost to service the claim, along with industry and demographic trends. Certain factors and related assumptions in determining our warranty liability involve judgments and estimates and are sensitive to changes in the factors described above. We believe that the warranty accrual is appropriate; however, actual claims incurred could differ from our original estimates which would require us to adjust our previously established accruals. Refer to Note U for additional information on our warranty accrual. A significant portion of our business is at the consumer retail level through home center retailers and other major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from us. Our revenue recognition policy takes into account this type of return when recognizing revenue, and an estimate of these amounts is recorded as a deduction to net sales at the time of sale. A. ACCOUNTING POLICIES (Continued) Insurance Reserves. We provide for expenses associated with workers' compensation and product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability. Any obligations expected to be settled within 12 months are recorded in accrued liabilities; all other obligations are recorded in other liabilities . Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. Liabilities and costs associated with these matters require estimates and judgments based upon our professional knowledge and experience and that of our legal counsel. When a liability is probable of being incurred and our exposure in these matters is reasonably estimable, amounts are recorded as charges to earnings. The ultimate resolution of these exposures may differ due to subsequent developments. Stock-Based Compensation. We issue stock-based incentives in various forms to our employees and non-employee Directors. Outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units ("RSUs"), performance restricted stock units ("PRSUs") and phantom stock awards. We measure compensation expense for stock awards and RSUs at the market price of our common stock at the grant date. We measure compensation expense for stock options using a Black-Scholes option pricing model. We measure compensation expense for PRSUs at the expected payout of the awards. We recognize forfeitures related to stock awards, stock options, RSUs and PRSUs as they occur. We initially measure compensation expense for phantom stock awards at the market price of our common stock at the grant date. Phantom stock awards are linked to the value of our common stock on the date of grant and are settled in cash upon vesting. We account for phantom stock awards as liability-based awards; the liability is remeasured and adjusted at the end of each reporting period until the awards are fully-vested and paid to the employees. In December 2019, our Organization and Compensation Committee of the Board of Directors (the "Compensation Committee") amended the terms of equity awards under our 2014 Long Term Stock Incentive Plan to provide that newly issued stock options, RSUs and phantom stock awards vest over a three-year period and redefined retirement-eligibility as age 65 or age 55 with at least 10 years of continuous service. As such, compensation expense for equity awards granted in 2020 and thereafter is recognized ratably over the shorter of the vesting period, typically three years, or the length of time until the grantee becomes retirement eligible. For prior year grants, expense was recognized ratably over the shorter of the vesting period of the stock awards, stock options and phantom stock awards, typically five years, or the length of time until the grantee became retirement-eligible, generally at age 65. Expense for PRSUs is recognized ratably over the three-year vesting period of the units. Refer to Note M for additional information on stock-based compensation. Noncontrolling Interest. We owned 68 percent of Hansgrohe SE at both December 31, 2020 and 2019. The aggregate noncontrolling interest, net of dividends, at December 31, 2020 and 2019 has been recorded as a component of equity on our consolidated balance sheets. Discontinued Operations. We report financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components represents a strategic shift that will have a major effect on our operations and financial results. In our consolidated statements of cash flows, the cash flow from discontinued operations are not separately classified. Refer to Note C for further information regarding our discontinued operations. A. ACCOUNTING POLICIES (Continued) Income Taxes. Deferred taxes are recognized based on the future tax consequences of differences between the financial statement carrying value of assets and liabilities and their respective tax basis. The future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company's three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable, and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of the deferred tax assets. The current accounting guidance allows the recognition of only those income tax positions that have a greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. We believe that there is an increased potential for volatility in our effective tax rate because this threshold allows for changes in the income tax environment and, to a greater extent, the inherent complexities of income tax law in a substantial number of jurisdictions, which may affect the computation of our liability for uncertain tax positions. We record interest and penalties on our uncertain tax positions in income tax expense. The accounting guidance for income taxes requires us to allocate our provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income (loss). Subsequent adjustments to deferred taxes originally recorded to other comprehensive income (loss) may reverse in a different category of earnings, such as continuing operations, resulting in a disproportionate tax effect within accumulated other comprehensive income (loss). Generally, a disproportionate tax effect will be eliminated and recognized in income tax expense when the circumstances upon which it is premised cease to exist. The disproportionate tax effect related to various defined-benefit pension plans will be eliminated from accumulated other comprehensive income (loss) at the termination of the related pension plans. The disproportionate tax effect relating to our interest rate swap hedge, which was terminated in 2012, will be eliminated from accumulated other comprehensive income (loss) upon the maturity of the related debt in March 2022. We record the tax effects of Global Intangible Low-taxed Income related to our foreign operations as a component of income tax expense in the period the tax arises. Reclassifications. Certain prior year amounts have been reclassified to conform to the 2020 presentation in the consolidated financial statements. Recently Adopted Accounting Pronouncements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which modifies the methodology for recognizing loss impairments on certain types of financial instruments, including receivables. The new methodology requires an entity to estimate the credit losses expected over the life of an exposure. Additionally, ASU 2016-13 amends the current available-for-sale security other-than-temporary impairment model for debt securities. We adopted ASU 2016-13 and recorded a cumulative-effect adjustment to opening retained earnings on January 1, 2020. The adoption of the standard did not have a material effect on our financial position or results of operations. In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which allows for the capitalization of certain implementation costs incurred in a hosting arrangement that is a service contract. We adopted ASU 2018-15 prospectively beginning on January 1, 2020. The adoption of the standard did not have an impact on our financial position or results of operations. A. ACCOUNTING POLICIES (Concluded) In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We early adopted ASU 2019-12 on January 1, 2020. The adoption of the standard did not have an impact on our financial position or results of operations. Recently Issued Accounting Pronouncements. In January 2020, the 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. ASU 2020-01 is effective for us for annual periods beginning January 1, 2021. Early adoption is permitted. We plan to adopt this standard for annual periods beginning January 1, 2021 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance and expedients for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are elective and are effective upon issuance. As of December 31, 2020 we have not elected any of the expedients set out in ASU 2020-04. To the extent we modify a contract going forward during the transition period we would consider applying the new standard. We consider the applicability and impact of all ASUs. ASUs not listed above were assessed and determined not to be applicable. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS 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 the 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. 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 contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. The range of the undiscounted amounts we could be required to pay is between $0 and $50 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $8 million. Refer to Note I for additional information regarding the measurement 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 the 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. 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 will expand 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 the 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. On November 10, 2020, we entered into an agreement to acquire a 75.1% equity interest in Easy Sanitary Solutions B.V. ("ESS"), for approximately €45 million ($55 million) subject to working capital and other adjustments. ESS is the inventor, developer and manufacturer of Easy Drain shower channels and offers a wide range of products for barrier-free showering and bathroom wall niches. A cash payment was made to a third-party notary for $52 million on December 29, 2020 for the acquisition of this equity interest in advance of the transaction closing on January 4, 2021. The cash payment was accounted for as prepaid expenses and other in the consolidated balance sheet and included in investing cash flows for the year ended December 31, 2020. B. ACQUISITIONS (Concluded) On March 9, 2018, we acquired substantially all of the net assets of The L.D. Kichler Co. ("Kichler"), a leader in decorative residential and light commercial lighting products, ceiling fans and LED lighting systems. This business expands our product offerings to our customers. The results of this acquisition for the period from the acquisition date are included in the consolidated financial statements and are reported in the Decorative Architectural Products segment. The purchase price, net of $2 million cash acquired, consisted of $549 million paid with cash on hand. Since the acquisition, we have revised the allocation of the purchase price to identifiable assets and liabilities based on analysis of information as of the acquisition date that has been made available in the year after acquisition. The initial and final allocations of the fair value of the acquisition of Kichler is summarized in the following table, in millions. Initial Final Receivables $ 101 $ 100 Inventories 173 166 Prepaid expenses and other 5 5 Property and equipment 33 33 Goodwill 46 64 Other intangible assets 243 240 Accounts payable (24) (24) Accrued liabilities (25) (30) Other liabilities (4) (5) Total $ 548 $ 549 |
DIVESTITURES
DIVESTITURES | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURES On September 6, 2019, we completed the divestiture of our UK Window Group business ("UKWG"), a manufacturer and distributor of windows and doors, for proceeds of approximately $8 million, of which $2 million net of cash disposed was received upon sale. The remaining $6 million was accounted for as a note receivable that is expected to be collected within two years of the divestiture. In connection with the sale, we recognized a loss of $70 million for the year ended December 31, 2019, which is included in income from discontinued operations, net in the consolidated statements of operations. 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. In connection with the sale, we recognized a gain on the divestiture of $368 million for the year ended December 31, 2019, which is included in income from discontinued operations, net in the consolidated statement of operations. In 2019, we determined that the previously reported Windows and Other Specialty Products segment met the criteria to be classified as a discontinued operation as a result of the combined sale of UKWG and Milgard. These businesses represented all of our windows businesses and all remaining businesses in the Windows and Other Specialty Products segment. C. DIVESTITURES (Continued) During the second quarter of 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 consolidated statement of operations, as a gain on the divestiture of Milgard. As of December 31, 2020, we have received the $17 million in cash, which is presented in investing activities on the consolidated statement of cash flow as proceeds from disposition of businesses, net of cash disposed. All post-closing adjustments related to our divestiture of Milgard were finalized with the buyer in the second quarter 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 I for additional information. The working capital adjustment was finalized with the buyer in the second quarter of 2020, resulting in no significant changes to net proceeds. In connection with the sale, we recognized a gain on the divestiture of $585 million for the year ended December 31, 2020, which is included in income from discontinued operations, net in the consolidated statement of operations. We determined that the previously reported Cabinetry Products segment met the criteria to be classified as a discontinued operation as Cabinetry represented all of our cabinet businesses and all remaining businesses in the Cabinetry Products segment. We determined that the assets and liabilities for Cabinetry, Milgard and UKWG met the held for sale criteria in accordance with ASC 205-20, Discontinued Operations, during 2019. We ceased recording depreciation and amortization for the held for sale assets upon meeting the held for sale criteria. As the combined sale of UKWG and Milgard and the sale of Cabinetry each represented a strategic shift that will have a major effect on our operations and financial results, these businesses were presented in discontinued operations separate from continuing operations for all periods presented. In addition, depreciation and amortization, capital expenditures, and significant non-cash operating and investing activities related to discontinued operations were separately disclosed. The results of the windows businesses recorded in (loss) income from discontinued operations before income tax was income of $2 million and $40 million for the years ended December 31, 2020 and 2018, respectively and a loss of $1 million for the year ended December 31, 2019. The results of the cabinetry business recorded in (loss) income from discontinued operations before income tax was a loss of $7 million for the year ended December 31, 2020 and income of $107 million and $95 million for the years ended December 31, 2019 and 2018, respectively. The major classes of line items constituting income from discontinued operations, net, in millions: For the Years Ended December 31, 2020 2019 2018 Net sales $ 101 $ 1,528 $ 1,705 Cost of sales 78 1,184 1,343 Gross profit 23 344 362 Selling, general and administrative expenses 28 232 228 Impairment charge for goodwill (A) — 7 — Other income (expense), net — 1 1 (Loss) income from discontinued operations (5) 106 135 Gain on disposal of discontinued operations, net 602 298 — Income before income tax 597 404 135 Income tax expense (183) (108) (37) Income from discontinued operations, net $ 414 $ 296 $ 98 (A) In the first quarter of 2019, we recognized a $7 million non-cash goodwill impairment charge related to a decline in the long-term outlook of our windows and doors business in the United Kingdom. C. DIVESTITURES (Concluded) The carrying amount of major classes of assets and liabilities included as part of the Cabinetry discontinued operations and reported as held for sale, were as follows, in millions: December 31, 2019 Receivables $ 76 Prepaid expenses and other 7 Inventories 90 Property and equipment, net 157 Operating lease right-of-use assets 4 Goodwill 181 Other intangible assets, net 1 Other assets 12 Total assets classified as held for sale $ 528 Accounts payable $ 103 Accrued liabilities 46 Noncurrent operating lease liabilities 3 Other liabilities 10 Total liabilities classified as held for sale $ 162 Assets and liabilities classified as held for sale were required to be recorded at the lower of its carrying value or fair value less costs to sell. The estimated fair value less costs to sell of the held for sale businesses exceeded their carrying value, and therefore no adjustment to these long-lived assets was necessary. Other selected financial information for Cabinetry, Milgard and UKWG during the period owned by us, were as follows, in millions: For the Years Ended December 31, 2020 2019 2018 Depreciation and amortization $ — $ 29 $ 36 Capital expenditures 1 34 38 ROU assets obtained in exchange for new lease obligations — 3 — In conjunction with the divestiture of Milgard and Cabinetry, we entered into Transition Services Agreements to provide administrative services to the buyers. As of December 31, 2020, our Transition Service Agreement with Milgard and Cabinetry concluded. The fees for services rendered under each of the Transition Service Agreements were not material to our results of operations. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 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: Year Ended December 31, 2020 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,753 $ 3,052 $ 5,805 International, principally Europe 1,383 — 1,383 Total $ 4,136 $ 3,052 $ 7,188 Year Ended December 31, 2019 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,605 $ 2,723 $ 5,328 International, principally Europe 1,379 — 1,379 Total $ 3,984 $ 2,723 $ 6,707 Year Ended December 31, 2018 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,552 $ 2,656 $ 5,208 International, principally Europe 1,446 — 1,446 Total $ 3,998 $ 2,656 $ 6,654 We recognized increases to revenue o f $7 million, $2 million, and $4 million in 2020, 2019, and 2018, respectively, for variable consideration related to performance obligations settled in previous periods. We record contract assets for items for which we have satisfied our performance obligation but our receipt of payment is contingent upon delivery or other circumstances other than the passage of time. Our contract assets are recorded in prepaid expenses and other in our consolidated balance sheets. Our contract assets generally become unconditional and are reclassified to receivables in the quarter subsequent to each balance sheet date. Our contract asset balance was $2 million at both December 31, 2020 and 2019. We record contract liabilities primarily for deferred revenue. Our contract liabilities are recorded in accrued liabilities in our consolidated balance sheets. Our contract liabilities are generally recognized to net sales in the immediately subsequent reporting period. Our contract liability balance was $62 million and $40 million at December 31, 2020 and 2019, respectively. Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Year Ended Balance at January 1 (after adopting ASU 2016-13) $ 5 Provision for expected credit losses during the period 3 Write-offs charged against the allowance (2) Recoveries of amounts previously written off 1 Balance at end of year $ 7 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES (In Millions) At December 31 2020 2019 Finished goods $ 552 $ 485 Raw materials 242 211 Work in process 82 58 Total $ 876 $ 754 Inventories, which include purchased parts, materials, direct labor and applied overhead, are stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We have operating and finance leases primarily for corporate offices, manufacturing facilities, warehouses, vehicles, and equipment. Our leases have remaining lease terms up to 22 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 20 years, and some of which may include options to terminate the leases prior to their expiration. The components of lease cost included in income from continuing operations were as follows, in millions: 2020 2019 Operating lease cost $ 47 $ 49 Short-term lease cost 7 6 Variable lease cost 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 Interest on lease liabilities 1 1 Supplemental cash flow information related to leases was as follows, in millions 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 58 Operating cash flows for finance leases 1 1 Financing cash flows for finance leases 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 27 27 Finance leases — — ______________________________ (A) Includes $9 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Kraus and Work Tools in the fourth quarter of 2020. F. LEASES (Concluded) Certain other information related to leases was as follows: At December 31 2020 2019 Weighted-average remaining lease term: Operating leases 10 years 10 years Finance leases 10 years 11 years Weighted-average discount rate: Operating leases 4.4 % 4.6 % Finance leases 3.3 % 3.4 % Supplemental balance sheet information related to leases was as follows, in millions: At December 31, 2020 At December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 27 $ — $ 29 Notes payable — 2 — 2 Accrued liabilities 39 — 38 — Long-term debt — 26 — 28 Gross ROU assets under finance leases recorded within property and equipment, net were $42 million at both December 31, 2020 and 2019, and accumulated amortization associated with these leases was $15 million and $13 million, at December 31, 2020 and 2019, respectively. At December 31, 2020, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2021 $ 46 $ 3 2022 37 3 2023 27 3 2024 20 4 2025 16 4 Thereafter 89 16 Total lease payments 235 33 Less: imputed interest (47) (5) Total $ 188 $ 28 Rental expense (under ASC 840) recorded in the consolidated statement of operations totaled approximately $63 million during 2018. |
LEASES | LEASES We have operating and finance leases primarily for corporate offices, manufacturing facilities, warehouses, vehicles, and equipment. Our leases have remaining lease terms up to 22 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 20 years, and some of which may include options to terminate the leases prior to their expiration. The components of lease cost included in income from continuing operations were as follows, in millions: 2020 2019 Operating lease cost $ 47 $ 49 Short-term lease cost 7 6 Variable lease cost 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 Interest on lease liabilities 1 1 Supplemental cash flow information related to leases was as follows, in millions 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 58 Operating cash flows for finance leases 1 1 Financing cash flows for finance leases 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 27 27 Finance leases — — ______________________________ (A) Includes $9 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Kraus and Work Tools in the fourth quarter of 2020. F. LEASES (Concluded) Certain other information related to leases was as follows: At December 31 2020 2019 Weighted-average remaining lease term: Operating leases 10 years 10 years Finance leases 10 years 11 years Weighted-average discount rate: Operating leases 4.4 % 4.6 % Finance leases 3.3 % 3.4 % Supplemental balance sheet information related to leases was as follows, in millions: At December 31, 2020 At December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 27 $ — $ 29 Notes payable — 2 — 2 Accrued liabilities 39 — 38 — Long-term debt — 26 — 28 Gross ROU assets under finance leases recorded within property and equipment, net were $42 million at both December 31, 2020 and 2019, and accumulated amortization associated with these leases was $15 million and $13 million, at December 31, 2020 and 2019, respectively. At December 31, 2020, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2021 $ 46 $ 3 2022 37 3 2023 27 3 2024 20 4 2025 16 4 Thereafter 89 16 Total lease payments 235 33 Less: imputed interest (47) (5) Total $ 188 $ 28 Rental expense (under ASC 840) recorded in the consolidated statement of operations totaled approximately $63 million during 2018. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT (In Millions) At December 31 2020 2019 Land and improvements $ 66 $ 64 Buildings 522 497 Computer hardware and software 249 232 Machinery and equipment 1,184 1,103 2,021 1,896 Less: Accumulated depreciation (1,113) (1,018) Total $ 908 $ 878 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill, by segment, were as follows, in millions: Gross Goodwill At December 31, 2020 Accumulated Net Goodwill At December 31, 2020 Plumbing Products $ 613 $ (340) $ 273 Decorative Architectural Products 365 (75) 290 Total $ 978 $ (415) $ 563 Gross Goodwill At December 31, 2019 Accumulated Net Goodwill At December 31, 2019 Acquisitions Other (A) Net Goodwill At December 31, 2020 Plumbing Products $ 566 $ (340) $ 226 $ 34 $ 13 $ 273 Decorative Architectural Products 358 (75) 283 7 — 290 Total $ 924 $ (415) $ 509 $ 41 $ 13 $ 563 Gross Goodwill At December 31, 2018 Accumulated Net Goodwill At December 31, 2018 Acquisitions Other (A) Net Goodwill At December 31, 2019 Plumbing Products $ 568 $ (340) $ 228 $ — $ (2) $ 226 Decorative Architectural Products 358 (75) 283 — — 283 Total $ 926 $ (415) $ 511 $ — $ (2) $ 509 ______________________________ (A) Other consists of the effect of foreign currency translation. Other indefinite-lived intangible assets were $109 million and $76 million at December 31, 2020 and 2019, respectively, and principally included registered trademarks. As a result of our 2020 acquisitions, other indefinite-lived intangible assets increased by $32 million as of the acquisition dates. During the first quarter of 2019, we recognized a $9 million impairment charge related to a registered trademark in our Decorative Architectural Products segment due to a change in the long-term net sales projections of lighting products. We completed our annual impairment testing of goodwill and other indefinite-lived intangible assets in the fourth quarters of 2020, 2019 and 2018. There was no impairment of goodwill for any of our reporting units or of our other indefinite-lived intangible assets in any of these years, other than as disclosed above. The carrying value of our definite-lived intangible assets wa s $248 million (net of accumulated amortization o f $73 million) at December 31, 2020 and $183 million (net of accumulated amortization of $48 million) at December 31, 2019 and principally included customer relationships with a weighted average amortization period of 15 years in 2020 and 17 years in 2019. Amortization expense, including discontinued operations, related to the definite-lived intangible assets wa s $24 million, $23 million and $20 million in 2020, 2019 and 2018, respectively. As a result of our 2020 acquisitions, definite-lived intangible assets increased by $86 million, as of the acquisition dates. At December 31, 2020, amortization expense related to the definite-lived intangible assets during each of the next five years was as follows: 2021 – $27 million; 2022 – $23 million; 2023 – $22 million, 2024 – $22 million and 2025 –$17 million. |
FAIR VALUE OF FINANCIAL INVESTM
FAIR VALUE OF FINANCIAL INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INVESTMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Preferred Stock of ACProducts Holding, Inc. 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. The preferred stock has a coupon of 8 percent until the first anniversary of issuance, 9 percent after the first anniversary and until the second anniversary of issuance, and 10 percent after the second anniversary of issuance and until the seventh anniversary of issuance. After which, the rate will increase by 50 basis points up to a maximum of 15 percent for each annual period occurring during and after the seventh anniversary until all shares have been redeemed in full. We do not have the ability to exercise significant influence, and the fair value of the preferred stock is not readily available. We elected to measure this investment at cost (less impairment, if any) adjusted for observable price changes in orderly transactions for the 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. The fair value of the preferred stock was measured on a non-recurring basis, and estimated using discounted cash flow and option pricing models (Level 3 inputs). The significant unobservable inputs used to value the preferred stock included: time to exit (deemed maturity) since the preferred stock is not mandatorily redeemable, discount rate used to determine the present value of expected cash flows, which included the spread on company specific debt and the risk-free rate of return, the liquidation preference and the coupon rate. On the date of acquisition, the fair value of this investment was determined to be $136 million and was included in other assets in our consolidated balance sheet. Dividends earned on this investment are included within other income (expense), net in our consolidated statement of operations with a corresponding increase to our basis in the investment. We had dividend income of $10 million for the year ended December 31, 2020. As such, the preferred stock was reported at the carrying value of $146 million in other assets in our 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 for the Kraus acquisition. The fair value of the liability was estimated to be $8 million as of December 31, 2020, the acquisition date, 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. This amount was included within the purchase consideration and will be remeasured at fair value as of each reporting date until the obligation is settled. 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. Any subsequent remeasurement of the estimate will be recorded in other, net within other income (expense), net in the consolidated statement of operations. 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 December 31, 2020 was approximately $3.3 billion, compared with the aggregate carrying value of $2.8 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2019 was approximately $3.0 billion, compared with the aggregate carrying value of $2.8 billion. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS (In Millions) At December 31 2020 2019 Preferred stock of ACProducts Holding, Inc. (Note I) $ 146 $ — Equity method investments 11 11 In-store displays, net 1 5 Deferred tax assets (Note S) 109 99 Other 27 24 Total $ 294 $ 139 We recognized amortization expense, including discontinued operations, related to in-store displays of $2 million, $12 million and $21 million in 2020, 2019 and 2018, respectively. Cash spent for displays was $11 million and $10 million in 2019 and 2018, respectively, and is included in other, net within investing activities on the consolidated statements of cash flows. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES (In Millions) At December 31 2020 2019 Salaries, wages and commissions $ 193 $ 141 Advertising and sales promotion 293 189 Interest 35 36 Warranty (Note U) 34 31 Employee retirement plans 182 41 Insurance reserves 29 37 Property, payroll and other taxes 32 18 Dividends payable 36 37 Deferred revenue 62 40 Product returns 23 25 Operating lease liabilities (Note F) 39 38 Other 80 67 Total $ 1,038 $ 700 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT (In Millions) 2020 2019 Notes and debentures: 3.500%, due April 1, 2021 $ — $ 399 5.950%, due March 15, 2022 326 326 4.450%, due April 1, 2025 500 500 4.375%, due April 1, 2026 498 498 3.500%, due November 15, 2027 300 300 7.750%, due August 1, 2029 235 235 2.000%, due October 1, 2030 300 — 6.500%, due August 15, 2032 200 200 4.500%, due May 15, 2047 418 299 Other 33 30 Prepaid debt issuance costs (15) (14) 2,795 2,773 Less: Current portion 3 2 Total long-term debt $ 2,792 $ 2,771 All of the notes and debentures above are senior indebtedness and, other than the 7.75% Notes due 2029, are redeemable at our option. On September 18, 2020, we issued $300 million of 2.0% 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 4.5% 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 formed a single series with the existing $300 million of 4.5% 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 $400 million of our 3.5% 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 in our consolidated statement of operations. On December 19, 2019, proceeds from the UKWG and Milgard divestitures were used to repay and early retire $201 million of our 7.125% Notes due March 15, 2020. In connection with this early retirement, we incurred a loss on debt extinguishment of $2 million for the year ended December 31, 2019, which was recorded as interest expense in our consolidated statement of operations. On April 16, 2018, we repaid and retired all of our $114 million, 6.625% Notes on the scheduled repayment date. 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. Upon entry into the Credit Agreement, our credit agreement dated March 28, 2013, as amended, with an aggregate commitment of $750 million, was terminated. 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 December 31, 2020, we had no outstanding standby letters of credit under the Credit Agreement. L. DEBT (Concluded) 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 December 31, 2020. At December 31, 2020, the debt maturities during each of the next five years were as follows: 2021 – $3 million; 2022– $334 million; 2023 – $3 million; 2024 – $3 million and 2025 – $503 million. Interest paid was $136 million , $157 million and $155 million in 2020, 2019 and 2018, respectively. These amounts exclude $5 million and $2 million of debt extinguishment costs related to the early retirement of debt, which were recorded as interest expense and paid in 2020 and 2019, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Our 2014 Long Term Stock Incentive Plan (the "2014 Plan") provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At December 31, 2020, 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 (income) included in income from continuing operations for these stock-based incentives was as follows, in millions: 2020 2019 2018 Long-term stock awards $ 14 $ 20 $ 20 Stock options 7 4 3 Restricted stock units 13 — — Performance restricted stock units 5 3 4 Phantom stock awards and stock appreciation rights 4 4 (2) Total $ 43 $ 31 $ 25 At December 31, 2020, 13.4 million shares of our common stock were available under the 2014 Plan for the granting of long-term stock awards, stock options, restricted stock units and performance restricted stock units. M. STOCK-BASED COMPENSATION (Continued) Long-Term Stock Awards. Prior to the amendment of our 2014 Plan in December 2019, we granted long-term stock awards 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 did not grant shares of long-term stock awards during 2020. Our long-term stock award activity was as follows, shares in millions: 2020 2019 2018 Unvested stock award shares at January 1 2 2 3 Weighted average grant date fair value $ 34 $ 30 $ 24 Stock award shares granted — 1 1 Weighted average grant date fair value $ — $ 36 $ 41 Stock award shares vested 1 1 2 Weighted average grant date fair value $ 32 $ 25 $ 21 Stock award shares forfeited — — — Weighted average grant date fair value $ 35 $ 35 $ 31 Unvested stock award shares at December 31 1 2 2 Weighted average grant date fair value $ 36 $ 34 $ 30 At December 31, 2020, 2019 and 2018, there was $21 million, $41 million and $46 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 December 31, 2020 and three years at both December 31, 2019 and 2018. The total market value (at the vesting date) of stock award shares which vested during both 2020 and 2019 was $31 million and during 2018 was $56 million. M. STOCK-BASED COMPENSATION (Continued) Stock Options. Stock options are granted to certain key employees. The exercise price equals the market price of our common stock at the grant date and expire no later than 10 years after the grant date. We granted 420,840 shares of stock options during 2020 with a grant date weighted-average exercise price of approximately $48 per share. During 2020, 60,838 stock option shares were forfeited (including options that expired unexercised). Our stock option activity was as follows, shares in millions: 2020 2019 2018 Option shares outstanding, January 1 3 4 5 Weighted average exercise price $ 27 $ 21 $ 16 Option shares granted 1 1 — Weighted average exercise price $ 48 $ 36 $ 42 Option shares exercised 2 2 1 Aggregate intrinsic value on date of exercise (A) $ 29 million $ 33 million $ 55 million Weighted average exercise price $ 17 $ 13 $ 11 Option shares forfeited — — — Weighted average exercise price $ 40 $ 34 $ 31 Option shares outstanding, December 31 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Weighted average remaining option term (in years) 6 6 5 Option shares vested and expected to vest, December 31 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Aggregate intrinsic value (A) $ 51 million $ 63 million $ 36 million Weighted average remaining option term (in years) 6 6 5 Option shares exercisable (vested), December 31 1 2 3 Weighted average exercise price $ 28 $ 21 $ 16 Aggregate intrinsic value (A) $ 35 million $ 47 million $ 34 million Weighted average remaining option term (in years) 5 4 4 ______________________________ (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 December 31, 2020, 2019 and 2018, there was $6 million, $9 million and $8 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 at December 31, 2020 and three years at both December 31, 2019 and 2018. 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: 2020 2019 2018 Weighted average grant date fair value $ 10.67 $ 8.81 $ 12.34 Risk-free interest rate 1.53 % 2.57 % 2.72 % Dividend yield 1.14 % 1.35 % 1.02 % Volatility factor 24.00 % 25.00 % 29.00 % Expected option life 6 years 6 years 6 years M. STOCK-BASED COMPENSATION (Concluded) The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2020, shares in millions: Option Shares Outstanding Option Shares Exercisable Range of Number of Weighted Weighted Number of Weighted $ 10 - 18 — 2 years $18 — $18 $ 19 - 34 1 5 years $26 1 $25 $ 35 - 48 1 8 years $41 — $39 $ 10 - 48 2 6 years $33 1 $28 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. The grant date fair value is based on the fair value of our common stock. We granted 445,670 restricted stock units during 2020 with a weighted average grant date fair value of $47 per share. In 2020, 11,100 restricted stock units were forfeited. At December 31, 2020, there was $7 million of unrecognized compensation expense related to unvested restricted stock units; such units had a weighted average remaining vesting period of two years. 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 return on invested capital performance goals, and beginning with the 2020 grant, an additional earning per share metric over a three-year period that have been established by our Compensation Committee for the performance period. To receive the award, the recipient must be employed through the share award date. Performance restricted stock units are granted at a target number; based on our performance, the number of performance restricted stock units that vest can be adjusted downward to zero and upward to a maximum of 200% of the target number. During 2020, we granted 133,390 performance restricted stock units with a grant date fair value of approximately $34 per share, 151,724 performance restricted stock units were issued and 10,680 performance restricted stock units were forfeited. At December 31, 2020, there were 102,990 shares vested, but unissued. During 2019, we granted 126,680 performance restricted stock units with a grant date fair value of approximately $39 per share, and 15,600 performance restricted stock units were forfeited. During 2018, we granted 113,260 performance restricted stock units with a grant date fair value of approximately $42 per share, and 11,600 performance restricted stock units were forfeited. Phantom Stock Awards and Stock Appreciation Rights. Certain non-U.S. employees are granted phantom stock awards and historically have been granted SARs. We recognized expense of $4 million in both 2020 and 2019, and income of $1 million in 2018 related to phantom stock awards. In 2020, 2019 and 2018, we granted 82,630, 79,500, and 98,140 shares, respectively, of phantom stock awards with an aggregate fair value of $3 million in both 2020 and 2019 and $4 million in 2018, and paid cash of $3 million in both 2020 and 2019, and $6 million in 2018 to settle phantom stock awards. Information related to phantom stock awards was as follows, in millions: At December 31, 2020 2019 Accrued compensation cost liability $ 6 $ 5 Unrecognized compensation cost $ 4 $ 3 Equivalent common shares — — We recognized income of $1 million in 2018 related to SARs. During 2020, 2019 and 2018, we did not grant any SARs. We paid cash of $2 million, and $5 million in 2019, and 2018, respectively, to settle SARs. At December 31, 2020 and 2019, there were no outstanding SARs. |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLANS | EMPLOYEE RETIREMENT PLANS We sponsor qualified defined-benefit and defined-contribution retirement plans for most of our employees. In addition to our qualified defined-benefit pension plans, we have unfunded non-qualified defined-benefit pension plans covering certain employees and former employees, which provide for benefits in addition to those provided by the qualified pension plans. Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Compensation Committee. Pre-tax expense included in income from continuing operations related to our retirement plans was as follows, in millions: 2020 2019 2018 Defined-contribution plans $ 46 $ 40 $ 37 Defined-benefit pension plans 38 24 17 $ 84 $ 64 $ 54 As of January 1, 2010, substantially all 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 a resolution to terminate our qualified domestic defined-benefit pension plans. As a result of this decision, the projected benefit obligations for these plans were increased to reflect the incremental cost to terminate the plans. Changes in the projected benefit obligation and fair value of plan assets, and the funded status of our defined-benefit pension plans were as follows, in millions: 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Changes in projected benefit obligation: Projected benefit obligation at January 1 $ 1,034 $ 161 $ 896 $ 155 Service cost 3 — 3 — Interest cost 23 5 33 6 Actuarial loss, net 85 10 149 13 Foreign currency exchange 18 — (3) — Benefit payments (45) (13) (44) (13) Divestitures — (1) — — Projected benefit obligation at December 31 $ 1,118 $ 162 $ 1,034 $ 161 Changes in fair value of plan assets: Fair value of plan assets at January 1 $ 780 $ — $ 670 $ — Actual return on plan assets 67 — 105 — Foreign currency exchange 8 — (1) — Company contributions 57 13 56 13 Expenses, other (4) — (6) — Benefit payments (45) (13) (44) (13) Fair value of plan assets at December 31 $ 863 $ — $ 780 $ — Funded status at December 31 $ (255) $ (162) $ (254) $ (161) N. EMPLOYEE RETIREMENT PLANS (Continued) Amounts in our consolidated balance sheets were as follows, in millions: At December 31, 2020 At December 31, 2019 Qualified Non-Qualified Qualified Non-Qualified Other assets $ 1 $ — $ 1 $ — Accrued liabilities (A) (135) (12) (1) (13) Other liabilities (A) (121) (150) (254) (148) Total net liability $ (255) $ (162) $ (254) $ (161) ______________________________ (A) As a result of the planned termination of the qualified domestic defined-benefit pension plans in 2021, the liabilities associated with these plans have been reported as current liabilities at December 31, 2020. Unrealized loss included in accumulated other comprehensive loss before income taxes was as follows, in millions: At December 31, 2020 At December 31, 2019 Qualified Non-Qualified Qualified Non-Qualified Net loss $ 540 $ 65 $ 520 $ 57 Net prior service cost 3 — 4 — Total $ 543 $ 65 $ 524 $ 57 Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions: At December 31 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Projected benefit obligation $ 1,100 $ 162 $ 1,019 $ 161 Accumulated benefit obligation 1,100 162 1,019 161 Fair value of plan assets 844 — 763 — The projected benefit obligation was in excess of plan assets for all of our qualified defined-benefit pension plans at December 31, 2020 and 2019 which had an accumulated benefit obligation in excess of plan assets. Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other income (expense), net, in our consolidated statement of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 2020 2019 2018 Qualified Non-Qualified Qualified Non-Qualified Qualified Non-Qualified Service cost $ 3 $ — $ 3 $ — $ 3 $ — Interest cost 28 5 39 6 36 6 Expected return on plan assets (24) — (44) — (48) — Recognized prior service cost 1 — — — — — Recognized net loss 22 3 18 2 17 3 Net periodic pension cost $ 30 $ 8 $ 16 $ 8 $ 8 $ 9 N. EMPLOYEE RETIREMENT PLANS (Continued) We expect to recognize $464 million of pre-tax net loss from accumulated other comprehensive loss into net periodic pension cost in 2021 related to our defined-benefit pension plans. This includes the full recognition of accumulated actuarial losses for our qualified domestic defined-benefit pension plans upon its expected termination. For plans in which almost all of the plan's participants are inactive, pre-tax net loss within accumulated other comprehensive loss is amortized using the straight-line method over the remaining life expectancy of the inactive plan participants. For plans which do not have almost all inactive participants, pre-tax net loss within accumulated other comprehensive loss is amortized using the straight-line method over the average remaining service period of the active employees expected to receive benefits from the plan. Plan Assets. Our qualified defined-benefit pension plan weighted average asset allocation, which is based upon fair value, was as follows: 2020 2019 Equity securities 15 % 41 % Debt securities 49 % 54 % Other 36 % 5 % Total 100 % 100 % For our qualified defined-benefit pension plans, we have adopted accounting guidance that defines fair value, establishes a framework for measuring fair value and prescribes disclosures about fair value measurements. Accounting guidance defines fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2020 compared to December 31, 2019. Common and Preferred Stocks and Short-Term and Other Investments: Valued at the closing price reported on the active market on which the individual securities are traded or based on the active market for similar securities. Certain investments are valued based on net asset value ("NAV"), which approximates fair value. Such basis is determined by referencing the respective fund's underlying assets. There are no unfunded commitments or other restrictions associated with these investments. Private Equity and Hedge Funds: Valued based on an estimated fair value using either a market approach or an income approach, both of which require a significant degree of judgment. There is no active trading market for these investments and they are generally illiquid. Due to the significant unobservable inputs, the fair value measurements used to estimate fair value are a Level 3 input. Corporate, Government and Other Debt Securities: Valued based on either the closing price reported on the active market on which the individual securities are traded or using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Certain investments are valued based on NAV, which approximates fair value. Such basis is determined by referencing the respective fund's underlying assets. There are no unfunded commitments or other restrictions associated with these investments. Common Collective Trust Fund: Valued based on an amortized cost basis, which approximates fair value. Such basis is determined by reference to the respective fund's underlying assets, which are primarily cash equivalents. There are no unfunded commitments or other restrictions associated with this fund. Buy-in Annuity: Valued based on the associated benefit obligation for which the buy-in annuity covers the benefits, which approximates fair value. Such basis is determined based on various assumptions, including the discount rate, long-term rate of return on plan assets and mortality rate. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. N. EMPLOYEE RETIREMENT PLANS (Continued) The following tables set forth, by level within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2020 and 2019, as well as those valued at NAV using the practical expedient, which approximates fair value, in millions. At December 31, 2020 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 26 $ — $ — $ 87 $ 113 International 15 — — — 15 Private Equity and Hedge Funds – International — — 1 — 1 Corporate Debt Securities: United States — 143 — — 143 International — 23 — — 23 Government and Other Debt Securities: United States — 214 — — 214 International — 46 — — 46 Common Collective Trust Fund – United States — 292 — — 292 Buy-in Annuity - International — 14 — — 14 Short-Term and Other Investments – International 2 — — — 2 Total Plan Assets $ 43 $ 732 $ 1 $ 87 $ 863 At December 31, 2019 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 85 $ — $ — $ 82 $ 167 International 47 — — 110 157 Private Equity and Hedge Funds: United States — — 2 — 2 International — — 17 — 17 Corporate Debt Securities: United States 74 — — 124 198 International — 1 — — 1 Government and Other Debt Securities: United States — 3 — 148 151 International 29 38 — — 67 Common Collective Trust Fund – United States — 4 — — 4 Buy-in Annuity - International — 12 — — 12 Short-Term and Other Investments: United States 2 — — — 2 International 2 — — — 2 Total Plan Assets $ 239 $ 58 $ 19 $ 464 $ 780 N. EMPLOYEE RETIREMENT PLANS (Continued) Changes in the fair value of the qualified defined-benefit pension plan Level 3 assets, were as follows, in millions: 2020 2019 Fair Value, January 1 $ 19 $ 59 Purchases — 4 Sales (18) (41) Unrealized losses — (3) Fair Value, December 31 $ 1 $ 19 Assumptions. Weighted average major assumptions used in accounting for our defined-benefit pension plans were as follows: 2020 2019 2018 Discount rate for obligations 1.70 % 2.50 % 3.80 % Expected return on plan assets 2.00 % 3.00 % 7.00 % Rate of compensation increase — % — % — % Discount rate for net periodic pension cost 2.50 % 3.80 % 3.30 % The discount rate for obligations for 2020, 2019 and 2018 is based primarily upon the expected duration of each defined-benefit pension plan's liabilities matched to the December 31, 2020, 2019 and 2018 Willis Towers Watson Rate Link Curve. At December 31, 2020, such rates for our defined-benefit pension plans ranged from 0.7 percent to 2.1 percent, with the most significant portion of the liabilities having a discount rate for obligations of 1.6 percent or higher. At December 31, 2019, such rates for our defined-benefit pension plans ranged from 1.1 percent to 3.0 percent, with the most significant portion of the liabilities having a discount rate for obligations of 2.4 percent or higher. At December 31, 2018, such rates for our defined‑benefit pension plans ranged from 1.5 percent to 4.2 percent, with the most significant portion of the liabilities having a discount rate for obligations of 4.1 percent or higher. The decrease in the weighted average discount rate from 2019 to 2020 is principally due to lower long-term interest rates in the bond markets. The decrease in the weighted average discount rate from 2018 to 2019 is principally the corresponding cost to terminate the domestic qualified defined-benefit pension plans, as well as, lower long-term interest rates in the bond markets. For 2020, we chose to set the expected long-term rate of return on plan assets equal to the discount rate for each domestic qualified defined-benefit pension plan, net of investment fees but not administrative expenses. The discount rate approximated the long-term expected rate of return provided by our investment consultants as a result of the decision to terminate these plans in 2021 and the plan assets comprised mostly of fixed income and cash. For 2020 our weighted average projected long-term rate of return on plan assets for the foreign qualified defined-benefit pension plans was 2.9 percent. For 2019 and 2018, our projected long-term rate of return on plan assets were 3.00 percent and 7.00 percent, respectively. The actual annual rate of return on our pension plan assets was positive 9.7 percent, positive 17.7 percent and negative 4.9 percent in 2020, 2019 and 2018, respectively. For the 10-year period ended December 31, 2020, the actual annual rate of return on our pension plan assets was 7.2 percent. The investment objectives seek to minimize the volatility of the value of our plan assets relative to pension liabilities and to ensure plan assets are sufficient to pay plan benefits. In 2020, we made substantial progress toward achieving our targeted asset allocation: 60 percent fixed-income and 40 percent cash, as we prepare to distribute funds for the upcoming settlement of the qualified domestic defined-benefit pension plans. In the first quarter of 2021 we anticipate that a lump sum payment window will open and following that any remaining liabilities of the plan are anticipated to be transferred to an insurer through the purchase of an annuity contract by a third party administrator. N. EMPLOYEE RETIREMENT PLANS (Concluded) The asset allocation of the investment portfolio was developed with the objective of achieving our expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits. The fixed-income portfolio is invested in corporate bonds, bond index funds and U.S. Treasury securities. Although we would expect alternative investments to yield a higher rate of return than the targeted overall long-term return, these investments are subject to greater volatility and would be less liquid than financial instruments that trade on public markets. As such, and as a result of the decision to terminate the domestic qualified defined-benefit pension plans, we sold most of our alternative investments. The fair value of our plan assets is subject to risk including significant concentrations of risk in our plan assets related to equity, interest rate and operating risk. In order to ensure plan assets are sufficient to pay benefits, a portion of our foreign qualified plans' assets are allocated to equity investments that are expected, over time, to earn higher returns with more volatility than fixed-income investments which more closely match pension liabilities. Within equity, risk is mitigated by targeting a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. In order to minimize asset volatility relative to the liabilities, a significant portion of plan assets are allocated to fixed-income investments that are exposed to interest rate risk. Rate increases generally will result in a decline in fixed-income assets, while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Potential events or circumstances that could have a negative effect on estimated fair value include the risks of inadequate diversification and other operating risks. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight, plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance and audit reviews to ensure adherence to these policies. In addition, we periodically seek the input of our independent advisor to ensure the investment policy is appropriate. Other. We sponsor certain post-retirement benefit plans that provide medical, dental and life insurance coverage for eligible retirees and dependents based upon age and length of service. Substantially all of these plans were frozen as of January 1, 2010. The aggregate present value of the unfunded accumulated post-retirement benefit obligation was $10 million at both December 31, 2020 and 2019. Cash Flows. At December 31, 2020, we expect to contribute approximately $140 million to our domestic qualified defined-benefit pension plans in 2021, which will exceed ERISA requirements and effectively settle these plans. We also expect to contribute approximately $1 million and $12 million in 2021 to our foreign and non-qualified (domestic) defined-benefit pension plans, respectively. At December 31, 2020, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to our defined-benefit pension plans, were as follows, in millions: Qualified Non-Qualified 2021 (A) $ 895 $ 12 2022 5 12 2023 6 12 2024 6 12 2025 6 12 2026 - 2030 38 50 _______________________ (A) The qualified benefit payments include the projected benefit obligations of the qualified domestic defined-benefit pension plans we plan to settle in 2021. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY In September 2019, 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. During 2020, we repurchased and retired 18.8 million shares of our common stock (including 0.4 million shares to offset the dilutive impact of restricted stock units granted in 2020), for cash aggregating $727 million. At December 31, 2020, we had $774 million remaining under the 2019 authorization. Our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion shares of our common stock in open-market transactions or otherwise, effective February 10, 2021, replacing the 2019 authorization. During 2019, we repurchased and retired 20.1 million shares of our common stock (including 0.6 million shares to offset the dilutive impact of long-term stock awards granted in 2019) for cash aggregating $896 million. During 2018, we repurchased and retired 18.6 million shares of our common stock (including 0.7 million shares to offset the dilutive impact of long-term stock awards granted in 2018) for cash aggregating $654 million. On the basis of amounts paid (declared), cash dividends per common share were $0.545 ($0.550) in 2020, $0.495 ($0.510) in 2019 and $0.435 ($0.450) in 2018. Accumulated Other Comprehensive Loss. The components of accumulated other comprehensive loss attributable to Masco Corporation were as follows, in millions: At December 31 2020 2019 Cumulative translation adjustments, net $ 325 $ 273 Unrealized loss on interest rate swaps, net (7) (8) Unrecognized net loss and prior service cost, net (460) (444) Accumulated other comprehensive loss $ (142) $ (179) |
RECLASSIFICATIONS FROM OTHER CO
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) | RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE LOSS The reclassifications from accumulated other comprehensive loss to the consolidated statements of operations were as follows, in millions: Accumulated Other Comprehensive Loss 2020 2019 2018 Statement of Operations Line Item Amortization of defined-benefit pension and other post-retirement benefits: Actuarial losses, net and prior service cost $ 26 $ 20 $ 20 Other income (expense), net Tax (benefit) (7) (5) (5) Net of tax $ 19 $ 15 $ 15 Interest rate swaps $ 2 $ 2 $ 2 Interest expense Tax (benefit) (1) — — Net of tax $ 1 $ 2 $ 2 In addition to the above amounts, we reclassified $9 million of deferred currency translation losses from accumulated other comprehensive loss to the consolidated statement of operations in conjunction with the liquidation of certain UK dormant entities upon receiving final regulatory approval in 2020. Additionally, we reclassified $14 million of deferred currency translation losses from accumulated other comprehensive loss to the consolidated statement of operations in conjunction with the disposition of UKWG in September 2019. In addition, as of March 31, 2018, we adopted ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." As a result of the adoption, we reclassified $59 million of the disproportionate tax benefit related to various defined-benefit plans from accumulated other comprehensive loss to retained earnings (deficit). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our reportable segments are as follows: Plumbing Products – principally includes faucets, plumbing system components and valves, showerheads and handheld showers, bath hardware and accessories, bath units, tubs and shower bases and enclosures, sinks, toilets, spas, exercise pools and fitness systems and water handling systems. Decorative Architectural Products – principally includes paints and other coating products, paint applicators and accessories, lighting fixtures, ceiling fans, landscape lighting and LED lighting systems, and cabinet and other hardware. The above products are sold to the residential repair and remodel and to a lesser extent the new home construction markets through home center retailers, online retailers, wholesalers and distributors, mass merchandisers, hardware stores, direct to the consumer and homebuilders. Our operations are principally located in North America and Europe. Our country of domicile is the United States of America. Other than those assets specifically identified within a segment, corporate assets consist primarily of property and equipment, right-of-use assets, deferred tax assets, cash and cash investments and other investments. Our segments are based upon similarities in products and represent the aggregation of operating units, for which financial information is regularly evaluated by our corporate operating executive in determining resource allocation and assessing performance, and is periodically reviewed by the Board of Directors. Accounting policies for the segments are the same as those for us. We primarily evaluate performance based upon operating profit and, other than general corporate expense, allocate specific corporate overhead to each segment. As described in Note C, our previously reported Windows and Other Specialty Products as well as Cabinetry Products segments were classified as discontinued operations in 2019. Q. SEGMENT INFORMATION (Concluded) Information by segment and geographic area was as follows, in millions: Net Sales (1)(2)(3)(4) Operating Profit Assets at 2020 2019 2018 2020 2019 2018 2020 2019 2018 Our operations by segment were: Plumbing Products $ 4,136 $ 3,984 $ 3,998 $ 806 $ 708 $ 715 $ 2,822 $ 2,375 $ 2,253 Decorative Architectural Products 3,052 2,723 2,656 583 480 456 1,633 1,526 1,534 Total $ 7,188 $ 6,707 $ 6,654 $ 1,389 $ 1,188 $ 1,171 $ 4,455 $ 3,901 $ 3,787 Our operations by geographic area were: North America $ 5,805 $ 5,328 $ 5,208 $ 1,167 $ 987 $ 954 $ 3,101 $ 2,785 $ 2,729 International, principally Europe 1,383 1,379 1,446 222 201 217 1,354 1,116 1,058 Total, as above $ 7,188 $ 6,707 $ 6,654 1,389 1,188 1,171 4,455 3,901 3,787 General corporate expense, net (5) (94) (100) (94) Operating profit, as reported 1,295 1,088 1,077 Other income (expense), net (164) (174) (170) Income from continuing operations before income taxes $ 1,131 $ 914 $ 907 Corporate assets 1,322 598 411 Assets held for sale — 528 1,195 Total assets $ 5,777 $ 5,027 $ 5,393 Property Additions (7) Depreciation and 2020 2019 2018 2020 2019 2018 Our operations by segment were: Plumbing Products $ 86 $ 108 $ 120 $ 84 $ 80 $ 77 Decorative Architectural Products 25 18 54 41 41 35 111 126 174 125 121 112 Unallocated amounts, principally related to corporate assets 2 2 7 8 9 8 Discontinued operations 1 34 38 — 29 36 Total $ 114 $ 162 $ 219 $ 133 $ 159 $ 156 ______________________________ (1) Included in net sales were export sales from the U.S. of $274 million, $244 million and $237 million in 2020, 2019 and 2018, respectively. (2) Excluded from net sales were intra-company sales between segments of less than one percent in 2020, 2019 and 2018. (3) Included in net sales were sales to one customer of $2,812 million, $2,481 million and $2,457 million in 2020, 2019 and 2018, respectively. Such net sales were included in each of our segments. (4) Net sales from our operations in the U.S. were $5,592 million, $5,127 million and $5,034 million in 2020, 2019 and 2018, respectively. (5) General corporate expense, net included those expenses not specifically attributable to our segments. (6) Long-lived assets of our operations in the U.S. and Europe were $1,301 million and $522 million, $1,198 million and $470 million, and $1,119 million and $446 million at December 31, 2020, 2019 and 2018, respectively. (7) Property additions exclude amounts paid for long-lived assets as part of acquisitions. Refer to Note B for further information. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2020 | |
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: 2020 2019 2018 Income from cash and cash investments and short-term bank deposits $ 3 $ 3 $ 5 Equity investment income, net 3 1 3 Realized gains from private equity funds — — 1 Foreign currency transaction (losses) gains (1) (10) 2 (8) Net periodic pension and post-retirement benefit cost (35) (21) (14) Dividend income 10 — — Other items, net (2) 9 — (1) Total other, net $ (20) $ (15) $ (14) _________________________________________________ (1) Included in foreign currency transaction (losses) gains for 2020 was a $9 million deferred currency translation loss reclassified from accumulated other comprehensive loss in conjunction with the liquidation of certain UK dormant entities upon receiving final regulatory approval in 2020. (2) Included in other items, net for 2020 was $9 million of miscellaneous income related to an escrow settlement. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES (In Millions) 2020 2019 2018 Income from continuing operations before income taxes: U.S. $ 892 $ 684 $ 670 Foreign 239 230 237 $ 1,131 $ 914 $ 907 Income tax expense: Currently payable: U.S. Federal $ 170 $ 155 $ 115 State and local 33 46 29 Foreign 69 70 74 Deferred: U.S. Federal (9) (23) 12 State and local 11 (15) — Foreign (5) (3) (9) $ 269 $ 230 $ 221 Deferred tax assets at December 31: Receivables $ 9 $ 7 Inventories 17 15 Other assets, including stock-based compensation 17 15 Accrued liabilities 82 48 Noncurrent operating lease liabilities 35 39 Other long-term liabilities 96 137 Net operating loss carryforward 56 63 Tax credit carryforward 9 9 321 333 Valuation allowance (35) (38) 286 295 Deferred tax liabilities at December 31: Property and equipment 67 73 Operating lease right-of-use assets 39 42 Intangibles 74 71 Investment in foreign subsidiaries 10 10 Other investments 3 — Other 4 22 197 218 Net deferred tax asset at December 31 $ 89 $ 77 The net deferred tax asset consisted of net deferred tax assets (included in other assets) of $109 million and $99 million, and net deferred tax liabilities (included in other liabilities) of $20 million and $22 million, at December 31, 2020 and 2019, respectively. We continue to maintain a valuation allowance on certain state and foreign deferred tax assets as of December 31, 2020. Should we determine that we would not be able to realize our remaining deferred tax assets, or the deferred tax assets that currently have a valuation allowance become realizable in these jurisdictions in the future, an adjustment to the valuation allowance would be recorded in the period such determination is made. S. INCOME TAXES (Continued) The current portion of the state and local income tax includes a $9 million, $8 million and $8 million tax benefit from the reversal of an accrual for uncertain tax positions resulting primarily from the expiration of applicable statutes of limitations in 2020, 2019 and 2018, respectively. The deferred portion of the state and local taxes includes a $1 million tax benefit in 2019 and 2018, resulting from changes in valuation allowances against state and local deferred tax assets. The deferred portion of the foreign taxes includes a $5 million, $4 million and $2 million tax benefit in 2020, 2019 and 2018, respectively, from a change in the valuation allowances against foreign deferred tax assets. Our capital allocation strategy includes reinvesting in our business, balancing share repurchases with potential acquisitions and maintaining an appropriate dividend. In order to provide greater flexibility in the execution of our capital allocation strategy, we may repatriate earnings from certain foreign subsidiaries. Our deferred tax balance on investment in foreign subsidiaries reflects the impact of all taxable temporary differences, including those related to substantially all undistributed foreign earnings, except those that are legally restricted, and consists primarily of foreign withholding taxes. Of the $65 million and $72 million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2020 and 2019, respectively, $35 million and $44 million, respectively, will expire between 2021 and 2036 and $30 million and $28 million, respectively, have no expiration. A reconciliation of the U.S. Federal statutory tax rate to the income tax expense on income from continuing operations before income taxes was as follows: 2020 2019 2018 U.S. Federal statutory tax rate 21 % 21 % 21 % State and local taxes, net of U.S. Federal tax benefit 3 3 3 Higher taxes on foreign earnings 1 2 2 U.S. and foreign taxes on distributed and undistributed foreign earnings — 1 1 Stock-based compensation (1) (1) (2) Other, net — (1) (1) Effective tax rate 24 % 25 % 24 % Income taxes paid were $442 million, $384 million and $231 million in 2020, 2019 and 2018, respectively. S. INCOME TAXES (Concluded) A reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties, is as follows, in millions: Uncertain Interest and Total Balance at January 1, 2019 $ 58 $ 9 $ 67 Current year tax positions: Additions 14 — 14 Reductions (1) — (1) Prior year tax positions: Additions 1 — 1 Lapse of applicable statute of limitations (9) — (9) Interest and penalties recognized in income tax expense — 1 1 Balance at December 31, 2019 $ 63 $ 10 $ 73 Current year tax positions: Additions 22 — 22 Reductions (2) — (2) Prior year tax positions: Additions 2 — 2 Reductions (2) — (2) Lapse of applicable statute of limitations (9) — (9) Balance at December 31, 2020 $ 74 $ 10 $ 84 If recognized, $58 million and $50 million of the liability for uncertain tax positions at December 31, 2020 and 2019, respectively, net of any U.S. Federal tax benefit, would impact our effective tax rate. Of the $84 million and $73 million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2020 and 2019, respectively, $81 million and $68 million are recorded in other liabilities, respectively, and $3 million and $5 million are recorded as a net offset to other assets, respectively. We file income tax returns in the U.S. Federal jurisdiction, and various local, state and foreign jurisdictions. We continue to participate in the Compliance Assurance Process ("CAP"). CAP is a real-time audit of the U.S. Federal income tax return that allows the Internal Revenue Service ("IRS"), working in conjunction with us, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program provides us with greater certainty about our tax liability for a given year within months, rather than years, of filing our annual tax return and greatly reduces the need for recording a liability for U.S. Federal uncertain tax positions. The IRS has completed their examination of our consolidated U.S. Federal tax returns through 2019. With few exceptions, we are no longer subject to state or foreign income tax examinations on filed returns for years before 2016. As a result of tax audit closings, settlements and the expiration of applicable statutes of limitation in various jurisdictions within the next 12 months, we anticipate that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $9 million. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | INCOME PER COMMON SHARE Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: 2020 2019 2018 Numerator (basic and diluted): Income from continuing operations $ 810 $ 639 $ 636 Less: Allocation to unvested restricted stock awards 6 4 6 Income from continuing operations attributable to common shareholders 804 635 630 Income from discontinued operations, net 414 296 98 Less: Allocation to unvested restricted stock awards 3 2 1 Income from discontinued operations, net attributable to common shareholders 411 294 97 Net income attributable to common shareholders $ 1,215 $ 929 $ 727 Denominator: Basic common shares (based upon weighted average) 264 287 305 Add: Stock option dilution — 1 2 Diluted common shares 264 288 307 We follow accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. In 2020, we began granting restricted stock units. The dividends associated with the unvested restricted stock units are forfeitable, and consequently, the restricted stock units are not considered a participating security and are not accounted for under the two-class method. We have also granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of our basic income per common share, using the two-class method. The two-class method of computing income per common share is an allocation method that calculates income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. For the years ended December 31, 2020, 2019 and 2018, we allocated dividends and undistributed earnings to the participating securities. Additionally, 374,000, 854,000 and 710,000 common shares for 2020, 2019 and 2018, respectively, related to stock options and 20,000 common shares for 2018 related to performance restricted stock units were excluded from the computation of diluted income per common share due to their antidilutive effect. Common shares outstanding included on our balance sheet and for the calculation of income per common share do not include unvested stock awards (1 million and 2 million common shares at December 31, 2020 and 2019, respectively); shares outstanding for legal requirements included all common shares that have voting rights (including unvested stock awards). |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
OTHER COMMITMENTS AND CONTINGENCIES | OTHER COMMITMENTS AND CONTINGENCIES Litigation. 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. Warranty. Changes in our warranty liability were as follows, in millions: 2020 2019 Balance at January 1 $ 84 $ 81 Accruals for warranties issued during the year 34 34 Accruals related to pre-existing warranties (3) 1 Settlements made (in cash or kind) during the year (33) (31) Other, net (including currency translation and acquisitions) 1 (1) Balance at December 31 $ 83 $ 84 Other Matters. We enter into contracts, which include reasonable and customary indemnifications that are standard for the industries in which we operate. Such indemnifications include claims made against builders by homeowners for issues relating to our products and workmanship. In conjunction with divestitures and other transactions, we occasionally provide reasonable and customary indemnifications. We have never had to pay a material amount related to these indemnifications, and we evaluate the probability that amounts may be incurred and record an estimated liability when it is probable and reasonably estimable. |
INTERIM FINANCIAL INFORMATION (
INTERIM FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
INTERIM FINANCIAL INFORMATION (UNAUDITED) | INTERIM FINANCIAL INFORMATION (UNAUDITED) Our quarterly results attributable to Masco Corporation were as follows: Quarters Ended (In Millions, Except Per Common Share Data) Total Year December 31 September 30 June 30 March 31 2020 Net sales $ 7,188 $ 1,860 $ 1,983 $ 1,764 $ 1,581 Gross profit $ 2,587 $ 660 $ 752 $ 628 $ 547 Income from continuing operations $ 810 $ 192 $ 275 $ 210 $ 133 Net income (1) $ 1,224 $ 195 $ 275 $ 224 $ 530 Income per common share: Basic: Income from continuing operations $ 3.05 $ 0.74 $ 1.05 $ 0.80 $ 0.49 Net income $ 4.60 $ 0.75 $ 1.05 $ 0.85 $ 1.93 Diluted: Income from continuing operations $ 3.04 $ 0.73 $ 1.05 $ 0.80 $ 0.48 Net income $ 4.59 $ 0.74 $ 1.05 $ 0.85 $ 1.92 2019 Net sales $ 6,707 $ 1,639 $ 1,716 $ 1,839 $ 1,513 Gross profit $ 2,371 $ 565 $ 611 $ 673 $ 522 Income from continuing operations $ 639 $ 158 $ 163 $ 211 $ 107 Net income (2) $ 935 $ 453 $ 126 $ 240 $ 116 Income per common share: Basic: Income from continuing operations $ 2.21 $ 0.56 $ 0.57 $ 0.73 $ 0.36 Net income $ 3.24 $ 1.60 $ 0.44 $ 0.82 $ 0.39 Diluted: Income from continuing operations $ 2.20 $ 0.56 $ 0.56 $ 0.72 $ 0.36 Net income $ 3.22 $ 1.59 $ 0.44 $ 0.82 $ 0.39 ______________________________ (1) Net income includes $397 million of income from discontinued operations, net for the quarter ended March 31, 2020, which includes the gain on the sale of the Cabinetry divestiture. (2) Net income includes $295 million and $(37) million of income (loss) from discontinued operations, net for the quarters ended December 31, 2019 and September 30, 2019, respectively, which includes the gain (loss) on the sale of the Milgard and UKWG divestitures, respectively. Income per common share amounts for the four quarters of December 31, 2020 and 2019 may not total to the income per common share amounts for the years ended December 31, 2020 and 2019 due to the allocation of income to participating securities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSOn January 4, 2021, we acquired a 75.1% equity interest in ESS, for approximately €45 million ($55 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. This business will be included in the Plumbing Products segment. In connection with this acquisition, we currently anticipate recognizing approximately $30 million of definite-lived intangible assets, primarily related to customer relationships. We also anticipate recognizing approximately $25 million of goodwill, which is not tax deductible and is related primarily to the expected synergies from combining the operations into our business. Refer to Note B for further information related to this acquisition. |
SCHEDULE II. VALUATION AND QUAL
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2020, 2019 and 2018 (In Millions) Column A Column B Column C Column D Column E Additions Description Balance at Charged to Charged Deductions Balance at Allowances for doubtful accounts, deducted from accounts receivable in the balance sheet: 2020 $ 5 (a) $ 3 $ — $ (1) (b) $ 7 2019 $ 5 $ 1 $ — $ (2) (b) $ 4 2018 $ 4 $ 3 $ — $ (2) (b) $ 5 Valuation allowance on deferred tax assets: 2020 $ 38 $ — $ 2 (c) $ (5) (d) $ 35 2019 $ 43 $ — $ — $ (5) (d) $ 38 2018 $ 47 $ — $ — $ (4) (e) $ 43 ______________________________ (a) Includes a $1 million adjustment related to the cumulative effect of adoption of the new credit loss standard (refer to Note A). (b) Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years. (c) $2 million net increase in valuation allowance due to currency translation recorded in other comprehensive income (loss). (d) $5 million net reduction to valuation allowance recorded as an income tax benefit. (e) $3 million net reduction to valuation allowance recorded as an income tax benefit and $1 million reduction recorded primarily in other comprehensive income (loss). |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. We consolidate the assets, liabilities and results of operations of variable interest entities for which we are the primary beneficiary. |
Use of Estimates and Assumptions in the Preparation of Financial Statements | Use of Estimates and Assumptions in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted ("GAAP") in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. |
Revenue Recognition | Revenue Recognition. We recognize revenue as control of our products is transferred to our customers, which is generally at the time of shipment or upon delivery based on the contractual terms with our customers. Our customers' payment terms generally range from 30 to 65 days of fulfilling our performance obligations and recognizing revenue. We provide customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. These customer programs and incentives are considered variable consideration. We include in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume for ecasts as it relates to our volume-based incentives. This determination is updated each reporting period. Certain product sales include a right of return. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund liability. We additionally record an asset, based on historical experience, for the amount of product we expect to return to inventory as a result of the return, which is recorded in prepaid expenses and other in the consolidated balance sheets. We consider shipping and handling activities performed by us as activities to fulfill the sales of our products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. We capitalize incremental costs of obtaining a contract and expense the costs on a straight-line basis over the contractual period if the cost is recoverable, the cost would not have been incurred without the contract and the term of the contract is greater than one year; otherwise, we expense the amounts as incurred. We do not adjust the promised amount of consideration for the effects of a financing component if the period between when we transfer our products or services and when our customers pay for our products or services is expected to be one year or less. |
Customer Displays | Customer Displays. In-store displays that are owned by us and used to market our products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three |
Foreign Currency | Foreign Currency. The financial statements of our foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet dates. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive loss component of shareholders' equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of operations in other income (expense), net. |
Cash and Cash Investments | Cash and Cash Investments. We consider all highly liquid investments with an initial maturity of three months or less to be cash and cash investments. |
Receivables | Receivables. We do business with a number of customers, including certain home center retailers. We monitor our exposure for credit losses on customer receivable balances and other financial investments measured at amortized cost and the credit worthiness of customers on an on-going basis, including requiring the completion of credit applications and performing periodic reviews of our open accounts receivable. We record allowances for doubtful accounts for estimated losses resulting from the inability of our customers to fulfill their required payment obligation to us. Allowances are estimated based upon specific customer balances, where a risk of loss has been identified, and also include a provision for losses based upon historical collection experience and write-off activity as well as reasonable and supportable forecast information that considers macro-economic factors and industry-specific trends associated with our businesses, among others. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $48 million and $36 million at December 31, 2020 and 2019, respectively. Our receivables balances are generally due in less than one year. |
Property and Equipment | Property and Equipment. Property and equipment, including significant improvements to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Maintenance and repair costs are charged against earnings as incurred. We review our property and equipment as events occur or circumstances change that would more likely than not reduce the fair value of the property and equipment below its carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, we evaluate the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. |
Depreciation | Depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, computer hardware and software, 17 to 33 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense, including discontinued operations, was $105 million in 2020 and $132 million in both 2019 and 2018. |
Leases | Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets (“ROU assets”), accrued liabilities and noncurrent operating lease liabilities on our consolidated balance sheet. Finance lease ROU assets are included in property and equipment, net, notes payable, and long-term debt on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the duration of the lease term while lease liabilities represent our obligation to make lease payments in exchange for the right to use an underlying asset. ROU assets and lease liabilities are measured based on the present value of fixed lease payments over the lease term at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and initial direct costs incurred, and is reduced by any lease incentives received. We review our ROU assets as events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values. If the carrying amount of the ROU asset is not recoverable from its undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate on the commencement date of the lease as the discount rate in determining the present value of future lease payments. We determine the incremental borrowing rate for each lease by using the current yields of our uncollateralized, publicly traded debts with maturity periods similar to the respective lease term, adjusted to a collateralized basis based on third-party data. Our lease terms may include options to extend or terminate the lease when there are relevant economic incentives present that make it reasonably certain that we will exercise that option. We account for any non-lease components separately from lease components. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. We perform our annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We have defined our reporting units and completed the impairment testing of goodwill at the operating segment level. Our operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. We compare the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs), and requires us to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Our judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, we rely on internally generated five-year forecasts for sales and operating profits, and, currently, a two percent to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. For 2020, we utilized a weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. Based upon our assessment of the risks impacting each of our businesses, we applied a risk premium to increase the discount rate to a range of 10.0 percent to 12.0 percent for our reporting units. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized to the extent that a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit. We review our other indefinite-lived intangible assets for impairment annually in the fourth quarter, or as events occur or circumstances change that indicate the assets may be impaired without regard to the business unit. Potential impairment is identified by comparing the fair value of an other indefinite-lived intangible asset to its carrying value. We utilize a relief-from-royalty model to estimate the fair value of other indefinite-lived intangible assets. We consider the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term. We also consider the profitability of the business, among other factors, to determine the royalty rate for use in the impairment assessment. We utilize our weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2020, based upon our assessment of the risks impacting each of our businesses and the nature of the trade name, we applied a risk premium to increase the discount rate to a range of 11.0 percent to 12.5 percent for our other indefinite-lived intangible assets. While we believe that the estimates and assumptions underlying the valuation methodologies are reasonable, different estimates and assumptions could result in different outcomes. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We review our intangible assets with finite useful lives as events occur or circumstances change that would more likely than not reduce the fair value of the assets below its carrying amount. If the carrying amount of the assets is not recoverable from the undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value. We evaluate the remaining useful lives of amortizable intangible assets at each reporting period to determine whether events or circumstances warrant a revision to the remaining periods of amortization. Refer to Note H for additional information regarding goodwill and other intangible assets. |
Acquisitions | Acquisitions. In accordance with accounting guidance for the provisions in Financial Accounting Standards Board ("FASB") ASC 805, "Business Combinations," we allocate the purchase price of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. In addition, any contingent consideration is fair valued as of the date of the acquisition and is recorded as part of the purchase price. This estimate is updated in future periods and any changes in the estimate, which are not considered an adjustment to the purchase price, are recorded in our consolidated statements of operations. We use all available information to estimate fair values. We typically engage external valuation specialists to assist in the fair value determination of identifiable intangible assets and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain more information regarding assets acquired and liabilities assumed based on facts and circumstances that existed as of the acquisition date. Our purchase price allocation methodology contains uncertainties because it requires us to make assumptions and to apply judgment to estimate the fair value of acquired assets and assumed liabilities. We estimate the fair value of assets and liabilities based upon the carrying value of the acquired assets and assumed liabilities and widely accepted valuation techniques, including discounted cash flows. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies. Other estimates used in determining fair value include, but are not limited to, future cash flows or income related to intangibles, market rate assumptions and appropriate discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but that are inherently uncertain, and therefore, may not be realized. Accordingly, there can be no assurance that the estimates, assumptions, and values reflected in the valuations will be realized, and actual results could vary materially. Refer to Note B for additional information regarding acquisitions. |
Fair Value Accounting | Fair Value Accounting. We use derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates, and occasionally from changes in commodity costs and interest rate exposures. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value, netted by counterparty, where the right of offset exists. The gain or loss is recognized in determining current earnings during the period of the change in fair value. We currently do not have any derivative instruments for which we have designated hedge accounting. |
Warranty | Warranty. We offer limited warranties on certain products with warranty periods ranging up to the lifetime of the product to the original consumer purchaser. At the time of sale, we accrue a warranty liability for the estimated future cost to provide products, parts or services to repair or replace products to satisfy our warranty obligations. Our estimate of future costs to service our warranty obligations is based upon the information available and includes a number of factors, such as the warranty coverage, the warranty period, historical experience specific to the nature, frequency and average cost to service the claim, along with industry and demographic trends. Certain factors and related assumptions in determining our warranty liability involve judgments and estimates and are sensitive to changes in the factors described above. We believe that the warranty accrual is appropriate; however, actual claims incurred could differ from our original estimates which would require us to adjust our previously established accruals. Refer to Note U for additional information on our warranty accrual. A significant portion of our business is at the consumer retail level through home center retailers and other major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from us. Our revenue recognition policy takes into account this type of return when recognizing revenue, and an estimate of these amounts is recorded as a deduction to net sales at the time of sale. |
Insurance Reserves | Insurance Reserves. We provide for expenses associated with workers' compensation and product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability. Any obligations expected to be settled within 12 months are recorded in accrued liabilities; all other obligations are recorded in other liabilities |
Litigation | Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. Liabilities and costs associated with these matters require estimates and judgments based upon our professional knowledge and experience and that of our legal counsel. When a liability is probable of being incurred and our exposure in these matters is reasonably estimable, amounts are recorded as charges to earnings. The ultimate resolution of these exposures may differ due to subsequent developments. |
Stock-Based Compensation | Stock-Based Compensation. We issue stock-based incentives in various forms to our employees and non-employee Directors. Outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units ("RSUs"), performance restricted stock units ("PRSUs") and phantom stock awards. We measure compensation expense for stock awards and RSUs at the market price of our common stock at the grant date. We measure compensation expense for stock options using a Black-Scholes option pricing model. We measure compensation expense for PRSUs at the expected payout of the awards. We recognize forfeitures related to stock awards, stock options, RSUs and PRSUs as they occur. We initially measure compensation expense for phantom stock awards at the market price of our common stock at the grant date. Phantom stock awards are linked to the value of our common stock on the date of grant and are settled in cash upon vesting. We account for phantom stock awards as liability-based awards; the liability is remeasured and adjusted at the end of each reporting period until the awards are fully-vested and paid to the employees. In December 2019, our Organization and Compensation Committee of the Board of Directors (the "Compensation Committee") amended the terms of equity awards under our 2014 Long Term Stock Incentive Plan to provide that newly issued stock options, RSUs and phantom stock awards vest over a three-year period and redefined retirement-eligibility as age 65 or age 55 with at least 10 years of continuous service. As such, compensation expense for equity awards granted in 2020 and thereafter is recognized ratably over the shorter of the vesting period, typically three years, or the length of time until the grantee becomes retirement eligible. For prior year grants, expense was recognized ratably over the shorter of the vesting period of the stock awards, stock options and phantom stock awards, typically five years, or the length of time until the grantee became retirement-eligible, generally at age 65. Expense for PRSUs is recognized ratably over the three-year vesting period of the units. Refer to Note M for additional information on stock-based compensation. |
Noncontrolling Interest | Noncontrolling Interest. We owned 68 percent of Hansgrohe SE at both December 31, 2020 and 2019. The aggregate noncontrolling interest, net of dividends, at December 31, 2020 and 2019 has been recorded as a component of equity on our consolidated balance sheets. |
Discontinued Operations | Discontinued Operations. We report financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components represents a strategic shift that will have a major effect on our operations and financial results. In our consolidated statements of cash flows, the cash flow from discontinued operations are not separately classified. Refer to Note C for further information regarding our discontinued operations. |
Income Taxes | Income Taxes. Deferred taxes are recognized based on the future tax consequences of differences between the financial statement carrying value of assets and liabilities and their respective tax basis. The future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company's three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable, and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of the deferred tax assets. The current accounting guidance allows the recognition of only those income tax positions that have a greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. We believe that there is an increased potential for volatility in our effective tax rate because this threshold allows for changes in the income tax environment and, to a greater extent, the inherent complexities of income tax law in a substantial number of jurisdictions, which may affect the computation of our liability for uncertain tax positions. We record interest and penalties on our uncertain tax positions in income tax expense. The accounting guidance for income taxes requires us to allocate our provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income (loss). Subsequent adjustments to deferred taxes originally recorded to other comprehensive income (loss) may reverse in a different category of earnings, such as continuing operations, resulting in a disproportionate tax effect within accumulated other comprehensive income (loss). Generally, a disproportionate tax effect will be eliminated and recognized in income tax expense when the circumstances upon which it is premised cease to exist. The disproportionate tax effect related to various defined-benefit pension plans will be eliminated from accumulated other comprehensive income (loss) at the termination of the related pension plans. The disproportionate tax effect relating to our interest rate swap hedge, which was terminated in 2012, will be eliminated from accumulated other comprehensive income (loss) upon the maturity of the related debt in March 2022. We record the tax effects of Global Intangible Low-taxed Income related to our foreign operations as a component of income tax expense in the period the tax arises. |
Reclassifications | Reclassifications. Certain prior year amounts have been reclassified to conform to the 2020 presentation in the consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which modifies the methodology for recognizing loss impairments on certain types of financial instruments, including receivables. The new methodology requires an entity to estimate the credit losses expected over the life of an exposure. Additionally, ASU 2016-13 amends the current available-for-sale security other-than-temporary impairment model for debt securities. We adopted ASU 2016-13 and recorded a cumulative-effect adjustment to opening retained earnings on January 1, 2020. The adoption of the standard did not have a material effect on our financial position or results of operations. In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which allows for the capitalization of certain implementation costs incurred in a hosting arrangement that is a service contract. We adopted ASU 2018-15 prospectively beginning on January 1, 2020. The adoption of the standard did not have an impact on our financial position or results of operations. A. ACCOUNTING POLICIES (Concluded) In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We early adopted ASU 2019-12 on January 1, 2020. The adoption of the standard did not have an impact on our financial position or results of operations. Recently Issued Accounting Pronouncements. In January 2020, the 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. ASU 2020-01 is effective for us for annual periods beginning January 1, 2021. Early adoption is permitted. We plan to adopt this standard for annual periods beginning January 1, 2021 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance and expedients for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are elective and are effective upon issuance. As of December 31, 2020 we have not elected any of the expedients set out in ASU 2020-04. To the extent we modify a contract going forward during the transition period we would consider applying the new standard. We consider the applicability and impact of all ASUs. ASUs not listed above were assessed and determined not to be applicable. |
Inventories | Inventories, which include purchased parts, materials, direct labor and applied overhead, are stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The initial and final allocations of the fair value of the acquisition of Kichler is summarized in the following table, in millions. Initial Final Receivables $ 101 $ 100 Inventories 173 166 Prepaid expenses and other 5 5 Property and equipment 33 33 Goodwill 46 64 Other intangible assets 243 240 Accounts payable (24) (24) Accrued liabilities (25) (30) Other liabilities (4) (5) Total $ 548 $ 549 |
DIVESTITURES (Tables)
DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The major classes of line items constituting income from discontinued operations, net, in millions: For the Years Ended December 31, 2020 2019 2018 Net sales $ 101 $ 1,528 $ 1,705 Cost of sales 78 1,184 1,343 Gross profit 23 344 362 Selling, general and administrative expenses 28 232 228 Impairment charge for goodwill (A) — 7 — Other income (expense), net — 1 1 (Loss) income from discontinued operations (5) 106 135 Gain on disposal of discontinued operations, net 602 298 — Income before income tax 597 404 135 Income tax expense (183) (108) (37) Income from discontinued operations, net $ 414 $ 296 $ 98 (A) In the first quarter of 2019, we recognized a $7 million non-cash goodwill impairment charge related to a decline in the long-term outlook of our windows and doors business in the United Kingdom. The carrying amount of major classes of assets and liabilities included as part of the Cabinetry discontinued operations and reported as held for sale, were as follows, in millions: December 31, 2019 Receivables $ 76 Prepaid expenses and other 7 Inventories 90 Property and equipment, net 157 Operating lease right-of-use assets 4 Goodwill 181 Other intangible assets, net 1 Other assets 12 Total assets classified as held for sale $ 528 Accounts payable $ 103 Accrued liabilities 46 Noncurrent operating lease liabilities 3 Other liabilities 10 Total liabilities classified as held for sale $ 162 Other selected financial information for Cabinetry, Milgard and UKWG during the period owned by us, were as follows, in millions: For the Years Ended December 31, 2020 2019 2018 Depreciation and amortization $ — $ 29 $ 36 Capital expenditures 1 34 38 ROU assets obtained in exchange for new lease obligations — 3 — |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [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: Year Ended December 31, 2020 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,753 $ 3,052 $ 5,805 International, principally Europe 1,383 — 1,383 Total $ 4,136 $ 3,052 $ 7,188 Year Ended December 31, 2019 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,605 $ 2,723 $ 5,328 International, principally Europe 1,379 — 1,379 Total $ 3,984 $ 2,723 $ 6,707 Year Ended December 31, 2018 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,552 $ 2,656 $ 5,208 International, principally Europe 1,446 — 1,446 Total $ 3,998 $ 2,656 $ 6,654 |
Financing Receivable, Allowance for Credit Loss | Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Year Ended Balance at January 1 (after adopting ASU 2016-13) $ 5 Provision for expected credit losses during the period 3 Write-offs charged against the allowance (2) Recoveries of amounts previously written off 1 Balance at end of year $ 7 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | (In Millions) At December 31 2020 2019 Finished goods $ 552 $ 485 Raw materials 242 211 Work in process 82 58 Total $ 876 $ 754 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost included in income from continuing operations were as follows, in millions: 2020 2019 Operating lease cost $ 47 $ 49 Short-term lease cost 7 6 Variable lease cost 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 Interest on lease liabilities 1 1 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows, in millions 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 58 Operating cash flows for finance leases 1 1 Financing cash flows for finance leases 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 27 27 Finance leases — — ______________________________ |
Lessee, Other Lease Information | Certain other information related to leases was as follows: At December 31 2020 2019 Weighted-average remaining lease term: Operating leases 10 years 10 years Finance leases 10 years 11 years Weighted-average discount rate: Operating leases 4.4 % 4.6 % Finance leases 3.3 % 3.4 % |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows, in millions: At December 31, 2020 At December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 27 $ — $ 29 Notes payable — 2 — 2 Accrued liabilities 39 — 38 — Long-term debt — 26 — 28 |
Finance Lease, Liability, Maturity | At December 31, 2020, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2021 $ 46 $ 3 2022 37 3 2023 27 3 2024 20 4 2025 16 4 Thereafter 89 16 Total lease payments 235 33 Less: imputed interest (47) (5) Total $ 188 $ 28 |
Operating Lease, Liability, Maturity | At December 31, 2020, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2021 $ 46 $ 3 2022 37 3 2023 27 3 2024 20 4 2025 16 4 Thereafter 89 16 Total lease payments 235 33 Less: imputed interest (47) (5) Total $ 188 $ 28 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | (In Millions) At December 31 2020 2019 Land and improvements $ 66 $ 64 Buildings 522 497 Computer hardware and software 249 232 Machinery and equipment 1,184 1,103 2,021 1,896 Less: Accumulated depreciation (1,113) (1,018) Total $ 908 $ 878 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | The changes in the carrying amount of goodwill, by segment, were as follows, in millions: Gross Goodwill At December 31, 2020 Accumulated Net Goodwill At December 31, 2020 Plumbing Products $ 613 $ (340) $ 273 Decorative Architectural Products 365 (75) 290 Total $ 978 $ (415) $ 563 Gross Goodwill At December 31, 2019 Accumulated Net Goodwill At December 31, 2019 Acquisitions Other (A) Net Goodwill At December 31, 2020 Plumbing Products $ 566 $ (340) $ 226 $ 34 $ 13 $ 273 Decorative Architectural Products 358 (75) 283 7 — 290 Total $ 924 $ (415) $ 509 $ 41 $ 13 $ 563 Gross Goodwill At December 31, 2018 Accumulated Net Goodwill At December 31, 2018 Acquisitions Other (A) Net Goodwill At December 31, 2019 Plumbing Products $ 568 $ (340) $ 228 $ — $ (2) $ 226 Decorative Architectural Products 358 (75) 283 — — 283 Total $ 926 $ (415) $ 511 $ — $ (2) $ 509 ______________________________ (A) Other consists of the effect of foreign currency translation. |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Schedule of other assets | (In Millions) At December 31 2020 2019 Preferred stock of ACProducts Holding, Inc. (Note I) $ 146 $ — Equity method investments 11 11 In-store displays, net 1 5 Deferred tax assets (Note S) 109 99 Other 27 24 Total $ 294 $ 139 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | (In Millions) At December 31 2020 2019 Salaries, wages and commissions $ 193 $ 141 Advertising and sales promotion 293 189 Interest 35 36 Warranty (Note U) 34 31 Employee retirement plans 182 41 Insurance reserves 29 37 Property, payroll and other taxes 32 18 Dividends payable 36 37 Deferred revenue 62 40 Product returns 23 25 Operating lease liabilities (Note F) 39 38 Other 80 67 Total $ 1,038 $ 700 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | (In Millions) 2020 2019 Notes and debentures: 3.500%, due April 1, 2021 $ — $ 399 5.950%, due March 15, 2022 326 326 4.450%, due April 1, 2025 500 500 4.375%, due April 1, 2026 498 498 3.500%, due November 15, 2027 300 300 7.750%, due August 1, 2029 235 235 2.000%, due October 1, 2030 300 — 6.500%, due August 15, 2032 200 200 4.500%, due May 15, 2047 418 299 Other 33 30 Prepaid debt issuance costs (15) (14) 2,795 2,773 Less: Current portion 3 2 Total long-term debt $ 2,792 $ 2,771 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 (income) included in income from continuing operations for these stock-based incentives was as follows, in millions: 2020 2019 2018 Long-term stock awards $ 14 $ 20 $ 20 Stock options 7 4 3 Restricted stock units 13 — — Performance restricted stock units 5 3 4 Phantom stock awards and stock appreciation rights 4 4 (2) Total $ 43 $ 31 $ 25 |
Schedule of the Company's long-term stock award activity | Our long-term stock award activity was as follows, shares in millions: 2020 2019 2018 Unvested stock award shares at January 1 2 2 3 Weighted average grant date fair value $ 34 $ 30 $ 24 Stock award shares granted — 1 1 Weighted average grant date fair value $ — $ 36 $ 41 Stock award shares vested 1 1 2 Weighted average grant date fair value $ 32 $ 25 $ 21 Stock award shares forfeited — — — Weighted average grant date fair value $ 35 $ 35 $ 31 Unvested stock award shares at December 31 1 2 2 Weighted average grant date fair value $ 36 $ 34 $ 30 Information related to phantom stock awards was as follows, in millions: At December 31, 2020 2019 Accrued compensation cost liability $ 6 $ 5 Unrecognized compensation cost $ 4 $ 3 Equivalent common shares — — |
Schedule of the Company's stock option activity | Our stock option activity was as follows, shares in millions: 2020 2019 2018 Option shares outstanding, January 1 3 4 5 Weighted average exercise price $ 27 $ 21 $ 16 Option shares granted 1 1 — Weighted average exercise price $ 48 $ 36 $ 42 Option shares exercised 2 2 1 Aggregate intrinsic value on date of exercise (A) $ 29 million $ 33 million $ 55 million Weighted average exercise price $ 17 $ 13 $ 11 Option shares forfeited — — — Weighted average exercise price $ 40 $ 34 $ 31 Option shares outstanding, December 31 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Weighted average remaining option term (in years) 6 6 5 Option shares vested and expected to vest, December 31 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Aggregate intrinsic value (A) $ 51 million $ 63 million $ 36 million Weighted average remaining option term (in years) 6 6 5 Option shares exercisable (vested), December 31 1 2 3 Weighted average exercise price $ 28 $ 21 $ 16 Aggregate intrinsic value (A) $ 35 million $ 47 million $ 34 million Weighted average remaining option term (in years) 5 4 4 ______________________________ (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: 2020 2019 2018 Weighted average grant date fair value $ 10.67 $ 8.81 $ 12.34 Risk-free interest rate 1.53 % 2.57 % 2.72 % Dividend yield 1.14 % 1.35 % 1.02 % Volatility factor 24.00 % 25.00 % 29.00 % Expected option life 6 years 6 years 6 years |
Summary of stock option shares outstanding and exercisable | The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2020, shares in millions: Option Shares Outstanding Option Shares Exercisable Range of Number of Weighted Weighted Number of Weighted $ 10 - 18 — 2 years $18 — $18 $ 19 - 34 1 5 years $26 1 $25 $ 35 - 48 1 8 years $41 — $39 $ 10 - 48 2 6 years $33 1 $28 |
EMPLOYEE RETIREMENT PLANS (Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of pre-tax expense related to retirement plans | Pre-tax expense included in income from continuing operations related to our retirement plans was as follows, in millions: 2020 2019 2018 Defined-contribution plans $ 46 $ 40 $ 37 Defined-benefit pension plans 38 24 17 $ 84 $ 64 $ 54 |
Schedule of changes in the projected benefit obligation and fair value of the plan assets, and the funded status of the Company's defined-benefit pension plans | Changes in the projected benefit obligation and fair value of plan assets, and the funded status of our defined-benefit pension plans were as follows, in millions: 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Changes in projected benefit obligation: Projected benefit obligation at January 1 $ 1,034 $ 161 $ 896 $ 155 Service cost 3 — 3 — Interest cost 23 5 33 6 Actuarial loss, net 85 10 149 13 Foreign currency exchange 18 — (3) — Benefit payments (45) (13) (44) (13) Divestitures — (1) — — Projected benefit obligation at December 31 $ 1,118 $ 162 $ 1,034 $ 161 Changes in fair value of plan assets: Fair value of plan assets at January 1 $ 780 $ — $ 670 $ — Actual return on plan assets 67 — 105 — Foreign currency exchange 8 — (1) — Company contributions 57 13 56 13 Expenses, other (4) — (6) — Benefit payments (45) (13) (44) (13) Fair value of plan assets at December 31 $ 863 $ — $ 780 $ — Funded status at December 31 $ (255) $ (162) $ (254) $ (161) |
Schedule of amounts in the Company's consolidated balance sheets | Amounts in our consolidated balance sheets were as follows, in millions: At December 31, 2020 At December 31, 2019 Qualified Non-Qualified Qualified Non-Qualified Other assets $ 1 $ — $ 1 $ — Accrued liabilities (A) (135) (12) (1) (13) Other liabilities (A) (121) (150) (254) (148) Total net liability $ (255) $ (162) $ (254) $ (161) |
Schedule of unrealized loss included in accumulated other comprehensive income before income taxes | Unrealized loss included in accumulated other comprehensive loss before income taxes was as follows, in millions: At December 31, 2020 At December 31, 2019 Qualified Non-Qualified Qualified Non-Qualified Net loss $ 540 $ 65 $ 520 $ 57 Net prior service cost 3 — 4 — Total $ 543 $ 65 $ 524 $ 57 |
Schedule of information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions: At December 31 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Projected benefit obligation $ 1,100 $ 162 $ 1,019 $ 161 Accumulated benefit obligation 1,100 162 1,019 161 Fair value of plan assets 844 — 763 — |
Schedule of net periodic pension cost for the Company's defined-benefit pension plans | Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 2020 2019 2018 Qualified Non-Qualified Qualified Non-Qualified Qualified Non-Qualified Service cost $ 3 $ — $ 3 $ — $ 3 $ — Interest cost 28 5 39 6 36 6 Expected return on plan assets (24) — (44) — (48) — Recognized prior service cost 1 — — — — — Recognized net loss 22 3 18 2 17 3 Net periodic pension cost $ 30 $ 8 $ 16 $ 8 $ 8 $ 9 |
Schedule of the Company's qualified defined-benefit pension plan weighted average asset allocation | Our qualified defined-benefit pension plan weighted average asset allocation, which is based upon fair value, was as follows: 2020 2019 Equity securities 15 % 41 % Debt securities 49 % 54 % Other 36 % 5 % Total 100 % 100 % |
Schedule of qualified defined-benefit pension plan assets at fair value | The following tables set forth, by level within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2020 and 2019, as well as those valued at NAV using the practical expedient, which approximates fair value, in millions. At December 31, 2020 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 26 $ — $ — $ 87 $ 113 International 15 — — — 15 Private Equity and Hedge Funds – International — — 1 — 1 Corporate Debt Securities: United States — 143 — — 143 International — 23 — — 23 Government and Other Debt Securities: United States — 214 — — 214 International — 46 — — 46 Common Collective Trust Fund – United States — 292 — — 292 Buy-in Annuity - International — 14 — — 14 Short-Term and Other Investments – International 2 — — — 2 Total Plan Assets $ 43 $ 732 $ 1 $ 87 $ 863 At December 31, 2019 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 85 $ — $ — $ 82 $ 167 International 47 — — 110 157 Private Equity and Hedge Funds: United States — — 2 — 2 International — — 17 — 17 Corporate Debt Securities: United States 74 — — 124 198 International — 1 — — 1 Government and Other Debt Securities: United States — 3 — 148 151 International 29 38 — — 67 Common Collective Trust Fund – United States — 4 — — 4 Buy-in Annuity - International — 12 — — 12 Short-Term and Other Investments: United States 2 — — — 2 International 2 — — — 2 Total Plan Assets $ 239 $ 58 $ 19 $ 464 $ 780 |
Schedule of changes in the fair value of the qualified defined-benefit pension plan level 3 assets | Changes in the fair value of the qualified defined-benefit pension plan Level 3 assets, were as follows, in millions: 2020 2019 Fair Value, January 1 $ 19 $ 59 Purchases — 4 Sales (18) (41) Unrealized losses — (3) Fair Value, December 31 $ 1 $ 19 |
Schedule of weighted-average major assumptions used in accounting for the Company's defined-benefit pension plans | Weighted average major assumptions used in accounting for our defined-benefit pension plans were as follows: 2020 2019 2018 Discount rate for obligations 1.70 % 2.50 % 3.80 % Expected return on plan assets 2.00 % 3.00 % 7.00 % Rate of compensation increase — % — % — % Discount rate for net periodic pension cost 2.50 % 3.80 % 3.30 % |
Schedule of benefits expected to be paid relating to the Company's defined-benefit pension plans | At December 31, 2020, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to our defined-benefit pension plans, were as follows, in millions: Qualified Non-Qualified 2021 (A) $ 895 $ 12 2022 5 12 2023 6 12 2024 6 12 2025 6 12 2026 - 2030 38 50 _______________________ (A) The qualified benefit payments include the projected benefit obligations of the qualified domestic defined-benefit pension plans we plan to settle in 2021. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive loss | The components of accumulated other comprehensive loss attributable to Masco Corporation were as follows, in millions: At December 31 2020 2019 Cumulative translation adjustments, net $ 325 $ 273 Unrealized loss on interest rate swaps, net (7) (8) Unrecognized net loss and prior service cost, net (460) (444) Accumulated other comprehensive loss $ (142) $ (179) |
RECLASSIFICATIONS FROM OTHER _2
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of reclassifications from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations | The reclassifications from accumulated other comprehensive loss to the consolidated statements of operations were as follows, in millions: Accumulated Other Comprehensive Loss 2020 2019 2018 Statement of Operations Line Item Amortization of defined-benefit pension and other post-retirement benefits: Actuarial losses, net and prior service cost $ 26 $ 20 $ 20 Other income (expense), net Tax (benefit) (7) (5) (5) Net of tax $ 19 $ 15 $ 15 Interest rate swaps $ 2 $ 2 $ 2 Interest expense Tax (benefit) (1) — — Net of tax $ 1 $ 2 $ 2 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of information by segment and geographic area | Information by segment and geographic area was as follows, in millions: Net Sales (1)(2)(3)(4) Operating Profit Assets at 2020 2019 2018 2020 2019 2018 2020 2019 2018 Our operations by segment were: Plumbing Products $ 4,136 $ 3,984 $ 3,998 $ 806 $ 708 $ 715 $ 2,822 $ 2,375 $ 2,253 Decorative Architectural Products 3,052 2,723 2,656 583 480 456 1,633 1,526 1,534 Total $ 7,188 $ 6,707 $ 6,654 $ 1,389 $ 1,188 $ 1,171 $ 4,455 $ 3,901 $ 3,787 Our operations by geographic area were: North America $ 5,805 $ 5,328 $ 5,208 $ 1,167 $ 987 $ 954 $ 3,101 $ 2,785 $ 2,729 International, principally Europe 1,383 1,379 1,446 222 201 217 1,354 1,116 1,058 Total, as above $ 7,188 $ 6,707 $ 6,654 1,389 1,188 1,171 4,455 3,901 3,787 General corporate expense, net (5) (94) (100) (94) Operating profit, as reported 1,295 1,088 1,077 Other income (expense), net (164) (174) (170) Income from continuing operations before income taxes $ 1,131 $ 914 $ 907 Corporate assets 1,322 598 411 Assets held for sale — 528 1,195 Total assets $ 5,777 $ 5,027 $ 5,393 Property Additions (7) Depreciation and 2020 2019 2018 2020 2019 2018 Our operations by segment were: Plumbing Products $ 86 $ 108 $ 120 $ 84 $ 80 $ 77 Decorative Architectural Products 25 18 54 41 41 35 111 126 174 125 121 112 Unallocated amounts, principally related to corporate assets 2 2 7 8 9 8 Discontinued operations 1 34 38 — 29 36 Total $ 114 $ 162 $ 219 $ 133 $ 159 $ 156 ______________________________ (1) Included in net sales were export sales from the U.S. of $274 million, $244 million and $237 million in 2020, 2019 and 2018, respectively. (2) Excluded from net sales were intra-company sales between segments of less than one percent in 2020, 2019 and 2018. (3) Included in net sales were sales to one customer of $2,812 million, $2,481 million and $2,457 million in 2020, 2019 and 2018, respectively. Such net sales were included in each of our segments. (4) Net sales from our operations in the U.S. were $5,592 million, $5,127 million and $5,034 million in 2020, 2019 and 2018, respectively. (5) General corporate expense, net included those expenses not specifically attributable to our segments. (6) Long-lived assets of our operations in the U.S. and Europe were $1,301 million and $522 million, $1,198 million and $470 million, and $1,119 million and $446 million at December 31, 2020, 2019 and 2018, respectively. (7) Property additions exclude amounts paid for long-lived assets as part of acquisitions. Refer to Note B for further information. |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: 2020 2019 2018 Income from cash and cash investments and short-term bank deposits $ 3 $ 3 $ 5 Equity investment income, net 3 1 3 Realized gains from private equity funds — — 1 Foreign currency transaction (losses) gains (1) (10) 2 (8) Net periodic pension and post-retirement benefit cost (35) (21) (14) Dividend income 10 — — Other items, net (2) 9 — (1) Total other, net $ (20) $ (15) $ (14) _________________________________________________ (1) Included in foreign currency transaction (losses) gains for 2020 was a $9 million deferred currency translation loss reclassified from accumulated other comprehensive loss in conjunction with the liquidation of certain UK dormant entities upon receiving final regulatory approval in 2020. (2) Included in other items, net for 2020 was $9 million of miscellaneous income related to an escrow settlement. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income taxes expense (benefit) from continuing operations | (In Millions) 2020 2019 2018 Income from continuing operations before income taxes: U.S. $ 892 $ 684 $ 670 Foreign 239 230 237 $ 1,131 $ 914 $ 907 Income tax expense: Currently payable: U.S. Federal $ 170 $ 155 $ 115 State and local 33 46 29 Foreign 69 70 74 Deferred: U.S. Federal (9) (23) 12 State and local 11 (15) — Foreign (5) (3) (9) $ 269 $ 230 $ 221 Deferred tax assets at December 31: Receivables $ 9 $ 7 Inventories 17 15 Other assets, including stock-based compensation 17 15 Accrued liabilities 82 48 Noncurrent operating lease liabilities 35 39 Other long-term liabilities 96 137 Net operating loss carryforward 56 63 Tax credit carryforward 9 9 321 333 Valuation allowance (35) (38) 286 295 Deferred tax liabilities at December 31: Property and equipment 67 73 Operating lease right-of-use assets 39 42 Intangibles 74 71 Investment in foreign subsidiaries 10 10 Other investments 3 — Other 4 22 197 218 Net deferred tax asset at December 31 $ 89 $ 77 |
Schedule of reconciliation of the U.S. Federal statutory tax rate to the income tax expense (benefit) on income (loss) from continuing operations | A reconciliation of the U.S. Federal statutory tax rate to the income tax expense on income from continuing operations before income taxes was as follows: 2020 2019 2018 U.S. Federal statutory tax rate 21 % 21 % 21 % State and local taxes, net of U.S. Federal tax benefit 3 3 3 Higher taxes on foreign earnings 1 2 2 U.S. and foreign taxes on distributed and undistributed foreign earnings — 1 1 Stock-based compensation (1) (1) (2) Other, net — (1) (1) Effective tax rate 24 % 25 % 24 % |
Schedule of reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | A reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties, is as follows, in millions: Uncertain Interest and Total Balance at January 1, 2019 $ 58 $ 9 $ 67 Current year tax positions: Additions 14 — 14 Reductions (1) — (1) Prior year tax positions: Additions 1 — 1 Lapse of applicable statute of limitations (9) — (9) Interest and penalties recognized in income tax expense — 1 1 Balance at December 31, 2019 $ 63 $ 10 $ 73 Current year tax positions: Additions 22 — 22 Reductions (2) — (2) Prior year tax positions: Additions 2 — 2 Reductions (2) — (2) Lapse of applicable statute of limitations (9) — (9) Balance at December 31, 2020 $ 74 $ 10 $ 84 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 earnings per common share were as follows, in millions: 2020 2019 2018 Numerator (basic and diluted): Income from continuing operations $ 810 $ 639 $ 636 Less: Allocation to unvested restricted stock awards 6 4 6 Income from continuing operations attributable to common shareholders 804 635 630 Income from discontinued operations, net 414 296 98 Less: Allocation to unvested restricted stock awards 3 2 1 Income from discontinued operations, net attributable to common shareholders 411 294 97 Net income attributable to common shareholders $ 1,215 $ 929 $ 727 Denominator: Basic common shares (based upon weighted average) 264 287 305 Add: Stock option dilution — 1 2 Diluted common shares 264 288 307 |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the Company's warranty liability | Changes in our warranty liability were as follows, in millions: 2020 2019 Balance at January 1 $ 84 $ 81 Accruals for warranties issued during the year 34 34 Accruals related to pre-existing warranties (3) 1 Settlements made (in cash or kind) during the year (33) (31) Other, net (including currency translation and acquisitions) 1 (1) Balance at December 31 $ 83 $ 84 |
INTERIM FINANCIAL INFORMATION_2
INTERIM FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of interim financial information | Our quarterly results attributable to Masco Corporation were as follows: Quarters Ended (In Millions, Except Per Common Share Data) Total Year December 31 September 30 June 30 March 31 2020 Net sales $ 7,188 $ 1,860 $ 1,983 $ 1,764 $ 1,581 Gross profit $ 2,587 $ 660 $ 752 $ 628 $ 547 Income from continuing operations $ 810 $ 192 $ 275 $ 210 $ 133 Net income (1) $ 1,224 $ 195 $ 275 $ 224 $ 530 Income per common share: Basic: Income from continuing operations $ 3.05 $ 0.74 $ 1.05 $ 0.80 $ 0.49 Net income $ 4.60 $ 0.75 $ 1.05 $ 0.85 $ 1.93 Diluted: Income from continuing operations $ 3.04 $ 0.73 $ 1.05 $ 0.80 $ 0.48 Net income $ 4.59 $ 0.74 $ 1.05 $ 0.85 $ 1.92 2019 Net sales $ 6,707 $ 1,639 $ 1,716 $ 1,839 $ 1,513 Gross profit $ 2,371 $ 565 $ 611 $ 673 $ 522 Income from continuing operations $ 639 $ 158 $ 163 $ 211 $ 107 Net income (2) $ 935 $ 453 $ 126 $ 240 $ 116 Income per common share: Basic: Income from continuing operations $ 2.21 $ 0.56 $ 0.57 $ 0.73 $ 0.36 Net income $ 3.24 $ 1.60 $ 0.44 $ 0.82 $ 0.39 Diluted: Income from continuing operations $ 2.20 $ 0.56 $ 0.56 $ 0.72 $ 0.36 Net income $ 3.22 $ 1.59 $ 0.44 $ 0.82 $ 0.39 ______________________________ (1) Net income includes $397 million of income from discontinued operations, net for the quarter ended March 31, 2020, which includes the gain on the sale of the Cabinetry divestiture. (2) Net income includes $295 million and $(37) million of income (loss) from discontinued operations, net for the quarters ended December 31, 2019 and September 30, 2019, respectively, which includes the gain (loss) on the sale of the Milgard and UKWG divestitures, respectively. |
ACCOUNTING POLICIES - Customer
ACCOUNTING POLICIES - Customer Promotion Costs (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Property and Equipment | |
Expected useful life of product | 3 years |
Maximum | |
Property and Equipment | |
Expected useful life of product | 5 years |
ACCOUNTING POLICIES - Receivabl
ACCOUNTING POLICIES - Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables | ||
Certain receivables allowances including allowances for doubtful accounts | $ 48 | $ 36 |
ACCOUNTING POLICIES - Depreciat
ACCOUNTING POLICIES - Depreciation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | |||
Depreciation expense | $ 105 | $ 132 | $ 132 |
Buildings | Minimum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 2.00% | ||
Buildings | Maximum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 10.00% | ||
Computer hardware and software | Minimum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 17.00% | ||
Computer hardware and software | Maximum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 33.00% | ||
Machinery and equipment | Minimum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 5.00% | ||
Machinery and equipment | Maximum | |||
Property and equipment | |||
Annual depreciation rates (as a percent) | 33.00% |
ACCOUNTING POLICIES - Goodwill
ACCOUNTING POLICIES - Goodwill and Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Period of operation forecasts used in impairment test | 5 years |
Weighted average cost of capital (as a percent) | 8.00% |
Minimum | |
Goodwill and Other Intangible Assets | |
Assumed annual growth rate of cash flows (as a percent) | 2.00% |
Maximum | |
Goodwill and Other Intangible Assets | |
Assumed annual growth rate of cash flows (as a percent) | 3.00% |
Measurement Input, Discount Rate | Minimum | |
Goodwill and Other Intangible Assets | |
Goodwill, measurement input | 10.00% |
Measurement Input, Discount Rate | Maximum | |
Goodwill and Other Intangible Assets | |
Goodwill, measurement input | 12.00% |
Measurement Input, Discount Rate | Assets, Total | Minimum | |
Goodwill and Other Intangible Assets | |
Discount rate on estimated discounted cash flows (as a percent) | 11.00% |
Measurement Input, Discount Rate | Assets, Total | Maximum | |
Goodwill and Other Intangible Assets | |
Discount rate on estimated discounted cash flows (as a percent) | 12.50% |
ACCOUNTING POLICIES - Stock Bas
ACCOUNTING POLICIES - Stock Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Period for recognition (in years) | 3 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) € in Millions, $ in Millions | Dec. 29, 2020USD ($) | Nov. 10, 2020USD ($) | Nov. 10, 2020EUR (€) | Mar. 09, 2018USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Acquisitions | |||||||||
Increase in definite-lived intangible assets | $ 86 | ||||||||
Goodwill | 41 | $ 0 | |||||||
Increase in other indefinite-lived intangible assets | 32 | ||||||||
Payments to acquire businesses, net of cash acquired | 227 | 0 | $ 549 | ||||||
SmarTap | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 24 | ||||||||
Increase in definite-lived intangible assets | $ 10 | ||||||||
Weighted average useful life | 5 years | ||||||||
Goodwill | 14 | ||||||||
Kraus USA Inc. | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 103 | ||||||||
Increase in definite-lived intangible assets | $ 49 | ||||||||
Weighted average useful life | 10 years | ||||||||
Goodwill | $ 20 | ||||||||
Contingent cash payment | 50 | ||||||||
Contingent consideration, undiscounted amount, minimum | 0 | 0 | |||||||
Contingent consideration, undiscounted amount, maximum | 50 | 50 | |||||||
Contingent consideration, liability | 8 | 8 | |||||||
Work Tools International Inc. and Elder & Jenks LLC | |||||||||
Acquisitions | |||||||||
Cash consideration | 48 | ||||||||
Increase in definite-lived intangible assets | $ 27 | ||||||||
Weighted average useful life | 12 years | ||||||||
Goodwill | $ 7 | ||||||||
Increase in other indefinite-lived intangible assets | 7 | ||||||||
Payments to acquire businesses, net of cash acquired | 53 | ||||||||
Liabilities incurred | $ 5 | ||||||||
Liabilities incurred, payment period | 18 months | ||||||||
ESS | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 52 | ||||||||
Equity interest acquired | 75.10% | 75.10% | |||||||
Consideration transferred | $ 55 | € 45 | |||||||
Plumbing Products | |||||||||
Acquisitions | |||||||||
Goodwill | 34 | 0 | |||||||
Plumbing Products | Kraus USA Inc. | |||||||||
Acquisitions | |||||||||
Increase in other indefinite-lived intangible assets | $ 25 | ||||||||
Decorative Architectural Products | |||||||||
Acquisitions | |||||||||
Goodwill | $ 7 | $ 0 | |||||||
Decorative Architectural Products | The LD Kichler Co | |||||||||
Acquisitions | |||||||||
Increase in definite-lived intangible assets | $ 181 | ||||||||
Increase in other indefinite-lived intangible assets | 59 | ||||||||
Cash and equivalents | 2 | ||||||||
Total consideration | 548 | $ 549 | |||||||
Customer Relationships | Decorative Architectural Products | The LD Kichler Co | |||||||||
Acquisitions | |||||||||
Increase in definite-lived intangible assets | $ 145 | ||||||||
Weighted average useful life | 20 years | ||||||||
Other Intangible Assets | Decorative Architectural Products | The LD Kichler Co | |||||||||
Acquisitions | |||||||||
Increase in definite-lived intangible assets | $ 36 | ||||||||
Weighted average useful life | 3 years |
ACQUISITIONS - Allocations (Det
ACQUISITIONS - Allocations (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 09, 2018 |
Acquisitions | ||||
Goodwill | $ 563 | $ 509 | $ 511 | |
Decorative Architectural Products | ||||
Acquisitions | ||||
Goodwill | $ 290 | $ 283 | 283 | |
The LD Kichler Co | Decorative Architectural Products | ||||
Acquisitions | ||||
Receivables | 100 | $ 101 | ||
Inventories | 166 | 173 | ||
Prepaid expenses and other | 5 | 5 | ||
Property and equipment | 33 | 33 | ||
Goodwill | 64 | 46 | ||
Other intangible assets | 240 | 243 | ||
Accounts payable | (24) | (24) | ||
Accrued liabilities | (30) | (25) | ||
Other liabilities | (5) | (4) | ||
Total | $ 549 | $ 548 |
DIVESTITURES - Narrative (Detai
DIVESTITURES - Narrative (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Nov. 06, 2019 | Sep. 06, 2019 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Businesses, net of cash disposed | $ 870 | $ 722 | $ 0 | ||||
Gain (loss) on disposition of business | 602 | 298 | 0 | ||||
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, net | 602 | 298 | 0 | ||||
Income (loss) from discontinued operation, before income tax | 597 | 404 | 135 | ||||
UK Window Group | 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 | $ 8 | ||||||
Business, net of cash disposed | 2 | ||||||
Discontinued operation, consideration | $ 6 | ||||||
Period of consideration to be collected | 2 years | ||||||
Gain (loss) on disposition of business | 70 | ||||||
Milgard Manufacturing Inc | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Business, net of cash disposed | $ 720 | 17 | |||||
Gain (loss) on disposition of business | 368 | ||||||
Gain on disposal of discontinued operations, net | $ 17 | ||||||
Masco Cabinetry | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Business, net of cash disposed | $ 989 | ||||||
Gain (loss) on disposition of business | 585 | ||||||
Masco Cabinetry | Discontinued Operations, Disposed of by Sale | ACProducts Preferred Stock | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Other assets acquired | 136 | ||||||
Masco Cabinetry | Discontinued Operations, Disposed of by Sale | Cash | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Business, net of cash disposed | $ 853 | ||||||
Milgard and UKWG | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income (loss) from discontinued operation, before income tax | 2 | (1) | 40 | ||||
Cabinetry Products | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income (loss) from discontinued operation, before income tax | $ (7) | $ 107 | $ 95 |
DIVESTITURES - Income Statement
DIVESTITURES - Income Statement (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Impairment charge for goodwill | $ 0 | $ 0 | $ 0 | ||||
Income from discontinued operations, net | $ (37,000,000) | $ 397,000,000 | $ 295,000,000 | 414,000,000 | 296,000,000 | 98,000,000 | |
Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net sales | 101,000,000 | 1,528,000,000 | 1,705,000,000 | ||||
Cost of sales | 78,000,000 | 1,184,000,000 | 1,343,000,000 | ||||
Gross profit | 23,000,000 | 344,000,000 | 362,000,000 | ||||
Selling, general and administrative expenses | 28,000,000 | 232,000,000 | 228,000,000 | ||||
Impairment charge for goodwill | 0 | 7,000,000 | 0 | ||||
Other income (expense), net | 0 | 1,000,000 | 1,000,000 | ||||
(Loss) income from discontinued operations | (5,000,000) | 106,000,000 | 135,000,000 | ||||
Gain on disposal of discontinued operations, net | 602,000,000 | 298,000,000 | 0 | ||||
Income before income tax | 597,000,000 | 404,000,000 | 135,000,000 | ||||
Income tax expense | (183,000,000) | (108,000,000) | (37,000,000) | ||||
Income from discontinued operations, net | 414,000,000 | 296,000,000 | 98,000,000 | ||||
UK Window Group | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Noncash goodwill impairment | $ 7,000,000 | ||||||
Milgard and UKWG | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income before income tax | 2,000,000 | (1,000,000) | 40,000,000 | ||||
Cabinetry Products | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income before income tax | $ (7,000,000) | $ 107,000,000 | $ 95,000,000 |
DIVESTITURES - Balance Sheet (D
DIVESTITURES - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total assets classified as held for sale | $ 0 | $ 528 | $ 1,195 |
Noncurrent operating lease liabilities | $ 149 | 162 | |
Masco Cabinetry | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Receivables | 76 | ||
Prepaid expenses and other | 7 | ||
Inventories | 90 | ||
Property and equipment, net | 157 | ||
Operating lease right-of-use assets | 4 | ||
Goodwill | 181 | ||
Other intangible assets, net | 1 | ||
Other assets | 12 | ||
Total assets classified as held for sale | 528 | ||
Accounts payable | 103 | ||
Accrued liabilities | 46 | ||
Noncurrent operating lease liabilities | 3 | ||
Other liabilities | 10 | ||
Total liabilities classified as held for sale | $ 162 |
DIVESTITURES - Additional Infor
DIVESTITURES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
ROU assets obtained in exchange for new lease obligations | $ 27 | $ 27 | |
Cabinetry, Milgard and UKWG | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Depreciation and amortization | 0 | 29 | $ 36 |
Capital expenditures | 1 | 34 | 38 |
ROU assets obtained in exchange for new lease obligations | $ 0 | $ 3 | $ 0 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 1,860 | $ 1,983 | $ 1,764 | $ 1,581 | $ 1,639 | $ 1,716 | $ 1,839 | $ 1,513 | $ 7,188 | $ 6,707 | $ 6,654 |
Performance obligation satisfied in previous period | 7 | 2 | 4 | ||||||||
Contract with customer, asset, gross, current | 2 | 2 | 2 | 2 | |||||||
Contract with customer, liability | $ 62 | $ 40 | 62 | 40 | |||||||
North America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 5,805 | 5,328 | 5,208 | ||||||||
International, principally Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 1,383 | 1,379 | 1,446 | ||||||||
Plumbing Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 4,136 | 3,984 | 3,998 | ||||||||
Plumbing Products | North America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,753 | 2,605 | 2,552 | ||||||||
Plumbing Products | International, principally Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 1,383 | 1,379 | 1,446 | ||||||||
Decorative Architectural Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 3,052 | 2,723 | 2,656 | ||||||||
Decorative Architectural Products | North America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 3,052 | 2,723 | 2,656 | ||||||||
Decorative Architectural Products | International, principally Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 0 | $ 0 | $ 0 |
REVENUE - Rollforward (Details)
REVENUE - Rollforward (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Balance at January 1 (after adopting ASU 2016-13) | $ 5 |
Provision for expected credit losses during the period | 3 |
Write-offs charged against the allowance | (2) |
Recoveries of amounts previously written off | 1 |
Balance at end of year | $ 7 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 552 | $ 485 |
Raw materials | 242 | 211 |
Work in process | 82 | 58 |
Total | $ 876 | $ 754 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term | 20 years | ||
Finance lease, right-of-use asset | $ 42 | $ 42 | |
Finance lease, right-of-use asset, accumulated amortization | $ 15 | $ 13 | |
Operating leases, rent expense | $ 63 | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 22 years |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 47 | $ 49 |
Short-term lease cost | 7 | 6 |
Variable lease cost | 3 | 3 |
Amortization of right-of-use assets | 3 | 3 |
Interest on lease liabilities | $ 1 | $ 1 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash flows for operating leases | $ 47 | $ 58 | |
Operating cash flows for finance leases | 1 | 1 | |
Financing cash flows for finance leases | 2 | 8 | |
Right-of-Use asset obtained in exchange for operating lease liability | 27 | 27 | |
Right-of-Use asset obtained in exchange for finance lease liability | 0 | 0 | |
Lessee, Lease, Description [Line Items] | |||
Right-of-Use asset obtained in exchange for operating lease liability | $ 27 | $ 27 | |
Kraus and Work Tools | |||
Leases [Abstract] | |||
Right-of-Use asset obtained in exchange for operating lease liability | $ 9 | ||
Lessee, Lease, Description [Line Items] | |||
Right-of-Use asset obtained in exchange for operating lease liability | $ 9 |
LEASES - Weighted Average Lease
LEASES - Weighted Average Lease Term and Discount Rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted-average remaining lease term: | ||
Operating leases | 10 years | 10 years |
Finance leases | 10 years | 11 years |
Weighted-average discount rate: | ||
Operating leases | 4.40% | 4.60% |
Finance leases | 3.30% | 3.40% |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities (Note F) | $ 39 | $ 38 |
Operating lease, liability, noncurrent | 149 | 162 |
Property and equipment, net | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities (Note F) | 0 | 0 |
Finance lease, liability, current | 27 | 29 |
Notes payable | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities (Note F) | 0 | 0 |
Finance lease, liability, current | 2 | 2 |
Accrued liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities (Note F) | 39 | 38 |
Finance lease, liability, current | 0 | 0 |
Long-term debt | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, liability, noncurrent | 0 | 0 |
Finance lease, liability, noncurrent | $ 26 | $ 28 |
LEASES - Future Maturities of L
LEASES - Future Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 46 |
2022 | 37 |
2023 | 27 |
2024 | 20 |
2025 | 16 |
Thereafter | 89 |
Total lease payments | 235 |
Less: imputed interest | (47) |
Total | 188 |
Finance Leases | |
2021 | 3 |
2022 | 3 |
2023 | 3 |
2024 | 4 |
2025 | 4 |
Thereafter | 16 |
Total lease payments | 33 |
Less: imputed interest | (5) |
Total | $ 28 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Property and equipment, Gross | $ 2,021 | $ 1,896 |
Less: Accumulated depreciation | (1,113) | (1,018) |
Total | 908 | 878 |
Land and improvements | ||
Property and Equipment | ||
Property and equipment, Gross | 66 | 64 |
Buildings | ||
Property and Equipment | ||
Property and equipment, Gross | 522 | 497 |
Computer hardware and software | ||
Property and Equipment | ||
Property and equipment, Gross | 249 | 232 |
Machinery and equipment | ||
Property and Equipment | ||
Property and equipment, Gross | $ 1,184 | $ 1,103 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | |||
Gross Goodwill | $ 978 | $ 924 | $ 926 |
Accumulated Impairment Losses | (415) | (415) | (415) |
Net Goodwill | 563 | 509 | 511 |
Acquisitions | 41 | 0 | |
Plumbing Products | |||
Goodwill | |||
Gross Goodwill | 613 | 566 | 568 |
Accumulated Impairment Losses | (340) | (340) | (340) |
Net Goodwill | 273 | 226 | 228 |
Acquisitions | 34 | 0 | |
Decorative Architectural Products | |||
Goodwill | |||
Gross Goodwill | 365 | 358 | 358 |
Accumulated Impairment Losses | (75) | (75) | (75) |
Net Goodwill | 290 | 283 | $ 283 |
Acquisitions | $ 7 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||
Gross Goodwill | $ 978 | $ 924 | $ 926 |
Accumulated Impairment Losses | (415) | (415) | (415) |
Changes in the carrying amount of goodwill | |||
Beginning balance | 509 | 511 | |
Acquisitions | 41 | 0 | |
Other | 13 | (2) | |
Ending balance | 563 | 509 | |
Plumbing Products | |||
Goodwill [Line Items] | |||
Gross Goodwill | 613 | 566 | 568 |
Accumulated Impairment Losses | (340) | (340) | (340) |
Changes in the carrying amount of goodwill | |||
Beginning balance | 226 | 228 | |
Acquisitions | 34 | 0 | |
Other | 13 | (2) | |
Ending balance | 273 | 226 | |
Decorative Architectural Products | |||
Goodwill [Line Items] | |||
Gross Goodwill | 365 | 358 | 358 |
Accumulated Impairment Losses | (75) | (75) | $ (75) |
Changes in the carrying amount of goodwill | |||
Beginning balance | 283 | 283 | |
Acquisitions | 7 | 0 | |
Other | 0 | 0 | |
Ending balance | $ 290 | $ 283 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Definite-lived Intangible Assets | ||||
Other indefinite-lived intangible assets | $ 109,000,000 | $ 76,000,000 | ||
Increase in other indefinite-lived intangible assets | 32,000,000 | |||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 0 | 0 | $ 0 | |
Impairment charge for goodwill | 0 | 0 | 0 | |
Carrying value of definite-lived intangible assets | 248,000,000 | 183,000,000 | ||
Accumulated amortization | 73,000,000 | 48,000,000 | ||
Amortization expense related to the definite-lived intangible assets | 24,000,000 | $ 23,000,000 | $ 20,000,000 | |
Increase in definite-lived intangible assets | 86,000,000 | |||
Amortization expense related to the definite-lived intangible assets, 2021 | 27,000,000 | |||
Amortization expense related to the definite-lived intangible assets, 2022 | 23,000,000 | |||
Amortization expense related to the definite-lived intangible assets, 2023 | 22,000,000 | |||
Amortization expense related to the definite-lived intangible assets, 2024 | 22,000,000 | |||
Amortization expense related to the definite-lived intangible assets, 2025 | $ 17,000,000 | |||
Weighted average | ||||
Definite-lived Intangible Assets | ||||
Weighted average amortization period | 15 years | 17 years | ||
Decorative Architectural Products | ||||
Definite-lived Intangible Assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 9,000,000 |
FAIR VALUE OF FINANCIAL INVES_2
FAIR VALUE OF FINANCIAL INVESTMENTS - General Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 18, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Dividend income | $ 10 | $ 0 | $ 0 | |
Investments | 146 | $ 0 | ||
Kraus USA Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration, undiscounted amount, maximum | 50 | |||
Contingent consideration, liability | $ 8 | |||
ACProducts Preferred Stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Coupon rate, percentage until the first anniversary issuance | 8.00% | |||
Coupon rate, percentage after the first anniversary and until the second anniversary issuance | 9.00% | |||
Coupon rate, percentage after the second anniversary and until the seventh anniversary issuance | 10.00% | |||
Preferred Stock, percentage of coupon rate increase | 0.50% | |||
Coupon rate, maximum percentage | 15.00% | |||
Fair value disclosure, investment | $ 136 | |||
ACProducts Preferred Stock | Other Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | $ 146 | |||
ACProducts Holding Inc | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liquidation preference | $ 150 |
FAIR VALUE OF FINANCIAL INVES_3
FAIR VALUE OF FINANCIAL INVESTMENTS - Fair Value of Debt (Details) - USD ($) $ in Billions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | ||
Fair value of debt | ||
Long-term and short-term debt | $ 3.3 | $ 3 |
Carrying Value | ||
Fair value of debt | ||
Debt, long-term and short-term | $ 2.8 | $ 2.8 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Preferred stock of ACProducts Holding, Inc. (Note I) | $ 146 | $ 0 | |
Equity method investments | 11 | 11 | |
In-store displays, net | 1 | 5 | |
Deferred tax assets (Note S) | 109 | 99 | |
Other | 27 | 24 | |
Total | 294 | 139 | |
Amortization expense related to in-store displays | $ 2 | 12 | $ 21 |
Cash spent for in-store displays | $ 11 | $ 10 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Salaries, wages and commissions | $ 193 | $ 141 |
Advertising and sales promotion | 293 | 189 |
Interest | 35 | 36 |
Warranty (Note U) | 34 | 31 |
Employee retirement plans | 182 | 41 |
Insurance reserves | 29 | 37 |
Property, payroll and other taxes | 32 | 18 |
Dividends payable | 36 | 37 |
Deferred revenue | 62 | 40 |
Product returns | $ 23 | $ 25 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Operating lease liabilities (Note F) | $ 39 | $ 38 |
Other | 80 | 67 |
Total | $ 1,038 | $ 700 |
DEBT - Tabular Disclosure - Not
DEBT - Tabular Disclosure - Notes and Debentures and Other (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 29, 2020 | Sep. 18, 2020 | Dec. 31, 2019 |
Debt | ||||
Other | $ 33 | $ 30 | ||
Debt Issuance Costs, Net | (15) | (14) | ||
Total long-term debt, current and non-current | 2,795 | 2,773 | ||
Less: Current portion | 3 | 2 | ||
Total long-term debt | 2,792 | 2,771 | ||
3.500%, due April 1, 2021 | ||||
Debt | ||||
Interest rate (as a percent) | 3.50% | |||
3.500%, due April 1, 2021 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 0 | 399 | ||
Interest rate (as a percent) | 3.50% | |||
5.950%, due March 15, 2022 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 326 | 326 | ||
Interest rate (as a percent) | 5.95% | |||
4.450%, due April 1, 2025 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 500 | 500 | ||
Interest rate (as a percent) | 4.45% | |||
4.375%, due April 1, 2026 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 498 | 498 | ||
Interest rate (as a percent) | 4.375% | |||
3.500%, due November 15, 2027 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 300 | 300 | ||
Interest rate (as a percent) | 3.50% | |||
7.750%, due August 1, 2029 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 235 | 235 | ||
Interest rate (as a percent) | 7.75% | |||
2.000%, due October 1, 2030 | ||||
Debt | ||||
Interest rate (as a percent) | 2.00% | |||
2.000%, due October 1, 2030 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 300 | 0 | ||
Interest rate (as a percent) | 2.00% | |||
6.500%, due August 15, 2032 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 200 | $ 200 | ||
Interest rate (as a percent) | 6.50% | |||
4.500%, due May 15, 2047 | ||||
Debt | ||||
Interest rate (as a percent) | 4.50% | 4.50% | ||
4.500%, due May 15, 2047 | Senior notes and debentures | ||||
Debt | ||||
Notes and debentures | $ 418 | $ 299 | ||
Interest rate (as a percent) | 4.50% |
DEBT - Notes and Debentures (De
DEBT - Notes and Debentures (Details) - USD ($) $ in Millions | Sep. 29, 2020 | Sep. 18, 2020 | Dec. 19, 2019 | Apr. 16, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt | |||||||
Repayments of notes payable | $ 400 | $ 201 | $ 114 | ||||
7.750%, due August 1, 2029 | Senior notes and debentures | |||||||
Debt | |||||||
Interest rate (as a percent) | 7.75% | ||||||
2.000%, due October 1, 2030 | |||||||
Debt | |||||||
Interest rate (as a percent) | 2.00% | ||||||
Long-term debt, gross | $ 300 | ||||||
Proceeds from issuance of debt | 300 | ||||||
2.000%, due October 1, 2030 | Senior notes and debentures | |||||||
Debt | |||||||
Interest rate (as a percent) | 2.00% | ||||||
4.500%, due May 15, 2047 | |||||||
Debt | |||||||
Interest rate (as a percent) | 4.50% | 4.50% | |||||
Long-term debt, gross | 100 | $ 300 | |||||
Proceeds from issuance of debt | $ 119 | ||||||
4.500%, due May 15, 2047 | Senior notes and debentures | |||||||
Debt | |||||||
Interest rate (as a percent) | 4.50% | ||||||
3.500%, due April 1, 2021 | |||||||
Debt | |||||||
Interest rate (as a percent) | 3.50% | ||||||
Repayments of notes payable | $ 400 | ||||||
Debt extinguishment costs | $ 6 | ||||||
3.500%, due April 1, 2021 | Senior notes and debentures | |||||||
Debt | |||||||
Interest rate (as a percent) | 3.50% | ||||||
7.125% Notes and Debentures Due 15 March 2020 | |||||||
Debt | |||||||
Debt extinguishment costs | $ 2 | ||||||
7.125% Notes and Debentures Due 15 March 2020 | Senior notes and debentures | |||||||
Debt | |||||||
Interest rate (as a percent) | 7.125% | ||||||
Repayments of notes payable | $ 201 | ||||||
6.625% Notes and Debentures Due 15 April 2018 | |||||||
Debt | |||||||
Interest rate (as a percent) | 6.625% | ||||||
Repayments of notes payable | $ 114 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) - USD ($) | Mar. 13, 2019 | Dec. 31, 2020 | Mar. 28, 2013 |
Year2019 Credit Agreement | |||
Debt | |||
Borrowing capacity, maximum | $ 1,000,000,000 | ||
Increase in maximum borrowing capacity | $ 500,000,000 | ||
Maximum Leverage Ratio | 4 | ||
Minimum interest coverage ratio | 2.5 | ||
Amount borrowed | $ 0 | ||
Year2019 Credit Agreement | Federal funds effective rate | |||
Debt | |||
Interest rate, basis spread (as a percent) | 0.50% | ||
Year2019 Credit Agreement | Libor rate | |||
Debt | |||
Interest rate, basis spread (as a percent) | 1.00% | ||
Year2019 Credit Agreement | Revolver | |||
Debt | |||
Borrowing capacity, maximum | $ 500,000,000 | ||
Year2019 Credit Agreement | Swingline loans | |||
Debt | |||
Borrowing capacity, maximum | 100,000,000 | ||
Year2019 Credit Agreement | Letters of credit | |||
Debt | |||
Borrowing capacity, maximum | $ 25,000,000 | ||
Outstanding and unused Letters of Credit | $ 0 | ||
Credit Agreement dated March 28, 2013 | |||
Debt | |||
Borrowing capacity, maximum | $ 750,000,000 |
DEBT - Debt Maturities (Details
DEBT - Debt Maturities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Debt maturities | |
2021 | $ 3 |
2022 | 334 |
2023 | 3 |
2024 | 3 |
2025 | $ 503 |
DEBT - Interest Paid (Details)
DEBT - Interest Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest paid | |||
Interest paid | $ 136 | $ 157 | $ 155 |
Debt extinguishment costs | $ 5 | $ 2 | $ 0 |
STOCK-BASED COMPENSATION - Pre-
STOCK-BASED COMPENSATION - Pre-tax Compensation Expense and the Related Income Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation | |||
Pre-tax compensation expense | $ 43 | $ 31 | $ 25 |
Long-term stock awards | |||
Stock-based compensation | |||
Pre-tax compensation expense | 14 | 20 | 20 |
Stock options | |||
Stock-based compensation | |||
Pre-tax compensation expense | 7 | 4 | 3 |
Restricted stock units | |||
Stock-based compensation | |||
Pre-tax compensation expense | 13 | 0 | 0 |
Performance restricted stock units | |||
Stock-based compensation | |||
Pre-tax compensation expense | 5 | 3 | 4 |
Phantom stock awards and stock appreciation rights | |||
Stock-based compensation | |||
Pre-tax compensation expense | $ 4 | $ 4 | $ (2) |
STOCK-BASED COMPENSATION - Comm
STOCK-BASED COMPENSATION - Common Stock Available under the Plan (Details) shares in Millions | Dec. 31, 2020shares |
2014 Plan | |
Stock-based compensation | |
Common stock available for granting stock options and other long-term stock incentive awards (in shares) | 13.4 |
STOCK-BASED COMPENSATION - Long
STOCK-BASED COMPENSATION - Long-Term Stock Awards (Details) - Long-term stock awards - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unvested stock award shares | |||
Balance at the beginning of the period (in shares) | 2 | 2 | 3 |
Granted (in shares) | 0 | 1 | 1 |
Vested (in shares) | 1 | 1 | 2 |
Forfeited (in shares) | 0 | 0 | 0 |
Balance at the end of the period (in shares) | 1 | 2 | 2 |
Weighted average grant date fair value | |||
Balance at the beginning of the period (in dollars per share) | $ 34 | $ 30 | $ 24 |
Granted (in dollars per share) | 0 | 36 | 41 |
Vested (in dollars per share) | 32 | 25 | 21 |
Forfeited (in dollars per share) | 35 | 35 | 31 |
Balance at the end of the period (in dollars per share) | $ 36 | $ 34 | $ 30 |
Additional disclosures | |||
Total unrecognized compensation expense | $ 21 | $ 41 | $ 46 |
Remaining weighted average vesting period | 2 years | 3 years | 3 years |
Total market value (at the vesting date) of stock award shares | $ 31 | $ 31 | $ 56 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Outstanding at the beginning of the period (in shares) | 3,000,000 | 4,000,000 | 5,000,000 |
Granted (in shares) | 1,000,000 | 1,000,000 | 0 |
Exercised (in shares) | 2,000,000 | 2,000,000 | 1,000,000 |
Forfeited (in shares) | 0 | 0 | 0 |
Outstanding at the end of the period (in shares) | 2,000,000 | 3,000,000 | 4,000,000 |
Option shares vested and expected to vest at the end of the period (in shares) | 2,000,000 | 3,000,000 | 4,000,000 |
Option shares exercisable at the end of the period (in shares) | 1,000,000 | 2,000,000 | 3,000,000 |
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 27 | $ 21 | $ 16 |
Granted (in dollars per share) | 48 | 36 | 42 |
Exercised (in dollars per share) | 17 | 13 | 11 |
Forfeited (in dollars per share) | 40 | 34 | 31 |
Outstanding at the end of the period (in dollars per share) | 33 | 27 | 21 |
Option shares vested and expected to vest at the end of the period (in dollars per share) | 33 | 27 | 21 |
Option shares exercisable at the end of the period (in dollars per share) | $ 28 | $ 21 | $ 16 |
Aggregate intrinsic value | |||
Exercised shares | $ 29 | $ 33 | $ 55 |
Option shares vested and expected to vest at the end of the period | 51 | 63 | 36 |
Option shares exercisable at the end of the period | $ 35 | $ 47 | $ 34 |
Weighted average remaining option term | |||
Outstanding at the end of the period | 6 years | 6 years | 5 years |
Option shares vested and expected to vest at the end of the period | 6 years | 6 years | 5 years |
Option shares exercisable at the end of the period | 5 years | 4 years | 4 years |
Stock options | |||
Shares | |||
Granted (in shares) | 420,840 | ||
Forfeited (in shares) | 60,838 | ||
Weighted average exercise price | |||
Granted (in dollars per share) | $ 48 | ||
Additional disclosures | |||
Total unrecognized compensation expense | $ 6 | $ 9 | $ 8 |
Remaining weighted average vesting period | 2 years | 3 years | 3 years |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted Average Grant Date Fair Value of Option Shares Granted and Assumptions Used (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Weighted average grant date fair value (in dollars per share) | $ 10.67 | $ 8.81 | $ 12.34 |
Risk-free interest rate | 1.53% | 2.57% | 2.72% |
Dividend yield | 1.14% | 1.35% | 1.02% |
Volatility factor | 24.00% | 25.00% | 29.00% |
Expected option life | 6 years | 6 years | 6 years |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock Option Shares Outstanding and Exercisable (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | $ 10 |
Exercise price range, high end of range (in dollars per share) | $ 48 |
Option shares outstanding, number of shares (in shares) | shares | 2 |
Weighted Average Remaining Option Term | 6 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 33 |
Option shares exercisable, number of shares (in shares) | shares | 1 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 28 |
Range One | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 10 |
Exercise price range, high end of range (in dollars per share) | $ 18 |
Option shares outstanding, number of shares (in shares) | shares | 0 |
Weighted Average Remaining Option Term | 2 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 18 |
Option shares exercisable, number of shares (in shares) | shares | 0 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 18 |
Range Two | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 19 |
Exercise price range, high end of range (in dollars per share) | $ 34 |
Option shares outstanding, number of shares (in shares) | shares | 1 |
Weighted Average Remaining Option Term | 5 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 26 |
Option shares exercisable, number of shares (in shares) | shares | 1 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 25 |
Range Three | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 35 |
Exercise price range, high end of range (in dollars per share) | $ 48 |
Option shares outstanding, number of shares (in shares) | shares | 1 |
Weighted Average Remaining Option Term | 8 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 41 |
Option shares exercisable, number of shares (in shares) | shares | 0 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 39 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation | |||
Period for recognition (in years) | 3 years | ||
Restricted stock units | |||
Stock-based compensation | |||
Granted (in shares) | 445,670 | ||
Grants in period, intrinsic value (in dollars per share) | $ 47 | ||
Forfeited (in shares) | 11,100 | ||
Unrecognized compensation cost | $ 7 | ||
Unrecognized compensation expense, recognition period | 2 years | ||
LTIP Program | Minimum | |||
Stock-based compensation | |||
Award vesting rights, percentage | 0.00% | ||
LTIP Program | Maximum | |||
Stock-based compensation | |||
Award vesting rights, percentage | 200.00% | ||
LTIP Program | Restricted stock units | |||
Stock-based compensation | |||
Period for recognition (in years) | 3 years | ||
LTIP Program | Performance restricted stock units | |||
Stock-based compensation | |||
Granted (in shares) | 133,390 | 126,680 | 113,260 |
Grants in period, intrinsic value (in dollars per share) | $ 34 | $ 39 | $ 42 |
Forfeited (in shares) | 10,680 | 15,600 | 11,600 |
Shares issued during period (in shares) | 151,724 | ||
Vested (in shares) | 102,990 |
STOCK-BASED COMPENSATION - Phan
STOCK-BASED COMPENSATION - Phantom Stock Awards and Stock Appreciation Rights ("SARs") (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Phantom Share Units (PSUs) | |||
Stock-based compensation | |||
Recognized expense (income) related to valuation | $ 4 | $ 4 | $ 1 |
Granted (in shares) | 82,630 | 79,500 | 98,140 |
Fair value of stock award granted | $ 3 | $ 3 | $ 4 |
Cash paid to settle awards | 3 | 3 | 6 |
Accrued compensation cost liability | 6 | 5 | |
Unrecognized compensation cost | $ 4 | $ 3 | |
Equivalent common shares (in shares) | 0 | 0 | |
Stock Appreciation Rights (SARs) | |||
Stock-based compensation | |||
Recognized expense (income) related to valuation | $ 1 | ||
Granted (in shares) | 0 | 0 | |
Cash paid to settle awards | $ 2 | $ 5 | |
Equity instruments other than options, outstanding (in shares) | 0 | 0 |
EMPLOYEE RETIREMENT PLANS - Pre
EMPLOYEE RETIREMENT PLANS - Pre-tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pre-tax expense | |||
Pre-tax expense | $ 84 | $ 64 | $ 54 |
Defined-contribution plans | |||
Pre-tax expense | |||
Pre-tax expense | 46 | 40 | 37 |
Defined-benefit pension plans | |||
Pre-tax expense | |||
Pre-tax expense | $ 38 | $ 24 | $ 17 |
EMPLOYEE RETIREMENT PLANS - Cha
EMPLOYEE RETIREMENT PLANS - Changes in the Projected Benefit Obligation and Fair Value of Plan Assets, and the Funded Status of Defined-benefit Pension Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Qualified | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at January 1 | $ 1,034 | $ 896 | |
Service cost | 3 | 3 | $ 3 |
Interest cost | 23 | 33 | |
Actuarial loss, net | (85) | (149) | |
Foreign currency exchange | (18) | 3 | |
Benefit payments | 45 | 44 | |
Divestitures | 0 | 0 | |
Projected benefit obligation at December 31 | 1,118 | 1,034 | 896 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at January 1 | 780 | 670 | |
Actual return on plan assets | 67 | 105 | |
Foreign currency exchange | (8) | 1 | |
Company contributions | 57 | 56 | |
Expenses, other | 4 | 6 | |
Benefit payments | 45 | 44 | |
Fair value of plan assets at December 31 | 863 | 780 | 670 |
Funded status at December 31 | (255) | (254) | |
Non-Qualified | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at January 1 | 161 | 155 | |
Service cost | 0 | 0 | 0 |
Interest cost | 5 | 6 | |
Actuarial loss, net | (10) | (13) | |
Foreign currency exchange | 0 | 0 | |
Benefit payments | 13 | 13 | |
Divestitures | (1) | 0 | |
Projected benefit obligation at December 31 | 162 | 161 | 155 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at January 1 | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Foreign currency exchange | 0 | 0 | |
Company contributions | 13 | 13 | |
Expenses, other | 0 | 0 | |
Benefit payments | 13 | 13 | |
Fair value of plan assets at December 31 | 0 | 0 | $ 0 |
Funded status at December 31 | $ (162) | $ (161) |
EMPLOYEE RETIREMENT PLANS - Amo
EMPLOYEE RETIREMENT PLANS - Amounts in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Amounts in the company's consolidated balance sheets | ||
Accrued liabilities | $ (182) | $ (41) |
Qualified | ||
Amounts in the company's consolidated balance sheets | ||
Other assets | 1 | 1 |
Accrued liabilities | (135) | (1) |
Other liabilities | (121) | (254) |
Total net liability | (255) | (254) |
Non-Qualified | ||
Amounts in the company's consolidated balance sheets | ||
Other assets | 0 | 0 |
Accrued liabilities | (12) | (13) |
Other liabilities | (150) | (148) |
Total net liability | $ (162) | $ (161) |
EMPLOYEE RETIREMENT PLANS - Unr
EMPLOYEE RETIREMENT PLANS - Unrealized Loss Included in Accumulated Other Comprehensive (Loss) Income before Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Qualified | ||
Amounts in accumulated other comprehensive income (loss) before income taxes | ||
Net loss | $ 540 | $ 520 |
Net prior service cost | 3 | 4 |
Total | 543 | 524 |
Non-Qualified | ||
Amounts in accumulated other comprehensive income (loss) before income taxes | ||
Net loss | 65 | 57 |
Net prior service cost | 0 | 0 |
Total | $ 65 | $ 57 |
EMPLOYEE RETIREMENT PLANS - Def
EMPLOYEE RETIREMENT PLANS - Defined-benefit Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Qualified | ||
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | $ 1,100 | $ 1,019 |
Accumulated benefit obligation | 1,100 | 1,019 |
Fair value of plan assets | 844 | 763 |
Non-Qualified | ||
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | 162 | 161 |
Accumulated benefit obligation | 162 | 161 |
Fair value of plan assets | $ 0 | $ 0 |
EMPLOYEE RETIREMENT PLANS - Net
EMPLOYEE RETIREMENT PLANS - Net Periodic Pension Cost for Defined-benefit Pension Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net periodic pension cost for the company's defined-benefit pension plans | |||
Pre-tax net loss from accumulated other comprehensive income (loss) into net periodic pension cost | $ 464 | ||
Qualified | |||
Net periodic pension cost for the company's defined-benefit pension plans | |||
Service cost | 3 | $ 3 | $ 3 |
Interest cost | 28 | 39 | 36 |
Expected return on plan assets | (24) | (44) | (48) |
Recognized prior service cost | 1 | 0 | 0 |
Recognized net loss | 22 | 18 | 17 |
Net periodic pension cost | 30 | 16 | 8 |
Non-Qualified | |||
Net periodic pension cost for the company's defined-benefit pension plans | |||
Service cost | 0 | 0 | 0 |
Interest cost | 5 | 6 | 6 |
Expected return on plan assets | 0 | 0 | 0 |
Recognized prior service cost | 0 | 0 | 0 |
Recognized net loss | 3 | 2 | 3 |
Net periodic pension cost | $ 8 | $ 8 | $ 9 |
EMPLOYEE RETIREMENT PLANS - Qua
EMPLOYEE RETIREMENT PLANS - Qualified Defined-benefit Pension Plan Weighted Average Asset Allocation (Details) - Qualified | Dec. 31, 2020 | Dec. 31, 2019 |
Plan Assets | ||
Weighted average asset allocation (as a percent) | 100.00% | 100.00% |
Equity securities | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 15.00% | 41.00% |
Debt securities | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 49.00% | 54.00% |
Other | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 36.00% | 5.00% |
EMPLOYEE RETIREMENT PLANS - Q_2
EMPLOYEE RETIREMENT PLANS - Qualified Defined-benefit Pension Plan Assets at Fair Value by Level within the Fair Value Hierarchy (Details) - Qualified - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value | |||
Private equity funds | $ 863,000,000 | $ 780,000,000 | $ 670,000,000 |
Valued at NAV | 87,000,000 | 464,000,000 | |
Level 1 | |||
Fair Value | |||
Private equity funds | 43,000,000 | 239,000,000 | |
Level 2 | |||
Fair Value | |||
Private equity funds | 732,000,000 | 58,000,000 | |
Level 3 | |||
Fair Value | |||
Private equity funds | 1,000,000 | 19,000,000 | |
United States | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 113,000,000 | 167,000,000 | |
Valued at NAV | 87,000,000 | 82,000,000 | |
United States | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | ||
Valued at NAV | 0 | ||
United States | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 143,000,000 | 198,000,000 | |
Valued at NAV | 0 | 124,000,000 | |
United States | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 214,000,000 | 151,000,000 | |
Valued at NAV | 0 | 148,000,000 | |
United States | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 292,000,000 | 4,000,000 | |
Valued at NAV | 0 | 0 | |
United States | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | ||
Valued at NAV | 0 | ||
United States | Level 1 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 26,000,000 | 85,000,000 | |
United States | Level 1 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 1 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 74,000,000 | |
United States | Level 1 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 1 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 1 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | ||
United States | Level 2 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 2 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 2 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 143,000,000 | 0 | |
United States | Level 2 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 214,000,000 | 3,000,000 | |
United States | Level 2 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 292,000,000 | 4,000,000 | |
United States | Level 2 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 3 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 3 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | ||
United States | Level 3 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 3 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 3 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 3 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 0 | ||
International | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 15,000,000 | 157,000,000 | |
Valued at NAV | 0 | 110,000,000 | |
International | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 1,000,000 | 17,000,000 | |
Valued at NAV | 0 | 0 | |
International | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 23,000,000 | 1,000,000 | |
Valued at NAV | 0 | 0 | |
International | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 46,000,000 | 67,000,000 | |
Valued at NAV | 0 | 0 | |
International | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 14,000,000 | 12,000,000 | |
Valued at NAV | 0 | 0 | |
International | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | 2,000,000 | |
Valued at NAV | 0 | 0 | |
International | Level 1 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 15,000,000 | 47,000,000 | |
International | Level 1 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 1 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 1 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 29,000,000 | |
International | Level 1 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 1 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 2,000,000 | 2,000,000 | |
International | Level 2 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 2 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 2 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 23,000,000 | 1,000,000 | |
International | Level 2 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 46,000,000 | 38,000,000 | |
International | Level 2 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 14,000,000 | 12,000,000 | |
International | Level 2 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 3 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 3 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 1,000,000 | 17,000,000 | |
International | Level 3 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 3 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 3 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
International | Level 3 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | $ 0 | $ 0 |
EMPLOYEE RETIREMENT PLANS - C_2
EMPLOYEE RETIREMENT PLANS - Changes in the Fair Value of the Qualified Defined-benefit Pension Plan Level 3 Assets (Details) - Qualified - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the fair value of plan level 3 assets | ||
Balance at the beginning of the period | $ 19 | $ 59 |
Purchases | 0 | 4 |
Sales | (18) | (41) |
Unrealized (losses) gains | 0 | (3) |
Balance at the end of the period | $ 1 | $ 19 |
EMPLOYEE RETIREMENT PLANS - Ass
EMPLOYEE RETIREMENT PLANS - Assumptions - Tabular Disclosure (Details) - Defined-benefit pension plans | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assumptions | |||
Discount rate for obligations | 1.70% | 2.50% | 3.80% |
Expected return on plan assets | 2.00% | 3.00% | 7.00% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Discount rate for net periodic pension cost | 2.50% | 3.80% | 3.30% |
EMPLOYEE RETIREMENT PLANS - A_2
EMPLOYEE RETIREMENT PLANS - Assumptions - General Disclosures (Details) - Defined-benefit pension plans | 12 Months Ended | 132 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Assumptions | ||||
Discount rate for obligations | 1.70% | 2.50% | 3.80% | 1.70% |
Expected return on plan assets | 2.00% | 3.00% | 7.00% | |
Actual annual rate of return on pension plan assets (as a percent) | 9.70% | 17.70% | 4.90% | 7.20% |
Debt securities | ||||
Assumptions | ||||
Asset allocation (as a percent) | 60.00% | 60.00% | ||
Alternative investments | ||||
Assumptions | ||||
Asset allocation (as a percent) | 40.00% | 40.00% | ||
Minimum | ||||
Assumptions | ||||
Discount rate for obligations | 0.70% | 1.10% | 1.50% | 0.70% |
Liabilities having a discount rate for obligations (as a percent) | 1.60% | 2.40% | 4.10% | 1.60% |
Maximum | ||||
Assumptions | ||||
Discount rate for obligations | 2.10% | 3.00% | 4.20% | 2.10% |
International | ||||
Assumptions | ||||
Expected return on plan assets | 2.90% |
EMPLOYEE RETIREMENT PLANS - Oth
EMPLOYEE RETIREMENT PLANS - Other and Cash Flows (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Qualified | ||
Employee Retirement Plans | ||
Contribution to qualified defined-benefit pension plans | $ 140 | |
Payments to participants defined-benefit pension plans | 895 | |
Non-Qualified | ||
Employee Retirement Plans | ||
Payments to participants defined-benefit pension plans | 12 | |
International | ||
Employee Retirement Plans | ||
Payments to participants defined-benefit pension plans | 1 | |
Defined-contribution plans | ||
Employee Retirement Plans | ||
Aggregate present value of unfunded accumulated post-retirement benefit obligation | $ 10 | $ 10 |
EMPLOYEE RETIREMENT PLANS - Ben
EMPLOYEE RETIREMENT PLANS - Benefits Expected to be Paid in Each of the Next Five Years, and in Aggregate for the Five Years Thereafter (Details) $ in Millions | Dec. 31, 2020USD ($) |
Qualified | |
Benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter | |
2021 | $ 895 |
2022 | 5 |
2023 | 6 |
2024 | 6 |
2025 | 6 |
2026 - 2030 | 38 |
Non-Qualified | |
Benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter | |
2021 | 12 |
2022 | 12 |
2023 | 12 |
2024 | 12 |
2025 | 12 |
2026 - 2030 | $ 50 |
SHAREHOLDERS' EQUITY - Stock Re
SHAREHOLDERS' EQUITY - Stock Repurchase (Details) - USD ($) shares in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 10, 2021 | Sep. 30, 2019 | |
Class of Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 2,000,000,000 | ||||
Repurchase and retirement of common stock (in shares) | 18.8 | 20.1 | 18.6 | ||
Repurchase and retirement of common stock to offset the dilutive impact of the grant of long-term stock awards (in shares) | 0.4 | 0.6 | 0.7 | ||
Repurchase and retirement of common stock | $ 727,000,000 | $ 896,000,000 | $ 654,000,000 | ||
Remaining authorized repurchase amount | $ 774,000,000 | ||||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 2,000,000,000 |
SHAREHOLDERS' EQUITY - Dividend
SHAREHOLDERS' EQUITY - Dividends (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||
Cash dividends per common share paid (in dollars per share) | $ 0.545 | $ 0.495 | $ 0.435 |
Cash dividends per common share declared (in dollars per share) | $ 0.550 | $ 0.510 | $ 0.450 |
SHAREHOLDERS' EQUITY - Accumula
SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Cumulative translation adjustments, net | $ 325 | $ 273 |
Unrealized loss on interest rate swaps, net | (7) | (8) |
Unrecognized net loss and prior service cost, net | (460) | (444) |
Accumulated other comprehensive loss | (142) | (179) |
Income tax benefit on cumulative translation adjustment | 1 | 1 |
Income tax benefit on unrealized loss on interest rate swap securities | 5 | 4 |
Income tax benefit on prior service cost and net loss | $ 124 | $ 117 |
RECLASSIFICATIONS FROM OTHER _3
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassifications from accumulated other comprehensive (loss) income | |||||
Actuarial losses, net and prior service cost | $ 164 | $ 174 | $ 170 | ||
Income tax expense | 269 | 230 | 221 | ||
Net of tax | (1,276) | (980) | (784) | ||
Interest expense | 144 | 159 | 156 | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings | $ 59 | ||||
Amount reclassified | |||||
Reclassifications from accumulated other comprehensive (loss) income | |||||
Actuarial losses, net and prior service cost | 9 | ||||
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Amount reclassified | |||||
Reclassifications from accumulated other comprehensive (loss) income | |||||
Actuarial losses, net and prior service cost | 26 | 20 | 20 | ||
Income tax expense | (7) | (5) | (5) | ||
Net of tax | 19 | 15 | 15 | ||
UK Window Group | Amount reclassified | |||||
Reclassifications from accumulated other comprehensive (loss) income | |||||
Actuarial losses, net and prior service cost | $ 14 | ||||
Interest rate swaps | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | Amount reclassified | |||||
Reclassifications from accumulated other comprehensive (loss) income | |||||
Income tax expense | (1) | 0 | 0 | ||
Net of tax | 1 | 2 | 2 | ||
Interest expense | $ 2 | $ 2 | $ 2 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Sales | |||||||||||
Net sales | $ 1,860 | $ 1,983 | $ 1,764 | $ 1,581 | $ 1,639 | $ 1,716 | $ 1,839 | $ 1,513 | $ 7,188 | $ 6,707 | $ 6,654 |
Operating profit | 1,295 | 1,088 | 1,077 | ||||||||
Other income (expense), net | (164) | (174) | (170) | ||||||||
Income from continuing operations before income taxes | 1,131 | 914 | 907 | ||||||||
Assets | 5,777 | 5,027 | 5,777 | 5,027 | 5,393 | ||||||
Assets held for sale | 0 | 528 | 0 | 528 | 1,195 | ||||||
Export sales from U.S. included in net sales | $ 274 | $ 244 | $ 237 | ||||||||
Maximum | |||||||||||
Net Sales | |||||||||||
Intra-company sales between segments in percentage | 1.00% | 1.00% | 1.00% | ||||||||
One customer | Customer concentration risk | Sales | |||||||||||
Net Sales | |||||||||||
Net sales | $ 2,812 | $ 2,481 | $ 2,457 | ||||||||
North America | |||||||||||
Net Sales | |||||||||||
Net sales | 5,805 | 5,328 | 5,208 | ||||||||
International, principally Europe | |||||||||||
Net Sales | |||||||||||
Net sales | 1,383 | 1,379 | 1,446 | ||||||||
United States | |||||||||||
Net Sales | |||||||||||
Long-lived assets | 1,301 | 1,198 | 1,301 | 1,198 | 1,119 | ||||||
United States | Sales | |||||||||||
Net Sales | |||||||||||
Net sales | 5,592 | 5,127 | 5,034 | ||||||||
Europe | |||||||||||
Net Sales | |||||||||||
Long-lived assets | 522 | 470 | 522 | 470 | 446 | ||||||
Plumbing Products | |||||||||||
Net Sales | |||||||||||
Net sales | 4,136 | 3,984 | 3,998 | ||||||||
Plumbing Products | North America | |||||||||||
Net Sales | |||||||||||
Net sales | 2,753 | 2,605 | 2,552 | ||||||||
Plumbing Products | International, principally Europe | |||||||||||
Net Sales | |||||||||||
Net sales | 1,383 | 1,379 | 1,446 | ||||||||
Decorative Architectural Products | |||||||||||
Net Sales | |||||||||||
Net sales | 3,052 | 2,723 | 2,656 | ||||||||
Decorative Architectural Products | North America | |||||||||||
Net Sales | |||||||||||
Net sales | 3,052 | 2,723 | 2,656 | ||||||||
Decorative Architectural Products | International, principally Europe | |||||||||||
Net Sales | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Operating Segments | |||||||||||
Net Sales | |||||||||||
Net sales | 7,188 | 6,707 | 6,654 | ||||||||
Operating profit | 1,389 | 1,188 | 1,171 | ||||||||
Assets | 4,455 | 3,901 | 4,455 | 3,901 | 3,787 | ||||||
Operating Segments | North America | |||||||||||
Net Sales | |||||||||||
Net sales | 5,805 | 5,328 | 5,208 | ||||||||
Operating profit | 1,167 | 987 | 954 | ||||||||
Assets | 3,101 | 2,785 | 3,101 | 2,785 | 2,729 | ||||||
Operating Segments | International, principally Europe | |||||||||||
Net Sales | |||||||||||
Net sales | 1,383 | 1,379 | 1,446 | ||||||||
Operating profit | 222 | 201 | 217 | ||||||||
Assets | 1,354 | 1,116 | 1,354 | 1,116 | 1,058 | ||||||
Operating Segments | Plumbing Products | |||||||||||
Net Sales | |||||||||||
Net sales | 4,136 | 3,984 | 3,998 | ||||||||
Operating profit | 806 | 708 | 715 | ||||||||
Assets | 2,822 | 2,375 | 2,822 | 2,375 | 2,253 | ||||||
Operating Segments | Decorative Architectural Products | |||||||||||
Net Sales | |||||||||||
Net sales | 3,052 | 2,723 | 2,656 | ||||||||
Operating profit | 583 | 480 | 456 | ||||||||
Assets | 1,633 | 1,526 | 1,633 | 1,526 | 1,534 | ||||||
Corporate, Non-Segment | |||||||||||
Net Sales | |||||||||||
General corporate expense, net | (94) | (100) | (94) | ||||||||
Assets | $ 1,322 | $ 598 | $ 1,322 | $ 598 | $ 411 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation and Amortization | |||
Property Additions | $ 114 | $ 162 | $ 219 |
Depreciation and amortization | 133 | 159 | 156 |
Operating Segments | |||
Depreciation and Amortization | |||
Property Additions | 111 | 126 | 174 |
Depreciation and amortization | 125 | 121 | 112 |
Operating Segments | Plumbing Products | |||
Depreciation and Amortization | |||
Property Additions | 86 | 108 | 120 |
Depreciation and amortization | 84 | 80 | 77 |
Operating Segments | Decorative Architectural Products | |||
Depreciation and Amortization | |||
Property Additions | 25 | 18 | 54 |
Depreciation and amortization | 41 | 41 | 35 |
Corporate, Non-Segment | |||
Depreciation and Amortization | |||
Property Additions | 2 | 2 | 7 |
Depreciation and amortization | 8 | 9 | 8 |
Discontinued operations | |||
Depreciation and Amortization | |||
Property Additions | 1 | 34 | 38 |
Depreciation and amortization | $ 0 | $ 29 | $ 36 |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Investment Income [Line Items] | |||
Income from cash and cash investments and short-term bank deposits | $ 3 | $ 3 | $ 5 |
Equity investment income, net | 3 | 1 | 3 |
Foreign currency transaction (losses) gains (1) | (10) | 2 | (8) |
Net periodic pension and post-retirement benefit cost | (35) | (21) | (14) |
Dividend income | 10 | 0 | 0 |
Other items, net | 9 | 0 | (1) |
Total other, net | (20) | (15) | (14) |
Deferred currency translation loss | 164 | 174 | 170 |
Miscellaneous income, escrow settlement | 9 | ||
Amount reclassified | |||
Net Investment Income [Line Items] | |||
Deferred currency translation loss | 9 | ||
Private equity funds | |||
Net Investment Income [Line Items] | |||
Realized gains from private equity funds | $ 0 | $ 0 | $ 1 |
INCOME TAXES - Income from Cont
INCOME TAXES - Income from Continuing Operations before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income from continuing operations before income taxes: | |||
U.S. | $ 892 | $ 684 | $ 670 |
Foreign | 239 | 230 | 237 |
Income from continuing operations before income taxes | 1,131 | 914 | 907 |
Currently payable: | |||
U.S. Federal | 170 | 155 | 115 |
State and local | 33 | 46 | 29 |
Foreign | 69 | 70 | 74 |
Deferred: | |||
U.S. Federal | (9) | (23) | 12 |
State and local | 11 | (15) | 0 |
Foreign | (5) | (3) | (9) |
Income tax (benefit) expense | 269 | 230 | $ 221 |
Deferred tax assets at December 31: | |||
Receivables | 9 | 7 | |
Inventories | 17 | 15 | |
Other assets, including stock-based compensation | 17 | 15 | |
Accrued liabilities | 82 | 48 | |
Noncurrent operating lease liabilities | 35 | 39 | |
Other long-term liabilities | 96 | 137 | |
Net operating loss carryforward | 56 | 63 | |
Tax credit carryforward | 9 | 9 | |
Total | 321 | 333 | |
Valuation allowance | (35) | (38) | |
Total | 286 | 295 | |
Deferred tax liabilities at December 31: | |||
Property and equipment | 67 | 73 | |
Operating lease right-of-use assets | 39 | 42 | |
Intangibles | 74 | 71 | |
Investment in foreign subsidiaries | 10 | 10 | |
Other investments | 3 | 0 | |
Other | 4 | 22 | |
Total | 197 | 218 | |
Net deferred tax asset at December 31 | $ 89 | $ 77 |
INCOME TAXES Income Tax Disclos
INCOME TAXES Income Tax Disclosure (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | |||
Deferred tax assets | $ 109 | $ 99 | |
Tax benefit, change in valuation allowance | 5 | 4 | $ 2 |
Deferred tax assets. net operating loss and tax credit carryforwards | 65 | 72 | |
Deferred tax assets. net operating loss and tax credit carryforwards, subject to expiration | 35 | 44 | |
Deferred tax assets. net operating loss and tax credit carryforwards, not subject to expiration | 30 | 28 | |
Income taxes paid | 442 | 384 | 231 |
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Tax benefit from reversal of an accrual for uncertain tax position | 9 | 8 | 8 |
Tax benefit. change in valuation allowance | 1 | $ 1 | |
Other Noncurrent Assets | |||
Income Tax Contingency [Line Items] | |||
Deferred tax assets | 109 | 99 | |
Other Noncurrent Liabilities | |||
Income Tax Contingency [Line Items] | |||
Deferred tax liabilities | $ 20 | $ 22 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the U.S. Federal Statutory Tax Rate to the Income Tax (Benefit) Expense (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal statutory tax rate | 21.00% | 21.00% | 21.00% |
State and local taxes, net of U.S. Federal tax benefit | 3.00% | 3.00% | 3.00% |
Higher taxes on foreign earnings | 1.00% | 2.00% | 2.00% |
U.S. and foreign taxes on distributed and undistributed foreign earnings | 0.00% | 1.00% | 1.00% |
Stock-based compensation | (1.00%) | (1.00%) | (2.00%) |
Other, net | 0.00% | (1.00%) | (1.00%) |
Effective tax rate | 24.00% | 25.00% | 24.00% |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Uncertain Tax Positions | ||
Balance at the beginning of the period | $ 63 | $ 58 |
Total balance at beginning of the period | 73 | 67 |
Additions | 22 | 14 |
Reductions | (2) | (1) |
Prior year tax positions: Additions | 2 | 1 |
Prior year tax positions: Reductions | (2) | |
Lapse of applicable statute of limitations | (9) | (9) |
Balance at the end of the period | 74 | 63 |
Total balance at the end of the period | 84 | 73 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract] | ||
Interest and penalties at period start | 10 | 9 |
Interest and penalties recognized in income tax expense | 1 | |
Interest and penalties at period end | $ 10 | $ 10 |
INCOME TAXES - Uncertain Tax _2
INCOME TAXES - Uncertain Tax Positions and Interest and Penalties - Additional Disclosures (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | |||
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 58 | $ 50 | |
Liability for uncertain tax positions | 84 | 73 | $ 67 |
Reasonably possible reduction in the liability for uncertain tax positions | 9 | ||
Other Noncurrent Liabilities | |||
Income Taxes | |||
Liability for uncertain tax positions | 81 | 68 | |
Other Noncurrent Assets | |||
Income Taxes | |||
Liability for uncertain tax positions | $ 3 | $ 5 |
INCOME PER COMMON SHARE - Recon
INCOME PER COMMON SHARE - Reconciliations of the Numerators and Denominators Used in the Computations of Basic and Diluted Earnings per Common Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator (basic and diluted): | |||||||||||
Income from continuing operations | $ 192 | $ 275 | $ 210 | $ 133 | $ 158 | $ 163 | $ 211 | $ 107 | $ 810 | $ 639 | $ 636 |
Less: Allocation to unvested restricted stock awards | 6 | 4 | 6 | ||||||||
Income from continuing operations attributable to common shareholders | 804 | 635 | 630 | ||||||||
Income from discontinued operations, net | 414 | 296 | 98 | ||||||||
Less: Allocation to unvested restricted stock awards | 3 | 2 | 1 | ||||||||
Income from discontinued operations, net attributable to common shareholders | 411 | 294 | 97 | ||||||||
Income from continuing operations attributable to common shareholders | $ 1,215 | $ 929 | $ 727 | ||||||||
Denominator: | |||||||||||
Basic common shares (based upon weighted average) (in shares) | 264 | 287 | 305 | ||||||||
Add: Stock option dilution (in shares) | 0 | 1 | 2 | ||||||||
Diluted common shares (in shares) | 264 | 288 | 307 |
EARNINGS PER COMMON SHARE - Ant
EARNINGS PER COMMON SHARE - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 374,000 | 854,000 | 710,000 |
Restricted stock units | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 20,000 | ||
Long-term stock awards | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 1,000,000 | 2,000,000 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the company's warranty liability | ||
Balance at January 1 | $ 84 | $ 81 |
Accruals for warranties issued during the year | 34 | 34 |
Accruals related to pre-existing warranties | (3) | 1 |
Settlements made (in cash or kind) during the year | (33) | (31) |
Other, net (including currency translation and acquisitions) | 1 | (1) |
Balance at December 31 | $ 83 | $ 84 |
INTERIM FINANCIAL INFORMATION_3
INTERIM FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 1,860 | $ 1,983 | $ 1,764 | $ 1,581 | $ 1,639 | $ 1,716 | $ 1,839 | $ 1,513 | $ 7,188 | $ 6,707 | $ 6,654 |
Gross profit | 660 | 752 | 628 | 547 | 565 | 611 | 673 | 522 | 2,587 | 2,371 | 2,327 |
Income from continuing operations | 192 | 275 | 210 | 133 | 158 | 163 | 211 | 107 | 810 | 639 | 636 |
Net income attributable to Masco Corporation | $ 195 | $ 275 | $ 224 | $ 530 | $ 453 | $ 126 | $ 240 | $ 116 | $ 1,224 | $ 935 | $ 734 |
Basic: | |||||||||||
Income from continuing operations (in dollars per share) | $ 0.74 | $ 1.05 | $ 0.80 | $ 0.49 | $ 0.56 | $ 0.57 | $ 0.73 | $ 0.36 | $ 3.05 | $ 2.21 | $ 2.06 |
Net income, basic (in dollars per share) | 0.75 | 1.05 | 0.85 | 1.93 | 1.60 | 0.44 | 0.82 | 0.39 | 4.60 | 3.24 | 2.38 |
Diluted: | |||||||||||
Income from continuing operations (in dollars per share) | 0.73 | 1.05 | 0.80 | 0.48 | 0.56 | 0.56 | 0.72 | 0.36 | 3.04 | 2.20 | 2.05 |
Net income, diluted (in dollars per share) | $ 0.74 | $ 1.05 | $ 0.85 | $ 1.92 | $ 1.59 | $ 0.44 | $ 0.82 | $ 0.39 | $ 4.59 | $ 3.22 | $ 2.37 |
Income from discontinued operations, net | $ (37) | $ 397 | $ 295 | $ 414 | $ 296 | $ 98 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) € in Millions, $ in Millions | Jan. 04, 2021USD ($) | Jan. 04, 2021EUR (€) | Dec. 29, 2020USD ($) | Nov. 10, 2020USD ($) | Nov. 10, 2020EUR (€) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Subsequent Event [Line Items] | ||||||||
Goodwill | $ 563 | $ 509 | $ 511 | |||||
ESS | ||||||||
Subsequent Event [Line Items] | ||||||||
Consideration transferred | $ 55 | € 45 | ||||||
Cash consideration | $ 52 | |||||||
ESS | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Consideration transferred | $ 55 | € 45 | ||||||
Cash consideration | 52 | |||||||
Liabilities incurred | $ 6 | |||||||
Liabilities incurred, payment period | 2 years | 2 years | ||||||
Definite lived intangible assets | $ 30 | |||||||
Goodwill | $ 25 |
SCHEDULE II. VALUATION AND QU_2
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 4 | $ 5 | $ 4 |
Charged to Costs and Expenses | 3 | 1 | 3 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (1) | (2) | (2) |
Balance at End of Period | 7 | 4 | 5 |
Cumulative Effect, Period of Adoption, Adjustment | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | 1 | ||
Balance at End of Period | 1 | ||
Cumulative Effect Period of Adoption Adjusted Balance | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | 5 | ||
Balance at End of Period | 5 | ||
Valuation allowance on deferred tax assets: | |||
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | 38 | 43 | 47 |
Charged to Costs and Expenses | 0 | 0 | 0 |
Charged to Other Accounts | 2 | 0 | 0 |
Deductions | (5) | (5) | (4) |
Balance at End of Period | $ 35 | $ 38 | 43 |
Valuation allowance on deferred tax assets: | Other Comprehensive Income (Loss) | |||
Movement in valuation and qualifying accounts | |||
Deductions | (1) | ||
Income Tax Benefit | Valuation allowance on deferred tax assets: | |||
Movement in valuation and qualifying accounts | |||
Deductions | $ (3) |