Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2022shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2022 |
Document Transition Report | false |
Entity File Number | 1-5794 |
Entity Registrant Name | Masco Corporation |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 38-1794485 |
Entity Address, Address Line One | 17450 College Parkway, |
Entity Address, City or Town | Livonia, |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 48152 |
City Area Code | 313 |
Local Phone Number | 274-7400 |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | MAS |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 235,940,440 |
Entity Central Index Key | 0000062996 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash investments | $ 479 | $ 926 |
Receivables | 1,502 | 1,171 |
Prepaid expenses and other | 107 | 109 |
Inventories: | ||
Finished goods | 809 | 702 |
Raw material | 409 | 383 |
Work in process | 122 | 131 |
Total inventories | 1,340 | 1,216 |
Total current assets | 3,428 | 3,422 |
Property and equipment, net | 892 | 896 |
Goodwill | 565 | 568 |
Other intangible assets, net | 379 | 388 |
Operating lease right-of-use assets | 195 | 187 |
Other assets | 109 | 114 |
Total assets | 5,568 | 5,575 |
Current Liabilities: | ||
Accounts payable | 1,114 | 1,045 |
Notes payable | 273 | 10 |
Accrued liabilities | 749 | 884 |
Total current liabilities | 2,136 | 1,939 |
Long-term debt | 2,946 | 2,949 |
Noncurrent operating lease liabilities | 179 | 172 |
Other liabilities | 407 | 437 |
Total liabilities | 5,668 | 5,497 |
Commitments and contingencies (Note P) | ||
Redeemable noncontrolling interest | 21 | 22 |
Masco Corporation's shareholders' equity: | ||
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2022 – 235,600,000; 2021 – 241,200,000 | 236 | 241 |
Preferred shares authorized: 1,000,000; Issued and outstanding: 2022 and 2021 – None | 0 | 0 |
Paid-in capital | 0 | 0 |
Retained deficit | (833) | (652) |
Accumulated other comprehensive income | 226 | 232 |
Total Masco Corporation's shareholders' deficit | (371) | (179) |
Noncontrolling interest | 250 | 235 |
Total equity | (121) | 56 |
Total liabilities and equity | $ 5,568 | $ 5,575 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common share, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, shares authorized (in shares) | 1,400,000,000 | 1,400,000,000 |
Common shares, shares issued (in shares) | 235,600,000 | 241,200,000 |
Common shares, shares outstanding (in shares) | 235,600,000 | 241,200,000 |
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 2,201 | $ 1,970 |
Cost of sales | 1,497 | 1,270 |
Gross profit | 704 | 700 |
Selling, general and administrative expenses | 351 | 335 |
Operating profit | 353 | 365 |
Other income (expense), net: | ||
Interest expense | (25) | (202) |
Other, net | (1) | (6) |
Total other income (expense), net | (26) | (208) |
Income before income taxes | 327 | 157 |
Income tax expense | 75 | 43 |
Net income | 252 | 114 |
Less: Net income attributable to noncontrolling interest | 19 | 20 |
Net income attributable to Masco Corporation | $ 233 | $ 94 |
Basic: | ||
Net income (in dollars per share) | $ 0.98 | $ 0.34 |
Diluted: | ||
Net income (in dollars per share) | $ 0.97 | $ 0.34 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 252 | $ 114 |
Less: Net income attributable to noncontrolling interest | 19 | 20 |
Net income attributable to Masco Corporation | 233 | 94 |
Other comprehensive income (loss), net of tax (Note L): | ||
Cumulative translation adjustment | (11) | (36) |
Interest rate swaps | 0 | 7 |
Pension and other post-retirement benefits | 1 | 5 |
Other comprehensive (loss), net of tax | (10) | (24) |
Less: Other comprehensive (loss) attributable to noncontrolling interest | (4) | (12) |
Other comprehensive (loss) attributable to Masco Corporation | (6) | (12) |
Total comprehensive income | 242 | 90 |
Less: Total comprehensive income attributable to noncontrolling interest | 15 | 8 |
Total comprehensive income attributable to Masco Corporation | $ 227 | $ 82 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | ||
Cash provided by operations | $ 334 | $ 323 |
Increase in receivables | (349) | (195) |
Increase in inventories | (127) | (78) |
Decrease in accounts payable and accrued liabilities, net | (85) | (139) |
Net cash for operating activities | (227) | (89) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | ||
Retirement of notes | 0 | (1,326) |
Purchase of Company common stock | (364) | (303) |
Proceeds from revolving credit borrowings, net | 263 | 0 |
Cash dividends paid | (67) | (36) |
Issuance of notes, net of issuance costs | 0 | 1,481 |
Debt extinguishment costs | 0 | (160) |
Proceeds from the exercise of stock options | 1 | 0 |
Employee withholding taxes paid on stock-based compensation | (17) | (14) |
Decrease in debt, net | (3) | (1) |
Net cash for financing activities | (187) | (359) |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | ||
Capital expenditures | (27) | (30) |
Businesses, net of cash disposed | 2 | 0 |
Other financial investments | 0 | 1 |
Other, net | (1) | 4 |
Net cash for investing activities | (26) | (25) |
Effect of exchange rate changes on cash and cash investments | (7) | (13) |
CASH AND CASH INVESTMENTS: | ||
Decrease for the period | (447) | (486) |
At January 1 | 926 | 1,326 |
At March 31 | $ 479 | $ 840 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Shares ($1 par value) | Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest |
Balance at Dec. 31, 2020 | $ 421 | $ 258 | $ 0 | $ 79 | $ (142) | $ 226 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 90 | 94 | (12) | 8 | ||
Shares issued | 0 | 1 | (1) | 0 | ||
Shares retired: | ||||||
Repurchased | (303) | (6) | (27) | (270) | ||
Surrendered (non-cash) | (13) | 0 | (13) | |||
Redeemable noncontrolling interest - redemption adjustment | (6) | (6) | ||||
Stock-based compensation | 28 | 28 | ||||
Balance at Mar. 31, 2021 | 217 | 253 | 0 | (116) | (154) | 234 |
Balance at Dec. 31, 2021 | 56 | 241 | 0 | (652) | 232 | 235 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 242 | 233 | (6) | 15 | ||
Shares issued | 1 | 1 | 0 | |||
Shares retired: | ||||||
Repurchased | (364) | (6) | (27) | (331) | ||
Surrendered (non-cash) | (17) | (17) | ||||
Redeemable noncontrolling interest - redemption adjustment | 1 | 1 | ||||
Cash dividends declared | (67) | (67) | ||||
Stock-based compensation | 27 | 27 | ||||
Balance at Mar. 31, 2022 | $ (121) | $ 236 | $ 0 | $ (833) | $ 226 | $ 250 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Statement of Stockholders' Equity [Abstract] | |||
Common share, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at March 31, 2022 and our results of operations, comprehensive income (loss), cash flows and changes in shareholders' equity for the three-month periods ended March 31, 2022 and 2021. The condensed consolidated balance sheet at December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America. Recently Adopted Accounting Pronouncements. In August 2020, the Financial Accounting Standards Board ("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 adopted this standard for annual periods beginning January 1, 2022. The adoption of this new standard did not impact our financial position or results of operations. 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 adopted this standard for annual periods beginning January 1, 2022. The adoption of this new standard did not impact our financial position or results of operations. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2022 | |
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. 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. Working capital and other adjustments were finalized with the seller in the fourth quarter of 2021, resulting in no significant changes. 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. 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 are recorded as temporary equity in the condensed consolidated balance sheet. We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained deficit. |
DIVESTITURES
DIVESTITURES | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURESOn May 31, 2021, we completed the divestiture of our Hüppe GmbH ("Hüppe") business, a manufacturer of shower enclosures and shower trays. The sale of Hüppe did 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. During the first quarter of 2022, we recorded a $2 million pre-tax post-closing gain related to the finalization of working capital items in other, net in our condensed consolidated statement of operations. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
Revenues [Abstract] | |
REVENUE | REVENUE Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions: Three Months Ended March 31, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 892 $ 842 $ 1,734 International, principally Europe 467 — 467 Total $ 1,359 $ 842 $ 2,201 Three Months Ended March 31, 2021 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 808 $ 721 $ 1,529 International, principally Europe 441 — 441 Total $ 1,249 $ 721 $ 1,970 Our contract asset balance was $2 million and $1 million at March 31, 2022 and December 31, 2021, respectively. Our contract liability balance was $28 million and $67 million at March 31, 2022 and December 31, 2021, respectively. We recognized $5 million and $1 million of revenue for the three-month periods ended March 31, 2022 and 2021, respectively, related to performance obligations settled in previous years. D. REVENUE (Concluded) Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Three Months Ended Twelve Months Ended December 31, 2021 Balance at January 1 $ 6 $ 7 Provision for expected credit losses during the period 2 1 Write-offs charged against the allowance (1) (2) Recoveries of amounts previously written off 1 1 Other (A) — (1) Balance at end of period $ 8 $ 6 (A) As a result of Hüppe being divested in May 2021, $1 million for the year end December 31, 2021 was removed from allowance for credit losses. |
DEPRECIATION AND AMORTIZATION
DEPRECIATION AND AMORTIZATION | 3 Months Ended |
Mar. 31, 2022 | |
Depreciation, Depletion and Amortization [Abstract] | |
DEPRECIATION AND AMORTIZATION | DEPRECIATION AND AMORTIZATION Depreciation and amortization expense was $35 million and $43 million for the three-month periods ended March 31, 2022 and 2021, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at March 31, 2022, by segment, was as follows, in millions: Gross Goodwill At March 31, 2022 Accumulated Net Goodwill At March 31, 2022 Plumbing Products $ 620 $ (301) $ 319 Decorative Architectural Products 366 (120) 246 Total $ 986 $ (421) $ 565 The changes in the carrying amount of goodwill for the three-month period ended March 31, 2022, by segment, were as follows, in millions: Gross Goodwill At December 31, 2021 Accumulated Net Goodwill At December 31, 2021 Other (B) Net Goodwill At March 31, 2022 Plumbing Products (A) $ 623 $ (301) $ 322 $ (3) $ 319 Decorative Architectural Products 366 (120) 246 — 246 Total $ 989 $ (421) $ 568 $ (3) $ 565 (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. (B) Other consists of the effect of foreign currency translation. The carrying value of our other indefinite-lived intangible assets was $109 million at both March 31, 2022 and December 31, 2021, and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $270 million (net of accumulated amortization of $83 million) and $279 million (net of accumulated amortization of $75 million) at March 31, 2022 and December 31, 2021, respectively, and principally included customer relationships. |
FAIR VALUE OF FINANCIAL INVESTM
FAIR VALUE OF FINANCIAL INVESTMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INVESTMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS 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 are therefore classified as Level 3 inputs. Examples of utilized unobservable inputs are estimated future revenues and earnings of the acquired business and an applicable discount rate. The estimate of the liability may fluctuate if there are changes in the forecast of the acquired business' future revenues and earnings, as a result of actual levels achieved, or in the discount rate used to determine the present value of contingent future cash flows. All subsequent remeasurements from the initial estimate at the time of acquisition are recorded in other, net in our condensed consolidated statements of operations, as described in Note N. The fair value of the liability was estimated to be $28 million and $24 million as of March 31, 2022 and December 31, 2021, 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 March 31, 2022 was approximately $3.1 billion, compared with the aggregate carrying value of $3.2 billion. 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. |
WARRANTY LIABILITY
WARRANTY LIABILITY | 3 Months Ended |
Mar. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY LIABILITY | WARRANTY LIABILITY Changes in our warranty liability were as follows, in millions: Three Months Ended Twelve Months Ended December 31, 2021 Balance at January 1 $ 80 $ 83 Accruals for warranties issued during the period 9 38 Accruals related to pre-existing warranties 1 (8) Settlements made (in cash or kind) during the period (8) (31) Other, net (including currency translation and acquisitions) — (2) Balance at end of period $ 82 $ 80 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTOn 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 three-month period ended March 31, 2021, which was recorded as interest expense in the condensed consolidated statement of operations. I. DEBT (Continued) On March 13, 2019, we entered into a credit agreement (the “2019 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 2019 Credit Agreement with the bank group (the "Amended Credit Agreement"). The 2019 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. 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 March 31, 2022, 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 $263 million was borrowed and outstanding at a weighted average interest rate of 1.5798% at March 31, 2022. I. DEBT (Concluded) Subsequent Events On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027. Under the 2022 Credit Agreement, the swingline loans borrowing capacity increased to $125 million. All other material terms are substantially the same as the Amended Credit Agreement as described above, including the two financial covenants. Upon entry into the 2022 Credit Agreement, our 2019 Credit Agreement dated March 13, 2019, as amended, with an aggregate commitment of $1.0 billion, was terminated. On April 26, 2022, we entered into a 364-day $500 million senior unsecured delayed draw term loan due April 26, 2023 with a syndicate of lenders. The senior unsecured term loan and commitments thereunder are subject to prepayment or termination at our option and the loans will bear interest at SOFR plus a spread adjustment and 0.70%. The covenants are substantially the same as those in the 2022 Credit Agreement. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Our 2014 Long Term Stock Incentive Plan provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At March 31, 2022, outstanding stock-based incentives were in the form of restricted stock units, performance restricted stock units, stock options, long-term stock awards and phantom stock awards. Pre-tax compensation expense for these stock-based incentives was as follows, in millions: Three Months Ended March 31, 2022 2021 Restricted stock units $ 19 $ 19 Performance restricted stock units 1 2 Stock options 5 4 Long-term stock awards 2 3 Phantom stock awards — 2 Total $ 27 $ 30 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 581,660 restricted stock units in the three-month period ended March 31, 2022 with a weighted average grant date fair value of $59 per share. J. STOCK-BASED COMPENSATION (Continued) Our restricted stock unit activity was as follows, units in millions: Three Months Ended March 31, 2022 2021 Unvested restricted stock units at January 1 1 — Weighted average grant date fair value $ 54 $ 47 Restricted stock units granted 1 1 Weighted average grant date fair value $ 59 $ 56 Restricted stock units vested 1 — Weighted average grant date fair value $ 53 $ 48 Restricted stock units forfeited — — Weighted average grant date fair value $ 55 $ 53 Unvested restricted stock units at March 31 1 1 Weighted average grant date fair value $ 57 $ 53 At March 31, 2022 and 2021, there was $30 million and $23 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 March 31, 2022 and 2021. The total market value (at the vesting date) of restricted stock units which vested was $18 million and $7 million during the three-month periods ended March 31, 2022 and 2021, respectively. Performance Restricted Stock Units. Under our Long Term Incentive Program, we grant performance restricted stock units to certain senior executives. These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement of specified performance metrics established by our Compensation Committee over a three-year performance period and the recipient's continued employment through the share award date. During the three-month period ended March 31, 2022, we granted 91,820 performance restricted stock units with a grant date fair value of approximately $55 per share and 167,903 shares were issued. No performance restricted stock units were forfeited during the three-month period ended March 31, 2022. During the three-month period ended March 31, 2021, we granted 85,360 performance restricted stock units with a grant date fair value of approximately $53 per share and 104,757 shares were issued. No performance restricted stock units were forfeited during the three-month period ended March 31, 2021. Stock Options. Stock options are granted to certain key employees. We granted 337,790 shares of stock options in the three-month period ended March 31, 2022 with a grant date weighted average exercise price of approximately $59 per share. J. STOCK-BASED COMPENSATION (Continued) Our stock option activity was as follows, shares in millions: Three Months Ended March 31, 2022 2021 Option shares outstanding, January 1 3 2 Weighted average exercise price $ 37 $ 33 Option shares granted — 1 Weighted average exercise price $ 59 $ 56 Option shares exercised — — Aggregate intrinsic value on date of exercise (A) $ — $ — Weighted average exercise price $ 38 $ — Option shares forfeited — — Weighted average exercise price $ 37 $ 11 Option shares outstanding, March 31 3 3 Weighted average exercise price $ 39 $ 36 Weighted average remaining option term (in years) 6 7 Option shares vested and expected to vest, March 31 3 3 Weighted average exercise price $ 39 $ 36 Aggregate intrinsic value (A) $ 40 million $ 65 million Weighted average remaining option term (in years) 6 6 Option shares exercisable (vested), March 31 2 2 Weighted average exercise price $ 34 $ 30 Aggregate intrinsic value (A) $ 36 million $ 51 million Weighted average remaining option term (in years) 5 5 (A) Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares. At March 31, 2022 and 2021, there was $4 million and $6 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 March 31, 2022 and 2021. 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: Three Months Ended March 31, 2022 2021 Weighted average grant date fair value $ 14.66 $ 13.61 Risk-free interest rate 1.90 % 0.75 % Dividend yield 1.89 % 1.67 % Volatility factor 29.00 % 30.00 % Expected option life 6 years 6 years J. STOCK-BASED COMPENSATION (Concluded) Long-Term Stock Awards. Prior to the amendment of our 2014 Long Term Stock Incentive Plan in December 2019, we granted long-term stock awards to our key employees and non-employee Directors. We did not grant shares of long-term stock awards in the three-month periods ended March 31, 2022 and 2021. Our long-term stock award activity was as follows, shares in millions: Three Months Ended March 31, 2022 2021 Unvested stock award shares at January 1 1 1 Weighted average grant date fair value $ 37 $ 36 Stock award shares vested 1 — Weighted average grant date fair value $ 37 $ 34 Stock award shares forfeited — — Weighted average grant date fair value $ 37 $ 37 Unvested stock award shares at March 31 — 1 Weighted average grant date fair value $ 38 $ 37 At March 31, 2022 and 2021, there was $8 million and $18 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 March 31, 2022 and 2021. The total market value (at the vesting date) of stock award shares which vested was $20 million and $26 million during the three-month periods ended March 31, 2022 and 2021, respectively. |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLANS | EMPLOYEE RETIREMENT PLANS Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our condensed consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: Three Months Ended March 31, 2022 2021 Qualified Non-Qualified Qualified Non-Qualified Service cost $ 1 $ — $ 1 $ — Interest cost 1 1 8 1 Expected return on plan assets (1) — (4) — Amortization of net loss 1 1 6 1 Net periodic pension cost $ 2 $ 2 $ 11 $ 2 In December 2019, our Board of Directors approved the termination of our qualified domestic defined-benefit pension plans and in the second quarter of 2021, we settled these pension plans. |
RECLASSIFICATIONS FROM ACCUMULA
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME | RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME The reclassifications from accumulated other comprehensive income to the condensed consolidated statements of operations were as follows, in millions: Amounts Reclassified Accumulated Other Comprehensive Income Three Months Ended March 31, Statement of Operations Line Item 2022 2021 Amortization of defined-benefit pension and other post-retirement benefits: Actuarial losses, net $ 2 $ 7 Other, net Tax (benefit) (1) (2) Net of tax $ 1 $ 5 Interest rate swaps (A) $ — $ 2 Interest expense Tax expense — 5 Net of tax $ — $ 7 (A) 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 | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Information by segment and geographic area was as follows, in millions: Three Months Ended March 31, 2022 2021 2022 2021 Net Sales (A) Operating Profit Operations by segment: Plumbing Products $ 1,359 $ 1,249 $ 228 $ 252 Decorative Architectural Products 842 721 155 142 Total $ 2,201 $ 1,970 $ 383 $ 394 Operations by geographic area: North America $ 1,734 $ 1,529 $ 300 $ 308 International, principally Europe 467 441 83 86 Total $ 2,201 $ 1,970 383 394 General corporate expense, net (30) (29) Operating profit 353 365 Other income (expense), net (26) (208) Income before income taxes $ 327 $ 157 (A) Inter-segment sales were not material. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended March 31, 2022 2021 Foreign currency transaction gains $ 4 $ — Contingent consideration (A) (4) — Gain on sale of business (B) 2 — Net periodic pension and post-retirement benefit cost (2) (11) Dividend income — 3 Equity investment income, net — 2 Other items, net (1) — Total other, net $ (1) $ (6) (A) In the first quarter of 2022, we recognized $4 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note G for additional information. (B) Represents a pre-tax post-closing gain related to the finalization of working capital items related to the divestiture of Hüppe. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | INCOME PER COMMON SHARE Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: Three Months Ended March 31, 2022 2021 Numerator (basic and diluted): Net income $ 233 $ 94 Less: Allocation to redeemable noncontrolling interest (1) 6 Less: Allocation to unvested restricted stock awards — — Net income attributable to common shareholders $ 234 $ 88 Denominator: Basic common shares (based upon weighted average) 239 256 Add: Stock option dilution 2 1 Diluted common shares 241 257 For the three-month period ended March 31, 2022, we allocated dividends and undistributed earnings to the unvested restricted stock awards. For the three-month period ended March 31, 2021, we allocated undistributed earnings to the unvested restricted stock awards. Additionally, 265,000 and 188,000 common shares for the three-month periods ended March 31, 2022 and 2021, respectively, related to stock options were excluded from the computation of diluted income per common share due to their antidilutive effect. Effective February 10, 2021, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2019. We repurchased and retired 6.1 million shares of our common stock in the three-month period ended March 31, 2022 for approximately $364 million. This included 0.6 million shares to offset the dilutive impact of restricted stock units granted in the three-month period ended March 31, 2022. At March 31, 2022, we had $764 million remaining under the 2021 authorization. On the basis of amounts paid (declared), cash dividends per common share were $0.280 ($0.280) for the three-month period ended March 31, 2022 and $0.140 for the three-month period ended March 31, 2021, respectively. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
OTHER COMMITMENTS AND CONTINGENCIES | OTHER COMMITMENTS AND CONTINGENCIES We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: competition, product liability, employment, warranty, advertising, contract, personal injury, environmental, intellectual property, 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESOur effective tax rate was 23 percent and 27 percent for the three-month periods ended March 31, 2022 and 2021, respectively. The decrease in the rate was primarily due to a $5 million income tax expense from the elimination of a disproportionate tax effect from accumulated other comprehensive income, relating to our interest rate swap, following the retirement of the related debt in March 2021 and a $5 million increase to income tax expense from a loss on the termination of our qualified domestic defined-benefit pension plans in 2021 providing no tax benefit in certain jurisdictions. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In August 2020, the Financial Accounting Standards Board ("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 adopted this standard for annual periods beginning January 1, 2022. The adoption of this new standard did not impact our financial position or results of operations. 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 adopted this standard for annual periods beginning January 1, 2022. The adoption of this new standard did not impact our financial position or results of operations. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenues [Abstract] | |
Disaggregation of Revenue | Our revenues are derived primarily from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions: Three Months Ended March 31, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 892 $ 842 $ 1,734 International, principally Europe 467 — 467 Total $ 1,359 $ 842 $ 2,201 Three Months Ended March 31, 2021 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 808 $ 721 $ 1,529 International, principally Europe 441 — 441 Total $ 1,249 $ 721 $ 1,970 |
Financing Receivable, Allowance for Credit Loss | Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Three Months Ended Twelve Months Ended December 31, 2021 Balance at January 1 $ 6 $ 7 Provision for expected credit losses during the period 2 1 Write-offs charged against the allowance (1) (2) Recoveries of amounts previously written off 1 1 Other (A) — (1) Balance at end of period $ 8 $ 6 (A) As a result of Hüppe being divested in May 2021, $1 million for the year end December 31, 2021 was removed from allowance for credit losses. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | Goodwill at March 31, 2022, by segment, was as follows, in millions: Gross Goodwill At March 31, 2022 Accumulated Net Goodwill At March 31, 2022 Plumbing Products $ 620 $ (301) $ 319 Decorative Architectural Products 366 (120) 246 Total $ 986 $ (421) $ 565 The changes in the carrying amount of goodwill for the three-month period ended March 31, 2022, by segment, were as follows, in millions: Gross Goodwill At December 31, 2021 Accumulated Net Goodwill At December 31, 2021 Other (B) Net Goodwill At March 31, 2022 Plumbing Products (A) $ 623 $ (301) $ 322 $ (3) $ 319 Decorative Architectural Products 366 (120) 246 — 246 Total $ 989 $ (421) $ 568 $ (3) $ 565 (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. (B) Other consists of the effect of foreign currency translation. |
WARRANTY LIABILITY (Tables)
WARRANTY LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in the Company's warranty liability | Changes in our warranty liability were as follows, in millions: Three Months Ended Twelve Months Ended December 31, 2021 Balance at January 1 $ 80 $ 83 Accruals for warranties issued during the period 9 38 Accruals related to pre-existing warranties 1 (8) Settlements made (in cash or kind) during the period (8) (31) Other, net (including currency translation and acquisitions) — (2) Balance at end of period $ 82 $ 80 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 for these stock-based incentives was as follows, in millions: Three Months Ended March 31, 2022 2021 Restricted stock units $ 19 $ 19 Performance restricted stock units 1 2 Stock options 5 4 Long-term stock awards 2 3 Phantom stock awards — 2 Total $ 27 $ 30 |
Schedule of restricted stock unit activity | Our restricted stock unit activity was as follows, units in millions: Three Months Ended March 31, 2022 2021 Unvested restricted stock units at January 1 1 — Weighted average grant date fair value $ 54 $ 47 Restricted stock units granted 1 1 Weighted average grant date fair value $ 59 $ 56 Restricted stock units vested 1 — Weighted average grant date fair value $ 53 $ 48 Restricted stock units forfeited — — Weighted average grant date fair value $ 55 $ 53 Unvested restricted stock units at March 31 1 1 Weighted average grant date fair value $ 57 $ 53 |
Schedule of the Company's stock option activity | Our stock option activity was as follows, shares in millions: Three Months Ended March 31, 2022 2021 Option shares outstanding, January 1 3 2 Weighted average exercise price $ 37 $ 33 Option shares granted — 1 Weighted average exercise price $ 59 $ 56 Option shares exercised — — Aggregate intrinsic value on date of exercise (A) $ — $ — Weighted average exercise price $ 38 $ — Option shares forfeited — — Weighted average exercise price $ 37 $ 11 Option shares outstanding, March 31 3 3 Weighted average exercise price $ 39 $ 36 Weighted average remaining option term (in years) 6 7 Option shares vested and expected to vest, March 31 3 3 Weighted average exercise price $ 39 $ 36 Aggregate intrinsic value (A) $ 40 million $ 65 million Weighted average remaining option term (in years) 6 6 Option shares exercisable (vested), March 31 2 2 Weighted average exercise price $ 34 $ 30 Aggregate intrinsic value (A) $ 36 million $ 51 million Weighted average remaining option term (in years) 5 5 (A) Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares. |
Schedule of weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model | The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows: Three Months Ended March 31, 2022 2021 Weighted average grant date fair value $ 14.66 $ 13.61 Risk-free interest rate 1.90 % 0.75 % Dividend yield 1.89 % 1.67 % Volatility factor 29.00 % 30.00 % Expected option life 6 years 6 years |
Schedule of the Company's long-term stock award activity | Our long-term stock award activity was as follows, shares in millions: Three Months Ended March 31, 2022 2021 Unvested stock award shares at January 1 1 1 Weighted average grant date fair value $ 37 $ 36 Stock award shares vested 1 — Weighted average grant date fair value $ 37 $ 34 Stock award shares forfeited — — Weighted average grant date fair value $ 37 $ 37 Unvested stock award shares at March 31 — 1 Weighted average grant date fair value $ 38 $ 37 |
EMPLOYEE RETIREMENT PLANS (Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic pension cost for the Company's defined-benefit pension plans | Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our condensed consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: Three Months Ended March 31, 2022 2021 Qualified Non-Qualified Qualified Non-Qualified Service cost $ 1 $ — $ 1 $ — Interest cost 1 1 8 1 Expected return on plan assets (1) — (4) — Amortization of net loss 1 1 6 1 Net periodic pension cost $ 2 $ 2 $ 11 $ 2 |
RECLASSIFICATIONS FROM ACCUMU_2
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations | The reclassifications from accumulated other comprehensive income to the condensed consolidated statements of operations were as follows, in millions: Amounts Reclassified Accumulated Other Comprehensive Income Three Months Ended March 31, Statement of Operations Line Item 2022 2021 Amortization of defined-benefit pension and other post-retirement benefits: Actuarial losses, net $ 2 $ 7 Other, net Tax (benefit) (1) (2) Net of tax $ 1 $ 5 Interest rate swaps (A) $ — $ 2 Interest expense Tax expense — 5 Net of tax $ — $ 7 (A) 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) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of information by segment and geographic area | Information by segment and geographic area was as follows, in millions: Three Months Ended March 31, 2022 2021 2022 2021 Net Sales (A) Operating Profit Operations by segment: Plumbing Products $ 1,359 $ 1,249 $ 228 $ 252 Decorative Architectural Products 842 721 155 142 Total $ 2,201 $ 1,970 $ 383 $ 394 Operations by geographic area: North America $ 1,734 $ 1,529 $ 300 $ 308 International, principally Europe 467 441 83 86 Total $ 2,201 $ 1,970 383 394 General corporate expense, net (30) (29) Operating profit 353 365 Other income (expense), net (26) (208) Income before income taxes $ 327 $ 157 (A) Inter-segment sales were not material. |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other, net, which is included in other income (expense), net | Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended March 31, 2022 2021 Foreign currency transaction gains $ 4 $ — Contingent consideration (A) (4) — Gain on sale of business (B) 2 — Net periodic pension and post-retirement benefit cost (2) (11) Dividend income — 3 Equity investment income, net — 2 Other items, net (1) — Total other, net $ (1) $ (6) (A) In the first quarter of 2022, we recognized $4 million of expense from the revaluation of contingent consideration related to a prior acquisition. Refer to Note G for additional information. (B) Represents a pre-tax post-closing gain related to the finalization of working capital items related to the divestiture of Hüppe. |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share | Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: Three Months Ended March 31, 2022 2021 Numerator (basic and diluted): Net income $ 233 $ 94 Less: Allocation to redeemable noncontrolling interest (1) 6 Less: Allocation to unvested restricted stock awards — — Net income attributable to common shareholders $ 234 $ 88 Denominator: Basic common shares (based upon weighted average) 239 256 Add: Stock option dilution 2 1 Diluted common shares 241 257 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) € in Millions, $ in Millions | 3 Months Ended | ||||||
Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jan. 04, 2021 | |
Easy Sanitary Solutions B.V. | |||||||
Business Acquisition [Line Items] | |||||||
Noncontrolling interest ownership | 24.90% | ||||||
Easy Sanitary Solutions B.V. | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses | $ 52 | ||||||
Finite-lived intangible assets acquired | $ 32 | ||||||
Weighted average useful life (in years) | 10 years | 10 years | |||||
Goodwill, acquired during period | $ 35 | ||||||
Equity interest acquired | 75.10% | ||||||
Consideration transferred | 58 | € 47 | |||||
Liabilities incurred | $ 6 | ||||||
Liabilities incurred, payment period | 2 years | 2 years | |||||
Kraus USA Inc | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses | $ 103 | ||||||
Finite-lived intangible assets acquired | $ 49 | ||||||
Weighted average useful life (in years) | 10 years | ||||||
Goodwill, acquired during period | $ 20 | ||||||
Contingent consideration, liability | 8 | $ 28 | $ 24 | ||||
Increase in other indefinite-lived intangible assets | 25 | ||||||
Decrease to goodwill | $ 1 | ||||||
Kraus USA Inc | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Contingent consideration, liability | $ 50 | ||||||
Steamist, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses | $ 56 | ||||||
Finite-lived intangible assets acquired | $ 31 | ||||||
Weighted average useful life (in years) | 11 years | ||||||
Goodwill, acquired during period | $ 29 |
DIVESTITURES - Narrative (Detai
DIVESTITURES - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Discontinued Operations, Disposed of by Sale | Hüppe | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gain on disposal of discontinued operations, net | $ 2 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 2,201 | $ 1,970 |
Plumbing Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,359 | 1,249 |
Decorative Architectural Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 842 | 721 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,734 | 1,529 |
North America | Plumbing Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 892 | 808 |
North America | Decorative Architectural Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 842 | 721 |
International, principally Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 467 | 441 |
International, principally Europe | Plumbing Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 467 | 441 |
International, principally Europe | Decorative Architectural Products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 0 | $ 0 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, asset, gross, current | $ 2 | $ 1 | |
Contract with customer, liability | 28 | $ 67 | |
Performance obligation satisfied in previous period | $ 5 | $ 1 |
REVENUE - Changes in the allowa
REVENUE - Changes in the allowance for credit losses (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at January 1 | $ 6 | $ 7 |
Provision for expected credit losses during the period | 2 | 1 |
Write-offs charged against the allowance | (1) | (2) |
Recoveries of amounts previously written off | 1 | 1 |
Other | 0 | 1 |
Balance at end of period | $ 8 | 6 |
Hüppe | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Financing receivable, allowance for credit losses, disposal group | $ 1 |
DEPRECIATION AND AMORTIZATION (
DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Depreciation, Depletion and Amortization [Abstract] | ||
Depreciation and amortization expense | $ 35 | $ 43 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill Rollforward (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
May 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | |||
Gross goodwill | $ 986 | $ 989 | |
Accumulated Impairment Losses | (421) | (421) | |
Net goodwill | 565 | 568 | |
Goodwill [Roll Forward] | |||
Beginning balance | 568 | ||
Other | (3) | ||
Ending balance | 565 | ||
Plumbing Products | |||
Goodwill [Line Items] | |||
Gross goodwill | 620 | 623 | |
Accumulated Impairment Losses | (301) | (301) | |
Net goodwill | 319 | 322 | |
Goodwill [Roll Forward] | |||
Beginning balance | 322 | ||
Other | (3) | ||
Ending balance | 319 | ||
Goodwill, written off related to sale of business unit | $ 39 | ||
Decorative Architectural Products | |||
Goodwill [Line Items] | |||
Gross goodwill | 366 | 366 | |
Accumulated Impairment Losses | (120) | (120) | |
Net goodwill | 246 | $ 246 | |
Goodwill [Roll Forward] | |||
Beginning balance | 246 | ||
Other | 0 | ||
Ending balance | $ 246 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Other indefinite-lived intangible assets | $ 109 | $ 109 |
Carrying value of definite-lived intangible assets | 270 | 279 |
Accumulated amortization | $ 83 | $ 75 |
FAIR VALUE OF FINANCIAL INVES_2
FAIR VALUE OF FINANCIAL INVESTMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Kraus USA Inc | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Contingent consideration, undiscounted amount, maximum | $ 50 | ||
Contingent consideration, liability | 28 | $ 24 | $ 8 |
Estimate of Fair Value Measurement | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Estimated market value of long-term and short-term debt | 3,100 | 3,200 | |
Carrying Value Reported Value Measurement | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Aggregate carrying value of long-term and short-term debt | $ 3,200 | $ 3,000 |
WARRANTY LIABILITY (Details)
WARRANTY LIABILITY (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at the beginning of the period | $ 80 | $ 83 |
Accruals for warranties issued during the period | 9 | 38 |
Accruals related to pre-existing warranties | 1 | (8) |
Settlements made (in cash or kind) during the period | (8) | (31) |
Other, net (including currency translation and acquisitions) | 0 | (2) |
Balance at the end of the period | $ 82 | $ 80 |
DEBT (Details)
DEBT (Details) | Apr. 26, 2022USD ($) | Dec. 21, 2021 | Mar. 22, 2021USD ($) | Mar. 04, 2021USD ($) | Mar. 13, 2019USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) |
Debt | |||||||
Proceeds from issuance of debt | $ 1,495,000,000 | ||||||
Repayments and retirement of notes | $ 0 | $ 1,326,000,000 | |||||
Loss on extinguishment of debt | $ (168,000,000) | ||||||
1.5 Notes and Debentures Due February 15, 2028 | |||||||
Debt | |||||||
Long-term debt issued | $ 600,000,000 | ||||||
Interest rate | 1.50% | ||||||
2.0% Notes and Debentures Due February 15, 2031 | |||||||
Debt | |||||||
Long-term debt issued | $ 600,000,000 | ||||||
Interest rate | 2.00% | ||||||
3.125 Notes and Debentures Due February 15, 2051 | |||||||
Debt | |||||||
Long-term debt issued | $ 300,000,000 | ||||||
Interest rate | 3.125% | ||||||
5.95 Notes and Debentures Due March 15, 2022 | |||||||
Debt | |||||||
Interest rate | 5.95% | 5.95% | |||||
Repayments and retirement of notes | $ 326,000,000 | ||||||
4.45 Notes and Debentures Due April 1, 2025 | |||||||
Debt | |||||||
Interest rate | 4.45% | ||||||
Repayments and retirement of notes | $ 500,000,000 | ||||||
4.375 Notes and Debentures Due April 1, 2026 | |||||||
Debt | |||||||
Interest rate | 4.375% | ||||||
Repayments and retirement of notes | $ 500,000,000 | ||||||
Credit Agreement dated March 13, 2019 | |||||||
Debt | |||||||
Borrowing capacity, maximum | $ 1,000,000,000 | ||||||
Increase in maximum borrowing capacity | $ 500,000,000 | ||||||
Maximum net leverage ratio | 4 | ||||||
Minimum interest coverage ratio | 2.5 | ||||||
Borrowings outstanding | $ 263,000,000 | ||||||
Weighted average interest rate (as a percent) | 1.5798% | ||||||
Credit Agreement dated March 13, 2019 | Revolver | |||||||
Debt | |||||||
Borrowing capacity, maximum | $ 500,000,000 | ||||||
Credit Agreement dated March 13, 2019 | Swingline loans | |||||||
Debt | |||||||
Borrowing capacity, maximum | 100,000,000 | ||||||
Credit Agreement dated March 13, 2019 | Letters of credit | |||||||
Debt | |||||||
Borrowing capacity, maximum | $ 25,000,000 | ||||||
Letters of credit outstanding, amount | $ 0 | ||||||
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% | ||||||
Year 2022 Credit Agreement | Subsequent Event | |||||||
Debt | |||||||
Borrowing capacity, maximum | $ 1,000,000,000 | ||||||
Year 2022 Credit Agreement | Swingline loans | Subsequent Event | |||||||
Debt | |||||||
Borrowing capacity, maximum | 125,000,000 | ||||||
Unsecured Term Loan | Subsequent Event | |||||||
Debt | |||||||
Debt instrument face amount | $ 500,000,000 | ||||||
Unsecured Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Subsequent Event | |||||||
Debt | |||||||
Interest rate, basis spread (as a percent) | 0.70% |
STOCK-BASED COMPENSATION - Pre-
STOCK-BASED COMPENSATION - Pre-tax Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock-based compensation | ||
Pre-tax compensation expense | $ 27 | $ 30 |
Restricted stock units | ||
Stock-based compensation | ||
Pre-tax compensation expense | 19 | 19 |
Performance restricted stock units | ||
Stock-based compensation | ||
Pre-tax compensation expense | 1 | 2 |
Stock options | ||
Stock-based compensation | ||
Pre-tax compensation expense | 5 | 4 |
Long-term stock awards | ||
Stock-based compensation | ||
Pre-tax compensation expense | 2 | 3 |
Phantom stock awards | ||
Stock-based compensation | ||
Pre-tax compensation expense | $ 0 | $ 2 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 337,790 | |
Grant date intrinsic value (in dollars per share) | $ 59 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 581,660 | 1,000,000 |
Granted (in dollars per share) | $ 59 | $ 56 |
unrecognized compensation expense | $ 30 | $ 23 |
Weighted average remaining vesting period | 2 years | 2 years |
Total market value (at the vesting date) of stock award shares | $ 18 | $ 7 |
Forfeited (in shares) | 0 | 0 |
Long-term stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average remaining vesting period | 2 years | 2 years |
Total market value (at the vesting date) of stock award shares | $ 20 | $ 26 |
Forfeited (in shares) | 0 | 0 |
Total unrecognized compensation expense | $ 8 | $ 18 |
Performance restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition | 3 years | |
Performance restricted stock units | LTIP Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 91,820 | 85,360 |
Granted (in dollars per share) | $ 55 | $ 53 |
Shares issued in period (in shares) | 167,903 | 104,757 |
Forfeited (in shares) | 0 | 0 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average remaining vesting period | 2 years | 2 years |
Granted (in shares) | 0 | 1,000,000 |
Total unrecognized compensation expense | $ 4 | $ 6 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Long-term stock awards | ||
Unvested stock award shares | ||
Beginning balance (in shares) | 1,000,000 | 1,000,000 |
Vested (in shares) | 1,000,000 | 0 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 0 | 1,000,000 |
Weighted average grant date fair value | ||
Nonvested, weighted average grant date fair value. beginning of period (in dollars per share) | $ 37 | $ 36 |
Vested (in dollars per share) | 37 | 34 |
Forfeited (in dollars per share) | 37 | 37 |
Nonvested, weighted average grant date fair value. end of period (in dollars per share) | $ 38 | $ 37 |
Restricted stock units | ||
Unvested stock award shares | ||
Beginning balance (in shares) | 1,000,000 | 0 |
Granted (in shares) | 581,660 | 1,000,000 |
Vested (in shares) | 1,000,000 | 0 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 1,000,000 | 1,000,000 |
Weighted average grant date fair value | ||
Nonvested, weighted average grant date fair value. beginning of period (in dollars per share) | $ 54 | $ 47 |
Granted (in dollars per share) | 59 | 56 |
Vested (in dollars per share) | 53 | 48 |
Forfeited (in dollars per share) | 55 | 53 |
Nonvested, weighted average grant date fair value. end of period (in dollars per share) | $ 57 | $ 53 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Shares | ||
Granted (in shares) | 337,790 | |
Stock options | ||
Shares | ||
Outstanding at the beginning of the period (in shares) | 3,000,000 | 2,000,000 |
Granted (in shares) | 0 | 1,000,000 |
Exercised (in shares) | 0 | 0 |
Forfeited (in shares) | 0 | 0 |
Outstanding at the end of the period (in shares) | 3,000,000 | 3,000,000 |
Exercisable at the end of the period (in shares) | 2,000,000 | 2,000,000 |
Weighted average exercise price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 37 | $ 33 |
Granted (in dollars per share) | 59 | 56 |
Exercised (in dollars per share) | 38 | 0 |
Forfeited (in dollars per share) | 37 | 11 |
Outstanding at the end of the period (in dollars per share) | 39 | 36 |
Exercisable at the end of the period (in dollars per share) | $ 34 | $ 30 |
Aggregate intrinsic value | ||
Exercised | $ 0 | $ 0 |
Exercisable at the end of the period | $ 36 | $ 51 |
Weighted average remaining option term | ||
Outstanding at the end of the period | 6 years | 7 years |
Vested and expected to vest at the end of the period | 6 years | 6 years |
Exercisable at the end of the period | 5 years | 5 years |
Vested and expected to vest at the end of the period (in shares) | 3,000,000 | 3,000,000 |
Vested and expected to vest at the end of the period (in dollars per share) | $ 39 | $ 36 |
Vested and expected to vest at the end of the period | $ 40 | $ 65 |
STOCK-BASED COMPENSATION - Opti
STOCK-BASED COMPENSATION - Option Pricing Assumptions and Estimates (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ 14.66 | $ 13.61 |
Risk-free interest rate (as a percent) | 1.90% | 0.75% |
Dividend yield (as a percent) | 1.89% | 1.67% |
Volatility factor (as a percent) | 29.00% | 30.00% |
Expected option life | 6 years | 6 years |
STOCK-BASED COMPENSATION - Long
STOCK-BASED COMPENSATION - Long-Term Stock Award (Details) - Long-term stock awards - $ / shares shares in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Unvested stock award shares | ||
Beginning balance (in shares) | 1 | 1 |
Vested (in shares) | 1 | 0 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 0 | 1 |
Weighted average grant date fair value | ||
Nonvested, weighted average grant date fair value. beginning of period (in dollars per share) | $ 37 | $ 36 |
Vested (in dollars per share) | 37 | 34 |
Forfeited (in dollars per share) | 37 | 37 |
Nonvested, weighted average grant date fair value. end of period (in dollars per share) | $ 38 | $ 37 |
EMPLOYEE RETIREMENT PLANS (Deta
EMPLOYEE RETIREMENT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Qualified | ||
Net periodic pension cost for the company's defined-benefit pension plans | ||
Service cost | $ 1 | $ 1 |
Interest cost | 1 | 8 |
Expected return on plan assets | (1) | (4) |
Amortization of net loss | 1 | 6 |
Net periodic pension cost | 2 | 11 |
Non-Qualified | ||
Net periodic pension cost for the company's defined-benefit pension plans | ||
Service cost | 0 | 0 |
Interest cost | 1 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of net loss | 1 | 1 |
Net periodic pension cost | $ 2 | $ 2 |
RECLASSIFICATIONS FROM ACCUMU_3
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 22, 2021 | |
Reclassifications from accumulated other comprehensive (loss) income | |||
Other, net | $ 26 | $ 208 | |
Tax (benefit) | 75 | 43 | |
Reclassifications, after tax | (252) | (114) | |
Interest expense | 25 | $ 202 | |
5.95 Notes and Debentures Due March 15, 2022 | |||
Reclassifications from accumulated other comprehensive (loss) income | |||
Interest rate | 5.95% | 5.95% | |
Reclassification out of Accumulated Other Comprehensive Income | Actuarial losses, net | |||
Reclassifications from accumulated other comprehensive (loss) income | |||
Other, net | 2 | $ 7 | |
Tax (benefit) | (1) | (2) | |
Reclassifications, after tax | 1 | 5 | |
Reclassification out of Accumulated Other Comprehensive Income | Interest rate swaps | Interest Rate Swaps | |||
Reclassifications from accumulated other comprehensive (loss) income | |||
Tax (benefit) | 0 | 5 | |
Reclassifications, after tax | 0 | (7) | |
Interest expense | $ 0 | $ 2 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Information | ||
Net sales | $ 2,201 | $ 1,970 |
Operating Profit (Loss) | 353 | 365 |
Other income (expense), net | (26) | (208) |
Income before income taxes | 327 | 157 |
North America | ||
Segment Information | ||
Net sales | 1,734 | 1,529 |
International, principally Europe | ||
Segment Information | ||
Net sales | 467 | 441 |
Plumbing Products | ||
Segment Information | ||
Net sales | 1,359 | 1,249 |
Plumbing Products | North America | ||
Segment Information | ||
Net sales | 892 | 808 |
Plumbing Products | International, principally Europe | ||
Segment Information | ||
Net sales | 467 | 441 |
Decorative Architectural Products | ||
Segment Information | ||
Net sales | 842 | 721 |
Decorative Architectural Products | North America | ||
Segment Information | ||
Net sales | 842 | 721 |
Decorative Architectural Products | International, principally Europe | ||
Segment Information | ||
Net sales | 0 | 0 |
Operating Segments | ||
Segment Information | ||
Net sales | 2,201 | 1,970 |
Operating Profit (Loss) | 383 | 394 |
Operating Segments | Plumbing Products | ||
Segment Information | ||
Net sales | 1,359 | 1,249 |
Operating Profit (Loss) | 228 | 252 |
Operating Segments | Decorative Architectural Products | ||
Segment Information | ||
Net sales | 842 | 721 |
Operating Profit (Loss) | 155 | 142 |
Geographic Areas | ||
Segment Information | ||
Net sales | 2,201 | 1,970 |
Operating Profit (Loss) | 383 | 394 |
Geographic Areas | North America | ||
Segment Information | ||
Net sales | 1,734 | 1,529 |
Operating Profit (Loss) | 300 | 308 |
Geographic Areas | International, principally Europe | ||
Segment Information | ||
Net sales | 467 | 441 |
Operating Profit (Loss) | 83 | 86 |
Corporate, Non-Segment | ||
Segment Information | ||
General corporate expense, net | $ (30) | $ (29) |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | ||
Foreign currency transaction gains | $ 4 | $ 0 |
Contingent consideration | (4) | 0 |
Gain on sale of business | 2 | 0 |
Net periodic pension and post-retirement benefit cost | (2) | (11) |
Dividend income | 0 | 3 |
Equity investment income, net | 0 | 2 |
Other items, net | (1) | 0 |
Total other, net | $ (1) | $ (6) |
INCOME PER COMMON SHARE - Sched
INCOME PER COMMON SHARE - Schedule of Earnings Per Share. Basic and Diluted (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator (basic and diluted): | ||
Net income | $ 233 | $ 94 |
Less: Allocation to redeemable noncontrolling interest | (1) | 6 |
Less: Allocation to unvested restricted stock awards | 0 | 0 |
Net income attributable to common shareholders | $ 234 | $ 88 |
Denominator: | ||
Basic common shares (based upon weighted average) (in shares) | 239 | 256 |
Add: Stock option dilution (in shares) | 2 | 1 |
Diluted common shares (in shares) | 241 | 257 |
INCOME PER COMMON SHARE - Narra
INCOME PER COMMON SHARE - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Feb. 10, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Amount authorized for repurchase | $ 2,000 | ||
Stock repurchased during period (in shares) | 6,100 | ||
Payments for repurchase of common stock | $ 364 | $ 303 | |
Remaining authorized repurchase amount | $ 764 | ||
Cash dividends per common share paid (in dollars per share) | $ 0.280 | $ 0.140 | |
Cash dividends per common share declared (in dollars per share) | $ 0.280 | ||
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 265 | 188 | |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock repurchased and retired during period to offset dilutive impact of awards granted (in shares) | 600 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (as a percent) | 23.00% | 27.00% |
Income tax expense, elimination of disproportionate tax | $ 5 | |
Income tax expense from anticipated loss | $ 5 |