FOR IMMEDIATE RELEASE | ||
Media Contact | Investor Contact | |
Sharon Rothwell | Maria Duey | |
Vice President — Corporate Affairs | Vice President — Investor Relations | |
313.792.6028 | 313.792.5500 | |
sharon_rothwell@mascohq.com | maria_duey@mascohq.com |
MASCO CORPORATION REPORTS SECOND QUARTER RESULTS AND AFFIRMS FULL-YEAR GUIDANCE
Second Quarter 2008
• | Net sales from continuing operations declined 15 percent to $2.6 billion. | ||
• | Income from continuing operations was $72 million or $.20 per common share. | ||
• | The Company returned $131 million to shareholders through share repurchases and dividends. | ||
• | Completed the sale of The Heating Group for net proceeds of $146 million. | ||
• | The Company had over $850 million of cash at June 30, 2008. |
Taylor, Mich., (July 29, 2008) —Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended June 30, 2008 declined 15 percent to $2.6 billion compared with $3.1 billion for the second quarter of 2007. North American sales declined 19 percent and International sales increased six percent. In local currencies, International sales declined six percent compared with the second quarter of 2007.
Income from continuing operations was $72 million or $.20 per common share and $182 million or $.49 per common share in the second quarters of 2008 and 2007, respectively.
The second quarter of 2008 results were adversely affected by significantly lower sales volume to the new home construction market and a continued decline in consumer spending for home improvement products.
The second quarter of 2008 was impacted by a higher tax rate (as previously communicated) which reduced earnings by $.05 per common share compared with the second quarter of 2007. The second quarter of 2008 results also included non-cash impairment charges for financial investments of $3 million pre-tax and currency losses of $5 million pre-tax which in aggregate, reduced the second quarter of 2008 earnings by $.01 per common share.
The second quarter of 2007 results included non-cash impairment charges related to financial investments of $10 million pre-tax ($.02 per common share, after tax).
The Company has been focused on the rationalization of its businesses, including sourcing programs, business consolidations, plant closures, headcount reductions and other initiatives. During the second quarters of 2008 and 2007, the Company incurred costs and charges of $15 million pre-tax ($.03 per common share, after tax) and $23 million pre-tax ($.04 per common share, after tax), respectively, related to these initiatives. Since late 2006, the Company has aggressively reduced its cost structure including closing 11 manufacturing facilities, reducing headcount by 17,000 (which approximates 30 percent of its North American workforce) and reducing installation branches by over 25 percent.
As previously disclosed, in the first quarter of 2008, the Company determined that several European business units were not core to the Company’s long-term growth strategy and, accordingly, embarked on a plan of disposition. During the second quarter of 2008, the Company completed the sale of The Heating Group for net proceeds of $146 million; the remaining dispositions are expected to be completed by the end of the first quarter of 2009.
Business conditions remain difficult in the Company’s markets. The Company continues to estimate that 2008 housing starts will decline to a range of 900,000 to one million units, compared to 1.3 million units in 2007. In the first half of 2008, housing starts declined 30 percent from 2007. The Company also anticipates that consumer spending for home improvement products and demand for certain of the Company’s International products will not improve from the depressed levels experienced in the first half of the year. As a result, the Company continues to estimate that its 2008 percentage sales decline will be low-double digits to mid-teens compared to 2007.
While forecasting future business conditions in the current uncertain economic environment remains challenging, the Company continues to estimate that 2008 earnings will be in a range of $.50 to $.65 per common share. The Company also estimates that free cash flow (cash from operations, after capital expenditures and before dividends) will continue to be strong and approximate $640 million.
The Company’s guidance also reflects increasingly competitive market conditions for its services and products and increasing costs for freight and logistics and for certain materials, including commodities impacted by energy costs.
The Company’s guidance includes the Company’s estimate that its full-year tax rate will approximate 48 to 49 percent (due to the U.S. tax on the anticipated repatriation of low-taxed foreign earnings to utilize favorable provisions of the U.S. tax law) which, compared to the Company’s normalized tax rate of approximately 36 percent, will reduce earnings by approximately $.17 per common share. The Company estimates that its tax rate on income from continuing operations for 2009 will approximate 35 to 36 percent.
The Company’s guidance includes impairment charges for financial investments and currency losses incurred in the first half of 2008 which, together with the expected increase in the tax rate, decrease full-year estimated earnings by approximately $.25 per common share, net.
Additional information about the Company is contained in the Company’s filings with the SEC and is available on Masco’s website.
2
Although the Company expects market conditions in its industry, over the next several quarters, to be very challenging, the Company is confident that the long-term fundamentals for the new home construction and home improvement products markets are positive. The Company believes that its current strategy of dividend increases and share repurchases, concentrating on organic growth, improving returns and generating superior cash flow, together with the leveraging of the combined market strength of its retail service, distribution and installation capabilities, brands and scale, will allow Masco to continue to drive long-term growth and value for its 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 Company is providing an Earnings Presentation, in a PDF format, on its website by 9:00 a.m. ET, July 29, 2008, that can be viewed as part of the conference call. Please refer to the Earnings Presentation for additional Business Highlights.
A conference call regarding items contained in this release is scheduled for Tuesday, July 29, 2008 at 11:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (913) 312-0851 (confirmation #2641213). The conference call will be webcast simultaneously on the Company’s website at www.masco.com and supplemental material, including the financial data referred to on the call and a reconciliation of non-GAAP information provided on the call, will also be available on the website. A replay of the call will be available on Masco’s website or by phone by dialing (719) 457-0820 (replay access code #2641213) approximately two hours after the end of the call and will continue through August 5, 2008.
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 website 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 website.
3
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For the Three Months and Six Months Ended June 30, 2008 and 2007
(In Millions Except Per Common Share Data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For the Three Months and Six Months Ended June 30, 2008 and 2007
(In Millions Except Per Common Share Data)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net sales | $ | 2,640 | $ | 3,089 | $ | 5,086 | $ | 5,892 | ||||||||
Cost of sales | 1,941 | 2,198 | 3,759 | 4,265 | ||||||||||||
Gross profit | 699 | 891 | 1,327 | 1,627 | ||||||||||||
Selling, general and administrative expenses | 484 | 530 | 952 | 1,014 | ||||||||||||
Operating profit | 215 | 361 | 375 | 613 | ||||||||||||
Other income (expense), net | (56 | ) | (64 | ) | (140 | ) | (85 | ) | ||||||||
Income from continuing operations before income taxes and minority interest | 159 | 297 | 235 | 528 | ||||||||||||
Income taxes | 75 | 108 | 115 | 193 | ||||||||||||
Income from continuing operations before minority interest | 84 | 189 | 120 | 335 | ||||||||||||
Minority interest | 12 | 7 | 24 | 16 | ||||||||||||
Income from continuing operations | 72 | 182 | 96 | 319 | ||||||||||||
Income (loss) from discontinued operations, net | 10 | 7 | (12 | ) | 13 | |||||||||||
Net income | $ | 82 | $ | 189 | $ | 84 | $ | 332 | ||||||||
Earnings per common share (diluted): | ||||||||||||||||
Income from continuing operations | $ | 0.20 | $ | 0.49 | $ | 0.27 | $ | 0.84 | ||||||||
Income (loss) from discontinued operations, net | 0.03 | 0.02 | (0.03 | ) | 0.03 | |||||||||||
Net income | $ | 0.23 | $ | 0.51 | $ | 0.24 | $ | 0.87 | ||||||||
Average diluted common shares outstanding | 354 | 374 | 355 | 381 | ||||||||||||
Masco Corporation
Key Financial Data — Unaudited
Q2 — 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data — Unaudited
Q2 — 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Sales & Earnings | Q2 - 2008 | Q2 - 2007 | Change | |||||||||
Net Sales | $ | 2,640 | $ | 3,089 | -15 | % | ||||||
Operating Profit | $ | 215 | $ | 361 | -40 | % | ||||||
Operating Profit % | 8.1 | % | 11.7 | % | (360 | )bps | ||||||
Other Income (Expense), Net | $ | (56 | ) | $ | (64 | ) | -13 | % | ||||
Income Taxes | $ | 75 | $ | 108 | -31 | % | ||||||
Minority Interest | $ | 12 | $ | 7 | 71 | % | ||||||
Income from Continuing Operations | $ | 72 | $ | 182 | -60 | % | ||||||
Diluted EPS from Continuing Operations | $ | 0.20 | $ | 0.49 | -59 | % |
Operating Expenses | Q2 - 2008 | Q2 - 2007 | Change | |||||||||
Cost of sales | $ | 1,941 | $ | 2,198 | -12 | % | ||||||
Gross Margin | 26.5 | % | 28.8 | % | (230 | )bps | ||||||
SG&A expenses (Including GCE) | $ | 484 | $ | 530 | -9 | % | ||||||
SG&A as a % of net sales | 18.3 | % | 17.2 | % | (110 | )bps | ||||||
General Corporate Expense (GCE) | $ | 35 | $ | 49 | -29 | % | ||||||
General Corp Expense as a % of net sales | 1.3 | % | 1.6 | % | 30 | bps |
Business Segments | Q2 - 2008 | Q2 - 2007 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 608 | $ | 737 | -18 | % | ||||||
Operating Profit | $ | 37 | $ | 96 | -61 | % | ||||||
Operating Profit % to Net Sales | 6.1 | % | 13.0 | % | (690 | )bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 854 | $ | 869 | -2 | % | ||||||
Operating Profit | $ | 107 | $ | 95 | 13 | % | ||||||
Operating Profit % to Net Sales | 12.5 | % | 10.9 | % | 160 | bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 508 | $ | 699 | -27 | % | ||||||
Operating Profit | $ | 4 | $ | 58 | -93 | % | ||||||
Operating Profit % to Net Sales | 0.8 | % | 8.3 | % | (750 | )bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 476 | $ | 534 | -11 | % | ||||||
Operating Profit | $ | 89 | $ | 115 | -23 | % | ||||||
Operating Profit % to Net Sales | 18.7 | % | 21.5 | % | (280 | )bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 194 | $ | 250 | -22 | % | ||||||
Operating Profit | $ | 13 | $ | 41 | -68 | % | ||||||
Operating Profit % to Net Sales | 6.7 | % | 16.4 | % | (970 | )bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 2,640 | $ | 3,089 | -15 | % | ||||||
Operating Profit | $ | 250 | $ | 405 | -38 | % | ||||||
Operating Profit % to Net Sales | 9.5 | % | 13.1 | % | (360 | )bps | ||||||
Change in Key Retailer Sales | -13 | % | 2 | % |
Masco Corporation
Key Financial Data — Unaudited
Q2 — 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data — Unaudited
Q2 — 2008(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions | Q2 - 2008 | Q2 - 2007 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 2,067 | $ | 2,548 | -19 | % | ||||||
Operating Profit | $ | 200 | $ | 360 | -44 | % | ||||||
Operating Profit % to Net Sales | 9.7 | % | 14.1 | % | (440 | )bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 573 | $ | 541 | 6 | % | ||||||
Operating Profit | $ | 50 | $ | 45 | 11 | % | ||||||
Operating Profit % to Net Sales | 8.7 | % | 8.3 | % | 40 | bps |
Working Capital | Q2 - 2008 | Q2 - 2007 | Change | |||||||||
Receivable Days | 52 | 50 | 2 | days | ||||||||
Inventory Days | 54 | 51 | 3 | days | ||||||||
Payable Days | 44 | 42 | 2 | days | ||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 1,938 | $ | 2,192 | -12 | % | ||||||
Working Capital as a % of Sales | 18.1 | % | 17.9 | % | (20 | )bps |
Other | Q2 - 2008 | Q2 - 2007 | ||||||||||
Dividend Payments (year-to-date) | $ | 168 | $ | 175 | ||||||||
Cash Paid for Share Repurchases (year-to-date) | $ | 147 | $ | 640 | ||||||||
Common Shares Repurchased (year-to-date) | 8 | 22 | ||||||||||
Common Shares Repurchased (QTR) | 3 | 13 | ||||||||||
CAPEX (year-to-date) | $ | 92 | $ | 116 | ||||||||
Depreciation and Amortization (year-to-date) | $ | 119 | $ | 124 | ||||||||
Return on Invested Capital (As Reported) | 7.3 | % | 8.1 | % | ||||||||
Return on Invested Capital (As Reconciled) | 8.0 | % | 10.5 | % | ||||||||
Average diluted common shares outstanding (QTR) | 354 | 374 | ||||||||||
Average diluted common shares outstanding (July 1) | 352 | 372 | ||||||||||
Effective Tax Rate (QTR) | 47.2 | % | 36.4 | % |
Debt Ratio | Q2 - 2008 | Q1 - 2008 | ||||||||||
Long-term Debt | $ | 3,960 | $ | 3,996 | ||||||||
Notes Payable | $ | 116 | $ | 117 | ||||||||
Total Debt | $ | 4,076 | $ | 4,113 | ||||||||
Shareholders’ Equity | $ | 3,954 | $ | 3,992 | ||||||||
Debt to Capital | 50.8 | % | 50.7 | % |
MASCO CORPORATION - 2nd Quarter 2008
Page | ||
1 | Condensed Consolidated Statements of Operations - 2008 & 2007 by Quarter - Unaudited | |
2 | Notes to Condensed Consolidated Statements of Operations - 2008 & 2007 by Quarter - Unaudited | |
3 | Sales by Segment and Geographic Area - Three Months Ended June 30, 2008 & 2007 - Unaudited | |
4 | Sales by Segment and Geographic Area - Six Months Ended June 30, 2008 & 2007 - Unaudited | |
5 | 2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives - Unaudited | |
6 | 2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives - Unaudited | |
7 | 2007 Quarterly Segment Data Excluding Net Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited | |
8 | 2007 Quarterly Segment Data Including Net Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited | |
9 | Other Income (Expense), Net - 2008 & 2007 by Quarter - Unaudited | |
10 | Condensed Consolidated Statements of Income - Three Months Ended June 30, 2008 & 2007 - Unaudited | |
11 | Condensed Consolidated Statements of Income - Six Months Ended June 30, 2008 & 2007 - Unaudited | |
12 | Condensed Consolidated Balance Sheets - Unaudited | |
13 | Discontinued Operations - Unaudited | |
GAAP Reconciliations: | ||
14 | Sales Growth Excluding the Effect of Acquisitions and Currency Translation - Unaudited | |
15 | Operating Profit and Margins - Unaudited | |
16 | Operating Profit and Shareholders’ Equity - Unaudited |
MASCO CORPORATION
Condensed Consolidated Statements of Operations
2008 & 2007 - by Quarter - Unaudited
(dollars in millions, except per share data)
Condensed Consolidated Statements of Operations
2008 & 2007 - by Quarter - Unaudited
(dollars in millions, except per share data)
2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||||||||||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||||||||||||||||||||||||||||||
- North America | $ | 2,067 | $ | 1,893 | $ | 9,271 | $ | 2,048 | $ | 2,417 | $ | 2,548 | $ | 2,258 | |||||||||||||||||||||||||||||||||||||
- International, principally Europe | 573 | 553 | 2,261 | 587 | 588 | 541 | 545 | ||||||||||||||||||||||||||||||||||||||||||||
- Consolidated | 2,640 | 2,446 | 11,532 | 2,635 | 3,005 | 3,089 | 2,803 | ||||||||||||||||||||||||||||||||||||||||||||
Cost of Sales | 1,941 | 1,818 | 8,380 | 1,960 | 2,155 | 2,198 | 2,067 | ||||||||||||||||||||||||||||||||||||||||||||
Gross Profit | 699 | 628 | 3,152 | 675 | 850 | 891 | 736 | ||||||||||||||||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 26.5 | % | 25.7 | % | 27.3 | % | 25.6 | % | 28.3 | % | 28.8 | % | 26.3 | % | |||||||||||||||||||||||||||||||||||||
S,G&A Expense (before GCE & (Gain) on Sale of Corporate Fixed Assets) | 449 | 425 | 1,806 | 449 | 435 | 486 | 436 | ||||||||||||||||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 17.0 | % | 17.4 | % | 15.7 | % | 17.0 | % | 14.5 | % | 15.7 | % | 15.6 | % | |||||||||||||||||||||||||||||||||||||
Operating Profit (before GCE, (Gain) on Sale of Corporate Fixed Assets & Impairment Charges for Goodwill and Other Intangible Assets) | 250 | 203 | 1,346 | 226 | 415 | 405 | 300 | ||||||||||||||||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 9.5 | % | 8.3 | % | 11.7 | % | 8.6 | % | 13.8 | % | 13.1 | % | 10.7 | % | |||||||||||||||||||||||||||||||||||||
- North America | 200 | 149 | 1,008 | 60 | 346 | 360 | 242 | ||||||||||||||||||||||||||||||||||||||||||||
(Margin as a % of Sales) | 9.7 | % | 7.9 | % | 10.9 | % | 2.9 | % | 14.3 | % | 14.1 | % | 10.7 | % | |||||||||||||||||||||||||||||||||||||
- International, principally Europe | 50 | 54 | 219 | 47 | 69 | 45 | 58 | ||||||||||||||||||||||||||||||||||||||||||||
(Margin as a % of Sales) | 8.7 | % | 9.8 | % | 9.7 | % | 8.0 | % | 11.7 | % | 8.3 | % | 10.6 | % | |||||||||||||||||||||||||||||||||||||
General Corporate Expense (GCE), Net | 35 | 43 | 181 | 37 | 44 | 49 | 51 | ||||||||||||||||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (Including GCE & (Gain) on Sale of Corporate Fixed Assets) | 18.3 | % | 19.1 | % | 17.2 | % | 18.4 | % | 15.9 | % | 17.2 | % | 17.3 | % | |||||||||||||||||||||||||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | (8 | ) | — | — | (5 | ) | (3 | ) | |||||||||||||||||||||||||||||||||||||||||
Impairment Charges for Goodwill and Other Intangible Assets | — | — | 119 | 119 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Operating Profit per F/S | $ | 215 | $ | 160 | $ | 1,054 | $ | 70 | $ | 371 | $ | 361 | $ | 252 | |||||||||||||||||||||||||||||||||||||
Earnings (Loss) per Common Share (Diluted): | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.20 | $ | 0.07 | $ | 1.32 | $ | (0.09 | ) | $ | 0.56 | $ | 0.49 | $ | 0.35 | ||||||||||||||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net | 0.03 | (0.06 | ) | (0.29 | ) | (0.33 | ) | — | 0.02 | 0.02 | |||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) | $ | 0.23 | $ | 0.01 | $ | 1.03 | $ | (0.42 | ) | $ | 0.56 | $ | 0.51 | $ | 0.37 | ||||||||||||||||||||||||||||||||||||
Please see page 2 for Notes.
Page 1
MASCO CORPORATION
Notes to Condensed Consolidated Statements of Operations
2008 & 2007 - by Quarter - Unaudited
Notes to Condensed Consolidated Statements of Operations
2008 & 2007 - by Quarter - Unaudited
Notes:
- | Operating results for the first and second 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) and $15 million pre-tax ($.03 per common share after tax), respectively. | |
- | Income from continuing operations for the first and second quarters of 2008 includes non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax) and $3 million pre-tax, respectively. | |
- | Income (loss) from discontinued operations for the first and second quarters of 2008 includes non-cash charges for those business units that are expected to be divested at a loss of $49 million pre-tax ($.08 per common share, after tax) and $2 million pre-tax, respectively. | |
- | Operating results for the first, second, third and fourth quarters of 2007 include costs and charges related to business rationalizations and other initiatives of $25 million pre-tax ($.04 per common share, after tax), $23 million pre-tax ($.04 per common share, after tax), $12 million pre-tax ($.02 per common share, after tax, net of an $8 million gain from the sale of fixed assets) and $19 million pre-tax ($.03 per common share, after tax), respectively. | |
- | Operating results for the fourth quarter of 2007 include non-cash impairment charges for goodwill and other intangible assets of $119 million pre-tax ($.28 per common share, after tax). | |
- | Income (loss) from continuing operations for the second and third quarters of 2007 includes non-cash impairment charges for financial investments of $10 million pre-tax ($.02 per common share, after tax) and $12 million pre-tax ($.02 per common share, after tax), respectively. | |
- | Income from continuing operations for the first, second, third and fourth quarters of 2007 includes income related to financial investments of $22 million pre-tax ($.04 per common share, after tax), $7 million pre-tax ($.01 per common share, after tax), $11 million pre-tax ($.02 per common share, after tax) and $3 million pre-tax ($.01 per common share, after tax), respectively. | |
- | Loss from discontinued operations for the fourth quarter of 2007 includes a non-cash impairment charge for goodwill of $108 million pre-tax ($.30 per common share, after tax). | |
- | Per common share amounts for the four quarters of 2007 do not total to the per common share amounts for the year, primarily due to the timing of common stock transactions. |
Page 2
MASCO CORPORATION
Sales by Segment and Geographic Area
Three Months Ended June 30, 2008 & 2007 - Unaudited
(dollars in millions)
Sales by Segment and Geographic Area
Three Months Ended June 30, 2008 & 2007 - Unaudited
(dollars in millions)
Three Months Ended | 2nd Qtr ’08 | |||||||||||
June 30, | vs. | |||||||||||
2008 | 2007 | 2nd Qtr ’07 | ||||||||||
Cabinets and Related Products | $ | 608 | $ | 737 | - 18 | % | ||||||
Plumbing Products | 854 | 869 | - 2 | % | ||||||||
Installation and Other Services | 508 | 699 | - 27 | % | ||||||||
Decorative Architectural Products | 476 | 534 | - 11 | % | ||||||||
Other Specialty Products | 194 | 250 | - 22 | % | ||||||||
Total | $ | 2,640 | $ | 3,089 | - 15 | % | ||||||
North America | $ | 2,067 | $ | 2,548 | - 19 | % | ||||||
International, principally Europe | 573 | 541 | + 6 | % | ||||||||
Total, as above | $ | 2,640 | $ | 3,089 | - 15 | % | ||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Excluding acquisitions, consolidated net sales decreased 15 percent, North American net sales decreased 20 percent and International net sales increased six percent compared with the second quarter of 2007 (please see page 14 for the GAAP reconciliation). | |
- | International net sales in local currencies decreased six percent compared with the second quarter of 2007 (please see page 14 for the GAAP reconciliation). |
Page 3
MASCO CORPORATION
Sales by Segment and Geographic Area
Six Months Ended June 30, 2008 & 2007 - Unaudited
(dollars in millions)
Sales by Segment and Geographic Area
Six Months Ended June 30, 2008 & 2007 - Unaudited
(dollars in millions)
Six Months Ended | 6 Months ’08 | |||||||||||
June 30, | vs. | |||||||||||
2008 | 2007 | 6 Months ’07 | ||||||||||
Cabinets and Related Products | $ | 1,204 | $ | 1,428 | - 16 | % | ||||||
Plumbing Products | 1,671 | 1,707 | - 2 | % | ||||||||
Installation and Other Services | 994 | 1,337 | - 26 | % | ||||||||
Decorative Architectural Products | 855 | 954 | - 10 | % | ||||||||
Other Specialty Products | 362 | 466 | - 22 | % | ||||||||
Total | $ | 5,086 | $ | 5,892 | - 14 | % | ||||||
North America | $ | 3,960 | $ | 4,806 | - 18 | % | ||||||
International, principally Europe | 1,126 | 1,086 | + 4 | % | ||||||||
Total, as above | $ | 5,086 | $ | 5,892 | - 14 | % | ||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Excluding acquisitions, consolidated net sales decreased 15 percent, North American net sales decreased 19 percent and International net sales increased four percent compared with the the first six months of 2007 (please see page 14 for the GAAP reconciliation). | |
- | International net sales in local currencies decreased eight percent compared with the first six months of 2007 (please see page 14 for the GAAP reconciliation). |
Page 4
MASCO CORPORATION
Quarterly Segment Data - 2008
Excluding Costs & Charges for Business Rationalizations and Other Initiatives - Unaudited
(dollars in millions)
Quarterly Segment Data - 2008
Excluding Costs & 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 | $ | 608 | $ | 596 | ||||||||||||||||
- Plumbing Products | 854 | 817 | ||||||||||||||||||
- Installation and Other Services | 508 | 486 | ||||||||||||||||||
- Decorative Architectural Products | 476 | 379 | ||||||||||||||||||
- Other Specialty Products | 194 | 168 | ||||||||||||||||||
- Total | $ | 2,640 | $ | 2,446 | ||||||||||||||||
- North America | $ | 2,067 | $ | 1,893 | ||||||||||||||||
- International, principally Europe | 573 | 553 | ||||||||||||||||||
- Total, as above | $ | 2,640 | $ | 2,446 | ||||||||||||||||
Operating Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 40 | $ | 29 | ||||||||||||||||
- Plumbing Products | 109 | 102 | ||||||||||||||||||
- Installation and Other Services | 8 | (1 | ) | |||||||||||||||||
- Decorative Architectural Products | 90 | 74 | ||||||||||||||||||
- Other Specialty Products | 13 | 8 | ||||||||||||||||||
- Total | $ | 260 | $ | 212 | ||||||||||||||||
- North America | $ | 207 | $ | 157 | ||||||||||||||||
- International, principally Europe | 53 | 55 | ||||||||||||||||||
- Total, as above | $ | 260 | $ | 212 | ||||||||||||||||
General Corporate Expense (GCE), Net | 30 | 43 | ||||||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | ||||||||||||||||||
Operating Profit (after GCE and Adjustments) | 230 | 169 | ||||||||||||||||||
Other Income (Expense), Net | (56 | ) | (84 | ) | ||||||||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | 174 | $ | 85 | ||||||||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 6.6 | % | 4.9 | % | ||||||||||||||||
- Plumbing Products | 12.8 | % | 12.5 | % | ||||||||||||||||
- Installation and Other Services | 1.6 | % | -0.2 | % | ||||||||||||||||
- Decorative Architectural Products | 18.9 | % | 19.5 | % | ||||||||||||||||
- Other Specialty Products | 6.7 | % | 4.8 | % | ||||||||||||||||
- Total | 9.8 | % | 8.7 | % | ||||||||||||||||
- North America | 10.0 | % | 8.3 | % | ||||||||||||||||
- International, principally Europe | 9.2 | % | 9.9 | % | ||||||||||||||||
- Total, as above | 9.8 | % | 8.7 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets. | |
- | Operating profit margins for the second quarter of 2008 exclude costs and charges of $15 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million) and GCE ($5 million). | |
- | Operating profit margins for the first quarter of 2008 exclude costs and charges of $9 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($1 million), Plumbing Products ($3 million), and Installation and Other Services ($5 million). |
Page 5
MASCO CORPORATION
Quarterly Segment Data - 2008
Including Costs & Charges for Business Rationalizations and Other Initiatives - Unaudited
(dollars in millions)
Quarterly Segment Data - 2008
Including Costs & 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 | $ | 608 | $ | 596 | ||||||||||||||||
- Plumbing Products | 854 | 817 | ||||||||||||||||||
- Installation and Other Services | 508 | 486 | ||||||||||||||||||
- Decorative Architectural Products | 476 | 379 | ||||||||||||||||||
- Other Specialty Products | 194 | 168 | ||||||||||||||||||
- Total | $ | 2,640 | $ | 2,446 | ||||||||||||||||
- North America | $ | 2,067 | $ | 1,893 | ||||||||||||||||
- International, principally Europe | 573 | 553 | ||||||||||||||||||
- Total, as above | $ | 2,640 | $ | 2,446 | ||||||||||||||||
Operating Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 37 | $ | 28 | ||||||||||||||||
- Plumbing Products | 107 | 99 | ||||||||||||||||||
- Installation and Other Services | 4 | (6 | ) | |||||||||||||||||
- Decorative Architectural Products | 89 | 74 | ||||||||||||||||||
- Other Specialty Products | 13 | 8 | ||||||||||||||||||
- Total | $ | 250 | $ | 203 | ||||||||||||||||
- North America | $ | 200 | $ | 149 | ||||||||||||||||
- International, principally Europe | 50 | 54 | ||||||||||||||||||
- Total, as above | $ | 250 | $ | 203 | ||||||||||||||||
General Corporate Expense (GCE), Net | 35 | 43 | ||||||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | ||||||||||||||||||
Operating Profit (after GCE and Adjustments) | 215 | 160 | ||||||||||||||||||
Other Income (Expense), Net | (56 | ) | (84 | ) | ||||||||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | 159 | $ | 76 | ||||||||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 6.1 | % | 4.7 | % | ||||||||||||||||
- Plumbing Products | 12.5 | % | 12.1 | % | ||||||||||||||||
- Installation and Other Services | 0.8 | % | -1.2 | % | ||||||||||||||||
- Decorative Architectural Products | 18.7 | % | 19.5 | % | ||||||||||||||||
- Other Specialty Products | 6.7 | % | 4.8 | % | ||||||||||||||||
- Total | 9.5 | % | 8.3 | % | ||||||||||||||||
- North America | 9.7 | % | 7.9 | % | ||||||||||||||||
- International, principally Europe | 8.7 | % | 9.8 | % | ||||||||||||||||
- Total, as above | 9.5 | % | 8.3 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets. | |
- | Operating profit margins for the second quarter of 2008 include costs and charges of $15 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million) and GCE ($5 million). | |
- | Operating profit margins for the first quarter of 2008 include costs and charges of $9 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($1 million), Plumbing Products ($3 million), and Installation and Other Services ($5 million). |
Page 6
MASCO CORPORATION
Quarterly Segment Data - 2007
Excluding Net Costs & Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited
(dollars in millions)
Quarterly Segment Data - 2007
Excluding Net Costs & 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 | $ | 2,829 | $ | 665 | $ | 736 | $ | 737 | $ | 691 | ||||||||||
- Plumbing Products | 3,391 | 819 | 865 | 869 | 838 | |||||||||||||||
- Installation and Other Services | 2,615 | 589 | 689 | 699 | 638 | |||||||||||||||
- Decorative Architectural Products | 1,768 | 347 | 467 | 534 | 420 | |||||||||||||||
- Other Specialty Products | 929 | 215 | 248 | 250 | 216 | |||||||||||||||
- Total | $ | 11,532 | $ | 2,635 | $ | 3,005 | $ | 3,089 | $ | 2,803 | ||||||||||
- North America | $ | 9,271 | $ | 2,048 | $ | 2,417 | $ | 2,548 | $ | 2,258 | ||||||||||
- International, principally Europe | 2,261 | 587 | 588 | 541 | 545 | |||||||||||||||
- Total, as above | $ | 11,532 | $ | 2,635 | $ | 3,005 | $ | 3,089 | $ | 2,803 | ||||||||||
Operating Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 368 | $ | 71 | $ | 108 | $ | 107 | $ | 82 | ||||||||||
- Plumbing Products | 349 | 66 | 103 | 97 | 83 | |||||||||||||||
- Installation and Other Services | 197 | 34 | 65 | 62 | 36 | |||||||||||||||
- Decorative Architectural Products | 385 | 62 | 114 | 116 | 93 | |||||||||||||||
- Other Specialty Products | 119 | 12 | 36 | 42 | 29 | |||||||||||||||
- Total | $ | 1,418 | $ | 245 | $ | 426 | $ | 424 | $ | 323 | ||||||||||
- North America | $ | 1,191 | $ | 195 | $ | 356 | $ | 377 | $ | 263 | ||||||||||
- International, principally Europe | 227 | 50 | 70 | 47 | 60 | |||||||||||||||
- Total, as above | $ | 1,418 | $ | 245 | $ | 426 | $ | 424 | $ | 323 | ||||||||||
General Corporate Expense (GCE), Net | 174 | 37 | 43 | 45 | 49 | |||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | (8 | ) | — | — | (5 | ) | (3 | ) | ||||||||||||
Operating Profit (after GCE and Adjustments) | 1,252 | 208 | 383 | 384 | 277 | |||||||||||||||
Other Income (Expense), Net | (188 | ) | (58 | ) | (45 | ) | (64 | ) | (21 | ) | ||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | 1,064 | $ | 150 | $ | 338 | $ | 320 | $ | 256 | ||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 13.0 | % | 10.7 | % | 14.7 | % | 14.5 | % | 11.9 | % | ||||||||||
- Plumbing Products | 10.3 | % | 8.1 | % | 11.9 | % | 11.2 | % | 9.9 | % | ||||||||||
- Installation and Other Services | 7.5 | % | 5.8 | % | 9.4 | % | 8.9 | % | 5.6 | % | ||||||||||
- Decorative Architectural Products | 21.8 | % | 17.9 | % | 24.4 | % | 21.7 | % | 22.1 | % | ||||||||||
- Other Specialty Products | 12.8 | % | 5.6 | % | 14.5 | % | 16.8 | % | 13.4 | % | ||||||||||
- Total | 12.3 | % | 9.3 | % | 14.2 | % | 13.7 | % | 11.5 | % | ||||||||||
- North America | 12.8 | % | 9.5 | % | 14.7 | % | 14.8 | % | 11.6 | % | ||||||||||
- International, principally Europe | 10.0 | % | 8.5 | % | 11.9 | % | 8.7 | % | 11.0 | % | ||||||||||
- Total, as above | 12.3 | % | 9.3 | % | 14.2 | % | 13.7 | % | 11.5 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets. | |
- | Operating profit margins for the fourth quarter of 2007 exclude $119 million of impairment charges for goodwill and other intangible assets as follows: Plumbing Products ($69 million) and Other Specialty Products ($50 million). | |
- | Operating profit margins for the fourth quarter of 2007 exclude costs and charges of $19 million pre-tax related business rationalizations and other initiatives as follows: Cabinets and Related Products ($8 million), Plumbing Products ($5 million) and Installation and Other Services ($6 million). | |
- | Operating profit margins for the third quarter of 2007 exclude net costs and charges of $12 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million, net of an $8 million gain from the sale of fixed assets), Plumbing Products ($3 million), Installation and Other Services ($5 million), and GCE ($1 million). | |
- | Operating profit margins for the second quarter of 2007 exclude costs and charges of $23 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($11 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million), Other Specialty Products ($1 million) and GCE ($4 million). | |
- | Operating profit margins for the first quarter of 2007 exclude costs and charges of $25 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($10 million), Plumbing Products ($6 million), Installation and Other Services ($6 million), Other Specialty Products ($1 million) and GCE ($2 million). |
Page 7
MASCO CORPORATION
Quarterly Segment Data - 2007
Including Net Costs & Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited
(dollars in millions)
Quarterly Segment Data - 2007
Including Net Costs & 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 | $ | 2,829 | $ | 665 | $ | 736 | $ | 737 | $ | 691 | ||||||||||
- Plumbing Products | 3,391 | 819 | 865 | 869 | 838 | |||||||||||||||
- Installation and Other Services | 2,615 | 589 | 689 | 699 | 638 | |||||||||||||||
- Decorative Architectural Products | 1,768 | 347 | 467 | 534 | 420 | |||||||||||||||
- Other Specialty Products | 929 | 215 | 248 | 250 | 216 | |||||||||||||||
- Total | $ | 11,532 | $ | 2,635 | $ | 3,005 | $ | 3,089 | $ | 2,803 | ||||||||||
- North America | $ | 9,271 | $ | 2,048 | $ | 2,417 | $ | 2,548 | $ | 2,258 | ||||||||||
- International, principally Europe | 2,261 | 587 | 588 | 541 | 545 | |||||||||||||||
- Total, as above | $ | 11,532 | $ | 2,635 | $ | 3,005 | $ | 3,089 | $ | 2,803 | ||||||||||
Operating Profit (Loss): | ||||||||||||||||||||
- Cabinets and Related Products | $ | 336 | $ | 63 | $ | 105 | $ | 96 | $ | 72 | ||||||||||
- Plumbing Products | 264 | (8 | ) | 100 | 95 | 77 | ||||||||||||||
- Installation and Other Services | 176 | 28 | 60 | 58 | 30 | |||||||||||||||
- Decorative Architectural Products | 384 | 62 | 114 | 115 | 93 | |||||||||||||||
- Other Specialty Products | 67 | (38 | ) | 36 | 41 | 28 | ||||||||||||||
- Total | $ | 1,227 | $ | 107 | $ | 415 | $ | 405 | $ | 300 | ||||||||||
- North America | $ | 1,008 | $ | 60 | $ | 346 | $ | 360 | $ | 242 | ||||||||||
- International, principally Europe | 219 | 47 | 69 | 45 | 58 | |||||||||||||||
- Total, as above | $ | 1,227 | $ | 107 | $ | 415 | $ | 405 | $ | 300 | ||||||||||
General Corporate Expense (GCE), Net | 181 | 37 | 44 | 49 | 51 | |||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | (8 | ) | — | — | (5 | ) | (3 | ) | ||||||||||||
Operating Profit (after GCE and Adjustments) | 1,054 | 70 | 371 | 361 | 252 | |||||||||||||||
Other Income (Expense), Net | (188 | ) | (58 | ) | (45 | ) | (64 | ) | (21 | ) | ||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | 866 | $ | 12 | $ | 326 | $ | 297 | $ | 231 | ||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 11.9 | % | 9.5 | % | 14.3 | % | 13.0 | % | 10.4 | % | ||||||||||
- Plumbing Products | 7.8 | % | -1.0 | % | 11.6 | % | 10.9 | % | 9.2 | % | ||||||||||
- Installation and Other Services | 6.7 | % | 4.8 | % | 8.7 | % | 8.3 | % | 4.7 | % | ||||||||||
- Decorative Architectural Products | 21.7 | % | 17.9 | % | 24.4 | % | 21.5 | % | 22.1 | % | ||||||||||
- Other Specialty Products | 7.2 | % | -17.7 | % | 14.5 | % | 16.4 | % | 13.0 | % | ||||||||||
- Total | 10.6 | % | 4.1 | % | 13.8 | % | 13.1 | % | 10.7 | % | ||||||||||
- North America | 10.9 | % | 2.9 | % | 14.3 | % | 14.1 | % | 10.7 | % | ||||||||||
- International, principally Europe | 9.7 | % | 8.0 | % | 11.7 | % | 8.3 | % | 10.6 | % | ||||||||||
- Total, as above | 10.6 | % | 4.1 | % | 13.8 | % | 13.1 | % | 10.7 | % |
Notes: | ||
- | Data exclude discontinued operations. | |
- | Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets. | |
- | Operating profit margins for the fourth quarter of 2007 include $119 million of impairment charges for goodwill and other intangible assets as follows: Plumbing Products ($69 million) and Other Specialty Products ($50 million). | |
- | Operating profit margins for the fourth quarter of 2007 include net costs and charges of $19 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($8 million), Plumbing Products ($5 million) and Installation and Other Services ($6 million). | |
- | Operating profit margins for the third quarter of 2007 include net costs and charges of $12 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million, net of an $8 million gain from the sale of fixed assets), Plumbing Products ($3 million), Installation and Other Services ($5 million), and GCE ($1 million). | |
- | Operating profit margins for the second quarter of 2007 include costs and charges of $23 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($11 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million), Other Specialty Products ($1 million) and GCE ($4 million). | |
- | Operating profit margins for the first quarter of 2007 include costs and charges of $25 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($10 million), Plumbing Products ($6 million), Installation and Other Services ($6 million), Other Specialty Products ($1 million) and GCE ($2 million). |
Page 8
MASCO CORPORATION
Other Income (Expense), Net
2008 & 2007 - by Quarter - Unaudited
(in millions)
Other Income (Expense), Net
2008 & 2007 - by Quarter - Unaudited
(in millions)
2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||||||||||||||||||||||||||||
Interest Expense | $ | (57 | ) | $ | (56 | ) | $ | (258 | ) | $ | (61 | ) | $ | (65 | ) | $ | (69 | ) | $ | (63 | ) | ||||||||||||||||||||||||||||||
Income from Cash and Cash Investments | 5 | 6 | 37 | 8 | 7 | 8 | 14 | ||||||||||||||||||||||||||||||||||||||||||||
Other Interest Income | 1 | — | 3 | 1 | 1 | 1 | — | ||||||||||||||||||||||||||||||||||||||||||||
Realized (Losses) Gains from Financial Investments, Net | 3 | (3 | ) | 43 | 3 | 11 | 7 | 22 | |||||||||||||||||||||||||||||||||||||||||||
Dividend Income | — | — | 6 | — | — | 1 | 5 | ||||||||||||||||||||||||||||||||||||||||||||
Impairment Charges for Financial Investments | (3 | ) | (26 | ) | (22 | ) | — | (12 | ) | (10 | ) | — | |||||||||||||||||||||||||||||||||||||||
Other, Net | (5 | ) | (5 | ) | 3 | (9 | ) | 13 | (2 | ) | 1 | ||||||||||||||||||||||||||||||||||||||||
Total Other Income (Expense), Net | $ | (56 | ) | $ | (84 | ) | $ | (188 | ) | $ | (58 | ) | $ | (45 | ) | $ | (64 | ) | $ | (21 | ) | ||||||||||||||||||||||||||||||
Notes: | ||
- | Data exclude discontinued operations. | |
- | Other, net, includes currency (losses) of $(10) million and $(5) million for the first and second quarters of 2008, respectively. | |
- | Other, net, includes currency gains (losses) of $3 million, $9 million and $(3) million for the second, third and fourth quarters of 2007, respectively. |
Page 9
MASCO CORPORATION
Condensed Consolidated Statements of Income
Three Months Ended June 30, 2008 & 2007 - Unaudited
(dollars and shares in millions, except per share data)
Condensed Consolidated Statements of Income
Three Months Ended June 30, 2008 & 2007 - Unaudited
(dollars and shares in millions, except per share data)
Three Months Ended | As a Percent of Sales | ||||||||||||||||||||||||
% | June 30, | Three Months Ended June 30, | |||||||||||||||||||||||
Line | Change | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||
1 | Net Sales | -15 | % | $ | 2,640 | $ | 3,089 | 100.0 | % | 100.0 | % | ||||||||||||||
2 | Cost of Sales | -12 | % | 1,941 | 2,198 | 73.5 | % | 71.2 | % | ||||||||||||||||
3 | Gross Profit | -22 | % | 699 | 891 | 26.5 | % | 28.8 | % | ||||||||||||||||
Operating Profit | |||||||||||||||||||||||||
4 | - Before GCE and (Gain) on Sale of Corporate Fixed Assets (3-8) | -38 | % | 250 | 405 | 9.5 | % | 13.1 | % | ||||||||||||||||
5 | - After GCE and (Gain) on Sale of Corporate Fixed Assets (3-9) | -40 | % | 215 | 361 | 8.1 | % | 11.7 | % | ||||||||||||||||
S,G&A Expense: | |||||||||||||||||||||||||
6 | - General Corporate Expense (GCE) | -29 | % | 35 | 49 | 1.3 | % | 1.6 | % | ||||||||||||||||
7 | - (Gain) on Sales of Corporate Fixed Assets, Net | — | (5 | ) | 0.0 | % | -0.2 | % | |||||||||||||||||
8 | - All Other | -8 | % | 449 | 486 | 17.0 | % | 15.7 | % | ||||||||||||||||
9 | - Total S,G&A Expense | -9 | % | 484 | 530 | 18.3 | % | 17.2 | % | ||||||||||||||||
10 | Other Income (Expense), Net | (53 | ) | (54 | ) | -2.0 | % | -1.7 | % | ||||||||||||||||
11 | Impairment Charges for Financial Investments | (3 | ) | (10 | ) | -0.1 | % | -0.3 | % | ||||||||||||||||
12 | Income from Continuing Operations before Income Taxes and Minority Interest (5+10+11) | -46 | % | 159 | 297 | 6.0 | % | 9.6 | % | ||||||||||||||||
13 | Income Taxes | -31 | % | 75 | 108 | 2.8 | % | 3.5 | % | ||||||||||||||||
(Tax Rate) | 47.2 | % | 36.4 | % | |||||||||||||||||||||
14 | Income from Continuing Operations before Minority Interest | -56 | % | 84 | 189 | 3.2 | % | 6.1 | % | ||||||||||||||||
15 | Minority Interest | (12 | ) | (7 | ) | -0.5 | % | -0.2 | % | ||||||||||||||||
16 | Income from Continuing Operations | -60 | % | 72 | 182 | 2.7 | % | 5.9 | % | ||||||||||||||||
17 | Income from Discontinued Operations, Net | 10 | 7 | 0.4 | % | 0.2 | % | ||||||||||||||||||
18 | Net Income | -57 | % | $ | 82 | $ | 189 | 3.1 | % | 6.1 | % | ||||||||||||||
Earnings Per Common Share (Diluted): | |||||||||||||||||||||||||
Income from Continuing Operations | -58 | % | $ | 0.20 | $ | 0.49 | |||||||||||||||||||
Income from Discontinued Operations, Net | 0.03 | 0.02 | |||||||||||||||||||||||
Net Income | -54 | % | $ | 0.23 | $ | 0.51 | �� | ||||||||||||||||||
Average (Diluted) Common Shares | -5 | % | 354 | 374 |
Page 10
MASCO CORPORATION
Condensed Consolidated Statements of Income
Six Months Ended June 30, 2008 & 2007 - Unaudited
(dollars and shares in millions, except per share data)
Condensed Consolidated Statements of Income
Six Months Ended June 30, 2008 & 2007 - Unaudited
(dollars and shares in millions, except per share data)
Six Months Ended | As a Percent of Sales | ||||||||||||||||||||||||
% | June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
Line | Change | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||
1 | Net Sales | -14 | % | $ | 5,086 | $ | 5,892 | 100.0 | % | 100.0 | % | ||||||||||||||
2 | Cost of Sales | -12 | % | 3,759 | 4,265 | 73.9 | % | 72.4 | % | ||||||||||||||||
3 | Gross Profit | -18 | % | 1,327 | 1,627 | 26.1 | % | 27.6 | % | ||||||||||||||||
Operating Profit | |||||||||||||||||||||||||
4 | - Before GCE and (Gain) on Sale of Corporate Fixed Assets (3-8) | -36 | % | 453 | 705 | 8.9 | % | 12.0 | % | ||||||||||||||||
5 | - After GCE and (Gain) on Sale of Corporate Fixed Assets (3-9) | -39 | % | 375 | 613 | 7.4 | % | 10.4 | % | ||||||||||||||||
S,G&A Expense: | |||||||||||||||||||||||||
6 | - General Corporate Expense (GCE) | -22 | % | 78 | 100 | 1.5 | % | 1.7 | % | ||||||||||||||||
7 | - (Gain) on Sales of Corporate Fixed Assets, Net | — | (8 | ) | 0.0 | % | -0.1 | % | |||||||||||||||||
8 | - All Other | -5 | % | 874 | 922 | 17.2 | % | 15.6 | % | ||||||||||||||||
9 | - Total S,G&A Expense | -6 | % | 952 | 1,014 | 18.7 | % | 17.2 | % | ||||||||||||||||
10 | Other Income (Expense), Net | (111 | ) | (75 | ) | -2.2 | % | -1.3 | % | ||||||||||||||||
11 | Impairment Charges for Financial Investments | (29 | ) | (10 | ) | -0.6 | % | -0.2 | % | ||||||||||||||||
12 | Income from Continuing Operations before Income Taxes and Minority Interest (5+10+11) | -55 | % | 235 | 528 | 4.6 | % | 9.0 | % | ||||||||||||||||
13 | Income Taxes | -40 | % | 115 | 193 | 2.3 | % | 3.3 | % | ||||||||||||||||
(Tax Rate) | 48.9 | % | 36.6 | % | |||||||||||||||||||||
14 | Income from Continuing Operations before Minority Interest | -64 | % | 120 | 335 | 2.4 | % | 5.7 | % | ||||||||||||||||
15 | Minority Interest | (24 | ) | (16 | ) | -0.5 | % | -0.3 | % | ||||||||||||||||
16 | Income from Continuing Operations | -70 | % | 96 | 319 | 1.9 | % | 5.4 | % | ||||||||||||||||
17 | (Loss) Income from Discontinued Operations, Net | (12 | ) | 13 | -0.2 | % | 0.2 | % | |||||||||||||||||
18 | Net Income | -75 | % | $ | 84 | $ | 332 | 1.7 | % | 5.6 | % | ||||||||||||||
Earnings Per Common Share (Diluted): | |||||||||||||||||||||||||
Income from Continuing Operations | -68 | % | $ | 0.27 | $ | 0.84 | |||||||||||||||||||
(Loss) Income from Discontinued Operations, Net | (0.03 | ) | 0.03 | ||||||||||||||||||||||
Net Income | -73 | % | $ | 0.24 | $ | 0.87 | |||||||||||||||||||
Average (Diluted) Common Shares | -7 | % | 355 | 381 |
Page 11
MASCO CORPORATION
Condensed Consolidated Balance Sheets - Unaudited
(in millions)
Condensed Consolidated Balance Sheets - Unaudited
(in millions)
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 853 | $ | 922 | ||||
Receivables | 1,567 | 1,405 | ||||||
Assets Held for Sale | 27 | — | ||||||
Inventories | 1,179 | 1,126 | ||||||
Prepaid Expenses and Other | 321 | 355 | ||||||
Total Current Assets | 3,947 | 3,808 | ||||||
Property and Equipment, Net | 2,249 | 2,367 | ||||||
Goodwill | 3,944 | 3,938 | ||||||
Other Intangible Assets, Net | 320 | 323 | ||||||
Assets Held for Sale | 14 | — | ||||||
Other Assets | 419 | 471 | ||||||
Total Assets | $ | 10,893 | $ | 10,907 | ||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Accounts Payable | $ | 808 | $ | 714 | ||||
Liabilities Held for Sale | 18 | — | ||||||
Notes Payable | 116 | 122 | ||||||
Accrued Liabilities | 997 | 1,072 | ||||||
Total Current Liabilities | 1,939 | 1,908 | ||||||
Long-term Debt | 3,960 | 3,966 | ||||||
Deferred Income Taxes and Other | 1,040 | 1,008 | ||||||
Total Liabilities | 6,939 | 6,882 | ||||||
Shareholders’ Equity | 3,954 | 4,025 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 10,893 | $ | 10,907 | ||||
Page 12
MASCO CORPORATION
Discontinued Operations - Unaudited
(in millions)
Discontinued Operations - Unaudited
(in millions)
Three Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Net Sales | $ | 35 | $ | 77 | ||||
Income from Discontinued Operations | $ | 5 | $ | 6 | ||||
Gain on Disposal of Discontinued Operations, Net | 7 | 2 | ||||||
Impairment of Assets Held for Sale | (2 | ) | — | |||||
Income Before Income Tax | 10 | 8 | ||||||
Income Tax (Expense) | — | (1 | ) | |||||
Income from Discontinued Operations, Net | $ | 10 | $ | 7 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Net Sales | $ | 100 | $ | 155 | ||||
Income from Discontinued Operations | $ | 12 | $ | 11 | ||||
Gain on Disposal of Discontinued Operations, Net | 7 | 3 | ||||||
Impairment of Assets Held for Sale | (51 | ) | — | |||||
(Loss) Income Before Income Tax | (32 | ) | 14 | |||||
Income Tax Benefit/(Expense) | 20 | (1 | ) | |||||
(Loss) Income from Discontinued Operations, Net | $ | (12 | ) | $ | 13 | |||
Page 13
MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation - Unaudited
(in millions)
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation - Unaudited
(in millions)
Three Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Consolidated Net Sales, As Reported | $ | 2,640 | $ | 3,089 | ||||
- Acquisitions | (16 | ) | — | |||||
Consolidated Net Sales, Excluding Acquisitions | $ | 2,624 | $ | 3,089 | ||||
North American Net Sales, As Reported | $ | 2,067 | $ | 2,548 | ||||
- Acquisitions | (16 | ) | — | |||||
North American Net Sales, Excluding Acquisitions | $ | 2,051 | $ | 2,548 | ||||
International Net Sales, As Reported | $ | 573 | $ | 541 | ||||
- Acquisitions | — | — | ||||||
International Net Sales, Excluding Acquisitions | 573 | 541 | ||||||
- Currency Translation | (65 | ) | — | |||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 508 | $ | 541 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Consolidated Net Sales, As Reported | $ | 5,086 | $ | 5,892 | ||||
- Acquisitions | (49 | ) | — | |||||
Consolidated Net Sales, Excluding Acquisitions | $ | 5,037 | $ | 5,892 | ||||
North American Net Sales, As Reported | $ | 3,960 | $ | 4,806 | ||||
- Acquisitions | (49 | ) | — | |||||
North American Net Sales, Excluding Acquisitions | $ | 3,911 | $ | 4,806 | ||||
International Net Sales, As Reported | $ | 1,126 | $ | 1,086 | ||||
- Acquisitions | — | — | ||||||
International Net Sales, Excluding Acquisitions | 1,126 | 1,086 | ||||||
- Currency Translation | (125 | ) | — | |||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,001 | $ | 1,086 | ||||
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 in local currencies before taking into account currency fluctuations. |
Page 14
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 June 30, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 215 | 8.1 | % | $ | 361 | 11.7 | % | ||||||||
Business Rationalizations and Other Initiatives | 15 | 23 | ||||||||||||||
Operating Profit, As Reconciled | $ | 230 | 8.7 | % | $ | 384 | 12.4 | % | ||||||||
Six Months Ended June 30, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 375 | 7.4 | % | $ | 613 | 10.4 | % | ||||||||
Business Rationalizations and Other Initiatives | 24 | 48 | ||||||||||||||
Operating Profit, As Reconciled | $ | 399 | 7.8 | % | $ | 661 | 11.2 | % | ||||||||
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 15
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 | ||||
June 30, | ||||
2008 | ||||
Operating Profit, As Reported | $ | 816 | ||
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations | 119 | |||
Operating Profit, As Reconciled | $ | 935 | ||
Twelve Months Ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Shareholders’ Equity, As Reported | $ | 3,954 | $ | 4,146 | ||||
Impairment Charges for Goodwill and Other Intangible Assets (after tax) | 208 | 321 | ||||||
Income Regarding Litigation Settlement (after tax) | — | (1 | ) | |||||
Shareholders’ Equity, As Reconciled | $ | 4,162 | $ | 4,466 | ||||
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 16