Exhibit 99
![]() | FOR IMMEDIATE RELEASE |
Investor / Media Contact
Maria Duey
Vice President — Investor Relations
313.792.5500
maria_duey@mascohq.com
Maria Duey
Vice President — Investor Relations
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS 2009 RESULTS
2009 Fourth Quarter Trends
• | Markets for most of our products are showing modest improvement. | ||
• | Comparing the fourth quarter of 2009 to the fourth quarter of 2008: |
• | Sales to key retailers increased eight percent. | ||
• | Three of our five business segments had sales increases. | ||
• | Our International operations had another strong quarter. | ||
• | Operating profit (excluding impairment charges for goodwill and other intangible assets) improved. |
2009 Full-Year Highlights
• | Over $1.4 billion of cash at December 31, 2009. | ||
• | Free cash flow (cash from operations, less capital expenditures, before dividends) approximated $550 million. | ||
• | Net sales from continuing operations declined 18 percent to $7.8 billion. | ||
• | Income from continuing operations was $.11 per common share excluding non-cash impairment charges for goodwill. | ||
• | (Loss) from continuing operations, as reported, was ($.41) per common share. |
Taylor, Mich., (February 10, 2010) — Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the year ended December 31, 2009 declined 18 percent to $7.8 billion from $9.5 billion for 2008. North American sales declined 18 percent and International sales declined 17 percent. In local currencies, International sales declined ten percent compared with 2008.
Income from continuing operations was $.11 per common share and $.20 per common share for 2009 and 2008, respectively, excluding non-cash impairment charges for goodwill and other intangible assets. Including these charges, the loss from continuing operations, as reported, was ($140) million or ($.41) per common share and ($366) million or ($1.06) per common share for the years ended December 31, 2009 and 2008, respectively.
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“We are very encouraged by our 2009 financial and operating performance in one of the more difficult economic environments Masco has ever experienced. Although our sales were down 18 percent, compared to 2008, we were able to offset a significant portion of our volume declines, primarily as a result of innovative new product introductions and market share gains,” said Masco’s CEO Tim Wadhams. “Obviously, forecasting business conditions and Company performance was extremely challenging in 2009, but having said that, we continued to exceed our expectations for sales, operating profit and cash flow as the year progressed. Ending the year with over $1.4 billion of cash is a testament to the world-wide Masco Team’s dedication and commitment to our emphasis on cash generation. We are very proud of their accomplishments,” added Wadhams.
Results for 2009 were adversely affected by lower sales volume of new home construction products and services, as well as a decline in consumer spending for home improvement products in both North American and International markets. The negative market conditions were partially offset by increased sales volume of paints and stains, market share gains, the improved relationship between selling prices and commodity costs and benefits associated with business rationalizations and other cost savings initiatives.
We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During 2009 and 2008, we incurred costs and charges of $94 million pre-tax ($.17 per common share, after tax) and $78 million pre-tax ($.14 per common share, after tax), respectively, related to these initiatives.
During 2009, we recognized non-cash, pre-tax impairment charges for goodwill (in the fourth quarter) aggregating $262 million ($.51 per common share, after tax), non-cash, pre-tax impairment charges for financial investments aggregating $10 million ($.02 per common share, after tax) and pre-tax currency transaction gains of $17 million ($.03 per common share, after tax). During 2008, we recognized non-cash, pre-tax impairment charges for goodwill and other intangible assets (in the fourth quarter) aggregating $467 million ($1.26 per common share, after tax), non-cash, pre-tax impairment charges for financial investments aggregating $58 million ($.10 per common share, after tax) and pre-tax currency transaction losses of $29 million ($.05 per common share, after tax).
Fourth Quarter 2009
Fourth quarter 2009 net sales from continuing operations declined three percent to $1.9 billion compared with $2.0 billion for the fourth quarter 2008. North American sales declined seven percent and International sales increased 12 percent. In local currencies, International sales increased one percent compared with the fourth quarter of 2008.
Income (loss) from continuing operations was $.02 per common share and ($.17) per common share for the fourth quarters of 2009 and 2008, respectively, excluding non-cash impairment charges for goodwill and other intangible assets. Including these charges, loss from continuing operations, as reported, was ($173) million or ($.49) per common share and ($504) million or ($1.44) per common share for the fourth quarters of 2009 and 2008, respectively.
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During the fourth quarters of 2009 and 2008, we incurred costs and charges of $27 million pre-tax ($.05 per common share, after tax) and $39 million pre-tax ($.07 per common share, after tax), respectively, related to the rationalization of our businesses. In addition, in the fourth quarter of 2008, we recognized non-cash, pre-tax impairment charges for financial investments of $28 million ($.05 per common share, after tax).
“Although new home construction and big-ticket remodeling activity continues to be depressed, our other product groups experienced relatively solid top-line repair and remodel sales growth in the fourth quarter of 2009. The fourth quarter of 2009 is the first quarter in a long time where sales to key retailers and operating profit, adjusted for impairment charges, exceeded the prior year quarter. We are encouraged by these positive trends, and we continue to increase market share in key segments as we move into 2010,” said Tim Wadhams.
2010 Outlook
We expect that business conditions in 2010 will improve compared to 2009. While we are concerned about the impact of current unemployment levels, foreclosure activity and access to financing, we believe that housing starts will improve in 2010 and will increase to a range of 600,000 to 700,000 units.
While we anticipate that expenditures on repair and remodel activity will improve modestly in 2010 from 2009 levels, we believe that big-ticket items will continue to be deferred, in the short-term, until general economic conditions, credit availability and home prices improve.
We are confident that the long-term fundamentals for the new home construction and home improvement markets are positive. We believe that our strong financial position, together with our current strategy of investing in leadership brands (including: KraftMaid and Merillat cabinets, Delta and Hansgrohe faucets, Behr paint and Milgard windows), our continued focus on innovation and our commitment to lean principles will allow us to drive long-term growth and create value for our shareholders.
Beginning with 2010, Masco will no longer provide definitive earnings per common share and cash flow guidance. Instead, we will provide additional segment detail, along with estimates of key financial data.
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.
The 2009 fourth quarter and full-year supplemental material including a presentation in PDF format, will be distributed after the market closes on February 10, 2010 and will be available on the Company’s Web site atwww.masco.com.
A conference call regarding items contained in this release is scheduled for Thursday, February 11, 2010 at 8:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (913) 312-0653 (confirmation #4115783).
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The conference call will be webcast simultaneously and in its entirety through the Masco Corporation Web site. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company’s Web site.
A replay of the call will be available on Masco’s Web site or by phone by dialing (719) 457-0820 (replay access code #4115783). The replay will be available approximately two hours after the end of the call and continue through February 18, 2010.
Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site atwww.masco.com.
# # #
Statements contained herein, or otherwise made available, that reflect the Company’s views about its future performance may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These views involve risks and uncertainties that are difficult to predict and the Company’s results may differ materially from the results discussed in such forward-looking statements. For further information, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections) and to any subsequent Quarterly Reports on Form 10-Q, all of which are on file with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Certain of the financial and statistical data made available are non-GAAP financial measures as defined by the SEC’s Regulation G. The Company believes that such non-GAAP performance measures and ratios used in managing the business may provide users with meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company’s filings with the SEC and is available on Masco’s Web site.
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MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2009 and 2008
(In Millions, Except Per Common Share Data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2009 and 2008
(In Millions, Except Per Common Share Data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net sales | $ | 1,898 | $ | 1,956 | $ | 7,792 | $ | 9,484 | ||||||||
Cost of sales | 1,403 | 1,559 | 5,774 | 7,125 | ||||||||||||
Gross profit | 495 | 397 | 2,018 | 2,359 | ||||||||||||
Selling, general and administrative expenses | 430 | 414 | 1,693 | 1,802 | ||||||||||||
Impairment charges for goodwill and other intangible assets | 262 | 467 | 262 | 467 | ||||||||||||
Charge for defined-benefit plan curtailment | — | — | 8 | — | ||||||||||||
Operating (loss) profit | (197 | ) | (484 | ) | 55 | 90 | ||||||||||
Other income (expense), net | (49 | ) | (87 | ) | (206 | ) | (283 | ) | ||||||||
(Loss) income from continuing operations before income taxes | (246 | ) | (571 | ) | (151 | ) | (193 | ) | ||||||||
Income tax (benefit) expense | (84 | ) | (71 | ) | (49 | ) | 134 | |||||||||
(Loss) income from continuing operations | (162 | ) | (500 | ) | (102 | ) | (327 | ) | ||||||||
(Loss) from discontinued operations, net | (12 | ) | (4 | ) | (43 | ) | (25 | ) | ||||||||
Net (loss) income | (174 | ) | (504 | ) | (145 | ) | (352 | ) | ||||||||
Less: Net income attributable to non-controlling interest | 11 | 4 | 38 | 39 | ||||||||||||
Net (loss) income attributable to Masco Corporation | $ | (185 | ) | $ | (508 | ) | $ | (183 | ) | $ | (391 | ) | ||||
Earnings (loss) per common share attributable to Masco Corporation (diluted): | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.49 | ) | $ | (1.44 | ) | $ | (0.41 | ) | $ | (1.06 | ) | ||||
(Loss) from discontinued operations, net | (0.03 | ) | (0.01 | ) | (0.12 | ) | (0.07 | ) | ||||||||
Net (loss) income attributable to Masco Corporation | $ | (0.53 | ) | $ | (1.45 | ) | $ | (0.53 | ) | $ | (1.13 | ) | ||||
Average diluted common shares outstanding | 352 | 351 | 351 | 353 | ||||||||||||
Amounts attributable to Masco Corporation: | ||||||||||||||||
(Loss) income from continuing operations | $ | (173 | ) | $ | (504 | ) | $ | (140 | ) | $ | (366 | ) | ||||
(Loss) from discontinued operations, net | (12 | ) | (4 | ) | (43 | ) | (25 | ) | ||||||||
Net (loss) income attributable to Masco Corporation | $ | (185 | ) | $ | (508 | ) | $ | (183 | ) | $ | (391 | ) | ||||
Masco Corporation
Key Financial Data As Reported — Unaudited
Q4 — 2009 and 2008(In Millions, Except Earnings Per Share)
Key Financial Data As Reported — Unaudited
Q4 — 2009 and 2008(In Millions, Except Earnings Per Share)
Sales & Earnings | 12/31/2009 | 12/31/2008 | Change | |||||||||
Net Sales | $ | 1,898 | $ | 1,956 | -3 | % | ||||||
Operating (Loss) | $ | (197 | ) | $ | (484 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -10.4 | % | -24.7 | % | 1,430 | bps | ||||||
Other Income (Expense), Net | $ | (49 | ) | $ | (87 | ) | 44 | % | ||||
Income Tax (Benefit) | $ | (84 | ) | $ | (71 | ) | N/A | |||||
(Loss) From Continuing Operations Attributable to Masco Corporation | $ | (173 | ) | $ | (504 | ) | N/A | |||||
Diluted EPS from Continuing Operations | $ | (0.49 | ) | $ | (1.44 | ) | N/A |
Operating Expenses | 12/31/2009 | 12/31/2008 | Change | |||||||||
Cost of Sales | $ | 1,403 | $ | 1,559 | -10 | % | ||||||
Gross Margin | 26.1 | % | 20.3 | % | 580 | bps | ||||||
SG&A Expenses (Including GCE) | $ | 430 | $ | 414 | 4 | % | ||||||
SG&A as a % of net sales | 22.7 | % | 21.2 | % | (150) | bps | ||||||
General Corporate Expense (GCE) | $ | 44 | $ | 34 | 29 | % | ||||||
General Corp Expense as a % of net sales | 2.3 | % | 1.7 | % | 60 | bps |
Business Segments | 12/31/2009 | 12/31/2008 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 426 | $ | 488 | -13 | % | ||||||
Operating (Loss) | $ | (8 | ) | $ | (84 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -1.9 | % | -17.2 | % | 1,530 | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 671 | $ | 612 | 10 | % | ||||||
Operating Profit (Loss) | $ | 35 | $ | (193 | ) | N/A | ||||||
Operating Profit (Loss) % of Net Sales | 5.2 | % | -31.5 | % | 3,670 | bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 295 | $ | 375 | -21 | % | ||||||
Operating (Loss) | $ | (27 | ) | $ | (54 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -9.2 | % | -14.4 | % | 520 | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 349 | $ | 328 | 6 | % | ||||||
Operating Profit | $ | 62 | $ | 42 | N/A | |||||||
Operating Profit % of Net Sales | 17.8 | % | 12.8 | % | 500 | bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 157 | $ | 153 | 3 | % | ||||||
Operating (Loss) | $ | (215 | ) | $ | (161 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -136.9 | % | -105.2 | % | (3,170) | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 1,898 | $ | 1,956 | -3 | % | ||||||
Operating (Loss) | $ | (153 | ) | $ | (450 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -8.1 | % | -23.0 | % | 1,490 | bps | ||||||
Change in Key Retailer Sales | 8 | % | -14 | % |
Masco Corporation
Key Financial Data As Reported — Unaudited
Q4 — 2009 and 2008(In Millions, Except Earnings Per Share)
Key Financial Data As Reported — Unaudited
Q4 — 2009 and 2008(In Millions, Except Earnings Per Share)
Business Regions | 12/31/2009 | 12/31/2008 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 1,441 | $ | 1,547 | -7 | % | ||||||
Operating (Loss) | $ | (168 | ) | $ | (49 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -11.7 | % | -3.2 | % | (850) | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 457 | $ | 409 | 12 | % | ||||||
Operating Profit (Loss) | $ | 15 | $ | (401 | ) | N/A | ||||||
Operating Profit (Loss) % of Net Sales | 3.3 | % | -98.0 | % | 10,130 | bps |
Other | 12/31/2009 | 12/31/2008 | ||||||
Dividend Payments | $ | 27 | $ | 85 | ||||
Cash Paid for Share Repurchases | $ | — | $ | — | ||||
Common Shares Repurchased | — | — | ||||||
CAPEX | $ | 55 | $ | 58 | ||||
Depreciation and Amortization | $ | 64 | $ | 59 | ||||
Average diluted common shares outstanding | 352 | 351 |
Masco Corporation
Key Financial Data As Reported — Unaudited
Full Year — 2009 and 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Full Year — 2009 and 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Sales & Earnings | 12/31/2009 | 12/31/2008 | Change | |||||||||
Net Sales | $ | 7,792 | $ | 9,484 | -18 | % | ||||||
Operating Profit | $ | 55 | $ | 90 | N/A | |||||||
Operating Profit % of Net Sales | 0.7 | % | 0.9 | % | (20) | bps | ||||||
Other Income (Expense), Net | $ | (206 | ) | $ | (283 | ) | 27 | % | ||||
Income Tax (Benefit) Expense | $ | (49 | ) | $ | 134 | N/A | ||||||
(Loss) From Continuing Operations Attributable to Masco Corporation | $ | (140 | ) | $ | (366 | ) | N/A | |||||
Diluted EPS from Continuing Operations | $ | (0.41 | ) | $ | (1.06 | ) | N/A | |||||
Operating Expenses | 12/31/2009 | 12/31/2008 | Change | |||||||||
Cost of Sales | $ | 5,774 | $ | 7,125 | -19 | % | ||||||
Gross Margin | 25.9 | % | 24.9 | % | 100 | bps | ||||||
SG&A Expenses (Including GCE) | $ | 1,701 | $ | 1,802 | -6 | % | ||||||
SG&A as a % of net sales | 21.8 | % | 19.0 | % | (280) | bps | ||||||
General Corporate Expense (GCE) | $ | 140 | $ | 144 | -3 | % | ||||||
General Corp Expense as a % of net sales | 1.8 | % | 1.5 | % | (30) | bps | ||||||
Business Segments | 12/31/2009 | 12/31/2008 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 1,674 | $ | 2,276 | -26 | % | ||||||
Operating (Loss) Profit | $ | (64 | ) | $ | 4 | N/A | ||||||
Operating (Loss) Profit % of Net Sales | -3.8 | % | 0.2 | % | (400) | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 2,564 | $ | 3,002 | -15 | % | ||||||
Operating Profit | $ | 237 | $ | 110 | N/A | |||||||
Operating Profit % of Net Sales | 9.2 | % | 3.7 | % | 550 | bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 1,256 | $ | 1,861 | -33 | % | ||||||
Operating (Loss) | $ | (131 | ) | $ | (46 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -10.4 | % | -2.5 | % | (790) | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 1,714 | $ | 1,629 | 5 | % | ||||||
Operating Profit | $ | 375 | $ | 299 | N/A | |||||||
Operating Profit % of Net Sales | 21.9 | % | 18.4 | % | 350 | bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 584 | $ | 716 | -18 | % | ||||||
Operating Loss | $ | (199 | ) | $ | (124 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -34.1 | % | -17.3 | % | (1,680) | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 7,792 | $ | 9,484 | -18 | % | ||||||
Operating Profit | $ | 218 | $ | 243 | N/A | |||||||
Operating Profit % of Net Sales | 2.8 | % | 2.6 | % | 20 | bps | ||||||
Change in Key Retailer Sales | -4 | % | -12 | % |
Masco Corporation
Key Financial Data As Reported — Unaudited
Full Year — 2009 and 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Full Year — 2009 and 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions | 12/31/2009 | 12/31/2008 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 6,135 | $ | 7,482 | -18 | % | ||||||
Operating Profit | $ | 93 | $ | 493 | N/A | |||||||
Operating Profit % to Net Sales | 1.5 | % | 6.6 | % | (510) | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 1,657 | $ | 2,002 | -17 | % | ||||||
Operating Profit (Loss) | $ | 125 | $ | (250 | ) | N/A | ||||||
Operating Profit (Loss) % to Net Sales | 7.5 | % | -12.5 | % | 2,000 | bps | ||||||
Working Capital | 12/31/2009 | 12/31/2008 | Change | |||||||||
Receivable Days | 48 | 50 | (2 | ) | ||||||||
Inventory Days | 48 | 48 | — | |||||||||
Payable Days | 47 | 43 | 4 | |||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 1,148 | $ | 1,409 | -19 | % | ||||||
Working Capital as a % of Sales (As Reported TTM1) | 14.7 | % | 14.7 | % | - | bps | ||||||
Other | 12/31/2009 | 12/31/2008 | ||||||||||
Dividend Payments | $ | 166 | $ | 336 | ||||||||
Cash Paid for Share Repurchases2 | $ | 11 | $ | 160 | ||||||||
Common Shares Repurchased2 | 2 | 9 | ||||||||||
CAPEX | $ | 125 | $ | 200 | ||||||||
Depreciation and Amortization | $ | 254 | $ | 238 | ||||||||
Return on Invested Capital (As Reported TTM1) | 0.5 | % | 0.8 | % | ||||||||
Return on Invested Capital (As Reconciled TTM1) | 3.6 | % | 5.3 | % | ||||||||
Average diluted common shares outstanding | 351 | 353 | ||||||||||
Average diluted common shares outstanding (January 1) | 350 | 359 | ||||||||||
Debt Ratio | 12/31/2009 | 12/31/2008 | ||||||||||
Long-Term Debt | $ | 3,604 | $ | 3,915 | ||||||||
Notes Payable | $ | 364 | $ | 71 | ||||||||
Total Debt | $ | 3,968 | $ | 3,986 | ||||||||
Shareholders’ Equity3 | $ | 2,817 | $ | 2,981 | ||||||||
Debt to Capital | 58 | % | 57 | % |
1 | - Trailing twelve months. | |
2 | - Common shares were repurchased to offset the effect of stock award grants in the first quarter of 2009. | |
3 | - Shareholders’ Equity at 12/31/08 includes $135 million related to the noncontrolling interest reclassification. |
Masco Corporation — 4th Quarter 2009
Page | ||
1 | Condensed Consolidated Statements of Operations — 2009 & 2008 by Quarter — Unaudited | |
2 | Notes to Condensed Consolidated Statements of Operations — 2009 & 2008 by Quarter — Unaudited | |
3 | 2009 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
4 | 2009 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
5 | 2009 Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited | |
6 | 2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
7 | 2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
8 | 2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
9 | Other Income (Expense), Net — 2009 & 2008 by Quarter — Unaudited | |
10 | Condensed Consolidated Balance Sheets — Unaudited GAAP Reconciliations: | |
GAAP Reconciliations: | ||
11 | Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited | |
12 | Operating Profit and Margins — Unaudited | |
13 | Operating (Loss) Profit and Shareholders’ Equity — Unaudited | |
14 | Reconciliation for Impairment Charges for Goodwill and Other Intangible Assets — Unaudited |
MASCO CORPORATION
Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
(dollars in millions, except per share data)
Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
(dollars in millions, except per share data)
2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||||||
Net Sales | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | $ | 9,484 | $ | 1,956 | $ | 2,501 | $ | 2,610 | $ | 2,417 | ||||||||||||||||||||
Cost of Sales | 5,774 | 1,403 | 1,517 | 1,470 | 1,384 | 7,125 | 1,559 | 1,854 | 1,916 | 1,796 | ||||||||||||||||||||||||||||||
Gross Profit | 2,018 | 495 | 567 | 543 | 413 | 2,359 | 397 | 647 | 694 | 621 | ||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 25.9 | % | 26.1 | % | 27.2 | % | 27.0 | % | 23.0 | % | 24.9 | % | 20.3 | % | 25.9 | % | 26.6 | % | 25.7 | % | ||||||||||||||||||||
SG&A Expense (before lines 1, 2, 3, 4) | 1,546.0 | 386 | 386 | 400 | 374 | 1,649 | 380 | 409 | 442 | 418 | ||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 19.8 | % | 20.3 | % | 18.5 | % | 19.9 | % | 20.8 | % | 17.4 | % | 19.4 | % | 16.4 | % | 16.9 | % | 17.3 | % | ||||||||||||||||||||
Operating Profit (before lines 1, 2, 3, 4) | 472.0 | 109 | 181 | 143 | 39 | 710 | 17 | 238 | 252 | 203 | ||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 6.1 | % | 5.7 | % | 8.7 | % | 7.1 | % | 2.2 | % | 7.5 | % | 0.9 | % | 9.5 | % | 9.7 | % | 8.4 | % | ||||||||||||||||||||
1 General Corporate Expense (GCE), Net | 140 | 44 | 36 | 27 | 33 | 144 | 34 | 32 | 35 | 43 | ||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (including lines 1,2,3,4) | 25.2 | % | 36.5 | % | 20.6 | % | 21.2 | % | 23.1 | % | 18.9 | % | 21.2 | % | 17.6 | % | 18.3 | % | 19.1 | % | ||||||||||||||||||||
2 Charge for Defined-Benefit Plan Curtailment | 8 | — | — | — | 8 | — | — | — | — | — | ||||||||||||||||||||||||||||||
3 Charge for Litigation Settlement | 7 | — | 7 | — | — | 9 | — | 9 | — | — | ||||||||||||||||||||||||||||||
4 Impairment Charges for Goodwill and Other Intangible Assets | 262 | 262 | — | — | — | 467 | 467 | — | — | — | ||||||||||||||||||||||||||||||
Operating Profit (Loss) per F/S | $ | 55 | $ | (197 | ) | $ | 138 | $ | 116 | $ | (2 | ) | $ | 90 | $ | (484 | ) | $ | 197 | $ | 217 | $ | 160 | |||||||||||||||||
Income (Loss) Per Common Share Attributable to | ||||||||||||||||||||||||||||||||||||||||
Masco Corporation (Diluted): | ||||||||||||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations | $ | (0.41 | ) | $ | (0.49 | ) | $ | 0.14 | $ | 0.19 | $ | (0.24 | ) | $ | (1.06 | ) | $ | (1.44 | ) | $ | 0.11 | $ | 0.20 | $ | 0.06 | |||||||||||||||
(Loss) Income from Discontinued Operations, Net | (0.12 | ) | (0.03 | ) | (0.06 | ) | (0.03 | ) | 0.01 | (0.07 | ) | (0.01 | ) | (0.02 | ) | 0.02 | (0.06 | ) | ||||||||||||||||||||||
Net Income (Loss) | $ | (0.53 | ) | $ | (0.53 | ) | $ | 0.08 | $ | 0.15 | $ | (0.23 | ) | $ | (1.13 | ) | $ | (1.45 | ) | $ | 0.09 | $ | 0.23 | $ | — | |||||||||||||||
Please see page 2 for Notes.
Page 1
MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
Notes To Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
Notes:
- | Data exclude discontinued operations. | ||
- | Operating results for the fourth quarter of 2009 include non-cash impairment charges for goodwill and other intangible assets of $262 million pre-tax ($.51 per common share, after tax). | ||
- | Operating results for the first, second, third and fourth quarters of 2009 include costs and charges related to business rationalizations and other initiatives of $24 million pre-tax ($.04 per common share, after tax), $22 million pre-tax ($.04 per common share, after tax), $21 million pre-tax ($.04 per common share, after tax), and $27 million pre-tax ($.05 per common share, after tax), respectively. | ||
- | Operating results for the third quarter of 2009 include litigation settlement expense of $7 million pre-tax ($.01 per common share, after tax). | ||
- | Operating results for the second quarter of 2009 include accelerated stock compensation expense of $6 million pre-tax ($.01 per common share, after tax). | ||
- | Operating results for the first quarter of 2009 include a non-cash charge of $8 million pre-tax ($.01 per common share, after tax) related to the curtailment and remeasurement of certain of the Company’s defined-benefit pension plans. | ||
- | Income from continuing operations for the first and second quarters of 2009 includes non-cash impairment charges for financial investments of $3 million pre-tax ($.01 per common share, after tax) and $7 million pre-tax ($.01 per common share, after tax), respectively. | ||
- | (Loss) income from discontinued operations for the fourth quarter of 2009 include loss of $19 million pre-tax ($.04 per common share, after tax) on the disposition of a European business unit in the Plumbing Products segment. | ||
- | (Loss) income from discontinued operations for the third quarter of 2009 include loss of $22 million pre-tax ($.06 per common share, after tax) on the disposition of a European business unit in the Plumbing Products segment. | ||
- | Operating results for the fourth quarter of 2008 include non-cash impairment charges for goodwill and other intangible assets of $467 million pre-tax ($1.27 per common share, after tax). | ||
- | Operating results for the first, second, third and fourth quarters of 2008 include costs and charges related to business rationalizations and other initiatives of $9 million pre-tax ($.02 per common share, after tax), $15 million pre-tax ($.03 per common share, after tax), $15 million per common share pre-tax ($.03 per common share, after tax) and $39 million pre-tax ($.07 per common share, after tax), respectively. | ||
- | Income from continuing operations for the first, second, third and fourth quarters of 2008 includes non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax), $3 million pre-tax, $1 million pre-tax and $28 million pre-tax ($.05 per common share, after tax), respectively. | ||
- | (Loss) income from discontinued operations for the first and second quarters of 2008 includes non-cash charges for those business units that were expected to be divested at a loss of $43 million pre-tax ($.06 per common share, after tax) and $2 million pre-tax, respectively. | ||
- | Per common share amounts for the four quarters of 2008 do not total to the per common share amounts for the year, primarily due to the allocation of income to unvested stock awards. | ||
- | Income per common share amounts reflect the adoption of new Financial Accounting Standards Board (“FASB”) guidance regarding whether instruments granted in share-based transactions are participating securities which was effective January 1, 2009 and required retrospective application. |
Page 2
MASCO CORPORATION
Quarterly Segment Data — 2009
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Quarterly Segment Data — 2009
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 1,674 | $ | 426 | $ | 434 | $ | 419 | $ | 395 | ||||||||||
- Plumbing Products | 2,564 | 671 | 678 | 631 | 584 | |||||||||||||||
- Installation and Other Services | 1,256 | 295 | 332 | 312 | 317 | |||||||||||||||
- Decorative Architectural Products | 1,714 | 349 | 474 | 505 | 386 | |||||||||||||||
- Other Specialty Products | 584 | 157 | 166 | 146 | 115 | |||||||||||||||
-Total | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | ||||||||||
- North America | $ | 6,135 | $ | 1,441 | $ | 1,630 | $ | 1,630 | $ | 1,434 | ||||||||||
- International, principally Europe | 1,657 | 457 | 454 | 383 | 363 | |||||||||||||||
-Total, as above | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | ||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (21 | ) | $ | 9 | $ | (9 | ) | $ | (2 | ) | $ | (19 | ) | ||||||
- Plumbing Products | 295 | 80 | 99 | 78 | 38 | |||||||||||||||
- Installation and Other Services | (107 | ) | (25 | ) | (27 | ) | (27 | ) | (28 | ) | ||||||||||
- Decorative Architectural Products | 376 | 62 | 123 | 116 | 75 | |||||||||||||||
- Other Specialty Products | 27 | 8 | 16 | 8 | (5 | ) | ||||||||||||||
-Total | $ | 570 | $ | 134 | $ | 202 | $ | 173 | $ | 61 | ||||||||||
- North America | $ | 394 | $ | 75 | $ | 139 | $ | 141 | $ | 39 | ||||||||||
- International, principally Europe | 176 | 59 | 63 | 32 | 22 | |||||||||||||||
-Total, as above | $ | 570 | $ | 134 | $ | 202 | $ | 173 | $ | 61 | ||||||||||
General Corporate Expense (GCE), Net | 136 | 42 | 36 | 27 | 31 | |||||||||||||||
Accelerated Stock Compensation Expense | 6 | — | — | 6 | — | |||||||||||||||
Loss on Corporate Fixed Assets, Net | 2 | — | — | 2 | — | |||||||||||||||
Charge for Litigation Settlement | 7 | — | 7 | — | — | |||||||||||||||
Charge for Defined-Benefit Plan Curtailment | 8 | — | — | — | 8 | |||||||||||||||
Operating Profit (after GCE and Adjustments) | 411 | 92 | 159 | 138 | 22 | |||||||||||||||
Other Income (Expense), Net | (206 | ) | (49 | ) | (49 | ) | (49 | ) | (59 | ) | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes | $ | 205 | $ | 43 | $ | 110 | $ | 89 | $ | (37 | ) | |||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -1.3 | % | 2.1 | % | -2.1 | % | -0.5 | % | -4.8 | % | ||||||||||
- Plumbing Products | 11.5 | % | 11.9 | % | 14.6 | % | 12.4 | % | 6.5 | % | ||||||||||
- Installation and Other Services | -8.5 | % | -8.5 | % | -8.1 | % | -8.7 | % | -8.8 | % | ||||||||||
- Decorative Architectural Products | 21.9 | % | 17.8 | % | 25.9 | % | 23.0 | % | 19.4 | % | ||||||||||
- Other Specialty Products | 4.6 | % | 5.1 | % | 9.6 | % | 5.5 | % | -4.3 | % | ||||||||||
-Total | 7.3 | % | 7.1 | % | 9.7 | % | 8.6 | % | 3.4 | % | ||||||||||
- North America | 6.4 | % | 5.2 | % | 8.5 | % | 8.7 | % | 2.7 | % | ||||||||||
- International, principally Europe | 10.6 | % | 12.9 | % | 13.9 | % | 8.4 | % | 6.1 | % | ||||||||||
-Total, as above | 7.3 | % | 7.1 | % | 9.7 | % | 8.6 | % | 3.4 | % |
Notes:
– | Data exclude discontinued operations. | |
– | Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined-benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement. | |
– | See 2009 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 5. |
Page 3
MASCO CORPORATION
Quarterly Segment Data — 2009
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Quarterly Segment Data — 2009
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 1,674 | $ | 426 | $ | 434 | $ | 419 | $ | 395 | ||||||||||
- Plumbing Products | 2,564 | 671 | 678 | 631 | 584 | |||||||||||||||
- Installation and Other Services | 1,256 | 295 | 332 | 312 | 317 | |||||||||||||||
- Decorative Architectural Products | 1,714 | 349 | 474 | 505 | 386 | |||||||||||||||
- Other Specialty Products | 584 | 157 | 166 | 146 | 115 | |||||||||||||||
-Total | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | ||||||||||
- North America | $ | 6,135 | $ | 1,441 | $ | 1,630 | $ | 1,630 | $ | 1,434 | ||||||||||
- International, principally Europe | 1,657 | 457 | 454 | 383 | 363 | |||||||||||||||
-Total, as above | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | ||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (64 | ) | $ | (8 | ) | $ | (16 | ) | $ | (12 | ) | $ | (28 | ) | |||||
- Plumbing Products | 237 | 35 | 93 | 74 | 35 | |||||||||||||||
- Installation and Other Services | (131 | ) | (27 | ) | (34 | ) | (34 | ) | (36 | ) | ||||||||||
- Decorative Architectural Products | 375 | 62 | 122 | 116 | 75 | |||||||||||||||
- Other Specialty Products | (199 | ) | (215 | ) | 16 | 7 | (7 | ) | ||||||||||||
-Total | $ | 218 | $ | (153 | ) | $ | 181 | $ | 151 | $ | 39 | |||||||||
- North America | $ | 93 | $ | (168 | ) | $ | 123 | $ | 119 | $ | 19 | |||||||||
- International, principally Europe | 125 | 15 | 58 | 32 | 20 | |||||||||||||||
-Total, as above | $ | 218 | $ | (153 | ) | $ | 181 | $ | 151 | $ | 39 | |||||||||
�� | ||||||||||||||||||||
General Corporate Expense (GCE), Net | 140 | 44 | 36 | 27 | 33 | |||||||||||||||
Accelerated Stock Compensation Expense | 6 | — | — | 6 | — | |||||||||||||||
Loss on Corporate Fixed Assets, Net | 2 | — | — | 2 | — | |||||||||||||||
Charge for Litigation Settlement | 7 | — | 7 | — | — | |||||||||||||||
Charge for Defined-Benefit Plan Curtailment | 8 | — | — | — | 8 | |||||||||||||||
Operating (Loss) Profit (after GCE and Adjustments) | 55 | (197 | ) | 138 | 116 | (2 | ) | |||||||||||||
Other Income (Expense), Net | (206 | ) | (49 | ) | (49 | ) | (49 | ) | (59 | ) | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes | $ | (151 | ) | $ | (246 | ) | $ | 89 | $ | 67 | $ | (61 | ) | |||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -3.8 | % | -1.9 | % | -3.7 | % | -2.9 | % | -7.1 | % | ||||||||||
- Plumbing Products | 9.2 | % | 5.2 | % | 13.7 | % | 11.7 | % | 6.0 | % | ||||||||||
- Installation and Other Services | -10.4 | % | -9.2 | % | -10.2 | % | -10.9 | % | -11.4 | % | ||||||||||
- Decorative Architectural Products | 21.9 | % | 17.8 | % | 25.7 | % | 23.0 | % | 19.4 | % | ||||||||||
- Other Specialty Products | -34.1 | % | -136.9 | % | 9.6 | % | 4.8 | % | -6.1 | % | ||||||||||
-Total | 2.8 | % | -8.1 | % | 8.7 | % | 7.5 | % | 2.2 | % | ||||||||||
- North America | 1.5 | % | -11.7 | % | 7.5 | % | 7.3 | % | 1.3 | % | ||||||||||
- International, principally Europe | 7.5 | % | 3.3 | % | 12.8 | % | 8.4 | % | 5.5 | % | ||||||||||
-Total, as above | 2.8 | % | -8.1 | % | 8.7 | % | 7.5 | % | 2.2 | % |
Notes:
– | Data exclude discontinued operations. | |
– | Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement. | |
– | See 2009 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 5. |
Page 4
MASCO CORPORATION
Quarterly Segment Data — 2009
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(in millions)
Quarterly Segment Data — 2009
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Business Rationalizations & Other Initiatives | ||||||||||||||||||||
- Cabinets and Related Products | $ | 43 | $ | 17 | $ | 7 | $ | 10 | $ | 9 | ||||||||||
- Plumbing Products | 19 | 6 | 6 | 4 | 3 | |||||||||||||||
- Installation and Other Services | 24 | 2 | 7 | 7 | 8 | |||||||||||||||
- Decorative Architectural Products | 1 | — | 1 | — | — | |||||||||||||||
- Other Specialty Products | 3 | — | — | 1 | 2 | |||||||||||||||
-Total | $ | 90 | $ | 25 | $ | 21 | $ | 22 | $ | 22 | ||||||||||
- North America | $ | 78 | $ | 20 | $ | 16 | $ | 22 | $ | 20 | ||||||||||
- International, principally Europe | 12 | 5 | 5 | — | 2 | |||||||||||||||
-Total, as above | $ | 90 | $ | 25 | $ | 21 | $ | 22 | $ | 22 | ||||||||||
General Corporate Expense (GCE), Net | 4 | 2 | — | — | 2 | |||||||||||||||
-Total | $ | 94 | $ | 27 | $ | 21 | $ | 22 | $ | 24 | ||||||||||
Goodwill and Other Intangible Assets Impairment | ||||||||||||||||||||
- Cabinets and Related Products | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | 39 | 39 | — | — | — | |||||||||||||||
- Installation and Other Services | — | — | — | — | — | |||||||||||||||
- Decorative Architectural Products | — | — | — | — | — | |||||||||||||||
- Other Specialty Products | 223 | 223 | — | — | — | |||||||||||||||
-Total | $ | 262 | $ | 262 | $ | — | $ | — | $ | — | ||||||||||
- North America | $ | 223 | $ | 223 | $ | — | $ | — | $ | — | ||||||||||
- International, principally Europe | 39 | 39 | — | — | — | |||||||||||||||
-Total, as above | $ | 262 | $ | 262 | $ | — | $ | — | $ | — | ||||||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives. |
Page 5
MASCO CORPORATION
Quarterly Segment Data — 2008
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Quarterly Segment Data — 2008
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 2,276 | $ | 488 | $ | 584 | $ | 608 | $ | 596 | ||||||||||
- Plumbing Products | 3,002 | 612 | 778 | 824 | 788 | |||||||||||||||
- Installation and Other Services | 1,861 | 375 | 492 | 508 | 486 | |||||||||||||||
- Decorative Architectural Products | 1,629 | 328 | 446 | 476 | 379 | |||||||||||||||
- Other Specialty Products | 716 | 153 | 201 | 194 | 168 | |||||||||||||||
-Total | $ | 9,484 | $ | 1,956 | $ | 2,501 | $ | 2,610 | $ | 2,417 | ||||||||||
- North America | $ | 7,482 | $ | 1,547 | $ | 1,975 | $ | 2,067 | $ | 1,893 | ||||||||||
- International, principally Europe | 2,002 | 409 | 526 | 543 | 524 | |||||||||||||||
-Total, as above | $ | 9,484 | $ | 1,956 | $ | 2,501 | $ | 2,610 | $ | 2,417 | ||||||||||
Operating Profit (Loss): | ||||||||||||||||||||
- Cabinets and Related Products | $ | 86 | $ | (12 | ) | $ | 29 | $ | 40 | $ | 29 | |||||||||
- Plumbing Products | 336 | 22 | 101 | 111 | 102 | |||||||||||||||
- Installation and Other Services | 21 | 3 | 11 | 8 | (1 | ) | ||||||||||||||
- Decorative Architectural Products | 301 | 42 | 95 | 90 | 74 | |||||||||||||||
- Other Specialty Products | 37 | (1 | ) | 17 | 13 | 8 | ||||||||||||||
-Total | $ | 781 | $ | 54 | $ | 253 | $ | 262 | $ | 212 | ||||||||||
- North America | $ | 602 | $ | 38 | $ | 200 | $ | 207 | $ | 157 | ||||||||||
- International, principally Europe | 179 | 16 | 53 | 55 | 55 | |||||||||||||||
-Total, as above | $ | 781 | $ | 54 | $ | 253 | $ | 262 | $ | 212 | ||||||||||
General Corporate Expense (GCE), Net | 137 | 32 | 32 | 30 | 43 | |||||||||||||||
(Gain) on Sales of Corporate Fixed Assets, Net | — | — | — | — | — | |||||||||||||||
Charge for Litigation Settlement | 9 | — | 9 | — | — | |||||||||||||||
Operating Profit (after GCE and Adjustments) | 635 | 22 | 212 | 232 | 169 | |||||||||||||||
Other Income (Expense), Net | (283 | ) | (87 | ) | (56 | ) | (56 | ) | (84 | ) | ||||||||||
Income (Loss) from Continuing Operations before Income Taxes | $ | 352 | $ | (65 | ) | $ | 156 | $ | 176 | $ | 85 | |||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 3.8 | % | -2.5 | % | 5.0 | % | 6.6 | % | 4.9 | % | ||||||||||
- Plumbing Products | 11.2 | % | 3.6 | % | 13.0 | % | 13.5 | % | 12.9 | % | ||||||||||
- Installation and Other Services | 1.1 | % | 0.8 | % | 2.2 | % | 1.6 | % | -0.2 | % | ||||||||||
- Decorative Architectural Products | 18.5 | % | 12.8 | % | 21.3 | % | 18.9 | % | 19.5 | % | ||||||||||
- Other Specialty Products | 5.2 | % | -0.7 | % | 8.5 | % | 6.7 | % | 4.8 | % | ||||||||||
-Total | 8.2 | % | 2.8 | % | 10.1 | % | 10.0 | % | 8.8 | % | ||||||||||
- North America | 8.0 | % | 2.5 | % | 10.1 | % | 10.0 | % | 8.3 | % | ||||||||||
- International, principally Europe | 8.9 | % | 3.9 | % | 10.1 | % | 10.1 | % | 10.5 | % | ||||||||||
-Total, as above | 8.2 | % | 2.8 | % | 10.1 | % | 10.0 | % | 8.8 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets and charge for litigation settlement. | |
- | See 2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 8. |
Page 6
MASCO CORPORATION
Quarterly Segment Data — 2008
Including Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Quarterly Segment Data — 2008
Including Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 2,276 | $ | 488 | $ | 584 | $ | 608 | $ | 596 | ||||||||||
- Plumbing Products | 3,002 | 612 | 778 | 824 | 788 | |||||||||||||||
- Installation and Other Services | 1,861 | 375 | 492 | 508 | 486 | |||||||||||||||
- Decorative Architectural Products | 1,629 | 328 | 446 | 476 | 379 | |||||||||||||||
- Other Specialty Products | 716 | 153 | 201 | 194 | 168 | |||||||||||||||
-Total | $ | 9,484 | $ | 1,956 | $ | 2,501 | $ | 2,610 | $ | 2,417 | ||||||||||
- North America | $ | 7,482 | $ | 1,547 | $ | 1,975 | $ | 2,067 | $ | 1,893 | ||||||||||
- International, principally Europe | 2,002 | 409 | 526 | 543 | 524 | |||||||||||||||
-Total, as above | $ | 9,484 | $ | 1,956 | $ | 2,501 | $ | 2,610 | $ | 2,417 | ||||||||||
Operating Profit (Loss): | ||||||||||||||||||||
- Cabinets and Related Products | $ | 4 | $ | (84 | ) | $ | 23 | $ | 37 | $ | 28 | |||||||||
- Plumbing Products | 110 | (193 | ) | 95 | 109 | 99 | ||||||||||||||
- Installation and Other Services | (46 | ) | (54 | ) | 10 | 4 | (6 | ) | ||||||||||||
- Decorative Architectural Products | 299 | 42 | 94 | 89 | 74 | |||||||||||||||
- Other Specialty Products | (124 | ) | (161 | ) | 16 | 13 | 8 | |||||||||||||
-Total | $ | 243 | $ | (450 | ) | $ | 238 | $ | 252 | $ | 203 | |||||||||
- North America | $ | 493 | $ | (49 | ) | $ | 193 | $ | 200 | $ | 149 | |||||||||
- International, principally Europe | (250 | ) | (401 | ) | 45 | 52 | 54 | |||||||||||||
-Total, as above | $ | 243 | $ | (450 | ) | $ | 238 | $ | 252 | $ | 203 | |||||||||
General Corporate Expense (GCE), Net | 144 | 34 | 32 | 35 | 43 | |||||||||||||||
(Gain) on Sales of Corporate Fixed Assets, Net | — | — | — | — | — | |||||||||||||||
Charge for Litigation Settlement | 9 | — | 9 | — | — | |||||||||||||||
Operating Profit (Loss) (after GCE and Adjustments) | 90 | (484 | ) | 197 | 217 | 160 | ||||||||||||||
Other Income (Expense), Net | (283 | ) | (87 | ) | (56 | ) | (56 | ) | (84 | ) | ||||||||||
(Loss) Income from Continuing Operations before Income Taxes | $ | (193 | ) | $ | (571 | ) | $ | 141 | $ | 161 | $ | 76 | ||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 0.2 | % | -17.2 | % | 3.9 | % | 6.1 | % | 4.7 | % | ||||||||||
- Plumbing Products | 3.7 | % | -31.5 | % | 12.2 | % | 13.2 | % | 12.6 | % | ||||||||||
- Installation and Other Services | -2.5 | % | -14.4 | % | 2.0 | % | 0.8 | % | -1.2 | % | ||||||||||
- Decorative Architectural Products | 18.4 | % | 12.8 | % | 21.1 | % | 18.7 | % | 19.5 | % | ||||||||||
- Other Specialty Products | -17.3 | % | -105.2 | % | 8.0 | % | 6.7 | % | 4.8 | % | ||||||||||
-Total | 2.6 | % | -23.0 | % | 9.5 | % | 9.7 | % | 8.4 | % | ||||||||||
- North America | 6.6 | % | -3.2 | % | 9.8 | % | 9.7 | % | 7.9 | % | ||||||||||
- International, principally Europe | -12.5 | % | -98.0 | % | 8.6 | % | 9.6 | % | 10.3 | % | ||||||||||
-Total, as above | 2.6 | % | -23.0 | % | 9.5 | % | 9.7 | % | 8.4 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit (loss) and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets and charge for litigation settlement. | |
- | See 2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 8. |
Page 7
MASCO CORPORATION
Quarterly Segment Data — 2008
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Quarterly Segment Data — 2008
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Business Rationalizations & Other Initiatives | ||||||||||||||||||||
- Cabinets and Related Products | $ | 23 | $ | 13 | $ | 6 | $ | 3 | $ | 1 | ||||||||||
- Plumbing Products | 23 | 12 | 6 | 2 | 3 | |||||||||||||||
- Installation and Other Services | 15 | 5 | 1 | 4 | 5 | |||||||||||||||
- Decorative Architectural Products | 2 | — | 1 | 1 | — | |||||||||||||||
- Other Specialty Products | 8 | 7 | 1 | — | — | |||||||||||||||
-Total | $ | 71 | $ | 37 | $ | 15 | $ | 10 | $ | 9 | ||||||||||
- North America | $ | 47 | $ | 25 | $ | 7 | $ | 7 | $ | 8 | ||||||||||
- International, principally Europe | 24 | 12 | 8 | 3 | 1 | |||||||||||||||
-Total, as above | $ | 71 | $ | 37 | $ | 15 | $ | 10 | $ | 9 | ||||||||||
General Corporate Expense (GCE), Net | 7 | 2 | — | 5 | — | |||||||||||||||
-Total | $ | 78 | $ | 39 | $ | 15 | $ | 15 | $ | 9 | ||||||||||
Goodwill and Other Intangible Assets Impairment | ||||||||||||||||||||
- Cabinets and Related Products | $ | 59 | $ | 59 | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | 203 | 203 | — | — | — | |||||||||||||||
- Installation and Other Services | 52 | 52 | — | — | — | |||||||||||||||
- Decorative Architectural Products | — | — | — | — | — | |||||||||||||||
- Other Specialty Products | 153 | 153 | — | — | — | |||||||||||||||
-Total | $ | 467 | $ | 467 | $ | — | $ | — | $ | — | ||||||||||
- North America | $ | 62 | $ | 62 | $ | — | $ | — | $ | — | ||||||||||
- International, principally Europe | 405 | 405 | — | — | — | |||||||||||||||
-Total, as above | $ | 467 | $ | 467 | $ | — | $ | — | $ | — | ||||||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives. |
Page 8
MASCO CORPORATION
Other Income (Expense), Net
2009 & 2008 — by Quarter — Unaudited
(in millions)
Other Income (Expense), Net
2009 & 2008 — by Quarter — Unaudited
(in millions)
2009 | 2008 | |||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||||||
Interest Expense | $ | (225 | ) | $ | (56 | ) | $ | (56 | ) | $ | (57 | ) | $ | (56 | ) | $ | (228 | ) | $ | (56 | ) | $ | (59 | ) | $ | (57 | ) | $ | (56 | ) | ||||||||||
Income from Cash and Cash Investments | 7 | 1 | 2 | 1 | 3 | 22 | 5 | 6 | 5 | 6 | ||||||||||||||||||||||||||||||
Other Interest Income | 2 | 1 | 1 | — | — | 2 | 1 | 1 | — | — | ||||||||||||||||||||||||||||||
Realized Gains (Losses) from Financial Investments, Net | 3 | 3 | — | — | — | 1 | 1 | — | 3 | (3 | ) | |||||||||||||||||||||||||||||
Impairment Charges for Financial Investments | (10 | ) | — | (7 | ) | (3 | ) | (58 | ) | (28 | ) | (1 | ) | (3 | ) | (26 | ) | |||||||||||||||||||||||
Other, Net | 17 | 2 | 4 | 14 | (3 | ) | (22 | ) | (10 | ) | (3 | ) | (4 | ) | (5 | ) | ||||||||||||||||||||||||
Total Other Income (Expense), Net | $ | (206 | ) | $ | (49 | ) | $ | (49 | ) | $ | (49 | ) | $ | (59 | ) | $ | (283 | ) | $ | (87 | ) | $ | (56 | ) | $ | (56 | ) | $ | (84 | ) | ||||||||||
Notes:
– | Data exclude discontinued operations. | |
– | Other, Net, includes currency (losses) gains of ($2) million, $11 million, $5 million, and $3 million for the first, second, third and fourth quarters of 2009, respectively. | |
– | Other, Net, includes currency (losses) of ($10) million, ($5) million, ($3) million, and ($11) million for the first, second, third and fourth quarters of 2008, respectively. |
Page 9
MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 1,413 | $ | 1,028 | ||||
Receivables | 983 | 999 | ||||||
Prepaid Expenses and Other | 312 | 332 | ||||||
Inventories | 743 | 941 | ||||||
Total Current Assets | 3,451 | 3,300 | ||||||
Property and Equipment, Net | 1,981 | 2,136 | ||||||
Goodwill | 3,108 | 3,371 | ||||||
Other Intangible Assets, Net | 290 | 299 | ||||||
Other Assets | 345 | 377 | ||||||
Total Assets | $ | 9,175 | $ | 9,483 | ||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Notes Payable | $ | 364 | $ | 71 | ||||
Accounts Payable | 578 | 531 | ||||||
Accrued Liabilities | 839 | 945 | ||||||
Total Current Liabilities | 1,781 | 1,547 | ||||||
Long-Term Debt | 3,604 | 3,915 | ||||||
Deferred Income Taxes and Other | 973 | 1,040 | ||||||
Total Liabilities | 6,358 | 6,502 | ||||||
Shareholders’ Equity | 2,817 | 2,981 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 9,175 | $ | 9,483 | ||||
Page10
MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation — Unaudited
(dollars in millions)
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation — Unaudited
(dollars in millions)
Three Months Ended | ||||||||||||
December 31, | ||||||||||||
2009 | 2008 | %D | ||||||||||
Net Sales, As Reported | $ | 1,898 | $ | 1,956 | -3 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (49 | ) | — | |||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,849 | $ | 1,956 | -5 | % | ||||||
North America Net Sales, As Reported | $ | 1,441 | $ | 1,547 | -7 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (7 | ) | — | |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,434 | $ | 1,547 | -7 | % | ||||||
International Net Sales, As Reported | $ | 457 | $ | 409 | 12 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (42 | ) | — | |||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 415 | $ | 409 | 1 | % | ||||||
Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2009 | 2008 | %D | ||||||||||
As Reported | $ | 7,792 | $ | 9,484 | -18 | % | ||||||
- Acquisitions | (9 | ) | — | |||||||||
- Currency Translation | 151 | — | ||||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 7,934 | $ | 9,484 | -16 | % | ||||||
�� | ||||||||||||
North America Net Sales, As Reported | $ | 6,135 | $ | 7,482 | -18 | % | ||||||
- Acquisitions | (9 | ) | — | |||||||||
- Currency Translation | 14 | — | ||||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 6,140 | $ | 7,482 | -18 | % | ||||||
International Net Sales, As Reported | $ | 1,657 | $ | 2,002 | -17 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 137 | — | ||||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,794 | $ | 2,002 | -10 | % | ||||||
Notes:
– | Data exclude discontinued operations. | |
– | The Company presents information comparing results from one period to another excluding the results of businesses acquired in order to assess the performance of the underlying businesses and to assess to what extent acquisitions are driving growth. | |
– | The Company also presents information comparing results of International operations from one period to another using constant exchange rates. To present this information, current period results for foreign entities are converted into U.S. dollars using the prior period’s exchange rates, rather than exchange rates for the current period. The Company presents this information in order to assess how the underlying businesses performed local currencies before taking into account currency fluctuations. | |
– | The currency translation effect on North American net sales includes currency translation related to Canadian business units. |
Page 11
MASCO CORPORATION
GAAP Reconciliation of Operating Profit and Margins — Unaudited
(dollars in millions)
GAAP Reconciliation of Operating Profit and Margins — Unaudited
(dollars in millions)
Three Months Ended December 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | (197 | ) | -10.4 | % | $ | (484 | ) | -24.7 | % | ||||||
Impairment Charges for Goodwill and Other Intangible Assets | 262 | 467 | ||||||||||||||
Business Rationalizations and Other Initiatives | 27 | 39 | ||||||||||||||
Charge for Litigation Settlement | — | — | ||||||||||||||
Charge for Defined-Benefit Plan Curtailment | — | — | ||||||||||||||
Operating Profit, As Reconciled | $ | 92 | 4.8 | % | $ | 22 | 1.1 | % | ||||||||
Twelve Months Ended December 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 55 | 0.7 | % | $ | 90 | 0.9 | % | ||||||||
Impairment Charges for Goodwill and Other Intangible Assets | 262 | 467 | ||||||||||||||
Business Rationalizations and Other Initiatives | 94 | 78 | ||||||||||||||
Charge for Litigation Settlement | 7 | 9 | ||||||||||||||
Charge for Defined-Benefit Plan Curtailment | 8 | — | ||||||||||||||
Operating Profit, As Reconciled | $ | 426 | 5.5 | % | $ | 644 | 6.8 | % | ||||||||
Notes:
– | Data exclude discontinued operations. | |
– | The Company believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. |
Page 12
MASCO CORORATION
GAAP Reconciliation of Operating (Loss) Profit and Shareholders’ Equity — Unaudited
(in millions)
GAAP Reconciliation of Operating (Loss) Profit and Shareholders’ Equity — Unaudited
(in millions)
Twelve | ||||
Months Ended | ||||
December 31, | ||||
2009 | ||||
Operating (Loss) Profit, As Reported | $ | 55 | ||
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations | 262 | |||
Charge for Defined-Benefit Plan Curtailment | 8 | |||
Charge for Litigation Settlement | 7 | |||
Operating Profit, As Reconciled | $ | 332 | ||
Twelve Months Ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Shareholders’ Equity, As Reported | $ | 2,817 | $ | 2,981 | ||||
Impairment Charges for Goodwill and Other Intangible Assets (after tax) | 180 | 445 | ||||||
Charge for Defined-Benefit Plan Curtailment (after tax) | 5 | — | ||||||
Charge for Litigation Settlement (after tax) | 4 | 6 | ||||||
Shareholders’ Equity, As Reconciled | $ | 3,006 | $ | 3,432 | ||||
Notes:
– | Data exclude discontinued operations. | |
– | The Company believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. | |
– | This information is provided as detail for the calculation of return on invested capital (“ROIC”) which is calculated as after-tax operating profit (last twelve months, as reconciled) divided by the total of average debt (net of average cash) and average shareholders’ equity. |
Page 13
Masco Corporation
Reconciliation for Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
Fourth Quarter and Full-Year 2009 and 2008
Reconciliation for Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
Fourth Quarter and Full-Year 2009 and 2008
Q4-2009 | 12/31/09 — Full Year | |||||||||||||||||||||||
As | Less: GW | As | As | Less: GW | As | |||||||||||||||||||
Reported | Impairment | Reconciled | Reported | Impairment | Reconciled | |||||||||||||||||||
Net Sales | $ | 1,898 | $ | 1,898 | $ | 7,792 | $ | 7,792 | ||||||||||||||||
Cost of Sales | 1,403 | 1,403 | 5,774 | 5,774 | ||||||||||||||||||||
Gross Profit | 495 | — | 495 | 2,018 | — | 2,018 | ||||||||||||||||||
Selling, general and administrative expenses | 692 | (262 | ) | 430 | 1,955 | (262 | ) | 1,693 | ||||||||||||||||
Charge for defined benefit plan curtailment | — | — | — | 8 | — | 8 | ||||||||||||||||||
Operating Profit (Loss) | (197 | ) | 262 | 65 | 55 | 262 | 317 | |||||||||||||||||
Other income (expense), net | (49 | ) | — | (49 | ) | (206 | ) | — | (206 | ) | ||||||||||||||
(Loss) Income from continuing operations before income taxes | (246 | ) | 262 | 16 | (151 | ) | 262 | 111 | ||||||||||||||||
Income tax (benefit) expense | (84 | ) | 82 | (2 | ) | (49 | ) | 82 | 33 | |||||||||||||||
(Loss) Income from continuing operations | (162 | ) | 180 | 18 | (102 | ) | 180 | 78 | ||||||||||||||||
(Loss) income from discontinued operations, net | (12 | ) | (12 | ) | (43 | ) | (43 | ) | ||||||||||||||||
Net (Loss) Income | (174 | ) | 180 | 6 | (145 | ) | 180 | 35 | ||||||||||||||||
Less: Net income attributable to noncontrolling interest | (11 | ) | — | (11 | ) | (38 | ) | — | (38 | ) | ||||||||||||||
Net (Loss) Income Attributable to Masco Corporation | $ | (185 | ) | $ | 180 | $ | (5 | ) | $ | (183 | ) | $ | 180 | $ | (3 | ) | ||||||||
Earnings (loss) per common share attributable to Masco Corporation (diluted): | ||||||||||||||||||||||||
Income (Loss) from continuing operations | $ | (0.49 | ) | $ | 0.51 | $ | 0.02 | $ | (0.41 | ) | $ | 0.51 | $ | 0.11 | ||||||||||
Income (Loss) from discontinued operations | (0.03 | ) | — | (0.03 | ) | (0.12 | ) | — | (0.12 | ) | ||||||||||||||
Net income (Loss) | $ | (0.53 | ) | $ | 0.51 | $ | (0.01 | ) | $ | (0.53 | ) | $ | 0.51 | $ | (0.01 | ) | ||||||||
Average diluted common shares outstanding | 352 | 352 | 352 | 351 | 351 | 351 | ||||||||||||||||||
Note: Earnings per common share may not add due to rounding and allocation to participating securitites.
Page 14