Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
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 | $ 14,501,171,300 | ||
Entity Common Stock, Shares Outstanding | 239,926,257 | ||
Entity Central Index Key | 0000062996 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's definitive Proxy Statement to be filed for its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Detroit, Michigan |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash investments | $ 926 | $ 1,326 |
Receivables | 1,171 | 1,138 |
Inventories | 1,216 | 876 |
Prepaid expenses and other | 109 | 149 |
Total current assets | 3,422 | 3,489 |
Property and equipment, net | 896 | 908 |
Goodwill | 568 | 563 |
Other intangible assets, net | 388 | 357 |
Operating lease right-of-use assets | 187 | 166 |
Other assets | 114 | 294 |
Total assets | 5,575 | 5,777 |
Current Liabilities: | ||
Accounts payable | 1,045 | 893 |
Notes payable | 10 | 3 |
Accrued liabilities | 884 | 1,038 |
Total current liabilities | 1,939 | 1,934 |
Long-term debt | 2,949 | 2,792 |
Noncurrent operating lease liabilities | 172 | 149 |
Other liabilities | 437 | 481 |
Total liabilities | 5,497 | 5,356 |
Commitments and contingencies (Note U) | ||
Redeemable noncontrolling interest | 22 | 0 |
Masco Corporation's shareholders' equity: | ||
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2021 – 241,200,000; 2020 – 258,200,000 | 241 | 258 |
Preferred shares authorized: 1,000,000; Issued and outstanding: 2021 and 2020 – None | 0 | 0 |
Paid-in capital | 0 | 0 |
Retained (deficit) earnings | (652) | 79 |
Accumulated other comprehensive income (loss) | 232 | (142) |
Total Masco Corporation's shareholders' (deficit) equity | (179) | 195 |
Noncontrolling interest | 235 | 226 |
Total equity | 56 | 421 |
Total liabilities and equity | $ 5,575 | $ 5,777 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
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) | 241,200,000 | 258,200,000 |
Common shares, shares outstanding (in shares) | 241,200,000 | 258,200,000 |
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares issued (in shares) | 0 | |
Preferred shares, shares outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 8,375 | $ 7,188 | $ 6,707 |
Cost of sales | 5,512 | 4,601 | 4,336 |
Gross profit | 2,863 | 2,587 | 2,371 |
Selling, general and administrative expenses | 1,413 | 1,292 | 1,274 |
Impairment charges for goodwill and other intangible assets | 45 | 0 | 9 |
Operating profit | 1,405 | 1,295 | 1,088 |
Other income (expense), net: | |||
Interest expense | (278) | (144) | (159) |
Other, net | (439) | (20) | (15) |
Other income (expense), net | (717) | (164) | (174) |
Income from continuing operations before income taxes | 688 | 1,131 | 914 |
Income tax expense | 210 | 269 | 230 |
Income from continuing operations | 478 | 862 | 684 |
Income from discontinued operations, net | 0 | 414 | 296 |
Net income | 478 | 1,276 | 980 |
Less: Net income attributable to noncontrolling interest | 68 | 52 | 45 |
Net income attributable to Masco Corporation | $ 410 | $ 1,224 | $ 935 |
Basic: | |||
Income from continuing operations (in dollars per share) | $ 1.63 | $ 3.05 | $ 2.21 |
Income from discontinued operations, net (in dollars per share) | 0 | 1.55 | 1.03 |
Net income, basic (in dollars per share) | 1.63 | 4.60 | 3.24 |
Diluted: | |||
Income from continuing operations (in dollars per share) | 1.62 | 3.04 | 2.20 |
Income from discontinued operations, net (in dollars per share) | 0 | 1.55 | 1.02 |
Net income, diluted (in dollars per share) | $ 1.62 | $ 4.59 | $ 3.22 |
Amounts attributable to Masco Corporation: | |||
Income from continuing operations | $ 410 | $ 810 | $ 639 |
Income from discontinued operations, net | $ 0 | $ 414 | $ 296 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 478 | $ 1,276 | $ 980 |
Less: Net income attributable to noncontrolling interest | 68 | 52 | 45 |
Net income attributable to Masco Corporation | 410 | 1,224 | 935 |
Other comprehensive income (loss), net of tax (Note P): | |||
Cumulative translation adjustment | (32) | 72 | 6 |
Interest rate swaps | 7 | 1 | 2 |
Pension and other post-retirement benefits | 384 | (18) | (64) |
Other comprehensive income (loss), net of tax | 359 | 55 | (56) |
Less: Other comprehensive income (loss) attributable to the noncontrolling interest: | |||
Cumulative translation adjustment | (19) | 20 | (1) |
Pension and other post-retirement benefits | 4 | (2) | (3) |
Less: Other comprehensive (loss) income attributable to noncontrolling interest | (15) | 18 | (4) |
Other comprehensive income (loss) attributable to Masco Corporation | 374 | 37 | (52) |
Total comprehensive income | 837 | 1,331 | 924 |
Less: Total comprehensive income attributable to noncontrolling interest | 53 | 70 | 41 |
Total comprehensive income attributable to Masco Corporation | $ 784 | $ 1,261 | $ 883 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | |||
Net income | $ 478 | $ 1,276 | $ 980 |
Depreciation and amortization | 151 | 133 | 159 |
Contingent consideration | 16 | 0 | 0 |
Display amortization | 0 | 2 | 12 |
Deferred income taxes | (68) | (3) | (41) |
Employee withholding taxes paid on stock-based compensation | 15 | 25 | 23 |
Gain on disposition of investments, net | (25) | (3) | (1) |
Loss (gain) on disposition of businesses, net | 18 | (602) | (298) |
Pension and other post-retirement benefits | 312 | (32) | (45) |
Impairment of goodwill and other intangible assets | 45 | 0 | 16 |
Stock-based compensation | 61 | 45 | 35 |
Dividends paid-in-kind | (6) | (10) | 0 |
Increase in receivables | (64) | (141) | (37) |
(Increase) decrease in inventories | (350) | (89) | 58 |
Increase (decrease) in accounts payable and accrued liabilities, net | 190 | 332 | (27) |
Debt extinguishment costs | 160 | 5 | 2 |
Other, net | (3) | 15 | (3) |
Net cash from operating activities | 930 | 953 | 833 |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | |||
Retirement of notes | (1,326) | (400) | (201) |
Purchase of Company common stock | (1,026) | (727) | (896) |
Cash dividends paid | (211) | (145) | (144) |
Dividends paid to noncontrolling interest | (43) | (23) | (42) |
Issuance of notes, net of issuance costs | 1,481 | 415 | 0 |
Debt extinguishment costs | (160) | (5) | (2) |
Proceeds from the exercise of stock options | 5 | 26 | 27 |
Employee withholding taxes paid on stock-based compensation | (15) | (25) | (23) |
Payment of debt | (3) | (2) | (8) |
Credit Agreement and other financing costs | 0 | 0 | (2) |
Net cash for financing activities | (1,298) | (886) | (1,291) |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | |||
Capital expenditures | (128) | (114) | (162) |
Acquisition of businesses, net of cash acquired | (57) | (227) | 0 |
Proceeds from disposition of: | |||
Businesses, net of cash disposed | 5 | 870 | 722 |
Property and equipment | 0 | 1 | 34 |
Financial investments | 171 | 3 | 1 |
Other, net | (3) | (2) | (13) |
Net cash (for) from investing activities | (12) | 531 | 582 |
Effect of exchange rate changes on cash and cash investments | (20) | 31 | 14 |
CASH AND CASH INVESTMENTS: | |||
(Decrease) increase for the year | (400) | 629 | 138 |
At January 1 | 1,326 | 697 | 559 |
At December 31 | $ 926 | $ 1,326 | $ 697 |
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 (Deficit) Earnings | Retained (Deficit) EarningsCumulative Effect, Period of Adoption, Adjustment | Retained (Deficit) EarningsCumulative Effect Period of Adoption Adjusted Balance | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) IncomeCumulative Effect Period of Adoption Adjusted Balance | Noncontrolling Interest | Noncontrolling InterestCumulative Effect Period of Adoption Adjusted Balance |
Beginning 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 | 0 | ||||||||||
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) | ||||||||||||
Redeemable noncontrolling interest - redemption adjustment | 0 | |||||||||||||
Stock-based compensation | 30 | 30 | ||||||||||||
Ending balance at Dec. 31, 2019 | $ (56) | $ (1) | $ (57) | 276 | $ 276 | 0 | $ 0 | (332) | $ (1) | $ (333) | (179) | $ (179) | 179 | $ 179 |
Shares retired: | ||||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||||||||||
Total comprehensive income (loss) | $ 1,331 | 1,224 | 37 | 70 | ||||||||||
Shares issued | 14 | 2 | 12 | |||||||||||
Repurchased | (727) | (19) | (53) | (655) | ||||||||||
Surrendered (non-cash) | (14) | (1) | (13) | |||||||||||
Cash dividends declared | (144) | (144) | ||||||||||||
Dividends paid to noncontrolling interest | (23) | (23) | ||||||||||||
Redeemable noncontrolling interest - redemption adjustment | 0 | |||||||||||||
Stock-based compensation | 41 | 41 | ||||||||||||
Ending balance at Dec. 31, 2020 | 421 | 258 | 0 | 79 | (142) | 226 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Total comprehensive income (loss) | 837 | |||||||||||||
Total comprehensive income | 836 | 410 | 374 | 52 | ||||||||||
Shares issued | 3 | 1 | 2 | |||||||||||
Shares retired: | ||||||||||||||
Repurchased | (1,026) | (18) | (57) | (951) | ||||||||||
Surrendered (non-cash) | (13) | 0 | (13) | |||||||||||
Cash dividends declared | (175) | (175) | ||||||||||||
Dividends paid to noncontrolling interest | (43) | (43) | ||||||||||||
Redeemable noncontrolling interest - redemption adjustment | (2) | (2) | ||||||||||||
Stock-based compensation | 55 | 55 | ||||||||||||
Ending balance at Dec. 31, 2021 | $ 56 | $ 241 | $ 0 | $ (652) | $ 232 | $ 235 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
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, 2021 | |
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. 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 accumulated other comprehensive income (loss) in the consolidated balance sheets. Realized foreign currency transaction gains and losses are included in other income (expense), net in the consolidated statements of operations. 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 home center retailers, plumbing wholesalers and a number of other customers. 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 $67 million and $48 million at December 31, 2021 and 2020, 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 $111 million in 2021, $105 million in 2020 and $132 million in 2019. 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 or a comparable market alternative, 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 2021, we utilized a weighted average cost of capital of approximately 7.5 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 9.0 percent to 11.5 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 7.5 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2021, 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 10.0 percent to 15.5 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 of Financial Instruments. 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 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 lasting 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, 2021 and 2020. The aggregate noncontrolling interest, net of dividends, at December 31, 2021 and 2020 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 effects 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, was eliminated from accumulated other comprehensive income (loss) upon the early retirement of the related debt in March 2021. 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. Recently Adopted 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. We adopted ASU 2020-01 prospectively beginning on January 1, 2021. The adoption of the standard did not have a material effect on our financial position or results of operations. Recently Issued Accounting Pronouncements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. We plan to adopt this standard for annual periods beginning January 1, 2022 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. A. ACCOUNTING POLICIES (Concluded) In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts. We plan to adopt this standard for annual periods beginning January 1, 2022 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS In the third quarter of 2021, we acquired all of the share capital of Steamist, Inc. ("Steamist") for approximately $56 million in cash. This amount is subject to working capital and other adjustments. Steamist is a manufacturer of residential steam bath products that are complementary to many of our plumbing products. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $31 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 11 years. We also recognized $29 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business. In the first quarter of 2021, we acquired a 75.1 percent equity interest in Easy Sanitary Solutions B.V. ("ESS"), for approximately €47 million ($58 million), including $52 million of cash and $6 million of debt that will be paid out over two years less any pending or settled indemnity matters. The cash payment was made to a third-party notary on December 29, 2020 for the acquisition of this equity interest in advance of the transaction closing on January 4, 2021. ESS is a manufacturer of shower channel drains and offers a wide range of products for barrier-free showering and bathroom wall niches. This business is included in our Plumbing Products segment. In connection with this acquisition, we recognized $32 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 10 years. We also recognized $35 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business. Working capital and other adjustments were finalized with the seller in the fourth quarter of 2021, resulting in no significant changes. The remaining 24.9 percent equity interest in ESS is subject to a call and put option that is exercisable by us or the sellers, respectively, any time after December 31, 2023. The redemption value of the call and put option is the same and based on a floating EBITDA value. The call and put options were determined to be embedded within the redeemable noncontrolling interest and were recorded as temporary equity in the consolidated balance sheet at December 31, 2021. We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained (deficit) earnings. In the fourth quarter of 2020, we acquired substantially all of the net assets of Kraus USA Inc. ("Kraus"), a designer and distributor of sinks, faucets and accessories for the kitchen and bathroom, for approximately $103 million and an additional cash payment of up to $50 million to be paid in 2023, contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $8 million. Refer to Note 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. During the first quarter of 2021, we revised the allocation of the purchase price to certain identifiable assets and liabilities based on analysis of information as of the acquisition date, which resulted in a $1 million decrease to goodwill. The working capital adjustments were finalized with the seller in the second quarter of 2021, resulting in no significant changes. B. ACQUISITIONS (Concluded) In the fourth quarter of 2020, we acquired substantially all of the net assets of Work Tools International Inc. and Elder & Jenks, LLC (collectively, "Work Tools") for approximately $53 million, including $48 million of cash and $5 million of debt that will be paid out in 18 months less any pending or settled indemnity matters. Work Tools expands our product offering to our customers as it is a leading manufacturer of high-quality precision painting tools and accessories including brushes, rollers and mini rollers for DIY and professionals. This business is included in 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. The working capital adjustments were finalized with the seller in the first quarter of 2021, resulting in no significant changes. In the first quarter of 2020, we acquired all of the share capital of SmarTap A.Y Ltd. ("SmarTap") for approximately $24 million in cash. SmarTap is a developer of a smart bathing system that monitors and controls the temperature and flow of water. This acquisition provides an adaptable solution for a wide range of products as it is compatible with showerheads, hand showers, spouts and shower jets. This business is included in 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. |
DIVESTITURES
DIVESTITURES | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURES On May 31, 2021, we completed the divestiture of our Hüppe GmbH ("Hüppe") business, a manufacturer of shower enclosures and shower trays. In connection with the divestiture, we recognized a loss of $18 million for the year ended December 31, 2021, which is included in other, net in our consolidated statements of operations. This loss resulted primarily from the recognition of $23 million of currency translation losses that were previously included within accumulated other comprehensive income (loss). The sale of Hüppe does not represent a strategic shift that will have a major effect on our operations and financial results and therefore was not presented as discontinued operations. Prior to the divestiture, the results of the business were included in our Plumbing Products segment. On 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 was collected in the third quarter of 2021. 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 statements 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 statements of operations, as a gain on the divestiture of Milgard. As of December 31, 2020, we received $17 million in cash, which was 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 was included in income from discontinued operations, net in the consolidated statements 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 income from discontinued operations before income tax was income of $2 million for the year ended December 31, 2020, and a loss of $1 million for the year ended December 31, 2019. The results of the cabinetry business recorded in 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 the year ended December 31, 2019. The major classes of line items constituting income from discontinued operations, net, in millions: Year Ended December 31, 2021 2020 2019 Net sales $ — $ 101 $ 1,528 Cost of sales — 78 1,184 Gross profit — 23 344 Selling, general and administrative expenses — 28 232 Impairment charge for goodwill (A) — — 7 Other income (expense), net — — 1 (Loss) income from discontinued operations — (5) 106 Gain on disposal of discontinued operations, net — 602 298 Income before income tax — 597 404 Income tax expense — (183) (108) Income from discontinued operations, net $ — $ 414 $ 296 (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) Other selected financial information for Cabinetry, Milgard and UKWG during the period owned by us, were as follows, in millions: Year Ended December 31, 2021 2020 2019 Depreciation and amortization $ — $ — $ 29 Capital expenditures — 1 34 ROU assets obtained in exchange for new lease obligations — — 3 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions: Year Ended December 31, 2021 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 3,384 $ 3,240 $ 6,624 International, principally Europe 1,751 — 1,751 Total $ 5,135 $ 3,240 $ 8,375 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 We recognized increases t o revenue o f $9 million, $7 million, and $2 million in 2021, 2020, and 2019, 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 $1 million and $2 million at December 31, 2021 and 2020, respectively. D. REVENUE (Concluded) 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 $67 million and $62 million at December 31, 2021 and 2020, respectively. Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Year Ended 2021 2020 Balance at January 1 $ 7 $ 5 Provision for expected credit losses during the period 1 3 Write-offs charged against the allowance (2) (2) Recoveries of amounts previously written off 1 1 Other (A) (1) — Balance at end of year $ 6 $ 7 ______________________________ (A) As a result of Hüppe being divested in May 2021, $1 million for the year ended December 31, 2021 was removed from allowance for credit losses. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The components of inventory were as follows, in millions: At December 31, 2021 2020 Finished goods $ 702 $ 552 Raw materials 383 242 Work in process 131 82 Total $ 1,216 $ 876 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, 2021 | |
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 21 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 15 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: Year Ended 2021 2020 2019 Operating lease cost $ 48 $ 47 $ 49 Short-term lease cost 8 7 6 Variable lease cost 4 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 3 Interest on lease liabilities 1 1 1 Supplemental cash flow information related to leases was as follows, in millions: Year Ended 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 47 $ 58 Operating cash flows for finance leases 1 1 1 Financing cash flows for finance leases 2 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 67 27 27 Finance leases — — — ______________________________ (A) Includes $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of ESS and Steamist in 2021. 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. Certain other information related to leases was as follows: At December 31, 2021 2020 2019 Weighted-average remaining lease term: Operating leases 9 years 10 years 10 years Finance leases 9 years 10 years 11 years Weighted-average discount rate: Operating leases 4.0 % 4.4 % 4.6 % Finance leases 3.3 % 3.3 % 3.4 % F. LEASES (Concluded) Supplemental balance sheet information related to leases was as follows, in millions: At December 31, 2021 2020 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 24 $ — $ 27 Notes payable — 3 — 2 Accrued liabilities 38 — 39 — Long-term debt — 23 — 26 Gross ROU assets under finance leases recorded within property and equipment, net At December 31, 2021, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2022 $ 44 $ 3 2023 37 3 2024 31 3 2025 26 4 2026 23 3 Thereafter 95 14 Total lease payments 256 30 Less: imputed interest (46) (4) Total $ 210 $ 26 |
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 21 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 15 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: Year Ended 2021 2020 2019 Operating lease cost $ 48 $ 47 $ 49 Short-term lease cost 8 7 6 Variable lease cost 4 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 3 Interest on lease liabilities 1 1 1 Supplemental cash flow information related to leases was as follows, in millions: Year Ended 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 47 $ 58 Operating cash flows for finance leases 1 1 1 Financing cash flows for finance leases 2 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 67 27 27 Finance leases — — — ______________________________ (A) Includes $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of ESS and Steamist in 2021. 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. Certain other information related to leases was as follows: At December 31, 2021 2020 2019 Weighted-average remaining lease term: Operating leases 9 years 10 years 10 years Finance leases 9 years 10 years 11 years Weighted-average discount rate: Operating leases 4.0 % 4.4 % 4.6 % Finance leases 3.3 % 3.3 % 3.4 % F. LEASES (Concluded) Supplemental balance sheet information related to leases was as follows, in millions: At December 31, 2021 2020 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 24 $ — $ 27 Notes payable — 3 — 2 Accrued liabilities 38 — 39 — Long-term debt — 23 — 26 Gross ROU assets under finance leases recorded within property and equipment, net At December 31, 2021, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2022 $ 44 $ 3 2023 37 3 2024 31 3 2025 26 4 2026 23 3 Thereafter 95 14 Total lease payments 256 30 Less: imputed interest (46) (4) Total $ 210 $ 26 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The components of property and equipment, net were as follows, in millions: At December 31, 2021 2020 Land and improvements $ 67 $ 66 Buildings 514 522 Computer hardware and software 259 249 Machinery and equipment 1,199 1,184 2,039 2,021 Less: Accumulated depreciation (1,143) (1,113) Total $ 896 $ 908 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at December 31, 2021, by segment, was as follows, in millions: Gross Goodwill At December 31, 2021 Accumulated Net Goodwill At December 31, 2021 Plumbing Products (A) $ 662 $ (340) $ 322 Decorative Architectural Products 366 (120) 246 Total $ 1,028 $ (460) $ 568 ______________________________ (A) As a result of Hüppe being divested in May 2021, both gross goodwill and accumulated impairment losses for the Plumbing Products segment were reduced by $39 million. The changes in the carrying amount of goodwill for years ended December 31, 2021 and 2020, by segment, were as follows, in millions: Gross Goodwill At December 31, 2020 Accumulated Net Goodwill At December 31, 2020 Acquisitions Pre-tax Other (B) Net Goodwill At December 31, 2021 Plumbing Products $ 613 $ (340) $ 273 $ 63 $ — $ (14) $ 322 Decorative Architectural Products 365 (75) 290 1 (45) — 246 Total $ 978 $ (415) $ 563 $ 64 $ (45) $ (14) $ 568 Gross Goodwill At December 31, 2019 Accumulated Net Goodwill At December 31, 2019 Acquisitions Pre-tax Other (B) 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 ______________________________ (B) Other consists of the effect of foreign currency translation. In the fourth quarter of 2021, we recognized a $45 million non-cash goodwill impairment charge within our Decorative Architectural Products segment due to competitive market conditions and higher inflationary costs in our lighting business. Other indefinite-lived intangible assets were $109 million at both December 31, 2021 and 2020, respectively, and principally included registered trademarks. In 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 2021, 2020 and 2019. 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. H. GOODWILL AND OTHER INTANGIBLE ASSETS (Concluded) The carrying value of our definite-lived intangible assets wa s $279 million (net of accumulated amortization o f $75 million) at December 31, 2021 and $248 million (net of accumulated amortization of $73 million) at December 31, 2020 and principally included customer relationships with a weighted average amortization period of 15 years in both 2021 and 2020. Amortization expense, including discontinued operations, related to the definite-lived intangible assets wa s $31 million, $24 million and $23 million in 2021, 2020 and 2019, respectively. The increase in our definite-lived intangible assets is primarily a result of our acquisitions of Steamist and ESS. At December 31, 2021, amortization expense related to the definite-lived intangible assets during each of the next five years will be as follows: 2022 – $30 million; 2023 – $29 million; 2024 – $28 million, 2025 – $23 million and 2026 – $22 million |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Preferred Stock of ACProducts Holding, Inc. As described in Note C, in conjunction with our divestiture of Cabinetry, we received preferred stock of ACProducts Holding, Inc., the holding company of the buyer, with a liquidation preference of $150 million. We did not have the ability to exercise significant influence, and the fair value of the preferred stock was not readily available. We elected to measure this investment at cost (less impairment, if any) adjusted for observable price changes in orderly transactions for 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, which was determined to be $136 million and was included in other assets in our consolidated balance sheet. In May 2021, we received, in cash, $166 million for the redemption of the preferred stock, including all accrued but unpaid dividends, and recognized a gain of $14 million, which was included within other, net in our consolidated statements of operations. Prior to the redemption, dividends earned on this investment were included within other, net in our consolidated statements of operations with a corresponding increase to our basis in the investment. We had dividend income of $6 million and $10 million for the years ended December 31, 2021 and 2020, respectively. 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 in 2023 for the Kraus acquisition contingent upon the achievement of certain financial performance metrics for the year ending December 31, 2022. The measurement of the liability for contingent consideration is based on significant inputs that are not observable in the market, and is therefore classified as Level 3 inputs. Examples of utilized unobservable inputs are estimated future revenues and earnings of the acquired business and an applicable discount rate. The estimate of the liability may fluctuate if there are changes in the forecast of the acquired business' future revenues and earnings, as a result of actual levels achieved or in the discount rate used to determine the present value of contingent future cash flows. All subsequent remeasurements from the initial estimate at the time of acquisition are recorded in other, net in the consolidated statements of operations, as described in Note R. The fair value of the liability was estimated to be $24 million and $8 million as of December 31, 2021, and 2020, respectively, using probability weighted discounted cash flows and a discount rate that reflects the uncertainty surrounding the expected outcomes, which we believe is appropriate and representative of a market participant assumption. Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. The aggregate estimated market value of our short-term and long-term debt at December 31, 2021 was approximately $3.2 billion, compared with the aggregate carrying value of $3.0 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2020 was approximately $3.3 billion, compared with the aggregate carrying value of $2.8 billion. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | J. OTHER ASSETS The components of other assets were as follows, in millions: At December 31, 2021 2020 Deferred tax assets (Note S) $ 57 $ 109 Equity method investments 18 11 Other investments 7 — Preferred stock of ACProducts Holding, Inc. (Note I) — 146 Other 32 28 Total $ 114 $ 294 We recognized amortization expense, including discontinued operations, related to in-store displays of $2 million and $12 million in 2020 and 2019, respectively. Cash spent for displays was $11 million in 2019 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, 2021 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES The components of accrued liabilities were as follows, in millions: At December 31, 2021 2020 Salaries, wages and commissions $ 195 $ 193 Advertising and sales promotion 297 293 Interest 29 35 Warranty (Note U) 31 34 Employee retirement plans 49 182 Insurance reserves 27 29 Property, payroll and other taxes 32 32 Dividends payable — 36 Deferred revenue 67 62 Product returns 23 23 Operating lease liabilities (Note F) 38 39 Other 96 80 Total $ 884 $ 1,038 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of outstanding debt was as follows, in millions: At December 31, 2021 2020 Notes and debentures: 5.950%, due March 15, 2022 $ — $ 326 4.450%, due April 1, 2025 — 500 4.375%, due April 1, 2026 — 498 3.500%, due November 15, 2027 300 300 1.500%, due February 15, 2028 599 — 7.750%, due August 1, 2029 235 235 2.000%, due October 1, 2030 300 300 2.000%, due February 15, 2031 596 — 6.500%, due August 15, 2032 200 200 4.500%, due May 15, 2047 417 418 3.125%, due February 15, 2051 300 — Other 35 33 Prepaid debt issuance costs (23) (15) 2,959 2,795 Less: Current portion 10 3 Total long-term debt $ 2,949 $ 2,792 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 March 4, 2021, we issued $600 million of 1.500% Notes due February 15, 2028, $600 million of 2.000% Notes due February 15, 2031 and $300 million of 3.125% Notes due February 15, 2051. We received proceeds of $1,495 million, net of discount, for the issuance of these Notes. The Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On March 22, 2021, proceeds from the debt issuances, together with cash on hand, were used to repay and early retire our $326 million 5.950% Notes due March 15, 2022, $500 million 4.450% Notes due April 1, 2025, and $500 million 4.375% Notes due April 1, 2026. In connection with these early retirements, we incurred a loss on debt extinguishment of $168 million for the year ended December 31, 2021, which was recorded as interest expense in the consolidated statements of operations. On September 18, 2020, we issued $300 million of 2.000% Notes due October 1, 2030 (the "2030 Notes") and received proceeds of $300 million, net of discount, for the issuance of the 2030 Notes. Also on September 18, 2020, we issued an incremental $100 million of our existing 4.500% Notes due May 15, 2047 (the "2047 Notes") and received proceeds of $119 million, including a premium, for the issuance of the 2047 Notes. The incremental $100 million formed a single series with the existing $300 million of 4.500% Notes due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On September 29, 2020, proceeds from the debt issuances were used to repay and early retire our $400 million 3.500% Notes due April 1, 2021. In connection with this early retirement, we incurred a loss on debt extinguishment of $6 million, which was recorded as interest expense in our consolidated statements of operations. On December 19, 2019, proceeds from the UKWG and Milgard divestitures were used to repay and early retire our $201 million 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 statements of operations. L. DEBT (Continued) 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. On December 22, 2021, we amended the Credit Agreement with the bank group (the "Amended Credit Agreement"). The Credit Agreement was amended to (i) expand the “Agreed Currencies” for which loans thereunder may be denominated outside of the swingline facility to include British Pounds Sterling and Canadian Dollars, together with their applicable interest rate benchmark, (ii) replace the London Interbank Offering Rate (“LIBOR”) with the Euro Interbank Offered Rate (“EURIBOR”) as the interest rate benchmark for purposes of loans denominated in Euros and (iii) provide mechanics for the replacement of a benchmark for an applicable Agreed Currency upon the occurrence of certain specified events. Under the Amended Credit Agreement, the replacement reference interest rate benchmark for loans denominated in U.S. dollars upon the eventual discontinuation of LIBOR will have a benchmark adjustment applied based on its historical relationship to LIBOR, which can be either the term Secured Overnight Financing Rate (“SOFR”) plus a spread, daily simple SOFR plus a spread, or another alternative interest rate index selected by the Administrative Agent and us. Under the Amended 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 Amended 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 Amended Credit Agreement reduce our borrowing capacity. At December 31, 2021, we had no outstanding standby letters of credit under the Amended Credit Agreement. Revolving credit loans denominated in U.S. Dollars bear interest under the Amended Credit Agreement at 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) adjusted LIBO Rate plus 1.0%; plus an applicable margin based upon our then-applicable corporate credit ratings. Foreign currency revolving credit loans denominated in Canadian Dollars bear interest under the Amended Credit Agreement at a rate per annum equal to the greater of (i) the rate equal to the PRIMCAN Index rate and (ii) the CDOR Rate for a one month interest period, plus 1.0%; plus an applicable margin based upon our then-applicable corporate credit ratings. Foreign currency revolving credit loans denominated in Pounds Sterling bear interest under the Amended Credit Agreement at a rate per annum equal to the Daily Simple SONIA plus 0.0326%. Foreign currency revolving credit loans denominated in Euros bear interest at the adjusted EURIBOR Rate, plus an applicable margin based upon our then-applicable corporate credit ratings. The various benchmarks are subject to applicable floors as specified in the Amended Credit Agreement. The Amended Credit Agreement also provides mechanics for the replacement of a benchmark upon the occurrence of certain specified events. The Amended 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 Amended Credit Agreement, there must not be any default in our covenants in the Amended 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 Amended 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, 2021. At December 31, 2021, the debt maturities during each of the next five years were as follows: 2022 – $10 million; 2023– $5 million; 2024 – $3 million; 2025 – $3 million and 2026 – $2 million. L. DEBT (Concluded) Interest paid was $114 million , $136 million and $157 million in 2021, 2020 and 2019, respectively. These amounts exclude $160 million, $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 2021, 2020 and 2019, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, outstanding stock-based incentives were in the form of long-term stock awards, stock options, restricted stock units, performance restricted stock units and phantom stock awards. Pre-tax compensation expense included in income from continuing operations for these stock-based incentives was as follows, in millions: Year Ended December 31, 2021 2020 2019 Long-term stock awards $ 10 $ 14 $ 20 Stock options 7 7 4 Restricted stock units 28 13 — Performance restricted stock units 10 5 3 Phantom stock awards 6 4 4 Total $ 61 $ 43 $ 31 At December 31, 2021, 12.9 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. 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 2021. Our long-term stock award activity was as follows, shares in millions: Year Ended December 31, 2021 2020 2019 Unvested stock award shares at January 1 1 2 2 Weighted average grant date fair value $ 36 $ 34 $ 30 Stock award shares granted — — 1 Weighted average grant date fair value $ — $ — $ 36 Stock award shares vested — 1 1 Weighted average grant date fair value $ 34 $ 32 $ 25 Stock award shares forfeited — — — Weighted average grant date fair value $ 36 $ 35 $ 35 Unvested stock award shares at December 31 1 1 2 Weighted average grant date fair value $ 37 $ 36 $ 34 At December 31, 2021, 2020 and 2019, there was $10 million, $21 million and $41 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of two years at both December 31, 2021 and 2020, and three years at December 31, 2019. M. STOCK-BASED COMPENSATION (Continued) The total market value (at the vesting date) of stock award shares which vested was $28 million during 2021 and $31 million during both 2020 and 2019. 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 331,970 shares of stock options during 2021 with a grant date weighted-average exercise price of approximately $56 per share. Our stock option activity was as follows, shares in millions: Year Ended December 31, 2021 2020 2019 Option shares outstanding, January 1 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Option shares granted 1 1 1 Weighted average exercise price $ 56 $ 48 $ 36 Option shares exercised — 2 2 Aggregate intrinsic value on date of exercise (A) $ 5 million $ 29 million $ 33 million Weighted average exercise price $ 25 $ 17 $ 13 Option shares forfeited — — — Weighted average exercise price $ 11 $ 40 $ 34 Option shares outstanding, December 31 3 2 3 Weighted average exercise price $ 37 $ 33 $ 27 Weighted average remaining option term (in years) 6 6 6 Option shares vested and expected to vest, December 31 3 2 3 Weighted average exercise price $ 36 $ 33 $ 27 Aggregate intrinsic value (A) $ 89 million $ 51 million $ 63 million Weighted average remaining option term (in years) 6 6 6 Option shares exercisable (vested), December 31 2 1 2 Weighted average exercise price $ 31 $ 28 $ 21 Aggregate intrinsic value (A) $ 63 million $ 35 million $ 47 million Weighted average remaining option term (in years) 5 5 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, 2021, 2020 and 2019, there was $4 million, $6 million and $9 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 both December 31, 2021 and 2020, and three years at December 31, 2019. M. STOCK-BASED COMPENSATION (Continued) 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: Year Ended December 31, 2021 2020 2019 Weighted average grant date fair value $ 13.61 $ 10.67 $ 8.81 Risk-free interest rate 0.75 % 1.53 % 2.57 % Dividend yield 1.67 % 1.14 % 1.35 % Volatility factor 30.00 % 24.00 % 25.00 % Expected option life 6 years 6 years 6 years The following table summarizes information for stock option shares outstanding and exercisable, shares in millions: At December 31, 2021 Option Shares Outstanding Option Shares Exercisable Range of Number of Weighted Weighted Number of Weighted $ 17 - 21 — 2 $20 — $20 $ 22 - 26 1 4 $24 1 $24 $ 27 - 36 1 6 $35 1 $34 $ 37 - 57 1 8 $49 — $44 $ 17 - 57 3 6 $37 2 $31 Restricted Stock Units. Restricted stock units are granted to our key employees and non-employee Directors. These grants did not cause net share dilution due to our practice of repurchasing and retiring an equal number of shares in the open market. We granted 669,980 restricted stock units in the year ended December 31, 2021 with a weighted average grant date fair value of $57 per share. In the year ended December 31, 2021, 141,461 shares were issued and 29,125 restricted stock units were forfeited. During the year ended December 31, 2020, we granted 445,670 restricted stock units with a weighted average grant date fair value of $47 per share and 11,100 restricted stock units were forfeited. At December 31, 2021, and 2020 there was $15 million and $7 million, respectively of unrecognized compensation expense related to unvested restricted stock units; such units had a weighted average remaining vesting period of two years at both December 31, 2021 and 2020. The total market value (at the vesting date) of restricted stock units which vested was $8 million during the year ended December 31, 2021. M. STOCK-BASED COMPENSATION (Concluded) 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 percent of the target number. During 2021, we granted 85,360 performance restricted stock units with a grant date fair value of approximately $53 per share, 104,757 performance restricted stock units were issued. No performance restricted stock units were forfeited. At December 31, 2021, there were 186,304 shares vested, but unissued. 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. 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. Phantom Stock Awards. Certain non-U.S. employees are granted phantom stock awards. We recognized expense of $6 million in 2021, and expense of $4 million in both 2020 and 2019 related to phantom stock awards. In 2021, 2020 and 2019, we granted 82,160, 82,630, and 79,500 shares, respectively, of phantom stock awards with an aggregate fair value of $5 million in 2021 and $3 million in both 2020 and 2019, and paid cash of $3 million in 2021, 2020 and 2019, to settle phantom stock awards. Information related to phantom stock awards was as follows, in millions: At December 31, 2021 2020 Accrued compensation cost liability $ 8 $ 6 Unrecognized compensation cost $ 3 $ 4 Equivalent common shares — — |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2021 | |
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: Year Ended December 31, 2021 2020 2019 Defined-contribution plans $ 57 $ 46 $ 40 Defined-benefit pension plans 435 38 24 $ 492 $ 84 $ 64 N. EMPLOYEE RETIREMENT PLANS (Continued) 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. In the second quarter of 2021, we settled these plans and made a final contribution of $101 million. The settlement loss included $447 million of pre-tax actuarial losses that were reclassified out of accumulated other comprehensive income (loss) for the year ended December 31, 2021. In the fourth quarter of 2021, we recognized a $7 million reduction in pension expense related to the reversion of excess pension plan assets for the settlement of such 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: Year Ended December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Changes in projected benefit obligation: Projected benefit obligation at January 1 $ 1,118 $ 162 $ 1,034 $ 161 Service cost 4 — 3 — Interest cost 15 4 23 5 Actuarial loss, net (105) (6) 85 10 Foreign currency exchange (16) — 18 — Benefit payments (230) (12) (45) (13) Divestitures (14) — — (1) Settlements (594) — — — Projected benefit obligation at December 31 $ 178 $ 148 $ 1,118 $ 162 Changes in fair value of plan assets: Fair value of plan assets at January 1 $ 863 $ — $ 780 $ — Actual return on plan assets (40) — 67 — Foreign currency exchange (7) — 8 — Company contributions 107 12 57 13 Expenses, other — — (4) — Benefit payments (230) (12) (45) (13) Settlements (594) — — — Fair value of plan assets at December 31 $ 99 $ — $ 863 $ — Funded status at December 31 $ (79) $ (148) $ (255) $ (162) N. EMPLOYEE RETIREMENT PLANS (Continued) Amounts in our consolidated balance sheets were as follows, in millions: At December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Other assets $ 1 $ — $ 1 $ — Accrued liabilities (A) — (12) (135) (12) Other liabilities (A) (80) (136) (121) (150) Total net liability $ (79) $ (148) $ (255) $ (162) ___________________________ (A) As a result of the termination of the qualified domestic defined-benefit pension plans in 2021, the liabilities associated with these plans were reported as current liabilities at December 31, 2020. Unrealized loss included in accumulated other comprehensive income (loss) before income taxes was as follows, in millions: At December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Net loss $ 56 $ 57 $ 540 $ 65 Net prior service cost 3 — 3 — Total $ 59 $ 57 $ 543 $ 65 Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions: At December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Projected benefit obligation $ 174 $ 148 $ 1,100 $ 162 Accumulated benefit obligation 174 148 1,100 162 Fair value of plan assets 94 — 844 — The projected benefit obligation was in excess of plan assets for all of our qualified defined-benefit pension plans at December 31, 2021 and 2020 which had an accumulated benefit obligation in excess of plan assets. N. EMPLOYEE RETIREMENT PLANS (Continued) Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other net, in our consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: Year Ended December 31, 2021 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Qualified Non-Qualified Service cost $ 4 $ — $ 3 $ — $ 3 $ — Interest cost 15 4 28 5 39 6 Expected return on plan assets (9) — (24) — (44) — Settlement loss 404 — — — — — Recognized prior service cost 1 — 1 — — — Recognized net loss 14 2 22 3 18 2 Net periodic pension cost $ 429 $ 6 $ 30 $ 8 $ 16 $ 8 We expect to recognize $7 million of pre-tax net loss from accumulated other comprehensive income (loss) into net periodic pension cost in 2022 related to our defined-benefit pension plans. For plans in which almost all of the plan's participants are inactive, pre-tax net loss within accumulated other comprehensive income (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 income (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: At December 31, 2021 2020 Equity securities 38 % 15 % Debt securities 48 % 49 % Other 14 % 36 % 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, 2021 compared to December 31, 2020. 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. N. EMPLOYEE RETIREMENT PLANS (Continued) 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. Real Estate: Real Estate consists of Real Estate Investment Trusts and property funds. Real Estate Investment Trusts are 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. Real Estate property funds are valued based on the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data. 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. 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. 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, 2021 and 2020, as well as those valued at NAV using the practical expedient, which approximates fair value, in millions. At December 31, 2021 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 25 $ — $ — $ — $ 25 International 13 — — — 13 Corporate Debt Securities: United States — 5 — — 5 International — 2 — — 2 Government and Other Debt Securities: United States — 4 — — 4 International — 36 — — 36 Real Estate United States 3 — — — 3 International 2 — 6 — 8 Short-Term and Other Investments – International 3 — — — 3 Total Plan Assets $ 46 $ 47 $ 6 $ — $ 99 N. EMPLOYEE RETIREMENT PLANS (Continued) 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 Changes in the fair value of the qualified defined-benefit pension plan Level 3 assets, were as follows, in millions: 2021 2020 Fair Value, January 1 $ 1 $ 19 Purchases 5 — Sales — (18) Fair Value, December 31 $ 6 $ 1 Assumptions. Weighted average major assumptions used in accounting for our defined-benefit pension plans were as follows: At December 31, 2021 2020 2019 Discount rate for obligations 1.80 % 1.70 % 2.50 % Expected return on plan assets 3.00 % 2.00 % 3.00 % Rate of compensation increase — % — % — % Discount rate for net periodic pension cost 1.70 % 2.50 % 3.80 % N. EMPLOYEE RETIREMENT PLANS (Continued) The discount rate for obligations for 2021, 2020 and 2019 is based primarily upon the expected duration of each defined-benefit pension plan's liabilities matched to the December 31, 2021, 2020 and 2019 Willis Towers Watson Rate Link Curve. At December 31, 2021, such rates for our defined-benefit pension plans ranged from 0.8 percent to 2.6 percent, with the most significant portion of the liabilities having a discount rate for obligations of 1.2 percent or higher. 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. The increase in the weighted average discount rate from 2020 to 2021 is principally the result of higher long-term interest rates in the bond markets. 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. Our weighted average projected long-term rate of return on plan assets for the foreign qualified defined-benefit pension plans was 3.0 percent, 2.9 percent and 3.9 percent for 2021, 2020 and 2019, respectively. 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. 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 and real assets 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 $9 million and $10 million at December 31, 2021 and 2020, respectively. Cash Flows. At December 31, 2021, we expect to contribute approximately $12 million in 2022 to our non-qualified (domestic) defined-benefit pension plans. N. EMPLOYEE RETIREMENT PLANS (Concluded) At December 31, 2021, 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 2022 $ 4 $ 12 2023 4 12 2024 4 12 2025 5 11 2026 5 11 2027 - 2031 31 48 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Effective February 10, 2021, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2019. During 2021, we repurchased and retired 17.6 million shares of our common stock (including 0.7 million shares to offset the dilutive impact of restricted stock units granted in 2021), for cash aggregating $1,026 million. At December 31, 2021, we had $1,128 million remaining under the 2021 authorization. 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. 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. On the basis of amounts paid (declared), cash dividends per common share were $0.845 ($0.705) in 2021, $0.545 ($0.550) in 2020 and $0.495 ($0.510) in 2019. Accumulated Other Comprehensive Income (Loss). The components of accumulated other comprehensive income (loss) attributable to Masco Corporation were as follows, in millions: At December 31, 2021 2020 Cumulative translation adjustments, net $ 312 $ 325 Unrealized loss on interest rate swaps, net — (7) Unrecognized net loss and prior service cost, net (80) (460) Accumulated other comprehensive income (loss) $ 232 $ (142) |
RECLASSIFICATIONS FROM OTHER CO
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) | RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations were as follows, in millions: Year Ended December 31, Accumulated Other 2021 2020 2019 Statement of Operations Line Item Settlement and amortization of defined-benefit pension and other post-retirement benefits (A): Actuarial losses, net and prior service cost $ 18 $ 26 $ 20 Other, net Settlement loss 451 — — Tax (benefit) (104) (7) (5) Net of tax $ 365 $ 19 $ 15 Interest rate swaps (B) $ 2 $ 2 $ 2 Interest expense Tax expense (benefit) 5 (1) — Net of tax $ 7 $ 1 $ 2 (A) In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $447 million of pre-tax actuarial losses from accumulated other comprehensive income (loss) and $96 million of income tax benefit, which included $11 million of related disproportionate tax expense. Additionally, the amortization of defined-benefit pension and post-retirement benefits included $3 million, net of tax, due to the disposition of pension plans in connection with the divestiture of Hüppe. (B) Upon full repayment and retirement of the 5.950% Notes due March 15, 2022 in the first quarter of 2021, we recognized the remaining interest rate swap loss and related disproportionate tax expense. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
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, shower drains, steam shower systems, sinks, kitchen accessories, 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: Year Ended December 31, At December 31, Net Sales (1)(2)(3)(4) Operating Profit Assets 2021 2020 2019 2021 2020 2019 2021 2020 2019 Our operations by segment were: Plumbing Products $ 5,135 $ 4,136 $ 3,984 $ 929 $ 806 $ 708 $ 3,195 $ 2,822 $ 2,375 Decorative Architectural Products 3,240 3,052 2,723 581 583 480 1,781 1,633 1,526 Total $ 8,375 $ 7,188 $ 6,707 $ 1,510 $ 1,389 $ 1,188 $ 4,976 $ 4,455 $ 3,901 Our operations by Geographic Area were: North America $ 6,624 $ 5,805 $ 5,328 $ 1,214 $ 1,167 $ 987 $ 3,510 $ 3,101 $ 2,785 International, principally Europe 1,751 1,383 1,379 296 222 201 1,466 1,354 1,116 Total, as above $ 8,375 $ 7,188 $ 6,707 1,510 1,389 1,188 4,976 4,455 3,901 General corporate expense, net (5) (105) (94) (100) Operating profit, as reported 1,405 1,295 1,088 Other income (expense), net (717) (164) (174) Income from continuing operations before income taxes $ 688 $ 1,131 $ 914 Corporate assets 599 1,322 598 Assets held for sale (8) — — 528 Total assets $ 5,575 $ 5,777 $ 5,027 Year Ended December 31, Property Additions Depreciation and 2021 2020 2019 2021 2020 2019 Our operations by segment were: Plumbing Products $ 94 $ 86 $ 108 $ 101 $ 84 $ 80 Decorative Architectural Products 31 25 18 37 41 41 125 111 126 138 125 121 Unallocated amounts, principally related to corporate assets 3 2 2 13 8 9 Discontinued operations — 1 34 — — 29 Total $ 128 $ 114 $ 162 $ 151 $ 133 $ 159 ______________________________ (1) Included in net sales were export sales from the U.S. of $322 million, $274 million and $244 million in 2021, 2020 and 2019, respectively. (2) Excluded from net sales were intra-company sales between segments of less than one percent in 2021, 2020 and 2019. (3) Included in net sales were sales to one customer of $3,037 million, $2,812 million and $2,481 million in 2021, 2020 and 2019, respectively. Such net sales were included in each of our segments. (4) Net sales from our operations in the U.S. were $6,387 million, $5,592 million and $5,127 million in 2021, 2020 and 2019, 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 $1,332 million and $546 million, $1,301 million and $522 million, and $1,198 million and $470 million at December 31, 2021, 2020 and 2019, respectively. (7) Property additions exclude amounts paid for long-lived assets as part of acquisitions. (8) Related to the divestiture of our Cabinetry business. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Other, net, which is included in other income (expense), net, was as follows, in millions: Year Ended December 31, 2021 2020 2019 Net periodic pension and post-retirement benefit expense (A) $ (430) $ (35) $ (21) Loss on sale of business (18) — — Contingent consideration (B) (16) — — Gain on preferred stock redemption 14 — — Equity investment income, net 11 3 1 Dividend income 6 10 — Foreign currency transaction (losses) gains (C) (4) (10) 2 Income from cash and cash investments 1 3 3 Other items, net (D) (3) 9 — Total other, net $ (439) $ (20) $ (15) _________________________________________________ (A) In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $406 million of additional pension expense. In the fourth quarter of 2021, we recognized a $7 million reduction in pension expense related to the reversion of excess pension plan assets for the settlement of such plans. Refer to Note N for additional information. (B) In 2021, we recognized $16 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note I for additional information. (C) Included in foreign currency transaction (losses) gains for 2020 was a $9 million deferred currency translation loss reclassified from accumulated other comprehensive income (loss) in conjunction with the liquidation of certain UK dormant entities upon receiving final regulatory approval in 2020. (D) 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, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES (In Millions) 2021 2020 2019 Income from continuing operations before income taxes: U.S. $ 374 $ 892 $ 684 Foreign 314 239 230 $ 688 $ 1,131 $ 914 Income tax expense: Currently payable: U.S. Federal $ 145 $ 170 $ 155 State and local 40 33 46 Foreign 93 69 70 Deferred: U.S. Federal (57) (9) (23) State and local (10) 11 (15) Foreign (1) (5) (3) $ 210 $ 269 $ 230 Deferred tax assets at December 31: Receivables $ 14 $ 9 Inventories 17 17 Other assets, including stock-based compensation 18 17 Accrued liabilities 58 82 Noncurrent operating lease liabilities 40 35 Other long-term liabilities 79 96 Net operating loss carryforward 26 56 Tax credit carryforward 11 9 263 321 Valuation allowance (17) (35) 246 286 Deferred tax liabilities at December 31: Property and equipment 62 67 Operating lease right-of-use assets 43 39 Intangibles 75 74 Investment in foreign subsidiaries 10 10 Other investments 3 3 Other 16 4 209 197 Net deferred tax asset at December 31 $ 37 $ 89 The net deferred tax asset consisted of net deferred tax assets (included in other assets) of $57 million and $109 million, and net deferred tax liabilities (included in other liabilities) of $20 million and $20 million, at December 31, 2021 and 2020, respectively. S. INCOME TAXES (Continued) We continue to maintain a valuation allowance on certain state and foreign deferred tax assets as of December 31, 2021. 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. The current portion of the state and local income tax includes a $10 million, $9 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 2021, 2020 and 2019, respectively. The deferred portion of the state and local taxes includes a $3 million tax expense in 2021 and a $1 million tax benefit in 2019, resulting from changes in valuation allowances against state and local deferred tax assets. The deferred portion of the foreign taxes includes a $2 million tax expense in 2021 and a $5 million and $4 million tax benefit in 2020 and 2019, respectively, from a change in the valuation allowances against foreign deferred tax assets. We incurred a $14 million state income tax expense in 2021 resulting from the loss on the termination of our qualified domestic defined-benefit pension plans providing no tax benefit in certain state jurisdictions. The loss from the divestiture of Hüppe provided no tax benefit in certain foreign jurisdictions resulting in a $4 million foreign income tax expense in 2021. We recorded a $16 million income tax expense due to the elimination of disproportionate tax effects from accumulated other comprehensive income (loss) relating to our interest rate swap following the retirement of the related debt, and the termination of our qualified domestic defined-benefit pension plans in 2021. Our capital allocation strategy includes reinvesting in our business, balancing share repurchases with potential acquisitions and maintaining a meaningful 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 $37 million and $65 million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2021 and 2020, respectively, $25 million and $35 million, respectively, will expire within approximately 15 years and $12 million and $30 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: Year Ended December 31, 2021 2020 2019 U.S. Federal statutory tax rate 21 % 21 % 21 % State and local taxes, net of U.S. Federal tax benefit 4 3 3 Higher taxes on foreign earnings 3 1 2 U.S. and foreign taxes on distributed and undistributed foreign earnings — — 1 Stock-based compensation (1) (1) (1) Business divestiture with no tax impact 1 — — Disproportionate tax effects 2 — — Other, net 1 — (1) Effective tax rate 31 % 24 % 25 % Income taxes paid were $246 million, $442 million and $384 million in 2021, 2020 and 2019, 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, 2020 $ 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 Current year tax positions: Additions 19 — 19 Reductions (2) — (2) Prior year tax positions: Additions 1 — 1 Reductions (1) — (1) Lapse of applicable statute of limitations (10) — (10) Interest and penalties recognized in income tax expense — 1 1 Balance at December 31, 2021 $ 81 $ 11 $ 92 If recognized, $64 million and $58 million of the liability for uncertain tax positions at December 31, 2021 and 2020, respectively, net of any U.S. Federal tax benefit, would impact our effective tax rate. Of the $92 million and $84 million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2021 and 2020, respectively, $88 million and $81 million are recorded in other liabilities, respectively, and $4 million and $3 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 2020. With few exceptions, we are no longer subject to state or foreign income tax examinations on filed returns for years before 2018. 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 $10 million. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | INCOME PER COMMON SHARE Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: Year Ended December 31, 2021 2020 2019 Numerator (basic and diluted): Income from continuing operations $ 410 $ 810 $ 639 Less: Allocation to redeemable noncontrolling interest 2 — — Less: Allocation to unvested restricted stock awards 2 6 4 Income from continuing operations attributable to common shareholders 406 804 635 Income from discontinued operations, net — 414 296 Less: Allocation to unvested restricted stock awards — 3 2 Income from discontinued operations, net attributable to common shareholders — 411 294 Net income attributable to common shareholders $ 406 $ 1,215 $ 929 Denominator: Basic common shares (based upon weighted average) 249 264 287 Add: Stock option dilution 2 — 1 Diluted common shares 251 264 288 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, 2021, 2020 and 2019, we allocated dividends and undistributed earnings to the participating securities. Additionally, 296,000, 374,000 and 854,000 common shares for 2021, 2020 and 2019, respectively, related to stock options. Common shares outstanding included on our balance sheet and for the calculation of income per common share do not include unvested stock awards (0.6 million and 1 million common shares at December 31, 2021 and 2020, 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, 2021 | |
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, product compliance 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: Year Ended December 31, 2021 2020 Balance at January 1 $ 83 $ 84 Accruals for warranties issued during the year 38 34 Accruals related to pre-existing warranties (8) (3) Settlements made (in cash or kind) during the year (31) (33) Other, net (including currency translation and acquisitions) (2) 1 Balance at December 31 $ 80 $ 83 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 not paid 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. |
SCHEDULE II. VALUATION AND QUAL
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, 2020 and 2019 (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: 2021 $ 7 $ 1 $ — $ (2) (a) (b) $ 6 2020 $ 5 (c) $ 3 $ — $ (1) (a) $ 7 2019 $ 5 $ 1 $ — $ (2) (a) $ 4 Valuation allowance on deferred tax assets: 2021 $ 35 $ 5 $ — $ (23) (b) $ 17 2020 $ 38 $ — $ 2 (d) $ (5) (e) $ 35 2019 $ 43 $ — $ — $ (5) (e) $ 38 ______________________________ (a) Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years. (b) As a result of the Hüppe divestiture in May 2021, $1 million was removed from allowance for credit losses and $23 million was removed from valuation allowance on deferred tax assets. (c) Includes a $1 million adjustment related to the cumulative effect of adoption of the new credit loss standard. (d) $2 million net increase in valuation allowance due to currency translation recorded in other comprehensive income (loss). (e) $5 million net reduction to valuation allowance recorded as an income tax benefit. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
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. 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 accumulated other comprehensive income (loss) in the consolidated balance sheets. Realized foreign currency transaction gains and losses are included in other income (expense), net in the consolidated statements of operations. |
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 home center retailers, plumbing wholesalers and a number of other customers. 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 $67 million and $48 million at December 31, 2021 and 2020, 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. |
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 or a comparable market alternative, 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 2021, we utilized a weighted average cost of capital of approximately 7.5 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 9.0 percent to 11.5 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 7.5 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2021, 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 10.0 percent to 15.5 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 of Financial Instruments | Fair Value of Financial Instruments. 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 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 lasting 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, 2021 and 2020. The aggregate noncontrolling interest, net of dividends, at December 31, 2021 and 2020 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 effects 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, was eliminated from accumulated other comprehensive income (loss) upon the early retirement of the related debt in March 2021. 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. |
Recently Adopted Accounting Pronouncements | Recently Adopted 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. We adopted ASU 2020-01 prospectively beginning on January 1, 2021. The adoption of the standard did not have a material effect on our financial position or results of operations. Recently Issued Accounting Pronouncements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. We plan to adopt this standard for annual periods beginning January 1, 2022 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. A. ACCOUNTING POLICIES (Concluded) In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts. We plan to adopt this standard for annual periods beginning January 1, 2022 and do not anticipate that the adoption of this new standard will have a material impact on our financial position or results of operations. |
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. |
DIVESTITURES (Tables)
DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The major classes of line items constituting income from discontinued operations, net, in millions: Year Ended December 31, 2021 2020 2019 Net sales $ — $ 101 $ 1,528 Cost of sales — 78 1,184 Gross profit — 23 344 Selling, general and administrative expenses — 28 232 Impairment charge for goodwill (A) — — 7 Other income (expense), net — — 1 (Loss) income from discontinued operations — (5) 106 Gain on disposal of discontinued operations, net — 602 298 Income before income tax — 597 404 Income tax expense — (183) (108) Income from discontinued operations, net $ — $ 414 $ 296 (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. Other selected financial information for Cabinetry, Milgard and UKWG during the period owned by us, were as follows, in millions: Year Ended December 31, 2021 2020 2019 Depreciation and amortization $ — $ — $ 29 Capital expenditures — 1 34 ROU assets obtained in exchange for new lease obligations — — 3 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 3,384 $ 3,240 $ 6,624 International, principally Europe 1,751 — 1,751 Total $ 5,135 $ 3,240 $ 8,375 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 |
Financing Receivable, Allowance for Credit Loss | Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Year Ended 2021 2020 Balance at January 1 $ 7 $ 5 Provision for expected credit losses during the period 1 3 Write-offs charged against the allowance (2) (2) Recoveries of amounts previously written off 1 1 Other (A) (1) — Balance at end of year $ 6 $ 7 ______________________________ (A) As a result of Hüppe being divested in May 2021, $1 million for the year ended December 31, 2021 was removed from allowance for credit losses. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The components of inventory were as follows, in millions: At December 31, 2021 2020 Finished goods $ 702 $ 552 Raw materials 383 242 Work in process 131 82 Total $ 1,216 $ 876 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost included in income from continuing operations were as follows, in millions: Year Ended 2021 2020 2019 Operating lease cost $ 48 $ 47 $ 49 Short-term lease cost 8 7 6 Variable lease cost 4 3 3 Finance lease cost: Amortization of right-of-use assets 3 3 3 Interest on lease liabilities 1 1 1 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows, in millions: Year Ended 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 47 $ 47 $ 58 Operating cash flows for finance leases 1 1 1 Financing cash flows for finance leases 2 2 8 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 67 27 27 Finance leases — — — ______________________________ |
Lessee, Other Lease Information | Certain other information related to leases was as follows: At December 31, 2021 2020 2019 Weighted-average remaining lease term: Operating leases 9 years 10 years 10 years Finance leases 9 years 10 years 11 years Weighted-average discount rate: Operating leases 4.0 % 4.4 % 4.6 % Finance leases 3.3 % 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, 2021 2020 Operating Leases Finance Leases Operating Leases Finance Leases Property and equipment, net $ — $ 24 $ — $ 27 Notes payable — 3 — 2 Accrued liabilities 38 — 39 — Long-term debt — 23 — 26 |
Finance Lease, Liability, Maturity | At December 31, 2021, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2022 $ 44 $ 3 2023 37 3 2024 31 3 2025 26 4 2026 23 3 Thereafter 95 14 Total lease payments 256 30 Less: imputed interest (46) (4) Total $ 210 $ 26 |
Operating Lease, Liability, Maturity | At December 31, 2021, future maturities of lease liabilities were as follows, in millions: Operating Leases Finance Leases Year ending December 31, 2022 $ 44 $ 3 2023 37 3 2024 31 3 2025 26 4 2026 23 3 Thereafter 95 14 Total lease payments 256 30 Less: imputed interest (46) (4) Total $ 210 $ 26 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The components of property and equipment, net were as follows, in millions: At December 31, 2021 2020 Land and improvements $ 67 $ 66 Buildings 514 522 Computer hardware and software 259 249 Machinery and equipment 1,199 1,184 2,039 2,021 Less: Accumulated depreciation (1,143) (1,113) Total $ 896 $ 908 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | Goodwill at December 31, 2021, by segment, was as follows, in millions: Gross Goodwill At December 31, 2021 Accumulated Net Goodwill At December 31, 2021 Plumbing Products (A) $ 662 $ (340) $ 322 Decorative Architectural Products 366 (120) 246 Total $ 1,028 $ (460) $ 568 ______________________________ (A) As a result of Hüppe being divested in May 2021, both gross goodwill and accumulated impairment losses for the Plumbing Products segment were reduced by $39 million. The changes in the carrying amount of goodwill for years ended December 31, 2021 and 2020, by segment, were as follows, in millions: Gross Goodwill At December 31, 2020 Accumulated Net Goodwill At December 31, 2020 Acquisitions Pre-tax Other (B) Net Goodwill At December 31, 2021 Plumbing Products $ 613 $ (340) $ 273 $ 63 $ — $ (14) $ 322 Decorative Architectural Products 365 (75) 290 1 (45) — 246 Total $ 978 $ (415) $ 563 $ 64 $ (45) $ (14) $ 568 Gross Goodwill At December 31, 2019 Accumulated Net Goodwill At December 31, 2019 Acquisitions Pre-tax Other (B) 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 ______________________________ (B) Other consists of the effect of foreign currency translation. |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Schedule of other assets | The components of other assets were as follows, in millions: At December 31, 2021 2020 Deferred tax assets (Note S) $ 57 $ 109 Equity method investments 18 11 Other investments 7 — Preferred stock of ACProducts Holding, Inc. (Note I) — 146 Other 32 28 Total $ 114 $ 294 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | The components of accrued liabilities were as follows, in millions: At December 31, 2021 2020 Salaries, wages and commissions $ 195 $ 193 Advertising and sales promotion 297 293 Interest 29 35 Warranty (Note U) 31 34 Employee retirement plans 49 182 Insurance reserves 27 29 Property, payroll and other taxes 32 32 Dividends payable — 36 Deferred revenue 67 62 Product returns 23 23 Operating lease liabilities (Note F) 38 39 Other 96 80 Total $ 884 $ 1,038 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The carrying value of outstanding debt was as follows, in millions: At December 31, 2021 2020 Notes and debentures: 5.950%, due March 15, 2022 $ — $ 326 4.450%, due April 1, 2025 — 500 4.375%, due April 1, 2026 — 498 3.500%, due November 15, 2027 300 300 1.500%, due February 15, 2028 599 — 7.750%, due August 1, 2029 235 235 2.000%, due October 1, 2030 300 300 2.000%, due February 15, 2031 596 — 6.500%, due August 15, 2032 200 200 4.500%, due May 15, 2047 417 418 3.125%, due February 15, 2051 300 — Other 35 33 Prepaid debt issuance costs (23) (15) 2,959 2,795 Less: Current portion 10 3 Total long-term debt $ 2,949 $ 2,792 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of pre-tax compensation expense and the related income tax benefit for these stock-based incentives | Pre-tax compensation expense included in income from continuing operations for these stock-based incentives was as follows, in millions: Year Ended December 31, 2021 2020 2019 Long-term stock awards $ 10 $ 14 $ 20 Stock options 7 7 4 Restricted stock units 28 13 — Performance restricted stock units 10 5 3 Phantom stock awards 6 4 4 Total $ 61 $ 43 $ 31 |
Schedule of the Company's long-term stock award activity | Our long-term stock award activity was as follows, shares in millions: Year Ended December 31, 2021 2020 2019 Unvested stock award shares at January 1 1 2 2 Weighted average grant date fair value $ 36 $ 34 $ 30 Stock award shares granted — — 1 Weighted average grant date fair value $ — $ — $ 36 Stock award shares vested — 1 1 Weighted average grant date fair value $ 34 $ 32 $ 25 Stock award shares forfeited — — — Weighted average grant date fair value $ 36 $ 35 $ 35 Unvested stock award shares at December 31 1 1 2 Weighted average grant date fair value $ 37 $ 36 $ 34 Information related to phantom stock awards was as follows, in millions: At December 31, 2021 2020 Accrued compensation cost liability $ 8 $ 6 Unrecognized compensation cost $ 3 $ 4 Equivalent common shares — — |
Schedule of the Company's stock option activity | Our stock option activity was as follows, shares in millions: Year Ended December 31, 2021 2020 2019 Option shares outstanding, January 1 2 3 4 Weighted average exercise price $ 33 $ 27 $ 21 Option shares granted 1 1 1 Weighted average exercise price $ 56 $ 48 $ 36 Option shares exercised — 2 2 Aggregate intrinsic value on date of exercise (A) $ 5 million $ 29 million $ 33 million Weighted average exercise price $ 25 $ 17 $ 13 Option shares forfeited — — — Weighted average exercise price $ 11 $ 40 $ 34 Option shares outstanding, December 31 3 2 3 Weighted average exercise price $ 37 $ 33 $ 27 Weighted average remaining option term (in years) 6 6 6 Option shares vested and expected to vest, December 31 3 2 3 Weighted average exercise price $ 36 $ 33 $ 27 Aggregate intrinsic value (A) $ 89 million $ 51 million $ 63 million Weighted average remaining option term (in years) 6 6 6 Option shares exercisable (vested), December 31 2 1 2 Weighted average exercise price $ 31 $ 28 $ 21 Aggregate intrinsic value (A) $ 63 million $ 35 million $ 47 million Weighted average remaining option term (in years) 5 5 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: Year Ended December 31, 2021 2020 2019 Weighted average grant date fair value $ 13.61 $ 10.67 $ 8.81 Risk-free interest rate 0.75 % 1.53 % 2.57 % Dividend yield 1.67 % 1.14 % 1.35 % Volatility factor 30.00 % 24.00 % 25.00 % 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, shares in millions: At December 31, 2021 Option Shares Outstanding Option Shares Exercisable Range of Number of Weighted Weighted Number of Weighted $ 17 - 21 — 2 $20 — $20 $ 22 - 26 1 4 $24 1 $24 $ 27 - 36 1 6 $35 1 $34 $ 37 - 57 1 8 $49 — $44 $ 17 - 57 3 6 $37 2 $31 |
EMPLOYEE RETIREMENT PLANS (Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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: Year Ended December 31, 2021 2020 2019 Defined-contribution plans $ 57 $ 46 $ 40 Defined-benefit pension plans 435 38 24 $ 492 $ 84 $ 64 |
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: Year Ended December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Changes in projected benefit obligation: Projected benefit obligation at January 1 $ 1,118 $ 162 $ 1,034 $ 161 Service cost 4 — 3 — Interest cost 15 4 23 5 Actuarial loss, net (105) (6) 85 10 Foreign currency exchange (16) — 18 — Benefit payments (230) (12) (45) (13) Divestitures (14) — — (1) Settlements (594) — — — Projected benefit obligation at December 31 $ 178 $ 148 $ 1,118 $ 162 Changes in fair value of plan assets: Fair value of plan assets at January 1 $ 863 $ — $ 780 $ — Actual return on plan assets (40) — 67 — Foreign currency exchange (7) — 8 — Company contributions 107 12 57 13 Expenses, other — — (4) — Benefit payments (230) (12) (45) (13) Settlements (594) — — — Fair value of plan assets at December 31 $ 99 $ — $ 863 $ — Funded status at December 31 $ (79) $ (148) $ (255) $ (162) |
Schedule of amounts in the Company's consolidated balance sheets | Amounts in our consolidated balance sheets were as follows, in millions: At December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Other assets $ 1 $ — $ 1 $ — Accrued liabilities (A) — (12) (135) (12) Other liabilities (A) (80) (136) (121) (150) Total net liability $ (79) $ (148) $ (255) $ (162) ___________________________ (A) As a result of the termination of the qualified domestic defined-benefit pension plans in 2021, the liabilities associated with these plans were reported as current liabilities at December 31, 2020. |
Schedule of unrealized loss included in accumulated other comprehensive income before income taxes | Unrealized loss included in accumulated other comprehensive income (loss) before income taxes was as follows, in millions: At December 31, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Net loss $ 56 $ 57 $ 540 $ 65 Net prior service cost 3 — 3 — Total $ 59 $ 57 $ 543 $ 65 |
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, 2021 2020 Qualified Non-Qualified Qualified Non-Qualified Projected benefit obligation $ 174 $ 148 $ 1,100 $ 162 Accumulated benefit obligation 174 148 1,100 162 Fair value of plan assets 94 — 844 — |
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: Year Ended December 31, 2021 2020 2019 Qualified Non-Qualified Qualified Non-Qualified Qualified Non-Qualified Service cost $ 4 $ — $ 3 $ — $ 3 $ — Interest cost 15 4 28 5 39 6 Expected return on plan assets (9) — (24) — (44) — Settlement loss 404 — — — — — Recognized prior service cost 1 — 1 — — — Recognized net loss 14 2 22 3 18 2 Net periodic pension cost $ 429 $ 6 $ 30 $ 8 $ 16 $ 8 |
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: At December 31, 2021 2020 Equity securities 38 % 15 % Debt securities 48 % 49 % Other 14 % 36 % 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, 2021 and 2020, as well as those valued at NAV using the practical expedient, which approximates fair value, in millions. At December 31, 2021 Level 1 Level 2 Level 3 Valued at NAV Total Plan Assets Common and Preferred Stocks: United States $ 25 $ — $ — $ — $ 25 International 13 — — — 13 Corporate Debt Securities: United States — 5 — — 5 International — 2 — — 2 Government and Other Debt Securities: United States — 4 — — 4 International — 36 — — 36 Real Estate United States 3 — — — 3 International 2 — 6 — 8 Short-Term and Other Investments – International 3 — — — 3 Total Plan Assets $ 46 $ 47 $ 6 $ — $ 99 N. EMPLOYEE RETIREMENT PLANS (Continued) 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 |
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: 2021 2020 Fair Value, January 1 $ 1 $ 19 Purchases 5 — Sales — (18) Fair Value, December 31 $ 6 $ 1 |
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: At December 31, 2021 2020 2019 Discount rate for obligations 1.80 % 1.70 % 2.50 % Expected return on plan assets 3.00 % 2.00 % 3.00 % Rate of compensation increase — % — % — % Discount rate for net periodic pension cost 1.70 % 2.50 % 3.80 % |
Schedule of benefits expected to be paid relating to the Company's defined-benefit pension plans | At December 31, 2021, 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 2022 $ 4 $ 12 2023 4 12 2024 4 12 2025 5 11 2026 5 11 2027 - 2031 31 48 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive loss | The components of accumulated other comprehensive income (loss) attributable to Masco Corporation were as follows, in millions: At December 31, 2021 2020 Cumulative translation adjustments, net $ 312 $ 325 Unrealized loss on interest rate swaps, net — (7) Unrecognized net loss and prior service cost, net (80) (460) Accumulated other comprehensive income (loss) $ 232 $ (142) |
RECLASSIFICATIONS FROM OTHER _2
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 income (loss) to the consolidated statements of operations were as follows, in millions: Year Ended December 31, Accumulated Other 2021 2020 2019 Statement of Operations Line Item Settlement and amortization of defined-benefit pension and other post-retirement benefits (A): Actuarial losses, net and prior service cost $ 18 $ 26 $ 20 Other, net Settlement loss 451 — — Tax (benefit) (104) (7) (5) Net of tax $ 365 $ 19 $ 15 Interest rate swaps (B) $ 2 $ 2 $ 2 Interest expense Tax expense (benefit) 5 (1) — Net of tax $ 7 $ 1 $ 2 (A) In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $447 million of pre-tax actuarial losses from accumulated other comprehensive income (loss) and $96 million of income tax benefit, which included $11 million of related disproportionate tax expense. Additionally, the amortization of defined-benefit pension and post-retirement benefits included $3 million, net of tax, due to the disposition of pension plans in connection with the divestiture of Hüppe. (B) Upon full repayment and retirement of the 5.950% Notes due March 15, 2022 in the first quarter of 2021, we recognized the remaining interest rate swap loss and related disproportionate tax expense. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of information by segment and geographic area | Information by segment and Geographic Area was as follows, in millions: Year Ended December 31, At December 31, Net Sales (1)(2)(3)(4) Operating Profit Assets 2021 2020 2019 2021 2020 2019 2021 2020 2019 Our operations by segment were: Plumbing Products $ 5,135 $ 4,136 $ 3,984 $ 929 $ 806 $ 708 $ 3,195 $ 2,822 $ 2,375 Decorative Architectural Products 3,240 3,052 2,723 581 583 480 1,781 1,633 1,526 Total $ 8,375 $ 7,188 $ 6,707 $ 1,510 $ 1,389 $ 1,188 $ 4,976 $ 4,455 $ 3,901 Our operations by Geographic Area were: North America $ 6,624 $ 5,805 $ 5,328 $ 1,214 $ 1,167 $ 987 $ 3,510 $ 3,101 $ 2,785 International, principally Europe 1,751 1,383 1,379 296 222 201 1,466 1,354 1,116 Total, as above $ 8,375 $ 7,188 $ 6,707 1,510 1,389 1,188 4,976 4,455 3,901 General corporate expense, net (5) (105) (94) (100) Operating profit, as reported 1,405 1,295 1,088 Other income (expense), net (717) (164) (174) Income from continuing operations before income taxes $ 688 $ 1,131 $ 914 Corporate assets 599 1,322 598 Assets held for sale (8) — — 528 Total assets $ 5,575 $ 5,777 $ 5,027 Year Ended December 31, Property Additions Depreciation and 2021 2020 2019 2021 2020 2019 Our operations by segment were: Plumbing Products $ 94 $ 86 $ 108 $ 101 $ 84 $ 80 Decorative Architectural Products 31 25 18 37 41 41 125 111 126 138 125 121 Unallocated amounts, principally related to corporate assets 3 2 2 13 8 9 Discontinued operations — 1 34 — — 29 Total $ 128 $ 114 $ 162 $ 151 $ 133 $ 159 ______________________________ (1) Included in net sales were export sales from the U.S. of $322 million, $274 million and $244 million in 2021, 2020 and 2019, respectively. (2) Excluded from net sales were intra-company sales between segments of less than one percent in 2021, 2020 and 2019. (3) Included in net sales were sales to one customer of $3,037 million, $2,812 million and $2,481 million in 2021, 2020 and 2019, respectively. Such net sales were included in each of our segments. (4) Net sales from our operations in the U.S. were $6,387 million, $5,592 million and $5,127 million in 2021, 2020 and 2019, 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 $1,332 million and $546 million, $1,301 million and $522 million, and $1,198 million and $470 million at December 31, 2021, 2020 and 2019, respectively. (7) Property additions exclude amounts paid for long-lived assets as part of acquisitions. (8) Related to the divestiture of our Cabinetry business. |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other, net, which is included in other income (expense), net | Other, net, which is included in other income (expense), net, was as follows, in millions: Year Ended December 31, 2021 2020 2019 Net periodic pension and post-retirement benefit expense (A) $ (430) $ (35) $ (21) Loss on sale of business (18) — — Contingent consideration (B) (16) — — Gain on preferred stock redemption 14 — — Equity investment income, net 11 3 1 Dividend income 6 10 — Foreign currency transaction (losses) gains (C) (4) (10) 2 Income from cash and cash investments 1 3 3 Other items, net (D) (3) 9 — Total other, net $ (439) $ (20) $ (15) _________________________________________________ (A) In the second quarter of 2021, we settled our qualified domestic defined-benefit pension plans and recognized $406 million of additional pension expense. In the fourth quarter of 2021, we recognized a $7 million reduction in pension expense related to the reversion of excess pension plan assets for the settlement of such plans. Refer to Note N for additional information. (B) In 2021, we recognized $16 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note I for additional information. (C) Included in foreign currency transaction (losses) gains for 2020 was a $9 million deferred currency translation loss reclassified from accumulated other comprehensive income (loss) in conjunction with the liquidation of certain UK dormant entities upon receiving final regulatory approval in 2020. (D) 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, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income taxes expense (benefit) from continuing operations | (In Millions) 2021 2020 2019 Income from continuing operations before income taxes: U.S. $ 374 $ 892 $ 684 Foreign 314 239 230 $ 688 $ 1,131 $ 914 Income tax expense: Currently payable: U.S. Federal $ 145 $ 170 $ 155 State and local 40 33 46 Foreign 93 69 70 Deferred: U.S. Federal (57) (9) (23) State and local (10) 11 (15) Foreign (1) (5) (3) $ 210 $ 269 $ 230 Deferred tax assets at December 31: Receivables $ 14 $ 9 Inventories 17 17 Other assets, including stock-based compensation 18 17 Accrued liabilities 58 82 Noncurrent operating lease liabilities 40 35 Other long-term liabilities 79 96 Net operating loss carryforward 26 56 Tax credit carryforward 11 9 263 321 Valuation allowance (17) (35) 246 286 Deferred tax liabilities at December 31: Property and equipment 62 67 Operating lease right-of-use assets 43 39 Intangibles 75 74 Investment in foreign subsidiaries 10 10 Other investments 3 3 Other 16 4 209 197 Net deferred tax asset at December 31 $ 37 $ 89 |
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: Year Ended December 31, 2021 2020 2019 U.S. Federal statutory tax rate 21 % 21 % 21 % State and local taxes, net of U.S. Federal tax benefit 4 3 3 Higher taxes on foreign earnings 3 1 2 U.S. and foreign taxes on distributed and undistributed foreign earnings — — 1 Stock-based compensation (1) (1) (1) Business divestiture with no tax impact 1 — — Disproportionate tax effects 2 — — Other, net 1 — (1) Effective tax rate 31 % 24 % 25 % |
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, 2020 $ 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 Current year tax positions: Additions 19 — 19 Reductions (2) — (2) Prior year tax positions: Additions 1 — 1 Reductions (1) — (1) Lapse of applicable statute of limitations (10) — (10) Interest and penalties recognized in income tax expense — 1 1 Balance at December 31, 2021 $ 81 $ 11 $ 92 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share | Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: Year Ended December 31, 2021 2020 2019 Numerator (basic and diluted): Income from continuing operations $ 410 $ 810 $ 639 Less: Allocation to redeemable noncontrolling interest 2 — — Less: Allocation to unvested restricted stock awards 2 6 4 Income from continuing operations attributable to common shareholders 406 804 635 Income from discontinued operations, net — 414 296 Less: Allocation to unvested restricted stock awards — 3 2 Income from discontinued operations, net attributable to common shareholders — 411 294 Net income attributable to common shareholders $ 406 $ 1,215 $ 929 Denominator: Basic common shares (based upon weighted average) 249 264 287 Add: Stock option dilution 2 — 1 Diluted common shares 251 264 288 |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the Company's warranty liability | Changes in our warranty liability were as follows, in millions: Year Ended December 31, 2021 2020 Balance at January 1 $ 83 $ 84 Accruals for warranties issued during the year 38 34 Accruals related to pre-existing warranties (8) (3) Settlements made (in cash or kind) during the year (31) (33) Other, net (including currency translation and acquisitions) (2) 1 Balance at December 31 $ 80 $ 83 |
ACCOUNTING POLICIES - Revenue R
ACCOUNTING POLICIES - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Revenue from External Customer [Line Items] | |
Customers' payment terms | 30 days |
Maximum | |
Revenue from External Customer [Line Items] | |
Customers' payment terms | 65 days |
ACCOUNTING POLICIES - Customer
ACCOUNTING POLICIES - Customer Displays (Details) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 | Dec. 31, 2020 |
Receivables | ||
Certain receivables allowances including allowances for doubtful accounts | $ 67 | $ 48 |
ACCOUNTING POLICIES - Depreciat
ACCOUNTING POLICIES - Depreciation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment | |||
Depreciation expense | $ 111 | $ 105 | $ 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, 2021 | |
Goodwill and Other Intangible Assets | |
Period of operation forecasts used in impairment test | 5 years |
Weighted average cost of capital (as a percent) | 7.50% |
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 | 9.00% |
Measurement Input, Discount Rate | Maximum | |
Goodwill and Other Intangible Assets | |
Goodwill, measurement input | 11.50% |
Measurement Input, Discount Rate | Assets, Total | Minimum | |
Goodwill and Other Intangible Assets | |
Discount rate on estimated discounted cash flows (as a percent) | 10.00% |
Measurement Input, Discount Rate | Assets, Total | Maximum | |
Goodwill and Other Intangible Assets | |
Discount rate on estimated discounted cash flows (as a percent) | 15.50% |
ACCOUNTING POLICIES - Stock Bas
ACCOUNTING POLICIES - Stock Based Compensation (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options | |||
Award requisite service period | 10 years | ||
Phantom Share Units (PSUs) | |||
Stock Options | |||
Award vesting period | 3 years | 3 years | 5 years |
Stock options | |||
Stock Options | |||
Award vesting period | 3 years | 3 years | 5 years |
Restricted stock units | |||
Stock Options | |||
Award vesting period | 3 years | 3 years | 5 years |
Performance restricted stock units | |||
Stock Options | |||
Award vesting period | 3 years |
ACCOUNTING POLICIES - Noncontro
ACCOUNTING POLICIES - Noncontrolling Interest (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Hansgrohe SE | ||
Noncontrolling interest | ||
Ownership percentage of Hansgrohe SE | 68.00% | 68.00% |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Acquisitions | |||||||
Goodwill | $ 64 | $ 41 | |||||
Easy Sanitary Solutions B.V. | |||||||
Acquisitions | |||||||
Noncontrolling interest ownership | 24.90% | 24.90% | |||||
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 | ||||||
Asset acquisition, consideration transferred, contingent consideration | 50 | ||||||
Contingent consideration, liability | 8 | 24 | 8 | ||||
Goodwill, purchase accounting adjustments | 1 | ||||||
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 | ||||||
Consideration transferred | 53 | ||||||
Liabilities incurred | $ 5 | ||||||
Liabilities incurred, payment period | 18 months | ||||||
Increase in other indefinite-lived intangible assets | $ 7 | ||||||
Steamist, Inc. | |||||||
Acquisitions | |||||||
Cash consideration | $ 56 | ||||||
Increase in definite-lived intangible assets | $ 31 | ||||||
Weighted average useful life | 11 years | ||||||
Goodwill | $ 29 | ||||||
Easy Sanitary Solutions B.V. | |||||||
Acquisitions | |||||||
Cash consideration | $ 52 | ||||||
Increase in definite-lived intangible assets | $ 32 | ||||||
Weighted average useful life | 10 years | 10 years | |||||
Goodwill | $ 35 | ||||||
Equity interest acquired | 75.10% | 75.10% | |||||
Consideration transferred | $ 58 | € 47 | |||||
Liabilities incurred | $ 6 | ||||||
Liabilities incurred, payment period | 2 years | 2 years | |||||
Plumbing Products | |||||||
Acquisitions | |||||||
Goodwill | $ 63 | $ 34 | |||||
Plumbing Products | Kraus USA Inc. | |||||||
Acquisitions | |||||||
Increase in other indefinite-lived intangible assets | $ 25 |
DIVESTITURES - Narrative (Detai
DIVESTITURES - Narrative (Details) - USD ($) $ in Millions | Nov. 14, 2019 | Nov. 06, 2019 | Sep. 06, 2019 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on sales of businesses, net | $ 18 | $ 0 | $ 0 | ||||
Businesses, net of cash disposed | 5 | 870 | 722 | ||||
Gain (loss) on disposition of business | (18) | 602 | 298 | ||||
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 | 0 | 602 | 298 | ||||
Income (loss) from discontinued operation, before income tax | 0 | 597 | 404 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposal group, not discontinued operation, currency translation gain (loss) | 23 | ||||||
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 | ||||||
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] | |||||||
Businesses, net of cash disposed | $ 853 | ||||||
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 | ||||||
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) | |||||
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 | |||||
Hüppe | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on sales of businesses, net | $ 18 |
DIVESTITURES - Income Statement
DIVESTITURES - Income Statement (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Impairment charge for goodwill | $ 0 | $ 0 | $ 0 | $ 45,000,000 | $ 0 | ||
Income from discontinued operations, net | 0 | 414,000,000 | $ 296,000,000 | ||||
Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net sales | 0 | 101,000,000 | 1,528,000,000 | ||||
Cost of sales | 0 | 78,000,000 | 1,184,000,000 | ||||
Gross profit | 0 | 23,000,000 | 344,000,000 | ||||
Selling, general and administrative expenses | 0 | 28,000,000 | 232,000,000 | ||||
Impairment charge for goodwill | 0 | 0 | 7,000,000 | ||||
Other income (expense), net | 0 | 0 | 1,000,000 | ||||
(Loss) income from discontinued operations | 0 | (5,000,000) | 106,000,000 | ||||
Gain on disposal of discontinued operations, net | 0 | 602,000,000 | 298,000,000 | ||||
Income before income tax | 0 | 597,000,000 | 404,000,000 | ||||
Income tax expense | 0 | (183,000,000) | (108,000,000) | ||||
Income from discontinued operations, net | $ 0 | $ 414,000,000 | $ 296,000,000 | ||||
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 |
DIVESTITURES - Additional Infor
DIVESTITURES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
ROU assets obtained in exchange for new lease obligations | $ 67 | $ 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 | 0 | 29 |
Capital expenditures | 0 | 1 | 34 |
ROU assets obtained in exchange for new lease obligations | $ 0 | $ 0 | $ 3 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 8,375 | $ 7,188 | $ 6,707 |
Performance obligation satisfied in previous period | 9 | 7 | 2 |
Contract with customer, asset, gross, current | 1 | 2 | |
Contract with customer, liability | 67 | 62 | |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 6,624 | 5,805 | 5,328 |
International, principally Europe | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,751 | 1,383 | 1,379 |
Plumbing Products | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 5,135 | 4,136 | 3,984 |
Plumbing Products | North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,384 | 2,753 | 2,605 |
Plumbing Products | International, principally Europe | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,751 | 1,383 | 1,379 |
Decorative Architectural Products | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,240 | 3,052 | 2,723 |
Decorative Architectural Products | North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,240 | 3,052 | 2,723 |
Decorative Architectural Products | International, principally Europe | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 0 | $ 0 | $ 0 |
REVENUE - Rollforward (Details)
REVENUE - Rollforward (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at January 1 | $ 7 | $ 5 |
Provision for expected credit losses during the period | 1 | 3 |
Write-offs charged against the allowance | (2) | (2) |
Recoveries of amounts previously written off | 1 | 1 |
Other | (1) | 0 |
Balance at end of year | 6 | 7 |
Financing receivable, allowance for credit losses, disposal group | 1 | $ 0 |
Hüppe | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Other | (1) | |
Financing receivable, allowance for credit losses, disposal group | $ 1 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 702 | $ 552 |
Raw materials | 383 | 242 |
Work in process | 131 | 82 |
Total | $ 1,216 | $ 876 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease remaining lease term | 21 years | |
Finance lease, remaining lease term | 21 years | |
Finance lease, renewal term | 15 years | |
Operating lease, renewal term | 15 years | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Finance lease, right-of-use asset | $ 42 | $ 42 |
Finance lease, right-of-use asset, accumulated amortization | $ 18 | $ 15 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease cost | $ 48 | $ 47 | $ 49 |
Short-term lease cost | 8 | 7 | 6 |
Variable lease cost | 4 | 3 | 3 |
Amortization of right-of-use assets | 3 | 3 | 3 |
Interest on lease liabilities | $ 1 | $ 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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Operating cash flows for operating leases | $ 47 | $ 47 | $ 58 | |
Operating cash flows for finance leases | 1 | 1 | 1 | |
Financing cash flows for finance leases | 2 | 2 | 8 | |
Right-of-Use asset obtained in exchange for new lease obligations - Operating leases | 67 | 27 | 27 | |
Right-of-Use asset obtained in exchange for new lease obligations - Finance leases | 0 | $ 0 | $ 0 | |
ESS And Steamist, Inc. | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-Use asset obtained in exchange for new lease obligations - Operating leases | $ 2 | |||
Kraus and Work Tools | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-Use asset obtained in exchange for new lease obligations - Operating leases | $ 9 |
LEASES - Weighted Average Lease
LEASES - Weighted Average Lease Term and Discount Rate (Details) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted-average remaining lease term: | |||
Operating leases | 9 years | 10 years | 10 years |
Finance leases | 9 years | 10 years | 11 years |
Weighted-average discount rate: | |||
Operating leases | 4.00% | 4.40% | 4.60% |
Finance leases | 3.30% | 3.30% | 3.40% |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Lessee, Lease, Description [Line Items] | ||
Operating Leases, current | $ 38 | $ 39 |
Operating Leases, noncurrent | 172 | 149 |
Finance Leases, noncurrent | $ 23 | $ 26 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt |
Property and equipment, net | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases, current | $ 0 | $ 0 |
Finance Leases, current | 24 | 27 |
Notes payable | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases, current | 0 | 0 |
Finance Leases, current | 3 | 2 |
Accrued liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases, current | 38 | 39 |
Finance Leases, current | 0 | 0 |
Long-term debt | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases, noncurrent | $ 0 | $ 0 |
LEASES - Future Maturities of L
LEASES - Future Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2021USD ($) |
Operating Leases | |
2022 | $ 44 |
2023 | 37 |
2024 | 31 |
2025 | 26 |
2026 | 23 |
Thereafter | 95 |
Total lease payments | 256 |
Less: imputed interest | (46) |
Total | 210 |
Finance Leases | |
2022 | 3 |
2023 | 3 |
2024 | 3 |
2025 | 4 |
2026 | 3 |
Thereafter | 14 |
Total lease payments | 30 |
Less: imputed interest | (4) |
Total | $ 26 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Property and Equipment | ||
Property and equipment, gross | $ 2,039 | $ 2,021 |
Less: Accumulated depreciation | (1,143) | (1,113) |
Total | 896 | 908 |
Land and improvements | ||
Property and Equipment | ||
Property and equipment, gross | 67 | 66 |
Buildings | ||
Property and Equipment | ||
Property and equipment, gross | 514 | 522 |
Computer hardware and software | ||
Property and Equipment | ||
Property and equipment, gross | 259 | 249 |
Machinery and equipment | ||
Property and Equipment | ||
Property and equipment, gross | $ 1,199 | $ 1,184 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill, Net (Details) - USD ($) $ in Millions | 1 Months Ended | |||
May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | ||||
Goodwill, Gross | $ 1,028 | $ 978 | $ 924 | |
Accumulated Impairment Losses | (460) | (415) | (415) | |
Net Goodwill | 568 | 563 | 509 | |
Goodwill, written off related to sale of business unit | $ 39 | |||
Plumbing Products | ||||
Goodwill [Line Items] | ||||
Goodwill, Gross | 662 | 613 | 566 | |
Accumulated Impairment Losses | (340) | (340) | (340) | |
Net Goodwill | 322 | 273 | 226 | |
Decorative Architectural Products | ||||
Goodwill [Line Items] | ||||
Goodwill, Gross | 366 | 365 | 358 | |
Accumulated Impairment Losses | (120) | (75) | (75) | |
Net Goodwill | $ 246 | $ 290 | $ 283 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in the Carrying Amount of Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||||
Gross Goodwill | $ 1,028,000,000 | $ 978,000,000 | $ 924,000,000 | $ 1,028,000,000 | $ 978,000,000 |
Accumulated Impairment Losses | (460,000,000) | (415,000,000) | (415,000,000) | (460,000,000) | (415,000,000) |
Changes in the carrying amount of goodwill | |||||
Beginning balance | 563,000,000 | 509,000,000 | |||
Acquisitions | 64,000,000 | 41,000,000 | |||
Pre-tax Impairment Charge | 0 | 0 | 0 | (45,000,000) | 0 |
Other | (14,000,000) | 13,000,000 | |||
Ending balance | 568,000,000 | 563,000,000 | 509,000,000 | 568,000,000 | 563,000,000 |
Plumbing Products | |||||
Goodwill [Line Items] | |||||
Gross Goodwill | 662,000,000 | 613,000,000 | 566,000,000 | 662,000,000 | 613,000,000 |
Accumulated Impairment Losses | (340,000,000) | (340,000,000) | (340,000,000) | (340,000,000) | (340,000,000) |
Changes in the carrying amount of goodwill | |||||
Beginning balance | 273,000,000 | 226,000,000 | |||
Acquisitions | 63,000,000 | 34,000,000 | |||
Pre-tax Impairment Charge | 0 | 0 | |||
Other | (14,000,000) | 13,000,000 | |||
Ending balance | 322,000,000 | 273,000,000 | 226,000,000 | 322,000,000 | 273,000,000 |
Decorative Architectural Products | |||||
Goodwill [Line Items] | |||||
Gross Goodwill | 366,000,000 | 365,000,000 | 358,000,000 | 366,000,000 | 365,000,000 |
Accumulated Impairment Losses | (120,000,000) | (75,000,000) | (75,000,000) | (120,000,000) | (75,000,000) |
Changes in the carrying amount of goodwill | |||||
Beginning balance | 290,000,000 | 283,000,000 | |||
Acquisitions | 1,000,000 | 7,000,000 | |||
Pre-tax Impairment Charge | (45,000,000) | (45,000,000) | 0 | ||
Other | 0 | 0 | |||
Ending balance | $ 246,000,000 | $ 290,000,000 | $ 283,000,000 | $ 246,000,000 | $ 290,000,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Definite-lived Intangible Assets | |||||||
Impairment charge for goodwill | $ 0 | $ 0 | $ 0 | $ 45,000,000 | $ 0 | ||
Other indefinite-lived intangible assets | 109,000,000 | 109,000,000 | 109,000,000 | 109,000,000 | |||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 0 | 0 | $ 0 | ||||
Carrying value of definite-lived intangible assets | 279,000,000 | 248,000,000 | 279,000,000 | 248,000,000 | |||
Accumulated amortization | 75,000,000 | $ 73,000,000 | 75,000,000 | 73,000,000 | |||
Amortization expense related to the definite-lived intangible assets | 31,000,000 | $ 24,000,000 | $ 23,000,000 | ||||
Amortization expense related to the definite-lived intangible assets, 2022 | 30,000,000 | 30,000,000 | |||||
Amortization expense related to the definite-lived intangible assets, 2023 | 29,000,000 | 29,000,000 | |||||
Amortization expense related to the definite-lived intangible assets, 2024 | 28,000,000 | 28,000,000 | |||||
Amortization expense related to the definite-lived intangible assets, 2025 | 23,000,000 | 23,000,000 | |||||
Amortization expense related to the definite-lived intangible assets, 2026 | 22,000,000 | 22,000,000 | |||||
Weighted average | |||||||
Definite-lived Intangible Assets | |||||||
Weighted average amortization period | 15 years | ||||||
Decorative Architectural Products | |||||||
Definite-lived Intangible Assets | |||||||
Impairment charge for goodwill | $ 45,000,000 | $ 45,000,000 | $ 0 | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 9,000,000 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS - General Disclosures (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 14, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Proceeds from redemption of preferred stock | $ 166 | ||||
Gain (loss) on preferred stock redemption | $ 14 | $ 14 | $ 0 | $ 0 | |
Dividend income | 6 | 10 | $ 0 | ||
Investments | 0 | 146 | |||
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 | 24 | 8 | |||
ACProducts Preferred Stock | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
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 INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Debt (Details) - USD ($) $ in Billions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value | ||
Fair value of debt | ||
Long-term and short-term debt | $ 3.2 | $ 3.3 |
Carrying Value | ||
Fair value of debt | ||
Debt, long-term and short-term | $ 3 | $ 2.8 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Deferred tax assets (Note S) | $ 57 | $ 109 | |
Equity method investments | 18 | 11 | |
Other investments | 7 | 0 | |
Preferred stock of ACProducts Holding, Inc. (Note I) | 0 | 146 | |
Other | 32 | 28 | |
Total | 114 | 294 | |
Amortization expense related to in-store displays | $ 0 | $ 2 | $ 12 |
Cash spent for in-store displays | $ 11 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Salaries, wages and commissions | $ 195 | $ 193 |
Advertising and sales promotion | 297 | 293 |
Interest | 29 | 35 |
Warranty (Note U) | 31 | 34 |
Employee retirement plans | 49 | 182 |
Insurance reserves | 27 | 29 |
Property, payroll and other taxes | 32 | 32 |
Dividends payable | 0 | 36 |
Deferred revenue | 67 | 62 |
Product returns | 23 | 23 |
Operating lease liabilities (Note F) | 38 | 39 |
Other | 96 | 80 |
Total | $ 884 | $ 1,038 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Total | Total |
DEBT - Tabular Disclosure - Not
DEBT - Tabular Disclosure - Notes and Debentures and Other (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Mar. 22, 2021 | Mar. 04, 2021 | Dec. 31, 2020 | Sep. 18, 2020 |
Debt Instrument [Line Items] | |||||
Other | $ 35 | $ 33 | |||
Prepaid debt issuance costs | (23) | (15) | |||
Total long-term debt, current and non-current | 2,959 | 2,795 | |||
Less: Current portion | 10 | 3 | |||
Total long-term debt | $ 2,949 | 2,792 | |||
5.950%, due March 15, 2022 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 5.95% | ||||
5.950%, due March 15, 2022 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 5.95% | ||||
Notes and debentures | $ 0 | 326 | |||
4.450%, due April 1, 2025 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.45% | ||||
4.450%, due April 1, 2025 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.45% | ||||
Notes and debentures | $ 0 | 500 | |||
4.375%, due April 1, 2026 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.375% | ||||
4.375%, due April 1, 2026 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.375% | ||||
Notes and debentures | $ 0 | 498 | |||
3.500%, due November 15, 2027 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 3.50% | ||||
Notes and debentures | $ 300 | 300 | |||
1.500%, due February 15, 2028 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 1.50% | ||||
1.500%, due February 15, 2028 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 1.50% | ||||
Notes and debentures | $ 599 | 0 | |||
7.750%, due August 1, 2029 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 7.75% | ||||
Notes and debentures | $ 235 | 235 | |||
2.000%, due October 1, 2030 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 2.00% | ||||
2.000%, due October 1, 2030 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 2.00% | ||||
Notes and debentures | $ 300 | 300 | |||
2.000%, due February 15, 2031 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 2.00% | ||||
2.000%, due February 15, 2031 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 2.00% | ||||
Notes and debentures | $ 596 | 0 | |||
6.500%, due August 15, 2032 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 6.50% | ||||
Notes and debentures | $ 200 | 200 | |||
4.500%, due May 15, 2047 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.50% | ||||
4.500%, due May 15, 2047 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 4.50% | ||||
Notes and debentures | $ 417 | 418 | |||
3.125%, due February 15, 2051 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 3.125% | ||||
3.125%, due February 15, 2051 | Senior notes and debentures | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 3.125% | ||||
Notes and debentures | $ 300 | $ 0 |
DEBT - Notes and Debentures (De
DEBT - Notes and Debentures (Details) - USD ($) $ in Millions | Mar. 22, 2021 | Mar. 04, 2021 | Sep. 29, 2020 | Sep. 18, 2020 | Dec. 19, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt | ||||||||
Proceeds from issuance of debt | $ 1,495 | |||||||
Repayments of notes payable | $ 1,326 | $ 400 | $ 201 | |||||
Debt extinguishment costs | $ 160 | 5 | $ 2 | |||||
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% | |||||||
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% | |||||||
3.5% Notes and Debentures Due April 1, 2021 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 3.50% | |||||||
Repayments of notes payable | $ 400 | |||||||
Debt extinguishment costs | $ 6 | |||||||
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 | |||||||
1.500%, due February 15, 2028 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 1.50% | |||||||
Long-term debt, gross | $ 600 | |||||||
1.500%, due February 15, 2028 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 1.50% | |||||||
2.000%, due February 15, 2031 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 2.00% | |||||||
Long-term debt, gross | $ 600 | |||||||
2.000%, due February 15, 2031 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 2.00% | |||||||
3.125%, due February 15, 2051 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 3.125% | |||||||
Long-term debt, gross | $ 300 | |||||||
3.125%, due February 15, 2051 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 3.125% | |||||||
5.950%, due March 15, 2022 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 5.95% | |||||||
Repayments of notes payable | $ 326 | |||||||
5.950%, due March 15, 2022 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 5.95% | |||||||
4.450%, due April 1, 2025 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.45% | |||||||
Repayments of notes payable | $ 500 | |||||||
4.450%, due April 1, 2025 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.45% | |||||||
4.375%, due April 1, 2026 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.375% | |||||||
Repayments of notes payable | $ 500 | |||||||
4.375%, due April 1, 2026 | Senior notes and debentures | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.375% | |||||||
5.95% Notes and Debentures due 2022, 4.45% Notes and Debentures due April 2025, and 4.375% Notes and Debentures Due April 1, 2026 | ||||||||
Debt | ||||||||
Debt extinguishment costs | $ 168 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) - USD ($) | Dec. 21, 2021 | Dec. 31, 2021 | Dec. 22, 2021 | Mar. 13, 2019 | Mar. 28, 2013 |
Year 2019 Credit Agreement | |||||
Debt | |||||
Borrowing capacity, maximum | $ 1,000,000,000 | ||||
Amended Credit Agreement | |||||
Debt | |||||
Increase in maximum borrowing capacity | $ 500,000,000 | ||||
Maximum Leverage Ratio | 4 | ||||
Minimum interest coverage ratio | 2.5 | ||||
Amount borrowed | $ 0 | ||||
Amended Credit Agreement | Federal funds effective rate | |||||
Debt | |||||
Interest rate, basis spread (as a percent) | 0.50% | ||||
Amended Credit Agreement | Libor rate | |||||
Debt | |||||
Interest rate, basis spread (as a percent) | 1.00% | ||||
Amended Credit Agreement | Canadian Interest Rate | |||||
Debt | |||||
Interest rate, basis spread (as a percent) | 1.00% | ||||
Amended Credit Agreement | Daily Sterling Overnight Index Average | |||||
Debt | |||||
Interest rate, basis spread (as a percent) | 0.0326% | ||||
Amended Credit Agreement | Revolver | |||||
Debt | |||||
Borrowing capacity, maximum | 500,000,000 | ||||
Amended Credit Agreement | Swingline loans | |||||
Debt | |||||
Borrowing capacity, maximum | 100,000,000 | ||||
Amended 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, 2021USD ($) |
Debt maturities | |
2022 | $ 10 |
2023 | 5 |
2024 | 3 |
2025 | 3 |
2026 | $ 2 |
DEBT - Interest Paid (Details)
DEBT - Interest Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest paid | |||
Interest paid | $ 114 | $ 136 | $ 157 |
Debt extinguishment costs | $ 160 | $ 5 | $ 2 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation | |||
Pre-tax compensation expense | $ 61 | $ 43 | $ 31 |
Long-term stock awards | |||
Stock-based compensation | |||
Pre-tax compensation expense | 10 | 14 | 20 |
Stock options | |||
Stock-based compensation | |||
Pre-tax compensation expense | 7 | 7 | 4 |
Restricted stock units | |||
Stock-based compensation | |||
Pre-tax compensation expense | 28 | 13 | 0 |
Performance restricted stock units | |||
Stock-based compensation | |||
Pre-tax compensation expense | 10 | 5 | 3 |
Phantom stock awards | |||
Stock-based compensation | |||
Pre-tax compensation expense | $ 6 | $ 4 | $ 4 |
STOCK-BASED COMPENSATION - Comm
STOCK-BASED COMPENSATION - Common Stock Available under the Plan (Details) shares in Millions | Dec. 31, 2021shares |
2014 Plan | |
Stock-based compensation | |
Common stock available for granting stock options and other long-term stock incentive awards (in shares) | 12.9 |
STOCK-BASED COMPENSATION - Long
STOCK-BASED COMPENSATION - Long-Term Stock Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Unvested stock award shares | |||
Forfeited (in shares) | 11,100 | ||
Long-term stock awards | |||
Unvested stock award shares | |||
Balance at the beginning of the period (in shares) | 1,000,000 | 2,000,000 | 2,000,000 |
Granted (in shares) | 0 | 0 | 1,000,000 |
Vested (in shares) | 0 | 1,000,000 | 1,000,000 |
Forfeited (in shares) | 0 | 0 | 0 |
Balance at the end of the period (in shares) | 1,000,000 | 1,000,000 | 2,000,000 |
Weighted average grant date fair value | |||
Balance at the beginning of the period (in dollars per share) | $ 36 | $ 34 | $ 30 |
Granted (in dollars per share) | 0 | 0 | 36 |
Vested (in dollars per share) | 34 | 32 | 25 |
Forfeited (in dollars per share) | 36 | 35 | 35 |
Balance at the end of the period (in dollars per share) | $ 37 | $ 36 | $ 34 |
Additional disclosures | |||
Total unrecognized compensation expense | $ 10 | $ 21 | $ 41 |
Remaining weighted average vesting period | 2 years | 2 years | 3 years |
Total market value (at the vesting date) of stock award shares | $ 28 | $ 31 | $ 31 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | |||
Outstanding at the beginning of the period (in shares) | 2,000,000 | 3,000,000 | 4,000,000 |
Granted (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Exercised (in shares) | 0 | 2,000,000 | 2,000,000 |
Forfeited (in shares) | 0 | 0 | 0 |
Outstanding at the end of the period (in shares) | 3,000,000 | 2,000,000 | 3,000,000 |
Option shares vested and expected to vest at the end of the period (in shares) | 3,000,000 | 2,000,000 | 3,000,000 |
Option shares exercisable at the end of the period (in shares) | 2,000,000 | 1,000,000 | 2,000,000 |
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 33 | $ 27 | $ 21 |
Granted (in dollars per share) | 56 | 48 | 36 |
Exercised (in dollars per share) | 25 | 17 | 13 |
Forfeited (in dollars per share) | 11 | 40 | 34 |
Outstanding at the end of the period (in dollars per share) | 37 | 33 | 27 |
Option shares vested and expected to vest at the end of the period (in dollars per share) | 36 | 33 | 27 |
Option shares exercisable at the end of the period (in dollars per share) | $ 31 | $ 28 | $ 21 |
Aggregate intrinsic value | |||
Option shares exercised | $ 5 | $ 29 | $ 33 |
Option shares vested and expected to vest at the end of the period | 89 | 51 | 63 |
Option shares exercisable at the end of the period | $ 63 | $ 35 | $ 47 |
Weighted average remaining option term | |||
Outstanding at the end of the period | 6 years | 6 years | 6 years |
Option shares vested and expected to vest at the end of the period | 6 years | 6 years | 6 years |
Option shares exercisable at the end of the period | 5 years | 5 years | 4 years |
Stock options | |||
Shares | |||
Granted (in shares) | 331,970 | ||
Weighted average exercise price | |||
Granted (in dollars per share) | $ 56 | ||
Additional disclosures | |||
Total unrecognized compensation expense | $ 4 | $ 6 | $ 9 |
Remaining weighted average vesting period | 2 years | 2 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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options | |||
Weighted average grant date fair value (in dollars per share) | $ 13.61 | $ 10.67 | $ 8.81 |
Risk-free interest rate | 0.75% | 1.53% | 2.57% |
Dividend yield | 1.67% | 1.14% | 1.35% |
Volatility factor | 30.00% | 24.00% | 25.00% |
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, 2021$ / sharesshares | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | $ 17 |
Exercise price range, high end of range (in dollars per share) | $ 57 |
Option shares outstanding, number of shares (in shares) | shares | 3 |
Weighted Average Remaining Option Term | 6 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 37 |
Option shares exercisable, number of shares (in shares) | shares | 2 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 31 |
Range One | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 17 |
Exercise price range, high end of range (in dollars per share) | $ 21 |
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) | $ 20 |
Option shares exercisable, number of shares (in shares) | shares | 0 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 20 |
Range Two | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 22 |
Exercise price range, high end of range (in dollars per share) | $ 26 |
Option shares outstanding, number of shares (in shares) | shares | 1 |
Weighted Average Remaining Option Term | 4 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 24 |
Option shares exercisable, number of shares (in shares) | shares | 1 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 24 |
Range Three | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 27 |
Exercise price range, high end of range (in dollars per share) | $ 36 |
Option shares outstanding, number of shares (in shares) | shares | 1 |
Weighted Average Remaining Option Term | 6 years |
Option shares outstanding, weighted average exercise price (in dollars per share) | $ 35 |
Option shares exercisable, number of shares (in shares) | shares | 1 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 34 |
Range Four | |
Stock-based compensation | |
Exercise price range, low end of range (in dollars per share) | 37 |
Exercise price range, high end of range (in dollars per share) | $ 57 |
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) | $ 49 |
Option shares exercisable, number of shares (in shares) | shares | 0 |
Option shares exercisable, weighted average exercise price (in dollars per share) | $ 44 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation | ||
Grants in period, intrinsic value (in dollars per share) | $ 47 | |
Forfeited (in shares) | 11,100 | |
Restricted stock units | ||
Stock-based compensation | ||
Granted (in shares) | 669,980 | 445,670 |
Grants in period, intrinsic value (in dollars per share) | $ 57 | |
Shares issued during period (in shares) | 141,461 | |
Forfeited (in shares) | 29,125 | |
Unrecognized compensation cost | $ 15 | $ 7 |
Unrecognized compensation expense, recognition period | 2 years | 2 years |
Total market value (at the vesting date) of stock award shares | $ 8 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance Restricted Stock Units and Phantom Stock Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation | |||
Grants in period, intrinsic value (in dollars per share) | $ 47 | ||
Forfeited (in shares) | 11,100 | ||
Minimum | LTIP Program | |||
Stock-based compensation | |||
Award vesting rights, percentage | 0.00% | ||
Maximum | LTIP Program | |||
Stock-based compensation | |||
Award vesting rights, percentage | 200.00% | ||
Performance restricted stock units | |||
Stock-based compensation | |||
Period for recognition | 3 years | ||
Performance restricted stock units | LTIP Program | |||
Stock-based compensation | |||
Granted (in shares) | 85,360 | 133,390 | 126,680 |
Grants in period, intrinsic value (in dollars per share) | $ 53 | $ 34 | $ 39 |
Shares issued during period (in shares) | 104,757 | 151,724 | |
Forfeited (in shares) | 0 | 10,680 | 15,600 |
Vested (in shares) | 186,304 | ||
Phantom Share Units (PSUs) | |||
Stock-based compensation | |||
Granted (in shares) | 82,160 | 82,630 | 79,500 |
Recognized expense (income) related to valuation | $ 6 | $ 4 | $ 4 |
Fair value of stock award granted | 5 | 3 | 3 |
Cash paid to settle awards | 3 | 3 | $ 3 |
Accrued compensation cost liability | 8 | 6 | |
Unrecognized compensation cost | $ 3 | $ 4 | |
Equivalent common shares | 0 | 0 |
EMPLOYEE RETIREMENT PLANS - Pre
EMPLOYEE RETIREMENT PLANS - Pre-tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Pre-tax expense | $ 492 | $ 84 | $ 64 | |
Settlements | $ 101 | |||
Amount reclassified | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Settlement loss | 447 | |||
Defined-contribution plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Pre-tax expense | 57 | 46 | 40 | |
Defined-benefit pension plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Pre-tax expense | $ 435 | $ 38 | $ 24 |
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 | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Settlements | $ (101) | |||
Qualified | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligation at January 1 | $ 1,118 | $ 1,034 | ||
Service cost | 4 | 3 | $ 3 | |
Interest cost | 15 | 23 | ||
Actuarial loss, net | (105) | 85 | ||
Foreign currency exchange | (16) | 18 | ||
Benefit payments | (230) | (45) | ||
Divestitures | (14) | 0 | ||
Settlements | (594) | 0 | ||
Projected benefit obligation at December 31 | 178 | 1,118 | 1,034 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets at January 1 | 863 | 780 | ||
Actual return on plan assets | (40) | 67 | ||
Foreign currency exchange | (7) | 8 | ||
Company contributions | 107 | 57 | ||
Expenses, other | 0 | (4) | ||
Benefit payments | (230) | (45) | ||
Settlements | (594) | 0 | ||
Fair value of plan assets at December 31 | 99 | 863 | 780 | |
Funded status at December 31 | (79) | (255) | ||
Non-Qualified | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligation at January 1 | 162 | 161 | ||
Service cost | 0 | 0 | 0 | |
Interest cost | 4 | 5 | ||
Actuarial loss, net | (6) | 10 | ||
Foreign currency exchange | 0 | 0 | ||
Benefit payments | (12) | (13) | ||
Divestitures | 0 | (1) | ||
Settlements | 0 | 0 | ||
Projected benefit obligation at December 31 | 148 | 162 | 161 | |
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 | 12 | 13 | ||
Expenses, other | 0 | 0 | ||
Benefit payments | (12) | (13) | ||
Settlements | 0 | 0 | ||
Fair value of plan assets at December 31 | 0 | 0 | $ 0 | |
Funded status at December 31 | $ (148) | $ (162) |
EMPLOYEE RETIREMENT PLANS - Amo
EMPLOYEE RETIREMENT PLANS - Amounts in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Amounts in the company's consolidated balance sheets | ||
Accrued liabilities | $ (49) | $ (182) |
Qualified | ||
Amounts in the company's consolidated balance sheets | ||
Other assets | 1 | 1 |
Accrued liabilities | 0 | (135) |
Other liabilities | (80) | (121) |
Total net liability | (79) | (255) |
Non-Qualified | ||
Amounts in the company's consolidated balance sheets | ||
Other assets | 0 | 0 |
Accrued liabilities | (12) | (12) |
Other liabilities | (136) | (150) |
Total net liability | $ (148) | $ (162) |
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, 2021 | Dec. 31, 2020 |
Qualified | ||
Amounts in accumulated other comprehensive income (loss) before income taxes | ||
Net loss | $ 56 | $ 540 |
Net prior service cost | 3 | 3 |
Total | 59 | 543 |
Non-Qualified | ||
Amounts in accumulated other comprehensive income (loss) before income taxes | ||
Net loss | 57 | 65 |
Net prior service cost | 0 | 0 |
Total | $ 57 | $ 65 |
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, 2021 | Dec. 31, 2020 |
Qualified | ||
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | $ 174 | $ 1,100 |
Accumulated benefit obligation | 174 | 1,100 |
Fair value of plan assets | 94 | 844 |
Non-Qualified | ||
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | 148 | 162 |
Accumulated benefit obligation | 148 | 162 |
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 | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | $ 7 | |||
Qualified | ||||
Net periodic pension cost for the company's defined-benefit pension plans | ||||
Service cost | 4 | $ 3 | $ 3 | |
Interest cost | 15 | 28 | 39 | |
Expected return on plan assets | (9) | (24) | (44) | |
Settlement loss | $ 406 | 404 | 0 | 0 |
Recognized prior service cost | 1 | 1 | 0 | |
Recognized net loss | 14 | 22 | 18 | |
Net periodic pension cost | 429 | 30 | 16 | |
Non-Qualified | ||||
Net periodic pension cost for the company's defined-benefit pension plans | ||||
Service cost | 0 | 0 | 0 | |
Interest cost | 4 | 5 | 6 | |
Expected return on plan assets | 0 | 0 | 0 | |
Settlement loss | 0 | 0 | 0 | |
Recognized prior service cost | 0 | 0 | 0 | |
Recognized net loss | 2 | 3 | 2 | |
Net periodic pension cost | $ 6 | $ 8 | $ 8 |
EMPLOYEE RETIREMENT PLANS - Qua
EMPLOYEE RETIREMENT PLANS - Qualified Defined-benefit Pension Plan Weighted Average Asset Allocation (Details) - Qualified | Dec. 31, 2021 | Dec. 31, 2020 |
Plan Assets | ||
Weighted average asset allocation (as a percent) | 100.00% | 100.00% |
Equity securities | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 38.00% | 15.00% |
Debt securities | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 48.00% | 49.00% |
Other | ||
Plan Assets | ||
Weighted average asset allocation (as a percent) | 14.00% | 36.00% |
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 ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | |||
Private equity funds | $ 99 | $ 863 | $ 780 |
Valued at NAV | 0 | 87 | |
Level 1 | |||
Fair Value | |||
Private equity funds | 46 | 43 | |
Level 2 | |||
Fair Value | |||
Private equity funds | 47 | 732 | |
Level 3 | |||
Fair Value | |||
Private equity funds | 6 | 1 | |
United States | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 25 | 113 | |
Valued at NAV | 0 | 87 | |
United States | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 5 | 143 | |
Valued at NAV | 0 | 0 | |
United States | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 4 | 214 | |
Valued at NAV | 0 | 0 | |
United States | Real Estate | |||
Fair Value | |||
Private equity funds | 3 | ||
Valued at NAV | 0 | ||
United States | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 292 | ||
Valued at NAV | 0 | ||
United States | Level 1 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 25 | 26 | |
United States | Level 1 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 1 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 1 | Real Estate | |||
Fair Value | |||
Private equity funds | 3 | ||
United States | Level 1 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 2 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
United States | Level 2 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 5 | 143 | |
United States | Level 2 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 4 | 214 | |
United States | Level 2 | Real Estate | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 2 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 292 | ||
United States | Level 3 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 0 | 0 | |
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 | Real Estate | |||
Fair Value | |||
Private equity funds | 0 | ||
United States | Level 3 | Common Collective Trust Fund – United States | |||
Fair Value | |||
Private equity funds | 0 | ||
International | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 13 | 15 | |
Valued at NAV | 0 | 0 | |
International | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 1 | ||
Valued at NAV | 0 | ||
International | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 2 | 23 | |
Valued at NAV | 0 | 0 | |
International | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 36 | 46 | |
Valued at NAV | 0 | 0 | |
International | Real Estate | |||
Fair Value | |||
Private equity funds | 8 | ||
Valued at NAV | 0 | ||
International | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 14 | ||
Valued at NAV | 0 | ||
International | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 3 | 2 | |
Valued at NAV | 0 | 0 | |
International | Level 1 | Common and Preferred Stocks: | |||
Fair Value | |||
Private equity funds | 13 | 15 | |
International | Level 1 | Private Equity and Hedge Funds – International | |||
Fair Value | |||
Private equity funds | 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 | 0 | |
International | Level 1 | Real Estate | |||
Fair Value | |||
Private equity funds | 2 | ||
International | Level 1 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 0 | ||
International | Level 1 | Short-Term and Other Investments – International | |||
Fair Value | |||
Private equity funds | 3 | 2 | |
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 | ||
International | Level 2 | Corporate Debt Securities: | |||
Fair Value | |||
Private equity funds | 2 | 23 | |
International | Level 2 | Government and Other Debt Securities: | |||
Fair Value | |||
Private equity funds | 36 | 46 | |
International | Level 2 | Real Estate | |||
Fair Value | |||
Private equity funds | 0 | ||
International | Level 2 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 14 | ||
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 | ||
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 | Real Estate | |||
Fair Value | |||
Private equity funds | 6 | ||
International | Level 3 | Buy-in Annuity - International | |||
Fair Value | |||
Private equity funds | 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, 2021 | Dec. 31, 2020 | |
Changes in the fair value of plan level 3 assets | ||
Fair Value, January 1 | $ 1 | $ 19 |
Purchases | 5 | 0 |
Sales | 0 | (18) |
Fair Value, December 31 | $ 6 | $ 1 |
EMPLOYEE RETIREMENT PLANS - Ass
EMPLOYEE RETIREMENT PLANS - Assumptions - Tabular Disclosure (Details) - Defined-benefit pension plans | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Assumptions | |||
Discount rate for obligations | 1.80% | 1.70% | 2.50% |
Expected return on plan assets | 3.00% | 2.00% | 3.00% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Discount rate for net periodic pension cost | 1.70% | 2.50% | 3.80% |
EMPLOYEE RETIREMENT PLANS - A_2
EMPLOYEE RETIREMENT PLANS - Assumptions - General Disclosures (Details) - Defined-benefit pension plans | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Assumptions | |||
Discount rate for obligations | 1.80% | 1.70% | 2.50% |
Expected return on plan assets | 3.00% | 2.00% | 3.00% |
Minimum | |||
Assumptions | |||
Discount rate for obligations | 0.80% | 0.70% | 1.10% |
Liabilities having a discount rate for obligations (as a percent) | 1.20% | 1.60% | 2.40% |
Maximum | |||
Assumptions | |||
Discount rate for obligations | 2.60% | 2.10% | 3.00% |
International | |||
Assumptions | |||
Expected return on plan assets | 3.00% | 2.90% | 3.90% |
EMPLOYEE RETIREMENT PLANS - Oth
EMPLOYEE RETIREMENT PLANS - Other and Cash Flows (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Non-Qualified | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Payments to participants defined-benefit pension plans | $ 12 | |
Defined-contribution plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Aggregate present value of unfunded accumulated post-retirement benefit obligation | $ 9 | $ 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, 2021USD ($) |
Qualified | |
Defined Benefit Plan Disclosure [Line Items] | |
2022 | $ 4 |
2023 | 4 |
2024 | 4 |
2025 | 5 |
2026 | 5 |
2027 - 2031 | 31 |
Non-Qualified | |
Defined Benefit Plan Disclosure [Line Items] | |
2022 | 12 |
2023 | 12 |
2024 | 12 |
2025 | 11 |
2026 | 11 |
2027 - 2031 | $ 48 |
SHAREHOLDERS' EQUITY - Stock Re
SHAREHOLDERS' EQUITY - Stock Repurchase (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 10, 2021 | |
Equity [Abstract] | ||||
Stock repurchase program, authorized amount (in shares) | $ 2,000 | |||
Repurchase and retirement of common stock (in shares) | 17.6 | 18.8 | 20.1 | |
Repurchase and retirement of common stock to offset the dilutive impact of the grant of long-term stock awards (in shares) | 0.7 | 0.4 | 0.6 | |
Repurchase and retirement of common stock | $ 1,026 | $ 727 | $ 896 | |
Remaining authorized repurchase amount | $ 1,128 |
SHAREHOLDERS' EQUITY - Dividend
SHAREHOLDERS' EQUITY - Dividends (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Cash dividends per common share paid (in dollars per share) | $ 0.845 | $ 0.545 | $ 0.495 |
Cash dividends per common share declared (in dollars per share) | $ 0.705 | $ 0.550 | $ 0.510 |
SHAREHOLDERS' EQUITY - Accumula
SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Cumulative translation adjustments, net | $ 325 | $ 312 |
Unrealized loss on interest rate swaps, net | (7) | 0 |
Unrecognized net loss and prior service cost, net | (460) | (80) |
Accumulated other comprehensive income (loss) | (142) | 232 |
Income tax benefit on cumulative translation adjustment | 1 | 1 |
Income tax benefit on unrealized loss on interest rate swap securities | 5 | |
Income tax benefit on prior service cost and net loss | $ 124 | $ 20 |
RECLASSIFICATIONS FROM OTHER _3
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 22, 2021 | |
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Actuarial losses, net and prior service cost | $ 717 | $ 164 | $ 174 | ||||
Interest rate swaps | 278 | 144 | 159 | ||||
Tax expense (benefit) | 210 | 269 | 230 | ||||
Net of tax | (478) | (1,276) | (980) | ||||
Disproportionate tax expense | $ 11 | ||||||
5.95 Notes and Debentures Due March 15, 2022 | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Interest rate (as a percent) | 5.95% | ||||||
Amount reclassified | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Actuarial losses, net and prior service cost | 9 | ||||||
Settlement loss | 447 | ||||||
Tax expense (benefit) | $ (96) | ||||||
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 | 18 | 26 | 20 | ||||
Settlement loss | $ 447 | 451 | 0 | 0 | |||
Tax expense (benefit) | (104) | (7) | (5) | ||||
Net of tax | 365 | 19 | 15 | ||||
UK Window Group | Accumulated Foreign Currency Adjustment Attributable to Parent | Amount reclassified | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Actuarial losses, net and prior service cost | $ 14 | ||||||
Hüppe | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Amount reclassified | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Actuarial losses, net and prior service cost | (3) | ||||||
Hüppe | Accumulated Foreign Currency Adjustment Attributable to Parent | Amount reclassified | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Actuarial losses, net and prior service cost | $ 23 | ||||||
Interest rate swaps (B) | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | Amount reclassified | |||||||
Reclassifications from accumulated other comprehensive (loss) income | |||||||
Interest rate swaps | 2 | 2 | 2 | ||||
Tax expense (benefit) | 5 | (1) | 0 | ||||
Net of tax | $ 7 | $ 1 | $ 2 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Sales | |||
Net sales | $ 8,375 | $ 7,188 | $ 6,707 |
Operating profit | 1,405 | 1,295 | 1,088 |
Other income (expense), net | (717) | (164) | (174) |
Income from continuing operations before income taxes | 688 | 1,131 | 914 |
Assets | 5,575 | 5,777 | 5,027 |
Assets held for sale | 0 | 0 | 528 |
Export sales from U.S. included in net sales | $ 322 | $ 274 | $ 244 |
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 | $ 3,037 | $ 2,812 | $ 2,481 |
North America | |||
Net Sales | |||
Net sales | 6,624 | 5,805 | 5,328 |
International, principally Europe | |||
Net Sales | |||
Net sales | 1,751 | 1,383 | 1,379 |
United States | |||
Net Sales | |||
Long-lived assets | 1,332 | 1,301 | 1,198 |
United States | Sales | |||
Net Sales | |||
Net sales | 6,387 | 5,592 | 5,127 |
Europe | |||
Net Sales | |||
Long-lived assets | 546 | 522 | 470 |
Plumbing Products | |||
Net Sales | |||
Net sales | 5,135 | 4,136 | 3,984 |
Plumbing Products | North America | |||
Net Sales | |||
Net sales | 3,384 | 2,753 | 2,605 |
Plumbing Products | International, principally Europe | |||
Net Sales | |||
Net sales | 1,751 | 1,383 | 1,379 |
Decorative Architectural Products | |||
Net Sales | |||
Net sales | 3,240 | 3,052 | 2,723 |
Decorative Architectural Products | North America | |||
Net Sales | |||
Net sales | 3,240 | 3,052 | 2,723 |
Decorative Architectural Products | International, principally Europe | |||
Net Sales | |||
Net sales | 0 | 0 | 0 |
Operating Segments | |||
Net Sales | |||
Net sales | 8,375 | 7,188 | 6,707 |
Operating profit | 1,510 | 1,389 | 1,188 |
Assets | 4,976 | 4,455 | 3,901 |
Operating Segments | North America | |||
Net Sales | |||
Net sales | 6,624 | 5,805 | 5,328 |
Operating profit | 1,214 | 1,167 | 987 |
Assets | 3,510 | 3,101 | 2,785 |
Operating Segments | International, principally Europe | |||
Net Sales | |||
Net sales | 1,751 | 1,383 | 1,379 |
Operating profit | 296 | 222 | 201 |
Assets | 1,466 | 1,354 | 1,116 |
Operating Segments | Plumbing Products | |||
Net Sales | |||
Net sales | 5,135 | 4,136 | 3,984 |
Operating profit | 929 | 806 | 708 |
Assets | 3,195 | 2,822 | 2,375 |
Operating Segments | Decorative Architectural Products | |||
Net Sales | |||
Net sales | 3,240 | 3,052 | 2,723 |
Operating profit | 581 | 583 | 480 |
Assets | 1,781 | 1,633 | 1,526 |
Corporate, Non-Segment | |||
Net Sales | |||
General corporate expense, net | (105) | (94) | (100) |
Assets | $ 599 | $ 1,322 | $ 598 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation and Amortization | |||
Property Additions | $ 128 | $ 114 | $ 162 |
Depreciation and amortization | 151 | 133 | 159 |
Operating Segments | |||
Depreciation and Amortization | |||
Property Additions | 125 | 111 | 126 |
Depreciation and amortization | 138 | 125 | 121 |
Operating Segments | Plumbing Products | |||
Depreciation and Amortization | |||
Property Additions | 94 | 86 | 108 |
Depreciation and amortization | 101 | 84 | 80 |
Operating Segments | Decorative Architectural Products | |||
Depreciation and Amortization | |||
Property Additions | 31 | 25 | 18 |
Depreciation and amortization | 37 | 41 | 41 |
Corporate, Non-Segment | |||
Depreciation and Amortization | |||
Property Additions | 3 | 2 | 2 |
Depreciation and amortization | 13 | 8 | 9 |
Discontinued operations | |||
Depreciation and Amortization | |||
Property Additions | 0 | 1 | 34 |
Depreciation and amortization | $ 0 | $ 0 | $ 29 |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | ||||
Net periodic pension and post-retirement benefit expense | $ (430) | $ (35) | $ (21) | |
Loss on sale of business | (18) | 0 | 0 | |
Contingent consideration | (16) | 0 | 0 | |
Gain on preferred stock redemption | $ 14 | 14 | 0 | 0 |
Equity investment income, net | 11 | 3 | 1 | |
Dividend income | 6 | 10 | 0 | |
Foreign currency transaction (losses) gains | (4) | (10) | 2 | |
Income from cash and cash investments | 1 | 3 | 3 | |
Other items, net | (3) | 9 | 0 | |
Total other, net | $ (439) | $ (20) | $ (15) |
OTHER INCOME (EXPENSE), NET - F
OTHER INCOME (EXPENSE), NET - Footnote Details (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Investment Income [Line Items] | |||||
Reduction in pension expense | $ 7 | ||||
Contingent consideration | $ 16 | $ 0 | $ 0 | ||
Deferred currency translation loss | 717 | 164 | 174 | ||
Miscellaneous income related to escrow settlement | 9 | ||||
Amount reclassified | |||||
Net Investment Income [Line Items] | |||||
Deferred currency translation loss | 9 | ||||
Qualified | |||||
Net Investment Income [Line Items] | |||||
Settlement loss | $ 406 | $ 404 | $ 0 | $ 0 |
INCOME TAXES - Income from Cont
INCOME TAXES - Income from Continuing Operations before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income from continuing operations before income taxes: | |||
U.S. | $ 374 | $ 892 | $ 684 |
Foreign | 314 | 239 | 230 |
Income from continuing operations before income taxes | 688 | 1,131 | 914 |
Currently payable: | |||
U.S. Federal | 145 | 170 | 155 |
State and local | 40 | 33 | 46 |
Foreign | 93 | 69 | 70 |
Deferred: | |||
U.S. Federal | (57) | (9) | (23) |
State and local | (10) | 11 | (15) |
Foreign | (1) | (5) | (3) |
Income tax (benefit) expense | 210 | 269 | $ 230 |
Deferred tax assets at December 31: | |||
Receivables | 14 | 9 | |
Inventories | 17 | 17 | |
Other assets, including stock-based compensation | 18 | 17 | |
Accrued liabilities | 58 | 82 | |
Noncurrent operating lease liabilities | 40 | 35 | |
Other long-term liabilities | 79 | 96 | |
Net operating loss carryforward | 26 | 56 | |
Tax credit carryforward | 11 | 9 | |
Total | 263 | 321 | |
Valuation allowance | (17) | (35) | |
Total | 246 | 286 | |
Deferred tax liabilities at December 31: | |||
Property and equipment | 62 | 67 | |
Operating lease right-of-use assets | 43 | 39 | |
Intangibles | 75 | 74 | |
Investment in foreign subsidiaries | 10 | 10 | |
Other investments | 3 | 3 | |
Other | 16 | 4 | |
Total | 209 | 197 | |
Net deferred tax asset at December 31 | $ 37 | $ 89 |
INCOME TAXES - Income Tax Discl
INCOME TAXES - Income Tax Disclosure (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||
Deferred tax assets | $ 57 | $ 109 | |
Tax (expense) benefit, change in valuation allowance | (2) | 5 | $ 4 |
Income tax expense from loss on termination of defined benefit plan | 14 | ||
Income tax expense from divestiture of business | 4 | ||
Income tax expense due to disproportionate tax effects | 16 | ||
Deferred tax assets. net operating loss and tax credit carryforwards | 37 | 65 | |
Deferred tax assets. net operating loss and tax credit carryforwards, subject to expiration | $ 25 | 35 | |
Deferred tax assets. net operating loss and tax credit carryforwards, subject to expiration, expiration term | 15 years | ||
Deferred tax assets. net operating loss and tax credit carryforwards, not subject to expiration | $ 12 | 30 | |
Income taxes paid | 246 | 442 | 384 |
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Tax benefit from reversal of an accrual for uncertain tax position | 10 | 9 | 8 |
Tax expense (benefit). change in valuation allowance | 3 | $ (1) | |
Other Noncurrent Assets | |||
Income Tax Contingency [Line Items] | |||
Deferred tax assets | 57 | 109 | |
Other Noncurrent Liabilities | |||
Income Tax Contingency [Line Items] | |||
Deferred tax liabilities | $ 20 | $ 20 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | 4.00% | 3.00% | 3.00% |
Higher taxes on foreign earnings | 3.00% | 1.00% | 2.00% |
U.S. and foreign taxes on distributed and undistributed foreign earnings | 0.00% | 0.00% | 1.00% |
Stock-based compensation | (1.00%) | (1.00%) | (1.00%) |
Business divestiture with no tax impact | 1.00% | 0.00% | 0.00% |
Disproportionate tax effects | 2.00% | 0.00% | 0.00% |
Other, net | 1.00% | 0.00% | (1.00%) |
Effective tax rate | 31.00% | 24.00% | 25.00% |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Uncertain Tax Positions | ||
Balance at the beginning of the period | $ 74 | $ 63 |
Interest and penalties, beginning balance | 10 | 10 |
Total balance at beginning of the period | 84 | 73 |
Current year tax positions: Additions | 19 | 22 |
Current year tax positions: Reductions | (2) | (2) |
Prior year tax positions: Additions | 1 | 2 |
Prior year tax positions: Reductions | (1) | (2) |
Lapse of applicable statute of limitations | (10) | (9) |
Interest and penalties recognized in income tax expense | 1 | |
Balance at the end of the period | 81 | 74 |
Interest and penalties, ending balance | 11 | 10 |
Total balance at the end of the period | $ 92 | $ 84 |
INCOME TAXES - Uncertain Tax _2
INCOME TAXES - Uncertain Tax Positions and Interest and Penalties - Additional Disclosures (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Taxes | |||
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 64 | $ 58 | |
Liability for uncertain tax positions | 92 | 84 | $ 73 |
Reasonably possible reduction in the liability for uncertain tax positions | 10 | ||
Other Noncurrent Liabilities | |||
Income Taxes | |||
Liability for uncertain tax positions | 88 | 81 | |
Other Noncurrent Assets | |||
Income Taxes | |||
Liability for uncertain tax positions | $ 4 | $ 3 |
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 | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator (basic and diluted): | |||
Income from continuing operations | $ 410 | $ 810 | $ 639 |
Less: Allocation to redeemable noncontrolling interest | 2 | 0 | 0 |
Less: Allocation to unvested restricted stock awards | 2 | 6 | 4 |
Income from continuing operations attributable to common shareholders | 406 | 804 | 635 |
Income from discontinued operations, net | 0 | 414 | 296 |
Less: Allocation to unvested restricted stock awards | 0 | 3 | 2 |
Income from discontinued operations, net attributable to common shareholders | 0 | 411 | 294 |
Income from continuing operations attributable to common shareholders | $ 406 | $ 1,215 | $ 929 |
Denominator: | |||
Basic common shares (based upon weighted average) (in shares) | 249 | 264 | 287 |
Add: Stock option dilution (in shares) | 2 | 0 | 1 |
Diluted common shares (in shares) | 251 | 264 | 288 |
INCOME PER COMMON SHARE - Antid
INCOME PER COMMON SHARE - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock options | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 296,000 | 374,000 | 854,000 |
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) | 600,000 | 1,000,000 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the company's warranty liability | ||
Balance at January 1 | $ 83 | $ 84 |
Accruals for warranties issued during the year | 38 | 34 |
Accruals related to pre-existing warranties | (8) | (3) |
Settlements made (in cash or kind) during the year | (31) | (33) |
Other, net (including currency translation and acquisitions) | (2) | 1 |
Balance at December 31 | $ 80 | $ 83 |
SCHEDULE II. VALUATION AND QU_2
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in valuation and qualifying accounts | ||||
Balance at Beginning of Period | $ 7 | $ 4 | $ 5 | |
Charged to Costs and Expenses | 1 | 3 | 1 | |
Charged to Other Accounts | 0 | 0 | 0 | |
Deductions | (2) | (1) | (2) | |
Balance at End of Period | 6 | 7 | 4 | |
Hüppe | ||||
Movement in valuation and qualifying accounts | ||||
Deductions | $ (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 | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Movement in valuation and qualifying accounts | ||||
Balance at Beginning of Period | 1 | |||
Balance at End of Period | 1 | |||
Valuation allowance on deferred tax assets: | ||||
Movement in valuation and qualifying accounts | ||||
Balance at Beginning of Period | 35 | 38 | 43 | |
Charged to Costs and Expenses | 5 | 0 | 0 | |
Charged to Other Accounts | 0 | 2 | 0 | |
Deductions | (5) | (5) | ||
Balance at End of Period | 17 | 35 | $ 38 | |
Valuation allowance on deferred tax assets: | Hüppe | ||||
Movement in valuation and qualifying accounts | ||||
Deductions | $ (23) | |||
Income Tax Benefit | Valuation allowance on deferred tax assets: | ||||
Movement in valuation and qualifying accounts | ||||
Deductions | $ (5) |