![]() | FOR IMMEDIATE RELEASE |
Investor / Media Contact
Maria Duey
Vice President — Investor Relations
313.792.5500
maria_duey@mascohq.com
Maria Duey
Vice President — Investor Relations
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS 2008 RESULTS, PROVIDES 2009 FULL-YEAR GUIDANCE AND ANNOUNCES PLANNED DIVIDEND REDUCTION
Full-Year 2008
• | Net sales from continuing operations declined 17 percent to $9.6 billion. | ||
• | Income from continuing operations was $.18 per common share, excluding non-cash impairment charges for goodwill and other intangible assets. | ||
• | Loss from continuing operations, as reported, was $1.08 per common share. | ||
• | Free cash flow before dividends was approximately $560 million. | ||
• | The Company completed the previously announced divestiture plan, generating net proceeds of $174 million. | ||
• | The Company had over $1 billion of cash at December 31, 2008. |
Taylor, Mich., (February 11, 2009) —Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the year ended December 31, 2008 declined 17 percent to $9.6 billion compared with $11.5 billion for 2007. North American sales declined 19 percent and International sales declined six percent. In local currencies, International sales declined ten percent compared with 2007.
Results for 2008 were adversely affected by declines in North American and International markets, particularly by significantly lower sales volume to the new home construction markets, as well as a continued decline in consumer spending for home improvement products.
Income from continuing operations was $.18 per common share and $1.59 per common share for 2008 and 2007, respectively, excluding non-cash impairment charges for goodwill and other intangible assets. Including these charges, (loss) income from continuing operations, as reported, was ($382) million or ($1.08) per common share and $494 million or $1.32 per common share for the years ended December 31, 2008 and 2007, respectively.
The Company continues to focus on the rationalization of its businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During 2008 and 2007, the Company incurred costs and charges of $83 million pre-tax ($.15 per common share, after tax) and $79 million pre-tax ($.13 per common share, after tax), respectively, related to these initiatives. Since late 2006, the Company has aggressively reduced its cost structure including closing 17 manufacturing facilities, reducing headcount by over 23,000 (which represents approximately 40 percent of its North American workforce) and reducing installation branches by over 80 locations. In 2008, the Company closed six manufacturing facilities, reduced headcount by over 13,000 and reduced installation branches by 29 locations.
During 2008, the Company recognized non-cash pre-tax impairment charges for goodwill and other intangible assets (in the fourth quarter) aggregating $467 million ($1.26 per common share, after tax), non-cash, pre-tax impairment charges for financial investments aggregating $58 million ($.10 per common share, after tax) and pre-tax currency transaction losses of $31 million ($.06 per common share, after tax). During 2007, the Company recognized non-cash, pre-tax impairment charges for goodwill and other intangible assets (in the fourth quarter) aggregating $119 million ($.27 per common share, after tax), non-cash, pre-tax impairment charges for financial investments aggregating $22 million ($.04 per common share, after tax) and pre-tax currency transaction gains of $9 million ($.02 per common share, after tax).
Fourth Quarter 2008
Fourth quarter 2008 net sales from continuing operations declined 25 percent to $2.0 billion compared with $2.6 billion for the fourth quarter 2007. North American sales declined 24 percent and International sales declined 26 percent. In local currencies, International sales declined 14 percent compared with the fourth quarter of 2007.
(Loss) income from continuing operations was ($.18) per common share and $.19 per common share for the fourth quarters of 2008 and 2007, respectively, excluding non-cash impairment charges for goodwill and other intangible assets. Including these charges, loss from continuing operations, as reported, was ($508) million or ($1.45) per common share and ($31) million or ($.09) per common share for the fourth quarters of 2008 and 2007, respectively.
During the fourth quarters of 2008 and 2007, the Company incurred costs and charges of $43 million pre-tax ($.08 per common share, after tax) and $19 million pre-tax ($.03 per common share, after tax), respectively, related to the rationalization of its businesses. During the fourth quarters of 2008 and 2007, the Company recognized non-cash pre-tax impairment charges for goodwill and other intangible assets of $1.27 per common share, after tax and $.28 per common share, after tax, respectively. In addition, in the fourth quarter of 2008 the Company recognized non-cash, pre-tax impairment charges for financial investments of $28 million ($.05 per common share, after tax).
Outlook 2009
Business conditions remain difficult in the Company’s markets. The Company experienced a further significant reduction in sales of its products and services in the fourth quarter of 2008, which has continued into early 2009. Housing starts declined over 30 percent to 900,000 in 2008 from 2007. The Company estimates that 2009 housing starts will decline approximately 35 percent to a range of 550,000 to 600,000 units. The Company anticipates that consumer spending for home improvement products and demand for certain of the Company’s International products will continue to decline in the near-term.
2
While the unprecedented changes in the global economic and financial market environment make forecasting future business conditions extremely difficult, the Company currently estimates that its full-year 2009 sales will decline mid-to-high teens percent compared to full-year 2008.
The Company currently estimates that its 2009 earnings will be in a range of approximately break-even to a loss of ($.30) per common share, reflecting the additional sales decline. The guidance also includes approximately $44 million pre-tax ($.08 per common share, after tax) of costs and charges for plans undertaken to further rationalize the Company’s business and system implementations but does not include any additional costs and charges that may result from the continued evaluation of the Company’s businesses or any other charges. The guidance also reflects increasingly competitive market conditions for its services and products.
The Company estimates that 2009 free cash flow (cash from operations, after capital expenditures and before dividends) will approximate $300 million.
Although the Company is confident that the long-term fundamentals for the new home construction and home improvement markets are positive, the Company expects that market conditions will be extremely challenging over the next several quarters, given the continued uncertainty in the global economic and financial markets. Accordingly, the Company will focus on liquidity preservation to ensure its ability to fund its business operations, growth opportunities that may arise and relatively modest debt maturity due in early 2010. As a result, the Company’s Management is recommending to the Board of Directors that the quarterly dividend be reduced from $.235 per common share ($.94 per common share annually) to $.075 per common share ($.30 per common share annually).
The Company believes that its financial position (including cash of over $1 billion at December 31, 2008, and its ability to generate cash flow) together with its current strategy of investing in leadership brands, innovative growth and flexible and scalable supply chains, 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 2008 fourth quarter and full-year supplemental material including a presentation in PDF format, will be distributed after the market closes on February 11, 2009 and will be available on the Company’s Web site atwww.masco.com.
3
A conference call regarding items contained in this release is scheduled for Thursday, February 12, 2009 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) 312-0717 (confirmation #3983492). 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 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 #3983492) approximately two hours after the end of the call and will continue through February 19, 2009.
Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site atwww.masco.com.
# # #
Statements contained herein, or otherwise made available, that reflect the Company’s views about its future performance may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These views involve risks and uncertainties that are difficult to predict and the Company’s results may differ materially from the results discussed in such forward-looking statements. For further information, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections) and to any subsequent Quarterly Reports on Form 10-Q, all of which are on file with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Certain of the financial and statistical data made available are non-GAAP financial measures as defined by the SEC’s Regulation G. The Company believes that such non-GAAP performance measures and ratios used in managing the business may provide users with meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company’s filings with the SEC and is available on Masco’s Web site.
4
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2008 and 2007
(In Millions Except Per Common Share Data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2008 and 2007
(In Millions Except Per Common Share Data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net sales | $ | 1,979 | $ | 2,635 | $ | 9,600 | $ | 11,532 | ||||||||
Cost of sales | 1,581 | 1,960 | 7,224 | 8,380 | ||||||||||||
Gross profit | 398 | 675 | 2,376 | 3,152 | ||||||||||||
Selling, general and administrative expenses | 422 | 486 | 1,826 | 1,979 | ||||||||||||
Impairment charges for goodwill and other intangible assets | 467 | 119 | 467 | 119 | ||||||||||||
Charge regarding litigation settlement | — | — | 9 | — | ||||||||||||
Operating (loss) profit | (491 | ) | 70 | 74 | 1,054 | |||||||||||
Other income (expense), net | (88 | ) | (58 | ) | (285 | ) | (188 | ) | ||||||||
(Loss) income from continuing operations before income taxes and minority interest | (579 | ) | 12 | (211 | ) | 866 | ||||||||||
Income tax (benefit) | (75 | ) | 33 | 132 | 335 | |||||||||||
(Loss) income from continuing operations before minority interest | (504 | ) | (21 | ) | (343 | ) | 531 | |||||||||
Minority interest | 4 | 10 | 39 | 37 | ||||||||||||
(Loss) income from continuing operations | (508 | ) | (31 | ) | (382 | ) | 494 | |||||||||
(Loss) income from discontinued operations, net | — | (120 | ) | (9 | ) | (108 | ) | |||||||||
Net (loss) income | $ | (508 | ) | $ | (151 | ) | $ | (391 | ) | $ | 386 | |||||
Earnings per common share (diluted): | ||||||||||||||||
(Loss) income from continuing operations | $ | (1.45 | ) | $ | (0.09 | ) | $ | (1.08 | ) | $ | 1.32 | |||||
(Loss) income from discontinued operations, net | — | (0.33 | ) | (0.03 | ) | (0.29 | ) | |||||||||
Net (loss) income | $ | (1.45 | ) | $ | (0.42 | ) | $ | (1.11 | ) | $ | 1.03 | |||||
Average diluted common shares outstanding | 351 | 360 | 353 | 373 | ||||||||||||
Masco Corporation
Key Financial Data As Reorted — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Full-Year December 31, 2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reorted — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Full-Year December 31, 2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Sales & Earnings | 12/31/2008 | 12/31/2007 | Change | |||||||||
Net Sales | $ | 9,600 | $ | 11,532 | -17 | % | ||||||
Operating Profit | $ | 74 | $ | 1,054 | N/A | |||||||
Operating Profit % to Net Sales | 0.8 | % | 9.1 | % | (830 | ) bps | ||||||
Other Income (Expense), Net | $ | (285 | ) | $ | (188 | ) | 52 | % | ||||
Income Tax | $ | 132 | $ | 335 | -61 | % | ||||||
Minority Interest | $ | 39 | $ | 37 | 5 | % | ||||||
(Loss) Income from Continuing Operations | $ | (382 | ) | $ | 494 | N/A | ||||||
Diluted EPS from Continuing Operations | $ | (1.08 | ) | $ | 1.32 | N/A |
Operating Expenses | 12/31/2008 | 12/31/2007 | Change | |||||||||
Cost of Sales | $ | 7,224 | $ | 8,380 | -14 | % | ||||||
Gross Margin | 24.8 | % | 27.3 | % | (250 | ) bps | ||||||
SG&A Expenses (Including GCE) | $ | 1,835 | $ | 1,979 | -7 | % | ||||||
SG&A as a % of net sales | 19.1 | % | 17.2 | % | (190 | ) bps | ||||||
General Corporate Expense (GCE) | $ | 144 | $ | 181 | -20 | % | ||||||
General Corp Expense as a % of net sales | 1.5 | % | 1.6 | % | 10 | bps |
Business Segments | 12/31/2008 | 12/31/2007 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 2,276 | $ | 2,829 | -20 | % | ||||||
Operating Profit | $ | 4 | $ | 336 | N/A | |||||||
Operating Profit % to Net Sales | 0.2 | % | 11.9 | % | (1,170 | ) bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 3,118 | $ | 3,391 | -8 | % | ||||||
Operating Profit | $ | 94 | $ | 264 | N/A | |||||||
Operating Profit % to Net Sales | 3.0 | % | 7.8 | % | (480 | ) bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 1,861 | $ | 2,615 | -29 | % | ||||||
Operating (Loss) Profit | $ | (46 | ) | $ | 176 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -2.5 | % | 6.7 | % | (920 | ) bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 1,629 | $ | 1,768 | -8 | % | ||||||
Operating Profit | $ | 299 | $ | 384 | N/A | |||||||
Operating Profit % to Net Sales | 18.4 | % | 21.7 | % | (330 | ) bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 716 | $ | 929 | -23 | % | ||||||
Operating (Loss) Profit | $ | (124 | ) | $ | 67 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -17.3 | % | 7.2 | % | (2,450 | ) bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 9,600 | $ | 11,532 | -17 | % | ||||||
Operating Profit | $ | 227 | $ | 1,227 | N/A | |||||||
Operating Profit % to Net Sales | 2.4 | % | 10.6 | % | (820 | ) bps | ||||||
Change in Key Retailer Sales | -12 | % | -2 | % |
1
Masco Corporation
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Full-Year December 31, 2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Full-Year December 31, 2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions | 12/31/2008 | 12/31/2007 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 7,482 | $ | 9,271 | -19 | % | ||||||
Operating Profit | $ | 493 | $ | 1,008 | N/A | |||||||
Operating Profit % to Net Sales | 6.6 | % | 10.9 | % | (430 | ) bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 2,118 | $ | 2,261 | -6 | % | ||||||
Operating (Loss) Profit | $ | (266 | ) | $ | 219 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -12.6 | % | 9.7 | % | (2,230 | ) bps |
Working Capital | 12/31/2008 | 12/31/2007 | Change | |||||||||
Receivable Days | 50 | 49 | 1 | |||||||||
Inventory Days | 48 | 48 | — | |||||||||
Payable Days | 43 | 43 | — | |||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 1,409 | $ | 1,817 | -22 | % | ||||||
Working Capital as a % of Sales (As Reported TTM*) | 14.7 | % | 15.4 | % | 70 | bps | ||||||
Other | 12/31/2008 | 12/31/2007 | ||||||||||
Dividend Payments | $ | 336 | $ | 347 | ||||||||
Cash Paid for Share Repurchases | $ | 160 | $ | 857 | ||||||||
Common Shares Repurchased | 9 | 31 | ||||||||||
CAPEX | $ | 200 | $ | 248 | ||||||||
Depreciation and Amortization | $ | 238 | $ | 248 | ||||||||
Return on Invested Capital (As Reported TTM) | 0.8 | % | 8.6 | % | ||||||||
Return on Invested Capital (As Reconciled TTM) | 5.3 | % | 10.3 | % | ||||||||
Average diluted common shares outstanding | 353 | 373 | ||||||||||
Average diluted common shares outstanding (January 1) | 359 | 360 | ||||||||||
Effective Tax Rate (YTD) | 62.6 | % | 38.7 | % | ||||||||
Debt Ratio | 12/31/2008 | 12/31/2007 | ||||||||||
Long-term Debt | $ | 3,915 | $ | 3,966 | ||||||||
Notes Payable | $ | 71 | $ | 122 | ||||||||
Total Debt | $ | 3,986 | $ | 4,088 | ||||||||
Shareholders’ Equity | $ | 2,846 | $ | 4,025 | ||||||||
Debt to Capital | 58.3 | % | 50.4 | % |
* | - Trailing Twelve Months |
2
Masco Corporation
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Q4-2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Q4-2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Sales & Earnings | Q4 - 2008 | Q4 - 2007 | Change | |||||||||
Net Sales | $ | 1,979 | $ | 2,635 | -25 | % | ||||||
Operating (Loss) Profit | $ | (491 | ) | $ | 70 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -24.8 | % | 2.7 | % | (2,750 | ) bps | ||||||
Other Income (Expense), Net | $ | (88 | ) | $ | (58 | ) | 52 | % | ||||
Income Tax (Benefit) | $ | (75 | ) | $ | 33 | -327 | % | |||||
Minority Interest | $ | 4 | $ | 10 | -60 | % | ||||||
(Loss) from Continuing Operations | $ | (508 | ) | $ | (31 | ) | N/A | |||||
Diluted EPS from Continuing Operations | $ | (1.45 | ) | $ | (0.09 | ) | N/A |
Operating Expenses | Q4 - 2008 | Q4 - 2007 | Change | |||||||||
Cost of Sales | $ | 1,581 | $ | 1,960 | -19 | % | ||||||
Gross Margin | 20.1 | % | 25.6 | % | (550 | ) bps | ||||||
SG&A Expenses (Including GCE) | $ | 422 | $ | 486 | -13 | % | ||||||
SG&A as a % of net sales | 21.3 | % | 18.4 | % | (290 | ) bps | ||||||
General Corporate Expense (GCE) | $ | 34 | $ | 37 | -8 | % | ||||||
General Corp Expense as a % of net sales | 1.7 | % | 1.4 | % | 30 | bps |
Business Segments | Q4 - 2008 | Q4 - 2007 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 488 | $ | 665 | -27 | % | ||||||
Operating (Loss) Profit | $ | (84 | ) | $ | 63 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -17.2 | % | 9.5 | % | (2,670 | ) bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 635 | $ | 819 | -22 | % | ||||||
Operating (Loss) Profit | $ | (200 | ) | $ | (8 | ) | N/A | |||||
Operating (Loss) Profit % to Net Sales | -31.5 | % | -1.0 | % | (3,050 | ) bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 375 | $ | 589 | -36 | % | ||||||
Operating (Loss) Profit | $ | (54 | ) | $ | 28 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -14.4 | % | 4.8 | % | (1,920 | ) bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 328 | $ | 347 | -5 | % | ||||||
Operating Profit | $ | 42 | $ | 62 | N/A | |||||||
Operating Profit % to Net Sales | 12.8 | % | 17.9 | % | (510 | ) bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 153 | $ | 215 | -29 | % | ||||||
Operating (Loss) Profit | $ | (161 | ) | $ | (38 | ) | N/A | |||||
Operating (Loss) Profit % to Net Sales | -105.2 | % | -17.7 | % | (8,750 | ) bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 1,979 | $ | 2,635 | -25 | % | ||||||
Operating (Loss) Profit | $ | (457 | ) | $ | 107 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -23.1 | % | 4.1 | % | (2,720 | ) bps | ||||||
Change in Key Retailer Sales | -14 | % | -5 | % |
04 - 2008
3
Masco Corporation
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Q4-2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Key Financial Data As Reported — Unaudited
Including Impairment Charges for Goodwill and Other Intangible Assets
Q4-2008 and 2007(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions | Q4 - 2008 | Q4 - 2007 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 1,547 | $ | 2,048 | -24 | % | ||||||
Operating (Loss) Profit | $ | (49 | ) | $ | 60 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -3.2 | % | 2.9 | % | (610 | ) bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 432 | $ | 587 | -26 | % | ||||||
Operating (Loss) Profit | $ | (408 | ) | $ | 47 | N/A | ||||||
Operating (Loss) Profit % to Net Sales | -94.4 | % | 8.0 | % | (10,240 | ) bps |
Q4 - 2008
4
MASCO CORPORATION — 4th 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 | 2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
4 | 2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited | |
5 | 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 | |
6 | 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 | |
7 | Other Income (Expense), Net — 2008 & 2007 by Quarter — Unaudited | |
8 | Condensed Consolidated Balance Sheets — Unaudited | |
GAAP Reconciliations: | ||
9 | Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited | |
10 | Operating Profit and Margins — Unaudited | |
11 | 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 | $ | 7,482 | $ | 1,547 | $ | 1,975 | $ | 2,067 | $ | 1,893 | $ | 9,271 | $ | 2,048 | $ | 2,417 | $ | 2,548 | $ | 2,258 | |||||||||||||||||||||
- International, principally Europe | 2,118 | 432 | 553 | 576 | 557 | 2,261 | 587 | 588 | 541 | 545 | |||||||||||||||||||||||||||||||
- Consolidated | 9,600 | 1,979 | 2,528 | 2,643 | 2,450 | 11,532 | 2,635 | 3,005 | 3,089 | 2,803 | |||||||||||||||||||||||||||||||
Cost of Sales | 7,224 | 1,581 | 1,880 | 1,943 | 1,820 | 8,380 | 1,960 | 2,155 | 2,198 | 2,067 | |||||||||||||||||||||||||||||||
Gross Profit | 2,376 | 398 | 648 | 700 | 630 | 3,152 | 675 | 850 | 891 | 736 | |||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 24.8 | % | 20.1 | % | 25.6 | % | 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, (Income) / Charge for Planned Disposition of Business, and Charge for Litigation Settlement) | 1,682 | 388 | 417 | 450 | 427 | 1,806 | 449 | 435 | 486 | 436 | |||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 17.5 | % | 19.6 | % | 16.5 | % | 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, (Income)/ Charge for Planned Dispostion of Business, Charge for Litigation Settlement & Impairment Charges for Goodwill and Other Intangible Assets) | 694 | 10 | 231 | 250 | 203 | 1,346 | 226 | 415 | 405 | 300 | |||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 7.2 | % | 0.5 | % | 9.1 | % | 9.5 | % | 8.3 | % | 11.7 | % | 8.6 | % | 13.8 | % | 13.1 | % | 10.7 | % | |||||||||||||||||||||
- North America | 555 | 13 | 193 | 200 | 149 | 1,127 | 179 | 346 | 360 | 242 | |||||||||||||||||||||||||||||||
(Margin as a % of Sales) | 7.4 | % | 0.8 | % | 9.8 | % | 9.7 | % | 7.9 | % | 12.2 | % | 8.7 | % | 14.3 | % | 14.1 | % | 10.7 | % | |||||||||||||||||||||
- International, principally Europe | 139 | (3 | ) | 38 | 50 | 54 | 219 | 47 | 69 | 45 | 58 | ||||||||||||||||||||||||||||||
(Margin as a % of Sales) | 6.6 | % | -0.7 | % | 6.9 | % | 8.7 | % | 9.7 | % | 9.7 | % | 8.0 | % | 11.7 | % | 8.3 | % | 10.6 | % | |||||||||||||||||||||
General Corporate Expense (GCE), Net | 144 | 34 | 32 | 35 | 43 | 181 | 37 | 44 | 49 | 51 | |||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (Including GCE & (Gain) | 19.0 | % | 21.3 | % | 17.8 | % | 18.4 | % | 19.2 | % | 17.2 | % | 18.4 | % | 15.9 | % | 17.2 | % | 17.3 | % | |||||||||||||||||||||
on Sale of Corporate Fixed Assets) | |||||||||||||||||||||||||||||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | — | — | — | (8 | ) | — | — | (5 | ) | (3 | ) | ||||||||||||||||||||||||||||
(Income) / Charge for Planned Disposition of Business | — | — | (6 | ) | — | 6 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Charge for Litigation Settlement | 9 | — | 9 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Impairment Charges for Goodwill and Other Intangible Assets | 467 | 467 | — | — | — | 119 | 119 | — | — | — | |||||||||||||||||||||||||||||||
Operating Profit (Loss) per F/S | $ | 74 | $ | (491 | ) | $ | 196 | $ | 215 | $ | 154 | $ | 1,054 | $ | 70 | $ | 371 | $ | 361 | $ | 252 | ||||||||||||||||||||
(Loss) Earnings per Common Share (Diluted): | |||||||||||||||||||||||||||||||||||||||||
(Loss) Income from Continuing Operations | $ | (1.08 | ) | $ | (1.45 | ) | $ | 0.10 | $ | 0.20 | $ | 0.05 | $ | 1.32 | $ | (0.09 | ) | $ | 0.56 | $ | 0.49 | $ | 0.35 | ||||||||||||||||||
(Loss) Income from Discontinued Operations, Net | (0.03 | ) | — | (0.01 | ) | 0.03 | (0.04 | ) | (0.29 | ) | (0.33 | ) | — | 0.02 | 0.02 | ||||||||||||||||||||||||||
Net (Loss) Income | $ | (1.11 | ) | $ | (1.45 | ) | $ | 0.09 | $ | 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 fourth quarter of 2008 include non-cash impairment charges for goodwill and other intangible assets of $467 million pre-tax ($1.27 per common share, after tax). | |
– | Operating results for the first, second, third and fourth quarters of 2008 include costs and charges related to business rationalizations and other initiatives of $9 million pre-tax ($.02 per common share, after tax), $15 million pre-tax ($.03 per common share after tax), $16 million pre-tax ($.03 per common share, after tax) and $43 million pre-tax ($.08 per common share, after tax), respectively. | |
– | Income from continuing operations for the first, second, third and fourth quarters of 2008 includes non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax), $3 million pre-tax, $1 million pre-tax and $28 million pre-tax ($.05 per common share, after tax), respectively. | |
– | 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 $43 million pre-tax ($.06 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 2008 and 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
Quarterly Segment Data — 2008
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 — 2008
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 | $ | 2,276 | $ | 488 | $ | 584 | $ | 608 | $ | 596 | ||||||||||
- Plumbing Products | 3,118 | 635 | 805 | 857 | 821 | |||||||||||||||
- Installation and Other Services | 1,861 | 375 | 492 | 508 | 486 | |||||||||||||||
- Decorative Architectural Products | 1,629 | 328 | 446 | 476 | 379 | |||||||||||||||
- Other Specialty Products | 716 | 153 | 201 | 194 | 168 | |||||||||||||||
- Total | $ | 9,600 | $ | 1,979 | $ | 2,528 | $ | 2,643 | $ | 2,450 | ||||||||||
- North America | 7,482 | $ | 1,547 | $ | 1,975 | $ | 2,067 | $ | 1,893 | |||||||||||
- International, principally Europe | 2,118 | 432 | 553 | 576 | 557 | |||||||||||||||
- Total, as above | $ | 9,600 | $ | 1,979 | $ | 2,528 | $ | 2,643 | $ | 2,450 | ||||||||||
Operating Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 86 | $ | (12 | ) | $ | 29 | $ | 40 | $ | 29 | |||||||||
- Plumbing Products | 325 | 19 | 95 | 109 | 102 | |||||||||||||||
- Installation and Other Services | 21 | 3 | 11 | 8 | (1 | ) | ||||||||||||||
- Decorative Architectural Products | 301 | 42 | 95 | 90 | 74 | |||||||||||||||
- Other Specialty Products | 37 | (1 | ) | 17 | 13 | 8 | ||||||||||||||
- Total | $ | 770 | $ | 51 | $ | 247 | $ | 260 | $ | 212 | ||||||||||
- North America | 602 | $ | 38 | $ | 200 | $ | 207 | $ | 157 | |||||||||||
- International, principally Europe | 168 | 13 | 47 | 53 | 55 | |||||||||||||||
- Total, as above | $ | 770 | $ | 51 | $ | 247 | $ | 260 | $ | 212 | ||||||||||
General Corporate Expense (GCE), Net | 137 | 32 | 32 | 30 | 43 | |||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | — | — | — | |||||||||||||||
Charge for Litigation Settlement | (9 | ) | — | (9 | ) | — | — | |||||||||||||
Income / (Charge) for Planned Disposition of Business | — | — | 6 | — | (6 | ) | ||||||||||||||
Operating Profit (after GCE and Adjustments) | 624 | 19 | 212 | 230 | 163 | |||||||||||||||
Other Income (Expense), Net | (285 | ) | (88 | ) | (57 | ) | (56 | ) | (84 | ) | ||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | 339 | $ | (69 | ) | $ | 155 | $ | 174 | $ | 79 | |||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 3.8 | % | -2.5 | % | 5.0 | % | 6.6 | % | 4.9 | % | ||||||||||
- Plumbing Products | 10.4 | % | 3.0 | % | 11.8 | % | 12.7 | % | 12.4 | % | ||||||||||
- Installation and Other Services | 1.1 | % | 0.8 | % | 2.2 | % | 1.6 | % | -0.2 | % | ||||||||||
- Decorative Architectural Products | 18.5 | % | 12.8 | % | 21.3 | % | 18.9 | % | 19.5 | % | ||||||||||
- Other Specialty Products | 5.2 | % | -0.7 | % | 8.5 | % | 6.7 | % | 4.8 | % | ||||||||||
- Total | 8.0 | % | 2.6 | % | 9.8 | % | 9.8 | % | 8.7 | % | ||||||||||
- North America | 8.0 | % | 2.5 | % | 10.1 | % | 10.0 | % | 8.3 | % | ||||||||||
- International, principally Europe | 7.9 | % | 3.0 | % | 8.5 | % | 9.2 | % | 9.9 | % | ||||||||||
- Total, as above | 8.0 | % | 2.6 | % | 9.8 | % | 9.8 | % | 8.7 | % |
Notes:
– | Data exclude discontinued operations. | |
– | Operating profit and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets, charge for litigation settlement and (income) / charge for planned disposition of a business. | |
– | Operating profit margins for the fourth quarter of 2008 exclude $467 million of impairment charges for goodwill and other intangible assets as follows: Cabinets and Related Products ($59 million), Plumbing Products ($203 million), Installation and Other Services ($52), and Other Specialty Products ($153 million). | |
– | Operating profit margins for the fourth quarter of 2008 exclude costs and charges of $43 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($13 million), Plumbing Products ($16 million), Installation and Other Services ($5 million), Other Specialty Products ($7 million), and GCE ($2 million). | |
– | Operating profit margins for the third quarter of 2008 exclude costs and charges of $16 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($6 million), Plumbing Products ($7 million), Installation and Other Services ($1 million), Decorative Architectural Products ($1 million), and Other Specialty Products ($1million). | |
– | 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 3
MASCO CORPORATION
Quarterly Segment Data — 2008
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 — 2008
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 | $ | 2,276 | $ | 488 | $ | 584 | $ | 608 | $ | 596 | ||||||||||
- Plumbing Products | 3,118 | 635 | 805 | 857 | 821 | |||||||||||||||
- Installation and Other Services | 1,861 | 375 | 492 | 508 | 486 | |||||||||||||||
- Decorative Architectural Products | 1,629 | 328 | 446 | 476 | 379 | |||||||||||||||
- Other Specialty Products | 716 | 153 | 201 | 194 | 168 | |||||||||||||||
- Total | $ | 9,600 | $ | 1,979 | $ | 2,528 | $ | 2,643 | $ | 2,450 | ||||||||||
- North America | 7,482 | $ | 1,547 | $ | 1,975 | $ | 2,067 | $ | 1,893 | |||||||||||
- International, principally Europe | 2,118 | 432 | 553 | 576 | 557 | |||||||||||||||
- Total, as above | $ | 9,600 | $ | 1,979 | $ | 2,528 | $ | 2,643 | $ | 2,450 | ||||||||||
Operating Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 4 | $ | (84 | ) | $ | 23 | $ | 37 | $ | 28 | |||||||||
- Plumbing Products | 94 | (200 | ) | 88 | 107 | 99 | ||||||||||||||
- Installation and Other Services | (46 | ) | (54 | ) | 10 | 4 | (6 | ) | ||||||||||||
- Decorative Architectural Products | 299 | 42 | 94 | 89 | 74 | |||||||||||||||
- Other Specialty Products | (124 | ) | (161 | ) | 16 | 13 | 8 | |||||||||||||
- Total | $ | 227 | $ | (457 | ) | $ | 231 | $ | 250 | $ | 203 | |||||||||
- North America | 493 | $ | (49 | ) | $ | 193 | $ | 200 | $ | 149 | ||||||||||
- International, principally Europe | (266 | ) | (408 | ) | 38 | 50 | 54 | |||||||||||||
- Total, as above | $ | 227 | $ | (457 | ) | $ | 231 | $ | 250 | $ | 203 | |||||||||
General Corporate Expense (GCE), Net | 144 | 34 | 32 | 35 | 43 | |||||||||||||||
(Gain) on Sale of Corporate Fixed Assets, Net | — | — | — | — | — | |||||||||||||||
Charge for Litigation Settlement | (9 | ) | — | (9 | ) | — | — | |||||||||||||
Income / (Charge) for Planned Disposition of Business | — | — | 6 | — | (6 | ) | ||||||||||||||
Operating Profit (after GCE and Adjustments) | 74 | (491 | ) | 196 | 215 | 154 | ||||||||||||||
Other Income (Expense), Net | (285 | ) | (88 | ) | (57 | ) | (56 | ) | (84 | ) | ||||||||||
Income from Continuing Operations before Income Taxes and Minority Interest | $ | (211 | ) | $ | (579 | ) | $ | 139 | $ | 159 | $ | 70 | ||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | 0.2 | % | -17.2 | % | 3.9 | % | 6.1 | % | 4.7 | % | ||||||||||
- Plumbing Products | 3.0 | % | -31.5 | % | 10.9 | % | 12.5 | % | 12.1 | % | ||||||||||
- Installation and Other Services | -2.5 | % | -14.4 | % | 2.0 | % | 0.8 | % | -1.2 | % | ||||||||||
- Decorative Architectural Products | 18.4 | % | 12.8 | % | 21.1 | % | 18.7 | % | 19.5 | % | ||||||||||
- Other Specialty Products | -17.3 | % | -105.2 | % | 8.0 | % | 6.7 | % | 4.8 | % | ||||||||||
- Total | 2.4 | % | -23.1 | % | 9.1 | % | 9.5 | % | 8.3 | % | ||||||||||
- North America | 6.6 | % | -3.2 | % | 9.8 | % | 9.7 | % | 7.9 | % | ||||||||||
- International, principally Europe | -12.6 | % | -94.4 | % | 6.9 | % | 8.7 | % | 9.7 | % | ||||||||||
- Total, as above | 2.4 | % | -23.1 | % | 9.1 | % | 9.5 | % | 8.3 | % |
Notes:
– | Data exclude discontinued operations. | |
– | Operating profit and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets, charge for litigation settlement and (income) / charge for planned - - disposition of a business. | |
– | Operating profit margins for the fourth quarter of 2008 include $467 million of impairment charges for goodwill and other intangible assets as follows: Cabinets and Related Products ($59 million), Plumbing Products ($203 million), Installation and Other Services ($52), and Other Specialty Products ($153 million). | |
– | Operating profit margins for the fourth quarter of 2008 include costs and charges of $43 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($13 million), Plumbing Products ($16 million), Installation and Other Services ($5 million), Other Specialty Products ($7 million), and GCE ($2 million). | |
– | Operating profit margins for the third quarter of 2008 include costs and charges of $16 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($6 million), Plumbing Products ($7 million), Installation and Other Services ($1 million), Decorative Architectural Products ($1 million), and Other Specialty Products ($1million). | |
– | 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 4
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 5
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). |
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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 | $ | (228 | ) | $ | (56 | ) | $ | (59 | ) | $ | (57 | ) | $ | (56 | ) | $ | (258 | ) | $ | (61 | ) | $ | (65 | ) | $ | (69 | ) | $ | (63 | ) | |||||||||||
Income from Cash and Cash Investments | 22 | 5 | 6 | 5 | 6 | 37 | 8 | 7 | 8 | 14 | |||||||||||||||||||||||||||||||
Other Interest Income | 2 | 1 | 1 | — | — | 3 | 1 | 1 | 1 | — | |||||||||||||||||||||||||||||||
Realized (Losses) Gains from Financial Investments, Net | 1 | 1 | — | 3 | (3 | ) | 43 | 3 | 11 | 7 | 22 | ||||||||||||||||||||||||||||||
Dividend Income | — | — | — | — | — | 6 | — | — | 1 | 5 | |||||||||||||||||||||||||||||||
Impairment Charges for Financial Investments | (58 | ) | (28 | ) | (1 | ) | (3 | ) | (26 | ) | (22 | ) | — | (12 | ) | (10 | ) | — | |||||||||||||||||||||||
Other, Net | (24 | ) | (11 | ) | (4 | ) | (4 | ) | (5 | ) | 3 | (9 | ) | 13 | (2 | ) | 1 | ||||||||||||||||||||||||
Total Other Income (Expense), Net | $ | (285 | ) | $ | (88 | ) | $ | (57 | ) | $ | (56 | ) | $ | (84 | ) | $ | (188 | ) | $ | (58 | ) | $ | (45 | ) | $ | (64 | ) | $ | (21 | ) | |||||||||||
Notes:
– | Data exclude discontinued operations. | |
– | Other, net, includes currency (losses) of ($11) million, ($4) million, ($4) million and ($12) million for the first, second, third and fourth 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. |
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MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 1,028 | $ | 922 | ||||
Receivables | 999 | 1,405 | ||||||
Inventories | 941 | 1,126 | ||||||
Prepaid Expenses and Other | 332 | 355 | ||||||
Total Current Assets | 3,300 | 3,808 | ||||||
Property and Equipment, Net | 2,136 | 2,367 | ||||||
Goodwill | 3,371 | 3,938 | ||||||
Other Intangible Assets, Net | 299 | 323 | ||||||
Other Assets | 377 | 471 | ||||||
Total Assets | $ | 9,483 | $ | 10,907 | ||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Accounts Payable | $ | 531 | $ | 714 | ||||
Notes Payable | 71 | 122 | ||||||
Accrued Liabilities | 945 | 1,072 | ||||||
Total Current Liabilities | 1,547 | 1,908 | ||||||
Long-Term Debt | 3,915 | 3,966 | ||||||
Deferred Income Taxes and Other | 1,175 | 1,008 | ||||||
Total Liabilities | 6,637 | 6,882 | ||||||
Shareholders’ Equity | 2,846 | 4,025 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 9,483 | $ | 10,907 | ||||
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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 | ||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Consolidated Net Sales, As Reported | $ | 1,979 | $ | 2,635 | ||||
- Acquisitions | (12 | ) | — | |||||
Consolidated Net Sales, Excluding Acquisitions | $ | 1,967 | $ | 2,635 | ||||
North American Net Sales, As Reported | $ | 1,547 | $ | 2,048 | ||||
- Acquisitions | (12 | ) | — | |||||
North American Net Sales, Excluding Acquisitions | $ | 1,535 | $ | 2,048 | ||||
International Net Sales, As Reported | $ | 432 | $ | 582 | ||||
- Acquisitions | — | — | ||||||
International Net Sales, Excluding Acquisitions | 432 | 582 | ||||||
- Currency Translation | 70 | — | ||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 502 | $ | 582 | ||||
Twelve Months Ended | ||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Consolidated Net Sales, As Reported | $ | 9,600 | $ | 11,532 | ||||
- Acquisitions | (77 | ) | — | |||||
Consolidated Net Sales, Excluding Acquisitions | $ | 9,523 | $ | 11,532 | ||||
North American Net Sales, As Reported | $ | 7,482 | $ | 9,271 | ||||
- Acquisitions | (77 | ) | — | |||||
North American Net Sales, Excluding Acquisitions | $ | 7,405 | $ | 9,271 | ||||
International Net Sales, As Reported | $ | 2,118 | $ | 2,261 | ||||
- Acquisitions | — | — | ||||||
International Net Sales, Excluding Acquisitions | 2,118 | 2,261 | ||||||
- Currency Translation | (76 | ) | — | |||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 2,042 | $ | 2,261 | ||||
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. |
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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 December 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating (Loss) Profit, As Reported | $ | (491 | ) | -24.8 | % | $ | 70 | 2.7 | % | |||||||
Impairment Charges for Goodwill and Other Intangible Assets | 467 | 119 | ||||||||||||||
Business Rationalizations and Other Initiatives | 43 | 19 | ||||||||||||||
Operating Profit, As Reconciled | $ | 19 | 1.0 | % | $ | 208 | 7.9 | % | ||||||||
Twelve Months Ended December 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 74 | 0.8 | % | $ | 1,054 | 9.1 | % | ||||||||
Impairment Charges for Goodwill and Other Intangible Assets | 467 | 119 | ||||||||||||||
Business Rationalizations and Other Initiatives | 83 | 79 | ||||||||||||||
Charge for Litigation | 9 | — | ||||||||||||||
Operating Profit, As Reconciled | $ | 633 | 6.6 | % | $ | 1,252 | 10.9 | % | ||||||||
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 10
MASCO CORPORATION | ||||||||
GAAP Reconciliation of Operating Profit and Shareholders’ Equity - Unaudited | ||||||||
(in millions) |
Twelve | ||||
Months Ended | ||||
December 31, | ||||
2008 | ||||
Operating Profit, As Reported | $ | 74 | ||
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations | 467 | |||
Income Regarding Litigation Settlement (pre-tax) | 9 | |||
Operating Profit, As Reconciled | $ | 550 | ||
Twelve Months Ended | ||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Shareholders’ Equity, As Reported | $ | 2,846 | $ | 4,025 | ||||
Impairment Charges for Goodwill and Other Intangible Assets (after tax) | 445 | 208 | ||||||
Income Regarding Litigation Settlement (after tax) | 6 | — | ||||||
Shareholders’ Equity, As Reconciled | $ | 3,297 | $ | 4,233 | ||||
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 11