![]() | FOR IMMEDIATE RELEASE |
Investor / Media Contact
Maria Duey
Vice President — Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
Maria Duey
Vice President — Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS THIRD QUARTER RESULTS
2010 Third Quarter Commentary
• | Sales decreased six percent to $2.0 billion. | ||
• | Excluding charges for business rationalizations and litigation, and with a normalized tax rate of 36 percent, our key financial measures were as follows, compared to the third quarter of 2009: |
• | Gross profit margins were 26.9 percent compared to 27.7 percent | ||
• | Operating profit margins were 7.2 percent compared to 8.0 percent | ||
• | Income, as adjusted, would have been $.11 per common share, compared to $.18 per common share. |
• | (Loss) income from continuing operations, as reported, was $(.02) per common share compared to $.14 per common share in the third quarter of 2009. | ||
• | Working capital, as a percent of sales, improved to 16.2 percent at September 30, 2010 compared to 17.3 percent at September 30, 2009. | ||
• | Cash was $1.5 billion at September 30, 2010. |
Taylor, Mich., (October 25, 2010) —Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended September 30, 2010 decreased six percent to $2.0 billion. North American sales and International sales each decreased six percent. In local currencies, International sales increased four percent compared with the third quarter of 2009.
“The slowing economic activity related to our markets, particularly consumer spending and new home construction in North America that we experienced late in the second quarter, continued into the third quarter of 2010. Four of our five product segments had sales declines compared to the third quarter of 2009. Our plumbing products segment was up modestly in sales, principally due to continued strong international results, as Hansgrohe continues to expand globally. Given the decline in sales, we were pleased with our performance from a profitability standpoint, as cost reductions partially offset the impact of volume declines and a less favorable relationship between selling prices and commodity costs compared to third quarter 2009,” said Masco’s CEO Tim Wadhams.
(Loss) income from continuing operations, as reported, was $(.02) per common share in the third quarter of 2010 compared to $.14 per common share in the third quarter of 2009.
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We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the third quarters of 2010 and 2009, we incurred costs and charges of $39 million pre-tax ($.07 per common share, after tax) and $21 million pre-tax ($.04 per common share, after tax), respectively, related to these initiatives.
Outlook 2010
Although we continue to be concerned about foreclosure activity and access to financing, we believe that housing starts will improve in 2010 from 554,000 units in 2009 and continue to believe that total starts will be in a range of 575,000 to 625,000 units. In addition, we anticipate that expenditures on repair and remodel activity will be challenged in the near-term, and that big-ticket items will continue to be deferred until general economic conditions, unemployment, consumer confidence, credit availability and home prices improve.
“We are confident that the long-term fundamentals for the new home construction and home improvement markets continue to be positive. However, it appears that the recovery in certain of our markets will be slower than previously anticipated. Given that, we will continue our intense focus on the things that we can control including driving the Masco Business System and aggressively managing our cost structure. We thank and appreciate our employees, world-wide, for their continued focus and dedication as we continue to address the challenging economic environment,” said Tim Wadhams.
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.
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 2010 third quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on October 25, 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 Tuesday, October 26, 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) 312-0395 (confirmation #6154441). The conference call will be webcast simultaneously on the Company’s Web site atwww.masco.com and supplemental material, including the financial data referred to on
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the call and a reconciliation of non-GAAP information provided on the call, will also be available on the 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 #6154441) approximately two hours after the end of the call and will continue through November 2, 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. See the exhibit that is included as part of this earnings release for a reconciliation of the non-GAAP performance measures contained herein. 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 Nine Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Three Months and Nine Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales | $ | 1,957 | $ | 2,084 | $ | 5,857 | $ | 5,894 | ||||||||
Cost of sales | 1,463 | 1,517 | 4,325 | 4,371 | ||||||||||||
Gross profit | 494 | 567 | 1,532 | 1,523 | ||||||||||||
Selling, general and administrative expenses | 392 | 429 | 1,233 | 1,263 | ||||||||||||
Charge for defined-benefit plan curtailment | — | — | — | 8 | ||||||||||||
Operating profit | 102 | 138 | 299 | 252 | ||||||||||||
Other income (expense), net | (64 | ) | (49 | ) | (223 | ) | (157 | ) | ||||||||
Income from continuing operations before income taxes | 38 | 89 | 76 | 95 | ||||||||||||
Income tax expense | 31 | 26 | 53 | 35 | ||||||||||||
Income from continuing operations | 7 | 63 | 23 | 60 | ||||||||||||
Loss from discontinued operations, net | — | (23 | ) | — | (31 | ) | ||||||||||
Net income | 7 | 40 | 23 | 29 | ||||||||||||
Less: Net income attributable to non-controlling interest | 12 | 12 | 32 | 27 | ||||||||||||
Net (loss) income attributable to Masco Corporation | $ | (5 | ) | $ | 28 | $ | (9 | ) | $ | 2 | ||||||
(Loss) earnings per common share attributable to Masco Corporation (diluted): | ||||||||||||||||
(Loss) income from continuing operations | $ | (0.02 | ) | $ | 0.14 | $ | (0.03 | ) | $ | 0.09 | ||||||
Loss from discontinued operations, net | — | (0.06 | ) | — | (0.09 | ) | ||||||||||
Net (loss) income attributable to Masco Corporation | $ | (0.02 | ) | $ | 0.08 | $ | (0.03 | ) | $ | 0.00 | ||||||
Average diluted common shares outstanding | 349 | 351 | 349 | 351 | ||||||||||||
Amounts attributable to Masco Corporation: | ||||||||||||||||
(Loss) income from continuing operations | $ | (5 | ) | $ | 51 | $ | (9 | ) | $ | 33 | ||||||
Loss from discontinued operations, net | — | (23 | ) | — | (31 | ) | ||||||||||
Net (loss) income attributable to Masco Corporation | $ | (5 | ) | $ | 28 | $ | (9 | ) | $ | 2 | ||||||
Page 1
MASCO CORPORATION
Gross Profit Margin and Operating Profit Margin Reconciliation
For the Three Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
Gross Profit Margin and Operating Profit Margin Reconciliation
For the Three Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
Three Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Sales | $ | 1,957 | $ | 2,084 | ||||
Gross profit, as reported | $ | 494 | $ | 567 | ||||
Rationalization charges | 32 | 10 | ||||||
Gross profit, as adjusted | $ | 526 | $ | 577 | ||||
Gross margin, as reported | 25.2 | % | 27.2 | % | ||||
Gross margin, as adjusted | 26.9 | % | 27.7 | % | ||||
Operating profit, as reported | $ | 102 | $ | 138 | ||||
Rationalization charges | 39 | 21 | ||||||
Litigation charge | — | 7 | ||||||
Operating profit, as adjusted | $ | 141 | $ | 166 | ||||
Operating margin, as reported | 5.2 | % | 6.6 | % | ||||
Operating margin, as adjusted | 7.2 | % | 8.0 | % |
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.
Exhibit Page 2
MASCO CORPORATION
EPS Reconciliation
For the Three Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
EPS Reconciliation
For the Three Months Ended September 30, 2010 and 2009
(In Millions, Except Per Common Share Data)
Three Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Income from continuing operations before income taxes — as reported | $ | 38 | $ | 89 | ||||
Rationalization charges | 39 | 21 | ||||||
One-time corporate charges | — | — | ||||||
Litigation charge | — | 7 | ||||||
Income from continuing operations before income taxes — as adjusted | 77 | 117 | ||||||
Tax at 36% rate | (28 | ) | (42 | ) | ||||
Less: Net income attributable to non-controlling interest | (12 | ) | (12 | ) | ||||
Net Income — as adjusted | $ | 37 | $ | 63 | ||||
Earnings per common share — as adjusted | $ | 0.11 | $ | 0.18 | ||||
Shares outstanding | 349 | 351 |
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.
Exhibit Page 3
Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2010 and 2009
(In Millions, Except Earnings Per Share)
Key Financial Data As Reported — Unaudited
Q3 — 2010 and 2009
(In Millions, Except Earnings Per Share)
Sales & Earnings | 9/30/2010 | 9/30/2009 | Change | |||||||||
Net Sales | $ | 1,957 | $ | 2,084 | -6 | % | ||||||
Operating Profit | $ | 102 | $ | 138 | N/A | |||||||
Operating Profit % of Net Sales | 5.2 | % | 6.6 | % | (140 | ) bps | ||||||
Other Income (Expense), Net | $ | (64 | ) | $ | (49 | ) | $ | (15 | ) | |||
Income Tax Expense | $ | 31 | $ | 26 | N/A | |||||||
(Loss) Income From Continuing Operations Attributable to Masco Corporation | $ | (5 | ) | $ | 28 | N/A | ||||||
Diluted EPS from Continuing Operations | $ | (0.02 | ) | $ | 0.14 | N/A |
Operating Expenses | 9/30/2010 | 9/30/2009 | Change | |||||||||
Cost of Sales | $ | 1,463 | $ | 1,517 | $ | (54 | ) | |||||
Gross Margin | 25.2 | % | 27.2 | % | (200 | ) bps | ||||||
SG&A Expenses (Including GCE) | $ | 392 | $ | 429 | $ | (37 | ) | |||||
SG&A as a % of net sales | 20.0 | % | 20.6 | % | 60 | bps | ||||||
General Corporate Expense (GCE) | $ | 27 | $ | 36 | $ | (9 | ) | |||||
General Corp Expense as a % of net sales | 1.4 | % | 1.7 | % | 30 | bps |
Business Segments | 9/30/2010 | 9/30/2009 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 357 | $ | 434 | -18 | % | ||||||
Operating (Loss) | $ | (61 | ) | $ | (16 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -17.1 | % | -3.7 | % | (1,340 | ) bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 686 | $ | 678 | 1 | % | ||||||
Operating Profit | $ | 97 | $ | 93 | N/A | |||||||
Operating Profit % of Net Sales | 14.1 | % | 13.7 | % | 40 | bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 292 | $ | 332 | -12 | % | ||||||
Operating (Loss) | $ | (22 | ) | $ | (34 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -7.5 | % | -10.2 | % | 270 | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 463 | $ | 474 | -2 | % | ||||||
Operating Profit | $ | 104 | $ | 122 | N/A | |||||||
Operating Profit % of Net Sales | 22.5 | % | 25.7 | % | (320 | ) bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 159 | $ | 166 | -4 | % | ||||||
Operating Profit | $ | 11 | $ | 16 | N/A | |||||||
Operating Profit % of Net Sales | 6.9 | % | 9.6 | % | (270 | ) bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 1,957 | $ | 2,084 | -6 | % | ||||||
Operating Profit | $ | 129 | $ | 181 | N/A | |||||||
Operating Profit % of Net Sales | 6.6 | % | 8.7 | % | (210 | ) bps | ||||||
Change in Key Retailer Sales | -4 | % | -4 | % |
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Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2010 and 2009
(In Millions, Except Earnings Per Share)
Key Financial Data As Reported — Unaudited
Q3 — 2010 and 2009
(In Millions, Except Earnings Per Share)
Business Regions | 9/30/2010 | 9/30/2009 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 1,528 | $ | 1,630 | -6 | % | ||||||
Operating Profit | $ | 79 | $ | 123 | N/A | |||||||
Operating Profit % of Net Sales | 5.2 | % | 7.5 | % | (230 | ) bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 429 | $ | 454 | -6 | % | ||||||
Operating Profit | $ | 50 | $ | 58 | N/A | |||||||
Operating Profit % of Net Sales | 11.7 | % | 12.8 | % | (110 | ) bps |
Other | 9/30/2010 | 9/30/2009 | ||||||
Dividend Payments | $ | 27 | $ | 27 | ||||
Cash Paid for Share Repurchases | $ | — | $ | — | ||||
Common Shares Repurchased | — | — | ||||||
CAPEX | $ | 26 | $ | 20 | ||||
Depreciation and Amortization | $ | 72 | $ | 62 | ||||
Average diluted common shares outstanding | 349 | 351 |
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Masco Corporation
Key Financial Data As Reported — Unaudited
Year-to-Date September 30, 2010 and 2009
(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Year-to-Date September 30, 2010 and 2009
(In Millions, Except Earnings Per Share and Working Capital Days)
Sales & Earnings | 9/30/2010 | 9/30/2009 | Change | |||||||||
Net Sales | $ | 5,857 | $ | 5,894 | -1 | % | ||||||
Operating Profit | $ | 299 | $ | 252 | N/A | |||||||
Operating Profit % of Net Sales | 5.1 | % | 4.3 | % | 80 | bps | ||||||
Other Income (Expense), Net | $ | (223 | ) | $ | (157 | ) | $ | (66 | ) | |||
Income Tax Expense | $ | 53 | $ | 35 | N/A | |||||||
(Loss) Income From Continuing Operations | ||||||||||||
Attributable to Masco Corporation | $ | (9 | ) | $ | 2 | N/A | ||||||
Diluted EPS from Continuing Operations | $ | (0.03 | ) | $ | 0.09 | N/A |
Operating Expenses | 9/30/2010 | 9/30/2009 | Change | |||||||||
Cost of Sales | $ | 4,325 | $ | 4,371 | $ | (46 | ) | |||||
Gross Margin | 26.2 | % | 25.8 | % | 40 | bps | ||||||
SG&A Expenses (Including GCE) | $ | 1,233 | $ | 1,263 | $ | (30 | ) | |||||
SG&A as a % of net sales | 21.1 | % | 21.4 | % | 30 | bps | ||||||
General Corporate Expense (GCE) | $ | 84 | $ | 96 | $ | (12 | ) | |||||
General Corp Expense as a % of net sales | 1.4 | % | 1.6 | % | 20 | bps |
Business Segments | 9/30/2010 | 9/30/2009 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 1,160 | $ | 1,248 | -7 | % | ||||||
Operating (Loss) | $ | (113 | ) | $ | (56 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -9.7 | % | -4.5 | % | (520) | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 2,031 | $ | 1,893 | 7 | % | ||||||
Operating Profit | $ | 267 | $ | 202 | N/A | |||||||
Operating Profit % of Net Sales | 13.1 | % | 10.7 | % | 240 | bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 874 | $ | 961 | -9 | % | ||||||
Operating (Loss) | $ | (87 | ) | $ | (104 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -10.0 | % | -10.8 | % | 80 | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 1,357 | $ | 1,365 | -1 | % | ||||||
Operating Profit | $ | 300 | $ | 313 | N/A | |||||||
Operating Profit % of Net Sales | 22.1 | % | 22.9 | % | (80) | bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 435 | $ | 427 | 2 | % | ||||||
Operating Profit | $ | 16 | $ | 16 | N/A | |||||||
Operating Profit % of Net Sales | 3.7 | % | 3.7 | % | - | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 5,857 | $ | 5,894 | -1 | % | ||||||
Operating Profit | $ | 383 | $ | 371 | N/A | |||||||
Operating Profit % of Net Sales | 6.5 | % | 6.3 | % | 20 | bps | ||||||
Change in Key Retailer Sales | -1 | % | -7 | % |
Page 6
Masco Corporation
Key Financial Data As Reported — Unaudited
Year-to-Date September 30, 2010 and 2009
(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Year-to-Date September 30, 2010 and 2009
(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions | 9/30/2010 | 9/30/2009 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 4,617 | $ | 4,694 | -2 | % | ||||||
Operating Profit | $ | 257 | $ | 261 | N/A | |||||||
Operating Profit % of Net Sales | 5.6 | % | 5.6 | % | - | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 1,240 | $ | 1,200 | 3 | % | ||||||
Operating Profit | $ | 126 | $ | 110 | N/A | |||||||
Operating Profit % of Net Sales | 10.2 | % | 9.2 | % | 100 | bps |
Working Capital | 9/30/2010 | 9/30/2009 | Change | |||||||||
Receivable Days | 49 | 50 | (1 | ) | ||||||||
Inventory Days | 53 | 50 | 3 | |||||||||
Payable Days | 51 | 49 | 2 | |||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 1,258 | $ | 1,368 | $ | (110 | ) | |||||
Working Capital as a % of Sales (As Reported TTM1) | 16.2 | % | 17.3 | % | 110 | bps |
Other | 9/30/2010 | 9/30/2009 | ||||||
Dividend Payments | $ | 81 | $ | 139 | ||||
Cash Paid for Share Repurchases2 | $ | 45 | $ | 11 | ||||
Common Shares Repurchased2 | 3 | 2 | ||||||
CAPEX | $ | 88 | $ | 70 | ||||
Depreciation and Amortization | $ | 209 | $ | 190 | ||||
Return on Invested Capital (As Reported TTM1) | 1.2 | % | -2.5 | % | ||||
Return on Invested Capital (As Reconciled TTM1) | 4.1 | % | 2.4 | % | ||||
Average diluted common shares outstanding | 349 | 351 |
Balance Sheet Information | 9/30/2010 | 12/31/2009 | ||||||
Long-Term Debt | $ | 4,036 | $ | 3,604 | ||||
Notes Payable | $ | 66 | $ | 364 | ||||
Total Debt | $ | 4,102 | $ | 3,968 | ||||
Shareholders’ Equity | $ | 2,700 | $ | 2,817 | ||||
Debt to Capital | 60 | % | 58 | % | ||||
Cash | $ | 1,537 | $ | 1,413 |
1 - | Trailing twelve months. | |
2 - | Common shares were repurchased to offset the effect of stock award grants in the first quarters of 2010 and 2009. |
Page 7
Masco Corporation — 3rd Quarter 2010
Page | |||
1 | Condensed Consolidated Statements of Operations - 2010 & 2009 by Quarter — Unaudited | ||
2 | Notes to Condensed Consolidated Statements of Operations - 2010 & 2009 by Quarter — Unaudited | ||
3 | 2010 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited | ||
4 | 2010 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited | ||
5 | 2010 Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited | ||
6 | 2009 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | ||
7 | 2009 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | ||
8 | 2009 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | ||
9 | Other Income (Expense), Net - 2010 & 2009 by Quarter — Unaudited | ||
10 | Condensed Consolidated Balance Sheets — Unaudited | ||
GAAP Reconciliations: | |||
11 | Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited | ||
12 | Operating Profit and Margins — Unaudited | ||
13 | Operating Profit and Shareholders’ Equity — Unaudited |
Index
MASCO CORPORATION
Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited
(dollars in millions, except per share data)
Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited
(dollars in millions, except per share data)
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||||||
Net Sales | $ | 1,957 | $ | 2,048 | $ | 1,852 | $ | 7,792 | $ | 1,898 | $ | 2,084 | $ | 2,013 | $ | 1,797 | ||||||||||||||||||||||||
Cost of Sales | 1,463 | 1,502 | 1,360 | 5,774 | 1,403 | 1,517 | 1,470 | 1,384 | ||||||||||||||||||||||||||||||||
Gross Profit | 494 | 546 | 492 | 2,018 | 495 | 567 | 543 | 413 | ||||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 25.2 | % | 26.7 | % | 26.6 | % | 25.9 | % | 26.1 | % | 27.2 | % | 27.0 | % | 23.0 | % | ||||||||||||||||||||||||
SG&A Expense (before lines 1, 2, 3, 4) | 365 | 400 | 384 | 1,546 | 386 | 386 | 400 | 374 | ||||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 18.7 | % | 19.5 | % | 20.7 | % | 19.8 | % | 20.3 | % | 18.5 | % | 19.9 | % | 20.8 | % | ||||||||||||||||||||||||
Operating Profit (before lines 1, 2, 3, 4) | 129 | 146 | 108 | 472 | 109 | 181 | 143 | 39 | ||||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 6.6 | % | 7.1 | % | 5.8 | % | 6.1 | % | 5.7 | % | 8.7 | % | 7.1 | % | 2.2 | % | ||||||||||||||||||||||||
1 General Corporate Expense (GCE), Net | 27 | 27 | 30 | 140 | 44 | 36 | 27 | 33 | ||||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (including lines 1,2,3,4) | 20.0 | % | 20.8 | % | 22.4 | % | 25.2 | % | 36.5 | % | 20.6 | % | 21.2 | % | 23.1 | % | ||||||||||||||||||||||||
2 Charge for Defined-Benefit Plan Curtailment | — | — | — | 8 | — | — | — | 8 | ||||||||||||||||||||||||||||||||
3 Charge for Litigation Settlement | — | — | — | 7 | — | 7 | — | — | ||||||||||||||||||||||||||||||||
4 Impairment Charges for Goodwill and Other Intangible Assets | — | — | — | 262 | 262 | — | — | — | ||||||||||||||||||||||||||||||||
Operating Profit (Loss) per F/S | $ | 102 | $ | 119 | $ | 78 | $ | 55 | $ | (197 | ) | $ | 138 | $ | 116 | $ | (2 | ) | ||||||||||||||||||||||
(Loss) Income Per Common Share Attributable to Masco Corporation (Diluted): | ||||||||||||||||||||||||||||||||||||||||
(Loss) Income from Continuing Operations | $ | (0.02 | ) | $ | 0.01 | $ | (0.02 | ) | $ | (0.41 | ) | $ | (0.49 | ) | $ | 0.14 | $ | 0.19 | $ | (0.24 | ) | |||||||||||||||||||
(Loss) Income from Discontinued Operations, Net | — | — | — | (0.12 | ) | (0.03 | ) | (0.06 | ) | (0.03 | ) | 0.01 | ||||||||||||||||||||||||||||
Net (Loss) Income | $ | (0.02 | ) | $ | 0.01 | $ | (0.02 | ) | $ | (0.53 | ) | $ | (0.53 | ) | $ | 0.08 | $ | 0.15 | $ | (0.23 | ) | |||||||||||||||||||
Please see page 2 for Notes.
Page 1
MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited
Notes To Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited
Notes:
- | Data exclude discontinued operations. | |
- | Operating results for the third quarter of 2010 include costs and charges related to business rationalizations and other initiatives of $39 million pre-tax ($.07 per common share, after tax). | |
- | Operating results for the second quarter of 2010 include costs and charges related to business rationalizations and other initiatives of $51 million pre-tax ($.09 per common share, after tax). | |
- | Operating results for the second quarter of 2010 include non-cash impairment charges for financial investments of $33 million pre-tax ($.06 per common share, after tax). | |
- | Operating results for the first quarter of 2010 include costs and charges related to business rationalizations and other initiatives of $14 million pre-tax ($.03 per common share, after tax). | |
- | 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. |
Page 2
MASCO CORPORATION
Quarterly Segment Data — 2010
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(dollars in millions)
Quarterly Segment Data — 2010
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 357 | $ | 400 | $ | 403 | ||||||||||||||
- Plumbing Products | 686 | 682 | 663 | |||||||||||||||||
- Installation and Other Services | 292 | 309 | 273 | |||||||||||||||||
- Decorative Architectural Products | 463 | 505 | 389 | |||||||||||||||||
- Other Specialty Products | 159 | 152 | 124 | |||||||||||||||||
-Total | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||
- North America | $ | 1,528 | $ | 1,659 | $ | 1,430 | ||||||||||||||
- International, principally Europe | 429 | 389 | 422 | |||||||||||||||||
-Total, as above | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (27 | ) | $ | 6 | $ | (4 | ) | ||||||||||||
- Plumbing Products | 100 | 92 | 85 | |||||||||||||||||
- Installation and Other Services | (20 | ) | (21 | ) | (40 | ) | ||||||||||||||
- Decorative Architectural Products | 104 | 109 | 87 | |||||||||||||||||
- Other Specialty Products | 11 | 11 | (6 | ) | ||||||||||||||||
-Total | $ | 168 | $ | 197 | $ | 122 | ||||||||||||||
- North America | $ | 116 | $ | 160 | $ | 76 | ||||||||||||||
- International, principally Europe | 52 | 37 | 46 | |||||||||||||||||
-Total, as above | $ | 168 | $ | 197 | $ | 122 | ||||||||||||||
General Corporate Expense (GCE), Net | 27 | 27 | 30 | |||||||||||||||||
Loss on Corporate Fixed Assets, Net | — | — | — | |||||||||||||||||
Charge for Litigation Settlement | — | — | — | |||||||||||||||||
Operating Profit (after GCE and Adjustments) | 141 | 170 | 92 | |||||||||||||||||
Other Income (Expense), Net | (64 | ) | (103 | ) | (56 | ) | ||||||||||||||
Income from Continuing Operations before Income Taxes | $ | 77 | $ | 67 | $ | 36 | ||||||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -7.6 | % | 1.5 | % | -1.0 | % | ||||||||||||||
- Plumbing Products | 14.6 | % | 13.5 | % | 12.8 | % | ||||||||||||||
- Installation and Other Services | -6.8 | % | -6.8 | % | -14.7 | % | ||||||||||||||
- Decorative Architectural Products | 22.5 | % | 21.6 | % | 22.4 | % | ||||||||||||||
- Other Specialty Products | 6.9 | % | 7.2 | % | -4.8 | % | ||||||||||||||
-Total | 8.6 | % | 9.6 | % | 6.6 | % | ||||||||||||||
- North America | 7.6 | % | 9.6 | % | 5.3 | % | ||||||||||||||
- International, principally Europe | 12.1 | % | 9.5 | % | 10.9 | % | ||||||||||||||
-Total, as above | 8.6 | % | 9.6 | % | 6.6 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2010 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.
Page 3
MASCO CORPORATION
Quarterly Segment Data — 2010
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
Quarterly Segment Data — 2010
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 357 | $ | 400 | $ | 403 | ||||||||||||||
- Plumbing Products | 686 | 682 | 663 | |||||||||||||||||
- Installation and Other Services | 292 | 309 | 273 | |||||||||||||||||
- Decorative Architectural Products | 463 | 505 | 389 | |||||||||||||||||
- Other Specialty Products | 159 | 152 | 124 | |||||||||||||||||
-Total | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||
- North America | $ | 1,528 | $ | 1,659 | $ | 1,430 | ||||||||||||||
- International, principally Europe | 429 | 389 | 422 | |||||||||||||||||
-Total, as above | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (61 | ) | $ | (37 | ) | $ | (15 | ) | |||||||||||
- Plumbing Products | 97 | 86 | 84 | |||||||||||||||||
- Installation and Other Services | (22 | ) | (23 | ) | (42 | ) | ||||||||||||||
- Decorative Architectural Products | 104 | 109 | 87 | |||||||||||||||||
- Other Specialty Products | 11 | 11 | (6 | ) | ||||||||||||||||
-Total | $ | 129 | $ | 146 | $ | 108 | ||||||||||||||
- North America | $ | 79 | $ | 114 | $ | 64 | ||||||||||||||
- International, principally Europe | 50 | 32 | 44 | |||||||||||||||||
-Total, as above | $ | 129 | $ | 146 | $ | 108 | ||||||||||||||
General Corporate Expense (GCE), Net | 27 | 27 | 30 | |||||||||||||||||
Loss on Corporate Fixed Assets, Net | — | — | — | |||||||||||||||||
Charge for Litigation Settlement | — | — | — | |||||||||||||||||
Operating Profit (after GCE and Adjustments) | 102 | 119 | 78 | |||||||||||||||||
Other Income (Expense), Net | (64 | ) | (103 | ) | (56 | ) | ||||||||||||||
Income from Continuing Operations before Income Taxes | $ | 38 | $ | 16 | $ | 22 | ||||||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -17.1 | % | -9.3 | % | -3.7 | % | ||||||||||||||
- Plumbing Products | 14.1 | % | 12.6 | % | 12.7 | % | ||||||||||||||
- Installation and Other Services | -7.5 | % | -7.4 | % | -15.4 | % | ||||||||||||||
- Decorative Architectural Products | 22.5 | % | 21.6 | % | 22.4 | % | ||||||||||||||
- Other Specialty Products | 6.9 | % | 7.2 | % | -4.8 | % | ||||||||||||||
-Total | 6.6 | % | 7.1 | % | 5.8 | % | ||||||||||||||
- North America | 5.2 | % | 6.9 | % | 4.5 | % | ||||||||||||||
- International, principally Europe | 11.7 | % | 8.2 | % | 10.4 | % | ||||||||||||||
-Total, as above | 6.6 | % | 7.1 | % | 5.8 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2010 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.
Page 4
MASCO CORPORATION
Quarterly Segment Data — 2010
Costs and Charges for Business Rationalizations and Other Initiatives
(in millions)
Quarterly Segment Data — 2010
Costs and Charges for Business Rationalizations and Other Initiatives
(in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Business Rationalizations & Other Initiatives | ||||||||||||||||||||
-Cabinets and Related Products | $ | 34 | $ | 43 | $ | 11 | ||||||||||||||
-Plumbing Products | 3 | 6 | 1 | |||||||||||||||||
-Installation and Other Services | 2 | 2 | 2 | |||||||||||||||||
-Decorative Architectural Products | — | — | — | |||||||||||||||||
-Other Specialty Products | — | — | — | |||||||||||||||||
-Total | $ | 39 | $ | 51 | $ | 14 | ||||||||||||||
-North America | $ | 37 | $ | 46 | $ | 12 | ||||||||||||||
-International, principally Europe | 2 | 5 | 2 | |||||||||||||||||
-Total, as above | $ | 39 | $ | 51 | $ | 14 | ||||||||||||||
General Corporate Expense (GCE), Net | — | — | — | |||||||||||||||||
-Total | $ | 39 | $ | 51 | $ | 14 | ||||||||||||||
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 — 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 — page 8.
Page 6
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 — page 8.
Page 7
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 8
MASCO CORPORATION
Other Income (Expense), Net
2010 & 2009 — by Quarter — Unaudited
(in millions)
Other Income (Expense), Net
2010 & 2009 — by Quarter — Unaudited
(in millions)
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||||||
Interest Expense | $ | (63 | ) | $ | (67 | ) | $ | (58 | ) | $ | (225 | ) | $ | (56 | ) | $ | (56 | ) | $ | (57 | ) | $ | (56 | ) | ||||||||||||||||
Income from Cash and Cash Investments | 2 | 1 | 1 | 7 | 1 | 2 | 1 | 3 | ||||||||||||||||||||||||||||||||
Other Interest Income | — | — | 1 | 2 | 1 | 1 | — | — | ||||||||||||||||||||||||||||||||
Realized Gains (Losses) from Financial Investments, Net | (3 | ) | 1 | — | 3 | 3 | — | — | — | |||||||||||||||||||||||||||||||
Impairment Charges for Financial Investments | — | (33 | ) | — | (10 | ) | — | — | (7 | ) | (3 | ) | ||||||||||||||||||||||||||||
Other, Net | — | (5 | ) | — | 17 | 2 | 4 | 14 | (3 | ) | ||||||||||||||||||||||||||||||
Total Other Income (Expense), Net | $ | — | $ | — | $ | (64 | ) | $ | (103 | ) | $ | (56 | ) | $ | (206 | ) | $ | (49 | ) | $ | (49 | ) | $ | (49 | ) | $ | (59 | ) | ||||||||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Other, Net, in 2010 includes currency (losses) gains of ($1) million, ($5) million and $4 million for the first, second and third quarters, respectively. | |
- | Other, Net, in 2009 includes currency (losses) gains of ($2) million, $11 million, $5 million, and $3 million for the first, second, third and fourth quarters, respectively. |
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MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 1,537 | $ | 1,413 | ||||
Receivables | 1,106 | 983 | ||||||
Prepaid Expenses and Other | 288 | 312 | ||||||
Inventories | 802 | 743 | ||||||
Total Current Assets | 3,733 | 3,451 | ||||||
Property and Equipment, Net | 1,838 | 1,981 | ||||||
Goodwill | 3,098 | 3,108 | ||||||
Other Intangible Assets, Net | 282 | 290 | ||||||
Other Assets | 302 | 345 | ||||||
Total Assets | $ | 9,253 | $ | 9,175 | ||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Notes Payable | $ | 66 | $ | 364 | ||||
Accounts Payable | 650 | 578 | ||||||
Accrued Liabilities | 842 | 839 | ||||||
Total Current Liabilities | 1,558 | 1,781 | ||||||
Long-Term Debt | 4,036 | 3,604 | ||||||
Deferred Income Taxes and Other | 959 | 973 | ||||||
Total Liabilities | 6,553 | 6,358 | ||||||
Shareholders’ Equity | 2,700 | 2,817 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 9,253 | $ | 9,175 | ||||
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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 | ||||||||||||
September 30, | ||||||||||||
2010 | 2009 | %D | ||||||||||
Net Sales, As Reported | $ | 1,957 | $ | 2,084 | -6 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 39 | — | ||||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,996 | $ | 2,084 | -4 | % | ||||||
North America Net Sales, As Reported | $ | 1,528 | $ | 1,630 | -6 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (3 | ) | — | |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,525 | $ | 1,630 | -6 | % | ||||||
International Net Sales, As Reported | $ | 429 | $ | 454 | -6 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 42 | — | ||||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 471 | $ | 454 | 4 | % | ||||||
Nine Months Ended | ||||||||||||
September 30, | ||||||||||||
2010 | 2009 | %D | ||||||||||
As Reported | $ | 5,857 | $ | 5,894 | -1 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 18 | — | ||||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 5,875 | $ | 5,894 | 0 | % | ||||||
North America Net Sales, As Reported | $ | 4,617 | $ | 4,694 | -2 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (20 | ) | — | |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 4,597 | $ | 4,694 | -2 | % | ||||||
International Net Sales, As Reported | $ | 1,240 | $ | 1,200 | 3 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 38 | — | ||||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,278 | $ | 1,200 | 6 | % | ||||||
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. |
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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 September 30, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 102 | 5.2 | % | $ | 138 | 6.6 | % | ||||||||
Impairment Charges for Goodwill and Other Intangible Assets | — | — | ||||||||||||||
Business Rationalizations and Other Initiatives | 39 | 21 | ||||||||||||||
Charge for Litigation Settlement | — | — | ||||||||||||||
Charge for Defined-Benefit Plan Curtailment | — | — | ||||||||||||||
Operating Profit, As Reconciled | $ | 141 | 7.2 | % | $ | 159 | 7.6 | % | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 299 | 5.1 | % | $ | 252 | 4.3 | % | ||||||||
Impairment Charges for Goodwill and Other Intangible Assets | — | — | ||||||||||||||
Business Rationalizations and Other Initiatives | 104 | 67 | ||||||||||||||
Charge for Litigation Settlement | — | 7 | ||||||||||||||
Charge for Defined-Benefit Plan Curtailment | — | 8 | ||||||||||||||
Operating Profit, As Reconciled | $ | 403 | 6.9 | % | $ | 334 | 5.7 | % | ||||||||
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 CORPORATION
GAAP Reconciliation of Operating Profit and Shareholders’ Equity — Unaudited
(in millions)
GAAP Reconciliation of Operating Profit and Shareholders’ Equity — Unaudited
(in millions)
Twelve | ||||
Months Ended | ||||
September 30, | ||||
2010 | ||||
Operating Profit, As Reported | $ | 102 | ||
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations | 262 | |||
Charge for Defined-Benefit Plan Curtailment | — | |||
Charge for Litigation Settlement | — | |||
Operating Profit, As Reconciled | $ | 364 | ||
Twelve Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Shareholders’ Equity, As Reported | $ | 2,700 | $ | 3,069 | ||||
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 | ||||||
Shareholders’ Equity, As Reconciled | $ | 2,880 | $ | 3,523 | ||||
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