Document and Entity Information
Document and Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | Apr. 28, 2010
| Jun. 30, 2009
| |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MASCO CORP /DE/ | ||
Entity Central Index Key | 0000062996 | ||
Document Type | 10-Q | ||
Document Period End Date | 2010-03-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $3,338,607,000 | ||
Entity Common Stock, Shares Outstanding (actual number) | 358,700,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current assets: | ||
Cash and cash investments | $1,378 | $1,413 |
Receivables | 1,147 | 983 |
Prepaid expenses and other | 310 | 312 |
Inventories: | ||
Finished goods | 430 | 405 |
Raw material | 266 | 247 |
Work in process | 109 | 91 |
Total Inventories | 805 | 743 |
Total current assets | 3,640 | 3,451 |
Property and equipment, net | 1,920 | 1,981 |
Goodwill | 3,095 | 3,108 |
Other intangible assets, net | 286 | 290 |
Other assets | 345 | 345 |
Total assets | 9,286 | 9,175 |
Current liabilities: | ||
Notes payable | 66 | 364 |
Accounts payable | 673 | 578 |
Accrued liabilities | 777 | 839 |
Total current liabilities | 1,516 | 1,781 |
Long-term debt | 4,100 | 3,604 |
Deferred income taxes and other | 967 | 973 |
Total liabilities | 6,583 | 6,358 |
Commitments and contingencies | ||
Masco Corporation's shareholders' equity: | ||
Common shares, par value $1 per share, Authorized shares: 1,400,000,000; issued and outstanding: 2010 - 348,100,000; 2009 - 350,400,000 | 348 | 350 |
Preferred shares authorized: 1,000,000; issued and outstanding: 2010 - None; 2009 - None | 0 | 0 |
Paid-in capital | 8 | 42 |
Retained earnings | 1,837 | 1,871 |
Accumulated other comprehensive income | 325 | 366 |
Total Masco Corporation's shareholders' equity | 2,518 | 2,629 |
Noncontrolling interest | 185 | 188 |
Total equity | 2,703 | 2,817 |
Total liabilities and equity | $9,286 | $9,175 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) | ||
Mar. 31, 2010
| Dec. 31, 2009
| |
Masco Corporation's shareholders' equity: | ||
Common shares, par value | 1 | 1 |
Common shares, shares authorized | 1,400,000,000 | 1,400,000,000 |
Common shares, shares issued | 348,100,000 | 350,400,000 |
Common shares, shares outstanding | 348,100,000 | 350,400,000 |
Preferred shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Condensed Consolidated Statements of Income [Abstract] | ||
Net sales | $1,852 | $1,797 |
Cost of sales | 1,360 | 1,384 |
Gross profit | 492 | 413 |
Selling, general and administrative expenses | 414 | 407 |
Charge for defined-benefit plan curtailment | 8 | |
Operating profit (loss) | 78 | (2) |
Other income (expense), net: | ||
Interest expense | (58) | (56) |
Impairment charges for financial investments | (3) | |
Other, net | 2 | |
Total Other income (expense), net | (56) | (59) |
Income (loss) from continuing operations before income taxes | 22 | (61) |
Income taxes | 18 | 17 |
Income (loss) from continuing operations | 4 | (78) |
Income from discontinued operations, net | 4 | |
Net income (loss) | 4 | (74) |
Less: Net income attributable to noncontrolling interest | (11) | (7) |
Net (loss) attributable to Masco Corporation | (7) | (81) |
Basic: | ||
(Loss) from continuing operations | -0.02 | -0.24 |
Income from discontinued operations, net | 0.01 | |
Net (loss) income | -0.02 | -0.23 |
Diluted: | ||
(Loss) from continuing operations | -0.02 | -0.24 |
Income from discontinued operations, net | 0.01 | |
Net (loss) income | -0.02 | -0.23 |
Amounts attributable to Masco Corporation: | ||
(Loss) from continuing operations | (7) | (85) |
Income from discontinued operations, net | 4 | |
Net (loss) income | ($7) | ($81) |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | ||
Cash provided by operations | $92 | $53 |
(Increase) in receivables | (180) | (156) |
(Increase) decrease in inventories | (72) | 30 |
Increase in accounts payable and accrued liabilities, net | 40 | 25 |
Net cash for operating activities | (120) | (48) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | ||
Increase in debt | 2 | 1 |
Payment of debt | (1) | (3) |
Issuance of Notes, net of issuance costs | 494 | |
Retirement of Notes | (300) | |
Purchase of Company common stock | (45) | (11) |
Cash dividends paid | (27) | (85) |
Net cash from (for) financing activities | 123 | (98) |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | ||
Capital expenditures | (26) | (27) |
Proceeds from disposition of: | ||
Marketable securities | 3 | |
Other financial investments, net | 1 | 3 |
Property and equipment | 3 | |
Acquisition of businesses, net of cash acquired | (8) | |
Other, net | (6) | (9) |
Net cash for investing activities | (28) | (38) |
Effect of exchange rate changes on cash and cash investments | (10) | (31) |
CASH AND CASH INVESTMENTS: | ||
Decrease for the period | (35) | (215) |
At January 1 | 1,413 | 1,028 |
At March 31 | $1,378 | $813 |
Accounting Policies
Accounting Policies | |
3 Months Ended
Mar. 31, 2010 | |
Accounting Policies [Abstract] | |
Accounting Policies | A. Accounting Policies In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to present fairly its financial position as at March31, 2010 and the results of operations for the three months ended March31, 2010 and 2009 and cash flows for the three months ended March31, 2010 and 2009. The condensed consolidated balance sheet at December31, 2009 was derived from audited financial statements. Certain prior-year amounts have been reclassified to conform to the 2010 presentation in the condensed consolidated financial statements. The results of operations related to 2009 discontinued operations have been separately stated in the accompanying condensed consolidated statements of income for the three months ended March31, 2009. In the Companys condensed consolidated statements of cash flows for the three months ended March31, 2009, cash flows of discontinued operations are not separately classified. Recently Issued Accounting Pronouncements Effective January1, 2010, the Company adopted new FASB guidance regarding how a company determines when an entity is insufficiently capitalized or is not controlled through voting and should be consolidated. The adoption of this guidance did not have any impact on the Companys consolidated financial condition and results of operations. |
Discontinued Operations
Discontinued Operations | |
3 Months Ended
Mar. 31, 2010 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | B. Discontinued Operations The Company has accounted for 2009 dispositions as discontinued operations. Selected financial information for these discontinued operations was as follows, in millions: Three Months Ended March 31, 2009 Net sales $ 22 (Loss) from discontinued operations $ (4 ) Loss before income tax (4 ) Income tax benefit 8 Income from discontinued operations, net $ 4 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
3 Months Ended
Mar. 31, 2010 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | C. Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill for the three months ended March31, 2010, by segment, were as follows, in millions: Gross Goodwill Accumulated Net Goodwill At Impairment at Mar. 31, 2010 Losses Mar. 31, 2010 Cabinets and Related Products $ 587 $ (364 ) $ 223 Plumbing Products 537 (340 ) 197 Installation and Other Services 1,819 (51 ) 1,768 Decorative Architectural Products 294 294 Other Specialty Products 980 (367 ) 613 Total $ 4,217 $ (1,122 ) $ 3,095 Gross Goodwill Accumulated Net Goodwill At Impairment at At Dec. 31, 2009 Losses Dec. 31, 2009 Other(A) Mar. 31, 2010 Cabinets and Related Products $ 590 $ (364 ) $ 226 $ (3 ) $ 223 Plumbing Products 547 (340 ) 207 (10 ) 197 Installation and Other Services 1,819 (51 ) 1,768 1,768 Decorative Architectural Products 294 294 294 Other Specialty Products 980 (367 ) 613 613 Total $ 4,230 $ (1,122 ) $ 3,108 $ (13 ) $ 3,095 (A) Other principally includes the effect of foreign currency translation. Other indefinite-lived intangible assets were $195million and $196million at March31, 2010 and December31, 2009, respectively, and principally included registered trademarks. The carrying value of the Companys definite-lived intangible assets was $91million (net of accumulated amortization of $69million) at March31, 2010 and $94million (net of accumulated amortization of $67million) at December31, 2009, and principally included customer relationships and non-compete agreements. |
Depreciation and Amortization E
Depreciation and Amortization Expense | |
3 Months Ended
Mar. 31, 2010 | |
Depreciation and Amortization Expense [Abstract] | |
Depreciation and Amortization Expense | D. Depreciation and Amortization Expense Depreciation and amortization expense was $60million and $62million, respectively, for the three months ended March31, 2010 and 2009. |
Fair Value of Financial Investm
Fair Value of Financial Investments and Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value of Financial Investments and Liabilities [Abstract] | |
Fair Value of Financial Investments and Liabilities | E. Fair Value of Financial Investments and Liabilities The Company has maintained investments in available-for-sale securities and a number of private equity funds, principally as part of its tax planning strategies, as any gains enhance the utilization of any current and future tax capital losses. Financial investments included in other assets were as follows, in millions: March 31, December 31, 2010 2009 Asahi Tec Corporation preferred stock $ 71 $ 71 Auction rate securities 22 22 TriMas Corporation common stock 16 17 Total recurring investments 109 110 Private equity funds 122 123 Other investments 9 9 Total non-recurring investments 131 132 Total $ 240 $ 242 The Companys investments in available-for-sale securities at March31, 2010 and December31, 2009 were as follows, in millions: Pre-tax Unrealized Unrealized Recorded Cost Basis Gains Losses Basis March31, 2010 $ 71 $ 38 $ $ 109 December31, 2009 $ 71 $ 39 $ $ 110 Recurring Fair Value Measurements. Financial assets and (liabilities)measured at fair value on a recurring basis at each reporting period and the amounts for each level within the fair value hierarchy were as follows, in millions: Fair Value Measurements Using Significant Quoted Other Significant Market Observable Unobservable Mar. 31, Prices Inputs Inputs 2010 (Level 1) (Level 2) (Level 3) Asahi Tec Corporation: Preferred stock $ 71 $ $ $ 71 Auction rate securities 22 22 TriMas Corporation 16 16 Total $ 109 $ 16 $ $ 93 Fair Value Measurements Using Significant Quoted Other Significant Market Observable Unobservable Dec. 31, Prices Inputs Inputs 2009 (Level 1) (Level 2) (Level 3) Asahi Tec Corporation: Preferred stock $ 71 $ $ $ 71 Auction rate securities 22 22 TriMas Corporation 17 17 Total $ 110 $ 17 $ $ 93 The Company did not have any transfers between Level 1 and Level 2 financial assets in the first quarter of 2010 or in the full-year 2009. The fair value of the auction rate securities held by the Company have been estimated, on a recurring basis, using a discounted cash flow model (Level 3 input). The significant inputs in the discounted cash flow model used to value the auction rate securities include: expected maturity of auction rate securities, discount |
Derivatives
Derivatives | |
3 Months Ended
Mar. 31, 2010 | |
Derivatives [Abstract] | |
Derivatives | F. Derivatives During 2010 and 2009, the Company entered into foreign currency exchange contracts to hedge currency fluctuations related to intercompany loans denominated in non-functional currencies. At March31, 2010, the Company had recorded gains of $4million on the foreign currency exchange contracts, which is partially offset by losses related to the translation of loans and accounts denominated in non-functional currencies. At December31, 2009, the Company had no recorded asset or liability related to foreign currency exchange contracts. Gains (losses) related to these contracts are recorded in the Companys consolidated statements of income in other income (expense), net. For the three months ended March31, 2010 and 2009, the Company had recorded gains (losses)of $4million and $(1) million, respectively, related to these foreign currency exchange contracts. During 2010 and 2009, the Company, including certain European operations, also entered into foreign currency forward contracts to manage a portion of its exposure to currency fluctuations in the European euro and the U.S. dollar. Based upon period-end market prices, the Company had recorded liabilities of $(2) million and $(1) million to reflect contract prices at March31, 2010 and December31, 2009, respectively. Gains (losses)related to these contracts are recorded in the Companys consolidated statements of income in other income (expense), net. For the three months ended March31, 2010 and 2009, the Company had recorded gains (losses)of $(1) million and $1million, respectively, related to these foreign currency exchange contracts. The fair value of these derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs). In the event that the counterparties fail to meet the terms of the foreign currency forward contracts, the Companys exposure is limited to the aggregate foreign currency rate differential with such institutions. |
Warranty
Warranty | |
3 Months Ended
Mar. 31, 2010 | |
Warranty [Abstract] | |
Warranty | G. Warranty Changes in the Companys warranty liability were as follows, in millions: Three Months Ended Twelve Months Ended March 31, 2010 December 31, 2009 Balance at January 1 $ 109 $ 119 Accruals for warranties issued during the period 7 32 Accruals related to pre-existing warranties 1 5 Settlements made (in cash or kind) during the period (10 ) (44 ) Other, net (1 ) (3 ) Balance at end of period $ 106 $ 109 |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Debt [Abstract] | |
Debt | H. Debt At March31, 2010 and December31, 2009, there were outstanding $108million principal amount of Zero Coupon Convertible Senior Notes due 2031, with an accreted value of $56million and $55million, respectively. The Company retired $300million of floating rate notes on March12, 2010, the scheduled maturity date. On March10, 2010, the Company issued $500million of 7.125% notes (Notes) due March15, 2020. The Notes are senior indebtedness and are redeemable at the Companys option. The Amended Five-Year Revolving Credit Agreement contains a requirement for maintaining a certain level of net worth; at March31, 2010, the Companys net worth exceeded such requirement by $900million. Under the terms of the Amended Five-Year Revolving Credit Agreement, any outstanding Letters of Credit reduce the Companys borrowing capacity. At March31, 2010, the Company had $82million of unused Letters of Credit. The Amended Five-Year Revolving Credit Agreement also contains limitations on additional borrowings, based on the relationship of debt to total capitalization requirements; at March31, 2010, the Company had additional borrowing capacity, subject to availability, of up to $1.2billion. Alternatively, at March31, 2010, the Company could absorb a reduction to shareholders equity of approximately $650million, and remain in compliance with the debt to total capitalization covenant. In order to borrow under the Amended Five-Year Revolving Credit Agreement, there must not be any defaults in the Companys covenants in the credit agreement (i.e., in addition to the two financial covenants, principally limitations on subsidiary debt, negative pledge restrictions, legal compliance requirements and maintenance of insurance) and the Companys representations and warranties in the credit agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, in each case since December31, 2008, no material ERISA or environmental non-compliance and no material tax deficiency). At March31, 2010 and December31, 2009, the Company was in compliance with the requirements of the Amended Five-Year Revolving Credit Facility. |
Stock-Based Compensation
Stock-Based Compensation | |
3 Months Ended
Mar. 31, 2010 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | I. Stock-Based Compensation The Companys 2005 Long Term Stock Incentive Plan (the 2005 Plan) provides for the issuance of stock-based incentives in various forms to employees and non-employee Directors of the Company. At March31, 2010, outstanding stock-based incentives were in the form of long-term stock awards, stock options, phantom stock awards and stock appreciation rights. Pre-tax compensation expense and the related income tax benefit, for these stock-based incentives, were as follows, in millions: Three months ended March 31, 2010 2009 Long-term stock awards $ 10 $ 8 Stock options 5 7 Phantom stock awards and stock appreciation rights 3 Total $ 18 $ 15 Income tax benefit $ 7 $ 6 Long-Term Stock Awards Long-term stock awards are granted to key employees and non-employee Directors of the Company and do not cause net share dilution inasmuch as the Company continues the practice of repurchasing and retiring an equal number of shares on the open market. Stock awards granted prior to January1, 2010 have a typical vesting period of 10years. Stock awards granted subsequent to January1, 2010 have a vesting period of 5years. The Companys long-term stock award activity was as follows, shares in millions: Three Months Ended March 31, 2010 2009 Unvested stock award shares at January 1 9 8 Weighted average grant date fair value $ 21 $ 26 Stock award shares granted 3 2 Weighted average grant date fair value $ 14 $ 8 Stock award shares vested 1 1 Weighted average grant date fair value $ 23 $ 26 Stock award shares forfeited Weighted average grant date fair value $ 19 $ 27 Unvested stock award shares at March 31 11 9 Weighted average grant date fair value $ 19 $ 22 At March31, 2010 and 2009, there was $158million and $160million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of six years and seven years, respectively. The total market value (at the vesting date) of stock award shares which vested during the three months ended March31, 2010 and 2009 was $17million and $11million, respectively. Stock Options Stock options are granted to key employees and non-employee Directors of the Company. The exercise price equals the market price of the Companys common stock at the grant date. These options generally become exercisable (vest ratably) over five years beginning on the first anniversary from the date of grant and expire no later than 10years after the grant date. The Company granted 5,185,100 of stock option shares in the three months ended March31, 2010 with a grant date exercise price approximating $14 per share. During the first quarter of 2010, 2,222,000 stock option shares were forfeited (including op |
Employee Retirement Plans
Employee Retirement Plans | |
3 Months Ended
Mar. 31, 2010 | |
Employee Retirement Plans [Abstract] | |
Employee Retirement Plans | J. Employee Retirement Plans The Company sponsors qualified defined-benefit and defined-contribution retirement plans for most of its employees. In addition to the Companys qualified defined-benefit pension plans, the Company has unfunded non-qualified defined-benefit pension plans covering certain employees, which provide for benefits in addition to those provided by the qualified pension plans. Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Organization and Compensation Committee of the Board of Directors. Net periodic pension cost for the Companys defined-benefit pension plans was as follows, in millions: Three Months ended March 31, 2010 2009 Qualified Non-Qualified Qualified Non-Qualified Service cost $ 1 $ $ 4 $ Interest cost 11 2 11 2 Expected return on plan assets (8 ) (8 ) Amortization of prior service cost 1 Recognized curtailment loss 3 5 Amortization of net loss 2 5 Net periodic pension cost $ 6 $ 2 $ 15 $ 8 Assumptions Major assumptions used in accounting for the Companys defined-benefit pension plans were as follows: December 31, 2009 2008 Discount rate for obligations 5.8 % 6.1 % Expected return on plan assets 8.0 % 8.0 % Discount rate for net periodic pension cost 6.1 % 6.25 % The discount rate for obligations was based upon the expected duration of each defined-benefit pension plans liabilities matched to the widely used Citigroup Pension Discount Curve and Liability Index for December31, 2009. Such rates for the Companys defined benefit pension plans ranged from 2.60percent to 6.25percent, with the most significant portion of the liabilities having a discount rate for obligations of 5.60percent or higher at December31, 2009. The decline in the weighted average discount rate to 5.8percent in 2009 from 6.1 percent in 2008 was principally the result of the variation in long-term rates which were highly volatile at the end of 2008 compared to 2009, for the Citigroup Pension Discount Curve, and the freezing of all future benefit accruals under substantially all of the Companys domestic qualified and non-qualified defined-benefit plans, which shortened the period of future pension payments. The decrease in the discount rate increased our projected benefit obligation by approximately $29million. The Company determined the expected long-term rate of return on plan assets of 8percent based upon an analysis of expected and historical rates of return of various asset classes utilizing the current and long-term target asset allocation of the plan assets. The projected asset return at December31, 2009 also considered near term returns, including current market conditions and also that pension assets are |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | |
3 Months Ended
Mar. 31, 2010 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | K. Accumulated Other Comprehensive Income The components of accumulated other comprehensive income attributable to Masco Corporation were as follows, in millions: Three Months Ended Year Ended March 31, 2010 December 31, 2009 Cumulative translation adjustments $ 504 $ 546 Unrealized gain on marketable securities, net 24 25 Unrecognized prior service cost and net loss, net (203 ) (205 ) Accumulated other comprehensive income $ 325 $ 366 The components of accumulated other comprehensive attributable to noncontrolling interest were as follows, in millions: Three Months Ended Year Ended March 31, 2010 December 31, 2009 Cumulative translation adjustments $ 17 $ 31 Unrealized gain on marketable securities, net Unrecognized prior service cost and net loss, net Accumulated other comprehensive income $ 17 $ 31 The Companys total comprehensive income was as follows, in millions: Three Months Ended Three Months Ended March 31, 2010 March 31, 2009 Attributable to Noncontrolling Attributable to Noncontrolling Masco Corporation Interest Masco Corporation Interest Net (loss)income $ (7 ) $ 11 $ (81 ) $ 7 Other comprehensive income: Cumulative translation adjustments, net (42 ) (14 ) (68 ) (11 ) Unrealized (loss)gain on marketable securities, net (1 ) 2 Prior service cost and net loss, net 2 62 Total comprehensive (loss) $ (48 ) $ (3 ) $ (85 ) $ (4 ) The unrealized (loss)gain on marketable securities, net, is net of income tax of $3million for the three months ended March31, 2009. The prior service cost and net loss, net, is net of income tax of $1million and $36million for the three months ended March31, 2010 and 2009, respectively. On the basis of amounts paid (declared), cash dividends per common share were $.075 ($.075) and $.235 ($.075) for the three months ended March31, 2010 and 2009, respectively. |
Segment Information
Segment Information | |
3 Months Ended
Mar. 31, 2010 | |
Segment Information [Abstract] | |
Segment Information | L. Segment Information Information about the Company by segment and geographic area was as follows, in millions: Three Months Ended March 31, 2010 2009 2010 2009 Net Sales(A) Operating Profit (Loss) The Companys operations by segment were: Cabinets and Related Products $ 403 $ 395 $ (15 ) $ (28 ) Plumbing Products 663 584 84 35 Installation and Other Services 273 317 (42 ) (36 ) Decorative Architectural Products 389 386 87 75 Other Specialty Products 124 115 (6 ) (7 ) Total $ 1,852 $ 1,797 $ 108 $ 39 The Companys operations by geographic area were: North America $ 1,430 $ 1,434 $ 64 $ 19 International, principally Europe 422 363 44 20 Total $ 1,852 $ 1,797 108 39 General corporate expense, net (30 ) (33 ) Charge for defined-benefit plan curtailment (B) (8 ) Operating profit (loss) 78 (2 ) Other income (expense), net (56 ) (59 ) Income (loss)from continuing operations before income taxes $ 22 $ (61 ) (A) Inter-segment sales were not material. (B) In March2009, the Company recognized a curtailment loss related to the plan to freeze all future benefit accruals beginning January1, 2010 under substantially all of the Companys domestic qualified and non-qualified defined-benefit pension plans. |
Other Income
Other Income (Expense), Net | |
3 Months Ended
Mar. 31, 2010 | |
Other Income (Expense), Net [Abstract] | |
Other Income (Expense), Net | M. Other Income (Expense), Net Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended March 31, 2010 2009 Income from cash and cash investments $ 1 $ 3 Other items, net 1 (3 ) Total other, net $ 2 $ Other items, net, included $1million and $2million of currency losses for the three months ended March31, 2010 and 2009, respectively. |
Earning Per Common Share
Earning Per Common Share | |
3 Months Ended
Mar. 31, 2010 | |
Earning Per Common Share [Abstract] | |
Earnings Per Common Share | N. Earnings Per Common Share Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: Three Months Ended March 31, 2010 2009 Numerator (basic and diluted): (Loss) from continuing operations $ (7 ) $ (85 ) Dividends on restricted stock awards (1 ) (1 ) (Loss) from continuing operations attributable to common shareholders $ (8 ) $ (86 ) Income from discontinued operations, net 4 Net (loss)available to common shareholders $ (8 ) $ (82 ) Denominator: Basic common shares (based upon weighted average) 350 351 Add: Contingent common shares Stock option dilution Diluted common shares 350 351 For the three months ended March31, 2010 and 2009, the Company allocated dividends to the unvested restricted stock awards (participating securities). At March31, 2010 and 2009, the Company did not include any common shares related to the Zero Coupon Convertible Senior Notes (Notes) in the calculation of diluted earnings per common share, as the price of the Companys common stock at March31, 2010 and 2009 did not exceed the equivalent accreted value of the Notes. Additionally, 39million common shares and 37million common shares for the three months ended March31, 2010 and 2009, respectively, related to stock options were excluded from the computation of diluted earnings per common share due to their antidilutive effect. In the first three months of 2010, the Company granted three million shares of long-term stock awards. In the first three months of 2010, the Company also repurchased and retired approximately three million shares of Company common stock, for cash aggregating $45million to offset the dilutive impact of these long-term stock awards. At March31, 2010, the Company had 27million shares of its common stock remaining under the July2007 Board of Directors repurchase authorization. |
Other Commitments and Contingen
Other Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Other Commitments and Contingencies [Abstract] | |
Other Commitments and Contingencies | O. Other Commitments and Contingencies The Company is subject to lawsuits and pending or asserted claims with respect to matters generally arising in the ordinary course of business. As previously disclosed, a lawsuit has been brought against the Company and a number of its insulation installation companies in the federal court in Atlanta, Georgia alleging that certain practices violate provisions of the federal antitrust laws. In February2009, the federal court in Atlanta certified a class of 377 insulation contractors. Two additional lawsuits, seeking class action status and alleging anticompetitive conduct, were filed against the Company and a number of its insulation suppliers. One of these lawsuits has been dismissed with prejudice and, with respect to the second lawsuit, which was originally filed in northern California and was subsequently transferred to Atlanta, Georgia, the Court has recently administratively stayed the case. The Company is vigorously defending the pending cases. Based upon the advice of its outside counsel, the Company believes that the conduct of the Company and its insulation installation companies, which has been the subject of the above-described lawsuits, has not violated any antitrust laws. The Company is unable at this time to reliably estimate any potential liability which might occur from an adverse judgment. There cannot be any assurance that the Company will ultimately prevail in the remaining lawsuits, or, if unsuccessful, that the ultimate liability would not be material and would not have a material adverse effect on its businesses or the methods used by its insulation installation companies in doing business. As previously disclosed, European governmental authorities are investigating possible anticompetitive business practices relating to the plumbing and heating industries in Europe. The investigations involve a number of European companies, including certain of the Companys European manufacturing divisions and a number of other large businesses. The Company believes that it will not incur material liability as a result of the matters that are subject to these investigations. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes [Abstract] | |
Income Taxes | P. Income Taxes In the first quarter of 2010, the Companys effective tax rate was 82percent, resulting primarily from a $9million increase in the Companys liability for uncertain tax positions including interest and penalties, net of U.S. Federal tax benefit. This increase resulted primarily from changes in the tax environment related to certain activities performed in various jurisdictions that caused a re-measurement of this liability. As a result of tax audit closings, settlements and expiration of applicable statutes of limitations in various jurisdictions within the next 12months, the Company anticipates that it is reasonably possible that the liability for uncertain tax positions could be reduced by approximately $13million. |
Subsequent Event
Subsequent Event | |
3 Months Ended
Mar. 31, 2010 | |
Subsequent Event [Abstract] | |
Subsequent Event | Q. Subsequent Event Subsequent event. As previously announced in February2010, the Company is combining its Builder Cabinet Group and Retail Cabinet Group to form Masco Cabinetry. Masco Cabinetry continues to review its product offerings and has determined in late April that it will discontinue the manufacture of ready-to-assemble and other non-core in-stock assembled product lines as they are not consistent with Masco Cabinetrys strategy of growth through brand building and innovation. These product lines had aggregate annual sales of approximately $200million in 2009. The Company anticipates it will close two manufacturing facilities associated with these products in the first half of 2011. The Company expects to incur approximately $115million (principally recognized ratably over the next 15months) of pre-tax charges related to the anticipated plant closures including approximately $90million related to non-cash charges principally associated with property, plant and equipment and approximately $25million of other cash charges. |